<PAGE> 1
As filed with the Securities and Exchange Commission on April 26, 1996.
File No. 811-2631
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT /X/
OF 1940
AMENDMENT No. 19
CHESTNUT STREET EXCHANGE FUND
-----------------------------
(Exact Name of Registrant as Specified in Charter)
400 Bellevue Parkway, Suite 100
Wilmington, Delaware 19809
--------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number: (302) 792-2555
Edward J. Roach
400 Bellevue Parkway, Suite 100
Wilmington, Delaware 19809
--------------------------
(Name and Address of Agent for Service)
Copy to:
Vernon Stanton, Jr., Esq.
Drinker Biddle & Reath
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, Pennsylvania 19107-3496
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CONTENTS OF FORM N-1A
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PART A. INFORMATION REQUIRED IN A PROSPECTUS 1
Item 1. Cover Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2. Synopsis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 3. Condensed Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 4. General Description of Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 5. Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 5A. Management's Discussion of Fund Performance . . . . . . . . . . . . . . . . . . . . . . . . . 8
Item 6. Capital Stock and Other Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Item 7. Purchase of Securities Being Offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 8. Redemption or Repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 9. Pending Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PART B. STATEMENT OF ADDITIONAL INFORMATION 14
Item 10. Cover Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 11. Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 12. General Information and History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 13. Investment Objective and Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 14. Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 15. Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Item 16. Investment Advisory and Other
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Item 17. Brokerage Allocation and Other
Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Item 18. Capital Stock and Other Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Item 19. Purchase, Redemption, and Pricing of
Securities Being Offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Item 20. Tax Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Item 21. Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Item 22. Calculation of Performance Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Item 23. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
PART C. OTHER INFORMATION C-1
Item 24. Financial Statements and Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
Item 25. Persons Controlled by or under Common Control with Registrant . . . . . . . . . . . . . . . . C-4
Item 26. Number of Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-4
Item 27. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-5
Item 28. Business and Other Connections of Investment Adviser . . . . . . . . . . . . . . . . . . . . . C-5
Item 29. Principal Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-17
Item 30. Location of Accounts and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-17
Item 31. Management Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-17
SIGNATURE C-19
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PART A. INFORMATION REQUIRED IN A PROSPECTUS
Item 1. Cover Page
Inapplicable.
Item 2. Synopsis
Inapplicable.
Item 3. Condensed Financial Information
Inapplicable.
Item 4. General Description of Registrant
(i) Registrant is a limited partnership organized as
of March 23, 1976 under The Uniform Limited
Partnership Act of California. Registrant is an
open-end diversified management investment
company.
(ii) Registrant's investment objectives are to seek
long-term growth of capital and, secondarily,
current income. Registrant will invest in a
portfolio of common stocks and securities
convertible into common stocks of issuers included
in the "List of Representative Companies" on pages
10 to 12 of Post- Effective Amendment No. 1 to
Registrant's Registration Statement on Form S-5
filed under the Securities Act of 1933 on October
28, 1976, which is incorporated herein by
reference, and of other issuers of comparable
quality. Registrant may also invest in other
types of securities for temporary or defensive
purposes, including preferred stocks, investment
grade bonds and money market obligations such as
U.S. Government securities, certificates of
deposit and commercial paper.
Up to 10% of the value of Registrant's total
assets may be invested in securities which are
subject to legal or contractual restrictions on
resale and which Registrant reasonably believes
will be saleable after a two year holding period
pursuant to Rule 144 under the Securities Act of
1933.
The Registrant may write exchange-traded covered
call options on portfolio securities up to 25% of
the value of its assets and may loan portfolio
<PAGE> 4
securities as permitted under subpart (8) of this
Item 4(ii). The Registrant will not sell securities
covered by outstanding options and will endeavor to
liquidate its position as an option writer in a
closing purchase transaction rather than deliver
portfolio securities upon exercise of the option.
The extent to which the Registrant may be able to
write such options will depend in part on state
securities regulations as amended from time to
time.
The investment objectives stated above may be
changed by the Board of Managing General Partners
without the approval of a majority of Registrant's
outstanding voting securities.
Registrant's fundamental policies which may not be
changed without the approval of a majority of
Registrant's outstanding voting securities are as
follows:
(1) Registrant will not issue any senior
securities (as defined in the Investment
Company Act of 1940).
(2) Registrant will not purchase securities on
margin or sell any securities short.
Registrant will not purchase or write
puts, calls, straddles or spreads with
respect to any security except that (i)
Registrant may write call options on
securities constituting not more than 25%
of the value of its assets if the option
is listed on a national securities
exchange and, at all times while the
option is outstanding, Registrant owns the
securities against which the option is
written or owns securities convertible
into such securities, and (ii) Registrant
may purchase call options in closing
purchase transactions to liquidate its
position as an option writer.
(3) Registrant will not borrow money except
from banks in amounts which in the
aggregate do not exceed 10% of the value
of its assets at the time of borrowing.
This borrowing provision is not for
purposes of leverage but is intended to
facilitate the orderly sale of portfolio
securities to accommodate abnormally heavy
redemption requests, and to pay
subscription fees due with respect to
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the exchange without having to sell
portfolio securities. Securities may be
purchased for Registrant's portfolio while
borrowings are outstanding.
(4) Registrant will not act as an underwriter
(except as it may be deemed such in a sale
of restricted securities owned by it).
(5) It is not the policy of Registrant to
concentrate its investments in any
particular industry, but if it is deemed
advisable in light of Registrant's
investment objectives, up to 25% of the
value of its assets may be invested in any
one industry. Registrant will not be
required to reduce holdings in a
particular industry if, solely as a result
of price changes, the value of such
holdings exceeds 25% of the value of
Registrant's total assets.
(6) Registrant will not purchase or sell real
estate or real estate mortgage loans.
(7) Registrant will not purchase or sell
commodities or commodity contracts.
(8) Registrant will not make loans except by
(i) the purchase of debt securities in
accordance with its investment objectives
and (ii) the loaning of securities against
collateral consisting of cash or
securities issued or guaranteed by the
U.S. Government, its agencies or
instrumentalities, which is equal at all
times to at least 100% of the value of the
securities loaned. Registrant will lend
portfolio securities only when its
investment adviser believes that the net
return to Registrant in consideration of
the loan is reasonable, that any fee paid
for placing the loan is reasonable and
based solely upon services rendered, that
the loan is consistent with Registrant's
investment objectives, and that no
affiliate of Registrant or of its
investment adviser is involved in the
lending transaction or is receiving any
fees in connection therewith. Registrant
will not have the right to vote securities
loaned, but will have the right to
terminate such a loan at any time and
receive back equivalent securities and to
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receive amounts equivalent to all dividends
and interest paid on the securities loaned.
(9) Registrant will not:
(A) Mortgage, pledge or hypothecate
its assets except to secure
borrowings described in Item
4(ii)(3) and in amounts not
exceeding 10% of the value of its
assets.
(B) Invest more than 5% of its assets
at the time of purchase in the
securities of any one issuer
(exclusive of securities issued
or guaranteed by the U.S.
Government, its agencies or
instrumentalities).
(C) Purchase securities if such
purchase would result in its
owning more than 10% of the
outstanding voting securities of
any one issuer at the time of
purchase.
(D) Invest in securities of companies
which have a record, together
with their predecessors, of less
than five years of continuous
operation.
(E) Purchase or hold securities of
any company if, to its knowledge,
those General Partners of
Registrant and those directors
and officers above the level of
Senior Vice President of its
investment adviser beneficially
owning more than 1/2 of 1% of the
securities of that company,
together own beneficially more
than 5% of the securities of such
company taken at market value.
(F) Purchase the securities of other
investment companies except that
Registrant has accepted for
exchange shares of common stock
of Coca-Cola International
Corporation in accordance with
the limitations imposed by the
Investment Company Act of 1940.
(G) Purchase oil, gas or other
mineral leases or partnership
interests in oil,
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gas or other mineral exploration
programs.
(H) Knowingly purchase or otherwise
acquire any equity or debt
securities which are subject to
legal or contractual restrictions
on resale if, as a result
thereof, more than 10% of the
value of its assets would be
invested in such securities.
(I) Invest in companies for the
purpose of exercising control or
management.
Any investment policy or restriction in
these Items (1)-(9) which involves a
maximum percentage of securities or assets
shall not be considered to be violated
unless an excess over the percentage
occurs immediately after an acquisition of
securities or utilization of assets and
results therefrom.
Registrant's investment policies which are not
deemed fundamental and may be changed without
shareholder approval are as follows:
Registrant does not intend to engage in any
significant degree in short-term trading.
Portfolio turnover is not expected to exceed 15%,
although Registrant reserves the right to exceed
this turnover rate. The tax consequences of a
sale of portfolio securities will be considered
prior to a sale, but sales will be effected when
the investment adviser believes a sale would be in
the best interests of Registrant's shareholders
even though capital gains will be realized.
Registrant will not sell securities covered by
outstanding options and will endeavor to liquidate
its position as an option writer in a closing
purchase transaction rather than by delivering
portfolio securities upon exercise of the option.
* * *
Limited Partners generally are not personally
liable for liabilities of the Fund. However, if
the Fund were unable to pay its liabilities,
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<PAGE> 8
recipients of distributions from the Fund could be
liable to creditors of the Fund to the extent of
such distributions, plus interest.
A Limited Partner has no right to take any part in
the control of the Partnership business, and the
exercise of such control would subject a Limited
Partner to the personal liability of a General
Partner for obligations of the Fund. Although no
absolute assurance can be given due to the lack of
specific statutory authority and the fact that
there are no authoritative judicial decisions on
the matter, the Fund received an opinion from
California Counsel that the existence and exercise
by the Limited Partners of the voting rights
provided for in the Partnership Agreement do not
subject the Limited Partners to liability as
general partners under the California Act. It is
possible, however, that the existence or exercise
of such rights, might subject the Limited Partners
to such liability under the laws of another state.
In the event that a Limited Partner should be
found to be liable as a general partner, then, to
the extent the assets and insurance of the Fund
and of the General Partners were insufficient to
reimburse a Limited Partner, he would be required
to personally satisfy claims of creditors against
the Fund.
The net asset value of the Shares on redemption or
repurchase may be more or less than the initial
offering price of the Shares depending upon the
market value of the Fund's portfolio securities at
the time of redemption or repurchase.
Item 5. Management of the Fund
(a) The business and affairs of the Fund are managed
by its four Managing General Partners. Their
addresses and principal occupations for the past
five years are stated at Item 14.
(b)(i) Registrant's investment advisers are PNC Bank,
National Association ("PNC Bank") which has
banking offices at Broad and Chestnut Streets,
Philadelphia, Pennsylvania 19101 and PNC
Institutional Management Corporation ("PIMC"),
located at 103 Bellevue Parkway, Wilmington,
Delaware 19809. PNC Bank and its predecessors
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<PAGE> 9
have been in the business of managing the investments
of fiduciary and other accounts in the Philadelphia
area since 1847. Investment advisory services are
provided to the Registrant by PNC Bank through its
Trust Division. PIMC was organized by PNC Bank in
June 1977 to perform investment advisory services for
Registrant and certain other regulated investment
companies advised by PNC Bank.
All of the capital stock of PIMC is owned by PNC
Bank. All of the capital stock of PNC Bank is owned
by PNC Bancorp, Inc. with principal offices in
Wilmington, Delaware. All of the capital stock of
PNC Bancorp, Inc. is owned by PNC Bank Corp., a
publicly held bank holding corporation with principal
offices in Pittsburgh, Pennsylvania.
(ii) The investment advisers, subject to the
authority of the Managing General
Partners, are responsible for the overall
management of the Fund's business affairs.
(iii) For the services provided by PNC Bank and
PIMC and the expenses assumed by them
under the Advisory Agreement, Registrant
has agreed to pay PIMC a fee, computed
daily and payable monthly, at the annual
rate of 1/2 of 1% of the first
$100,000,000 of the Registrant's net
assets, plus 4/10ths of 1% of the net
assets exceeding $100,000,000. In the
Advisory Agreement, PIMC has agreed to pay
PNC Bank a monthly fee equal to 75% of
each month's advisory fee paid by
Registrant to PIMC under the agreement,
adjusted quarterly to assure that PIMC has
income before taxes from all sources of at
least $22,500 during each quarter. The
fee paid by PIMC to PNC Bank does not
affect the amount of the advisory fee
payable by Registrant. In 1995, the Fund
paid $1,021,188, or approximately .45% of
its average net assets for 1995, to PIMC.
(c) Since January 1996, Mary Elizabeth C. Pfeil and
Robert K. Urquhart have been primarily responsible for
the day-to-day management of the Fund's portfolio.
Prior to joining PNC Equity Advisors Company in 1993,
Ms. Pfeil was a member of the Equity Research Group of
PNC Asset Management Group (then named PNC Investment
Management and Research) where she covered the energy
and housing-related industries. From 1990 to 1992, she
was employed by Wellington Management Company as a
generalist equity researcher. Prior to 1990, Ms. Pfeil
worked first as a commercial lender and later as an
equity analyst for PNC Bank. She is a member of the
Financial Analysts of Philadelphia and is a Chartered
Financial Analyst.
Prior to joining PNC in 1995, Mr. Urquhart was the
Chief Investment Officer at Cole Financial Group and a
partner at RCM Capital Management. He was also
employed by J.P. Morgan Investments, Inc. and Sanford
C. Bernstein & Co. Inc.
(d) Inapplicable.
(e) The Fund's transfer agent and dividend disbursing
agent is PFPC Inc. ("PFPC"). Its principal business
address is 400 Bellevue Parkway, Wilmington, DE
19809.
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(f) In 1995, the Fund's expenses totalled $1,200,548, or
approximately .52% of its average net assets.
(g) Inapplicable.
Item 5A. Management's Discussion of Fund Performance
Inapplicable.
Item 6. Capital Stock and Other Securities
(a) Registrant has one class of partnership
interest, no par value ("Shares"). All Shares
are entitled to participate equally in
distributions declared by the Board of Managing
General Partners. Each full Share entitles the
record holder thereof, other than the
Non-Managing General Partner, to one full vote,
and each fractional Share to a fractional vote,
on all matters submitted to the shareholders.
The Partnership Agreement provides that the
Non-Managing General Partner shall take no part
in the management, conduct or operation of the
Fund's business and shall not have the right to
vote its Shares. Shareholders are not entitled
to cumulative voting in elections for General
Partners. Each Share has equal liquidation
rights. There are no pre-emptive rights or
conversion rights.
Registrant is a limited partnership formed under
The Uniform Limited Partnership Act of
California. Limited Partners generally are not
personally liable for liabilities of Registrant.
However, if Registrant were unable to pay its
liabilities, recipients of distributions from
Registrant could be liable to certain creditors
of Registrant to the extent of such
distributions, plus interest. Registrant
believes that, because of the nature of
Registrant's business, the assets and insurance
of Registrant and of the General Partners, and
Registrant's ability to contract with third
parties to prevent recourse by the party against
a Limited Partner, it is unlikely that Limited
Partners will receive distributions which have
to be returned or that they will be subject to
liability as General Partners. In the event
that a Limited
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<PAGE> 11
Partner should be found to be liable as a General
Partner, then, to the extent the assets and
insurance of Registrant and of the General Partners
were insufficient to reimburse a Limited Partner,
he would be required to personally satisfy claims
of creditors against Registrant.
(b) Inapplicable.
(c) The rights of the holders of Shares may not be
modified otherwise than by the vote of a majority
of outstanding shares, but "outstanding shares"
for this purpose excludes those shares held by the
non- voting Non-Managing General Partner.
(d) Inapplicable.
(e) Shareholder inquiries should be made to the Fund,
400 Bellevue Parkway, Suite 100, Wilmington,
Delaware 19809, telephone (302) 792-2555.
(f) Registrant intends to distribute from its net
investment income such amounts as the Managing
General Partners determine after the end of each
of the first three quarters of each year
(currently such distributions are at the rate of
$.50 per share), and the remainder of its net
investment income and 30% of its realized net
capital gains at the end of each fiscal year.
Distributions will be made in cash except to those
shareholders who elect to receive income or
capital gains distributions in additional Shares
computed at their net asset value as of the record
date for the distribution. In the discretion of
the Managing General Partners, the amount of
income distributions for the first three quarters
may be changed and distributions may be made at
other times, and the percentage of realized net
capital gains distributed may be more or less than
30%. Investors who elect to participate in the
Registrant's Systematic Withdrawal Plan will
receive quarterly in cash as a partial redemption
of their Shares up to 3/4 of 1% of the net asset
value of their Shares determined as of the last
trading day of each calendar quarter.
(g) Since inception, the Registrant has been
classified as a partnership for federal income tax
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<PAGE> 12
purposes. As a partnership, Registrant itself
does not pay any federal income or capital gains
tax. Instead, each partner is required, in
determining his own federal income tax
liability, to take into account his allocable
share of each item of Registrant's income, gain,
loss, deduction and credit (whether or not
distributed to him) for the taxable year of the
Registrant ending within or with his taxable
year.
In general, distributions by the Registrant,
whether received in additional shares of
partnership interest ("Shares") or cash, will
not be taxable to a partner. Instead, as
previously described, each partner will take
into account in determining his federal income
tax liability his allocable share of
Registrant's income, gain, loss, deduction and
credit. In the event that distributions to a
partner exceed his basis for his aggregate
partnership interest immediately prior to the
distribution, the partner would recognize a
capital gain in the amount of such excess. Such
event is unlikely since distributions normally
will be made from his allocable share of items
of net income and capital gains which had the
initial effect of increasing his aggregate
basis. A cash distribution will reduce the
aggregate basis for all of a partner's Shares
(but not below zero) by the amount of the
distribution. If the distribution is taken in
the form of additional Shares, a partner's
aggregate basis, as increased by his share of
the income and gain, will remain unchanged. It
is not contemplated that any distributions will
be made in portfolio securities.
It should be noted that under the Publicly
Traded Partnership Rules of the Internal
Revenue Code, the Registrant will be
treated as a corporation for federal tax
purposes beginning January 1, 1998. See the
Statement of Additional Information for further
information.
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Item 7. Purchase of Securities Being Offered
(a) Inapplicable.
(b) Inapplicable.
(c) Investors who have not exchanged restricted
securities for Shares or received certificates
for their Shares may, by notice in writing to
the transfer agent, elect to participate in the
Systematic Withdrawal Plan (the "Plan").
Participants in the Plan will receive quarterly
in cash as a partial redemption of their Shares
up to 3/4 of 1% of the net asset value of their
Shares as of the close of trading on the New
York Stock Exchange on the last trading day of
each calendar quarter. Registrant does not
intend to impose a charge upon investors for
participating in the Plan. Participants may
withdraw from the Plan at any time by written
notice to the transfer agent.
(d) Inapplicable.
(e) Inapplicable.
(f) Inapplicable.
Item 8. Redemption or Repurchase
(a) Shares may be redeemed at the option of the
investor at any time without charge at their net
asset value next computed after receipt by PFPC
of a written request for redemption setting
forth the name of the Registrant and the
investor's account number. The request must be
accompanied by certificates (if issued) or if
certificates have not been issued, by stock
powers. The certificate or stock powers must be
endorsed by the record owner(s) exactly as the
Shares are registered and the signature(s) must
be guaranteed by a commercial bank or trust
company or member of a registered national
securities exchange. The Registrant reserves
the right to require that additional documents
be furnished in the case of redemptions by other
than the registered owner of the Shares.
Except to the extent Shares are redeemed for
cash pursuant to the Systematic Withdrawal Plan,
Registrant intends to distribute upon redemption
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<PAGE> 14
securities in kind valued at the same value used
for purposes of next determining Registrant's
net asset value after the receipt of the request
for redemption in proper form. Registrant may
in its discretion pay part or all of redemption
proceeds in cash.
The proceeds of redemption will be paid as soon
as possible but not later than seven days after
the request for redemption is received with the
required documentation. The Registrant may
suspend the right of redemption or delay payment
during any period when the New York Stock
Exchange is closed (other than customary weekend
and holiday closings); when trading on that
exchange is restricted or an emergency exists
which makes disposal or valuation of portfolio
securities impracticable; or during such other
period as the Securities and Exchange Commission
may by order permit.
The net asset value of the Shares on redemption
or repurchase may be more or less than the
initial offering price of the Shares depending
upon the market value of the Fund's portfolio
securities at the time of redemption or
repurchase.
(b) Inapplicable.
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(c) Inapplicable.
(d) Inapplicable.
Item 9. Pending Legal Proceedings
Inapplicable.
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PART B. STATEMENT OF ADDITIONAL INFORMATION
Item 10. Cover Page
Inapplicable.
<TABLE>
<CAPTION>
Item 11. Table of Contents Page No.
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<S> <C>
General Information and History . . . . . . . . . . . . . . . . . . . . . . . . . 14
Investment Objectives and Policies . . . . . . . . . . . . . . . . . . . . . . . . 14
Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Investment Advisory and Other Services . . . . . . . . . . . . . . . . . . . . . . 18
Brokerage Allocation and Other Practices . . . . . . . . . . . . . . . . . . . . . 20
Capital Stock and Other Securities . . . . . . . . . . . . . . . . . . . . . . . . 21
Purchase, Redemption and Pricing of
Securities Being Offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Tax Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Calculation of Performance Data . . . . . . . . . . . . . . . . . . . . . . . . . 24
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
Item 12. General Information and History
Inapplicable.
Item 13. Investment Objective and Policies
(a) See Item 4(ii).
(b) See Item 4(ii).
(c) See Item 4(ii).
(d) For the fiscal years ended December 31, 1995 and
1994, Registrant's portfolio turnover rates were
0% and 3.88%, respectively.
Item 14. Management of the Fund
(a) Managing General Partners and officers of the
Fund:
-14-
<PAGE> 17
<TABLE>
<CAPTION>
Principal Occupations
Position with During Past 5 Years and
Name and Address Age with Registrant and Current Affiliations
- ---------------- ---- --------------- ------------------------
<S> <C> <C> <C>
Robert R. Fortune 79 President and Financial Consultant; Former Chairman,
2920 Ritter Lane Chairman of the President and Chief Executive
Allentown, PA 18104 Managing General Officer, Associated Electric &
Partners Gas Insurance Services Limited from 1984 to 1993; Member
of the Financial Executives Institute and American
Institute of Certified Pubic Accountants; Director,
Trustee or Managing General Partner of 5 other
investment companies advised by PIMC; Director,
Prudential Utility Fund, Inc.
and Prudential Structured Maturity
Fund, Inc.
G. Willing Pepper 87 Managing Retired; Chairman of the Board,
128 Springton Lake Rd. General Specialty Composites Corporation
Media, PA 19063 Partner until May 1984; Chairman of the Board, The Institute for
Cancer Research until 1979; Director, Philadelphia
National Bank until 1978; President, Scott Paper
Company, 1971-1973; Director, Marmon Group, Inc. until
April 1986; Director, Trustee or Managing General
Partner of 6 other investment companies advised by
PIMC.
David R. Wilmerding, Jr. 59 Managing President, Gee Wilmerding
Aldwyn Center General & Associates
Villanova, PA 19085 Partner (investment advisers) since February 1989; Director,
Beaver Management Corporation; Until September 1988,
President, Treasurer and Trustee, The Mutual Assurance
Company; Until September 1988, Chairman, President,
Treasurer and Director, The Green Tree Insurance Company
(a wholly-owned subsidiary of The Mutual Assurance
Company); Until September 1988, Director, Keystone State
Life Insurance Company; Director or Trustee
</TABLE>
-15-
<PAGE> 18
<TABLE>
<CAPTION>
Principal Occupations
Position with During Past 5 Years and
Name and Address Age with Registrant and Current Affiliations
- ---------------- ---- --------------- ------------------------
<S> <C> <C> <C>
of 5 other investment companies advised by PIMC.
R. Stewart Rauch 80 Managing Honorary Trustee, Committee for
928 Merion Square Road General Economic Development; Advisory
Gladwyne, PA 19035 Partner Council, The Greater Philadelphia Urban Affairs
Partnership; Chairman of the Board, The Philadelphia
Contributionship for the Insurance of Houses from Loss
by Fire until 1986; Chairman of the Board, The
Philadelphia Contributionship Insurance Company
until 1986; Director, The Philadelphia Orchestra
Association until 1986; Director, Independence Square
Income Securities, Inc.
