<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 18, 2000.
REGISTRATION NO. 333-______
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
PINNACLE GLOBAL GROUP, INC.
(Exact name of registrant as specified in its charter)
----------------
TEXAS 76-0583569
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
5599 SAN FELIPE, SUITE 555
HOUSTON, TEXAS 77056
(Address of Principal Executive Offices)
----------------
PINNACLE GLOBAL GROUP, INC.
401(k) PLAN
(Full Title of the Plan)
----------------
Name, Address and Telephone Copy of Communications to:
Number of Agent for Service:
CHRIS A. FERAZZI
ROBERT E. GARRISON II PORTER & HEDGES, L.L.P.
5599 SAN FELIPE, SUITE 555 700 LOUISIANA STREET, SUITE 3500
HOUSTON, TEXAS 77056 HOUSTON, TEXAS 77002-2370
(713) 993-4610 (713) 226-0600
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
PROPOSED
AMOUNT TO PROPOSED MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED (1)(3) BE REGISTERED(1) PRICE PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share 500,000 $3.594 $1,797,000 $475
====================================================================================================================================
</TABLE>
(1) Pursuant to Rule 416(a), also registered hereunder is an
indeterminate number of shares of Common Stock issuable as a result
of the anti-dilution provisions of the Plan.
(2) Estimated pursuant to Rule 457(h) solely for the purpose of
calculating the registration fee based on the average of the high and
low sale prices for the Common Stock on the Nasdaq National Market on
May 12, 2000, $3.594.
(3) Pursuant to Rule 416(c), also registered hereunder is an
indeterminate amount of Plan interests.
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Securities and
Exchange Commission by Pinnacle Global Group, Inc. are incorporated into this
registration statement by reference:
- Annual report on Form 10-K for the year ended December 31, 1999.
- Quarterly report on Form 10-Q for the three months ended March
31, 2000.
- Current reports on Form 8-K as filed on January 12, February 4,
and April 28, 2000.
- All other reports filed by Pinnacle pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") since December 31, 1999.
- Definitive Proxy Statement on Schedule 14A dated December 6,
1999, as supplemented by the Proxy Statement dated January 12,
2000.
- Definitive Proxy Statement on Schedule 14A dated May 1, 2000.
- The description of the Company's common stock, par value $.01 per
share, which is contained in Pinnacle's Registration Statement on
Form S-4 (Registration No. 333-65417).
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, subsequent to the
filing date of this registration statement and prior to the filing of a
post-effective amendment to this registration statement which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing such
documents. Pinnacle Global Group, Inc. will provide without charge to each
participant in its 401(k) Plan, upon written or oral request of such person, a
copy (without exhibits, unless such exhibits are specifically incorporated by
reference) of any or all of the documents incorporated by reference pursuant to
this Item 3.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Article 1302-7.06 of the Texas Miscellaneous Corporation Laws
Act, the articles of incorporation of a Texas corporation may provide that a
director of that corporation shall not be liable, or shall be liable only to the
extent provided in the articles of incorporation, to the corporation or its
shareholders for monetary damages for acts or omissions in the director's
capacity as a director, except that the articles of incorporation cannot provide
for the elimination or limitation of a director to the extent that the director
is found liable for (1) a breach of the director's duty of loyalty to the
corporation or its shareholders, (2) acts or omissions not in good faith that
constitute a breach of duty of the director to the corporation or an act or
missions not in good faith that constitute a breach of duty of the director to
the corporation or an act or omission that involves intentional misconduct or a
knowing violation of the law, (3) any
<PAGE>
transaction from which the director received an improper benefit, or (4) an act
or omission for which the liability of a director is expressly provided by an
applicable statute. Article IX of Pinnacle's Articles of Incorporation, as
amended, states that a director of Pinnacle shall not be liable to Pinnacle or
its shareholders for monetary damages except to the extent otherwise expressly
provided by the statutes of the State of Texas.
In addition, Article 2.02-1 of the Texas Business Corporation Act
(the "TBCA") authorizes a Texas corporation to indemnify a person who was, or is
threatened to be made a named defendant or respondent in a proceeding, including
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, arbitrative, or investigative because the person is or
was a director. The TBCA provides that unless a court of competent jurisdiction
determines otherwise, indemnification is permitted only if it is determined that
the person (1) conducted himself in good faith; (2) reasonably believed (a) in
the case of conduct in his official capacity as a director of the corporation,
that his conduct was in the corporation's best interests; and (b) in all other
cases, that his conduct was at least not opposed to the corporation's best
interest; and (3) in the case of any criminal proceeding, had no reasonable
cause to believe his conduct was unlawful. A person may be indemnified under
Article 2.02-1 of the TBCA against judgments, penalties (including excise and
similar taxes), fines, settlements, and reasonable expenses actually incurred by
the person (including court costs and attorneys' fees), but if the person is
found liable to the corporation or is found liable on the basis that personal
benefit was improperly received by him, the indemnification is limited to
reasonable expenses actually incurred and shall not be made in respect of any
proceeding in which the person has been found liable for willful or intentional
misconduct in the performance of his duty to the corporation. A corporation is
obligated under Article 2.02-1 of the TBCA to indemnify a director or officer
against reasonable expenses incurred by him in connection with a proceeding in
which he is named defendant or respondent because he is or was a director or
officer if he has been wholly successful, on the merits or otherwise, in the
defense of the proceeding. Under Article 2.02-1 of the TBCA a corporation may
(1) indemnify and advance expenses to an officer, employee, agent or other
persons who are or were serving at the request of the corporation as a director,
officer, partner, venturer, proprietor, trustee, employee, agent or similar
functionary of another entity to the same extent that it may indemnify and
advance expenses to its directors, (2) indemnify and advance expenses to
directors and such other persons identified in (1) to such further extent,
consistent with law, as may be provided in the corporation's articles of
incorporation, bylaws, action of its board of directors, or contract or as
permitted by common law and (3) purchase and maintain insurance or another
agreement on behalf of directors and such other persons identified in (1)
against any liability asserted against him and incurred by him in such a
capacity or arising out of his status as such a person.
The Bylaws, as amended, of Pinnacle set forth specific provisions for
indemnification of directors, officers, agents and other persons which are
substantially identical to the provisions of Article 2.02-1 of the TBCA
described above.
Pinnacle maintains directors' and officers' insurance and has entered
into agreements to indemnify each of its directors and certain of its executive
officers regarding liabilities that may result from such officer's service as an
officer of director of Pinnacle.
The above discussion of Pinnacle's Articles of Incorporation and
Bylaws, as amended, and Texas statutes is not intended to be exhaustive and is
qualified in its entirety by such Articles, Bylaws and statutes.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
2
<PAGE>
ITEM 8. EXHIBITS
Exhibit
No. Description
- ------------ -----------
*4.1 Pinnacle Global Group, Inc. 401(k) Plan.
5.1 In lieu of an Internal Revenue Service ("IRS") determination letter
that the Plan is qualified under Section 401 of the Internal Revenue
Code, Pinnacle Global Group, Inc. undertakes that (1) it will submit or
has submitted the Plan and any amendments thereto to the IRS in a
timely manner and (2) it will make all changes required by the IRS in
order to maintain the tax-qualified status of the Plan.
*23.1 Consent of PricewaterhouseCoopers LLP.
*23.2 Consent of Cheshier & Fuller, L.L.P.
*23.3 Consent of KPMG LLP.
*23.4 Consent of Grant Thornton LLP. (filed herewith).
24.1 Power of Attorney (included on signature page of this Registration
Statement).
- ------------------------
* Filed herewith.
ITEM 9. UNDERTAKINGS
(a) UNDERTAKING TO UPDATE
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933, as amended (the
"Securities Act");
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information in the Registration
Statement; and
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any material
change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Securities and Exchange Commission by the
Registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.
3
<PAGE>
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) UNDERTAKING WITH RESPECT TO DOCUMENTS INCORPORATED BY
REFERENCE
The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each
filing of the Registrant's annual report pursuant to section 13(a) or
section 15(d) of the Exchange Act that is incorporated by reference
in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial BONA FIDE offering thereof.
(c) UNDERTAKING WITH RESPECT TO INDEMNIFICATION
Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on this 18th day of May,
2000.
PINNACLE GLOBAL GROUP, INC.
By: /s/ ROBERT E. GARRISON II
------------------------------------
Robert E. Garrison II, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Titus H. Harris, Jr. and Robert E.
Garrison II, and each of them, either of whom may act without joinder of the
other, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all pre- and post-effective amendments
and supplements to this Registration Statement, and to file the same, or cause
to be filed the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
such attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, or the substitute or substitutes
of either of them, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on this 18th day of May, 2000.
SIGNATURE TITLE
--------- -----
/s/ ROBERT E. GARRISON II President, Chief Executive Officer and Director
- ---------------------------- (Principal Executive Officer)
Robert E. Garrison II
/s/ TITUS H. HARRIS, JR. Chairman of the Board and Director
- ----------------------------
Titus H. Harris, Jr.
/s/ DONALD R. CAMPBELL Vice Chairman and Director
- ---------------------------- (Principal Financial and Accounting Officer)
Donald R. Campbell
/s/ DON A. SANDERS Vice Chairman and Director
- ----------------------------
Don A. Sanders
/s/ BEN T. MORRIS Director
- ----------------------------
Ben T. Morris
/s/ GEORGE L. BALL Director
- ----------------------------
George L. Ball
5
<PAGE>
SIGNATURE TITLE
/s/ STEPHEN M. RECKLING Director
- ----------------------------
Stephen M. Reckling
/s/ PETER W. BADGER Director
- ----------------------------
Peter W. Badger
/s/ RICHARD C. WEBB Director
- ----------------------------
Richard C. Webb
Director
- ----------------------------
Tony Coelho
/s/ W. BLAIR WALTRIP Director
- ----------------------------
W. Blair Waltrip
/s/ JAMES H. GREER Director
- ----------------------------
James H. Greer
Director
- ----------------------------
John H. Styles
/s/ T. CRAIG BENSON Director
- ----------------------------
T. Craig Benson
6
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ---------- -----------
*4.1 Pinnacle Global Group, Inc. 401(k) Plan.
5.1 In lieu of an Internal Revenue Service ("IRS") determination
letter that the Plan is qualified under Section 401 of the
Internal Revenue Code, Pinnacle Global Group, Inc. undertakes
that (1) it will submit or has submitted the Plan and any
amendments thereto to the IRS in a timely manner and (2) it will
make all changes required by the IRS in order to maintain the
tax-qualified status of the Plan.
*23.1 Consent of PricewaterhouseCoopers LLP.
*23.2 Consent of Cheshier & Fuller, L.L.P.
*23.3 Consent of KPMG LLP.
*23.4 Consent of Grant Thornton LLP.
24.1 Power of Attorney (included on signature page of this
Registration Statement).
- ---------------------------
* Filed herewith.
<PAGE>
Ex 4-1
PROFIT SHARING PLAN AND TRUST
WITH EMPLOYEE CONTRIBUTIONS
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.01 Initial Eligibility 30
2.02 Change in Employee Classification 30
2.03 Eligibility Upon Reemployment 31
2.04 Participation During an Authorized Leave of Absence 31
2.05 Limitations with Regard to Owner-Employees 31
ARTICLE III
CONTRIBUTIONS
3.01 Employee Elective Deferrals 33
3.02 Terms of Deferral Agreement 33
3.03 Employer Matching and Qualified Matching Contributions 33
3.04 Employer Profit Sharing Contributions 34
3.05 Employer Qualified Non-Elective Contributions 34
3.06 Employee Post-Tax Voluntary Contributions 34
3.07 Employee Rollover/Transfer Contributions 34
3.08 Payment of Employer Contributions to Trustee 34
<PAGE>
ARTICLE IV
ACCOUNTING AND ALLOCATION
4.01 Accounting Procedure 36
4.02 Allocation of Employer Profit Sharing Contributions
and Forfeitures 38
4.03 Timing of Employer Contributions 40
4.04 Valuation and Allocation of Contracts 41
4.05 Correction of Allocations 41
4.06 Additional Eligible Employees 41
ARTICLE V
LIMITATION ON ALLOCATIONS, DEFERRALS AND CONTRIBUTIONS
5.01 Limitation on Allocations 43
5.02 Limitation on Employee Elective Deferrals 45
5.03 Limitations on Employer Matching Contributions and Employer
Post-Tax Voluntary Contributions 47
5.04 Procedure for Distribution of Excess Elective Deferrals 48
5.05 Distribution of Excess Contributions 49
5.06 Distribution of Excess Matching Contributions or Employee
Post-Tax Voluntary Contributions 50
5.07 Multiple Use Limitation 50
ARTICLE VI
VESTING AND FORFEITURES
6.01 Nonforfeitable Accounts 52
6.02 Accounts Subject to Vesting Schedule 52
6.03 Vesting at Termination 52
6.04 Forfeitures 53
6.05 Buyback 53
<PAGE>
ARTICLE VII
PAYMENT OF BENEFITS
7.01 Payment of Benefits 54
7.02 Commencement of Benefits 55
7.03 Joint and Survivor Requirements 56
7.04 Minimum Distribution Requirements 56
7.05 Payment at Death 57
7.06 Optional Form of Payment of Benefits 59
7.07 Designation of Beneficiary 59
7.08 Restrictions on Immediate Distributions 60
7.09 Notice Requirements 61
7.10 Special Rule for Elective Plans 62
7.11 Transitional Joint and Survivor Annuity Rules 62
7.12 Hardship Withdrawals 63
7.13 Transitional Minimum Distribution Rules 65
7.14 In-Service Distributions 66
7.15 Distributions Under Qualified Domestic Relations Order 66
7.16 Direct Rollover 67
ARTICLE VIII
SPECIAL TOP-HEAVY PLAN RULES
8.01 Applicability of Article 68
8.02 Minimum Allocations 68
8.03 Minimum Vesting 69
8.04 Super Top-Heavy Plans 69
<PAGE>
ARTICLE IX
ADMINISTRATION OF PLAN
9.01 Responsibilities of Employer 70
9.02 Rights and Responsibilities of Plan Administrator 70
9.03 Administrative Committee 71
9.04 Benefit Claims Procedure 72
9.05 Multiple Roles 74
ARTICLE X
TRUST AGREEMENT
10.01 Trust Agreement 75
10.02 Basic Responsibilities of Trustee 75
10.03 Investment 75
10.04 Rights and Powers of the Trustee 77
10.05 Administration and Payment 79
10.06 Compensations and Expenses 80
10.07 Accounts of the Trustee 80
10.08 Co-Trustees 81
10.09 Resignation and Removal of Trustee 81
10.10 Successor Trustee 81
ARTICLE XI
LOANS TO PARTICIPANTS
11.01 Loans to Participants 82
11.02 Terms and Conditions 82
11.03 Protection of Trustee 84
<PAGE>
ARTICLE XII
INSURANCE CONTRACTS
12.01 Investment in Insurance Contracts 85
12.02 Investment Limitations 85
12.03 General Provisions 85
12.04 Insurance as General Investment 87
12.05 Insurance Company Not a Party 87
ARTICLE XIII
EXCLUSIVE BENEFIT
13.01 Exclusive Benefit 88
13.02 Mistake of Fact 88
13.03 Requirement of Qualification 88
13.04 Requirement of Deductibility 88
ARTICLE XIV
AMENDMENT, TERMINATION, AND MERGER
14.01 Amendment 89
14.02 Plan Termination 90
14.03 Distribution Upon Plan Termination 90
14.04 Merger 90
ARTICLE XV
MISCELLANEOUS
15.01 This Plan is not an Employment Contract 91
15.02 Limitations on the Obligations of the Employer 91
15.03 Agreement Binding 91
<PAGE>
15.04 Assignment, Alienation, or Encumbrance 91
15.05 Retroactive Effect 91
15.06 Construction 92
15.07 Headings 92
15.08 Governing Law 92
ARTICLE XVI
PARTICIPATING EMPLOYERS
16.01 Adoption by Other Employers 93
16.02 Requirements of Participating Employers 93
16.03 Designation of Agent 94
16.04 Employee Transfers 94
16.05 Participating Employers Contribution 94
16.06 Amendment 94
16.07 Discontinuance of Participation 95
16.08 Administrator's Authority 95
<PAGE>
PLAN DATA, INC. REGIONAL PROTOTYPE
PROFIT SHARING PLAN AND TRUST
WITH EMPLOYEE CONTRIBUTIONS
(PLAN 001)
The Employer whose name and signature appear on the attached Adoption Agreement
hereby adopts a profit sharing plan in the form of this Plan Data, Inc. Regional
Prototype Profit Sharing Plan and Trust With Employee Contributions, as modified
by the information provided and selections made in the Adoption Agreement.
The Employer hereby establishes the Plan and creates the Trust for the exclusive
benefit of Participants and their Beneficiaries, as follows:
ARTICLE I
DEFINITIONS
The following words and phrases, when used herein, shall have the meanings
indicated below, unless a different meaning is clearly indicated by the context.
All references to sections herein pertain to sections of the Plan unless
otherwise indicated by the text or context.
1.01 ACTUAL DEFERRAL PERCENTAGE ("ADP"):
For a specified group of Participants for a Plan Year, the average of
the ratios (calculated separately for each Participant in such group)
of (1) the amount of Employer contributions actually paid over to the
trust on behalf of such Participant for the Plan Year to (2) the
Participant's Compensation for such Plan Year.
For purposes of the preceding sentence, "Employer contributions" on
behalf of any Participant shall include: (1) any Employee Elective
Deferrals made pursuant to the Participant's Deferral Agreement,
including Excess Elective Deferrals, but excluding Elective Deferrals
that are taken into account in the Contribution Percentage test
(provided the ADP test is satisfied both with and without exclusion of
these Employee Elective Deferrals); and (2) Employer Qualified
Non-Elective Contributions and Employer Qualified Matching
Contributions. The amounts of Employer Qualified Matching Contributions
and Employer Qualified Non-Elective Contributions taken into account
for purposes of calculating the Actual Deferral Percentage, subject to
such other requirements as may be prescribed by the Secretary of the
Treasury, shall be such amounts as are needed to meet the Actual
Deferral Percentage test in section 5.02(a) of the Plan.
For purposes of computing Actual Deferral Percentages, "Participant"
shall include an Employee who would be a Participant (with respect to
eligibility to make Employee Elective Deferrals) but for the failure to
make Employee Elective Deferrals. Such Employee shall be treated as a
Participant on whose behalf no Employee Elective Deferrals are made.
1.02 ADMINISTRATOR, PLAN ADMINISTRATOR:
The person or Committee named to administer the Plan on behalf of the
Employer, as specified in the Adoption Agreement. If no person or
Committee is named, the Employer shall be the Administrator.
1
<PAGE>
1.03 ADOPTION AGREEMENT:
The instrument, completed and executed by the Employer and accepted by
the Trustee, in which the Employer adopts the Plan and Trust and
selects its options under this Plan. Such agreement may be amended by
the Employer from time to time.
1.04 AFFILIATED EMPLOYER:
Any corporation which is a member of a controlled group of corporations
(as defined in Section 414(b) of the Code) which includes the Employer;
any trade or business (whether or not incorporated) which is under
common control (as defined in Section 414(c) of the Code) with the
Employer; any organization (whether or not incorporated) which is a
member of an affiliated service group (as defined in Section 414(m) of
the Code) which includes the Employer; and any other entity required to
be aggregated with the Employer pursuant to regulations under 414(o) of
the Code.
1.05 AGGREGATE LIMIT:
The sum of (a) 125 percent of the greater of the ADP of the Non-highly
Compensated Employees for the Plan Year or the ACP of Non-highly
Compensated Employees under the Plan subject to section 401(m) of the
Code for the Plan Year beginning with or within the Plan Year of the
cash or deferred arrangement and (b) the lesser of 200% or two plus the
lesser of such ADP or ACP.
1.06 ANNIVERSARY DATE:
The last day of the Plan Year.
1.07 ANNUAL ADDITIONS:
The sum of the following amounts allocated on behalf of a Participant
for the Limitation Year:
(a) all employer contributions,
(b) all forfeitures,
(c) all employee contributions.
For purposes of this subsection, amounts reapplied to reduce employer
contributions under section 5.01 shall also be included as Annual
Additions. Excess Elective Deferrals and Excess Contributions shall be
treated as Annual Additions under the Plan.
Amounts allocated, after March 31, 1984, to an individual medical
account, as defined in section 415(l)(2) of the Code, which is part of
a pension or annuity plan maintained by the Employer, are treated as
Annual Additions to a defined contribution plan. Also, amounts derived
from contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to post-retirement
medical benefits allocated to the separate account of a key employee,
as defined in section 419A(d)(3) of the Code, under a welfare benefit
fund, as defined in section 419(e), maintained by the Employer, are
treated as Annual Additions to a defined contribution plan.
1.08 ANNUITY STARTING DATE:
Annuity Starting Date is the first day of the first period for which an
amount is paid as an annuity or any other form.
2
<PAGE>
1.09 APPLICABLE LIFE EXPECTANCY:
The life expectancy (or joint and last survivor expectancy) calculated
using the attained age of the Participant (or Designated Beneficiary)
as of the Participant's (or Designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year which
has elapsed since the date life expectancy was first calculated. If
life expectancy is being recalculated, the Applicable Life Expectancy
shall be the life expectancy as so recalculated. The applicable
calendar year shall be the first Distribution Calendar Year, and if
life expectancy is being recalculated, such succeeding calendar year.
Life expectancy and joint and last survivor expectancy are computed by
use of the expected return multiples in Tables V and VI of section
1.72- 9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or Spouse, in the case of
distributions described in section 7.05(c)(2)(B)) by the time
distributions are required to begin, life expectancies shall not be
recalculated annually. Such election shall be irrevocable as to the
Participant (or Spouse) and shall apply to all subsequent years. The
life expectancy of a nonspouse beneficiary may not be recalculated.
1.10 APPLICABLE PERIOD:
The Applicable Period for notice in the case of a Preretirement
Survivor Annuity is whichever of the following periods ends last:
(a) the period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the close
of the Plan Year preceding the Plan Year in which the
Participant attains age 35;
(b) a reasonable period ending after the individual becomes a
Participant;
(c) a reasonable period ending after section 7.03 first applies to
the Participant. Notwithstanding the foregoing, notice must be
provided within a reasonable period ending after separation
from service in the case of a Participant who separates from
service before attaining age 35.
For purposes of the above, a reasonable period ending after the
enumerated events described in (b) and (c) is the end of the two-year
period beginning one year prior to the date the applicable event
occurs, and ending one year after that date. In the case of a
Participant who separates from service before the Plan Year in which
age 35 is attained, notice shall be provided within the two-year period
beginning one year prior to separation and ending one year after
separation. If such a Participant thereafter returns to employment with
the Employer, the Applicable Period for such Participant shall be
redetermined.
1.11 AUTHORIZED LEAVE OF ABSENCE:
Any absence authorized by the Employer under the Employer's standard
personnel practices, so long as all persons under similar circumstances
will have such practices uniformly applied to them, and further
provided that the Participant either returns or retires within the
period of the Authorized Leave of Absence. An absence due to service in
the armed forces of the United States or of any state shall be
considered an Authorized Leave of Absence if that absence is caused by
war or other emergency or if the Participant is required to serve under
the laws of conscription in time of peace, and the Participant returns
to employment within the time provided by law.
3
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1.12 AVERAGE CONTRIBUTION PERCENTAGE ("ACP"):
The average of the Contribution Percentages of the Eligible
Participants in a specified group.
1.13 BENEFICIARY:
The person or persons designated pursuant to Article VII of the Plan to
receive a Participant's benefits upon the Participant's death, subject
to the restrictions of Article VII.
1.14 BREAK IN SERVICE:
(a) Hour of Service Method - If the Employer has specified in the
Adoption Agreement that the Hour of Service method shall be
used, then a Break in Service shall mean a Plan Year during
which an Employee does not complete more than 500 Hours of
Service with the Employer. However, in determining the Break
in Service referenced in section 1.121(a)(2), the computation
period shall be the same as that which is used to determine a
Year of Service for eligibility purposes.
Solely for purposes of determining whether a Break in Service
for eligibility and vesting purposes has occurred in a
computation period, an individual who is absent from work for
maternity or paternity reasons shall receive credit for the
Hours of Service which would otherwise have been credited to
such individual but for such absence, or in any case in which
such hours cannot be determined, 8 Hours of Service per day of
such absence. The Hours of Service credited under this
paragraph shall be credited in the computation period in which
the absence begins if the crediting is necessary to prevent a
Break in Service in that period, or, in all other cases, in
the following computation period.
(b) Regular Time Hours Method - If the Employer has specified in
the Adoption Agreement that the Regular Time Hours Method
shall be used, then a Break in Service will be determined
under the Hour of Service Method described in (a) above,
except that 375 Regular Time Hours will be substituted for 500
Hours of Service.
(c) Elapsed Time Method - If the Employer has specified in the
Adoption Agreement that the elapsed time method shall be used,
then a Break in Service shall mean a Period of Severance of at
least twelve-consecutive months.
In the case of an individual who is absent from work for
maternity or paternity reasons, the twelve-consecutive month
period beginning on the first anniversary of the first date of
such absence shall not constitute a Break in Service.
(d) For purposes of sections 1.14(a) and (c) above, an absence
from work for maternity or paternity reasons means an absence
(1) by reason of the pregnancy of the individual, (2) by
reason of the birth of a child of the individual, (3) by
reason of the placement of a child with the individual in
connection with the adoption of such child by such individual,
or (4) for purposes of caring for such child for a period
beginning immediately following such birth or placement.
1.15 CHANGE DATE:
The date or dates elected in Item 19 of the Adoption Agreement as of
which a Participant will be able to change the amount deferred pursuant
to his Deferral Agreement.
4
<PAGE>
1.16 CODE:
The Internal Revenue Code of 1986 and the regulations thereunder, as
heretofore or hereafter amended. Reference to a section of the Code
shall include that section and any comparable section or sections, or
any future statutory provision which amends, supplements or supersedes
that section.
1.17 COLLECTIVE BARGAINING AGREEMENT:
An agreement which the Secretary of Labor finds to be a collective
bargaining agreement between employee representatives and one or more
employers, if there is evidence that retirement benefits were the
subject of good faith bargaining. For this purpose, the term "employee
representatives" does not include any organization more than half of
whose members are employees who are owners, officers or executives of
the Employer.
1.18 COMMITTEE:
If the Employer so designates in the Adoption Agreement, the person or
persons appointed by the Employer to have the responsibilities set
forth in Article IX.
1.19 COMPENSATION:
(a) Compensation shall mean one of the following amounts as
elected by the Employer in item 18. of the Adoption Agreement:
(1) Wages, Tips and Other Compensation Box on Form W-2
Compensation is defined as wages as defined in
section 3401(a) of the Code and all other payments of
compensation to an employee by the employer (in the
course of the employer's trade or business) for which
the employer is required to furnish the employee a
written statement under section 6041(d) and
6051(a)(3) of the Code. Compensation must be
determined without regard to any rules under section
3401(a) that limit the remuneration included in wages
based on the nature or location of the employment or
the services performed (such as the exception for
agricultural labor in section 3401(a)(2)).
(2) Section 3401(a) Wages
Compensation is defined as wages within the meaning
of section 3401(a) for the 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 (such as the
exception for agricultural labor in section
3401(a)(2)).
(3) 415 Safe-Harbor Compensation.
Compensation is defined as wages, salaries, and fees
for professional services and other amounts received
(without regard to whether or not an amount is paid
in cash) for personal services actually rendered in
the course of employment with the employer
maintaining the plan to the extent that the amounts
are includable in gross income (including, but not
limited to, commissions paid salesmen, compensation
for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses,
fringe benefits and reimbursements or other expense
allowances under a nonaccountable plan (as described
in 1.62-2(c)), and excluding the following:
5
<PAGE>
i) Employer contributions to a plan of deferred
compensation which are not includable in the
employee's gross income for the taxable
years in which contributed, or employer
contributions under a simplified employee
pension plan to the extent such
contributions are deductible by the
employee, or any distributions from a plan
of deferred compensation;
ii) Amounts realized from the exercise of a
non-qualified stock option, or when
restricted stock (or property) held by the
employee either becomes freely transferable
or is no longer subject to a substantial
risk of forfeiture;
iii) Amounts realized from the sale, exchange or
other disposition of stock acquired under a
qualified stock option; and
iv) other amounts which received special tax
benefits, or contributions made by the
employer (whether or not under a salary
reduction agreement) towards the purchase of
an annuity contract described in section
403(b) of the Code (whether or not the
contributions are actually excludable from
the gross income of the employee).
Notwithstanding the above, if elected by the employer in the
Adoption Agreement item 18., compensation shall include any
amount which is contributed by the Employer pursuant to a
salary reduction agreement and which is not includable in the
gross income of the employee under sections 125, 402(a)(8),
402(h) or 403(b) of the Code.
For plan years beginning on or after January 1, 1989, and
before January 1, 1994, the annual Compensation of each
Participant taken into account for determining all benefits
provided under the Plan for any Compensation Determination
Period shall not exceed $200,000, as adjusted by the Secretary
at the same time and in the same manner as under section
415(d) of the Code, except that the dollar increase in effect
on January 1 of any calendar year is effective for plan years
beginning in such calendar year and the first adjustment to
the $200,000 limitation is effective on January 1, 1990.
For plan years beginning on or after January 1, 1994, the
annual compensation of each participant taken into account for
determining all benefits provided under the plan for any
Compensation Determination Period shall not exceed $150,000,
as adjusted for increases in the cost-of-living in accordance
with section 401(a)(17)(B) of the Internal Revenue Code. The
cost-of-living adjustment in effect for a calendar year
applies to any determination period beginning in such calendar
year.
If the determination period consists of fewer than 12 months,
the annual compensation limit is an amount equal to the
otherwise applicable annual compensation limit multiplied by a
fraction, the numerator of which is the number of months in
the short determination period, and the denominator of which
is 12.
In determining the Compensation of a Participant for purposes
of this limitation, the rules of section 414(q)(6) of the Code
shall apply, except that in applying such rules, the term
"family" shall include only the spouse of the Participant and
any lineal descendants of the Participant who have not
attained age 19 before the close of the year. If, as a result
of application of such rules, the adjusted annual
6
<PAGE>
compensation limitation is exceeded, then (except for purposes
of determining the portion of Compensation up to the
Integration Level if this Plan provides for permitted
disparity), the limitation shall be prorated among the
affected individuals in proportion to each such individual's
Compensation as determined under this section prior to the
application of this limitation.
If Compensation for any prior Compensation Determination
Period is taken into account in determining an employee's
allocations or benefits for the current Plan Year, the
Compensation for such prior Compensation Determination Period
is subject to the applicable annual compensation limit in
effect for that prior period. For this purpose, for years
beginning on or after January 1, 1989, the annual compensation
limit in effect for Compensation Determination Periods
beginning before that date is $200,000 (as adjusted). In
addition, in determining allocations in plan years beginning
on or after January 1, 1994, the annual compensation limit in
effect for Compensation Determination Periods beginning on or
after that date is $150,000 (as adjusted).
If so elected in Item 18.c. of the Adoption Agreement,
Compensation for purposes of allocating Employer Contributions
shall not include Compensation prior to the date the
Employee's participation in this Plan commenced. For purposes
of determining the Compensation of a Self-Employed,
Compensation shall be deemed to have been earned at a uniform
rate throughout the year, and shall include a pro rata amount
based on the number of complete months of participation in
this Plan.
If so elected in Item 18.d. of the Adoption Agreement,
Compensation for purposes of allocating Employer Contributions
shall not include any of the amounts specified in Item 18.d.
However, these amounts can be excluded for a Compensation
Determination Period only if the "compensation percentage" for
the Employer's Highly Compensated Employees is not greater
than the "compensation percentage" for the Employer's
Nonhighly Compensated Employees by more than a DE MINIMIS
amount. The compensation percentage for a group of Employees
is calculated by averaging the separately calculated
compensation ratios for each Employee in the group. An
Employee's compensation ratio is calculated by dividing the
amount of the Employee's Compensation taking Item 18.d. into
account by the amount of the Employee's Compensation without
regard to Item 18.d.
(b) When the Plan refers to "_415 Compensation," such term shall
mean the amount as elected by the Employer in item 18.a of the
Adoption Agreement determined without regard to the additional
amounts included or excluded under items 18.b., or 18.c., or
18.d. of the Adoption Agreement.
_415 Compensation for a Limitation Year is the Compensation
actually paid or includable in gross income during such
Limitation Year.
(c) For purposes of determining the Actual Contribution Percentage
and the Actual Deferral Percentage and testing under 410(b)
and 401(a)(4), Compensation shall mean an amount elected by
the Employer which satisfies the requirements of Code Section
414(s) and the regulations thereunder. Further, the Employer
may elect to exclude from Compensation considered for this
purpose any Compensation paid prior to the time the Employee
became a Participant in the Plan.
7
<PAGE>
(d) When the Plan refers to "_414(q) Compensation", such term
shall mean the amount elected by the Employer in item 18.a of
the Adoption Agreement and shall include salary deferral
contributions under sections 125, 402(a)(8), 402(h)(1)(B), and
403(b) of the Code.
1.20 COMPENSATION DETERMINATION PERIOD:
The Compensation Determination Period is the period selected by the
Employer in the Adoption Agreement over which Compensation is
determined.
1.21 CONTRACT:
A life insurance policy or annuity contract (group or individual)
issued by an insurer.
1.22 CONTRIBUTION PERCENTAGE:
The ratio (expressed as a percentage) of the Participant's Contribution
Percentage Amounts to the Participant's Compensation for the Plan Year
(whether or not the Employee was a Participant for the entire Plan
Year).
1.23 CONTRIBUTION PERCENTAGE AMOUNTS:
The sum of the Employee Contributions, Matching Contributions, and
Employer Qualified Non-Elective Contributions (to the extent not taken
into account for purposes of the ADP test) made under the Plan on
behalf of the Participant for the Plan Year. The Employer may include
Employee Elective Deferrals in the Contribution Percentage Amounts so
long as the ADP test is met before the Employee Elective Deferrals are
used in the ACP test and continues to be met following the exclusion of
those Employee Elective Deferrals that are used to meet the ACP test.
1.24 DEFERRAL AGREEMENT:
A written agreement between an Employee who has otherwise satisfied the
participation requirements of Section 2.01 and the Employer which
provides that the Participant's cash compensation will be reduced in
accordance with Item 19 of the Adoption Agreement and that the Employer
will contribute an equivalent amount to the Trust as an Employee
Elective Deferral on behalf of such Participant. Under no circumstances
shall a Deferral Agreement be adopted retroactively.
1.25 DEFINED BENEFIT FRACTION:
A fraction, the numerator of which is the sum of the Participant's
Projected Annual Benefits under all the defined benefit plans (whether
or not terminated) maintained by the Employer, and the denominator of
which is the lesser of 125 percent of the dollar limitation determined
for the Limitation Year under sections 415(b) and (d) of the Code or
140 percent of the Highest Average Compensation, including any
adjustments under section 415(b) of the Code.
Notwithstanding the above, if the Participant was a participant as of
the first day of the first Limitation Year beginning after December 31,
1986, in one or more defined benefit plans maintained by the Employer
which were in existence on May 6, 1986, the denominator of this
fraction will not be less than 125 percent of the sum of the annual
benefits under such plans which the Participant had accrued as of the
close of the last Limitation Year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the Plan after
May 5, 1986. The preceding sentence applies only if the defined benefit
plans individually and in the aggregate satisfied the requirements of
section 415 for all Limitation Years beginning before January 1, 1987.
