<PAGE>
As filed with the Securities and Exchange Commission on June 17, 1999
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
NCRIC GROUP, INC.
(Exact name of registrant as specified in its charter)
District of Columbia 52-2134774
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1115 30th Street, N.W.
Washington, D.C. 20007
(202) 969-1866
(Address of Principal Executive Offices, Including Zip Code)
NCRIC, INC.
401(k) PLAN
(Full Title of the Plan)
R. Ray Pate, Jr.
NCRIC Group, Inc.
1115 30th Street, N.W.
Washington, D.C. 20007
(Name and Address of Agent for Service)
(202) 969-1866
(Telephone Number, Including Area Code, of Agent For Service)
Copy to:
James B. Halpern, Esq.
John P. Foley, Esq.
Arent Fox Kintner Plotkin & Kahn, PLLC
1050 Connecticut Avenue, N.W.
Washington, DC 20036-5339
_______________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================================
Proposed Maximum Estimated Maximum
Title of Securities Amount to be Offering Price Per Aggregate Offering Amount of
to be Registered Registered Share (1) or Interest (2) Price (1)(2) Registration Fee
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 300,000 shares $7.00 $2,100,000 $584
Interests in 401(k) plan (3) -- -- --
======================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee under
Rule 457(h).
(2) Pursuant to Rule 457(h)(2), no separate fee is required with respect to
interests in the NCRIC, Inc. 401(k) Plan constituting separate securities.
(3) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the NCRIC, Inc. 401(k) Plan.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information*
Item 2. Registrant Information and Employee Plan Annual Information*
* Information required by Part I to be contained in a Section 10(a)
prospectus is omitted from the Registration Statement in accordance
with Rule 428 under the Securities Act of 1933 (the "Securities Act")
and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents previously filed by the Registrant with the
Securities and Exchange Commission are incorporated by reference in this
Registration Statement:
1. The Registrant's quarterly report on Form 10-QSB for the period
ended March 31, 1999.
2. The Prospectus filed with the Commission by the Registrant (File
No. 333-69537) pursuant to Rule 424(b) dated May 10, 1999, which includes the
consolidated financial statements of the Registrant as of December 31, 1998 and
1997 and for each of the three years in the period ended December 31, 1998,
together with the report of Deloitte & Touche LLP, independent auditors.
3. Registrant's Form 8-A Registration Statement filed pursuant to
Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act"),
containing a description of the Registrant's common stock, including any
amendment or report filed for the purpose of updating such description.
In addition, all documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
II-2
<PAGE>
Item 6. Indemnification of Directors and Officers
Section 9.1 of the Registrant's articles of incorporation provides that
the Registrant shall indemnify its directors and officers to the fullest extent
permitted under the Registrant's bylaws and the law of the District of Columbia.
Article VII of the Registrant's bylaws provides that the Registrant shall
indemnify its directors and officers to the fullest extent permitted by law, as
now in effect and as the law may be amended in the future.
Section 29-304(16) of the D.C. Code authorizes indemnifications of
directors and officers against expenses actually and necessarily incurred in
connection with the defense of an action, except in relation to matters as to
which an officer or director is adjudged to be liable for negligence or
misconduct in the performance of duty. This indemnification is not exclusive of
other rights under any bylaw agreement, vote of stockholders or otherwise.
The Registrant maintains directors' and officers' liability insurance.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
See Exhibit Index.
Item 9. Undertakings
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made of the securities registered hereby, a post-effective
amendment to this Registrant Statement to:
(i) Include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in this Registration Statement;
(iii) Include any additional or changed material information
on the plan of distribution;
provided, however, that the undertakings set forth in paragraphs (1)(i) and
- -------- -------
(1)(ii) above do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in this Registration Statement.
(2) For determining liability under the Securities Act, each
such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered
II-3
<PAGE>
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the end of the offering.
(b) The Registrant hereby further 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 the Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the 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, unless in the opinion of its counsel the matter has
been settled by controlling precedent, will 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.
II-4
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the District of Columbia, on this 16th day of June, 1999.
NCRIC GROUP, INC.
By: /s/ R. Ray Pate, Jr.
------------------------------------
R. Ray Pate, Jr.
President and Chief Executive
Officer
POWER OF ATTORNEY
-----------------
Each person whose signature appears below constitutes and appoints R. Ray
Pate, Jr. and Rebecca B. Crunk, and each of them his or her true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him or her, and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments to the Form S-8 Registration
Statement, and to file the same, with all exhibits thereto, and all documents in
connection therewith, with the Commission, granting unto said attorney-in-fact
and agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done to comply with the
provisions of the Securities Act and all requirements of the Commission, hereby
ratifying and confirming all that said attorney-in-fact and agent or any of
them, or their or his or her substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ Nelson P. Trujillo, M.D. Chair of the Board June 16, 1999
- -----------------------------------
Nelson P. Trujillo, M.D. of Directors
/s/ R. Ray Pate, Jr. President, Chief Executive June 16, 1999
- -----------------------------------
R. Ray Pate, Jr. Officer and Director
Principal Executive Officer
/s/ Rebecca B. Crunk Chief Financial Officer June 16, 1999
- -----------------------------------
Rebecca B. Crunk Principal Financial and
Accounting Officer
</TABLE>
II-5
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Vincent C. Burke, III Director June 16, 1999
- -----------------------------------
Vincent C. Burke, III
/s/ Pamela W. Coleman, M.D. Director June 16, 1999
- -----------------------------------
Pamela W. Coleman, M.D.
/s/ Charles H. Epps, Jr., M.D. Director June 16, 1999
- -----------------------------------
Charles H. Epps, Jr., M.D.
/s/ Leonard M. Glassman, M.D. Director June 16, 1999
- -----------------------------------
Leonard M. Glassman, M.D.
/s/ J. Paul McNamara Director June 16, 1999
- -----------------------------------
J. Paul McNamara
/s/ Leonard Parver, M.D. Director June 16, 1999
- -----------------------------------
Leonard Parver, M.D.
___________________________________ Director June __, 1999
Raymond Scalettar, M.D.
___________________________________ Director June __, 1999
David M. Seitzman, M.D.
</TABLE>
THE PLAN
--------
Pursuant to the requirements of the Securities Act, the trustees have duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the District of Columbia on June 16,
1999.
NCRIC, INC. 401(k) PLAN
By: /s/ R. Ray Pate, Jr.
----------------------------------
R. Ray Pate, Jr.
Trustee
By: /s/ Rebecca B. Crunk
----------------------------------
Rebecca B. Crunk
Trustee
II-6
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
- -------
4. The NCRIC, Inc. 401(k) Plan, as amended
5. Opinion of Arent Fox Kintner Plotkin & Kahn, PLLC
concerning validity of securities registered
8. Tax opinion not required. The Registrant has submitted or
hereby undertakes to submit the NCRIC, Inc. 401(k) Plan and
any amendment thereto to the Internal Revenue Service in a timely
manner and has made or will make all changes required by the
Internal Revenue Service in order to qualify the plan.
23. Consents of experts and counsel
(a) Consent of Deloitte & Touche LLP,
Certified Public Accountants
(b) Consent of Arent Fox Kintner Plotkin &
Kahn, PLLC (counsel): included in exhibit 5
24. Power of Attorney: included on signature page
<PAGE>
EXHIBIT 4
EMPLOYEE BENEFITS SERVICES, INC. REGIONAL PROTOTYPE
DEFINED CONTRIBUTION
PLAN AND TRUST
<PAGE>
EMPLOYEE BENEFIT SERVICES, INC.
DEFINED CONTRIBUTION
PLAN AND TRUST
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
<TABLE>
<S> <C>
2.1 TOP HEAVY PLAN REQUIREMENTS..................................... 15
2.2 DETERMINATION OF TOP HEAVY STATUS............................... 15
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER..................... 19
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY......................... 19
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES................... 20
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR.......................... 20
2.7 RECORDS AND REPORTS............................................. 21
2.8 APPOINTMENT OF ADVISERS......................................... 21
2.9 INFORMATION FROM EMPLOYER....................................... 21
2.10 PAYMENT OF EXPENSES............................................. 22
2.11 MAJORITY ACTIONS................................................ 22
2.12 CLAIMS PROCEDURE................................................ 22
2.13 CLAIMS REVIEW PROCEDURE......................................... 22
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY....................................... 23
3.2 EFFECTIVE DATE OF PARTICIPATION................................. 23
3.3 DETERMINATION OF ELIGIBILITY.................................... 23
3.4 TERMINATION OF ELIGIBILITY...................................... 24
3.5 OMISSION OF ELIGIBLE EMPLOYEE................................... 24
3.6 INCLUSION OF INELIGIBLE EMPLOYEE................................ 24
3.7 ELECTION NOT TO PARTICIPATE..................................... 24
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE........................... 24
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION................. 25
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION...................... 26
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS............ 26
4.4 MAXIMUM ANNUAL ADDITIONS........................................ 33
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS....................... 40
4.6 TRANSFERS FROM QUALIFIED PLANS.................................. 40
4.7 VOLUNTARY CONTRIBUTIONS......................................... 42
</TABLE>
<PAGE>
<TABLE>
<S> <C>
4.8 DIRECT INVESTMENT ACCOUNT....................................... 43
4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS...................... 43
4.10 ACTUAL CONTRIBUTION PERCENTAGE TESTS............................ 44
4.11 INTEGRATION IN MORE THAN ONE PLAN............................... 44
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND..................................... 44
5.2 METHOD OF VALUATION............................................. 45
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT....................... 45
6.2 DETERMINATION OF BENEFITS UPON DEATH............................ 45
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY................ 47
6.4 DETERMINATION OF BENEFITS UPON TERMINATION...................... 47
6.5 DISTRIBUTION OF BENEFITS........................................ 50
6.6 DISTRIBUTION OF BENEFIT1TS UPON DEATH........................... 55
6.7 TIME OF SEGREGATION OR DISTRIBUTION............................. 60
6.8 DISTRIBUTION FOR MINOR BENEFICIARY.............................. 60
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN.................. 60
6.10 PRE-RETIREMENT DISTRIBUTION..................................... 61
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP............................... 61
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS....................... 62
6.13 SPECIAL RULE FOR NON-ANNUITY PLANS.............................. 62
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE........................... 63
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE..................... 63
7.3 OTHER POWERS OF THE TRUSTEE..................................... 65
7.4 LOANS TO PARTICIPANTS........................................... 67
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS........................ 70
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES................... 70
7.7 ANNUAL REPORT OF THE TRUSTEE.................................... 70
7.8 AUDIT........................................................... 71
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE.................. 71
7.10 TRANSFER OF INTEREST............................................ 72
7.11 TRUSTEE INDEMNIFICATION......................................... 72
7.12 EMPLOYER SECURITIES AND REAL PROPERTY........................... 73
</TABLE>
<PAGE>
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
<TABLE>
<S> <C>
8.1 AMENDMENT........................................................ 73
8.2 TERMINATION...................................................... 74
8.3 MERGER OR CONSOLIDATION.......................................... 74
ARTICLE IX
MISCELLANEOUS
9.1 EMPLOYER ADOPTIONS............................................... 75
9.2 PARTICIPANT'S RIGHTS............................................. 75
9.3 ALIENATION....................................................... 75
9.4 CONSTRUCTION OF PLAN............................................. 76
9.5 GENDER AND NUMBER................................................ 76
9.6 LEGAL ACTION..................................................... 76
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS........................... 76
9.8 BONDING.......................................................... 77
9.9 EMPLOYER'S AND TRUST'S PROTECTIVE CLAUSE......................... 77
9.10 INSURER'S PROTECTIVE CLAUSE...................................... 77
9.11 RECEIPT AND RELEASE FOR PAYMENTS................................. 78
9.12 ACTION BY THE EMPLOYER........................................... 78
9.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY............... 78
9.14 HEADINGS......................................................... 78
9.15 APPROVAL BY INTERNAL REVENUE SERVICE............................. 79
9.16 UNIFORMITY....................................................... 79
9.17 PAYMENT OF BENEFITS.............................................. 79
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER...................... 79
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS.......................... 80
10.3 DESIGNATION OF AGENT............................................. 80
10.4 EMPLOYEE TRANSFERS............................................... 80
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES............ 81
10.6 AMENDMENT........................................................ 81
10.7 DISCONTINUANCE OF PARTICIPATION.................................. 81
10.8 ADMINISTRATOR'S AUTHORITY........................................ 81
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE................ 82
</TABLE>
<PAGE>
ARTICLE XI
CASH OR DEFERRED PROVISIONS
<TABLE>
<S> <C>
11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION.................. 82
11.2 PARTICIPANT'S SALARY REDUCTION ELECTION.......................... 83
11.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS............. 87
11.4 ACTUAL DEFERRAL PERCENTAGE TESTS................................. 89
11.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS................... 92
11.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS............................. 95
11.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS............... 98
11.8 ADVANCE DISTRIBUTION FOR HARDSHIP................................ 102
</TABLE>
<PAGE>
ARTICLE I
DEFINITIONS
As used in this Plan, the following words and phrases shall have the
meanings set forth herein unless a different meaning is clearly required by the
context:
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.2 "Administrator" means the person(s) or entity designated by the
Employer pursuant to Section 2.4 to administer the Plan on behalf of the
Employer.
1.3 "Adoption Agreement" means the separate Agreement which is executed by
the Employer and accepted by the Trustee which sets forth the elective
provisions of this Plan and Trust as specified by the Employer.
1.4 "Affiliated Employer" means the Employer and any corporation which is
a member of a controlled group of corporations (as defined in Code Section
414(b)) which includes the Employer; any trade or business (whether or not
incorporated) which is under common control (as defined in Code Section 414(c))
with the Employer; any organization (whether or not incorporated) which is a
member of an affiliated service group (as defined in Code Section 414(m)) which
includes the Employer; and any other entity required to be aggregated with the
Employer pursuant to Regulations under Code Section 414(o).
1.5 "Aggregate Account" means with respect to each Participant, the value
of all accounts maintained on behalf of a Participant, whether attributable to
Employer or Employee contributions, subject to the provisions of Section 2.2.
1.6 "Anniversary Date" means the anniversary date specified in C3 of the
Adoption Agreement.
1.7 "Beneficiary" means the person to whom a share of a deceased
Participant's interest in the Plan is payable, subject to the restrictions of
Sections 6.2 and 6.6.
1.8 "Code" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.9 "Compensation" with respect to any Participant means such
Participant's compensation as specified by the Employer in E1 of the Adoption
Agreement that is paid during the applicable period. Compensation for any Self-
Employed Individual shall be equal to his Earned Income.
1
<PAGE>
In addition, if specified in the Adoption Agreement, Compensation for all
Plan purposes shall also include compensation which is not currently includible
in the Participant's gross income by reason of the application of Code Sections
125, 402(a)(8), 402(h)(1)(B), or 403(b).
Compensation in excess of $200,000 shall be disregarded. Such amount shall
be adjusted at the same time and in such manner as permitted under Code Section
415(d). In applying this limitation, the family group of a Highly Compensated
Participant who is subject to the Family Member aggregation rules of Code
Section 414(q)(6) because such Participant is either a "five percent owner" of
the Employer or one of the ten (10) Highly Compensated Employees paid the
greatest "415 Compensation" during the year, shall be treated as a single
Participant, except that for this purpose Family Members shall include only the
affected Participant's spouse and any lineal descendants who have not attained
age nineteen (19) before the close of the year. If, as a result of the
application of such rules, the adjusted $200,000 limitation is exceeded, then
(except for purposes of determining the portion of Compensation up to the
integration level if this plan is integrated), 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.
For Plan Years beginning prior to January 1, 1989, the S200,000 limit
(without regard to Family Member aggregation) shall apply only for Top Heavy
Plan Years and shall not be adjusted.
1.10 "Contract" or "Policy" means any life insurance policy, retirement
income policy, or annuity contract (group or individual) issued by the Insurer.
In the event of any conflict between the terms of this Plan and the terms of any
insurance contract purchased hereunder, the Plan provisions shall control.
1.11 "Deferred Compensation" means, with respect to any Participant, that
portion of the Participant's total Compensation which has been contributed to
the Plan in accordance with the Participant's deferral election pursuant to
Section 11.2.
1.12 "Early Retirement Date" means the date specified in the Adoption
Agreement on which a Participant or Former Participant has satisfied the age and
service requirements specified in the Adoption Agreement (Early Retirement Age).
A Participant shall become fully Vested upon satisfying this requirement if
still employed at his Early Retirement Age.
A Former Participant who terminates employment after satisfying the service
requirement for Early Retirement and who thereafter reaches the age requirement
contained herein shall be entitled to receive his benefits under this Plan.
1.13 "Earned Income" means with respect to a Self-Employed Individual, the
net earnings from self-employment in the trade or business with respect to which
the Plan is established, for which the personal services of the individual are a
material income-producing
2
<PAGE>
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 Code Section 404. In addition, for Plan Years beginning after
December 31, 1989, net earnings shall be determined with regard to the deduction
allowed to the Employer by Code Section 164(f).
1.14 "Elective Contribution" means the Employer's contributions to the
Plan that are made pursuant to the Participant's deferral election pursuant to
Section 11.2. In addition, if selected in E3 of the Adoption Agreement, the
Employer's matching contribution made pursuant to Section 11.1(b) shall be
considered an Elective Contribution for purposes of the Plan. Elective
Contributions shall be subject to the requirements of Sections 11.2(b) and
11.2(c) and shall further be required to satisfy the discrimination requirements
of Regulation 1.401Qc)-1(b)(3), the provisions of which are specifically
incorporated herein by reference.
1.15 "Eligible Employee" means any Employee specified in D1 of the
Adoption Agreement.
1.16 "Employee" means any person who is employed by the Employer, but
excludes any person who is employed as an independent contractor. The term
Employee shall also include Leased Employees as provided in Code Section 414(n)
or (o).
Except as provided in the Non-Standardized Adoption Agreement, all
Employees of all entities which are an Affiliated Employer will be treated as
employed by a single employer.
1.17 "Employer" means the entity specified in the Adoption Agreement, any
Participating Employer (as defined in Section 10.1) which shall adopt this Plan,
any successor which shall maintain this Plan and any predecessor which has
maintained this Plan.
1.18 "Excess Compensation" means, with respect to a Plan that is
integrated with Social Security, a Participant's Compensation which is in excess
of the amount set forth in the Adoption Agreement.
1.19 "Excess Contributions" means, with respect to a Plan Year, the excess
of Elective Contributions and Qualified Non-Elective Contributions made on
behalf of Highly Compensated Participants for the Plan Year over the maximum
amount of such contributions permitted under Section 1 l .4(a).
1.20 "Excess Deferred Compensation" means, with respect to any taxable
year of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 11.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference.
3
<PAGE>
1.21 "Family Member" means, with respect to an affected Participant, such
Participant's spouse, and such Participant's lineal descendants and ascendants
and their spouses, all as described in Code Section 414(q)(6)(B).
1.22 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Employer and its representative body, and the
Administrator.
1.23 "Fiscal Year" means the Employer's accounting year as specified in
the Adoption Agreement.
1.24 "Forfeiture" means that portion of a Participant's Account that is
not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a Participant's
Account, or
(b) the last day of the Plan Year in which the Participant incurs
five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of a
Terminated Participant whose Vested benefit is zero, such Terminated Participant
shall be deemed to have received a distribution of his Vested benefit upon his
termination of employment. In addition, the term Forfeiture shall also include
amounts deemed to be Forfeitures pursuant to any other provision of this Plan.
1.25 "Former Participant" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.26 "414(s) Compensation" with respect to any Employee means his
Compensation as defined in Section 1.9. However, for purposes of this Section,
Compensation shall be Compensation paid and shall be determined by including, in
the case of a non-standardized Adoption Agreement, any items that are excluded
from Compensation pursuant to the Adoption Agreement. The amount of "414(s)
Compensation" with respect to any Employee shall include "414(s) Compensation"
during the entire twelve (12) month period ending on the last day of such Plan
Year, except that for Plan Years beginning prior to the later of January 1,
1992, or the date that is sixty (60) days after the date final Regulations are
issued, "414(s) Compensation" shall only be recognized as of an Employee's
effective date of participation.
4
<PAGE>
In addition, if specified in the Adoption Agreement, "414(s) Compensation"
shall also include compensation which is not currently includible in the
Participant's gross income by reason of the application of Code Sections 125,
402(a)(8), 402(h)(1)(B), or 403(b), plus Elective Contributions attributable to
Deferred Compensation recharacterized as voluntary Employee contributions
pursuant to 11.5(a).
1.27 "415 Compensation" means compensation as defined in Section
4.4(f)(2).
1.28 "Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder and generally means an Employee
who performed services for the Employer during the "determination year" and is
in one or more of the following groups:
(a) Employees who at any time during the "determination year" or
"look-back year" were "five percent owners" as defined in Section 1.35(c).
(b) Employees who received "415 Compensation" during the "look-back
year" from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during the "look-back
year" from the Employer in excess of $50,000 and were in the Top Paid Group
of Employees for the Plan Year.
(d) Employees who during the "look-back year" were officers of the
Employer (as that term is defined within the meaning of the Regulations
under Code Section 416) and received "415 Compensation" during the "look-
back year" from the Employer greater than 50 percent of the limit in effect
under Code Section 415(b)(1)(A) for any such Plan Year. The number of
officers shall be limited to the lesser of (i) 50 employees; or (ii) the
greater of 3 employees or 10 percent of all employees. If the Employer
does not have at least one officer whose annual "415 Compensation" is in
excess of 50 percent of the Code Section 415(b)(1)(A) limit, then the
highest paid officer of the Employer will be treated as a Highly
Compensated Employee.
(e) Employees who are in the group consisting of the 100 Employees
paid the greatest "415 Compensation" during the "determination year" and
are also described in (b), (c) or (d) above when these paragraphs are
modified to substitute "determination year" for "look-back year".
The "determination year" shall be the Plan Year for which testing is being
performed, and the "look-back year" shall be the immediately preceding
twelve-month period. However, if the Plan Year is a calendar year, or if
another Plan of the Employer so provides, then the "look-back year" shall
be the calendar year ending with or within the Plan Year for which testing
is being performed, and the "determination year" (if applicable) shall be
the
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period of time, if any, which extends beyond the "look-back year" and ends
on the last day of the Plan Year for which testing is being performed (the
"lag period"). With respect to this election, it shall be applied on a
uniform and consistent basis to all plans, entities, and arrangements of
the Employer.
For purposes of this Section, the determination of "415 Compensation" shall
be made by including amounts that would otherwise be excluded from a
Participant's gross income by reason of the application of Code Sections
125, 402(a)(8), 402(h)(1)(B) and, in the case of Employer contributions
made pursuant to a salary reduction agreement, Code Section 403(b).
Additionally, the dollar threshold amounts specified in (b) and (c) above
shall be adjusted at such time and in such manner as is provided in
Regulations. In the case of such an adjustment, the dollar limits which
shall be applied are those for the calendar year in which the
"determination year" or "look back year" begins.
In determining who is a Highly Compensated Employee, Employees who are non-
resident aliens and who received no earned income (within the meaning of
Code Section 911(d)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Affiliated Employers shall be taken into
account as a single employer and Leased Employees within the meaning of
Code Sections 414(n)(2) and 414(o)(2) shall be considered Employees unless
such Leased Employees are covered by a plan described in Code Section
414(n)(5) and are not covered in any qualified plan maintained by the
Employer. The exclusion of Leased Employees for this purpose shall be
applied on a uniform and consistent basis for all of the Employer's
retirement plans. In addition, Highly Compensated Former Employees shall
be treated as Highly Compensated Employees without regard to whether they
performed services during the "determination year".
1.29 "Highly Compensated Former Employee" means a former Employee who had
a separation year prior to the "determination year" and was a Highly Compensated
Employee in the year of separation from service or in any "determination year"
after attaining age 55. Notwithstanding the foregoing, an Employee who
separated from service prior to 1987 will be treated as a Highly Compensated
Former Employee only if during the separation year (or year preceding the
separation year) or any year after the Employee attains age 55 (or the last year
ending before the Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner". For purposes
of this Section, "determination year", "415 Compensation" and "five percent
owner" shall be determined in accordance with Section 1.28. Highly Compensated
Former Employees shall be treated as Highly Compensated Employees. The method
set forth in this Section for determining who is a "Highly Compensated Former
Employee" shall be applied on a uniform and consistent basis for all purposes
for which the Code Section 414(q) definition is applicable.
1.30 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
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1.31 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties during the applicable computation period; (2) each
hour for which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period; (3) each hour for
which back pay is awarded or agreed to by the Employer without regard to
mitigation of damages. The same Hours of Service shall not be credited both
under (1) or (2), as the case may be, and under (3).
Notwithstanding the above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be made by or
due from the Employer regardless of whether such payment is made by or due from
the Employer directly, or indirectly through, among others, a trust fund, or
insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
An Hour of Service must be counted for the purpose of determining a Year of
Service, a year of participation for purposes of accrued benefits, a l-Year
Break in Service, and employment commencement date (or reemployment commencement
date). The provisions of Department of Labor regulations 2530.200b-2(b) and (c)
are incorporated herein by reference.
Hours of Service will be credited for employment with all Affiliated
Employers and for any individual considered to be a Leased Employee pursuant to
Code Sections 414(n) or 414(o) and the Regulations thereunder.
Hours of Service will be determined on the basis of the method selected in
the Adoption Agreement.
1.32 "Insurer" means any legal reserve insurance company which shall issue
one or more policies under the Plan.
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1.33 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.34 "Joint and Survivor Annuity" means an annuity for the life of a
Participant with a survivor annuity for the life of the Participant's spouse
which is not less than 2, nor greater than the amount of the annuity payable
during the joint lives of the Participant and the Participant's spouse. The
Joint and Survivor Annuity will be the amount of benefit which can be purchased
with the Participant's Vested interest in the Plan.
1.35 "Key Employee" means an Employee as defined in Code Section 416(i)
and the Regulations thereunder. Generally, any Employee or former Employee (as
well as each of his Beneficiaries) is considered a Key Employee if he, at any
time during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is defined within the
meaning of the Regulations under Code Section 416) having annual "41S
Compensation" greater than 50 percent of the amount in effect under Code
Section 415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415 Compensation" from
the Employer for a Plan Year greater than the dollar limitation in effect
under Code Section 415(c)(1)(A) for the calendar year in which such Plan
Year ends and owning (or considered as owning within the meaning of Code
Section 318) both more than one-half percent interest and the largest
interests in the Employer.
(c) a "five percent owner" of the Employer. "Five percent owner"
means any person who owns (or is considered as owning within the meaning of
Code Section 318) more than five percent (5%) of the outstanding stock of
the Employer or stock possessing more than five percent (5%) of the total
combined voting power of all stock of the Employer or, in the case of an
unincorporated business, any person who owns more than five percent (5%) of
the capital or profits interest in the Employer. In determining percentage
ownership hereunder, employers that would otherwise be aggregated under
Code Sections 414(b), (c), (m) and (o) shall be treated as separate
employers.