Edward J. Roach 71 Treasurer Certified Public Accountant; Partner
400 Bellevue Parkway of the accounting firm of Main
Suite 100 Hurdman until 1981; Vice
Wilmington, DE 19809 Chairman of the Board, Fox Chase Cancer Center;
Trustee Emeritus, Pennsylvania
School for the Deaf; Trustee Emeritus, Immaculata
College; Former Director, Biotrol USA, Inc.; President,
Vice-President and/or Treasurer of 8 other
investment companies advised by PIMC; Director, The
Bradford Funds, Inc.
Morgan R. Jones 56 Secretary Partner of the law firm of
PNB Building Drinker Biddle & Reath,
1345 Chestnut Street Philadelphia, Pennsylvania.
Philadelphia, PA 19107-3496
</TABLE>
(b) See item (a) above.
-16-
<PAGE> 19
(c) The Registrant pays Managing General Partners $6,000 annually,
and pays the Chairman an additional $4,000 annually. The
following table provides information concerning the
compensation of each of the Registrant's Managing General
Partners for services rendered during the Company's last
fiscal year ended December 31, 1995:
<TABLE>
<CAPTION>
Aggregate Pension or Retirement Estimated Annual Total Compensation
Name of Person/ Compensation Benefits Accrued as Benefits Upon from Registrant and
Position From Registrant Part of Fund Expenses Retirement Fund Complex (1)
- --------------- --------------- --------------------- ---------------- --------------------
<S> <C> <C> <C> <C>
Robert R. Fortune $10,000 None None (6)(2) $64,100
President and Chairman
of the Managing General
Partners
G. Willing Pepper $ 6,000 None None (7)(2) $96,750
Managing General Partner
David R. Wilmerding, Jr. $ 6,000 None None (6)(2) $61,100
Managing General Partner
R. Stewart Rauch $ 6,000 None None (2)(2) $12,000
Managing General Partner
</TABLE>
- -----------------------
(1) A Fund Complex means two or more investment
companies that hold themselves out to
investors as related companies for purposes
of investment and investor services, or have
a common investment adviser or have an
investment adviser that is an affiliated
person of the investment adviser of any of
the other investment companies.
(2) Total number of such other investment
companies within the Fund Complex of which
the managing general partner serves as
director, trustee or managing general
partner.
-17-
<PAGE> 20
Item 15. Control Persons and Principal Holders of Securities
(a) Inapplicable.
(b) Inapplicable.
(c) As of April 2, 1996, all officers and Managing General
Partners of Registrant as a group beneficially owned less
than 1% of the Registrant's outstanding equity
securities.
Item 16. Investment Advisory and Other Services
(a) All of the capital stock of PIMC is owned by PNC Bank. All
of the capital stock of PNC Bank is owned by PNC Bancorp,
Inc., with principal offices in Wilmington, Delaware. All
of the capital stock of PNC Bancorp, Inc. is owned by PNC
Bank Corp., a publicly held bank holding corporation with
principal offices in Pittsburgh, Pennsylvania. The
Registrant paid $881,140, $878,636 and $1,021,188 for
investment advisory services for the years ended December
31, 1993, 1994, and 1995, respectively. The method of
computing the advisory fee payable by the Registrant is
determined as in Item 5(b)(iii) above.
(b) Subject to the supervision of Registrant's Managing
General Partners, PIMC manages the Registrant's portfolio
and is responsible for, makes decisions with respect to,
and places orders for, all purchases and sales of the
Registrant's portfolio securities. PIMC is also required
to compute the Registrant's net asset value and net
income.
The Advisory Agreement also provides that, subject to the
supervision of the Registrant's Managing General Partners
and without additional charge to Registrant, PNC Bank
will, through its Trust Division and on behalf of
Registrant: (i) provide PIMC investment research and
credit analysis concerning prospective and existing
investments of the Registrant, (ii) make recommendations
to PIMC with respect to the Registrant's continuous
investment program, (iii) make recommendations to PIMC
regarding the amount of the Registrant's assets to be
invested or held uninvested in cash or cash equivalents,
(iv)
-18-
<PAGE> 21
supply PIMC with computer facilities and operating
personnel, (v) provide PIMC with such statistical
services as PIMC may reasonably request, and (vi)
maintain or cause PIMC to maintain Registrant's financial
accounts and records.
PNC Bank has agreed that unless and until two years'
prior notice has been given to Registrant and Registrant
has chosen a successor non-Managing General Partner, PNC
Bank will provide to Registrant a Non-Managing General
Partner, who (i) will own at all times at least 1% of the
Registrant's outstanding Shares, (ii) will continue to
stand for re-election as a Non-Managing General Partner,
and (iii) will not withdraw as Non- Managing General
Partner. PNC Bank has agreed to provide such a
Non-Managing General Partner as a result of the tax
ruling received by Registrant which conditions the
Registrant's classification as a partnership for federal
income tax purposes upon the Registrant's General
partners maintaining in the aggregate an interest of at
least 1% in each material item of the Registrant's
income, gain, loss, deduction and credit. Pursuant to an
agreement dated October 22, 1976 between PNC Bank and The
Sandridge Corporation ("Sandridge"), Sandridge has agreed
that unless and until two years' notice is given and
Registrant has chosen a successor Non-Managing General
Partner, it will act as the Registrant's Non-Managing
General Partner in the manner described above. In
consideration thereof, PNC Bank has agreed to pay
Sandridge during the period it acts as the Registrant's
Non-Managing General Partner a fee, computed daily and
payable monthly, at the annual rate of 1/10 of 1% of the
Registrant's net assets.
PNC Bank and PIMC have agreed to bear all expenses
incurred by them in connection with their activities
other than the cost of securities (including brokerage
commissions, if any) purchased for Registrant.
(c) Inapplicable.
(d) Inapplicable.
-19-
<PAGE> 22
(e) Inapplicable.
(f) Inapplicable.
(g) Inapplicable.
(h) The custodian of Registrant's portfolio securities is the
Wilmington Trust Company, located at Wilmington Trust
Center, Rodney Square North, Wilmington, Delaware 19890.
The custodian has agreed to provide certain services as
depository and custodian for the Registrant.
Registrant's independent accountants are Coopers &
Lybrand L.L.P., located at 2400 Eleven Penn Center,
Philadelphia, Pennsylvania 19103. The following is a
general description of the services performed by Coopers
& Lybrand L.L.P.: auditing and reporting upon financial
statements; reviewing semi-annual report; and reporting
on internal control structure for inclusion in Form
N-SAR.
(i) Inapplicable.
Item 17. Brokerage Allocation and Other Practices
(a) Registrant effects transactions in portfolio securities
through brokers and dealers. Registrant paid aggregate
brokerage commissions of $0, $9,569 and $0 for the years
ended December 31, 1993, 1994, and 1995, respectively.
(b) Inapplicable.
(c) In placing orders with brokers and dealers for purchases
and sales of securities, PIMC attempts to obtain the best
net price and the most favorable execution of its orders.
In seeking best execution, PIMC uses its best judgment to
evaluate the terms of a transaction, giving consideration
to all relevant factors including the nature of the
transaction and of the markets for the security, the
financial condition and execution and settlement
capabilities of the broker-dealer, and the reasonableness
of any brokerage commission. Where the terms of a
transaction are comparable, PIMC may give consideration
to firms which supply investment research, statis-
-20-
<PAGE> 23
tical and other services to Registrant or to PNC Bank,
although there are no agreements to that effect with any
such firm. Research and statistical material furnished by
brokers without cost to PNC Bank and PIMC may tend to
benefit the Fund or other clients of PNC Bank and PIMC by
improving the quality of advice given.
(d) Inapplicable.
(e) Inapplicable.
Item 18. Capital Stock and Other Securities
(a) Inapplicable.
(b) Inapplicable.
Item 19. Purchase, Redemption, and Pricing of Securities
Being Offered
(a) Inapplicable.
(b) Net asset value per share for purposes of redemptions
Shares is determined by PIMC as of the close of business
on each day (other than a day during which no Shares are
tendered for redemption and no order to sell Shares is
received by the Registrant) in which there is a
sufficient degree of trading in the Registrant's
portfolio securities that the current net asset value of
the Registrant's Shares might be materially affected by
changes in the value of the portfolio securities. The
net asset value per share is computed by taking the total
value of all assets of Registrant less its liabilities
and dividing by the number of Shares outstanding.
Securities for which market quotations are readily
available are valued at their current market value in
the principal market in which such securities are
normally traded. These values are normally determined
by (i) the last sales price, if the principal
market is on the New York Stock Exchange or other
securities exchange (or the closing bid price, if there
has been no sales on such exchange on that day), or (ii)
the most recent
-21-
<PAGE> 24
bid price, if the principal market is other than an
exchange. Securities and other assets for which market
quotations are not readily available (including
restricted securities) are valued at their fair value as
determined in good faith under procedures established by
and under the general supervision of the Managing General
Partners. With respect to call options written on
portfolio securities, the amount of the premium received
is treated as an asset and amortized over the life of the
option, and the price of an option to purchase identical
securities upon the same terms and conditions is treated
as a liability marked to the market daily. The price of
options are normally determined by the last sales price
on the principal exchange on which such options are
normally traded (or the closing asked price if there has
been no sales on such exchange on that day).
(c) Inapplicable.
Item 20. Tax Status
In 1976, the Registrant received a ruling from the Internal Revenue
Service that for federal income tax purposes the Registrant will be
classified as a partnership and not as an association taxable as a
corporation. Such ruling is based upon the accuracy of certain
representations and the satisfaction of certain conditions throughout
the existence of the Registrant. If the Registrant fails (or is
unable) to comply with any required representations made by it in
obtaining the ruling or if any conditions of the ruling are not
satisfied, the ruling may become inapplicable retroactively to the
date of its issuance, and the Registrant may be treated as an
association for federal income tax purposes. If the Registrant were
treated as an association, it would be taxable as a corporation
paying corporate income tax on its income; its partners would be
treated as shareholders thereof; and distributions of income to
partners would be taxed to them as dividends.
The ruling that the Registrant will be treated as a partnership for
federal income tax purposes is conditioned upon the General Partners
maintaining in the aggregate an interest of at least 1% in each
material item of partnership income, gain, loss,
-22-
<PAGE> 25
deduction and credit. The General Partners met this requirement initially
by investing in the aggregate as General Partners not less than 1% of the
Fund's total capital outstanding. Substantially all of such investment
has been made by The Sandridge Corporation, the Non-Managing General
Partner. To ensure continued satisfaction of this requirement, the
Registrant's investment adviser, PNC Bank, has agreed that unless and
until two years' prior notice has been given to the Registrant and the
Registrant has chosen a successor Non-Managing General Partner, it will
provide the Registrant a Non-Managing General Partner who (i) will own at
least 1% of the Registrant's outstanding Shares, (ii) will continue to
stand for re-election as the Non- Managing General Partner, and (iii) will
not withdraw as the Non-Managing General Partner. No additional Shares of
the Registrant may be issued, except in payment of distributions to
holders of Shares and in connection with the admission of additional
general partners.
Furthermore, for the Registrant to be treated as a partnership for federal
income tax purposes, the Internal Revenue Service requires that its
General Partners have and maintain substantial net worth (in excess of
their partnership interests) which can be reached by creditors of the
Registrant. The meaning of "substantial" in these circumstances has not
been defined by Internal Revenue Service tax rulings. While there is no
assurance that the Registrant will be able to do so, it will attempt to
have at all times General Partners who meet such net worth requirements.
It should be noted that the Revenue Act of 1987 added section 7704 to the
Internal Revenue Code of 1986, as amended (the "Code"). Section 7704, which
is also known as the Publicly Traded Partnership Rules, provides that a
publicly traded partnership is to be treated as a corporation for federal
tax purposes. A publicly traded partnership is defined to include any
partnership whose interests are (1) traded on an established securities
market, or (2) readily tradeable on a secondary market (or the substantial
equivalent thereof). A transitional rule postpones the application of
section 7704 to a partnership which was a publicly traded partnership on
-23-
<PAGE> 26
December 17, 1987 until its first taxable year beginning after
December 31, 1997 provided that the partnership does not add a
substantial new line of business. The Registrant is eligible for the
transitional rule.
In 1998, upon its deemed incorporation for tax
purposes, the Registrant may elect to be taxed as a regulated
investment company in which case it would have to comply with the
qualifying income, asset diversification and other requirements of
Subchapter M of the Code. This election would permit the Registrant
to receive pass through tax treatment similar to that of a regular
partnership. The Registrant would continue to be organized for all
other purposes as a California Limited Partnership. If the Registrant
did not make the election or failed to meet the requirements of
Subchapter M of the Code, it would be taxed as a regular corporation
and any distributions to its partners would be taxed as ordinary
dividend income to the extent of the Registrant's earnings and
profits.
Item 21. Underwriters
(a) Inapplicable.
(b) Inapplicable.
(c) Inapplicable.
Item 22. Calculation of Performance Data
(a) Inapplicable.
(b) Inapplicable.
Item 23. Financial Statements
The audited financial statements and related report of Coopers &
Lybrand, L.L.P., independent auditors, contained in the annual report to
partners for the fiscal year ended December 31, 1995 (the "1995 Annual Report")
as filed with the Securities and Exchange Commission on March 1, 1996 are
incorporated herein by reference. No other parts of the 1995 Annual Report are
incorporated herein by reference. The financial statements included in the 1995
Annual Report have been incorporated herein in reliance upon the report of
Coopers & Lybrand, L.L.P. given on the authority of said firm as expert in
accounting and auditing. A copy of the 1995 Annual Report may be obtained by
writing to the Registrant or by calling (302) 792-2555.
-24-
<PAGE> 27
PART C. OTHER INFORMATION
Item A. Financial Statements and Exhibits
B. Financial Statements:
1. Part A:
None.
2. Part B:
Audited financial statements and related report of Coopers &
Lybrand, L.L.P. is contained in the annual report to
partners for the fiscal year ended December 31, 1995.
C. Exhibits:
1. (a) Restated Certificate and Agreement of Limited
Partnership dated October 22, 1976.
(b) Amendment to Registrant's Restated Certificate and
Agreement of Limited Partnership filed on June 16,
1983.
(c) Certificate of Limited Partnership filed November 14,
1984, and Amendment to Restated Certificate and
Agreement of Limited Partnership dated November 12,
1984.
(d) Amendment to Restated Certificate of Limited
Partnership dated January 4, 1988.
(e) Amendment to Restated Certificate of Limited
Partnership dated September 14, 1987.
(f) Amendment to Restated Certificate of Limited
Partnership dated October 12, 1978.
(g) Amendment to Restated Certificate of Limited
Partnership dated October 26, 1977.
(h) Amendment to Restated Certificate of Limited
Partnership dated April 24, 1992.
2. (a) Code of Regulations of Registrant.
(b) Amendment No. 1 to Registrant's Code of Regulations
adopted December 16, 1982.
3. Inapplicable.
<PAGE> 28
4. Specimen certificate for units of partnership interest in
Registrant is incorporated herein by reference to Exhibit
No. (4)(a)(1) of Amendment No. 2 to Registrant's
Registration Statement on Form S-5, filed on September 16,
1976.
5. Advisory Agreement dated January 19, 1983 among Registrant,
PNC Bank and PIMC, which was approved by the partners of
Registrant on April 13, 1983.
6. Inapplicable.
7. Chestnut Street Exchange Fund - Fund Office Retirement
Profit-Sharing Plan and Adoption Agreement.
8. Amended and Restated Custodian Agreement dated October 15,
1983, between Registrant and Wilmington Trust Company.
9. Inapplicable.
10. Inapplicable.
11. Inapplicable.
12. Inapplicable.
13. (a) Agreement dated September 15, 1976 between Registrant
and The Sandridge Corporation relating to Initial
Capitalization.
(b) Amendment No. 1 to Agreement dated September 15, 1976
relating to Initial Capitalization.
14. Inapplicable.
15. Inapplicable.
16. Inapplicable.
17. Financial Data Schedule of the Registrant as Exhibit 27.
18. Inapplicable.
<PAGE> 29
Item 25. Persons Controlled by or under Common Control with Registrant
Inapplicable.
Item 26. Number of Holders of Securities
<TABLE>
<CAPTION>
(1) (2)
Title of Number of Record Holders
Class as of March 31, 1996
<S> <C>
Shares of partnership
interest (no par value) 346
</TABLE>
Item 27. Indemnification
The answer to Item 19 of Amendment No. 2 to Registrant's
Registration Statement on Form N-8B-1 filed on September 16, 1976
is incorporated herein by reference.
Item 28. Business and Other Connections of Investment Adviser
(a) The information required by this Item 28 with respect to
each director, officer and partner of PIMC is incorporated by reference to
Schedule A of Form ADV and Schedule A and D filed by PIMC with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934 (the
"1934 Act") (SEC File No. 801-13304).
(b) To Registrant's knowledge, none of the directors or
principal officers of PNC Bank, N.A., except those set forth below, is, or has
been at any time during Registrant's past two fiscal years, engaged in any other
business, profession, vocation or employment of a substantial nature. Set forth
below are the names and principal businesses of the directors and principal
officers of PNC Bank, N.A. who are engaged in any other business, profession,
vocation or employment of a substantial nature.
(c) Set forth below are the names and principal businesses of
the directors and certain executives of PNC Bank who are engaged in any other
business, profession, vocation or employment of a substantial nature.
<PAGE> 30
PNC BANK, NATIONAL ASSOCIATION
DIRECTORS
<TABLE>
<CAPTION>
POSITION WITH TYPE
PNC BANK NAME OTHER BUSINESS CONNECTIONS OF BUSINESS
- -------- ---- -------------------------- -----------
<S> <C> <C> <C>
Director B.R. Brown Chairman and C.E.O. Coal
Consol Inc.
Consol Plaza
Pittsburgh, PA 15241
Director Constance E. Clayton Associate Dean, School of Public Medical
Health & Professor of Pediatrics
Medical College of PA,
Hahnemann University
430 E. Sedgwick Street
Philadelphia, PA 19119
Director Eberhard Faber IV Chairman and C.E.O. Manufacturing
E.F.L., Inc.
450 Hedge Road
P.O. Box 49
Bear Creek, PA 18602
Director Dr. Stuart Heydt President and C.E.O. Medical
Geisinger Foundation
100 N. Academy Avenue
Danville, PA 17822
Director Edward P. Junker, III Vice Chairman Banking
PNC Bank, N.A.
Ninth and State Streets
Erie, PA 16553
Director Thomas A. McConomy President, C.E.O. and Manufacturing
Chairman, Calgon Carbon
Corporation
413 Woodland Road
Sewickley, PA 15143
Director Thomas H. O'Brien Chairman Banking
PNC Bank, National Association
One PNC Plaza, 30th Floor
Pittsburgh, PA 15265
</TABLE>
<PAGE> 31
<TABLE>
<CAPTION>
POSITION WITH TYPE
PNC BANK NAME OTHER BUSINESS CONNECTIONS OF BUSINESS
- -------- ---- -------------------------- -----------
<S> <C> <C> <C>
Director Dr. J. Dennis O'Connor Provost, The Smithsonian Education
Institution
1000 Jefferson Drive, S.W.
Room 230, MRC 009
Washington, D.C. 20560
Director Rocco A. Ortenzio Chairman and C.E.O. Medical
Continental Medical Systems, Inc.
P.O. Box 715
Mechanicsburg, PA 17055
Director Jane G. Pepper President Horticulture
Pennsylvania Horticultural Society
325 Walnut Street
Philadelphia, PA 19106
Director Robert C. Robb, Jr. President, Lewis, Eckert, Robb Financial and
& Company Management
425 One Plymouth Meeting Consultants
Plymouth Meeting, PA 19462
Director James E. Rohr President and C.E.O. Bank Holding
PNC Bank, National Association Company
One PNC Plaza, 30th Floor
Pittsburgh, PA 15265
Director Daniel M. Rooney President, Pittsburgh Steelers Football
Football Club of the National
Football League
300 Stadium Circle
Pittsburgh, PA 15212
Director Seth E. Schofield Chairman and C.E.O. Airline
USAir, Inc.
2345 Crystal Drive
Arlington, VA 22227
</TABLE>
<PAGE> 32
PNC BANK, NATIONAL ASSOCIATION
OFFICERS
Robert V. Aiken Senior Vice President
John E. Alden Senior Vice President
James C. Altman Senior Vice President
John W. Atkinson Executive Vice President
Lila M. Bachelier Senior Vice President
R. Perrin Baker Chief Market Counsel, Northwest PA
James R. Bartholomew Senior Vice President
Peter R. Begg Senior Vice President
Donald G. Berdine Senior Vice President
James H. Best Senior Vice President
Eva T. Blum Senior Vice President
Susan B. Bohn Senior Vice President
Michael S. Borocz Senior Vice President
George Brikis Executive Vice President
Anthony J. Cacciatore Senior Vice President
Richard C. Caldwell Executive Vice President
Craig T. Campbell Senior Vice President
J. Richard Carnall Executive Vice President
Peter K. Classen President & C.E.O., PNC Bank, Northeast PA
Andra D. Cochran Senior Vice President
Sharon Coghlan Coordinating Market Chief Counsel,
Philadelphia
James P. Conley Senior Vice President
C. David Cook Senior Vice President
Alfred F. Cordasco Supervising Counsel, Pittsburgh, PA
Robert Crouse Senior Vice President
Keith P. Crytzer Senior Vice President
John J. Daggett Senior Vice President
Anuj Dhanda Senior Vice President
Victor M. DiBattista Chief Regional Counsel
Thomas C. Dilworth Senior Vice President
James Dionise Senior Vice President and C.F.O.
Patrick S. Doran Senior Vice President, Head of Consumer
Lending
Robert D. Edwards Senior Vice President
<PAGE> 33
PNC BANK, NATIONAL ASSOCIATION
OFFICERS
David J. Egan Senior Vice President
J. Lynn Evans Senior Vice President & Controller
William E. Fallon Senior Vice President
James M. Ferguson, III Senior Vice President
Frederick C. Frank, III Executive Vice President
William J. Friel Executive Vice President
John F. Fulgoney Coordinating Market Chief Counsel, Northeast
PA
Brian K. Garlock Senior Vice President
George D. Gonczar Senior Vice President
Richard C. Grace Senior Vice President
James S. Graham Senior Vice President
Michael J. Hannon Senior Vice President
Stephen G. Hardy Senior Vice President
Michael J. Harrington Senior Vice President
Marva H. Harris Senior Vice President
Maurice H. Hartigan, II Executive Vice President
G. Robert Hoffman Executive Vice President
Sylvan M. Holzer Executive Vice President
John M. Infield Senior Vice President
Joe R. Irwin Executive Vice President
Philip C. Jackson Senior Vice President
William J. Johns Controller
William R. Johnson Audit Director
Edward P. Junker, III Vice Chairman
Robert D. Kane Senior Vice President
Michael D. Kelsey Chief Compliance Counsel
Randall C. King Senior Vice President
Joseph E. Kloecker Senior Vice President
Christopher M. Knoll Senior Vice President
Richard C. Krauss Senior Vice President
Frank R. Krepp Senior Vice President & Chief Credit Policy
Officer
Kenneth P. Leckey Senior Vice President & Cashier
Marilyn R. Levins Senior Vice President
Carl J. Lisman Executive Vice President
<PAGE> 34
PNC BANK, NATIONAL ASSOCIATION
OFFICERS
William H. Lochman Senior Vice President
George Lula Senior Vice President
Jane E. Madio Senior Vice President
Nicholas M. Marsini, Jr. Senior Vice President
David O. Matthews Senior Vice President
Walter B. McClellan Senior Vice President
James C. Mendelson Senior Vice President
Scott C. Meves Senior Vice President
J. William Mills Senior Vice President
Barbara A. Misner Senior Vice President
Marlene D. Mosco Senior Vice President
Scott Moss Senior Vice President
Peter F. Moylan Senior Vice President
Michael B. Nelson Executive Vice President
Thomas J. Nist Senior Vice President
Thomas H. O'Brien Chairman
James F. O'Day Senior Vice President
Cynthia G. Osofsky Senior Vice President
George R. Partridge Senior Vice President
David M. Payne Senior Vice President
Charles C. Pearson, Jr. President and CEO, PNC Bank, Central PA
Helen P. Pudlin Senior Vice President
Edward V. Randall, Jr. President and CEO, PNC Bank, Pittsburgh
Richard C. Rhoades Senior Vice President
Bryan W. Ridley Senior Vice President
James E. Rohr President and Chief Executive Officer
Gary Royer Senior Vice President
William Sayre, Jr. Senior Vice President
David W. Schoffstall Executive Vice President
Timothy G. Shack Senior Vice President
Douglas E. Shaffer Senior Vice President
Alfred A. Silva Senior Vice President
George R. Simon Senior Vice President
Richard L. Smoot President and CEO of PNC Bank, Philadelphia
<PAGE> 35
PNC BANK, NATIONAL ASSOCIATION
OFFICERS
Timothy N. Smyth Senior Vice President
Kenneth S. Spatz Senior Vice President
Darcel H. Steber Senior Vice President
William F. Strome Senior Vice President and Secretary
Herbert G. Summerfield, Jr. Executive Vice President
Stephen L. Swanson Executive Vice President
Jane B. Tompkins Senior Vice President
Robert B. Trempe Senior Vice President
Kevin M. Tucker Senior Vice President
Alan P. Vail Senior Vice President
Bruce E. Walton Executive Vice President
Annette M. Ward-Kredel Senior Vice President
Arlene M. Yocum Senior Vice President
Carole Yon Senior Vice President
David E. Zuern President & C.E.O., PNC Bank, Northwest PA
Item 29. (a) Principal Underwriters
Inapplicable.
