<PAGE>
As filed with the Securities and Exchange Commission on October 5, 1999
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------------------------
COMMUNITY BANCORP INC.
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 33-0859334
- ------------------------------- -------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
130 WEST FALLBROOK STREET, FALLBROOK CA. 92028
- ---------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
FALLBROOK NATIONAL BANK 401(K) PROFIT SHARING PLAN,
--------------------------------------------------
AS ADOPTED AND ASSUMED BY COMMUNITY BANCORP INC.
------------------------------------------------
(FULL TITLE OF THE PLAN)
THOMAS SWANSON
PRESIDENT AND CHIEF EXECUTIVE OFFICER
COMMUNITY BANCORP INC.
130 WEST FALLBROOK STREET
FALLBROOK, CA 92028
-------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(760) 723-8811
--------------
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER SHARE PRICE FEE
- ------------------- ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Plan Interests (1)
Common Stock, 100,000 shares $7.90625 $790,625 $220.00
$0.625 par value
================================================================================
</TABLE>
(1) Indeterminate amount pursuant to Rule 416(c).
<PAGE>
PART I INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document containing the information in Part I and the documents
incorporated by reference into this Registration Statement constitute a
prospectus that meets the requirements of Section 10(a) of the Securities Act
of 1933. Pursuant to the notes to Form S-8, such documents need not be filed
with the Securities and Exchange Commission but must be given to participants
in the 401(k) Profit Sharing Plan (the "Plan").
Community Bancorp Inc. ("Community Bancorp") acquired all the
outstanding common stock of Fallbrook National Bank (the "Bank") in a bank
holding company reorganization (the "Reorganization") consummated on June 25,
1999. As a result of the Reorganization, the outstanding shares of the Bank
were converted and exchanged for shares of Community Bancorp on a tax-free,
one-share-for one-share basis and the Bank became a wholly-owned subsidiary
of Community Bancorp. Additionally, Community Bancorp was designated as the
"successor-registrant" to the Bank which previously had filed reports and
proxy statements pursuant to the Securities Exchange Act of 1934 with the
Comptroller of the Currency.
As part of the Reorganization, Community Bancorp adopted and assumed
certain stock based compensation plans of the Bank, including the Plan. These
plans now apply to the shares of common stock of Community Bancorp. Shares of
the Bank which were to be issued pursuant to the Plan had previously been
registered with the Comptroller of the Currency pursuant to the Securities
Act of 1933 prior to the Reorganization.
PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are incorporated by reference in this
Registration Statement:
(a) The Bank's Form 10-KSB for the year ended December 31, 1998
(as filed with the Comptroller of the Currency);
(b) The Bank's Form 10-QSB for the quarter ended March 31, 1999
(as filed with the Comptroller of the Currency);
(c) Community Bancorp's Form 10-QSB for the quarter ended June 30,
1999 (as filed with the Securities and Exchange Commission),
including the description of Community Bancorp's common stock
included therein; and
(d) Community Bancorp's Form 8-K as of June 25, 1999 (as filed
with the Securities and Exchange Commission) filed in
connection with the Reorganization.
1
<PAGE>
Additionally, all documents subsequently filed by Community Bancorp
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange
Act of 1934, prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold shall be deemed to be incorporated by
reference in this Registration Statement and be part thereof from the date of
filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
COMMUNITY BANCORP
Community Bancorp's bylaws provide for indemnification of its
officers, directors, employees and agents to the fullest extent permitted by
Delaware law. Community Bancorp's Certificate of Incorporation also contains
a provision, consistent with Delaware law, reducing or eliminating director
liability in certain circumstances.
Section 145 of the Delaware Corporation Law provides that
corporations may indemnify an individual made a party to any threatened,
pending, or completed action, suit or proceeding whether civil, criminal,
administrative or investigative, because the individual is or was a director,
officer, employee or agent of the corporation, against liability incurred in
the proceeding if the person acted in good faith and reasonably believed his
conduct was in the corporation's best interest or was not opposed to the
corporation's best interest.
Section 145(c) further provides that a corporation shall indemnify
an individual who was fully successful on the merits or otherwise in any
proceeding to which the director or officer was a party because the
individual was or is a director or officer of the corporation, for reasonable
expenses incurred by the director in connection with the proceeding. Section
145(g) provides that a corporation may purchase and maintain insurance on
behalf of the corporation or who, while a director, officer, employee or
agent of the corporation is or was serving at the request of the corporation
as a director, officer, partner, trustee, employee or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
any liability asserted against or incurred by the individual in that capacity
or arising from the individual status as a director, officer, employee or
agent.
FALLBROOK NATIONAL BANK
Pursuant to the regulations of the Comptroller of the Currency, a
national bank may only make or agree to make indemnification payments to an
institution-affiliated party with respect to any
2
<PAGE>
administrative proceeding or civil action initiated by any Federal banking
agency that are reasonable and consistent with the requirements of 12 USC
1828(k) and the implementing regulation thereunder. In connection with
administrative proceedings or civil actions not initiated by a Federal
banking agency, a national bank may indemnify an institution-affiliated party
for damages and expenses, including the advancement of expenses and legal
fees, in accordance with the law of the state in which the main office of the
bank is located, the law of the state in which the bank's holding company, if
any, is incorporated or the relevant provisions of the Model Business
Corporation Act or the Delaware General Corporations Law, provided such
payments are consistent with safe and sound banking practices. The Bank has
selected California as the model for its indemnification provisions.
The California General Corporation Law (the "CGCL") provides a
detailed statutory framework covering limitation of liability of directors in
certain instances and indemnification of any officer or other agent of a
corporation who is made or threatened to be made a party to any legal
proceeding by reason of his or her services on behalf of such corporation.
With respect to limitation of liability, the CGCL permits a
California corporation to adopt a provision in its articles of incorporation
reducing or eliminating the liability of a director to the corporation or its
shareholders for monetary damages for breach of the fiduciary duty of care,
provided that such liability does not arise from certain proscribed conduct
(including intentional misconduct and breach of duty of loyalty). The CGCL in
this regard relates only to actions brought by shareholders on behalf of the
corporation (i.e., "derivative actions") and does not apply to claims brought
by outside parties.
With respect to indemnification, the CGCL provides that to the
extent any officer, director or other agent of a corporation is successful
"on the merits" in defense of any legal proceeding to which such person is a
party or is threatened to be made a party by reason of his or her service on
behalf of such corporation or in defense of any claim, issue, or matter
therein, such agent shall be indemnified against expenses actually and
reasonably incurred by the agent in connection therewith, but does not
require indemnification in any other circumstance. The CGCL also provides
that a corporation may indemnify any agent of the corporation, including
officers and directors, against expenses, judgments, fines, settlements and
other amounts actually and reasonably incurred in a third party proceeding
against such person by reason of his or her services on behalf of the
corporation, provided the person acted in good faith and in a manner he or
she reasonably believed to be in the best interests of such corporation. The
CGCL further provides that in derivative suites a corporation may indemnify
such a person against expenses incurred in such a proceeding, provided such
person acted in good faith and in a manner he or she reasonably believed to
be in the best interests of the corporation and its shareholders.
Indemnification is not available in derivative actions (i) for amounts paid
or expenses incurred in connection with a matter that is settled or otherwise
disposed of without court approval or (ii) with respect to matters for which
the agent shall have been adjudged to be liable to the corporation unless the
court shall determine that such person is entitled to indemnification.
The CGCL permits the advancing of expenses incurred in defending any
proceeding against a corporate agent by reason of his or her service on behalf
of the corporation upon the giving of a
3
<PAGE>
promise to repay any such sums in the event it is later determined that such
person is not entitled to be indemnified. Finally, the CGCL provides that the
indemnification provided by the statute is not exclusive of other rights to
which those seeking indemnification may be entitled, by bylaw, agreement or
otherwise, to the extent additional rights are authorized in a corporation's
articles of incorporation. The law further permits a corporation to procure
insurance on behalf of its directors, officers and agents against any
liability incurred by any such individual, even if a corporation would not
otherwise have the power under applicable law to indemnify the director,
officer or agent for such expenses.
The Articles of Association and Bylaws of the Bank implement the
applicable statutory framework by limiting the personal liability of
directors for monetary damages for a breach of a director's fiduciary duty of
care and making indemnification mandatory in those situations where it is
merely permissible under the CGCL. The Bank's Articles of Association,
pursuant to the applicable provisions of the CGCL, also include a provision
allowing the Bank to include agreements between the Bank and its directors,
officers and other agents, provisions expanding the scope of indemnification
not inconsistent with the spirit of the Articles.
The Bylaws of the Bank have been amended to provided for mandatory
indemnification in certain instances.
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
The Bank presently maintains a policy of directors' and officers'
liability insurance.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4a Fallbrook National Bank 401(k) Profit Sharing Plan
(including the related Agreement of Trust), as
adopted and assumed by Community Bancorp Inc.
5a Pursuant to Instruction (b) under Item 8 of Form S-8,
Community Bancorp and the Bank undertake that they
will submit or have submitted the Plan and any
amendments thereto to the Internal Revenue Service in
a timely manner and have made or will make all
changes required by the Internal Revenue Service in
order to qualify the Plan
5b Opinion of Reitner & Stuart relating to the legality of
securities being registered, and consent
23a Consent of KMPG LLP
23b Consent of Reitner & Stuart is contained in the opinion filed
as Exhibit 5b
4
<PAGE>
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the registration statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Securities and Exchange Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include
any financial statements required by Section 210.3-19 of this
chapter at the start of any delayed offering or throughout a
continuous offering. Financial statements and information otherwise
required by Section 10(a)(3) of the Act need not be furnished,
PROVIDED that the registrant includes in the prospectus to this
paragraph (a)(4) and other information necessary to ensure that all
other information in the prospectus is at least as current as the
date of those financial statements. Notwithstanding the foregoing,
with respect to registration statements on Form F-3, a
post-effective amendment need not be filed to include financial
statements and information required by Section 10(a)(3) of the Act
or Section 210.3-19 of this chapter if such financial statements and
information are contained in
5
<PAGE>
periodic reports file with or furnished to the Commission by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Form
F-3.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Community Bancorp Inc. has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fallbrook, State of California on October 4, 1999.
COMMUNITY BANCORP INC.
By: /s/ THOMAS E. SWANSON
---------------------
THOMAS E. SWANSON
President and Chief Executive officer
By: /s/ L. BRUCE MILLS, JR.
-----------------------
L. BRUCE MILLS, JR.
Chief Financial officer
II-1
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Dated:
<S> <C> <C>
/s/ GRANGER HAUGH
- ------------------------ Chairman of the October 4, 1999
GRANGER HAUGH Board
/s/ E. STEVE LEFEVRE
- ------------------------ Director October 4, 1999
E. STEVE LEFEVRE
/s/ ROY B. HISCOCK
- ------------------------ Director October 4, 1999
ROY B. HISCOCK
- ------------------------ Director October ___, 1999
ROBERT H.S. KIRKPATRICK
- ------------------------ Director October ___, 1999
PHILLIP D. OBERHANSLEY
/s/ COREY SEALE
- ------------------------ Director October 4, 1999
COREY SEALE
/s/ THOMAS E. SWANSON
- ------------------------ Director October 4, 1999
THOMAS E. SWANSON
- ------------------------ Director October ___, 1999
GORDON T. TUCKER
/s/ GARY M. YOUMANS
- ------------------------ Director October 4, 1999
GARY M. YOUMANS
</TABLE>
II-2
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the trustees of the Plan on behalf
of the Plan in the City of Fallbrook, State of California on October 4, 1999.
THE FALLBROOK NATIONAL BANK 401(k) PROFIT SHARING PLAN, as adopted and
assumed by Community Bancorp Inc.
by: /s/ Granger Haugh
------------------------
Granger Haugh, trustee
by: /s/ Thomas E. Swanson
------------------------
Thomas E. Swanson, trustee
II-3
<PAGE>
EXHIBIT INDEX
Page at which
Exhibit Appears
in Sequentially
EXHIBIT DESCRIPTION NUMBERED COPY
- ------- ----------- -------------
4a Fallbrook National Bank 401(k) Profit
Sharing Plan (including the related
Agreement of Trust), as adopted and assumed
by Community Bancorp Inc.
5a Purusant to Instruction (b) under Item 8 of Form S-8,
Community Bancorp and the Bank undertake that they
will submit or have submitted the Paln and any
amendments threto to the Internal Revenue Service in a
timely manner and have made or will make all
changes required by the Internal Revenue Service
in order to qualify the Plan
5b Opinion of Reitner & Stuart relating to the legality
of securities being registered, and consent
23a Consent of KMPG LLP
23b Consent of Reitner & Stuart*
- -------------------------------
* Contained in the opinion filed as Exhibit 5b
<PAGE>
FALLBROOK NATIONAL BANK
401(K) PROFIT SHARING PLAN
Defined Contribution Plan 7.7
Restated January 1, 1998
<PAGE>
TABLE OF CONTENTS
INTRODUCTION
ARTICLE I FORMAT AND DEFINITIONS
Section 1.01 --- Format
Section 1.02 --- Definitions
ARTICLE II PARTICIPATION
Section 2.01 --- Active Participant
Section 2.02 --- Inactive Participant
Section 2.03 --- Cessation of Participation
ARTICLE III CONTRIBUTIONS
Section 3.01 --- Employer Contributions
Section 3.01A --- Rollover Contributions
Section 3.02 --- Forfeitures
Section 3.03 --- Allocation
Section 3.04 --- Contribution Limitation
Section 3.05 --- Excess Amounts
ARTICLE IV INVESTMENT OF CONTRIBUTIONS
Section 4.01 --- Investment of Contributions
Section 4.01A --- Investment in Qualifying Employer Securities
Section 4.01B --- Limitation on Investment in Qualifying Employer
Securities by Some Participants
ARTICLE V BENEFITS
Section 5.01 --- Retirement Benefits
Section 5.02 --- Death Benefits
Section 5.03 --- Vested Benefits
Section 5.04 --- When Benefits Start
Section 5.05 --- Withdrawal Privileges
Section 5.06 --- Loans to Participants
TABLE OF CONTENTS 3
<PAGE>
ARTICLE VI DISTRIBUTION OF BENEFITS
Section 6.01 --- Automatic Forms of Distribution
Section 6.02 --- Optional Forms of Distribution and Distribution
Requirements
Section 6.02A --- Distributions in Qualifying Employer Securities
Section 6.03 --- Election Procedures
Section 6.04 --- Notice Requirements
ARTICLE VII TERMINATION OF PLAN
ARTICLE VIII ADMINISTRATION OF PLAN
Section 8.01 --- Administration
Section 8.02 --- Records
Section 8.03 --- Information Available
Section 8.04 --- Claim and Appeal Procedures
Section 8.05 --- Unclaimed Vested Account Procedure
Section 8.06 --- Delegation of Authority
ARTICLE IX GENERAL PROVISIONS
Section 9.01 --- Amendments
Section 9.02 --- Direct Rollovers
Section 9.03 --- Mergers and Direct Transfers
Section 9.04 --- Provisions Relating to the Insurer and Other Parties
Section 9.05 --- Employment Status
Section 9.06 --- Rights to Plan Assets
Section 9.07 --- Beneficiary
Section 9.08 --- Nonalienation of Benefits
Section 9.09 --- Construction
Section 9.10 --- Legal Actions
Section 9.11 --- Small Amounts
Section 9.12 --- Word Usage
Section 9.13 --- Transfers Between Plans
ARTICLE X TOP-HEAVY PLAN REQUIREMENTS
Section 10.01 --- Application
Section 10.02 --- Definitions
Section 10.03 --- Modification of Vesting Requirements
Section 10.04 --- Modification of Contributions
Section 10.05 --- Modification of Contribution Limitation
PLAN EXECUTION
TABLE OF CONTENTS 4
<PAGE>
INTRODUCTION
The Primary Employer previously established a 401(k) profit sharing
plan on January 1, 1986.
The Primary Employer is of the opinion that the plan should be changed.
It believes that the best means to accomplish these changes is to completely
restate the plan's terms, provisions and conditions. The restatement,
effective January 1, 1998, is set forth in this document and is substituted in
lieu of the prior document.
The restated plan continues to be for the exclusive benefit of employees
of the Employer. All persons covered under the plan on December 31, 1997,
shall continue to be covered under the restated plan with no loss of benefits.
It is intended that the plan, as restated, shall qualify as a profit
sharing plan under the Internal Revenue Code of 1986, including any later
amendments to the Code.
INTRODUCTION 5
<PAGE>
ARTICLE I
FORMAT AND DEFINITIONS
SECTION 1.01--FORMAT.
Words and phrases defined in the DEFINITIONS SECTION of Article I shall
have that defined meaning when used in this Plan, unless the context clearly
indicates otherwise.
These words and phrases have an initial capital letter to aid in
identifying them as defined terms.
SECTION 1.02--DEFINITIONS.
ACCOUNT means, for a Participant, his share of the Investment Fund.
Separate accounting records are kept for those parts of his Account that
result from:
(a) Elective Deferral Contributions
(b) Matching Contributions
(c) Other Employer Contributions
(d) Rollover Contributions
A Participant's Account shall be reduced by any distribution of his
Vested Account and by any Forfeitures. A Participant's Account will
participate in the earnings credited, expenses charged and any
appreciation or depreciation of the Investment Fund. His Account is
subject to any minimum guarantees applicable under the Group Contract
or other investment arrangement.
ACCRUAL COMPUTATION PERIOD means a 12-consecutive month period ending on
the last day of each Plan Year, including corresponding 12-consecutive
month periods before January 1, 1986.
ACTIVE PARTICIPANT means an Eligible Employee who is actively
participating in the Plan according to the provisions in the ACTIVE
PARTICIPANT SECTION of Article II.
AFFILIATED SERVICE GROUP means any group of corporations, partnerships or
other organizations of which the Employer is a part and which is
affiliated within the meaning of Code Section 414(m) and regulations
thereunder. Such a group includes at least two organizations one of which
is either a service organization (that is, an organization the principal
business of which is performing services), or an organization the
principal business of which is performing management functions on a
regular and continuing basis. Such service is of a type historically
performed by employees. In the case of a management organization, the
Affiliated Service Group shall include organizations related, within
the meaning of Code Section 144(a)(3), to either the management
organization or the organization for which it performs management
functions. The term Controlled Group, as it is used in this Plan,
shall include the term Affiliated Service Group.
6
<PAGE>
ANNUAL COMPENSATION means, on any given date, the Employee's Compensation
for the latest Compensation Year ending on or before the given date.
ANNUITY STARTING DATE means, for a Participant, the first day of the
first period for which an amount is payable as an annuity or any other
form.
BENEFICIARY means the person or persons named by a Participant to
receive any benefits under this Plan upon the Participant's death. See
the BENEFICIARY SECTION of Article IX.
CLAIMANT means any person who has made a claim for benefits under this
Plan. See the CLAIM AND APPEAL PROCEDURES SECTION of Article VIII.
CODE means the Internal Revenue Code of 1986, as amended.
COMPENSATION means, except as modified in this definition, the total
earnings paid or made available to an Employee by the Employer or a
Predecessor Employer during any specified period.
"Earnings" in this definition means Compensation as defined in the
CONTRIBUTION LIMITATION SECTION of Article III.
Compensation shall also include elective contributions. Elective
contributions are amounts excludable from the Employee's gross income
under Code Sections 125, 402(e)(3), 402(h) or 403(b), and contributed
by the Employer, at the Employee's election, to a Code Section 401(k)
arrangement, a simplified employee pension, cafeteria plan or
tax-sheltered annuity. Elective contributions also include Compensation
deferred under a Code Section 457 plan maintained by the Employer and
Employee contributions "picked up" by a governmental entity and,
pursuant to Code Section 414(h)(2), treated as Employer contributions.
For purposes of the EXCESS AMOUNTS SECTION of Article III, the Employer
may elect to use an alternative nondiscriminatory definition of
Compensation in accordance with the regulations under Code Section
414(s).
For purposes of determining the amount of Elective Deferral
Contributions, Compensation shall exclude reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving expenses, deferred
compensation and welfare benefits.
For Plan Years beginning after December 31, 1988, and before January 1,
1994, the annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any year shall not
exceed $200,000. For Plan Years beginning on or after January 1, 1994,
the annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any year shall not
exceed $150,000.
The $200,000 limit shall be adjusted by the Secretary at the same time
and in the same manner as under Code Section 415(d). The $150,000 limit
shall be adjusted by the Commissioner for increases in the cost of living
in accordance with Code Section 401(a)(17)(B). The cost of living
adjustment in effect for a calendar year applies to any period, not
exceeding 12 months, over which pay is determined (determination period)
beginning in such calendar year. If a determination period consists of
fewer than
7
<PAGE>
12 months, the 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.
In determining the Compensation of a Participant for purposes of the
annual compensation limit, the rules of Code Section 414(q)(6) shall
apply, except that in applying such rules, the term "family" shall
include only the spouse of the Participant and any lineal descendants
of the Participant who have not attained age 19 before the close of the
year. If, as a result of the application of such rules the adjusted
annual compensation limit is exceeded, then (except for purposes of
determining the portion of Compensation up to the integration level if
this Plan provides for permitted disparity) the limitation shall be
prorated among the affected individuals in proportion to each such
individual's Compensation as determined under this definition prior to
the application of this limitation.
If Compensation for any prior determination period is taken into account
in determining a Participant's benefits accruing in the current Plan
Year, the Compensation for that prior determination period is subject to
the annual compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning before the
first day of the first Plan Year beginning on or after January 1, 1989,
which are used to determine benefits in Plan Years beginning after
December 31, 1988 and before January 1, 1994, the annual compensation
limit is $200,000. For this purpose, for determination periods beginning
before the first day of the first Plan Year beginning on or after
January 1, 1994, which are used to determine benefits in Plan Years
beginning on or after January 1, 1994, the annual compensation limit is
$150,000.
Compensation means, for an Employee who is a Leased Employee, the
Employee's Compensation for the services he performs for the Employer,
determined in the same manner as the Compensation of Employees who are not
Leased employees, regardless of whether such Compensation would be
received directly from the Employer or from the leasing organization.
COMPENSATION YEAR means each one-year period ending on the last day of
the Plan Year, including corresponding periods before January 1, 1986.
CONTINGENT ANNUITANT means an individual named by the Participant to
receive a lifetime benefit after the Participant's death in accordance
with a survivorship life annuity.
CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Discretionary Contributions
Rollover Contributions
as set out in Article III, unless the context clearly indicates otherwise.
CONTROLLED GROUP means any group of corporations, trades or businesses of
which the Employer is a part that are under common control. A Controlled
Group includes any group of corporations, trades or businesses, whether
or not incorporated, which is either a parent-subsidiary group, a
brother-sister group, or a combined group within the meaning of Code
Section 414(b), Code Section 414(c) and regulations thereunder and, for
purposes of determining contribution limitations under the CONTRIBUTION
LIMITATION SECTION of Article III, as modified by Code Section 415(h) and,
for the
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purpose of identifying Leased Employees, as modified by Code Section
144(a)(3). The term Controlled Group, as it is used in this Plan, shall
include the term Affiliated Service Group and any other employer
required to be aggregated with the Employer under Code Section 414(o)
and the regulations thereunder.
DIRECT ROLLOVER means a payment by the Plan to the Eligible Retirement
Plan specified by the Distributee.
DISCRETIONARY CONTRIBUTIONS means discretionary contributions made by
the Employer to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION
of Article III.
DISTRIBUTEE means an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in Code Section
414(p), are Distributees with regard to the interest of the spouse or
former spouse.
EARLY RETIREMENT DATE means the first day of any month before a
Participant's Normal Retirement Date which the Participant selects for
the start of his retirement benefit. This day shall be on or after the
date on which he ceases to be an Employee and the date he meets the
following requirement(s):
(a) He has attained age 55.
