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EXHIBIT 10.7
STANDARD INSURANCE COMPANY HOME OFFICE EMPLOYEES'
DEFERRED COMPENSATION PLAN
RESTATEMENT
2000
This Plan has been adopted by the Company and
its affiliates, StanCorp Financial Group, Inc.,
StanCorp Real Estate, LLC, and StanCorp Mortgage
Investors, LLC, as of the date written below.
By: /s/ Dwight L. Cramer
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(Signature)
Dwight L. Cramer
------------------------------------
Title: Vice President, General Counsel,
and Corporate Secretary
Date Signed: August 16, 2000
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TABLE OF CONTENTS
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ARTICLE I STATEMENT OF PURPOSE AND INTENTIONS
1.1 Purpose................................................................ 1
1.2 Intent to Qualify...................................................... 1
1.3 Effect of Amendment and Restatement.................................... 1
ARTICLE II DEFINITIONS
2.1 Anniversary Date....................................................... 2
2.2 Annuity Starting Date.................................................. 2
2.3 Beneficiary............................................................ 2
2.4 Break in Service Year.................................................. 2
2.5 Code................................................................... 2
2.6 Company................................................................ 2
2.7 Compensation........................................................... 2
2.8 Date of Employment..................................................... 3
2.9 Date of Re-employment.................................................. 3
2.10 Effective Date......................................................... 3
2.11 Eligible Compensation.................................................. 3
2.12 Employee............................................................... 3
2.13 Employer............................................................... 5
2.14 ERISA.................................................................. 5
2.15 Hour of Service........................................................ 5
2.16 Individual Accounts.................................................... 7
2.17 Insurance Company...................................................... 7
2.18 Limitation Year........................................................ 7
2.19 Normal Retirement Age.................................................. 7
2.20 Participant............................................................ 7
2.21 Plan................................................................... 7
2.22 Plan Administrator..................................................... 7
2.23 Plan Year.............................................................. 7
2.24 Preliminary Service.................................................... 7
2.25 Qualified Matching Contributions ("QMAC").............................. 7
Qualified Nonelective Contributions ("QNC")............................ 7
2.26 Qualifying Employer Securities......................................... 7
2.27 Required Beginning Date................................................ 7
2.28 Retirement and Retirement Date......................................... 8
2.29 Service................................................................ 8
2.30 Total and Permanent Disability......................................... 8
2.31 Trustees............................................................... 8
2.32 Vested Benefit......................................................... 8
2.33 Years of Service....................................................... 8
ARTICLE III PARTICIPATION
3.1 Commencement of Participation.......................................... 10
3.2.1 Minimum Participation Requirements..................................... 10
3.2.2 Additional Participation Requirements.................................. 10
3.3 Preliminary Service.................................................... 10
3.4 Active Participation; Inactive Participation........................... 11
3.5 Cessation of Participation............................................. 11
3.6 Participation on Resumption of Employment.............................. 11
ARTICLE IV CONTRIBUTIONS
4.1.1 Elective Contributions................................................. 12
4.1.2 Elective Contributions: Allocations................................... 14
4.1.3 Elective Contributions: Vesting....................................... 14
4.1.4 Elective Contributions: Withdrawals................................... 14
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4.2.1 Employer Contributions................................................. 16
4.2.2 Employer Contributions: Allocation.................................... 17
4.2.3 Employer Contributions: Vesting....................................... 17
4.3.1 Supplemental Contributions: Amount.................................... 17
4.3.2 Supplemental Contributions: Allocations............................... 17
4.3.3 Supplemental Contributions: Vesting................................... 18
4.4.1 Rollover Contribution: Amount......................................... 18
4.4.2 Rollover Contributions: Allocation.................................... 18
4.4.3 Rollover Contributions: Vesting....................................... 18
4.5.1 Plan-to-Plan Transfers: Amount........................................ 18
4.5.2 Plan-to-Plan Transfer: Allocation..................................... 19
4.5.3 Plan-to-Plan Transfers: Vesting....................................... 19
4.6.1 Prior Plan Contributions: Amount and Allocation....................... 19
4.6.2 Prior Plan Contributions: Vesting..................................... 19
4.6.3 Prior Plan Contributions: Withdrawals................................. 19
ARTICLE V REQUIRED NON-DISCRIMINATION TESTING
5.1.1 Limitation on Additions................................................ 21
5.1.2 Suspense Account....................................................... 24
5.2.1 Top-Heavy Provisions: Application..................................... 24
5.2.2 Top-Heavy Determination................................................ 24
5.2.3 Special Rules for Top-Heavy Plans...................................... 26
5.3 Actual Deferral Percentage Test........................................ 27
5.4 Actual Contribution Percentage Test.................................... 27
5.5 Multiple Use of Alternative Limitation................................. 27
ARTICLE VI ADMINISTRATION OF PLAN ASSETS
6.1.1 The Trust Fund......................................................... 28
6.1.2 Investment Restrictions................................................ 28
6.1.3 Participant Directed Investments....................................... 28
6.2 Account Adjustments.................................................... 29
6.3 Distribution Adjustments............................................... 29
6.4 Expenses............................................................... 29
ARTICLE VII DISTRIBUTIONS
7.1 Termination of Employment or Disability Before Retirement.............. 30
7.2 Death Benefits......................................................... 30
7.3 Retirement............................................................. 33
7.4 Form of Retirement Benefit............................................. 33
7.5 Retirement Benefits: Election of Forms and Commencement of Payments... 35
7.6 Direct Rollovers....................................................... 39
7.7 Plan Loans............................................................. 40
ARTICLE VIII GENERAL PROVISIONS
8.1.1 Plan Modification: Authority.......................................... 41
8.1.2 Plan Modification: Merger............................................. 41
8.1.3 Plan Modification: Termination........................................ 41
8.2.1 Duties: Plan Administrator............................................ 41
8.2.2 Duties: Employer...................................................... 42
8.3 Benefit Claims Procedure............................................... 42
8.4 Review Procedure....................................................... 42
8.5 Qualification of the Plan and Conditions of Contributions.............. 43
8.6 Beneficiaries.......................................................... 43
8.7 Spendthrift Clause..................................................... 44
8.8 Applicable Law......................................................... 44
8.9 Military Service....................................................... 44
8.10 Annuities.............................................................. 44
8.11 Limitations of the Employer's Liability................................ 44
8.12 Non-Guarantee of Employment............................................ 45
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ARTICLE I
STATEMENT OF PURPOSE AND INTENTIONS
1.1 Purpose
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The Employer adopts this Plan as a defined contribution retirement plan of
the profit-sharing type with a cash or deferred arrangement to provide
retirement benefits and incidental benefits to certain Employees who
qualify for such benefits as more particularly provided herein.
1.2 Intent to Qualify
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It is the Employer's intent that this Plan be a qualified plan in the
meaning of Code sec. 401 and that any trust that may become part hereof be
exempt from tax under Code sec. 501(a), and that contributions made by the
Employer be deductible under Code sec. 404. This Plan shall be
interpreted, applied and administered in a manner consistent with this
intent to qualify. All amounts contributed to, accumulated and/or held
pursuant to this Plan shall not be diverted to or used for other than the
exclusive benefit of the Participants or their Beneficiaries until after
such amounts have been distributed from this Plan. In the event that the
portion of this Plan comprising the qualified cash or deferred arrangement
fails to qualify under the provisions of Code sec. 401(k), the Plan as a
whole shall nonetheless be interpreted so as to qualify under Code sec.
401(a).
1.3 Effect of Amendment and Restatement
-----------------------------------
This Plan is an amendment and restatement of the Standard Insurance
Company Home Office Employees' Deferred Compensation Plan. As such, it is
effective only with respect to Employees who terminate employment with the
Employer on or after the date the restated Plan was adopted, so that the
rights to benefits from the Plan, if any, of former Employees who
terminated employment before that date shall be determined according to
the Plan as it was on the date they terminated employment, except to the
extent that it may cause this Plan's document to more accurately reflect
the ongoing administration of the Plan, and except as may be otherwise
specifically provided in this Plan, and except to the extent required by
law.
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ARTICLE II
DEFINITIONS
For the purpose of this Plan, when the following terms appear in this Plan in
boldface type, they shall have the meanings indicated in this Article unless a
different meaning is clearly required by the context.
Whenever required by the context, masculine pronouns shall include the feminine,
and singular the plural.
2.1 Anniversary Date means each January 1.
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2.2 Annuity Starting Date means the first day of the first period for which an
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amount is payable as an annuity or any other form.
2.3 Beneficiary means a person, estate, trust or entity designated by a
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Participant or by Section 8.6 who is or may become entitled to a benefit
from the Plan.
2.4 Break in Service Year means a twelve-consecutive-month period commencing
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on an Anniversary Date (or, for the purposes of determining an Employee's
Preliminary Service, each Preliminary Computation Period, as described in
Article III) and during which an Employee (or former Employee) is not
credited with any Hours of Service.
2.5 Code means the Internal Revenue Code of 1986, as amended, and all final,
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temporary and proposed regulations promulgated thereunder.
2.6 Company means Standard Insurance Company.
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2.7 Compensation means wages, salary, and/or other remuneration that is
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received by an Employee during a Plan Year in exchange for Service while
an Eligible Employee and that is required to be reported as income on the
individual's Form W-2 for federal income tax purposes, EXCEPT that
Compensation shall not include amounts attributable to Company-wide profit
sharing bonuses, officers' hiring or relocation bonuses, other
individualized bonuses paid to officers, long-term incentive compensation
plans, reimbursement for unused vacation, severance pay, taxable fringe
benefits, tax reimbursements, awards and prizes, club dues, noncash
compensation, disqualifying dispositions from a qualified employee stock
purchase program, or contributions to and benefits from any other employee
benefit plan maintained by the Company except as provided below.
In addition, Compensation shall include the following amounts:
(a) all elective deferrals (as defined by Code sec. 402(g)(3)) made by
the Participant during the Plan Year pursuant to a salary reduction
agreement with the Employer, including those described by Section
4.1.1 of this Plan; and
(b) all Compensation accrued by the Participant during the Plan Year but
which is not then included as taxable income of the Participant
pursuant to a "cafeteria" or other such plan maintained by the
Employer according to Code sec. 125, or which amount represents a
"qualified transportation fringe" under Code sec. 132(f).
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, 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 in accordance with Code
sec. 401(a)(17)(B). The cost-of-living adjustment in effect for
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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.
Any reference in this Plan to the limitation under Code sec. 401(a)(17)
shall mean the OBRA '93 annual compensation limit set forth in this
provision.
2.8 Date of Employment means the date on which an Employee has his first Hour
--- ------------------
of Service.
2.9 Date of Re-employment means the first date as of which an Employee has an
--- ---------------------
Hour of Service after his most recent termination of Service, EXCEPT
that for the purposes of determining Preliminary Service, Date of Re-
employment means the first date as of which an Employee is credited with
an Hour of Service after he most recently has accrued a Break in Service
Year which permits his prior Preliminary Service to be disregarded.
2.10 Effective Date means January 1, 1980. The effective date of this
---- --------------
amendment and restatement is March 3, 1999, except that changes required
by the Retirement Protection Act of Title VII of the Uruguay Round
Agreements Act of 1994, the Uniformed Services Employment and Reemployment
Rights Act of 1994, the Small Business Jobs Protection Act of 1996, and
the Tax Reform Act of 1997 are effective on the first day of the first
Plan Year beginning on or after January 1, 1997, or as otherwise required
by a particular Plan provision. For those Plan provisions concerning the
involuntary distribution or spousal consent threshold amount, the
effective date of this amendment and restatement is January 1, 1999.
2.11 Eligible Compensation means that portion of a Participant's Compensation
---- ---------------------
that is attributable to Service performed while the Participant was
eligible for Employer Contributions, regardless of whether such
contributions were made.
2.12 Employee means a natural person who performs Service for the Employer,
---- --------
including any Leased Employee (as described below) but excluding any
independent contractor who is not a Leased Employee. For the purposes of
this Plan, Employee shall be further described as follows.
(a) Eligible Employee means any Employee, EXCEPT:
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(i) an Employee who is a Leased Employee
(ii) an Employee who is included in a unit of employees covered by a
collective bargaining agreement with the Employer pursuant to
which retirement benefits were the subject of good faith
bargaining, except to the extent that such agreement expressly
permits or requires participation in this Plan
(iii) any person who is an Agent, as defined in the Standard Insurance
Company Agents' Deferred Compensation Plan
(iv) an individual who provides Service pursuant to a written
agreement with the Employer that states the individual is not
eligible to participate in the Plan, or an individual
reclassified as a common law employee, EXCEPT such reclassified
individuals shall be considered Eligible Employees as of the
effective date of the reclassification, or the reclassification
date, whichever is later.
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(b) Highly Compensated Employee ("HCE") means any Employee or former
---------------------------
Employee who (1) was a 5-percent owner during the "Determination
Year" or "Look-back Year", or (2) for the Look-back Year had
Compensation from the Employer greater than $80,000 (as indexed) and
was in the Top-Paid Group of Employees.
A "Determination Year" is the applicable Plan Year for which a
determination is being made. A "Look-back Year" is the 12-month
period immediately preceding the Determination Year. A "five percent
owner" is defined in Code sec. 416(i)(1)(B), including the
attribution rules therein.
For purposes of this Section, "Compensation" means Compensation
within the meaning of Section 5.1.1(d). "Top-Paid Group" means the
group of the top twenty percent (20%) of Employees when ranked on the
basis of Compensation paid to Employees during the Determination
Year.
A Highly Compensated former Employee is determined based on the rules
applicable to determining Highly Compensated Employee status as in
effect for that Determination Year, in accordance with Code sec.