Item 30. (b) Location of Accounts and Records
Books or other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940 and the Rules (17 CFR 270.31a-1 to
31a-3) promulgated thereunder, are maintained by PIMC at 400 Bellevue Parkway,
Suite 100, Wilmington, Delaware 19809 except for the Certificate and Agreement
of Limited Partnership and Code of Regulations which are maintained by the
Secretary of the Registrant at Philadelphia National Bank Building, 1345
Chestnut Street, Philadelphia, Pennsylvania 19107-3496.
Item 31. (c) Management Services
None.
<PAGE> 36
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the following with respect to Amendment No.
19 to the Registration Statement (No. 811-2631) on Form N-1A under the
Investment Company Act of 1940, as amended, of Chestnut Street Exchange Fund:
1. The incorporation by reference of our report dated February
16, 1996 accompanying the financial statements of Chestnut
Street Exchange Fund.
2. The reference to our Firm under the heading "Investment
Advisory and Other Services" and "Financial Statements" in
the Statement of Additional Information.
/s/ Coopers & Lybrand L.L.P.
- ----------------------------
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
April 26, 1996
<PAGE> 37
SIGNATURE
Pursuant to the requirements of the Investment Company Act of
1940, the Registrant has duly caused this Amendment No. 19 to its Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wilmington, and State of Delaware, on the 26th day of
April, 1996.
CHESTNUT STREET EXCHANGE FUND
By /s/ Edward J. Roach
--------------------------
Edward J. Roach
Treasurer
<PAGE> 38
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
- ------- ------ -----------
<S> <C> <C>
(1)(a) Restated Certificate and Agreement of Limited
Partnership dated October 22, 1976.
(1)(b) Amendment to Registrant's Restated Certificate and
Agreement of Limited Partnership filed on June 16,
1983.
(1)(c) Certificate of Limited Partnership filed November 14,
1984, and Amendment to Restated Certificate and
Agreement of Limited Partnership dated November 12,
1984.
(1)(d) Amendment to Restated Certificate of Limited
Partnership dated January 4, 1988.
(1)(e) Amendment to Restated Certificate of Limited
Partnership dated September 14, 1987.
(1)(f) Amendment to Restated Certificate of Limited
Partnership dated October 12, 1978.
(1)(g) Amendment to Restated Certificate of Limited
Partnership dated October 26, 1977.
(1)(h) Amendment to Restated Certificate of Limited
Partnership dated April 24, 1992.
(2)(a) Code of Regulations of Registrant.
(2)(b) Amendment No. 1 to Registrant's Code of Regulations
adopted December 16, 1982.
(5) Advisory Agreement dated January 19, 1983.
(7) Fund Office Retirement Profit-Sharing Plan and
Adoption Agreement.
(8) Amended and Restated Custodian Agreement dated October
15, 1983.
(13)(a) Agreement dated September 15, 1976 relating to Initial
Capitalization.
(13)(b) Amendment No. 1 to Agreement dated September 15, 1976
relating to Initial Capitalization.
(27) Financial Data Schedule of the Registrant.
</TABLE>
<PAGE> 1
EXHIBIT 1(a)
TABLE OF CONTENTS
TO
RESTATED CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP
OF
CHESTNUT STREET EXCHANGE FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I - NAME AND STATUTORY OFFICE............................................................. 1
1.1 Name..................................................................................... 1
1.2 Principal Place of Business.............................................................. 1
ARTICLE II - CHARACTER OF THE BUSINESS OF THE FUND................................................ 2
2.1 Purpose.................................................................................. 2
2.2 Investment Objectives.................................................................... 2
2.3 Operating Powers......................................................................... 2
2.4 Investment Limitations................................................................... 3
ARTICLE III - GENERAL PARTNERS.................................................................... 5
3.1 Identity of Managing and Non-Managing General Partners................................... 5
3.2 Designation and Election of Successor or Additional General Partners..................... 5
3.3 Management and Control................................................................... 6
3.4 Limitations on the Authority of the General Partners..................................... 8
3.5 Action by the General Partners........................................................... 8
3.6 Reimbursement and Indemnification........................................................ 9
3.7 Limitation of Liability to Shareholders.................................................. 10
3.8 Termination of Status and Interest of General Partners................................... 10
3.9 Right of General Partners to Become Limited Partners..................................... 11
3.10 No Agency............................................................................... 11
3.11 Voting of Shares Owned by General Partners.............................................. 11
ARTICLE IV - LIMITED PARTNERS..................................................................... 11
4.1 Identity of Limited Partners............................................................. 11
4.2 Sales of Additional Shares: Admission of
Additional Limited Partners.............................................................. 11
4.3 Right to Assign Shares: Substituted and
Additional Limited Partners.............................................................. 12
4.4 No Power to Control Business............................................................. 13
4.5 Limited Liability........................................................................ 13
4.6 Limited Partners Not Personally Liable................................................... 14
</TABLE>
-i-
<PAGE> 2
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
4.7 Death of a Limited Partner............................................................... 14
4.8 Partners' Representations to the Fund.................................................... 14
ARTICLE V - CAPITAL CONTRIBUTIONS: SALES OF SHARES;
ALLOCATIONS TO SHARES................................................................... 15
5.1 Shares of Partnership Interest.......................................................... 15
5.2 Contributions for Issuance of Shares.................................................... 15
5.3 Minimum Capitalization of the Fund: Initial
Public Offering......................................................................... 16
5.4 Contributions by General Partners....................................................... 16
5.5 Contributions by the Limited Partners................................................... 17
5.6 Allocation of Fund Income, Gains, Losses,
Deductions and Credits Among the Shares................................................. 18
ARTICLE VI - DISTRIBUTIONS AND RETURNS OF CONTRIBUTIONS........................................... 18
6.1 In General.............................................................................. 18
6.2 Distributions with Respect to Income and Net
Realized Capital Gains.................................................................. 18
6.3 Distributions in Connection With Redemption of
Shares.................................................................................. 19
6.4 Distributions upon Winding Up of the Fund............................................... 21
6.5 Returns of Contributions................................................................ 22
ARTICLE VII - PARTNERS' RIGHTS TO VOTE UPON MATTERS
AFFECTING THE BASIC STRUCTURE OF THE FUND:
EXERCISE OF VOTING RIGHTS............................................................... 23
7.1 Voting Rights of Partners............................................................... 23
7.2 Meetings of the Partners................................................................ 24
7.3 Quorum and Required Vote at Meetings of the
Partners................................................................................ 24
7.4 Action by Written Consent............................................................... 25
ARTICLE VIII - TERMS AND DISSOLUTION OF THE FUND.................................................. 25
8.1 Term.................................................................................... 25
8.2 Events Causing Earlier Dissolution of the Fund.......................................... 25
8.3 Right of General Partners to Continue the Business
of the Fund in Certain Events........................................................... 26
8.4 Right of the Partners to Provide for Continuation
of the Business of the Fund in Certain Events........................................... 26
ARTICLE IX - FUND DOCUMENTATION; AMENDMENT OF THE
CERTIFICATE AND AGREEMENT; POWER-OF-ATTORNEY............................................ 27
9.1 Certificate and Agreement and Other Documentation....................................... 27
9.2 Events Requiring Amendment of Certificate and Agreement................................. 27
9.3 Partnership Authorization............................................................... 28
9.4 Power of Attorney by Substituted or Additional
Limited Partners........................................................................ 30
</TABLE>
-ii-
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
9.5 Amendments Requiring Signature by Less than All
Limited Partners....................................................................... 30
9.6 Amendments Requiring Signature by all Partners......................................... 30
ARTICLE X - BOOKS AND RECORDS, STATEMENTS
AND INCOME TAX INFORMATION............................................................. 30
10.1 Fiscal Year............................................................................ 30
10.2 Records and Accounting................................................................. 30
10.3 Periodic Financial Statements.......................................................... 31
10.4 Record Dates........................................................................... 31
10.5 Income Tax Information................................................................. 32
10.6 Statement Upon Winding Up of the Fund.................................................. 32
ARTICLE XI - GENERAL PROVISIONS.................................................................. 32
11.1 Definitions............................................................................ 32
11.2 Independent Activities................................................................. 34
11.3 Custodian.............................................................................. 34
11.4 Benefit................................................................................ 34
11.5 Nonrecourse Creditors.................................................................. 34
11.6 Tax Election........................................................................... 34
11.7 Notices................................................................................ 35
11.8 Captions............................................................................... 35
11.9 Certificate and Agreement in Counterparts.............................................. 35
11.10 Agent for Service of Process.......................................................... 35
11.11 Principles of Construction; Severability.............................................. 35
11.12 California Law........................................................................ 35
11.13 Integrated Agreement.................................................................. 36
</TABLE>
SCHEDULE "A": Names, Places of Residence, Number of Shares of
Partnership Interest, and Contributions of General
and Limited Partners.
-iii-
<PAGE> 4
CHESTNUT STREET EXCHANGE FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
RESTATED CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP
This RESTATED CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP (the
"Certificate and Agreement") has been executed and delivered among the General
Partners and Limited Partners herein named, for the purpose of amending and
restating in full the Restated Certificate and Agreement of Limited Partnership
dated as of September 16, 1976, recorded on September 16, 1976, as Document
Number 3504, in the official records of the office of the County Recorder of Los
Angeles County, California, of Chestnut Street Exchange Fund (a California
Limited Partnership), a limited partnership formed pursuant to the Uniform
Limited Partnership Act as enacted by the State of California.
WHEREAS, the General Partners and Limited Partners herein named have
formed a Limited Partnership under the laws of the State of California which
will qualify as a diversified, open-end, management investment company under the
Investment Company Act of 1940;
WHEREAS, the General and Limited Partners desire to amend and restate
the Restated Certificate and Agreement of Limited Partnership previously
recorded as described above;
NOW, THEREFORE, THE GENERAL PARTNERS AND THE LIMITED PARTNERS HEREIN
NAMED HEREBY AMEND AND RESTATE THE RESTATED CERTIFICATE AND AGREEMENT OF LIMITED
PARTNERSHIP OF CHESTNUT STREET EXCHANGE FUND (A CALIFORNIA LIMITED PARTNERSHIP)
IN FULL AS FOLLOWS:
ARTICLE I
NAME AND STATUTORY OFFICE
1.1 Name. This Partnership shall be known as and shall operate under
the firm name of "CHESTNUT STREET EXCHANGE FUND (A California Limited
Partnership)".
1.2 Principal Place of Business. The principal place of business of
the Partnership for purposes of Section 15502 of the Partnership Act shall be
555 Capitol Mall, Sacramento, California 95814 (Attn: Loren S. Dahl, Esquire).
The Managing General Partners may from time to time establish additional places
of business of the Partnership in such other locations, within and without
California, as they deem necessary or desirable for the conduct of the
Partnership's business.
<PAGE> 5
ARTICLE II
CHARACTER OF THE BUSINESS OF THE FUND
2.1 Purpose. The purpose of the Fund is to create and operate an
open-end, diversified management investment company which will qualify under the
1940 Act, and will be classified as a partnership under the Internal Revenue
Code of 1954.
2.2 Investment Objectives. The Fund's investment objectives are to
seek long-term growth of capital and, secondarily, current income. The Fund will
invest in a portfolio of common stocks and securities convertible into common
stocks, and may also invest in other types of securities for temporary or
defensive purposes including preferred stocks, investment grade bonds,
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, certificates of deposit, commercial paper and other
"money-market" obligations. Up to 10% of the value of the Fund's total assets
may be invested in securities which are subject to legal or contractual
restrictions on resale (for example restrictions on resale without registration
under the 1933 Act). The Fund may write exchange-traded call options on
portfolio securities and may loan portfolio securities as permitted under
Section 2.4, "Investment Limitations" below.
2.3 Operating Powers. Subject to the Fund's Investment Objectives in
Section 2.2 and its Investment Limitations in Section 2.4, the Fund shall have
the power to: (a) to invest and trade in capital stock, subscriptions, bonds,
notes, debentures, trust receipts and other securities of any corporation or
entity; (b) to engage personnel and do such other acts and incur such other
expenses on behalf of the Fund as may be necessary or advisable; (c) to engage
attorneys, accountants or such other persons as may be deemed necessary or
advisable; (d) to receive, acquire, buy, sell, exchange, trade, loan, borrower
and otherwise deal in and with property; (e) to open, conduct and close accounts
with brokers and to pay the customary fees and charges applicable to
transactions in all such accounts; (f) to open, maintain, and close bank
accounts and to draw checks and other orders for the payment of money; (g) to
enter into, make and perform such contracts, agreements and other undertakings,
and to do such other acts, as may be deemed necessary or advisable, including,
without in any manner limiting the generality of the foregoing, contracts,
agreements, undertakings and transactions with any Partner or with any other
person, firm or corporation having any business, financial or other relationship
with any Partner; (h) to institute and prosecute litigation arising out of the
regular course of its affairs or in the enforcement of its obligations due it,
including all rights of appeal; (i) to compromise and settle any claims against
the Fund and to provide for indemnification by the Fund in the Fund's contracts
and
-2-
<PAGE> 6
agreements; (j) to defend any litigation, including all rights of appeal,
whether or not arising in the regular course of its affairs; (k) to appear
before any governmental board or agency or to otherwise participate in any
administrative review or appeal; (l) to employ one or more investment advisors
for the Fund to supervise the Fund's investments and to administer the affairs
of the Fund subject to the provisions of this Certificate and Agreement; (m) to
file and publish all such certificates, notices, statements or other instruments
required by law for the formation and operation of a limited partnership in any
jurisdictions where the Fund may elect to do business; (n) to exercise any and
all other powers which may be necessary to implement the purposes, policies and
powers of the Fund and not inconsistent therewith, including those granted to
limited partnerships under the Uniform Limited Partnership Act of the State of
California; and (o) to exercise such other powers as the Managing General
Partners reasonably believe to be necessary to comply with the provisions of the
1940 Act.
2.4 Investment Limitations. The Fund shall not: (a) invest more than
5% of its assets at the time of purchase in securities of any one issuer
(exclusive of securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities); (b) purchase securities if such purchase would
result in the Fund owning more than 10% of the outstanding voting securities of
any one issuer at the time of purchase, (c) invest in securities of companies
which have a record, together with their predecessors, of less than five years
of continuous operation; (d) borrow money except from banks in amounts which in
the aggregate do not exceed 10% of the value of its assets at the time of
borrowing, or mortgage, pledge or hypothecate its assets except to secure such
borrowings in amounts not exceeding 10% of the value of its assets. This
borrowing provision is not for purposes of leverage but is intended to
facilitate the orderly sale of portfolio securities to accommodate abnormally
heavy redemption requests, and to pay subscription fees due with respect to the
exchange without having to sell portfolio securities. Securities may be
purchased for the Fund's portfolio while borrowings are outstanding; (e) make
loans except by (x) the purchase of debt securities in accordance with its
investment objectives, and (y) the loaning of securities against collateral
consisting of cash or securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities which is equal at all times at least 100% of
the value of the securities loaned. The purchase of publicly issued debt
securities shall not be considered the making of a loan. The Fund will lend
portfolio securities only when the investment adviser believes that the net
return to the Fund in consideration of the loan is reasonable, that any fee paid
for placing the loan is reasonable and based solely upon services rendered, that
the loan is consistent with the Fund's investment objectives, and that no
affiliate of the Fund or of the investment adviser is involved in the lending
-3-
<PAGE> 7
transaction or is receiving any fees in connection therewith. The Fund will not
have the right to vote securities loaned, but will have the right to terminate
such a loan at any time and receive back equivalent securities, and to receive
amounts equivalent to all dividends and interest paid on the securities loaned;
(f) purchase or hold securities of any company if, to the knowledge of the Fund,
those General Partners of the Fund and those directors and officers above the
level of senior Vice President of its investment adviser beneficially owning
more than one-half of 1% of the securities of that company, together own
beneficially more than 5% of the securities of such company taken at market
value; (g) purchase or sell commodities or commodity contracts; purchase
securities on margin or sell any securities short; purchase the securities of
other investment companies except that the Fund may accept for exchange shares
of common stock of Coca Cola International Corporation in accordance with the
limitations imposed by the 1940 Act; purchase oil, gas or other mineral leases
or partnership interests in oil, gas or other mineral exploration programs;
invest in companies for the purpose of exercising control or management; act as
an underwriter (except as it may be deemed such in a sale of restricted
securities owned by it); or buy or sell real estate; (h) purchase or write puts,
calls, straddles or spreads with respect to any security except that (x) the
Fund may write call options on securities constituting not more than 5% of the
value of its assets if the option is listed on a national securities exchange
and at all times while the option is outstanding, the Fund owns the securities
against which the option is written or owns securities convertible into such
securities, and (y) the Fund may purchase call options in closing purchase
transactions to liquidate its position as an option writer; or (i) knowingly
purchase or otherwise acquire any equity or debt securities which are subject to
legal or contractual restrictions on resale if, as a result thereof, more than
10% of the value of its assets would be invested in such securities.
It is not the policy of the Fund to concentrate its investments in any
particular industry, but if it is deemed advisable in light of the Fund's
investment objectives, up to 25% of the value of its assets may be invested in
any one industry. The Fund will not be required to reduce holdings in a
particular industry if, solely as a result of price changes, the value of such
holdings exceeds 25% of the value of the Fund's total assets.
The limitations and policies set forth in this Section 2.4 may not be
changed without a Majority Shareholder Vote as defined in Section 11.1(a) of
Article XI hereof.
-4-
<PAGE> 8
ARTICLE III
GENERAL PARTNERS
3.1 Identity of Managing and Non-Managing General Partners. The
General Partners of the Fund shall consist of Managing and Non-Managing General
Partners. Only individuals may act as Managing General Partners, and all
individual General Partners shall act as Managing General Partners. Any General
Partner which is a corporation, association, partnership, joint venture or trust
shall act as a Non-Managing General Partner.
A Non-Managing General Partner shall take no part in the management,
conduct or operation of the Fund's business and shall have no authority to act
on behalf of the Fund or to bind the Fund, except to the limited extent
permitted in Sections 3.2 and 8.3 below, and to the extent that a Non-Managing
General Partner may be authorized by the Managing General Partners to act in one
or more capacities described in Section 3.3(e) or (f) below.
The names of the currently acting Managing and Non-Managing General
Partners, their places of residence and the number of Shares owned by each of
them are set forth in Schedule "A" to this Certificate and Agreement and are
incorporated herein by this reference.
3.2 Designation and Election of Successor or Additional General
Partners. The Managing General Partners shall determine from time to time the
number of persons who will be proposed for election as General Partners. In each
year at the annual meeting of Partners or at any special meeting held in lieu
thereof, the Partners shall elect the General Partners. Each of the Managing and
Non-Managing General Partners shall serve until the next annual meeting or
special meeting in lieu thereof and until the election and qualification of the
person's successor, or until the person's status as such is sooner terminated as
provided in Section 3.8 below. If at any time the number of Managing General
Partners is reduced to less than three, the remaining Managing General Partners
shall, within 120 days, call a meeting of Partners for the purpose of electing
an additional Managing General Partner or Managing General Partners so as to
restore the number of Managing General Partners to at least three. If there are
no remaining Managing General Partners, the Non-Managing General Partner(s)
shall, within 120 days, call such a meeting of Partners for such purpose.
In the event the status of all persons acting as Non-Managing General
Partners is terminated as provided in Section 3.8 below, the Managing General
Partners may appoint a person satisfying the requirements of this Certificate
and Agreement to act as a Non-Managing General Partner until such person or its
successor is elected by the Partners as provided herein. Subject
-5-
<PAGE> 9
only to the preceding sentence, a person may be added or substituted as a
General Partner only upon his election by the Partners as provided herein. Each
General Partner, by becoming a General Partner, consents to the appointment of a
Non-Managing General Partner in the circumstances of the first sentence of this
paragraph and to the admission as an added or substituted General Partner of any
person elected by the Partners in accordance with this Certificate and
Agreement. Each Partner, by becoming a Partner of the Fund, consents to and
ratifies the actions of the General Partners in determining the persons who will
be proposed for election and admission as additional or substituted General
Partners, and in appointing a person to act as Non-Managing General Partner in
the circumstances of the first sentence of this paragraph, and the actions of
the Partners in electing an additional or substituted General Partner pursuant
to the procedure in Article VII of this Certificate and Agreement.
Any General Partner who is elected at a meeting of the Partners and who
is not then serving as a General Partner shall be admitted to the Partnership as
a General Partner effective as of the date of such election.
3.3 Management and Control. Subject to the provisions of this
Certificate and Agreement, the business of the Fund shall be managed solely by
the Managing General Partners, and they shall have complete and exclusive
control over the management, conduct and operation of the Fund's business.
Except as otherwise specifically provided in this Certificate and Agreement, the
Managing General Partners, acting pursuant to Section 3.5 hereof, shall have the
right, power and authority, on behalf of the Fund and in its name to exercise
all of the rights, powers and authority of a partner in a partnership without
limited partners under the California Uniform General Partnership Act. Without
limiting the foregoing, but subject to the Investment Limitations in Section 2.4
above and the right of the Partners to vote on certain matters affecting the
basic structure of the Fund in Article VII below, the Managing General Partners,
acting pursuant to Section 3.5 below, shall have the power and authority to: (a)
adopt, amend and repeal a Code of Regulations not inconsistent with this
Certificate and Agreement providing for the operation of the Fund; (b) appoint
one of their number to be President, who shall preside at all meetings of
Partners, shall be responsible for the execution of policies established by the
Managing General Partners and may be the chief executive, financial and
accounting officer; (c) appoint from their own number, and terminate, any one or
more committees consisting of two or more managing General Partners, including
an executive committee which may, when the Managing General Partners are not in
session, exercise some or all of the power and authority of the Managing General
Partners as the Managing General Partners may determine; (d) elect and appoint,
delegate authority to, remove and terminate such officers and agents (who need
not be Partners) as they consider
-6-
<PAGE> 10
appropriate; (e) subject always to the continuing supervision of the Managing
General Partners, contract with one or more banks, trust companies, investment
advisers or other persons for the performance of such functions as they may
determine, including, but not by way of limitation, the investment and
reinvestment of all or part of the Fund's assets and effecting portfolio
transactions, and any or all administrative functions of the Fund; (f) at any
time and from time to time, contract with any corporation, trust, association or
other person to act as exclusive or nonexclusive distributor or Principal
Underwriter for the Shares; (g) purchase and pay for entirely out of Fund
property insurance policies insuring the Shareholders, General Partners, Limited
Partners, officers, employees, agents, investment advisers, principal
underwriters, or independent contractors of the Fund individually against all
claims and liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action alleged to
have been taken or omitted by any such person as Partner, officer, employee,
agent, investment adviser, principal underwriter, or independent contractor,
including any action taken or omitted that may be determined to constitute
negligence, whether or not the Fund would have the power to indemnify such
person against such liability; and (h) pay or cause to be paid out of the
principal or income of the Fund, or partly out of principal and partly out of
income, all expenses, fees, charges, taxes and liabilities incurred or arising
in connection with the Fund, or in connection with the management thereof,
including but not limited to, the General Partners' compensation and such
expenses and charges for the services of the Fund's officers, employees,
investment adviser or manager, Principal Underwriter, auditor, counsel,
custodian, transfer agent, Shareholder servicing agent, and such other agents or
independent contractors and such other expenses and charges as the Managing
General Partners may deem necessary or advisable to incur.