(b) He has completed ten years of Vesting Service.
ELECTIVE DEFERRAL CONTRIBUTIONS means Contributions made by the Employer
to fund this Plan in accordance with a qualified cash or deferred
arrangement as described in Code Section 401(k). See the EMPLOYER
CONTRIBUTIONS SECTION of Article III.
ELIGIBILITY SERVICE means an Employee's Period of Service. If he has
more than one Period of Service, or if all or a part of a Period of
Service is not counted, his Eligibility Service shall be determined by
adjusting his Employment Commencement Date so that he has one continuous
period of Eligibility Service equal to the aggregate of all his
countable Periods of Service. An Employee's Eligibility Service shall be
determined on the basis that 30 days equal one month and 365 days equal
one year.
However, Eligibility Service is modified as follows:
Predecessor Employer service included:
An Employee's service with a Predecessor Employer shall be included
as service with the Employer.
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited.
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Period of Severance included (service spanning rule):
A Period of Severance shall be deemed to be a Period of Service under
either of the following conditions:
(a) the Period of Severance immediately follows a period during which
an Employee is not absent from work and ends within 12 months; or
(b) the Period of Severance immediately follows a period during which
an Employee is absent from work for any reason other than
quitting, being discharged or retiring (such as a leave of
absence or layoff) and ends within 12 months of the date he was
first absent.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
ELIGIBLE EMPLOYEE means any Employee of the Employer.
ELIGIBLE RETIREMENT PLAN means an individual retirement account
described in Code Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan described in Code
Section 403(a) or a qualified trust described in Code Section 401(a),
that accepts the Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the
surviving spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
ELIGIBLE ROLLOVER DISTRIBUTION means any distribution of all or any
portion of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include:
(a) Any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee and the
Distributee's designated Beneficiary, or for a specified period
of ten years or more.
(b) Any distribution to the extent such distribution is required under
Code Section 401(a)(9).
(c) The portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
EMPLOYEE means an individual who is employed by the Employer or any
other employer required to be aggregated with the Employer under Code
Sections 414(b), (c), (m) or (o). A Controlled Group member is required
to be aggregated with the Employer.
The term Employee shall also include any Leased Employee deemed to be an
employee of any employer described in the preceding paragraph as
provided in Code Sections 414(n) or 414(o).
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EMPLOYER means the Primary Employer. This will also include any
successor corporation or firm of the Employer which shall, by written
agreement, assume the obligations of this Plan or any predecessor
corporation or firm of the Employer (absorbed by the Employer, or of
which the Employer was once a part) which became a predecessor because
of a change of name, merger, purchase of stock or purchase of assets and
which maintained this Plan.
EMPLOYER CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Discretionary Contributions
as set out in Article III, unless the context clearly indicates
otherwise.
EMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs
an Hour-of-Service.
ENTRY DATE means the date an Employee first enters the Plan as an Active
Participant. See the ACTIVE PARTICIPANT SECTION of Article II.
FISCAL YEAR means the Primary Employer's taxable year. The last day of
the Fiscal Year is December 31.
FORFEITURE means the part, if any, of a Participant's Account that is
forfeited. See the FORFEITURES SECTION of Article III.
GROUP CONTRACT means the group annuity contract or contracts into which
the Trustee enters with the Insurer for the investment of Contributions
and the payment of benefits under this Plan. The term Group Contract as
it is used in this Plan is deemed to include the plural unless the
context clearly indicates otherwise.
HIGHLY COMPENSATED EMPLOYEE means a highly compensated active Employee
or a highly compensated former Employee.
A highly compensated active Employee means any Employee who performs
service for the Employer during the determination year and who, during
the look-back year is:
(a) An Employee who is a 5% owner, as defined in Section 416(i)(1)(B)(i),
at any time during the determination year or the look-back year.
(b) An Employee who receives compensation in excess of $75,000 (indexed in
accordance with Section 415(d) during the look-back year.
(c) An Employee who receives compensation in excess of $50,000 (indexed in
accordance with Section 415(d) during the look-back year and is a
member of the top-paid group for the look-back year.
(d) An Employee who is an officer, within the meaning of Section 416(i),
during the look-back year and who receives compensation in the
look-back year greater than 50% of the dollar limitation in
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effect under Section 415(b)(1)(A) for the calendar year in which
the look-back year begins. The number of officers is limited to 50
(or, if lesser, the greater of 3 employees or 10% of employees)
excluding those employees who may be excluded in determining the
top-paid group.
(e) An Employee who is both described in paragraph b, c or d above when
these paragraphs are modified to substitute the determination year
for the look-back year and one of the 100 Employees who receive the
most compensation from the Employer during the determination year.
If no officer has satisfied the compensation requirement of (c) above
during either a determination year or look-back year, the highest paid
officer for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding the
determination year.
A highly compensated former Employee means any Employee who separated
from service (or was deemed to have separated) prior to the determination
year, performs no service for the Employer during the determination year,
and was a highly compensated active Employee for either the separation
year or any determination year ending on or after the Employee's 55th
birthday.
If an Employee is, during a determination year or look-back year, a
family member of either a 5 percent owner who is an active or former
Employee or a Highly Compensated Employee who is one of the 10 most
highly compensated Employees ranked on the basis of compensation paid by
the Employer during such year, then the family member and the 5 percent
owner or top-ten highly compensated Employee shall be aggregated. In
such case, the family member and 5 percent owner or top-ten highly
compensated Employee shall be treated as a single Employee receiving
compensation and Plan contributions or benefits equal to the sum of such
compensation and contributions or benefits of the family member and 5
percent owner or top-ten highly compensated Employee. For purposes of
this definition, family member includes the spouse, lineal ascendants and
descendants of the Employee or former Employee and the spouses of such
lineal ascendants and descendants.
Compensation is compensation within the meaning of Code Section
415(c)(3), including elective or salary reduction contributions to a
cafeteria plan, cash or deferred arrangement or tax-sheltered annuity.
The top-paid group consists of the top 20% of employees ranked on the
basis of compensation received during the year.
Employers aggregated under Section 414(b), (c), (m) or (o) are treated as
a single Employer.
HOUR-OF-SERVICE means, for the elapsed time method of crediting service
in this Plan, each hour for which an Employee is paid, or entitled to
payment, for performing duties for the Employer. Hour-of-Service means,
for the hours method of crediting service in this Plan, the following:
(a) Each hour for which an Employee is paid, or entitled to payment, for
performing duties for the Employer during the applicable computation
period.
(b) Each hour for which an Employee is paid, or entitled to payment, by
the Employer because of a period of time in which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability),
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layoff, jury duty, military duty or leave of absence.
Notwithstanding the preceding provisions of this subparagraph (b),
no credit will be given to the Employee
(1) for more than 501 Hours-of-Service under this subparagraph
(b) because of any single continuous period in which the
Employee performs no duties (whether or not such period
occurs in a single computation period); or
(2) for an Hour-of-Service for which the Employee is directly or
indirectly paid, or entitled to payment, because of a period
in which no duties are performed if such payment is made or
due under a plan maintained solely for the purpose of
complying with applicable worker's or workmen's compensation,
or unemployment compensation or disability insurance laws; or
(3) for an Hour-of-Service for a payment which solely reimburses
the Employee for medical or medically related expenses
incurred by him.
For purposes of this subparagraph (b), a payment shall be deemed to
be made by, or due from the Employer, regardless of whether such
payment is made by, or due from the Employer, directly or indirectly
through, among others, a trust fund or insurer, to which the
Employer contributes or pays premiums and regardless of whether
contributions made or due to the trust fund, insurer or other entity
are for the benefit of particular employees or are on behalf of a
group of employees in the aggregate.
(c) Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer. The same
Hours-of-Service shall not be credited both under subparagraph (a)
or subparagraph (b) above (as the case may be) and under this
subparagraph (c). Crediting of Hours-of-Service for back pay
awarded or agreed to with respect to periods described in
subparagraph (b) above will be subject to the limitations set forth
in that subparagraph.
The crediting of Hours-of-Service above shall be applied under the rules
of paragraphs (b) and (c) of the Department of Labor Regulation
2530.200b-2 (including any interpretations or opinions implementing said
rules); which rules, by this reference, are specifically incorporated in
full within this Plan. The reference to paragraph (b) applies to the
special rule for determining hours of service for reasons other than the
performance of duties such as payments calculated (or not calculated) on
the basis of units of time and the rule against double credit. The
reference to paragraph (c) applies to the crediting of hours of service
to computation periods.
Hours-of-Service shall be credited for employment with any other employer
required to be aggregated with the Employer under Code Sections 414(b),
(c), (m) or (o) and the regulations thereunder for purposes of
eligibility and vesting. Hours-of-Service shall also be credited for any
individual who is considered an employee for purposes of this Plan
pursuant to Code Section 414(n) or Code Section 414(o) and the
regulations thereunder.
Solely for purposes of determining whether a one-year break in service
has occurred for eligibility or vesting purposes, during a Parental
Absence an Employee shall be credited with the Hours-of-Service which
otherwise would normally have been credited to the Employee but for such
absence, or in any case in which such hours cannot be determined, eight
Hours-of-Service per day of such absence. The Hours-of-Service credited
under this paragraph shall be credited in the computation period in which
the
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<PAGE>
absence begins if the crediting is necessary to prevent a break in
service in that period; or in all other cases, in the following
computation period.
INACTIVE PARTICIPANT means a former Active Participant who has an
Account. See the INACTIVE PARTICIPANT SECTION of Article II.
INSURER means Principal Mutual Life Insurance Company and any other
insurance company or companies named by the Trustee or Primary Employer.
INVESTMENT FUND means the total assets held for the purpose of providing
benefits for Participants. These funds result from Contributions made
under the Plan.
INVESTMENT MANAGER means any fiduciary (other than a trustee or Named
Fiduciary)
(a) who has the power to manage, acquire, or dispose of any assets of
the Plan; and
(b) who (1) is registered as an investment adviser under the Investment
Advisers Act of 1940, or (2) is a bank, as defined in the Investment
Advisers Act of 1940, or (3) is an insurance company qualified to
perform services described in subparagraph (a) above under the laws
of more than one state; and
(c) who has acknowledged in writing being a fiduciary with respect to the
Plan.
LATE RETIREMENT DATE means the first day of any month which is after a
Participant's Normal Retirement Date and on which retirement benefits
begin. If a Participant continues to work for the Employer after his
Normal Retirement Date, his Late Retirement Date shall be the earliest
first day of the month on or after he ceases to be an Employee. An
earlier or a later Retirement Date may apply if the Participant so
elects. An earlier Retirement Date may apply if the Participant is age
70 1/2. See the WHEN BENEFITS START SECTION of Article V.
LEASED EMPLOYEE means any person (other than an employee of the
recipient) who pursuant to an agreement between the recipient and any
other person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined in
accordance with Code Section 414(n)(6)) on a substantially full time
basis for a period of at least one year, and such services are of a type
historically performed by employees in the business field of the
recipient employer. Contributions or benefits provided a Leased Employee
by the leasing organization which are attributable to service performed
for the recipient employer shall be treated as provided by the recipient
employer.
A Leased Employee shall not be considered an employee of the recipient if:
(a) such employee is covered by a money purchase pension plan providing
(1) a nonintegrated employer contribution rate of at least 10 percent
of compensation, as defined in Code Section 415(c)(3), but including
amounts contributed pursuant to a salary reduction agreement which
are excludable from the employee's gross income under Code Sections
125, 402(e)(3), 402(h) or 403(b), (2) immediate participation, and
(3) full and immediate vesting and
(b) Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce.
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LOAN ADMINISTRATOR means the person or positions authorized to
administer the Participant loan program.
The Loan Administrator is Karen Kaligian.
MATCHING CONTRIBUTIONS means matching contributions made by the Employer
to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article III.
MONTHLY DATE means each Yearly Date and the same day of each following
month during the Plan Year beginning on such Yearly Date.
NAMED FIDUCIARY means the person or persons who have authority to
control and manage the operation and administration of the Plan.
The Named Fiduciary is the Employer.
NONHIGHLY COMPENSATED EMPLOYEE means an Employee of the Employer who is
neither a Highly Compensated Employee nor a family member.
NORMAL FORM means a single life annuity with installment refund.
NORMAL RETIREMENT AGE means the age at which the Participant's normal
retirement benefit becomes nonforfeitable. A Participant's Normal
Retirement Age is the older of age 65 or his age on the date five years
after his Entry Date.
NORMAL RETIREMENT DATE means the earliest first day of the month on or
after the date the Participant reaches his Normal Retirement Age. Unless
otherwise provided in this Plan, a Participant's retirement benefits
shall begin on a Participant's Normal Retirement Date if he has ceased to
be an Employee on such date and has a Vested Account. Even if the
Participant is an Employee on his Normal Retirement Date, he may choose
to have his retirement benefit begin on such date. See the WHEN BENEFITS
START SECTION of Article V.
PARENTAL ABSENCE means an Employee's absence from work which begins on or
after the first Yearly Date after December 31, 1984,
(a) by reason of pregnancy of the Employee,
(b) by reason of birth of a child of the Employee,
(c) by reason of the placement of a child with the Employee in
connection with adoption of such child by such Employee, or
(d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
PARTICIPANT means either an Active Participant or an Inactive Participant.
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PERIOD OF MILITARY DUTY means, for an Employee
(a) who served as a member of the armed forces of the United States, and
(b) who was reemployed by the Employer at a time when the Employee had a
right to reemployment in accordance with seniority rights as protected
under Section 2021 through 2026 of Title 38 of the U.S. Code,
the period of time from the date the Employee was first absent from
active work for the Employer because of such military duty to the date
the Employee was reemployed.
PERIOD OF SERVICE means a period of time beginning on an Employee's
Employment Commencement Date or Reemployment Commencement Date (whichever
applies) and ending on his Severance from Service Date.
PERIOD OF SEVERANCE means a period of time beginning on an Employee's
Severance from Service Date and ending on the date he again performs an
Hour-of-Service.
A one-year Period of Severance means a Period of Severance of 12
consecutive months.
Solely for purposes of determining whether a one-year Period of Severance
has occurred for eligibility or vesting purposes, the 12-consecutive
month period beginning on the first anniversary of the first date of a
Parental Absence shall not be a one-year Period of Severance.
PLAN means the 401(k) profit sharing plan of the Employer set forth in
this document, including any later amendments to it.
PLAN ADMINISTRATOR means the person or persons who administer the Plan.
The Plan Administrator is the Employer.
PLAN YEAR means a period beginning on a Yearly Date and ending on the day
before the next Yearly Date.
PREDECESSOR EMPLOYER means a firm absorbed by the Employer by change of
name, merger, acquisition or a change of corporate status which
maintained a qualified retirement plan or a firm of which the Employer
was once a part which maintained a qualified retirement plan.
PRIMARY EMPLOYER means Fallbrook National Bank.
QUALIFIED JOINT AND SURVIVOR FORM means, for a Participant who has a
spouse, an immediate survivorship life annuity with installment refund,
where the survivorship percentage is 50% and the Contingent Annuitant is
the Participant's spouse. A former spouse will be treated as the spouse
to the extent provided under a qualified domestic relations order as
described in Code Section 414(p). If a Participant does not have a
spouse, the Qualified Joint and Survivor Form means the Normal Form.
The amount of benefit payable under the Qualified Joint and Survivor Form
shall be the amount of benefit which may be provided by the Participant's
Vested Account.
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QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means a single life annuity with
installment refund payable to the surviving spouse of a Participant who
dies before his Annuity Starting Date. A former spouse will be treated as
the surviving spouse to the extent provided under a qualified domestic
relations order as described in Code Section 414(p).
QUALIFYING EMPLOYER SECURITIES means any instrument issued by the
Employer and meeting the requirements of Section 4975(e)(8) of the Code.
QUALIFYING EMPLOYER SECURITIES ACCOUNT means for a Participant, his share
of Qualifying Employer Securities.
REEMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs
an Hour-of-Service following a Period of Severance.
REENTRY DATE means the date a former Active Participant reenters the
Plan. See the ACTIVE PARTICIPANT SECTION of Article II.
RETIREMENT DATE means the date a retirement benefit will begin and is a
Participant's Early, Normal or Late Retirement Date, as the case may be.
ROLLOVER CONTRIBUTIONS means the Rollover Contributions which are made by
or for a Participant according to the provisions of the ROLLOVER
CONTRIBUTIONS SECTION of Article III.
SEVERANCE FROM SERVICE DATE means the earlier of
(a) the date on which an Employee quits, retires, dies or is discharged,
or
(b) the first anniversary of the date an Employee begins a one-year absence
from service (with or without pay). This absence may be the result of
any combination of vacation, holiday, sickness, disability, leave of
absence or layoff.
Solely to determine whether a one-year Period of Severance has occurred
for eligibility or vesting purposes for an Employee who is absent from
service beyond the first anniversary of the first day of a Parental
Absence, Severance from Service Date is the second anniversary of the
first day of the Parental Absence. The period between the first and
second anniversaries of the first day of the Parental Absence in not a
Period of Service and is not a Period of Severance.
TEFRA means the Tax Equity and Fiscal Responsibility Act of 1982.
TEFRA COMPLIANCE DATE means the date a plan is to comply with the
provisions of TEFRA. The TEFRA Compliance Date as used in this Plan is,
(a) for purposes of contribution limitations, Code Section 415,
(1) if the plan was in effect on July 1, 1982, the first day of
the first limitation year which begins after December 31,
1982, or
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<PAGE>
(2) if the plan was not in effect on July 1, 1982, the first day of
the first limitation year which ends after July 1, 1982.
(b) for all other purposes, the first Yearly Date after December 31, 1983.
TOTALLY AND PERMANENTLY DISABLED means that a Participant is disabled, as
a result of sickness or injury, to the extent that he is prevented from
engaging in any substantial gainful activity, and is eligible for and
receives a disability benefit under Title II of the Federal Social
Security Act.
TRUST means an agreement of trust between the Primary Employer and
Trustee established for the purpose of holding and distributing the Trust
Fund under the provisions of the Plan. The Trust may provide for the
investment of all or any portion of the Trust Fund in the Group Contract.
TRUST FUND means the total funds held under the Trust for the purpose of
providing benefits for Participants. These funds result from
Contributions made under the Plan which are forwarded to the Trustee to
be deposited in the Trust Fund.
TRUSTEE means the trustee or trustees under the Trust. The term
Trustee as it is used in this Plan is deemed to include the plural unless
the context clearly indicates otherwise.
VALUATION DATE means the date on which the value of the assets of the
Trust is determined. The value of each Account which is maintained under
this Plan shall be determined on the Valuation Date. In each Plan Year,
the Valuation Date shall be the close of each business day.
VESTED ACCOUNT means the vested part of a Participant's Account. The
Participant's Vested Account is equal to his Account.
The Participant's Vested Account is nonforfeitable. The percentage used
to determine that portion of a Participant's Account attributable to
Employer Contributions which is nonforfeitable is 100%.
VESTING COMPUTATION PERIOD means a 12-consecutive month period ending on
the last day of each Plan Year, including corresponding 12-consecutive
month periods before January 1, 1986.
VESTING SERVICE means one year of service for each Vesting Computation
Period in which an Employee is credited with at least 1,000
Hours-of-Service.
However, Vesting Service is modified as follows:
Predecessor Employer service included:
An Employee's service with a Predecessor Employer shall be included
as service with the Employer.
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited. For purposes
of crediting Hours-of-Service during the Period of Military Duty, an
Hour-of-Service shall be credited (without regard to the 501
Hour-of-Service limitation)
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<PAGE>
for each hour an Employee would normally have been scheduled to work
for the Employer during such period.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
YEARLY DATE means January 1, 1986, and the same day of each following year.
YEARS OF SERVICE means an Employee's Vesting Service disregarding any
modifications which exclude service.
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ARTICLE II
PARTICIPATION
SECTION 2.01--ACTIVE PARTICIPANT.
(a) An Employee shall first become an Active Participant (begin active
participation in the Plan) on the earliest Monthly Date on or after
January 1, 1986, on which he is an Eligible Employee and has met
both of the eligibility requirements set forth below. This date is
his Entry Date.
(1) He has completed six months of Eligibility Service before his
Entry Date.
(2) He is age 21 or older.
Each Employee who was an Active Participant under the Plan on
December 31, 1997, shall continue to be an Active Participant if he
is still an Eligible Employee on January 1, 1998, and his Entry
Date shall not change.
If a person has been an Eligible Employee who has met all the
eligibility requirements above, but is not an Eligible Employee on
the date which would have been his Entry Date, he shall become an
Active Participant on the date he again becomes an Eligible
Employee. This date is his Entry Date.
(b) An Inactive Participant shall again become an Active Participant
(resume active participation in the Plan) on the date he again
performs an Hour-of-Service as an Eligible Employee. This date is
his Reentry Date.
Upon again becoming an Active Participant, he shall cease to be an
Inactive Participant.
(c) A former Participant shall again become an Active Participant
(resume active participation in the Plan) on the date he again
performs an Hour-of-Service as an Eligible Employee. This date is
his Reentry Date.
There shall be no duplication of benefits for a Participant under this
Plan because of more than one period as an Active Participant.
SECTION 2.02--INACTIVE PARTICIPANT.
An Active Participant shall become an Inactive Participant (stop
accruing benefits under the Plan) on the earlier of the following:
(a) The date on which he ceases to be an Eligible Employee (on his
Retirement Date if the date he ceases to be an Eligible Employee
occurs within one month of his Retirement Date).
(b) The effective date of complete termination of the Plan.
An Employee or former Employee who was an Inactive Participant under the
Plan on December 31, 1997, shall continue to be an Inactive Participant on
January 1, 1998. Eligibility for any benefits payable to
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him or on his behalf and the amount of the benefits shall be determined
according to the provisions of the prior document, unless otherwise stated in
this document.
SECTION 2.03--CESSATION OF PARTICIPATION.
A Participant shall cease to be a Participant on the date he is no
longer an Eligible Employee and his Account is zero.
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ARTICLE III
CONTRIBUTIONS
SECTION 3.01--EMPLOYER CONTRIBUTIONS.
Employer Contributions for Plan Years which end on or after January 1,
1998, may be made without regard to current or accumulated net income,
earnings, or profits of the Employer. Notwithstanding the foregoing, the
Plan shall continue to be designed to qualify as a profit sharing plan for
purposes of Code Sections 401(a), 402, 412, and 417. Such Contributions will
be equal to the Employer Contributions as described below:
(a) The amount of each Elective Deferral Contribution for a
Participant shall be equal to any percentage (not more than 15%)
of his Compensation as elected in his elective deferral
agreement. An Employee who is eligible to participate in the
Plan may file an elective deferral agreement with the Employer.
The elective deferral agreement to start Elective Deferral
Contributions may be effective on a Participant's Entry Date
(Reentry Date, if applicable) or any following Monthly Date.
The Participant shall make any change or terminate the elective
deferral agreement by filing a new elective deferral
agreement. A Participant's elective deferral agreement making a
change may be effective on any date an elective deferral
agreement to start Elective Deferral Contributions could be
effective. A Participant's elective deferral agreement to stop
Elective Deferral Contributions may be effective on any date.
The elective deferral agreement must be in writing and effective
before the beginning of the pay period in which Elective
Deferral Contributions are to start, change or stop.
Elective Deferral Contributions are fully (100%) vested and
nonforfeitable.
(b) The amount of each Matching Contribution for a Participant shall
be equal to 100% of the Elective Deferral Contributions made for
him, disregarding any Elective Deferral Contributions in excess
of 3% of his Compensation.
The Employer may, at its discretion, make all or any portion (up
to 100%) of this Matching Contribution to the Trustee in the
form of Qualifying Employer Securities.