1.414(q)-1T, A-4 and Notice 97-45 or subsequent guidance.
(c) Key Employee means (solely for the purposes of Section 5.2) an
------------
Employee who, at any time during the Plan Year or four preceding Plan
Years, was:
(1) an officer of the Employer having annual Compensation greater
than 50% of the amount in effect under Code sec. 415(b)(1)(A)
for any such Plan Year; or
(2) one of the ten Employees having annual Compensation greater than
the limitation in effect under Code sec. 415(c)(1)(A) and owning
(or considered as owning within the meaning of Code sec. 318)
the largest interest of the Employer; or
(3) a five percent (5%) owner of the Employer; or
(4) a one percent (1%) owner of the Employer having an annual
Compensation of more than $150,000.
For the purposes of this Plan, Key Employee shall be described more
particularly by Code sec. 416(i)(1). "Compensation" is defined under
Highly Compensated Employee, above.
(d) Leased Employee means any person (other than an Employee) who is
---------------
employed by a leasing organization and who pursuant to an agreement
between the Employer and the leasing organization performs services
for the Employer (or for the Employer and related persons determined
in accordance with Code sec. 414(n)(6)) on a substantially full-time
basis for a period of at least one year, and such services are
performed under the primary direction or control of the Employer.
Contributions or benefits provided to a Leased Employee by the
leasing organization which are attributable to services performed for
the Employer shall be treated as provided by the Employer.
A Leased Employee shall not be considered an Employee if: (1) such
person is covered by a money purchase pension plan maintained by the
leasing organization which provides (A) a nonintegrated employer
contribution rate of at least 10% of compensation, with compensation
being determined according to Code sec. 415(c)(3), but including
amounts contributed pursuant to a salary reduction agreement which
are excludable from the Leased Employee's gross income under Code
sec. 125, 402(e)(3), 402(h)(1)(B), or 403(b); (B) immediate
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participation; and (C) full and immediate vesting, AND (2) if the sum
of all such persons is not more than 20% of the Employer's "nonhighly
compensated workforce" (as defined in Code sec. 414(n)(5)(C)(ii)).
Any provisions of this Section and this Plan to the contrary
notwithstanding, the term "Leased Employee" shall be more
specifically defined by, and Leased Employees shall be treated under
this Plan consistent with, Code sec. 414(n) and any regulations
thereunder.
2.13 Employer means the Company, StanCorp Financial Group, Inc., StanCorp Real
---- --------
Estate, LLC, and StanCorp Mortgage Investors, LLC, and any other person or
business organization which has adopted and maintains this Plan on behalf
of its employees with the consent of the Company.
In addition, to the extent required for this Plan's qualification for
special tax treatment under the Code, and to the extent otherwise required
by applicable law, including for example the determination of a
Participant's Preliminary Service and Years of Service, Employer also
means any predecessor organization which previously maintained this Plan
on behalf of its employees (but only with regard to that period of time
during which the Plan was maintained by such organization(s)), and any
entity which, together with the Employer (as otherwise defined in this
Section), is a member of a controlled group of corporations in the meaning
of Code sec. 414(b), or is a member of a group of trades or business
(whether or not incorporated) under common control in the meaning of Code
sec. 414(c), or is a member of an affiliated service group in the meaning
of Code sec. 414(m), or is otherwise required to be aggregated by Code
sec. 414(o), EXCEPT that for the purpose of determining this Plan's
compliance with the requirements of Code sec. 415, Code sec. 414(b) and
(c) shall be applied by substituting the phrase "more than 50 percent" for
the phrase "at least 80 percent" each time it appears in Code sec.
1563(a)(1) defining a "parent-subsidiary controlled group".
2.14 ERISA means the Employee Retirement Income Security Act of 1974, as
---- -----
amended.
2.15 Hour of Service means:
---- ---------------
(a) each hour for which an Employee is paid, or entitled to payment, by
the Employer for the performance of duties for the Employer, which
shall be credited to the Employee for the Plan Year in which the
duties are performed;
(b) each hour for which an Employee is directly or indirectly paid, or
entitled to payment, by the Employer on account of a period of time
during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty,
military duty or leave of absence EXCEPT with respect to payments
made or due under a plan maintained solely for the purpose of
complying with applicable workers' compensation or unemployment
compensation or disability insurance laws or which are solely in
reimbursement to the Employee for medical or medically-related
expenses incurred by the Employee; however, no more than 501 Hours of
Service shall be credited pursuant to this paragraph 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
Plan Year);
(c) each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer; however, an Hour of
Service shall not be credited under both this paragraph and paragraph
(a) or (b), above. These hours will be credited to the Employee for
the Plan Year(s) to which the award or agreement pertains rather than
the Plan Year in which the award, agreement or payment is made.
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Hours of Service credited under paragraphs (b) and (c), above, shall be
credited in accordance with 29 CFR sec. 2530.200b-2, which is incorporated
herein by this reference. Hours of Service shall be credited to the
appropriate Plan Year in accordance with 29 CFR sec. 2530.200b-2(c).
Hours of Service will be credited for employment with other members of an
affiliated service group, a controlled group of corporations, a group of
trades or businesses under common control (as described in Code sec.
414(m), (b) and (c), respectively) of which the Employer is a member, or
any other entity required to be aggregated with the Employer pursuant to
Code sec. 414(o).
Hours of Service included pursuant to paragraph (a) shall be determined
according to records of employment maintained by the Employer. If such
records do not provide an adequate basis for determining the actual number
of Hours of Service accrued by a particular Employee (e.g. a salaried
Employee), then the Employee shall be credited with 45 Hours of Service
for every week in which he has accrued at least one Hour of Service as
otherwise described in paragraph (a).
If the Employer is subject to the Family and Medical Leave Act (FMLA), for
purposes of eligibility and vesting, any period of unpaid FMLA leave shall
not be treated or counted towards a Break in Service Year. Also, if this
Plan requires an Employee to be employed on a specific date in order to be
credited with a Year of Service for vesting, contribution or participation
purposes, an Employee on unpaid FMLA leave on that date shall be deemed to
have been employed on that date. Unpaid FMLA leave shall not be treated
as Hours of Service for purposes of benefit accrual, vesting or
eligibility to participate.
Solely for purposes of avoiding a Break in Service Year for participation
and vesting purposes, an Employee who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service which
would otherwise have been credited to the Employee but for such absence,
or in any case in which such hours cannot be determined, eight (8) Hours
of Service per day of such absence. For purposes of this paragraph, an
absence from work for maternity or paternity reasons means an absence due
to
(1) the Employee's pregnancy;
(2) the birth of a child of the Employee;
(3) the placement of a child with the Employee in connection with the
adoption of the child by the Employee; or
(4) the caring for such child described in (2) or (3) for a period
beginning immediately following such birth or placement.
The Hours of Service credited under this paragraph shall be credited (1)
in the Plan Year in which the absence begins if the crediting is necessary
to prevent a Break in Service Year in that Plan Year, or (2) in all other
cases, in the following Plan Year. A maximum of 501 Hours of Service
shall be credited, but shall not increase any Participant's vested
percentage, Individual Account balance, or contribution amount.
The Plan Administrator may establish rules which require the Employee to
provide written certification from the Employee's attending physician, or
other licensed attendant at birth or a representative of the relevant
adoption agency to establish that the absence from work is for the reasons
referred to above.
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2.16 Individual Accounts means, for any Participant, those accounts which are
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maintained pursuant to this Plan on his behalf, which shall be adjusted as
provided in Article VI and which shall be closed when the Participant is
entitled to no further benefits under the terms of the Plan.
2.17 Insurance Company means a legal reserve life insurance company, licensed
---- -----------------
to do business in the state of Oregon, with which the Trustees have
entered into a contract to provide benefits under the Plan.
2.18 Limitation Year, for purposes of determining the limitation on certain
---- ---------------
additions to the Plan for the benefit of an Employee as described in
Section 5.1.1, means a twelve-consecutive-month period beginning on an
Anniversary Date.
2.19 Normal Retirement Age is defined in Article VII under "Retirement".
---- ---------------------
2.20 Participant means an Employee or former Employee who has become a
---- -----------
Participant or resumed participation pursuant to Section 3.1 or 3.6 and
who has not subsequently ceased to participate as provided in Section 3.5.
A Participant may be Active or Inactive as provided in Section 3.4.
2.21 Plan means this Standard Insurance Company Home Office Employees'
---- ----
Deferred Compensation Plan.
2.22 Plan Administrator means one or more persons appointed by the Company to
------------------
control and manage the operation and administration of the Plan. The
person or persons so appointed shall constitute a named fiduciary or
fiduciaries for purposes of ERISA.
2.23 Plan Year means a period of time commencing on an Anniversary Date and
---- ---------
ending with the day immediately preceding the next Anniversary Date.
2.24 Preliminary Service is defined in Article III.
---- -------------------
2.25 Qualified Matching Contributions ("QMAC") means Employer contributions
---- -----------------------------------------
(other than non-Elective Contributions) made to a plan for a Participant
on account of any Employee contributions or Elective Contributions made to
a Plan, but which are subject to the nonforfeitability and distribution
limitations of Code sec. 1.401(k)-1(c) and (d) the same as Elective
Contributions.
Qualified Nonelective Contributions ("QNC") means Employer contributions
-------------------------------------------
made to a plan which are not Matching Contributions (i.e. not made on
account of any Employee or Elective Contribution) or Elective
Contributions, but which are subject to nonforfeitability and distribution
limitations of Code sec. 1.401(k)-1(c) and (d) the same as Elective
Contributions.
2.26 Qualifying Employer Securities means any securities issued by the Employer
---- ------------------------------
as defined in ERISA sec. 407(d)(5).
2.27 Required Beginning Date means for any Participant except a five-percent
---- -----------------------
owner, April 1 of the calendar year following the later of:
(a) the calendar year in which the Participant attained age 70 1/2, or
(b) the calendar year in which the Participant retires.
The Required Beginning Date of a Participant who is a five-percent owner
shall be the April 1 of the calendar year following the calendar year the
five-percent owner attains age 70 1/2. A five-percent owner, for purposes
of this Section, means a Participant who is a five-percent owner within
the meaning of Code sec. 416(i) or was a five-percent owner at any time
during the Plan Year ending with or within the calendar
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year in which the Participant attains age 66 1/2, or any subsequent Plan
Year (EXCEPT without regard to whether the Plan is actually top heavy).
Once a Participant becomes a five-percent owner, distributions must
continue to that Participant even if that Participant ceases to be a five-
percent owner in a subsequent year.
2.28 Retirement and Retirement Date are defined in Article VII under
---- ---------- ---------------
"Retirement".
2.29 Service means employment of the Employee by the Employer for the
---- -------
performance of labor or duties by the Employee on behalf of the Employer
and for which the Employee is to be compensated by the Employer.
2.30 Total and Permanent Disability means a physical or mental condition which
---- ------------------------------
results in the Participant being eligible to receive disability
benefits under the Federal Social Security program or under any formal
program of long-term disability insurance provided by the Employer.
2.31 Trustees means those persons or the organization with which the Employer
---- --------
has entered into a trust agreement to provide benefits under the Plan.
However, at any time that the Plan is not trusteed, "Trustees" shall mean
the Company.
2.32 Vested Benefit means, at any time, the sum of the Participant's vested
---- --------------
Individual Account balances.
2.33 Years of Service
---- ----------------
(a) General Rule
------------
Subject to the exclusions set forth in (b) below, an Employee's Years
of Service for the purposes of this Plan shall be measured as
follows.
An Employee shall be credited with one Year of Service for each
twelve-consecutive-month period which commenced on an Anniversary
Date on or after the Effective Date and during which the Participant
accrued at least 1,000 Hours of Service.
In addition, if the Employee was employed on the Effective Date, the
Employee shall also be credited with one Year of Service for each
twelve-consecutive-month period which commenced on an Anniversary
Date prior to the Effective Date and during which the Employee
accrued at least 1,000 Hours of Service.
(b) Exclusions
----------
If a Participant or former Participant accrues a Break in Service
Year, all Years of Service attributable to his employment prior to
that Break in Service Year shall thereafter be disregarded unless
either
(1) his Vested Percentage is greater than zero at the time the Break
in Service Year has accrued, or
(2) the number of his consecutive Break in Service Years is less
than (A) or (B), whichever is greater, where
(A) equals 5, and
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(B) equals the aggregate number of his Years of Service before
the Break in Service Years, not taking into account Years
of Service previously disregarded because of prior Break in
Service Years.
In addition, if a Participant or former Participant has at least
five consecutive Break in Service Years, all Years of Service
attributable to his employment subsequent to said five
consecutive Break in Service Years shall thereafter be
disregarded for purposes of determining his vested interest in
the amount which had been allocated to his Employer Contribution
Account (pursuant to Section 4.2.3) prior to the period of such
five consecutive Break in Service Years.
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ARTICLE III
PARTICIPATION
3.1 Commencement of Participation
--- -----------------------------
The date of commencement of participation of Employees who were
Participants before the effective date of this restatement of the Plan
(i.e., March 3, 1999) shall be determined by the terms of this Plan as it
was in effect before this restatement.
Any other Employee shall become a Participant EXCEPT for purposes of
Section 4.2 on the first Entry Date following his Date of Employment after
the restatement's effective date upon which he meets the Plan's Minimum
Participation Requirements, and for purposes of Section 4.2 on the first
Entry Date after meeting the Plan's Additional Participation Requirements.
The Entry Dates shall be the first day of each month.
3.2.1 Minimum Participation Requirements
----- ----------------------------------
Effective January 1, 1999, an Employee meets the Plan's Minimum
Participation Requirements at any time when the Employee is an Eligible
Employee. These Requirements apply for all purposes except Employer
Matching Contributions under Section 4.2.