The Managing General Partners shall devote themselves to the Fund's
business to the extent they may determine necessary for the efficient conduct
thereof, which need not, however, occupy their full time. General Partners may
also engage in other businesses, whether or not similar in nature to the
business of the Fund, subject to the limitations of the 1940 Act. Further,
subject to the limitations of the 1940 Act and the Partnership Act, the fact
that:
(i) any of the Partners or officers of the Fund is a
shareholder, director, officer, partner, trustee, employee, manager,
adviser, Principal Underwriter or distributor or agent of or for any
corporation, trust, association, or other person, or of or for any
parent or affiliate of any person which handles brokerage transactions
for the Fund or with which the Fund has or may hereafter enter into an
-7-
<PAGE> 11
advisory or management contract, or Principal Underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
contract, or that any such organization, or any parent or affiliate
thereof, is a Shareholder or has an interest in the Fund, or that
(ii) any corporation, trust, association or other person which
handles brokerage transactions for the Fund or with which the Fund has
or may hereafter enter into an advisory or management contract or
Principal Underwriter's or distributor's contract, or transfer,
Shareholder servicing or other contract, also has an advisory or
management contract, or Principal Underwriter's or distributor's
contract, or transfer, Shareholder servicing or other contract with one
or more other corporations, trusts, associations, or other persons, in
which any of the Partners or officers of the Fund may have an interest,
shall not preclude such contracts or dealings, or affect the validity of any
such contract or dealings or disqualify any Partner or officer of the Fund from
voting upon or executing the same or create any liability or accountability to
the Fund or its Shareholders with respect to such contract or dealings.
3.4 Limitations on the Authority of the General Partners. The
General Partners shall have no authority without the vote or written consent of
all of the Limited Partners to: (a) do any act in contravention of this
Certificate and Agreement, as it may be amended, or which would make it
impossible to carry on the ordinary business of the Fund; (b) confess a judgment
against the Fund; or (c) possess Fund property, or assign the Fund's rights in
specific Fund property, for other than a Fund purpose.
In addition, certain actions of the Managing General Partners shall be
subject to a Majority Shareholder Vote as provided in paragraph 7.3 below.
3.5 Action by the General Partners. Except as may otherwise be
provided herein or from time to time in the Code of Regulations, any action to
be taken by the Managing General Partners shall be taken: (a) by a majority of
the Managing General Partners present at a meeting of the Managing General
Partners at which at least 50% of the Managing General Partners are present,
within or without California, including any meeting held by means of a
conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other at the same time, and
participation by such means shall constitute presence at a meeting; or (b) by
unanimous written consent of the Managing General Partners acting without a
meeting, unless the 1940 Act or the Partnership Act requires that a particular
action be taken by a greater vote or only at a meeting in person of the Managing
General Partners.
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<PAGE> 12
Each Managing General Partner shall have one vote. No single Managing General
Partner shall have authority to act on behalf of the Partnership or to bind the
Partnership except as specifically authorized in a particular case by the
Managing General Partners.
3.6 Reimbursement and Indemnification. The General Partners shall
be reimbursed for all reasonable out-of-pocket expenses incurred in performing
their duties hereunder. Each General Partner and officer of the Fund, each
corporate Non- Managing General Partner and officer and director thereof, and
each former General Partner who has not ceased to be liable as a General Partner
under the Partnership Act (herein collectively referred to as "Agent"), shall be
indemnified by the Fund, to the extent permitted by applicable law, against
judgments, fines, amounts paid in settlement, and expenses (including counsel
fees) reasonably incurred by such Agent by virtue of being threatened to be
made, being or having been a party to any civil, criminal, administrative or
investigative proceeding in which such Agent is involved or threatened to be
involved by reason of such person being an Agent, provided that the Agent acted
in good faith and in a manner the Agent reasonably believed to be within the
scope of such person's authority and for a purpose which such person reasonably
believed to be in the best interests of the Fund or the Limited Partners. To the
extent that an Agent has been successful on the merits or otherwise in defense
of any such proceeding or in defense of any claim or matter therein, such person
shall be deemed to have acted in good faith and in a manner such person
reasonably believed to be in the best interests of the Fund or the Limited
Partners. The determination under any other circumstances as to whether an Agent
acted in good faith and in a manner such person reasonably believed to be within
the scope of the person's authority and for a purpose which the person
reasonably believed to be in the best interests of the Fund or the Limited
Partners shall be made, (i) by action of the Managing General Partners who were
not parties to such proceedings, or (ii) the court in which such proceeding is
or was pending, upon application made by the Fund or the Agent (whether or not
such application is opposed by the Fund), or (iii) by independent legal counsel
(who may not be the regular counsel for the Fund) in a written opinion. No Agent
shall be indemnified against any liability to the Fund or its Partners to which
he would otherwise be subjected by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office.
The foregoing indemnification provisions shall not preclude any other
rights to which those persons indemnified hereunder may be entitled under any
applicable statute, agreement, vote of the General Partners or Limited Partners
or otherwise, nor shall the foregoing preclude the Fund from purchasing and
maintaining insurance on behalf of any Agent against liability which may be
asserted against or incurred by the Agent in such capacity,
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whether or not the Fund would have the power to indemnify the Agent against such
liability under the provisions of this Section 3.6.
Expenses incurred in defending any proceeding may be advanced by the
Fund prior to final disposition of such proceeding upon receipt of an
undertaking by or on behalf of the Agent to repay such amount unless it shall be
determined ultimately that the Agent is entitled to be indemnified as authorized
in this Section 3.6.
3.7 Limitation of Liability to Shareholders. No General Partner
shall have any personal liability to any Shareholder for the repayment of the
contributions with respect to Shares held by him, or for the payment of the
amount standing in the individual accounts of the Limited Partners or any
portion thereof; any such amounts shall be paid solely from assets of the Fund,
if any, sufficient therefor, according to the terms of the Certificate and
Agreement. Nor, to the extent permitted by the Partnership Act and the 1940 Act,
shall the General Partners be liable to any Shareholder for any neglect or
wrongdoing of any officer, agent, employee, investment adviser or principal
underwriter of the Fund, or by reason of any change in the federal or state
income tax laws, or in interpretations thereof, as they apply to the Partnership
and the Shareholders, whether such change occurs through legislative, judicial
or administrative action, provided, that nothing herein shall protect a General
Partner against any liability to which he would otherwise be subject by reason
of misfeasance, bad faith, negligence, or reckless disregard of the duties
involved in the conduct of his office.
3.8 Termination of Status and Interest of General Partners.
(a) The status and interest of a person as a Managing
General Partners shall terminate and such person shall have no further right or
power to act as General Partner (except to execute any amendment to this
Certificate and Agreement to evidence his termination) effective when and if he:
(1) dies; (2) becomes insane; (3) is adjudicated a bankrupt; (4) voluntarily
retires effective upon not less than 180 days' written notice to the other
General Partners or election of his successor, whichever first occurs; (5) fails
to be re-elected by the Partners, as provided in Section 3.2 above; or (6) is
removed by the Partners, as provided in Section 7.1 below.
(b) The status and interest of a person as a Non- Managing
General Partner shall terminate effective when and if it: (1) is adjudicated a
bankrupt; (2) fails to be re-elected as provided in Section 3.2 above; or (3) is
removed by the Partners as provided in Section 7.1 below, or voluntarily retires
in accordance with the provisions of any agreement it may enter into
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with the Fund pertaining to its obligations as a Non-Managing General Partner.
(c) Termination of a person's status as a General Partner
shall not affect his status, if any, as a Limited Partner. A General Partner
shall not be entitled to any special payment from the Partnership as a result of
termination of his status as General Partner. Upon termination of his status and
in interest as a General Partner, a General Partner may redeem his Shares in
accordance with Section 6.3 or retain such Shares as a Limited Partner.
3.9 Right of General Partners to Become Limited Partners. A General
Partner may also become a Limited Partner and thereby become entitled to all of
the rights of a Limited Partner to the extent of the Limited Partnership
interest so acquired, and the consent of the Limited Partners thereto need not
be obtained. Such event shall not, however, affect such General Partner's
liability hereunder.
3.10 No Agency. Nothing in this Certificate and Agreement shall be
construed as establishing any General Partner as an agent of any Limited
Partner, except to the extent provided in Sections 9.3 and 9.4 below.
3.11 Voting of Shares Owned by General Partners. In accordance with
Section 7.1, the Managing General Partners shall have the right to vote any
Shares which they own, whether as a General or as a Limited Partner. Each
General Partner shall own at least one Share.
ARTICLE IV
LIMITED PARTNERS
4.1 Identity of Limited Partners. The names of the Limited
Partners, their places of residence and the number of Shares owned by each of
them are set forth in Schedule "A" to this Certificate and Agreement and are
incorporated herein by this reference.
4.2 Sales of Additional Shares: Admission of Additional Limited
Partners. The Fund is authorized and intends, through an initial public
offering, to issue and sell a minimum of 1,000,000 Shares to public purchasers
and, upon their compliance with the requirements set forth below, to admit such
purchasers as additional Limited Partners in the Fund. In addition, without the
consent or approval of the Limited Partners, the Fund may issue additional
Shares from time to time in payment of the distributions to the Partners
contemplated by Article VI below or in connection with the admission of General
Partners pursuant to
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Section 3.2 above. The Fund shall not otherwise issue additional Shares after
the consummation of the exchange referred to in Section 5.3 and the
contributions referred to in Section 5.4. The Managing General Partners shall
admit any purchaser of Shares from the Fund as an additional Limited Partner,
upon: (a) the execution and acknowledgement by such purchaser of a Partnership
Authorization (which contains a special power-of-attorney for certain
Partnership purposes), as provided in Article IX below, and such other
instruments as the Managing General Partners may deem necessary or desirable to
effectuate such admission; (b) the written acceptance and adoption by such
purchaser of all of the terms and provisions of this Certificate and Agreement,
as the same may have been amended; and (c) the payment or undertaking for
payment by such purchaser, as the Managing General Partners may determine, of
all reasonable expenses connected with such admission. Upon satisfaction of the
foregoing conditions, the purchaser shall become a Limited Partner upon the
filing of an appropriate amendment to this Certificate and Agreement, as
required by the Partnership Act. Such amendments shall be prepared and submitted
for processing as of the end of each business day of the Fund. Each purchaser of
a Share from the Fund shall be bound by all the terms and conditions of this
Certificate and Agreement.
4.3 Right to Assign Shares: Substituted and Additional Limited
Partners. A Shareholder may assign the whole or any portion of his Shares by a
written instrument of assignment in form satisfactory to the Managing General
Partners provided that (i) the assignee agrees to become a Limited Partner and
(ii) the Managing General Partners consent to such assignment and substitution.
Each assignee of a Share shall be bound by all the terms and conditions of this
Certificate and Agreement including, without limitation, the allocation of
income, gains, losses, deductions and credits as provided in Section 5.6. Any
Shareholder who assigns Shares, and any assignee of such Shares who subsequently
assigns such Shares, by virtue of an assignment made in accordance with the
provisions hereof confers upon his assignee the right to be substituted as a
Limited Partner upon compliance with the following conditions: (a) the
assignment instrument shall be in form and substance satisfactory to the
Managing General Partners; (b) the assignor and the assignee named therein shall
execute and acknowledge a Partnership Authorization as provided in Article IX
below, and such other instrument or instruments as the Managing General Partners
may deem necessary or desirable to effectuate such admission; (c) the assignee
shall, in writing, accept and adopt all the terms and provisions of this
Certificate and Agreement, as the same may have been amended; and (d) such
assignee shall pay or obligate himself to pay, as the Managing General Partners
may determine, all reasonable expenses connected with such admission.
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When all the foregoing conditions have been satisfied, the assignee
shall become a substituted or additional Limited Partner upon the filing of an
appropriate amendment to this Certificate and Agreement, as required by the
Partnership Act. Such amendments shall be prepared and submitted for processing
as of the end of each business day of the Fund.
4.4 No Power to Control Business. A Limited Partner shall have no
right to and shall take no part in the control of the Fund's business and shall
have no right or authority to act for or bind the Fund, but may exercise the
rights and powers of a Limited Partner under this Certificate and Agreement,
including without limitation, the voting rights and the giving of consents and
approvals provided for hereunder. The exercise of such rights and powers are
deemed to be matters affecting the basic structure of the Fund and not the
control of its business.
4.5 Limited Liability. No Limited Partner shall be liable for any
debts, obligations or losses of the Fund, provided, however, that the
contributions of a Limited Partner shall be subject to the risks of the business
of the Fund and subject to the claims of the Fund's creditors and provided
further, that after any Limited Partner has received the return of any part of
his contribution, he will be liable to the Fund, only to the extent required by
the Partnership Act, for: (a) his proportionate share, not in excess of the
amount of such returned contributions plus interest thereon, of any sum
necessary to discharge any liabilities of the Fund to creditors who extended
credit or whose claims arose before such returns were made; and (b) for his
proportionate share, not in excess of any amount of such sum wrongfully
distributed to him and necessary to discharge any liabilities of the Fund to any
creditors.
In the event a Limited Partner or former Limited Partner who received
the return of any part of his contribution is required pursuant to the foregoing
paragraph to discharge more than his proportionate share of a Fund liability
("Discharged Liability"), the Fund shall indemnify such person, to the extent of
its net assets, against the Discharged Liability. In the event the Fund's net
assets are insufficient to satisfy such person's right of reimbursement for the
Discharged Liability, the Fund shall use its best efforts to obtain for such
person an amount equal to the insufficiency arising in its net assets to
reimburse ("Insufficiency Reimbursement") such person for the Discharged
Liability from each of the other Limited Partners or former Limited Partners of
the Fund who received a return of contribution after the time the creditor whose
claim was discharged extended credit to the Fund. The Insufficiency
Reimbursement to be sought against each other Limited Partner or former Limited
Partner shall be limited to that amount obtained by multiplying the amount of
the Insufficiency Reimbursement by that percentage of the aggregate
contributions so returned to all
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<PAGE> 17
Limited Partners which was received by the particular Limited Partner or former
Limited Partner from whom the Insufficiency Reimbursement is sought. Each
Limited Partner, to the extent of his proportionate share of such a returned
contribution as above determined, hereby agrees to indemnify each other Limited
Partner against such Insufficiency Reimbursement.
In addition, the General Partners and the Fund (to the extent of its
net assets) hereby further indemnify any Limited Partner against any liability
of the Fund discharged by him pursuant to the final decision of any court of
competent jurisdiction that such Limited Partner was liable for such liability
solely by virtue of the grant or exercise of the voting rights set forth in
Article VII (and not by virtue of any action or representation by such Limited
Partner).
Any such right of indemnification pursuant to either of the preceding
two paragraphs shall be conditioned upon the party so seeking indemnification
giving to the Fund prompt notice of, and the opportunity to defend, any claim
instituted or threatened against such person by a creditor of the Fund. Each
Limited Partner further agrees that any sum or property wrongfully distributed
to him shall be held by him as trustee for the Fund to be delivered to the Fund
upon its demand in order to satisfy the Insufficiency Reimbursement.
4.6 Limited Partners Not Personally Liable. All persons extending
credit to, contracting with or having any claim against the Fund shall look only
to the assets of the Fund and of the General Partners for payment under such
credit, contract or claim, or only to the assets of the Fund if any such person
has so agreed, and except to the extent provided in Section 4.5 hereof, neither
the Limited Partners, nor any of the Fund's officers, employees or agents,
whether past, present or future, shall be personally liable therefor.
4.7 Death of a Limited Partner. The death of a Limited Partner
shall not dissolve or terminate the Partnership. Upon the death of a Limited
Partner the personal representative of such deceased Limited Partner shall have
all the rights of a Limited Partner, to the extent of the deceased's interest in
the Fund, for the sole purpose of settling his estate, including the right to
assign his Shares and to designate his assignee a substituted Limited Partner,
upon compliance with the provisions of Section 4.3 above. The estate of a
deceased Limited Partner shall be liable for all such deceased Limited Partner's
liabilities as a Limited Partner.
4.8 Partners' Representations to the Fund. Each person who has
deposited or may hereafter deposit or exchange securities with the Fund shall
furnish to the Fund upon request evidence satisfactory to the Managing General
Partners as to his date of
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<PAGE> 18
acquisition and holding period of such securities and their adjusted basis in
his hands for Federal income tax purposes and shall represent and warrant the
accuracy of such information. The Managing General Partners may also require
each Partner or proposed Partner to make such representations and warranties to
the Fund, and to furnish such information (including an opinion of counsel
satisfactory to the Fund), as the Managing General Partners consider reasonably
necessary to assure that: (a) any securities which he has contributed or
proposes to contribute may be freely marketed and sold by the Fund and are not
subject to any restriction on transferability, including but not limited to, any
restriction contained in any state securities law, the 1933 Act or regulations
thereunder; and (b) he has unencumbered ownership of any property contributed or
proposed to be contributed to the Fund. Each Partner, by becoming a Partner
under this Certificate and Agreement, agrees to notify the Fund immediately if
any representations or warranties made pursuant to this Section should become
untrue.
ARTICLE V
CAPITAL CONTRIBUTIONS: SALES OF SHARES; ALLOCATIONS TO SHARES
5.1 Shares of Partnership Interest. The entire beneficial interest
of the Partners in the Fund and its assets shall be divided into equal
proportionate units of partnership interest, referred to herein as "Shares." The
Managing General Partners may from time to time divide or combine such units
into a greater or lesser number of Shares, provided that no such action shall in
and of itself alter the proportionate beneficial interest of the several Holders
of Shares in the Fund at the time. The Managing General Partners shall, by
appointment of an agent for the purpose or otherwise, at all times maintain a
record of the outstanding Shares and the Holders thereof from time to time.
5.2 Contributions for Issuance of Shares. The Fund shall exchange
Shares only in consideration for the exchange of deposits of cash and securities
which are acceptable to the Managing General Partners. The Managing General
Partners may maintain a list of representative companies whose securities may be
accepted for exchange, which list shall be subject to change at any time without
notice. All capital contributions for Shares shall be valued for purposes of the
exchange as of the close of business on the last business day preceding the day
on which such deposits are exchanged for Shares. A contribution shall be
considered to have been made to the Fund as of the effective date of the
exchange.
The value of securities deposited with the Fund for exchange shall be
conclusively determined by the Fund's investment adviser
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in the same manner as is provided in Section 11.1(g) with respect to the
valuation of the Fund's portfolio securities.
5.3 Minimum Capitalization of the Fund: Initial Public Offering.
The Fund is authorized and intends to issue, sell and exchange with the initial
General and Limited Partners and through an initial public offering a minimum of
1,000,000 Shares upon such terms and conditions as may be determined by the
Managing General Partners and in consideration for contributions of cash and
securities to the Fund to be valued at $25.00 per Share for purposes of the
exchange (after deducting applicable subscription fees as determined by the
Managing General Partners). If upon completion of such initial public offering
of Shares, the Fund has not received deposits of securities and cash aggregating
at least $25,000,000 (before deduction of applicable subscription fees), or if
the aggregate value (as of the last business day preceding the exchange date) of
all securities and cash remaining on deposit is not at least $25,000,000 (before
deduction of applicable subscription fees), the Fund will commence dissolution
and all deposits will be returned to the prospective Partners.
5.4 Contributions by General Partners. Each of the initial General
Partners has purchased the number of Shares set forth in Schedule "A" to this
Certificate and Agreement and has contributed $25.00 in cash or securities to
the Fund for each Share purchased. Each Share purchased by a General Partner
will be held in such person's capacity as a General Partner and not as a Limited
Partner.
The initial Non-Managing General Partner, not later than the
consummation of the exchange referred to in Section 5.3, will have purchased for
its own account as a General Partner that number of Shares which in the
aggregate shall not be less than one percent (1%) of the total outstanding
Shares to be issued by the Fund pursuant to the exchange. The Non-Managing
General Partner(s) shall at all times during the existence of the Partnership,
own for its own account as a General Partner, that number of Shares which in the
aggregate shall not be less than one percent (1%) of the total outstanding
Shares. No person or entity may subsequently be elected or admitted as a
Non-Managing General Partner unless he or it owns a number of Shares which shall
be equal to not less than one percent (1%) of the total number of Shares then
outstanding, or unless the Non-Managing General Partners would own such number
of Shares in the aggregate after such admission. A Non-Managing General
Partner's right to redeem its Shares shall be limited to the extent provided in
any agreement it may enter into with the Fund or the Fund's investment advisor
pertaining to its obligations as a Non-Managing General Partner.
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Except as provided in this Section, no General Partner has agreed to
make any contribution in addition to that required as a condition to admission
as a General Partner, or to lend additional funds to the Partnership.
5.5 Contributions by the Limited Partners.
(a) The original Limited Partner has purchased the number
of Shares of Partnership interest set forth on Schedule "A" to this
Certificate and Agreement (which Schedule is incorporated herein by
reference) in consideration for a contribution of $25 in cash to the
Fund for each such Share. Additional Limited Partners (other than an
assignee of a Limited Partner) shall contribute securities and cash to
the capital of the Fund valued for purposes of the exchange as
described in Section 5.2. Up to 10% of the value of a deposit may
consist of cash. The minimum deposit which will be accepted for
exchange will be securities and cash having a value of at least $25,000
(before deduction of the subscription fee) at the close of business on
the date of the deposit provided, that the minimum deposit requirement
shall not be applicable to exchanges by Managing General Partners. If a
withdrawal reduces the value (determined as of the date of withdrawal)
of the remaining securities and cash deposited by an investor below
$25,000, the investor will be required to withdraw his entire deposit
or the Fund may, in its discretion, permit him to promptly substitute
cash or acceptable securities for those withdrawn to increase his
deposit to the required minimum.
(b) A subscription fee not to exceed 4 1/2% of the valUE of
each Limited Partner's deposit as of the close of business on the last
business day preceding the effective date of the exchange (other than
that of the original Limited Partner) may be charged prior to the
exchange to each subscribing Limited Partner's and Managing General
Partner's account to pay a commission to the persons acting as
Principal Underwriters or distributors of the Fund's Shares.
(c) The initial value of a Share shall be $25.00. In the
event after consummation of the initial public sale of Shares described
in Section 5.3, additional Shares are sold or exchanged by the Fund
pursuant to Section 4.2, the Managing General Partners shall determine
the value of a Share, and therefore the amount to be contributed to the
Fund with respect to each such Share in accordance with applicable
provisions of the 1940 Act and the Partnership Act. Such amount may be
more or less than the initial per Share contributions to the Fund.
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(d) Except to the extent a Limited Partner hereafter elects
to participate in an income and/or capital gains reinvestment program
which may be offered by the Fund, no Limited Partner has agreed to make
any additional contributions to or to lend additional funds to the
Fund, and no Limited Partner shall be liable for any additional
assessment therefor.
5.6 Allocation of Fund Income, Gains, Losses, Deductions and
Credits Among the Shares. All items of Fund income, gain, loss, deduction and
credit during each taxable year of the Fund shall be computed for the Fund on a
daily basis and shall be allocated equally among the outstanding Shares. A
Holder of a Share shall be allocated the proportionate part of such items
actually realized by the Fund during the specific days of the taxable year on
which such Share was owned by such Holder.
For Federal income tax purposes the aggregate deductions to be claimed
by the Partners as their distributive shares of partnership losses for the first
two years of operation of the Partnership shall not exceed the amount of equity
capital invested in the Partnership.
ARTICLE VI
DISTRIBUTIONS AND RETURNS OF CONTRIBUTIONS
6.1 In General. Distributions of cash or other property may be made
by the Managing General Partners in accordance with this Article: (a) with
respect to net income and net realized capital gains of the Fund; (b) in
connection with redemption of Shares; and (c) upon dissolution of the Fund.
However, all such distributions shall be in proportion to the number of Shares
held and without regard to the dollar amount of contributions received with
respect thereto.