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent owner"
means any person who owns (or is considered as owning within the meaning of
Code Section 318) more than one percent (1 %) of the outstanding stock of
the Employer or stock possessing more than one percent (1 %) of the total
combined voting power of all stock of the Employer or, in the case of an
unincorporated business, any person who owns more
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than one percent (1 %) of the capital or profits interest in the Employer.
In determining percentage ownership hereunder, employers that would
otherwise be aggregated under Code Sections 414(b), (c), (m) and (o) shall
be treated as separate employers. However, in determining whether an
individual has "415 Compensation" of more than $150,0()0, "415
Compensation" from each employer required to be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be taken into account.
For purposes of this Section, the determination of "415 Compensation"
shall be made by including amounts that would otherwise be excluded from a
Participant's gross income by reason of the application of Code Sections
125, 402(a)(8), 402(h)(1)(B) and, in the case of Employer contributions
made pursuant to a salary reduction agreement, Code Section 403(b).
1.36 "Late Retirement Date" means the date of, or the first day of the
month or the Anniversary Date coinciding with or next following, whichever
corresponds to the election made for the Normal Retirement Date, a Participant's
actual retirement after having reached his Normal Retirement Date.
1.37 "Leased Employee" means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are 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.
A leased employee shall not be considered an Employee of the recipient if:
(i) 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 Code Section 415(c)(3), but including amounts contributed pursuant
to a salary reduction agreement which are excludable from the employee's gross
income under Code Sections 125, 402(a)(8), 402(h) or 403(b), (2) immediate
participation, and (3) full and immediate vesting; and (ii) leased employees do
not constitute more than 20 percent of the recipient's nonhighly compensated
workforce.
1.38 "Net Profit" means with respect to any Fiscal Year the Employer's net
income or profit for such Fiscal Year determined upon the basis of the
Employer's books of account in accordance with generally accepted accounting
principles, without any reduction for taxes based upon income, or for
contributions made by the Employer to this Plan and any other qualified plan.
1.39 "Non-Elective Contribution" means the Employer's contributions to the
Plan other than those made pursuant to the Participant's deferral election made
pursuant to Section
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11.2 and any Qualified Non-Elective Contribution. In addition, if selected in E3
of the Adoption Agreement, the Employer's Matching Contribution made pursuant to
Section 4.3(b) shall be considered a Non-Elective Contribution for purposes of
the Plan.
1.40 "Non-Highly Compensated Participant" means any Participant who is
neither a Highly Compensated Employee nor a Family Member.
1.41 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.42 "Normal Retirement Age" means the age specified in the Adoption
Agreement at which time a Participant shall become fully Vested in his
Participant's Account.
1.43 "Normal Retirement Date" means the date specified in the Adoption
Agreement on which a Participant shall become eligible to have his benefits
distributed to him.
1.44 "l-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a l-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and paternity
leaves of absence."
"Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" means, for Plan Years beginning
after December 31, 1984, an absence from work for any period by reason of the
Employee's pregnancy, birth of the Employee's child, placement of a child with
the Employee in connection with the adoption of such child, or any absence for
the purpose of caring for such child for a period immediately following such
birth or placement. For this purpose, Hours of Service shall be credited for
the computation period in which the absence from work begins, only if credit
therefore is necessary to prevent the Employee from incurring a l-Year Break in
Service, or, in any other case, in the immediately following computation period.
The Hours of Service credited for a "maternity or paternity leave of absence"
shall be those which would normally have been credited but for such absence, or,
in any case in which the Administrator is unable to determine such hours
normally credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity leave of absence"
shall not exceed 501.
1.45 "Owner-Employee" means a sole proprietor who owns the entire interest
in the Employer or a partner who owns more than 10% of either the capital
interest or the profits interest in the Employer and who receives income for
personal services from the Employer.
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1.46 "Participant" means any Eligible Employee who participates in the
Plan as provided in Section 3.2 and has not for any reason become ineligible to
participate further in the Plan.
1.47 "Participant's Account" means the account established and maintained
by the Administrator for each Participant with respect to his total interest
under the Plan resulting from (a) the Employer's contributions in the case of a
Profit Sharing Plan or Money Purchase Plan, and (b) the Employer's Non-Elective
Contributions in the case of a 401(k) Profit Sharing Plan.
1.48 "Participant's Combined Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest under the Plan resulting from the Employer's contributions.
1.49 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer's Elective
Contributions and Qualified Non-Elective Contributions. A separate accounting
shall be maintained with respect to that portion of the Participant's Elective
Account attributable to Elective Contributions made pursuant to Section 11.2,
Employer matching contributions if they are deemed to be Elective Contributions,
and any Qualified Non-Elective Contributions.
1.50 "Participant's Rollover Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan resulting from amounts transferred from another qualified
plan or "conduit~ Individual Retirement Account in accordance with Section 4.6.
1.51 "Plan" means this instrument (hereinafter referred to as Employee
Benefits Services, Inc, Regional Prototype Defined Contribution Plan and Trust
Basic Plan Document #01) including all amendments thereto, and the Adoption
Agreement as adopted by the Employer.
1.52 "Plan Year" means the Plan's accounting year as specified in C2 of
the Adoption Agreement.
1.53 "Pre-Retirement Survivor Annuity" means an immediate annuity for the
life of the Participant's spouse, the payments under which must be equal to the
actuarial equivalent of 50% of the Participant's Vested interest in the Plan as
of the date of death.
1.54 "Qualified Non-Elective Account" means the account established
hereunder to which Qualified Non-Elective Contributions are allocated.
1.55 "Qualified Non-Elective Contribution" means the Employer's
contributions to the Plan that are made pursuant to E5 of the Adoption Agreement
and Section 11.1(d) which are
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used to satisfy the "Actual Deferral Percentage" tests. Qualified Non-Elective
Contributions are nonforfeitable when made and are distributable only as
specified in Sections 11.2(c) and 11.8. In addition, the Employer's
contributions to the Plan that are made pursuant to Section 11.7(h) and which
are used to satisfy the "Actual Contribution Percentage" tests shall be
considered Qualified Non-Elective Contributions.
1.56 "Qualified Voluntary Employee Contribution Account" means the account
established and maintained by the Administrator for each Participant with
respect to his total interest under the Plan resulting from the Participant's
tax deductible qualified voluntary employee contributions made pursuant to
Section 4.9.
1.57 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to time.
1.58 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.59 "Retirement Date" means the date as of which a Participant retires
for reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date, Early or Late Retirement Date
(see Section 6.1).
1.60 "Self-Employed Individual" means an individual who has earned income
for the taxable year from the trade or business for which the Plan is
established, and, also, an individual who would have had earned income but for
the fact that the trade or business had no net profits for the taxable year. A
Self-Employed Individual shall be treated as an Employee.
1.61 "Shareholder-Employee" means a Participant who owns more than five
percent (5%) of the Employer's outstanding capital stock during any year in
which the Employer elected to be taxed as a Small Business Corporation under the
applicable Code Section.
1.62 "Short Plan Year" means, if specified in the Adoption Agreement, that
the Plan Year shall be less than a 12 month period. If chosen, the following
rules shall apply in the administration of this Plan. In determining whether an
Employee has completed a Year of Service for benefit accrual purposes in the
Short Plan Year, the number of the Hours of Service required shall be
proportionately reduced based on the number of days in the Short Plan Year. The
determination of whether an Employee has completed a Year of Service for vesting
and eligibility purposes shall be made in accordance with Department of Labor
Regulation 2530.203-2(c). In addition, if this Plan is integrated with Social
Security, the integration level shall also be proportionately reduced based on
the number of days in the Short Plan Year.
1.63 "Super Top Heavy Plan" means a plan described in Section 2.2(b).
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1.64 "Taxable Wage Base" means, with respect to any year, the maximum
amount of earnings which may be considered wages for such year under Code
Section 3121(a)(1).
1.65 "Terminated Participant" means a person who has been a Participant,
but whose employment has been terminated other than by death, Total and
Permanent Disability or retirement.
1.66 "Top Heavy Plan" means a plan described in Section 2.2(a).
1.67 "Top Heavy Plan Year" means a Plan Year commencing after December 31,
1983 during which the Plan is a Top Heavy Plan.
1.68 "Top Paid Group" shall be determined pursuant to Code Section 414(q)
and the Regulations thereunder and generally means the top 20 percent of
Employees who performed services for the Employer during the applicable year,
ranked according to the amount of "415 Compensation" (as determined pursuant to
Section 1.28) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased Employees
shall be treated as Employees pursuant to Code Section 414(n) or (o). Employees
who are non-resident aliens who received no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, for the purpose of determining the number of active
Employees in any year, the following additional Employees shall also be
excluded, however, such Employees shall still be considered for the purpose of
identifying the particular Employees in the Top Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 2 hours per week;
(c) Employees who normally work less than six (6) months during a
year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the Employer are
covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Employer, and the
Plan covers only Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the identification of particular
Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be applied on a
uniform and consistent basis for all purposes for which the Code Section 414(q)
definition is applicable.
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1.69 "Total and Permanent Disability" means the inability to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less than 12 months. The
disability of a Participant shall be determined by a licensed physician chosen
by the Administrator. However, if the condition constitutes total disability
under the federal Social Security Acts, the Administrator may rely upon such
determination that the Participant is Totally and Permanently Disabled for the
purposes of this Plan. The determination shall be applied uniformly to all
Participants.
1.70 "Trustee" means the person or entity named in B6 of the Adoption
Agreement and any successors.
1.71 "Trust Fund" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.72 "Vested" means the nonforfeitable portion of any account maintained
on behalf of a Participant.
1.73 "Voluntary Contribution Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan resulting from the Participant's nondeductible voluntary
contributions made pursuant to- Section 4.7.
1.74 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, and during which an Employee has completed
at least 1000 Hours of Service.
For purposes of eligibility for participation, the initial computation
period shall begin with the date on which the Employee first performs an Hour of
Service (employment commencement date). The computation period beginning after
a l-Year Break in Service shall be measured from the date on which an Employee
again performs an Hour of Service. The succeeding computation periods shall
begin with the first anniversary of the Employee's employment commencement date.
However, if one (1) Year of Service or less is required as a condition of
eligibility, then after the initial eligibility computation period, the
eligibility computation period shall shift to the current Plan Year which
includes the anniversary of the date on which the Employee first performed an
Hour of Service. An Employee who is credited with 1,000 Hours of Service in
both the initial eligibility computation period and the first Plan Year which
commences prior to the first anniversary of the Employee's initial eligibility
computation period will be credited with two Years of Service for purposes of
eligibility to participate.
For vesting purposes, and all other purposes not specifically addressed in
this Section, the computation period shall be the Plan Year, including periods
prior to the Effective Date of the Plan unless specifically excluded pursuant to
the Adoption Agreement.
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Years of Service and breaks in service will be measured on the same
computation period.
Years of Service with any predecessor Employer which maintained this Plan
shall be recognized. Years of Service with any other predecessor Employer shall
be recognized as specified in the Adoption Agreement.
Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special vesting
requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan and the
special minimum allocation requirements of Code Section 416(c) pursuant to
Section 4.3(i) of the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year beginning
after December 31, 1983, in which, as of the Determination Date, (1) the
Present Value of Accrued Benefits of Key Employees and (2) the sum of the
Aggregate Accounts of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds sixty percent (60%) of the Present Value of
Accrued Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year, but such
Participant was a Key Employee for any prior Plan Year, such Participant's
Present Value of Accrued Benefit and/or Aggregate Account balance shall not
be taken into account for purposes of determining whether this Plan is a
Top Heavy or Super Top Heavy Plan (or whether any Aggregation Group which
includes this Plan is a Top Heavy Group). In addition, if a Participant or
Former Participant has not performed any services for any Employer
maintaining the Plan at any time during the five year period ending on the
Determination Date, any accrued benefit for such Participant or Former
Participant shall not be taken into account for the purposes of determining
whether this Plan is a Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan Year
beginning after December 31, 1983, in which, as of the Determination Date,
(1) the Present Value of Accrued Benefits of Key Employees and (2) the sum
of the Aggregate Accounts of Key Employees under this Plan and all plans of
an Aggregation Group, exceeds ninety percent (90%) of the Present Value of
Accrued Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation Group.
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(c) Aggregate Account: A Participant's Aggregate Account as of the
Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the most recent
valuation occurring within a twelve (12) month period ending on the
Determination Date;
(2) for a Profit Sharing Plan, an adjustment for any contributions
due as of the Determination Date. Such adjustment shall be the amount
of any contributions actually made after the valuation date but before
the Determination Date, except for the first Plan Year when such
adjustment shall also reflect the amount of any contributions made
after the Determination Date that are allocated as of a date in that
first Plan Year;
(3) for a Money Purchase Plan, contributions that would be allocated
as of a date not later than the Determination Date, even though those
amounts are not yet made or required to be made.
(4) any Plan distributions made within the Plan Year that includes
the Determination Date or within the four (4) preceding Plan Years.
However, in the case of distributions made after the valuation date
and prior to the Determination Date, such distributions are not
included as distributions for top heavy purposes to the extent that
such distributions are already included in the Participant's Aggregate
Account balance as of the valuation date. In the case of a
distribution of an annuity Contract, the amount of such distribution
is deemed to be the current actuarial value of the Contract,
determined on the date of the distribution. Notwithstanding anything
herein to the contrary, all distributions, including distributions
made prior to January 1, 1984, and distributions under a terminated
plan which if it had not been terminated would have been required to
be included in an Aggregation Group, will be counted. Further,
distributions from the Plan (including the cash value of life
insurance policies) of a Participant's account balance because of
death shall be treated as a distribution for the purpose of this
paragraph.
(5) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified voluntary
employee contributions shall not be considered to be a part of the
Participant's Aggregate Account balance.
(6) with respect to unrelated rollovers and plan-to-plan transfers
(ones which are both initiated by the Employee and made from a plan
maintained by one employer to a plan maintained by another employer),
if this Plan provides the rollovers or plan-to-plan transfers, it
shall always consider such rollovers or
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plan-to-plan transfers as a distribution for the purposes of this
Section. If this Plan is the plan accepting such rollovers or plan-to-
plan transfers, it shall not consider such rollovers or plan-to-plan
transfers accepted after December 31, 1983 as part of the
Participant's Aggregate Account balance. However, rollovers or
plan-to-plan transfers accepted prior to January 1, 1984 shall be
considered as part of the Participant's Aggregate Account balance.
(7) with respect to related rollovers and plan-to-plan transfers
(ones either not initiated by the Employee or made to a plan
maintained by the same employer), if this Plan provides the rollover
or plan-to-plan transfer, it shall not be counted as a distribution
for purposes of this Section. If this Plan is the plan accepting such
rollover or plan-to-plan transfer, it shall consider such rollover or
plan-to-plan transfer as part of the Participant's Aggregate Account
balance, irrespective of the date on which such rollover or plan-to-
plan transfer is accepted.
(8) For the purposes of determining whether two employers are to be
treated as the same employer in 2.2(c)(6) and 2.2(c)(7).above, all
employers aggregated under Code Section 414(b), (c), (m) and (o) are
treated as the same employer.
(d) "Aggregation Group" means either a Required Aggregation Group or
a Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each qualified plan of the Employer,
including any Simplified Employee Pension Plan, in which a Key
Employee is a participant in the Plan Year containing the
Determination Date or any of the four preceding Plan Years, and each
other qualified plan of the Employer which enables any qualified plan
in which a Key Employee participates to meet the requirements of Code
Sections 401(a)(4) or 410, will be required to be aggregated. Such
group shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the group
will be considered a Top Heavy Plan if the Required Aggregation Group
is a Top Heavy Group. No plan in the Required Aggregation Group will
be considered a Top Heavy Plan if the Required Aggregation Group is
not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also include any
other plan of the Employer, including any Simplified Employee Pension
Plan, not required to be included in the Required Aggregation Group,
provided the resulting group, taken as a whole, would continue to
satisfy the provisions of Code Sections 401(a)(4) and 410. Such group
shall be known as a Permissive Aggregation Group.
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In the case of a Permissive Aggregation Group, only a plan that is
part of the Required Aggregation Group will be considered a Top Heavy
Plan if the Permissive Aggregation Group is a Top Heavy Group. No
plan in the Permissive Aggregation Group will be considered a Top
Heavy Plan if the Permissive Aggregation Group is not a Top Heavy
Group.
(3) Only those plans of the Employer in which the Determination Dates
fall within the same calendar year shall be aggregated in order to
determine whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years ending on
the Determination Date.
(e) "Determination Date" means (a) the last day of the preceding Plan
Year, or (b) in the case of the fist Plan Year, the last day of such Plan
Year.
(f) Present Value of Accrued Benefit: In the case of a defined
benefit plan, the Present Value of Accrued Benefit for a Participant other
than a Key Employee shall be as determined using the single accrual method
used for all plans of the Employer and Affiliated Employers, or if no such
single method exists, using a method which results in benefits accruing not
more rapidly than the slowest accrual rate permitted under Code Section
411(b)(1)(C). The determination of the Present Value of Accrued Benefit
shall be determined as of the most recent valuation date that falls within
or ends with the 12-month period ending on the Determination Date, except
as provided in Code Section 416 and the Regulations thereunder for the fist
and second plan years of a defined benefit plan.
However, any such determination must include present value of accrued
benefit attributable to any Plan distributions referred to in Section
2.2(c)(4) above, any Employee contributions referred to in Section
2.2(c)(5) above or any related or unrelated rollovers referred to in
Sections 2.2(c)(6) and 2.2(c)(7) above.
(g) "Top Heavy Group" means an Aggregation Group in which, as of the
Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees under all
defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group, exceeds sixty percent (60%)
of a similar sum determined for all Participants.
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(h) The Administrator shall determine whether this Plan is a Top
Heavy Plan on the Anniversary Date specified in the Adoption Agreement.
Such determination of the top heavy ratio shall be in accordance with Code
Section 416 and the Regulations thereunder.
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint and remove the Trustee
and the Administrator from time to time as it deems necessary for the
proper administration of the Plan to assure that the Plan is being operated
for the exclusive benefit of the Participants and their Beneficiaries in
accordance with the terms of the Plan, the Code, and the Act.
(b) The Employer shall establish a "funding policy and method", i.e.,
it shall determine whether the Plan has a short run need for liquidity
(e.g., to pay benefits) or whether liquidity is a long run goal and
investment growth (and stability of same) is a more current need, or shall
appoint a qualified person to do so. The Employer or its delegate shall
communicate such needs and goals to the Trustee, who shall coordinate such
Plan needs with its investment policy. The communication of such a
"funding policy and method" shall not, however, constitute a directive to
the Trustee as to investment of the Trust Funds. Such "funding policy and
method" shall be consistent with the objectives of this Plan and with the
requirements of Title I of the Act.
(c) 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.
(d) The Employer shall periodically review the performance of any
Fiduciary or other person to whom duties have been delegated or allocated
by it under the provisions of this Plan or pursuant to procedures
established hereunder. This requirement may be satisfied by formal periodic
review by the Employer or by a qualified person specifically designated by
the Employer, through day-to-day conduct and evaluation, or through other
appropriate ways.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any person,
including, but not limited to, the Employees of the Employer, shall be eligible
to serve as an Administrator. Any person so appointed shall signify his
acceptance by filing written acceptance with the Employer. An Administrator may
resign by delivering his written resignation to the Employer or be removed by
the Employer by delivery of written notice of removal, to take effect at a date
specified therein, or upon delivery to the Administrator if no date is
specified.
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The Employer, upon the resignation or removal of an Administrator, shall
promptly designate in writing a successor to this position. If the Employer
does not appoint an Administrator, the Employer will function as the
Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the responsibilities
of each Administrator may be specified by Employer and accepted in writing by
each Administrator. In the event that no such delegation is made by the
Employer, the Administrators may allocate the responsibilities among themselves,
in which event the Administrators shall notify the Employer and the Trustee in
writing of such action and specify the responsibilities of each Administrator.
The Trustee thereafter shall accept and rely upon any documents executed by the
appropriate Administrator until such time as the Employer or the Administrators
file with the Trustee a written revocation of such designation.
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the Plan
for the exclusive benefit of the Participants and their Beneficiaries, subject
to the specific terms of the Plan. The Administrator shall administer the Plan
in accordance with its terms and shall have the power and discretion to construe
the terms of the Plan and determine all questions arising in connection with the
administration, interpretation, and application of the Plan. Any such
determination by the Administrator shall be conclusive and binding upon all
persons. The Administrator may establish procedures, correct any defect, supply
any information, or reconcile any inconsistency in such manner and to such
extent as shall be deemed necessary or advisable to carry out the purpose of the
Plan; provided, however, that any procedure, discretionary act, interpretation
or construction shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the intent that the
Plan shall continue to be deemed a qualified plan under the terms of Code
Section 401(a), and shall comply with the terms of the Act and all regulations
issued pursuant thereto. The Administrator shall have all powers necessary or
appropriate to accomplish his duties under this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant hereunder
and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect to the
amount and the kind of benefits to which any Participant shall be entitled
hereunder;
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(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust Fund;
(d) to maintain all necessary records for the administration of the
Plan;
(e) to interpret the provisions of the Plan and to make and publish
such rules for regulation of the Plan as are consistent with the terms
hereof;
(f) to determine the size and type of any Contract to be purchased
from any Insurer, and to designate the Insurer from which such Contract
shall be purchased;
(g) to compute and certify to the Employer and to the Trustee from
time to time the sums of money necessary or desirable to be contributed to
the Trust Fund;
(h) to consult with the Employer and the Trustee regarding the short
and long-term liquidity needs of the Plan in order that the Trustee can
exercise any investment discretion in a manner designed to accomplish
specific objectives;
(i) to prepare and distribute to Employees a procedure for notifying
Participants and Beneficiaries of their rights to elect Joint and Survivor
Annuities and Pre-Retirement Survivor Annuities if required by the Code and
Regulations thereunder;
(j) to assist any Participant regarding his rights, benefits, or
elections available under the Plan.
2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall keep
all other books of account, records, and other data that may be necessary for
proper administration of the Plan and shall be responsible for supplying all
information and reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and others as required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the Administrator,
may appoint counsel, specialists, advisers, and other persons as the
Administrator or the Trustee deems necessary or desirable in connection with the
administration of this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the Employer shall
supply full and timely information to the Administrator on all matters relating
to the Compensation of all Participants, their Hours of Service, their Years of
Service, their retirement, death, disability, or
21
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termination of employment, and such other pertinent facts as the Administrator
may require; and the Administrator shall advise the Trustee of such of the
foregoing fasts as may be pertinent to the Trustee's duties under the Plan. The
Administrator may rely upon such information as is supplied by the Employer and
shall have no duty or responsibility to verify such information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund unless
paid by the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, including, but not limited to, fees of
accountants, counsel, and other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall constitute a liability
of the Trust Fund. However, the Employer may reimburse the Trust Fund for any
administration expense incurred. Any administration expense paid to the Trust
Fund as a reimbursement shall not be considered an Employer contribution.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of administrative
authority pursuant to Section 2.5, if there shall be more than one
Administrator, they shall act by a majority of their number, but may authorize
one or more of them to sign all papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within 90 days after the application is filed. In the event the
claim is denied, the reasons for the denial shall be specifically set forth in
the notice in language calculated to be understood by the claimant, pertinent
provisions of the Plan shall be cited, and, where appropriate, an explanation as
to how the claimant can perfect the claim will be provided. In addition, the
claimant shall be furnished with an explanation of the Plan's claims review
procedure.
2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section 2.12
shall be entitled to request the Administrator to give further consideration to
his claim by filing with the Administrator a written request for a hearing.
Such request, together with a written statement of the reasons why the claimant
believes his claim should be allowed, shall be filed with the Administrator no
later than 60 days after receipt of the written notification provided for in
Section 2.12. The Administrator shall then conduct a hearing within the next 60
days, at which the claimant may be represented by an attorney or any other
representative of his choosing and expense and at which the claimant shall have
an opportunity to submit written and oral evidence and arguments in support of
his claim. At the hearing (or prior thereto upon 5 business days written notice
to the Administrator)
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the claimant or his representative shall have an opportunity to review all
documents in the possession of the Administrator which are pertinent to the
claim at issue and its disallowance. Either the claimant or the Administrator
may cause a court reporter to attend the hearing and record the proceedings. In
such event, a complete written transcript of the proceedings shall be furnished
to both parties by the court reporter. The full expense of any such court
reporter and such transcripts shall be borne by the party causing the court
reporter to attend the hearing. A final decision as to the allowance of the
claim shall be made by the Administrator within 60 days of receipt of the appeal
(unless there has been an extension of 60 days due to special circumstances,
provided the delay and the special circumstances occasioning it are communicated
to the claimant within the 60 day period). Such communication shall be written
in a manner calculated to be understood by the claimant and shall include
specific reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate hereunder on the
date he has satisfied the requirements specified in the Adoption Agreement.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee who has become eligible to be a Participant shall
become a Participant effective as of the day specified in the Adoption
Agreement.
In the event an Employee who has satisfied the Plan's eligibility
requirements and would otherwise have become a Participant shall go from a
classification of a noneligible Employee to an Eligible Employee, such Employee
shall become a Participant as of the date he becomes an Eligible Employee.
In the event an Employee who has satisfied the Plan's eligibility
requirements and would otherwise become a Participant shall go from a
classification of an Eligible Employee to a noneligible Employee and becomes
ineligible to participate and has not incurred a l-Year Break in Service, such
Employee shall participate in the Plan as of the date he returns to an eligible
class of Employees. If such Employee does incur a l-Year Break in Service,
eligibility will be determined under the Break in Service rules of the Plan.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer.
Such determination shall be conclusive
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and binding upon all persons, as long as the same is made pursuant to the Plan
and the Act. Such determination shall be subject to review per Section 2.13.
3.4 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of an Eligible
Employee to an ineligible Employee, such Former Participant shall continue to
vest in his interest in the Plan for each Year of Service completed while a
noneligible Employee, until such time as his Participant's Account shall be
forfeited or distributed pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings of the Trust Fund.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a Participant
in the Plan is erroneously omitted and discovery of such omission is not made
until after a contribution by his Employer for the year has been made, the
Employer shall make a subsequent contribution, if necessary after the
application of Section 4.3(e), so that the omitted Employee receives a total
amount which the said Employee would have received had he not been omitted.
Such contribution shall be made regardless of whether or not it is deductible in
whole or in part in any taxable year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made, the
Employer shall not be entitled to recover the contribution made with respect to
the ineligible person regardless of whether or not a deduction is allowable with
respect to such contribution. In such event, the amount contributed with
respect to the ineligible person shall constitute a Forfeiture for the Plan Year
in which the discovery is made.
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect voluntarily
not to participate in the Plan. The election not to participate must be
communicated to the Employer, in writing, at least thirty (30) days before the
beginning of a Plan Year. For Standardized Plans, a Participant or an Eligible
Employee may not elect not to participate. Furthermore, the foregoing election
not to participate shall not be available with respect to partners in a
partnership.