Matching Contributions are fully (100%) vested and
nonforfeitable.
(c) The amount of each Discretionary Contribution shall be
determined by the Employer.
Discretionary Contributions are fully (100%) vested and
nonforfeitable.
No Participant shall be permitted to have Elective Deferral
Contributions, as defined in the EXCESS AMOUNTS SECTION of Article III, made
under this Plan, or any other qualified plan maintained by the Employer,
during any taxable year, in excess of the dollar limitation contained in Code
Section 402(g) in effect at the beginning of such taxable year.
The Employer shall pay to the Trustee its Contributions used to
determine the Actual Deferral Percentage, as defined in the EXCESS AMOUNTS
SECTION of Article III, to the Plan for each Plan Year not
ARTICLE III 22
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later than the end of the twelve-month period immediately following the Plan
Year for which they are deemed to be paid. Any such Contributions
accumulated through payroll deductions shall be paid within 90 days of the
date withheld or the date it is first reasonably practical for the Employer
to do so, if earlier.
A portion of the Plan assets resulting from Employer Contributions (but
not more than the original amount of those Contributions and reduced
proportionately for losses, if applicable) may be returned if the Employer
Contributions are made because of a mistake of fact or are more than the
amount deductible under Code Section 404 (excluding any amount which is not
deductible because the Plan is disqualified). The amount involved must be
returned to the Employer within one year after the date the Employer
Contributions are made by mistake of fact or the date the deduction is
disallowed, whichever applies. Except as provided under this paragraph and
Article VII, the assets of the Plan shall never be used for the benefit of
the Employer and are held for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and for defraying reasonable expenses of
administering the Plan.
SECTION 3.01A--ROLLOVER CONTRIBUTIONS.
A Rollover Contribution may be made by or for an Eligible Employee if
the following conditions are met:
(a) The Contribution is a rollover contribution which the Code
permits to be transferred to a plan that meets the requirements
of Code Section 401(a).
(b) If the Contribution is made by the Eligible Employee, it is made
within sixty days after he receives the distribution.
(c) The Eligible Employee furnishes evidence satisfactory to the
Plan Administrator that the proposed transfer is in fact a
rollover contribution that meets conditions (a) and (b) above.
The Rollover Contribution may be made by the Eligible Employee or the
Eligible Employee may direct the trustee or named fiduciary of another plan
to transfer the funds which would otherwise be a Rollover Contribution
directly to this Plan. Such transferred funds shall be called a Rollover
Contribution. The Contribution shall be made according to procedures set up
by the Plan Administrator.
If the Eligible Employee is not an Active Participant at the time the
Rollover Contribution is made, he shall be deemed to be a Participant only
for the purposes of investment and distribution of the Rollover Contribution.
He shall not share in the allocation of Employer Contributions or Forfeitures
until the time he meets all the requirements to become an Active Participant.
Rollover Contributions made by or for an Eligible Employee shall be
credited to his Account. The part of the Participant's Account resulting
from Rollover Contributions is fully (100%) vested and nonforfeitable at all
times. A separate accounting record shall be maintained for that part of his
Rollover Contribution which consists of voluntary contributions that were
deducted from the Participant's gross income for Federal income tax purposes.
SECTION 3.02--FORFEITURES.
A Forfeiture shall occur as described in the EXCESS AMOUNTS SECTION of
Article III.
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Forfeitures of Matching Contributions which relate to excess amounts
shall be applied as provided in the EXCESS AMOUNTS SECTION of Article III.
SECTION 3.03--ALLOCATION.
The following Contributions for the Plan Year shall be allocated among
all eligible persons:
Discretionary Contributions
The eligible persons are all Participants and former Participants who (i) are
Active Participants on the last day of the Plan Year or (ii) were Active
Participants at any time in the Plan Year and had 500 or more
Hours-of-Service in the Accrual Computation Period that ends in the Plan
Year. The amount allocated to such a person shall be determined below and
under Article X.
An Employee's service with a Predecessor Employer shall be included as
service with the Employer for the purpose of determining his Hours-of-Service
to be eligible for an allocation.
The following Contributions for each Plan Year shall be allocated to
each Participant for whom such Contributions were made under the EMPLOYER
CONTRIBUTIONS SECTION of Article III:
Elective Deferral Contributions
Matching Contributions
These Contributions shall be allocated when made and credited to the
Participant's Account.
Discretionary Contributions are allocated as of the last day of each
Plan Year. The amount allocated to each eligible person for the Plan Year
shall be equal to the Discretionary Contributions for the Plan Year,
multiplied by the ratio of (a) his Annual Compensation as of the last day of
the Plan Year to (b) the total of such compensation for all eligible persons.
This amount is credited to his Account.
In determining the amount of Employer Contributions to be allocated to a
Participant who is a Leased Employee, contributions and benefits provided by
the leasing organization which are attributable to services such Leased
Employee performs for the Employer shall be treated as provided by the
Employer and there shall be no duplication of those contributions or benefits
under this Plan.
SECTION 3.04--CONTRIBUTION LIMITATION.
(a) For the purpose of determining the contribution limitation set
forth in this section, the following terms are defined:
AGGREGATE ANNUAL ADDITION means, for a Participant with respect
to any Limitation Year, the sum of his Annual Additions under
all defined contribution plans of the Employer, as defined in
this section, for such Limitation Year. The nondeductible
participant contributions which the Participant makes to a
defined benefit plan shall be treated as Annual Additions to a
defined contribution plan. The Contributions the Employer, as
defined in this section, made for the Participant for a Plan
Year beginning on or after March 31, 1984, to an individual
medical benefit account, as defined in Code Section 415(l)(2),
under a pension or annuity plan of the Employer, as defined in
this section, shall be treated as Annual Additions to a defined
contribution plan. Also,
24
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amounts derived from contributions paid or accrued after December 31, 1985,
in Fiscal Years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account of a key
employee, as defined in Code Section 419A(d)(3), under a welfare benefit
fund, as defined in Code Section 419(e), maintained by the Employer, as
defined in this section, are treated as Annual Additions to a defined
contribution plan. The 25% of Compensation limit under Maximum Permissible
Amount does not apply to Annual Additions resulting from contributions made
to an individual medical account, as defined in Code Section 415(l)(2), or to
Annual Additions resulting from contributions for medical benefits, within
the meaning of Code Section 419A, after separation from service.
ANNUAL ADDITION means the amount added to a Participant's account for any
Limitation Year which may not exceed the Maximum Permissible Amount. The
Annual Addition under any plan for a Participant with respect to any
Limitation Year, shall be equal to the sum of (1) and (2) below:
(1) Employer contributions and forfeitures credited to his account for the
Limitation Year.
(2) Participant contributions made by him for the Limitation Year.
Before the first Limitation Year beginning after December 31, 1986, the
amount under (2) above is the lesser of (i) 1/2 of his nondeductible
participant contributions made for the Limitation Year, or (ii) the amount,
if any, of his nondeductible participant contributions made for the
Limitation Year which is in excess of six percent of his Compensation, as
defined in this section, for such Limitation Year.
COMPENSATION means all wages for Federal income tax withholding purposes, as
defined under Code Section 3401(a) (for purposes of income tax withholding at
the source), disregarding any rules limiting the remuneration included as
wages based on the nature or location of the employment or the services
performed. Compensation also includes all other payments to an Employee in
the course of the Employer's trade or business, for which the Employer must
furnish the Employee a written statement under Code Sections 6041(d) and
6051(a)(3). The "Wages, Tips and Other Compensation" box on Form W-2
satisfies this definition.
For any self-employed individual Compensation will mean earned income.
For purposes of applying the limitations of this section, Compensation for a
Limitation Year is the Compensation actually paid or made available during
such Limitation Year.
DEFINED BENEFIT PLAN FRACTION means, with respect to a Limitation Year for a
Participant who is or has been a participant in a defined benefit plan ever
maintained by the Employer, as defined in this section, the quotient,
expressed as a decimal, of
(1) the Participant's Projected Annual Benefit under all such plans as of
the close of such Limitation Year, divided by
(2) on and after the TEFRA Compliance Date, the lesser of (i) or (ii) below:
(i) 1.25 multiplied by the maximum dollar limitation which applies to
defined benefit plans determined for the Limitation Year under Code
Sections 415(b) or (d) or
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(ii) 1.4 multiplied by the Participant's highest average compensation as
defined in the defined benefit plan(s),
including any adjustments under Code Section 415(b).
Before the TEFRA Compliance Date, this denominator is the Participant's
Projected Annual Benefit as of the close of the Limitation Year if the
plan(s) provided the maximum benefit allowable.
The Defined Benefit Plan Fraction shall be modified as follows:
If the Participant was a participant as of the first day of the first
Limitation Year beginning after December 31, 1986, in one or more defined
benefit plans maintained by the Employer, as defined in this section, which
were in existence on May 6, 1986, the denominator of this fraction will not
be less than 125 percent of the sum of the annual benefits under such plans
which the Participant had accrued as of the close of the last Limitation Year
beginning before January 1, 1987, disregarding any changes in the terms and
conditions of the plan after May 5, 1986. The preceding sentence applies only
if the defined benefit plans individually and in the aggregate satisfied the
requirements of Code Section 415 for all Limitation Years beginning before
January 1, 1987.
DEFINED CONTRIBUTION PLAN FRACTION means, for a Participant with respect to a
Limitation Year, the quotient, expressed as a decimal, of
(1) the Participant's Aggregate Annual Additions for such Limitation Year
and all prior Limitation Years, under all defined contribution plans
(including the Aggregate Annual Additions attributable to nondeductible
accounts under defined benefit plans and attributable to all welfare
benefit funds, as defined in Code Section 419(e) and attributable to
individual medical accounts, as defined in Code Section 415(l)(2)) ever
maintained by the Employer, as defined in this section, divided by
(2) on and after the TEFRA Compliance Date, the sum of the amount determined
for the Limitation Year under (i) or (ii) below, whichever is less, and
the amounts determined in the same manner for all prior Limitation Years
during which he has been an Employee or an employee of a predecessor
employer:
(i) 1.25 multiplied by the maximum permissible dollar amount for each
such Limitation Year, or
(ii) 1.4 multiplied by the maximum permissible percentage of the
Participant's Compensation, as defined in this section, for each
such Limitation Year.
Before the TEFRA Compliance Date, this denominator is the sum of the
maximum allowable amount of Annual Addition to his account(s) under all
the plan(s) of the Employer, as defined in this section, for each such
Limitation Year.
The Defined Contribution Plan Fraction shall be modified as follows:
26
<PAGE>
If the Participant was a participant as of the first day of the first
Limitation Year beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer, as defined in this section,
which were in existence on May 6, 1986, the numerator of this fraction shall
be adjusted if the sum of the Defined Contribution Plan Fraction and Defined
Benefit Plan Fraction would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, the dollar amount determined below shall be
permanently subtracted from the numerator of this fraction. The dollar
amount is equal to the excess of the sum of the two fractions, before
adjustment, over 1.0 multiplied by the denominator of his Defined
Contribution Plan Fraction. The adjustment is calculated using his Defined
Contribution Plan Fraction and Defined Benefit Plan Fraction as they would be
computed as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the
plan made after May 5, 1986, but using the Code Section 415 limitations
applicable to the first Limitation Year beginning on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before January 1, 1987,
shall not be recomputed to treat all employee contributions as Annual
Additions.
For a plan that was in existence on July 1, 1982, for purposes of determining
the Defined Contribution Plan Fraction for any Limitation Year ending after
December 31, 1982, the Plan Administrator may elect, in accordance with the
provisions of Code Section 415, that the denominator for each Participant for
all Limitation Years ending before January 1, 1983, will be equal to
(1) the Defined Contribution Plan Fraction denominator which would apply for
the last Limitation Year ending in 1982 if an election under this
paragraph were not made, multiplied by.
(2) a fraction, equal to (i) over (ii) below:
(i) the lesser of (A) $51,875, or (B) 1.4, multiplied by 25% of the
Participant's Compensation, as defined in this section, for the
Limitation Year ending in 1981;
(ii) the lesser of (A) $41,500, or (B) 25% of the Participant's
Compensation, as defined in this section, for the Limitation Year
ending in 1981.
The election described above is applicable only if the plan administrators
under all defined contribution plans of the Employer, as defined in this
section, also elect to use the modified fraction.
EMPLOYER means any employer that adopts this Plan and all Controlled Group
members and any other entity required to be aggregated with the employer
pursuant to regulations under Code Section 414(o).
LIMITATION YEAR means the 12-consecutive month period within which it is
determined whether or not the limitations of Code Section 415 are exceeded.
Limitation Year means each 12-consecutive month period ending on December 31.
If the Limitation Year is other than the calendar year, execution of this
Plan (or any amendment to this Plan changing the Limitation Year)
27
<PAGE>
constitutes the Employer's adoption of a written resolution electing
the Limitation Year. If the Limitation Year is changed, the new
Limitation Year shall begin within the current Limitation Year, creating
a short Limitation Year.
MAXIMUM PERMISSIBLE AMOUNT means, for a Participant with respect to any
Limitation Year, the lesser of (1) or (2) below:
(1) The greater of $30,000 or one-fourth of the maximum dollar
limitation which applies to (?) defined benefit plans set forth in
Code Section 415(b)(1)(A) as in effect for the Limitation Year.
(Before the TEFRA Compliance Date, $25,000 multiplied by the cost
of living adjustment factor permitted by Federal regulations.)
(2) 25% of his Compensation, as defined in this section, for such
Limitation Year.
The compensation limitation referred to in (2) shall not apply to any
contribution for medical benefits (within the meaning of Code Section
401(h) or Code Section 419A(f)(2)) which is (?) otherwise treated as an
annual addition under Code Section 415(l)(1) or Code Section 419A(d)(?).
If there is a short Limitation Year because of a change in Limitation
Year, the Maximum Permissible Amount will not exceed the maximum dollar
limitation which would otherwise a(?) multiplied by the following
fraction:
Number of months in the short Limitation Year
--------------------------------------------
12
PROJECTED ANNUAL BENEFIT means a Participant's expected annual benefit
under all defined benefit plan(s) ever maintained by the Employer, as
defined in this section. The Projected Annual Benefit(?) shall be
determined assuming that the Participant will continue employment until
the latest(?) current age or normal retirement age under such plans(s),
and that the Participant's compensation for the current Limitation Year
and all other relevant factors used to determine benefits under such (?)
plans(s) will remain constant for all future Limitation Years. Such
expected annual benefit shall be(?) adjusted to the actuarial equivalent
of a straight life annuity if expressed in a form other than the straight
life or qualified joint and survivor annuity.
(b) The Annual Addition under this Plan for a Participant during a Limitation
Year shall not be more than the Maximum Permissible Amount.
(c) Contributions which would otherwise be credited to the Participant's
Account shall be limited or reallocated to the extent necessary to meet
the restrictions of subparagraph (b) above for any Limitation Year in
the following order. Discretionary Contributions shall be reallocated in
the same manner as described in the ALLOCATION SECTION of Article III to
the remaining Participants to whom the limitations do not apply for the
Limitation Year. The Discretionary Contributions shall be limited if
there are no such remaining Participants. Elective Deferral
Contributions that are not the basis for Matching Contributions shall be
limited. Matching Contributions shall be limited to the extent necessary
to limit the Participant's Annual Addition under this Plan to his
maximum amount. If Matching Contributions are limited because of this
limit, Elective Deferral Contributions that are the basis for Matching
Contributions shall be reduced in proportion.
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If, due to (i) an error in estimating a Participant's Compensation as
defined in this section, (ii) because the amount of the Forfeitures to be
used to offset Employer Contributions is more than the amount of the
Employer Contributions due for the remaining Participants, (iii) as a
result of a reasonable error in determining the amount of elective
deferrals (within the meaning of Code Section 402(g)(3)) that may be made
with respect to any individual under the limits of Code Section 415, or
(iv) other limited facts and circumstances, a Participant's Annual
Addition is greater than the amount permitted in (b) above, such excess
amount shall be applied as follows. Elective Deferral Contributions
which are not the basis for Matching Contributions will be returned to
the Participant. If an excess still exists, Elective Deferral
Contributions that are the basis for Matching Contributions will be
returned to the Participant. Matching Contributions based on Elective
Deferral Contributions which are returned shall be forfeited. If after
the return of Elective Deferral Contributions, an excess amount still
exists, and the Participant is an Active Participant as of the end of the
Limitation Year, the excess amount shall be used to offset Employer
Contributions for him in the next Limitation Year. If after the return
of Elective Deferral Contributions, an excess amount still exists, and
the Participant is not an Active Participant as of the end of the
Limitation Year, the excess amount will be held in a suspense account
which will be used to offset Employer Contributions for all Participants
in the next Limitation Year. No Employer Contributions that would be
included in the next Limitation Year's Annual Addition may be made before
the total suspense account has been used.
(d) A Participant's Aggregate Annual Addition for a Limitation Year shall
not exceed the Maximum Permissible Amount.
If, for the Limitation Year, the Participant has an Annual Addition
under more than one defined contribution plan or a welfare benefit fund,
as defined in Code Section 419(e), or an individual medical account, as
defined in Code Section 415(l)(2), maintained by the Employer, as
defined in this section, and such plans and welfare benefit funds and
individual medical accounts do not otherwise limit the Aggregate Annual
Addition to the Maximum Permissible Amount, any reduction necessary shall
be made first to the profit sharing plans, then to all other such plans
and welfare benefit funds and individual medical accounts and, if
necessary, by reducing first those that were most recently allocated.
Welfare benefit funds and individual medical accounts shall be deemed to
be allocated first. However, elective deferral contributions shall be
the last contributions reduced before the welfare benefit fund or
individual medical account is reduced.
If some of the Employer's defined contribution plans were not in
existence on July 1, 1982, and some were in existence on that date, the
Maximum Permissible Amount which is based on a dollar amount may differ
for a Limitation Year. The Aggregate Annual Addition for the Limitation
Year in which the dollar limit differs shall not exceed the lesser of
(1) 25% of Compensation as defined in this section, (2) $45,475, or (3)
the greater of $30,000 or the sum of the Annual Additions for such
Limitation Year under all the plan(s) to which the $45,475 amount
applies.
(e) If a Participant is or has been a participant in both defined benefit
and defined contribution plans (including a welfare benefit fund or
individual medical account) ever maintained by the Employer, as defined
in this section, the sum of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction for any Limitation Year shall not
exceed 1.0 (1.4 before the TEFRA Compliance Date).
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<PAGE>
After all other limitations set out in the plans and funds have been
applied, the following limitations shall apply so that the sum of the
Participant's Defined Benefit Plan Fraction and Defined Contribution
Plan Fraction shall not exceed 1.0 (1.4 before the TEFRA Compliance
Date). The Projected Annual Benefit shall be limited first. If the
Participant's annual benefit(s) equal his Projected Annual Benefit, as
limited, then Annual Additions to the defined contribution plan(s) shall
be limited to the extent needed to reduce the sum to 1.0 (1.4). First,
the voluntary contributions the Participant may make for the Limitation
Year shall be limited. Next, in the case of a profit sharing plan, any
forfeitures allocated to the Participant shall be reallocated to
remaining participants to the extent necessary to reduce the decimal to
1.0 (1.4). Last, to the extent necessary, employer contributions for the
Limitation Year shall be reallocated or limited, and any required and
optional employee contributions to which such employer contributions
were geared shall be reduced in proportion.
If, for the Limitation Year, the Participant has an Annual Addition under
more than one defined contribution plan or welfare benefit fund or
individual medical account maintained by the Employer, as defined in
this section, any reduction above shall be made first to the profit
sharing plans, then to all other such plans and welfare benefit plans
and individual medical accounts and, if necessary, by reducing first
those that were most recently allocated. However, elective deferral
contributions shall be the last contributions reduced before the welfare
benefit fund or individual medical account is reduced. The annual
addition to the welfare benefit fund and individual medical account shall
be limited last.
SECTION 3.05--EXCESS AMOUNTS.
(a) For the purposes of this section, the following terms are defined:
ACTUAL DEFERRAL PERCENTAGE means the ratio (expressed as a percentage)
of Elective Deferral Contributions under this Plan on behalf of the
Eligible Participant for the Plan Year to the Eligible Participant's
Compensation for the Plan Year. The Elective Deferral Contributions
used to determine the Actual Deferral Percentage shall include Excess
Elective Deferrals (other than Excess Elective Deferrals of Nonhighly
Compensated Employees that arise solely from Elective Deferral
Contributions made under this Plan or any other plans of the Employer or
a Controlled Group member), but shall exclude Elective Deferral
Contributions that are used in computing the Contribution Percentage
(provided the Average Actual Deferral Percentage test is satisfied
both with and without exclusion of these Elective Deferral
Contributions). Under such rules as the Secretary of the Treasury shall
prescribe in Code Section 401(k)(3)(D), the Employer may elect to include
Qualified Nonelective Contributions and Qualified Matching Contributions
under this Plan in computing the Actual Deferral Percentage. For an
Eligible Participant for whom such Contributions on his behalf for the
Plan Year are zero, the percentage is zero.
AGGREGATE LIMIT means the greater of (1) or (2) below:
(1) The sum of
(i) 125 percent of the greater of the Average Actual Deferral
Percentage of the Nonhighly Compensated Employees for the
Plan Year or the Average Contribution Percentage of
Nonhighly Compensated Employees under the Plan subject to
Code
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Section 401(m) for the Plan Year beginning with or within
the Plan Year of the cash or deferred arrangement and
(ii) the lesser of 200% or two plus the lesser of such Average
Actual Deferral Percentage or Average Contribution
Percentage.
(2) The sum of
(i) 125 percent of the lesser of the Average Actual Deferral
Percentage of the Nonhighly Compensated Employees for the
Plan Year or the Average Contribution Percentage of
Nonhighly Compensated Employees under the Plan subject to
Code Section 401(m) for the Plan Year beginning with or
within the Plan Year of the cash or deferred arrangement and
(ii) the lesser of 200% or two plus the greater of such Average
Actual Deferral Percentage or Average Contribution
Percentage.
AVERAGE ACTUAL DEFERRAL PERCENTAGE means the average (expressed as a
percentage) of the Actual Deferral Percentages of the Eligible
Participants in a group.
AVERAGE CONTRIBUTION PERCENTAGE means the average (expressed as a
percentage) of the Contribution Percentages of the Eligible Participants
in a group.
CONTRIBUTION PERCENTAGE means the ratio (expressed as a percentage) of
the Eligible Participant's Contribution Percentage Amounts to the Eligible
Participant's Compensation for the Plan Year. For an Eligible
Participant for whom such Contribution Percentage Amounts for the Plan
Year are zero, the percentage is zero.
CONTRIBUTION PERCENTAGE AMOUNTS means the sum of the Participant
Contributions and Matching Contributions (that are not Qualified
Matching Contributions) under this Plan on behalf of the Eligible
Participant for the Plan Year. Such Contribution Percentage Amounts
shall not include Matching Contributions that are forfeited either to
correct Excess Aggregate Contributions or because the Contributions to
which they relate are Excess Elective Deferrals, Excess Contributions or
Excess Aggregate Contributions. Under such rules as the Secretary of
the Treasury shall prescribe in Code Section 401(k)(3)(D), the Employer
may elect to include Qualified Nonelective Contributions and Qualified
Matching Contributions under this Plan which were not used in computing
the Actual Deferral Percentage in computing the Contribution Percentage.
The Employer may also elect to use Elective Deferral Contributions in
computing the Contribution Percentage so long as the Average Actual
Deferral Percentage test is met before the Elective Deferral
Contributions are used in the Average Contribution Percentage test and
continues to be met following the exclusion of those Elective Deferral
Contributions that are used to meet the Average Contribution Percentage
test.