8
<PAGE>
1.26 DEFINED CONTRIBUTION DOLLAR LIMITATION:
$30,000 or if greater, one-fourth of the defined benefit dollar
limitation set forth in section 415(b)(1) of the Code as in effect for
the Limitation Year.
1.27 DEFINED CONTRIBUTION FRACTION:
A fraction, the numerator of which is the sum of the Annual Additions
to the Participant's account under all the defined contribution plans
(whether or not terminated) maintained by the Employer for the current
and all prior Limitation Years, (including the Annual Additions
attributable to the Participant's nondeductible employee contributions
to all defined benefit plans, whether or not terminated, maintained by
the Employer and the Annual Additions attributable to all welfare
benefit funds, as defined in section 419(e) of the Code, and individual
medical accounts, as defined in section 415(l)(2) of the Code,
maintained by the Employer), and the denominator of which is the sum of
the maximum aggregate amounts for the current and all prior Limitation
Years of service with the Employer (regardless of whether a defined
contribution plan was maintained by the Employer). The maximum
aggregate amount in any Limitation Year is the lesser of 125 percent of
the dollar limitation determined under sections 415(b) and (d) of the
Code in effect under section 415(c)(1)(A) of the Code or 35 percent of
the Participant's _415 Compensation for such year.
If the Employee was a Participant as of the end of the first day of the
first Limitation Year beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction will be
adjusted if the sum of this fraction and the Defined Benefit Fraction
would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the excess of the sum
of the fractions over 1.0 times (2) the denominator of this fraction,
will be permanently subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they would be computed
as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the
plan made after May 5, 1986, but using the section 415 limitation
applicable to the first Limitation Year beginning on or after January
1, 1987. The Annual Addition for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all employee
contributions as Annual Additions.
1.28 DESIGNATED BENEFICIARY:
The individual who is designated as the Beneficiary under the Plan in
accordance with section 401(a)(9) of the Code and the regulations
thereunder.
1.29 DETERMINATION DATE:
For the first Plan Year of the Plan, the last day of that year. For any
subsequent Plan Year, the last day of the preceding Plan Year.
1.30 DIRECT ROLLOVER:
A Direct Rollover is a payment by the Plan to the Eligible Retirement
Plan specified by the Distributee.
1.31 DISABILITY:
A medically determinable physical or mental condition resulting from
bodily injury, disease, or mental disorder which is expected to be of
long and indefinite duration and which renders a Participant incapable
of continuing his usual and customary employment with the Employer.
Disability shall be determined by a licensed physician selected by the
Administrator.
9
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1.32 DISTRIBUTEE:
A Distributee is a Participant or a former Participant who is eligible
to receive a distribution from this Plan. In addition, a Distributee
includes a Participant's or former Participant's Spouse or former
Spouse who is the alternate payee under a qualified domestic relations
order, as defined in section 414(p) of the Code with regard to the
interest of the Spouse or former Spouse.
1.33 DISTRIBUTION CALENDAR YEAR:
A calendar year for which a minimum distribution is required. For
distributions beginning before the Participant's death, the first
Distribution Calendar Year is the calendar year immediately preceding
the calendar year which contains the Participant's Required Beginning
Date. For distributions beginning after the Participant's death, the
first Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to section 7.05(c).
1.34 EARNED INCOME:
The net earnings from self-employment in the trade or business with
respect to which the Plan is established, for which personal services
of the Self-Employed are a material income-producing factor. Net
earnings will be determined without regard to items not included in
gross income and the deductions allocable to such items. Net earnings
are reduced by contributions by the Employer to a qualified plan to the
extent deductible under section 404 of the Code. Net earnings shall be
determined with regard to the deduction allowed to the Employer by
section 164(f) of the Code for taxable years beginning after December
31, 1989.
1.35 ELIGIBLE PARTICIPANT:
Any Employee who is eligible to make an Employee Contribution, or an
Employee Elective Deferral (if the Employer takes such contributions
into account in the calculation of the Contribution Percentage), or to
receive an Employer Matching Contribution (including forfeitures) or an
Employer Qualified Matching Contribution.
1.36 ELIGIBLE RETIREMENT PLAN:
An Eligible Retirement Plan is an individual retirement account
described in section 408(a) of the Code, an individual retirement
annuity described in section 408(b) of the Code, an annuity plan
described in section 403(a) of the Code, or a qualified trust described
in section 401(a) of the Code, that accepts the Distributee's Eligible
Rollover Distribution. However, in the case of an Eligible Rollover
Distribution to the Surviving Spouse, an Eligible Retirement Plan is an
individual retirement account or individual retirement annuity.
1.37 ELIGIBLE ROLLOVER DISTRIBUTION:
Any distribution of all or any portion of the balance to the credit of
the Distributee, except:
(a) a distribution that is one of a series of substantially equal
periodic payments, made not less frequently than annually,
that is made over the life or life expectancy of the
Distributee, or the joint lives of the Distributee and the
Distributee's designated Beneficiary, the joint life and last
survivor expectancy of the Distributee and the Distributee's
designated Beneficiary, or a specified period of ten years or
more; or,
(b) any distribution to the extent the distribution is required
under section 401(a)(9) of the Code; or,
10
<PAGE>
(c) the portion of any distribution that is not includable in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities); or,
(d) such other distributions the Secretary or Commissioner
designates ineligible for treatment as Eligible Rollover
Distributions in regulations, rulings, notices or other
guidance of general applicability.
1.38 EMPLOYEE:
Any employee of the Employer maintaining the Plan or of any other
employer required to be aggregated with such Employer under sections
414(b), (c), (m) or (o) of the Code. The term "Employee" shall also
include any "Leased Employee" deemed to be an employee of any employer
described in the previous sentence as provided in sections 414(n) or
(o) of the Code.
A Leased Employee shall not be considered an employee of the recipient
if: (a) such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least
10 percent of compensation, as defined in section 415(c)(3) of the
Code, but including amounts contributed pursuant to a salary reduction
agreement which are excludable from the employee's gross income under
section 125, section 402(a)(8), section 402(h) or section 403(b) of the
Code, (2) immediate participation, and (3) full and immediate vesting;
and (b) Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce.
1.39 EMPLOYEE CONTRIBUTION:
Any contribution made to the Plan by or on behalf of a Participant that
is included in the Participant's gross income in the year in which made
and that is maintained under a separate account to which earnings and
losses are allocated.
1.40 EMPLOYEE ELECTIVE DEFERRALS:
Any Employer contributions made to the Plan at the election of the
Participant, in lieu of cash compensation, including contributions made
pursuant to a Deferral Agreement or other deferral mechanism. With
respect to any taxable year, a Participant's Employee Elective
Deferrals is the sum of all employer contributions made on behalf of
such Participant pursuant to an election to defer under any qualified
cash or deferred arrangement as described in section 401(k) of the
Code, any simplified employee pension cash or deferred arrangement as
described in section 402(h)(1)(B), any eligible deferred compensation
plan under section 457, any plan as described under section 501(c)(18),
and any employer contributions made on the behalf of a Participant for
the purchase of an annuity contract under section 403(b) pursuant to a
salary reduction agreement.
1.41 EMPLOYEE ELECTIVE DEFERRAL ACCOUNT:
The account maintained with respect to a Participant in which is
recorded his Employee Elective Deferrals under this Plan and any
adjustments thereto.
1.42 EMPLOYEE POST-TAX VOLUNTARY CONTRIBUTIONS:
Amounts contributed by a Participant pursuant to section 3.06 of the
Plan.
1.43 EMPLOYEE POST-TAX VOLUNTARY CONTRIBUTION ACCOUNT:
The account maintained with respect to a Participant in which is
recorded his Employee Post-Tax Voluntary Contributions and adjustments
thereto.
11
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1.44 EMPLOYEE ROLLOVER/TRANSFER CONTRIBUTIONS:
Amounts received by the Trustee which either -
(a) Were received by a Participant from another Qualified Deferred
Compensation Plan and were then contributed to the Trustee of
this Plan in such manner that the requirements for deferral of
income pursuant to section 402(a)(5), 403(a)(4),
408(d)(3)(A)(ii), or other applicable provision of the Code
dealing with rollover contributions are met; or
(b) Were transferred on behalf of a Participant directly to the
Trustee of this Plan by the Trustee of another Qualified
Deferred Compensation Plan, provided such transfer meets any
applicable requirements of law.
1.45 EMPLOYEE ROLLOVER/TRANSFER ACCOUNT:
The account maintained with respect to a Participant in which is
recorded his Employee Rollover/Transfer Contributions and any
adjustments thereto.
1.46 EMPLOYEE VDEC CONTRIBUTIONS:
Amounts received by the Trustee which are voluntary deductible employee
contributions. This Plan will not accept deductible employee
contributions which are made for a taxable year beginning after
December 31, 1986.
1.47 EMPLOYEE VDEC ACCOUNT:
The account maintained with respect to a Participant in which is
recorded his Employee VDEC Contributions and any adjustments thereto.
The account will be nonforfeitable at all times. The account will share
in the gains and losses of the trust in the same manner as described in
section 4.01(h) of the Plan. No part of the account will be used to
purchase life insurance.
1.48 EMPLOYER:
The sole proprietorship, partnership, corporation or other entity whose
name appears on the Adoption Agreement executed by it, any successor
which elects to continue the Plan, and any predecessor which has
maintained this Plan.
For purposes of section 5.01, "Employer" shall include not only the
Employer adopting this Plan, but also all Affiliated Employers.
1.49 EMPLOYER CONTRIBUTION ACCOUNT:
The account maintained with respect to a Participant which consists of
his Employer Profit Sharing Account, Employer Matching Account,
Employer Qualified Matching Account, and Employer Qualified
Non-Elective Account.
1.50 EMPLOYER MATCHING CONTRIBUTIONS:
Amounts contributed to the Plan by the Employer for a Plan Year
pursuant to section 3.03(a) of the Plan.
1.51 EMPLOYER MATCHING CONTRIBUTION ACCOUNT:
The account maintained with respect to a Participant in which is
recorded his Employer Matching Contributions under this Plan and any
adjustments thereto.
1.52 EMPLOYER PROFIT SHARING CONTRIBUTIONS:
Amounts contributed to the Plan by the Employer for a Plan Year
pursuant to section 3.04 of the Plan.
12
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1.53 EMPLOYER PROFIT SHARING CONTRIBUTION ACCOUNT:
The account maintained with respect to a Participant in which is
recorded his Employer Profit Sharing Contributions and any adjustments
thereto.
1.54 EMPLOYER QUALIFIED MATCHING CONTRIBUTIONS:
Amounts contributed to the Plan by the Employer for a Plan Year and
designated as such pursuant to section 3.03(b) of the Plan. Such
contributions are nonforfeitable when made and are distributable only
in accordance with the distribution provisions that are applicable to
Employee Elective Deferrals. These amounts will be determined in
accordance with the provisions of Section 1.401(k)-1(b)(5) of the Code,
which are incorporated herein by this reference.
1.55 EMPLOYER QUALIFIED MATCHING CONTRIBUTION ACCOUNT:
The account maintained with respect to a Participant in which is
recorded his Employer Qualified Matching Contributions and any
adjustments thereto.
1.56 EMPLOYER QUALIFIED NON-ELECTIVE CONTRIBUTIONS:
Amounts contributed to the Plan by the Employer for a Plan Year and
designated as such pursuant to section 3.05 of the Plan. Participants
shall have no right to elect to receive such contributions in cash
until such amounts are otherwise distributable under the Plan. Such
contributions are nonforfeitable when made and are distributable only
in accordance with the distribution provisions that are applicable to
Employee Elective Deferrals. These amounts will be determined in
accordance with the provisions of Section 1.401(k)-1(b)(5) and Section
1.401(m)-1(b)(5) of the Code, which are incorporated herein by this
reference.
1.57 EMPLOYER QUALIFIED NON-ELECTIVE CONTRIBUTION ACCOUNT:
The account maintained with respect to a Participant in which is
recorded his Employer Qualified Non-Elective Contributions and any
adjustments thereto.
1.58 ENTRY DATE:
The date or dates set out in the Adoption Agreement as of which an
Employee who has satisfied the eligibility requirements may enter this
Plan and become a Participant hereunder.
1.59 ERISA:
Public Law No. 93-406, known as the "Employee Retirement Income
Security Act of 1974," as amended from time to time.
1.60 EXCESS AGGREGATE CONTRIBUTIONS:
With respect to any Plan Year, the excess of:
(a) The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution
Percentage actually made on behalf of Highly Compensated
Employees for such Plan Year, over
(b) The maximum Contribution Percentage Amounts permitted by the
ACP test (determined by reducing contributions made on behalf
of Highly Compensated Employees in order of their Contribution
Percentages beginning with the highest of such percentages).
Such determination shall be made after first determining Excess
Elective Deferrals pursuant to section 5.04 and then determining Excess
Contributions pursuant to section 5.05.
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1.61 EXCESS AMOUNT:
The excess of the Participant's Annual Additions for the Limitation
Year over the Maximum Permissible Amount.
1.62 EXCESS COMPENSATION:
A Participant's Compensation in excess of the Integration Level.
1.63 EXCESS COMPENSATION PERCENTAGE:
The percentage in Item 24 of the Adoption Agreement, which shall not
exceed the percentage equal to the portion of the rate of tax under
section 3111(a) of the Code in effect at the beginning of the Plan Year
which is attributable to old-age insurance. If the Integration Level is
less than the Taxable Wage Base, the Excess Compensation Percentage
shall not exceed the following applicable percentage:
If the Integration Level is:
----------------------------
<TABLE>
<CAPTION>
more than but not more than the applicable percentage is
--------- ----------------- ----------------------------
<S> <C> <C>
$0 X* 5.7%
X* of TWB 80% of the TWB 4.3%
80% of TWB Y** 5.4%
</TABLE>
X* = the greater of $10,000 or 20% of the TWB
Y** = any amount more than 80% but less than 100% of the TWB
1.64 EXCESS CONTRIBUTIONS:
With respect to any Plan Year, the excess of:
(a) The aggregate amount of Employer contributions (as defined in
section 1.01) actually taken into account in computing the ADP
of Highly Compensated Employees for such Plan Year, over
(b) The maximum amount of such contributions permitted by the ADP
test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of the ADPs, beginning
with the highest of such percentages).
1.65 EXCESS ELECTIVE DEFERRALS:
Those Employee Elective Deferrals that are includable in a
Participant's gross income under section 402(g) of the Code to the
extent such Participant's Employee Elective Deferrals for a taxable
year exceed the dollar limitation under such Code section.
1.66 FAMILY MEMBER:
An individual described in Section 414(q)(6)(B) of the Code. Generally,
this term includes, with respect to a Participant, such Participant's
spouse and lineal ascendants or descendants and the spouses of such
lineal ascendants or descendants.
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1.67 FORFEITURE:
That portion of a Participant's Employer Contribution Account which is
not vested and thus becomes a Forfeiture on the earlier of:
(a) the date of the distribution (or deemed distribution pursuant
to section 7.08(a)) of the Vested Percentage of a
Participant's Employer Contribution Account; or
(b) the last day of the Plan Year in which the Participant incurs
five consecutive 1-year Breaks in Service.
1.68 FORMER PARTICIPANT:
A Participant whose employment with the Employer has terminated or who
ceased to be a Participant for any reason.
1.69 HIGHEST AVERAGE COMPENSATION:
The average _415 Compensation for the three consecutive years of
service with the Employer that produces the highest average. A year of
service with the Employer is the Limitation Year specified in the
Adoption Agreement.
1.70 HIGHLY COMPENSATED EMPLOYEE:
Any Employee who is a "highly compensated active employee" or a "highly
compensated former employee."
(a) Unless otherwise elected in the Adoption Agreement, a "highly
compensated active employee" is any Employee who performed
service for the Employer during the determination year and
who, during the look-back year:
(1) received _414(q) Compensation from the Employer in
excess of $75,000 (as adjusted pursuant to section
415(d) of the Code).
(2) received _414(q) Compensation from the Employer in
excess of $50,000 (as adjusted pursuant to section
415(d) of the Code) and who was in the Top Paid Group
of Employees for such Plan Year.
(3) was an officer of the Employer and received _414(q)
Compensation greater than 50% of the amount in effect
under Code Section 415(b)(1)(A) during such year. If
none of the officers of the Employer meet the
compensation requirement of the preceding sentence,
then the most highly compensated officer will be
treated as a Highly Compensated Employee, regardless
of the level of _414(q) Compensation.
(4) was both described in (1), (2), or (3) above if the
term "determination year" is substituted for the term
"look-back year" and was one of the 100 Employees who
received the most _414(q) Compensation from the
Employer during the determination year.
(5) was a "five percent owner" of the Employer at any
time during the look-back year or the determination
year. "Five percent owner" means any person who owns
(or is considered as owning within the meaning of
section 318 of the Code) more than five percent (5%)
of the outstanding stock of the Employer or
possessing more than five percent (5%) of the capital
or profits interest in the Employer. In determining
percentage ownership hereunder, employers that would
otherwise be aggregated
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under Code Sections 414(b), (c) and (m) shall be
treated as separate employers.
(b) A "highly compensated former employee" includes any Employee
who separated from service (or was deemed to have separated)
prior to the determination year, performs no service for the
Employer during the determination year, and was a highly
compensated active employee for either the separation year or
any determination year ending on or after the Employee's 55th
birthdate.
(c) If an Employee is, during a determination year or look-back
year, a Family Member of either a 5 percent owner who is an
active or former employee or a Highly Compensated Employee who
is one of the 10 most highly compensated employees ranked on
the basis of _414(q) Compensation paid by the Employer during
such year, then the Family Member and the 5 percent owner or
top-ten highly compensated employee shall be aggregated. In
such case, the Family Member and 5 percent owner or top-ten
Highly Compensated Employee shall be treated as a single
Employee receiving Compensation and plan contributions or
benefits equal to the sum of such compensation and
contributions or benefits of the family member and 5 percent
owner or top-ten Highly Compensated Employee.
(d) For purposes of this section, the determination year shall be
the Plan Year. The look-back year shall be the twelve-month
period immediately preceding the determination year unless the
Employer, in its sole and absolute discretion, elects to make
the look-back year calculation for a determination year on the
basis of the calendar year ending with or within the
applicable determination year (or, in the case of a
determination year that is shorter than 12 months, the
calendar year ending with the end of the determination year in
question). If the applicable period for which the
determination is being made is the calendar year, the Employer
may still elect to make the calendar year calculation. In
order for such calendar year election to be effective, it must
apply with respect to all plans, entities and arrangements of
the Employer and must be made pursuant to the requirements of
Treasury Regulation section 1.414(q)-1T, Q&A-14, or any final
regulations or rulings issued with respect thereto.
(e) The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of
Employees in the top-paid group, the top 100 Employees, the
number of Employees treated as officers and the Compensation
that is considered, will be made in accordance with section
414(q) of the Code and the regulations thereunder.
(f) If the Employer has elected in the Adoption Agreement to
determine the Highly Compensated Employees under the method
described in section 414(q)(12) of the Code, paragraph (a)(1)
of this section will be modified by substituting $50,000 for
$75,000 and paragraph (a)(2) will be disregarded. This
simplified definition of Highly Compensated Employee will
apply only to Employers that maintain significant business
activities (and employ Employees) in at least two
significantly separate geographic areas, and in compliance
with section 414(q)(12) of the Code.
1.71 HOUR OF SERVICE:
(a) (1) Each hour for which an Employee is paid, or
entitled to payment, for the performance of duties
for the Employer. These hours shall be credited to
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the Employee for the computation period in which the
duties are performed;
(2) Each hour for which an Employee is paid, or is
entitled to payment, on account of a period during
which no duties have been performed (irrespective of
whether the employment relationship has terminated)
due to vacation, holiday, illness, incapacity
(including Disability), layoff, jury duty, military
duty, maternity or paternity leave (as described in
section 1.14(d)) or Authorized Leave of Absence. No
more than 501 Hours of Service shall be credited
under this paragraph for any single continuous period
(whether or not such period occurs in a single
computation period). Hours shall be calculated and
credited under this paragraph pursuant to section
2530.200b-2 of the Department of Labor Regulations,
which are incorporated herein by this reference; and
(3) Each hour for which back pay, without regard to
mitigation of damages, is either awarded or agreed to
by the Employer. The same Hours of Service shall not
be credited both under paragraph (1) or (2), as the
case may be, and under this paragraph (3). These
hours shall be credited to the Employee for the
eligibility computation period or periods to which
the award or agreement pertains, rather than to the
eligibility computation period in which the award,
agreement or payment is made.
(b) Hours of Service will be credited for employment with an
Affiliated Employer.
(c) Hours of Service will also be credited for any individual
considered an Employee for purposes of this Plan under section
414(n) or 414(o) of the Code.
(d) Hours of Service shall be determined from the records of the
Employer. However, if the Employer elects an alternative
method of crediting service in the Adoption Agreement, then in
lieu of crediting on the basis of hours actually completed,
Hours of Service shall be credited on the basis of the method
selected.
(e) Where the Employer maintains the plan of a predecessor
employer, service for such predecessor shall be treated as
service for the Employer.
(f) The provisions of this section shall be construed so as to
resolve any ambiguities in favor of crediting Employees with
Hours of Service.
1.72 INTEGRATION LEVEL:
The amount specified in Item 24 of the Adoption Agreement, which shall
not exceed the Taxable Wage Base.
1.73 INVESTMENT MANAGER:
Any person, firm or corporation who is a registered investment advisor
under the Investment Advisors Act of 1940, a bank or an insurance
company, who has the power to manage, acquire or dispose of Plan
assets, and who acknowledges in writing his fiduciary responsibility to
the Plan.
1.74 JOINT AND SURVIVOR ANNUITY:
An immediate annuity for the life of the Participant with a survivor
annuity for the life of the Participant's Spouse equal to 50% of the
amount of the annuity payable during the joint lives of the Participant
and the Participant's Spouse, and which is the amount of benefit which
can be purchased with the Vested Percentage of the Participant's
Account.
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1.75 KEY EMPLOYEE:
Any Employee or former Employee (and the beneficiaries of such Employee
if such Employee has died) who, at any time during the Plan Year or the
four preceding Plan Years (including Plan Years before 1984), is:
(a) One of the ten Employees who are owners (as defined in section
318 of the Code) of both more than one-half percent (1/2%)
interest and the largest interests in the Employer, if such
Employee's compensation exceeds the dollar amount under
section 415(c)(1)(A) of the Code for the calendar year in
which such Plan Year ends;
(b) An owner of more than five percent (5%) of the Employer;
(c) An owner of more than one percent (1%) of the Employer having
an annual compensation from the Employer of more than
$150,000.00; or
(d) An officer of the Employer, if such individual's annual
compensation exceeds 50% of the dollar limitation under
section 415(b)(1)(A) of the Code for the calendar year in
which such Plan Year ends. For Plan Years beginning prior to
February 28, 1985, an officer shall only be considered a Key
Employee if the Employer is a corporation.
"Compensation" means _415 Compensation, but including amounts
contributed by the Employer pursuant to a salary reduction agreement
which are excludable from the Employee's gross income under section
125, section 402(a)(8), section 402(h), or section 403(b) of the Code.
Determination of who is a Key Employee will be made in accordance with
section 416(i)(l) of the Code.
1.76 LEASED EMPLOYEE:
Any person (other than an employee of the recipient) who pursuant to an
agreement between the recipient and any other person ("leasing
organization") has performed services for the recipient (or for the
recipient and related persons determined in accordance with section
414(n)(6) of the Code) on a substantially full time basis for a period
of at least one year, and such services are of a type historically
performed by employees in the business field of the recipient employer.
Contributions or benefits provided a Leased Employee by the leasing
organization which are attributable to services performed for the
recipient employer shall be treated as provided by the recipient
employer.
1.77 LIMITATION YEAR:
A calendar year or the 12-consecutive month period elected by the
Employer in Item 10 of the Adoption Agreement. All qualified plans
maintained by the Employer must use the same Limitation Year. If the
Limitation Year is amended to a different 12-consecutive month period,
the new Limitation Year must begin on a date within the Limitation Year
in which the amendment is made.
1.78 MASTER OR PROTOTYPE PLAN:
A master or prototype plan the form of which is the subject of a
favorable opinion letter or a regional prototype plan which receives a
notification letter from the Internal Revenue Service.
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1.79 MATCHING CONTRIBUTION:
An Employer contribution made to this or any other defined contribution
plan on behalf of a Participant on account of an Employee Contribution
made by such Participant, or on account of a Participant's Employee
Elective Deferral, under a plan maintained by the Employer.
1.80 MAXIMUM PERMISSIBLE AMOUNT:
The maximum Annual Addition that may be contributed or allocated to a
Participant's account under the Plan for any Limitation Year shall not
exceed the lesser of:
(a) the Defined Contribution Dollar Limitation, or
(b) 25 percent of the Participant's _415 Compensation for the
Limitation Year.
The compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits (within the meaning of section 401(h)
or section 419A(f)(2) of the Code) which is otherwise treated as an
Annual Addition under section 415(1)(1) or 419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment changing
the Limitation Year to a different 12-consecutive month period, the
Maximum Permissible Amount will not exceed the Defined Contribution
Dollar Limitation multiplied by the following fraction:
number of months in the Short Limitation Year
---------------------------------------------
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1.81 NONHIGHLY COMPENSATED EMPLOYEE:
An Employee who is neither a Highly Compensated Employee nor a Family
Member of a Highly Compensated Employee.
1.82 NONRESIDENT ALIEN:
A nonresident alien who receives no earned income from the Employer
which constitutes income from sources within the United States (with
the meaning of section 861(a)(3) of the Code).
1.83 NORMAL RETIREMENT AGE:
The age specified in the Adoption Agreement, which may not exceed age
65. Normal Retirement Age may not exceed any mandatory retirement age
enforced by the Employer.
1.84 NORMAL RETIREMENT DATE:
The day on which a Participant attains the Normal Retirement Age
specified in the Adoption Agreement.
1.85 OWNER-EMPLOYEE:
An individual who is a sole proprietor or who is a partner who owns
more than 10% of either the capital or profits interest of the
partnership.
1.86 PARTICIPANT:
An Employee who has satisfied the eligibility requirements contained in
the Adoption Agreement and in section 2.01 of the Plan with respect to
a particular type of contribution, and who was employed by the Employer
on the Entry Date. Such
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Employee is a Participant only with respect to the type(s) of
contribution for which the eligibility and Entry Date requirements have
been satisfied.
1.87 PARTICIPANT'S ACCOUNT:
The individual account established and maintained for each Participant,
Former Participant or Beneficiary who has an interest in the Trust
Fund. A Participant's Account shall be comprised of the following
accounts, if applicable: Employer Profit Sharing Contribution Account,
Employer Matching Contribution Account, Employer Qualified Matching
Contribution Account, Employer Qualified Non-Elective Contribution
Account, Employee Elective Deferral Account, Employee Post-Tax
Voluntary Contribution Account, Employee Rollover/Transfer Contribution
Account, and Employee VDEC Account.
1.88 PARTICIPANT'S BENEFITS:
The balance of the Participant's Account as of the last Valuation Date
in the calendar year immediately preceding the Distribution Calendar
Year (valuation calendar year) increased by the amount of any
contributions or Forfeitures allocated to the Participant's Account
balance as of dates in the valuation calendar year after the Valuation
Date and decreased by distributions made in the valuation calendar year
after the Valuation Date. However, if any portion of the minimum
distribution for the first Distribution Calendar Year is made in the
second Distribution Calendar Year on or before the Required Beginning
Date, the amount of the minimum distribution made in the second
Distribution Calendar Year shall be treated as if it had been made in
the immediately preceding Distribution Calendar Year.
1.89 PERIOD OF SERVICE:
The period running from the date an Employee first completes an Hour of
Service upon employment or reemployment and ending on the date a Period
of Severance begins. For purposes of eligibility and vesting, a Period
of Service shall include a Period of Severance of less than 12
consecutive months.
1.90 PERIOD OF SEVERANCE:
The period beginning on the earlier of (a) the date on which an
Employee quits, retires, is discharged or dies, or (b) the first
anniversary of the first date of a period in which an Employee remains
absent from service with the Employer for any reason other than quit,
retirement, discharge or death.
1.91 PERMISSIVE AGGREGATION GROUP:
The Required Aggregation Group of plans plus any other plan or plans of
the Employer which, when considered as a group with the Required
Aggregation Group, would continue to satisfy the requirements of
sections 401(a)(4) and 410 of the Code.
1.92 PLAN:
This Profit Sharing Plan and Trust adopted by the Employer, as provided
herein and on the Adoption Agreement executed by the Employer. Unless
otherwise indicated, any reference to the Plan shall also include the
Adoption Agreement.
1.93 PLAN YEAR:
The 12-consecutive month period specified by the Employer in the
Adoption Agreement.
1.94 PRERETIREMENT SURVIVOR ANNUITY:
An annuity for the life of the Participant's Spouse in an amount which
can be purchased with the entire balance of the Participant's Account.
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1.95 PRESENT VALUE:
Present Value shall be based on the interest and mortality rates
specified in the Adoption Agreement.
1.96 PROJECTED ANNUAL BENEFIT:
The annual retirement benefit (adjusted to an actuarially equivalent
straight life annuity if such benefit is expressed in a form other than
a straight life annuity) or qualified joint and survivor annuity to
which the Participant would be entitled under the terms of the Plan
assuming:
(a) the Participant will continue employment until Normal
Retirement Age under the Plan (or current age, if later), and
(b) the Participant's Compensation for the current Limitation Year
and all other relevant factors used to determine benefits
under the Plan will remain constant for all future Limitation
Years.
1.97 QUALIFIED DEFERRED COMPENSATION PLAN:
Any pension, profit sharing, stock bonus, or other plan which meets the
requirements of section 401 of the Code, which includes a trust exempt
from tax under section 501(a) of the Code; any annuity plan described
in section 403(a) of the Code; and any such plan established for its
employees by the United States or by a state or political division
thereof, or by an agency or instrumentality of any of the foregoing.
1.98 QUALIFIED EARLY RETIREMENT AGE:
The latest of:
(a) The earliest date, under the Plan, on which the Participant
may elect to receive retirement benefits,
(b) The first day of the 120th month beginning before the
Participant reaches Normal Retirement Age, or
(c) The date the Participant begins participation.
1.99 QUALIFIED ELECTION:
An election to waive a Joint and Survivor Annuity or a Preretirement
Survivor Annuity which meets the following requirements:
(a) the Participant's Spouse consents in writing to the election;
(b) the election designates a specific beneficiary, including any
class of beneficiaries or any contingent beneficiaries, which
may not be changed without spousal consent (or the Spouse
expressly permits designations by the Participant without any
further spousal consent);
(c) the Spouse's consent acknowledges the effect of the election;
and
(d) the Spouse's consent is witnessed by a Plan representative or
notary public.
A Participant's waiver of the Joint and Survivor Annuity shall not be
effective unless the election designates a form of benefit payment
which may not be changed without spousal consent (or the Spouse
expressly permits designations by the Participant without any further
spousal consent). If it is established to the satisfaction of a Plan
representative
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that there is no Spouse or that the Spouse cannot be located, a waiver
will be deemed a Qualified Election. A Participant may elect to or
revoke an election to waive a Joint and Survivor Annuity at any time
any number of times within the applicable election period.
1.100 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY ELECTION PERIOD:
The period which begins on the first day of the Plan Year in which the
Participant attains age 35 and ends on the date of the Participant's
death. If a Participant separates from service prior to the first day
of the Plan Year in which age 35 is attained, the election period shall
begin on the date of separation. A Participant who will not yet attain
age 35 as of the end of any current Plan Year may make a special
qualified election to waive the Preretirement Survivor Annuity for the
period beginning on the date of such election and ending on the first
day of the Plan Year in which the Participant will attain age 35. Such
election shall not be valid unless the Participant receives a written
explanation of the Preretirement Survivor Annuity in such terms as are
comparable to the explanation required under section 7.09. The
Preretirement Survivor Annuity will automatically become applicable as
of the first day of the Plan Year in which the Participant attains age
35. Any new waiver on or after such date shall be subject to the full
requirements of article VI.
1.101 REGULAR EMPLOYEE:
Any Employee (or former Employee) who is not a Key Employee.
1.102 REGULAR TIME HOUR:
(a) (1) Each hour, except those hours described in (3.)
below, for which an Employee is paid, or entitled to
payment, for the performance of duties for the
Employer. These hours shall be credited to the
Employee for the computation period in which the
duties are performed;
(2) Each hour, except those hours described in (3.)
below, for which back pay, without regard to
mitigation of damages, is either awarded or agreed to
by the Employer. The same Regular Time Hour shall not
be credited both under paragraph (1) and this
paragraph (2). These hours shall be credited to the
Employee for the computation period or periods to
which the award or agreement pertains, rather than to
the computation period in which the award, agreement
or payment is made.
(3) Regular Time Hours shall not include:
i) Hours for which a premium rate is paid
because such hours are in excess of the
maximum workweek applicable to an Employee
under section 7(a) of the Fair Labor
Standards Act of 1938, as amended, or
because such hours are in excess of a bona
fide standard workweek or workday.
ii) Hours for which an Employee is paid, or is
entitled to payment, on account of a period
during which no duties have been performed
due to vacation, holiday, illness,
incapacity (including Disability), layoff,
jury duty, military duty, maternity or
paternity leave or Authorized Leave of
Absence.
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1.103 REQUIRED AGGREGATION GROUP:
(a) Each qualified plan of the Employer in which at least one Key
Employee is participating or participated at any time during
the Plan Year containing the Determination Date or any of the
four preceding Plan Years (regardless of whether the plan has
terminated); and
(b) Any other qualified plan of the Employer which enables a plan
described in (a) above to meet the requirements of sections
401(a)(4) or 410 of the Code.
1.104 REQUIRED BEGINNING DATE:
The Required Beginning Date of a Participant is the first day of April
of the calendar year following the calendar year in which the
Participant attains age 70-1/2, except as follows:
(a) The Required Beginning Date of a Participant who attains age
70- 1/2 before January 1, 1988, shall be determined in
accordance with (1) or (2) below:
(1) Non-5-percent owners. The Required Beginning Date for
a Participant who is not a 5-percent owner is the
first day of April of the calendar year following the
calendar year in which the later of retirement or
attainment of age 70- 1/2 occurs.
(2) 5-percent owners. The Required Beginning Date of a
Participant who is a 5-percent owner during any year
beginning after December 31, 1979, is the first day
of April following the later of:
(A) the calendar year in which the Participant
attains age 70-1/2, or
(B) the earlier of the calendar year with or
within which ends the Plan Year in which the
Participant becomes a 5-percent owner, or
the calendar year in which the Participant
retires.
A Participant is treated as a 5-percent
owner for purposes of this section if such
Participant is a 5-percent owner as defined
in section 416(i) of the Code (determined in
accordance with section 416 but without
regard to whether the plan is top-heavy) at
any time during the Plan Year ending with or
within the calendar year in which such owner
attains age 66-1/2 or any subsequent Plan
Year.
Once distributions have begun to a 5-percent
owner under this section, they must continue
to be distributed, even if the Participant
ceases to be a 5-percent owner in a
subsequent year.
(b) The Required Beginning Date of a Participant who is not a 5-
percent owner who attains age 70-1/2 during 1988 and who has
not retired as of January 1, 1989, is April 1, 1990.
1.105 SELF-EMPLOYED:
An individual who has Earned Income for the Taxable Year from the trade
or business for which the Plan is established, and an individual who
would have had Earned Income except for the fact that the trade or
business had no net profits for the Taxable Year.
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1.106 SPONSOR:
Plan Data, Inc., the sponsor of this regional prototype plan.