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE
(a) If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the business for which this Plan is
established and
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one or more other entities, this Plan and the plan established for other
trades or businesses must, when looked at as a single Plan, satisfy Code
Sections 401(a) and (d) for the Employees of this and all other entities.
(b) If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a plan
which satisfies Code Sections 401(a) and (d) and which provides
contributions and benefits not less favorable than provided for Owner-
Employees under this Plan.
(c) If an individual is covered as an Owner-Employee under the plans
of two or more trades or business which are not controlled and the
individual controls a trade or business, then the benefits or contributions
of 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, will be considered to control an entity if the
Owner-Employee, or two or more Owner-Employees together:
(1) own the entire interest in an unincorporated entity, or
(2) in the case of a partnership, own more than 50 percent of either
the capital interest or the profits interest in the partnership.
(e) 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.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
(a) For a Money Purchase Plan
(1) The Employer shall make contributions over such period of years as the
Employer may determine on the following basis. On behalf of each
Participant eligible to share in allocations, for each year of his
participation in this Plan, the Employer shall contribute the amount
specified in the Adoption Agreement. All contributions by the Employer
shall be made in cash or in such property as is acceptable to the Trustee.
The Employer
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shall be required to obtain a waiver from the Internal Revenue Service for
any Plan Year in which it is unable to make the full required contribution
to the Plan. In the event a waiver is obtained, this Plan shall be deemed
to be an individually designed plan.
(2) For any Plan Year beginning prior to January 1, 1990, and if elected
in the non-standardized Adoption Agreement for any Plan Year beginning on
or after January 1, 1990, the Employer shall not contribute on behalf of a
Participant who performs less than a Year of Service during any Plan Year,
unless there is a Short Plan Year or a contribution is required pursuant to
4.3(h).
(3) Notwithstanding the foregoing, the Employer's contribution for any
Fiscal Year shall not exceed the maximum amount allowable as a deduction to
the Employer under the provisions of Code Section 404. However, to the
extent necessary to provide the top heavy minimum allocations, the Employer
shall make a contribution even if it exceeds the amount which is deductible
under Code Section 404.
(b) For a Profit Sharing Plan
(1) For each Plan Year, the Employer shall contribute to the Plan such
amount as specified by the Employer in the Adoption Agreement.
Notwithstanding the foregoing, however, the Employer's contribution for any
Fiscal Year shall not exceed the maximum amount allowable as a deduction to
the Employer under the provisions of Code Section 404. All contributions
by the Employer shall be made in cash or in such property as is acceptable
to the Trustee.
(2) Except, however, to the extent necessary to provide the top heavy
minimum allocations, the Employer shall make a contribution even if it
exceeds current or accumulated Net Profit or the amount which is deductible
under Code Section 404.
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution to the
Plan for each Plan Year within the time prescribed by law, including extensions
of time, for the filing of the Employer's federal income tax return for the
Fiscal Year.
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account in the
name of each Participant to which the Administrator shall credit as of each
Anniversary Date, or other valuation date, all amounts allocated to each
such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all information
required by the Administrator to make a proper allocation of the Employer's
contributions
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for each Plan Year. Within a reasonable period of time after the date of
receipt by the Administrator of such information, the Administrator shall
allocate such contribution as follows:
(1) For a Money Purchase Plan:
(i) The Employer's Contribution shall be allocated to each
Participant's Combined Account in the manner set forth in Section
4.1 herein and as specified in Section E2 of the Adoption
Agreement.
(2) For an Integrated Profit Sharing Plan:
(i) The Employer's contribution shall be allocated to each
Participant's Account, except as provided in Section 4.3(f), in a
dollar amount equal to 5.7% of the sum of each Participant's
total Compensation plus Excess Compensation. If the Employer
does not contribute such amount for all Participants, each
Participant will be allocated a share of the contribution in the
same proportion that his total Compensation plus his total Excess
Compensation for the Plan Year bears to the total Compensation
plus the total Excess Compensation of all Participants for that
year.
Regardless of the preceding, 4.3% shall be substituted for 5.7% above if
Excess Compensation is based on more than 20% and less than or equal to 80%
of the Taxable Wage Base. If Excess Compensation is based on less than
100% and more than 80% of the Taxable Wage Base, then 5.4% shall be
substituted for 5.7% above.
(ii) The balance of the Employer's contribution over the amount
allocated above, if any, shall be allocated to each
Participant's Combined Account in the same proportion that his
total Compensation for the Year bears to the total Compensation
of all Participants for such year.
(iii) Except, however, for any Plan Year beginning prior to
January 1, 1990, and if elected in the non-standardized Adoption
Agreement for any Plan Year beginning on or after January 1,
1990, a Participant who performs less than a Year of Service
during any Plan Year shall not share in the Employer's
contribution for that year, unless there is a Short Plan Year or
a contribution is required pursuant to Section 4.3(h).
(3) For a Non-Integrated Profit Sharing Plan:
(i) The Employer's contribution shall be allocated to each
Participant's Account in the same proportion that each such
Participant's Compensation
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for the year bears to the total Compensation of all Participants
for such year.
(ii) Except, however, for any Plan Year beginning prior to
January 1, 1990, and if elected in the non-standardized Adoption
Agreement for any Plan Year beginning on or after January 1,
1990, a Participant who performs less than a Year of Service
during any Plan Year shall not share in the Employer's
contribution for that year, unless there is a Short Plan Year or
a contribution is required pursuant to Section 4.3(h).
(c) As of each Anniversary Date or other valuation date, before
allocation of Employer contributions and Forfeitures, any earnings or
losses (net appreciation or net depreciation) of the Trust Fund shall be
allocated in the same proportion that each Participant's and Former
Participant's nonsegregated accounts bear to the total of all Participants'
and Former Participants' nonsegregated accounts as of such date. If any
nonsegregated account of a Participant has been distributed prior to the
Anniversary Date or other valuation date subsequent to a Participant's
termination of employment, no earnings or losses shall be credited to such
account.
Notwithstanding the above, with respect to contributions made to Plan
after the previous Anniversary Date or allocation date, the method
specified in the Adoption Agreement shall be used.
(d) Participants' Accounts shall be debited for any insurance or
annuity premiums paid, if any, and credited with any dividends or interest
received on insurance contracts.
(e) As of each Anniversary Date any amounts which became Forfeitures
since the last Anniversary Date shall first be made available to reinstate
previously forfeited account balances of Former Participants, if any, in
accordance with Section 6.4(g)(2) or be used to satisfy any contribution
that may be required pursuant to Section 3.5 and/or 6.9. The remaining
Forfeitures, if any, shall be treated in accordance with the Adoption
Agreement. Provided, however, that in the event the allocation of
Forfeitures provided herein shall cause the "annual addition" (as defined
in Section 4.4) to any Participant's Account to exceed the amount allowable
by the Code, the excess shall be reallocated in accordance with Section
4.5. Except, however, for any Plan Year beginning prior to January 1,
1990, and if elected in the non-standardized Adoption Agreement for any
Plan Year beginning on or after January 1, 1990, a Participant who performs
less than a Year of Service during any Plan Year shall not share in the
Plan Forfeitures for that year, unless there is a Short Plan Year or a
contribution required pursuant to Section 4.3(h).
(f) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of the
Employer's
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contributions and Forfeitures allocated to the Participant's Combined
Account of each Non-Key Employee shall be equal to at least three percent
(3%) of such Non-Key Employee's "415 Compensation" (reduced by
contributions and forfeitures, if any, allocated to each Non-Key Employee
in any defined contribution plan included with this plan in a Required
Aggregation Group). However, if (i) the sum of the Employer's contributions
and Forfeitures allocated to the Participant's Combined Account of each Key
Employee for such Top Heavy Plan Year is less than three percent (3%) of
each Key Employee's "415 Compensation" and (ii) this Plan is not required
to be included in an Aggregation Group to enable a defined benefit plan to
meet the requirements of Code Section 401(a)(4) or 410, the sum of the
Employer's contributions and Forfeitures allocated to the Participant's
Combined Account of each Non-Key Employee shall be equal to the largest
percentage allocated to the Participant's Combined Account of any Key
Employee.
However, for each Non-Key Employee who is a Participant in a paired
Profit Sharing Plan or 401(k) Profit Sharing Plan and a paired Money
Purchase Plan, the minimum 3% allocation specified above shall be provided
in the Money Purchase Plan.
If this is an integrated Plan, then for any Top Heavy Plan Year the
Employer's contribution shall be allocated as follows:
(1) An amount equal to 3% multiplied by each Participant's
Compensation for the Plan Year shall be allocated to each
Participant's Account. If the Employer does not contribute such
amount for all Participants, the amount shall be allocated to each
Participant's Account in the same proportion that his total
Compensation for the Plan Year bears to the total Compensation of all
Participants for such year.
(2) The balance of the Employer's contribution over the amount
allocated under subparagraph (1) hereof shall be allocated to each
Participant's Account in a dollar amount equal to 3% multiplied by a
Participant's Excess Compensation. If the Employer does not
contribute such amount for all Participants, each Participant will be
allocated a share of the contribution in the same proportion that his
Excess Compensation bears to the total Excess Compensation of all
Participants for that year.
(3) The balance of the Employer's contribution over the amount
allocated under subparagraph (2) hereof shall be allocated to each
Participant's Account in a dollar amount equal to 2.7% multiplied by
the sum of each Participant's total Compensation plus Excess
Compensation. If the Employer does not contribute such amount for all
Participants, each Participant will be allocated a share of the
contribution in the same proportion that his total Compensation plus
his total Excess Compensation for the Plan Year bears to the total
Compensation plus the total Excess Compensation of all Participants
for that year.
29
<PAGE>
Regardless of the preceding, 1.3% shall be substituted for 2.7% above
if Excess Compensation is based on more than 20% and less than or
equal to 80% of the Taxable Wage Base. If Excess Compensation is
based on less than 100% and more than 80% of the Taxable Wage Base,
then 2.4% shall be substituted for 2.7% above.
(4) The balance of the Employer's contributions over the amount
allocated above, if any, shall be allocated to each Participant's
Account in the same proportion that his total Compensation for the
Plan Year bears to the total Compensation of all Participants for such
year.
For each Non-Key Employee who is a Participant in this Plan and
another non-paired defined contribution plan maintained by the Employer,
the minimum 3% allocation specified above shall be provided as specified in
F3 of the Adoption Agreement.
(g) For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant's Combined Account of any Key
Employee shall be equal to the ratio of the sum of the Employer's
contributions and Forfeitures allocated on behalf of such Key Employee
divided by the "415 Compensation" for such Key Employee.
(h) For any Top Heavy Plan Year, the minimum allocations set forth in
this Section shall be allocated to the Participant's Combined Account of
all Non-Key Employees who are Participants and who are employed by the
Employer on the last day of the Plan Year, including Non-Key Employees who
have (1) failed to complete a Year of Service; or (2) declined to make
mandatory contributions (if required) or, in the case of a cash or deferred
arrangement, elective contributions to the Plan.
(i) Notwithstanding anything herein to the contrary, in any Plan Year
in which the Employer maintains both this Plan and a defined benefit
pension plan included in a Required Aggregation Group which is top heavy,
the Employer shall not be required to provide a Non-Key Employee with both
the full separate minimum defined benefit plan benefit and the full
separate defined contribution plan allocations. Therefore, if the Employer
maintains both a Defined Benefit and a Defined Contribution Plan that are a
Top Heavy Group, the top heavy minimum benefits shall be provided as
follows:
(1) Applies if Flb of the Adoption Agreement is Selected -
(i) The requirements of Section 2.1 shall apply except that each
Non-Key Employee who is a Participant in the Profit Sharing Plan
or Money Purchase Plan and who is also a Participant in the
Defined Benefit Plan shall receive a minimum allocation of five
percent (5%) of such
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Participant's "415 Compensation" from the applicable Defined
Contribution Plan(s).
(ii) For each Non-Key Employee who is a Participant only in the
Defined Benefit Plan the Employer will provide a minimum non-
integrated benefit equal to 2% of his highest five consecutive
year average "415 Compensation" for each Year of Service while a
Participant in the Plan, in which the Plan is top heavy, not to
exceed ten.
(iii) For each Non-Key Employee who is a Participant only in
this Defined Contribution Plan, the Employer shall provide a
contribution equal to 3% of his "415 Compensation".
(2) Applies if Flc of the Adoption Agreement is Selected
(i) The minimum allocation specified in Section 4.3(i)(1)(i)
shall be 7 1/2% if the Employer elects in the Adoption Agreement
for years in which the Plan is Top Heavy, but not Super Top
Heavy.
(ii) The minimum benefit specified in Section 4.3(i)(1)(ii)
shall be 3% if the Employer elects in the Adoption Agreement for
years in which the Plan is Top Heavy, but not Super Top Heavy.
(iii) The minimum allocation specified in Section 4.3(i)(1)(iii)
shall be 4% if the Employer elects in the Adoption Agreement for
years in which the Plan is Top Heavy, but not Super Top Heavy.
(j) For the purposes of this Section, "415 Compensation" shall be
limited to $200,000 (unless adjusted in such manner as permitted under Code
Section 415(d)). However, for Plan Years beginning prior to January 1,
1989, the $200,000 limit shall apply only for Top Heavy Plan Years and
shall not be adjusted.
(k) Not withstanding anything herein to the contrary, any Participant
who terminated employment during the Plan Year for reasons other than
death, Total and Permanent Disability, or retirement shall or shall not
share in the allocations of the Employer's Contributions and Forfeitures as
provided in the Adoption Agreement. Notwithstanding the foregoing, for
Plan Years beginning after 1989, if this is a standardized Plan, any such
terminated Participant shall share in the allocations as provided in this
Section provided such Participant completed more than 500 Hours of Service.
(l) Notwithstanding anything herein to the contrary, Participants
terminating for reasons of death, Total and Permanent Disability, or
retirement shall share in the
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<PAGE>
allocations as provided in this Section regardless of whether they
completed a Year of Service during the Plan Year.
(m) If a Former Participant is reemployed after five (5) consecutive
l-Year Breaks in Service, then separate accounts shall be maintained as
follows:
(1) one account for nonforfeitable benefits attributable to pre-break
service; and
(2) one account representing his employer derived account balance in
the Plan attributable to post-break service.
(n) Notwithstanding any election in the Adoption Agreement to the
contrary, if this is a non-standardized Plan that would otherwise fail to
meet the requirements of Code Sections 401(a)(26), 410(b)(1), or
410(b)(2)(A)(i) and the Regulations thereunder because Employer
Contributions have not been allocated to a sufficient number or percentage
of Participants for a Plan Year, then the following rules shall apply:
(1) 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.
(2) If after application of paragraph (1) 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.
Nothing in this Section shall permit the reduction of a Participant's
accrued benefit. Therefore any amounts that have previously been allocated
to Participants may not be reallocated to satisfy these requirements. In
such event, the Employer shall make an additional contribution equal to the
amount such affected Participants would have received had they been
included in the allocations, even if it exceeds the amount which would be
deductible under Code Section 404. Any adjustment to the allocations
pursuant
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<PAGE>
to this paragraph shall be considered a retroactive amendment adopted by
the last day of the Plan Year.
4.4 MAXIMUM ANNUAL ADDITIONS
(a)(l) 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 Code Section 419(e)), maintained
by the Employer, or an individual medical account (as defined in Code
Section 415(1)(2)) maintained by the Employer, which provides Annual
Additions, the amount of Annual Additions which may be credited to the
Participant's accounts for any Limitation Year shall 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 accounts
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 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 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 such Limitation
Year shall be determined on the basis of the Participant's actual
compensation for such Limitation Year.
(4) If pursuant to Section 4.4(a)(2) or as a result of the
allocation of Forfeitures, there is an Excess Amount, the excess will
be disposed of as follows:
(i) Any nondeductible Voluntary Employee Contributions, to the
extent they would reduce the Excess Amount, will be returned to
the Participant;
(ii) If, after the application of subparagraph (i), 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>
(iii) If, after the application of subparagraph (i), 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;
(iv) 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 investment gains and losses.
If a suspense account is in existence at any time during a
particular limitation year, all amounts in the suspense account
must be allocated and reallocated to participants' accounts
before any employer contributions or any employee contributions
may be made to the plan for that limitation year. Excess
amounts may not be distributed to participants or former
participants.
(b)(l) This subsection applies if, in addition to this Plan, the
Participant is covered under another qualified Regional Prototype
defined contribution plan maintained by the Employer, or a welfare
benefit fund (as defined in Code Section 419(e)) maintained by the
Employer, or an individual medical account (as defined in Code Section
415(1)(2)) maintained by the Employer, which provides Annual
Additions, during any Limitation Year. The Annual Additions which may
be credited to a Participant's accounts under this Plan for any such
Limitation Year shall not exceed the Maximum Permissible Amount
reduced by the Annual Additions credited to a Participant's accounts
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 plans and welfare benefit
funds maintained by the Employer are less than the Maximum Permissible
Amount and the Employer contribution that would other vise be
contributed or allocated to the Participant's accounts 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 welfare benefit
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 Compensation for
the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant in the manner described in
Section 4.4(a)(2).
34
<PAGE>
(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
Compensation for the Limitation Year.
(4) If, pursuant to Section 4.4(b)(2) or as a result of the
allocation of Forfeitures, a Participant's Annual Additions under this
Plan and such other plans would result in an Excess Amount for a
Limitation Year, the Excess Amount will be deemed to consist of the
Annual Additions last allocated, except that Annual Additions
attributable to a welfare benefit fund or individual medical account
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,
(i) the total Excess Amount allocated as of such date, times
(ii) the ratio of (1) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
Plan to (2) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
and all the other qualified defined contribution plans.
(6) Any Excess Amount attributed to this Plan will be disposed in the
manner described in Section 4.4(a)(4).
(c) If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a Regional
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 4.4(b), unless the Employer provides other
limitations in 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 the Limitation on
Allocations Section of the Adoption Agreement.
(e) For purposes of applying the limitations of Code Section 415, the
transfer of funds from one qualified plan to another is not an "annual
addition". In addition, the following are not Employee contributions for
the purposes of Section 4.4(f)(1)(2): (1) rollover contributions (as
defined in Code Sections 402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3));
(2) repayments of loans made to a Participant from the Plan; (3) repayments
35
<PAGE>
of distributions received by an Employee pursuant to Code Section
411(a)(7)(B) (cash-outs); (4) repayments of distributions received by an
Employee pursuant to Code Section 411(a)(3)(D) (mandatory contributions);
and (5) Employee contributions to a simplified employee pension excludable
from gross income under Code Section 408(k)(6)
(f) For purposes of this Section, the following terms shall be
defined as follows:
(1) Annual Additions means the sum credited to a Participant's
accounts for any Limitation Year of (1) Employer contributions, (2)
effective with respect to "limitation years" beginning after December
31, 1986, Employee contributions, (3) forfeitures, (4) amounts
allocated, after March 31, 1984, to an individual medical account, as
defined in Code Section 415(1)(2), which is part of a pension or
annuity plan maintained by the Employer and (5) amounts derived from
contributions paid or accrued after December 31, 198S, in taxable
years ending after such date, which are attributable to post-
retirement medical benefits allocated to the separate account of a key
employee (as defined in Code Section 419A(d)(3)) under a welfare
benefit fund (as defined in Code Section 419(e)) maintained by the
Employer. Except, however, the "415 Compensation" percentage
limitation referred to in paragraph (a)(2) above shall not apply to:
(1) any contribution for medical benefits (within the meaning of Code
Section 419A(f)(2)) after separation from service which is otherwise
treated as an "annual addition", or (2) any amount otherwise treated
as an "annual addition" under Code Section 415(1)(1). Notwithstanding
the foregoing, for "limitation years" beginning prior to January 1,
1987, only that portion of Employee contributions equal to the lesser
of Employee contributions in excess of six percent (6Sa) of "415
Compensation" or one-half of Employee contributions shall be
considered an "annual addition".
For this purpose, any Excess Amount applied under Sections 4.4(a)(4)
and 4.4(b)(6) in the Limitation Year to reduce Employer contributions
shall be considered Annual Additions for such Limitation Year.
(2) Compensation means a Participant's earned income, wages,
salaries, fees for professional services and other amounts received
for personal services actually rendered in the course of employment
with the Employer maintaining the Plan (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips, and
bonuses) and excluding the following:
(i) Employer contributions to a plan of deferred compensation which
are not includible in the Employee's gross income for the taxable year
in which
36
<PAGE>
contributed, or Employer contributions under a simplified employee
pension plan to the extent such contributions are excludable from the
Employee's gross income, or any distributions from a plan of deferred
compensation;
(ii) contributions made by the Employer to a plan of deferred
compensation to the extent that all or a portion of such contributions
are recharacterized as a voluntary Employee contribution;
(iii) amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by an Employee
becomes freely transferable or is no longer subject to a substantial
risk of forfeiture;
(iv) amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; and
(v) other amounts which received special tax benefits, or
contributions made by an Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Code Section 403(b) (whether or not the contributions are
excludable from the gross income of the Employee).
For purposes of applying the limitations of this Section 4.4, Compensation
for any Limitation Year is the Compensation actually paid or includible in
gross income during such year. Notwithstanding the preceding sentence,
Compensation for a Participant in a profit-sharing plan who is permanently
and totally disabled (as defined in Code Section 22(e)(3)) is the
Compensation such Participant would have received for the Limitation Year
if the Participant had been paid at the rate of Compensation paid
immediately before becoming permanently and totally disabled; such imputed
Compensation for the disabled Participant may be taken into account only if
the Participant is not a Highly Compensated Employee and contributions made
on behalf of such Participant are nonforfeitable when made.
(3) Defined Benefit Fraction means 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 12S percent of the
dollar limitation determined for the Limitation Year under Code Sections
415(b) and (d) or 140 percent of his Highest Average Compensation including
any adjustments under Code Section 415(b).
Notwithstanding the above, if the Participant was a Participant as of the
first day of the first Limitation Year beginning after December 31, 1986,
in one or more defined benefit plans maintained by the Employer which were
in existence on May 6, 1986, the denominator of this fraction will not be
less than 125 percent of the sum of the annual benefits under such plans
which the Participant had accrued as of the end of the close of
37
<PAGE>
the last Limitation Year beginning before January 1, 1987, disregarding any
changes in the terms and conditions of the plan after May 5, 1986. The
preceding sentence applies only if the defined benefit plans individually
and in the aggregate satisfied the requirements of Code Section 415 for all
Limitation Years beginning before January 1, 1987.
Notwithstanding the foregoing, for any Top Heavy Plan Year, 100 shall be
substituted for 125 unless the extra minimum allocation is being made
pursuant to the Employer's election in F1 of the Adoption Agreement.
However, for any Plan Year in which this Plan is a Super Top Heavy Plan,
100 shall be substituted for 125 in any event.
(4) Defined Contribution Dollar Limitation means $30,000, or, if greater,
one-fourth of the defined benefit dollar limitation set forth in Code
Section 415(b)(1) as in effect for the Limitation Year.
(5) Defined Contribution Fraction means 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 voluntary
employee contributions to any defined benefit plans, whether or not
terminated, maintained by the Employer and the annual additions
attributable to all welfare benefit funds, as defined in Code Section
419(e), and individual medical accounts, as defined in Code Section
415(1)(2), maintained by the Employer), and the denominator of which is the
sum of the maximum aggregate amounts for the current and all prior
Limitation Years of Service with the Employer (regardless of whether a
defined contribution plan was maintained by the Employer). The maximum
aggregate amount in any Limitation Year is the lesser of 125 percent of the
Defined Contribution Dollar Limitation or 35 percent of the Participant's
Compensation for such year. For Limitation Years beginning prior to
January 1, 1987, the "annual addition" shall not be recomputed to treat all
Employee contributions as an Annual Addition.
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 5, 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 factions
over 1.0 times (2) the denominator of this fraction, will be permanently
subtracted from the numerator of this faction. The adjustment is
calculated using the fractions as they would be computed as of the end of
the last Limitation Year beginning before January 1, 1987, and disregarding
any changes in the terms and conditions of the plan made after May 5, 1986,
but using the Code Section 415 limitation applicable to the first
Limitation Year beginning on or after January 1, 1987.
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<PAGE>
Notwithstanding the foregoing, for any Top Heavy Plan Year, 100 shall be
substituted for 125 unless the extra minimum allocation is being made
pursuant to the Employer's election in F1 of the Adoption Agreement.
However, for any Plan Year in which this Plan is a Super Top Heavy Plan,
100 shall be substituted for 125 in any event.
(6) Employer means the Employer that adopts this Plan and all Affiliated
Employers, except that for purposes of this Section, Affiliated Employers
shall be determined pursuant to the modification made by Code Section
415(h).
(7) Excess Amount means the excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
(8) Highest Average Compensation means the average Compensation for the
three consecutive Years of Service with the Employer that produces the
highest average. A Year of Service with the Employer is the 12 consecutive
month period defined in Section E1 of the Adoption Agreement which is used
to determine Compensation under the Plan.
(9) Limitation Year means the Compensation Year (a 12 consecutive month
period) as elected by the Employer in 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.
(10) Maximum Permissible Amount means the maximum Annual Addition that may
be contributed or allocated to a Participant's account under the plan for
any Limitation Year, which shall not exceed the lesser of:
(i) the Defined Contribution Dollar Limitation, or
(ii) 25 percent of the Participant's Compensation for the Limitation
Year.
The Compensation Limitation referred to in (ii) shall not apply to any
contribution for medical benefits (within the meaning of Code Sections
401(h) or 419A(f)(2)) which is otherwise treated as an annual addition
under Code Sections 415(1)(1) or 419A(d)(2).
If a short Limitation Year is created because of an amendment changing the
Limitation Year to a different 12 consecutive month period, the Maximum
Permissible Amount will not exceed the Defined Contribution Dollar
Contribution multiplied by the following fraction:
number of months in the short Limitation Year
---------------------------------------------
12
39
<PAGE>
(11) Projected Annual Benefit means 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:
(12) the Participant will continue employment until Normal Retirement Age
(or current age, if later), and
(13) 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.
(g) Regional Prototype Plan means a plan the form of which has been the
subject of a favorable notification letter from the Internal Revenue Service.
(h) Notwithstanding anything contained in this Section to the contrary,
the limitations, adjustments and other requirements prescribed in this Section
shall at all times comply with the provisions of Code Section 415 and the
Regulations thereunder, the terms of which are specifically incorporated herein
by reference.
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If as a result of the allocation of Forfeitures, a reasonable
error in estimating a Participant's annual Compensation, or other facts and
circumstances to which Regulation 1.415-6(b)(6) shall be applicable, the
"annual additions~ under this Plan would cause the maximum provided in
Section 4.4 to be exceeded, the Administrator shall treat the excess in
accordance with Section 4.4(a)(4).