ELECTIVE DEFERRAL CONTRIBUTIONS means employer contributions made on
behalf of a participant pursuant to an election to defer under any
qualified cash or deferred arrangement as described in Code Section
401(k), any simplified employee pension cash or deferred arrangement as
described in Code Section 402(h)(1)(B), any eligible deferred
compensation plan under Code Section 457, any plan as described under
Code Section 501(c)(18), and any employer contributions made on
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behalf of a participant for the purchase of an annuity contract
under Code Section 403(b) pursuant to a salary reduction agreement.
Elective Deferral Contributions shall not include any deferrals properly
distributed as excess Annual Additions.
ELIGIBLE PARTICIPANT means, for purposes of the Actual Deferral
Percentage, any Employee who is eligible to make an Elective Deferral
Contribution, and shall include the following: any Employee who would be
a plan participant if he chose to make required contributions; any
Employee who can make Elective Deferral Contributions but who has
changed the amount of his Elective Deferral Contribution to 0%, or whose
eligibility to make an Elective Deferral Contribution is suspended
because of a loan, distribution or hardship withdrawal; and, any
Employee who is not able to make an Elective Deferral Contribution
because of Code Section 415(c)(1) - Annual Additions limits. The Actual
Deferral Percentage for any such included Employee is zero.
Eligible Participant means, for purposes of the Average Contribution
Percentage, any Employee who is eligible to make a Participant
Contribution or to receive a Matching Contribution, and shall include
the following: any Employee who would be a plan participant if he chose
to make required contributions; any Employee who can make a Participant
Contribution or receive a matching contribution but who has made an
election not to participate in the Plan; and any Employee who is not
able to make a Participant Contribution or receive a matching
contribution because of Code Section 415(c)(1) or 415(e) limits. The
Average Contribution Percentage for any such included Employee is zero.
EXCESS AGGREGATE CONTRIBUTIONS means, with respect to any Plan Year, the
excess of:
(1) The aggregate Contributions taken into account in computing the
numerator of the Contribution Percentage actually made on behalf
of Highly Compensated Employees for such Plan Year, over
(2) The maximum amount of such Contributions permitted by the Average
Contribution Percentage test (determined by reducing
Contributions made on behalf of Highly Compensated Employees in
order of their Contribution Percentages beginning with the
highest of such percentages).
Such determination shall be made after first determining Excess Elective
Deferrals and then determining Excess Contributions.
EXCESS CONTRIBUTIONS means, with respect to any Plan Year, the excess of:
(1) The aggregate amount of Contributions actually taken into account
in computing the Actual Deferral Percentage of Highly Compensated
Employees for such Plan Year, over
(2) The maximum amount of such Contributions permitted by the Actual
Deferral Percentage test (determined by reducing Contributions
made on behalf of Highly Compensated Employees in order of the
Actual Deferral Percentages, beginning with the highest of such
percentages).
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A Participant's Excess Contributions for a Plan Year will be reduced by
the amount of Excess Elective Deferrals, if any, previously distributed
to the Participant for the taxable year ending in that Plan Year.
EXCESS ELECTIVE DEFERRALS means those Elective Deferral Contributions
that are includible in a Participant's gross income under Code Section
402(g) to the extent such Participant's Elective Deferral Contributions
for a taxable year exceed the dollar limitation under such Code section.
Excess Elective Deferrals shall be treated as Annual Additions, as
defined in the CONTRIBUTION LIMITATION SECTION of Article III, under the
Plan, unless such amounts are distributed no later than the first April
15 following the close of the Participant's taxable year.
FAMILY MEMBER means an Employee, or former employee; the spouse of the
Employee or former employee, and the lineal ascendants or descendants
and the spouses of such lineal ascendants or descendants of any such
Employee or former employee. In determining if an individual is a
family member as to an Employee or former employee, legal adoptions are
taken into account.
MATCHING CONTRIBUTIONS means employer contributions made to this or any
other defined contribution plan, or to a contract described in Code
Section 403(b), on behalf of a participant on account of a Participant
Contribution made by such participant, or on account of a participant's
Elective Deferral Contributions, under a plan maintained by the employer.
PARTICIPANT CONTRIBUTIONS means contributions made to any plan by or on
behalf of a participant that are included in the participant's gross
income in the year in which made and that are maintained under a
separate account to which earnings and losses are allocated.
QUALIFIED MATCHING CONTRIBUTIONS means Matching Contributions which are
subject to the distribution and nonforfeitability requirements under
Code Section 401(k) when made.
QUALIFIED NONELECTIVE CONTRIBUTIONS means any employer contributions
(other than Matching Contributions) which an employee may not elect to
have paid to him in cash instead of being contributed to the plan and
which are subject to the distribution and nonforfeitability requirements
under Code Section 401(k) when made.
(b) A Participant may assign to this Plan any Excess Elective Deferrals made
during a taxable year by notifying the Plan Administrator in writing on
or before the first following March 1 of the amount of the Excess
Elective Deferrals to be assigned to the Plan. A Participant is deemed
to notify the Plan Administrator of any Excess Elective Deferrals that
arise by taking into account only those Elective Deferral Contributions
made to this Plan and any other plans of the Employer or a Controlled
Group member and reducing such Excess Elective Deferrals by the amount
of Excess Contributions, if any, previously distributed for the Plan
Year beginning in that taxable year. The Participant's claim for Excess
Elective Deferrals shall be accompanied by the Participant's written
statement that if such amounts are not distributed, such Excess Elective
Deferrals, when added to amounts deferred under other plans or
arrangements described in Code Sections 401(k), 408(k) or 403(b), will
exceed the limit imposed on the Participant by Code Section 402(g) for
the year in which the deferral occurred. The Excess Elective Deferrals
assigned to this Plan can not exceed the Elective Deferral Contributions
allocated under this Plan for such taxable year.
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Notwithstanding any other provisions of the Plan, Elective Deferral
Contributions in an amount equal to the Excess Elective Deferrals
assigned to this Plan, plus any income and minus any loss allocable
thereto, shall be distributed no later than April 15 to any Participant
to whose Account Excess Elective Deferrals were assigned for the
preceding year and who claims Excess Elective Deferrals for such taxable
year.
The income or loss allocable to such Excess Elective Deferrals shall be
equal to the income or loss allocable to the Participant's Elective
Deferral Contributions for the taxable year in which the excess occurred
multiplied by a fraction. The numerator of the fraction is the Excess
Elective Deferrals. The denominator of the fraction is the closing
balance without regard to any income or loss occurring during such
taxable year (as of the end of such taxable year) of the Participant's
Account resulting from Elective Deferral Contributions.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Elective Deferrals, plus
any income and minus any loss allocable thereto, shall be forfeited. These
Forfeitures shall be used to offset the earliest Employer Contribution
due after the Forfeiture arises.
(c) As of the end of each Plan Year after Excess Elective Deferrals have
been determined, one of the following tests must be met:
(1) The Average Actual Deferral Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year is not
more than the Average Actual Deferral Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 1.25.
(2) The Average Actual Deferral Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year is not
more than the Average Actual Deferral Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 2 and the difference between the Average
Actual Deferral Percentages is not more than 2.
The Actual Deferral Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to
have Elective Deferral Contributions (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if used in
computing the Actual Deferral Percentage) allocated to his account under
two or more plans or arrangements described in Code Section 401(k) that
are maintained by the Employer or a Controlled Group member shall be
determined as if all such Elective Deferral Contributions (and, if
applicable, such Qualified Nonelective Contributions or Qualified
Matching Contributions, or both) were made under a single arrangement.
If a Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar year shall
be treated as a single arrangement. Notwithstanding the foregoing,
certain plans shall be treated as separate if mandatorily disaggregated
under the regulations under Code Section 401(k) or permissibly
disaggregated as provided.
In the event that this Plan satisfies the requirements of Code Sections
401(k), 401(a)(4), or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such
Code sections only if aggregated with this Plan, then this section shall
be
34
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applied by determining the Actual Deferral Percentage of employees as if
all such plans were a single plan. Plans may be aggregated in order to
satisfy Code Section 401(k) only if they have the same Plan Year.
For purposes of determining the Actual Deferral Percentage of an
Eligible Participant who is a five-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if used in computing the Actual
Deferral Percentage) and Compensation of such Eligible Participant include
the Elective Deferral Contributions (and, if applicable, Qualified
Nonelective Contributions or Qualified Matching Contributions, or both)
and Compensation for the Plan Year of Family Members. Family Members,
with respect to such Highly Compensated Employees, shall be disregarded
as separate employees in determining the Actual Deferral Percentage both
for Participants who are Nonhighly Compensated Employees and for
Participants who are Highly Compensated Employees.
For purposes of determining the Actual Deferral Percentage, Elective
Deferral Contributions, Qualified Nonelective Contributions and
Qualified Matching Contributions must be made before the last day of the
12-month period immediately following the Plan Year to which
contributions relate.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Actual Deferral Percentage test and the
amount of Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
The determination and treatment of the Contributions used in computing
the Actual Deferral Percentage shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
If the Plan Administrator should determine during the Plan Year that
neither of the above tests is being met, the Plan Administrator may
adjust the amount of future Elective Deferral Contributions of the
Highly Compensated Employees.
Notwithstanding any other provisions of this Plan, Excess Contributions,
plus any income and minus any loss allocable thereto, shall be
distributed no later than the last day of each Plan Year to Participants
to whose Accounts such Excess Contributions were allocated for the
preceding Plan Year. If such excess amounts are distributed more than
2 1/2 months after the last day of the Plan Year in which such excess
amounts arose, a ten (10) percent excise tax will be imposed on the
employer maintaining the plan with respect to such amounts. Such
distributions shall be made beginning with the Highly Compensated
Employee(s) who has the greatest Actual Deferral Percentage, reducing
his Actual Deferral Percentage to the next highest Actual Deferral
Percentage level. Then, if necessary, reducing the Actual Deferral
Percentage of the Highly Compensated Employees at the next highest level,
and continuing in this manner until the average Actual Deferral
Percentage of the Highly Compensated Group satisfies the Actual Deferral
Percentage test. Excess Contributions of Participants who are subject to
the family member aggregation rules shall be allocated among the Family
Members in proportion to the Elective Deferral Contributions (and amounts
treated as Elective Deferral Contributions) of each Family Member that is
combined to determine the combined the combined Actual Deferral
Percentage.
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Excess Contributions shall be treated as Annual Additions, as defined in
the CONTRIBUTION LIMITATION SECTION of Article III, under the Plan.
The Excess Contributions shall be adjusted for income or loss. The
income or loss allocable to such Excess Contributions shall be equal to
the income or loss allocable to the Participant's Elective Deferral
Contributions (and, if applicable, Qualified Nonelective Contributions
or Qualified Matching Contributions, or both) for the Plan Year in which
the excess occurred multiplied by a fraction. The numerator of the
fraction is the Excess Contributions. The denominator of the fraction
is the closing balance without regard to any income or loss occurring
during such Plan Year (as of the end of such Plan Year) of the
Participant's Account resulting from Elective Deferral Contributions
(and Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if used in computing the Actual Deferral
Percentage).
Excess Contributions shall be distributed from the Participant's Account
resulting first from Elective Deferral Contributions not the basis for
Matching Contributions, then if necessary, from Elective Deferral
Contributions which are the basis for Matching Contributions. If such
Excess Contributions exceed the balance in the Participant's Account
resulting from Elective Deferral Contributions, the balance shall be
distributed from the Participant's Account resulting from Qualified
Matching Contributions (if applicable) and Qualified Nonelective
Contributions, respectively.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Contributions, plus any
income and minus any loss allocable thereto, shall be forfeited. These
Forfeitures shall be used to offset the earliest Employer Contribution
due after the Forfeiture arises.
(d) As of the end of each Plan Year, one of the following tests must be met:
(1) The Average Contribution Percentage for Eligible Participants who
are Highly Compensated Employees for the Plan Year is not more
than the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 1.25.
(2) The Average Contribution Percentage for Eligible Participants who
are Highly Compensated Employees for the Plan Year is not more
than the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 2 and the difference between the Average
Contribution Percentages is not more than 2.
If one or more Highly Compensated Employees participate in both a cash
or deferred arrangement and a plan subject to the Average Contribution
Percentage test maintained by the Employer or a Controlled Group member
and the sum of the Average Actual Deferral Percentage and Average
Contribution Percentage of those Highly Compensated Employees subject to
either or both tests exceeds the Aggregate Limit, then the Contribution
Percentage of those Highly Compensated Employees who also participate in
a cash or deferred arrangement will be reduced (beginning with such
Highly Compensated Employees whose Contribution Percentage is the
highest) so that the limit is not exceeded. The amount by which each
Highly Compensated Employee's Contribution Percentage is reduced shall
be treated as an Excess Aggregate Contribution. The Average Actual
Deferral Percentage and Average Contribution Percentage of the Highly
Compensated Employees
36
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are determined after any corrections required to meet the Average Actual
Deferral Percentage and Average Contribution Percentage tests. Multiple
use does not occur if either the Average Actual Deferral Percentage or
Average Contribution Percentage of the Highly Compensated Employees does
not exceed 1.25 multiplied by the Average Actual Deferral Percentage and
Average Contribution Percentage of the Nonhighly Compensated Employees.
The Contribution Percentage for any Eligible Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have
Contribution Percentage Amounts allocated to his account under two or
more plans described in Code Section 401(a) or arrangements described in
Code Section 401(k) that are maintained by the Employer or a Controlled
Group member shall be determined as if the total of such Contribution
Percentage Amounts was made under each plan. If a Highly Compensated
Employee participates in two or more cash or deferred arrangements that
have different Plan Years, all cash or deferred arrangements ending with
or within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated under the regulations
under Code Section 401(m) or permissibly disaggregated as provided.
In the event that this Plan satisfies the requirements of Code Sections
401(m), 401(a)(4), or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of Code
sections only if aggregated with this Plan, then this section shall be
applied by determining the Contribution Percentages of Eligible
Participants as if all such plans were a single plan. Plans may be
aggregated in order to satisfy Code Section 401(m) only if they have the
same Plan Year.
For purposes of determining the Contribution Percentage of an Eligible
Participant who is a five-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the Contribution Percentage
Amounts and Compensation of such Participant shall include Contribution
Percentage Amounts and Compensation for the Plan Year of Family Members.
Family Members, with respect to Highly Compensated Employees, shall be
disregarded as separate employees in determining the Contribution
Percentage both for employees who are Nonhighly Compensated Employees
and for employees who are Highly Compensated Employees.
For purposes of determining the Contribution Percentage, Participant
Contributions are considered to have been made in the Plan Year in which
contributed to the Plan. Matching Contributions and Qualified
Nonelective Contributions will be considered made for a Plan Year if
made no later than the end of the 12-month period beginning on the day
after the close of the Plan Year.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Contribution Percentage test and the amount
of Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
The determination and treatment of the Contribution Percentage of any
Participant shall satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
Notwithstanding any other provisions of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if not vested, or distributed, if vested, no later
than the last day of each Plan Year to Participants to whose Accounts
such Excess Aggregate Contributions were allocated for the preceding
Plan Year. If such Excess
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<PAGE>
Aggregate Contributions are distributed more than 2 1/2 months after the
last day of the Plan Year in which such excess amounts arose, a ten (10)
percent excise tax will be imposed on the employer maintaining the plan
with respect to those amounts. Excess Aggregate Contributions will be
distributed beginning with the Highly Compensated Employee(s) who has
the greatest Contribution Percentage, reducing his contribution
percentage to the next highest level. Then, if necessary, reducing the
Contribution Percentage of the Highly Compensated Employee at the next
highest level, and continuing in this manner until the Actual
Contribution Percentage of the Highly Compensated Group satisfies the
Actual Contribution Percentage Test. Excess Aggregate Contributions of
Participants who are subject to the family member aggregation rules
shall be allocated among the Family Members in proportion to the
Employee and Matching Contributions (or amounts treated as Matching
Contributions) of each Family Member that is combined to determine the
combined Contribution Percentage. Excess Aggregate Contributions shall
be treated as Annual Additions, as defined in the CONTRIBUTION
LIMITATION SECTION of Article III, under the Plan.
The Excess Aggregate Contributions shall be adjusted for income or loss.
The income or loss allocable to such Excess Aggregate Contributions
shall be equal to the income or loss allocable to the Participant's
Contribution Percentage Amounts for the Plan Year in which the excess
occurred multiplied by a fraction. The numerator of the fraction is the
Excess Aggregate Contributions. The denominator of the fraction is the
closing balance without regard to any income or loss occurring during
such Plan Year (as of the end of such Plan Year) of the Participant's
Account resulting from Contribution Percentage Amounts.
Excess Aggregate Contributions shall be distributed from the
Participant's Account resulting from Participant Contributions that are
not required as a condition of employment or participation or for
obtaining additional benefits from Employer Contributions. If such
Excess Aggregate Contributions exceed the balance in the Participant's
Account resulting from such Participant Contributions, the balance shall
be forfeited, if not vested, or distributed, if vested, on a pro-rata
basis from the Participant's Account resulting from Contribution
Percentage Amounts. These Forfeitures shall be used to offset the
earliest Employer Contribution due after the Forfeiture arises.
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ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
SECTION 4.01--INVESTMENT OF CONTRIBUTIONS.
All contributions are forwarded by the Employer to the Trustee to be
deposited in the Trust Fund.
Investment of Contributions is governed by the provisions of the Trust,
the Group Contract and any other funding arrangement in which the Trust Fund
is or may be invested. To the extent permitted by the Trust, Group Contract
or other funding arrangement, the parties named below shall direct the
Contributions to any of the accounts available under the Trust or Group
Contract and may request the transfer of assets resulting from those
Contributions between such accounts. A Participant may not direct the Trustee
to invest the Participant's Account in collectibles. Collectibles means any
work of art, rug or antique, metal or gem, stamp or coin, alcoholic beverage
or other tangible personal property specified by the Secretary of Treasury.
To the extent that a Participant does not direct the investment of his
Account, such Account shall be invested ratably in the accounts available
under the Trust or Group Contract in the same manner as the undirected
Accounts of all other Participants. The Vested Accounts of all Inactive
Participants may be segregated and invested separately from the Accounts of
all other Participants.
The Trust Fund shall be valued at current fair market value as of the
last day of the last calendar month ending in the Plan Year and, at the
discretion of the Trustee, may be valued more frequently. The valuation shall
take into consideration investment earnings credited, expenses charged,
payments made and changes in the value of the assets held in the Trust Fund.
The Account of a Participant shall be credited with its share of the gains
and losses of the Trust Fund. That part of a Participant's Account invested
in a funding arrangement which establishes an account or accounts for such
Participant thereunder shall be credited with the gain or loss from such
account or accounts. That part of a Participant's Account which is invested
in other funding arrangements shall be credited with a proportionate share
of the gain or loss of such investments. The share shall be determined by
multiplying the gain or loss of the investment by the ratio of the part of
the Participant's Account invested in such funding arrangement to the total
of the Trust Fund invested in such funding arrangement.
At least annually, the Named Fiduciary shall review all pertinent
Employee information and Plan data in order to establish the funding policy
of the Plan and to determine appropriate methods of carrying out the Plan's
objectives. The Named Fiduciary shall inform the Trustee and any Investment
Manager of the Plan's short-term and long-term financial needs so the
investment policy can be coordinated with the Plan's financial requirements.
(a) Matching Contributions: The Trustee shall direct the initial
investment of such Matching Contributions to the extent such
Contributions are made in the form of Qualifying Employer
Securities. Any Matching Contributions not made in the form of
Qualifying Employer Securities and subsequent investment of such
Matching Contributions and transfer of assets resulting from those
Contributions shall be subject to the investment direction of the
Participant.
(b) Discretionary Contributions: The Participant shall direct the
investment of Discretionary Contributions and transfer of assets
resulting from those Contributions.
ARTICLE IV 39
<PAGE>
(c) Elective Deferral Contributions: The Participant shall direct the
investment of Elective Deferral Contributions and transfer of
assets resulting from those Contributions.
(d) Rollover Contributions: The Participant shall direct the investment
of Rollover Contributions and transfer of assets resulting from
those Contributions.
However, the Named Fiduciary may delegate to the Investment Manager
investment discretion for Contributions and Plan assets which are not subject
to Participant direction.
SECTION 4.01A--INVESTMENT IN QUALIFYING EMPLOYER SECURITIES.
All or any portion (up to 100%) of the Matching Contributions shall be
made in the form of Qualifying Employer Securities as long as the Plan
Administrator so directs. The portion of a Participant's Account resulting
from Matching Contributions that are initially made in the form of Qualifying
Employer Securities shall remain invested in Qualifying Employer Securities
until the Participant directs such investment elsewhere.
Participants in the Plan shall be entitled to invest all or any portion of
their Account in Qualifying Employer Securities.
Once investment in Qualifying Employer Securities is made available to
Eligible Employees, then it shall continue to be available unless the Plan
and Trust is amended to disallow such available investment. In the absence of
such election, such Eligible Employees shall be deemed to have elected to
have their Accounts invested wholly in the Investment Funds. Once an election
is made, it shall be considered to continue until a new election is made.
Any dividends payable on the Qualifying Employer Securities shall be
paid in cash and reinvested in Qualifying Employer Securities or other
investment options of the Investment Fund according to the investment
direction of the Participant.
If the securities of the Employer are not publicly traded and if no
market or an extremely thin market exists for the Qualifying Employer
Securities, so that a reasonable valuation may not be obtained from the
market place, then such Qualifying Employer Securities must be valued at
least annually by an independent appraiser who is not associated with the
Employer, the Plan Administrator, the Trustee, or any person related to any
fiduciary under the Plan. The independent appraiser may be associated with a
person who is merely a contract administrator with respect to the Plan, but
who exercises no discretionary authority and is not a Plan fiduciary.
If there is a public market for Qualifying Employer Securities of the
type held by the Plan, then the Plan Administrator may use as the value of
the shares the price at which such shares traded in such market, or an
average of the bid and asked prices for such shares in such market, provided
that such value is representative of the fair market value of such shares in
the opinion of the Plan Administrator. If the Qualifying Employer
Securities do not trade on the annual valuation date or if the market is very
thin on such date, then the Plan Administrator may use the average of trade
prices for a period of time ending on such date, provided that such value is
representative of the fair market value of such shares in the opinion of the
Plan Administrator. The value of a Participant's Qualifying Employer
Securities Account may be expressed in units.
For purposes of determining the annual valuation of the Plan and for
reporting to Participants and regulatory authorities, the assets of the Plan
shall be valued at least annually on the Valuation Date which
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corresponds to the last day of the Plan Year. The fair market value of
Qualifying Employer Securities shall be determined on such a Valuation Date.
The average of the bid and asked prices of Qualifying Employer Securities as
of the date of the transaction shall apply for purposes of valuing
distributions and other transactions of the Plan to the extent such value is
representative of the fair market value of such shares in the opinion of the
Plan Administrator.
All purchases of Qualifying Employer Securities shall be made at a
price, or prices, which, in the judgment of the Plan Administrator, do not
exceed the fair market value of such Qualifying Employer Securities.
In the event that the Trustee acquires shares of Qualifying Employer
Securities by purchase from a "disqualified person" as defined in Code
Section 4975(e)(2), in exchange for cash or other assets of the Trust, the
terms of such purchase shall contain the provision that in the event that
there is a final determination by the Internal Revenue Service or court of
competent jurisdiction that a fair market value of such shares of Qualifying
Employer Securities, as of the date of purchase was less than the purchase
price paid by the Trustee, then the seller shall pay or transfer, as the case
may be, to the Trustee, an amount of cash, shares of Qualifying Employer
Securities, or any combination thereof equal in value to the difference
between the purchase price and said fair market value for all such shares. In
the event that cash and/or shares of Qualifying Employer Securities are paid
and/or transferred to the Trustee under this provision, shares of Qualifying
Employer Securities shall be valued at their fair market value as of the date
of said purchase, and interest at a reasonable rate from the date of purchase
to the date of payment shall be paid by the seller on the amount of cash paid.