6.2 Distributions with Respect to Income and Net Realized Capital
Gains. The Managing General Partners shall determine the amounts with respect to
net investment income and net realized capital gains, if any, to be distributed
to the Shareholders and the times when such distributions shall be made. Except
as otherwise provided in this Certificate and Agreement, such amounts shall be
distributed equally among the Shares outstanding. For purposes of such
distributions, a person will be deemed to be a Shareholder if such person's
interest is recorded on the books of the Fund maintained for that purpose on the
record date determined for such distribution. Subject always to the authority of
the Managing General Partners to fix and alter, from time to time, the times and
amounts of distributions to the Partners, if the Managing General Partners
determine to
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distribute amounts to the Shareholders, it is anticipated that they will, to the
extent practicable:
(a) Distribute amounts with respect to net investment
income of the Fund, exclusive of capital gains, quarterly to the
Shareholders of record at the close of business on the last day of each
quarter of the Fund's fiscal year. Distributions of net investment
income shall be made in cash, except to those Partners who have
properly elected to receive such distributions in additional Shares.
Any such election, and any modification thereof, shall be made in
writing in the manner required by the Managing General Partners and
shall be effective only with respect to distributions declared after
receipt of such written election by the Fund or its duly appointed
agent and paid more than 30 days after such receipt.
(b) Distribute 30% of the Fund's net realized capital
gains, if any, annually to Shareholders of record on the last business
day of the Fund's fiscal year. The Managing General Partners shall have
the authority to change, from time to time, the amount of any such net
realized capital gains to be distributed to the Shareholders.
Distributions of net realized capital gains shall be made in cash,
except to those Partners who have properly elected to receive such
distributions in additional Shares. Any such election, and any
modification thereof, shall be made in writing in the manner required
by the Managing General Partners and shall be effective only with
respect to distributions declared after receipt of such written
election by the Fund or its duly appointed agent and paid more than 30
days after such receipt.
Distributions paid in additional Shares will be paid at their Net Asset Value as
of the record date for such distribution.
6.3 Distributions in Connection With Redemption of Shares.
(a) Subject to any contractual limitation on the right of
the Non-Managing General Partner(s) to redeem Shares, the requirement
stated in Section 3.11 that each General Partner own at least one
Share, and to the limitations of Sections 6.3(b) and (d) below, a
Shareholder may elect to redeem any or all of the Shares held by him of
record at the Net Asset Value Per Share next computed after receipt by
the Fund (or by a person designated by the Fund for such purpose) of a
written request for redemption. The request must be accompanied by
either the certificates representing the Shares to be redeemed, if
certificates have been issued, or a stock power, duly endorsed by the
record Holder(s) with signature(s) guaranteed by a commercial bank or
trust company or member of a registered national securities
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exchange. Except to the extent Shares are redeemed for cash pursuant to
a Systematic Withdrawal Plan described in Section 6.3(f) below,
payments upon redemption may be made in cash or in portfolio securities
or in any combination thereof, in the sole discretion of the Managing
General Partners. For the first five years after the exchange,
securities paid upon redemption will, to the extent available in the
Fund's portfolio, be paid with securities of the same issuers as those
deposited in connection with the original issuance of such Shares. To
the extent such securities are not available, the redemption may be
paid in cash, other portfolio securities or a combination thereof, as
the Managing General Partners may in their sole discretion determine.
If securities which were subject to a legal or contractual restriction
on their resale by the Fund ("restricted securities") were exchanged
for Shares, and such securities are still subject to such a restriction
at the time the Shares issued in exchange therefor are redeemed, the
Fund may distribute in such redemption restricted securities of the
same issuer or issuers as contributed to the Fund. The Fund will not
otherwise distribute restricted securities in redemption of Shares.
(b) The Managing General Partners may suspend redemptions
and defer payment of the redemption price during any period that the
determination of Net Asset Value Per Share is suspended pursuant to
Section 11.1(g).
(c) No Holder shall be entitled to receive the return of
any part of the contribution with respect to his Shares unless all
liabilities of the Partnership, except liabilities to General Partners
and to Limited Partners on account of their contributions, have been
paid or there remains property of the Fund sufficient to pay them.
(d) Each Shareholder, by becoming a Shareholder: (i)
agrees that payment of the redemption price as determined hereunder
with respect to a Share owned by him as reflected in this Certificate
and Agreement constitutes full and complete discharge of any obligation
of the Fund and the General Partners with respect to his interest in
the Fund represented by such Share, including, without limitation, any
right to the return of contribution represented by such Share, and
that, upon such redemption, he shall have no further rights with
respect to such Share; (ii) agrees that the date upon which Net Asset
Value is computed for purposes of redeeming a Share shall constitute
the date specified in this Certificate and Agreement for the return of
the contribution with respect to such Share for purposes of the
Partnership Act; and (iii) consents to the redemption of any Share in
accordance with the provisions of this Certificate and Agreement.
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(e) The Managing General Partners shall cause appropriate
amendments to this Certificate and Agreement reflecting redemptions to
be prepared and submitted for processing and recording in California as
of the end of each business day of the Fund.
(f) The Managing General Partners may in their discretion
adopt a Systematic Withdrawal Plan (the "Plan") pursuant to which a
Shareholder electing to participate in the Plan will receive in cash a
partial redemption of his Shares a stipulated percentage of the net
asset value of such Shares as of the close of trading on the New York
Stock Exchange on such day or days as the Managing General Partners may
determine. The Managing General Partners may in their sole discretion
determine from time to time the percentage to be paid to Plan
participants, the amount of any fees or other service charges which may
be imposed upon participants, and such other matters as are necessary
or advisable in connection with the implementation and administration
of the Plan. Shareholders whose Shares were originally issued in
exchange for restricted securities or are evidenced by certificates
issued by the Fund shall not be eligible to participate in the Plan.
6.4 Distributions upon Winding Up of the Fund. Upon the dissolution
of the Fund pursuant to Section VIII, the Managing General Partners, or trustee,
if one is appointed, shall proceed to wind up the affairs of the Fund and to
liquidate its assets as promptly as is consistent with obtaining fair value. The
proceeds from such liquidation of the Fund assets shall be applied and
distributed in the following order of priority:
(a) to the payment of debts and liabilities of the Fund
(other than any loans or advances which may have been made by any of
the Partners to the Fund) and the expenses of liquidation;
(b) to create any reserve which the Managing General
Partners or trustee may deem reasonably necessary for any contingent or
unforeseen liabilities or obligations of the Fund. Such reserve shall
be paid over by the Managing General Partners or trustee to a bank or
trust company to act as escrow agent selected by the Managing General
Partners or trustee. Any such escrow agent shall hold such reserves for
payment of any of the aforementioned contingencies, and, at the
expiration of such period as the Managing General Partners or trustee
designate, shall distribute the balance thereafter remaining in the
manner hereinafter provided;
(c) to the repayment of any loans or advances that may have
been made by any of the Partners to the Fund, but if
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<PAGE> 25
the amount available for such repayment shall be insufficient, then pro
rata on account thereof; and
(d) the balance, if any, pro rata among the Shareholders in
proportion to the number of Shares held by them at the record date for
any such distribution.
When the Managing General Partners have complied with the foregoing
distribution plan (including payment over to the escrow agent), the Partners
shall execute, acknowledge, and cause to be filed a cancellation of this
Certificate and Agreement.
6.5 Returns of Contributions.
(a) Except upon dissolution of the Fund or the earlier
effective date of any redemption of the Shares of a Holder pursuant to
Section 6.3 above (which shall be the date specified in this
Certificate for return of contributions pursuant to the Partnership
Act), no Partner has the right to demand return of any part of his
contribution. The Managing General Partners may, however, from time to
time, elect to make returns of contributions to Shareholders, provided
that: (i) all liabilities of the Fund to persons other than
Shareholders have been paid or, in the good faith determination of the
Managing General Partners, there remains property of the Fund
sufficient to pay them; (ii) the consent, expressed or implied, of all
of the Partners is obtained; and (iii) the Managing General Partners
cause this Certificate and Agreement to be amended to reflect a
reduction in contributions.
For purposes of the foregoing provisions, the condition of subpart (ii)
shall have been satisfied if such return of contribution is effected by
a distribution made pro rata to all of the Shareholders based upon the
number of Shares held by each of them, or upon the redemption of Shares
pursuant to the authority of Section 6.3 above. Each Partner, by
becoming such, consents to any such distribution theretofore or
thereafter duly authorized and made in accordance with the foregoing
provisions.
(b) In the event subparts (i) and (ii) of part (a) above
are satisfied, the Managing General Partners agree to cause an
appropriate amendment to this Certificate and Agreement to be promptly
filed.
(c) In return for his contribution, subject to the
provisions of Section 6.3 above, a Shareholder may receive cash or
other property at the sole discretion of the Managing General Partners,
but a Shareholder has no right to demand return of his contribution
other than in cash.
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ARTICLE VII
PARTNERS' RIGHTS TO VOTE UPON MATTERS AFFECTING
THE BASIC STRUCTURE OF THE FUND: EXERCISE OF VOTING RIGHTS
7.1 Voting Rights of Partners. The Non-Managing General Partner
shall not be entitled to vote its Shares, nor shall its Shares be counted for
purposes of any vote. Subject to the provisions of Sections 4.4 and 4.5 above,
the Managing General and Limited Partners shall have in proportion to the
numbers of Shares held of record by them, voting, approval, consent or similar
rights with respect to the following matters affecting the basic structure of
the Partnership, which include the voting, approval, consent or similar rights
required under the 1940 Act for voting security holders:
(a) the right to remove General Partners and to elect new
General Partners;
(b) the right to approve or disapprove of proposed changes
in the investment limitations and policies referred to in Section 2.4
above;
(c) the right to approve or disapprove of a proposed change
in the nature of the Fund's business so as to cease to be an investment
company;
(d) the right to approve or disapprove of any investment
advisory contract or the termination of such a contract entered into by
the Managing General Partners pursuant to Section 3.3(e) above;
(e) the right to ratify or reject the appointment of and to
terminate employment of the independent public accountants of the Fund;
(f) the right to approve or disapprove the sale of all or
substantially all of the assets of the Fund;
(g) the right to amend this Certificate and Agreement in
any other respect; provided, however, that no such amendment shall
conflict with the 1940 Act, so long as the Fund is registered
thereunder, or affect the liability of the General Partners without
their consent nor the limited liability of the Limited Partners as
provided under Section 4.5 above and provided further that the
foregoing shall not preclude amendments to this Certificate and
Agreement without the vote of the Partners to the extent permitted in
Article IX below; and
(h) The right to elect to wind up and dissolve the Fund.
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Limited Partners shall not have the right to vote on any other matters.
7.2 Meetings of the Partners. There shall be an annual meeting of
the Partnership on the thirtieth day in the month of April in each year at such
time as the Managing General Partners may fix in the notice of the meeting or
otherwise. If that day be a legal holiday at the place where the meeting is to
be held, the meeting shall be held on the next preceding day not a legal
holiday. Such meetings shall be held at the statutory office of the Fund in
California, or at such other place as may be designated in the call thereof,
which call shall be made by the Managing General Partners. In the event that
such meeting is not held in any year on the date fixed, whether the omission be
by oversight or otherwise, a subsequent special meeting may be called by the
Managing General Partners and held in lieu of the annual meeting with the same
effect as though held on such date. Special meetings may also be called by the
Managing General Partners from time to time for the purpose of taking action
upon any matter requiring the vote or authority of the Partners as herein
provided.
Written notice of any meeting of Partners shall be given or caused to
be given by the Managing General Partners by mailing such notice at least seven
days before such meeting, postage prepaid, stating the time, place and purpose
of the meeting, to each Partner at the Partner's address as it appears on the
records of the Fund. Any adjourned session or sessions may be held, within a
reasonable time after the date set for the original meeting, without the
necessity for further notice.
If the Managing General Partners shall fail to call or give notice of
any meeting of Partners for a period of 30 days after written application by
Partners holding at least 10% of the Shares then outstanding requesting that a
meeting be called for a purpose requiring action by the Partners as provided
herein, then Partners holding at least 10% of the Shares then outstanding may
call and give notice of such meeting, and thereupon the meeting shall be held in
the manner provided for herein in case of call thereof by the Managing General
Partners.
7.3 Quorum and Required Vote at Meetings of the Partners. Partners
holding a majority of the Shares entitled to vote present or represented by
proxy shall be a quorum for the transaction of business at a Partners' meeting,
but any lesser number shall be sufficient for adjournments.
Each Partner (except the Non-Managing General Partner, which shall not
be entitled to vote its Shares) shall have one vote for each Share standing of
record in such Partner's name as of the record date set forth in the notice of
meeting. A majority of
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the Shares voted at a meeting at which a quorum is present shall constitute
action of the Partners, except:
(a) that in the election of General Partners, those
candidates receiving the highest number of votes cast at a meeting of
Partners at which a quorum is present, up to the number of General
Partners to be elected, shall be elected as General Partners of the
Fund; there shall be no cumulative voting in election of General
Partners;
(b) that approval of matters referred to in (b), (c) and
(d) and the termination of the employment of independent public
accountants referred to in (e) of paragraph 7.1 above shall require a
Majority Shareholder Vote; and
(c) where a larger vote, if any, is otherwise required by
provision of this Certificate and Agreement.
Shares may be voted at a meeting of Partners in person or by proxy duly
executed by the Partner(s) holding the Shares of record on the record date for
such meeting fixed by the Managing General Partners as provided in Section 10.4.
All such proxies shall be filed with the Fund before or at the meeting. No such
proxy shall be valid after eleven months from the date of its execution. The law
of California pertaining to corporate proxies will govern all Partnership
proxies. Notwithstanding that a valid proxy is outstanding, powers of the proxy
holder will be suspended if the person executing the proxy is present at the
meeting and elects to vote in person.
7.4 Action by Written Consent. Any action taken by Partners may be
taken without a meeting if all of the Partners entitled to vote on the matter
consent to the action in writing and such written consents are filed with the
records of the meetings of Partners. Such consent shall be treated for all
purposes as a role taken at a meeting of Partners.
ARTICLE VIII
TERMS AND DISSOLUTION OF THE FUND
8.1 Term. The Term of this Partnership shall commence as of March
25, 1976, the date of the initial filing of this Certificate and Agreement with
the County Recorder in the County of Los Angeles, of the State of California, as
required by the Partnership Act, and shall continue in existence until December
31, 2071, on which date it shall commence dissolution, unless it is sooner
dissolved as hereinafter provided.
8.2 Events Causing Earlier Dissolution of the Fund. The Fund shall
commence dissolution, and the affairs of the Fund
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shall be wound up, prior to the date specified above, upon the happening of any
of the following events:
(a) the Fund disposes of all of its assets; or
(b) if a Managing General Partner has not filed an
amendment to this Certificate and Agreement evidencing his
determination to continue the business of the Partnership within One
Hundred and Eighty (180) days after the death, retirement or insanity
of a General Partner; or
(c) partners holding a majority of the Shares vote to
dissolve the Fund; or
(d) if for any reason or cause whatsoever the Fund does not
have the minimum aggregate deposits as specified in Section 5.3 hereof.
The Limited Partners shall have no right or power to cause the
termination or dissolution of the Partnership except as set forth in this
Certificate and Agreement. No Limited Partner shall have the right to bring an
action for partition against the Partnership.
8.3 Right of General Partners to Continue the Business of the Fund
in Certain Events. The death, retirement or insanity of a General Partner shall
not dissolve the Partnership. In any such event the business of the Partnership
shall continue pending the election to continue the business of the Fund
contemplated in this Section or the exercise of the rights of the Partners
provided in Section 8.4 below.
After the death, retirement or insanity of a General Partner, any
remaining Managing General Partner shall have the right to elect to continue the
business of the Fund. If a remaining Managing General Partner so elects to
continue the Fund, within sixty (60) days after such event he shall execute and
cause to be filed an appropriate amendment to this Certificate and Agreement to
evidence such election. If no remaining Managing General Partner is willing to
continue the business of the Partnership, then prior to the expiration of such
sixty-day period, the remaining Managing General Partners shall (or, if there is
no Managing General Partner then acting, the Non-Managing General Partner or any
Partner or Partners owing 10% or more of the Shares then outstanding) shall,
within one hundred and twenty (120) days of such event, call a meeting of the
Partners for the purpose of exercising the rights provided in Section 8.4 below.
8.4 Right of the Partners to Provide for Continuation of the
Business of the Fund in Certain Events. In the event that (a) at any time the
status and interest of all Managing General
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Partners has terminated by virtue of any of the events or circumstances
specified in Section 3.8 of this Certificate and Agreement; or (b) the Managing
General Partner(s) remaining after the death, retirement or insanity of a
General Partner do not elect to continue the Fund (which failure to elect to
continue the Fund shall constitute an election to retire pursuant to Section
3.8(a)(4) above), then, to the extent permitted by the Partnership Act, the
Partners shall have the right to elect a successor Managing General Partner or
Partners who shall have the authority to elect to continue the business of the
Fund under its present name. Any such successor Managing General Partner shall
have all of the rights and powers, and be subject to all of the duties and
obligations of a Managing General Partner provided in this Certificate and
Agreement.
ARTICLE IX
FUND DOCUMENTATION; AMENDMENT OF THE
CERTIFICATE AND AGREEMENT; POWER-OF-ATTORNEY
9.1 Certificate and Agreement and Other Documentation. This
Certificate and Agreement shall constitute a Certificate of Limited Partnership
within the meaning of the Partnership Act, and the Managing General Partners
shall promptly cause it to be filed and recorded in accordance with the
Partnership Act in the County of the location of the Fund's statutory office,
and to the extent required by local law, in the appropriate place in each state
in which the Fund may hereafter establish a place of business.
9.2 Events Requiring Amendment of Certificate and Agreement. This
Certificate and Agreement shall be promptly amended, as hereafter provided, upon
the occurrence of any of the following events: (a) there is a change in the name
of the Fund or in the amount or character of the contribution of any Partner;
(b) a person is substituted as a Limited Partner; (c) an additional Limited
Partner is admitted; (d) a person is admitted as a General Partner; (e) a
General Partner retires, dies or becomes insane, and the business is continued
as permitted by Article VIII; (f) there is a change in the character of the
business of the Fund; (g) there is a false or erroneous statement in this
Certificate and Agreement; (h) there is a change in the time as stated in this
Certificate and Agreement for the dissolution of the Fund or for the return of a
contribution; (i) the Partners desire to make a change in any other statement in
this Certificate and Agreement in order that it shall accurately represent the
agreement among them; or (j) there is a change in the right to vote upon any of
the matters described in Article VII.
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9.3 Partnership Authorization. Each of the Limited Partners hereby
makes, constitutes and appoints the Managing General Partners of the Partnership
listed in Schedule "A" to this Certificate and Agreement or any of them and each
person who shall hereafter become a Managing General Partner, with full power of
substitution, the true and lawful attorney of, and in the name, place and stead
of such Limited Partner, with the power from time to time to execute,
acknowledge, make, swear to, verify, deliver, record, file and/or publish: (a)
this Certificate and Agreement of Limited Partnership under the laws of the
State of California or any other jurisdiction, any amendment to any such
Certificate and Agreement of Limited Partnership (including, but not limited to,
amendments reflecting the withdrawal of any Partner or the return, in whole or
in part, of the contribution of any Partner or amendments reflecting the
addition or substitution of Limited Partners) or any other document required
from time to time to admit such Limited Partner, to effect his substitution as a
Limited Partner or to effect the substitution of the Limited Partner's assignee
as a Limited Partner as to any or all shares of limited partnership interest
assigned to such assignee; (b) any amendment to this Certificate and Agreement
or any other document required to reflect any action of the Partners provided
for in this Certificate and Agreement whether or not such Limited Partner voted
in favor of or otherwise consented to such action; and (c) any other instrument,
certificate or document as may be required by any regulatory agency, the laws of
the United States, any state or any other jurisdiction in which the Fund is
doing or intends to do business or which the Managing General Partners deem
advisable to file or record, provided such instrument, certificate or document
is in accordance with the terms of this Certificate and Agreement as then in
effect.
Each of the General Partners hereby makes, continues and appoints the
Managing General Partners and any one of them and each person who shall
hereafter become a Managing General Partner, and additionally appoints the
transfer agent and any successor transfer agent employed by the Fund, with full
power of substitution, the true and lawful attorney of, and in the name, place
and stead of such General Partner, with the powers from time to time to execute,
acknowledge, make, swear to, verify, deliver, record, file and/or publish the
documents specified or contemplated by subparts (a), (b) and (c) of the
preceding paragraph.
Each of the Limited Partners is aware that the terms of the Certificate
and Agreement permit certain amendments of the Certificate and Agreement to be
effected and certain other actions to be taken or omitted by or with respect to
the Partnership, in each case with the approval of less than all the Limited
Partners, provided that a specified percentage of Partners shall have voted in
favor of or otherwise consented to
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such action. Such actions include, without limitation, admission of new General
Partners duly elected at meetings of the Partners. If, as and when (i) an
amendment of the Certificate and Agreement is proposed or an action is proposed
to be taken or omitted by or with respect to the Partnership which requires,
under the terms of the Certificate and Agreement, the approval of a specified
percentage in interest (but less than all) of the Partners, (ii) Partners
holding the percentage of Partnership interests in the Partnership specified in
the Certificate and Agreement as being required for such amendment or action
have approved such amendment or action in the manner contemplated by the
Certificate and Agreement; and (iii) a Limited Partner has failed or refused to
approve such amendment or action (hereinafter referred to as a non-consenting
Limited Partner), each non-consenting Limited Partner agrees that each special
attorney specified above, with full power of substitution, is hereby authorized
and empowered to execute, acknowledge, make, swear to, verify, deliver, record,
file and/or publish, for and on behalf of such non-consenting Limited Partner,
and in his name, place and stead, any and all instruments and documents which
may be necessary or appropriate to permit such amendment to be lawfully made or
action lawfully taken or omitted. Each consenting and non-consenting Limited
Partner is fully aware that he and each other Limited Partner have executed this
special power of attorney, and that each Limited Partner will rely on the
effectiveness of such powers with a view to the orderly administration of the
Partnership's affairs.
The foregoing grant of authority (i) is a special power-of- attorney
coupled with an interest in favor of the Managing General Partners now and
hereafter acting and as such shall be irrevocable and shall survive the death or
insanity (or, in the case of a Limited Partner that is a corporation,
association, partnership, joint venture or trust, the merger, dissolution or
other termination of the existence) of such Limited Partner, (ii) may be
exercised for each Limited Partner by a facsimile signature of any Managing
General Partner or by listing all of the Limited Partners executing any
instrument with a single signature of any Managing General Partner acting as
attorney-in-fact for all of them, (iii) shall survive the assignment by such
Limited Partner of the whole or any portion of his interest, provided that where
the assignee of the whole thereof has furnished a power-of-attorney in the form
provided by the Partnership and has been approved by the Managing General
Partners for admission to the Fund as a substituted Limited Partner, the
power-of-attorney shall survive such assignment for the sole purpose of enabling
a Managing General Partner to execute, acknowledge and file any instrument
necessary to effect such substitution and shall thereafter terminate, and (iv)
shall survive the redemption by the Limited Partner of the whole or any portion
of his interest as provided in Section 6.3 hereof, provided that where all of
such Limited Partner's interest is so
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redeemed, the power of attorney shall survive such redemption for the sole
purpose of enabling a Managing General Partner to execute, acknowledge and file
any instrument necessary to effect the deletion of such person as a Limited
Partner.
9.4 Power of Attorney by Substituted or Additional Limited
Partners. As a condition to effectiveness of any assignment of Shares and to
becoming a Limited Partner, each original purchaser or assignee of Shares shall
execute and deliver to the Managing General Partners one or more Partnership
Authorizations, including a power-of-attorney in form acceptable to the Managing
General Partners and in content substantially in accordance with the foregoing
provisions of Section 9.3, which shall similarly be irrevocable during the
period specified above. Such Partnership Authorizations may be set forth on
checks (including as a condition to endorsement) or other instruments
distributed to Shareholders from time to time for endorsement and execution.
9.5 Amendments Requiring Signature by Less than All Limited
Partners. Anything herein to the contrary notwithstanding, any amendment to this
Certificate and Agreement substituting or adding a Partner may be signed by any
Managing General Partner and by the person to be substituted or added as a
Partner, and shall also be signed by or on behalf of the assigning Partner, in
the case of a substitution. The execution of any such amendment on behalf of a
Limited Partner or any proposed substituted or added Limited Partner may be
effected by his attorney-in-fact. An amendment reflecting the death, retirement
or insanity of a General Partner and the election of a Managing General Partner
to continue the business of the Fund pursuant to Article VIII above, need only
be signed by any General Partner.