4.6 TRANSFERS FROM QUALIFIED PLANS
(a) If specified in the Adoption Agreement and with the consent of
the Administrator, amounts may be transferred from other qualified plans,
provided that the trust from which such funds are transferred permits the
transfer to be made and the transfer will not jeopardize the tax exempt
status of the Plan or create adverse tax consequences for the Employer. The
amounts transferred shall be set up in a separate account herein referred
to as a "Participant's Rollover Account". Such account shall be fully
Vested at all times and shall not be subject to forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be held by the
Trustee pursuant to the provisions of this Plan and may not be withdrawn
by, or distributed to the Participant, in whole or in part, except as
provided in Paragraphs (c) and (d) of this Section.
<PAGE>
(c) Amounts attributable to elective contributions (as defined in
Regulation 1.401(1c)-l(g)(4)), including amounts treated as elective
contributions, which are transferred from another qualified plan in a plan-
to-plan transfer shall be subject to the distribution limitations provided
for in Regulation 1.401*)-l(d).
(d) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits, the
fair market value of the Participant's Rollover Account shall be used to
provide additional benefits to the Participant or his Beneficiary. Any
distributions of amounts held in a Participant's Rollover Account shall be
made in a manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(11) and 417 and the Regulations
thereunder. Furthermore, such amounts shall be considered as part of a
Participant's benefit in determining whether an involuntary cash-out of
benefits without Participant consent may be made.
(e) The Administrator may direct that employee transfers made after a
valuation date be segregated into a separate account for each Participant
until such time as the allocations pursuant to this Plan have been made, at
which time they may remain segregated or be invested as part of the general
Trust Fund, to be determined by the Administrator.
(f) For purposes of this Section, the term "qualified plan" shall
mean any tax qualified plan under Code Section 401(a). The term "amounts
transferred from other qualified plans" shall mean: (i) amounts transferred
to this Plan directly from another qualified plan; (ii) lump-sum
distributions received by an Employee from another qualified plan which are
eligible for tax free rollover to a qualified plan and which are
transferred by the Employee to this Plan within sixty (60) days following
his receipt thereof; (iii) amounts transferred to this Plan from a conduit
individual retirement account provided that the conduit individual
retirement account has no assets other than assets which (A) were
previously distributed to the Employee by another qualified plan as a lump-
sum distribution (B) were eligible for tax-free rollover to a qualified
plan and (C) were deposited in such conduit individual retirement account
within sixty (60) days of receipt thereof and other than earnings on said
assets; and (iv) amounts distributed to the Employee from a conduit
individual retirement account meeting the requirements of clause (iii)
above, and transferred by the Employee to this Plan within sixty (60) days
of his receipt thereof from such conduit individual retirement account.
(g) Prior to accepting any transfers to which this Section applies,
the Administrator may require the Employee to establish that the amounts to
be transferred to this Plan meet the requirements of this Section and may
also require the Employee to provide an opinion of counsel satisfactory to
the Employer that the amounts to be transferred meet the requirements of
this Section.
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<PAGE>
(h) Notwithstanding anything herein to the contrary, a transfer
directly to this Plan from another qualified plan (or a transaction having
the effect of such a transfer) shall only be permitted if it will not
result in the elimination or reduction of any "Section 411(d)(6) protected
benefit" as described in Section 8.1.
4.7 VOLUNTARY CONTRIBUTIONS
(a) If this is an amendment to a Plan that had previously allowed
voluntary Employee contributions, then, except as provided in 4.7(b) below,
this Plan will not accept voluntary Employee contributions for Plan Years
beginning after the Plan Year in which this Plan is adopted by the
Employer.
(b) For 401(k) Plans, if elected in the Adoption Agreement, each
Participant may, at the discretion of the Administrator in a
nondiscriminatory manner, elect to voluntarily contribute a portion of his
compensation earned while a Participant under this Plan. Such
contributions shall be paid to the Trustee within a reasonable period of
time but in no event later than 90 days after the receipt of the
contribution.
(c) The balance in each Participant's Voluntary Contribution Account
shall be fully Vested at all times and shall not be subject to Forfeiture
for any reason.
(d) A Participant may elect to withdraw his voluntary contributions
from his Voluntary Contribution Account and the actual earnings thereon in
a manner which is consistent with and satisfies the provisions of Section
6.5, including, but not limited to, all notice and consent requirements of
Code Sections 411(a)(11) and 417 and the Regulations thereunder. If the
Administrator maintains sub-accounts with respect to voluntary
contributions (and earnings thereon) which were made on or before a
specified date, a Participant shall be permitted to designate which sub-
account shall be the source for his withdrawal. No Forfeitures shall occur
solely as a result of an Employee's withdrawal of Employee contributions.
In the event such a withdrawal is made, or in the event a Participant
has received a hardship distribution pursuant to Regulation 1.401(k)-
l(d)(2)(iii)(B) from any plan maintained by the Employer, then such
Participant shall be barred from making any voluntary contributions for a
period of twelve (12) months after receipt of the withdrawal or
distribution.
(e) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits, the
fair market value of the Voluntary Contribution Account shall be used to
provide additional benefits to the Participant or his Beneficiary.
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(f) The Administrator may direct that voluntary contributions made
after a valuation date be segregated into a separate account until such
time as the allocations pursuant to this Plan have been made, at which time
they may remain segregated or be invested as part of the general Trust
Fund, to be determined by the Administrator.
4.8 DIRECT INVESTMENT ACCOUNT
(a) If elected in the Adoption Agreement, all Participants may direct
the Trustee as to the investment of all or a portion of any one or more of
their individual account balances. Participants may direct the Trustee in
writing to invest their account in specific assets as permitted by the
Administrator provided such investments are in accordance with the
Department of Labor regulations and are permitted by the Plan. That
portion of the account of any Participant so directing will thereupon be
considered a Directed Investment Account.
(b) A separate Directed Investment Account shall be established for
each Participant who has directed an investment. Transfers between the
Participant's regular account and their Directed Investment Account shall
be charged and credited as the case may be to each account. The Directed
Investment Account shall not share in Trust Fund Earnings, but it shall be
charged or credited as appropriate with the net earnings, gains, losses and
expenses as well as any appreciation or depreciation in market value during
each Plan Year attributable to such account.
(c) The Administrator shall establish a procedure, to be applied in a
uniform and nondiscriminatory manner, setting forth the permissible
investment options under this Section, how often changes between
investments may be made, and any other limitations that the Administrator
shall impose on a Participant's right to direct investments.
4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS
(a) If this is an amendment to a Plan that previously permitted
deductible voluntary contributions, then each Participant who made a
"Qualified Voluntary Employee Contribution" within the meaning of Code
Section 219(e)(2) as it existed prior to the enactment of the Tax Reform
Act of 1986, shall have his contribution held in a separate Qualified
Voluntary Employee Contribution Account which shall be fully Vested at all
times. Such contributions, however, shall not be permitted if they are
attributable to taxable years beginning after December 31, 1986.
(b) A Participant may, upon written request delivered to the
Administrator, make withdrawals from his Qualified Voluntary Employee
Contribution Account. Any distribution shall be made in a manner which is
consistent with and satisfies the provisions of Section 6.5, including, but
not limited to, all notice and consent requirements of Code Sections
411(a)(11) and 417 and the Regulations thereunder.
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(c) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits, the
fair market value of the Qualified Voluntary Employee Contribution Account
shall be used to provide additional benefits to the Participant or his
Beneficiary.
(d) Unless the Administrator directs Qualified Voluntary Employee
Contributions made pursuant to this Section be segregated into a separate
account for each Participant, they shall be invested as part of the
general Trust Fund and share in earnings and losses.
4.10 ACTUAL CONTRIBUTION PERCENTAGE TESTS
In the event this Plan previously provided for voluntary or mandatory
Employee contributions, then, with respect to Plan Years beginning after
December 31, 1986, such contributions must satisfy the provisions of Code
Section 401(m) and the Regulations thereunder.
4.11 INTEGRATION IN MORE THAN ONE PLAN
If the Employer and/or an Affiliated Employer maintain qualified
retirement plans integrated with Social Security such that any Participant in
this Plan is covered under more than one of such plans, then such plans will be
considered to be one plan and will be considered to be integrated if the extent
of the integration of all such plans does not exceed 100%. For purposes of the
preceding sentence, the extent of integration of a plan is the ratio, expressed
as a percentage, which the actual benefits, benefit rate, offset rate, or
employer contribution rate, whatever is applicable, under the Plan bears to the
limitation applicable to such Plan. If the Employer maintains two or more
standardized paired plans, only one plan may be integrated with Social Security.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Anniversary Date,
and at such other date or dates deemed necessary by the Administrator, herein
called "valuation date", to determine the net worth of the assets comprising the
Trust Fund as it exists on the "valuation date". In determining such net worth,
the Trustee shall value the assets comprising the Trust Fund at their fair
market value as of the "valuation date" and shall deduct all expenses for which
the Trustee has not yet obtained reimbursement from the Employer or the Trust
Fund.
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5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the Trust Fund
which are listed on a registered stock exchange, the Administrator shall direct
the Trustee to value the same at the prices they were last traded on such
exchange preceding the close of business on the "valuation date". If such
securities were not traded on the "valuation date", or if the exchange on which
they are traded was not open for business on the "valuation date", then the
securities shall be valued at the prices at which they were last traded prior to
the "valuation date". Any unlisted security held in the Trust Fund shall be
valued at its bid price next preceding the close of business on the "valuation
date", which bid price shall be obtained from a registered broker or an
investment banker. In determining the fair market value of assets other than
securities for which trading or bid prices can be obtained, the Trustee may
appraise such assets itself, or in its discretion, employ one or more appraisers
for that purpose and rely on the values established by such appraiser or
appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer and retire
for the purposes hereof on or after his Normal Retirement Date or Early
Retirement Date. Upon such Normal Retirement Date or Early Retirement Date, all
amounts credited to such Participant's Combined Account shall become
distributable. However, a Participant may postpone the termination of his
employment with the Employer to a later date, in which event the participation
of such Participant in the Plan, including the right to receive allocations
pursuant to Section 4.3, shall continue until his Late Retirement Date. Upon a
Participant's Retirement Date, or as soon thereafter as is practicable, the
Administrator shall direct the distribution of all amounts credited to such
Participant's Combined Account in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement Date or
other termination of his employment, all amounts credited to such
Participant's Combined Account shall become fully Vested. The Administrator
shall direct, in accordance with the provisions of Sections 6.6 and 6.7,
the distribution of the deceased Participant's accounts to the
Participant's Beneficiary.
(b) Upon the death of a Former Participant, the Administrator shall
direct, in accordance with the provisions of Sections 6.6 and 6.7, the
distribution of any remaining amounts credited to the accounts of such
deceased Former Participant to such Former Participant's Beneficiary.
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(c) The Administrator may require such proper proof of death and such
evidence of the right of any person to receive payment of the value of the
account of a deceased Participant or Former Participant as the
Administrator may deem desirable. The Administrator's determination of
death and of the right of any person to receive payment shall be
conclusive.
(d) Unless otherwise elected in the manner prescribed in Section 6.6,
the Beneficiary of the Pre-Retirement Survivor Annuity shall be the
Participant's spouse. Except, however, the Participant may designate a
Beneficiary other than his spouse for the Pre-Retirement Survivor Annuity
if:
(1) the Participant and his spouse have validly waived the Pre
Retirement Survivor Annuity in the manner prescribed in Section 6.6,
and the spouse has waived his or her right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has been abandoned
(within the meaning of local law) and the Participant has a court
order to such effect (and there is no "qualified domestic relations
order" as defined in Code Section 414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be made on a
form satisfactory to the Administrator. A Participant may at any time
revoke his designation of a Beneficiary or change his Beneficiary by filing
written notice of such revocation or change with the Administrator.
However, the Participant's spouse must again consent in writing to any
change in Beneficiary unless the original consent acknowledged that the
spouse had the right to limit consent only to a specific Beneficiary and
that the spouse voluntarily elected to relinquish such right. The
Participant may, at any time, designate a Beneficiary for death benefits
payable under the Plan that are in excess of the Pre-Retirement Survivor
Annuity. In the event no valid designation of Beneficiary exists at the
time of the Participant's death, the death benefit shall be payable to his
estate.
(e) If the Plan provides an insured death benefit and a Participant
dies before any insurance coverage to which he is entitled under the Plan
is effected, his death benefit from such insurance coverage shall be
limited to the standard rated premium which was or should have been used
for such purpose.
(f) In the event of any conflict between the terms of this Plan and
the terms of any Contract issued hereunder, the Plan provisions shall
control.
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6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability prior to his
Retirement Date or other termination of his employment, all amounts credited to
such Participant's Combined Account shall become fully Vested. In the event of a
Participant's Total and Permanent Disability, the Administrator, in accordance
with the provisions of Sections 6.5 and 6.7, shall direct the distribution to
such Participant of all amounts credited to such Participant's Combined Account
as though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date, or other valuation date,
coinciding with or subsequent to the termination of a Participant's
employment for any reason other than retirement, death, or Total and
Permanent Disability, the Administrator may direct that the amount of the
Vested portion of such Terminated Participant's Combined Account be
segregated and invested separately. In the event the Vested portion of a
Participant's Combined Account is not segregated, the amount shall remain
in a separate account for the Terminated Participant and share in
allocations pursuant to Section 4.3 until such time as a distribution is
made to the Terminated Participant. The amount of the portion of the
Participant's Combined Account which is not Vested may be credited to a
separate account (which will always share in gains and losses of the Trust
Fund) and at such time as the amount becomes a Forfeiture shall be treated
in accordance with the provisions of the Plan regarding Forfeitures.
Regardless of whether distributions in kind are permitted, in the
event that the amount of the Vested portion of the Terminated Participant's
Combined Account equals or exceeds the fair market value of any insurance
Contracts, the Trustee, when so directed by the Administrator and agreed to
by the Terminated Participant, shall assign, transfer, and set over to such
Terminated Participant all Contracts on his life in such form or with such
endorsements, so that the settlement options and forms of payment are
consistent with the provisions of Section 6.5. In the event that the
Terminated Participant's Vested portion does not at least equal the fair
market value of the Contracts, if any, the Terminated Participant may pay
over to the Trustee the sum needed to make the distribution equal to the
value of the Contracts being assigned or transferred, or the Trustee,
pursuant to the Participant's election, may borrow the cash value of the
Contracts from the Insurer so that the value of the Contracts is equal to
the Vested portion of the Terminated Participant's Combined Account and
then assign the Contracts to the Terminated Participant.
Distribution of the funds due to a Terminated Participant shall be
made on the occurrence of an event which would result in the distribution
had the Terminated Participant remained in the employ of the Employer (upon
the Participant's death, Total and Permanent Disability, Early or Normal
Retirement). However, at the election of the
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Participant, the Administrator shall direct that the entire Vested portion
of the Terminated Participant's Combined Account to be payable to such
Terminated Participant provided the conditions, if any, set forth in the
Adoption Agreement have been satisfied. Any distribution under this
paragraph shall be made in a manner which is consistent with and satisfies
the provisions of Section 6.5, including but not limited to, all notice and
consent requirements of Code Sections 411(a)(11) and 417 and the
Regulations thereunder.
Notwithstanding the above, if the value of a Terminated Participant's
Vested benefit derived from Employer and Employee contributions does not
exceed, and at the time of any prior distribution, has never exceeded
$3,500, the Administrator shall direct that the entire Vested benefit be
paid to such Participant in a single lump-sum without regard to the consent
of the Participant or the Participant's spouse. A Participant's Vested
benefit shall not include Qualified Voluntary Employee Contributions within
the meaning of Code Section 72(o)(5)(B) for Plan Years beginning prior to
January 1, 1989.
(b) The Vested portion of any Participant's Account shall be a
percentage of such Participant's Account determined on the basis of the
Participant's number of Years of Service according to the vesting schedule
specified in the Adoption Agreement.
(c) For any Top Heavy Plan Year, one of the minimum top heavy vesting
schedules as elected by the Employer in the Adoption Agreement will
automatically apply to the Plan. The minimum top heavy vesting schedule
applies to all benefits within the meaning of Code Section 411 (a)(7)
except those attributable to Employee contributions, including benefits
accrued before the effective date of Code Section 416 and benefits accrued
before the Plan became top heavy. Further, no decrease in a Participant's
Vested percentage may occur in the event the Plan's status as top heavy
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 top heavy and the Vested percentage of such
Employee's Participant's Account shall be determined without regard to this
Section 6.4(c).
If in any subsequent Plan Year, the Plan ceases to be a Top Heavy
Plan, the Administrator shall continue to use the vesting schedule in
effect while the Plan was a Top Heavy Plan for each Employee who had an
Hour of Service during a Plan Year when the Plan was Top Heavy.
(d) Notwithstanding the vesting schedule above, upon the complete
discontinuance of the Employer's contributions to the Plan or upon any full
or partial termination of the Plan, all amounts credited to the account of
any affected Participant shall become 100Sa Vested and shall not thereafter
be subject to Forfeiture.
(e) If this is an amended or restated Plan, then notwithstanding the
vesting schedule specified in the Adoption Agreement, the Vested percentage
of a Participant's
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Account shall not be less than the Vested percentage attained as of the
later of the effective date or adoption date of this amendment and
restatement. The computation of a Participant's nonforfeitable percentage
of his interest in the Plan shall not be reduced as the result of any
direct or indirect amendment to this Article, or due to changes in the
Plan's status as a Top Heavy Plan.
(f) If the Plan's vesting schedule is amended, or if the Plan is
amended in any way that directly or indirectly affects the computation of
the Participant's nonforfeitable percentage or if the Plan is deemed
amended by an automatic change to a top heavy vesting schedule, then each
Participant with at least 3 Years of Service as of the expiration date of
the election period may elect to have his nonforfeitable percentage
computed under the Plan without regard to such amendment or change.
Notwithstanding the foregoing, for Plan Years beginning before January 1,
1989, or with respect to Employees who fail to complete at least one (1)
Hour of Service in a Plan Year beginning after December 31, 1988, five (S)
shall be substituted for three (3) in the preceding sentence. If a
Participant fails to make such election, then such Participant shall be
subject to the new vesting schedule. The Participant's election period
shall commence on the adoption date of the amendment and shall end 60 days
after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
(g) (l) If any Former Participant shall be reemployed by the
Employer before a l-Year Break in Service occurs, he shall continue to
participate in the Plan in the same manner as if such termination had
not occurred.
(2) If any Former Participant shall be reemployed by the
Employer before five (5) consecutive l-Year Breaks in Service, and
such Former Participant had received a distribution of his entire
Vested interest prior to his reemployment, his forfeited account shall
be reinstated only if he repays the full amount distributed to him
before the earlier of five (S) years after the first date on which the
Participant is subsequently reemployed by the Employer or the close of
the first period of 5 consecutive l-Year Breaks in Service commencing
after the distribution. If a distribution occurs for any reason other
than a separation from service, the time for repayment may not end
earlier than five (S) years after the date of separation. In the event
the Former Participant does repay the full amount distributed to him,
the undistributed portion of the Participant's Account must be
restored in full, unadjusted by any gains or losses occurring
subsequent to the Anniversary Date or other valuation date preceding
his termination. If an
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Employee receives a distribution pursuant to this Section and the
Employee resumes employment covered under this plan, the Employee's
Employer-derived account balance will be restored to the amount on the
date of distribution if the Employee repays to the Plan the full
amount of the distribution attributable to Employer contributions
before the earlier of 5 years after the first date on which the
Participant is subsequently re-employed by the Employer, or the date
the Participant incurs S consecutive l-Year Breaks in Service
following the date of the distribution. If a non-Vested Former
Participant was deemed to have received a distribution and such Former
Participant is re-employed by the Employer before five (5) consecutive
l-Year Breaks in Service, then such Participant will be deemed to have
repaid the deemed distribution as of the date of reemployment.
(3) If any Former Participant is reemployed after a l-Year Break in
Service has occurred, Years of Service shall include Years of Service prior
to his 1-Year Break in Service subject to the following rules:
(i) Any Former Participant who under the Plan does not have a
nonforfeitable right to any interest in the Plan resulting from
Employer contributions shall lose credits if his consecutive l-Year
Breaks in Service equal or exceed the greater of (A) five (S) or (B)
the aggregate number of his pre break Years of Service;
(ii) After five (5) consecutive 1-Year Breaks in Service, a
Former Participant's Vested Account balance attributable to pre-break
service shall not be increased as a result of post-break service;
(iii) A Former Participant who is reemployed and who has not had
his Years of Service before a l-Year Break in Service disregarded
pursuant to (i) above, shall participate in the Plan as of his date of
reemployment;
(iv) If a Former Participant completes a Year of Service (a l-
Year Break in Service previously occurred, but employment had not
terminated), he shalt participate in the Plan retroactively from the
first day of the Plan Year during which he completes one (1) Year of
Service.
(h) In determining Years of Service for purposes of vesting under the
Plan, Years of Service shall be excluded as specified in the Adoption
Agreement.
6.5 DISTRIBUTION OF BENEFITS
(a) (l) Unless otherwise elected as provided below, a Participant who is
married on the "annuity starting date" and who does not die before the
"annuity starting date" shall receive the value of all of his benefits in
the form of a Joint and Survivor Annuity. The
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Joint and Survivor Annuity is an annuity that commences immediately and
shall be equal in value to a single life annuity. Such joint and survivor
benefits following the Participant's death shall continue to the spouse
during the spouse's lifetime at a rate equal to 50b of the rate at which
such benefits were payable to the Participant. This Joint and Survivor
Annuity shall be considered the designated qualified Joint and Survivor
Annuity and automatic form of payment for the purposes of this Plan.
However, the Participant may elect to receive a smaller annuity benefit
with continuation of payments to the spouse at a rate of seventy-five
percent (75%) or one hundred percent (100%) of the rate payable to a
Participant during his lifetime which alternative Joint and Survivor
Annuity shall be equal in value to the automatic Joint and 50% Survivor
Annuity. An unmarried Participant shall receive the value of his benefit in
the form of a life annuity. Such unmarried Participant, however, may elect
in writing to waive the life annuity. The election must comply with the
provisions of this Section as if it were an election to waive the Joint and
Survivor Annuity by a married Participant, but without the spousal consent
requirement. The Participant may elect to have any annuity provided for in
this Section distributed upon the attainment of the "earliest retirement
age" under the Plan. The "earliest retirement age" is the earliest date on
which, under the Plan, the Participant could elect to receive retirement
benefits.
(2) Any election to waive the Joint and Survivor Annuity must be made
by the Participant in writing during the election period and be consented
to by the Participant's spouse. If the spouse is legally incompetent to
give consent, the spouse's legal guardian, even if such guardian is the
Participant, may give consent.
Such election shall designate a Beneficiary (or a form of benefits) that
may not be changed without spousal consent (unless the consent of the
spouse expressly permits designations by the Participant without the
requirement of further consent by the spouse). Such spouse's consent shall
be irrevocable and must acknowledge the effect of such election and be
witnessed by a Plan representative or a notary public. Such consent shall
not be required if it is established to the satisfaction of the
Administrator that the required consent cannot be obtained because there is
no spouse, the spouse cannot be located, or other circumstances that may be
prescribed by Regulations. The election made by the Participant and
consented to by his spouse may be revoked by the Participant in writing
without the consent of the spouse at any time during the election period.
The number of revocations shall not be limited. Any new election must
comply with the requirements of this paragraph. A former spouse's waiver
shall not be binding on a new spouse.
(3) The election period to waive the Joint and Survivor Annuity shall
be the 90 day period ending on the "annuity starting date."
(4) For purposes of this Section and Section 6.6, the "annuity
starting date" means the first day of the first period for which an amount
is paid as an annuity, or, in the
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case of a benefit not payable in the form of an annuity, the first day on
which all events have occurred which entitles the Participant to such
benefit.
(5) With regard to the election, the Administrator shall provide to
the Participant no less than 30 days and no more than 90 days before the
"annuity starting date" a written explanation of:
(i) the terms and conditions of the Joint and Survivor Annuity, and
(ii) the Participant's right to make and the effect of an election
to waive the Joint and Survivor Annuity, and
(iii) the right of the Participant's spouse to consent to any
election to waive the Joint and Survivor Annuity, and
(iv) the right of the Participant to revoke such election, and the
effect of such revocation.
(b) In the event a married Participant duly elects pursuant to
paragraph (a)(2) above not to receive his benefit in the form of a Joint
and Survivor Annuity, or if such Participant is not married, in the form of
a life annuity, the Administrator, pursuant to the election of the
Participant, shall direct the distribution to a Participant or his
Beneficiary any amount to which he is entitled under the Plan in one or
more of the following methods which are permitted pursuant to the Adoption
Agreement:
(1) One lump-sum payment in cash or in property;
(2) Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments. In order to provide such
installment payments, the Administrator may direct that the
Participant's interest in the Plan be segregated and invested
separately, and that the funds in the segregated account be used for
the payment of the installments. The period over which such payment is
to be made shall not extend beyond the Participant's life expectancy
(or the life expectancy of the Participant and his designated
Beneficiary);
(3) Purchase of or providing an annuity. However, such annuity may
not be in any form that will provide for payments over a period
extending beyond either the life of the Participant (or the lives of
the Participant and his designated Beneficiary) or the life expectancy
of the Participant (or the life expectancy of the Participant and his
designated Beneficiary).
(c) The present value of a Participant's Joint and Survivor Annuity
derived from Employer and Employee contributions may not be paid without
his written consent
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if the value exceeds, or has ever exceeded at the time of any prior
distribution, $3,500. Further, the spouse of a Participant must consent in
writing to any immediate distribution. If the value of the Participant's
benefit derived from Employer and Employee contributions does not exceed
$3,500 and has never exceeded $3,500 at the time of any prior distribution,
the Administrator may immediately distribute such benefit without such
Participant's consent. No distribution may be made under the preceding
sentence after the "annuity starting date" unless the Participant and his
spouse consent in writing to such distribution. Any written consent
required under this paragraph must be obtained not more than 90 days before
commencement of the distribution and shall be made in a manner consisted
with Section 6.S(a)(2).
(d) Any distribution to a Participant who has a benefit which exceeds,
or has ever exceeded at the time of any prior distribution, $3,500 shall
require such Participant's consent if such distribution commences prior to
the later of his Normal Retirement Age or age 62. With regard to this
required consent:
(1) No consent shall be valid unless the Participant has received a
general description of the material features and an explanation of the
relative values of the optional forms of benefit available under the
Plan that would satisfy the notice requirements of Code Section 417.
(2) The Participant must be informed of his right to defer receipt of
the distribution. If a Participant fails to consent, it shall be
deemed an election to defer the commencement of payment of any
benefit. However, any election to defer the receipt of benefits shall
not apply with respect to distributions which are required under
Section 6.S(e).
(3) Notice of the rights specified under this paragraph shall be
provided no less than 30 days and no more than 90 days before the
"annuity starting date".
(4) Written consent of the Participant to the distribution must not be
made before the Participant receives the notice and must not be made
more than 90 days before the "annuity starting date".