1.107 SPOUSE, SURVIVING SPOUSE:
The Spouse or Surviving Spouse of the Participant, provided that a
former Spouse will be treated as the Spouse or Surviving Spouse and a
current spouse will not be treated as the Spouse or the Surviving
Spouse to the extent provided under a qualified domestic relations
order as described in section 414(p) of the Code.
1.108 SUPER TOP-HEAVY PLAN:
A Top-Heavy Plan in which the Top-Heavy Ratio is more than 90 percent.
1.109 TAXABLE WAGE BASE:
The taxable wage base under section 230 of the Social Security Act in
effect on the first day of the Plan Year.
1.110 TAXABLE YEAR:
The Employer's taxable year for federal income tax purposes indicated
on the Adoption Agreement.
1.111 TOP-HEAVY PLAN:
For any Plan Year beginning after December 31, 1983, this Plan is
Top-Heavy if any of the following conditions exists:
(a) If the Top-Heavy Ratio for this Plan exceeds 60 percent and
this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans.
(b) If this Plan is a part of a Required Aggregation Group of
plans but not part of a Permissive Aggregation Group and the
Top-Heavy Ratio for the group of plans exceeds 60 percent.
(c) If this Plan is a part of a Required Aggregation Group and
part of a Permissive Aggregation Group of plans and the
Top-Heavy Ratio for the Permissive Aggregation Group exceeds
60 percent.
1.112 TOP-HEAVY PLAN YEAR:
A Plan Year commencing after December 31, 1983, for which the Plan is a
Top-Heavy Plan.
1.113 TOP-HEAVY RATIO:
(a) If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the
Employer has not maintained any defined benefit plan which
during the 5-year period ending on the Determination Date(s)
has or has had accrued benefits, the Top-Heavy Ratio for this
Plan alone or for the Required or Permissive Aggregation
Group, as appropriate, is a fraction, the numerator of which
is the sum of the account balances of all Key Employees as of
the Determination Date(s) (including any part of any account
balance distributed in the 5-year period ending on the
Determination Date(s)), and the denominator of which is the
sum of all account balances (including any part of any account
balance distributed in the 5-year period ending on the
Determination Date(s)), both computed in accordance with
section 416 of the Code and the regulations thereunder. Both
the numerator and denominator of the Top-Heavy Ratio are
adjusted to reflect any contribution not actually made as of
the
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Determination Date, but which is required to be taken into
account on that date under section 416 of the Code and the
regulations thereunder.
(b) If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the
Employer maintains or has maintained one or more defined
benefit plans which during the 5-year period ending on the
Determination Date(s) has or has had any accrued benefits, the
Top-Heavy Ratio for any Required or Permissive Aggregation
Group, as appropriate, is a fraction, the numerator of which
is the sum of account balances under the aggregated defined
contribution plans for all Key Employees determined in
accordance with (1) above, and the Present Value of accrued
benefits under the aggregated defined benefit plans for all
Key Employees as of the Determination Date(s), and the
denominator of which is the sum of the account balances under
the aggregated defined contribution plans for all Participants
determined in accordance with (1) above, and the Present Value
of accrued benefits under the defined benefit plans for all
Participants as of the Determination Date(s), all determined
in accordance with section 416 of the Code and the regulations
thereunder. The accrued benefits under a defined benefit plan
in both the numerator and the denominator of the Top-Heavy
Ratio are increased for any distribution of an accrued benefit
made in the 5-year period ending on the Determination Date.
(c) For purposes of (a) and (b) above, the value of account
balances and the Present Value of accrued benefits will be
determined as of the most recent Top-Heavy Valuation Date that
falls within or ends with the 12-month period ending on the
Determination Date, except as provided in section 416 of the
Code and the regulations thereunder for the first and second
plan years of a defined benefit plan. The account balances and
accrued benefits of a Participant who is a Regular Employee
but who was a Key Employee in a prior year, or a Participant
who has not been credited with at least one Hour of Service
with any Employer maintaining the Plan at any time during the
5-year period ending on the Determination Date will be
disregarded. The calculation of the Top-Heavy Ratio, and the
extent to which distributions, rollovers, and transfers are
taken into account will be made in accordance with section 416
of the Code and the regulations thereunder. Deductible
voluntary employee contributions will not be taken into
account for purposes of computing the Top-Heavy Ratio. When
aggregating plans, the value of account balances and accrued
benefits will be calculated with reference to the
Determination Dates that fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee
shall be determined under the method, if any, that uniformly
applies for accrual purposes under all defined benefit plans
maintained by the Employer, or if there is no such method, as
if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional rule of section
411(b)(1)(C) of the Code.
1.114 TOP-HEAVY VALUATION DATE:
The date elected by the Employer in Item 29 of the Adoption Agreement
as of which account balances or accrued benefits are valued for
purposes of calculating the Top-Heavy Ratio.
1.115 TOP PAID GROUP:
An Employee is in the Top Paid Group of Employees for a Plan Year if
such Employee is in the group consisting of the top 20 percent of the
Employees when ranked on the basis of Compensation paid during such
Plan Year. For purposes of determining the number of
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Employees to be considered, the following Employees shall be excluded,
unless an election has been made to modify the exclusions in the
Adoption Agreement:
(a) Employees who have not completed six (6) months of service,
(b) Employees who normally work less than 17-1/2 hours per week,
(c) Employees who normally work during not more than six (6)
months during any Plan Year,
(d) Employees who have not attained age 21,
(e) Employees who are included in a bona fide collective
bargaining agreement, except to the extent provided in
regulations, and
(f) Employees who are nonresident aliens and who receive no earned
income (within the meaning of Code Section 911(d)(2)) from the
Employer which constitutes income from sources within the
United States (within the meaning of Code Section 861(a)(3)).
1.116 TRUST:
The legal relationship created under Article X between the Employer,
the Trustee, and the Participants and their Beneficiaries.
1.117 TRUST FUND:
The fund maintained in accordance with Article X and the property held
therein.
1.118 TRUSTEE:
The person or persons named in the Adoption Agreement and accepting the
Trust, or any successor or successors appointed by the Employer and
accepting the Trust.
1.119 VALUATION DATE:
The last day of each Plan Year, any additional dates specified in the
Adoption Agreement, and such other dates as shall be directed by the
Plan Administrator.
1.120 VESTED PERCENTAGE:
The nonforfeitable amount of each Participant's Employer Profit Sharing
Contribution Account and Employer Matching Contribution Account
determined in accordance with the vesting schedule specified by the
Employer in the Adoption Agreement and Article VI, and 100% of each of
the following accounts: Employer Qualified Matching Contribution
Account, Employer Qualified Non-Elective Contribution Account, Employee
Elective Deferral Account, Employee Post-Tax Voluntary Contribution
Account, Employee Rollover/Transfer Account, and Employee VDEC Account.
1.121 YEAR OF SERVICE:
Except where specifically excluded under sections 1.121(a), 1.121(b),
and 1.121(c) below, all of an Employee's Years of Service shall be
taken into account for eligibility and vesting purposes, including: (1)
Years of Service with the predecessor employer, if so specified in the
Adoption Agreement; (2) Years of Service with the predecessor employer
during the time a qualified plan was maintained, if so specified in the
Adoption Agreement; (3) Years of Service for employment with an
Affiliated Employer; and (4) Years of Service for an employee required
under section 414(n) or 414(o) of the Code to be considered an employee
of any employer aggregated with the Employer pursuant to section
414(b), (c), or (m) of the Code.
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(a) Hours of Service Method.
(1) Crediting Year of Service - An Employee will be
credited with a Year of Service upon completion of at
least 1,000 Hours of Service during the applicable
twelve-consecutive month computation period.
(2) For Eligibility Purposes - In the determination of
Years of Service for purposes of eligibility, the
initial twelve-consecutive month computation period
shall commence on the date an Employee first
completes an Hour of Service. The succeeding
twelve-consecutive month periods shall begin with the
Plan Year which commences prior to the end of the
initial twelve-consecutive month period, regardless
of whether the Employee is entitled to be credited
with at least 1000 Hours of Service during the
initial eligibility computation period. An Employee
who is credited with at least 1,000 Hours of Service
in both the initial eligibility computation period
and the first Plan Year which commences prior to the
end of the initial twelve-consecutive month period
will be credited with two Years of Service for
purposes of eligibility.
If an Employee is required to complete more than one
Year of Service in order to become eligible to
participate in the Plan, the initial and all
subsequent twelve-consecutive month computation
periods shall begin on the date an Employee first
completes an Hour of Service and anniversaries
thereof. However, if, in such case, the Employee
fails to complete a Year of Service in the initial
twelve-consecutive month period, all subsequent
periods shall be Plan Years beginning with the Plan
Year that includes his first anniversary of
employment. In addition, if such an Employee incurs a
1-year Break in Service prior to satisfaction of the
Plan's eligibility requirements, then service prior
to such 1-year Break in Service shall not be taken
into account in the determination of the Employee's
eligibility to participate in the Plan.
If any fractional Year of Service is specified in the
Adoption Agreement as a service requirement to become
a Participant under the Plan, an Employee shall not
be required to complete any specified number of Hours
of Service to receive credit for such fractional
year.
(3) For Vesting Purposes - In the determination of Years
of Service for purposes of computing a Participant's
Vested Percentage, the twelve-consecutive month
computation period shall be the Plan Year. If a
Participant fails to complete 1,000 Hours of Service
in either of the Plan Years which overlap the
eligibility computation period in which he becomes a
Participant, he shall nevertheless be credited with a
Year of Service for determining his Vested
Percentage.
Notwithstanding the foregoing, for any short Plan
Year, the determination of whether an Employee has
completed a Year of Service for vesting purposes
shall be made in accordance with Department of Labor
regulation 2530.203-2(c).
In the determination of a Participant's Vested
Percentage, the following service shall be
disregarded:
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(A) Service excluded as specified in Item 34 of
the Adoption Agreement.
(B) Service after five (5) consecutive 1-year
Breaks in Service shall be disregarded for
purposes of determining a Participant's
Vested Percentage in any portion of his
Employer Contribution Account attributable
to Employer Contributions contributed prior
to the time such five (5) consecutive 1-year
Breaks in Service occurred; however, both
pre-break and post-break service will be
counted for purposes of determining a
Participant's Vested Percentage in any
portion of his Employer Contribution Account
attributable to Employer Contributions
contributed after such breaks. Separate
Employer Contribution Accounts will be
maintained for the Participant's pre-break
and post-break derived Employer
Contributions. Both pre-break and post-break
Employer Contribution Accounts will share in
the earnings and losses of the Trust Fund.
In the case of a Participant who does not
have five (5) consecutive 1-year Breaks in
Service, both pre-break and post-break
service will be counted for purposes of
determining such Participant's Vested
Percentage in both the pre-break and the
post-break derived Employer Contribution
Accounts.
(b) Regular Time Hours Method.
If the Employer has specified in the Adoption Agreement that
the Regular Time Hours Method shall be used, then a Year of
Service will be determined under the Hour of Service Method
described in (a) above, except that 750 Regular Time Hours
will be substituted for 1,000 Hours of Service.
(c) Elapsed Time Method.
(1) Crediting Year of Service - If the Employer has
specified in the Adoption Agreement that the elapsed
time method shall be used to determine Years of
Service, a Period of Service of 365 days shall
represent a Year of Service. Periods of Service of
less than one year shall be expressed in terms of
days. An Employee shall also receive credit for any
Period of Severance of less than twelve consecutive
months.
(2) For Eligibility Purposes - If an Employee is required
to complete more than one Year of Service in order to
become eligible to participate in the Plan, and such
an Employee incurs a 1-year Break in Service prior to
satisfaction of the Plan's eligibility requirements,
then service prior to such 1-year Break in Service
shall not be taken into account in the determination
of the Employee's eligibility to participate in the
Plan.
(3) For Vesting Purposes - In the determination of a
Participant's Vested Percentage, the following
service shall be disregarded:
(A) Service excluded as specified in Item 34 of
the Adoption Agreement.
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(B) Service after five (5) consecutive 1-year
Breaks in Service shall be disregarded for
purposes of determining a Participant's
Vested Percentage in any portion of his
Employer Contribution Account attributable
to Employer Contributions contributed prior
to the time such five (5) consecutive 1-year
Breaks in Service occurred; however, both
pre-break and post-break service will be
counted for purposes of determining a
Participant's Vested Percentage in any
portion of his Employer Contribution Account
attributable to Employer Contributions
contributed after such breaks. Separate
Employer Contribution Accounts will be
maintained for the Participant's pre-break
and post-break derived Employer
Contributions. Both pre-break and post-break
Employer Contribution Accounts will share in
the earnings and losses of the Trust Fund.
In the case of a Participant who does not
have five (5) consecutive 1-year Breaks in
Service, both pre-break and post-break
service will be counted for purposes of
determining a Participant's Vested
Percentage in both the pre-break and the
post-break derived Employer Contribution
Accounts.
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ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.01 INITIAL ELIGIBILITY:
Any Employee of the Employer to whom eligibility has been extended
pursuant to Item 12 of the Adoption Agreement and who is still employed
by the Employer shall become a Participant on the Entry Date specified
in Item 17 of the Adoption Agreement, as follows:
(a) With respect to eligibility to make Employee Elective
Deferrals, after having attained the minimum age and completed
the minimum Years of Service specified in Item 13 of the
Adoption Agreement.
(b) With respect to eligibility to make Employee Post-Tax
Voluntary Contributions, after having attained the minimum age
and completed the minimum Years of Service specified in Item
13 of the Adoption Agreement.
(c) With respect to eligibility to receive an allocation of
Employer Profit Sharing Contributions, after having attained
the minimum age and completed the minimum Years of Service
specified in Item 13 of the Adoption Agreement.
(d) With respect to eligibility to receive an allocation of
Employer Matching Contributions, after having attained the
minimum age and completed the minimum Years of Service
specified in Item 13 of the Adoption Agreement.
(e) With respect to eligibility to receive an allocation of
Employer Qualified Matching Contributions, after having
attained the minimum age and completed the minimum Years of
Service specified in Item 13 of the Adoption Agreement.
(f) With respect to eligibility to receive an allocation of
Employer Qualified Non-Elective Contributions, after having
attained the minimum age and completed the minimum Years of
Service specified in Item 13 of the Adoption Agreement.
(g) With respect to eligibility to make Employee Rollover/Transfer
Contributions, after having attained the minimum age and
completed the minimum Years of Service specified in Item 13 of
the Adoption Agreement.
2.02 CHANGE IN EMPLOYEE CLASSIFICATION:
(a) If a Participant is no longer a member of an eligible class of
Employees and therefore becomes ineligible to participate, but
has not incurred a Break in Service, such Employee will
participate immediately upon returning to an eligible class of
Employees. If such Participant does incur a Break in Service,
eligibility will be determined under the Break in Service
rules of the Plan.
(b) If an Employee who is not a member of an eligible class of
Employees becomes a member of an eligible class, such Employee
may participate immediately if such Employee has satisfied the
Plan's minimum age and service requirements, and would have
otherwise previously become a Participant.
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2.03 ELIGIBILITY UPON REEMPLOYMENT:
(a) A Former Participant will become a Participant immediately
upon returning to the employ of the Employer if such Former
Participant had a nonforfeitable right to all or a portion of
his Employer Contribution Account at the time of termination
from service.
(b) For a Former Participant who did not have a nonforfeitable
right to any portion of his Employer Contribution Account or
for a former Employee (other than an Employee required to
complete more than one Year of Service in order to become
eligible to participate in the Plan) who had not yet become a
Participant at the time of termination from service, the
Participant's Years of Service prior to the Break(s) in
Service will be disregarded if the number of consecutive
1-year Breaks in Service equal or exceed the greater of five
(5) or the aggregate number of Years of Service before such
Breaks in Service.
(c) A Former Participant whose Years of Service before termination
from service cannot be disregarded pursuant to section 2.03(b)
shall participate immediately upon reemployment.
(d) A former Employee who had met the eligibility requirements of
section 2.01 before termination from service but who had not
become a Participant and whose Years of Service before
termination from service cannot be disregarded pursuant to
section 2.03(b) will become a Participant as of the later of:
(1) his date of reemployment, and
(2) the Entry Date next following his date of termination
from service.
(e) A former Employee who had not met the eligibility requirements
of section 2.01 and whose prior Years of Service cannot be
disregarded pursuant to section 2.03(b) will be eligible to
participate subject to the provisions of section 2.01 above.
(f) A former Employee (including a Former Participant) whose Years
of Service before termination from service can be disregarded
pursuant to section 2.03(b) will be treated as a new Employee
for eligibility purposes and will be eligible to participate
once he has met the requirements of section 2.01 above
following his most recent date of reemployment.
2.04 PARTICIPATION DURING AN AUTHORIZED LEAVE OF ABSENCE:
All contributions on behalf of a Participant shall be suspended, but
membership in the Plan shall be deemed to be continuous, unless
otherwise terminated, for the period of any Authorized Leave of
Absence, provided that the Employee returns to work for the Employer
upon completion of such Authorized Leave of Absence.
2.05 LIMITATIONS WITH REGARD TO OWNER-EMPLOYEES:
Notwithstanding the provisions of this Article:
(a) If this Plan provides contributions or benefits for one or
more Owner-Employees who control both the business with
respect to which this Plan is established and one or more
other trades or businesses, this Plan and any plan established
with respect to such other trades or businesses must, when
looked at as a single plan,
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satisfy sections 401(a) and (d) of the Code with respect to
the employees of this and all such other trades or businesses.
(b) If this Plan provides contributions or benefits for one or
more Owner-Employees who control one or more other trades or
businesses, the employees of each such other trade or business
must be included in a plan which satisfies sections 401(a) and
(d) of the Code and which provides contributions and benefits
not less favorable than provided for such Owner-Employees
under this Plan.
(c) If an individual is covered as an Owner-Employee under the
plans of two or more trades or businesses which are not
controlled and the individual controls a trade or business,
then the contributions or benefits for the employees under the
plan of the trades or businesses which are controlled must be
as favorable as those provided for him under the most
favorable plan of the trade or business which is not
controlled.
(d) For purposes of the preceding paragraphs, an Owner-Employee,
or two or more Owner-Employees, shall be considered to control
a trade or business if such Owner-Employee or such two or more
Owner-Employees together:
(1) own the entire interest in an unincorporated trade or
business, or
(2) in the case of a partnership, own more than 50% of
either the capital interest or the profits interest
in such partnership.
For purposes of the preceding sentence, an Owner-Employee, or
two or more Owner-Employees, shall be treated as owning any
interest in a partnership which is owned, directly or
indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control
within the meaning of the preceding sentence.
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ARTICLE III
CONTRIBUTIONS
3.01 EMPLOYEE ELECTIVE DEFERRALS:
(a) If the Adoption Agreement provides for Employee Elective
Deferrals, the Employer shall contribute on behalf of any
Participant with whom there is in effect a binding Deferral
Agreement, for any full pay period, an amount equal to the
amount by which the Participant's Compensation for such pay
period was reduced pursuant to the Deferral Agreement. Each
such Employee Elective Deferral will be paid in cash to the
Trustee in accordance with section 3.08 and shall be credited
to the Participant's Employee Elective Deferral Account in
accordance with section 4.01.
(b) Notwithstanding (a) above, no Participant shall be permitted
to have Employee Elective Deferrals made under this Plan, or
any other qualified plan maintained by the Employer, during
any taxable year of the Participant, in excess of the dollar
limitation contained in section 402(g) of the Code in effect
at the beginning of such taxable year.
3.02 TERMS OF DEFERRAL AGREEMENT:
An eligible Participant who is not currently having his cash
compensation reduced under the terms of a Deferral Agreement with the
Employer may enter into a Deferral Agreement as of any Entry Date. A
Participant who is currently having or has previously had his cash
compensation reduced under the terms of a Deferral Agreement with the
Employer may amend such agreement to increase or decrease the amount by
which his cash compensation is reduced only in accordance with Item 19
of the Adoption Agreement. The Deferral Agreement shall be in a form
prescribed or approved by the Administrator and shall be (a)
irrevocable while the agreement is in effect with respect to
compensation already earned, but (b) revocable as to the first and
subsequent pay periods commencing at least 15 days after written notice
is given by the Participant to the Employer. Notwithstanding the
foregoing, the Plan Administrator in its sole discretion may, at any
time and with or without notice, permit a temporary or permanent change
in or a suspension of the terms of any Deferral Agreement if it deems
such a change or suspension to be justified by circumstances of the
Employees or an individual Employee.
3.03 EMPLOYER MATCHING AND QUALIFIED MATCHING CONTRIBUTIONS:
(a) If the Adoption Agreement provides for Employer Matching
Contributions, the Employer shall make such contributions in
accordance with the provisions of Item 22 of the Adoption
Agreement. Employer Matching Contributions, if any, will be
credited to the Participants' Matching Contribution Accounts
in accordance with section 4.01 of the Plan.
(b) The Employer may designate that all or any portion of the
Employer Matching Contributions shall instead be Employer
Qualified Matching Contributions. Employer Qualified Matching
Contributions, if any, will be credited to the Participants'
Employer Qualified Matching Contribution Accounts in
accordance with section 4.01 of the Plan.
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3.04 EMPLOYER PROFIT SHARING CONTRIBUTIONS:
Employer Profit Sharing Contributions shall be in amounts, if any,
determined annually in the sole discretion of the Employer. The
Employer's determination of the amount of any such contribution shall
be binding on all Participants, the Employer, and the Trustee. Employer
Profit Sharing Contributions shall be credited to Participants'
Employer Profit Sharing Contribution Accounts in accordance with
section 4.01 and 4.02 of the Plan.
3.05 EMPLOYER QUALIFIED NON-ELECTIVE CONTRIBUTIONS:
(a) The Employer may designate that all or any portion of the Employer
Profit Sharing Contributions shall instead be Employer Qualified
Non-Elective Contributions. Employer Qualified Non-Elective
Contributions shall be credited to Participants' Employer Qualified
Non-Elective Contribution Accounts in accordance with section 4.01 of
the Plan.
(b) In the Employer's discretion, the Employer may make Employer Qualified
Non-Elective Contributions in accordance with section 4.01 of the Plan
that are at least sufficient to satisfy either the Actual Deferral
Percentage test or the Average Contribution Percentage test, or both,
in lieu of distributing Excess Contributions as provided in section
5.05 or Excess Aggregate Contributions as provided in section 5.06 of
the Plan.
3.06 EMPLOYEE POST-TAX VOLUNTARY CONTRIBUTIONS:
(a) If the Employer provides in the Adoption Agreement, a
Participant may elect to make Employee Post-Tax Voluntary
Contributions to this Plan. The maximum total Employee
Post-Tax Voluntary Contributions which may be made by any
Participant under this and all other qualified plans of this
Employer is 10% of the Participant's Compensation for the
Limitation Year.
(b) Unless otherwise authorized by the Employer, Employee Post-Tax
Voluntary Contributions shall be made only by payroll
deductions pursuant to written direction of the Participant,
filed with the Employer on such form as may be prescribed by
it. All such contributions shall be made in accordance with
section 3.08. Amounts deposited in the Trust pursuant to this
section shall be credited to the Participant's Employee
Post-Tax Voluntary Contribution Account.
3.07 EMPLOYEE ROLLOVER/TRANSFER CONTRIBUTIONS:
If so elected by the Employer in the Adoption Agreement, the Plan and
Trust may accept Employee Rollover/Transfer Contributions. The Plan
Administrator may require appropriate evidence that the contribution
would qualify as an Employee Rollover/Transfer Contribution, and such
evidence may include an opinion of legal counsel acceptable to the Plan
Administrator. Employee Rollover/Transfer Contributions may be made
without regard to the limitations on allocations under Article V.
Amounts deposited in the Trust pursuant to the provisions of this
section shall be credited to the Participant's Employee
Rollover/Transfer Account.
3.08 PAYMENT OF EMPLOYER CONTRIBUTIONS TO TRUSTEE:
(a) All Employer Contributions for each Taxable Year shall be paid
to the Trustee not later than the date prescribed by law for
filing the Employer's federal income tax return for such
Taxable Year, including extensions.
(b) Employee Elective Deferrals and Employee Post-Tax Voluntary
Contributions shall be paid to the Trustee as soon as such
amounts can reasonably be segregated
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from the general assets of the Employer, and in any event will
be paid by the end of the succeeding month following the month
in which the payroll deductions or reductions occurred or the
month in which the amount of the deferral was determined.
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ARTICLE IV
ACCOUNTING AND ALLOCATION
4.01 ACCOUNTING PROCEDURE:
As of each Valuation Date, the Plan Administrator shall determine from
the Trustee the current market value of Trust assets and determine the
allocation of such value among the total Participant's Accounts; in
doing so, the Plan Administrator shall, in the following order:
(a) Charge to the proper Participant's Account all payments and
distributions made from such account since the last preceding
Valuation Date that have not been previously charged. Such
charges shall include the payment of any premiums on life
insurance Contracts purchased on behalf of specified
Participants.
(b) Allocate any Employee Elective Deferrals directly to the
Employee Elective Deferral Account of the Participant on whose
behalf the contributions were made.
(c) Allocate any Employee Post-Tax Voluntary Contributions
directly to the Employee Post-Tax Voluntary Contribution
Account of the Participant on whose behalf the contributions
were made.
(d) Allocate any Employee Rollover/Transfer Contributions directly
to the respective Employee Rollover/Transfer Account of the
Participant on whose behalf the contribution was made.
(e) If the Valuation Date is a Valuation Date specified in Item
22.c.iii. of the Adoption Agreement, allocate any Employer
Matching Contributions, Employer Qualified Matching
Contributions, and any Forfeitures which were used to reduce
Matching Contributions to the respective Employer Matching
Contribution Accounts and/or Employer Qualified Matching
Contribution Accounts of those Participants eligible to share
in the Matching Contributions in accordance with Items 22 and
23 of the Adoption Agreement.
(f) Allocate any Employer Qualified Non-Elective Contributions to
the respective Employer Qualified Non-Elective Contribution
Accounts of Participants entitled to receive them in
accordance with Item 21 of the Adoption Agreement, pro rata on
the basis of Compensation.
(g) If the Valuation Date is the final Valuation Date of the Plan
Year, allocate any Employer Profit Sharing Contributions and
any amounts which became Forfeitures during the Plan Year and
which may be allocated in accordance with section 6.04(d)
among the Employer Profit Sharing Contribution Accounts in
accordance with section 4.02.
(h) (1) Except as provided in section 4.01(h)(2),
allocate any earnings or losses (net increase or net
decrease in the market value) of the Trust Fund among
the total Participant's Accounts in one of the
following methods selected by the Employer in Item 30
of the Adoption Agreement:
(A) Pro rata among Participant's Accounts on the
basis of account balances as of the
preceding Valuation Date, less
distributions,
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withdrawals, insurance premium payments, and
Forfeitures from the respective accounts,
and if Item 38.b.i.A. is elected in the
Adoption Agreement, less any loans
outstanding, plus one-half of Employee
Rollover/Transfer Contributions if such
Employee Rollover/Transfer Contribution was
deposited prior to the mid-point of the
period commencing on the immediately
preceding Valuation Date and ending on the
current Valuation Date.
(B) Pro rata among Participant's Accounts on the
basis of account balances as of the
preceding Valuation Date, less
distributions, withdrawals, insurance
premium payments, and Forfeitures from the
respective accounts, and if Item 38.b.i.A.
is elected in the Adoption Agreement, less
any loans outstanding, plus one-half of any
contributions allocated to the account
pursuant to section 4.01(b) or (c) since the
preceding Valuation Date, plus one-half of
Employee Rollover/Transfer Contributions if
such Employee Rollover/Transfer Contribution
was deposited prior to the mid-point of the
period commencing on the immediately
preceding Valuation Date and ending on the
current Valuation Date.
(C) Pro rata among Participant's Accounts on the
basis of account balances as of the
preceding Valuation Date, less
distributions, withdrawals, insurance
premium payments, and Forfeitures from the
respective accounts, and if Item 38.b.i.A.
is elected in the Adoption Agreement, less
any loans outstanding, plus one-half of any
contributions allocated to the account
pursuant to section 4.01(b) or (c) and any
Employer Matching Contributions allocated to
the account pursuant to section 4.01(e)
since the preceding Valuation Date, plus
one-half of Employee Rollover/Transfer
Contributions if such Employee
Rollover/Transfer Contribution was deposited
prior to the mid-point of the period
commencing on the immediately preceding
Valuation Date and ending on the current
Valuation Date.
(D) Pro rata among Participant's Accounts on the
basis of account balances as of the
preceding Valuation Date, adjusted on a
nondiscriminatory time-weighted basis which
recognizes the actual dates of deposit of
contributions to and of distributions and
payment of insurance premiums from such
accounts.
(2) The following special rules apply:
(A) Each segregated account maintained on behalf
of a Participant (such as a segregated
account for Participant-directed
investments) shall be credited or charged
with its separate earnings and losses.
(B) If Item 38.b.i.A. is elected in the Adoption
Agreement, the interest with respect to a
Participant's loan shall be credited to the
Participant's Account.
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(C) The earnings or losses with respect to
investments in which funds from some
Participant-directed accounts have been
commingled (pursuant to section 10.04(t))
shall be allocated among the accounts of
Participants who have directed such
investment in accordance with the method
elected under section 4.01(h)(1). Such
allocation will be made separately with
respect to each investment fund in which
Participant-directed accounts have been
commingled.
(i) Allocate any expenses of the Trust
directly to a Participant's Account
if the Plan Administrator so directs
after determining that such expenses
are directly attributable to the
Participant or the Participant's
Account.
4.02 ALLOCATION OF EMPLOYER PROFIT SHARING CONTRIBUTIONS AND FORFEITURES:
(a) NON-INTEGRATED PLAN -
If the Employer has elected in Item 24 of the Adoption
Agreement that allocation of Employer Profit Sharing
Contributions and Forfeitures shall not be integrated with
Social Security, then Employer Profit Sharing Contributions
plus any Forfeitures which may be allocated in accordance with
section 6.04(d) will be allocated to the Employer Profit
Sharing Contribution Account of each Participant entitled to
share in the Employer Profit Sharing Contributions for that
Plan Year ( as provided in Item 24 of the Adoption Agreement)
as follows:
(1) If the Employer has elected in Item 24 of the
Adoption Agreement that the allocation will be based
on the ratio of each Participant's Compensation to
total Participants' Compensation, then the allocation
will be made as follows:
(A) In a year which is not a Top-Heavy Plan
Year, the Employer Profit Sharing
Contributions and Forfeitures will be
allocated in the ratio that each
Participant's Compensation bears to the
total Compensation of all Participants.
(B) In a Top-Heavy Plan Year:
(i) First, Employer Profit Sharing
Contributions and Forfeitures will
be allocated to all Participants
who are not Key Employees in the
ratio that each such Participant's
Compensation bears to all such
Participants' Compensation, but not
in excess of the minimum allocation
amount described in section 8.02.
Such minimum allocation percentage
shall be reduced by the lowest
percentage of Compensation
contributed by the Employer as an
Employer Qualified Nonelective
Contribution on behalf of any
non-Key Employee otherwise eligible
to share in the Employer Profit
Sharing Plan Contribution. If the
Employer has so elected in Item 18
of the Adoption Agreement,
Compensation shall not include
Compensation prior to the
Participant's Entry Date.
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(ii) Next, Employer Profit Sharing
Contributions and Forfeitures will
be allocated to all Participants
who are Key Employees in the ratio
that each such Participant's
Compensation bears to all such
Participants' Compensation, but not
in excess of the minimum allocation
amount described in section 8.02.
Such minimum allocation percentage
shall be reduced by the lowest
percentage of Compensation
contributed by the Employer as an
Employer Qualified Nonelective
Contribution on behalf of any
non-Key Employee otherwise eligible
to share in the Employer Profit
Sharing Plan Contribution. If the
Employer has so elected in Item 18
of the Adoption Agreement,
Compensation shall not include
Compensation prior to the
Participant's Entry Date.
(iii) Finally, any remaining Employer
Profit Sharing Contributions and
Forfeitures will be allocated in the
ratio that each Participant's
Compensation bears to the total
Compensation of Participants.
(2) If the Employer has elected in Item 24 of the
Adoption Agreement that the allocation will be an
equal dollar amount for each Participant, then the
Employer Profit Sharing Contributions and Forfeitures
will be allocated to each eligible Participant's
account in an amount equal to the total Employer
Profit Sharing Contributions and Forfeitures divided
by the number of Participants entitled to share in
the allocation.
(b) INTEGRATED PLAN -
If the Employer has elected in Item 24 of the Adoption
Agreement that allocation of Employer Profit Sharing
Contributions and Forfeitures shall be integrated with Social
Security, then Employer Profit Sharing Contributions for the
Plan Year plus any Forfeitures which may be allocated in
accordance with section 6.04(d) will be allocated to the
Employer Profit Sharing Contribution Account of each
Participant entitled to share in them for that Plan Year as
follows:
(1) In a year which is not a Top-Heavy Plan Year:
(A) First, Employer Profit Sharing Contributions
and Forfeitures will be allocated
simultaneously as follows so that the
allocation percentage for each allocation
will be equal:
(i) In the ratio that each
Participant's Compensation bears to
the Compensation of all
Participants; and
(ii) In the ratio that each
Participant's Excess Compensation
bears to Excess Compensation of all
Participants.
The allocation percentage shall not
exceed the Excess Compensation
Percentage set out in Item 24 of the
Adoption Agreement.
(B) Finally, any remaining Employer Profit
Sharing Contributions will be allocated in
the ratio that each Participant's
Compensation bears to total Compensation of
all Participants.
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<PAGE>
(2) In a Top-Heavy Plan Year:
(A) First, Employer Profit Sharing Contributions
and Forfeitures will be allocated to all
Participants who are not Key Employees in
the ratio that each such Participant's
Compensation bears to all such Participants'
Compensation, but not in excess of the
minimum allocation amount described in
section 8.02. Such minimum allocation
percentage shall be reduced by the lowest
percentage of Compensation contributed by
the Employer as an Employer Qualified
Nonelective Contribution on behalf of any
non-Key Employee otherwise eligible to share
in the Employer Profit Sharing Plan
Contribution. If the Employer has so elected
in Item 18 of the Adoption Agreement,
Compensation shall not include Compensation
prior to the Participant's Entry Date.
(B) Next, Employer Profit Sharing Contributions
and Forfeitures will be allocated to all
Participants who are Key Employees in the
ratio that each such Participant's
Compensation bears to all such Participants'
Compensation, but not in excess of the
minimum allocation amount described in
section 8.02. Such minimum allocation
percentage shall be reduced by the lowest
percentage of Compensation contributed by
the Employer as an Employer Qualified
Nonelective Contribution on behalf of any
non-Key Employee otherwise eligible to share
in the Employer Profit Sharing Plan
Contribution. If the Employer has so elected
in Item 18 of the Adoption Agreement,
Compensation shall not include Compensation
prior to the Participant's Entry Date.
(C) Next, Employer Profit Sharing Contributions
and Forfeitures will be allocated in the
same ratio that each Participant's Excess
Compensation bears to the Excess
Compensation of all Participants for the
Plan Year, but not in excess of the minimum
allocation percentage determined under
section 8.02. Such percentage shall be
reduced by the lowest percentage of
Compensation contributed by the Employer as
an Employer Qualified Nonelective
Contribution on behalf of any non-Key
Employee otherwise eligible to share in the
Employer Profit Sharing Plan Contribution.
(D) Next, Employer Profit Sharing Contributions
and Forfeitures will be allocated
simultaneously as follows, so that the
allocation percentage for each allocation
will be equal:
(i) In the ratio that each
Participant's Compensation bears to
the Compensation of all
Participants; and
(ii) In the ratio that each
Participant's Excess Compensation
bears to Excess Compensation of all
Participants.