3.2.2 Additional Participation Requirements
----- -------------------------------------
An Employee meets the Plan's Additional Participation Requirements at any
time when the Employee satisfies the following conditions:
(a) He is an Eligible Employee.
(b) He is credited with at least one year of Preliminary Service.
These Requirements apply to Employer Matching Contributions under Section
4.2.
3.3 Preliminary Service
--- -------------------
An Employee shall be credited with one year of Preliminary Service for
each complete Preliminary Computation Period in which he has not less than
1,000 Hours of Service, whether or not he was continuously employed during
the Preliminary Computation Period.
Preliminary Computation Periods shall have a duration of twelve
consecutive months. Each Employee's initial Preliminary Computation
Period shall commence as of his Date of Employment (or, after a Break in
Service Year that permits the Employee's prior Preliminary Service to be
disregarded, his Date of Re-employment). Thereafter, the Preliminary
Computation Periods shall commence as of each Anniversary Date, beginning
with the first Anniversary Date following the Employee's Date of
Employment (or Date of Re-employment, if applicable).
If an Employee accrues a Break in Service Year, then his Preliminary
Service attributable to his employment prior to that Break in Service Year
shall thereafter be disregarded unless either
(a) his Vested Percentage is greater than zero at the time the Break in
Service Year accrues, or
10
<PAGE>
(b) the number of his consecutive Break in Service Years is less than (1)
or (2), whichever is greater, where
(1) equals five (5), and
(2) equals the aggregate number of his years of Preliminary Service
before the Break in Service Years, not taking into account years
of Preliminary Service previously disregarded because of prior
Break in Service Years.
3.4 Active Participation; Inactive Participation
--- --------------------------------------------
Once an Employee has commenced participation (or if the Employee
subsequently ceased to participate, once the Employee has resumed
participation), he shall be an Active Participant with respect to each
Hour of Service accrued while he is an Eligible Employee. At any time
thereafter at which the Employee is not an Eligible Employee, but before
the Employee's participation has ceased, the Employee shall be an Inactive
Participant.
3.5 Cessation of Participation
--- --------------------------
A Participant shall cease to participate in this Plan as of the first date
on which the Participant has most recently terminated his employment as an
Employee and also has no rights (present or contingent) to any benefit
under this Plan.
3.6 Participation on Resumption of Employment
--- -----------------------------------------
A former Participant who does not have Break in Service Years which permit
his Preliminary Service to be disregarded shall resume participation as of
his first Hour of Service upon resumption of employment as an Eligible
Employee.
Any other former Employee shall commence participation as of the first
Entry Date which occurs on or after the former Employee's Date of Re-
employment and as of which he satisfies the Minimum and Additional
Participation Requirements in Sections 3.2.1 and 3.2.2.
11
<PAGE>
ARTICLE IV
CONTRIBUTIONS
4.1.1 Elective Contributions
----- ----------------------
(a) Amount
------
Each Participant may elect to defer receipt of Compensation that has
not yet become available to him as an Elective Contribution to the
Plan. For each Plan Year, a Participant's Elective Contributions may
equal not less than three percent (3%) and not more than twenty-two
percent (22%) of his Compensation for the payroll period.
For each Plan Year, the Employer shall contribute an amount to the
Plan equal to the amount of each Participant's Elective
Contributions for the Plan Year. Each Elective Contribution shall be
paid to the Plan by the Employer as soon as reasonably practicable
but in no event later than the fifteenth business day of the month
following the month in which the Employer otherwise would have paid
the amounts in cash to the Participant.
(b) Election
--------
A Participant may elect to change the amount of his Elective
Contributions, within the limits prescribed in subsection (a) above.
A Participant may also elect to cease his Elective Contributions
altogether, or, having done so, may elect to recommence them.
A Participant's election to commence or recommence Elective
Contributions may become effective only as of the first day of any
prospective month.
Effective January 1, 2000, a Participant's election to change the
amount of his Elective Contributions may become effective only as of
the first day of any prospective month. Prior to January 1, 2000,
such an election could become effective only as of the first day of
any prospective calendar quarter.
A Participant's election to cease his Elective Contributions
altogether may become effective only as of the first day of any
prospective payroll period.
Any of the provisions of this subparagraph (b) to the contrary
notwithstanding, any election described by this subparagraph (b)
regarding Elective Contributions may become effective only after
written notice delivered to the Plan Administrator within a
reasonable time prior to the effective date of the election.
(c) Limit on Amount
---------------
The total sum of any Participant's elective deferrals for any
taxable year of the Participant may not exceed the adjusted limit
prescribed by Code sec. 1.402(g)-1(d). (Generally, for taxable years
beginning in 2000, that limit equals $10,500.)
For the purposes of this subsection (c), "elective deferrals" has
the meaning defined in Code sec. 1.402(g)-1(b), including (but not
limited to) Elective Contributions received by this Plan on the
Participant's behalf.
For any Participant, if this limit on elective deferrals is
exceeded, then the following corrective measures are permitted.
12
<PAGE>
(1) The Participant may notify the Plan Administrator of the excess
deferral, and may request that the Plan Administrator
distribute to the Participant an amount not exceeding the
lesser of:
(A) the amount of the excess deferral, plus all income
allocable to the excess deferral;
(B) the sum of all amounts deferred by the Participant and
contributed to the Plan as Elective Contributions on
behalf of the Participant with regard to the affected
taxable year, net of any allocable earnings, gains or
losses attributable to such amounts; or
(C) the balance of the Participant's Elective Contribution
Account as of the date of distribution, minus any legally
required withholding amounts.
In addition, the amount that may be included in a corrective
distribution shall be reduced by any excess contributions
previously distributed to the Participant for the Plan Year
that began with or within the affected taxable year of the
Participant.
To be effective for the purposes of this Plan, the
Participant's notice and request must be in writing and
delivered to the Plan Administrator prior to the first April 15
following the close of the affected taxable year of the
Participant.
To the extent that the Participant has excess deferrals for the
taxable year calculated by taking into account only Elective
Contributions under this Plan and other plans of the Employer,
and absent actual notification by the Participant, the
Participant shall be deemed to have provided the notice
described above in this subsection.
(2) A corrective distribution of excess deferrals and allocable
income may be made during the affected taxable year of the
Participant only if all of the following conditions are
satisfied.
(A) The Participant has designated the amount of the
distribution as being attributable to an excess deferral.
(Because subsection (1) above limits the amount of the
corrective distribution to not more than the amount of
excess deferrals calculated by taking into account only
Elective Contributions under this Plan and other plans of
the Employer, and absent an actual designation by the
Participant, the Participant shall be deemed to have
provided the designation described above in this
subsection.)
(B) The corrective distribution is made after the date on
which the Plan received the excess deferral.
(C) The Plan has designated the amount of the distribution as
being attributable to an excess deferral.
(3) Not later than the first April 15 following the close of the
affected taxable year of the Participant, and after receipt of
the Participant's written notice and request, the Plan
Administrator may make the appropriate corrective distribution,
consistent with the provisions of this subparagraph (c).
13
<PAGE>
The Plan Administrator may require that before the
corrective distribution is made, the Participant must
provide to the Plan Administrator additional documentation
evidencing the Participant's representations regarding the
excess deferrals.
The income allocable to excess deferrals for the affected taxable
year of the Participant shall be determined according to Code sec.
1.402(g)-1(e)(5).
In the event of a corrective distribution of excess deferrals and
allocable income, the balance of the Participant's Elective
Contribution Account shall be reduced accordingly.
4.1.2 Elective Contributions: Allocations
----- -----------------------------------
Any Elective Contribution received by the Plan on behalf of a Participant
shall be credited to the Elective Contribution Account of that Participant
as of the date on which the Elective Contribution was received by the
Plan.
4.1.3 Elective Contributions: Vesting
----- --------------------------------
The Elective Contributions received by the Plan on behalf of any
Participant shall be fully vested in such Participant and not subject to
forfeiture at any time.
4.1.4 Elective Contributions: Withdrawals
----- ------------------------------------
(a) At any time before his Retirement Date, a Participant may apply to
withdraw an amount from his Elective Contribution Account. The
application must be in writing and received by the Plan
Administrator. If the Participant has attained age 59 1/2 or is not
an Employee as of the date of withdrawal, the Participant may
withdraw up to the entire balance of his Elective Contribution
Account, including interest or other earnings. Subject to the
additional restrictions of this Section, any other Participant may
withdraw an amount that does not exceed the balance of the account
attributable to Elective Contributions made on his behalf, excluding
any interest or other earnings that have been allocated after the
last day of the Plan Year ending before July 1, 1989. However, in no
event shall a withdrawal under this Section be permitted if it
requires the sale of Qualifying Employer Securities.
If the Participant's Vested Benefit exceeds $5,000, a Participant's
application may be approved by the Plan Administrator only if spousal
consent requirements of the type described in Section 7.5(c) have
been met within 90 days before the date of the withdrawal.
(b) If the Participant is an Employee on the date of the withdrawal, and
if the Participant has not yet attained age 59 1/2 as of the date of
the withdrawal, the Plan Administrator may permit the withdrawal only
if the distribution is both made on account of an immediate and heavy
financial need of the Participant and necessary to satisfy that
financial need.
(1) Any of the following facts and circumstances shall constitute an
immediate and heavy financial need of the Participant:
(A) expenses for medical care (as defined in Code sec. 213(d))
that were either previously incurred by the Participant,
the Participant's spouse, or any dependents (as defined by
Code sec. 152) of the Participant or that are necessary for
these persons to obtain such medical care;
14
<PAGE>
(B) costs directly related to the purchase of a principal
residence for the Participant (excluding mortgage
payments);
(C) payment of tuition, related educational fees, and room and
board expenses for the next 12 months of post-secondary
education for the Participant, or the Participant's spouse,
children, or dependents (as defined in Code sec. 152);
(D) payments necessary to prevent the eviction of the
Participant from the Participant's principal residence, or
foreclosure on the mortgage on that residence;
(E) expenses of repair or replacement of the Participant's
principal residence and its contents for damages caused by
natural disasters;
(F) funeral expenses for members of the Participant's family;
or
(G) any other facts and circumstances that the Commissioner of
the Internal Revenue Service has included through the
publication of revenue rulings, notices, or other documents
of general applicability.
A financial need shall not fail to qualify as immediate and
heavy merely because such need was reasonably foreseeable or
voluntarily incurred by the Participant.
(2) In requesting a withdrawal due to financial need, the
Participant shall specifically identify the facts and
circumstances which have caused the financial need and shall
state the amount needed to satisfy the need, which may include
amounts necessary to pay any income taxes or penalties
reasonably anticipated to result from the withdrawal. The
Participant shall further represent in writing that, to the
extent of the amount requested, the financial need cannot
otherwise be satisfied by:
(A) reimbursement or compensation by insurance or otherwise;
(B) reasonable liquidation of the Participant's assets, but
only to the extent that such liquidation would not in
itself cause an immediate and heavy financial need;
(C) cessation of Elective Contributions permitted by the Plan
or Participant Contributions to any other plan;
(D) other distributions or nontaxable (at the time of the loan)
loans from this Plan or any other plan maintained by the
Employer or any other employer; or
(E) borrowing from commercial sources on reasonable commercial
terms.
For the purposes of this subsection, the Participant's resources
shall be deemed to include those assets of the Participant's
spouse and minor children to the extent that such assets are
reasonably available to the Participant.
The Plan Administrator may rely upon the Participant's
representation unless the Plan Administrator has actual
knowledge to the contrary.
(3) Before the withdrawal occurs, the Plan Administrator shall
receive from the Participant any documentation that the Plan
Administrator requires in
15
<PAGE>
the performance of its fiduciary duty to substantiate that the
withdrawal is necessary to satisfy the financial need identified
by the Participant. Under no circumstances shall the withdrawal
be more than the Plan Administrator reasonably believes is
necessary to satisfy the financial need identified by the
Participant.
(c) The Plan Administrator shall approve or deny the Participant's
application for such a withdrawal within a reasonable amount of time
after receipt of such application. If approved, payment shall be made
by the Plan Administrator as soon as administratively practicable,
but in any event within ninety (90) days after the Plan
Administrator's receipt of the Participant's application.
The Plan Administrator shall also issue any denial of such an
application as soon as administratively practicable. Such a denial
shall be provided to the Participant in writing and shall state
specifically the reasons for such denial.
(d) Withdrawals under this Section shall be limited to not more than one
per quarter by each Participant.
(e) The amount of any withdrawal from an Elective Contribution Account
pursuant to this Section shall be charged against that Account as of
the date that the withdrawal is made from the Plan.
A withdrawal shall be taken pro rata from the Participant's balances
in the Plan's investment options as of the date of withdrawal.
4.2.1 Employer Contributions
----- ----------------------
The Employer may contribute amounts to the Plan for each Plan Year. These
amounts shall be called Employer Contributions, and shall be determined
according to the following provisions.
Matching Contributions
----------------------
The Employer may contribute amounts as a match of Elective Contributions
made by Participants who have satisfied the Additional Participation
Requirements of Section 3.2.2. Effective July 1, 1999, Matching
Contributions shall be made in Qualifying Employer Securities, consistent
with the current Deferred Compensation Plan Trust Investment Strategy.
The amount of the matching contribution will equal one hundred percent
(100%) of each Participant's Elective Contributions for the payroll
period, EXCEPT that in determining the amount of a matching contribution,
no matching contribution shall be made on behalf of any Participant in
excess of three percent (3%) of the Participant's Eligible Compensation
for the Plan Year.
For the purposes of this Section, the amount of Elective Contributions to
be matched shall be determined without regard to any withdrawals of
Elective Contributions that were made during that Plan Year (see Section
4.1.4).