(5) No consent shall be valid if a significant detriment is imposed
under the Plan on any Participant who does not consent to the
distribution.
(e) Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits, made on or after January 1, 198S,
whether under the Plan or through the purchase of an annuity Contract,
shall be made in accordance with the following requirements and shall
otherwise comply with Code Section 401(a)(9) and the Regulations thereunder
(including Regulation Section 1.401(a)(9)-2), the provisions of which are
incorporated herein by reference:
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(1) A Participant's benefits shall be distributed to him not later
than April 1st of the calendar year following the later of (i) the
calendar year in which the Participant attains age 70 1/2 or (ii) the
calendar year in which the Participant retires, provided, however,
that this clause (ii) shall not apply in the case of a Participant who
is a "five (5) percent owner" at any time during the five (5) Plan
Year period ending in the calendar year in which he attains age 70 1/2
or, in the case of a Participant who becomes a "five (5) percent
owner" during any subsequent Plan Year, clause (ii) shall no longer
apply and the required beginning date shall be the April 1st of the
calendar year following the calendar year in which such subsequent
Plan Year ends. Alternatively, distributions to a Participant must
begin no later than the applicable April 1st as determined under the
preceding sentence and must be made over the life of the Participant
(or the lives of the Participant and the Participant's designated
Beneficiary) or, if benefits are paid in the form of a Joint and
Survivor Annuity, the life expectancy of the Participant (or the life
expectancies of the Participant and his designated Beneficiary) in
accordance with Regulations. For Plan Years beginning after December
31, 1988, clause (ii) above shall not apply to any Participant unless
the Participant had attained age 70 1/2 before January 1, 1988 and was
not a "five (5) percent owner" at any time during the Plan Year ending
with or within the calendar year in which the Participant attained age
66 1/2 or any subsequent Plan Year.
(2) Distributions to a Participant and his Beneficiaries shall only be
made in accordance with the incidental death benefit requirements of
Code Section 401(a)(9)(G) and the Regulations thereunder.
Additionally, for calendar years beginning before 1989, distributions
may also be made under an alternative method which provides that the
then present value of the payments to be made over the period of the
Participant's life expectancy exceeds fifty percent (50%) of the then
present value of the total payments to be made to the Participant and
his Beneficiaries.
(f) For purposes of this Section, the life expectancy of a Participant
and a Participant's spouse (other than in the case of a life annuity) shall
be redetermined annually in accordance with Regulations if permitted
pursuant to the Adoption Agreement. If the Participant or the Participant's
spouse may elect whether recalculations will be made, then the election,
once made, shall be irrevocable. If no election is made by the time
distributions must commence, then the life expectancy of the Participant
and the Participant's spouse shall not be subject to recalculation. Life
expectancy and joint and last survivor expectancy shall be computed using
the return multiples in Tables V and VI of Regulation 1.72-9.
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(g) All annuity Contracts under this Plan shall be non-transferable
when distributed. Furthermore, the terms of any annuity Contract purchased
and distributed to a Participant or spouse shall comply with all of the
requirements of this Plan.
(h) Subject to the spouse's right of consent afforded under the Plan,
the restrictions imposed by this Section shall not apply if a Participant
has, prior to January 1, 1984, made a written designation to have his
retirement benefit paid in an alternative method acceptable under Code
Section 401(a)as in effect prior to the enactment of the Tax Equity and
Fiscal Responsibility Act of 1982.
(i) If a distribution is made at a time when a Participant who has
not terminated employment is not fully Vested in his Participant's Account
and the Participant may increase the Vested percentage in such account:
(1) A separate account shall be established for the Participant's
interest in the Plan as of the time of the distribution, and
(2) At any relevant time the Participant's Vested portion of the
separate account shall be equal to an amount ("X") determined by the
formula:
X equals P(AB plus (RxD)) -R x D)
For purposes of applying the formula: P is the Vested percentage at
the relevant time, AB is the account balance at the relevant time, D
is the amount of distribution, and R is the ratio of the account
balance at the relevant time to the account balance after
distribution.
6.6 DISTRIBUTION OF BENEF1TS UPON DEATH
(a) Unless otherwise elected as provided below, a Vested Participant
who dies before the annuity starting date and who has a surviving spouse
shall have the Pre-Retirement Survivor Annuity paid to his surviving
spouse. The Participant's spouse may direct that payment of the Pre-
Retirement Survivor Annuity commence within a reasonable period after the
Participant's death. If the spouse does not so direct, payment of such
benefit will commence at the time the Participant would have attained the
later of his Normal Retirement Age or age 62. However, the spouse may
elect a later commencement date. Any distribution to the Participant's
spouse shall be subject to the rules specified in Section 6.6(h).
(b) Any election to waive the Pre-Retirement Survivor Annuity before
the Participant's death must be made by the Participant in writing during
the election period and shall require the spouse's irrevocable consent in
the same manner provided for in Section 6.5(a)(2). Further, the spouse's
consent must acknowledge the specific nonspouse
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Beneficiary. Notwithstanding the foregoing, the nonspouse Beneficiary need
not be acknowledged, provided the consent of the spouse acknowledges that
the spouse has the right to limit consent only to a specific Beneficiary
and that the spouse voluntarily elects to relinquish such right.
(c) The election period to waive the Pre-Retirement Survivor Annuity
shall begin on the first day of the Plan Year in which the Participant
attains age 35 and end on the date of the Participant's death. An earlier
waiver (with spousal consent) may be made provided a written explanation of
the Pre-Retirement Survivor Annuity is given to the Participant and such
waiver becomes invalid at the beginning of the Plan Year in which the
Participant turns age 35. In the event a Vested Participant separates from
service prior to the beginning of the election period, the election period
shall begin on the date of such separation from service.
(d) With regard to the election, the Administrator shall provide each
Participant within the applicable period, with respect to such Participant
(and consistent with Regulations), a written explanation of the Pre-
Retirement Survivor Annuity containing comparable information to that
required pursuant to Section 6.5(a)(5). For the purposes of this
paragraph, the term "applicable period" means, with respect to a
Participant, whichever of the following periods ends last:
(1) 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;
(2) A reasonable period after the individual becomes a Participant.
For this purpose, in the case of an individual who becomes a
Participant after age 32, the explanation must be provided by the end
of the three-year period beginning with the first day of the first
Plan Year for which the individual is a Participant;
(3) A reasonable period ending after the Plan no longer fully
subsidizes the cost of the Pre-Retirement Survivor Annuity with
respect to the Participant;
(4) A reasonable period ending after Code Section 401(a)(11) applies
to the Participant; or
(5) A reasonable period after separation from service in the case of
a Participant who separates before attaining age 35. For this purpose,
the Administrator must provide the explanation beginning one year
before the separation from service and ending one year after
separation.
(e) The Pre-Retirement Survivor Annuity provided for in this Section
shall apply only to Participants who are credited with an Hour of Service
on or after August 23,
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1984. Former Participants who are not credited with an Hour of Service on
or after August 23, 1984 shall be provided with rights to the Pre-
Retirement Survivor Annuity in accordance with Section 303(e)(2) of the
Retirement Equity Act of 1984.
(f) If the value of the Pre-Retirement Survivor Annuity derived from
Employer and Employee contributions does not exceed $3,500 and has never
exceeded S3,500 at the time of any prior distribution, the Administrator
shall direct the immediate distribution of such amount to the Participant's
spouse. No distribution may be made under the preceding sentence after the
annuity starting date unless the spouse consents in writing. If the value
exceeds, or has ever exceeded at the time of any prior distribution,
$3,500, an immediate distribution of the entire amount may be made to the
surviving spouse, provided such surviving spouse consents in writing to
such distribution. Any written consent required under this paragraph must
be obtained not more than 90 days before commencement of the distribution
and shall be made in a manner consistent with Section 6.5(a)(2).
(g) (l) In the event there is an election to waive the Pre-
Retirement Survivor Annuity, and for death benefits in excess of the
Pre-Retirement Survivor Annuity, such death benefits shall be paid to
the Participant's Beneficiary by either of the following methods, as
elected by the Participant (or if no election has been made prior to
the Participant's death, by his Beneficiary) subject to the rules
specified in Section 6.6(h) and the selections made in the Adoption
Agreement:
(i) One lump-sum payment in cash or in property;
(ii) Payment in monthly, quarterly, semi-annual, or annual cash
installments over a period to be determined by the Participant or
his Beneficiary. After periodic installments commence, the
Beneficiary shall have the right to reduce the period over which
such periodic installments shall be made, and the cash amount of
such periodic installments shall be adjusted accordingly.
(iii) If death benefits in excess of the Pre-Retirement Survivor
Annuity are to be paid to the surviving spouse, such benefits may
be paid pursuant to (i) or (ii) above, or used to purchase an
annuity so as to increase the payments made pursuant to the Pre-
Retirement Survivor Annuity;
(2) In the event the death benefit payable pursuant to Section
6.2 is payable in installments, then, upon the death of the
Participant, the Administrator may direct that the death benefit be
segregated and invested separately, and that the funds accumulated in
the segregated account be used for the payment of the installments.
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(h) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant made on or after January 1,
1985, shall be made in accordance with the following requirements and shall
otherwise comply with Code Section 401(a)(9) and the Regulations
thereunder.
(1) If it is determined, pursuant to Regulations, that the
distribution of a Participant's interest has begun and the Participant
dies before his entire interest has been distributed to him, the
remaining portion of such interest shall be distributed at least as
rapidly as under the method of distribution selected pursuant to
Section 6.5 as of his date of death.
(2) If a Participant dies before he has begun to receive any
distributions of his interest in the Plan or before distributions are
deemed to have begun pursuant to Regulations, then his death benefit
shall be distributed to his Beneficiaries in accordance with the
following rules subject to the selections made in the Adoption
Agreement and Subsections 6.6(h)(3) and 6.6(i) below:
(i) The entire death benefit shall be distributed to the
Participant's Beneficiaries by December 31st of the calendar year
in which the fifth anniversary of the Participant's death occurs;
(ii) The 5-year distribution requirement of (i) above shall not
apply to any portion of the deceased Participant's interest which
is payable to or for the benefit of a designated Beneficiary. In
such event, such portion shall be distributed over the life of
such designated Beneficiary (or over a period not extending
beyond the life expectancy of such designated Beneficiary)
provided such distribution begins not later than December 31st of
the calendar year immediately following the calendar year in
which the Participant died;
(iii) However, in the event the Participant's spouse (determined
as of the date of the Participant's death) is his designated
Beneficiary, the provisions of (ii) above shall apply except that
the requirement that distributions commence within one year of
the Participant's death shall not apply. In lieu thereof,
distributions must commence on or before the later of: (1)
December 31st of the calendar year immediately following the
calendar year in which the Participant died; or (2) December 31st
of the calendar year in which the Participant would have attained
age 70 2. If the surviving spouse dies before distributions to
such spouse begin, then the 5-year distribution requirement of
this Section shall apply as if the spouse was the Participant.
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(3) Notwithstanding subparagraph (2) above, or any selections made in
the Adoption Agreement, if a Participant's death benefits are to be
paid in the form of a Pre-Retirement Survivor Annuity, then
distributions to the Participant's surviving spouse must commence on
or before the later of: (1) December 31st of the calendar year
immediately following the calendar year in which the Participant died;
or (2) December 31st of the calendar year in which the Participant
would have attained age 70 2.
(i) For purposes of Section 6.6(h)(2), the election by a designated
Beneficiary to be excepted from the 5-year distribution requirement (if
permitted in the Adoption Agreement) must be made no later than December
31st of the calendar year following the calendar year of the Participant's
death. Except, however, with respect to a designated Beneficiary who is
the Participant's surviving spouse, the election must be made by the
earlier of: (1) December 31st of the calendar year immediately following
the calendar year in which the Participant died or, if later, the calendar
year in which the Participant would have attained age 70 2; or (2) December
31st of the calendar year which contains the fifth anniversary of the date
of the Participant's death. An election by a designated Beneficiary must
be in writing and shall be irrevocable as of the last day of the election
period stated herein. In the absence of an election by the Participant or
a designated Beneficiary, the 5-year distribution requirement shall apply.
(j) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a life
annuity) shall or shall not be redetermined annually as provided in the
Adoption Agreement and in accordance with Regulations. If the Participant
or the Participant's spouse may elect, pursuant to the Adoption Agreement,
to have life expectancies recalculated, then the election, once made shall
be irrevocable. If no election is made by the time distributions must
commence, then the life expectancy of the Participant and the Participant's
spouse shall not be subject to recalculation. Life expectancy and joint and
last survivor expectancy shall be computed using the return multiples in
Tables V and VI of Regulation Section 1.72-9.
(k) In the event that less than 100% of a Participant's interest in
the Plan is distributed to such Participant's spouse, the portion of the
distribution attributable to the Participant's Voluntary Contribution
Account shall be in the same proportion that the Participant's Voluntary
Contribution Account bears to the Participant's total interest in the Plan.
(l) Subject to the spouse's right of consent afforded under the Plan,
the restrictions imposed by this Section shall not apply if a Participant
has, prior to January 1, 1984, made a written designation to have his death
benefits paid in an alternative method acceptable under Code Section 401(a)
as in effect prior to the enactment of the Tax Equity and Fiscal
Responsibility Act of 1982.
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6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever a distribution is to be
made, or a series of payments are to commence, on or as of an Anniversary Date,
the distribution or series of payments may be made or begun on such date or as
soon thereafter as is practicable, but in no event later than 180 days after the
Anniversary Date. However, unless a Former Participant elects in writing to
defer the receipt of benefits (such election may not result in a death benefit
that is more than incidental), the payment of benefits shall begin not later
than the 60th day after the close of the Plan Year in which the latest of the
following events occurs: (a) the date on which the Participant attains the
earlier of age 65 or the Normal Retirement Age specified herein; (b) the 10th
anniversary of the year in which the Participant commenced participation in the
Plan; or (c) the date the Participant terminates his service with the Employer.
Notwithstanding the foregoing, the failure of a Participant and, if
applicable, the Participant's spouse, to consent to a distribution pursuant to
Section 6.5(d), shall be deemed to be an election to defer the commencement of
payment of any benefit sufficient to satisfy this Section.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable to a
Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored,
first from Forfeitures, if any, and then from an additional Employer
contribution if necessary.
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6.10 PRE-RETIREMENT DISTRIBUTION
For Profit Sharing Plans and 401(k) Profit Sharing Plans, if elected in the
Adoption Agreement, at such time as a Participant shall have attained the age
specified in the Adoption Agreement, the Administrator, at the election of the
Participant, shall direct the distribution of up to the entire amount then
credited to the accounts maintained on behalf of the Participant. However, no
such distribution from the Participant's Account shall occur prior to 100%
Vesting. In the event that the Administrator makes such a distribution, the
Participant shall continue to be eligible to participate in the Plan on the same
basis as any other Employee. Any distribution made pursuant to this Section
shall be made in a manner consistent with Section 6.5, including, but not
limited to, all notice and consent requirements of Code Sections 411(a)(11) and
417 and the Regulations thereunder.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) For Profit Sharing Plans, if elected in the Adoption Agreement,
the Administrator, at the election of the Participant, shall direct the
distribution to any Participant in any one Plan Year up to the lesser of
100% of his Participant's Combined Account valued as of the last
Anniversary Date or other valuation date or the amount necessary to satisfy
the immediate and heavy financial need of the Participant. Any
distribution made pursuant to this Section shall be deemed to be made as of
the first day of the Plan Year or, if later, the valuation date immediately
preceding the date of distribution, and the account from which the
distribution is made shall be reduced accordingly. Withdrawal under this
Section shall be authorized only if the distribution is on account of:
(1) Medical expenses described in Code Section 213(d) incurred by the
Participant, his spouse, or any of his dependents (as defined in Code
Section 152);
(2) The purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Funeral expenses for a member of the Participant's family;
(4) Payment of tuition for the next semester or quarter of post-
secondary education for the Participant, his spouse, children, or
dependents; or
(5) The need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence.
(b) No such distribution shall be made from the Participant's Account
until such Account has become fully Vested.
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(c) Any distribution made pursuant to this Section shall be made in a
manner which is consistent with and satisfies the provisions of Section
6.5, including, but not limited to, all notice and consent requirements of
Code Sections 411(a)(11) and 417 and the Regulations thereunder.
6.12 LIM1TATIONS ON BENEF1TS AND DISTRIBUTIONS
All rights and benefits, including elections, provided to a Participant in
this Plan shall be subject to the rights afforded to any "alternate payee" under
a "qualified domestic relations order." Furthermore, a distribution to an
"alternate payee" shall be permitted if such distribution is authorized by a
"qualified domestic relations order, n even if the affected Participant has not
reached the "earliest retirement age" under the Plan. For the purposes of this
Section, "alternate payee," "qualified domestic relations order" and "earliest
retirement age" shall have the meaning set forth under Code Section 414(p).
6.13 SPECIAL RULE FOR NON-ANNUITY PLANS
If elected in the Adoption Agreement, the following shall apply to a
Participant in a Profit Sharing Plan or 401(k) Profit Sharing Plan and to any
distribution, made on or after the first day of the first plan year beginning
after December 31, 1988, from or under a separate account attributable solely to
accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and maintained on behalf of a participant in a money purchase
pension plan, (including a target benefit plan):
(a) The Participant shall be prohibited from electing benefits in the
form of a life annuity;
(b) Upon the death of the Participant, the Participant's entire
Vested account balances will be paid to his or her surviving spouse, or, if
there is no surviving spouse or the surviving spouse has already consented
to waive his or her benefit, in accordance with Section 6.6, to his
designated Beneficiary; and
(c) Except to the extent otherwise provided in this Section and
Section 6.5(h), the other provisions of Sections-6.2, 6.5 and 6.6 regarding
spousal consent and the forms of distributions shall be inoperative with
respect to this Plan.
This Section shall not apply to any Participant if it is
determined that this Plan is a direct or indirect transferee of a defined
benefit plan or money purchase plan, or a target benefit plan, stock bonus
or profit sharing plan which would otherwise provide for a life annuity
form of payment to the Participant.
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ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of responsibilities:
(a) Consistent with the "funding policy and method" determined by the
Employer to invest, manage, and control the Plan assets subject, however,
to the direction of an Investment Manager if the Employer should appoint
such manager as to all or a portion of the assets of the Plan;
(b) At the direction of the Administrator, to pay benefits required
under the Plan to be paid to Participants, or, in the event of their death,
to their Beneficiaries;
(c) To maintain records of receipts and disbursements and furnish to
the Employer and/or Administrator for each Plan Year a written annual
report per Section 7.7; and
(d) If there shall be more than one Trustee, they shall act by a
majority of their number, but may authorize one or more of them to sign
papers on their behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust Fund to keep the
Trust Fund invested without distinction between principal and income and in
such securities or property, real or personal, wherever situated, as the
Trustee shall deem advisable, including, but not limited to, stocks, common
or preferred, bonds and other evidences of indebtedness or ownership, and
real estate or any interest therein. The Trustee shall at all times in
making investments of the Trust Fund consider, among other factors, the
short and long-term financial needs of the Plan on the basis of information
furnished by the Employer. In making such investments, the Trustee shall
not be restricted to securities or other property of the character
expressly authorized by the applicable law for trust investments; however,
the Trustee shall give due regard to any limitations imposed by the Code or
the Act so that at all times this Plan may qualify as a qualified Plan and
Trust.
(b) The Trustee may employ a bank or trust company pursuant to the
terms of its usual and customary bank agency agreement, under which the
duties of such bank or trust company shall be of a custodial, clerical and
record-keeping nature.
(c) The Trustee may from time to time transfer to a common,
collective, or pooled trust fund maintained by any corporate Trustee
hereunder pursuant to Revenue Ruling 81-100, all or such part of the Trust
Fund as the Trustee may deem advisable, and
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such part or all of the Trust Fund so transferred shall be subject to all
the terms and provisions of the common, collective, or pooled trust fund
which contemplate the commingling for investment purposes of such trust
assets with trust assets of other trusts. The Trustee may withdraw from
such common, collective, or pooled trust fund all or such part of the Trust
Fund as the Trustee may deem advisable.
(d) The Trustee, at the direction of the Administrator and pursuant
to instructions from the individual designated in the Adoption Agreement
for such purpose and subject to the conditions set forth in the Adoption
Agreement, shall ratably apply for, own, and pay all premiums on Contracts
on the lives of the Participants. Any initial or additional Contract
purchased on behalf of a Participant shall have a face amount of not less
than S1,000, the amount set forth in the Adoption Agreement, or the
limitation of the Insurer, whichever is greater. If a life insurance
Contract is to be purchased for a Participant, the aggregate premium for
ordinary life insurance for each Participant must be less than 50% of the
aggregate contributions and Forfeitures allocated to a Participant's
Combined Account. For purposes of this limitation, ordinary life insurance
Contracts are Contracts with both non-decreasing death benefits and non-
increasing premiums. If term insurance or universal life insurance is
purchased with such contributions, the aggregate premium must be 25% or
less of the aggregate contributions and Forfeitures allocated to a
Participant's Combined Account. If both term insurance and ordinary life
insurance are purchased with such contributions, the amount expended for
term insurance plus one-half of the premium for ordinary life insurance may
not in the aggregate exceed 25% of the aggregate Employer contributions and
Forfeitures allocated to a Participant's Combined Account. The Trustee must
distribute the Contracts to the Participant or convert the entire value of
the Contracts at or before retirement into cash or provide for a periodic
income so that no portion of such value may be used to continue life
insurance protection beyond retirement. Notwithstanding the above, the
limitations imposed herein with respect to the purchase of life insurance
shall not apply, in the case of a Profit Sharing Plan, to the portion of a
Participant's Account that has accumulated for at least two (2) Plan Years.
Notwithstanding anything hereinabove to the contrary, amounts credited
to a Participant's Qualified Voluntary Employee Contribution Account
pursuant to Section 4.9, shall not be applied to the purchase of life
insurance contracts.
(e) The Trustee will be the owner of any life insurance Contract
purchased under the terms of this Plan. The Contract must provide that the
proceeds will be payable to the Trustee; however, the Trustee shall be
required to pay over all proceeds of the Contract to the Participant's
designated Beneficiary in accordance with the distribution provisions of
Article VI. A Participant's spouse will be the designated Beneficiary
pursuant to Section 6.2, unless a qualified election has been made in
accordance with Sections 6.5 and 6.6 of the Plan, if applicable. Under no
circumstances shall the Trust retain any part of the proceeds. However,
the Trustee shall not pay the proceeds in a
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method that would violate the requirements of the Retirement Equity Act, as
stated in Article VI of the Plan, or Code Section 401(a)(9) and the
Regulations thereunder.
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under common law,
statutory authority, including the Act, and other provisions of this Plan, shall
have the following powers and authorities to be exercised in the Trustee's sole
discretion:
(a) To purchase, or subscribe for, any securities or other property
and to retain the same. In conjunction with the purchase of securities,
margin accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to purchase,
or otherwise dispose of any securities or other property held by the
Trustee, by private contract or at public auction. No person dealing with
the Trustee shall be bound to see to the application of the purchase money
or to inquire into the validity, expediency, or propriety of any such sale
or other disposition, with or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or without power of
substitution; to exercise any conversion privileges, subscription rights or
other options, and to make any payments incidental thereto; to oppose, or
to consent to, or otherwise participate in, corporate reorganizations or
other changes affecting corporate securities, and to delegate discretionary
powers, and to pay any assessments or charges in connection therewith; and
generally to exercise any of the powers of an owner with respect to stocks,
bonds, securities, or other property;
(d) To cause any securities or other property to be registered in the
Trustee's own name or in the name of one or more of the Trustee's nominees,
and to hold any investments in bearer form, but the books and records of
the Trustee shall at all times show that all such investments are part of
the Trust Fund;
(e) To borrow or raise money for the purposes of the Plan in such
amount, and upon such terms and conditions, as the Trustee shall deem
advisable; and for any sum so borrowed, to issue a promissory note as
Trustee, and to secure the repayment thereof by pledging all, or any part,
of the Trust Fund; and no person lending money to the Trustee shall be
bound to see to the application of the money lent or to inquire into the
validity, expediency, or propriety of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash balances
as the Trustee may, from time to time, deem to be in the best interests of
the Plan, without liability for interest thereon;
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(g) to accept and retain for such time as it may deem advisable any
securities or other property received or acquired by it as Trustee
hereunder, whether or not such securities or other property would normally
be purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all documents
of transfer and conveyance and any and all other instruments that may be
necessary or appropriate to carry out the powers herein granted;
(i) To settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Plan, to commence or defend
suits or legal or administrative proceedings, and to represent the Plan in
all suits and legal and administrative proceedings;
(j) To employ suitable agents and counsel and to pay their reasonable
expenses and compensation, and such agent or counsel may or may not be
agent or counsel for the Employer;
(k) To apply for and procure from the Insurer as an investment of the
Trust Fund such annuity, or other Contracts (on the life of any
Participant) as the Administrator shall deem proper; to exercise, at any
time or from time to time, whatever rights and privileges may be granted
under such annuity, or other Contracts; to collect, receive, and settle for
the proceeds of all such annuity, or other Contracts as and when entitled
to do so under the provisions thereof;
(l) To invest funds of the Trust in time deposits or savings accounts
bearing a reasonable rate of interest in the Trustee's bank;
(m) To invest in Treasury Bills and other forms of United States
government obligations;
(n) To sell, purchase and acquire put or call options if the options
are traded on and purchased through a national securities exchange
registered under the Securities Exchange Act of 1934, as amended, or, if
the options are not traded on a national securities exchange, are
guaranteed by a member firm of the New York Stock Exchange;
(o) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan associations;
(p) To pool all or any of the Trust Fund, from time to time, with
assets belonging to any other qualified employee pension benefit trust
created by the Employer or any Affiliated Employer, and to commingle such
assets and make joint or common investments and carry joint accounts on
behalf of this Plan and such other trust or trusts,
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allocating undivided shares or interests in such investments or accounts or
any pooled assets of the two or more trusts in accordance with their
respective interests;
(q) To do all such acts and exercise all such rights and privileges,
although not specifically mentioned herein, as the Trustee may deem
necessary to carry out the purposes of the Plan.
(r) Directed Investment Account. The powers granted to the Trustee
shall be exercised in the sole fiduciary discretion of the Trustee.
However, if elected in the Adoption Agreement, each Participant may direct
the Trustee to separate and keep separate all or a portion of his interest
in the Plan; and further each Participant is authorized and empowered, in
his sole and absolute discretion, to give directions to the Trustee in such
form as the Trustee may require concerning the investment of the
Participant's Directed Investment Account, which directions must be
followed by the Trustee subject, however, to restrictions on payment of
life insurance premiums. Neither the Trustee nor any other persons
including the Administrator or otherwise shall be under any duty to
question any such direction of the Participant or to review any securities
or other property, real or personal, or to make any suggestions to the
Participant in connection therewith, and the Trustee shall comply as
promptly as practicable with directions given by the Participant hereunder.