9.6 Amendments Requiring Signature by All Partners. Any amendment
to this Certificate and Agreement other than amendments described in Section 9.5
shall be signed by or on behalf of all Partners. The execution of any such
amendment on behalf of a General or Limited Partner may be effected by his
attorney-in-fact pursuant to Section 9.3 and 9.4.
ARTICLE X
BOOKS AND RECORDS, STATEMENTS
AND INCOME TAX INFORMATION
10.1 Fiscal Year. The fiscal year of the Fund shall be the calendar
year for financial reporting and for federal income tax purposes.
10.2 Records and Accounting. At all times during the continuance of
the Fund, books of account and records, which shall be adequate and appropriate
for the Fund business, shall be
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kept on a basis consistent with the accounting methods followed by the Fund for
federal income tax purposes and, where deemed appropriate, in accordance with
generally accepted accounting principles and procedures applied in a consistent
manner. Such books and records shall include such separate and additional
accounts for each Partner and such records of each other Shareholder as shall be
necessary to reflect accurately the rights and interest of the respective
Shareholders and shall specifically reflect the name and address of each
Shareholder and the number of Shares held by him for the purpose of determining
recipients of distributions and notices. Such books of account, a copy of this
Certificate and Agreement and all amendments hereto, the Code of Regulations,
all documents relating to the ownership and condition of title of Fund
properties, and copies of all Fund tax returns shall be maintained by the Fund
at all times during its operations, and each Partner shall have access to them
and the right, at such Partner's expense, to inspect and copy them at all
reasonable times upon reasonable notice to the Fund. In addition, each Partner
shall have the right to receive by mail, upon written request to the
Partnership, a copy of a list of the names and addresses of the Limited Partners
and the number of Shares held by each of them, against reimbursement of the cost
of duplicating and mailing the same.
10.3 Periodic Financial Statements. The Fund shall cause certified
annual and uncertified semiannual financial statements of the operations of the
Fund to be prepared and forwarded to the Partners. The annual statements shall
include a statement of assets and liabilities, statements of operations and
changes in net assets, and such supporting statements or schedules as required
by law or by the Managing General Partners.
10.4 Record Dates. For the purpose of determining the Partners who
are entitled to notice of, and to vote or act at any Meeting of Partners or any
adjournment thereof, or the Shareholders who are entitled to receive payment of
any dividend or of any other distribution, the Managing General Partners may
from time to time, in advance, fix a time, which shall be not more than 50 days
nor less than 10 days before the date of any Meeting of Partners or the date for
the payment of any dividend or of any other distribution, as the record date for
determining the Partners having the right to notice of and to vote at such
meeting and any adjournment thereof or Shareholders having the right to receive
such dividend or distribution, and in such case only Partners or Shareholders of
record, as appropriate, on such record date shall have such right,
notwithstanding any transfer of shares on the books of the Fund after the record
date; or without fixing such record date, the Managing General Partners may, for
any of such purposes, close the register or transfer books for all or any part
of such period.
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10.5 Income Tax Information. The Fund shall provide to each
Shareholder information with respect to the Fund's federal taxable income or
loss and each class of income, gain, loss, deduction or credit that is relevant
to reporting Fund income. The information shall also show each Shareholder's
allocated share of each class of income, gain, loss, deduction or credit. This
information shall be furnished to the Shareholders as soon as possible and in
any event within 75 days after the close of the Fund's taxable year.
10.6 Statement Upon Winding Up of the Fund. As soon as possible
after completion of the winding up of the Fund pursuant to Section 6.4 above,
each Shareholder shall be furnished with a statement prepared by the Fund's
accountants which shall set forth the assets and liabilities of the Fund as at
the date of complete winding up.
ARTICLE XI
GENERAL PROVISIONS
11.1 Definitions. Whenever used herein, unless otherwise required
by the context or specifically provided:
(a) The terms "Affiliated Person," "Assignment,"
"Commission," "Interested Person" and "Principal Underwriter" shall
have the respective meanings given such terms in Section 2(a)(3),
2(a)(4), 2(a)(7), 2(a)(19), and 2(a)(29) respectively of the 1940 Act;
"Majority Shareholder Vote" shall mean "vote of a majority of
outstanding voting securities" as defined in Section 2(a)(42) of the
1940 Act;
(b) "Certificate and Agreement" shall mean this Certificate
and Agreement of Limited Partnership, as amended or restated from time
to time;
(c) "Code of Regulations" shall mean the "Code of
Regulations" of the Fund as amended from time to time;
(d) "General Partners" refers to the Managing and Non-
Managing General Partners named herein and any person who shall
hereafter become a General partner. "Managing General Partner" refers
to the individuals designated as such in Section 3.1 and identified
from time to time, in Schedule "A" to this Certificate and Agreement.
"Non-Managing General Partner" refers to the corporation or
corporations to be designated as such in Section 3.1 and identified,
from time to time, in Schedule "A" to this Certificate and Agreement.
(e) The pronouns "he," "his," "him," "it" or "who," with
"Limited Partner" or "General Partner" as the
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antecedent shall be deemed to refer also to a Limited Partner or
General Partner who is a woman, a partnership, a joint venture, an
association, a corporation or a trust;
(f) "Limited Partners" shall mean the original Limited
Partner and all other persons who shall hereafter be admitted to the
Fund as additional Limited Partners or substituted Limited Partners, as
reflected in Schedule "A" to this Certificate and Agreement from time
to time, except those persons who (i) have redeemed all Shares of the
Fund owned by them, or (ii) have been replaced by a substituted Limited
Partner to the extent of their entire Limited Partnership Interest;
(g) "Net Asset Value Per Share." The Net Asset Value Per
Share of the Fund shall be determined as of the close of trading on the
New York Stock Exchange on each day on which the Exchange is open for
trading (and at such other times as the Fund may determine). The Net
Asset Value Per Share shall be computed by taking the total value of
all assets of the Fund, less its liabilities and dividing by the number
of Shares outstanding. Securities for which market quotations are
readily available shall be valued at their current market values in the
principal market in which such securities are normally traded.
Securities and other assets for which market quotations are not readily
available (including restricted securities) shall be valued at their
fair value as determined in good faith under procedures established by
and under the general supervision of the Managing General Partners.
The Partnership may suspend the determination of the Net Asset
Value Per Share in the event the New York Stock Exchange is closed for
other than customary weekends or holidays, or during periods when
trading on the Exchange is restricted or an emergency exists which
makes disposition or valuation of portfolio securities impractical, or
during any other period permitted by order of the Commission.
(h) The "1940 Act" refers to the Investment Company Act of
1940, as amended, and the Rules and Regulations thereunder, all as
amended from time to time; the "1933 Act" refers to the Securities Act
of 1933, as amended, and the Rules and Regulations thereunder, all as
amended from time to time;
(i) "Partners" shall mean collectively the General Partners
and the Limited Partners. Reference to a "Partner" shall mean any one
of the Partners.
(j) "Partnership" or the "Fund" refers to this Limited
Partnership formed under the law of the State of California
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and established by this Certificate and Agreement, as amended from time
to time.
(k) The "Partnership Act" refers to The Uniform Limited
Partnership Act as enacted by the State of California and hereafter
amended, set forth presently at Sections 15500 and following, of the
Corporations Code of the State of California;
(l) "Person" means an individual, partnership, joint
venture, association, corporation or trust;
(m) "Shareholder" or "Holder" means a holder of Shares,
whether a General Partner, Limited Partner or assignee of any of them,
but only to the extent such person's interest is recorded on the books
of the Fund maintained for such purpose either by the Fund or by its
appointed transfer or similar agent.
(n) "Shares" shall mean the equal proportionate units into
which the Partnership Interests of the Fund shall be divided from time
to time as provided in Section 5.1 of this Certificate and Agreement.
11.2 Independent Activities. Each Partner reserves the right to
conduct activities similar to those conducted by the Fund, including buying or
selling securities for his own account or for others.
11.3 Custodian. All assets of the Partnership shall be held by a
Custodian as required by the Investment Company Act of 1940, and may be
registered in the name of the Partnership or such custodian or a nominee
thereof.
11.4 Benefit. Except as herein otherwise provided to the contrary,
this Certificate and Agreement shall be binding upon and inure to the benefit of
the parties signatory hereto, and their respective heirs, executors, guardians,
representatives, successors and assigns.
11.5 Nonrecourse Creditors. No creditor making a nonrecourse loan to
the Partnership shall, by reason thereof, acquire any direct or indirect
interest in the profits, capital or property of the Partnership other than as a
secured creditor.
11.6 Tax Election.
(a) No election shall be made by any Shareholder to be
excluded from the application of the provisions of Subchapter K of the
Internal Revenue Code, or from any similar provisions of state tax
laws, and no such election shall be made by the Fund.
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(b) In the event of the transfer of a Partner's interest,
or the death of a Partner, or the distribution of any Fund property to
any Partner, the Managing General Partners, on behalf of the Fund, may,
at their option, file an election, in accordance with applicable
Treasury Regulations, to cause the value of the Fund's property to be
adjusted for federal income tax purposes as provided in Sections 734,
743 and 754 of the Internal Revenue Code, as then in effect.
11.7 Notices. All notices required or permitted to be given under
this Certificate and Agreement shall be in writing and shall be given to the
parties at the addresses set forth in Schedule "A" to this Certificate and
Agreement and to the Fund at its statutory office in California, or at such
other address as any of the parties may hereafter specify in writing to the
Fund.
11.8 Captions. Paragraph titles or captions contained in this
Certificate and Agreement are inserted only as a matter of convenience and for
reference and in no way define, limit, extend or describe the scope of this
Certificate and Agreement or the intent of any provision hereof.
11.9 Certificate and Agreement in Counterparts. This Certificate and
Agreement may be executed in several counterparts, and as so executed, shall
constitute one Certificate and Agreement, binding on all of the parties hereto,
notwithstanding that all of the parties are not signatory to the original or the
same counterpart.
11.10 Agent for Service of Process. The Managing General Partners
shall take whatever action is necessary to designate an agent at the Fund's
office in California upon whom service of process upon the Fund may lawfully be
made.
11.11 Principles of Construction; Severability. This Certificate and
Agreement shall be construed to the maximum extent possible to comply with all
of the terms and conditions of the 1940 Act and the Partnership Act. If,
nevertheless, it shall be determined by a court of competent jurisdiction that
any provision or wording of this Certificate and Agreement shall be invalid or
unenforceable under the 1940 Act, the Partnership Act or other applicable law,
such invalidity or unenforceability shall not invalidate the Fund's Certificate
and Agreement. In that case, the Certificate and Agreement shall be construed so
as to limit any term or provision so as to make it enforceable or valid within
the requirements of such law, and in the event such term or provision cannot be
so limited, this Certificate and Agreement shall construed to omit such invalid
or unenforceable provision.
-35-
<PAGE> 39
11.12 California Law. This Certificate and Agreement is made in the
State of California, and it is created under and is to be governed by and
construed and administered according to the laws of said state.
11.13 Integrated Agreement. This Certificate and Agreement
constitutes the entire understanding and agreement among the parties hereto with
respect to the subject matter hereof, and there are no agreements,
understandings, restrictions, representations or warranties among the parties
other than those set forth herein.
-36-
<PAGE> 40
IN WITNESS WHEREOF, the General Partners and the Initial Limited
Partner have executed this Restated Certificate and Agreement of Limited
Partnership as of the 22nd day of October, 1976.
MANAGING GENERAL PARTNERS:
C. Canby Balderston
------------------------------------
C. Canby Balderston
Henry M. Watts, Jr.
------------------------------------
Henry M. Watts, Jr.
G. Willing Pepper
------------------------------------
G. Willing Pepper
Robert R. Fortune
------------------------------------
Robert R. Fortune
David R. Wilmerding, Jr.
------------------------------------
David R. Wilmerding, Jr.
THE NON-MANAGING GENERAL PARTNER:
THE SANDRIDGE CORPORATION
By Neale C. Bringhurst
------------------------------------
Neale C. Bringhurst, President
By Warrin C. Meyers
------------------------------------
Warrin C. Meyers, Secretary
THE INITIAL LIMITED PARTNER:
Harrison Clarke
------------------------------------
Harrison Clarke
-37-
<PAGE> 41
SCHEDULE "A"
NAMES, PLACES OF RESIDENCE, NUMBER OF SHARES
OF PARTNERSHIP INTEREST, AND CONTRIBUTIONS
OF
GENERAL AND LIMITED PARTNERS
MANAGING GENERAL PARTNERS
<TABLE>
<CAPTION>
Shares of
Name and Address Partnership Interest Contributions
---------------- -------------------- -------------
<S> <C> <C>
Dr. C. Canby Balderston 1 $25
749 West Rosetree Road
Media, Pennsylvania 19063
Henry M. Watts, Jr. 1 $25
20 Broad Street
New York, New York 10005
G. Willing Pepper 1 $25
128 Springton Lake Road
Media, Pennsylvania 19063
Robert R. Fortune 1 $25
2920 Ritter Lane
Allentown, Pennsylvania 18104
David R. Wilmerding, Jr. 1 $25
240 S. 4th Street
Philadelphia, PA 19106
</TABLE>
NON-MANAGING GENERAL PARTNER
<TABLE>
<CAPTION>
Shares of
Partnership
Name and Address Interest Contributions
---------------- ----------- -------------
<S> <C> <C>
The Sandridge Corporation 4,001 $100,025
1002 Wilmington Trust Building
100 West 10th Street
Wilmington, Delaware 19801
</TABLE>
LIMITED PARTNER
<TABLE>
<CAPTION>
Shares of
Partnership
Name and Address Interest Contributions
---------------- ----------- -------------
<S> <C> <C>
Harrison Clarke 1 $25
Johnson, Lane, Space,
Smith & Co., Inc.
34 Broad Street, N.W.
Commerce Building
Atlanta, Georgia 30303
</TABLE>
<PAGE> 1
Exhibit 1(b)
CHESTNUT STREET EXCHANGE FUND
(A California Limited Partnership)
AMENDMENT TO RESTATED
CERTIFICATE AND AGREEMENT
OF LIMITED PARTNERSHIP
THIS AMENDMENT has been executed and delivered among the General
Partners and the Limited Partners herein named for the purpose of amending the
Restated Certificate and Agreement of Limited Partnership (the "Certificate and
Agreement") of Chestnut Street Exchange Fund, a California limited partnership
(the "Partnership") as previously recorded in the Official Records of the Office
of the County Recorder of Sacramento, California, in order to amend Section 7.2
of Article VII of the Certificate and Agreement to provide that the annual
meeting of the Partnership shall be held on such date as the Managing Partners
may fix in the notice of the meeting or otherwise.
NOW THEREFORE, the General Partners and the Limited Partners of
the Partnership, acting through their respective attorneys in fact as authorized
by Sections 9.3 and 9.4 of the Certificate and Agreement, hereby amend Section
7.2 of Article VII of the Certificate and Agreement by deleting the first two
sentences thereof in their entirety and adding in their place the following:
There shall be an annual meeting of the Partnership on such day
as the Managing General Partners may fix in the notice of the
meeting or otherwise.
IN WITNESS WHEREOF, the General Partners and the Limited Partners
have executed this Amendment as of the 10th day of June, 1983.
MANAGING GENERAL PARTNERS
NON-MANAGING GENERAL PARTNERS
By: /s/ signature illegible (Title)
-----------------------
for DST, Inc., attorney-in-fact for the
Managing General Partners and the Non-
Managing General Partner set forth in
Schedule "A" to the Certificate and
Agreement pursuant to Section 9.3 of the
Certificate and Agreement
THE LIMITED PARTNERS
By: /s/ signature illegible (Title)
-----------------------
for DST, Inc., attorney-in-fact for the
Managing General Partners and exercising
the power of attorney granted to each of
the Managing General Partners by the
Limited Partners set forth in Schedule "A"
to the Certificate and Agreement pursuant
to Sections 9.3 and 9.4 of the Certificate
and Agreement
<PAGE> 1
Exhibit 1(c)
STATE OF CALIFORNIA
Office of
March Fong Eu
Secretary of State
Sacramento
I, MARCH FONG EU, Secretary of State of the State of California, hereby
certify:
That the annexed transcript of 2 page(s) was prepared by and in this
office from the record on file, of which it purports to be a copy, and that it
is full, true and correct.
IN WITNESS WHEREOF, I execute this
certificate and affix the Great
Seal of the State of California this
November 21, 1984
-------------------------------------
/s/ March Fong Eu
-------------------------------------
Secretary of State
<PAGE> 2
STATE OF CALIFORNIA
CERTIFICATE OF LIMITED PARTNERSHIP - FORM LP-1
IMPORTANT - Read instructions on back before completing this form
This Certificate is presented for filing pursuant to Chapter 3, Article 2,
Section 15621, California Corporations Code.
NAME OF LIMITED PARTNERSHIP
Chestnut Street Exchange Fund ("A California Limited Partnership")
STREET ADDRESS OF PRINCIPAL EXECUTIVE OFFICE CITY AND STATE ZIP CODE
Suite 204 Webster Building, 3411 Silverside Road Wilmington, DE 19840
STREET ADDRESS OF CALIFORNIA OFFICE IF EXECUTIVE CITY AND STATE ZIP CODE
OFFICE IN ANOTHER STATE
Shearson, Lehman/American Express, Inc., San Francisco, CA 94111
TransAmerica Bldg., 600 Montgomery Street,
40th Floor
COMPLETE IF LIMITED PARTNERSHIP WAS FORMED PRIOR TO JULY 1, 1984 AND IS IN
EXISTENCE ON DATE THIS CERTIFICATE IS EXECUTED
THE ORIGINAL LIMITED PARTNERSHIP CERTIFICATE WAS RECORDED ON March 25 1976
WITH THE RECORDER OF Los Angeles COUNTY. FILE OR RECORDATION NUMBER 4170
NAMES AND ADDRESSES OF ALL GENERAL PARTNERS: (CONTINUE ON SECOND PAGE, IF
NECESSARY)
NAME: Henry M. Watts, Jr.
ADDRESS: Mitchel, Schreiber, Watts & Co., Inc., 55 Broad Street
CITY: New York STATE New York ZIP CODE 10004
NAME: G. Willing Pepper
ADDRESS: 128 Springton Lake Road
CITY: Media STATE PA ZIP CODE 19063
NAME: Robert R. Fortune
ADDRESS: 2920 Ritter Lane
CITY: Allentown STATE PA ZIP CODE 18101
NAME: Hefner, Stark & Marois, Attn: Robert Stark
ADDRESS: 555 Capitol Mall
CITY: Sacramento STATE CA ZIP CODE 95814
NAME: R. Stewart Rauch
ADDRESS: Philadelphia Saving Fund Society, 1212 Market Street
CITY: Philadelphia STATE PA ZIP CODE 19107
NAME: David R. Wilmerding, Jr.
ADDRESS: The Mutual Assurance Company, 240 South 4th Street
CITY: Philadelphia STATE PA ZIP CODE 19106
NAME: The Sandridge Corporation
ADDRESS: 1002 Wilmington Trust Building, 100 West 10th Street
CITY: Wilmington STATE DE ZIP CODE 19801
DATE FOR WHICH THIS PARTNERSHIP IS TO EXIST
March 25, 1976 to December 31, 2071
<PAGE> 3
FOR THE PURPOSE OF FILING AMENDMENTS, DISSOLUTION AND CANCELLATION CERTIFICATES
PERTAINING TO THIS CERTIFICATE. THE ACKNOWLEDGEMENT OF 1 GENERAL PARTNERS IS
REQUIRED. Agreement of Limited Partnership permits execution by
attorney-in-fact on behalf of a General Partner.
ANY OTHER MATTERS THE GENERAL PARTNERS DESIRE TO INCLUDE IN THIS CERTIFICATE MAY
BE NOTED ON SEPARATE PAGES AND BY REFERENCE HEREIN IS A PART OF THIS
CERTIFICATE. NUMBER OF PAGES ATTACHED 1
IT IS HEREBY DECLARED THAT I AM (WE ARE) THE PERSON(S) WHO EXECUTED THIS
CERTIFICATE OF LIMITED PARTNERSHIP, WHICH EXECUTION IS MY (OUR) ACT AND DEED
(SEE INSTRUCTIONS).
<TABLE>
<S> <C>
/s/ R.S. Rauch 9/21/84 /s/ Henry M. Watts
- --------------------------------------- -------------------------------------------
Signature of General Partner Date Signature of General Partner Date
/s/ D.R. Wilmerding, Jr. 9/21/84 /s/ G. Willing Pepper 10/26/84
- --------------------------------------- -------------------------------------------
Signature of General Partner Date Signature of General Partner Date
/s/ Robert R. Fortune 9/21/84 /s/ Signature Illegible 11/12/84
- --------------------------------------- -------------------------------------------
Signature of General Partner Date Signature of General Partner
V.P., Provident Financial Processing Corp.
attorney-in-fact for The Sandridge
Corporation
</TABLE>
RETURN ACKNOWLEDGEMENT TO:
Morgan R. Jones, Esquire THIS SPACE IS FOR FILING OFFICER
Drinker Biddle & Reath USE (FILE NUMBER, DATE OF FILING)
1100 PNB Building
Broad and Chestnut Streets 8432100026
Philadelphia, PA 19107 FILED
In the office of the Secretary of
State of the State of California
November 14, 1984
/s/ March Fong Eu
-----------------------------
MARCH FONG EU
SECRETARY OF STATE
Form LP-1 Filing Fee $70
Approved by the Secretary of State
<PAGE> 4
CHESTNUT STREET EXCHANGE FUND
(A California Limited Partnership)
AMENDMENT TO RESTATED
CERTIFICATE AND AGREEMENT
OF LIMITED PARTNERSHIP
THIS AMENDMENT has been executed and delivered among the General
Partners and the Limited Partners herein named for the purpose of amending the
Restated Certificate and Agreement of Limited Partnership (the "Certificate and
Agreement") of Chestnut Street Exchange Fund, a California limited partnership
(the "Partnership") as initially recorded in the Official Records of the Office
of the County Recorder of Sacramento, California, in order to amend Section 1.2
of Article I of the Certificate and Agreement to provide that the principal
place of business of the Partnership for the purposes of Section 15614 of the
Limited Partnership Act shall be c/o Shearson Lehman/American Express, Inc.,
TransAmerica Building, 40th Floor, 600 Montgomery Street, San Francisco,
California 94111.
NOW THEREFORE, the General Partners and the Limited Partners of the
Partnership, acting through their respective attorneys in fact as authorized by
Sections 9.3 and 9.4 of the Certificate and Agreement, hereby amend Section 1.2
of Article I of the Certificate and Agreement be deleting the first sentence
thereof in its entirety and adding in its place the following:
1.2 Principal Place of Business. The principal place of
business of the Partnership for purposes of Section 15614 of
the Limited Partnership Act shall be c/o Shearson
Lehman/American Express, Inc., TransAmerica Building, 600
Montgomery Street, San Francisco, California 94111.
<PAGE> 5
IN WITNESS WHEREOF, the General Partners and the Limited Partners have
executed this Amendment as of the 12th day of November, 1984.
MANAGING GENERAL PARTNERS
NON-MANAGING GENERAL PARTNER
By: /s/ signature illegible (Title)
-----------------------
for Provident Financial Processing
Corporation, attorney-in-fact for the
Managing General Partners and the Non-
Managing General Partner set forth in
Schedule "A" to the Certificate and
Agreement pursuant to Section 9.3 of the
Certificate and Agreement
THE LIMITED PARTNERS
By: /s/ signature illegible (Title)
-----------------------
for Provident Financial Processing
Corporation, attorney-in-fact for the
Managing General Partners and exercising
the power of attorney granted to each of
the managing General Partners by the
Limited Partners set forth in Schedule
"A" to the Certificate and Agreement
pursuant to Sections 9.3 and 9.4 of the
Certificate and Agreement
<PAGE> 1
Exhibit 1(d)
STATE OF CALIFORNIA
Office of
March Fong Eu
Secretary of State
SACRAMENTO
I, MARCH FONG EU, Secretary of State of the State of California, hereby
certify:
That the annexed transcript of 1 page(s) was prepared by and in this
office from the record on file, of which it purports to be a copy, and that it
is full, true and correct.