Any of the provisions of this Section to the contrary notwithstanding, no
amounts may be contributed to the Plan as Employer Contributions in excess
of the maximum amount which may be allocated consistently with the
limitations stated in Section 5.1.1.
Employer Contributions shall be allocated among the Plan's Participants
pursuant to Section 4.2.2 in a uniform and nondiscriminatory manner.
16
<PAGE>
4.2.2 Employer Contributions: Allocation
----- -----------------------------------
Matching Contributions: Allocation
-----------------------------------
As of the date it is received by the Plan and all necessary information to
complete the allocation is available, a portion of the Matching
Contribution for the payroll period, if any, shall be allocated to the
Matching Contribution Account of each Participant who is allocated an
Elective Contribution for that payroll period.
Each such Participant shall be allocated a portion of the Matching
Contribution according to the Matching Contribution formula described in
Section 4.2.1(a).
4.2.3 Employer Contributions: Vesting
----- --------------------------------
(a) Each Participant's interest in his Matching Contribution Account
balances (EXCEPT in Matching Contributions that are forfeited because
they relate to excess deferrals, excess contributions, or excess
aggregate contributions) shall be fully vested in the Participant and
not subject to forfeiture at any time.
(b) Under no circumstances shall any amendment of this Plan reduce any
Participant's Vested Percentage regarding any benefits accrued under
this Plan as of the adoption date (or effective date, if later) of
such amendment. With regard to the effect of such an amendment on
subsequently accrued benefits, for each Participant whose Vested
Percentage under the Plan as amended would at any future time be less
than it would be if determined without regard to such amendment, then
provided that the Participant had completed at least three Years of
Service as of the adoption date (or effective date, if later) of the
amendment, such Participant may irrevocably elect in a writing
delivered to the Plan Administrator during the election period
described below to have the Participant's Vested Percentage in his
subsequently accrued benefits under this Plan determined without
regard to such amendment.
For the purpose of this Section, the election period within which
such election may be delivered to the Plan Administrator shall begin
as of the adoption date of the amendment, and shall end on the
sixtieth day after the latest of:
(1) the adoption date of the amendment;
(2) the effective date of the amendment; or
(3) the date on which the Participant received written notice of the
amendment from the Employer or Plan Administrator.
4.3.1 Supplemental Contributions: Amount
----- -----------------------------------
For any Plan Year in which the Plan Administrator determines that the
average of the actual deferral ratios or the actual contribution ratios of
Participants who are HCEs exceeds the limit determined pursuant to Section
5.3 or 5.4, as applicable, the Employer may make Supplemental
Contributions that meet the requirements for Qualified Nonelective
Contributions or Qualified Matching Contributions. Supplemental
Contributions shall be made solely for the purpose of complying with the
limitations of the applicable Section, and shall not exceed the amount
necessary to satisfy the test described therein, subject to the limits of
Section 5.1.1.
4.3.2 Supplemental Contributions: Allocations
----- ----------------------------------------
As of the date on which it is received by the Plan and all necessary
information to complete the allocation is available, a portion of the
Supplemental Contribution for the Plan Year, if any, shall be allocated to
the Supplemental Contribution Account of the
17
<PAGE>
Participant who has the lowest Compensation for the Plan Year and who is
not an HCE and who (1) is allocated an Elective Contribution for that Plan
Year and (2) is an Employee on the last day of the Plan Year.
The allocation shall not exceed the limit described in Section 5.1.1 and
the amount necessary to satisfy the tests described in Section 5.3 or 5.4.
If necessary, the Participant with the next lowest Compensation who is not
an HCE and who (1) is allocated an Elective Contribution for that Plan
Year and (2) is an Employee on the last day of the Plan Year shall receive
an allocation, subject to the same limits. This process shall continue
until the entire amount of Supplemental Contribution has been allocated.
4.3.3 Supplemental Contributions: Vesting
----- ------------------------------------
At any time, a Participant's Supplemental Contribution Account balance
shall be fully vested and not subject to forfeiture.
4.4.1 Rollover Contribution: Amount
----- ------------------------------
The Plan Administrator may accept Rollover Contributions from or on behalf
of an Active Participant (prior to June 1, 2000, from an Active or
Inactive Participant). An Employee who makes such an early Rollover
Contribution shall be treated as a Participant for all purposes, except
that he shall not receive an allocation or share of any Employer
Contributions or make Elective Contributions until he satisfies the
requirements of Article III.
As used herein, Rollover Contribution means all or a portion of an
"eligible rollover distribution" described in Code sec. 402(c)(4), or an
amount paid or distributed out of an individual retirement account or
individual retirement annuity described in Code sec. 408(d)(3)(A)(ii).
The Plan Administrator may require such assurance and proofs of fact from
the Employee as may be necessary to determine whether an amount the
Employee desires to contribute is a Rollover Contribution as defined
herein. The Plan Administrator may further require the Employee to agree
to indemnify the Plan for any adverse consequences which may follow if a
contribution proves not to have been a Rollover Contribution. An Employee
on whose behalf a Rollover Contribution described in this Section is made
shall agree to cooperate fully with the Plan Administrator in effecting
any and all corrective measures which may be required by an agency of the
federal government to prevent the Plan's disqualification as a result of
the rollover.
4.4.2 Rollover Contributions: Allocation
----- -----------------------------------
Any Rollover Contribution received by the Plan pursuant to this Article IV
shall be credited as it is received to the Rollover Contribution
Account(s) of the Participant on whose behalf it was received.
4.4.3 Rollover Contributions: Vesting
----- --------------------------------
The Rollover Contributions received by the Plan on behalf of any
Participant shall be fully vested in such Participant and not subject to
forfeiture at any time.
4.5.1 Plan-to-Plan Transfers: Amount
----- -------------------------------
For any Plan Year, the Plan may make or accept the direct transfer of
assets to or from an appropriate funding agency, fiduciary or plan
administrator of another qualified retirement plan in which the
Participant requesting such transfer is participating, PROVIDED
18
<PAGE>
that the amount transferred or received by the Plan includes at least the
entire present value of the accrued benefit or at least the entire balance
of all accounts derived from employer contributions (whichever is
appropriate) which is due to the Participant under the terms of this Plan
or the other qualified retirement plan, as applicable, as of the proposed
date of transfer.
The Plan Administrator may, in its discretion, make or accept a transfer
of assets described in the preceding paragraph provided that such transfer
is consistent with the requirements of Code secs. 411(d)(6) and 414(l).
The Plan Administrator may elect not to make or receive a transfer
pursuant to this Section if it has any doubt as to the qualified status of
the other plan that is to receive or transfer the assets, and the Plan
Administrator shall assume no liability resulting from any adverse
consequences resulting from such a transfer. An Employee who directs a
transfer described in this Section shall cooperate fully with the Plan
Administrator in effecting any and all corrective measures which may be
required to prevent the Plan's disqualification as a result of the
transfer.
4.5.2 Plan-to-Plan Transfers: Allocation
----- -----------------------------------
Any Plan-to-Plan Transfer received by the Plan pursuant to this Article IV
shall be credited, as it is received, to the Plan-to-Plan Transfer Account
of the Participant on whose behalf it was received.
4.5.3 Plan-to-Plan Transfers: Vesting
----- --------------------------------
The Plan-to-Plan Transfers received by the Plan on behalf of any
Participant shall be fully vested in such Participant and not subject to
Forfeiture at any time.
4.6.1 Prior Plan Contributions: Amount and Allocation
----- ------------------------------------------------
On behalf of any Participant for whom amounts are held under this Plan
which are attributable to Employer Match, Basic, Supplementary or Special
Contributions made to and defined under this Plan as it existed prior to
the effective date of the 1984 restatement, there shall be maintained a
Prior Plan Contribution Account, into which all such amounts shall be
credited. Within this account, all amounts attributable to pre-tax
contributions and all earnings on both pre-tax and after-tax contributions
shall be held and accounted separate from any after-tax contributions that
are held.
Prior Plan Contribution Accounts shall be adjusted as provided in Article
VI, and shall be closed when the balances of such accounts, including
allocable earnings, gains and losses, have been distributed pursuant to
this Plan.
4.6.2 Prior Plan Contributions: Vesting
----- ----------------------------------
At any time, the balance of any Participant's Prior Plan Contribution
Account shall be fully vested in such Participant and not subject to
forfeiture.
4.6.3 Prior Plan Contributions: Withdrawals
----- --------------------------------------
(a) Subject to the provisions of this Section, a Participant may
withdraw some or all of the amounts credited to his Prior Plan
Contribution Account. A Participant may elect to withdraw such
amounts at any time by filing a written election to do so with the
Plan Administrator in the time, form and manner which the Plan
Administrator prescribes, including compliance with applicable
spousal consent requirements.
(b) Withdrawals pursuant to this Section shall be subject to the
following restrictions:
(1) a Participant may make no more than one withdrawal per Plan
Year; and
19
<PAGE>
(2) a withdrawal must equal at least $100, but may not exceed the
amount credited to the Prior Plan Contribution Account.
(c) A Participant need not demonstrate "financial need," as defined in
Section 4.2.5(b) for in-service withdrawals of Elective
Contributions, prior to withdrawing any amounts from the
Participant's Prior Plan Contribution Account.
20
<PAGE>
ARTICLE V
REQUIRED NON-DISCRIMINATION TESTING
5.1.1 Limitation on Additions
----- -----------------------
(a) Annual Additions are the sum of the following contributions for any
Limitation Year to any plan maintained by the Employer for that
Limitation Year:
(1) Employer Contributions;
(2) Employee Contributions; and
(3) Allocations to any individual medical account maintained on
behalf of the Participant by the Employer pursuant to a pension
or annuity plan, as described in Code secs. 415(l)(1) and
419A(d)(2).
Contributions shall not fail to be Annual Additions to this Plan
merely because such contributions are excess contributions or excess
aggregate contributions, or merely because such excess contributions
or excess aggregate contributions are distributed. Excess deferrals
are Annual Additions only if they are not distributed as provided in
Article IV.
(b) A Participant's Maximum Annual Addition for a Limitation Year is the
lesser of:
(1) twenty-five percent (25%) of the Participant's Compensation for
the Limitation Year; or
(2) $30,000 as adjusted under Code sec. 415(d).
(c) Any provisions of this Plan to the contrary notwithstanding, the
Annual Additions to this Plan for the benefit of a Participant in a
Limitation Year shall in no event exceed the Participant's Maximum
Annual Addition for that Limitation Year.
If allocations pursuant to Article IV would otherwise result in the
limitation in the preceding sentence being exceeded for a Participant
in a Limitation Year because of the allocation of Forfeitures, if
any, or because of a reasonable error in estimating a Participant's
annual Compensation, or because of a reasonable error in determining
the amount of Elective Contributions (within the meaning of Code sec.
402(g)(3)), or because of any other facts and circumstances which the
Internal Revenue Service finds to be appropriate consistent with Code
sec. 415 and regulations promulgated thereunder, then the Plan
Administrator shall reduce that Participant's Annual Additions, but
only to the extent that the sum of such Additions no longer exceeds
his Maximum Annual Additions.
This reduction of the Participant's Annual Additions shall be
accomplished by reducing the allocation (if any) to the Participant's
Individual Accounts of each of the allocated amounts described below
according to the order in which they are listed. Each such amount
shall be completely exhausted before the next listed allocation is
reduced.
The allocations to be reduced (and the order in which they shall be
reduced) shall be as follows:
(1) Elective Contributions and, if the Participant is an HCE,
related Matching Contributions
(2) Matching Contributions not described above
21
<PAGE>
(3) Supplemental Contributions
The amount by which an Elective Contribution is reduced shall be
distributed to the Participant on whose behalf it was received as
soon as administratively practicable, and shall include any earnings
and gains that have been allocated and which are attributable to that
returned amount.
The remaining surplus amounts created by the reductions described
above shall be held in a Suspense Account established and
administered pursuant to Section 5.1.2.
(d) For purposes of this Section, "Compensation" means a Participant's
wages, salary, and/or other remuneration received from the Employer
that is required to be reported as income in Box 1 of IRS Form W-2,
plus, for Plan Years beginning after December 31, 1997, any elective
deferrals which are not included in the Participant's gross income by
reason of Code secs. 125, 402(g)(3) or 457. Compensation shall not
include contributions to any individual medical account maintained on
behalf of the Participant by the Employer as described in Code secs.
415(l)(1) and 419A(d)(2).
For the purposes of this Section, the total amount of Compensation
that is actually paid or made available to a Participant within a
Limitation Year shall be the amount of that Participant's
Compensation taken into account regarding that Limitation Year.
(e) Aggregation of Plans
--------------------
For purposes of this Section, all qualified defined contribution
plans (without regard to whether a plan has been terminated) ever
maintained by the Employer will be treated as part of this Plan, and
all qualified defined benefit plans (without regard to whether a plan
has been terminated) ever maintained by the Employer will be treated
as one defined benefit plan. If the Annual Additions to all
qualified defined contributions plans exceed the limits of this
Section on an aggregated basis, reductions required by this Section
shall be made as provided in subsection (c) unless the other defined
contribution plans specifically provide otherwise.
Employee contributions (whether mandatory or voluntary) to a
qualified defined benefit plan maintained by the Employer shall be
treated as a defined contribution plan maintained by the Employer.
Any qualified defined benefit or defined contribution plan maintained
by any member of a controlled group of corporations or group of
trades or businesses (whether or not incorporated) under common
control (within the meaning of Code sec. 414(b) and (c) as modified
by Code sec. 415(h)) of which the Employer is a member shall be
treated as a plan maintained by the Employer.
(f) Additional Limitation in the Case of Defined Benefit Plan and Defined
---------------------------------------------------------------------
Contribution Plan for Same Employee:
-----------------------------------
(1) The provisions of this paragraph are applicable for all Plan
Years beginning prior to January 1, 2000.