The Plan Administrator may direct the Trustee to sell, resell or
otherwise dispose of Qualifying Employer Securities to any person, including
the Employer, provided that any such sales to any disqualified person,
including the Employer, will be made at not less than the fair market value
and no commission is charged. Any such sale shall be made in conformance with
Section 408(e) of ERISA.
In the event the Plan Administrator directs the Trustee to dispose of
any Qualifying Employer Securities held as Trust Assets under circumstances
which require registration and/or qualification of the securities under
applicable Federal or state securities laws, then the Employer, at its own
expense, will take or cause to be taken any and all such action as may be
necessary or appropriate to effect such registration and/or qualification.
If SEC filing is required, the Qualifying Employer Securities provisions
set forth in this Plan restatement will not be made available to Participants
until the later of the effective date of the Plan restatement or the date the
Plan and any other necessary documentation has been filed for registration
with the SEC by the Employer.
SECTION 4.01B--LIMITATION OF INVESTMENT IN QUALIFYING
EMPLOYER SECURITIES BY SOME PARTICIPANTS.
Participants who are directors, officers, or beneficial owners of 10% or
more of the outstanding securities of the Employer, and other persons subject
to Section 16 of the Securities Exchange Act of 1934, as amended ("Exchange
Act") shall not be permitted to increase AND decrease or decrease AND increase
the level of investment in the Qualifying Employer Securities Account in any
six month period, but shall be permitted to increase such level one or more
times OR decrease such level one or more times during any six month period.
Additionally, such Participants who cease participation in the Qualifying
Employer Securities Account, or who reduce their participation in such
account to a nominal level, may not participate (e.g., direct that investments
be made on their behalf) under the Qualifying Employer Securities Account
again for at least six months. Any
41
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transfers of funds by such Participants into or from the Qualifying Employer
Securities Account may only be made during time periods permitted by
securities regulations and only after approval by the Employer. In general,
any transfer into the Qualifying Employer Securities Account shall not be
permitted within six months of any transfer or distribution from the
Qualifying Employer Securities Account, and vice versa, but multiple
transfers into OR multiple transfers or distributions from the Qualifying
Employer Securities Account may be permissible. Subject to certain limited
exceptions, Participants who are directors, officers, beneficial owners of
10% or more of the outstanding securities of the Employer, and other persons
subject to Section 16 of the Exchange Act making withdrawals of investments
under the Qualifying Employer Securities Account must cease further
purchases/investment under the Qualifying Employer Securities Account for six
months.
With respect to Participants who are directors, officers, beneficial
owners of 10% or more of the outstanding securities of the Employer, and
other persons subject to the Exchange Act, transactions under this Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provisions of the Plan
or action by the Plan Administrator fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by the
Plan Administrator.
Participants who are "affiliates" of the Employer within the meaning of
the rules and regulations promulgated under the Securities Act of 1933 (the
"Securities Act") may not offer or sell, or cause to be offered or sold,
Qualifying Employer Securities from their Account unless such offers and
sales are made pursuant to an effective registration statement under the
Securities Act or pursuant to appropriate exemption from the registration
requirements of the Securities Act or, if available to the Participant,
within the limitations and subject to conditions set forth in Rule 144
promulgated under the Securities Act. Notwithstanding the penultimate
paragraph of Section 4.01A, the Employer shall have no obligation to effect a
registration of Qualifying Employer Securities in connection with the resale
of such Securities by Affiliates. Participants who are Affiliates of the
Employer shall notify the Employer and the Plan Administrator in
writing fifteen (15) days prior to any attempt to decrease the level of
investment in their Qualifying Employer Securities Account.
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ARTICLE V
BENEFITS
SECTION 5.01--RETIREMENT BENEFITS.
On a Participant's Retirement Date, his Vested Account shall be
distributed to him according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article IX.
SECTION 5.02--DEATH BENEFITS.
If a Participant dies before his Annuity Starting Date, his Vested
Account shall be distributed according to the distribution of benefits
provisions of Article VI and the provisions of the SMALL AMOUNTS SECTION of
Article IX.
SECTION 5.03--VESTED BENEFITS.
A Participant may receive a distribution of his Vested Account at any
time after he ceases to be an Employee, provided he has not again become an
Employee. If such amount is not payable under the provisions of the SMALL
AMOUNTS SECTION of Article IX, it will be distributed only if the Participant
so elects. The Participant's election shall be subject to the requirements in
the ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit.
If a Participant does not receive an earlier distribution according to
the provisions of this section or the SMALL AMOUNTS SECTION of Article IX,
upon his Retirement Date or death, his Vested Account shall be applied
according to the provisions of the RETIREMENT BENEFITS SECTION or the DEATH
BENEFITS SECTION of Article V.
The Nonvested Account of a Participant who has ceased to be an Employee
shall remain a part of his Account until it becomes a Forfeiture; provided,
however, if the Participant again becomes an Employee so that his Vesting
Percentage can increase, the Nonvested Account may become a part of his
Vested Account.
SECTION 5.04--WHEN BENEFITS START.
Benefits under the Plan begin when a Participant retires, dies or ceases
to be an Employee, whichever applies, as provided in the preceding sections
of this article. Benefits which begin before Normal Retirement Date for a
Participant who became Totally and Permanently Disabled when he was an
Employee shall be deemed to begin because he is Totally and Permanently
Disabled. The start of benefits is subject to the qualified election
procedures of Article VI.
Unless otherwise elected, benefits shall begin before the sixtieth day
following the close of the Plan Year in which the latest date below occurs:
(a) The date the Participant attains age 65 (Normal Retirement Age, if
earlier).
(b) The tenth anniversary of the Participant's Entry Date.
ARTICLE V 43
<PAGE>
(c) The date the Participant ceases to be an Employee.
Notwithstanding the foregoing, the failure of a Participant and spouse
to consent to a distribution while a benefit is immediately distributable,
within the meaning of the ELECTION PROCEDURES SECTION of Article VI, shall be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this section.
The Participant may elect to have his benefits begin after the latest
date for beginning benefits described above, subject to the provisions of
this section. The Participant shall make the election in writing and deliver
the signed statement of election to the Plan Administrator before Normal
Retirement Date or the date he ceases to be an Employee, if later. The
election must describe the form of distribution and the date the benefits
will begin. The Participant shall not elect a date for beginning benefits or
a form of distribution that would result in a benefit payable when he dies
which would be more than incidental within the meaning of governmental
regulations.
Benefits shall begin by the Participant's Required Beginning Date, as
defined in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS
SECTION of Article VI.
Contributions which are used to compute the Actual Deferral Percentage,
as defined in the EXCESS AMOUNTS SECTION of Article III, may be distributed
upon disposition by the Employer of substantially all of the assets (within
the meaning of Code Section 409(d)(2)) used by the Employer in a trade or
business or disposition by the Employer of the Employer's interest in a
subsidiary (within the meaning of Code Section 409(d)(3)) if the transferee
corporation is not a Controlled Group member, the Employee continues
employment with the transferee corporation and the transferor corporation
continues to maintain the Plan. Such distributions made after March 31, 1988,
must be made in a single sum.
SECTION 5.05--WITHDRAWAL PRIVILEGES.
A Participant who has attained age 59 1/2 may withdraw all or any
portion of his Vested Account which results from the following Contributions:
Elective Deferral Contributions
Matching Contributions
Discretionary Contributions
Rollover Contributions
A Participant may make only two such withdrawals in any 12-month period.
A Participant may withdraw all or any portion of his Vested Account
which results from the following Contributions
Elective Deferral Contributions
Matching Contributions
Discretionary Contributions
Rollover Contributions
in the event of hardship due to an immediate and heavy financial need.
Withdrawals from the Participant's Account resulting from Elective Deferral
Contributions shall be limited to the amount of the Participant's
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Elective Deferral Contributions plus income allocable thereto credited to his
Account as of December 31, 1988. Immediate and heavy financial need shall be
limited to: (i) expenses incurred or necessary for medical care, described in
Code Section 213(d), of the Participant, the Participant's spouse, or any
dependents of the Participant (as defined in Code Section 152); (ii) purchase
(excluding mortgage payments) of a principal residence for the Participant;
(iii) payment of tuition and related educational fees and the payment of room
and board expenses for the next 12 months of post-secondary education for the
Participant, his spouse, children or dependents; (iv) the need to prevent the
eviction of the Participant from his principal residence or foreclosure on
the mortgage of the Participant's principal residence; or (v) any other
distribution which is deemed by the Commissioner of Internal Revenue to be
made on account of immediate and heavy financial need as provided in
Treasury regulations. The Participant's request for a withdrawal shall
include his written statement that an immediate and heavy financial need
exists and explain its nature.
No withdrawal shall be allowed which is not necessary to satisfy such
immediate and heavy financial need. Such withdrawal shall be deemed necessary
only if all of the following requirements are met: (i) the distribution is not
in excess of the amount of the immediate and heavy financial need of the
Participant (including amounts necessary to pay any Federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution); (ii) the Participant has obtained all distributions, other
than hardship distributions, and all nontaxable loans currently available
under all plans maintained by the Employer; (iii) the Plan, and all other
plans maintained by the Employer, provide that the Participant's elective
contributions and employee contributions will be suspended for at least 12
months after receipt of the hardship distribution; and (iv) the Plan, and all
other plans maintained by the Employer, provide that the Participant may not
make elective contributions for the Participant's taxable year immediately
following the taxable year of the hardship distribution in excess of the
applicable limit under Code Section 402(g) for such next taxable year less
the amount of such Participant's elective contributions for the taxable year
of the hardship distribution. The Plan will suspend elective contributions
and employee contributions for 12 months and limit elective deferrals as
provided in the preceding sentence. A Participant shall not cease to be an
Eligible Participant, as defined in the EXCESS AMOUNTS SECTION of Article
III, merely because his elective contributions or employee contributions are
suspended.
A request for withdrawal shall be in writing on a form furnished for
that purpose and delivered to the Plan Administrator before the withdrawal is
to occur. The Participant's request shall be subject to the requirements in
the ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit payable in a form other than a Qualified Joint and
Survivor Form.
A forfeiture shall not occur solely as a result of a withdrawal.
SECTION 5.06--LOANS TO PARTICIPANTS.
Loans shall be made available to all Participants on a reasonably
equivalent basis. For purposes of this section, Participant means any
Participant or Beneficiary who is a party-in-interest, within the meaning of
Section 3(14) of the Employee Retirement Income Security Act of 1974 (ERISA).
Loans shall not be made to highly compensated employees, as defined in Code
Section 414(q), in an amount greater than the amount made available to other
Participants.
No loans will be made to any shareholder-employee or owner-employee. For
purposes of this requirement, a shareholder-employee means an employee or
officer of an electing small business (Subchapter S) corporation who owns (or
is considered as owning within the meaning of Code Section 318(a)(1)), on any
day during the taxable year of such corporation, more than 5% of the
outstanding stock of the corporation.
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A loan to a Participant shall be a Participant-directed investment of his
Account. No Account other than the borrowing Participant's Account shall share
in the interest paid on the loan or bear any expense or loss incurred because
of the loan.
The number of outstanding loans shall be limited to one. No more than
three loans will be approved for any Participant in any 12-month period. The
minimum amount of any loan shall be $500.
Loans must be adequately secured and bear a reasonable rate of interest.
The amount of the loan shall not exceed the maximum amount that may be
treated as a loan under Code Section 72(p) (rather than a distribution) to the
Participant and shall be equal to the lesser of (a) or (b) below:
(a) $50,000 reduced by the highest outstanding loan balance of loans
during the one-year period ending on the day before the new loan is
made.
(b) The greater of (1) or (2), reduced by (3) below:
(1) One-half of the Participant's Vested Account.
(2) $10,000.
(3) Any outstanding loan balance on the date the new loan is made.
For purposes of this maximum, a Participant's Vested Account does not include
any accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and all qualified employer plans, as defined in Code Section
72(p)(4), of the Employer and any Controlled Group member shall be treated as
one plan.
The foregoing notwithstanding, the amount of such loan shall not exceed
50% of the amount of the Participant's Vested Account. For purposes of this
maximum, a Participant's Vested Account does not include any accumulated
deductible employee contributions, as defined in Code Section 72(o)(5)(B). No
collateral other than a portion of the Participant's Vested Account (as limited
above) shall be accepted. The Loan Administrator shall determine if the
collateral is adequate for the amount of the loan requested.
A Participant must obtain the consent of the Participant's spouse, if any,
to the use of the Vested Account 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 to be so secured is made. The consent must be in
writing, must acknowledge the effect of the loan, and must be witnessed by a
plan representative or a 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 Vested Account is
used for collateral upon renegotiation, extension, renewal, or other revision
of the loan.
If a valid spousal consent has been obtained in accordance with the above,
then, notwithstanding any other provision of this Plan, the portion of the
Participant's Vested Account 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 Account payable at the time of
death or distribution, but only if the reduction is used as repayment of the
loan. If less than 100% of the Participant's Vested Account (determined without
regard to the preceding sentence) is payable to the surviving spouse, then the
Vested Account shall be
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adjusted by first reducing the Vested Account by the amount of the security
used as repayment of the loan, and then determining the benefit payable to the
surviving spouse.
Each loan shall bear a reasonable fixed rate of interest to be determined
by the Loan Administrator. In determining the interest rate, the Loan
Administrator shall take into consideration fixed interest rates currently being
charged by commercial lenders for loans of comparable risk on similar terms and
for similar durations, so that the interest will provide for a return
commensurate with rates currently charged by commercial lenders for loans made
under similar circumstances. The Loan Administrator shall not discriminate
among Participants in the matter of interest rates; but loans granted at
different times may bear different interest rates in accordance with the
current appropriate standards.
The loan shall by its terms require that repayment (principal and interest)
be amortized in level payments, not less frequently than quarterly, over a
period not extending beyond five years from the date of the loan. The period
of repayment for any loan shall be arrived at by mutual agreement between the
Loan Administrator and the Participant.
The Participant shall make a written application for a loan from the Plan
on forms provided by the Loan Administrator. The application must specify the
amount and duration requested. No loan will be approved unless the Participant
is creditworthy. The Participant must grant authority to the Loan Administrator
to investigate the Participant's creditworthiness so that the loan application
may be properly considered.
Information contained in the application for the loan concerning the
income, liabilities, and assets of the Participant will be evaluated to
determine whether there is a reasonable expectation that the Participant will be
able to satisfy payments on the loan as due. Additionally, the Loan
Administrator will pursue any appropriate further investigations concerning the
creditworthiness and/or credit history of the Participant to determine whether
a loan should be approved.
Each loan shall be fully documented in the form of a promissory note signed
by the Participant for the face amount of the loan, together with interest
determined as specified above.
There will be an assignment of collateral to the Plan executed at the time
the loan is made.
In those cases where repayment through payroll deduction by the Employer
is available, installments are so payable, and a payroll deduction agreement
will be executed by the Participant at the time of making the loan.
Where payroll deduction is not available, payments are to be timely made.
Any payment that is not by payroll deduction shall be made payable to the
Employer or Trustee, as specified in the promissory note, and delivered to the
Loan Administrator, including prepayments, service fees and penalties, if any,
and other amounts due under the note.
The promissory note may provide for reasonable late payment penalties
and/or service fees. Any penalties or service fees shall be applied to all
Participants in a nondiscriminatory manner. If the promissory note so
provides, such amounts may be assessed and collected from the Account of the
Participant as part of the loan balance.
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Each loan may be paid prior to maturity, in part or in full, without
penalty or service fee, except as may be set out in the promissory note.
If any amount remains unpaid for more than 31 days after due, a default is
deemed to occur.
Upon default, the Plan has the right to pursue any remedy available by law
to satisfy the amount due, along with accrued interest, including the right to
enforce its claim against the security pledged and execute upon the collateral
as allowed by law.
If any payment of principal or interest or any other amount due under the
promissory note, or any portion thereof, is not made for a period of 90 days
after due, the entire principal balance whether or not otherwise then due, shall
become immediately due and payable without demand or notice, and subject to
collection or satisfaction by any lawful means, including specifically but not
limited to the right to enforce the claim against the security pledged and to
execute upon the collateral as allowed by law.
In the event of default, foreclosure on the note and attachment of
security or use of amounts pledged to satisfy the amount then due, will not
occur until a distributable event occurs in accordance with the Plan, and will
not occur to an extent greater than the amount then available upon any
distributable event which has occurred under the Plan.
All reasonable costs and expenses, including but not limited to attorney's
fees, incurred by the Plan in connection with any default or in any proceeding
to enforce any provision of a promissory note or instrument by which a
promissory note for a Participant loan is secured, shall be assessed and
collected from the Account of the Participant as part of the loan balance.
If payroll deduction is being utilized, in the event that a Participant's
available payroll deduction amounts in any given month are insufficient to
satisfy the total amount due, there will be an increase in the amount taken
subsequently, sufficient to make up the amount that is then due. If the
subsequent deduction is also insufficient to satisfy the amount due within 31
days, a default is deemed to occur as above. If any amount remains past due
more than 90 days, the entire principal amount, whether or not otherwise then
due, along with interest then accrued and any other amount then due under the
promissory note, shall become due and payable, as above.
If the Participant ceases to be a party-in-interest (as defined in this
section) the balance of the outstanding loan becomes due and payable, and the
Participant's Vested Account will be used as available for distribution(s) to
pay the outstanding loan. The Participant's Vested Account will not be used to
pay any amount due under the outstanding loan before the date which is 31 days
after the date he ceased to be an Employee, and the Participant may elect to
repay the outstanding loan with interest on the day of repayment. If no
distributable event has occurred under the Plan at the time that the
Participant's Vested Account would otherwise be used under this provision to pay
any amount due under the outstanding loan, this will not occur until the time,
or in excess of the extent to which, a distributable event occurs under the
Plan.
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ARTICLE VI
DISTRIBUTION OF BENEFITS
SECTION 6.01--AUTOMATIC FORMS OF DISTRIBUTION.
Unless a qualified election of an optional form of benefit has been made
within the election period (see the ELECTION PROCEDURES SECTION of Article
VI), the automatic form of benefit payable to or on behalf of a Participant
is determined as follows:
(a) The automatic form of retirement benefit for a Participant who
does not die before his Annuity Starting Date shall be the
Qualified Joint and Survivor Form.
(b) The automatic form of death benefit for a Participant who dies before
his Annuity Starting Date shall be:
(1) A Qualified Preretirement Survivor Annuity for a Participant
who has a spouse to whom he has been continuously married
throughout the one-year period ending on the date of his death.
The spouse may elect to start receiving the death benefit on
any first day of the month on or after the Participant dies
and before the date the Participant would have been age 70 1/2.
If the spouse dies before benefits start, the Participant's
Vested Account, determined as of the date of the spouse's
death, shall be paid to the spouse's Beneficiary.
(2) A single-sum payment to the Participant's Beneficiary for a
Participant who does not have a spouse who is entitled to a
Qualified Preretirement Survivor Annuity.
Before a death benefit will be paid on account of the death of a
Participant who does not have a spouse who is entitled to a Qualified
Preretirement Survivor Annuity, it must be established to the
satisfaction of a plan representative that the Participant does not
have such a spouse.
SECTION 6.02--OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS.
(a) For purposes of this section, the following terms are defined:
APPLICABLE LIFE EXPECTANCY means Life Expectancy (or Joint and Last
Survivor Expectancy) calculated using the attained age of the
Participant (or Designated Beneficiary) as of the Participant's (or
Designated Beneficiary's) birthday in the applicable calendar year
reduced by one for each calendar year which has elapsed since the
date Life Expectancy was first calculated. If Life Expectancy is
being recalculated, the Applicable Life Expectancy shall be the
Life Expectancy so recalculated. The applicable calendar year shall
be the first Distribution Calendar Year, and if Life Expectancy is
being recalculated such succeeding calendar year.
DESIGNATED BENEFICIARY means the individual who is designated as the
beneficiary under the Plan in accordance with Code Section 401(a)(9)
and the regulations thereunder.
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DISTRIBUTION CALENDAR YEAR means a calendar year for which a minimum
distribution is required. For distributions beginning before the
Participant's death, the first Distribution Calendar Year is the
calendar year immediately preceding the calendar year which contains
the Participant's Required Beginning Date. For distributions
beginning after the Participant's death, the first Distribution
Calendar Year is the calendar year in which distributions are
required to begin pursuant to (e) below.
JOINT AND LAST SURVIVOR EXPECTANCY means joint and last survivor
expectancy computed by use of the expected return multiples in
Table VI of section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the case
of distributions described in (e)(2)(ii) below) by the time
distributions are required to begin, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the
Participant (or spouse) and shall apply to all subsequent years. The
life expectancy of a nonspouse Beneficiary may not be recalculated.
LIFE EXPECTANCY means life expectancy computed by use of the
expected return multiples in Table V of section 1.72-9 of the Income
Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the case
of distributions described in (e)(2)(ii) below) by the time
distributions are required to begin, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the
Participant (or spouse) and shall apply to all subsequent years. The
life expectancy of a nonspouse Beneficiary may not be recalculated.
PARTICIPANT'S BENEFIT means
(1) The Account balance as of the last valuation date in the
calendar year immediately preceding the Distribution Calendar
Year (valuation calendar year) increased by the amount of any
contributions or forfeitures allocated to the Account balance
as of the dates in the valuation calendar year after the
valuation date and decreased by distributions made in the
valuation calendar year after the valuation date.
(2) For purposes of (1) above, if any portion of the minimum
distribution for the first Distribution Calendar Year is made
in the second Distribution Calendar Year on or before the
Required Beginning Date, the amount of the minimum
distribution made in the second Distribution Calendar Year
shall be treated as if it had been made in the immediately
preceding Distribution Calendar Year.
REQUIRED BEGINNING DATE means, for a Participant, the first day of
April of the calendar year following the calendar year in which the
Participant attains age 70 1/2, unless otherwise provided in (1), (2)
or (3) below:
(1) The Required Beginning Date for a Participant who attains age
70 1/2 before January 1, 1988, and who is not a 5-percent
owner is the first day of April of the calendar year following
the calendar year in which the later of retirement or
attainment of age 70 1/2 occurs.
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(2) The Required Beginning Date for a Participant who attains age
70 1/2 before January 1, 1988, and who is a 5-percent owner is
the first day of April of the calendar year following the
later of
(i) the calendar year in which the Participant attains
age 70 1/2, or
(ii) the earlier of the calendar year with or within which
ends the Plan Year in which the Participant becomes a
5-percent owner, or the calendar year in which the
Participant retires.
(3) The Required Beginning Date of a Participant who is not a
5-percent owner and who attains age 70 1/2 during 1988 and who
has not retired as of January 1, 1989, is April 1, 1990.
A Participant is treated as a 5-percent owner for purposes of this
section if such Participant is a 5-percent owner as defined in Code
Section 416(i) (determined in accordance with Code Section 416 but
without regard to whether the Plan is top-heavy) at any time during
the Plan Year ending with or within the calendar year in which such
owner attains age 66 1/2 or any subsequent Plan Year.
Once distributions have begun to a 5-percent owner under this
section, they must continue to be distributed, even if the
Participant ceases to be a 5-percent owner in a subsequent year.