IN WITNESS WHEREOF, I execute this
certificate and affix the Great Seal
of the State of California
January 21, 1988
--------------------------------------
/s/ March Fong Eu
--------------------------------------
<PAGE> 2
AMENDMENT TO CERTIFICATE OF LIMITED PARTNERSHIP - FORM LP-2
IMPORTANT-READ INSTRUCTIONS ON BACK BEFORE COMPLETING THIS FORM. THIS AMENDMENT
IS PRESENTED FOR FILING PURSUANT TO CHAPTER 3, ARTICLE 2, SECTION 15622,
CALIFORNIA CORPORATION CODE.
SECRETARY OF STATE FILE NO. SECRETARY OF STATE FILE DATE
(ORIGINAL CERTIFICATE) (ORIGINAL CERTIFICATE)
8432100026 November 14, 1984
NAME OF LIMITED PARTNERSHIP
CHESTNUT STREET EXCHANGE FUND "A CALIFORNIA LIMITED PARTNERSHIP"
THE LIMITED PARTNERSHIP NAME IS CHANGED TO:
, a California Limited Partnership
THE PRINCIPAL EXECUTIVE OFFICE ADDRESS OR THE OFFICE ADDRESS IN CALIFORNIA.
IF THE PRINCIPAL EXECUTIVE OFFICE IS LOCATED OUTSIDE CALIFORNIA IS CHANGED
TO:
- -------------------------------------------------------------------------------
(Street) (City) (State) (Zip)
THE ADDRESS OF THE FOLLOWING GENERAL PARTNER(S) IS CHANGED TO: (CONTINUE ON
SEPARATE PAGE IF NECESSARY)
- -------------------------------------------------------------------------------
(Name) (Street) (City) (State) (Zip)
THE FOLLOWING GENERAL PARTNER(S) HAS (HAVE) WITHDRAWN: (CONTINUE ON SEPARATE
PAGE IF NECESSARY)
- -------------------------------------------------------------------------------
(Name) (Street) (City) (State) (Zip)
THE FOLLOWING GENERAL PARTNER(S) HAS (HAVE) BEEN ADDED: (CONTINUE ON SEPARATE
PAGE IF NECESSARY)
- -------------------------------------------------------------------------------
(Name) (Street) (City) (State) (Zip)
THE ADDRESS OF THE CURRENT AGENT FOR SERVICE OF PROCESS IS CHANGED TO:
- -------------------------------------------------------------------------------
(Name) (Street) (City) (State) (Zip)
THE AGENT FOR SERVICE OF PROCESS HAS BEEN CHANGED TO:
CORPORATION SERVICE COMPANY Which Will Do Business In California As CSC-LAWYERS
INCORPORATING SERVICE, 179 Southgate Road Sacramento CA 95815
(Street) (City) (State) (Zip)
THE TERM FOR WHICH THE LIMITED PARTNERSHIP IS TO EXIST HAS BEEN CHANGE TO:
OTHER MATTERS INCLUDED IN THE CERTIFICATE OF LIMITED PARTNERSHIP ARE AMENDED AS
INDICATED ON THE ATTACHED PAGE(S).
NUMBER OF PAGES ATTACHED:
<PAGE> 3
I HEREBY DECLARED THAT I AM (WE ARE) THE PERSON(S) WHO EXECUTED THIS AMENDMENT
TO THE IDENTIFIED CERTIFICATE OF LIMITED PARTNERSHIP WHICH EXECUTION IS MY (OUR)
ACT AND FEES. (SEE INSTRUCTIONS)
/s/ Henry M. Watts, Jr. 12/22/87
- --------------------------------------- -------------------------------------
Signature of General Partner Date Signature of General Partner Date
President & Chairman
- --------------------------------------- -------------------------------------
Signature of General Partner Date Signature of General Partner Date
- --------------------------------------- -------------------------------------
Signature of General Partner Date Signature of General Partner Date
RETURN ACKNOWLEDGMENT TO: THIS SPACE FOR FILING OFFICER USE
(DATE OF FILING)
Carol K. Dolor 8432100026
Corporation Services Company
P.O Box 591 FILED
Wilmington, DC 19899 In the office of the Secretary of
State of the State of California
January 4, 1988
/s/ March Fong Eu
MARCH FONG EU
SECRETARY OF STATE
FORM LP-2 - FILING FEE $15
Approved by the Secretary of State
<PAGE> 1
Exhibit 1(e)
STATE OF CALIFORNIA
Office of
March Fong Eu
Secretary of State
SACRAMENTO
I, MARCH FONG EU, Secretary of State of the State of California, hereby
certify:
That the annexed transcript of 1 page(s) was prepared by and in this
office from the record on file, of which it purports to be a copy, and that it
is full, true and correct.
IN WITNESS WHEREOF, I execute this
certificate and affix the Great Seal
of the State of California
September 29, 1987
--------------------------------------
/s/ March Fong Eu
--------------------------------------
<PAGE> 2
AMENDMENT TO CERTIFICATE OF LIMITED PARTNERSHIP - FORM LP-2
IMPORTANT-READ INSTRUCTIONS ON BACK BEFORE COMPLETING THIS FORM. THIS AMENDMENT
IS PRESENTED FOR FILING PURSUANT TO CHAPTER 3, ARTICLE 2, SECTION 15622,
CALIFORNIA CORPORATIONS CODE.
SECRETARY OF STATE FILE NO. SECRETARY OF STATE FILE DATE
(ORIGINAL CERTIFICATE) (ORIGINAL CERTIFICATE)
8432100026 November 14, 1984
NAME OF LIMITED PARTNERSHIP
CHESTNUT STREET EXCHANGE FUND (A CALIFORNIA LIMITED PARTNERSHIP)
THE CERTIFICATE OF LIMITED PARTNERSHIP IS AMENDED AS FOLLOWS: (COMPLETE
APPROPRIATE SUB-SECTIONS)
THE LIMITED PARTNERSHIP NAME IS CHANGED TO:
, a California Limited Partnership
THE PRINCIPAL EXECUTIVE OFFICE ADDRESS OR THE OFFICE ADDRESS IN CALIFORNIA. IF
THE PRINCIPAL EXECUTIVE OFFICE IS LOCATED OUTSIDE CALIFORNIA IS CHANGED TO:
- --------------------------------------------------------------------------------
(Street) (City) (State) (Zip)
THE ADDRESS OF THE FOLLOWING GENERAL PARTNER(S) IS CHANGED TO: (CONTINUE ON
SEPARATE PAGE IF NECESSARY)
- --------------------------------------------------------------------------------
(Name) (Street) (City) (State) (Zip)
THE FOLLOWING GENERAL PARTNER(S) HAS (HAVE) WITHDRAWN: (CONTINUE ON SEPARATE
PAGE IF NECESSARY)
Russel W. Richie, Morgan House, 760 Stenton Avenue, Philadelphia PA 19118
- --------------------------------------------------------------------------------
(Name) (Street) (City) (State) (Zip)
THE FOLLOWING GENERAL PARTNER(S) HAS (HAVE) BEEN ADDED: (CONTINUE ON SEPARATE
PAGE IF NECESSARY)
- --------------------------------------------------------------------------------
(Name) (Street) (City) (State) (Zip)
THE ADDRESS OF THE CURRENT AGENT FOR SERVICE OF PROCESS IS CHANGED TO:
- --------------------------------------------------------------------------------
(Name) (Street) (City) (State) (Zip)
THE AGENT FOR SERVICE OF PROCESS HAS BEEN CHANGED TO:
- --------------------------------------------------------------------------------
(Street) (City) (State) (Zip)
THE TERM FOR WHICH THE LIMITED PARTNERSHIP IS TO EXIST HAS BEEN CHANGE TO:
OTHER MATTERS INCLUDED IN THE CERTIFICATE OF LIMITED PARTNERSHIP ARE AMENDED AS
INDICATED ON THE ATTACHED PAGE(S).
NUMBER OF PAGES ATTACHED:
<PAGE> 3
I HEREBY DECLARED THAT I AM (WE ARE) THE PERSON(S) WHO EXECUTED THIS AMENDMENT
TO THE IDENTIFIED CERTIFICATE OF LIMITED PARTNERSHIP WHICH EXECUTION IS MY (OUR)
ACT AND FEES.
(SEE INSTRUCTIONS)
/s/ Henry M. Watts, Jr. 9/8/87
- -------------------------------------- ------------------------------------
Signature of General Partner Date Signature of General Partner Date
President & Chairman
- -------------------------------------- ------------------------------------
Signature of General Partner Date Signature of General Partner Date
- -------------------------------------- ------------------------------------
Signature of General Partner Date Signature of General Partner Date
RETURN ACKNOWLEDGMENT TO: THIS SPACE FOR FILING OFFICER USE
(DATE OF FILING)
Nancy H. Paterson, Esquire 8432100026
Drinker Biddle & Reath
1100 Philadelphia, Nat'l Bank Bldg. FILED
Broad and Chestnut Streets In the office of the Secretary of State
Philadelphia, PA 19107 of the State of California
September 14, 1987
/s/ March Fong Eu
MARCH FONG EU
SECRETARY OF STATE
<PAGE> 1
Exhibit 1(f)
CHESTNUT STREET EXCHANGE FUND
(A California Limited Partnership)
AMENDMENT TO RESTATED
CERTIFICATE AND AGREEMENT
OF LIMITED PARTNERSHIP
THIS AMENDMENT has been executed and delivered among the General
Partners and the Limited Partners herein named for the purpose of amending the
Restated Certificate and Agreement of Limited Partnership, as heretofore amended
(the "Certificate and Agreement") of Chestnut Street Exchange Fund, a California
limited partnership (the "Partnership") as previously recorded in the Official
Records of the Office of the County Recorder of Sacramento, California, in order
to amend subsection (a) of Section 6.3 of the Certificate and Agreement to
permit payment upon redemption by a Shareholder who is not an original purchaser
of Shares to be made in any portfolio securities, in cash, or in any combination
thereof, as the Managing General Partners may in their sole discretion
determine.
NOW THEREFORE, the General Partners and the Limited Partners of the
Partnership, acting through their respective attorneys-in-fact as authorized by
Sections 9.3 and 9.6 of the Certificate of Agreement, hereby amend subsection
(a) of Section 6.3 of the Certificate and Agreement to read in its entirety as
follows:
"(a) Subject to any contractual limitation on the right of the
Non-Managing General Partner(s) to redeem Shares, the requirement stated in
Section 3.11 that each General Partner own at least one Share, and to the
limitations of Sections 6.3(b) and (d) below, a Shareholder may elect to
redeem any or all of the Shares held by him of record at the Net Asset Value
Per Share next computed after receipt by the Fund (or by a person designated
by the Fund for such purpose) of a written request for redemption. The
request must be accompanied by either the certificates representing the
Shares to be redeemed, if certificates have been issued, or a stock power,
duly endorsed by the record Holder(s) with signature(s) guaranteed by a
commercial bank or trust company or member of a registered national
securities exchange. Except as otherwise provided in this Section 6.3(a) and
except to the extent Shares are redeemed for cash pursuant to a Systematic
Withdrawal Plan described in Section 6.3(f) below, payments upon redemption
may be made in cash, in any portfolio securities or in any combination
thereof, in the sole discretion of the Managing General
<PAGE> 2
Partners. For the first five years after the exchange, securities paid upon
a redemption of Shares which were originally issued to the redeeming
Shareholder upon consummation of the exchange will, the extent available in
the Fund's portfolio, be securities of the same issuer or issuers as those
deposited by such Shareholder with the Fund for exchange. To the extent such
securities are not available, such redemption may be paid in cash, in any
portfolio securities or in any combination thereof, as the Managing General
Partners may in their sole discretion determine. If securities which were
subject to a legal or contractual restriction on their resale by the Fund
("restricted securities") were exchanged for Shares, and such securities are
still subject to such a restriction at the time the Shares issued in
exchange therefor are redeemed, the Fund may distribute in such redemption
restricted securities of the same issuer or issuers as contributed to the
Fund. The Fund will not otherwise distribute restricted securities in
redemption of Shares."
IN WITNESS WHEREOF, the General Partners and the Limited Partners have
executed this Amendment as of the 12th day of October, 1978.
THE LIMITED PARTNERS THE GENERAL PARTNERS
/s/ John W. McLaughlin /s/ John W. McLaughlin
- --------------------------------- ---------------------------------
By: Vice President (title) By: Vice President (title)
for Provident National Bank, for Provident National Bank,
attorney-in-fact for the attorney-in-fact for the
Managing General Partners and General Partners set forth
exercising the power of in Schedule "A" to this
attorney granted to each of Amendment pursuant to Sections
the Managing General Partners 9.3 and 9.6 of the Certificate
by the Limited Partners set and Agreement.
forth in Schedule "A" to this
Amendment pursuant to Sections
9.3 and 9.6 of the Certificate
and Agreement.
<PAGE> 1
Exhibit 1(g)
CHESTNUT STREET EXCHANGE FUND
(A California Limited Partnership)
AMENDMENT TO RESTATED
CERTIFICATE AND AGREEMENT
OF LIMITED PARTNERSHIP
THIS AMENDMENT has been executed and delivered among the General
Partners and the Limited Partners herein for the purpose of amending the
Restated Certificate and Agreement of Limited Partnership, as heretofore amended
(the "Certificate and Agreement") of Chestnut Street Exchange Fund, a California
limited partnership (the "Partnership") as previously recorded in the Official
Records of the Office of the County Recorder of Sacramento, California, in order
to amend the investment restriction set forth in subsection (h) of Section 2.4
of the Certificate and Agreement to permit the Partnership to write call options
on securities constituting not more than 25% of the value of its assets.
NOW THEREFORE, the General Partners and the Limited Partners of the
Partnership, acting through their respective attorneys-in-fact as authorized by
Sections 9.3 and 9.6 of the Certificate of Agreement, hereby amend subsection
(h) of Section 2.4 of the Certificate and Agreement to read in its entirety as
follows:
"(h) purchase or write puts, calls, straddles or spreads with
respect to any security except that (x) the Fund may write call options on
securities constituting not more than 25% of the value of its assets if the
option is listed on a national securities exchange and at all times while
the option is outstanding, the Fund owns the securities against which the
option is written or owns securities convertible into such securities, and
(y) the Fund may purchase call options in closing purchase transactions to
liquidate its position as an option writer; or"
IN WITNESS WHEREOF, the General Partners and the Limited Partners have
executed this Amendment as of the 26th day of October, 1977.
THE LIMITED PARTNERS THE GENERAL PARTNERS
By: /s/ Walter R. Knorr, A.V.P.(title) By: /s/ Walter R. Knorr, A.V.P.(title)
--------------------------- ---------------------------
for Provident National Bank, for Provident National Bank,
attorney-in-fact for the attorney-in-fact for the
Managing General Partners General Partners set forth
and exercising the power of in Schedule "A" to this
attorney granted to each of Amendment pursuant to Section
the Managing General Partners 9.3 of the Certificate and
by the Limited Partners set Agreement.
forth in Schedule "A" to this
Amendment pursuant to Sections
9.3 and 9.6 of the Certificate
and Agreement.
<PAGE> 1
Exhibit 1(h)
CHESTNUT STREET EXCHANGE FUND
(A California Limited Partnership)
AMENDMENT TO RESTATED CERTIFICATE AND
AGREEMENT OF LIMITED PARTNERSHIP
THIS AMENDMENT has been executed and delivered among the General
Partners and the Limited Partners herein for the purpose of amending the
Restated Certificate and Agreement of Limited Partnership, as heretofore amended
(the "Certificate and Agreement") of Chestnut Street Exchange Fund, a California
limited partnership (the "Partnership") as previously recorded in the Official
Records of the Office of the County Recorder of Sacramento, California, in order
to eliminate the requirement of an annual meeting of partners, as approved by
the Partnership at an Annual Meeting of Partners held on April 24, 1992.
NOW THEREFORE, the General Partners and the Limited Partners of the
Partnership, acting through their respective attorneys-in-fact as authorized by
Sections 9.3 and 9.6 of the Certificate and Agreement, hereby amend the
Certificate and Agreement as follows:
(a) the first paragraph of Article VII, Section 7.2 of the
Certificate and Agreement shall be amended and restated in its entirety
as follows:
"7.2 Meetings of the Partners. An annual meeting of the
Partners for the election of General Partners, the ratification or
rejection of the appointment of the independent public accountants of
the Fund or other business is not required to be held unless required
by applicable law or otherwise determined by the Managing General
Partners. Any such meetings shall be held at the statutory office of
the Fund in California, or at such other place as may be designated in
the call thereof, which call shall be made by the Managing General
Partners. Special meetings may also be called by the Managing General
Partners from time to time for the purpose of taking action upon any
matter requiring the vote or authority of the Partners as herein
provided."
(b) Section 7.1(e) of the Certificate and Agreement shall
be amended and restated in its entirety as follows:
"(e) the right to ratify or reject the appointment of and to
terminate employment of the independent
<PAGE> 2
public accountants of the Fund to the extent required by the 1940 Act
or other applicable law."
(c) the first paragraph of Article III, Section 3.2 of the
Certificate and Agreement shall be amended and restated in its entirety
as follows:
"3.2 Designation and Election of Successor or Additional
General Partners. The Managing General Partners shall determine from
time to time the number of persons who will be proposed for election as
General Partners. At the annual meeting of Partners, if held in a given
year, or at any special meeting called for the purpose of electing
General Partners, the Partners shall elect the General Partners. Each
of the Managing and Non-Managing General Partners shall serve until the
next annual or special meeting at which General Partners are elected
and until the election and qualification of the persons's successor, or
until the person's status as such is sooner terminated as provided in
Section 3.8 below. If at any time the number of Managing Partners is
reduced to less than three, the remaining Managing General Partner or
Managing General Partners so as to restore the number of Managing
General Partners to at least three. If there are no remaining Managing
General Partners, the Non-Managing General Partner(s) shall, within 120
days, call such a meeting of Partners for such purpose.
If at any time a vacancy occurs among the Managing General
Partners, the procedure for filing such vacancy shall be as set forth
in Sections 16(a) and (b) of the Investment Company Act of 1940."
IN WITNESS WHEREOF, the General Partners and the Limited Partners have
executed this Amendment as of the day of , 1992.
THE LIMITED PARTNERS THE GENERAL PARTNERS
By: By:
--------------------------- -----------------------------
attorney-in-fact for the attorney-in-fact for the
Managing General Partners General Partners
and exercising the power of pursuant to Section 9.3
attorney granted to each of of the Certificate and
the Managing General Partners Agreement
by the Limited Partners
pursuant to Sections 9.3 and
9.6 of the Certificate and
Agreement
<PAGE> 1
EXHIBIT 2(a)
CODE OF REGULATIONS
OF
CHESTNUT STREET EXCHANGE FUND,
a California Partnership
<PAGE> 2
CODE OF REGULATIONS
OF
CHESTNUT STREET EXCHANGE FUND,
a California Limited Partnership
Page
----
ARTICLE I - Offices............................................ 4
Section 1.01 Statutory Office............................. 4
Section 1.02 Other Offices................................ 4
ARTICLE II - Meetings of the Partners.......................... 4
Section 2.01 Place of Meetings............................ 4
Section 2.02 Annual Meetings.............................. 4
Section 2.03 Special Meetings............................. 5
Section 2.04 Adjourned Meetings and
Notice Thereof.................................... 5
Section 2.05 Quorum....................................... 6
Section 2.06 Voting....................................... 6
Section 2.07 Consent of Absentees......................... 7
Section 2.08 Action Without Meeting....................... 7
Section 2.09 Proxies...................................... 7
ARTICLE III - General Partners................................. 7
Section 3.01 Identity of Managing and
Non-Managing General Partners..................... 7
Section 3.02 Designation and Election
of Substituted or Additional
General Partners.................................. 7
Section 3.03 Managing and Non-Managing
General Partners.................................. 8
Section 3.04 Management and Control....................... 8
Section 3.05 Limitations on the Authority
of the General Partners........................... 10
Section 3.06 Action by the Fund........................... 11
Section 3.07 Reimbursement and
Indemnification................................... 11
Section 3.08 Limitation of Liability to
Limited Partners.................................. 11
Section 3.09 Termination of Authority
and Interest of General Partners.................. 12
ARTICLE IV - Officers.......................................... 12
Section 4.01 Officers..................................... 12
Section 4.02 Election..................................... 12
Section 4.03 Removal and Resignation...................... 12
Section 4.04 Vacancies.................................... 13
ARTICLE V - Miscellaneous...................................... 13
Section 5.01 Record Date and Closing
Share Records..................................... 13
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<PAGE> 3
Page
----
Section 5.02 Inspection of Partnership
Records........................................... 13
Section 5.03 Checks, Drafts, Etc.......................... 14
Section 5.04 Annual Report................................ 14
Section 5.05 Contract, Etc., How Executed................. 14
Section 5.06 Certificates for Shares...................... 14
Section 5.07 Representation of Shares
of Corporations................................... 14
Section 5.08 Inspection of Code of
Regulations....................................... 15
Section 5.09 Periodic Reports............................. 15
ARTICLE VI - Amendments........................................ 15
Section 6.01 Power of Partners............................ 15
Section 6.02 Power of the Managing
General Partners.................................. 15
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<PAGE> 4
CODE OF REGULATIONS FOR THE REGULATION,
EXCEPT AS OTHERWISE PROVIDED BY
THE CALIFORNIA LIMITED PARTNERSHIP ACT
AND THE CERTIFICATE AND AGREEMENT OF
LIMITED PARTNERSHIP, OF
CHESTNUT STREET EXCHANGE FUND,
a California Limited Partnership
ARTICLE I
Offices
Section 1.01 Statutory Office. The principal office of the
Partnership for purposes of Section 15502 of the California Limited Partnership
Act (the "Partnership Act") is hereby located at Suite 800, 9601 Wilshire
Boulevard in the City of Beverly Hills, County of Los Angeles, State of
California. The Managing General Partners are hereby granted full power and
authority to change said statutory office to any other location in California by
amendment of this Section 1.01.
Section 1.02 Other Offices. Branch or subordinate offices may at any
time be established by the Managing General Partners at any place or places,
within or without California, where the Partnership qualifies to do business.
ARTICLE II
Meetings of the Partners
Section 2.01 Place of Meetings. All annual meetings of the Partners
and all other meetings of the Partners shall be held either at the principal
office or at any other place within or without the State of California which may
be designated either by the Managing General Partners in the call thereof, or by
the written consent of all Partners entitled to vote thereat, given either
before or after the meeting and filed with the Partnership.
Section 2.02 Annual Meetings. The annual meetings of the Partners
shall be held on the 30th of September in each year at such time as the Managing
General Partners may fix in the notice of the meeting; provided however, that
should said day fall upon a legal holiday, then any such annual meeting of
Partners shall be held at the same time and place on the next preceding day
which is not a legal holiday. At such meetings General Partners shall be
elected, reports of the affairs of the Partnership shall be considered, and any
other business may be transacted which is within the power of the Partners under
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<PAGE> 5
Section 7.1 of the Certificate and Agreement of Limited Partnership (the
"Certificate and Agreement").
Written notice of each annual meeting shall be given to each Partner
entitled to vote, either personally or by mail or other means of written
communication, charges prepaid, addressed to such Partner at his address
appearing on the books of the Partnership or given by him to the Partnership for
the purpose of notice. If a Partner gives no address, notice shall be deemed to
have been given if sent by mail or other means of written communication
addressed to the place where the principal office of the Partnership is
situated, or if published at least once in some newspaper of general circulation
in the county in which said office is located. All such notices shall be sent to
each Partner entitled thereto not less than seven (7) days before each annual
meeting, and shall specify the place, the day and the hour of such meeting, and
shall state such other matters, if any, as may be expressly required by the
Partnership Act.
Section 2.03 Special Meetings. Special meetings of the Partners, for
any purpose or purposes permitted under the Certificate and Agreement, may be
called at any time by any Managing General Partner. In addition, if the Managing
General Partners shall fail to call or give notice of any meeting of the
Partners (for a purpose permitted by the Certificate and Agreement) within
thirty (30) days after written application by Partners holding at least ten
percent (10%) of the Shares, then one or more Partners holding not less than
then percent (10%) of the outstanding Shares may call and give notice of a
Special Meeting of Partners, and thereupon said meeting shall be held in the
manner provided herein in the case of Special Meetings called by the Managing
General Partners. Except in special cases where other express provision is made
by the Partnership Act or the Certificate and Agreement, notice of such special
meetings shall be given in the same manner as for annual meetings of Partners.