In any case where a Participant has at any time participated in
a defined benefit plan maintained by the Employer, the
limitation imposed by this Section (without regard to this
Additional Limitation) shall be reduced to the extent necessary
to prevent the Participant's Combination Ratio from exceeding
1.0 in any Limitation Year. A Participant's Combination Ratio
22
<PAGE>
is the sum of his Defined Benefit Fraction and his Defined
Contribution Fraction.
(2) A Participant's Defined Benefit Fraction for a Limitation Year
is a fraction -
(A) the numerator of which is his projected annual benefit (as
defined in Code sec. 415(e) and regulations thereunder) to
which the Participant would be entitled under the defined
benefit plan as of the close of the Limitation Year;
(B) the denominator of which is the lesser of:
(i) the product of 1.25 (or, if the Plan is top-heavy as
determined under the provisions of Section 5.2)
multiplied by the dollar limitation in effect under
Code sec. 415(b)(1)(A) for such Limitation Year, or
(ii) the product of 1.4 multiplied by the amount which may
be taken into account under Code sec. 415(b)(1)(B)
with respect to such Participant for such Limitation
Year.
(3) A Participant's Defined Contribution Fraction for a Limitation
Year is a fraction -
(A) the numerator of which is the sum of the Annual Additions
(as defined in this Section) to the Participant's account
for the Participant's benefit as of the close of the
Limitation Year and for all prior Limitation Years; and
(B) the denominator of which is the sum of the lesser of the
following amounts determined for such Limitation Year and
for each prior Limitation Year of Service with the
Employer:
(i) the product of 1.25 (or, if the Plan is top-heavy as
determined under the provisions of Section 5.2, 1.0)
multiplied by the dollar limitation in effect under
Code sec. 415(c)(1)(A) for such Limitation Year
(determined without regard to Code sec. 415(c)(6)), or
(ii) the product of 1.4 multiplied by the amount which may
be taken into account under Code sec. 415(c)(1)(B) (or
subsection (c)(7) or (8), if applicable) with respect
to such Participant for such Limitation Year.
(4) For purposes of this Additional Limitation, Employee
contributions to any defined benefit plan maintained by the
Employer, whether mandatory or voluntary, shall be treated as a
separate defined contribution plan maintained by the Employer.
(5) If an Additional Limitation is applicable, it shall be imposed
in the defined benefit plan before any reduction in the
limitation on benefits payable under this Plan, unless the
applicable defined benefit plan provides expressly to the
contrary.
23
<PAGE>
5.1.2 Suspense Account
----- ----------------
For any Plan Year, any surplus amounts created by reductions described in
Section 5.1.1(c) and not returned to a Participant shall be held
unallocated in a Suspense Account.
Any provisions of this Plan to the contrary notwithstanding, any amounts
held in a Suspense Account shall be applied to Employer contributions and
Plan expenses as such obligations accrue, with the Employer making no
further contributions to the Plan until such time as the Suspense Account
balance has been exhausted.
No amounts held in a Suspense Account may be distributed to any
Participant at any time prior to termination of the Plan. If there are
amounts held in a Suspense Account when the Plan is terminated, such
amounts shall be reallocated to Participants in proportion to their
Compensation for that Plan Year but not in excess of each Participant's
Maximum Annual Addition for the Plan Year. Any amounts that cannot be
reallocated because they exceed the limits of Section 5.1.1, may revert to
the Employer according to Section 8.1.3.
5.2.1 Top-Heavy Provisions: Application
----- ----------------------------------
The provisions of Sections 5.2.1 - 5.2.3 shall become effective only if,
as of the first day of the applicable Plan Year, the Plan is top-heavy
pursuant to Section 5.2.2.
5.2.2 Top-Heavy Determination
----- -----------------------
(a) Definitions
(1) Aggregation Group
-----------------
(A) Required Aggregation Group means
--------------------------
(i) each and every plan of the Employer in which a Key
Employee is a Participant during the Plan Year
containing the Determination Date or any of the four
preceding Plan Years, including any plan that has
subsequently terminated, and
(ii) each other plan of the Employer which enables any
plan described in subsection (i) above to meet the
participation or nondiscrimination requirements of
the Code, including (but not limited to) the
requirements of Code secs. 401(a)(4) and 410.
(B) Permissive Aggregation Group means a Required Aggregation
----------------------------
Group or a plan described in subsection (A)(i) above
together with any other plan of the Employer which is not
required to be included in an Aggregation Group under
subsection (A)(ii) above but which may be so included if
such group would continue to meet the participation and
nondiscrimination requirements of Code secs. 401(a)(4) and
410.
(C) Top-Heavy Group means any Required Aggregation Group found
---------------
to be top-heavy pursuant to subsection (b) of this Section
5.2.2.
(2) Compensation means compensation as defined in Section 5.1.1(d).
------------
(3) Determination Date means the last day of the preceding Plan
------------------
Year.
(4) Non-Key Employee means any Employee who is not a Key Employee.
----------------
24
<PAGE>
(5) Present Value of Accrued Benefits means, for this Plan, the sum
---------------------------------
of
(A) the account balances attributable to Elective and Employer
Contributions and Supplemental Contributions and non-
deductible Employee Contributions as of the most recent
Valuation Date occurring within a twelve-month period
ending on the Determination Date, and
(B) an adjustment for certain contributions due as of the
Determination Date, as required by Code sec. 416.
If this Plan is a member of an Aggregation Group, Present Value
of Accrued Benefits shall mean the sum of the account balances
of all Elective, Employer and non-deductible Employee
contribution accounts maintained for the Participant pursuant to
all defined contribution plans that belong to the group and of
which he is a participant and also the sum of the present values
of the vested accrued benefits due the Participant pursuant to
all defined benefit plans that belong to the group and in which
the Participant participates.
(6) Valuation Date means the last date in each Plan Year on which
--------------
account balances are valued.
(b) Top-Heavy Test
The Plan (or Aggregation Group) shall be top-heavy for each Plan Year
if, as of the Determination Date, the Plan's (or Aggregation Group's)
top-heavy ratio for the Plan Year exceeds sixty percent (60%). The
top-heavy ratio is the Present Value of Accrued Benefits of all Key
Employees over the Present Value of Accrued Benefits of all
Employees, excluding former Key Employees. Calculation of the top-
heavy ratio shall be made in accordance with Code sec. 416 (with
specific reference to Code sec. 416(g)(3)) and shall take into
account the following amounts:
(1) Present Value of Accrued Benefits as described in subsection
(a)(5) above; and
(2) The amount of all distributions to Participants or their
Beneficiaries during the Plan Year that includes the
Determination Date and also during the four preceding Plan Years
pursuant to this Plan or pursuant to a terminated plan which if
it had not been terminated would have been required to be
included in an Aggregation Group, EXCEPT
(A) any rollover to this Plan initiated by the Employee; and
(B) any transfer to this Plan from a qualified plan maintained
by an unrelated employer; and
(C) any distribution which occurred after the Valuation Date
but prior to the Determination Date to the extent that such
a distribution has been included in the calculation of the
Present Value of Accrued Benefits.
However, calculation of the top-heavy ratio for any Plan Year shall
not take into account the Present Value of Accrued Benefits or the
amount of all distributions made to any individual who has not
performed services for the Employer at any time during the five-year
period ending on such Plan Year's Determination Date.
For an Aggregation Group, each plan shall initially be tested
separately, and then the plans shall be aggregated by adding together
the results for each plan as of the Determination Dates that fall
within the same calendar year. If the
25
<PAGE>
Aggregation Group includes two or more defined benefit plans, the
same actuarial assumptions will be specified within and used by such
plans for the purposes of this Section 5.2. Also, in such defined
benefit plans proportional subsidies shall be ignored and non-
proportional subsidies considered for the purposes of this Section
5.2.2(b).
For a Required Aggregation Group, each Plan shall be tested by
determining the Present Value of Accrued Benefits for non-Key
Employees (1) pursuant to the method, if any, that uniformly applies
for accrual purposes under all plans maintained by the affiliated
employers; or (2) if there is no such method, as if such Accrued
Benefits accrued not more rapidly than the slowest accrual rate
permitted under the fractional accrual rates of Code sec.
411(b)(1)(C).
5.2.3 Special Rules for Top-Heavy Plans
----- ---------------------------------
(a) Application of Special Rules
(1) If, after application of the top-heavy test described in Section
5.2.2(b), this Plan is found not to be top-heavy, then the
special rules set forth below shall not apply to this Plan. In
that event, the other applicable provisions in this Plan will
govern.
(2) If, after application of the top-heavy test in Section 5.2.2(b),
this Plan is found to be top-heavy, then the following special
rules shall govern.
(b) Minimum Contribution
(1) For each Plan Year in which this Plan or any other qualified
plan of the Employer is top-heavy, each non-Key Employee who is
a Participant and who has not separated from Service at the end
of the Plan Year, including any Participant who failed to
complete 1,000 Hours of Service, and any who did not make an
Elective Contribution pursuant to Section 4.1.1, shall accrue
not less than the minimum contribution described below.
(2) The sum of the Employer's contributions and any forfeitures
allocated to the Individual Accounts of each such Participant
for each Plan Year in which the Plan is top-heavy must equal not
less than
(A) at least three percent (3%) of each such Participant's
Compensation for that Plan Year; or
(B) if the highest percentage of Compensation provided on
behalf of Key Employees who are Participants for that Plan
Year is less than three percent (3%), then not less than
the same percentage of such Compensation for that Plan Year
for each non-Key Employee Participant as the largest
percentage of such Compensation provided on behalf of Key
Employee Participants for that Plan Year.
(3) Any provisions of subsection (2) above to the contrary
notwithstanding, for each Plan Year in which the Employer
maintains both a defined benefit plan and a defined contribution
plan and both plans are top-heavy, each non-Key Employee who is
a Participant in the defined benefit plan shall be credited with
the minimum benefit as set forth in that plan. Any other
Participant shall be credited with not less than a portion of
the sum of the Employer's contributions and forfeitures made
under the terms of this Plan for that Plan Year equal to five
percent (5%) of his Compensation.
26
<PAGE>
In determining the minimum contribution that is required for non-Key
Employees by this Section, Elective Contributions and Matching
Contributions, if any, that are allocated to Key Employees shall be
taken into account. However, to the extent that Matching
Contributions made on behalf of non-Key Employees are taken into
account in meeting the Actual Deferral Percentage Test or the Actual
Contribution Percentage Test described below, such contributions may
not additionally be credited as part of any minimum contribution
required by this Section. Elective Contributions made on behalf of
non-Key Employees may not be credited as part of any minimum
contribution required by this Section.
If the Employer is required to contribute an additional amount to
this Plan or any other plan on behalf of a Participant as a result of
the operation of this Article, that amount shall be credited to an
Employer Contribution Account established and maintained on the
Participant's behalf.
5.3 Actual Deferral Percentage Test
--- -------------------------------
The Plan shall satisfy the Actual Deferral Percentage (ADP) Test of Code
sec. 401(k)(3), which is incorporated herein by reference, along with Code
sec. 1.401(k)-1, and any subsequent guidance under Code sec. 401(k),
issued by the Internal Revenue Service. The ADP test shall be satisfied
by using current Plan Year data as described in Code sec. 401(k)(3) and
Notices 97-2 and 98-1 and subsequent guidance.
5.4 Actual Contribution Percentage Test
--- -----------------------------------
The Plan shall satisfy the Actual Contribution Percentage (ACP) Test of
Code sec. 401(m)(2), which is incorporated herein by reference, along with
Code sec. 1.401(m)-1, and any subsequent guidance under Code sec. 401(m),
issued by the Internal Revenue Service. The ACP test shall be satisfied
by using current Plan Year data as described in Code sec. 401(m) and
Notices 97-2 and 98-1 and subsequent guidance.
5.5 Multiple Use of Alternative Limitation
--- --------------------------------------
(a) The Plan shall comply with the provisions of Code sec. 401(m)(9),
which are incorporated herein by reference, along with Code sec.
1.401(m)-2, and any subsequent guidance under Code sec. 401(m)(9),
issued by the Internal Revenue Service.
(b) If a multiple use of the alternative limitation occurs, the multiple
use shall be corrected by reducing the ADP, the ACP, or a combination
of the two, as determined by the Plan Administrator.
27
<PAGE>
ARTICLE VI
ADMINISTRATION OF PLAN ASSETS
6.1.1 The Trust Fund
----- --------------
All funds received by the Plan pursuant to Article IV, including amounts
deposited with the Insurance Company under an annuity or insurance
contract, shall be credited to the trust fund. The trust fund shall be of
a suitable nature to hold the funds and to provide the benefits payable
under this Plan.
The Plan Administrator shall create and maintain adequate records to
disclose the interest in the trust fund of each Participant or, where
appropriate, Beneficiary. Such records shall be in the form of Individual
Accounts, and credits and charges shall be made to such accounts in the
manner herein described. These amounts shall be maintained for accounting
purposes only and shall not represent any segregated or identifiable
portion of the trust fund.
All deposits to the trust fund shall be applied for the exclusive benefit
of Participants and their Beneficiaries, except for such reasonable
expenses as may be incurred in the establishment or operation of the Plan
and which are not otherwise paid. Except as provided in Sections 8.1.3
and 8.5, no amounts in the trust fund nor any earnings attributable
thereto, may ever revert to the Employer prior to full satisfaction of all
liabilities under the Plan.
6.1.2 Investment Restrictions
----- -----------------------
The Trustee may invest in Qualifying Employer Securities consistent with
the current Deferred Compensation Plan Trust Investment Strategy.