(b) The optional forms of retirement benefit shall be the following: a
straight life annuity; single life annuities with certain periods of
five, ten or fifteen years; a single life annuity with installment
refund; survivorship life annuities with installment refund and
survivorship percentages of 50, 66 2/3 or 100; fixed period annuities
for any period of whole months which is not less than 60 and does not
exceed the Life Expectancy of the Participant and the named
Beneficiary as provided in (d) below where the Life Expectancy is not
recalculated; and a series of installments chosen by the Participant
with a minimum payment each year beginning with the year the
Participant turns age 70 1/2. The payment for the first year in
which a minimum payment is required will be made by April 1 of the
following calendar year. The payment for the second year and each
successive year will be made by December 31 of that year. The
minimum payment will be based on a period equal to the Joint and
Last Survivor Expectancy of the Participant and the Participant's
spouse, if any, as provided in (d) below where the Joint and Last
Survivor Expectancy is recalculated. The balance of the
Participant's Vested Account, if any, will be payable on the
Participant's death to his Beneficiary in a single sum. The
Participant may also elect to receive his Vested Account in
a single-sum payment.
Election of an optional form is subject to the qualified election
provisions of Article VI.
Any annuity contract distributed shall be nontransferable. The
terms of any annuity contract purchased and distributed by the
Plan to a Participant or spouse shall comply with the requirements
of this Plan.
(c) The optional forms of death benefit are a single-sum payment and
any annuity that is an optional form of retirement benefit.
However, a series of installments shall not be available if the
Beneficiary is not the spouse of the deceased Participant.
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(d) Subject to the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI,
joint and survivor annuity requirements, the requirements of this section
shall apply to any distribution of a Participant's interest and will
take precedence over any inconsistent provisions of this Plan. Unless
otherwise specified, the provisions of this section apply to calendar
years beginning after December 31, 1984.
All distributions required under this section shall be determined and
made in accordance with the proposed regulations and Code Section
401(a)(9), including the minimum distribution incidental benefit
requirement of section 1.401(a)(9)-2 of the proposed regulations.
The entire interest of a Participant must be distributed or begin to be
distributed no later than the Participant's Required Beginning Date.
As of the first Distribution Calendar Year, distributions, if not made
in a single sum, may only be made over one of the following periods (or
combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a Designated Beneficiary,
(3) a period certain not extending beyond the Life Expectancy of the
Participant, or
(4) a period certain not extending beyond the Joint and Last Survivor
Expectancy of the Participant and a Designated Beneficiary.
If the Participant's interest is to be distributed in other than a
single sum, the following minimum distribution rules shall apply on or
after the Required Beginning Date:
(5) Individual account:
(i) If a Participant's Benefit is to be distributed over
(a) a period not extending beyond the Life Expectancy of the
Participant or the Joint Life and Last Survivor
Expectancy of the Participant and the Participant's
Designated Beneficiary or
(b) a period not extending beyond the Life Expectancy of
the Designated Beneficiary,
the amount required to be distributed for each calendar year
beginning with the distributions for the first Distribution
Calendar Year, must be at least equal to the quotient obtained
by dividing the Participant's Benefit by the Applicable Life
Expectancy.
(ii) For calendar years beginning before January 1, 1989, if
the Participant's spouse is not the Designated Beneficiary,
the method of distribution selected must assure that at least
50% of the present value of the amount available for
distribution is paid within the Life Expectancy of the
Participant.
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(iii) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with
distributions for the first Distribution Calendar Year shall
not be less than the quotient obtained by dividing the
Participant's Benefit by the lesser of
(a) the Applicable Life Expectancy or
(b) if the Participant's spouse is not the Designated
Beneficiary, the applicable divisor determined from the
table set forth in Q&A-4 of section 1.401(a)(9)-2 of the
proposed regulations.
Distributions after the death of the Participant shall be
distributed using the Applicable Life Expectancy in (5)(i) above
as the relevant divisor without regard to Proposed Regulations
section 1.401(a)(9)-2.
(iv) The minimum distribution required for the Participant's first
Distribution Calendar Year must be made on or before the
Participant's Required Beginning Date. The minimum
distribution for the Distribution Calendar Year 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.
(6) Other forms:
(i) If the Participant's Benefit is distributed in the form of an
annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements of
Code Section 401(a)(9) and the proposed regulations thereunder.
(e) Death distribution provisions:
(1) Distribution beginning before death. If the Participant dies after
distribution of his interest has begun, the remaining portion of
such interest will continue to be distributed at least as rapidly
as under the method of distribution being used prior to the
Participant's death.
(2) Distribution beginning after death. If the Participant dies before
distribution of his interest begins, distribution of the
Participant's entire interest shall be completed by December 31 of
the calendar year containing the fifth anniversary of the
Participant's death except to the extent that an election is made
to receive distributions in accordance with (i) or (ii) below:
(i) if any portion of the Participant's interest is payable to a
Designated Beneficiary, distributions may be made over the
life or over a period certain not greater than the Life
Expectancy of the Designated Beneficiary commencing on or
before December 31 of the calendar year immediately following
the calendar year in which the Participant died;
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(ii) if the Designated Beneficiary is the Participant's surviving
spouse, the date distributions are required to begin in
accordance with (i) above shall not be earlier than the later
of
(a) December 31 of the calendar year immediately following
the calendar year in which the Participant died and
(b) December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If the Participant has not made an election pursuant to this (e)(2)
by the time of his death, the Participant's Designated Beneficiary
must elect the method of distribution no later than the earlier of
(iii) December 31 of the calendar year in which distributions would
be required to begin under this subparagraph, or
(iv) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Participant.
If the Participant has no Designated Beneficiary, or if the
Designated Beneficiary does not elect a method of distribution,
distribution of the Participant's entire interest must be completed
by December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
(3) For purposes of (e)(2) above, if the surviving spouse dies after
the Participant, but before payments to such spouse begin, the
provisions of (e)(2) above, with the exception of (e)(2)(ii)
therein, shall be applied as if the surviving spouse were the
Participant.
(4) For purposes of this (e), any amount paid to a child of the
Participant will be treated as if it had been paid to the surviving
spouse if the amount becomes payable to the surviving spouse when
the child reaches the age of majority.
(5) For purposes of this (e), distribution of a Participant's interest
is considered to begin on the Participant's Required Beginning Date
(or if (e)(3) above is applicable, the date distribution is
required to begin to the surviving spouse pursuant to (e)(2)
above). If distribution in the form of an annuity irrevocably
commences to the Participant before the Required Beginning Date,
the date distribution is considered to begin is the date
distribution actually commences.
SECTION 6.02A--DISTRIBUTIONS IN QUALIFYING EMPLOYER SECURITIES.
In lieu of the cash distributions permitted under Section 6.02 above,
any portion of the Participant's Vested Account held in Qualifying Employer
Securities may be distributed in kind upon the election of the Participant.
Fractional shares shall be paid in cash valued as of the most recent Valuation
Date; the distribution shall include any dividends (cash or stock) on such
whole shares or any additional shares received as a result of a stock split or
any other adjustment to such whole shares since the Valuation Date preceding
the date of distribution.
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Election of such distribution is subject to the qualified election provisions of
Article VI.
SECTION 6.03--ELECTION PROCEDURES.
The Participant, Beneficiary, or spouse shall make any election under this
section in writing. The Plan Administrator may require such individual to
complete and sign any necessary documents as to the provisions to be made. Any
election permitted under (a) and (b) below shall be subject to the qualified
election provisions of (c) below.
(a) Retirement Benefits. A Participant may elect his Beneficiary or
Contingent Annuitant and may elect to have retirement benefits
distributed under any of the optional forms of retirement benefit
described in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI.
(b) Death Benefits. A Participant may elect his Beneficiary and may elect
to have death benefits distributed under any of the optional forms of
death benefit described in the OPTIONAL FORMS OF DISTRIBUTION AND
DISTRIBUTION REQUIREMENTS SECTION of Article VI.
If the Participant has not elected an optional form of distribution
for the death benefit payable to his Beneficiary, the Beneficiary may,
for his own benefit, elect the form of distribution, in like manner as
a Participant.
The Participant may waive the Qualified Preretirement Survivor Annuity
by naming someone other than his spouse as Beneficiary.
In lieu of the Qualified Preretirement Survivor Annuity described in
the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI, the spouse
may, for his own benefit, waive the Qualified Preretirement Survivor
Annuity by electing to have the benefit distributed under any of the
optional forms of death benefit described in the OPTIONAL FORMS OF
DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of Article VI.
(c) Qualified Election. The Participant, Beneficiary or spouse may make an
election at any time during the election period. The Participant,
Beneficiary, or spouse may revoke the election made (or make a new
election) at any time and any number of times during the election
period. An election is effective only if it meets the consent
requirements below.
The election period as to retirement benefits is the 90-day period
ending on the Annuity Starting Date. An election to waive the
Qualified Joint and Survivor Form may not be made before the date he
is provided with the notice of the ability to waive the Qualified
Joint and Survivor Form. If the Participant elects the series of
installments, he may elect on any later date to have the balance of
his Vested Account paid under any of the optional forms of retirement
benefit available under the Plan. His election period for this
election is the 90-day period ending on the Annuity Starting Date for
the optional form of retirement benefit elected.
A Participant may make an election as to death benefits at any time
before he dies. The spouse's election period begins on the date the
Participant dies and ends on the date benefits begin. The
Beneficiary's election period begins on the date the Participant dies
and ends on the date benefits begin. An election to waive the
Qualified Preretirement Survivor Annuity may not be made by the
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Participant before the date he is provided with the notice of the
ability to waive the Qualified Preretirement Survivor Annuity. A
Participant's election to waive the Qualified Preretirement
Survivor Annuity which is made before the first day of the Plan
Year in which he reaches age 35 shall become invalid on such date.
An election made by a Participant after he ceases to be an
Employee will not become invalid on the first day of the Plan
Year in which he reaches age 35 with respect to death benefits
from that part of his Account resulting from Contributions made
before he ceased to be an Employee.
If the Participant's Vested Account has at any time exceeded $3,500,
any benefit which is (1) immediately distributable or (2) payable in a
form other than a Qualified Joint and Survivor Form or a Qualified
Preretirement Survivor Annuity requires the consent of the Participant
and the Participant's spouse (or where either the Participant or the
spouse has died, the survivor). The consent of the Participant or
spouse to a benefit which is immediately distributable must not be
made before the date the Participant or spouse is provided with the
notice of the ability to defer the distribution. Such consent shall be
made in writing. The consent shall not be made more than 90 days
before the Annuity Starting Date. Spousal consent is not required for
a benefit which is immediately distributable in a Qualified Joint and
Survivor Form. Furthermore, if spousal consent is not required because
the Participant is electing an optional form of retirement benefit
that is not a life annuity pursuant to (d) below, only the Participant
need consent to the distribution of a benefit payable in a form that
is not a life annuity and which is immediately distributable. Neither
the consent of the Participant nor the Participant's spouse shall be
required to the extent that a distribution is required to satisfy Code
Section 401(a)(9) or Code Section 415. In addition, upon termination
of this Plan if the Plan does not offer an annuity option (purchased
from a commercial provider), the Participant's Account balance may,
without the Participant's consent, be distributed to the Participant
or transferred to another defined contribution plan (other than an
employee stock ownership plan as defined in Code Section 4975(e)(7))
within the same Controlled Group. A benefit is immediately
distributable if any part of the benefit could be distributed to the
Participant (or surviving spouse) before the Participant attains (or
would have attained if not deceased) the older of Normal Retirement
Age or age 62. If the Qualified Joint and Survivor Form is waived, the
spouse has the right to limit consent only to a specific Beneficiary
or a specific form of benefit. The spouse can relinquish one or both
such rights. Such consent shall be made in writing. The consent shall
not be made more than 90 days before the Annuity Starting Date. If the
Qualified Preretirement Survivor Annuity is waived, the spouse has the
right to limit consent only to a specific Beneficiary. Such consent
shall be in writing. The spouse's consent shall be witnessed by a plan
representative or notary public. The spouse's consent must acknowledge
the effect of the election, including that the spouse had the right to
limit consent only to a specific Beneficiary or a specific form of
benefit, if applicable, and that the relinquishment of one or both
such rights was voluntary. Unless the consent of the spouse expressly
permits designations by the Participant without a requirement of
further consent by the spouse, the spouse's consent must be limited
to the form of benefit, if applicable, and the Beneficiary
(including any Contingent Annuitant), class of Beneficiaries, or
contingent Beneficiary named in the election. Spousal consent is
not required, however, if the Participant establishes to the
satisfaction of the plan representative that the consent of the
spouse cannot be obtained because there is no spouse or the spouse
cannot be located. A spouse's consent under this paragraph shall
not be valid with respect to any other spouse. A Participant may
revoke a prior election without the consent of the spouse. Any
new election will require a new spousal consent, unless the
consent of the spouse expressly permits such election by the
Participant without further consent by the spouse. A spouse's consent
may be revoked at any time within the Participant's election period.
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(d) Special Rule for Profit Sharing Plan. As provided in the preceding
provisions of the Plan, if a Participant has a spouse to whom he has
been continuously married throughout the one-year period ending on the
date of his death, the Participant's Vested Account shall be paid to
such spouse. However, if there is no such spouse or if the surviving
spouse has already consented in a manner conforming to the qualified
election requirements in (c) above, the Vested Account shall be
payable to the Participant's Beneficiary in the event of the
Participant's death.
The Participant may waive the spousal death benefit described above at
any time provided that no such waiver shall be effective unless it
satisfies the conditions of (c) above (other than the notification
requirement referred to therein) that would apply to the Participant's
waiver of the Qualified Preretirement Survivor Annuity.
Because this is a profit sharing plan which pays death benefits as
described above, this subsection (d) applies if the following
condition is met: with respect to the Participant, this Plan is not
a direct or indirect transferee after December 31, 1984, of a
defined benefit plan, money purchase plan (including a target plan),
stock bonus plan or profit sharing plan which is subject to the
survivor annuity requirements of Code Section 401(a)(11) and Code
Section 417. If the above condition is met, spousal consent is not
required for electing a benefit payable in a form that is not a life
annuity. If the above condition is not met, the consent requirements
of this article shall be operative.
SECTION 6.04--NOTICE REQUIREMENTS.
(a) Optional forms of retirement benefit. The Plan Administrator shall
furnish to the Participant and the Participant's spouse a written
explanation of the optional forms of retirement benefit in the
OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION
of Article VI, including the material features and relative values of
these options, in a manner that would satisfy the notice requirements
of Code Section 417(a)(3) and the right of the Participant and the
Participant's spouse to defer distribution until the benefit is no
longer immediately distributable. The Plan Administrator shall furnish
the written explanation by a method reasonably calculated to reach the
attention of the Participant and the Participant's spouse no less than
30 days and no more than 90 days before the Annuity Starting Date.
(b) Qualified Joint and Survivor Form. The Plan Administrator shall
furnish to the Participant a written explanation of the following: the
terms and conditions of the Qualified Joint and Survivor Form; the
Participant's right to make, and the effect of, an election to waive
the Qualified Joint and Survivor Form; the rights of the Participant's
spouse; and the right to revoke an election and the effect of such a
revocation. The Plan Administrator shall furnish the written
explanation by a method reasonably calculated to reach the attention
of the Participant no less than 30 days and no more than 90 days
before the Annuity Starting Date.
After the written explanation is given, a Participant or spouse may
make written request for additional information. The written
explanation must be personally delivered or mailed (first class mail,
postage prepaid) to the Participant or spouse within 30 days from the
date of the written request. The Plan Administrator does not need to
comply with more than one such request by a Participant or spouse.
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The Plan Administrator's explanation shall be written in
nontechnical language and will explain the terms and
conditions of the Qualified Joint and Survivor Form and the
financial effect upon the Participant's benefit (in terms of
dollars per benefit payment) of electing not to have benefits
distributed in accordance with the Qualified Joint and
Survivor Form.
(c) Qualified Preretirement Survivor Annuity. As required by the
Code and Federal regulation, the Plan Administrator shall
furnish to the Participant a written explanation of the
following: the terms and conditions of the Qualified
Preretirement Survivor Annuity; the Participant's right to
make, and the effect of, an election to waive the Qualified
Preretirement Survivor Annuity; the rights of the
Participant's spouse; and the right to revoke an election and
the effect of such a revocation. The Plan Administrator shall
furnish the written explanation by a method reasonably
calculated to reach the attention of the Participant within
the applicable period. The applicable period for a Participant
is whichever of the following periods ends last:
(1) the period beginning one year before the date the
individual becomes a Participant and ending one year
after such date; or
(2) the period beginning one year before the date the
Participant's spouse is first entitled to a Qualified
Preretirement Survivor Annuity and ending one year
after such date.
If such notice is given before the period beginning with the
first day of the Plan Year in which the Participant attains
age 32 and ending with the close of the Plan Year preceding
the Plan Year in which the Participant attains age 35, an
additional notice shall be given within such period. If a
Participant ceases to be an Employee before attaining age 35,
an additional notice shall be given within the period
beginning one year before the date he ceases to be an Employee
and ending one year after such date.
After the written explanation is given, a Participant or
spouse may make written request for additional information.
The written explanation must be personally delivered or mailed
(first class mail, postage prepaid) to the Participant or
spouse within 30 days from the date of the written request.
The Plan Administrator does not need to comply with more than
one such request by a Participant or spouse.
The Plan Administrator's explanation shall be written in
nontechnical language and will explain the terms and
conditions of the Qualified Preretirement Survivor Annuity and
the financial effect upon the spouse's benefit (in terms of
dollars per benefit payment) of electing not to have benefits
distributed in accordance with the Qualified Preretirement
Survivor Annuity.
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ARTICLE VII
TERMINATION OF PLAN
The Employer expects to continue the Plan indefinitely but reserves the
right to terminate the Plan in whole or in part at any time upon giving written
notice to all parties concerned. Complete discontinuance of Contributions under
the Plan constitutes complete termination of Plan.
The Account of each Participant shall be fully (100%) vested and
nonforfeitable as of the effective date of complete termination of Plan. The
Account of each Participant who is included in the group of Participants
deemed to be affected by the partial termination of the Plan shall be fully
(100%) vested and nonforfeitable as of the effective date of the partial Plan
termination. The Participant's Account shall continue to participate in the
earnings credited, expenses charged and any appreciation or depreciation of
the Investment Fund until the Vested Account is distributed. A distribution
under this article will be a retirement benefit and shall be distributed to
the Participant according to the provisions of Article VI.
A Participant's Account which does not result from Contributions which
are used to compute the Actual Deferral Percentage, as defined in the EXCESS
AMOUNTS SECTION of Article III, may be distributed to the Participant after the
effective date of the complete or partial Plan termination. A Participant's
Account resulting from Contributions which are used to compute such percentage
may be distributed upon termination of the Plan without the establishment or
maintenance of another defined contribution plan, other than an employee stock
ownership plan (as defined in Code Section 4975(e) or Code Section 409) or a
simplified employee pension plan (as defined in Code Section 408(k)). Such a
distribution made after March 31, 1988, must be in a single sum.
Upon complete termination of Plan, no more Employees shall become
Participants and no more Contributions shall be made.
The assets of this Plan shall not be paid to the Employer at any time,
except that, after the satisfaction of all liabilities under the Plan, any
assets remaining may be paid to the Employer. The payment may not be made if it
would contravene any provision of law.
ARTICLE VII 59
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ARTICLE VIII
ADMINISTRATION OF PLAN
SECTION 8.01--ADMINISTRATION.
Subject to the provisions of this article, the Plan Administrator has
complete control of the administration of the Plan. The Plan Administrator has
all the powers necessary for it to properly carry out its administrative duties.
Not in limitation, but in amplification of the foregoing, the Plan Administrator
has the power to construe the Plan, including ambiguous provisions, and to
determine all questions that may arise under the Plan, including all questions
relating to the eligibility of Employees to participate in the Plan and the
amount of benefit to which any Participant, Beneficiary, spouse or Contingent
Annuitant may become entitled. The Plan Administrator's decisions upon all
matters within the scope of its authority shall be final.
Unless otherwise set out in the Plan or Group Contract, the Plan
Administrator may delegate recordkeeping and other duties which are necessary
for the administration of the Plan to any person or firm which agrees to accept
such duties. The Plan Administrator shall be entitled to rely upon all tables,
valuations, certificates and reports furnished by the consultant or actuary
appointed by the Plan Administrator and upon all opinions given by any counsel
selected or approved by the Plan Administrator.
The Plan Administrator shall receive all claims for benefits by
Participants, former Participants, Beneficiaries, spouses, and Contingent
Annuitants. The Plan Administrator shall determine all facts necessary to
establish the right of any Claimant to benefits and the amount of those benefits
under the provisions of the Plan. The Plan Administrator may establish rules and
procedures to be followed by Claimants in filing claims for benefits, in
furnishing and verifying proofs necessary to determine age, and in any other
matters required to administer the Plan.
Each Participant shall be entitled to direct the Trustee as to the
exercise of all voting powers over shares allocated to his Account with respect
to any corporate matter which involves the voting of such shares allocated to
the Participant's Account with respect to the approval or disapproval of any
corporate merger or consolidation, recapitalization, reclassification,
liquidation, dissolution, sale of substantially all assets of a trade or
business, or such similar transaction as may be prescribed in the Treasury
Regulations. The Trustee shall vote all shares of Qualifying Employer Securities
allocated to a Participant's Account which are not voted by the Participant,
because the Participant has not directed (or not timely directed) the Trustee as
to the manner in which such Qualifying Employer Securities are to be voted in
the same proportion as those shares of Qualifying Employer Securities for which
the Trustee has received proper direction on such matter.
In the event that a tender offer is made for some or all of the shares
of the Employer, each Participant shall have the right to direct whether those
shares allocated to his Account, whether or not vested, shall be tendered. This
right shall be exercised in the manner set forth herein. In the absence of a
written directive from or election by a Participant to the Plan Administrator,
the Plan Administrator shall direct the Trustee not to tender such shares.
Because the choice is to be given to the Participants, the Plan Administrator
and the Trustee shall not have fiduciary responsibility with respect to the
decision to tender or not or whether to tender all such shares or only a portion
thereof.
In order to facilitate the decision of Participants whether to tender
their shares in a tender offer (or how many shares to tender), the Plan
Administrator shall provide election forms for the Participants, whereby they
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may elect to tender or not and whereby they may elect to tender all or a portion
of such shares. Unless otherwise limited by Federal securities law, such
election may be made or changed at any time prior to the date before the
expiration date of the tender offer (with extensions); any election or change in
election must be received by the Plan Administrator, or designated
representative of the Plan Administrator, on or before the day preceding the
expiration date of the tender offer (with extensions, if any). The Plan
Administrator my develop procedures to facilitate Participants' choices, such as
the use of facsimile transmissions for the Employees located in areas physically
remote from the Plan Administrator. The election shall be binding on the Plan
Administrator and the Trustee. The Plan Administrator shall make every effort to
distribute the notice of the tender, election forms and other communications
related to the tender offer to all Participants as soon as practicable following
the announcement of the tender offer, including mailing such notice and form to
Participants and posting such notice in places designed to be reviewed by
Participants.
As to shares which are not allocated to the Account of any Participant,
all such shares (in the aggregate) shall be tendered or not as the majority
of the shares held by Participants and directed by Participants are tendered
or not. The Plan Administrator shall direct the Trustee to tender all such
unallocated shares or not, in accordance with the elections of the
Participants having an allocation of the majority of the shares under the
Plan.
SECTION 8.02--RECORDS.
All acts and determinations of the Plan Administrator shall be duly
recorded. All these records, together with other documents necessary for the
administration of the Plan, shall be preserved in the Plan Administrator's
custody.
Writing (handwriting, typing, printing), photostating, photographing,
microfilming, magnetic impulse, mechanical or electrical recording or other
forms of data compilation shall be acceptable means of keeping records.
SECTION 8.03--INFORMATION AVAILABLE.