The allocation percentage shall not
exceed the difference between the
Excess Compensation Percentage and
the allocation percentage used in
(b)(2)(B) above.
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<PAGE>
(E) Finally, any remaining Employer Profit
Sharing Contributions and Forfeitures will
be allocated in the ratio that each
Participant's Compensation bears to total
Compensation of Participants.
(c) Notwithstanding the provisions of 4.02(a) and 4.02(b), if a
Participant is eligible to share in the allocation of the
Employer Profit Sharing Contributions and Forfeitures solely
because the plan is a Top-Heavy Plan and the Participant is
entitled to the minimum allocation described in 8.02(a), the
allocation to such Participant will not exceed the minimum
allocation required under section 8.02.
4.03 TIMING OF EMPLOYER CONTRIBUTIONS:
For purposes of this Article IV, any Employer Contributions to the Plan
for a given Plan Year made after the close of the Plan Year but by the
due date of the Employer's federal income tax return, including
extensions, will be considered to have been made on the last Valuation
Date of such Plan Year.
4.04 VALUATION AND ALLOCATION OF CONTRACTS:
The value of any Contracts issued under the Plan as of a given date
shall be the cash values of such Contracts as of such date. All
Contracts held by the Trustee shall be allocated to the accounts of
those Participants on whose behalf such Contracts are maintained.
Unallocated Contracts shall be valued at cash value and shall be part
of the general Trust Fund.
4.05 CORRECTION OF ALLOCATIONS:
(a) In the event that the Plan Administrator learns that
allocations have not been made on behalf of an Employee for
whom allocations should have been made pursuant to the terms
of this Plan, the Participant's Account for such Employee
shall be restored to its proper balance as soon as is
reasonably possible. Restoration shall be accomplished by
allocating to the account amounts necessary to restore the
account from the following sources:
(1) First, from Forfeitures for the Plan Year in which
the account is restored;
(2) Next, from income for the Plan Year in which the
account is restored; and
(3) Next, from Employer Contributions for the Plan Year
in which the account is restored.
(4) Finally, from additional Employer Contributions.
(b) In the event that the Plan Administrator learns that
contributions or allocations have been made on behalf of an
Employee for whom allocations should not have been made
pursuant to the terms of this Plan:
(1) If such contributions were made pursuant to a mistake
of fact, such contributions shall be returned to the
Employer within one year of the contributions, if
possible. Earnings attributable to the mistaken
contribution shall not be returned to the Employer,
but losses attributable to the mistaken contribution
shall reduce the amount to be returned to the
Employer.
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(2) In other cases, the erroneous contributions or
allocations plus earnings or less losses attributable
thereto, shall be deemed to be Forfeitures and shall
be allocated pursuant to section 6.04.
4.06 ADDITIONAL ELIGIBLE EMPLOYEES
Notwithstanding anything to the contrary, if this Plan would otherwise
fail to meet the requirements of Code Section 401(a)(26) and the
Regulations thereunder because Employer contributions would not be
allocated to a sufficient number or percentage of Participants for a
Plan Year, then the rules described in (a) and (b) below shall apply.
Notwithstanding anything to the contrary, if this Plan would otherwise
fail to meet the requirements of Code Sections 410(b)(1)(A) and
410(B)(1)(B) and the Regulations thereunder because Employer
contributions would not be allocated to a sufficient number or
percentage of Participants for a Plan Year, then the rules described in
(a) and (b) below shall apply:
(a) The group of Participants eligible to share in the Employer's
contribution and Forfeitures for the Plan Year shall be
expanded to include the minimum number of Participants who
would not otherwise be eligible as are necessary to satisfy
the applicable test specified above. The specific Participants
who shall become eligible under the terms of this paragraph
shall be those who are actively employed on the last day of
the Plan Year, and, when compared to similarly situated
Participants, have completed the greatest number of Hours of
Service in the Plan Year.
(b) If after the application of paragraph (a) above, the
applicable test is still not satisfied, then the group of
Participants eligible to share in the Employer's contribution
and Forfeitures for the Plan Year shall be further expanded to
include the minimum number of Participants who are not
actively employed on the last day of the Plan Year as are
necessary to satisfy the applicable test. The specific
Participants who shall become eligible to share shall be those
Participants, when compared to similarly situated
Participants, who have completed the greatest number of Hours
of Service in the Plan Year before terminating employment.
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<PAGE>
ARTICLE V
LIMITATION ON ALLOCATIONS, DEFERRALS AND CONTRIBUTIONS
5.01 LIMITATION ON ALLOCATIONS:
(a) (1) If the Participant does not participate in, and has
never participated in another qualified plan
maintained by the Employer or a welfare benefit fund,
as defined in section 419(e) of the Code maintained
by the Employer, or an individual medical account, as
defined in section 415(1)(2) of the Code, maintained
by the Employer, which provides an Annual Addition as
defined in section 1.07, the amount of Annual
Additions which may be credited to the Participant's
account for any Limitation Year will not exceed the
lesser of the Maximum Permissible Amount or any other
limitation contained in this Plan. If the Employer
contribution that would otherwise be contributed or
allocated to the Participant's account would cause
the Annual Additions for the Limitation Year to
exceed the Maximum Permissible Amount, the amount
contributed or allocated will be reduced so that the
Annual Additions for the Limitation year will equal
the Maximum Permissible Amount.
(2) Prior to determining the Participant's actual _415
Compensation for the Limitation Year, the Employer
may determine the Maximum Permissible Amount for a
Participant on the basis of a reasonable estimation
of the Participant's _415 Compensation for the
Limitation Year, uniformly determined for all
Participants similarly situated.
(3) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible
amount for the Limitation Year will be determined on
the basis of the Participant's actual _415
Compensation for the Limitation Year.
(4) If, as a result of the allocation of Forfeitures, a
reasonable error in estimating a Participant's
Compensation, a reasonable error in determining the
amount of elective deferrals (within the meaning of
Code Section 402(g)(3)) that may be made with respect
to any Participant hereunder or other facts and
circumstances to which Regulation 1.415-6(b)(6) shall
be applicable, there is an Excess Amount, the excess
will be disposed of as follows:
(A) Any elective deferrals (within the meaning
of Code Section 402(g)(3)) or any
nondeductible voluntary employee
contributions, to the extent they would
reduce the Excess Amount, will be returned
to the Participant;
(B) If after the application of paragraph (A) an
Excess Amount still exists, and the
Participant is covered by the Plan at the
end of the Limitation Year, the Excess
Amount in the Participant's account will be
used to reduce Employer Contributions
(including any allocation of forfeitures)
for such Participant in the next Limitation
Year, and each succeeding Limitation Year if
necessary.
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<PAGE>
(C) If after the application of paragraph (A) an
Excess Amount still exists, and the
Participant is not covered by the Plan at
the end of a Limitation Year, the Excess
Amount will be held unallocated in a
suspense account. The suspense account will
be applied to reduce future Employer
Contributions (including allocation of any
Forfeitures) for all remaining Participants
in the next Limitation Year, and each
succeeding Limitation Year if necessary.
(D) If a suspense account is in existence at any
time during a Limitation Year pursuant to
this section, it will not participate in the
allocation of the trust's investment gains
and losses. If a suspense account is in
existence at any time during a particular
Limitation Year, all amounts in the suspense
account must be allocated and reallocated to
Participant's Accounts before any Employer
Contributions or any employee contributions
may be made to the Plan for that Limitation
Year. Excess Amounts may not be distributed
to Participants or Former Participants.
(b) (1) This subsection applies if, in addition to this Plan,
the Participant is covered under another qualified
master or prototype defined contribution plan
maintained by the Employer, a welfare benefit fund,
as defined in section 419(e) of the Code maintained
by the Employer, or an individual medical account, as
defined in section 415(1)(2) of the Code, maintained
by the Employer, which provides an Annual Addition as
defined in section 1.07, during any Limitation Year.
The Annual Additions which may be credited to a
Participant's account under this Plan for any such
Limitation Year will not exceed the Maximum
Permissible Amount reduced by the Annual Additions
credited to a Participant's account under the other
plans and welfare benefit funds for the same
Limitation Year. If the Annual Additions with respect
to the Participant under other defined contribution
plan and welfare benefit funds maintained by the
Employer are less than the Maximum Permissible Amount
and the Employer Contribution that would otherwise be
contributed or allocated to the Participant's account
under this Plan would cause the Annual Additions for
the Limitation Year to exceed this limitation, the
amount contributed or allocated will be reduced so
that the Annual Additions under all such plans and
funds for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with
respect to the Participant under such other defined
contribution plans and welfare benefit funds in the
aggregate are equal to or greater than the Maximum
Permissible Amount, no amount will be contributed or
allocated to the Participant's account under this
Plan for the Limitation Year.
(2) Prior to determining the Participant's actual _415
Compensation for the Limitation Year, the Employer
may determine the Maximum Permissible Amount for a
Participant in the manner described in section
5.01(a)(2).
(3) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible
Amount for the Limitation Year will be determined on
the basis of the Participant's actual _415
Compensation for the Limitation Year.
(4) If, pursuant to section 5.01(b)(3) or as a result of
the allocation of Forfeitures, a Participant's Annual
Additions under this Plan and such
44
<PAGE>
other plans would result in an Excess Amount for a
Limitation Year, the Excess Amount will be deemed to
consist of the Annual Additions last allocated,
except that Annual Additions attributed to a welfare
benefit fund or individual medical account will be
deemed to have been allocated first regardless of the
actual allocation date.
(5) If an Excess Amount was allocated to a Participant on
an allocation date of this Plan which coincides with
an allocation date of another plan, the Excess Amount
attributed to this Plan will be the product of -
(A) the total Excess Amount allocated as of such
date, times
(B) the ratio of (i) the Annual Additions
allocated to the participant for the
Limitation Year as of such date under this
Plan to (ii) the total Annual Additions
allocated to the Participant for the
Limitation Year as of such date under this
and all the other qualified master or
prototype defined contribution plans.
(6) Any Excess Amount attributed to this Plan will be
disposed in the manner described in section
5.01(a)(4).
(c) If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a
Master or Prototype Plan, Annual Additions which may be
credited to the Participant's account under this Plan for any
Limitation Year will be limited in accordance with section
5.01(b)(1) through (6) as though the other plan were a Master
or Prototype Plan unless the Employer provides other
limitations in Item 43 of the Adoption Agreement.
(d) If the Employer maintains, or at any time maintained, a
qualified defined benefit plan covering any Participant in
this Plan, the sum of the Participant's Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction will not
exceed 1.0 in any Limitation Year. The Annual Additions which
may be credited to the Participant's account under this Plan
for any Limitation Year will be limited in accordance with
Item 43 of the Adoption Agreement.
5.02 LIMITATIONS ON EMPLOYEE ELECTIVE DEFERRALS:
(a) The Actual Deferral Percentage (hereinafter sometimes "ADP")
for Participants who are Highly Compensated Employees for each
Plan Year and the ADP for Participants who are Nonhighly
Compensated Employees for the same Plan Year must satisfy one
of the following tests:
(1) The Actual Deferral Percentage for Participants who
are Highly Compensated Employees for the Plan Year
shall not exceed the Actual Deferral Percentage for
Participants who are Nonhighly Compensated Employees
for the Plan Year multiplied by 1.25; or
(2) The Actual Deferral Percentage for Participants who
are Highly Compensated Employees for the Plan Year
shall not exceed the Actual Deferral Percentage for
Participants who are Nonhighly Compensated Employees
for the Plan Year multiplied by 2, provided that the
Actual Deferral Percentage for Participants who are
Highly Compensated Employees does not exceed the
Actual Deferral Percentage for
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<PAGE>
Participants who are Nonhighly Compensated Employees
by more than two (2) percentage points.
(b) Special Rules
(1) The ADP for any Participant who is a Highly
Compensated Employee for the Plan Year and who is
eligible to have Employee Elective Deferrals (and
Employer Qualified NonElective Contributions or
Employer Qualified Matching Contributions, or both,
if treated as Employee Elective Deferrals for
purposes of the ADP test) allocated to his or her
accounts under two or more arrangements described in
section 401(k) of the Code, that are maintained by
the Employer, shall be determined as if such Employee
Elective Deferrals (and, if applicable such Employer
Qualified Non- elective Contributions or Employer
Qualified Matching Contributions, or both) were made
under a single arrangement. If a Highly Compensated
Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all cash
or deferred arrangements ending with or within the
same calendar year shall be treated as a single
arrangements.
(2) In the event that this Plan satisfies the
requirements of sections 401(k), 401(a)(4), or 410(b)
of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the
requirements of such sections of the Code only if
aggregated with this Plan, then this section shall be
applied by determining the ADP of employees as if all
such plans were a single plan. For Plan Years
beginning after December 31, 1989, plans may be
aggregated in order to satisfy section 401(k) of the
Code only if they have the same Plan Year.
(3) For purposes of determining the ADP of a Participant
who is a 5-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the
Employee Elective Deferrals (and Employer Qualified
Non-elective Contributions or Employer Qualified
Matching Contributions, or both, if treated as
Employee Elective Deferrals for purposes of the ADP
test) and Compensation of such Participant shall
include the Employee Elective Deferrals (and, if
applicable, Employer Qualified Non-elective
Contributions and Employer Qualified Matching
Contributions, or both) and Compensation for the Plan
Year of Family Members (as defined in section
414(g)(6) of the Code). Family Members, with respect
to such Highly Compensated Employees, shall be
disregarded as separate employees in determining the
ADP both for Participants who are Nonhighly
Compensated Employees and for Participants who are
Highly Compensated Employees.
(4) For purposes of determining the ADP test, Employee
Elective Deferrals, Employer Qualified Non-elective
Contributions and Employer Qualified Matching
Contributions must be made before the last day of the
twelve-month period immediately following the Plan
Year to which contributions relate.
(5) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the
amount of Employer Qualified Non-Elective
Contributions or Employer Qualified Matching
Contributions, or both, used in such test.
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<PAGE>
(6) The determination and treatment of the ADP amounts of
any Participant shall satisfy such other requirements
as may be prescribed by the Secretary of the
Treasury.
5.03 LIMITATIONS ON EMPLOYER MATCHING CONTRIBUTIONS AND EMPLOYEE POST-TAX
VOLUNTARY CONTRIBUTIONS:
(a) The Average Contribution Percentage (hereinafter sometimes
"ACP") for Participants who are Highly Compensated Employees
for each Plan Year and the ACP for Participants who are
Non-highly Compensated Employees for the same Plan Year must
satisfy one of the following tests:
(1) The Average Contribution Percentage for Participants
who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Contribution
Percentage for Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by
1.25; or
(2) The Average Contribution Percentage for Participants
who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Contribution
Percentage for Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by
2, provided that the Average Contribution Percentage
for Participants who are Highly Compensated Employees
does not exceed the Average Contribution Percentage
for Participants who are Nonhighly Compensated
Employees by more than two (2) percentage points.
(b) Special Rules
(1) For purposes of this section, the Contribution
Percentage for any Participant who is a Highly
Compensated Employee and who is eligible to have
Contribution Percentage Amounts allocated to his or
her account under two or more plans described in
section 401(k) of the Code that are maintained by the
Employer, shall be determined as if the total of such
Contribution Percentage Amounts was made under each
plan. If a Highly Compensated Employee participates
in two or more cash or deferred arrangements that
have different plan years, all cash or deferred
arrangements ending with or within the same calendar
year shall be treated as a single arrangement.
(2) In the event that this Plan satisfies the
requirements of sections 401(m), 401(a)(4) or 410(b)
of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the
requirements of such sections of the Code only if
aggregated with this Plan, then this section shall be
applied by determining the Contribution Percentage of
employees as if all such plans were a single plan.
For Plan Years beginning after December 31, 1989,
plans may be aggregated in order to satisfy section
401(m) of the Code only if they have the same Plan
Year.
(3) For purposes of determining the Contribution
Percentage of a Participant who is a five-percent
owner or one of the ten most highly-paid Highly
Compensated Employees, the Contribution Percentage
Amounts and Compensation of such Participant shall
include the Contribution Percentage Amounts and
Compensation for the Plan Year of Family
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Members (as defined in section 414(q)(6) of the
Code). Family Members, with respect to Highly
Compensated Employees, shall be disregarded as
separate employees in determining the Contribution
Percentage both for Participants who are Nonhighly
Compensated Employees and for Participants who are
Highly Compensated Employees.
(4) For purposes of determining the Contribution
Percentage test, Employee Contributions are
considered to have been made in the Plan Year in
which contributed to the trust. Employer Matching
Contributions, Employer Qualified Matching
Contributions, and Employer Qualified Non-elective
Contributions will be considered made for a Plan Year
if made no later than the end of the twelve-month
period beginning on the date after the close of the
Plan Year.
(5) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the
amount of Employer Qualified Non-elective
Contributions or Employer Qualified Matching
Contributions, or both, used in such test.
(6) For purposes of the ACP test, the Plan will take into
account the Contribution Percentages of all eligible
employees. For this purpose, an eligible employee is
any employee who is directly or indirectly eligible
to receive an allocation of Employer Matching
Contributions, including: an employee who would be a
Participant but for the failure to make required
contributions; an employee whose right to make
Employee Contributions or to receive Employer
Matching Contributions has been suspended because of
an election (other than certain one-time elections)
not to participate; and an employee who is unable to
make an Employee Contribution or receive an Employer
Matching Contribution because his Compensation is
less than a stated dollar amount. In the case of an
eligible employee who makes no Employee Contributions
and receives no Employer Matching Contributions, the
Contribution Percentage to be included in determining
the Average Contribution Percentage is zero.
(7) For Plan Years beginning before the later of January
1, 1992 or the date that is 60 days after publication
of final regulations, "Compensation" for purposes of
computing an Employee's Contribution Percentage shall
be limited to Compensation (as defined in section
1.19) received by the Employee while a Participant in
the Plan.
(8) The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such
other requirements as may be prescribed by the
Secretary of the Treasury.
5.04 PROCEDURE FOR DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS:
(a) Notwithstanding any other provision of this Plan, Excess
Elective Deferrals assigned to this Plan, plus any income and
minus any losses allocable thereto, shall be distributed no
later than April 15 to Participants who claim Excess Elective
Contributions for the preceding taxable year and assign them
to the Plan for such preceding year.
(b) A Participant may assign to this Plan any Excess Elective
Deferrals made during a taxable year of the Participant by
notifying the Plan Administrator on or before
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March 15 of the amount of the Excess Elective Deferrals to be
assigned to the Plan. The Participant's notice shall be in
writing, shall specify the Participant's Excess Elective
Deferrals for the preceding taxable year, and shall be
accompanied by the Participant's written statement that if
such amounts are not distributed, such Excess Elective
Deferrals when added to amounts deferred under other plans or
arrangements described in sections 401(k), 408(k) or 403(b) of
the Code, exceed the limit imposed on the Participant by
section 402(g) of the Code for the year in which the deferral
occurred.
(c) Excess Elective Deferrals shall be adjusted for any income or
loss up to the date of distribution. The income or loss
allocable to Excess Elective Deferrals is the income or loss
allocable to the Participant's Employee Elective Deferral
account for the taxable year multiplied by a fraction, the
numerator of which is such Participant's Excess Elective
Deferrals for the year and the denominator is the
Participant's account balance attributable to Employee
Elective Deferrals without regard to any income or loss
occurring during such taxable year. There shall be no further
adjustment for income or loss allocable to the period between
the end of the taxable year and the date of distribution.
5.05 DISTRIBUTION OF EXCESS CONTRIBUTIONS:
(a) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income or minus any loss allocable
thereto, shall be distributed no later than the last day of
each Plan Year to Participants to whose accounts such Excess
Contributions were allocated for the preceding Plan Year. If
such excess amounts are distributed more than 2-1/2 months
after the last day of the Plan Year in which such excess
amounts arose, a ten (10) percent excise tax will be imposed
on the Employer maintaining the Plan with respect to such
amounts. Such distributions shall be made to Highly
Compensated Employees on the basis of the respective portions
of the Excess Contributions attributable to each of such
Employees. Excess Contributions shall be allocated to
Participants who are subject to the Family Member aggregation
rules of section 414(q)(6) of the Code in the manner
prescribed by the regulations.
(b) Distribution of Excess Contributions shall include any income
or loss up to the date of distribution. The income or loss
allocable to Excess Contributions is the sum of: (1) income or
loss allocable to the Participant's Employee Elective Deferral
Account (and, if applicable, the Employer Qualified
Non-elective Contribution Account or the Employer Qualified
Matching Contributions Account or both) for the Plan Year
multiplied by a fraction, the numerator of which is such
Participant's Excess Contributions for the year and the
denominator is the Participant's account balance attributable
to Employee Elective Deferrals (and Employer Qualified
Non-Elective Contributions or Employer Qualified Matching
Contributions, or both, if any of such contributions are
included in the ADP test) without regard to any income or loss
occurring during such Plan Year. There shall be no further
adjustment for income or loss allocable to the period between
the end of the Plan Year and the date of the distribution.
(c) Excess Contributions shall be first distributed from the
Participant's Employee Elective Deferral Account until
exhausted and then from the Employer Qualified Matching
Contribution Account (to the extent used in the ADP test) for
the Plan Year. Excess Contributions shall be distributed from
the Participant's Employer Qualified Non-Elective Contribution
account only to the extent that such Excess
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Contributions exceed the balance in the Participant's Employee
Elective Deferral Account and Employer Qualified Matching
Contribution Account.
5.06 DISTRIBUTION OF EXCESS MATCHING CONTRIBUTIONS OR EMPLOYEE POST-TAX
VOLUNTARY CONTRIBUTIONS:
(a) Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss
allocable thereto, shall be distributed no later than the last
day of each Plan Year to Participants to whose accounts such
Excess Aggregate Contributions were allocated for the
preceding Plan Year. Excess Aggregate Contributions shall be
allocated to Participants who are subject to the Family Member
aggregation rules of section 414(q)(6) of the Code in the
manner prescribed by the regulations.
If such Excess Aggregate Contributions are distributed more
than 2-1/2 months after the last day of the Plan Year in which
such excess amounts arose, a ten (10) percent excise tax will
be imposed on the Employer maintaining the Plan with respect
to those amounts.
(b) The amount of Excess Aggregate Contributions to be distributed
shall be adjusted for any income or loss up to the date of
distribution. The income or loss allocable to Excess Aggregate
Contributions is the income or loss allocable to the
Participant's Employee Post-Tax Voluntary Contribution
Account, Employer Matching Contribution Account (if any, and
if all amounts therein are not used in the ADP test) and, if
applicable, Employer Qualified Non-Elective Contribution
Account, Employer Qualified Matching Account, and Employee
Elective Deferral Account for the Plan Year multiplied by a
fraction, the numerator of which is such Participant's Excess
Aggregate Contributions for the year and the denominator is
the Participant's account balance(s) attributable to
Contribution Percentage Amounts without regard to any income
or loss occurring during such Plan Year. There shall be no
further adjustment for income or loss allocable to the period
between the end of the Plan Year and the date of distribution.
(c) Excess Aggregate Contributions shall be distributed on a pro
rata basis from the Participant's Employee Post-Tax Voluntary
Contribution Account, Employer Matching Contribution Account,
Employer Qualified Matching Contribution Account (and, if
applicable, from the Participant's Employer Qualified Non-
elective Contribution Account or Employee Elective Deferral
Account, or both).
5.07 MULTIPLE USE LIMITATION:
If one or more Highly Compensated Employees participate in both a cash
or deferred arrangement and a plan subject to the ACP test maintained
by the Employer, and the sum of the ADP and ACP of those Highly
Compensated Employees subject to either or both tests exceeds the
Aggregate Limit, then the ADP of those Highly Compensated Employees who
also participate in a cash or deferred arrangement will be reduced
(beginning with such Highly Compensated Employee whose ADP is the
highest) so that the limit is not exceeded. The amount by which each
Highly Compensated Employee's Contribution Percentage Amounts is
reduced shall be treated as an Excess Aggregate Contribution. The ADP
and ACP of the Highly Compensated Employees are determined after any
corrections required to meet the ADP and ACP tests. Multiple use does
not occur if both ADP and ACP of the Highly Compensated Employees does
not exceed 1.25 multiplied by the ADP and ACP of the Non-highly
Compensated Employees.
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Provided, however, that for Plan Years beginning before the later of
January 1, 1992 or the date that is 60 days after publication of final
regulations, the Aggregate Limit in the preceding paragraph is
increased to the greater of the Aggregate Limit or the following new
aggregate limit. The new aggregate limit is the sum of:
(a) 125 percent of the lesser of (1) the actual deferral
percentage of the group of non-highly compensated employees
eligible under the arrangement subject to section 401(k) of
the Code for the Plan Year, or (2) the actual contribution
percentage of the group of non-highly compensated employees
eligible under the Plan subject to section 401(m) of the Code
for the Plan year beginning with or within the Plan Year of
the arrangement subject to section 401(k) of the Code, and
(b) Two plus the greater of (1) or (2) above. In no event,
however, shall this amount exceed 200 percent of the greater
of (1) or (2) above.
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ARTICLE VI
VESTING AND FORFEITURES
6.01 NONFORFEITABLE ACCOUNTS:
A Participant's Employee Elective Deferral Account, Employee Post-Tax
Voluntary Contribution Account, Employee Rollover/Transfer Account,
Employee VDEC Account, Employer Qualified Matching Contribution
Account, and Employer Qualified Non-Elective Contribution Account, and
all earnings, appreciations and additions thereto, less any losses,
depreciation and distributions allocable thereto, shall be fully vested
and nonforfeitable at all times.
6.02 ACCOUNTS SUBJECT TO VESTING SCHEDULE:
A Participant's Vested Percentage in his Employer Profit Sharing
Contribution Account and Employer Matching Contribution Account shall
be determined as follows:
(a) NORMAL RETIREMENT AGE:
A Participant's interest in his Employer Profit Sharing
Contribution Account and Employer Matching Contribution
Account shall become fully vested when he reaches Normal
Retirement Age. A Participant who terminates his service with
the Employer prior to Normal Retirement Age but does not
suffer a one-year Break in Service before the close of the
Plan Year in which his Normal Retirement Date occurs will be
deemed to have terminated employment on his Normal Retirement
Age.
(b) DEATH OR DISABILITY:
A Participant's interest in his Employer Profit Sharing
Contribution Account and Employer Matching Contribution
Account shall become fully vested upon his death or Disability
prior to Normal Retirement Age.
(c) TERMINATION BEFORE NORMAL RETIREMENT AGE:
A Participant's Vested Percentage in his Employer Profit
Sharing Contribution Account and Employer Matching
Contribution Account shall be determined according to the
vesting schedule specified in the Adoption Agreement if the
Participant terminates his employment before attaining Normal
Retirement Age.
(d) PLAN TERMINATION:
A Participant's interest in his Employer Profit Sharing
Contribution Account and Employer Matching Contribution
Account shall become fully vested in the event of termination
or partial termination of this Plan, or upon complete
discontinuance of Employer contributions.
6.03 VESTING AT TERMINATION:
(a) When a Participant's employment is terminated on account of
retirement on or after Normal Retirement Age, death,
Disability, or otherwise, the Vested Percentage of his
Employer Profit Sharing Contribution Account and his Employer
Matching Contribution Account (after all required adjustments
thereto) shall be determined in accordance with section 6.02
and the vesting schedule specified in the Adoption Agreement
as of the Valuation Date coincident with or next following
termination of employment. The Participant's Vested Percentage
of his Employer Profit Sharing Contribution Account and his
Employer Matching
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Contribution Account and the balance, if any, of all of the
Participant's other accounts will become distributable to the
Participant or his Beneficiary in accordance with Article VII.
Any nonvested balance will become a Forfeiture and will be
allocated pursuant to section 6.04.
(b) If a Participant terminates employment and elects in
accordance with the requirements of section 7.02(b) to receive
less than the entire value of the Vested Percentage of his
Participant's Account derived from Employer contributions, the
part of the nonvested portion that will be a Forfeiture is the
total nonvested portion multiplied by a fraction, the
numerator of which is the amount of the distribution
attributable to employer contributions and the denominator of
which is the total value of the Vested Percentage of the
Participant's Employer Contribution Account.
6.04 FORFEITURES:
Forfeitures will be allocated as follows:
(a) Forfeitures shall be first used to restore Participants'
Employer Profit Sharing Contribution Accounts and Employer
Matching Contribution Accounts pursuant to the buyback
provisions of section 6.05;
(b) Forfeitures shall next be used to restore any Participant's
Accounts pursuant to the restoration provisions of sections
4.05(a)(1) and 9.04(e);
(c) Forfeitures shall next be used to reduce the Employer's
Matching Contribution, if any, for the Plan Year, if so
elected in the Adoption Agreement; and
(d) Any remaining Forfeitures shall be allocated to Participant's
Employer Profit Sharing Contribution Accounts in accordance
with section 4.02 for the Plan Year in which the Forfeiture
occurs.
6.05 BUYBACK:
(a) If a Former Participant is reemployed by the Employer before
the Former Participant incurs five consecutive 1-year Breaks
in Service, and such Former Participant has received a
distribution of all or any portion of the Vested Percentage of
his Participant's Account prior to his reemployment, any
forfeited amounts shall be restored to the amount on the date
of distribution if he repays the full amount distributed to
him, other than his Employee Post-Tax Voluntary Contribution
Account and his Employee Rollover/Transfer Contribution
Account, before the earlier of 5 years after the first date on
which the Participant is subsequently reemployed by the
Employer, or the date the Participant incurs five consecutive
1-year Breaks in Service after the date of the distribution.
(b) If a Former Participant is reemployed by the Employer before
the Former Participant incurs five consecutive 1-year Breaks
in Service, and such Former Participant was deemed to have
received a distribution of the entire Vested Percentage of his
Participant's Account prior to his reemployment, he shall be
deemed to have repaid the amount of the deemed distribution,
and any amounts forfeited on the date of deemed distribution
shall be restored.
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ARTICLE VII
PAYMENT OF BENEFITS
7.01 PAYMENT OF BENEFITS:
(a) The Vested Percentage of a Participant's Account shall become
payable to a Participant or his beneficiary pursuant to this
Article VII as follows:
(1) Upon actual retirement on or after the Participant's
Normal Retirement Date.
(2) Upon the death of the Participant.
(3) Upon the Disability of the Participant.
(4) Upon termination of the Participant's employment
prior to retirement, death, or Disability.
(b) The Vested Percentage of a Participant's Account may also be
distributed upon:
(1) Termination of the Plan without the establishment of
another defined contribution plan.
(2) The disposition by the Employer (if a corporation) to
an unrelated corporation of substantially all of the
assets (within the meaning of section 409(d)(2) of
the Code) used in a trade or business of such
corporate Employer if such corporate Employer
continues to maintain this Plan after the
disposition, but only with respect to Employees who
continue employment with the corporation acquiring
such assets.
(3) The disposition by the Employer (if a corporation) to
an unrelated entity of such corporate Employer's
interest in a subsidiary (within the meaning of
section 409(d)(3) of the Code) if such corporate
Employer continues to maintain the Plan, but only
with respect to Employees who continue employment
with such subsidiary.
(4) The attainment of the age, if any, elected in Item 42
of the Adoption Agreement. However, under no
circumstances will any distribution be made from a
Participant's Employee Elective Deferral Account,
Employer Qualified Non-Elective Contribution Account,
or Employer Qualified Matching Contribution Account
pursuant to this provision before the Participant
attains age 59-1/2.
(5) The hardship of the Participant as described in
section 7.12 of the Plan, if the Employer so elects
in the Adoption Agreement.
(c) If so elected in Item 20 of the Adoption Agreement, a
Participant shall be entitled to withdraw all or a portion of
his Employee Post-Tax Voluntary Contributions and, with the
consent of the Plan Administrator, the actual earnings
thereon. In the event such a withdrawal is made, a Participant
shall be barred from making any additional Employee Post-Tax
Voluntary Contributions or withdrawals until
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the first day of the next Plan Year. All withdrawals of
Employee Post-Tax Voluntary Contributions shall be made
subject to the uniform and nondiscriminatory requirements of
the Employer as to the timing and manner of such withdrawals.
No Forfeitures shall result solely as a result of withdrawal
of Employee Post-Tax Voluntary Contributions.
All distributions that may be made pursuant to one or more of
the foregoing distributable events are subject to the spousal
and participant consent requirements (if applicable) contained
in sections 401(a)(11) and 417 of the Code.
7.02 COMMENCEMENT OF BENEFITS:
(a) A Participant whose benefit has become payable pursuant to
7.01(a)(1), (2) or (3) (retirement, death or Disability) shall
be eligible to commence receiving benefit payments as of the
Valuation Date coincident with or next following the date of
termination of employment. Such Participant (or the
Participant's Beneficiary, if the Participant has died) may
request that up to 50% of the Participant's Account be
distributed as soon as administratively feasible, and the
remainder will be distributed after such Valuation Date.
However, if the Employer has elected item 37.c or 37.d which
would permit payment sooner had the Participant terminated for
reasons other than death, Disability or retirement, then the
Participant (or his Beneficiary) may elect such earlier
payment as if his benefit had become payable pursuant to
7.01(a)(4). A Participant whose benefit has become payable
pursuant to 7.01(a)(4) shall be eligible to commence receiving
benefit payments in accordance with the selection made in Item
37 of the Adoption Agreement.
(b) Each Participant whose employment with the Employer has
terminated for a cause other than death of the Participant
shall be eligible to elect the time at which his benefit
payments hereunder shall commence. Such election may be made
at any time after the Participant's termination of employment
and must be made in writing to the Plan Administrator. The
election must specify the proposed date as of which the
Participant elects to commence receiving benefit payments. The
Plan Administrator shall commence benefit payments pursuant to
the election as soon as administratively feasible after the
Valuation Date coincident with or next following the
commencement date specified in the Participant's election.
However, if the Employer has elected Item 37.c. in the
Adoption Agreement, the distribution will be made in one or
more payments as soon as administratively feasible after the
proposed date, based on the balance of the Participant's
Account as of the immediately preceding Valuation Date,
adjusted for any contributions, withdrawals, distributions,
loans, insurance payments, or expenses since that date.
(c) Unless the Participant elects to the contrary pursuant to
7.02(b), distribution of benefits shall commence no later than
sixty (60) days after the latest of:
(1) The close of the Plan Year in which the Participant
attains the Normal Retirement Age specified in the
Adoption Agreement;
(2) If the Participant does not retire by his Normal
Retirement Date, the date the Participant terminates
employment; or
(3) The 10th anniversary of the year in which the
Participant commenced participation in the Plan.
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Notwithstanding the foregoing, the failure of a Participant
and Spouse to consent to a distribution while a benefit is
immediately distributable, within the meaning of section 7.08
of the Plan, shall be deemed to be an election to defer
commencement of payment of any benefit sufficient to satisfy
this section.
(d) Distribution of a Participant's Account must be made or begun
by the Required Beginning Date.
7.03 JOINT AND SURVIVOR REQUIREMENTS:
(a) Unless an election was made in the Adoption Agreement not to
provide life annuity benefit options pursuant to the special
rule described in section 7.10, the provisions of this section
7.03 shall apply to any Participant who is credited with at
least one Hour of Service with the Employer on or after August
23, 1984 and such other Participants as provided in section
7.11.