Investment of Elective Contributions in Qualifying Employer Securities, if
any, shall not exceed the limits described in ERISA sec. 407(b) unless
such investments are directed by Participants pursuant to Section 6.1.3.
6.1.3 Participant Directed Investments
----- --------------------------------
Amounts held in the trust fund shall be allocated among a variety of
investment options made available and selected by the Trustees pursuant to
the contract with the Insurance Company. Each Participant and Beneficiary
may direct and redirect the allocation of the amounts held in the trust
fund on his behalf among these investment options, EXCEPT that Matching
Contributions made in Qualifying Employer Securities may not be
redirected.
To the extent that the Participant or Beneficiary does not direct the
investment of such amounts received on his behalf, the remainder will
automatically be allocated to and invested in one of the investment
options available under the Insurance Company contract and pursuant to the
Trustees' direction.
Any of the above-specified directives to allocate, re-allocate, transfer
or remove funds from or among the various investment options shall be
effective for the purposes of this Plan only prospectively after
reasonable notice to the Insurance Company and subject to any restrictions
on the amount or timing of transfers to or from particular investment
options, according to the terms of the Insurance Company contract or
procedures established and uniformly applied by the Plan Administrator.
28
<PAGE>
6.2 Account Adjustments
--- -------------------
Individual Accounts shall be valued as of the last day of each calendar
quarter and every other day on which earnings, gains, and losses are
credited. Each Active Account shall be credited with earnings, gains, and
losses according to the terms of its underlying investments. Plan
expenses described in Section 6.4 shall be allocated at least once in
every calendar quarter to Individual Accounts existing on that allocation
date. Each Individual Account shall receive an allocation of such
expenses in the same proportion that the balance of the Individual Account
bears to the sum of the balances of all Individual Accounts. The
allocation dates shall be determined according to a uniform, consistent,
and nondiscriminatory procedure approved by the Plan Administrator.
Proceeds from the sale of StanCorp Financial Group stock distributed to
the Plan as a result of the demutualization of Standard Insurance Company
shall be allocated to the Individual Accounts of Active and retired
Participants. The allocation shall be made on a pro rata basis according
to Individual Account balances as of November 24, 1999. Dividends on this
stock shall also be allocated pro rata to Individual Account balances as
of November 24, 1999, or, if payable later, when received by the Plan.
For purposes of this Section, Active Account means each Individual
Account, any Suspense Account, and each other account that can accrue
earnings, gains, and losses, such as an account used for holding
Forfeitures until they can be applied as provided in Article IV.
6.3 Distribution Adjustments
--- ------------------------
The amount of any distribution from an Individual Account maintained on
behalf of a Participant pursuant to the terms of this Plan shall be
charged against that Individual Account as of the date the distribution is
made.
6.4 Expenses
--- --------
For any Plan Year, the Employer may pay the expenses of operating and
maintaining the Plan. Such payment shall be in addition to and
independent of any contributions to the Plan or assets held by the Plan.
Absent prompt and timely payment by the Employer, the expenses of
operating and maintaining the Plan for the Plan Year shall be allocated to
Individual Accounts pursuant to Section 6.2, EXCEPT that the loan
administration fee shall be directly charged against that Participant's
Individual Accounts.
29
<PAGE>
ARTICLE VII
DISTRIBUTIONS
7.1 Termination of Employment or Disability Before Retirement
--- ---------------------------------------------------------
(a) If a Participant's employment as an Employee is terminated for any reason
except his death or Retirement, or if the Participant incurs a Total and
Permanent Disability, he may elect to receive his Vested Benefit. To be
effective for the purposes of this Plan, such an election must be delivered
in writing to the Plan Administrator within a reasonable time not more than
90 days before the Annuity Starting Date that the Participant has selected.
In the election the Participant shall specify a form in which the Vested
Benefit is to be distributed from among the forms described in Section 7.4,
and also an Annuity Starting Date, provided that no distribution under this
Section shall be made or commence before the Participant's date of
termination as an Employee or Total and Permanent Disability, nor later
than the Participant's Retirement Age.
If the Participant is married at the time of his election, his election
shall have no effect for the purposes of this Plan unless the requirements
of Section 7.5(c) regarding waiver of the Qualified Joint and Survivor
annuity are met within 90 days before the Annuity Starting Date.
(b) In any event, the Plan Administrator (or Trustee, as applicable) shall
distribute to the Participant his entire Vested Benefit in a lump sum as
soon as administratively practicable after the date of his termination or
disability, provided that the Participant's Vested Benefit does not exceed
$5,000 as of the distribution date. If the Participant's entire Vested
Benefit equals zero as of the date his Service terminates or the date the
Participant first incurs a Total and Permanent Disability, then the
Participant shall be deemed to have received a distribution of his entire
Vested Benefit as of that date of termination or disability.
(c) Any distribution that is made to a Participant pursuant to this Section
shall be in lieu of any and all other benefits, present or contingent, to
which the Participant may be entitled under the terms of this Plan.
7.2 Death Benefits
--- --------------
(a) If a Participant dies after the Annuity Starting Date of his Vested
Benefit, the remaining portion of the Vested Benefit will continue to be
distributed at least as rapidly as under the method of distribution being
used prior to the Participant's death.
If a Participant dies prior to the Annuity Starting Date of his Vested
Benefit, then the Plan shall distribute a death benefit on the
Participant's behalf as provided below.
The amount of the death benefit shall be the Participant's Vested Benefit
(after having taken into account any security interest in his Vested
Benefit that the Plan has as a result of any currently outstanding loan to
the Participant).
(b) Unless the Participant elects otherwise as provided in subsection (e)
below, if the Participant has a "surviving spouse" (as defined in
subsection (d) below) as of his date of death, the death benefit shall be
payable to the surviving spouse. If the Participant has no surviving
spouse, the death benefit will be paid to the Participant's designated
Beneficiary.
30
<PAGE>
If the Participant's Vested Benefit has a lump sum value of $5,000 or less,
then the death benefit shall be distributed in the form of a lump sum, and
the Annuity Starting Date of that benefit shall be as soon as
administratively practicable following the Participant's date of death.
If the Participant's death benefit has a lump sum value in excess of
$5,000, and if the Participant has a surviving spouse as of the
Participant's date of death, unless the Participant elects otherwise as
provided in subsection (e) below, the form in which that benefit will be
automatically distributable to the surviving spouse (or to a non-spouse
Beneficiary elected pursuant to subsection (e)) shall be a "qualified
preretirement survivor annuity", providing equal monthly payments to the
surviving spouse (or non-spouse Beneficiary, as applicable) for the
duration of his or her life, with no payments after his or her death.
(c) The Annuity Starting Date of the qualified preretirement survivor annuity
shall be within a reasonable time (not exceeding 90 days) following the
Plan Administrator's receipt from the surviving spouse (or non-spouse
Beneficiary, as applicable) of a writing requesting the commencement of
that annuity. Absent such a request, the Annuity Starting Date shall not be
later than the date specified in subsection (f)(1) or (2) below.
(d) "Surviving spouse" means a spouse to whom the Participant was married
throughout the one-year period ending on the earlier of:
(1) the Annuity Starting Date of the Participant's death benefit, PROVIDED
that if the Participant was married within one year of his Annuity
Starting Date and he and his spouse from such marriage were married
for at least a one-year period ending on the date of the Participant's
death, such Participant and such spouse shall be treated as having
been married throughout the one-year period ending on the Annuity
Starting Date of the Participant's death benefit, or
(2) the date of the Participant's death.
(e) (1) Subject to the requirements of Section 7.5(c), at any time during the
"election period" a Participant may elect to waive the qualified
preretirement survivor annuity benefit form so that the benefit will
be payable, if at all, in an alternate form permissible under this
Plan, and may also elect a specifically designated non-spouse
Beneficiary to replace the Participant's surviving spouse as the
Beneficiary. The Participant may also at any time revoke an election
and make another election. Any such election or revocation shall be in
writing and shall be effective upon receipt by the Plan Administrator.
(2) For purposes of this subsection, the "election period" shall be:
(A) for a Participant who has not separated from Service, the period
commencing on the Participant's Date of Employment or Date of Re-
employment and ending on the last day of the Plan Year preceding
the Plan Year in which the Participant attains age 35.
Thereafter, a Participant must make a new election within the
period beginning on the later of the first day of the Plan Year
in which the Participant attains age 35 or the Participant's Date
of Employment or Date of Re-employment and ending on the date of
the Participant's death; or
(B) for a Participant who is separated from Service with the
Employer, the period beginning on the date the Participant
separates from
31
<PAGE>
Service with the Employer and ending on the date of his death. In
the case of such Participant, such election shall pertain only to
the Participant's account balances earned prior to the date of
the separation.
(3) A written explanation with respect to the qualified preretirement
survivor annuity shall be provided to each Participant within a
reasonable period following his commencement of participation and, if
later, once within the period commencing with the first day of the
Plan Year in which the Participant attains age 32 and ending with the
last day of the Plan Year preceding the Plan Year in which he attains
age 35, unless he terminates his employment prior to his attainment of
age 35, in which case such written explanation shall be provided at
the time of the Participant's termination or within a reasonable
period thereafter. The written explanation shall be provided in such
terms and in such manner as would be comparable to the explanation
provided for meeting the requirements of Section 7.5(d).
For the purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events is the end of the two-year
period beginning one year prior to the date the applicable event
occurs, and ending one year after that date. In the case of a
Participant who separates from Service before the Plan Year in which
the Participant attains age 35, notice shall be provided within the
two-year period beginning one year prior to separation and ending one
year after separation. If such a Participant thereafter returns to
employment with the Employer, the applicable period for such
Participant shall be redetermined.
(f) Except as provided above regarding the qualified preretirement survivor
annuity, the Participant's death benefit shall be distributed in the form
of a lump sum as soon as administratively practicable following the
Participant's date of death but not later than the December 31 of the
calendar year containing the fifth anniversary of the Participant's death,
EXCEPT as provided below. If the Participant's death benefit exceeds
$5,000, a surviving spouse or other designated Beneficiary may elect an
Annuity Starting Date or have the death benefit distributed in any other
form of benefit described in Section 7.4 and not precluded thereby. To be
effective for the purposes of this Plan, such an election must be in
writing, and must be received by the Plan Administrator and specify an
Annuity Starting Date prior to December 31 of the calendar year described
below:
(1) if payable to a surviving spouse, the Annuity Starting Date may be the
later of (A) December 31 of the calendar year immediately following
the calendar year in which the Participant died or (B) December 31 of
the calendar year in which the Participant would have attained age
70 1/2; or
(2) if payable to any other designated Beneficiary as a non-lump sum, the
Annuity Starting Date may be no later than December 31 of the calendar
year immediately following the calendar year in which the Participant
died.
PROVIDED that, if the spouse or Beneficiary cannot be located within the
applicable time period specified above, the Plan Administrator may delay
commencement or distribution of payments for a period ending not later than
the first day of the first month beginning after the sixtieth day following
the date on which the spouse or Beneficiary has been identified and located
by the Plan Administrator and the Plan Administrator has received any
necessary documentation of death.
32
<PAGE>
A death benefit payable to any surviving child of the Participant shall be
treated as if payable to the surviving spouse for purposes of (1) above in
this subsection PROVIDED that such benefit will become payable to the
surviving spouse as of the date such child reaches age 21 or as of such
other time as prescribed by the Secretary of the Treasury under
regulations.
If a surviving spouse is eligible to receive death benefits under this
Plan, and if that surviving spouse dies prior to the Annuity Starting Date
of those death benefits, then the death benefits to which the deceased
spouse had been entitled shall be payable on his or her behalf within such
a time-frame as would be appropriate if the deceased spouse had been the
Participant, with the date of death of the surviving spouse being
substituted for the Participant's. However, the exceptions provided in Code
sec. 401(a)(9)(B)(iv) shall not be available regarding any surviving spouse
of the Participant's surviving spouse.
(g) If a Participant dies after his Vested Benefit has been distributed in the
form of a lump sum, there shall be no benefit payable from the Plan as a
result of the Participant's death. If his Vested Benefit has been
distributed in the form of an annuity, any benefit payable as a result of
the Participant's death shall be determined solely under the terms of the
annuity that was distributed, provided that the remaining portion of such
benefit, if any, shall be distributed to the Beneficiary at least as
rapidly as provided in the terms of the annuity but in any event consistent
with Code sec. 401(a)(9)(B).
If a Participant dies while receiving the Payments from Account described
in Section 7.4 before his entire Vested Benefit has been distributed, his
surviving spouse or Beneficiary may elect in writing to the Plan
Administrator to receive the previously undistributed portion of such
Vested Benefit in the form of a lump sum; in any event, the remaining
portion of such benefit, if any, shall be distributed at least as rapidly
as under the terms of the Payments from Account in effect for the
Participant at death.
7.3 Retirement
--- ----------
A Participant, regardless of his status as an Employee, shall have attained
Retirement Age when he:
(a) has attained at least age 60, which shall be his Early Retirement Age;
or
(b) has attained age 65, which shall be his Normal Retirement Age.
A Participant who has attained Retirement Age may retire by designating in
writing to the Plan Administrator a Retirement Date, which shall be his
Retirement benefit's Annuity Starting Date, and which may be the first day
of any month after he has attained Normal Retirement Age, or the first day
of any month after he has both attained Early Retirement Age and terminated
Service, but not later than the latest date permitted by the provisions of
Section 7.5(e). This latter date shall be the Retirement Date of any
Participant who has not previously designated a Retirement Date.
Upon Retirement, a Participant shall commence to receive the Participant's
Vested Benefit as provided in Sections 7.4 and 7.5.