Any such direction may be of a continuing nature or otherwise and may be
revoked by the Participant at any time in such form as the Trustee may
require. The Trustee may refuse to comply with any direction from the
Participant in the event the Trustee, in its sole and absolute discretion,
deems such directions improper by virtue of applicable law, and in such
event, the Trustee shall not be responsible or liable for any loss or
expense which may result. Any costs and expenses related to compliance
with the Participant's directions shall be borne by the Participant's
Directed Investment Account.
Notwithstanding anything hereinabove to the contrary, the Trustee
shall not, at any time after December 31, 1981, invest any portion of a
Directed Investment Account in "collectibles" within the meaning of that
term as employed in Code Section 408(m).
7.4 LOANS TO PARTICIPANTS
(a) If specified in the Adoption Agreement, the Trustee (or, if loans
are treated as Directed Investment pursuant to the Adoption Agreement, the
Administrator) may, in the Trustee's (or, if applicable, the
Administrator's) sole discretion, make loans to Participants or
Beneficiaries under the following circumstances: (1) loans shall be made
available to all Participants and Beneficiaries on a reasonably equivalent
basis; (2) loans shall not be made available to Highly Compensated
Employees in an amount greater than the amount made available to other
Participants; (3) loans shall bear a reasonable rate of interest; (4) loans
shall be adequately secured; and (5) shall provide for periodic repayment
over a reasonable period of time.
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(b) Loans shall not be made to any Shareholder-Employee or Owner-
Employee unless an exemption for such loan is obtained pursuant to Act
Section 408 and further provided that such loan would not be subject to tax
pursuant to Code Section 4975.
(c) Loans shall not be granted to any Participant that provide for a
repayment period extending beyond such Participant's Normal Retirement
Date.
(d) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the Participant)
shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest outstanding
balance of loans from the Plan to the Participant during the one year
period ending on the day before the date on which such loan is made,
over the outstanding balance of loans from the Plan to the Participant
on the date on which such loan was made, or
(2) the greater of (A) one-half (2) of the present value of the non-
forfeitable accrued benefit of the Employee under the Plan, or (B), if
permitted pursuant to the Adoption Agreement, $10,000.
For purposes of this limit, all plans of the Employer shall be
considered one plan. Additionally, with respect to any loan made prior to
January 1, 1987, the $50,000 limit specified in (1) above shall be
unreduced.
(e) No Participant loan shall take into account the present value of
such Participant's Qualified Voluntary Employee Contribution Account.
(f) Loans shall provide for level amortization with payments to be
made not less frequently than quarterly over a period not to exceed five
(5) years. However, loans used to acquire any dwelling unit which, within
a reasonable time, is to be used (determined at the time the loan is made)
as a principal residence of the Participant shall provide for periodic
repayment over a reasonable period of time that may exceed five (5) years.
Notwithstanding the foregoing, loans made prior to January 1, 1987 which
are used to acquire, construct, reconstruct or substantially rehabilitate
any dwelling unit which, within a reasonable period of time is to be used
(determined at the time the loan is made) as a principal residence of the
Participant or a member of his family (within the meaning of Code Section
267(c)(4)) may provide for periodic repayment over a reasonable period of
time that may exceed five (5) years. Additionally, loans made prior to
January 1, 1987, may provide for periodic payments which are made less
frequently than quarterly and which do not necessarily result in level
amortization.
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(g) An assignment or pledge of any portion of a Participant's
interest in the Plan and a loan, pledge, or assignment with respect to any
insurance Contract purchased under the Plan, shall be treated as a loan
under this Section.
(h) Any loan made pursuant to this Section after August 18, 1985
where the Vested interest of the Participant is used to secure such loan
shall require the written consent of the Participant's spouse in a manner
consistent with Section 6.5(a) provided the spousal consent requirements of
such Section apply to the Plan. Such written consent must be obtained
within the 90-day period prior to the date the loan is made. Any security
interest held by the Plan by reason of an outstanding loan to the
Participant shall be taken into account in determining the amount of the
death benefit or Pre-Retirement Survivor Annuity. However, no spousal
consent shall be required under this paragraph if the total accrued benefit
subject to the security is not in excess of S3,500.
(i) With regard to any loans granted or renewed on or after the last
day of the first Plan Year beginning after December 31, 1988, a Participant
loan program shall be established which must include, but need not be
limited to, the following:
(1) the identity of the person or positions authorized to administer
the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans offered,
including what constitutes a hardship or financial need if selected in
the Adoption Agreement;
(5) the procedure under the program for determining a reasonable rate
of interest;
(6) the types of collateral which may secure a Participant loan; and
(7) the events constituting default and the steps that will be taken
to preserve plan assets.
Such Participant loan program shall be contained in a separate
written document which, when properly executed, is hereby incorporated by
reference and made a part of this plan. Furthermore, such Participant loan
program may be modified or amended in writing from time to time without the
necessity of amending this Section of the Plan.
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7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from time to
time, in accordance with the terms of the Plan, make payments out of the Trust
Fund. The Trustee shall not be responsible in any way for the application of
such payments.
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as set forth in the
Trustee's fee schedule (if the Trustee has such a schedule) or as agreed upon in
writing by the Employer and the Trustee. AD individual serving as Trustee who
already receives full-time pay from the Employer shall not receive compensation
from this Plan. In addition, the Trustee shall be reimbursed for any reasonable
expenses, including reasonable counsel fees incurred by it as Trustee. Such
compensation and expenses shall be paid from the Trust Fund unless paid or
advanced by the Employer. All taxes of any kind and all kinds whatsoever that
may be levied or assessed under existing or future laws upon, or in respect of,
the Trust Fund or the income thereof, shall be pud from the Trust Fund.
7.7 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the Anniversary Date
or receipt of the Employer's contribution for each Plan Year, the Trustee, or
its agent, shall furnish to the Employer and Administrator a written statement
of account with respect to the Plan Year for which such contribution was made
setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the guns, or losses, realized by the Trust Fund upon sales or
other disposition of the assets;
(c) the increase, or decrease, in the value of the Trust Fund;
(d) all payments and distributions made from the Trust Fund; und
(e) such further information as the Trustee und/or Administrator
deems appropriate. The Employer, forthwith upon its receipt of each such
statement of account, shall acknowledge receipt thereof in writing and
advise the Trustee and/or Administrator of its approval or disapproval
thereof. Failure by the Employer to disapprove any such statement of
account within thirty (30) days after its receipt thereof shall be deemed
un approval thereof. The approval by the Employer of any statement of
account shall be binding as to all matters embraced therein as between the
Employer and the Trustee to the same extent as if the account of the
Trustee had been settled by judgment or decree in an action for a judicial
settlement of its account in a court of competent jurisdiction in which
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the Trustee, the Employer und all persons having or claiming an interest in
the Plan were parties; provided, however, that nothing herein contained
shall deprive the Trustee of its right to have its accounts judicially
settled if the Trustee so desires.
7.8 AUDIT
(a) If an audit of the Plan's records shall be required by the Act
and the regulations thereunder for any Plan Year, the Administrator shall
direct the Trustee to engage on behalf of all Participants an independent
qualified public accountant for that purpose. Such accountant shall, after
an audit of the books und records of the Plan in accordance with generally
accepted auditing standards, within a reasonable period after the close of
the Plan Year, furnish to the Administrator and the Trustee a report of his
audit setting forth his opinion as to whether any statements, schedules or
lists, that are required by Act Section 103 or the Secretary of Labor to be
filed with the Plan's annual report, are presented fairly in conformity
with generally accepted accounting principles applied consistently.
(b) All auditing and accounting fees shall be an expense of and may,
at the election of the Administrator, be paid from the Trust Fund.
(c) If some or all of the information necessary to enable the
Administrator to comply with Act Section 103 is maintained by a bank,
insurance company, or similar institution, regulated and supervised and
subject to periodic examination by a state or federal agency, it shall
transmit and certify the accuracy of that information to the Administrator
as provided in Act Section 103(b) within one hundred twenty (120) days
after the end of the Plan Year or such other date as may be prescribed
under regulations of the Secretary of Labor.
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering to the Employer,
at least thirty (30) days before its effective date, a written notice of
his resignation.
(b) The Employer may remove the Trustee by mailing by registered or
certified mail, addressed to such Trustee at his last known address, at
least thirty (30) days before its effective date, a written notice of his
removal.
(c) Upon the death, resignation, incapacity, or removal of any
Trustee, a successor may be appointed by the Employer; and such successor,
upon accepting such appointment in writing and delivering same to the
Employer, shall, without further act, become vested with all the estate,
rights, powers, discretions, and duties of his predecessor with like
respect as if he were originally named as a Trustee herein. Until
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such a successor is appointed, the remaining Trustee or Trustees shall have
full authority to act under the terms of the Plan.
(d) The Employer may designate one or more successors prior to the
death, resignation, incapacity, or removal of a Trustee. In the event a
successor is so designated by the Employer and accepts such designation,
the successor shall, without further act, become vested with all the
estate, rights, powers, discretions, and duties of his predecessor with the
like effect as if he were originally named as Trustee herein immediately
upon the death, resignation, incapacity, or removal of his predecessor.
(e) Whenever any Trustee hereunder ceases to sene as such, he shall
furnish to the Employer and Administrator a written statement of account
with respect to the portion of the Plan Year during which he served as
Trustee. This statement shall be either (i) included as part of the annual
statement of account for the Plan Year required under Section 7.7 or (ii)
set forth in a special statement. Any such special statement of account
should be rendered to the Employer no later than the due date of the annual
statement of account for the Plan Year. The procedures set forth in
Section 7.7 for the approval by the Employer of annual statements of
account shall apply to any special statement of account rendered hereunder
and approval by the Employer of any such special statement in the manner
provided in Section 7.7 shall have the same effect upon the statement as
the Employer's approval of an annual statement of account. No successor to
the Trustee shall have any duty or responsibility to investigate the acts
or transactions of any predecessor who has rendered all statements of
account required by Section 7.7 and this subparagraph.
7.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, the Trustee at
the direction of the Administrator shall transfer the Vested interest, if any,
of such Participant in his account to another trust forming part of a pension,
profit sharing, or stock bonus plan maintained by such Participant's new
employer and represented by said employer in writing as meeting the requirements
of Code Section 401(a), provided that the trust to which such transfers are made
permits the transfer to be made.
7.11 TRUSTEE INDEMNIFICATION
The Employer agrees to indemnify and save harmless the Trustee against any
and all claims, losses, damages, expenses and liabilities the Trustee may incur
in the exercise and performance of the Trustee's powers and duties hereunder,
unless the same are determined to be due to gross negligence or willful
misconduct.
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7.12 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold "qualifying Employer
securities" and "qualifying Employer real property," as those terms are defined
in the Act. However, no more than 100%, in the case of a Profit Sharing Plan or
401(k) Plan or 10%, in the case of a Money Purchase Plan of the fair market
value of all the assets in the Trust Fund may be invested in "qualifying
Employer securities" and "qualifying Employer real property".
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to amend this Plan
subject to the limitations of this Section. However, any amendment which
affects the rights, duties or responsibilities of the Trustee and
Administrator may only be made with the Trustee's and Administrator's
written consent. Any such amendment shall become effective as provided
therein upon its execution. The Trustee shall not be required to execute
any such amendment unless the amendment affects the duties of the Trustee
hereunder.
(b) 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 Code Sections 415 or 416 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 an
individually designed plan. An Employer that amends the Plan for any other
reason, including a waiver of the minimum funding requirement under Code
Section 412(d), will no longer participate in this Regional Prototype Plan
and will be considered to have an individually designed plan.
(c) The Employer expressly delegates authority to the sponsoring
organization of this Plan, the right to amend this Plan by submitting a
copy of the amendment to each Employer who has adopted this Plan after
first having received a ruling or favorable determination from the Internal
Revenue Service that the Plan as amended qualifies under Code Section
401(a) and the Act.
(d) No amendment to the Plan shall be effective if it authorizes or
permits any part of the Trust Fund (other than such part as is required to
pay taxes and administration expenses) to be used for or diverted to any
purpose other than for the exclusive benefit of the Participants or their
Beneficiaries or estates; or causes any reduction in the amount credited to
the account of any Participant; or causes or permits any portion of the
Trust Fund to revert to or become property of the Employer.
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(e) Except as permitted by Regulations (including Regulation
1.411(d)4), no Plan amendment or transaction having the effect of a Plan
amendment (such as a merger, plan transfer or similar transaction) shall be
effective if it eliminates or reduces any "Section 411(d)(6) protected
benefit" or adds or modifies conditions relating to "Section 411(d)(6)
protected benefits" the result of which is a further restriction on such
benefit unless such protected benefits are preserved with respect to
benefits accrued as of the later of the adoption date or effective date of
the amendment. "Section 411(d)(6) protected benefits" are benefits
described in Code Section 411(d)(6)(A), early retirement benefits and
retirement-type subsidies, and optional forms of benefit.
8.2 TERMINATION
(a) The Employer shall have the right at any time to terminate the
Plan by delivering to the Trustee and Administrator written notice of such
termination. Upon any full or partial termination all amounts credited to
the affected Participants' Combined Accounts shall become 100% Vested and
shall not thereafter be subject to forfeiture, and all unallocated amounts
shall be allocated to the accounts of all Participants in accordance with
the provisions hereof.
(b) Upon the full termination of the Plan, the Employer shall direct
the distribution of the assets to Participants in a manner which is
consistent with and satisfies the provisions of Section 6.5. Distributions
to a Participant shall be made in cash (or in property if permitted in the
Adoption Agreement) or through the purchase of irrevocable nontransferable
deferred commitments from the Insurer. Except as permitted by Regulations,
the termination of the Plan shall not result in the reduction of "Section
411(d)(6) protected benefits" as described in Section 8.1.
8.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets and/or
liabilities may be transferred to any other plan only if the benefits which
would be received by a Participant of this Plan, in the event of a termination
of the plan immediately after such transfer, merger or consolidation, are at
least equal to the benefits the Participant would have received if the Plan had
terminated immediately before the transfer, merger or consolidation and such
merger or consolidation does not otherwise result in the elimination or
reduction of any "Section 411(d)(6) protected benefits" as described in Section
8.1(e).
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ARTICLE IX
MISCELLANEOUS
9.1 EMPLOYER ADOPTIONS
(a) Any organization may become the Employer hereunder by executing
the Adoption Agreement in form satisfactory to the Trustee, and it shall
provide such additional information as the Trustee may require. The consent
of the Trustee to act as such shall be signified by its execution of the
Adoption Agreement.
(b) Except as otherwise provided in this Plan, the affiliation of the
Employer and the participation of its Participants shall be separate and
apart from that of any other employer and its participants hereunder.
9.2 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the Employer
and any Participant or to be a consideration or an inducement for the employment
of any Participant or Employee. Nothing contained in this Plan shall be deemed
to give any Participant or Employee the right to be retained in the service of
the Employer or to interfere with the right of the Employer to discharge any
Participant or Employee at any time regardless of the effect which such
discharge shall have upon him as a Participant of this Plan.
9.3 ALIENATION
(a) Subject to the exceptions provided below, no benefit which shall
be payable to any person (including a Participant or his Beneficiary) shall
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or charge the same
shall be void; and no such benefit shall in any manner be liable for, or
subject to, the debts, contracts, liabilities, engagements, or torts of any
such person, nor shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized except to such
extent as may be required by law.
(b) This provision shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, for any reason, under any provision of
this Plan. At the time a distribution is to be made to or for a
Participant's or Beneficiary's benefit, such proportion of the amount to be
distributed as shall equal such indebtedness shall be paid to the Plan, to
apply against or discharge such indebtedness. Prior to making a payment,
however, the Participant or Beneficiary must be given written notice by the
Administrator that such indebtedness is to be so paid in whole or part from
his Participant's Combined Account. If the Participant or Beneficiary does
not agree that the indebtedness is a valid claim
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against his Vested Participant's Combined Account, he shall be entitled to
a review of the validity of the claim in accordance with procedures
provided in Sections 2.12 and 2.13.
(c) This provision shall not apply to a "qualified domestic relations
order" defined in Code Section 414(p), and those other domestic relations
orders permitted to be so treated by the Administrator under the provisions
of the Retirement Equity Act of 1984. The Administrator shall establish a
written procedure to determine the qualified status of domestic relations
orders and to administer distributions under such qualified orders.
Further, to the extent provided under a "qualified domestic relations
order", a former spouse of a Participant shall be treated as the spouse or
surviving spouse for all purposes under the Plan.
9.4 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to the Act
and the laws of the State or Commonwealth in which the Employer's principal
office is located, other than its laws respecting choice of law, to the extent
not pre-empted by the Act.
9.5 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in another gender
in all cases where they would so apply, and whenever any words are used herein
in the singular or plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.
9.6 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the Trust
and/or Plan established hereunder to which the Trustee or the Administrator may
be a party, and such claim, suit, or proceeding is resolved in favor of the
Trustee or Administrator, they shall be entitled to be reimbursed from the Trust
Fund for any and all costs, attorney's fees, and other expenses pertaining
thereto incurred by them for which they shall have become liable.
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically permitted by
law, it shall be impossible by operation of the Plan or of the Trust, by
termination of either, by power of revocation or amendment, by the
happening of any contingency, by collateral arrangement or by any other
means, for any part of the corpus or income of any Trust Fund maintained
pursuant to the Plan or any funds contributed thereto to be used for, or
diverted to, purposes other than the exclusive benefit of Participants,
Retired Participants, or their Beneficiaries.
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(b) In the event the Employer shall make a contribution under a
mistake of fact pursuant to Section 403(c)(2)(A) of the Act, the Employer
may demand repayment of such contribution at any time within one (1) year
following the time of payment and the Trustees shall return such amount to
the Employer within the one (1) year period. Earnings of the Plan
attributable to the contributions may not be returned to the Employer but
any losses attributable thereto must reduce the amount so returned.
9.8 BONDING
Every Fiduciary, except a bank or an insurance company, unless exempted by
the Act and regulations thereunder, shall be bonded in an amount not less than
10% of the amount of the funds such Fiduciary handles; provided, however, that
the minimum bond shall be $1,000 and the maximum bond, $500,000. The amount of
funds handled shall be determined at the beginning of each Plan Year by the
amount of funds handled by such person, group, or class to be covered and their
predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled during the
then current year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as such
term is used in Act Section 412 (a) (2)), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary the cost of such bonds shall be an expense of and may, at the election
of the Administrator, be paid from the Trust Fund or by the Employer.
9.9 EMPLOYER'S AND TRUST'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors, shall be
responsible for the validity of any Contract issued hereunder or for the failure
on the part of the Insurer to make payments provided by any such Contract, or
for the action of any person which may delay payment or render a Contract null
and void or unenforceable in whole or in part.
9.10 INSURER'S PROTECTIVE CLAUSE
The Insurer who shall issue Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal aspects of
this Plan. The Insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the Insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the Insurer.
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9.11 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative, Beneficiary, or
to any guardian or committee appointed for such Participant or Beneficiary in
accordance with the provisions of this Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Trustee and the Employer.
9.12 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or required
to do or perform any act or matter or thing, it shall be done and performed by a
person duly authorized by its legally constituted authority.
9.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator, (3) the Trustee, and (4) any Investment Manager appointed
hereunder. The named Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them under the Plan.
In general, the Employer shall have the sole responsibility for making the
contributions provided for under Section 4.1; and shall have the sole authority
to appoint and remove the Trustee and the Administrator; to formulate the Plan's
"funding policy and method"; and to amend the elective provisions of the
Adoption Agreement or terminate, in whole or in part, the Plan. The
Administrator shall have the sole responsibility for the administration of the
Plan, which responsibility is specifically described in the Plan. The Trustee
shall have the sole responsibility of management of the assets held under the
Trust, except those assets, the management of which have been assigned to an
Investment Manager, who shall be solely responsible for the management of the
assets assigned to it, all as specifically provided in the Plan. Each named
Fiduciary warrants that any directions given, information furnished, or action
taken by it shall be in accordance with the provisions of the Plan, authorizing
or providing for such direction, information or action. Furthermore, each named
Fiduciary may rely upon any such direction, information or action of another
named Fiduciary as being proper under the Plan, and is not required under the
Plan to inquire into the propriety of any such direction, information or action.
It is intended under the Plan that each named Fiduciary shall be responsible for
the proper exercise of its own powers, duties, responsibilities and obligations
under the Plan. No named Fiduciary shall guarantee the Trust Fund in any manner
against investment loss or depreciation in asset value. Any person or group may
serve in more than one Fiduciary capacity.
9.14 HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
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9.15 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary, if, pursuant to a
timely application filed by or in behalf of the Plan, the Commissioner of
Internal Revenue Service or his delegate should determine that the Plan
does not initially qualify as a tax-exempt plan under Code Sections 401 and
501, and such determination is not contested, or if contested, is finally
upheld, then if the Plan is a new plan, it shall be void ab initio and all
amounts contributed to the Plan, by the Employer, less expenses paid, shall
be returned within one year and the Plan shall terminate, and the Trustee
shall be discharged from all further obligations. If the disqualification
relates to an amended plan, then the Plan shall operate as if it had not
been amended and restated. In the event that a contribution is made to the
Plan conditioned upon qualification of the Plan as amended, such
contribution must be returned to Employer upon the determination that the
amended Plan fails to qualify under the Code.
(b) Except as specifically stated in the Plan, any contribution by the
Employer to the Trust Fund is conditioned upon the deductibility of the
contribution by the Employer under the Code and, to the extent any such
deduction is disallowed, the Employer may within one (1) year following a
final determination of the disallowance, whether by agreement with the
Internal Revenue Service or by final decision of a court of competent
jurisdiction, demand repayment of such disallowed contribution and the
Trustee shall return such contribution within one (1) year following the
disallowance. Earnings of the Plan attributable to the excess contribution
may not be returned to the Employer, but any losses attributable thereto
must reduce the amount so returned.
9.16 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a uniform,
nondiscriminatory manner.
9.17 PAYMENT OF BENEFITS
Benefits under this Plan shall be paid, subject to Section 6.10 and Section
6.11 only upon death, Total and Permanent Disability, normal or early
retirement, termination of employment, or upon Plan Termination.
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER
Notwithstanding anything herein to the contrary, with the consent of the
Employer and Trustee, any Affiliated Employer may adopt this Plan and all of the
provisions hereof, and
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participate herein and be known as a Participating Employer, by a properly
executed document evidencing said intent and will of such Participating
Employer.
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each Participating Employer shall be required to select the same
Adoption Agreement provisions as those selected by the Employer other than
the Plan Year, the Fiscal Year, and such other items that must, by
necessity, vary among employers.
(b) Each such Participating Employer shall be required to use the same
Trustee as provided in this Plan.
(c) 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 sc all increments thereof.
(d) 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 Combined Account
as well as his accumulated service time with the transferor or predecessor,
and his length of participation in the Plan, shall continue to his credit.
(e) Any expenses of the Plan which are to be paid by the Employer or
borne by the Trust Fund shall be paid by each Participating Employer in the
same proportion that the total amount standing to the credit of all
Participants employed by such Employer bears to the total standing to the
credit of all Participants.
10.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a part of this Plan;
provided, however, that with respect to all of its relations with the Trustee
and Administrator for the purpose of this Plan, each Participating Employer
shall be deemed to have designated irrevocably the Employer as its agent. Unless
the context of the Plan clearly indicates the contrary, the word "Employer"
shall be deemed to include each Participating Employer as related to its
adoption of the Plan.
10.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between Participating
Employers, and in the event of any such transfer, the Employee involved shall
carry with him his accumulated service and eligibility. No such transfer shall
affect a termination of employment hereunder, and the Participating Employer to
which the Employee is transferred shall thereupon
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become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred.
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES
Any contribution or Forfeiture subject to allocation during each Plan Year
shall be allocated among all Participants of all Participating Employers in
accordance with the provisions of this Plan. On the basis of the information
furnished by the Administrator, the Trustee shall keep separate books and
records concerning the affairs of each Participating Employer hereunder and as
to the accounts and credits of the Employees of each Participating Employer. The
Trustee may, but need not, register contracts so as to evidence that a
particular Participating Employer is the interested Employer hereunder, but in
the event of an Employee transfer from one Participating Employer to another,
the employing Employer shall immediately notify the Trustee thereof.
10.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there shall be a
Participating Employer hereunder shall only be by the written action of each and
every Participating Employer and with the consent of the Trustee where such
consent is necessary in accordance with the terms of this Plan.
10.7 DISCONTINUANCE OF PARTICIPATION
Except in the case of a Standardized Plan, any Participating Employer shall
be permitted to discontinue or revoke its participation in the Plan at any time.
At the time of any such discontinuance or revocation, satisfactory evidence
thereof and of any applicable conditions imposed shall be delivered to the
Trustee. The Trustee shall thereafter transfer, deliver and assign Contracts and
other Trust Fund assets allocable to the Participants of such Participating
Employer to such new Trustee as shall have been designated by such Participating
Employer, in the event that it has established a separate pension plan for its
Employees provided, however, that no such transfer shall be made if the result
is the elimination or reduction of any "Section 411(d)(6) protected benefits" in
accordance with Section 8.1(e). If no successor is designated, the Trustee shall
retain such assets for the Employees of said Participating Employer pursuant to
the provisions of Article VII hereof. In no such event shall any part of the
corpus or income of the Trust Fund as it relates to such Participating Employer
be used for or diverted for purposes other than for the exclusive benefit of the
Employees of such Participating Employer.
10.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all necessary rules
or regulations, binding upon all Participating Employers and all Participants,
to effectuate the purpose of this Article.
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10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE
If any Participating Employer is prevented in whole or in part from making
a contribution which it would otherwise have made under the Plan by reason of
having no current or accumulated earnings or profits, or because such earnings
or profits are less than the contribution which it would otherwise have made,
then, pursuant to Code Section 404(a)(3)(B), so much of the contribution which
such Participating Employer was so prevented from making may be made, for the
benefit of the Participating Employees of such Participating Employer, by other
Participating Employers who are members of the same affiliated group within the
meaning of Code Section 1504 to the extent of their current or accumulated
earnings or profits, except that such contribution by each such other
Participating Employer shall be limited to the proportion of its total current
and accumulated earnings or profits remaining after adjustment for its
contribution to the Plan made without regard to this paragraph which the total
prevented contribution bears to the total current and accumulated earnings or
profits of all the Participating Employers remaining after adjustment for all
contributions made to the Plan without regard to this paragraph.
A Participating Employer on behalf of whose employees a contribution is
made under this paragraph shall not be required to reimburse the contributing
Participating Employers.
ARTICLE XI
CASH OR DEFERRED PROVISIONS
Notwithstanding any provisions in the Plan to the contrary the provisions
of this Article shall apply with respect to any 401Qc) Profit Sharing Plan.