(b) Except as provided in section 7.03(a) and 7.10, a Participant
or Former Participant who has a Vested Percentage in his
Participant's Account, including any balance held in the
Participant's Employee Post-Tax Voluntary Contribution Account
and Employee Rollover/Transfer Account, which becomes payable
for any reason other than the death of the Participant shall
receive any distribution from the Plan in the form of a Joint
and Survivor Annuity if the Participant is married on the date
benefit payments commence, or in the form of a life annuity if
the Participant is unmarried, unless an optional form of
benefit described in section 7.06 is selected pursuant to a
Qualified Election within the 90 day period ending on the
Annuity Starting Date, or unless the benefit is payable under
section 7.08(a). These joint and survivor annuity requirements
shall apply to any benefit payable to a Participant under a
contract purchased by the Plan and paid by a third party.
7.04 MINIMUM DISTRIBUTION REQUIREMENTS:
(a) Subject to the joint and survivor annuity requirements, the
requirements of sections 7.04, 7.05, 7.06, 7.07, and 7.13
shall apply to any distribution of a Participant's Account and
will take precedence over any inconsistent provisions of this
Plan. Unless otherwise specified, the provisions of such
sections apply to calendar years beginning after December 31,
1984. All distributions required under such sections shall be
determined and made in accordance with the proposed
regulations under section 401(a)(9) of the Code, including the
minimum distribution incidental benefit requirement of section
1.401(a)(9)-2 of the proposed regulations.
(b) If the Participant's Account is to be distributed in other
than a single sum, the following minimum distribution rules
shall apply on or after the Required Beginning Date:
(1) For amounts distributed from an individual account:
(A) If a Participant's Benefit is to be
distributed over (i) a period not extending
beyond the life expectancy of the
Participant or the joint life and last
survivor expectancy of the Participant and
the Participant's Designated Beneficiary or
(ii) a period not extending beyond the life
expectancy of the Designated Beneficiary,
the amount required to be distributed for
each calendar year, beginning with
distributions for the first Distribution
Calendar Year, must at
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least equal the quotient obtained by
dividing the Participant's Benefit by the
Applicable Life Expectancy.
(B) For calendar years beginning before January
1, 1989, if the Participant's Spouse is not
the Designated Beneficiary, the method of
distribution selected must assure that at
least 50% of the present value of the amount
available for distribution is paid within
the life expectancy of the Participant.
(C) For calendar years beginning after December
31, 1988, the amount to be distributed each
year, beginning with distributions for the
first Distribution Calendar Year, shall not
be less than the quotient obtained by
dividing the Participant's Benefit by the
lesser of (i) the Applicable Life Expectancy
or (ii) if the Participant's Spouse is not
the Designated Beneficiary, the applicable
divisor determined from the table set forth
in Q&A-4 of section 1.401(a)(9)- 2 of the
proposed regulations. Distributions after
the death of the Participant shall be
distributed using the Applicable Life
Expectancy in section 7.04(b)(1)(a) above as
the relevant divisor without regard to
proposed regulations section 1.401(a)(9)- 2.
(D) The minimum distribution required for the
Participant's first Distribution Calendar
Year must be made on or before the
Participant's Required Beginning Date. The
minimum distribution for the other calendar
years, including the minimum distribution
for the Distribution Calendar Year in which
the Employee's Required Beginning Date
occurs, must be made on or before December
31 of that Distribution Calendar Year.
(2) If the Participant's Benefit is distributed in the
form of an annuity purchased from an insurance
company, distributions thereunder shall be made in
accordance with the requirements of section 401(a)(9)
of the Code and the proposed regulations thereunder.
7.05 PAYMENT AT DEATH:
(a) Except as provided in sections 7.03(a) and 7.10, if a
Participant or Former Participant dies before benefit payments
have commenced, the Vested Percentage of the Participant's
Account, including the proceeds of any life insurance
Contracts allocated to the Participant's Account, will be paid
in the form of a Preretirement Survivor Annuity unless an
optional form of benefit described in section 7.06 is selected
pursuant to a Qualified Election within the Qualified
Preretirement Survivor Annuity Election Period. Furthermore,
the Surviving Spouse may elect to have such Preretirement
Survivor Annuity distributed within a reasonable period after
the death of the Participant.
(b) Notwithstanding section 7.05(a), the Participant's
Beneficiary, including the Participant's Surviving Spouse,
shall have the right to elect following the death of the
Participant that the Vested Percentage of the Participant's
Account be paid in an optional form of benefit as described in
section 7.06. Further, the Participant's Beneficiary may elect
the time at which benefit payments shall commence. Such
election may be made at any time after the Participant's death
and must be made in writing to the Plan Administrator. The
election must specify the proposed date as of which the
Beneficiary elects to commence receiving benefit payments.
Such
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commencement date shall not be earlier than the date the
Beneficiary becomes eligible for payment pursuant to section
7.02(a) and shall comply with the requirements of 7.05(c)
below. The Plan Administrator shall commence benefit payments
pursuant to the election as soon as administratively feasible
after the Valuation Date coincident with or next following the
commencement date specified in the Participant's Beneficiary's
election.
(c) Any benefits paid because of the death of the Participant,
including the proceeds of any life insurance Contracts held by
the Plan on the life of the Participant, shall be distributed
according to the following rules:
(1) If the Participant dies after distribution of his
interest has begun, the remaining portion of such
interest will continue to be distributed at least as
rapidly as under the method of distribution being
used prior to the Participant's death.
(2) If the Participant dies before distribution of his
interest begins, distribution of the Participant's
entire interest shall be completed by December 31 of
the calendar year containing the fifth anniversary of
the Participant's death, except to the extent that an
election is made to receive the distribution in
accordance with (A) or (B) below.
(A) If any portion of the Participant's interest
is payable to a Designated Beneficiary,
distributions may be made over the life or
over a period certain not greater than the
life expectancy of the Designated
Beneficiary commencing on or before December
31 of the calendar year immediately
following the calendar year in which the
Participant died.
(B) If the Designated Beneficiary is the
Participant's Surviving Spouse, the date
distributions are required to begin in
accordance with (A) above need not be
earlier than the later of (i) December 31 of
the calendar year immediately following the
calendar year in which the Participant died
and (ii) December 31 of the calendar year in
which the Participant would have attained
age 70-1/2.
If the Participant has not made an election
pursuant to this section 7.05(c)(2) by the
time of his death, the Participant's
Designated Beneficiary must elect the method
of distribution no later than the earlier of
(1) December 31 of the calendar year in
which distributions would be required to
begin under this section, or (2) December 31
of the calendar year which contains the
fifth anniversary of the date of death of
the Participant. If the Participant has no
Designated Beneficiary, or if the Designated
Beneficiary does not elect a method of
distribution, distribution of the
Participant's entire interest must be
completed by December 31 of the calendar
year containing the fifth anniversary of the
Participant's death.
(3) For purposes of section 7.05(c)(2) above, if the
Surviving Spouse dies after the Participant, but
before payments to such spouse begin, the provisions
of section 7.05(c)(2), with the exception of
paragraph (B) therein, shall be applied as if the
Surviving Spouse were the Participant.
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(4) For purposes of this section 7.05(c), any amount paid
to a child of the Participant will be treated as if
it had been paid to the Surviving Spouse if the
amount becomes payable to the Surviving Spouse when
the child reaches the age of majority.
(5) For the purposes of this section 7.05(c),
distribution of a Participant's interest is
considered to begin on the Participant's Required
Beginning Date (or, if section 7.05(c)(3) above is
applicable, the date distribution is required to
begin to the surviving spouse pursuant to section
7.05(c)(2) above). If distribution in the form of an
annuity irrevocably commences to the Participant
before the Required Beginning Date, the date
distribution is considered to begin is the date
distribution actually commences.
7.06 OPTIONAL FORM OF PAYMENT OF BENEFITS:
Benefits may be paid in any of the following forms subject to the
provisions of sections 7.03, 7.04, and 7.05. However, options (c) and
(d) are not applicable if the Employer has elected in the Adoption
Agreement that the benefit options will not include any form of life
annuity.
(a) A single payment to the Participant (or to the Designated
Beneficiary, if the Participant has died).
(b) Installments for a period certain not to exceed the life
expectancy of the Participant (or the Participant's
Beneficiary, if the Participant has died) or the joint lives
and last survivor expectancies of the Participant and the
Participant's Designated Beneficiary. In such case, the
Participant's Account from which such benefits are paid shall
remain part of the general Trust Fund and shall be subject to
the gains and losses of the Trust Fund. However, the
Participant may elect to have such Participant's Account held
in a segregated account and to invest the same as directed by
such Participant in writing.
(c) An annuity for the life of the Participant (or for the life of
the Designated Beneficiary, if the Participant has died).
(d) A joint and survivor annuity for the lives of the Participant
and the Designated Beneficiary.
(e) A combination of the above.
7.07 DESIGNATION OF BENEFICIARY:
(a) Each Participant may, by written notice filed with the
Administrator, designate a Beneficiary or Beneficiaries to
receive the Participant's benefit at the Participant's death.
Such designation may be changed or revised from time to time
by written instrument filed with the Administrator. If no
designation has been made, or if no Beneficiary is living at
the time of a Participant's death, his Beneficiary shall be:
(1) his Surviving Spouse; but if he has no Surviving
Spouse,
(2) his surviving children, in equal shares; but if he
has no surviving children,
(3) his estate.
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(b) A Beneficiary designation shall be effective only to the
extent that the Plan is not required to:
(1) pay the Vested Percentage of the Participant's
Account in the form of an annuity for the life of the
Surviving Spouse pursuant to section 7.03(b), or
(2) pay the Vested Percentage of the Participant's
Account to the Surviving Spouse in accordance with
section 7.10.
7.08 RESTRICTIONS ON IMMEDIATE DISTRIBUTIONS:
(a) If a Participant's Account has become payable pursuant to the
provisions of section 7.02 and the Vested Percentage of the
Participant's Account does not exceed $3,500, the value of the
Vested Percentage of the Participant's Account shall be
distributed to him. If the Vested Percentage of the
Participant's Account is zero, the Participant shall be deemed
to have received a distribution of the value of the Vested
Percentage of the account. For purposes of computing the value
of the Vested Percentage of the Participant's Account,
accumulated deductible employee contributions within the
meaning of section 72(o)(5)(B) of the Code for Plan Years
beginning before January 1, 1989 shall not be considered.
(b) (1) If the value of the Vested Percentage of a
Participant's Account derived from Employer and
Employee contributions exceeds (or at the time of any
prior distribution exceeded) $3,500, and the account
balance is immediately distributable, the Participant
and the Participant's Spouse (or where either the
Participant or the Spouse has died, the survivor)
must consent to any distribution of such account
balance. The consent of the Participant and the
Participant's Spouse shall be obtained in writing
within the 90-day period ending on the Annuity
Starting Date. The Plan Administrator shall notify
the Participant and the Participant's Spouse of the
right to defer any distribution until the
Participant's account balance is no longer
immediately distributable. Such notification shall
include a general description of the material
features, and an explanation of the relative values
of, the optional forms of benefit available under the
Plan in a manner that would satisfy the notice
requirements of section 417(a)(3), and shall be
provided no less than 30 days and no more that 90
days prior to the Annuity Starting Date.
Notwithstanding the foregoing, if a distribution is
one to which sections 401(a)(11) and 417 of the Code
do not apply, such distribution may commence less
than 30 days after the notice required under section
1.411(a)-11(c) of the regulations under the Code is
given, provided that:
(A) the Plan Administrator clearly informs the
Participant that the Participant has a right
to a period of at least 30 days after
receiving the notice to consider the
decision of whether or not to elect a
distribution (and, if applicable, a
particular distribution option), and
(B) the Participant, after receiving the notice,
affirmatively elects a distribution.
(2) Notwithstanding the foregoing, only the Participant
need consent to the commencement of a distribution in
the form of a Joint and Survivor
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Annuity while the account balance is immediately
distributable. (Furthermore, if payment in the form
of a Joint and Survivor Annuity is not required with
respect to the Participant pursuant to section 7.10
of the Plan, only the Participant need consent to the
distribution of an account balance that is
immediately distributable.) Neither the consent of
the Participant nor the Participant's Spouse shall be
required to the extent that a distribution is
required to satisfy section 401(a)(9) or section 415
of the Code. In addition, upon termination of this
Plan if the Plan does not offer an annuity option
(purchased from a commercial provider), the
Participant's Account may, without the Participant's
consent, be distributed to the Participant or
transferred to another defined contribution plan
(other than an employee stock ownership plan as
defined in section 4975(e)(7) of the Code) within the
same controlled group.
(3) An account balance is immediately distributable if
any part of the account balance could be distributed
to the Participant (or Surviving Spouse) before the
Participant attains (or would have attained if not
deceased) the later of Normal Retirement Age or age
62.
(4) For purposes of determining the applicability of the
foregoing consent requirements to distributions made
before the first day of the first Plan Year beginning
after December 31, 1988, the value of the Vested
Percentage of the Participant's Account shall not
include amounts attributable to accumulated
deductible employee contributions within the meaning
of section 72(o)(5)(B) of the Code.
7.09 NOTICE REQUIREMENTS:
(a) In the case of a Joint and Survivor Annuity, the Plan
Administrator shall no less than 30 days and no more than 90
days prior to the Annuity Starting Date provide each
Participant a written explanation of:
(1) The terms and conditions of a Joint and Survivor
Annuity;
(2) The Participant's right to make and the effect of an
election to waive the Joint and Survivor Annuity form
of benefit;
(3) The rights of a Participant's Spouse; and
(4) The right to make, and the effect of, a revocation of
a previous election to waive the Joint and Survivor
Annuity.
(b) In the case of a Preretirement Survivor Annuity, the Plan
Administrator shall provide each Participant within the
Applicable Period a written explanation of the Preretirement
Survivor Annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the
requirements of section 7.09(a) applicable to a Joint and
Survivor Annuity.
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7.10 SPECIAL RULE FOR ELECTING PLANS:
(a) This section applies if the Employer has elected in the
Adoption Agreement that the benefit options will not include
any form of life annuity. If such an election is made by the
Employer, then the following two conditions are applicable to
the Plan:
(1) The Participant cannot elect payments in the form of
a life annuity, and
(2) On the death of the Participant, the Participant's
Account including any life insurance proceeds from
Contracts on the life of the Participant will be paid
to the Participant's Surviving Spouse, but if there
is no Surviving Spouse, or, if the Surviving Spouse
has already consented in a manner conforming to a
Qualified Election, then to the Participant's
Designated Beneficiary.
(3) The Surviving Spouse may elect to have distribution
of the Participant's Account within the 90-day period
following the date of the Participant's death. The
account balance will be adjusted for gains or losses
occurring after the Participant's death in accordance
with the provisions of the Plan governing the
adjustment of account balances for other types of
distributions.
However, this section 7.10 shall not be operative with respect
to the Participant if it is determined that this Plan is a
direct or indirect transferee of a defined benefit plan, money
purchase pension plan (including a target benefit plan), or
stock bonus or profit sharing plan which is subject to the
survivor annuity requirements of section 401(a)(11) and 417 of
the Code. If this section is operative, then the Joint and
Survivor Annuity requirement of section 7.04 and the
Preretirement Survivor Annuity requirement of section 7.05
shall be inoperative.
(b) The Participant may waive the spousal benefit provided in
section 7.10(a)(2) above at any time; provided, however, that
no such waiver shall be effective unless it satisfies the
conditions (other than the notice requirements referred to
therein) that would apply to the Participant's Qualified
Election to waive the Preretirement Survivor Annuity.
7.11 TRANSITIONAL JOINT AND SURVIVOR ANNUITY RULES:
(a) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed
by the previous sections of this Article must be given the
opportunity to elect to have the prior sections of this
Article apply if such Participant is credited with at least
one Hour of Service under this Plan or a predecessor plan in a
Plan Year beginning on or after January 1, 1976, and such
Participant had at least 10 years of vesting service when he
separated from service.
(b) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour of Service under
this Plan or a predecessor plan on or after September 2, 1974,
and who is not otherwise credited with any service in a Plan
Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance
with section 7.11(d) of this Article.
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(c) The opportunities to elect described in (a) and (b) above must
be afforded to the appropriate Participants during the period
commencing on August 23, 1984, and ending on the date benefits
would otherwise commence to said Participants.
(d) Any Participant who has elected pursuant to section 7.11(b)
above and any Participant who does not elect under section
7.11(a) above or who meets the requirements of section 7.11(a)
except that such Participant does not have at least 10 years
of vesting service when he separates from service, shall have
his benefits distributed in accordance with all of the
following requirements if benefits would have been payable in
the form of a life annuity.
(1) Automatic Joint and Survivor Annuity. If benefits in
the form of a life annuity become payable to a
married Participant who:
(i) begins to receive payments under the Plan on
or after Normal Retirement Age; or
(ii) dies on or after Normal Retirement Age while
still working for the Employer; or
(iii) begins to receive payments on or after the
qualified early retirement age; or
(iv) separates from service on or after attaining
Normal Retirement Age (or the Qualified
Early Retirement Age) and after satisfying
the eligibility requirements for the payment
of benefits under the Plan and thereafter
dies before beginning to receive such
benefits,
then such benefits will be received under this Plan
in the form of a Joint and Survivor Annuity, unless
the Participant has elected otherwise during the
election period. The election period must begin at
least 6 months before the Participant attains
Qualified Early Retirement Age and end not more than
90 days before the commencement of benefits. Any
election hereunder will be in writing and may be
changed by the Participant at any time.
(2) Election of early survivor annuity. A Participant who
is employed after attaining the Qualified Early
Retirement Age will be given the opportunity to
elect, during the election period, to have a survivor
annuity payable on death. If the Participant elects
the survivor annuity, payments under such annuity
must not be less than the payments which would have
been made to the Spouse under the Joint and Survivor
Annuity if the Participant had retired on the day
before his death. Any election under this provision
will be in writing and may be changed by the
Participant at any time. The election period begins
on the later of (1) the 90th day before the
Participant attains the Qualified Early Retirement
Age, or (2) the date on which participation begins,
and ends on the date the Participant terminates
employment.
7.12 HARDSHIP WITHDRAWALS:
(a) If so elected by the Employer in the Adoption Agreement,
distribution of a Participant's Employee Elective Deferrals
Account (including only those earnings accrued as of December
31, 1988) may be made to a Participant in the event of
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hardship. For the purposes of this section, hardship is
defined as an immediate and heavy financial need of the
Employee where such Employee lacks other available resources.
Hardship distributions are subject to the spousal consent
requirements contained in sections 401(a)(11) and 417 of the
Code, unless the Employer has made the election described in
section 7.10.
(b) The following are the only financial needs considered
immediate and heavy: expenses incurred or necessary for
medical care described in section 213(d) of the Code, of the
Employee, the Employee's spouse, children, or dependents; the
purchase (excluding mortgage payments) of a principal
residence for the Employee; payment of tuition and related
educational fees for the next 12 months of post-secondary
education for the Employee, the Employee's spouse, children or
dependents; the need to prevent the eviction of the Employee
from, or a foreclosure on the mortgage of, the Employee's
principal residence; and any other financial need deemed by
the Commissioner of the Internal Revenue Service to be
immediate and heavy.
(c) A distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Employee only if:
(1) The Employee has obtained all distributions, other
than hardship distributions, and all nontaxable loans
under all plans maintained by the Employer;
(2) All plans maintained by the Employer provided that
the Employee's Elective Deferrals (and Employee Post-
Tax Voluntary Contributions) will be suspended for
twelve months after the receipt of the hardship
distribution;
(3) The distribution is not in excess of the amount of an
immediate and heavy financial need (including amounts
necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result
from the distribution); and
(4) All plans maintained by the Employer provide that the
Employee may not make Employee Elective Deferrals for
the Employee's taxable year immediately following the
taxable year of the hardship distribution in excess
of the applicable limit under section 401(g) of the
Code for such taxable year less the amount of such
Employee's Employee Elective Deferral for the taxable
year of the hardship distribution.
(d) If a distribution is made to a Participant under this section
7.12, then the following shall apply:
(1) The Participant's Employee Elective Deferrals and
Employee Post-Tax Voluntary Contributions will be
suspended for 12 months after the receipt of the
hardship distribution. A Participant whose deferrals
and contributions have been suspended will be deemed
to have elected to stop his deferrals and
contributions and will be permitted to begin
deferrals and contributions pursuant to the
applicable provisions of this Plan.
(2) The Participant may not make Employee Elective
Deferrals for the Employee's taxable year immediately
following the taxable year of the hardship
distribution in excess of the applicable limit under
section 401(g)
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of the code for such taxable year less the amount of
such Participant's Employee Elective Deferral for the
taxable year of the hardship distribution.
7.13 TRANSITIONAL MINIMUM DISTRIBUTION RULES:
(a) Notwithstanding the other requirements of this article and
subject to the joint and survivor annuity requirements in this
article, distribution on behalf of any Employee, including a
5-percent owner, may be made in accordance with all of the
following requirements (regardless of when such distribution
commences):
(1) The distribution by the trust is one which would not
have disqualified such trust under section 401(a)(9)
of the Internal Revenue Code as in effect prior to
amendment by the Deficit Reduction Act of 1984.
(2) The distribution is in accordance with a method of
distribution designated by the Employee whose
interest in the trust is being distributed or, if the
Employee is deceased, by a Beneficiary of such
Employee.
(3) Such designation was in writing, was signed by the
Employee or the Beneficiary, and was made before
January 1, 1984.
(4) The Employee had accrued a benefit under the Plan as
of December 31, 1983.
(5) The method of distribution designated by the Employee
or the Beneficiary specifies the time at which
distribution will commence, the period over which
distributions will be made, and in the case of any
distribution upon the Employee's death, the
Beneficiaries of the Employee listed in order of
priority.
(b) A distribution upon death will not be covered by this
transitional rule unless the information in the designation
contains the required information described above with respect
to the distributions to be made upon the death of the
Employee.
(c) For any distribution which commences before January 1, 1984,
but continues after December 31, 1983, the Employee will be
presumed to have designated the method of distribution under
which the distribution is being made if the method of
distribution was specified in writing and the distribution
satisfies the requirements in subsections 7.13(a)(1) and (5).
(d) If a designation is revoked, any subsequent distribution must
satisfy the requirements of section 401(a)(9) of the Code and
the proposed regulations thereunder. If a designation is
revoked subsequent to the date distributions are required to
begin, the trust must distribute by the end of the calendar
year following the calendar year in which the revocation
occurs the total amount not yet distributed which would have
been required to have been distributed to satisfy section
401(a)(9) of the Code and the proposed regulations thereunder,
but for the section 242(b)(2) election. For calendar years
beginning after December 31, 1988, such distributions must
meet the minimum distribution incidental benefit requirements
in section 1.401(a)(9)-2 of the proposed regulations. Any
changes in the designation will be considered to be a
revocation of the designation. However, the mere substitution
or addition of another beneficiary (one not named in the
designation) under the designation will not be considered to
be a revocation
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of the designation, so long as such substitution or addition
does not alter the period over which distributions are to be
made under the designation, directly or indirectly (for
example, by altering the relevant measuring life). In the case
in which an amount is transferred or rolled over from one plan
to another plan, the rules in Q&A J-2 and Q&A J-3 shall apply.
7.14 IN-SERVICE DISTRIBUTIONS:
If so elected in Item 42 of the Adoption Agreement, distribution of up
to 100% of the Participant's Account may be made to a Participant who
is still an Employee if all of the following requirements have been
met:
(a) The Participant must have completed at least 5 years of
participation in the Plan. If the Participant has not
completed 5 years of participation, then only amounts which
have been on deposit for at least 24 months may be withdrawn.
(b) The Participant has satisfied any requirements specified in
Item 42 of the Adoption Agreement.
(c) If required by Item 42 of the Adoption Agreement, the
Participant must have suffered a financial hardship,
determined by the Administrator. Financial hardship shall
include but not be limited to a deductible medical expense, a
deductible casualty loss, an illness or disability which
prevents employment for six weeks or more, a judgment or other
extraordinary liability exceeding 10% of the Participant's
taxable income, funeral expenses for a member of the
Participant's family, the threatened foreclosure of a mortgage
on the Participant's residence, the threatened bankruptcy of
the Participant, the education of the Participant's children,
or the purchase of the Participant's primary personal
residence.
Notwithstanding the above, distributions to a Participant from his
Employee Elective Deferral Account, Employer Qualified Matching
Account, and Employer Qualified Non-Elective Account may be made only
if otherwise distributable under section 7.01.
7.15 DISTRIBUTIONS UNDER QUALIFIED DOMESTIC RELATIONS ORDER:
(a) Distribution of all or any part of a Participant's Account
pursuant to the provisions of a qualified domestic relations
order as defined in section 414(p) of the Code ("QDRO") is
specifically authorized. Distribution may be made to an
alternate payee (as defined in section 414(p)(8) of the Code)
under a QDRO prior to a Participant's earliest retirement age
(as defined in section 414(p)(4)(B) of the Code) if the QDRO
provides for an earlier distribution. This provision does not
entitle the alternate payee to receive a form of distribution
not otherwise permitted under this Plan.
(b) Upon receipt of an order which appears to be a domestic
relations order, the Plan Administrator will promptly notify
the Participant and each alternate payee of the receipt of the
order and provide them with a copy of the procedures
established by the Plan for determining whether the order is a
QDRO. While the determination is being made, a separate
accounting will be made with respect to any amounts which
would be payable under the order while the determination is
being made. If the Plan Administrator or a court determines
that the order is a QDRO within 18 months after receipt, the
Plan Administrator will begin making payments, including the
separately-accounted for amounts, pursuant to the order when
required or as soon as administratively practical. If the Plan
Administrator or
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court determines that the order is not a QDRO, or if no
determination is made within 18 months after receipt, then the
separately accounted for amounts will be either restored to
the Participant's Account or distributed to the Participant,
as if the order did not exist. If the order is subsequently
determined to be a QDRO, such determination shall be applied
prospectively to payments made after the determination.
(c) This section does not authorize a Participant to receive a
distribution at a time not otherwise permitted under the Plan.
7.16 DIRECT ROLLOVER:
Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Distributee's election under this
part, a Distributee may elect with respect to any distribution
made on or after January 1, 1993, at the time and in the
manner prescribed by the Plan Administrator, to have any
portion of an Eligible Rollover Distribution paid directly to
an Eligible Retirement Plan. If the Distributee's Eligible
Rollover Distributions are expected to total less than $200
during the Plan Year, the Administrator is not required to
remit the benefit in a Direct Rollover. If the Distributee
elects to have only a portion of an Eligible Rollover
Distribution paid as a Direct Rollover, the Administrator may
require that portion equal or exceed $500. The Distributee may
not specify more than one Eligible Retirement Plan to which a
Direct Rollover is to be made.
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ARTICLE VIII
SPECIAL TOP-HEAVY PLAN RULES
8.01 APPLICABILITY OF ARTICLE:
If the Plan is or becomes a Top-Heavy Plan in any Plan Year beginning
after December 31, 1983, or is deemed to be a Top-Heavy Plan under the
Adoption Agreement, the provisions of this Article VIII shall become
applicable and shall supersede any conflicting provisions under the
Plan or the Adoption Agreement.
8.02 MINIMUM ALLOCATIONS:
(a) Except as otherwise provided in (c) and (d) below, the
Employer Contributions and Forfeitures allocated on behalf of
any Participant who is not a Key Employee shall not be less
than the lesser of three percent of such Participant's
Compensation, or in the case where the Employer has no defined
benefit plan which designates this Plan to satisfy section 401
of the Code, the largest percentage of Employer Contributions
and Forfeitures and Employee Elective Deferrals, as a
percentage of the Key Employee's Compensation as limited by
section 401(a)(17) of the Code, allocated on behalf of any Key
Employee for that year. The minimum allocation is determined
without regard to any Social Security contribution. This
minimum allocation shall be made even though, under other Plan
provisions, the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser
allocation for the year because of (i) the Participant's
failure to complete 1,000 Hours of Service (or any equivalent
provided in the Plan), or (ii) the Participant's failure to
make mandatory employee contributions or elective
contributions to the Plan, or (iii) Compensation less than a
stated amount. In a Top-Heavy Plan Year in which the Employer
maintains another plan or plans covering any Participant under
this Plan, then the minimum allocation level as selected in
Item 28 of the Adoption Agreement shall be substituted for the
three percent (3%) of Compensation described above.
(b) For purposes of computing the minimum allocation, Compensation
will mean Compensation as defined in Item 18 of the Adoption
Agreement without regard to the exclusions from Compensation
as defined in Item 18.d. of the Adoption Agreement.
(c) Employee Elective Deferrals and Employer Matching
Contributions and Employer Qualified Matching Contributions
made on account of Employee Elective Deferrals may not be
taken into account for the purpose of satisfying this section.
(d) The provision in (a) above shall not apply to any Participant
who was not employed by the Employer on the last day of the
Plan Year.
(e) The provision in (a) above shall not apply to any Participant
to the extent the Participant is covered under any other plan
or plans of the Employer and the Employer has provided in Item
28 of the Adoption Agreement that the minimum allocation or
benefit requirement applicable to Top-Heavy Plans will be met
in the other plan or plans.
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(f) The minimum contribution required pursuant to this section (to
the extent required to be nonforfeitable under section 416(b)
of the Code) may not be forfeited under sections 411(a)(3)(B)
or 411(a)(3)(D) of the Code.
8.03 MINIMUM VESTING:
For any Plan Year in which this is a Top-Heavy Plan, the minimum
vesting schedule elected by the Employer in the Adoption Agreement will
automatically apply to the Plan. The minimum vesting schedule applies
to all benefits within the meaning of section 411(a)(7) of the Code
except those attributable to Employee contributions, including benefits
accrued before the effective date of section 416 and benefits accrued
before the Plan became a Top-Heavy Plan. Further, no decrease in a
Participant's Vested Percentage may occur in the event the Plan's
status as a Top-Heavy Plan changes for any Plan Year. However, this
section does not apply to the account balances of any Employee who does
not have an Hour of Service after the Plan has initially become a
Top-Heavy Plan and such Employee's account balance attributable to
Employer Contributions and Forfeitures will be determined without
regard to this section. If the Plan's status changes from a Top-Heavy
Plan to a non- Top-Heavy Plan, any change to a different vesting
schedule because of the change in status will be considered an
amendment to the vesting schedule for purposes of Section 14.01 of the
Plan.
8.04 SUPER TOP-HEAVY PLANS:
In any Plan Year in which the Top-Heavy Ratio exceeds 90%, the
denominators of the Defined Benefit Fraction and the Defined
Contribution Fraction shall be computed using 100 percent of the dollar
limitation instead of 125 percent.
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ARTICLE IX
ADMINISTRATION OF PLAN
9.01 RESPONSIBILITIES OF EMPLOYER:
The Employer shall have the following responsibilities with respect to
administration of the Plan:
(a) The Employer shall adopt a funding policy and method
consistent with the obligations of the Plan and Title I of
ERISA. The Employer shall communicate such policy to the
Trustee, which shall coordinate such funding policy with its
investment strategy.
(b) The Employer may in its discretion appoint an Investment
Manager to manage all or a designated portion of the assets of
the Plan. In such event, the Trustee shall follow the
directive of the Investment Manager in investing the assets of
the Plan managed by the Investment Manager.
(c) The Employer shall appoint an Administrator to administer the
Plan. In absence of such an appointment, the Employer shall
serve as Administrator. The Employer may remove and reappoint
an Administrator from time to time.
(d) The Employer shall, formally or informally, review the
performance from time to time of persons appointed by it or to
which duties have been delegated by it, such as the Trustee,
Administrator, and Committee.
(e) The Employer shall supply the Administrator in a timely manner
with all information necessary for it to fulfill its
responsibilities under the Plan. The Administrator may rely
upon such information and shall have no duty to verify it.
9.02 RIGHTS AND RESPONSIBILITIES OF PLAN ADMINISTRATOR:
The Administrator shall administer the Plan according to its terms for
the exclusive benefit of Participants, Former Participants, and their
Beneficiaries.
(a) The Administrator's responsibilities shall include but not be
limited to the following:
(1) Determining all questions relating to the eligibility
of Employees to participate or remain Participants
hereunder.
(2) Computing, certifying and directing the Trustee with
respect to the amount and form of benefits to which a
Participant may be entitled hereunder.
(3) Authorizing and directing the Trustee with respect to
disbursements from the Trust Fund.
(4) Maintaining all necessary records for administration
of the Plan.
(5) Interpreting the provisions of the Plan and preparing
and publishing rules and regulations for the Plan
which are not inconsistent with its terms and
provisions.
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(6) Complying with all reporting, disclosure and notice
requirements of the Code and ERISA.
(b) In order to fulfill its responsibilities, the Administrator
shall have all powers necessary or appropriate to accomplish
his duties under the Plan, including the power to determine
all questions arising in connection with the administration,
interpretation and application of the Plan. Any such
determination shall be conclusive and binding upon all
persons. However, all discretionary acts, interpretations and
constructions shall be done in a nondiscriminatory manner
based upon uniform principles consistently applied. No action
shall be taken which would be inconsistent with the intent
that the Plan remain qualified under section 401(a) of the
Code. The Administrator is specifically authorized to employ
or retain suitable employees, agents, and counsel as may be
necessary or advisable to fulfill its responsibilities
hereunder, and to pay their reasonable compensation, which
shall be reimbursed from the Trust Fund if not paid by the
Employer within thirty days after the Administrator advises
the Employer of the amount owed.
(c) The Administrator shall serve as the designated agent for
legal process under the Plan.
9.03 ADMINISTRATIVE COMMITTEE:
If so provided in the Adoption Agreement, the Employer shall appoint a
Committee of one or more persons to serve as the Administrator. The
Employer shall make its appointments in writing, and each member of the
Committee shall consent in writing to serve on the Committee. The
following provisions shall govern the Committee.
(a) MEMBERSHIP -
Any Employee or member of the board of directors of the
Employer is eligible to serve as a member of the Committee.
The Committee members shall hold office at the pleasure of the
Employer, and all vacancies shall be filled by the Employer.
(b) OFFICERS -
The Committee shall elect a Chairman, Secretary, and such
other officers as it may determine from its membership, to
serve at the pleasure of the Committee.
(c) MEETINGS -
The Committee shall hold meetings upon such notice, at such
place or places, and at such times as it may from time to time
determine. Notice shall not be required if waived in writing.
A majority of the members of the Committee in office at the
time shall constitute a quorum for the transaction of
business. All resolutions or other actions taken by the
Committee at any meeting shall be by vote of a majority of
those present at such meeting and entitled to vote.
Resolutions may be adopted or other action taken without a
meeting upon written consent signed by a majority of the
members of the Committee.
(d) EXPENSES AND COMPENSATION -
All usual and reasonable expenses of the Committee may be paid
in whole or part by the Employer, and any expenses of the
Committee not paid by the Employer shall be paid by the
Trustee out of the principal or earnings of the Trust Fund.
Any members of the Committee who are Employees shall not
receive compensation with respect to their services with the
Committee. The Committee and the individual members thereof
shall be indemnified by the Employer, and not from the Trust
Fund, against any and all liabilities arising by reason of any
act
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or failure to act made in good faith pursuant to the
provisions of the Plan, including expenses reasonably incurred
in the defense of any claim relating thereto.
(e) RECORDS -
Any act or determination with respect to the administration of
the Plan made by the Committee and any assistant or
representative appointed by it shall be duly recorded by the
Committee or by the assistant or representative appointed by
it to keep such records. All records, together with such other
documents as may be necessary for the administration of the
Plan, shall be preserved in the custody of the Committee or
the assistant or representative appointed by it. The Committee
shall keep on file a copy of the Plan and Trust, including any
subsequent amendments, and registration statements as may be
required by the laws of the United States or other
jurisdiction, for examination by Participants in the Plan
during reasonable business hours.
(f) ADMINISTRATIVE DIRECTIVES OF THE COMMITTEE -
Administrative directives of the Committee to the Trustee
shall be delivered in writing and signed by a member of the
Committee authorized by the Committee to sign on its behalf.