7.4 Form of Retirement Benefit
--- --------------------------
(a) Unless an optional form of benefit has been selected pursuant to
subsection (b) below, the Retirement benefit payable to a Participant whose
Vested Benefit exceeds $5,000 on the Participant's Retirement Date shall be
distributed in the form of a Qualified Joint and Survivor Annuity.
33
<PAGE>
(1) For a Participant who has no spouse as of his Retirement Date,
the Qualified Joint and Survivor Annuity is an annuity providing
monthly income payable for his life only, with no payments after
his death.
(2) For a Participant who has a spouse as of the Participant's
Retirement Date, his Qualified Joint and Survivor Annuity is an
annuity which provides monthly income payable for the
Participant's life, and thereafter for the life of the
Participant's spouse, with payments to the spouse equal to one-
half of the payments to the Participant.
Otherwise, the Retirement benefit shall be distributed in the form of
a Lump Sum.
(b) Unless a Lump Sum is required by Sections 7.1(b) or 7.2(b), or if the
Participant's Retirement benefit exceeds $5,000 as of the
Participant's Retirement Date, subject to the provisions of Section
7.5, a Participant may elect to waive receipt of the Participant's
Vested Benefit in the form of a Qualified Joint and Survivor Annuity
or Qualified Preretirement Survivor Annuity, and instead to receive
the Vested Benefit in one of the following forms.
(1) Joint and Contingent Survivor Annuity - monthly income payable
for the life of the Participant, and thereafter for the life of
the Participant's spouse, if the Participant is married on the
Annuity Starting Date designated in the election, otherwise for
the life of the Participant's Beneficiary. Payments to the spouse
or Beneficiary may be the same amount as or two thirds of the
payment paid to the Participant, as specified in the election.
(2) Straight Life Annuity - monthly income payable for the life of
the Participant only, with no payments after the Participant's
death.
(3) Certain and Life Annuity - monthly income payable for the life of
the Participant with the provision that if the Participant dies
after the Participant's Retirement Date, or if a Beneficiary dies
after commencement of payments, but before the end of a certain
period of 60, 120 or 180 months, as elected, payments will
commence or be continued for the remainder of the certain period
to the Participant's Beneficiary (or, if the annuity is
distributed pursuant to Section 7.2, to a Beneficiary designated
by the Participant's Beneficiary) PROVIDED, however, that the
certain period elected shall not extend beyond (1) the life
expectancy of the Participant, (2) the life expectancies of the
Participant and the Participant's designated Beneficiary, (3) if
payable pursuant to Section 7.2, the life expectancy of the
designated Beneficiary, or (4) 60 months, if the Participant's
Beneficiary is the Participant's estate.
(4) Annuity for a Certain Period - monthly income payable for a
certain period elected by the Participant of not more than 240
months, with the provision that if the Participant dies after the
Participant's Retirement Date, or if a Beneficiary dies after
commencement of payments, but before the end of the certain
period, payments will commence or be continued for the remainder
of the certain period to the Participant's Beneficiary (or, if
the annuity is distributed pursuant to Section 7.2, to a
Beneficiary designated by the Participant's Beneficiary)
PROVIDED, however, that the certain period elected shall not
extend beyond (1) the life expectancy of the Participant, (2) the
life expectancies of the Participant and the Participant's
designated Beneficiary, (3) if payable pursuant to Section 7.2,
the life expectancy of the designated Beneficiary, or (4) 60
months, if the Participant's Beneficiary is the Participant's
estate.
34
<PAGE>
(5) Payments from Account - periodic payments in an amount specified
by the Participant or his surviving Beneficiary, but not less
than $100, continuing until the Participant's Vested Benefit
(adjusted for subsequent Account Adjustments) is exhausted,
PROVIDED however that the period over which the payments are to
be made shall not extend beyond (1) the life expectancy of the
Participant, (2) the life expectancies of the Participant and his
designated Beneficiary, (3) if payable pursuant to Section 7.2,
the life expectancy of the designated Beneficiary, or (4) 60
months, if the Participant's Beneficiary is the Participant's
estate. Each payment shall be taken pro rata from the
Participant's balances in the Plan's investment options as of the
date of the payment.
(6) Lump Sum - a single payment in an amount equal to the
Participant's Vested Benefit.
(7) Partial Distributions - A lump sum payment in an amount specified
by the Participant, except that the amount of the payment may not
be less than $500, and except that no more than four (4)
distributions shall be made to the Participant during any Plan
Year. Each payment will be taken pro rata from the Participant's
balances in the Plan's investment options as of the date of the
payment.
However, no optional form may be elected under which the amount of
monthly benefit payable to the Participant would not exceed 50% of the
amount the Participant would receive in the form of a Straight Life
annuity unless such optional form is a Lump Sum or a Joint and
Survivor Annuity with the Participant's spouse as Beneficiary.
7.5 Retirement Benefits: Election of Forms and Commencement of Payments
--- --------------------------------------------------------------------
(a) Applicability of this Section
-----------------------------
In the case of a Participant who will receive a distribution pursuant
to Section 7.1 due to his termination of Service or Total and
Permanent Disability before the Participant's attainment of
Retirement Age, the form of the distribution and the time of
commencement of payments will be as provided in that Section. The
form and time of commencement of death benefits payable to
Beneficiaries shall be governed according to Section 7.2. The form
and time of commencement of any other benefits payable pursuant to
this Plan will be determined according to this Section and Section
7.4.
In any event, all distributions required under this Section shall be
determined and made in accordance with Code sec. 401(a)(9), including
the minimum distribution incidental benefit requirement of Code sec.
1.401(a)(9)-2.
(b) Election
--------
A Participant may elect to waive his right to receive his Retirement
benefit in the form of a Qualified Joint and Survivor Annuity so as
to receive his Retirement benefit in one of the alternative forms
described in Section 7.4, and may also elect to name a Beneficiary or
to replace the Beneficiary currently designated by the Participant or
this Plan. Such an election may be revoked and replaced with another
such election. However, to be effective for the purposes of this
Plan, any such an election or revocation must be made in writing and
received by the Plan Administrator before the Participant's Annuity
Starting Date, and must satisfy the spousal consent requirements
described in subsection (c) below, and must specifically designate
the form in which the benefits shall be paid. In order to waive the
Participant's right to receive a Retirement benefit in the form of a
Qualified Joint and Survivor
35
<PAGE>
Annuity, the election or revocation must be received by the Plan
Administrator within 90 days of the date the explanation described in
subsection (d) below was provided to the Participant. In addition, if
the election is to replace the Beneficiary currently designated by
the Participant (or if there is no such designation by the
Participant, then the Beneficiary (if any) designated by this Plan),
then the election must specifically designate the person who is to
become the Beneficiary.
(c) Spousal Consent
---------------
An election by a Participant to receive his Retirement benefit in one
of the alternative benefit forms or to change his Beneficiary shall
not have any effect for the purposes of this Plan unless:
(1) the Participant's spouse, in a writing received by the Plan
Administrator, acknowledges the effect of and consents to the
Participant's election within 90 days before the Annuity Starting
Date, and the writing is witnessed by the Plan Administrator or a
notary public; or
(2) it can be established to the Plan Administrator's satisfaction
that spousal consent cannot be obtained because there is no
spouse, or because the spouse cannot be located, or because of
other circumstances which render obtaining such spousal consent
impossible.
Any consent by a spouse (or establishment that the consent of the
spouse cannot be obtained) pursuant to this subsection shall be
effective only with respect to such spouse.
(d) Explanation
-----------
No less than 30 days and no more than 90 days before a Participant's
Annuity Starting Date, the Plan Administrator shall provide the
Participant with a written explanation of (1) the terms and conditions
of the Qualified Joint and Survivor Annuity; (2) the Participant's
right to make and the effect of an election to waive the Qualified
Joint and Survivor Annuity; (3) the rights of the Participant's spouse
(if any) regarding the Qualified Joint and Survivor Annuity; and (4)
the right to make, and the effect of, a revocation of a previous
election to waive the Qualified Joint and Survivor Annuity.
The Annuity Starting Date for a distribution in a form other than a
Qualified Joint and Survivor Annuity may be less than 30 days after
receipt of the written explanation described in the preceding
paragraph provided:
(1) The Participant has been provided with information that clearly
indicates that the Participant has at least 30 days to consider
whether to waive the Qualified Joint and Survivor Annuity and
elect (with spousal consent) a form of distribution other than a
Qualified Joint and Survivor Annuity; and
(2) the Participant is permitted to revoke any affirmative
distribution election at least until the Annuity Starting Date
or, if later, at any time prior to the expiration of the seven
(7) day period that begins the day after the explanation of the
Qualified Joint and Survivor Annuity is provided to the
Participant; and
(3) the Annuity Starting Date is a date after the date that the
written explanation was provided to the Participant.
36
<PAGE>
The Annuity Starting Date may be a date prior to the date the written
explanation is provided to the Participant if the distribution does
not commence until at least 30 days after such written explanation is
provided, subject to the waiver of the 30-day period as provided for
in the above paragraph.
(e) Commencement of Payments
------------------------
(1) Unless a Participant otherwise elects in a writing received by the
Plan Administrator prior to the Participant's Annuity Starting
Date, payment of the Participant's Vested Benefit shall begin not
later than the 60th day after the close of the Plan Year in which
occurs the latest of:
(A) the Participant's attainment of Normal Retirement Age; or
(B) the tenth anniversary of the date on which the Participant
commenced participation in this Plan; or
(C) the Participant's termination of employment as an Employee,
provided that if the Participant has failed to provide the Plan
Administrator with sufficient information as to age and marital status
or any other relevant information, so that the amounts of payment may
not be determined, or if the Participant cannot be located, then the
Plan Administrator may delay commencement of payments for not more
than 60 days after the earliest date on which the amount and form of
payment may be determined under the terms of this Plan, or the
Participant is located. The amount of payment in the event of such a
delay shall be retroactive to the Participant's Retirement Date.
Notwithstanding any provisions of this paragraph (1) to the contrary,
the failure of a Participant and the Participant's spouse to consent
to the distribution of a benefit while that benefit is immediately
distributable pursuant to this Section shall be deemed to be an
election to defer commencement of payment of that benefit.
(2) Any provisions of this Plan to the contrary notwithstanding, the
entire vested interest of the Participant in benefits under this Plan:
(A) will be distributed to the Participant not later than the
Participant's Required Beginning Date, or
(B) will be distributed, beginning not later than the Participant's
Required Beginning Date, over the life of the Participant or over
the lives of the Participant and a designated Beneficiary (or
over a period not extending beyond the life expectancy of the
Participant or the life expectancy of the Participant and a
designated Beneficiary).
For the purpose of determining the amount to be distributed as of the
Participant's Required Beginning Date, his Vested Benefit shall be
valued as of December 31 of the calendar year immediately preceding
his Required Beginning Date.
The Participant may elect for these required distributions to be paid
in any of the forms of benefit allowed in Section 7.4, subject to any
spousal consent requirements that may apply pursuant to this Plan.
Absent such an election, these distributions automatically shall be
payable in the form described in Section 7.4(a).
37
<PAGE>
(3) If a Participant's interest is to be distributed in a form other than
a Lump Sum, the following minimum distribution rules shall apply on or
after the Participant's Required Beginning Date.
(A) If the Participant's benefit is to be distributed over (1) a
period not extending beyond the life expectancy of the
Participant or the joint life and last survivor expectancy of the
Participant and the Participant's Beneficiary, or (2) a period
not extending beyond the life expectancy of the Beneficiary, then
the amount required to be distributed for each calendar year,
beginning with distributions for the first distribution calendar
year, must at least equal the quotient obtained by dividing the
Participant's benefit by the applicable life expectancy.
(B) The amount to be distributed each year, beginning with
distributions for the first distribution calendar year, shall not
be less than the quotient obtained by dividing the Participant's
benefit by the lesser of (1) the applicable life expectancy, or
(2) if the Participant's spouse (if any) is not the Beneficiary,
the applicable divisor determined from the table set forth in
Code sec. 1.401(a)(9)-2, Q&A-4. Distributions after the death of
the Participant shall be distributed using the applicable life
expectancy referenced in paragraph (3)(A) above as the relevant
divisor without regard to Code sec. 1.401(a)(9)-2.
(C) The minimum distribution required for the Participant's first
distribution calendar year must be made on or before the
Participant's Required Beginning Date. The minimum distribution
for other calendar years, including the minimum distribution for
the distribution calendar year in which the Participant's
Required Beginning Date occurs, must be made on or before
December 31 of that distribution calendar year.
If the Participant's benefit is distributed in the form of an annuity
purchased from an Insurance Company, any such distribution shall be
made in accordance with the requirements of Code sec. 401(a)(9) and
the regulations promulgated thereunder.
(4) Any additional amounts of Vested Benefit accrued by the Participant
after his Required Beginning Date shall be distributed annually in the
form of a Lump Sum consistent with the requirements of Code sec.
401(a)(9) and applicable regulations.
(5) Once distributions have begun to a five-percent owner under this
subsection, they must continue to be distributed even if the
Participant ceases to be a five-percent owner in a subsequent year.
(6) For the purposes of this subsection, "applicable life expectancy"
means the life expectancy (or joint and last survivor expectancy)
calculated using the attained age of the Participant (or designated
Beneficiary) as of the Participant's (or designated Beneficiary's)
birthday in the applicable calendar year reduced by one for each
calendar year which has elapsed since the date the life expectancy was
first calculated.
If the life expectancy is being recalculated, the applicable life
expectancy shall be the life expectancy as so recalculated.
The applicable calendar year shall be the first distribution
calendar year, and if the life expectancy is being recalculated,
each such succeeding calendar year.
38
<PAGE>
If annuity payments commence before the Required Beginning Date,
the applicable calendar year is the year such payments commence.
If the distribution is in the form of an immediate annuity
purchased after the Participant's death with the Participant's
remaining Vested Benefit, the applicable calendar year is the
year of purchase.