Any Participant in the Plan or any Beneficiary may examine copies of the
Plan description, latest annual report, any bargaining agreement, this Plan, the
Group Contract or any other instrument under which the Plan was established or
is operated. The Plan Administrator shall maintain all of the items listed in
this section in its office, or in such other place or places as it may designate
in order to comply with governmental regulations. These items may be examined
during reasonable business hours. Upon the written request of a Participant or
Beneficiary receiving benefits under the Plan, the Plan Administrator will
furnish him with a copy of any of these items. The Plan Administrator may make a
reasonable charge to the requesting person for the copy.
SECTION 8.04--CLAIM AND APPEAL PROCEDURES.
A Claimant must submit any required forms and pertinent information when
making a claim for benefits under the Plan.
If a claim for benefits under the Plan is denied, the Plan Administrator
shall provide adequate written notice to the Claimant whose claims for
benefits under the Plan has been denied. The notice must be furnished within
90 days of the date that the claim is received by the Plan Administrator. The
Claimant shall be notified in writing within this initial 90-day period if
special circumstances require an extension of time needed to process the
claim and the date by which the Plan Administrator's decision is expected to
be rendered. The
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written notice shall be furnished no later than 180 days after the date the
claim was received by the Plan Administrator.
The Plan Administrator's notice to the Claimant shall specify the reason
for the denial; specify references to pertinent Plan provisions on which denial
is based; describe any additional material and information needed for the
Claimant to perfect his claim for benefits; explain why the material and
information is needed; inform the Claimant that any appeal he wishes to make
must be in writing to the Plan Administrator within 60 days after receipt of the
Plan Administrator's notice of denial of benefits and that failure to make the
written appeal within such 60-day period shall render the Plan Administrator's
determination of such denial final, binding and conclusive.
If the Claimant appeals to the Plan Administrator, the Claimant, or his
authorized representative, may submit in writing whatever issues and comments
the Claimant, or his representative, feels are pertinent. The Claimant, or his
authorized representative may review pertinent Plan documents. The Plan
Administrator shall reexamine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under the
circumstances. The Plan Administrator shall advise the Claimant of its decision
within 60 days of his written request for review, unless special circumstances
(such as a hearing) would make rendering a decision within the 60-day limit
unfeasible. The Claimant must be notified within the 60-day limit if an
extension is necessary. The Plan Administrator shall render a decision on a
claim for benefits no later than 120 days after the request for review is
received.
SECTION 8.05--UNCLAIMED VESTED ACCOUNT PROCEDURE.
At the time the Participant's Vested Account is distributable to the
Participant, spouse or Beneficiary without his consent according to the
provisions of Article VI or Article IX, the Plan Administrator, by certified
or registered mail addressed to his last known address and in accordance with
the notice requirements of Article VI, will notify him of his entitlement to
a benefit. If the Participant, spouse or Beneficiary fails to claim the
Vested Account or make his whereabouts known in writing within six months
from the date of mailing the notice, the Plan Administrator may treat such
unclaimed Vested Account as a forfeiture and apply it according to the
forfeiture provisions of Article III. If Article III contains no forfeiture
provisions, such amount will be applied to reduce the earliest Employer
Contributions due after the forfeiture arises.
If a Participant's Vested Account is forfeited according to the provisions
of the above paragraph and the Participant, his spouse or his Beneficiary at any
time make a claim for benefits, the forfeited Vested Account shall be
reinstated, unadjusted for any gains or losses occurring after the date it was
forfeited. The reinstated Vested Account shall then be distributed to the
Participant, spouse or Beneficiary according to the preceding provisions of the
Plan.
SECTION 8.06--DELEGATION OF AUTHORITY.
All or any part of the administrative duties and responsibilities under
this article may be delegated by the Plan Administrator to a retirement
committee. The duties and responsibilities of the retirement committee shall be
set out in a separate written agreement.
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ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01--AMENDMENTS.
The Employer may amend this Plan at any time, including any remedial
retroactive changes (within the specified period of time as may be determined
by Internal Revenue Service regulations) to comply with the requirements of
any law or regulation issued by any governmental agency to which the Employer
is subject. An amendment may not diminish or adversely affect any accrued
interest or benefit of Participants or their Beneficiaries or eliminate an
optional form of distribution with respect to benefits attributable to
service before the amendment nor allow reversion or diversion of Plan assets
to the Employer at any time, except as may be necessary to comply with the
requirements of any law or regulation issued by any governmental agency to
which the Employer is subject. No amendment to this Plan shall be effective
to the extent that it has the effect of decreasing a Participant's accrued
benefit. However, a Participant's Account may be reduced to the extent
permitted under Code Section 412(c)(8). For purposes of this paragraph, a
Plan amendment which has the effect of decreasing a Participant's Account or
eliminating an optional form of benefit, with respect to benefits
attributable to service before the amendment shall be treated as reducing an
accrued benefit. Furthermore, if the vesting schedule of the Plan is amended,
in the case of an Employee who is a Participant as of the later of the date
such amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such Employee's
employer-derived accrued benefit will not be less than his percentage
computed under the Plan without regard to such amendment.
An amendment shall not decrease a Participant's vested interest in the
Plan. If an amendment to the Plan, or a deemed amendment in the case of a change
in top-heavy status of the Plan as provided in the MODIFICATION OF VESTING
REQUIREMENTS SECTION of Article X, changes the computation of the percentage
used to determine that portion of a Participant's Account attributable to
Employer Contributions which is nonforfeitable (whether directly or indirectly),
each Participant or former Participant
(a) who has completed at least three Years of Service on the date the
election period described below ends (five Years of Service if the
Participant does not have at least one Hour-of-Service in a Plan Year
beginning after December 31, 1988) and
(b) whose nonforfeitable percentage will be determined on any date after
the date of the change
may elect, during the election period, to have the nonforfeitable percentage
of his Account that results from Employer Contributions determined without
regard to the amendment. This election may not be revoked. An election does
not need to be provided for any Participant or former Participant whose
nonforfeitable percentage, determined according to the Plan provisions as
changed, cannot at any time be less that the percentage determined without
regard to such change. The election period shall begin no later than the date
the Plan amendment is adopted, or deemed adopted in the case of a change in
the top-heavy status of the Plan, and end no earlier than the sixtieth day
after the latest of the date the amendment is adopted (deemed adopted) or
becomes effective, or the date the Participant is issued written notice of
the amendment (deemed amendment) by the Employer or the Plan Administrator.
ARTICLE IX 63
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SECTION 9.02--DIRECT ROLLOVERS.
This section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this section, a Distributee
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 Distributee, in a
Direct Rollover.
SECTION 9.03--MERGERS AND DIRECT TRANSFERS.
The Plan may not be merged or consolidated with, nor have its assets or
liabilities transferred to, any other retirement plan, unless each
Participant in the plan would (if the plan then terminated)
receive a benefit immediately after the merger, consolidation or transfer
which is equal to or greater than the benefit the Participant would have been
entitled to receive immediately before the merger, consolidation or transfer
(if this Plan had then terminated). The Employer may enter into merger
agreements or direct transfer of assets agreements with the employers under
other retirement plans which are qualifiable under Code Section 401(a),
including an elective transfer, and may accept the direct transfer of plan
assets, or may transfer plan assets, as a party to any such agreement. The
Employer shall not consent to, or be a party to a merger, consolidation or
transfer of assets with a defined benefit plan if such action would result in
a defined benefit feature being maintained under this Plan.
The Plan may accept a direct transfer of plan assets on behalf of an
Eligible Employee. If the Eligible Employee is not an Active Participant when
the transfer is made, the Eligible Employee shall be deemed to be an Active
Participant only for the purpose of investment and distribution of the
transferred assets. Employer Contributions shall not be made for or allocated
to the Eligible Employee, until the time he meets all of the requirements to
become an Active Participant.
The Plan shall hold, administer and distribute the transferred assets as
a part of the Plan. The Plan shall maintain a separate account for the
benefit of the Employee on whose behalf the Plan accepted the transfer in
order to reflect the value of the transferred assets. Unless a transfer of
assets to the Plan is an elective transfer, the Plan shall apply the optional
forms of benefit protections described in the AMENDMENTS SECTION of Article
IX to all transferred assets. A transfer is elective if: (1) the transfer is
voluntary, under a fully informed election by the Participant; (2) the
Participant has an alternative that retains his Code Section 411(d)(6)
protected benefits (including an option to leave his benefit in the
transferor plan, if that plan is not terminating); (3) if the transferor plan
is subject to Code Sections 401(a)(11) and 417, the transfer satisfies the
applicable spousal consent requirements of the Code; (4) the notice
requirements under Code Section 417, requiring a written explanation with
respect to an election not to receive benefits in the form of a qualified
joint and survivor annuity, are met with respect to the Participant and
spousal transfer election; (5) the Participant has a right to immediate
distribution from the transferor plan under provisions in the plan not
inconsistent with Code Section 401(a); (6) the transferred benefit is equal
to the Participant's entire nonforfeitable accrued benefit under the
transferor plan, calculated to be at least the greater of the single sum
distribution provided by the transferor plan (if any) or the present value of
the Participant's accrued benefit under the transferor plan payable at the
plan's normal retirement age and calculated using an interest rate subject to
the restrictions of Code Section 417(e) and subject to the overall
limitations of Code Section 415; (7) the Participant has a 100%
nonforfeitable interest in the transferred benefit; and (8) the transfer
otherwise satisfies applicable Treasury regulations.
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SECTION 9.04--PROVISIONS RELATING TO THE INSURER
AND OTHER PARTIES.
The obligations of an Insurer shall be governed solely by the provisions
of the Group Contract. The Insurer shall not be required to perform any act
not provided in or contrary to the provisions of the Group Contract. See the
CONSTRUCTION SECTION of this article.
Any issuer or distributor of investment contracts or securities is
governed solely by the terms of its policies, written investment contract,
prospectuses, security instruments, and any other written agreements entered
into with the Trustee.
Such Insurer, issuer or distributor is not a party to the Plan, nor bound
in any way by the Plan provisions. Such parties shall not be required to look
to the terms of this Plan, nor to determine whether the Employer, the Plan
Administrator, the Trustee, or the Named Fiduciary have the authority to act
in any particular manner or to make any contract or agreement.
Until notice of any amendment or termination of this Plan or a change in
Trustee has been received by the Insurer at its home office or an issuer or
distributor at their principal address, they are and shall be fully protected
in assuming that the Plan has not been amended or terminated and in dealing
with any party acting as Trustee according to the latest information which
they have received at their home office or principal address.
SECTION 9.05--EMPLOYMENT STATUS.
Nothing contained in this Plan gives an Employee the right to be retained
in the Employer's employ or to interfere with the Employer's right to
discharge any Employee.
SECTION 9.06--RIGHTS TO PLAN ASSETS.
No Employee shall have any right to or interest in any assets of the Plan
upon termination of his employment or otherwise except as specifically
provided under this Plan, and then only to the extent of the benefits payable
to such Employee in accordance with Plan provisions.
Any final payment or distribution to a Participant or his legal
representative or to any Beneficiaries, spouse or Contingent Annuitant of
such Participant under the Plan provisions shall be in full satisfaction of
all claims against the Plan, the Named Fiduciary, the Plan Administrator, the
Trustee, the Insurer, and the Employer arising under or by virtue of the Plan.
SECTION 9.07--BENEFICIARY.
Each Participant may name a Beneficiary to receive any death benefit
(other than any income payable to a Contingent Annuitant) that may arise out
of his participation in the Plan. The Participant may change his Beneficiary
from time to time. Unless a qualified election has been made, for purposes of
distributing any death benefits before Retirement Date, the Beneficiary of a
Participant who has a spouse who is entitled to a Qualified Preretirement
Survivor Annuity shall be the Participant's spouse. The Participant's
Beneficiary designation and any change of Beneficiary shall be subject to the
provisions of the ELECTION PROCEDURES
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SECTION of Article VI. It is the responsibility of the Participant to give
written notice to the Insurer of the name of the Beneficiary on a form
furnished for that purpose.
With the Employer's consent, the Plan Administrator may maintain records
of Beneficiary designations for Participants before their Retirement Dates.
In that event, the written designations made by Participants shall be filed
with the Plan Administrator. If a Participant dies before his Retirement
Date, the Plan Administrator shall certify to the Insurer the Beneficiary
designation on its records for the Participant.
If, at the death of a Participant, there is no Beneficiary named or
surviving, any death benefit under the Group Contract shall be paid under the
applicable provisions of the Group Contract.
SECTION 9.08--NONALIENATION OF BENEFITS.
Benefits payable under the Plan are not subject to the claims of any
creditor of any Participant, Beneficiary, spouse or Contingent Annuitant. A
Participant, Beneficiary, spouse or Contingent Annuitant does not have any
rights to alienate, anticipate, commute, pledge, encumber or assign any of
such benefits, except in the case of a loan as provided in the LOANS TO
PARTICIPANTS SECTION of Article V. The preceding sentences shall also apply
to the creation, assignment, or recognition of a right to any benefit payable
with respect to a Participant according to a domestic relations order, unless
such order is determined by the Plan Administrator to be a qualified domestic
relations order, as defined in Code Section 414(p), or any domestic relations
order entered before January 1, 1985.
SECTION 9.09--CONSTRUCTION.
The validity of the Plan or any of its provisions is determined under and
construed according to Federal law and, to the extent permissible, according
to the laws of the state in which the Employer has its principal office. In
case any provision of this Plan is held illegal or invalid for any reason,
such determination shall not affect the remaining provisions of this Plan,
and the Plan shall be construed and enforced as if the illegal or invalid
provision had never been included.
In the event of any conflict between the provisions of the Plan and the
terms of any contract or policy issued hereunder, the provisions of the Plan
control the operation and administration of the Plan.
SECTION 9.10--LEGAL ACTIONS.
The Plan, the Plan Administrator, the Trustee and the Named Fiduciary are
the necessary parties to any action or proceeding involving the assets held
with respect to the Plan or administration of the Plan or Trust. No person
employed by the Employer, no Participant, former Participant or their
Beneficiaries or any other person having or claiming to have an interest in
the Plan is entitled to any notice of process. A final judgment entered in
any such action or proceeding shall be binding and conclusive on all persons
having or claiming to have an interest in the Plan.
SECTION 9.11--SMALL AMOUNTS.
If the Vested Account of a Participant has never exceeded $3,500, the
entire Vested Account shall be payable in a single sum as of the earliest of
his Retirement Date, the date he dies, or the date he ceases to be an
Employee for any other reason. This is a small amounts payment. If a small
amount is payable as of the
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date the Participant dies, the small amounts payment shall be made to the
Participant's Beneficiary (spouse if the death benefit is payable to the
spouse). If a small amount is payable while the Participant is living, the
small amounts payment shall be made to the Participant. The small amounts
payment is in full settlement of all benefits otherwise payable. The service
credited to a Participant who is reemployed by the Employer is not diminished
as a result of receiving a small amounts payment.
No other small amounts payments shall be made.
SECTION 9.12--WORD USAGE.
The masculine gender, where used in this Plan, shall include the
feminine gender and the singular words as used in this Plan may include the
plural, unless the context indicates otherwise.
SECTION 9.13--TRANSFERS BETWEEN PLANS.
If an Employee previously participated in another plan of the Employer
which credited service under the elapsed time method for any purpose which
under this Plan is determined using the hours method, then the Employee's
service shall be equal to the sum of (a), (b) and (c) below:
(a) The number of whole years of service credited to him under the
other plan as of the date he became an Eligible Employee under this
Plan.
(b) One year or a part of a year of service for the applicable service
period in which he became an Eligible Employee if he is credited
with the required number of Hours-of-Service. If the Employer does
not have sufficient records to determine the Employee's actual
Hours-of-Service in that part of the service period before the date
he became an Eligible Employee, the Hours-of-Service shall be
determined using an equivalency. For any month in which he would be
required to be credited with one Hour-of-Service, the Employee shall
be deemed for purposes of this section to be credited with
190 Hours-of-Service.
(c) The Employee's service determined under this Plan using the hours
method after the end of the applicable service period in which he
became an Eligible Employee.
If an Employee previously participated in another plan of the Employer
which credited service under the hours method for any purpose which under
this Plan is determined using the elapsed time method, then the Employee's
service shall be equal to the sum of (d), (e) and (f) below:
(d) The number of whole years of service credited to him under the
other plan as of the beginning of the applicable service period
under that plan in which he became an Eligible Employee under this
Plan.
(e) The greater of (1) the service that would be credited to him for
that entire service period using the elapsed time method or (2) the
service credited to him under the other plan as of the date he
became an Eligible Employee under this Plan.
(f) The Employee's service determined under this Plan using the elapsed
time method after the end of the applicable service period under
the other plan in which he became an Eligible Employee.
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Any modification of service contained in this Plan shall be applicable to
the service determined pursuant to this section.
If the Employee previously participated in the plan of a Controlled
Group member which credited service under a different method than is used in
this Plan, for purposes of determining eligibility and vesting the provisions
above shall apply as though the plan of the Controlled Group member were a
plan of the Employer.
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ARTICLE X
TOP-HEAVY PLAN REQUIREMENTS
SECTION 10.01--APPLICATION.
The provisions of this article shall supersede all other provisions in the
Plan to the contrary.
For the purpose of applying the Top-heavy Plan requirements of this
article, all members of the Controlled Group shall be treated as one
Employer. The term Employer as used in this article shall be deemed to
include all members of the Controlled Group unless the term as used clearly
indicates only the Employer is meant.
The accrued benefit or account of a participant which results from
deductible voluntary contributions shall not be included for any purpose
under this article.
The minimum vesting and contribution provisions of the MODIFICATION OF
VESTING REQUIREMENTS and MODIFICATION OF CONTRIBUTIONS SECTIONS of Article X
shall not apply to any Employee who is included in a group of Employees
covered by a collective bargaining agreement which the Secretary of Labor
finds to be a collective bargaining agreement between employee
representatives and one or more employers, including the Employer, if there
is evidence that retirement benefits were the subject of good faith
bargaining between such representatives. For this purpose, the term "employee
representatives" does not include any organization more than half of whose
members are employees who are owners, officers, or executives.
SECTION 10.02--DEFINITIONS.
The following terms are defined for purposes of this article.
AGGREGATION GROUP means
(a) each of the Employer's retirement plans in which a Key Employee is
a participant during the Year containing the Determination Date or
one of the four preceding Years.
(b) each of the Employer's other retirement plans which allows the
plan(s) described in (a) above to meet the nondiscrimination
requirement of Code Section 401(a)(4) or the minimum coverage
requirement of Code Section 410, and
(c) any of the Employer's other retirement plans not included in (a) or
(b) above which the Employer desires to include as part of the
Aggregation Group. Such a retirement plan shall be included only
if the Aggregation Group would continue to satisfy the requirements
of Code Section 401(a)(4) and Code Section 410.
The plans in (a) and (b) above constitute the "required" Aggregation
Group. The plans in (a), (b) and (c) above constitute the "permissive"
Aggregation Group.
COMPENSATION means, as to an Employee for any period, compensation as
defined in the CONTRIBUTION LIMITATION SECTION of Article III. For
purposes of determining who is a Key Employee, Compensation
ARTICLE X 69
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shall include, in addition to compensation as defined in the CONTRIBUTION
LIMITATION SECTION of Article III, elective contributions. Elective
contributions are amounts excludable from the Employee's gross income under
Code Sections 125, 402(e)(3), 402(h) or 403(b), and contributed by the
Employer, at the Employee's election, to a Code Section 401(k) arrangement, a
simplified employee pension, cafeteria plan or tax-sheltered annuity.
For purposes of Compensation as defined in this section, Compensation shall
be limited to the maximum dollar amount, as adjusted, in the same manner and
in the same time as the Compensation defined in the DEFINITION SECTION of
Article I.
DETERMINATION DATE means as to this Plan for any Year, the last day of the
preceding Year. However, if there is no preceding Year, the Determination
Date is the last day of such Year.
KEY EMPLOYEE means any Employee or former Employee (including Beneficiaries
of deceased Employees) who at any time during the determination period was
(a) one of the Employer's officers (subject to the maximum below) whose
Compensation (as defined in this section) for the Year exceeds 50 percent
of the dollar limitation under Code Section 415(b)(1)(A),
(b) one of the ten Employees who owns (or is considered to own, under Code
Section 318) more than a half percent ownership interest and one of the
largest interests in the Employer during any Year of the determination
period if such person's Compensation (as defined in this section) for the
Year exceeds the dollar limitation under Code Section 415(c)(1)(A),
(c) a five-percent owner of the Employer, or
(d) a one-percent owner of the Employer whose Compensation (as defined in
this section) for the Year is more than $150,000.
Each member of the Controlled Group shall be treated as a separate employer
for purposes of determining ownership in the Employer.
The determination period is the Year containing the Determination Date and
the four preceding Years. If the Employer has fewer than 30 Employees, no
more than three Employees shall be treated as Key Employees because they are
officers. If the Employer has between 30 and 500 Employees, no more than ten
percent of the Employer's Employees (if not an integer, increased to the next
integer) shall be treated as Key Employees because they are officers. In no
event will more than 50 Employees be treated as Key Employees because they
are officers if the Employer has 500 or more Employees. The number of
Employees for any Plan Year is the greatest number of Employees during the
determination period. Officers who are employees described in Code
Section 414(q)(8) shall be excluded. If the Employer has more than the
maximum number of officers to be treated as Key Employees, the officers shall
be ranked by amount of annual Compensation (as defined in this section), and
those with the greater amount of annual Compensation during the determination
period shall be treated as Key Employees. To determine the ten Employees
owning the largest interests in the Employer, if more than one Employee has
the same ownership interest, the Employee(s) having the greater annual
Compensation shall be treated as owning the larger interest(s). The
determination of who is a Key Employee shall be made according to Code
Section 416(i)(1) and the regulations thereunder.
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NON-KEY EMPLOYEE means a person who is a non-key employee within the meaning
of Code Section 416 and regulations thereunder.
PRESENT VALUE means the present value of a participant's accrued benefit
under a defined benefit plan as of his normal retirement age (attained age if
later) or, if the plan provides non-proportional subsidies, the age at which
the benefit is most valuable. The accrued benefit of any Employee (other than
a Key Employee) shall be determined under the method which is used for
accrual purposes for all plans of the Employer or if there is no one method
which is used for accrual purposes for all plans of the Employer, as if such
benefit accrued not more rapidly than the slowest accrual rate permitted
under Code Section 411(b)(1)(C). For purposes of establishing Present Value,
any benefit shall be discounted only for 7.5% interest and mortality
according to the 1971 Group Annuity Table (Male) without the 7% margin but
with projection by Scale E from 1971 to the later of (a) 1974, or (b) the
year determined by adding the age to 1920, and wherein for females the male
age six years younger is used. If the Present Value of accrued benefits is
determined for a participant under more than one defined benefit plan
included in the Aggregation Group, all such plans shall use the same
actuarial assumptions to determine the Present Value.
TOP-HEAVY PLAN means a plan which is a top-heavy plan for any plan year
beginning after December 31, 1983. This Plan shall be a Top-heavy Plan if
(a) the Top-heavy Ratio for this Plan alone exceeds 60 percent and this Plan
is not part of any required Aggregation Group or permissive Aggregation
Group.
(b) this Plan is a part of a required Aggregation Group, but not part of a
permissive Aggregation Group, and the Top-heavy Ratio for the required
Aggregation Group exceeds 60 percent.
(c) this Plan is a part of a required Aggregation Group and part of a
permissive Aggregation Group and the Top-heavy Ratio for the permissive
Aggregation Group exceeds 60 percent.
TOP-HEAVY RATIO means the ratio calculated below for this Plan or for the
Aggregation Group.