(g) DISCRETIONARY ACTS -
Any discretionary actions of the Committee or the Employer
with respect to the administration of the Plan shall be made
in a manner which does not discriminate in favor of Highly
Compensated Employees. In the event the Committee exercises
any discretionary authority under the Plan with respect to a
Participant who is a member of the Committee, such
discretionary authority shall be exercised solely and
exclusively by those members of the Committee other than such
Participant, or if such Participant is the sole member of the
Committee, such discretionary authority shall be exercised
solely and exclusively by the Board of Directors of the
Employer.
(h) RESIGNATION -
A member of the Committee may resign at any time by filing a
writing notice thereof with the Employer and the Committee,
effective on some later date specified in the notice. If a
member of the Committee ceases to be an Employee or member of
the board of directors of the Employer, he shall be deemed to
have resigned from the Committee on such date.
9.04 BENEFIT CLAIMS PROCEDURE:
(a) Any claim for benefits under the Plan shall be made in writing
to the Administrator. If such claim for benefits is wholly or
partially denied, the Administrator shall, within thirty (30)
days after receipt of the claim, notify the Participant or
Beneficiary of the denial of the claim. Such notice of denial
shall:
(1) be in writing;
(2) be written in a manner calculated to be understood by
the Participant or Beneficiary, and
(3) contain:
(A) the specific reason or reasons for denial of
the claim,
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(B) a specific reference to the pertinent Plan
provisions upon which the denial is based,
(C) a description of any additional material or
information necessary to perfect the claim,
along with an explanation of why such
material or information is necessary, and
(D) an explanation of the claim review procedure
in accordance with the provisions of this
Article.
(b) Within sixty (60) days after the receipt by the Participant or
Beneficiary of a written notice of denial of the claim, or
such later time as shall be deemed reasonable taking into
account the nature of the benefit subject to the claim and any
other attendant circumstances, the Participant or Beneficiary
may file a written request with the Administrator that it
conduct a full and fair review of the denial of the claim for
benefits.
(c) The Administrator shall deliver to the Participant or
Beneficiary a written decision on the claim within thirty (30)
days after the receipt of the aforementioned request for
review, except that if there are special circumstances (such
as the need to hold a hearing, if necessary) which require an
extension of time for processing, the aforementioned thirty
(30) day period shall be extended to sixty (60) days. Such
decisions shall:
(1) be written in a manner calculated to be understood by
the Participant or Beneficiary,
(2) include the specific reason or reasons for the
decision, and
(3) contain a specific reference to the pertinent Plan
provisions upon which the decision is based.
(d) The decision of the Administrator shall be final and binding
on all parties, unless determined by a court of competent
jurisdiction to be arbitrary and capricious.
(e) (1) If after a Participant's Account becomes
distributable under Article VII no claim for benefit
is made by the Participant within 6 months after
notice by certified mail addressed to such
Participant is sent to the last known address of such
Participant, then the Participant's Account shall be
deemed to have been forfeited, and the forfeiture
shall be allocated pursuant to section 6.04 of the
Plan.
(2) If a Participant whose Participant's Account has been
forfeited pursuant to this provision at any time
thereafter makes a claim for the benefit, the dollar
amount of the Participant's Account which was
forfeited, unadjusted for earnings or losses
subsequent to the date of forfeiture, shall be
restored during the Plan Year in which the claim is
made. The restoration shall be made as follows:
first, from any Forfeitures which would have
otherwise been allocated for the Plan Year; second,
from any earnings of the Trust Fund for the Plan
Year; and finally, from Employer contributions
allocated for the Plan Year.
9.05 MULTIPLE ROLES:
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Nothing herein shall be interpreted to prevent the same person from
serving in more than one fiduciary capacity for the Plan.
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ARTICLE X
TRUST AGREEMENT
10.01 TRUST AGREEMENT:
Unless otherwise elected in the Adoption Agreement, this Trust
Agreement shall form a part of the Plan, and all rights and benefits
that may accrue to any persons under the Plan shall be subject to all
the terms and provisions of this Article X. The Trustee hereunder
agrees to take, hold, invest, administer, and distribute, in accordance
with the following provisions, all contributions and assets paid or
delivered to it pursuant to the Plan. The Trustee shall carry out its
duties with the care, skill, prudence, and diligence under the
circumstances then prevailing that a man in a like capacity and
familiar with such matters would use in the conduct of an enterprise of
a like character and with like aims. All legal right, title and
interest in and to the assets of the Trust Fund shall at all times be
vested exclusively in the Trustee.
10.02 BASIC RESPONSIBILITIES OF TRUSTEE:
The Trustee shall have the following primary responsibilities:
(a) To invest, manage and control the assets of the Plan in a
manner consistent with the funding policy established by the
Employer, subject, however, to the direction of an Investment
Manager as to all or a portion of the assets of the Plan, if
an Investment Manager has been appointed by the Employer, and
subject to the direction of Participants if the Employer has
so provided in the Adoption Agreement.
(b) To maintain accounting records for all receipts, disbursements
and interests of Participants, and to furnish the Employer an
annual report.
(c) To value the assets of the trust at fair market value on the
Valuation Date, and to allocate the earnings and losses to
each Participant's Account in the manner specified in the
Adoption Agreement.
(d) To pay benefits under the Plan to Participants and their
Beneficiaries at the direction of the Administrator.
10.03 INVESTMENT:
(a) Subject to the provisions of paragraphs (c) and (d) of this
section, the Trustee is authorized to invest the Trust Fund in
such bonds, notes, debentures, mortgages, investment trust
certificates, preferred or common stocks, interests in real
estate, leaseholds, royalties (including overriding oil and
gas royalties whether measured by production or by gross or
taxable income from property), oil and gas leases, oil
payments or any other type of oil properties, and other forms
of securities (including qualified employer securities (as
defined in section 407(d)(5) of ERISA), but not exceeding the
percentage, if any, of the Trust Fund specified by the
Employer in the Adoption Agreement), any pooled investment
funds or any common or mutual trust funds, including any
pooled fund or common trust fund administered by the Trustee,
or in any other property, real or personal, either within or
without the State of Texas, as the Trustee may deem advisable,
without being limited by a statute or rule of court regarding
investments by trustees. The
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Trustee may hold any reasonable portion of the Trust Fund in
cash pending investment or payment of expenses or benefits,
without liability for interest.
(b) Subject to the provisions of paragraphs (c) and (d) of this
section, as of any valuation date of a collective trust
established for the purpose of collective investment of the
assets of trusts maintained with the Trustee or other trustees
under qualified retirement plans (hereinafter referred to as a
"Collective Trust"), the Trustee may transfer any part or all
of the assets of the Trust Fund to the trustee of the
Collective Trust for admission to one or more of the
investment funds therein. The Trustee is expressly authorized
to permit the commingling of any or all of the assets of the
Trust Fund, through the medium of the Collective Trust, with
the assets of other trusts eligible to participate in the
Collective Trust under the terms thereof. During such time as
any part or all of the assets of the Trust Fund are held in
the Collective Trust, they shall be subject to all of the
provisions of the declaration creating the Collective Trust as
amended from time to time. The Trustee shall have with respect
to the interest of the Trust Fund in the Collective Trust the
powers conferred by this Trust Agreement to the extent that
such powers are not inconsistent with the provisions of the
declaration creating the Collective Trust. The Trustee may
withdraw all or any part of any interest of the Trust Fund in
the Collective Trust in accordance with the terms of the
Collective Trust. To the extent of the interest of the Trust
Fund in the Collective Trust, the Collective Trust shall be
part of the Plan.
(c) If the Employer so elects in the Adoption Agreement, a
Participant may direct the Trustee as to the investment of the
Participant's accounts specified in the Adoption Agreement.
The Trustee shall maintain a segregated account for each of
the accounts for which investment is directed by a
Participant, except for the portion of any Participant's
Account which has been invested in a commingled investment
fund established by the Trustee pursuant to section 10.04(t).
The Trustee is authorized to establish any reasonable rules
and procedures governing Participant-directed accounts which
it deems desirable. Any such rules and procedures will be
applied to all Participants on a nondiscriminatory basis. The
Trustee is specifically authorized to establish any rules,
procedures, and investment alternatives which it deems
necessary or advisable to comply with the requirements of
section 404(c) of ERISA. To the extent allowed by law, the
Trustee shall not be liable for any loss resulting from the
Participant's direction of the investment of all or any
portion of his Participant's Account.
(d) The Employer may, in its discretion, appoint in writing one or
more Investment Managers to direct the investment of all or
any portion of the Trust Fund, as follows:
(1) The Employer shall give the Trustee copies of (A) the
instrument appointing the Investment Manager, (B) an
instrument evidencing the acceptance of appointment,
acknowledging that the Investment Manager is a
fiduciary for purposes of ERISA, and certifying the
Investment Manager's registration under the
Investment Adviser's Act of 1940, and (C) direction
to the Trustee as to the portion of the Trust Fund to
be invested at the direction of the Investment
Manager.
(2) After receipt of the instruments described in (1)
above, the Trustee shall make available to the
Investment Manager the appropriate portion of the
Trust Fund. The Trustee shall be under no obligation
to review or question any investment decision made by
the Investment Manager, and
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the Trustee shall have no liability for losses with
respect to such investments on account of any action
directed, taken, or omitted by such Investment
Manager. The Investment Manager will continue to
direct the investment of the appropriate portion of
the Trust Fund until the Trustee receives written
notice from the Employer that the Investment Manager
has resigned or has been removed.
10.04 RIGHTS AND POWERS OF THE TRUSTEE:
The Trustee is authorized to exercise all powers conferred upon the
Trustee by law which it may deem necessary or proper for the investment
and protection of the Trust Fund. The Trustee, to the extent permitted
by law or regulatory authority, is specifically authorized and
empowered:
(a) To purchase, or subscribe for, any securities or other
property and to retain the same. In conjunction with the
purchase of securities, margin accounts may be opened and
maintained;
(b) To sell, exchange, convey, transfer, grant options to
purchase, or otherwise dispose of any securities or other
property held by the Trustee, by private contract or at public
auction. No person dealing with the Trustee shall be bound to
see to the application of the purchase money or to inquire
into the validity, expediency, or propriety of any such sale
or other disposition, with or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or
without power of substitution; to exercise any conversion
privileges, subscription rights or other options, and to make
any payments incidental thereto; to oppose, or to consent to,
or otherwise participate in, corporate reorganizations or
other changes affecting corporate securities, and to delegate
discretionary powers, and to pay any assessments or charges in
connection therewith; and generally to exercise any of the
powers of an owner with respect to stocks, bonds, securities,
or other property;
(d) To cause any securities or other property to be registered in
the Trustee's own name or in the name of one or more of the
Trustee's nominees, and to hold any investments in bearer
form, but the books and records of the Trustee shall at all
times show that all such investments are part of the Trust
Fund;
(e) To borrow or raise money for the purposes of the Plan in such
amount, and upon such terms and conditions, as the Trustee
shall deem advisable; and for any sum so borrowed, to issue a
promissory note as Trustee, and to secure the repayment
thereof by pledging all, or any part, of the Trust Fund; and
no person lending money to the Trustee shall be bound to see
the application of the money lent or to inquire into the
validity, expediency, or propriety of any borrowing;
(f) To keep such reasonable portion of the Trust Fund in cash or
cash balances as the Trustee may, from time to time, deem to
be in the best interests of the Plan, without liability for
interest thereon;
(g) To accept and retain for such time as the Trustee may deem
advisable any securities or other property received or
acquired as Trustee hereunder, whether or not such securities
or other property would normally be purchased as investments
hereunder;
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(h) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry out
the powers herein granted;
(i) To settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Plan, to
commence or defend suits or legal or administrative
proceedings, and to represent the Plan in all suits and legal
and administrative proceedings;
(j) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation, and such agent or
counsel may or may not be agent or counsel for the Employer;
(k) To apply for and procure from responsible insurance companies,
to be selected by the Administrator, as an investment of the
Trust Fund such annuity, or other Contracts (on the life of
any Participant) as the Administrator shall deem proper; to
exercise, at any time or from time to time, whatever rights
and privileges may be granted under such annuity, or other
Contracts; to collect, receive, and settle for the proceeds of
all such annuity or other Contracts as and when entitled to do
so under the provisions thereof;
(l) To invest funds of the Trust in time deposits or savings
accounts bearing a reasonable rate of interest in the
Trustee's bank;
(m) To invest in Treasury Bills and other forms of United States
government obligations;
(n) Except as hereinafter expressly authorized, the Trustee is
prohibited from selling or purchasing stock options. The
Trustee is expressly authorized to write and sell call options
under which the holder of the option has the right to purchase
shares of stock held by the Trustee as a part of the assets of
this Trust, if such options are traded on and sold through a
national securities exchange registered under the Securities
Exchange Act of 1934, as amended, which exchange has been
authorized to provide a market for option contracts pursuant
to Rule 9B-1 promulgated under such Act, and so long as the
Trustee at all times up to and including the time of exercise
or expiration of any such option holds sufficient stock in the
assets of this Trust to meet the obligations under such option
if exercised. In addition, the Trustee is expressly authorized
to purchase and acquire call options for the purchase of
shares of stock covered by such options if the options are
traded on and purchased through a national securities exchange
as described in the immediately preceding sentence, and so
long as any such option is purchased solely in a closing
purchase transaction, meaning the purchase of an exchange
traded call option the effect of which is to reduce or
eliminate the obligations of the Trustee with respect to a
stock option contract or contracts which it has previously
written and sold in a transaction authorized under the
immediately preceding sentence;
(o) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan
associations;
(p) To pool all or any of the Trust Fund, from time to time, with
assets belonging to any other qualified employee pension
benefit trust created by the Employer or an affiliated company
of the Employer, and to commingle such assets and make joint
or common investments and carry joint accounts on behalf of
this Plan and such
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other trust or trusts, allocating undivided shares or
interests in such investments or accounts or any pooled assets
of the two or more trusts in accordance with their respective
interests;
(q) To employ a bank or trust company pursuant to the terms of its
usual and customary bank agency agreement, under which the
duties of such bank or trust company shall be of a custodial,
clerical and record-keeping nature;
(r) To transfer a Participant's interest in the Plan to the
trustee of another trust forming part of a plan represented by
such trustee as meeting the requirements of section 401(a) of
the Code, provided such trust permits such transfers to be
made;
(s) To accept funds for the account of a Participant transferred
from the trustee of another plan represented by such trustee
as meeting the requirements of section 401(a) of the Code,
provided such trust permits such transfers to be made;
(t) If the Employer has specified in the Adoption Agreement that
Participants may direct the investment of their accounts, to
establish and maintain one or more investment funds in which
all or a portion of the accounts of Participants may be
commingled.
(u) To do all such acts and exercise all such rights and
privileges, although not specifically mentioned herein, as the
Trustee may deem necessary to carry out the purposes of the
Plan.
10.05 ADMINISTRATION AND PAYMENT:
(a) The Trustee shall be accountable for all contributions
received by it but shall have no duty to require any
contributions to be made to it, or to determine that the
amounts received comply with the Plan, or to determine that
the fund is adequate to provide the benefits payable pursuant
to the Plan.
(b) Payments shall be made from the Trust Fund by the Trustee to
such persons, in such manner, at such times and in such
amounts as the Administrator shall direct. The Trustee shall
be fully protected in making, discontinuing or stopping
payments from the Trust Fund in accordance with the directions
of the Administrator. The Trustee shall have no responsibility
to see to the application of payments so made or to ascertain
whether the directions of the Administrator comply with the
Plan. In no event, however, shall any such payment exceed the
amount then credited to the respective Participant's Account.
When the Administrator directs that any payment is to be made
only during or until the time a certain condition exists
regarding the payee, any payment made by the Trustee in good
faith, without actual notice or knowledge of the changed
status or condition of the payee, shall be considered to have
been properly made by the Trustee and made in accordance with
the direction of the Administrator.
(c) All notices, communications, designations, certifications,
orders, instructions and objections of the Administrator or
Employer shall be in writing, and the Trustee shall act and
shall be fully protected in acting in accordance with such
notices, communications, designations, certifications, orders,
instructions and objections. In the event that the
Administrator fails for any reason to furnish the Trustee with
any required notice, communication, designation,
certification, order, instruction, or objection, the Trustee
may take such action, including the making of distributions,
as it in its discretion deems necessary or advisable under the
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circumstances, after it has been put on notice that any action
on its part is required. All notices or other communications
from the Trustee to the Administrator shall be in writing
signed by the Trustee.
(d) The Trustee shall be fully protected in acting in accordance
with a determination by the Administrator of whether a
domestic relations order received by the Plan is a qualified
domestic relations order described in section 414(p) of the
Code. If the Administrator for any reason fails to make such
determination, the Trustee may take such action, including
making distributions and segregating accounts, as it shall in
its discretion deem necessary and advisable under the
circumstances.
10.06 COMPENSATION AND EXPENSES:
The Trustee shall be reimbursed for any reasonable expenses incurred by
it as Trustee, including reasonable expenses of legal counsel. In
addition, the Trustee shall be paid such reasonable compensation as
shall be agreed upon from time to time in writing by the Employer and
the Trustee. However, an individual serving as Trustee who already
receives full-time pay from the Employer shall not receive compensation
from this Plan. Unless paid or advanced by the Employer, such expenses
and compensation shall be paid from the Trust Fund.
10.07 ACCOUNTS OF THE TRUSTEE:
(a) The Trustee shall maintain accurate and detailed records and
accounts of all transactions hereunder, which shall be
available at all reasonable times for inspection or audit by
any person or persons designated by the Administrator. The
Trustee, at the direction of the Administrator, shall submit
to auditors such valuations, reports or other information as
they may reasonably require.
(b) Within sixty days following the later of the Anniversary Date
or receipt by the Trustee of the Employer's contribution for
the Taxable Year, and following the effective date of the
removal or resignation of the Trustee, the Trustee shall file
with the Employer a written account setting forth all
transactions affected by it subsequent to the end of the
period covered by its last previous annual account, the assets
of the Trust Fund at the close of the period covered by such
account, the net income or loss of the Trust Fund, the gains
or losses realized by the Trust Fund upon the sale or other
disposition of assets, the increase or decrease in the value
of the Trust Fund, all payments and distributions made from
the Trust Fund, and such other information as the Trustee or
Administrator deems appropriate.
(c) Upon the receipt by the Trustee of the Employer's written
approval of any such account, or upon the expiration of thirty
days after delivery of any such account to the Employer, such
account (as originally stated if no objection has been
theretofore filed by the Employer, or as theretofore adjusted
pursuant to agreement between the Employer and the Trustee)
shall be deemed to be approved by the Employer except as to
matters, if any, covered by written objections theretofore
delivered to the Trustee by the Employer regarding which the
Trustee has not given an explanation, or made adjustments,
satisfactory to the Employer, and the Trustee shall be
released and discharged as to all items, matters and things
set forth in such account which are not covered by such
written objections as if such account had been settled and
allowed by a decree of a court having jurisdiction regarding
such account and of the Trustee, the Employer, the
Administrator and all persons having or claiming to have any
interest in the Fund. The Trustee, nevertheless, shall have
the right to have its accounts settled by
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judicial proceedings if it so elects, in which event the
Employer, the Administrator and the Trustee shall be the only
necessary parties.
10.08 CO-TRUSTEES:
If the Employer has designated two or more persons to serve as
Co- Trustees, then the Employer and the Co-Trustees may agree
in writing as to the division of fiduciary responsibilities
among the Co-Trustees, which agreement may provide that
certain assets or classes of assets will be held and invested
by each Co-Trustee. Each Co-Trustee shall be responsible only
with respect to those assets for which it is given custody and
investment discretion. In absence of such an agreement, then
the Co-Trustees shall be jointly responsible for the duties of
the Trustee.
10.09 RESIGNATION AND REMOVAL OF TRUSTEE:
(a) The Trustee may resign at any time by delivering to the
Employer, at least thirty (30) days before its effective date,
a written notice of his resignation.
(b) The Employer may remove the Trustee at any time by delivering
or mailing by registered or certified mail, addressed to such
Trustee at his last known address, at least thirty (30) days
before its effective date, a written notice of his removal.
(c) Upon the death, resignation, incapacity, or removal of any
Trustee, a successor may be appointed by the Employer. Upon
accepting such appointment in writing, such successor shall
become vested with all the estate, rights, powers,
discretions, and duties of his predecessor with like respect
as if he were originally named as a Trustee herein. Until such
a successor is appointed and has accepted its appointment, the
remaining Trustee or Trustees shall have full authority to act
under the terms of this Agreement.
(d) The Employer may designate one or more successors prior to the
death, resignation, incapacity, or removal of a Trustee. In
the event a successor is so designated by the Employer and
accepts such designation, the successor shall, without further
act, become vested with all the estate, rights, powers,
discretion, and duties of his predecessor with the like effect
as if he were originally named as Trustee herein immediately
upon the death, resignation, incapacity, or removal of his
predecessor.
(e) Upon resignation or removal, any Trustee hereunder shall
provide the accounting required by section 10.07 within sixty
days of the effective date of his resignation or removal.
10.10 SUCCESSOR TRUSTEE:
(a) Upon resignation or removal of the Trustee and acceptance by a
successor, the reigning or removed Trustee shall transfer and
deliver the Trust Fund to the successor, after reserving such
reasonable amount as it shall deem necessary to pay its
compensation and all expenses incurred or to be incurred by it
in administering or settling the accounts of the Trust Fund.
(b) Any successor Trustee shall have all of the powers of the
initial Trustee. A successor Trustee may rely on the
accounting provided by its predecessors, and a successor
Trustee shall not be liable for the acts or omissions of any
predecessor Trustee.
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ARTICLE XI
LOANS TO PARTICIPANTS
11.01 LOANS TO PARTICIPANTS:
(a) If the Adoption Agreement provides that loans shall be made
available under the Plan, the Trustee shall establish a
participant loan program which meets the requirements of
_2550.408b-1 of the DOL Regulations. The program shall
delegate to the Administrator the responsibility of
administering the loan program.
(b) At the direction of the Administrator and pursuant to such
program, the Trustee shall lend a Participant or beneficiary
an amount of his Participant's Account not exceeding the
lesser of (1) one-half (1/2) of the Vested Percentage in his
Participant's Account, or (2) $50,000. In no event may the
loan amount exceed $50,000 reduced by the excess (if any) of
the highest outstanding balance of loans during the one year
period ending on the day before the loan is made, over the
outstanding balance of loans from the Plan on the date the
loan is made. For purposes of the above limitation, all loans
from all plans of the Employer and Affiliated Employers are
aggregated.
11.02 TERMS AND CONDITIONS:
The Administrator shall notify the Participants of the general terms
and conditions under which such loans are to be made. In addition to
such rules and regulations as the Trustee shall adopt, all loans shall
be subject to the following terms and conditions:
(a) An application for a loan by a Participant shall be made in
writing to the Administrator. The Administrator shall
investigate each such application and his action thereon shall
be final. The Administrator shall make loans available to all
Participants and beneficiaries on a reasonably equivalent
basis. Loans shall not be made available to Highly Compensated
Employees in an amount greater than the amount made available
to other employees.
(b) Loans must be adequately secured. Although it is the intention
under this Plan that loans to Participants be repaid, the
collateral for each loan shall be the assignment of the
Participant's entire right, title and interest in and to the
Trust Fund, evidenced by the Participant's promissory note for
the amount of the loan (including interest), payable to the
order of the Trustee, and such other security as the
Administrator may require.
(c) Unless this is an electing plan described in section 7.10, a
Participant must obtain the consent of his or her spouse, if
any, to use of the Participant's Account as security for the
loan. Such Participant's Spouse's consent must be obtained
within the 90 day period immediately preceding the date of the
loan. The consent must be in writing, must acknowledge the
effect of the loan, and must be witnessed by a plan
representative or notary public. Such consent shall thereafter
be binding with respect to the consenting spouse or any
subsequent spouse with respect to that loan. A new consent
shall be required if the Participant's Account is used for
renegotiation, extension, renewal, or other revision of the
loan.
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(d) (1) The period of repayment for any loan shall be by
agreement between the Administrator and the
Participant, but in no event shall it exceed five (5)
years.
(2) Notwithstanding the provisions of section 11.02(d)(1)
of the Plan, any loan used to acquire any dwelling
unit which within a reasonable time (determined at
the time the loan is made) is to be used as a
principal residence of the Participant, shall not be
required to be repaid within five (5) years, but
shall be repaid within a reasonable period of time to
be determined by the Administrator.
(3) The provisions of section 11.02(d)(1) and (2) shall
not apply to loans, assignments, and pledges made
prior to August 13, 1982. In the case of such loans,
the period of repayment shall be by agreement between
the Administrator and the Participant, but in no
event shall it exceed ten (10) years.
(4) For purposes of this section 11.02, the outstanding
balance of any loan which is renegotiated, extended,
renewed, or revised after such date shall be treated
as an amount received as a loan on the date of such
renegotiation, extension, renewal, or revision.
(e) The loan by its terms shall require substantially level
amortization with payments not less frequently than quarterly
over the term of the loan.
(f) Each loan shall bear interest at a reasonable rate to be fixed
by the Administrator and, in determining the interest rate,
the Administrator shall take into consideration interest rates
being charged at the time of the loan. The Administrator shall
not discriminate among Participants in the matter of interest
rates, but loans granted at different times may bear different
interest rates and terms, if, in the opinion of the
Administrator, the differences are justified by changes in the
general economic condition.
(g) No distribution shall be made to any Participant, Former
Participant or to a Beneficiary of such a person, unless and
until all unpaid loans, including accrued interest thereon,
have been liquidated.
(h) No Participant loan shall exceed the present value of the
Participant's Vested Percentage in his Participant's Account.
(i) In the event of default, foreclosure on the note and
attachment of security will not occur until a distributable
event occurs under the Plan.
(j) No loans will be made to any Owner-Employee or
shareholder-employees, unless approval for such loan is
obtained from the U.S. Department of Labor. For purposes of
this requirement, a shareholder-employee means an employee or
officer of an S corporation who owns (or is considered as
owning within the meaning of section 318(a)(1) of the Code),
on any day during the taxable year of such corporation, more
than 5% of the outstanding stock of the corporation.
(k) If a valid spousal consent has been obtained in accordance
with (c), then, notwithstanding any other provision of this
plan, the portion of the Participant's vested account balance
used as a security interest held by the Plan by reason of a
loan outstanding to the Participant shall be taken into
account for purposes of determining the amount of the account
balance payable at the time of death or
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distribution, but only if the reduction is used as repayment
of the loan. If less than 100% of the Participant's vested
account balance (determined without regard to the preceding
sentence) is payable to the surviving spouse, then the account
balance shall be adjusted by first reducing the vested account
balance by the amount of the security used as repayment of the
loan, and then determining the benefit payable to the
surviving spouse.
11.03 PROTECTION OF TRUSTEE:
Notwithstanding the provisions of section 11.01, the Trustee shall not
be obligated to make any loan to any Participant if it determines that
the rate of interest fixed by the Administrator is not reasonable as
required by section 408(b)(1) of ERISA, or if the loan or the terms of
the loan violate ERISA or any other statute or regulation. Any
promissory note given to the Trustee under section 11.01 shall
constitute an asset of the Trust Fund, but the Trustee shall have no
responsibility with respect to holding, investing or administering the
note except upon the written direction of the Administrator. The
Employer shall indemnify and hold the Trustee harmless against any
expense, loss, liability or obligation resulting from any loan made to
any Participant at the written direction of the Administrator.
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ARTICLE XII
INSURANCE CONTRACTS
12.01 INVESTMENT IN INSURANCE CONTRACTS:
If the Employer chooses in the Adoption Agreement to allow insurance as
an investment of the Trust Fund, the Administrator or an individual
Participant may direct that part or all of the contributions by or for
any Participant be allocated to such Participant's insurance account
and used to purchase and pay premiums for appropriate annuity Contracts
or life insurance Contracts on the life of the Participant from such
legal reserve insurance companies as shall be designated by the
Administrator or Participant from time to time. Any amounts not used
for premium payment because of small differences between premium
amounts and the percentage of contributions actually allocated may be
applied against future premiums or returned to the account from which
allocated as directed by the Participant.
12.02 INVESTMENT LIMITATIONS:
Purchases of life insurance Contracts pursuant to section 12.01 shall
be subject to the following investment limitations:
(a) ORDINARY LIFE -
For purposes of these incidental insurance provisions,
ordinary life insurance Contracts are Contracts with both
non-decreasing death benefits and non-increasing premiums. If
such Contracts are purchased, less than one-half (1/2) of the
aggregate Employer Contributions allocated to any Participant
shall be used to the pay premiums attributable to ordinary
life insurance Contracts.
(b) TERM AND UNIVERSAL LIFE -
No more than one-fourth (1/4) of the aggregate Employer
Contributions allocated to any Participant shall be used to
pay the premiums on term life insurance Contracts, universal
life insurance Contracts, and all other life insurance
Contracts which are not ordinary life.
(c) COMBINATION -
The sum of one-half (1/2) of the ordinary life premiums and
the term premiums shall not exceed one-fourth (1/4) of the
aggregate Employer Contributions allocated to any Participant.
12.03 GENERAL PROVISIONS:
The investment and administration of a Participant's insurance account
shall be subject to the following provisions:
(a) All Contracts and the insurers issuing such Contracts shall be
authorized to act in the state of the situs of the Trust.
(b) Any life insurance Contract shall be of the type commonly
known as "ordinary life", "endowment", "retirement income",
"universal life", or "term life" Contract. No life insurance
Contract shall provide a higher death benefit per dollar of
premium than that provided by a Contract of ordinary life
insurance, except for any "term life" Contract. If retirement
income Contracts are purchased on the life of any Participant,
the insurance factor will be considered to be incidental only
if
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the death benefit under the Contract does not exceed one
hundred times the monthly annuity provided under the Contract.
(c) Any annuity Contract shall provide for the payment, commencing
at the Participant's Normal Retirement Date, of at least
$25.00 per month, or a benefit of equivalent actuarial value.
(d) Any life insurance Contract shall provide a death benefit in
the face amount of not less than $1,000.
(e) The Participant on whose life a Contract may be issued shall
sign the application for such Contract and submit to any
physical examination as may be required by the insurer.
(f) All Contracts shall provide that they are not transferable
except by the Trustee; and that in the case of any other
holder, they may not be sold, assigned, discounted or pledged
as collateral for a loan or as security for the performance of
an obligation or for any other purpose except to the insurer.
All annuity Contracts which are distributed must be
nontransferable.
(g) All Contracts must provide that the Trustee will be the
beneficiary; however, the Trustee shall be required to pay
over all Contract proceeds to the Participant's designated
Beneficiary in accordance with the distribution provisions of
the Plan.
(h) All Contracts shall be purchased and held by the Trustee as
owner thereof. The Trustee shall exercise the incidents of
ownership in such Contracts at the direction of the
Participant in accordance with the Plan subject to the
following conditions:
(1) Dividends payable on such Contracts shall be applied
to reduce the premiums thereon unless the
Administrator shall, by notice in writing to the
Trustee at the time of the first direction of a
contribution under the Plan to the insurance account,
direct that all dividends payable on all Contracts to
be purchased for the account of all Participants
thereafter should accumulate to increase the benefits
provided thereunder.
(2) If at any time the amount of contributions by or on
behalf of any Participant which is allocated to the
insurance account shall be inadequate to pay the
premiums then due on any Contract held by the Trustee
for the account of such Participant, after reduction
of such premiums by any dividends available for
premium reduction pursuant to subsection (1) above,
the Trustee shall reduce the amount of such Contracts
so that the premiums then due shall equal the amount
which is available for the payment thereof. The
reduction may be made by surrendering a Contract or a
portion thereof for its cash surrender value (which
shall be transferred by the Trustee to the investment
account) or by putting all or a portion of any
Contract on a paid-up basis. No extended term
coverage shall be elected upon any reduction of
premiums.
(i) Directions of monies to the insurance account must be
accompanied or preceded by written instructions from the
Administrator or Participant designating the insurer and
selecting the Contracts to be purchased. In the absence of
such instructions, no monies shall be allocated to the
insurance account. Amounts allocated to the insurance account
with respect to each Participant shall, in the absence of
express instructions by the Participant to the contrary, be
first used to
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pay the premiums then due on any Contracts then in effect
under the Plan for the account of such Participant. If the
amount directed to the insurance account for the account of
any Participant should, after the application of the portion
thereof (if any) required to pay premiums on any Contracts
previously purchased for him, be less than or in excess of the
amount required to purchase an initial or additional Contract
for his account, the amount which cannot be applied to such
purchase shall be allocated to the regular Employer
Contribution Account within sixty (60) days after the end of
the Plan Year.
(j) At or before retirement, and subject to the joint survivor
annuity requirements, any life insurance on the life of a
Participant shall be either distributed to the Participant or
converted to cash to provide retirement income for the
Participant. Any benefits arising from such distribution or
conversion shall be paid in accordance with the Plan.
(k) The terms of any annuity Contract purchased and distributed by
the Plan to a Participant or Spouse shall comply with the
requirements of this Plan. In the event of any conflict
between the terms of the Plan and the provisions of any
Contract hereunder, the terms of the Plan shall control.
12.04 INSURANCE AS GENERAL INVESTMENT:
If directed by the Administrator, the Trustee shall have the authority
to apply for and pay premiums on life insurance policies for the
benefit of the Trust Fund as a whole, and such Contracts may be on the
lives of any person in whom there is an insurable interest, including
Participants. Any such Contracts held for the benefit of the Trust Fund
as a whole shall be treated as investments of the Trust and the cash
value thereof shall be used in valuing the Trust and all premiums paid
thereon by the Trustee shall be charged to the trust assets as a whole
and not to any specific accounts. All dividends, death benefits and
other payments actually received by the Trustee by reason of such
Contracts shall be credited to the Trust and allocated the same as
proceeds derived from the sale of any other assets held thereunder.
12.05 INSURANCE COMPANY NOT A PARTY:
If the Trustee shall be directed to purchase a life insurance,
retirement income or annuity Contract from an insurance company, no
such insurance company shall be deemed a party to this Plan and Trust,
nor shall such insurance company have any obligation to determine that
any person with respect to whom the Trustee makes an application for a
Contract is, in fact, eligible for benefits or participation under this
Plan. The insurance company shall have no obligation to determine any
fact, the determination of which is necessary or desirable for the
proper issuance of such Contracts, and shall be fully protected in
acting upon any advice, representation or other instrument executed by
the Trustee. In no event shall the insurance company be responsible for
any lack or failure of proper authority in the establishment of the
Plan or Trust, or for any acts of any person or of the Employer in the
establishment or maintenance thereof.
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ARTICLE XIII
EXCLUSIVE BENEFIT
13.01 EXCLUSIVE BENEFIT:
Except as provided in this Article, the assets of this Plan shall not
inure to the benefit of the Employer and shall be held for the
exclusive purpose of providing benefits to Participants, Former
Participants, and their Beneficiaries, and defraying the reasonable
expenses of administering the Trust Fund.
13.02 MISTAKE OF FACT:
Any contribution which is made by the Employer under a mistake of fact
shall be returned to the Employer within one year of the contribution.
13.03 REQUIREMENT OF QUALIFICATION:
(a) All contributions made by the Employer under this Plan are
conditioned upon the initial qualification of the Plan under
section 401 of the Code. In the event that the Commissioner of
Internal Revenue determines that the Plan is not initially
qualified under the Code, any contribution made incident to
that initial qualification by the Employer must be returned to
the Employer within one year after the date the initial
qualification is denied, but only if the application for the
qualification is made by the time prescribed by law for filing
the Employer's return for the taxable year in which the Plan
is adopted, or such later date as the Secretary of the
Treasury may prescribe.