11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of all
Participants made pursuant to Section 11.2(a), which amount shall be deemed
an Employer's Elective Contribution, plus
(b) If specified in E3 of the Adoption Agreement, a matching
contribution equal to the percentage specified in the Adoption Agreement of
the Deferred Compensation of each Participant eligible to share in the
allocations of the matching contribution, which amount shall be deemed an
Employer's Non-Elective or Elective Contribution as selected in the
Adoption Agreement, plus
(c) If specified in E4 of the Adoption Agreement, a discretionary
amount, if any, which shall be deemed an Employer's Non-Elective
Contribution, plus
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(d) If specified in E5 of the Adoption Agreement, a Qualified Non-
Elective Contribution.
(e) Notwithstanding the foregoing, however, the Employer's
contributions for any Fiscal Year shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code
Section 404. All contributions by the Employer shall be made in cash or in
such property as is acceptable to the Trustee.
(f) Except, however, to the extent necessary to provide the top heavy
minimum allocations, the Employer shall make a contribution even if it
exceeds current or accumulated Net Profit or the amount which is deductible
under Code Section 404.
(g) Employer Elective Contributions accumulated through payroll
deductions shall be paid to the Trustee as of the earliest date on which
such contributions can reasonably be segregated from the Employer's general
assets, but in any event within ninety (90) days from the date on which
such amounts would otherwise have been payable to the Participant in cash.
The provisions of Department of Labor regulations 2510.3-102 are
incorporated herein by reference. Furthermore, any additional Employer
contributions which are allocable to the Participant's Elective Account for
a Plan Year shall be paid to the Plan no later than the twelve-month period
immediately following the close of such Plan Year.
11.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) If selected in the Adoption Agreement, each Participant may elect
to defer his Compensation which would have been received in the Plan Year,
but for the deferral election, subject to the limitations of this Section
and the Adoption Agreement. A deferral election (or modification of an
earlier election) may not be made with respect to Compensation which is
currently available on or before the date the Participant executed such
election, or if later, the latest of the date the Employer adopts this cash
or deferred arrangement, or the date such arrangement first became
effective. Any elections made pursuant to this Section shall become
effective as soon as is administratively feasible.
Additionally, if elected in the Adoption Agreement, each Participant
may elect to defer and have allocated for a Plan Year all or a portion of
any cash bonus attributable to services performed by the Participant for
the Employer during such Plan Year and which would have been received by
the Participant on or before two and one-half months following the end of
the Plan Year but for the deferral. A deferral election may not be made
with respect to cash bonuses which are currently available on or before the
date the Participant executed such election. Notwithstanding the foregoing,
cash bonuses attributable to services performed by the Participant during a
Plan Year but which are to be paid to the Participant later than two and
one-half months after the close of such Plan
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Year will be subjected to whatever deferral election is in effect at the
time such cash bonus would have otherwise been received.
The amount by which Compensation and/or cash bonuses are reduced shall
be that Participant's Deferred Compensation and be treated as an Employer
Elective Contribution and allocated to that Participant's Elective Account.
Once made, a Participant's election to reduce Compensation shall
remain in effect until modified or terminated. Modifications may be made as
specified in the Adoption Agreement, and terminations may be made at any
time. Any modification or termination of an election will become effective
as soon as is administratively feasible.
(b) The balance in each Participant's Elective Account shall be fully
Vested at all times and shall not be subject to Forfeiture for any reason.
(c) Amounts held in the Participant's Elective Account and Qualified
Non-Elective Account may be distributable as permitted under the Plan, but
in no event prior to the earlier of:
(1) a Participant's termination of employment, Total and Permanent
Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the proven financial hardship of a Participant, subject to the
limitations of Section 11.8;
(4) the termination of the Plan without the existence at the time of
Plan termination of another defined contribution plan (other than an
employee stock ownership plan as defined in Code Section 4975(e)(7))
or the establishment of a successor defined contribution plan (other
than an employee stock ownership plan as defined in Code Section
4975(e)(7)) by the Employer or an Affiliated Employer within the
period ending twelve months after distribution of all assets from the
Plan maintained by the Employer;
(5) the date of the sale by the Employer to an entity that is not an
Affiliated Employer of substantially all of the assets (within the
meaning of Code Section 409(d)(2)) with respect to a Participant who
continues employment with the corporation acquiring such assets; or
(6) the date of the sale by the Employer or an Affiliated Employer of
its interest in a subsidiary (within the meaning of Code Section
409(d)(3)) to an
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entity that is not an Affiliated Employer with respect to a
Participant who continues employment with such subsidiary.
(d) In any Plan Year beginning after December 31, 1987, a
Participant's Deferred Compensation made under this Plan and all other
plans, contracts or arrangements of the Employer maintaining this Plan
shall not exceed the limitation imposed by Code Section 402(g), as in
effect for the calendar year in which such Plan Year began. This dollar
limitation shall be adjusted annually pursuant to the method provided in
Code Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship distribution
pursuant to Regulation 1.401(k)-l(d)(2)(iii)(B) from any other plan
maintained by the Employer or from his Participant's Elective Account
pursuant to Section 11.8, then such Participant shall not be permitted to
elect to have Deferred Compensation contributed to the Plan on his behalf
for a period of twelve (12) months following the receipt of the
distribution. Furthermore, the dollar limitation under Code Section 402(g)
shall be reduced, with respect to the Participant's taxable year following
the taxable year in which the hardship distribution was made, by the amount
of such Participant's Deferred Compensation, if any, made pursuant to this
Plan (and any other plan maintained by the Employer) for the taxable year
of the hardship distribution.
(f) If a Participant's Deferred Compensation under this Plan together
with any elective deferrals (as defined in Regulation 1.402(g)-l(b)) under
another qualified cash or deferred arrangement (as defined in Code Section
401 O), a simplified employee pension (as defined in Code Section 408(k)),
a salary reduction arrangement (within the meaning of Code Section
3121(a)(5)(D)), a deferred compensation plan under Code Section 457, or a
trust described in Code Section 501(c)(18) cumulatively exceed the
limitation imposed by Code Section 402(g) (as adjusted annually in
accordance with the method provided in Code Section 415(d) pursuant to
Regulations) for such Participant's taxable year, the Participant may, not
later than March 1st following the close of his taxable year, notify the
Administrator in writing of such excess and request that his Deferred
Compensation under this Plan be reduced by an amount specified by the
Participant. In such event, the Administrator shall direct the Trustee to
distribute such excess amount (and any Income allocable to such excess
amount) to the Participant not later than the first April l5th following
the close of the Participant's taxable year. Distributions in accordance
with this paragraph may be made for any taxable year of the Participant
which begins after December 31, 1986. Any distribution of less than the
entire amount of Excess Deferred Compensation and Income shall be treated
as a pro rata distribution of Excess Deferred Compensation and Income. The
amount distributed shall not exceed the Participant's Deferred Compensation
under-the Plan for the taxable year. Any distribution on or before the
last day of the Participant's taxable year must satisfy each of the
following conditions:
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(1) the Participant shall designate the distribution as Excess
Deferred Compensation;
(2) the distribution must be made after the date on which the Plan
received the Excess Deferred Compensation; and
(3) the Plan must designate the distribution as a distribution of
Excess Deferred Compensation.
For the purpose of this Section, "Income" means the amount of
income or loss allocable to a Participant's Excess Deferred Compensation
and shall be equal to the sum of the allocable gain or loss for the taxable
year of the Participant and the allocable gain or loss for the period
between the end of the taxable year of the Participant and the date of
distribution ("gap period"). The income or loss allocable to each such
period is calculated separately and is determined by multiplying the income
or loss allocable to the Participant's Deferred Compensation for the
respective period by a fraction. The numerator of the fraction is the
Participant's Excess Deferred Compensation for the taxable year of the
Participant. The denominator is the balance, as of the last day of the
respective period, of the Participant's Elective Account that is
attributable to the Participant's Deferred Compensation reduced by the gain
allocable to such total amount for the respective period and increased by
the loss allocable to such total amount for the respective period.
In lieu of the "fractional method" described above, a "safe
harbor method" may be used to calculate the allocable income or loss for
the "gap period". Under such "safe harbor method", allocable income or
loss for the "gap period" shall be deemed to equal ten percent (10%) of the
income or loss allocable to a Participant's Excess Deferred Compensation
for the taxable year of the Participant multiplied by the number of
calendar months in the "gap period". For purposes of determining the
number of calendar months in the "gap period", a distribution occurring on
or before the fifteenth day of the month shall be treated as having been
made on the last day of the preceding month and a distribution occurring
after such fifteenth day shall be treated as having been made on the first
day of the next subsequent month.
Income or loss allocable to any distribution of Excess Deferred
Compensation on or before the last day of the taxable year of the
Participant shall be calculated from the first day of the taxable year of
the Participant to the date on which the distribution is made pursuant to
either the "fractional method" or the "safe harbor method".
Notwithstanding the above, for the 1987 calendar year, Income
during the "gap period" shall not be taken into account.
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(g) Notwithstanding the above, a Participant's Excess Deferred
Compensation shall be reduced, but not below zero, by any distribution
and/or recharacterization of Excess Contributions pursuant to Section
ll.5(a) for the Plan Year beginning with or within the taxable year of the
Participant.
(h) At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair market value of
the Participant's Elective Account shall be used to provide benefits to the
Participant or his Beneficiary.
(i) Employer Elective Contributions made pursuant to this Section may
be segregated into a separate account for each Participant in a federally
insured savings account, certificate of deposit in a bank or savings and
loan association, money market certificate, or other short-term debt
security acceptable to the Trustee until such time as the allocations
pursuant to Section 11.3 have been made.
(j) The Employer and the Administrator shall adopt a procedure
necessary to implement the salary reduction elections provided for herein.
11.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account in the
name of each Participant to which the Administrator shall credit as of each
Anniversary Date, or other valuation date, all amounts allocated to each
such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all information
required by the Administrator to make a proper allocation of the Employer's
contributions for each Plan Year. Within a reasonable period of time after
the date of receipt by the Administrator of such information, the
Administrator shall allocate such contribution as follows:
(1) With respect to the Employer's Elective Contribution made
pursuant to Section 11.1(a), to each Participant's Elective Account in
an amount equal to each such Participant's Deferred Compensation for
the year.
(2) With respect to the Employer's Matching Contribution made
pursuant to Section 11.1 (b), to each Participant's Account, or
Participant's Elective Account as selected in E3 of the Adoption
Agreement, in accordance with Section 11.1(b).
Except, however, a Participant who is not credited with a Year of
Service during any Plan Year shall or shall not share in the
Employer's Matching Contribution for that year as provided in E3 of
the Adoption Agreement. However, for Plan Years beginning after 1989,
if this is a standardized Plan, a Participant shall share in the
Employer's Matching Contribution regardless of Hours of Service.
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(3) With respect to the Employer's Non-Elective Contribution made
pursuant to Section 11.1(c), to each Participant's Account in
accordance with the provisions of Sections 4.3(b)(2) or 4.3(b)(3),
whichever is applicable, 4.3(k) and 4.3(1).
(4) With respect to the Employer's Qualified Non-Elective
Contribution made pursuant to Section 11.1(d), to each Participant's
Qualified Non-Elective Contribution Account in the same proportion
that each such Participant's Compensation for the year bears to the
total Compensation of all Participants for such year. However, for any
Plan Year beginning prior to January 1, 1990, and if elected in the
non-standardized Adoption Agreement for any Plan Year beginning on or
after January 1, 1990, a Participant who is not credited with a Year
of Service during any Plan Year shall not share in the Employer's
Qualified Non-Elective Contribution for that-year, unless required
pursuant to Section 4.3(h). In addition, the provisions of Sections
4.3(k) and 4.3(1) shall apply with respect to the allocation of the
Employer's Qualified Non-Elective contribution.
(c) Notwithstanding anything in the Plan to the contrary, for Plan
Years beginning after December 31, 1988, in determining whether a Non-Key
Employee has received the required minimum allocation pursuant to Section
4.3(f) such Non-Key Employee's Deferred Compensation and matching
contributions used to satisfy the "Actual Deferral Percentage" test
pursuant to Section 11.4(a) or the "Actual Contribution Percentage" test of
Section 11.6(a) shall not be taken into account.
(d) Notwithstanding anything herein to the contrary, Participants who
terminated employment during the Plan Year shall share in the salary
reduction contributions made by the Employer for the year of termination
without regard to the Hours of Service credited.
(e) Notwithstanding anything herein to the contrary (other than
Sections 11.3(d)and 11.3(g)), any Participant who terminated employment
during the Plan Year for reasons other than death, Total and Permanent
Disability, or retirement shall or shall not share in the allocations of
the Employer's Matching Contribution made pursuant to Section 11.1(b), the
Employer's Non-Elective Contributions made pursuant to Section 11.1(c), the
Employer's Qualified Non-Elective Contribution made pursuant to Section
11.1(d), and Forfeitures as provided in the Adoption Agreement.
Notwithstanding the foregoing, for Plan Years beginning after 1989, if this
is a standardized Plan, any such terminated Participant shall share in such
allocations provided the terminated Participant completed more than 500
Hours of Service.
(f) Notwithstanding anything herein to the contrary, Participants
terminating for reasons of death, Total and Permanent Disability, or
retirement shall share in the allocation of the Employer's Matching
Contribution made pursuant to Section 11.1(b), the Employer's Non-Elective
Contributions made pursuant to Section 11.1(c), the Employer's
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Qualified Non-Elective Contribution made pursuant to Section 11.1(d), and
Forfeitures as provided in this Section regardless of whether they
completed a Year of Service during the Plan Year.
(g) Notwithstanding any election in the Adoption Agreement to the
contrary, if this is a non-standardized Plan that would otherwise fail to
meet the requirements of Code Sections 401(a)(26),410(b)(1),
or410(b)(2)(A)(i) and the Regulations thereunder because Employer matching
Contributions made pursuant to Section 11.1(b), Employer Non-Elective
Contributions made pursuant to Section 11.1(c) or Employer Qualified Non-
Elective Contributions made pursuant to Section 11.1(d) have not been
allocated to a sufficient number or percentage of Participants for a Plan
Year, then the following rules shall apply:
(1) The group of Participants eligible to share in the respective
contributions 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 be come 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.
(2) If after application of paragraph (1) above, the applicable test
is still not satisfied, then the group of Participants eligible to
share 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.
11.4 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year beginning after
December 31, 1986, the annual allocation derived from Employer Elective
Contributions and Qualified Non-Elective Contributions to a Participant's
Elective Account and Qualified Non-Elective Account shall satisfy one of
the following tests:
(1) The "Actual Deferral Percentage" for the Highly Compensated
Participant group shall not be more than the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant group multiplied
by 1.25, or
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(2) The excess of the "Actual Deferral Percentage" for the Highly
Compensated Participant group over the "Actual Deferral Percentage"
for the Non-Highly Compensated Participant group shall not be more
than two percentage points. Additionally, the "Actual Deferral
Percentage" for the Highly Compensated Participant group shall not
exceed the "Actual Deferral Percentage" for the Non-Highly Compensated
Participant group multiplied by 2. The provisions of Code Section
401(k)(3) and Regulation 1.401(k)-l(b) are incorporated herein by
reference.
However, for Plan Years beginning after December 31, 1988, to prevent
the multiple use of the alternative method described in (2) above and
Code Section 401(m)(9)(A), any Highly Compensated Participant eligible
to make elective deferrals pursuant to Section 11.2 and to make
Employee contributions or to receive matching contributions under this
Plan or under any other plan maintained by the Employer or an
Affiliated Employer shall have his actual contribution ratio reduced
pursuant to Regulation 1.401(m)-2, the provisions of which are
incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant group and Non-
Highly Compensated Participant group for a Plan Year, the average of the
ratios, calculated separately for each Participant in such group, of the
amount of Employer Elective Contributions and Qualified Non-Elective
Contributions allocated to each Participant's Elective Account and
Qualified Non-Elective Account for such Plan Year, to such Participant's
"414(s) Compensation" for such Plan Year. The actual deferral ratio for
each Participant and the "Actual Deferral Percentage" for each group, for
Plan Years beginning after December 31, 1988, shall be calculated to the
nearest one--hundredth of one percent of the Participant's "414(s)
Compensation" . Employer Elective Contributions allocated to each Non-
Highly Compensated Participant's Elective Account shall be reduced by
Excess Deferred Compensation to the extent such excess amounts are made
under this Plan or any other plan maintained by the Employer.
(c) For the purpose of determining the actual deferral ratio of a Highly
Compensated Participant who is subject to the Family Member aggregation rules of
Code Section 414(q)(6) because such Participant is either a "five percent owner"
of the Employer or one of the ten (10) Highly Compensated Employees paid the
greatest "415 Compensation" during the year, the following shall apply:
(1) The combined actual deferral ratio for the family group (which
shall be treated as one Highly Compensated Participant) shall be the
greater of: (i) the ratio determined by aggregating Employer Elective
Contributions and "414(s) Compensation" of all eligible Family Members
who are Highly Compensated Participants without regard to family
aggregation; and (ii) the ratio determined by
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aggregating Employer Elective Contributions and "414(s) Compensation"
of all eligible Family Members (including Highly Compensated
Participants). However, in applying the $200,000 limit to "414(s)
Compensation" for Plan Years beginning after December 31, 1988, Family
Members shall include only the affected Employee's spouse and any
lineal descendants who have not attained age 19 before the close of
the Plan Year.
(2) The Employer Elective Contributions and "414(s) Compensation" of
all Family Members shall be disregarded for purposes of determining
the "Actual Deferral Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into account in paragraph
(1) above.
(3) If a Participant is required to be aggregated as a member of more
than one family group in a plan, all Participants who are members of
those family groups that include the Participant are aggregated as one
family group in accordance with paragraphs (1) and (2) above.
(d) For the purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k), if two or more plans which include cash or deferred
arrangements are considered one plan for the purposes of Code Section
401(a)(4) or 410(b) (other than Code Section 401(b)(2)(A)(ii) as in effect
for Plan Years beginning after December 31, 1988), the cash or deferred
arrangements included in such plans shall be treated as one arrangement.
In addition, two or more cash or deferred arrangements may be considered as
a single arrangement for purposes of determining whether or not such
arrangements satisfy Code Sections 401(a)(4), 410(b) and 401(k). In such a
case, the cash or deferred arrangements included in such plans and the
plans including such arrangements shall be treated as one arrangement and
as one plan for purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k). For plan years beginning after December 31, 1989, plans
may be aggregated under this paragraph (e) only if they have the same plan
year.
Notwithstanding the above, for Plan Years beginning after December 31,
1988, an employee stock ownership plan described in Code Section 4975(e)(7)
may not be combined with this Plan for purposes of determining whether the
employee stock ownership plan or this Plan satisfies this Section and Code
Sections 401(a)(4), 410(b) and 401(k).
(e) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two (2) or more cash or deferred
arrangements (other than a cash or deferred arrangement which is part of an
employee stock ownership plan as defined in Code Section 4975(e)(7) for
Plan Years beginning after December 31, 1988) of the Employer or an
Affiliated Employer, all such cash or deferred arrangements shall be
treated as one cash or deferred arrangement for the purpose of determining
the actual deferral ratio with respect to such Highly Compensated
Participant. However, for Plan
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Years beginning after December 31, 1988, if the cash or deferred
arrangements have different Plan Years, this paragraph shall be applied by
treating all cash or deferred arrangements ending with or within the same
calendar year as a single arrangement.
11.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's Elective
Contributions and Qualified Non-Elective Contributions do not satisfy one of the
tests set forth in Section 11.4, for Plan Years beginning after December 31,
1986, the Administrator shall adjust Excess Contributions pursuant to the
options set forth below:
(a) On or before the fifteenth day of the third month following the
end of each Plan Year, the Highly Compensated Participant having the
highest actual deferral ratio shall have his portion of Excess
Contributions distributed to him and/or at his election recharacterized as
a voluntary Employee contribution pursuant to Section 4.7 until one of the
tests set forth in Section 11.4 is satisfied, or until his actual deferral
ratio equals the actual deferral ratio of the Highly Compensated
Participant having the second highest actual deferral ratio. This process
shall continue under one of the tests set forth in Section 11.4 is
satisfied. For each Highly Compensated Participant, the amount of Excess
Contributions is equal to the Elective Contributions and Qualified Non-
Elective Contributions made on behalf of such Highly Compensated
Participant (determined prior to the application of this paragraph) minus
the amount determined by multiplying the Highly Compensated Participant's
actual deferral ratio (determined after application of this paragraph) by
his "414(s) Compensation". However, in determining the amount of Excess
Contributions to be distributed and/or recharacterized with respect to an
affected Highly Compensated Participant as determined herein, such amount
shall be reduced by any Excess Deferred Compensation previously distributed
to such affected Highly Compensated Participant for his taxable year ending
with or within such Plan Year. Any distribution and/or recharacterization
of Excess Contributions shall be made in accordance with the following:
(1) With respect to the distribution of Excess Contributions pursuant
to (a) above, such distribution:
(i) may be postponed but not later than the close of the Plan
Year following the Plan Year to which they are allocable;
(ii) shall be made first from unmatched Deferred Compensation
and, thereafter, simultaneously from Deferred Compensation which
is matched and matching contributions which relate to such
Deferred Compensation. However, any such matching contributions
which are not Vested shall be forfeited in lieu of being
distributed;
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(iii) shall be made from Qualified Non-Elective Contributions
only to the extent that Excess Contributions exceed the balance
in the Participant's Elective Account attributable to Deferred
Compensation and Employer matching contributions.
(iv) shall be adjusted for Income; and
(v) shall be designated by the Employer as a distribution of
Excess Contributions (and Income).
(2) With respect to the recharacterization of Excess Contributions
pursuant to (a) above, such recharacterized amounts:
(i) shall be deemed to have occurred on the date on which the
last of those Highly Compensated Participants with Excess
Contributions to be recharacterized is notified of the
recharacterization and the tax consequences of such
recharacterization;
(ii) for Plan Years ending on or before August 8,1988, may be
postponed but not later than October 24, 1988;
(iii) shall not exceed the amount of Deferred Compensation on
behalf of any Highly Compensated Participant for any Plan Year;
(iv) shall be treated as voluntary Employee contributions for
purposes of Code Section 401(a)(4) and Regulation 1.401Qc)-1(b).
However, for purposes of Sections 2.2 and 4.3(f), recharacterized
Excess Contributions continue to be treated as Employer
contributions that are Deferred Compensation. For Plan Years
beginning after December 31, 1988, Excess Contributions
recharacterized as voluntary Employee contributions shall
continue to be nonforfeitable and subject to the same
distribution rules provided for in Section 11.2(c);
(v) which relate to Plan Years ending on or before October 24,
1988, may be treated as either Employer contributions or
voluntary Employee contributions and therefore shall not be
subject to the restrictions of Section 11.2(c);
(vi) are not permitted if the amount recharacterized plus
voluntary Employee contributions actually made by such Highly
Compensated Participant, exceed the maximum amount of voluntary
Employee contributions (determined prior to application of
Section 11.6) that such
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Highly Compensated Participant is permitted to make under the
Plan in the absence of recharacterization;
(vii) shall be adjusted for Income.
(3) Any distribution and/or recharacterization of less than the
entire amount of Excess Contributions shall be treated as a pro rata
distribution and/or recharacterization of Excess Contributions and
Income.
(4) The determination and correction of Excess Contributions of a
Highly Compensated Participant whose actual deferral ratio is
determined under the family aggregation rules shall be accomplished as
follows:
(i) If the actual deferral ratio for the Highly Compensated
Participant is determined in accordance with Section
11.4(c)(1)(ii), then the actual deferral ratio shall be reduced
as required herein and the Excess Contributions for the family
unit shall be allocated among the Family Members in proportion to
the Elective Contributions of each Family Member that were
combined to determine the group actual deferral ratio.
(ii) If the actual deferral ratio for the Highly Compensated
Participant is determined under Section 11.4(c)(1)(i), then the
actual deferral ratio shall first be reduced as required herein,
but not below the actual deferral ratio of the group of Family
Members who are not Highly Compensated Participants without
regard to family aggregation. The Excess Contributions resulting
from this initial reduction shall be allocated (in proportion to
Elective Contributions) among the Highly Compensated Participants
whose Elective Contributions were combined to determine the
actual deferral ratio. If further reduction is still required,
then Excess Contributions resulting from this further reduction
shall be determined by taking into account the contributions of
all Family Members and shall be allocated among them in
proportion to their respective Elective Contributions.
(b) Within twelve (12) months after the end of the Plan Year, the
Employer shall make a special Qualified Non-Elective Contribution on behalf
of Non-Highly Compensated Participants in an amount sufficient to satisfy
one of the tests set forth in Section 11.4(a). Such contribution shall be
allocated to the Participant's Qualified Non-Elective Account of each Non-
Highly Compensated Participant in the same proportion that each Non-Highly
Compensated Participant's Compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants.
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(c) For purposes of this Section, "Income" means the income or loss
allocable to Excess Contributions which shall equal the sum of the
allocable gain or loss for the Plan Year and the allocable gain or loss for
the period between the end of the Plan Year and the date of distribution
("gap period"). The income or loss allocable to Excess Contributions for
the Plan Year and the "gap period" is calculated separately and is
determined by multiplying the income or loss for the Plan Year or the "gap
period" by a fraction. The numerator of the fraction is the Excess
Contributions for the Plan Year. The denominator of the fraction is the
total of the Participant's Elective Account attributable to Elective
Contributions and the Participant's Qualified Non-Elective Account as of
the end of the Plan Year or the "gap period", reduced by the gain allocable
to such total amount for the Plan Year or the "gap period" and increased by
the loss allocable to such total amount for the Plan Year or the "gap
period".
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable Income for the "gap period".
Under such "safe harbor method", allocable Income for the "gap period"
shall be deemed to equal ten percent (10So) of the Income allocable to
Excess Contributions for the Plan Year of the Participant multiplied by the
number of calendar months in the "gap period". For purposes of determining
the number of calendar months in the "gap period", a distribution occurring
on or before the fifteenth day of the month shall be treated as having been
made on the last day of the preceding month and a distribution occurring
after such fifteenth day shall be treated as having been made on the first
day of the next subsequent month.
Notwithstanding the above, for Plan Years which began in 1987, Income
during the "gap period" shall not be taken into account.
(d) Any amounts not distributed or recharacterized within 2 2 months
after the end of the Plan Year shall be subject to the 10Sa Employer excise
tax imposed by Code Section 4979.
11.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage", for Plan Years beginning
after the later of the Effective Date of this Plan or December 31, 1986,
for the Highly Compensated Participant group shall not exceed the greater
of:
(1) 125 percent of such percentage for the Non-Highly Compensated
Participant group; or
(2) the lesser of 200 percent of such percentage for the Non-Highly
Compensated Participant group, or such percentage for the Non-Highly
Compensated Participant group plus 2 percentage points. However, for
Plan Years beginning after December 31, 1988, to prevent the multiple
use of the
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alternative method described in this paragraph and Code Section
401(m)(9)(A), any Highly Compensated Participant eligible to make
elective deferrals pursuant to Section 11.2 or any other cash or
deferred arrangement maintained by the Employer or an Affiliated
Employer and to make Employee contributions or to receive matching
contributions under any plan maintained by the Employer or an
Affiliated Employer shall have his actual contribution ratio reduced
pursuant to Regulation 1.401(m)-2. The provisions of Code Section
401(m) and Regulations 1.401(m)-l(b) and 1.401(m)-2 are incorporated
herein by reference.