(7) Unless otherwise elected by the Participant (or spouse, as
applicable) by the time distributions are required to begin, life
expectancies shall be recalculated annually. If such an election
has been made by the Participant (or spouse, as applicable), it
shall be irrevocable as to the Participant (or spouse) and shall
apply to all subsequent years.
The life expectancy of a nonspouse Beneficiary may not be
recalculated.
7.6 Direct Rollovers
--- ----------------
(a) Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Participant's election under this Article, a
Participant may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by
the Participant in a direct rollover.
(b) Definitions
(1) Eligible rollover distribution: An eligible rollover distribution
is any distribution of all or any portion of the Participant's
Vested Benefit, except that an eligible rollover distribution
does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the
Participant or the joint lives (or joint life expectancies) of
the Participant and the Participant's designated Beneficiary, or
for a specified period of ten years or more; any distribution to
the extent such distribution is required under Code sec.
401(a)(9); any hardship withdrawal of Elective Contributions made
pursuant to Section 4.1.4 after December 31, 1998; and the
portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to Employer securities).
(2) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Code sec. 408(a), an
individual retirement annuity described in Code sec. 408(b), an
annuity plan described in Code sec. 403(a), or a qualified trust
described in Code sec. 401(a), that accepts the Participant's
eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
(3) Participant: as defined in Article II. In addition, the
Participant's surviving spouse and the Participant's spouse or
former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Code sec. 414(p), are
Participants with regard to the interest of the spouse or former
spouse.
(4) Direct rollover: A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the Participant.
39
<PAGE>
7.7 Plan Loans
--- ----------
The Plan Administrator is authorized to establish a Plan loan program. The
program shall be administered in accordance with a written loan policy
which shall comply with all applicable statutes and any regulations, and
which is incorporated herein by reference.
(a) Loans shall be made available on a reasonably equivalent basis to
Participants and Beneficiaries who are eligible pursuant to the
written Loan Policy.
(b) Loans shall not be made available to Highly Compensated Employees in
an amount greater than the amount made available to other
Participants.
(c) Loans must be adequately secured and bear a reasonable interest rate.
(d) No Participant loan shall exceed the present value of the
Participant's vested accrued benefit.
(e) A Participant whose total Individual Accounts exceed $5,000 must
obtain the consent of his or her spouse, if any, to use the Individual
Accounts as security for the loan. Spousal consent shall be obtained
no earlier than the beginning of the 90-day period that ends on the
date on which the loan is to be so secured. The consent must be in
writing, must acknowledge the effect of the loan, and must be
witnessed by a Plan representative or notary public. Such consent
shall thereafter be binding with respect to the consenting spouse or
any subsequent spouse with respect to that loan. A new consent shall
be required if the Individual Accounts are used for renegotiation,
extension, renewal, or other revision of the loan.
If a valid spousal consent has been obtained, then, notwithstanding
any other provision of this Plan, the portion of the Participant's
Vested Benefit used as a security interest held by the Plan by reason
of a loan outstanding to the Participant shall be taken into account
for purposes of determining the amount of the Vested Benefit payable
at the time of death or distribution, but only if the reduction is
used as repayment of the loan. If less than 100% of the Participant's
Vested Benefit (determined without regard to the preceding sentence)
is payable to the surviving spouse, then the Vested Benefit shall be
adjusted by first reducing the Vested Benefit by the amount of the
security used as repayment of the loan, and then determining the
benefit payable to the surviving spouse.
40
<PAGE>
ARTICLE VIII
GENERAL PROVISIONS
8.1.1 Plan Modification: Authority
----- -----------------------------
The Company reserves the right to amend, modify, or terminate the Plan at
any time, provided that no amendment or modification shall act to reduce
the balances of the Individual Accounts of any Participant accrued to the
time of such amendment or modification.
8.1.2 Plan Modification: Merger
----- --------------------------
No merger, consolidation, or transfer of the assets or liabilities of
this Plan with or to any other qualified plan shall be undertaken unless,
after such merger, consolidation, or transfer, each Participant would, if
the Plan then terminated, receive a benefit not less than the benefit he
would have received had the Plan terminated immediately prior to such
merger, consolidation, or transfer.
8.1.3 Plan Modification: Termination
----- -------------------------------
Upon termination or partial termination of this Plan, or the complete
discontinuance of contributions by the Employer (as defined in Code sec.
1.401-6(c) and 1.411(d)-2(d)), the rights of each affected Participant
to benefits accrued to the date of termination or partial termination,
or the complete cessation of contributions by the Employer, shall be
fully vested to the extent funded. Distributions due to termination
shall be made in a form provided for in this Plan and shall meet any
applicable requirements of Code sec. 401(a)(11), 411, and 417. However,
Elective Contributions shall be distributed because of Plan termination
only if the Employer does not establish or maintain a successor plan
within the meaning of Code secs. 1.401(k)-(1)(d)(3) or because of other
events described in Code secs. 1.401(k)-(1)(d)(1)(iii), (iv), and (v).
If, after the allocation of the Plan's assets pursuant to the Plan's
termination, all liabilities of the Plan have been satisfied in full and
there remain surplus Plan assets not necessary to satisfy the
liabilities of the Plan, such surplus shall revert to the Employer,
consistent with the provisions of the termination amendment of this
Plan.
8.2.1 Duties: Plan Administrator
----- --------------------------
The Plan Administrator has the discretionary authority to control and
manage the operation and administration of the Plan, including the
specific duties outlined below. The Plan Administrator has full
discretion to interpret the terms of the Plan, to determine factual
questions that arise in the course of administering the Plan, to adopt
rules and regulations regarding the administration of the Plan, to
determine the conditions under which benefits become payable under the
Plan and to make any other determinations that the Plan Administrator
believes are necessary and advisable for the administration of the Plan.
Any determination made by the Plan Administrator shall be final and
binding on all parties. The Plan Administrator may delegate all or any
portion of its authority to any person or entity.
Duties of the Plan Administrator include, but are not limited to,
determination of benefits and eligibility to participate, payment of
funds to the Insurance Company or Trustee, authorization of benefit
payments and payment of any expenses incurred in the administration of
the Plan. The Plan Administrator may employ such consultants and
advisors as it deems necessary or desirable for carrying out its duties
under the Plan.
41
<PAGE>
8.2.2 Duties: Employer
----- -----------------
Duties of the Employer include, but are not limited to, payment of funds
to the Insurance Company or Trustee, in addition to the discretionary
payment of any expenses incurred in the administration of the Plan. The
Employer shall indemnify and hold harmless any Plan fiduciary who is an
Employee from any and all claims, loss, damages, expense (including
counsel fees), and liability (including amounts paid in settlement with
the Employer's written consent) arising from any act or omission of the
fiduciary, except when the same is judicially determined to be done due
to the gross negligence or willful misconduct of the fiduciary.
8.3 Benefit Claims Procedure
--- ------------------------
Any Participant or Beneficiary may make a claim for benefits due under
this Plan to the Participant or Beneficiary by delivering a written
application to the Plan Administrator.
If a claim is wholly or partially denied, notice of the decision shall
be furnished to the claimant by the Plan Administrator within 90 days
after receipt of the claim by the Plan Administrator unless special
circumstances require an extension of time for processing the claim. If
an extension of time is required the Plan Administrator shall furnish
the claimant within the 90-day period with written notice of that fact,
including the reason why an extension is required and an estimated date
upon which a final decision is expected, which shall be not later than
180 days after the claim was made. In that event, if the claim is denied
in whole or part, written notice of denial shall be given as soon as
practicable, but not later than 180 days after the claim was made.
A notice of denial of a claim shall state:
(a) the specific reason or reasons for the denial;
(b) reference to the specific Plan provisions upon which the denial was
based; and
(c) a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such
additional material or information is required.
If this notice is not furnished with the time period provided in this
Section, the claim shall be deemed wholly denied.
8.4 Review Procedure
--- ----------------
In the event that a claim is denied under this Plan, the claimant or his
authorized representative may apply in writing to the Plan Administrator
within 60 days of receiving notice of the denial or, if no written
notice of denial is received within the 90- or 180-day period (as
applicable) prescribed in Section 8.3, within 60 days after the
expiration of the 90-or 180-day period, asking that the denial be
reviewed. This time limit may be extended by the Plan Administrator if
an extension appears to be reasonable in view of the nature of the claim
and the pertinent circumstances. Upon receipt of such application, the
Plan Administrator shall afford the claimant an opportunity to review
pertinent documents and to submit issues and comments in writing. A
decision on review shall be rendered by the Plan Administrator not later
than 60 days after the claimant's application for review unless an
extension of time for processing is required, in which case a decision
will be made. If an extension of time is required, the Plan
Administrator shall give the claimant written notice of that fact before
the extension period begins. A decision on review shall be in writing
and shall include specific reasons for the decision and specific
references to the Plan provisions on which the decision is based.
42
<PAGE>
If the claimant has not received written decision on review within 60
days after the request for review was received, or within 120 days if an
extension of time was required, the claim will be considered wholly
denied on review.
8.5 Qualification of the Plan and Conditions of Contributions
--- ---------------------------------------------------------
This Plan, together with any insurance or annuity contracts or trust
agreement used in conjunction with it, is intended to meet the
requirements of the Internal Revenue Service for approval as a tax-
exempt plan or trust under Code sec. 401. Any amendments which may be
necessary to meet these requirements shall be made retroactive to the
date upon which the Plan failed to meet these requirements.
Contributions to this Plan are made with the intent and on the condition
that such contributions are deductible under Code sec. 404. If any
contribution by the Employer is disallowed as a deduction by the
Internal Revenue Service then, to the extent the deduction is
disallowed, the contribution shall be refunded to the Employer within
one year after the disallowance of the deduction. If any contribution by
the Employer is made by a mistake of fact, such contribution shall be
refunded to the Employer within one year after the payment of the
contribution.
If a refund occurs pursuant to this Section, the amount which shall be
returned to the Employer shall be the excess of the amount which was
contributed over the amount (1) which was deductible, or (2) which would
have been contributed absent the mistake of fact (as the case may be),
without any earnings but net of any losses attributable to such excess.
8.6 Beneficiaries
--- -------------
Any payments due under the Plan to a Beneficiary shall be paid according
to the Beneficiary designation last filed in writing with the Plan
Administrator by the Participant or surviving Beneficiary. If no such
designation is made by the Participant, payments shall be made in the
following order of priority:
(a) to the surviving spouse of the Participant;
(b) if no spouse survives the Participant, then to the children of the
Participant in equal shares, with a share by right of
representation to the then surviving children of any deceased
child; or
(c) if neither a spouse, children nor grandchildren survive the
Participant, then to the Participant's estate; or
(d) if none of the above, the payment shall escheat pursuant to the
laws of the state applicable to the Plan pursuant to Section 8.8.
Payments to a minor child shall be made to the guardian, conservator or
other fiduciary of the child (as determined by the laws of the state in
which the minor resides), until the child reaches majority, when any
remaining payments shall be made directly to the former minor child.
If a Beneficiary has made no such designation, payments shall be made to
the Beneficiary's estate.
43
<PAGE>
8.7 Spendthrift Clause
--- ------------------
(a) General Rule
------------
Subject to the exception specified in subsection (b) below,
benefits payable under this Plan shall not be subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution, or levy of any kind,
either voluntary or involuntary, including any such liability which
is for alimony or other payments for the support of a spouse or
former spouse, or for any other relative of the Participant, prior
to actually being received by the Participant or Beneficiary except
as provided below, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, charge or otherwise dispose of
any right to benefits payable hereunder shall be void; also, the
Plan shall not in any manner be liable for, nor subject to, the
debts, contracts, liabilities, engagements or torts of any
Participant or Beneficiary.
(b) Exception
---------
The provisions of subsection (a) above to the contrary shall not
withstand a right to a benefit payable under this Plan that has
been created, assigned or recognized pursuant to a "qualified
domestic relations order", as defined in Code sec. 414(p).
Administration of the Plan with respect to qualified domestic
relations orders shall at all times be consistent with Code sec.
414, regulations promulgated thereunder, and any other provisions
of state and federal law that may be applicable. Payment of a
benefit to an alternate payee pursuant to a qualified domestic
relations order may be made prior to the time such payment could be
made to the Participant, provided that such payment is consistent
with the provisions of this Plan in all respects except for the
time of payment.
8.8 Applicable Law
--- --------------
The provisions of this Plan shall be governed, construed, and
administered in accordance with federal law, and to the extent that state
law is not preempted by federal law, the law of the state of Oregon.
8.9 Military Service
--- ----------------
Effective October 13, 1996, with respect to re-employments initiated
after December 11, 1994, 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 Code sec.
414(u).
8.10 Annuities
---- ---------
Any provisions of this Plan to the contrary notwithstanding:
(a) any annuity contract distributed from this Plan shall contain
express provisions sufficient to make such contract nontransferable;
and
(b) the terms of any annuity contract purchased and distributed by the
Plan to a Participant or Participant's Beneficiary shall comply and
be consistent with the requirements of this Plan.
8.11 Limitations of the Employer's Liability
---- ---------------------------------------
To the extent permitted by law, the liability of the Employer with
respect to any and all obligations arising from or in any way connected
with this Plan shall be limited to amounts already contributed.
44
<PAGE>
8.12 Non-Guarantee of Employment
---- ---------------------------
This Plan shall not be considered to constitute a contract of employment
and nothing contained in the Plan shall give any Employee the right to be
retained in employment, nor shall anything contained in the Plan
interfere with the Employer's right to discharge or retire any Employee
at any time. Participation in the Plan shall not give any Employee any
right or claim in any benefits except as specifically provided in this
Plan.
45