(b) If the Employer's plan fails to attain or retain
qualification, such plan will no longer participate in this
prototype plan and will be considered an individually designed
plan.
13.04 REQUIREMENT OF DEDUCTIBILITY:
All contributions made by the Employer under this Plan are conditioned
upon the deductibility of such contributions under section 404 of the
Code, as amended. To the extent that a deduction of any contribution is
disallowed, such contribution (to the extent disallowed) shall be
returned to the Employer within one year after the date of
disallowance.
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ARTICLE XIV
AMENDMENT, TERMINATION AND MERGER
14.01 AMENDMENT:
(a) Plan Data, Inc., as the Sponsor of this regional prototype
plan, may amend any part of the plan document or the Adoption
Agreement.
(b) The Employer reserves the right at any time, and from time to
time, to discontinue making contributions to the Trust Fund,
or to amend any and all of the provisions of this Plan and
Trust, or to terminate or partially terminate the Plan and
Trust. The Employer may (1) change the choice of options in
the Adoption Agreement, (2) add overriding language in the
Adoption Agreement when such language is necessary to satisfy
section 415 or section 416 of the Code because of the required
aggregation of multiple plans, and (3) add certain model
amendments published by the Internal Revenue Service which
specifically provide that their adoption will not cause the
Plan to be treated as individually designed. An Employer that
amends the Plan for any other reason, including a waiver of
the minimum funding requirement under section 412(d) of the
Code, will no longer participate in this regional prototype
plan and will be considered to have an individually designed
plan.
(c) No part of the Trust Fund shall, by reason of any suspension,
amendment, termination or partial termination, be used for or
diverted to purposes other than the exclusive benefit of the
Participants, Former Participants and Beneficiaries. No
suspension, amendment, termination or partial termination may
retroactively change or deprive any Participant, Former
Participant or Beneficiary of rights already accrued under the
Plan or eliminate an optional form of benefit, except insofar
as such amendment is necessary to preserve the qualification
and tax exemption of the Trust pursuant to sections 401(a) and
501(a) of the Code, or to the extent permitted under section
412(c)(8) of the Code, or to comply with any applicable
provision of law. For purposes of this paragraph, a Plan
amendment which has the effect of decreasing a Participant's
account balance or eliminating an optional form of benefit
with respect to service before the amendment shall be treated
as reducing an accrued benefit. If the vesting schedule of the
Plan is amended, in the case of an Employee who is a
Participant as of the later of the date such amendment is
adopted or the date it becomes effective, the Vested
Percentage (determined as of such date) of such Employee's
Employer-derived accrued benefit will not be less than the
percentage computed under the Plan without regard to such
amendment. No amendment shall affect the terms of payment or
the value of any life insurance policies already issued as
computed to the date of such amendment, and no such amendment
shall deprive the insurer of any of its exemptions with
respect to its policies and annuities. No amendment shall
increase the duties of the Trustee or otherwise adversely
affect the Trustee unless the Trustee agrees thereto in
writing.
(d) If the Plan's vesting schedule is amended, or the Plan is
amended in any way which directly or indirectly affects the
computation of the Participant's Vested Percentage, each
Participant with at least three (3) Years of Service with the
Employer may elect, within a reasonable period after the
adoption of the amendment, to have his Vested Percentage
computed under the Plan without
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regard to such amendment or change. For Participants who do
not have at least 1 hour of service in any Plan Year beginning
after December 31, 1988, the preceding sentence shall be
applied by substituting "5 Years of Service" for "3 Years of
Service" where such language appears. If a Participant fails
to make such election, then such Participant shall be subject
to the amended vesting provisions. The period during which the
election may be made shall commence with the date the
amendment is adopted and shall end on the later of:
(1) Sixty (60) days after the amendment is adopted;
(2) Sixty (60) days after the amendment becomes
effective; or
(3) Sixty (60) days after the Participant is issued
written notice of the amendment by the Employer.
14.02 PLAN TERMINATION:
Upon complete discontinuance of Employer contributions or termination
of the Plan, each Participant's Account shall become fully vested and
nonforfeitable. Upon termination of the Plan with respect to a group of
Employees which constitutes a partial termination of the Plan, the
Participant's Account of each Employee affected shall be fully vested
and nonforfeitable.
14.03 DISTRIBUTION UPON PLAN TERMINATION:
Upon termination, partial termination, or complete discontinuance of
contributions, the Administrator shall instruct the Trustee to
determine the value of the Trust Fund and to adjust the Participants'
Accounts. The Administrator shall thereupon instruct the Trustee
whether currently to distribute the entire amount of each Participant's
Account required to be fully vested as a result of such termination,
partial termination, or discontinuance; or whether to distribute
therefrom as if the Plan had continued; or whether currently to
distribute the balance of certain of those accounts, and distribute the
balance of others as if the Plan had continued; or whether to make
distributions after the complete discontinuance of contributions, or
termination, or partial termination of the Plan, but prior to the time
when distributions would have been made had the Plan continued. The
Administrator shall, in all events, exercise its discretion under this
section 14.03 in a non-discriminatory manner. Any distribution
hereunder shall be made in accordance with the provisions of Article
VII as if the Participant had terminated employment. The Trust shall
continue in effect until the Trustee shall have completed the
distribution of the assets of the Trust Fund, and the accounts of the
Trustee have been settled.
14.04 MERGER:
In the event that the Plan is merged or consolidated with, or the
assets or liabilities of the Trust Fund are transferred to any other
plan, each Participant shall have a benefit immediately after such
merger, consolidation or transfer which is equal to or greater than the
benefit he would have been entitled to receive immediately before such
merger, consolidation or transfer. The amount of such benefit shall be
determined by comparing the benefit to which the Participant would have
been entitled had the Plan terminated immediately prior to the merger,
consolidation or transfer to the benefit to which the Participant would
have been entitled had the Plan terminated immediately after the
merger, consolidation or transfer. However, the Plan is not considered
terminated as a result of the merger, consolidation or transfer and the
full vesting requirement of section 14.02 does not apply solely because
of the merger, consolidation or transfer unless the Plan is merged
with, consolidated with or transferred to a defined benefit pension
plan.
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ARTICLE XV
MISCELLANEOUS
15.01 THIS PLAN IS NOT AN EMPLOYMENT CONTRACT:
Neither the adoption of the Plan by the Employer, nor any action of the
Employer or the Trustee under this Plan, nor the issuance of any
insurance policy, nor the payment of any benefits, shall be construed
to confer upon any person any legal right to be continued as an
Employee of the Employer or any affiliated or related employer. All
Employees shall be subject to discharge to the same extent as they
would have been had this Plan never been adopted.
15.02 LIMITATIONS ON THE OBLIGATIONS OF THE EMPLOYER:
The Employer assumes no obligations under the Plan, except those
specifically stated in this Plan. No person shall have any right to
participate in profits by reason of this Plan, except to the extent
expressly set forth herein. The Employer shall be under no legal
obligation to make any contributions to the Trust Fund, except as
expressly provided herein.
15.03 AGREEMENT BINDING:
The Plan (including any and all amendments hereto) shall be binding
upon the Employer, its successors and assigns, and upon the
Participants and their Beneficiaries and their respective heirs,
executors, administrators, personal representatives and all persons
claiming by, under, or through any of them.
15.04 ASSIGNMENT, ALIENATION, OR ENCUMBRANCE:
No interest, right or claim in or to any part of the Trust Fund or any
payment therefrom may be assigned, alienated or encumbered, either
voluntarily or involuntarily, and any attempt to do so shall be null
and void. The preceding sentence shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with
respect to a Participant pursuant to a domestic relations order, unless
such order is determined to be a qualified domestic relations order as
defined in section 414(p) of the Code. A domestic relations order which
is entered into before January 1, 1985, shall be treated as a qualified
domestic relations order if payment of benefits pursuant to the order
has commenced as of such date, and may be treated as a qualified
domestic relations order if payment of benefits has not commenced as of
such date, even though the order does not satisfy the requirements of
section 414(p). The Administrator shall determine whether any domestic
relations order received by the Plan is a qualified domestic relations
order described in section 414(p) of the Code and shall advise the
Trustee in writing of its determination within a reasonable time after
the receipt of the order.
15.05 RETROACTIVE EFFECT:
The Employer may adopt this Plan to restate an existing plan to comply
with any requirements of the Tax Reform Act of 1986 (Pub. L. 99-514),
the Omnibus Budget Reconciliation Act of 1986 (Pub. L. 99-509), and the
Omnibus Budget Reconciliation Act of 1987 (Pub. L. 100-23) that are
effective for Plan Years beginning before January 1, 1989. In such
case, notwithstanding the retroactive effective date of this Plan
specified in the Adoption Agreement, the provisions of such existing
plan shall remain operative for Plan Years beginning before January 1,
1989, and only those provisions of this Plan required to be effective
for such prior Plan Years shall be retroactively effective.
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15.06 CONSTRUCTION:
Whenever in the language of the Plan the masculine gender is used, it
shall be deemed equally to refer to the feminine gender. Unless
otherwise indicated, the words "hereof," "herein," and other similar
compounds of the word "here" shall mean and refer to the entire Plan,
and not to any particular provision or section.
15.07 HEADINGS:
The headings of Articles and sections are included solely for
convenience of reference, and if there be any conflict between such
headings and the text of the Plan, the text shall control.
15.08 GOVERNING LAW:
Except as superseded by federal law, this Plan shall be governed by the
laws of the State of Texas as to all matters of construction, validity,
effect and performance.
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ARTICLE XVI
PARTICIPATING EMPLOYERS
16.01 ADOPTION BY OTHER EMPLOYERS:
Notwithstanding anything herein to the contrary, with the consent of
the Employer and Trustee, any other corporation or entity (provided an
Owner-Employee of such entity does not participate in the Plan for Plan
Years beginning before January 1, 1984), whether an affiliate or
subsidiary or not, may adopt this Plan and all of the provisions
hereof, and participate herein and be known as a Participating
Employer, by signing a duplicate of the signature page of the Adoption
Agreement, which will then be attached to the Adoption Agreement.
16.02 REQUIREMENTS OF PARTICIPATING EMPLOYERS:
(a) Each such Participating Employer shall be required to use the
same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to, commingle, hold
and invest as one Trust Fund all contributions made by
Participating Employers, as well as all increments thereof.
(c) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the
Employer or a Participating Employer shall not affect such
Participant's rights under the Plan, and all amounts credited
to such Participant's Account as well as his accumulated
service time with the transferor or predecessor, and his
length of participation in the Plan, shall continue to his
credit.
(d) (1) Money Purchase Pension Plan - All rights and values
forfeited by termination of employment shall inure
only to the benefit of the Participating Employer by
which the forfeiting Participant was employed, except
if the Forfeiture is for an Employee whose Employer
is a member of an affiliated or controlled group,
then said Forfeiture shall be apportioned to the
Participating Employers who are members of the
affiliated or controlled group and be used to reduce
contributions to the Plan. Should an Employee of one
("First") Employer be transferred to an associated
("Second") Employer (the Employer, an affiliate or
subsidiary), such transfer shall not cause his
Participant's Account balance (generated while an
Employee of "First" Employer) in any manner, or by an
amount to be forfeited. Such Employee's Participant's
Account balance for all purposes of the Plan,
including length of service, shall be considered as
though he had always been employed by the "Second"
Employer and as such had received contributions,
Forfeitures, earnings or losses, and appreciation or
depreciation in value of assets totaling amount so
transferred.
(2) Profit Sharing Plan - All rights and values forfeited
by termination of employment shall inure only to the
benefit of the Participants of the Participating
Employer by which the forfeiting Participant was
employed, except if the Forfeiture is for an Employee
whose Employer is a member of an affiliated or
controlled group, then said Forfeiture shall be
allocated
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to all Employer Profit Sharing Contribution Accounts
of Participating Employers who are members of the
affiliated or controlled group. Should an Employee of
one ("First") Employer be transferred to an
associated ("Second") Employer (the Employer, an
affiliate or subsidiary), such transfer shall not
cause his Participant's Account balance (generated
while an Employee of "First" Employer) in any manner,
or by any amount to be forfeited. Such Employee's
Participant's Account balance for all purposes of the
Plan, including length of service, shall be
considered as though he had always been employed by
the "Second" Employer and as such had received
contributions, Forfeitures, earnings or losses, and
appreciation or depreciation in value of assets
totaling amount so transferred.
(e) Any expenses of the Trust which are to be paid by the Employer
or by the Trust Fund shall be paid by each Participating
Employer in the same proportion that the total amount standing
to be credit of all Participants employed by such Employer
bears to the total standing to the credit of all Participants.
16.03 DESIGNATION OF AGENT:
Each Participating Employer shall be deemed to be a part of this Plan;
provided, however, that with respect to all of its relations with the
Trustee and Administrator for the purpose of this Plan, each
Participating Employer shall be deemed to have designated irrevocably
the Employer as its agent. Unless the context of the Plan clearly
indicates the contrary, the word "Employer" shall be deemed to include
each Participating Employer as related to its adoption of the Plan.
16.04 EMPLOYEE TRANSFERS:
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the
Employee involved shall carry with him his accumulated service and
eligibility. No such transfer shall effect a termination of employment
hereunder, and the Participating Employer to which the Employee is
transferred shall thereupon become obligated hereunder with respect to
such Employee in the same manner as was the Participating Employer from
whom the Employee was transferred.
16.05 PARTICIPATING EMPLOYERS CONTRIBUTION:
Any contribution or Forfeiture subject to allocation during each Plan
Year shall be allocated among all Participants of all Participating
Employers in accordance with the provisions of this Plan. On the basis
of the information furnished by the Administrator, the Trustee shall
keep separate books and records concerning the affairs of each
Participating Employer hereunder and as to the accounts and credits of
the Employees of each Participating Employer. The Trustee may, but need
not, register Contracts so as to evidence that a particular
Participating Employer is the interested Employer hereunder, but in the
event of an Employee transfer from one Participating Employer to
another, the employing Employer shall immediately notify the Trustee
thereof.
16.06 AMENDMENT:
Amendment of this Plan by the Employer at any time when there shall be
a Participating Employer hereunder shall only be by the written action
of each and every Participating Employer and with the consent of the
Trustee where such consent is necessary in accordance with the terms of
this Plan.
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16.07 DISCONTINUANCE OF PARTICIPATION:
Any Participating Employer shall be permitted to discontinue or revoke
its participation in the Plan. At the time of any such discontinuance
or revocation, satisfactory evidence thereof and of any applicable
conditions imposed shall be delivered to the Trustee. The Trustee shall
thereafter transfer, deliver and assign Contracts and other Trust Fund
assets allocable to the Participants of such Participating Employer to
such new Trustee as shall have been designated by such Participating
Employer, in the event that it has established a separate qualified
plan for its Employees. If no successor is designated, the Trustee
shall retain such assets for the Employees of said Participating
Employer pursuant to the provisions of Article X hereof. In no such
event shall any part of the corpus or income of the Trust as it relates
to such Participating Employer be used for or diverted for purposes
other than for the exclusive benefit of the Employees of such
Participating Employer.
16.08 ADMINISTRATOR'S AUTHORITY:
The Administrator shall have authority to make any and all necessary
rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
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AMENDMENT NUMBER ONE
to the
PLAN DATA, INC. REGIONAL PROTOTYPE
PROFIT SHARING PLAN AND TRUST
WITH EMPLOYEE CONTRIBUTIONS
---------------------------
(PLAN 001)
WHEREAS, Plan Data, Inc. is the Sponsor of the Plan Data, Inc. Regional
Prototype Profit Sharing Plan and Trust With Employee Contributions (Plan 001)
(the "Plan"), and
WHEREAS, Section 14.01(a) of the Plan provides that the Sponsor may amend any
part of the Plan, and
WHEREAS, recent federal regulations have required certain amendments to the
Plan,
NOW, THEREFORE, the Plan is amended as follows:
1. The in-service distribution provisions are amended by adding a new
paragraph to section 7.14 as follows:
The provisions of this paragraph are effective as of the first day of the
first plan year beginning on or after December 12, 1994, or, if later, 90
days after December 12, 1994. Notwithstanding any provision of this Plan
to the contrary, to the extent that any optional form of benefit under
this Plan permits a distribution prior to the Employee's retirement,
death, Disability, or severance from employment, and prior to plan
termination, the optional form of benefit is not available with respect
to benefits attributable to assets (including the post-transfer earnings
thereon) and liabilities that are transferred, within the meaning of
section 414(l) of the Internal Revenue Code, to this Plan from a money
purchase pension plan qualified under section 401(a) of the Internal
Revenue Code (other than any portion of those assets and liabilities
attributable to voluntary employee contributions).
2. The provisions for eligibility upon reemployment are amended, effective
December 12, 1994, by adding a new section 2.03(g) as follows:
(g) Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with
414(u) of the Internal Revenue Code.
<PAGE>
3. The provisions for loans to participants are amended, effective December
12, 1994, by adding a new section 11.02(l) as follows:
(l) Loan repayments will be suspended under this Plan as permitted
under section 414(u) of the Internal Revenue Code for any period
during which the Participant performs services in the uniformed
services (as defined in chapter 43 of title 38, United States
Code).
Signed this 16 day of June, 1997.
PLAN DATA, INC.
By: /s/ John McGlothlin
-------------------------------------
John McGlothlin, President
<PAGE>
PLAN DATA, INC. REGIONAL PROTOTYPE
PROFIT SHARING PLAN AND TRUST
WITH EMPLOYEE CONTRIBUTIONS
(PLAN 001)
NON-STANDARDIZED ADOPTION AGREEMENT
The undersigned Employer hereby adopts a profit sharing plan in the form of the
Plan Data, Inc. Regional Prototype Profit Sharing Plan and Trust With Employee
Contributions, which is attached hereto, and agrees that the following
definitions, elections and terms shall be part of such Plan and Trust:
1. Name and address of Employer:
Pinnacle Global Group, Inc.
______________________________________________________________________
5599 San Felipe, Suite 555
______________________________________________________________________
Houston, TX 77056
______________________________________________________________________
2. Employer Identification Number: 76-0583569
______________________________________
Plan Number: 001
__________
3. Other employers authorized to adopt the same Plan:
Pinnacle Management & Trust Co.; Spires Financial, L.P.; Sanders,
Morris, Harris, Inc.; Energy Recovery Resources, Inc.
______________________________________________________________________
______________________________________________________________________
4. Name of Plan: Pinnacle Global Group, Inc. 401(k) Plan
________________________________________________________
______________________________________________________________________
5. Name(s) and address(es) of Trustee(s):
( X ) a. The following person(s) or entity is (are) named as
Trustee(s) (enter name and address):
Pinnacle Management & Trust Co.
__________________________________________________________
5599 San Felipe, Suite 300
__________________________________________________________
Houston, Texas 77056
__________________________________________________________
( ) b. The Employer names Founders Trust Company as Trustee
and elects that the Trust will be the Founders Trust Company
Prototype Plan Collective Trust and hereby accepts all the
terms and provisions thereof. The provisions of the trust
agreement in Article X of the plan document will not apply
with respect to this Plan unless the Employer elects below
to appoint a second Trustee for this Plan:
<PAGE>
( ) i. No second Trustee is appointed. Article X of the plan
document does not apply.
( ) ii. The Employer designates that the assets of the Trust
will be divided with a portion to be determined by the
Employer held in the Founders Trust Company Prototype Plan
Collective Trust and a portion held by the following
person(s) or entity as a second Trustee under the provisions
of Article X of the plan document (enter name and address of
second Trustee):
__________________________________________________________
__________________________________________________________
__________________________________________________________
( ) c. The following person(s) or entity is (are) named as
Trustee(s) (enter name and address), the provisions of the
trust agreement in Article X of the plan document will not
apply with respect to this Plan, and the provisions of the
trust shall be set forth in a separate trust document:
__________________________________________________________
__________________________________________________________
__________________________________________________________
6. Plan Administrator:
( X ) a. Employer
( ) b. A Committee appointed by the Employer pursuant to the
provisions of section 9.03 of the Plan
( ) c.
____________________________________________________________
7. Employer has completed and signed this Adoption Agreement in order to:
( ) a. establish a new plan. The effective date of the Plan is
______________________________ , __________.
( ) b. restate a plan previously adopted by the Employer in
the form of this Plan. The effective date of this
restatement is ______________, ________. The original
effective date of the plan was _______________, ________.
( ) c. restate a plan previously adopted by the Employer as a
master or prototype plan, thereby canceling participation in
such master or prototype plan. The effective date of this
restatement is _____________________, _______. The original
effective date of the plan was
______________________________, ________.
( ) d. amend a plan previously adopted by the Employer by
making a different choice in the Adoption Agreement. The
effective date of this amendment is ______________, _______.
The original effective date of the plan was
___________________, _________ .
2
<PAGE>
( X ) e. merge, amend and restate the Sanders Morris Mundy, Inc.
401(k) Plan and the Pinnacle Global Group, Inc. 401(k) Plan
into the Pinnacle Global Group, Inc. 401(k) Plan.
The effective date of the merger is May 1, 2000, and the
effective date of the restatement is May 1, 2000. The original
effective date of the surviving plan was January 1, 1993.
( ) f. restate a plan previously adopted by the Employer as a
wasting trust to which no further contributions will be allowed
or required. The effective date of this restatement is
____________, ________. The original effective date of the plan
was _______________, ________.
8. The Employer's Taxable Year is:
( X ) a. the calendar year.
( ) b. the twelve-consecutive month period beginning on __________
and ending on _____________.
9. a. The Plan Year is:
( X ) i. the calendar year.
( ) ii. the twelve-consecutive month period beginning on
______________ and ending on _____________________.
b. The initial/amended Plan Year is:
( X ) i. the period specified in Item 9.a.
( ) ii. the shorter period beginning on ____________________, ____
and ending on _________________________, _______.
10. a. The Limitation Year is:
( X ) i. the calendar year.
( ) ii. the twelve-consecutive month period beginning on __________
and ending on __________.
b. The initial/amended Limitation Year is:
( X ) i. the period specified in Item 10.a.
( ) ii. the shorter period beginning on ____________, ________,
and ending on ___________, ________.
11. Valuation Date(s) is (are):
( ) a. The last day of the Plan Year.
( ) b. The last day of the sixth and twelfth months of
the Plan Year.
3
<PAGE>
( ) c. The last day of the third, sixth, ninth, and twelfth months
of the Plan Year.
( ) d. The last day of the following months of the Plan Year: .
________________________________________________________.
( X ) e. Each business day (daily).
12. ELIGIBLE EMPLOYEES
The Employer extends eligibility under the Plan to all Employees
except:
( ) a. Employees included in a unit of Employees covered by a
Collective Bargaining Agreement.
( X ) b. Nonresident Aliens.
( ) c. employees of the following employer(s) aggregated with
Employer under section 414(b), (c) or (m) of the Code:
________________________________________________________.
( X ) d. other [SPECIFY]: leased employees.
( ) e. No exclusions.
13. ELIGIBILITY REQUIREMENTS
An otherwise eligible Employee must complete the following minimum age
and service requirements before becoming eligible to participate in the
Plan:
a. If elected below, the age and service requirements specified must
be satisfied for an Employee to become eligible for any and all
types of benefits under this Plan:
( ) i. An Employee must have attained age _____________.**
( ) ii. An Employee must have completed ____________
Year(s) of Service.*
( ) iii. No age or service requirement.
( X ) iv. Not applicable (see b. below).
b. If a general eligibility requirement has not been selected in a.
above, then an Employee must satisfy the following age and service
requirements for purposes of eligibility to share in each of the
contributions listed:
<TABLE>
<CAPTION>
SERVICE* AGE**
CONTRIBUTION REQUIREMENT REQUIREMENT
------------ ----------- -----------
<S> <C> <C>
Employee Elective Deferral and
Employer Qualified Non-Elective 0 21
Employee Post-Tax Voluntary N/A N/A
Employer Profit Sharing N/A N/A
Employer Matching and
Employer Qualified Matching 0 21
Employee Rollover/Transfer 0 0
</TABLE>
4
<PAGE>
* THE SERVICE REQUIREMENT FOR EMPLOYEE ELECTIVE DEFERRAL
CONTRIBUTIONS AND EMPLOYER QUALIFIED NON-ELECTIVE
CONTRIBUTIONS CANNOT EXCEED 1 YEAR OF SERVICE. THE SERVICE
REQUIREMENT FOR ANY OTHER PURPOSE CANNOT EXCEED 1 YEAR UNLESS
THE PLAN PROVIDES A NONFORFEITABLE RIGHT TO 100% OF THE
PARTICIPANT'S ACCOUNT BALANCE DERIVED FROM EMPLOYER
CONTRIBUTIONS AFTER NOT MORE THAN 2 YEARS OF SERVICE IN WHICH
CASE UP TO 2 YEARS IS PERMISSIBLE. IF THE YEAR(S) OF SERVICE
SELECTED IS OR INCLUDES A FRACTIONAL YEAR, AN EMPLOYEE WILL
NOT BE REQUIRED TO COMPLETE ANY SPECIFIED NUMBER OF HOURS OF
SERVICE TO RECEIVE CREDIT FOR SUCH FRACTIONAL YEAR.
** THE AGE REQUIREMENT CANNOT EXCEED AGE 21.
c. If elected below, the age and service requirements described for
each purpose above are waived for Employees in the employ of the
Employer on the later of the Effective Date or the Entry Date
selected in item 17.b.i. (if applicable) and who are members of
the eligible class of Employees.
i. Service requirements:
( ) A. are waived initially.
( X ) B. are not waived initially.
ii. Age requirements:
( ) A. are waived initially.
( X ) B. are not waived initially.
14. SERVICE
Service under the Plan shall be computed on the basis of the method
selected below:
( X ) a. on the basis of Hours of Service completed.
( ) b. on the basis of Regular Time Hours completed.
( ) c. on the basis of elapsed time, as provided for in section
1.121(b) of the Plan.
15. HOURS OF SERVICE
If Item 14.a. or 14.b. is elected, Hours of Service shall be credited
on the basis of the method indicated below. The method selected will
be applied to all Employees.
( X ) a. on the basis of Hours of Service for which an Employee is
paid or entitled to payment.
( ) b. on the basis of Regular Time Hours for which an Employee
is paid or entitled to payment.
( ) c. on the basis of days worked: An Employee shall be
credited with ten (10) Hours of Service if, under section
1.71 of the Plan, such Employee would be credited with at
least one Hour of Service during the day.
( ) d. on the basis of weeks worked: An Employee shall be
credited with forty-five (45) Hours of Service if, under
section 1.71 of the Plan, such Employee would be credited
with at least one Hour of Service during the week.
( ) e. on the basis of semi-monthly payroll periods: An
Employee shall be credited with ninety-five (95) Hours
of Service if, under section 1.71 of the Plan, such
Employee would be credited with at least one Hour of
Service during the semi-monthly payroll period.
5
<PAGE>
( ) f. on the basis of months worked: An Employee shall be
credited with one hundred-ninety (190) Hours of Service
if, under section 1.71 of the Plan, such Employee would
be credited with at least one Hour of Service during the
month.
( ) g. Not applicable (elapsed time only).
16. PREDECESSOR EMPLOYER SERVICE
Service for eligibility and vesting purposes will include:
( X ) a. All Years of Service with the following named predecessor
employer(s): Sanders Morris Mundy, Inc.; Harris, Webb &
Garrison, Inc.; Tanknology Corporation International;
Ustman Industries, Inc.; Tanknology Worldwide, Inc.;
Tanknology Environmental Services, Inc.; Mankuff, Inc.;
Tanknology Engineered Systems, Inc.; TEI, Inc.
( ) b. Years of Service with the following named predecessor
employer(s) during the time a qualified plan was
maintained.
--------------------------------------------------------
( ) c. No predecessor employer service credit.
( ) d. Not applicable (no predecessor employer).
17. ENTRY DATE
a. Entry Date for an eligible Employee (as determined under 12.
above) who has completed the eligibility requirements) as
determined under 13. above) will be:
( ) i. the first day of the Plan Year or the first day of
the seventh month of the Plan Year, coincident with
or next following the date the Employee satisfies
the eligibility
requirements.
( ) ii. the first day of the Plan Year coincident with or
next following the date the Employee satisfies the
eligibility requirements. [THE AGE REQUIREMENT OF
ITEM 13 MAY NOT EXCEED 20 1/2. THE SERVICE
REQUIREMENT OF ITEM 13 MAY NOT EXCEED 6 MONTHS.]
( X ) iii. the first day of the month coincident with or next
following the date the Employee satisfies the
eligibility requirements.
( ) iv. the first day of the Plan Year in which the Employee
satisfies the eligibility requirements.
( ) v. the Employee's date of employment.
( ) vi. the first day of each of the following months of the
Plan Year:
---------------------------------------------------.
b. Notwithstanding the option selected in a. above, the following
exception(s) apply with respect to the Entry Date:
( ) i. an employee who has completed the eligibility
requirements as of______________________ will be
eligible to begin participation on that date.
6
<PAGE>
( X ) ii. notwithstanding the option selected above, if an
Employee is eligible to make a Rollover/Transfer
Contribution, his Entry Date will be the earlier of
the date the Rollover/Transfer Contribution is made
or the Entry Date selected above.
( ) iii. No exceptions.
18. COMPENSATION
a. Compensation for a Participant will be all of the Participant's:
( ) i. Compensation as defined for the Wages, Tips and
Other Compensation Box on Form W-2, except for any
Self-Employed individual covered under the plan, in
which case Compensation shall mean Earned Income.
( X ) ii. Compensation as defined in Section 3401(a).
( ) iii. Compensation as defined for the section 415 safe
harbor.
b. If elected below, Compensation shall include Employer
contributions made pursuant to a salary reduction agreement which
are not includable in the gross income of the employee under the
following sections of the Code:
( X ) i. Section 125 (Cafeteria plan deferrals).
( X ) ii. Section 402(a)(8) (401(k) deferrals).
( ) iii. Section 402(h) (government pick-up contributions).
( ) iv. Section 457.
( ) v. 403(b).
( ) vi. no amounts included.
c. Compensation paid prior to the date the Employee's participation
under this Plan commenced:
( X ) i. will be included.
( ) ii. will not be included.
d. The following amounts are excluded from Compensation:
( ) i. Overtime.
( ) ii. All bonuses.
( ) iii. Discretionary bonuses only.
( ) iv. Taxable employee benefits.
( ) v. Compensation in excess of $ ______________________.
( ) vi. Other __________________________________________.
( X ) vii. No exclusions (must be elected if allocation is
integrated with Social Security).
NOTE: If exclusions are elected, the special nondiscrimination rule
described in the last paragraph of section 1.19(a) of the Plan must be
satisfied annually.
e. The Compensation Determination Period is as selected below:
( X ) i. The Plan Year.
( ) ii. The calendar year ending with or within the Plan
Year.
7
<PAGE>
19. EMPLOYEE ELECTIVE DEFERRALS
( ) a. Employee Elective Deferrals are not permitted.
( X ) b. Employee Elective Deferrals are permitted subject to the
following [THE PROVISION TO PERMIT EMPLOYEE ELECTIVE
DEFERRALS CANNOT BE MADE EFFECTIVE PRIOR TO THE FIRST DAY
OF THE PLAN YEAR IN WHICH THE PROVISION IS ADOPTED]:
i. The minimum allowable deferral per Participant is:
( X ) A. No minimum amount.
( ) B. $_____________per___________(week, etc.).
( ) C. ____________ % of Compensation.
ii. The maximum allowable deferral is:
( X ) A. Maximum permitted under the Code.
( ) B. $ ___________ per___________ (week, etc.)
( ) C. ______________% of Compensation.
iii. The Participant will be permitted to change the amount of
his deferral election effective the beginning of the pay
period coincident with or next following the Change
Date(s) elected below:
( ) A. First day of the first month of the Plan
Year.
( ) B. First day of the first or the seventh month
of the Plan Year.
( X ) C. First day of the first, fourth, seventh and
tenth months of the Plan Year.
( ) D. First day of each month.
( ) E. Each:__________________________________
iv. If a Participant elects to stop his Employee Elective
Deferrals at a time other than on a Change Date, he will
be permitted to start again on:
( X ) A. The Change Date next following the date
Employee Elective Deferrals were stopped.
( ) B. The Change Date following__________________
after Employee Elective Deferrals were
stopped.
20. EMPLOYEE POST-TAX VOLUNTARY CONTRIBUTIONS
( X ) a. Employee Post-Tax Voluntary Contributions are not
permitted.
( ) b. Employee Post-Tax Voluntary Contributions are permitted
subject to the following:
i. The minimum contribution per Participant is:
( ) A. No minimum amount.
( ) B. $ _________ per_________(week, month, etc.)
( ) C. _____________% of Compensation.
ii. The maximum contribution is % of Compensation [NOT TO
EXCEED 10%].
8
<PAGE>
iii. The Participant will be permitted to change the amount of
his Employee Post-Tax Voluntary Contribution election
effective the beginning of the pay period coincident with
or next following the:
( ) A. First day of the first month of the Plan
Year.
( ) B. First day of the first or the seventh month
of the Plan Year.
( ) C. First day of the first, fourth, seventh and
tenth months of the Plan Year.
( ) D. First day of each month.
( ) E. Each: ________________________________
iv. If elected below, a Participant will be permitted to
withdraw all or a portion of his Employee Post Tax
Voluntary Contribution Account in accordance with the
provisions of 7.01(c) of the Plan.
( ) A. Withdrawals from the Employee Post-Tax
Voluntary Contribution Account are
permitted.
( ) B. Withdrawals from the Employee Post-Tax
Voluntary Contribution Account are not
permitted.
( ) c. Employee Post-Tax Voluntary Contributions are no longer
permitted, but Employee Post-Tax Voluntary Contribution
Accounts may be maintained on behalf of Participants who
have previously made such contributions. If elected
below, a Participant will be permitted to withdraw all
or a portion of his Employee Post-Tax Voluntary
Contribution Account in accordance with the provisions
of 7.01(c) of the Plan.
( ) i. Withdrawals from the Employee Post-Tax Voluntary
Contribution Account are permitted.
( ) ii. Withdrawals from the Employee Post-Tax Voluntary
Contribution Account are not permitted.
21. EMPLOYER QUALIFIED NON-ELECTIVE CONTRIBUTIONS
a. Employer Qualified Non-Elective Contributions will be allocated as
of the final Valuation Date in a Plan Year on behalf of the
following Participants:
( ) i. All eligible Participants.
( ) ii. Only eligible Nonhighly Compensated Participants.
( ) iii. Only eligible Participants who are not Self-Employed
individuals, shareholders or owners (or considered
one of these under section 318 of the Code) of the
Employer.
( ) iv. Only eligible Participants who are not Self-Employed
individuals, shareholders or owners (or considered
one of these under section 318 of the Code) of the
Employer having an ownership interest of at least
_____________% at any time during the Plan Year.
9
<PAGE>
( X ) v. Not applicable (No Employer Qualified Non-Elective
Contributions).
b. Employer Qualified Non-Elective Contributions for a Plan Year will
be allocated to all eligible Participants as elected in 21.a above
except as provided below:
( ) i. Participants who terminated employment during the
Plan Year for reasons other than retirement on or
after attainment of Normal Retirement Age, death or
Disability shall not share in the allocation.
( ) ii. Participants employed on the Valuation Date who did
not complete a minimum of Hours of Service during
the Plan Year shall not share in the allocation.
( ) iii. Participants who terminated employment before the
Valuation Date for reasons other than death,
Disability or attainment of Normal Retirement Age
who did not complete a minimum of_________Hours of
Service during the Plan Year shall not share in the
allocation.