(b) For the purposes of this Section and Section 11.7, "Actual
Contribution Percentage" for a Plan Year means, with respect to the Highly
Compensated Participant group and Non-Highly Compensated Participant group,
the average of the ratios (calculated separately for each Participant in
each group) of:
(1) the sum of Employer matching contributions made pursuant to
Section 11.1(b) (to the extent such matching contributions are not
used to satisfy the tests set forth in Section 11.4), voluntary
Employee contributions made pursuant to Section 4.7 and Excess
Contributions recharacterized as voluntary Employee contributions
pursuant to Section 11.5 on behalf of each such Participant for such
Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan Year.
(c) For purposes of determining the "Actual Contribution Percentage"
and the amount of Excess Aggregate Contributions pursuant to Section
11.7(d), only Employer matching contributions contributed to the Plan prior
to the end of the succeeding Plan Year shall be considered. In addition,
the Administrator may elect to take into account, with respect to Employees
eligible to have Employer matching contributions made pursuant to Section
11.1(b) or voluntary Employee contributions made pursuant to Section 4.7
allocated to their accounts, elective deferrals (as defined in Regulation
1.402(g)-1(b)) and qualified non-elective contributions (as defined in Code
Section 401(m)(4)(C)) contributed to any plan maintained by the Employer.
Such elective deferrals and qualified non-elective contributions shall be
treated as Employer matching contributions subject to Regulation 1.401(m)-
1(b)(2) which is incorporated herein by reference. However, for Plan Years
beginning after December 31, 1988, the Plan Year must be the same as the
Plan Year of the Plan to which the elective deferrals and the qualified
non-elective contributions are made.
(d) For the purpose of determining the actual contribution ratio of a
Highly Compensated Employee who is subject to the Family Member aggregation
rules of Code Section 414(q)(6) because such Employee is either a "five
percent owner" of the Employer or one of the ten (10) Highly Compensated
Employees paid the greatest "415 Compensation" during the year, the
following shall apply:
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(1) The combined actual contribution ratio for the family group (which
shall be treated as one Highly Compensated Participant) shall be the
greater of: (i) the ratio determined by aggregating Employer matching
contributions made pursuant to Section 11.1(b) (to the extent such
matching contributions are not used to satisfy the tests set forth in
Section 11.4), voluntary Employee contributions made pursuant to
Section 4.7, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 11.5 and "414(s)
Compensation" of all eligible Family Members who are Highly
Compensated Participants without regard to family aggregation; and
(ii) the ratio determined by aggregating Employer matching
contributions made pursuant to Section 11.1(b) (to the extent such
matching contributions are not used to satisfy the tests set forth in
Section 11.4), voluntary Employee contributions made pursuant to
Section 4.7, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 11.5 and "414(s)
Compensation" of all eligible Family Members (including Highly
Compensated Participants). However, in applying the $200,000 limit to
"414(s) Compensation" for Plan Years beginning after December 31,
1988, Family Members shall include only the affected Employee's spouse
and any lineal descendants who have not attained age 19 before the
close of the Plan Year.
(2) The Employer matching contributions made pursuant to Section
11.1(b) (to the extent such matching contributions are not used to
satisfy the tests set forth in Section 11.4), voluntary Employee
contributions made pursuant to Section 4.7, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 11.5 and "414(s) Compensation" of all Family Members shall be
disregarded for purposes of determining the "Actual Contribution
Percentage" of the Non-Highly Compensated Participant group except to
the extent taken into account in paragraph (1) above.
(3) If a Participant is required to be aggregated as a member of more
than one family group in a plan, all Participants who are members of
those family groups that include the Participant are aggregated as one
family group in accordance with paragraphs (1) and (2) above.
(e) For purposes of this Section and Code Sections 401(a)(4), 410(b)
and 401(m), if two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made are treated as one
plan for purposes of Code Sections 401(a)(4) or 410(b) (other than the
average benefits test under Code Section 410(b)(2)(A)(ii) as in effect for
Plan Years beginning after December 31, 1988), such plans shall be treated
as one plan. In addition, two or more plans of the Employer to which
matching contributions, Employee contributions, or both, are made may be
considered as a single plan for purposes of determining whether or not such
plans satisfy Code Sections 401(a)(4), 410(b) and 401(m). In such a case,
the aggregated plans must satisfy this Section and Code Sections
401(a)(4),410(b) and 401(m) as though such
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aggregated plans were a single plan. For plan years beginning after
December 31, 1989, plans may be aggregated under this paragraph only if
they have the same plan year.
Notwithstanding the above, for Plan Years beginning after December 31,
1988, an employee stock ownership plan described in Code Section 4975(e)(7)
may not be aggregated with this Plan for purposes of determining whether
the employee stock ownership plan or this Plan satisfies this Section and
Code Sections 401(a)(4), 410(b) and 401(m).
(f) If a Highly Compensated Participant is a Participant under two or
more plans (other than an employee stock ownership plan as defined in Code
Section 4975(e)(7) for Plan Years beginning after December 31, 1988) which
are maintained by the Employer or an Affiliated Employer to which matching
contributions, Employee contributions, or both, are made, all such
contributions on behalf of such Highly Compensated Participant shall be
aggregated for purposes of determining such Highly Compensated
Participant's actual contribution ratio. However, for Plan Years beginning
after December 31, 1988, if the plans have different plan years, this
paragraph shall be applied by treating all plans ending with or within the
same calendar year as a single plan.
(g) For purposes of Section 11.6(a) and 11.7, a Highly Compensated
Participant and a Non-Highly Compensated Participant shall include any
Employee eligible to have matching contributions made pursuant to Section
11.1(b) (whether or not a deferred election was made or suspended pursuant
to Section 11.2(e)) allocated to his account for the Plan Year or to make
salary deferrals pursuant to Section 11.2 (if the Employer uses salary
deferrals to satisfy the provisions of this Section) or voluntary Employee
contributions pursuant to Section 4.7 (whether or not voluntary Employee
contributions are made) allocated to his account for the Plan Year.
(h) For purposes of this Section, "Matching Contribution" shall mean an
Employee contribution made to the Plan, or to a contract described in Code
Section 403(b), on behalf of a Participant on account of an Employee
contribution made by such Participant, or on account of a Participant's Deferred
Compensation, under a plan maintained by the Employer.
11.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that for Plan Years beginning after December 31, 1986,
the "Actual Contribution Percentage" for the Highly Compensated Participant
group exceeds the "Actual Contribution Percentage" for the Non-Highly
Compensated Participant group pursuant to Section 11.6(a), the Administrator (on
or before the fifteenth day of the third month following the end of the Plan
Year, but in no event later than the close of the following Plan Year) shall
direct the Trustee to distribute to the Highly Compensated Participant having
the highest actual contribution ratio, his portion of Excess Aggregate
Contributions (and Income allocable to such contributions) or, if forfeitable,
forfeit such non-Vested Excess Aggregate Contributions
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attributable to Employer matching contributions (and Income allocable to such
Forfeitures) under either one of the tests set forth in Section 11.6(a) is
satisfied, or under his actual contribution ratio equals the actual contribution
ratio of the Highly Compensated Participant having the second highest actual
contribution ratio. This process shall continue under one of the tests set forth
in Section 11.6(a) is satisfied. The distribution and/or Forfeiture of Excess
Aggregate Contributions shall be made in the following order:
(1) Employer matching contributions distributed and/or forfeited
pursuant to Section 11.5(a)(1);
(2) Voluntary Employee contributions including Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 11.5(a)(2);
(3) Remaining Employer matching contributions.
(b) Any distribution or Forfeiture of less than the entire amount of
Excess Aggregate Contributions (and Income) shall be treated as a pro rata
distribution of Excess Aggregate Contributions and Income. Distribution of
Excess Aggregate Contributions shall be designated by the Employer as a
distribution of Excess Aggregate Contributions (and Income). Forfeitures of
Excess Aggregate Contributions shall be treated in accordance with Section
4.3. However, no such Forfeiture may be allocated to a Highly Compensated
Participant whose contributions are reduced pursuant to this Section.
(c) Excess Aggregate Contributions attributable to amounts other than
voluntary Employee contributions, including forfeited matching
contributions, shall be treated as Employer contributions for purposes of
Code Sections 404 and 415 even if distributed from the Plan.
(d) For the purposes of this Section and Section 11.6, "Excess
Aggregate Contributions" means, with respect to any Plan Year, the excess
of:
(1) the aggregate amount of Employer matching contributions made
pursuant to Section 11.1(a) (to the extent such contributions are
taken into account pursuant to Section 11.6(a)), voluntary Employee
contributions made pursuant to Section 4.7, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 11.5 and any Qualified Non-Elective Contributions or elective
deferrals taken into account pursuant to Section 11.6(c) actually made
on behalf of the Highly Compensated Participant group for such Plan
Year, over
(2) the maximum amount of such contributions permitted under the
limitations of Section 11.6(a).
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(e) For each Highly Compensated Participant, the amount of Excess
Aggregate Contributions is equal to the total Employer matching
contributions made pursuant to Section 11.1(b) (to the extent taken into
account pursuant to Section 11.6(a)), voluntary Employee contributions made
pursuant to Section 4.7, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 11.5 and any Qualified Non-
Elective Contributions or elective deferrals taken into account pursuant to
Section 11.6(c) on behalf of the Highly Compensated Participant (determined
prior to the application of this paragraph) minus the amount determined by
multiplying the Highly Compensated Participant's actual contribution ratio
(determined after application of this paragraph) by his "414(s)
Compensation". The actual contribution ratio must be rounded to the nearest
one-hundredth of one percent for Plan Years beginning after December 31,
1988. In no case shall the amount of Excess Aggregate Contribution with
respect to any Highly Compensated Participant exceed the amount of Employer
matching contributions made pursuant to Section 11.1(b) (to the extent
taken into account pursuant to Section 11.6(a)), voluntary Employee
contributions made pursuant to Section 4.7, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to Section
11.5 and any Qualified Non-Elective Contributions or elective deferrals
taken into account pursuant to Section 11.6(c) on behalf of such Highly
Compensated Participant for such Plan Year.
(f) The determination of the amount of Excess Aggregate Contributions
with respect to any Plan Year shall be made after first determining the
Excess Contributions, if any, to be treated as voluntary Employee
contributions due to recharacterization for the plan year of any other
qualified cash or deferred arrangement (as defined in Code Section 401(k))
maintained by the Employer that ends with or within the Plan Year or which
are treated as voluntary Employee contributions due to recharacterization
pursuant to Section 11.5.
(g) The determination and correction of Excess Aggregate Contributions
of a Highly Compensated Participant whose actual contribution ratio is
determined under the family aggregation rules shall be accomplished as
follows:
(1) If the actual contribution ratio for the Highly Compensated
Participant is determined in accordance with Section 11.6(d)(1), then
the actual contribution ratio shall be reduced and the Excess
Aggregate Contributions for the family unit shall be allocated among
the Family Members in proportion to the sum of Employer matching
contributions made pursuant to Section 11.1(b) (to the extent taken
into account pursuant to Section 11.6(a)), voluntary Employee
contributions made pursuant to Section 4.7, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 11.5 and any Qualified Non-Elective Contributions or elective
deferrals taken into account pursuant to Section 11.6(c) of each
Family Member that were combined to determine the group actual
contribution ratio.
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(2) If the actual contribution ratio for the Highly Compensated
Participant is determined under Section 11.6(d)(2), then the actual
contribution ratio shall first be reduced, as required herein, but not
below the actual contribution ratio of the group of Family Members who
are not Highly Compensated Participants without regard to family
aggregation. The Excess Aggregate Contributions resulting from this
initial reduction shall be allocated among the Highly Compensated
Participants whose Employer matching contributions made pursuant to
Section 11.1(b) (to the extent taken into account pursuant to Section
11.6(a)), voluntary Employee contributions made pursuant to Section
4.7, Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 11.5 and any Qualified Non-Elective
Contributions or elective deferrals taken into account pursuant to
Section 11.6(c) were combined to determine the actual contribution
ratio. If further reduction is still required, then Excess Aggregate
Contributions resulting from this further reduction shall be
determined by taking into account the contributions of all Family
Members and shall be allocated among them in proportion to their
respective Employer matching contributions made pursuant to Section
11.1(b) (to the extent taken into account pursuant to Section
11.6(a)), voluntary Employee contributions made pursuant to Section
4.7, Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 11.5 and any Qualified Non-Elective
Contributions or elective deferrals taken into account pursuant to
Section 11.6(c).
(h) Notwithstanding the above, within twelve (12) months after the end
of the Plan Year, the Employer may make a special Qualified Non-Elective
Contribution on behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy one of the tests set forth in Section 11.6. Such
contribution shall be allocated to the Participant's Qualified Non-Elective
Account of each Non-Highly Compensated Participant in the same proportion
that each Non-Highly Compensated Participant's Compensation for the year
bears to the total Compensation of all Non-Highly Compensated Participants.
A separate accounting shall be maintained for the purpose of excluding such
contributions from the "Actual Deferral Percentage" tests pursuant to
Section 11.4.
(i) For purposes of this Section, "Income" means the income or loss
allocable to Excess Aggregate Contributions which shall equal the sum of
the allocable gain or loss for the Plan Year and the allocable gain or loss
for the period between the end of the Plan Year and the date of
distribution ("gap period"). The income or loss allocable to Excess
Aggregate Contributions for the Plan Year and the "gap period" is
calculated separately and is determined by multiplying the income or loss
for the Plan Year or the "gap period" by a fraction. The numerator of the
fraction is the Excess Aggregate Contributions for the Plan Year. The
denominator of the fraction is the total Participant's Account and
Voluntary Contribution Account attributable to Employer matching
contributions subject to Section 11.6, voluntary Employee contributions
made pursuant to Section 4.7, and any Qualified Non-Elective Contributions
and elective deferrals taken into account pursuant
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to Section 11.6(c) as of the end of the Plan Year or the "gap period",
reduced by the gain allocable to such total amount for the Plan Year or the
"gap period" and increased by the loss allocable to such total amount for
the Plan Year or the "gap period".
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable Income for the "gap period".
Under such "safe harbor method", allocable Income for the "gap period"
shall be deemed to equal ten percent (10%) of the Income allocable to
Excess Aggregate Contributions for the Plan Year of the Participant
multiplied by the number of calendar months in the "gap period". For
purposes of determining the number of calendar months in the "gap period",
a distribution occurring on or before the fifteenth day of the month shall
be treated as having been made on the last day of the preceding month and a
distribution occurring after such fifteenth day shall be treated as having
been made on the first day of the next subsequent month.
The Income allocable to Excess Aggregate Contributions resulting from
recharacterization of Elective Contributions shall be determined and
distributed as if such recharacterized Elective Contributions had been
distributed as Excess Contributions.
Notwithstanding the above, for Plan Years which began in 1987,
Income during the "gap period" shall not be taken into account.
11.8 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant, shall direct
the Trustee to distribute to any Participant in any one Plan Year up to the
lesser of (1) 100% of his accounts as specified in the Adoption Agreement valued
as of the last Anniversary Date or other valuation date or (2) the amount
necessary to satisfy the immediate and heavy financial need of the Participant.
Any distribution made pursuant to this Section shall be deemed to be made as of
the first day of the Plan Year or, if later, the valuation date immediately
preceding the date of distribution, and the account from which the distribution
is made shall be reduced accordingly. Withdrawal under this Section shall be
authorized only if the distribution is on account of one of the following or any
other items permitted by the Internal Revenue Service:
(1) Medical expenses described in Code Section 213(d) incurred by the
Participant, his spouse, or any of his dependents (as defined in Code
Section 152);
(2) The purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Payment of tuition for the next semester or quarter of post-
secondary education for the Participant, his spouse, children, or
dependents; or
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(4) The need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence.
(b) No such distribution shall be made from the Participant's Account
under such Account has become fully Vested.
(c) No distribution shall be made pursuant to this Section unless the
Administrator, based upon the Participant's representation and such other
facts as are known to the Administrator, determines that all of the
following conditions are satisfied:
(1) The distribution is not in excess of the amount of the immediate
and heavy financial need of the Participant;
(2) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available
under all plans maintained by the Employer;
(3) The Plan, and all other plans maintained by the Employer, provide
that the Participant's elective deferrals and voluntary Employee
contributions will be suspended for at least twelve (12) months after
receipt of the hardship distribution; and
(4) The Plan, and all other plans maintained by the Employer, provide
that the Participant may not make elective deferrals for the
Participant's taxable year immediately following the taxable year of
the hardship distribution in excess of the applicable limit under Code
Section 402(g) for such next taxable year less the amount of such
Participant's elective deferrals for the taxable year of the hardship
distribution.
(d) Notwithstanding the above, distributions from the Participant's
Elective Account and Qualified Non-Elective Account pursuant to this
Section shall be limited solely to the Participant's Deferred Compensation
and any income attributable thereto credited to the Participant's Elective
Account as of December 31, 1988.
(e) Any distribution made pursuant to this Section shall be made in a
manner which is consistent with and satisfies the provisions of Section
6.5, including, but not limited to, all notice and consent requirements of
Code Sections 411(a)(11) and 417 and the Regulations thereunder.
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AMENDMENT TO
EMPLOYEE BENEFITS SERVICES, INC.
REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST
1. Section 1.9 is amended by the addition of the following:
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for plan years
beginning on or after January 1, 1994, the annual compensation of each employee
taken into account under the plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination period, and
the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in this
plan to the limitation under Section 401(a)(17) of the Code shall mean the OBRA
'93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into account in
determining an employee's benefits accruing in the current plan year, the
compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
2. Section 6.13 is amended by the addition of the following:
If a distribution is one to which Sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution may commence less than 30
days after the notice required under Section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(1) the plan administrator clearly informs the participant that the
participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and
(2) the participant, after receiving the notice, affirmatively elects a
distribution.
<PAGE>
3. Section 7.10 is amended by the addition of the following:
(a) Notwithstanding any provision of the plan to the contrary, with
respect to distributions made after December 31, 1992, a Participant shall be
permitted to elect to have any "eligible rollover distribution" transferred
directly to an "eligible retirement plan" specified by the Participant. The Plan
provisions otherwise applicable to distributions continue to apply to the direct
transfer option. The Participant shall, in the time and manner prescribed by the
Administrator, specify the amount to be directly transferred and the "eligible
retirement plan" to receive the transfer. Any portion of a distribution which is
not transferred shall be distributed to the Participant.
(b) For purposes of this Section, the term "eligible rollover
distribution" means any distribution other than a distribution of substantially
equal periodic payments over the life or life expectancy of the Participant (or
joint life or joint life expectancies of the Participant and the designated
beneficiary) or a distribution over a period certain of ten years or more.
Amounts required to be distributed under Code Section 401(a)(9) are not eligible
rollover distributions. The direct transfer option described in subsection (a)
applies only to eligible rollover distributions which would otherwise be
includible in gross income if not transferred.
(c) For purposes of this Section, the term "eligible retirement plan"
means an individual retirement account as described in Code Section 408(a), an
individual retirement annuity as described in Code Section 408(b), an annuity
plan as described in Code Section 403(a), or a defined contribution plan as
described in Code Section 401(a) which is exempt from tax under Code Section
501(a) and which accepts rollover distributions.
(d) The election described in subsection (a) also applies to the surviving
spouse after the Participant's death; however, distributions to the surviving
spouse may only be transferred to an individual retirement account or individual
retirement annuity. For purposes of subsection (a), a spouse or former spouse
who is the alternate payee under a qualified domestic relations order as defined
in Code Section 414(p) will be treated as the Participant.
2
<PAGE>
CERTIFICATE OF CORPORATE RESOLUTION
The undersigned Secretary of Employee Benefits Services, Inc. (the
Corporation) hereby certifies that the following resolutions were duly adopted
by the board of directors of the Corporation on December 31, 1994, and that such
resolutions have not been modified or rescinded as of the date hereof:
RESOLVED, that the amendment to the Employee Benefits Services, Inc.
Regional Prototype (Name of Plan) is hereby approved and adopted.
The undersigned further certifies that attached hereto as Exhibit A is a
true copy of the amendment approved and adopted in the foregoing resolution.
/s/ W.A. Hunter, Jr.
----------------------------------------
Secretary
Date: 12/31/94
<PAGE>
SUMMARY OF MATERIAL MODIFICATIONS
Your Employer has amended your retirement plan. This is a summary of the
modifications that were made. It should be read in conjunction with the Summary
Plan Description that has already been distributed to you.
1. Compensation
Effective as of the first day of the 1994 Plan Year, the definition of
Compensation has been modified to exclude compensation in excess of
$150,000.
2. Treatment of Distributions from Your Plan
Whenever you receive a distribution from your Plan, it will normally be
subject to income taxes. You may, however, reduce, or defer entirely, the
tax due on your distribution through use of one of the following methods:
(a) The rollover of all or a portion of the distribution to an Individual
Retirement Account (IRA) or another qualified employer plan. This
will result in no tax being due until you begin withdrawing funds from
the IRA or other qualified employer plan. The rollover of the
distribution, however, MUST be made within strict time frames
(normally, within 60 days after you receive your distribution). Under
certain circumstances all or a portion of a distribution may not
qualify for this rollover treatment. In addition, most distributions
made after December 31, 1992 will be subject to mandatory federal
income tax withholding at a rate of 20%. This will reduce the amount
you actually receive. For this reason, if you wish to rollover all or
a portion of your distribution amount, the direct transfer option
described in paragraph (b) below would be the better choice.
(b) You may request for most distributions made after December 31, 1992,
that a direct transfer of all or a portion of your distribution amount
be made to either an Individual Retirement Account (IRA) or another
qualified employer plan willing to accept the transfer. A direct
transfer will result in no tax being due until you withdraw funds from
the IRA or other qualified employer plan. Like the rollover, under
certain circumstances all or a portion of the amount to be distributed
may not qualify for this direct transfer. If you elect to actually
receive the distribution rather than request a direct transfer, then
in most cases 20% of the distribution amount will be withheld for
federal income tax purposes.
(c) The election of favorable income tax treatment under "10-year forward
averaging", "5-year averaging" or, if you qualify, "capital gains"
method of taxation.
<PAGE>
WHENEVER YOU RECEIVE A DISTRIBUTION, THE ADMINISTRATOR WILL DELIVER TO YOU
A MORE DETAILED EXPLANATION OF THESE OPTIONS. HOWEVER, THE RULES WHICH
DETERMINE WHETHER YOU QUALIFY FOR FAVORABLE TAX TREATMENT ARE VERY COMPLEX.
YOU SHOULD CONSULT WITH QUALIFIED TAX COUNSEL BEFORE MAKING A CHOICE.
2
<PAGE>
AMENDMENT TO
EMPLOYEE BENEFIT SERVICES REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST
1. Article VI of the Plan is amended by the addition of the new subsection,
effective as of the following date:
a. For Plans not entitled to extended reliance as described in Revenue
Ruling 94-76, the first day of the first Plan Year beginning on or after
December 31, 1994, or if later, 90 days after December 31, 1994; or
b. For Plans entitled to extended reliance as described in Revenue Ruling
94-76, as of the first day of the first plan year beginning in 1999.
However, in the event of a transfer of assets to the Plan from a money
purchase plan that occurs after the date of the most recent determination
letter, the effective date of the amendment shall be the date immediately
preceding the date of such transfer of assets.
TRANSFER OF ASSETS FROM A MONEY PURCHASE PLAN
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 option 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 401(a) of the Internal Revenue Code (other than any portion
of those assets and liabilities attributable to voluntary employee
contributions).
2. Article VI is amended by the addition of the following new subsection,
effective as of December 12, 1994:
UNIFORMED SERVICES
Notwithstanding any provision of this plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with Section 414(u) of the Internal Revenue Code.
Loan repayments will be suspended under this plan as permitted under Code
Section 414(u)(4).
<PAGE>
Pursuant to the terms of the Plan regarding amendments, Employee Benefits
Services, Inc., as the sponsor of the prototype, hereby adopts this amendment as
of the date set forth below.
Employee Benefits Services, Inc.
By: /s/ W.A. Hunter Jr.
-----------------------------------------
Title: President
Date: 6/30/97
2
<PAGE>
SUMMARY OF MATERIAL MODIFICATIONS
Your retirement plan has been amended effective as of December 12, 1994, or, if
later, the first day of the Plan's first plan year. The amendment was made to
conform the plan with certain requirements mandated by the Uniformed Services
Employment and Reemployment Rights Act of 1994. This is a summary of the
modification that was made to the plan. It should be read in conjunction with
the Summary Plan Description that has already been distributed to you.
Your Plan has been modified to provide that if you are a veteran and are
reemployed under the Uniformed Services Employment and Reemployment Rights Act
of 1994, your qualified military service may be considered service with the
Employer. In addition, loan repayments to the Plan may be suspended for any part
of any period during which you are performing service in the uniformed services.
If you may be affected by any of these provisions, ask your Administrator for
further details.
<PAGE>
EXHIBIT 5
Letterhead of Arent Fox Kintner Plotkin & Kahn, PLLC
June 16, 1999
The Board of Directors
NCRIC Group, Inc.
1115 30th Street, N.W.
Washington, D.C. 20007
Gentlemen:
We have acted as counsel to NCRIC Group, Inc. (the "Company") with respect
to the Company's Registration Statement on Form S-8, filed by the Company with
the Securities and Exchange Commission in connection with the registration under
the Securities Act of 1933, as amended, of 300,000 shares of Common Stock, par
value $.01 per share (the "Shares").
As counsel to the Company, we have examined the Company's Certificate of
Incorporation and such records, certificates and other documents of the Company,
as well as relevant statutes, regulations, published rulings and such questions
of law, as we considered necessary or appropriate for the purpose of this
opinion.
Based on the foregoing, we are of the opinion that the 300,000 Shares
subject to the NCRIC, Inc. 401(k) Plan (the "Plan") when issued or delivered and
paid for in accordance with the terms of the Plan, will be validly issued, fully
paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to all references to our firm in the Registration
Statement. In giving this consent, we do not hereby admit that we come within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the General Rules and Regulations
thereunder.
Very truly yours,
Arent Fox Kintner Plotkin & Kahn, PLLC
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
NCRIC Group, Inc. on Form S-8 of our report for NCRIC Group, Inc. and
subsidiaries dated February 4, 1999 appearing in the Prospectus filed with the
Commission by the Registrant (File No. 333-69537) pursuant to Rule 424(b) dated
May 10, 1999.
Deloitte & Touche LLP
June 15, 1999
Washington, D.C.