(a) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer has not
maintained any defined benefit plan which during the five-year period
ending on the determination date has or has had accrued benefits, the
Top-heavy Ratio for this Plan alone or for the required or permissive
Aggregation Group as appropriate is a fraction, the numerator of which is
the sum of the account balances of all Key Employees as of the
determination date and the denominator of which is the sum of all account
balances of all employees as of the determination date. Both the numerator
and denominator of the Top-heavy Ratio are adjusted for any distribution
of an account balance (including those made from terminated plan(s) of the
Employer which would have been part of the required Aggregation Group had
such plan(s) not been terminated) made in the five-year period ending on
the determination date. Both the numerator and denominator of the
Top-heavy Ratio are increased to reflect any contribution not actually
made as of the Determination Date, but which is required to be taken into
account on that date under Code Section 416 and the regulations thereunder.
(b) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer
maintains or has maintained one or more defined benefit plans which during
the five-year period ending on the determination date has or has had
accrued
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benefits, the Top-heavy Ratio for any required or permissive Aggregation
Group as appropriate is a fraction, the numerator of which is the sum of
the account balances under the defined contribution plan(s) of all Key
Employees and the Present Value of accrued benefits under the defined
benefit plan(s) for all Key Employees, and the denominator of which is
the sum of the account balances under the defined contribution plan(s)
for all employees and the Present Value of accrued benefits under the
defined benefit plans for all employees. Both the numerator and
denominator of the Top-heavy Ratio are adjusted for any distribution of
an account balance or an accrued benefit (including those made from
terminated plan(s) of the Employer which would have been part of the
required Aggregation Group had such plan(s) not been terminated) made in
the five-year period ending on the determination date.
(c) For purposes of (a) and (b) above, the value of account balances and the
Present Value of accrued benefits will be determined as of the most
recent valuation date that falls within or ends with the 12-month period
ending on the determination date, except as provided in Code Section 416
and the regulations thereunder for the first and second plan years of a
defined benefit plan. The account balances and accrued benefits of an
employee who is not a Key Employee but who was a Key Employee in a prior
year will be disregarded. The calculation of the Top-heavy Ratio and the
extent to which distributions, rollovers and transfers during the
five-year period ending on the determination date are to be taken into
account, shall be determined according to the provisions of Code
Section 416 and regulations thereunder. The account balances and accrued
benefits of an individual who has performed no service for the Employer
during the five-year period ending on the determination date shall be
excluded from the Top-heavy Ratio until the time the individual again
performs service for the Employer. Deductible employee contributions
will not be taken into account for purposes of computing the Top-heavy
Ratio. When aggregating plans, the value of account balances and accrued
benefits will be calculated with reference to the determination dates
that fall within the same calendar year.
Account, as used in this definition, means the value of an employee's account
under one of the Employer's retirement plans on the latest valuation date. In
the case of a money purchase plan or target benefit plan, such value shall be
adjusted to include any contributions made for or by the employee after the
valuation date and on or before such determination date or due to be made as
of such determination date but not yet forwarded to the insurer or trustee.
In the case of a profit sharing plan, such value shall be adjusted to include
any contributions made for or by the employee after the valuation date and on
or before such determination date. During the first Year of any profit sharing
plan such adjustment in value shall include contributions made after such
determination date that are allocated as of a date in such Year. The
nondeductible employee contributions which an employee makes under a defined
benefit plan of the Employer shall be treated as if they were contributions
under a separate defined contribution plan.
VALUATION DATE means, as to this Plan, the last day of the last calendar
month ending in a Year.
YEAR means the Plan Year unless another year is specified by the Employer in
a separate written resolution in accordance with regulations issued by the
Secretary of the Treasury or his delegate.
SECTION 10.03--MODIFICATION OF VESTING REQUIREMENTS.
A Participant's nonforfeitable percentage is 100%. Such percentage is at
all times at least as great as the nonforfeitable percentage required to
satisfy the requirements of Code Section 416.
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The part of the Participant's Vested Account resulting from the minimum
contributions required pursuant to the MODIFICATION OF CONTRIBUTIONS SECTION
of Article X shall not be forfeited because of a period of reemployment after
benefit payments have begun.
SECTION 10.04--MODIFICATION OF CONTRIBUTIONS.
During any Year in which this Plan is a Top-heavy Plan, the Employer
shall make a minimum contribution or allocation on the last day of the Year
for each person who is a Non-key Employee on that day and who either was or
could have been an Active Participant during the Year. A Non-key Employee is
not required to have a minimum number of hours-of-service or minimum amount
of Compensation, or to have had any Elective Deferral Contributions made for
him in order to be entitled to this minimum. The minimum contribution or
allocation for such person shall be equal to the lesser of (a) or (b) below:
(a) Three percent of such person's Compensation (as defined in this
article).
(b) The "highest percentage" of Compensation (as defined in this
article) for such Year at which the Employer's contributions are
made for or allocated to any Key Employee. The highest percentage
shall be determined by dividing the Employer Contributions made for
or allocated to each Key Employee during such Year by the amount of
his Compensation (as defined in this article), which is not more
than the maximum set out above, and selecting the greatest quotient
(expressed as a percentage). To determine the highest percentage,
all of the Employer's defined contribution plans within the
Aggregation Group shall be treated as one plan. The provisions of
this paragraph shall not apply if this Plan and a defined benefit
plan of the Employer are required to be included in the Aggregation
Group and this Plan enables the defined benefit plan to meet the
requirements of Code Section 401(a)(4) or Code Section 410.
If the Employer's contributions and allocations otherwise required under
the defined contribution plan(s) are at least equal to the minimum above, no
additional contribution or reallocation shall be required. If the Employer's
contributions and allocations are less than the minimum above and Employer
Contributions under this Plan are allocated to Participants, any Employer
Contributions (other than those which are allocated on the basis of the
amount made for such person) shall be reallocated to provide the minimum. The
remaining Contributions shall be allocated as provided in the preceding
articles of this Plan taking into account any amount which was reallocated to
provide the minimum. If the Employer's total contributions and allocations
are less than the minimum above after any reallocation provided above, the
Employer shall contribute the difference for the Year.
The minimum contribution or allocation applies to all of the Employer's
defined contribution plans in the aggregate which are Top-heavy Plans. If an
additional contribution or allocation is required to meet the minimum above,
it shall be provided in this Plan.
A minimum allocation under a profit sharing plan shall be made without
regard to whether or not the Employer has profits.
If a person who is otherwise entitled to a minimum contribution or
allocation above is also covered under a defined benefit plan of the
Employer's which is a Top-heavy Plan during that same Year, the minimum
benefits for him shall not be duplicated. The defined benefit plan shall
provide an annual benefit for him on, or adjusted to, a straight life basis
of the lesser of (c) two percent of his average pay multiplied by his years
of
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service or (d) twenty percent of his average pay. Average pay and years of
service shall have the meaning set forth in such defined benefit plan for
this purpose.
For purposes of this section, any employer contribution made according
to a salary reduction or similar arrangement shall not apply before the first
Yearly Date in 1985. On and after the first Yearly Date in 1989, any such
employer contributions and employer contributions which are matching
contributions, as defined in Code Section 401(m), shall not apply in
determining if the minimum contribution requirement has been met, but shall
apply in determining the minimum contribution required. Forfeitures credited
to a Participant's Account are treated as employer contributions.
The requirements of this section shall be met without regard to
contributions under Chapter 2 of the Code (relating to tax on
self-employment), Chapter 21 of the Code (relating to Federal Insurance
Contributions Act), Title II of the Social Security Act or any other Federal
or state law.
SECTION 10.05--MODIFICATION OF CONTRIBUTION LIMITATION.
If the provisions of subsection (e) of the CONTRIBUTION LIMITATION
SECTION of Article III are applicable for any Limitation Year during which
this Plan is a Top-heavy Plan, the benefit limitations shall be modified. The
definitions of Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction in the CONTRIBUTION LIMITATION SECTION of Article III shall be
modified by substituting "1.0" in lieu of "1.25." The optional denominator
for determining the Defined Contribution Plan Fraction shall be modified by
substituting "$41,500" in lieu of "$51,875." In addition, an adjustment shall
be made to the numerator of the Defined Contribution Plan Fraction. The
adjustment is a reduction of that numerator similar to the modification of
the Defined Contribution Plan Fraction described in the CONTRIBUTION
LIMITATION SECTION of Article III, and shall be made with respect to the last
Plan Year beginning before January 1, 1984.
The modifications in the paragraph above shall not apply with respect to
a Participant so long as employer contributions, forfeitures or nondeductible
employee contributions are not credited to his account under this or any of
the Employer's other defined contribution plans and benefits do not accrue
for such Participant under the Employer's defined benefit plan(s), until the
sum of his Defined Contribution and Defined Benefit Plan Fractions is less
than 1.0.
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By executing this Plan, the Primary Employer acknowledges having
counseled to the extent necessary with selected legal and tax advisors
regarding the Plan's legal and tax implications.
Executed this _________ day of __________________________, 19___.
FALLBROOK NATIONAL BANK
By: _______________________________
_______________________________
Title
PLAN EXECUTION 75
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AGREEMENT OF TRUST
This Agreement is made as of ____________ by and between ______________
(herein called Grantor) or any successor corporation or business
organization which agrees in writing to assume the obligations of the Grantor
and Delaware Charter Guarantee & Trust Company (herein called the Trustee).
The Grantor and the Trustee mutually agree as follows:
SECTION 1 - THE TRUST AND TRUST FUND
By executing this Agreement, the Grantor establishes the Trust to hold and
distribute the Trust Fund under the provisions of the Plan. The Trust shall
be construed, regulated, and administered under the laws of Delaware.
The Trust Fund consists of the total assets held under the Trust for the
purpose of providing benefits for Participants. The Trust Fund shall be
valued at current fair market value at least annually and, at the discretion
of the Grantor, may be valued more frequently. Such valuations may consist of
copies of regularly issued broker-dealer statements, copies of insurance
company summary account statements, written appraisals provided by qualified
independent appraisers, and copies of account statements representing other
lawful trust investments including, but not limited to, mutual fund
statements. Writing (handwriting, typing, printing) photostating,
photographing, microfilming, magnetic impulse, mechanical or electrical
recording, or other forms of data compilation shall be acceptable means of
keeping records.
The Trustee or their appointed agent shall file with the Grantor an
accounting of its transactions as soon as practical after the first day of
each Plan year. Any report or accounting which the Trustee files with the
Grantor is open to inspection for a period of 60 days following the date it
is filed. At the end of the 60 day period, the Trustee is released and
discharged as to any matters set forth in the report or account except with
respect to any act of omission as to which a Participant, the Plan
Administrator, the named Fiduciary, or the Grantor has filed a written
objection within the 60 day period.
SECTION 2 - THE TRUSTEE
The Grantor has appointed the Trustee named above. The Grantor has the power
to appoint an additional or successor Trustee by providing 30 days written
notice to the initially appointed Trustee named above. The Grantor shall
notify the appointed Trustee or any other party to this Agreement of any
change of Trustee, including appointment of an additional Trustee. If more
than one person is appointed as Trustee, the Trustees may, in writing, name
one of their number to act in the execution of all documents relating to the
Trust.
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SECTION 3 - DUTIES OF TRUSTEE
The Trustee shall accept and hold the Trust Fund and administer it according
to the provisions of this Agreement of Trust. The Trustee has no duty to
demand or require that contributions be made to the Trust, nor shall the
Trustee be liable to determine the amount of any contributions to the Trust.
The Trustee is not required to look into any action taken by the named
Fiduciary, Plan Administrator, or the Grantor and will be fully protected in
taking, permitting, or omitting any action on the basis of their actions. Any
action by the named Fiduciary, Plan Administrator, or the Grantor according
to the Plan provisions shall be evidenced in writing. The Grantor will
indemnify the Trustee by satisfying any liabilities the Trustee may incur in
acting according to the Trust provisions upon written instruction from the
named Fiduciary, Plan Administrator, or Grantor.
SECTION 4 - POWERS TO TRUSTEE
The Trustee is authorized and empowered only at the direction of the Grantor
or its agent:
a) to hold all or any portion of the assets of the Trust Fund through
the facilities of the financial institution selected by the Grantor,
Plan Participants, or their Agent;
b) to sell, exchange, convey, transfer, or otherwise to dispose of any
property held by it, by private contract or at public auction;
c) to make, execute, acknowledge, and deliver any instruments that may
be necessary to carry out the powers granted it;
d) to employ such Agents, actuaries, clerical staff, custodians, and
others (including an insurance company) as needed to carry out the
Trustee's duties; and
e) to consult with legal counsel, including the Grantor's counsel, with
respect to the meaning or construction of, or the Trustee's
obligations or duties under the Trust, or with respect to any action
or proceeding or any question of law. The Trustee shall be fully
protected with respect to any action it takes in good faith
pursuant to the advice of such counsel.
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SECTION 5 - EXPENSES
The Trustee shall be paid such reasonable compensation as shall, from time to
time, be communicated to the Grantor by the Trustee, or its agent, and such
compensation shall be chargeable to the Grantor. The Grantor hereby covenants
and agrees to pay the same.
The Trustee shall charge against the Grantor any taxes paid by it which may
be imposed under the Trust Fund of the income thereof or upon or with respect
to the interest of any person therein which the Trustee is required to pay,
as well as all expenses of administration of the Trust including fees for
legal services rendered to the Trustee, and the Trust and the Grantor hereby
covenants and agrees to pay the same.
In the event the Grantor shall at any time fail to pay the Trustee's
compensation, taxes, and expenses within a reasonable time after demand for
such payment has been made by the Trustee of the Grantor, the Trustee will
charge the Trust Fund such fees, taxes, and expenses and may liquidate such
assets of the fund for such purposes as in its sole discretion it shall
determine. Notwithstanding any contrary provision of this Agreement, the
liquidation of assets to obtain funds, therefore, may be made without the
approval or direction of the Grantor. If the Trust Fund is not sufficient to
satisfy these fees, taxes, and expenses, then the Trustee will charge the
Grantor for such unpaid fees, taxes, and expenses. A late fee may be assessed.
SECTION 6 - ACCOUNTING
The Trustee is not responsible for account of the Trust Fund's transactional
activity. Further, the Trustee shall not be responsible to file any report,
return or information regarding such transactional activity unless
specifically provided under a separate agreement.
SECTION 7 - INDEMNIFICATION
The Trustee shall not be liable for the proper application of any part of the
Trust Fund if distributions are made in accordance with the written
directions of the Grantor as herein provided, nor shall the Trustee be
responsible for the adequacy of the Trust Fund to meet and discharge any and
all distributions and liabilities under the Plan.
Neither the Trustee, nor any Agent named hereunder, nor the Grantor, shall be
liable hereunder in any respect except for its own negligence or willful
misconduct.
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4
The Grantor shall indemnify, save and hold harmless the Trustee (including
its affiliates, representatives, and Agents) from and against any liability,
cost, or other expense, including, but not limited to, the payment of
attorneys' fees that the Trustee may incur in connection with this Trust
Agreement or the Plan unless such liability, costs, or other expense (whether
direct or indirect) arises from the Trustee's own willful misconduct or
negligence. The Grantor recognizes that a burden of litigation may be imposed
upon the Trustee as a result of some act or transaction for which it has no
responsibility or over which it has no control under this Trust Agreement.
Therefore, the Grantor agrees to indemnify and hold harmless and, if
requested, defend the Trustee (including its affiliates, representatives, and
Agents) from any expenses (including counsel fees, liabilities, claims,
damages, actions, suits, or other charges) incurred by the Trustee in
prosecuting or defending against any such litigation.
It is agreed that the Trustee is not undertaking any duty or obligation,
expressed or implied, to review, and will not be deemed to have any knowledge
of, or responsibility with respect to, any transaction involving the
investment of the Trust Fund as a result of the performance of its
ministerial duties. Therefore, as a result of any act or omission of the
Grantor or its Agent or any Participant or as a result of any transaction
engaged in by any of them, the receipt and processing of investment orders
and other documents relating to Plan assets by an officer or other employee
of the Trustee or its affiliates, representatives, or Agents engaged in the
performance of purely ministerial functions shall not constitute "knowledge"
of the Trustee.
SECTION 8-TERMINATION
The Trustee may resign at any time upon 30 days written notice to the
Grantor. The Trustee may be removed at any time by the Grantor upon 30 days
written notice to the Trustee. Upon resignation or removal of the Trustee,
the Grantor shall appoint a successor Trustee. If within 30 days after the
Trustee's resignation or removal, the Grantor has not appointed a successor
Trustee which has accepted such appointment in writing, the Trustee reserves
the right to appoint the Grantor as successor Trustee. Upon the delivery by
the resigning or removed Trustee to its successor Trustee of all property of
the Trust Fund, less such reasonable amount as it shall deem necessary to
provide for its expenses, compensation, and any taxes or advances chargeable
or payable out of the Trust Fund, the successor Trustee shall thereupon have
the same powers and duties as are conferred upon the Trustee. No successor
Trustee shall have any obligation or liability with respect to the acts or
omissions of its predecessors.
The actual appointment of a successor Trustee to whom the Trust assets may be
transferred must be fulfilled before the resignation or removal of the Trustee
shall become effective. The resigned or removed Trustee shall endorse,
transfer, convey, and deliver to the successor Trustee all of the funds,
securities, or property then held by it under the Trust, together with such
records as may be reasonably required in order that the successor Trustee may
properly administer the Trust.
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5
SECTION 9-INSURANCE COMPANY
If any portion of the assets of the Trust Fund are held by an insurance
company, such insurance company shall in no event be deemed to be a party to
this Trust or to be responsible for its validity. The obligations and
responsibilities of the insurance company shall be measured and determined
solely by the terms of the annuity contract and any insurance policy, and it
shall not be required to do any act not provided for or any act contrary to
the provisions of such annuity contract and insurance policy.
The insurance company shall not be required to look into the terms of this
Trust or question any action of the Trustee, nor shall it be responsible to
see that any action of the Trustee is authorized. The insurance company shall
act only upon the written direction of the Trustee and shall be fully
discharged from any and all liability for any amount paid to the Trustee, or
paid in accordance with the direction of the Trustee, or for any change made
or action taken upon such direction, and shall not be obligated to see that
any money paid by it to the Trustee or to any person shall be properly
distributed or applied. Any instrument executed by the Trustee may be treated
as conclusive. The insurance company shall be without liability in taking,
permitting, or omitting any action on the faith of any such instrument and
shall incur no liability or responsibility for doing so.
SECTION 10-LIMITATION ON RIGHTS AND REMEDIES
The Trustee shall have the right, at any time, to apply to a court of
competent jurisdiction for judicial settlement of its accounts or for
determination of any questions of construction which may arise or for
instructions.
SECTION 11-BINDING ARBITRATION
The Grantor and/or any Participant agrees that all controversies between the
Grantor and/or any Participant and/or Beneficiaries and the Trustee and/or
any of its officers, directors, or employees, present or former, concerning
or arising from (i) any retirement account maintained with the Trustee by
the Grantor (ii) any transaction involving any Participant's account, whether
or not such transaction occurred in such account or accounts; or (iii) the
construction, performance, or breach of the Agreement between us, whether
such controversy arose prior, on, or subsequent to the date hereof, shall be
determined by arbitration rules of the American Arbitration Association. Any
disputes as to the arbitrability of a matter or the manner of such
arbitration shall be determined in such arbitration.
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6
Arbitration Disclosures
(a) Arbitration is final and binding on the parties.
(b) The parties are waiving their right to seek remedies in court,
including the right to a jury trial.
(c) Pre-arbitration discovery is generally more limited than and
different from court proceedings.
(d) The arbitrator's award is not required to include factual findings
or legal reasoning, and any party's right to appeal or to seek
modification of rulings by the arbitrators is strictly limited.
(e) The panel of arbitrators will consist of arbitrators from American
Arbitrators Association.
(f) The arbitration will be under the commercial arbitration rules of
the American Arbitration Association.
(g) The arbitration shall be held in Wilmington, Delaware.
(h) Any disputes as to such arbitration or the manner thereof shall be
determined in such arbitration.
The determination that any provision of this Trust Agreement is not
enforceable in accordance with its terms in a particular jurisdiction
shall not affect the validity or enforceability of the remaining provisions
of this Trust Agreement generally or in any other jurisdiction or as to any
other parties, but rather such unenforceable provisions shall be stricken or
modified in accordance with such determination only as to such parties and
this Trust Agreement, as so modified, shall continue to bind the specific
parties involved therein and otherwise all parties in unmodified form.
All contributions to the Trust shall be deemed to take place in the state in
which the principal place of business of the Trustee is located.
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7
SECTION 12-EXECUTION
This Agreement of Trust shall be executed in counterparts of each of which
shall be deemed an original. By signing below, the Grantor acknowledges
having counseled to the extent necessary with its attorney regarding the
legal and tax implications of establishing a Trust using this Trust Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement of Trust as
of this _________ day of ______________.
FOR THE GRANTOR
________________________
________________________
(Title)
The undersigned hereby accepts appointment as Trustee hereunder and agrees to
be bound by the terms of this Agreement of Trust.
ACCEPTANCE OF TRUSTEE
________________________
________________________
(Title)
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EXHIBIT 5b
REITNER & STUART
A PARTNERSHIP OF PROFESSIONAL CORPORATIONS
ATTORNEYS AT LAW
1319 Marsh Street
San Luis Obispo, CA 93401
Tel: (805) 545-8590 Fax: (805) 545-8599
BARNET REITNER* WASHINGTON D.C. OFFICE:
JOHN F. STUART 1730 K STREET, N.W., 11TH FLOOR
*ADMITTED ONLY IN CALIFORNIA
TEL (202) 466-2818 FAX (202) 466-3535
October 4, 1999
Community Bancorp Inc.
130 West Fallbrook Street
Fallbrook, CA 92028
Re: Registration Statement on Form S-8
Gentlemen:
At your request, we have examined the Registration Statement on Form
S-8 (the "Registration Statement") being filed by Community Bancorp Inc. (the
"Company") with the Securities and Exchange Commission in connection with the
registration under the Securities Act of 1933, as amended, of 100,000 shares
of the Company's common stock, (the "Common Stock"), and an unspecified
number of interests in Fallbrook National Bank's 401(k) Profit Sharing Plan,
as adopted and assumed by the Company (the "Plan").
In rendering this opinion, we have examined such documents and
records as we have deemed relevant. We have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals
and the conformity to originals of all documents submitted to us as certified
or reproduced copies.
Based upon the foregoing and such other and further review of fact
and law as we have deemed necessary or appropriate under the circumstances,
and assuming that all shares of Common Stock acquired by the Plan
participants in the open market were, at the time of their original issuance,
validly issued, fully paid and issued in compliance with applicable
securities laws, it is our opinion that the shares of Common Stock acquired
for Plan participants in the open market will, when so acquired in accordance
with the terms of the Plan, be validly issued, fully paid and non-assessable.
This opinion is issued to you solely for use in connection with the
Registration Statement and is not to be quoted or otherwise referred to in
any financial statements of the Company or related documents, nor is it to be
filed with or furnished to any government agency or other person, without the
prior written consent of this firm in each instance.
<PAGE>
This firm hereby consents to the filing of this opinion as an
exhibit to the Registration Statement and to the reference to the undersigned
under the heading "Legal Matters" therein and in any prospectus delivered to
participants in the Plan and any amendments thereto.
Respectfully submitted,
/s/ REITNER & STUART
--------------------
REITNER & STUART
JFS: wsm
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EXHIBIT 23.a
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Community Bancorp Inc.:
We consent to incorporation by reference in the registration statement on
Form S-8 of Community Bancorp Inc. of our report dated January 13, 1999,
relating to the balance sheet of Fallbrook National Bank as of December 31,
1998 and 1997, and the related statements of income, shareholders' equity,
and cash flows for the three-year period ended December 31, 1998, which
report appears in the Form 10-KSB of Fallbrook National Bank.
/s/ KPMG LLP
San Diego, California
October 1, 1999