( ) iv. Participants who terminated employment during the
Plan Year for reasons other than retirement on or
after attainment of Normal Retirement Age, death or
Disability and who had not more than 500 Hours of
Service during the Plan Year shall not share in the
allocation.
( ) v. No exceptions.
NOTE: IF 21.b.i, 21.b.ii, OR 21.b.iii HAS BEEN ELECTED AND
THE PLAN FAILS TO SATISFY THE MINIMUM COVERAGE
REQUIREMENTS OF CODE SECTION 410(B) OR THE MINIMUM
PARTICIPATION REQUIREMENTS OF CODE SECTION 401(a)(26)
FOR A GIVEN PLAN YEAR BECAUSE OF THE OPERATION OF THESE
EXCEPTIONS, THE PROVISIONS OF SECTION 4.06 OF THE PLAN
SHALL APPLY.
22. EMPLOYER MATCHING CONTRIBUTIONS
a. If elected below, Employer Matching Contributions will be permitted:
( X ) i. Employer Matching Contributions are permitted.
( ) ii. Employer Matching Contributions are not permitted.
b. If Employer Matching Contributions are permitted, contributions to
the following accounts will be eligible to be matched:
( X ) i. Employee Elective Deferral Contributions.
( ) ii. Employee Post-Tax Voluntary Contributions.
c. If Employer Matching Contributions are permitted:
i. The amount of the Matching Contribution to be allocated on
behalf of any Participant eligible to share in the Employer
Matching Contribution will be determined as follows:
( ) A. _________% of each Participant's Contribution as
elected in b. above.
( X ) B. Declared annually at the discretion of the
Employer.
( ) C. Declared annually at the discretion of the
Employer, but with a minimum of______% and a
maximum of ______% of each Participant's
contribution as elected in b. above.
10
<PAGE>
( ) D. Declared annually at the discretion of the
Employer as a percentage of Compensation
to be allocated on behalf of any Participant
eligible to share in the Employer
Matching Contribution.
ii. The Employer Matching Contribution to be made on behalf of
any Participant is limited as follows:
( X ) A. Maximum Employer Matching Contribution per
Participant is to be declared annually at
the discretion of the Employer.
( ) B. No limitation.
( ) C. Employer Matching Contribution to be applied with
respect to only the first ______ % of Compensation
contributed by the Participant as described in
22.b above.
( ) D. Employer Matching Contribution not to exceed
$_______per Participant.
iii. The Employer Matching Contribution will be allocated as of:
( ) A. Each Valuation Date.
( X ) B. The final Valuation Date in the Plan Year.
( ) C. Each ____________ (Quarter, etc.).
( ) D. The date the contribution is made to the Trust.
iv. The Employer Matching Contribution will be allocated on behalf
of:
( X ) A. All eligible Participants.
( ) B. Only eligible Nonhighly Compensated Participants.
( ) C. Only eligible Participants who are not sole
proprietors, partners, shareholders or owners
(or considered one of these under Section 318 of
the Code) of the Employer.
( ) D. Only eligible Participants who ___________________
__________________________________________________
d. Employer Matching Contributions for a Plan Year shall be allocated
as of the Valuation Date (as elected in 22.c.iii above) to all
eligible Participants (as elected in 22.c.iv above) except as
provided below:
( ) i. Participants who terminated employment during the
Plan Year for reasons other than retirement on or
after attainment of Normal Retirement Age, death or
Disability shall not share in the allocation.
( ) ii. Participants employed on the Valuation Date who did
not complete a minimum of _____ Hours of Service
during the Plan Year shall not share in the
allocation.
( ) iii. Participants who terminated employment before the
Valuation Date for reasons other than death,
Disability or attainment of Normal Retirement Age
who did not complete a minimum of _________Hours
of Service during the Plan Year shall not share in
the allocation.
11
<PAGE>
( ) iv. Participants who terminated employment during the
Plan Year for reasons other than retirement on or after
attainment of Normal Retirement Age, death or
Disability and who had not more than 500 Hours of
Service during the Plan Year shall not share in the
allocation.
( X ) v. No exceptions.
NOTE: IF 22.d.i, 22.d.ii, OR 22.d.iii HAS BEEN ELECTED AND THE
PLAN FAILS TO SATISFY THE MINIMUM COVERAGE
REQUIREMENTS OF CODE SECTION 410(B) OR THE MINIMUM
PARTICIPATION REQUIREMENTS OF CODE SECTION 401(a)(26)
FOR A GIVEN PLAN YEAR BECAUSE OF THE OPERATION OF
THESE EXCEPTIONS, THE PROVISIONS OF SECTION 4.06 OF
THE PLAN SHALL APPLY.
23. EMPLOYER QUALIFIED MATCHING CONTRIBUTIONS
Employer Qualified Matching Contributions will be allocated as of the
final Valuation Date in a Plan Year on behalf of the following
Participants who are otherwise eligible to share in the allocation of
Employer Matching Contributions:
( ) a. All eligible Participants.
( ) b. Only eligible Nonhighly Compensated Participants.
( ) c. Only eligible Participants who are not Self-Employed
individuals, shareholders or owners (or considered one
of these under section 318 of the Code) of the Employer.
( ) d. Only eligible Participants who are not Self-Employed
individuals, shareholders or owners (or considered one
of these under section 318 of the Code) of the Employer,
and who had an ownership interest of at least ______% at
any time during the Plan Year.
( ) e. Only eligible Participants who are not _________________.
________________________________________________________
( X ) f. Not Applicable (no Employer Qualified Matching
Contributions).
24. EMPLOYER PROFIT SHARING CONTRIBUTIONS
a. If elected below, Employer Profit Sharing Contributions will be
permitted:
( ) i. Employer Profit Sharing Contributions are permitted.
( X ) ii. Employer Profit Sharing Contributions are not
permitted.
b. If Employer Profit Sharing Contributions are permitted, the
allocation of Employer Profit Sharing Contributions and
Forfeitures:
( ) i. shall be integrated with Social Security.
( ) ii. shall not be integrated with Social Security and
shall be allocated in the ratio that each
Participant's Compensation bears to the total
Compensation of all Participants.
( ) iii. shall not be integrated with Social Security and
shall be an equal dollar amount for each Participant.
12
<PAGE>
c. If Employer Profit Sharing Contributions are permitted and the
allocation of Employer Profit Sharing Contributions and
Forfeitures is integrated with Social Security:
i. The Integration Level will be:
( ) A. $ _________ [MAY NOT EXCEED TAXABLE WAGE BASE].
( ) B. the Taxable Wage Base in effect on the first day
of the Plan Year.
( ) C. ___________ % of the Taxable Wage Base in effect
on the first day of the Plan Year [MAY NOT
EXCEED 100%].
ii. The maximum Excess Compensation Percentage will be:
( ) A. the statutory maximum as described in section
1.63 of the Plan.
( ) B. declared annually at the discretion of the
Employer [MAY NOT EXCEED THE STATUTORY
MAXIMUM AS DESCRIBED IN SECTION 1.63 OF THE PLAN].
d. Employer Profit Sharing Contributions for a Plan Year shall be
allocated as of the final Valuation Date of the Plan Year to all
eligible Participants except as provided below:
( ) i. Participants who terminated employment during the
Plan Year for reasons other than retirement on or after
attainment of Normal Retirement Age, death or
Disability shall not share in the allocation.
( ) ii. Participants employed on the Valuation Date who
did not complete a minimum of __ Hours of Service
during the Plan Year shall not share in the allocation.
( ) iii. Participants who terminated employment before the
Valuation Date for reasons other than death, Disability
or attainment of Normal Retirement Age who did not
complete a minimum of Hours of Service during the Plan
Year shall not share in the allocation.
( ) iv. Participants who terminated employment during the
Plan Year for reasons other than retirement on or after
attainment of Normal Retirement Age, death or
Disability and who had not more than 500 Hours of
Service during the Plan Year shall not share in the
allocation.
( ) v. No exceptions.
NOTES:
(1) ITEM 24.d.ii ABOVE MAY NOT BE CHECKED IF ITEM 27.a.
BELOW IS ELECTED. IF ITEM 27.b. BELOW IS ELECTED, THEN
ITEM 24.d.ii SHALL APPLY ONLY DURING PLAN YEARS IN
WHICH THE PLAN IS NOT TOP-HEAVY.
(2) IF 24.d.i, 24.d.ii, OR 24.d.iii HAS BEEN ELECTED AND
THE PLAN FAILS TO SATISFY THE MINIMUM COVERAGE
REQUIREMENTS OF CODE SECTION 410(b) OR THE MINIMUM
PARTICIPATION REQUIREMENTS OF CODE SECTION 401(a)(26)
FOR A GIVEN PLAN YEAR BECAUSE OF THE OPERATION OF
THESE EXCEPTIONS, THE PROVISIONS OF SECTION 4.06 OF
THE PLAN SHALL APPLY.
13
<PAGE>
25. FORFEITURES
( X ) a. Forfeitures not used to restore Participants'
Accounts will first be used to reduce Employer Matching
Contributions and the balance, if any, will be
allocated according to the method elected for the
allocation of Employer Profit Sharing Contributions as
described in 24. above. If no election has been made in
24., forfeitures will be allocated in accordance with
section 4.02 of the Plan and will not be integrated
with Social Security.
( ) b. Forfeitures not used to restore Participants'
Accounts will be allocated by the same method as that
described for Employer Profit Sharing Contributions. If
no election has been made in 24., forfeitures will be
allocated in accordance with section 4.02 of the Plan
and will not be integrated with Social Security.
26. EMPLOYEE ROLLOVER/TRANSFER CONTRIBUTIONS
a. Employee Rollover Contributions:
( X ) i. will be permitted.
( ) ii. will not be permitted.
b. Employee Transfer Contributions:
( X ) i. will be permitted.
( ) ii. will not be permitted.
27. TOP-HEAVY STATUS
Applicability of Top-Heavy Plan provisions:
( ) a. The Plan is deemed to be a Top-Heavy Plan and Article
VIII shall apply at all times while this provision is
effective.
( X ) b. Article VIII shall apply only if the Plan is or becomes
a Top-Heavy Plan.
28. TOP-HEAVY MINIMUM ALLOCATION
a. If the Employer maintains another plan or plans covering any
Participant under this Plan, the minimum allocation or benefit
requirements applicable to Top-Heavy Plans:
( ) i. will be met in this Plan. The total of Employer
Profit Sharing Contributions, Employer Qualified
Non-Elective Contributions and Forfeitures (other than
Forfeitures used to reduce Employer Matching
Contributions) shall be a minimum of the percentage of
Compensation selected below (or such lesser amount as
determined under section 8.02 of the Plan): [CHECK ONE]
( ) 3% [IF ALL OTHER PLANS ARE DEFINED CONTRIBUTION PLANS
INCLUDED IN A REQUIRED AGGREGATION GROUP].
( ) 4% [IF ANOTHER PLAN IS A DEFINED BENEFIT PLAN
INCLUDED IN A REQUIRED AGGREGATION GROUP AND THE
HIGHER LIMITATION OF CODE SECTION 415 IS DESIRED
WHEN THIS PLAN IS NOT SUPER TOP-HEAVY: NOT SAFE
HARBOR].
( ) 5% [IF ANOTHER PLAN IS A DEFINED BENEFIT PLAN
INCLUDED IN A REQUIRED AGGREGATION GROUP: SAFE
HARBOR].
14
<PAGE>
( ) 7.5% [IF ANOTHER PLAN IS A DEFINED BENEFIT PLAN
INCLUDED IN A REQUIRED AGGREGATION GROUP AND
THE HIGHER LIMITATION OF CODE SECTION 415 IS
DESIRED WHEN THIS PLAN IS NOT SUPER TOP-HEAVY:
SAFE HARBOR].
( ) ii. will not be met in this Plan but will be met in the
following plan or plans:
____________________________________________________
____________________________________________________
There shall be no (0%) required minimum allocation
level under this option for this Plan.
( X ) iii. Employer does not maintain another Plan. The
minimum allocation applicable to a Top-Heavy plan will
be 3% (or such lesser amount as determined under
section 8.02 of the Plan) and will be allocated to the
Participants elected in b. below.
b. The minimum allocation selected above will be made to the
following Participants who are otherwise eligible to share in the
allocation of the Employer Profit Sharing Contribution:
( ) i. All Participants.
( X ) ii. Only Participants who are not Key Employees.
( ) iii. Not Applicable (28.a.ii. elected).
29. TOP-HEAVY ASSUMPTIONS
( X ) a. Employer has never maintained another plan and the
Top-Heavy Valuation Date will be the Determination Date
under this Plan.
( ) b. Employer currently maintains or has previously
maintained another plan and makes the following
selections for purposes of determining the Top-Heavy
Ratio:
i. For purposes of establishing present value to compute
the Top-Heavy Ratio, any benefit shall be discounted
only for mortality and interest based on the
following:
A. Interest rate: ___________ %.
B. Mortality Table: ___________ .
ii. For purposes of computing the Top-Heavy Ratio, the
Top-Heavy Valuation Date shall be _____ of each year.
30. ALLOCATION OF TRUST EARNINGS
Trust earnings (other than segregated account earnings) shall be
allocated to the Participants' Accounts as of each Valuation Date
according to the following basis:
( ) a. Participant's Account balance as of the preceding
Valuation Date less subsequent distributions, withdrawals,
Forfeitures from the account, loans (only if 38.b.i.A. is
selected) and insurance premium payments, plus one-half of
Employee Rollover/Transfer Contributions if such Employee
Rollover/Transfer Contribution was deposited prior to the
mid-point of the period commencing on the immediately
preceding Valuation Date and ending on the current Valuation
Date.
15
<PAGE>
( ) b. Participant's Account balance as of the preceding
Valuation Date less subsequent distributions, withdrawals,
Forfeitures from the account, loans (only if 38.b.i.A. is
selected) and insurance premium payments plus one-half of
Employee Elective Deferrals, one-half of Employee Post-Tax
Voluntary Contributions and one-half of Employee
Rollover/Transfer Contributions if such Employee
Rollover/Transfer Contribution was deposited prior to the
mid-point of the period commencing on the immediately
preceding Valuation Date and ending on the current Valuation
Date.
( ) c. Participant's Account balance as of the preceding
Valuation Date less subsequent distributions, withdrawals,
Forfeitures from the account, loans (only if 38.b.i.A. is
selected) and insurance premium payments plus one-half of
Employee Elective Deferrals, one-half of Employee Post-Tax
Voluntary Contributions, one-half of Employer Matching
Contributions and one-half of Employee Rollover/Transfer
Contributions if such Employee Rollover/Transfer
Contribution was deposited prior to the mid-point of the
period commencing on the immediately preceding Valuation
Date and ending on the current Valuation Date.
( X ) d. Time-weighted basis which recognizes the
Participant's Account balance as of the most recent
Valuation Date and the actual dates of any increases or
decreases (other than trust earnings) in the Participant's
Account.
( ) e. Not applicable (Plan consists of only segregated
accounts).
31. EMPLOYER PROFIT SHARING CONTRIBUTION ACCOUNT VESTING SCHEDULE
Each Participant's Vested Percentage in his Employer Profit Sharing
Account shall be determined under the following schedule:
( ) a. Schedule 1: 100% vested at all times.
( ) b. Schedule 2: 100% vested after ______ [NOT TO EXCEED
FIVE] Years of Service.
( ) c. Schedule 3:
Years of Service Vested Percentage
---------------- -----------------
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 100%
( ) d. Schedule 4:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C> <C>
Less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 100%
16
<PAGE>
( X ) e. Schedule 5:
Years of Service Vested Percentage
---------------- -----------------
Less than 1 0 %
1 20 %
2 40 %
3 60 %
4 80 %
5 100 %
6 100 %
7 100 %
</TABLE>
IF THIS 31.e. IS SELECTED, THE VESTED PERCENTAGE IN ANY YEAR
CANNOT BE LESS THAN THE SCHEDULES PROVIDED IN 31.b. OR
31.d ABOVE.
( ) f. Notwithstanding the schedule selected above, all
Participants as of_______(specify date) will be 100%
vested.
( ) g. Pre-Amendment Vesting Schedule:
If the vesting schedule has been changed, the vesting
schedule prior to amendment as of _____________ was as
follows:
Years of Service Vested Percentage
---------------- -----------------
32. EMPLOYER MATCHING CONTRIBUTION ACCOUNT VESTING SCHEDULE
The Employer Matching Contribution Account shall:
( X ) a. vest in accordance with the schedule selected in 31.
above.
( ) b. be 100% vested at all times.
( ) c. N/A (no Employer Matching Contribution).
33. TOP-HEAVY VESTING
Notwithstanding the vesting schedule selected in Item 31 and 32, the
following vesting schedule shall apply in any Plan Year in which the
Plan is a Top-Heavy Plan:
( X ) a. The schedule selected in Item 31 and 32 which already
meets the top-heavy requirements (Items 31.a, 31.c, and
31.b with 3 or fewer years elected will satisfy the
top-heavy requirements).
( ) b. Schedule 2: 100% vested after______[NOT TO EXCEED THREE]
Years of Service.
( ) c. Schedule 3:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
------------------ -------------------
<S> <C>
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 100%
17
<PAGE>
( ) d. Schedule 4:
Years of Service Vested Percentage
------------------ -------------------
Less than 1 ______% (minimum 0%)
1 ______% (minimum 0%)
2 ______% (minimum 20%)
3 ______% (minimum 40%)
4 ______% (minimum 60%)
5 ______% (minimum 80%)
6 100 %
</TABLE>
34. VESTING SERVICE
For purposes of computing a Participant's Vested Percentage, the
following Years of Service shall not be taken into account:
( ) a. Years of Service before an Employee attains age 18.
(For a Participant terminating in a Plan Year beginning
prior to January 1, 1985, and who performs no service in
Plan Years beginning after December 31, 1984, Years of
Service before an Employee attains age 22.)
( ) b. Years of Service before the Employer maintained this
Plan or a predecessor plan.
( X ) c. No exclusions.
35. NORMAL RETIREMENT AGE
Normal Retirement Age for each Participant shall be age 65 [NOT TO
EXCEED 65].
36. BENEFIT FORM
The benefit options under the Plan:
( ) a. shall include a life annuity, which shall be the normal
form of retirement benefit.
( ) b. shall include a life annuity, which shall be the normal
form of retirement benefit, but only with respect to the
following participants:
( X ) c. shall not include a life annuity.
37. DISTRIBUTIONS
If a Participant terminates employment for a reason other than
retirement on or after the Participant's Normal Retirement Date, death
or Disability of the Participant, the Participant shall be eligible for
payment of benefits:
( ) a. as soon as administratively feasible following the first
Valuation Date coincident with or next following the date
of termination.
( ) b. as soon as administratively feasible following the first
Valuation Date after the Participant incurs______ [UP TO
FIVE] consecutive one-year Breaks in Service.
( ) c. as soon as administratively feasible following the date
of termination.
( X ) d. as soon as administratively feasible following the end
of the month (quarter, etc) in which the date of
termination occurs.
18
<PAGE>
38. PARTICIPANT LOANS
( ) a. The Trustee shall not be authorized to make loans to
Participants.
( X ) b. The Trustee shall, in accordance with the terms of the
Plan, be authorized to make loans to Participants subject
to the following:
i. Interest paid by a Participant on a loan will be
credited as follows:
( X ) A. directly to the Participant's Account.
( ) B. Loan interest credited to general trust
fund.
ii. The minimum amount for any loan will be:
( ) A. No minimum amount.
( X ) B. $ 1,000 ________(not to exceed $1,000).
39. LIFE INSURANCE OPTION
a. If elected below, the Trustee shall be authorized to purchase life
insurance Contracts on the lives of the Participants.
( ) i. Life insurance purchases shall be authorized.
( X ) ii. Life insurance purchases shall not be authorized.
b. If authorized under Item 39.a., the Trustee shall purchase insurance
only at the direction of:
( ) i. the Plan Administrator.
( ) ii. the individual Participant.
40. DIRECTED INVESTMENTS
( ) a. Participants shall not have the authority to direct the
Trustee as to investment of any portion of the
Participant's Account.
( X ) b. Each Participant shall have the authority to direct the
Trustee as to investment of the accounts named below in
accordance with the guidelines established by the
Trustees and the Plan Administrator.
( X ) i. the entire Participant's Account
( ) ii. the Participants' accounts selected below:
( ) A. Employer Profit Sharing Account.
( ) B. Employer Matching Account.
( ) C. Employer Qualified Matching Account.
( ) D. Employer Qualified Non-Elective Account.
( ) E. Employee Elective Deferral Account.
( ) F. Employee Post-Tax Voluntary Account.
( ) G. Employee Rollover/Transfer Account.
( ) H. Employee VDEC Account.
19
<PAGE>
41. HARDSHIP WITHDRAWALS OF ELECTIVE DEFERRAL CONTRIBUTIONS
If elected below, the Trustee shall be authorized to make distributions
to a Participant from the Participant's Employee Elective Deferral
Account in the event of financial hardship as described in section
7.12.a. of the Plan.
( ) a. Hardship withdrawals are authorized.
( X ) b. Hardship withdrawals are not authorized.
42. IN-SERVICE DISTRIBUTIONS
If elected below, the Trustee shall be authorized to distribute to any
Participant in any one Plan Year up to 100% of the Vested Interest in
the Participant's Account if the Participant has completed at least 5
years of participation in the Plan or the balance in the Participant's
Account has accumulated for at least 2 years. However, under no
circumstance may any amount from the Employee Elective Deferral
Account, the Employer Qualified Non-Elective Account, or the Employer
Qualified Matching Account be distributed pursuant to this provision
prior to attainment of age 59 1/2.
a. In-service withdrawal election.
( ) i. In-service distributions are not permitted.
( X ) ii. In-service distributions are permitted. If elected
below, a Participant must satisfy the requirement(s)
specified to become eligible to receive an in-service
distribution:
( ) A. A Participant must have attained age _________.
( ) B. A Participant must have completed _______Year(s)
of Service.
( ) C. A Participant must have________________________.
b. If elected below, a Participant who is otherwise eligible to
receive an in-service distribution must have a financial hardship
as described in section 7.14 of the Plan before the in-service
withdrawal is permitted.
( ) i. Financial hardship is required for in-service
distributions.
( X ) ii. Financial hardship is not required for in-service
distributions.
43. MULTIPLE PLAN REDUCTION
a. If the Employer maintains or ever maintained another qualified
plan in which any Participant in this Plan is (or was) a
participant or could become a participant, one of the following
must be completed. The Employer must also complete this section if
it maintains a welfare benefit fund, as defined in section 419(e)
of the Code, or an individual medical account, as defined in
section 415(1)(2) of the Code, under which amounts are treated as
Annual Additions with respect to any Participant in this Plan.
( X ) i. Employer has never maintained another qualified plan.
( ) ii. The provisions of section 5.01.b.1 through 5.01.b.6.
will apply as if the other plan were a master or
prototype plan.
20
<PAGE>
( ) iii. The method described below will limit total
annual additions to the maximum permissible
amount and will properly reduce any excess
amounts in a manner that precludes Employer
discretion.
________________________________________________
________________________________________________
________________________________________________
b. If the Participant is or has ever been a Participant in a defined
benefit plan maintained by the Employer:
( X ) i. [NO OTHER PLAN]
Employer has never maintained a defined benefit plan.
( ) ii. [DEFINED CONTRIBUTION PLAN REDUCTION]
In any Limitation Year, the Annual Additions credited
under this Plan to the Participant may not cause the
sum of the Defined Benefit Fraction and Defined
Contribution Fraction to exceed 1.0. If the Employer's
contribution that would otherwise be made on the
Participant's behalf during the Limitation Year would
cause the 1.0 limitation to be exceeded, the rate of
contribution under this Plan will be reduced so that
the sum of the fractions equals 1.0. If the 1.0
limitation is exceeded because of an Excess Amount,
such Excess Amount will be reduced in accordance with
Section 5.01(h) of Article V.
( ) iii. [DEFINED BENEFIT PLAN REDUCTION]
In any Limitation Year if the sum of the Defined
Benefit Fraction and the Defined Contribution Fraction
shall exceed 1.0 for any Participant in this Plan, the
Plan Administrator shall adjust the numerator of the
Defined Benefit Fraction so that the sum of both
fractions shall not exceed 1.0 in any Limitation Year
for such Participant.
44. QUALIFIED EMPLOYER SECURITIES
If elected below, the Trustee is authorized to invest an amount not to
exceed the percentage of plan assets specified in qualified employer
securities (as defined in section 407(d)(5) of ERISA).
( ) a. Investment in qualified employer securities is not
permitted.
( X ) b. Investment in qualified employer securities is permitted
in an amount not to exceed 25% of plan assets.
45. DETERMINATION OF HIGHLY COMPENSATED EMPLOYEES
( X ) a. No exceptions with respect to the Plan's regular method
for determination of Highly Compensated Employees.
( ) b. The exclusions used to determine the Top-paid Group will
be modified as follows:
( ) i. No employees identified in 414(q)(8) of the Code will
be excluded.
( ) ii. Employees who have not completed _____ months of
service will be excluded (MAY NOT EXCEED 6 MONTHS OF
SERVICE).
( ) iii. Employees who normally work less than ____ hours
per week will be excluded (MAY NOT EXCEED 17-1/2
HOURS PER WEEK).
21
<PAGE>
( ) iv. Employees who normally work less than ___ months
during any year will be excluded (MAY NOT EXCEED 6
MONTHS).
( ) v. Employees who are less than age______ as of the end
of such year will be excluded (MAY NOT EXCEED AGE 21).
( ) vi. Employees subject to a Collective Bargaining
Agreement will be excluded subject to the regulations
of section 414(q) of the Code.
( ) c. Highly Compensated Employees will be determined using the
method contained in section 414(q)(12) of the Code.
46. EFFECTIVE DATES
Notwithstanding the effective date elected in item 7., the effective
date of the items selected below are as follows:
( X ) a. Not applicable. All items are effective as elected in
item 7.
( ) b. The Plan Year election of item 9. is effective
____________________________.
( ) c. The Eligibility Requirements of item 13. are effective
____________________________.
( ) d. The Entry Date Requirements of item 17. are effective
____________________________.
( ) e. The Employer Matching Contribution provisions of item 22.
are effective ____________________________.
( ) f. The Employer Profit Sharing provisions of item 24. are
effective ____________________________.
( ) g. The Employer Profit Sharing Contribution Account Vesting
Schedule of item 31 is effective _______________________.
( ) h. The provisions of item ____are effective _______________.
( ) i. The provisions of item ____are effective _______________.
( ) j. The provisions of item ____are effective _______________.
( ) k. The provisions of item ____are effective _______________.
( ) l. The provisions of item ____are effective _______________.
( ) m. The provisions of item ____are effective _______________.
( ) n. The provisions of item ____are effective _______________.
( ) o. The provisions of item ____are effective _______________.
22
<PAGE>
47. PLAN SPONSOR
This regional prototype plan is sponsored by:
Plan Data, Inc.
11130 Jollyville Road, Suite 100
Austin, Texas 78759-5599
(512) 345-5833
Plan Data, Inc. will inform the adopting employer of any amendments
made to the Plan or of the discontinuance or abandonment of the Plan.
48. EMPLOYER AND TRUSTEE SIGNATURES
NOTICE: Failure to properly complete this Adoption Agreement may result in
disqualification of the Plan. The adopting employer may not rely
on a notification letter issued by a Key District Office of the
Internal Revenue Service as evidence that the plan is qualified
under section 401 of the Internal Revenue Code. In order to obtain
reliance with respect to plan qualification, the employer must
apply to the appropriate key district office for a determination
letter.
Signed this 28 day of April, 2000
EMPLOYER:
Pinnacle Global Group, Inc.
-------------------------------------------
(Name of Employer)
ATTEST:
/s/ Pat Howles
- ---------------
By: /s/ R.E. Garrison II
----------------------------------------
Authorized Signature
President & CEO
----------------------------------------
(Name and title of Signer)
The undersigned Trustee(s) hereby accepts its/their appointment as Trustee(s)
under the Plan and agree(s) to serve in accordance with its terms.
Signed this 2 day of May, 2000
PINNACLE MANAGEMENT & TRUST CO.
/s/ Stephen D. Strake
------------------------------------
<PAGE>
47. PLAN SPONSOR
This regional prototype plan is sponsored by:
Plan Data, Inc.
11130 Jollyville Road, Suite 100
Austin, Texas 78759-5599
(512) 345-5833
Plan Data, Inc. will inform the adopting employer of any amendments
made to the Plan or of the discontinuance or abandonment of the Plan.
48. EMPLOYER AND TRUSTEE SIGNATURES
NOTICE: Failure to properly complete this Adoption Agreement may result in
disqualification of the Plan. The adopting employer may not rely
on a notification letter issued by a Key District Office of the
Internal Revenue Service as evidence that the plan is qualified
under section 401 of the Internal Revenue Code. In order to obtain
reliance with respect to plan qualification, the employer must
apply to the appropriate key district office for a determination
letter.
Signed this 28 day of April, 2000
EMPLOYER:
Pinnacle Management & Trust Co
-------------------------------------------
(Name of Employer)
ATTEST:
/s/ Linda K. Martin
- --------------------
By: /s/ Stephen D. Strake
----------------------------------------
Authorized Signature
Stephen D. Strake President/COO
----------------------------------------
(Name and title of Signer)
The undersigned Trustee(s) hereby accepts its/their appointment as Trustee(s)
under the Plan and agree(s) to serve in accordance with its terms.
Signed this 28th day of April, 2000
PINNACLE MANAGEMENT & TRUST CO.
/s/ Stephen D. Strake
------------------------------------
<PAGE>
47. PLAN SPONSOR
This regional prototype plan is sponsored by:
Plan Data, Inc.
11130 Jollyville Road, Suite 100
Austin, Texas 78759-5599
(512) 345-5833
Plan Data, Inc. will inform the adopting employer of any amendments
made to the Plan or of the discontinuance or abandonment of the Plan.
48. EMPLOYER AND TRUSTEE SIGNATURES
NOTICE: Failure to properly complete this Adoption Agreement may result in
disqualification of the Plan. The adopting employer may not rely
on a notification letter issued by a Key District Office of the
Internal Revenue Service as evidence that the plan is qualified
under section 401 of the Internal Revenue Code. In order to obtain
reliance with respect to plan qualification, the employer must
apply to the appropriate key district office for a determination
letter.
Signed this 1 day of May, 2000
EMPLOYER:
Spires Financial, L.P.
-------------------------------------------
(Name of Employer)
ATTEST:
/s/ Pat Howles
- --------------------
By: /s/ Peter W. Badeer
----------------------------------------
Authorized Signature
Peter W. Badeer
----------------------------------------
(Name and title of Signer)
The undersigned Trustee(s) hereby accepts its/their appointment as Trustee(s)
under the Plan and agree(s) to serve in accordance with its terms.
Signed this 2 day of May, 2000
PINNACLE MANAGEMENT & TRUST CO.
/s/ Stephen D. Strake
------------------------------------
<PAGE>
47. PLAN SPONSOR
This regional prototype plan is sponsored by:
Plan Data, Inc.
11130 Jollyville Road, Suite 100
Austin, Texas 78759-5599
(512) 345-5833
Plan Data, Inc. will inform the adopting employer of any amendments
made to the Plan or of the discontinuance or abandonment of the Plan.
48. EMPLOYER AND TRUSTEE SIGNATURES
NOTICE: Failure to properly complete this Adoption Agreement may result in
disqualification of the Plan. The adopting employer may not rely
on a notification letter issued by a Key District Office of the
Internal Revenue Service as evidence that the plan is qualified
under section 401 of the Internal Revenue Code. In order to obtain
reliance with respect to plan qualification, the employer must
apply to the appropriate key district office for a determination
letter.
Signed this 1 day of May, 2000
EMPLOYER:
Sanders Morris Harris
-------------------------------------------
(Name of Employer)
ATTEST:
/s/ Sandy Williams
- --------------------
By: /s/ Ben T. Morris,
----------------------------------------
Authorized Signature
Ben T. Morris Pres.
----------------------------------------
(Name and title of Signer)
The undersigned Trustee(s) hereby accepts its/their appointment as Trustee(s)
under the Plan and agree(s) to serve in accordance with its terms.
Signed this 2 day of May, 2000
PINNACLE MANAGEMENT & TRUST CO.
/s/ Stephen D. Strake
------------------------------------
<PAGE>
47. PLAN SPONSOR
This regional prototype plan is sponsored by:
Plan Data, Inc.
11130 Jollyville Road, Suite 100
Austin, Texas 78759-5599
(512) 345-5833
Plan Data, Inc. will inform the adopting employer of any amendments
made to the Plan or of the discontinuance or abandonment of the Plan.
48. EMPLOYER AND TRUSTEE SIGNATURES
NOTICE: Failure to properly complete this Adoption Agreement may result in
disqualification of the Plan. The adopting employer may not rely
on a notification letter issued by a Key District Office of the
Internal Revenue Service as evidence that the plan is qualified
under section 401 of the Internal Revenue Code. In order to obtain
reliance with respect to plan qualification, the employer must
apply to the appropriate key district office for a determination
letter.
Signed this 1 day of May, 2000
EMPLOYER:
Energy Recovery Resources, Inc.
-------------------------------------------
(Name of Employer)
ATTEST:
/s/ Pat Howles
- --------------------
By: /s/ Donald R. Campbell
----------------------------------------
Authorized Signature
Donald R. Campbell, Secretary/Treasurer
----------------------------------------
(Name and title of Signer)
The undersigned Trustee(s) hereby accepts its/their appointment as Trustee(s)
under the Plan and agree(s) to serve in accordance with its terms.
Signed this 2 day of May, 2000
PINNACLE MANAGEMENT & TRUST CO.
/s/ Stephen D. Strake
------------------------------------
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated March 17, 2000 relating
to the financial statements and financial statement schedule, which appears in
Pinnacle Global Group's Annual Report on Form 10-K for the year ended December
31, 1999.
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated February 25, 2000
relating to the financial statements of Sanders Morris Mundy Inc., which appears
in the Current Report on Form 8-K dated April 28, 2000 of Pinnacle Global Group,
Inc.
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated February 24, 1999
relating to the financial statements of Spires Financial, L.P., which appears in
the Definitive Proxy Statement on Schedule 14A dated December 6, 1999, as
supplemented by the Proxy Statement dated January 12, 2000 of Pinnacle Global
Group, Inc.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
May 16, 2000
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the inclusion in this registration statement on Form
S-8 our report dated February 11, 1999 (except for Note 18 for which the date is
March 15, 1999), on our audit of the financial statements of Harris, Webb &
Garrison, Inc. at December 31, 1998 and 1997, and for each of the three years in
the period ended December 31, 1998 incorporated by reference in this
registration statement.
/s/ Cheshier & Fuller, L.L.P.
CHESHIER & FULLER, L.L.P.
Dallas, Texas
May 16, 2000
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the use of our report dated February 19, 1999, with
respect to the financial statements of Pinnacle Management & Trust Co. as of
and for the years ended December 31, 1998 and 1997, incorporated herein by
reference.
/s/ KPMG LLP
KPMG LLP
Houston, Texas
May 16, 2000
<PAGE>
Exhibit 23.4
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated February 7, 1997, accompanying the
financial statements of Pinnacle Management & Trust Company contained in the
Definitive Proxy Statement dated December 6, 1999 of Pinnacle Global Group, Inc.
on Schedule 14A, as supplemented by the Proxy Statement dated January 12, 2000,
which is incorporated by reference in this Registration Statement on Form S-8.
We consent to the incorporation by reference in this Registration Statement of
the aforementioned report.
/s/Grant Thornton LLP
GRANT THORNTON LLP
Houston, Texas
May 16, 2000