Notices of any special meeting shall specify in addition to the place, day and
hour of such meeting, the general nature of the business to be transacted.
Section 2.04 Adjourned Meetings and Notice Thereof. Any Partners'
meeting, annual or special, whether or not a quorum is present, may be adjourned
from time to time by the vote of a majority of the Shares, the holders of which
are either present in person or represented by proxy thereat, but in the absence
of a quorum no other business may be transacted at such meeting.
When any Partners' meeting, either annual or special, is adjourned for
thirty (30) days or more, notice of the adjourned meeting shall be given as in
the case of an original meeting. Save as aforesaid, it shall not be necessary to
give any notice of an adjournment or of the business to be transacted
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<PAGE> 6
at an adjourned meeting, other than by announcement at the meeting at which such
adjournment is taken.
Section 2.05 Quorum. The presence in person or by proxy of Partners
entitled to vote a majority of the Shares at any meeting shall constitute a
quorum for the transaction of business. The Partners present at a duly called or
held meeting at which a quorum is present may continue to do business until
adjournment, notwithstanding the withdrawal of enough Partners to leave less
than a quorum, provided a sufficient number of Shares are voted in favor of a
proposal to cause its adoption under the terms of these Regulations and the
Certificate and Agreement.
Section 2.06 Voting. Unless a record date for voting purposes be
fixed as provided in Section 5.01 of this Code of Regulations, only Partners in
whose names Shares entitled to vote stand in the Certificate and Agreement on
the day then (10) days prior to any meeting of Partners shall be entitled to
vote at such meeting. Such vote may be viva voce or by ballot; provided,
however, that all elections of General Partners must be by ballot upon demand
made by a Partner at any election and before the voting begins. Each Partner
shall have one vote for each Share owned by him as reflected in the Certificate
and Agreement. A majority of the Shares voted at a meeting at which a quorum is
present shall constitute action of the Partners, except:
(a) that in the election of General Partners, those
candidates receiving the highest number of votes cast at a Meeting of Partners
at which a quorum is present, up to the number of General Partners to be
elected, shall be elected as General Partners of the Fund; there shall be no
cumulative voting in election of General Partners;
(b) that approval of the following matters shall require
the approval of a majority of the outstanding Shares:
(i) approval or disapproval of proposed changes in
the investment limitations referred to in Section II of the Certificate
and Agreement;
(ii) approval or disapproval of proposed changes in
the nature of the Fund's business as such business is described in
Section II of the Certificate and Agreement; and
(iii) approval or disapproval of any investment
advisory or management contract or termination of any such existing
contract entered into by the Managing General Partners pursuant to
Section 3.3(e) of the Certificate and Agreement; and
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<PAGE> 7
(c) where a larger vote, if any, is otherwise required by
provision of the Certificate and Agreement.
Section 2.07 Consent of Absentees. The transactions of any meeting
of Partners, either annual or special, however called and noticed, shall be as
valid as though had at a meeting duly held after regular call and notice, if a
quorum be present either in person or by proxy, and if, either before or after
the meeting, each of the Partners entitled to vote, not present in person or by
proxy, signs a written waiver of notice, or a consent to the holding of such
meeting, or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the records of the Partnership or made a part of
the minutes of the meeting.
Section 2.08 Action Without Meeting. Any action which, under the
Certificate and Agreement of Limited Partnership, may be taken at a meeting of
the Partners, may be taken without a meeting if authorized by a writing signed
by all of the persons who would be entitled to vote upon such action at a
meeting, and filed with the Partnership.
Section 2.09 Proxies. Every person entitled to vote or execute
consents shall have the right to do so either in person or by one or more agents
authorized by a written proxy executed by such person or his duly authorized
agent and filed with the Partnership; provided that no such proxy shall be valid
after the expiration of eleven (11) months from the date of its execution,
unless the person executing it specifies therein the length of time for which
such proxy is to continue in force, which in no case shall exceed seven (7)
years from the date of its execution.
ARTICLE III
General Partners
Section 3.01 Identity of Managing and Non-Managing General Partners.
The names of the Managing and Non-Managing General Partners, their places of
residence and the number of Shares owned by each of them are set forth in
Schedule "A" to this Certificate and Agreement and are incorporated herein by
this reference.
Section 3.02 Designation and Election of Substituted or Additional
General Partners. The Managing General Partners shall determine from time to
time the number of persons who will be proposed for election as General
Partners. In each year, beginning in 1977, at the annual meeting of Partners or
at any special meeting held in lieu thereof, the Partners shall elect the
General Partners, each of whom shall serve until the next annual meeting or
special meeting in lieu thereof and until the election and qualification of his
successor, or until his
-7-
<PAGE> 8
authority is sooner terminated as provided in Section 3.8 below. If at any time
the number of Managing General Partners is reduced to less than three, the
remaining Managing General Partners shall, within 120 days, call a meeting of
Partners for the purpose of electing an additional Managing General Partner or
Managing General Partners so as to restore the number of Managing General
Partners to at least three.
A person may be added or substituted as a General Partner only upon his
election by the Partners as provided herein. Each General Partner, by becoming a
General Partner, consents to the admission as an added or substituted General
Partner of any person elected by the Partners in accordance with this
Certificate and Agreement. Each Partner, by becoming a Partner of the Fund,
consents to and ratifies the actions of the General Partners in determining the
persons who will be proposed for election and admission as additional or
substituted General Partners.
Section 3.03 Managing and Non-Managing General Partners. Only
individuals may act as managing General Partners, and all individual General
Partners shall act as Managing General Partners. Any General Partner which is a
corporation, association, partnership, joint venture or trust shall act as a
Non-Managing General Partner.
A Non-Managing General Partner shall take no part in the management,
conduct or operation of the Fund's business and shall have no authority to act
on behalf of the Fund or to bind the Fund, except as a Non-Managing General
Partner may be authorized to act in Section 3.04(e) below.
Section 3.04 Management and Control. Subject to the provisions of
this Certificate and Agreement, the business of the Fund shall be managed by the
Managing General Partners, and they shall have complete and exclusive control
over the management, conduct and operation of the Fund's business. Except as
otherwise specifically provided in this Certificate and Agreement, each of the
Managing General Partners shall have the right, power and authority, on behalf
of the Fund and in its name, to exercise all of the rights, powers and authority
of a partner in a partnership without limited partners under The Uniform
Partnership Act of the State of California. Without limiting the foregoing, but
subject to the Investment and Operating Limitations in Section ____ above and
the right of the Partners to vote on certain matters affecting the basic
structure of the Fund in Article _____ below, the Fund and the Managing General
Partners, acting pursuant to Section 3.06 below, shall have th power and
authority to:
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<PAGE> 9
(a) Adopt, amend and repeal By-Laws not inconsistent with
this Certificate and Agreement providing for the conduct of the business of the
Fund;
(b) Appoint one of their number to be Administrative
Partner, who shall preside at all meetings of Partners, shall be responsible for
the execution of policies established by the Managing General Partners and may
be the chief executive, financial and accounting officer;
(c) Appoint from their own number, and terminate, any one
or more committees consisting of two or more Managing General Partners,
including an executive committee which may, when the Managing General Partners
are not in session, exercise some or all of the power and authority of the
Managing General Partners as the Managing General Partners may determine;
(d) Elect and appoint, delegate authority to, remove and
terminate such officers and agents (who need not be Partners) as they consider
appropriate;
(e) Subject always to the continuing supervision of the
Managing General Partners, contract with one or more banks, trust companies or
investment advisers for the performance of such functions as they may determine,
including, but not by way of limitation, the investment and reinvestment of all
or part of the Fund's assets and effecting portfolio transactions, and any or
all administrative functions;
(f) At any time and from time to time, contract with any
corporation, trust, association or other organization, to act as exclusive or
nonexclusive distributor or principal underwriter for the Shares, upon such
requirements and restrictions as may be set forth in the By-Laws;
(g) Purchase and pay for entirely out of Fund property
insurance policies insuring the Shareholders, General Partners, Limited
Partners, officers, employees, agents, investment advisers, principal
underwriters, or independent contractors of the Fund individually against all
claims and liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action alleged to
have been taken or omitted by any such person as Partner, officer, employee,
agent, investment adviser, principal underwriter, or independent contractor,
including any action taken or omitted that may be determined to constitute
negligence, whether or not the Fund would have the power to indemnify such
person against such liability;
(h) Pay or cause to be paid out of the principal or income
of the Fund, or partly out of principal and partly out of income, as they deem
fair, all expenses, fees, changes, taxes
-9-
<PAGE> 10
and liabilities incurred or arising in connection with the Fund, or in
connection with the management thereof, including but not limited to, the
General Partners' compensation and such expenses and charges for the services of
the Fund's officers, employees, investment adviser or manager, principal
underwriter, auditor, counsel, custodian, transfer agent, Shareholder servicing
agent, and such other agents or independent contractors and such other expenses
and charges as the Managing General Partners may deem necessary or proper to
incur.
The Managing General Partners shall devote themselves to the Fund's
business to the extent they may determine necessary for the efficient conduct
thereof, which need not, however, occupy their full time. General Partners may
also engage in other businesses, whether or not similar in nature to the
business of the Fund, subject to the limitations of the 1940 Act. The fact that:
(i) any of the Partners of officers of the Fund is
a shareholder, director, officer, partner, trustee, employee, manager, adviser,
principal underwriter or distributor or agent of or for any corporation, trust,
association, or other organization, or of or for any parent or affiliate of any
organization, with which an advisory or management contract, or principal
underwriter's or distributor's contract, or transfer, Shareholder servicing or
other agency contract may have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a Shareholder or has an
interest in the Fund, or that
(ii) any corporation, trust, association or other
organization with which an advisory or management contract or principal
underwriter's, distributor's contract, or transfer, Shareholder servicing or
other agency contract may have been or may hereafter be made also has an
advisory or management contract, or principal underwriter's or distributor's
contract, or transfer, Shareholder servicing or other agency contract with one
or more other corporations, trusts, associations, or other organizations, or has
other businesses or interests, shall not affect the validity of any such
contract or disqualify any Partner or officer of the Fund from voting upon or
executing the same or create any liability or accountability to the Fund or its
Shareholders.
Section 3.05 Limitations on the Authority of the General Partners.
The General Partners shall have no authority without the vote or written consent
of all of the Limited Partners to:
(a) Do any act in contravention of this Certificate and
Agreement, as it may be amended, or which would make it impossible to carry on
the ordinary business of the Fund;
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<PAGE> 11
(b) Confess a judgment against the Fund; or
(c) Possess Fund property, or assign the Fund's rights in
specific Fund property, for other than a Fund purpose.
Section 3.06 Action by the Fund. Except as otherwise provided herein
or from time to time in the By-Laws, any action to be taken by the Managing
General Partners shall be taken: (a) by a majority of the Managing General
Partners present at a meeting of the Managing General Partners at which at least
50% of the Managing General Partners are present, within or without California,
including any meeting held by means of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time, and participation by such means
shall constitute presence in person at a meeting; or (b) by written consents of
a majority of the Managing General Partners then in office, unless the 1940 Act
or the Partnership Act requires that a particular action be taken by a greater
vote or only at a meeting of the Managing General Partners. Each Managing
General Partner shall have one vote.
Section 3.07 Reimbursement and Indemnification. The General Partners
will be reimbursed for all reasonable out-of- pocket expenses incurred in
performing their duties hereunder. They shall be indemnified by the Fund, to the
extent permitted by the Partnership Act, against judgments, fines, amounts paid
in settlement, and expenses (including counsel fees) reasonably incurred by them
in any civil, criminal or investigative proceeding in which they are involved or
threatened to be involved by reason of their being General Partners of the Fund,
provided that they acted in good faith and in a manner they believed to be in
the best interests of the Fund. To the extent that a General Partner has been
successful on the merits or otherwise in defense of any such proceeding or in
defense of any claim or matter therein, he shall be deemed to have acted in good
faith and in a manner he believed to be in the best interests of the Fund. The
determination under any other circumstances as to whether a General Partner
acted in good faith and in a manner he believed to be in the best interests of
the Fund shall be made by action of the Managing General Partners who were not
parties to such proceeding, or by independent legal counsel in a written
opinion. No General Partner shall be indemnified against any liability to the
Fund, its Partners or holders of Shares to which he would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
Section 3.08 Limitation of Liability to Limited Partners. The
General Partners shall not have any personal liability to any Shareholder for
the repayment of the contributions with respect to Shares held by him, or for
the
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<PAGE> 12
payment of the amount standing in the individual accounts of the Limited
Partners or any portion thereof; any such amounts shall be paid solely from
assets. Nor shall the General Partners be liable to any Shareholder for any
neglect or wrongdoing of any officer, agent, employee, Manager or principal
underwriter of the Fund, or by reason of any change in the federal or state
income tax laws, or in interpretations thereof, as they apply to the Partnership
and the Shareholders, whether such change occurs through legislative, judicial
or administrative action, so long as the General Partners have acted in good
faith.
Section 3.09 Termination of Authority and Interest of General
Partners. The authority and interest of a person as a General Partner shall
terminate and such person shall have no further right or power to act as General
Partner (except to execute any amendment to this Certificate and Agreement to
evidence his termination) if he:
(a) Dies;
(b) Becomes insane;
(c) Is adjudicated a bankrupt;
(d) Voluntarily retires upon not less than 180 days'
written notice to the other General Partners;
(e) Fails to be re-elected by the Partners, as provided in
Section 3.2 above; or
(f) Is removed by the Partners, as provided in Section
______________.
ARTICLE IV
Officers
Section 4.01 Officers. The Managing General Partners may appoint
such officers and agents of the Partnership as the business of the Partnership
may require, each of whom shall have such authority and perform such duties as
are provided in this Code of Regulations or as the Managing General Partners may
from time to time specify, and shall hold office until he shall resign or shall
be removed or otherwise disqualified to serve.
Section 4.02 Election. The officers of the Partnership, except such
officers as may be appointed in accordance with the provisions of Section 4.04,
shall be chosen annually be the Managing General Partners, and each shall hold
his office until he shall resign or shall be removed or otherwise disqualified
to serve, or his successor shall be elected and qualified.
Section 4.03 Removal and Resignation. Any officer may be removed,
either with or without cause by a majority of the Managing General Partners at
the time in office, at any regular
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<PAGE> 13
or special meeting of the General Partners, or, except in case of an officer
chosen by the Managing General Partner, by any officer upon whom such power of
removal may be conferred by the Managing General Partners.
Any officer may resign at any time by giving written notice to the
Managing General Partners. Any such resignation shall take effect at the date of
the receipt of such notice or at any later time specified therein; and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 4.04 Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in this Code of Regulations for regular appointments to such
office.
ARTICLE V
Miscellaneous
Section 5.01 Record Date and Closing Share Records. The Managing
General Partners may fix a time in the future as a record date for the
determination of the shareholders entitled to notice of and to vote at any
meeting of shareholders or entitled to receive any distribution, or any
allotment of rights, or to exercise rights in respect to any change, conversion
or exchange of Shares. The record date so fixed shall be not more than fifty
(50) days nor less than then (10) days prior to the date of the meeting or event
for the purposes of which it is fixed. When a record date is so fixed, only
shareholders who are such of record on that date are entitled to notice of and
to vote at the meeting or to receive the distribution, or allotment of rights,
or to exercise the rights, as the case may be, notwithstanding any transfer of
any Shares on the books of the Partnership after the record date.
The Managing General Partners may close the books of the Partnership
against transfers of Shares during the whole or any part of a period not more
than fifty (50) days prior to the date of a shareholders' meeting, the date when
the right to any distribution, or allotment of rights vests, or the effective
date of any change, conversion or exchange of Shares.
Section 5.02 Inspection of Partnership Records. The Share register
or duplicate Share register, the books of account, and minutes of proceedings of
the shareholders and the General Partners shall be open to inspection upon the
written demand of any shareholder at any reasonable time, and for a purpose
reasonably related to his interests as a shareholder, and shall be exhibited at
any time when required by the demand at any shareholders' meeting of then
percent (10%) of the Shares
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<PAGE> 14
represented at the meeting. Such inspection may be made in person or by an agent
or attorney, and shall include the right to make extracts. Demand of inspection
other than at a shareholders' meeting shall be made in writing upon any Managing
General Partner.
Section 5.03 Checks, Drafts, Etc. All checks, drafts or other orders
for payments of money, notes or other evidences of indebtedness, issued in the
name of or payable to the Partnership, shall be signed or endorsed by such
person or persons and in such manner as, from time to time, shall be determined
by resolution of the Managing General Partners.
Section 5.04 Annual Report. The Managing General Partners shall
cause an annual report to be sent to the shareholders, not later than one
hundred twenty (120) days after the close of the fiscal or calendar year.
Section 5.05 Contract, Etc., How Executed. The Managing General
Partners, except as in this Code of Regulations otherwise provided, may
authorize any officer or officers, agent or agents, to enter into any contract
or execute any instrument in the name of and on behalf of the Partnership, and
such authority may be general or confined to specific instances; and unless so
authorized by the Managing General Partners, no officer, agent or employee shall
have any power or authority to bind the Partnership by any contract or
engagement or to pledge its credit or to tender it liable for any purpose or in
any amount.
Section 5.06 Certificates for Shares. A certificate or certificates
for Shares of Partnership Interest shall be issued to each shareholder when any
such Shares are fully paid up. All such certificates shall be signed by such
officers or agents of the Partnership as shall be designated by the Managing
General Partners or be authenticated by facsimiles of one or more of the
signatures of such officers or agents.
Certificates for Shares may be issued prior to full payment under such
restrictions and for such purposes as the Managing Partners or this Code of
Regulations may provide; provided, however, that any such certificate so issued
prior to full payment shall state on its fact the amount remaining unpaid and
the terms of payment thereof.
Section 5.07 Representation of Shares of Corporations. The Managing
General Partners are authorized to vote, represent and exercise on behalf of the
Partnership all rights incident to any and all shares of any corporation or
corporations standing in the name of the Partnership. The authority herein
granted to the Managing General Partners to vote or represent on behalf of the
Partnership any and all Shares held by the Partnership in any
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<PAGE> 15
corporation or corporations may be exercised either by such Managing General
Partners in person or by any person authorized so to do by proxy or power of
attorney duly executed by said Managing General Partners.
Section 5.08 Inspection of Code of Regulations. The Partnership
shall keep in its principal office for the transaction of business the original
or a copy of this Code of Regulation as amended or otherwise altered to date,
which shall be open to inspection by the shareholders at all reasonable times
during office hours.
Section 5.09 Periodic Reports. Regular reports containing detailed
financial and other information concerning the business and affairs of the
Partnership shall be furnished periodically to the responsible officers and
Managing General Partners of the Partnership, and such reports shall be designed
to keep each such officer and Managing General Partner currently and reasonably
informed of the affairs of the Partnership.
ARTICLE VI
Amendments
Section 6.01 Power of Partners. New provisions of this Code of
Regulations may be adopted or this Code of Regulations may be amended or
repealed by the vote of partners entitled to vote a majority of the outstanding
Shares or by the written assent of such partners, except as otherwise provided
by law or by the Certificate and Agreement.
Section 6.02 Power of the Managing General Partners. Subject to the
right of partners as provided in Section 6.01, provisions of the Code of
Regulations may be adopted, amended or repealed by the Managing General Partners
at any regular or special meeting thereof.
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<PAGE> 1
Exhibit 2(b)
Chestnut Street Exchange Fund
Amendment No. 1 to Code of Regulations
December 16, 1982
RESOLVED, that the first sentence of Section 2.02 of Article II of the
Fund's Code of Regulations be, and hereby is, amended to read in full as
follows:
There shall be an annual meeting of the Partnership on such
days as the Managing General Partners may fix in the notice of
the meeting or otherwise.
<PAGE> 1
Exhibit 5
ADVISORY AGREEMENT
AGREEMENT, dated January 19, 1983 between CHESTNUT STREET EXCHANGE
FUND, a California Limited Partnership ("Fund"), and PROVIDENT NATIONAL BANK, a
national banking association ("Provident"), and PROVIDENT INSTITUTIONAL
MANAGEMENT CORPORATION ("PIMC"), a Delaware corporation registered as an
investment adviser under the Investment Advisers Act of 1940 and wholly-owned by
Provident.
WHEREAS, the Fund is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940; and
WHEREAS, the Fund desires to retain Provident and PIMC to render
investment advisory and administrative services to the Fund, and Provident and
PIMC are willing to render such services;
NOW THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Delivery of Documents. The Fund has previously furnished Provident
with copies properly certified or authenticated of each of the following:
(a) The Fund's Restated Certificate and Agreement of Limited
Partnership dated August 16, 1976 and recorded in California on August 16,
1976 and all subsequent restatements and amendments thereto. Such Restated
Certificates and Agreement of Limited Partnership, as presently in effect
and as it may hereinafter from time to time be restated or further amended,
is hereinafter referred to as the "Certificate of Limited Partnership";
(b) The Fund's Code of Regulations, as amended, (such Code,
as presently in effect and as it may hereinafter from time to time be
amended, is hereinafter referred to as the "Code");
(c) Resolutions of the Managing General Partners of the Fund
authorizing the appointment of the Advisers and approving this Agreement;
(d) The Fund's Registration Statement under the Securities
Act of 1933, as amended, on Form S-5 (No. 2- 55797) as filed with the
Securities and Exchange Commission on March 25, 1976 relating to the units
of partnership interest of the Fund (herein called "Shares") and all
amendments thereto;
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(e) The Fund's Registration Statement under the Investment
Company Act of 1940 on Form N-8B-1 (No. 811-2631) as filed with the
Securities and Exchange Commission on March 25, 1976 and all amendments
thereto;
(f) The Fund's Notification of Registration under the
Investment Company Act of 1940 on Form N-8A as filed with the Securities
and Exchange Commission on March 25, 1976 and all amendments thereto;
(g) The Fund's Prospectus dated October 28, 1976 (the
"Prospectus");
(h) An Order of the Securities and Exchange Commission, dated
November 9, 1976, exempting the Fund from certain provisions of Sections
2(a)(3), 2(a)(19), 18(f) and 22(e) of the Investment Company Act of 1940,
and exempting the Non-Managing General Partner of the Fund from certain
provisions of Section 17(a) of the Act; and
(i) A ruling from the Internal Revenue Service, dated
September 23, 1976, with respect to the Fund's classification for tax
purposes.
The Fund agrees to furnish PIMC from time to time with copies, properly
certified or authenticated, of any amendments or supplements to the foregoing.
2. Appointment. The Fund hereby appoints Provident and PIMC to act as
investment advisers to the Fund for the period and on the terms set forth in
this Agreement. The Provident and PIMC are sometimes hereinafter referred to
collectively as "the Advisers." The Advisers accept such appointment and agree
that the services herein set forth shall be rendered for the compensation herein
provided.
3. Services Rendered by Provident. Subject to the supervision of the
Managing General Partners of the Fund, Provident, through its Trust Division and
on behalf of the Fund, will provide PIMC investment research and credit analysis
concerning prospective and existing Fund investments, make recommendations to
PIMC with respect to the Fund's continuous investment program, recommend to PIMC
the portion of the Fund's assets to be invested or held uninvested in cash or
cash equivalents, supply PIMC computer facilities and operating personnel, and
provide certain statistical services as PIMC may from time to time reasonably
request. Provident will provide the services rendered by it hereunder in
accordance with the Fund's investment objectives, policies and restrictions as
stated in the Prospectus and as they may hereafter be amended. Provident further
agrees that it:
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(a) will use the same skill and care in providing such
services as it uses in providing services to fiduciary accounts for which
it has investment responsibilities;
(b) will conform with all applicable Rules and Regulations of
the Securities and Exchange Commission (hereinafter called the "Rules"),
and will in addition conduct its activities under this Agreement in
accordance with the regulations of the Board of Governors of the Federal
Reserve System pertaining to the investment advisory activities of bank
holding companies to the same extent as if such regulations were by their
terms applicable to its activities hereunder;
(c) will not invest its assets or assets of any fiduciary
account managed by it in Shares of the Fund, make loans for purposes of
purchasing or carrying such Shares or make loans to the Fund;
(d) will maintain or cause PIMC to maintain all books and
records with respect to the Fund's securities transactions and shall keep
or shall cause PIMC to keep the Fund's books of account;
(e) will render to the Fund's Managing General Partners such
periodic and special reports as the Board may request;
(f) will maintain its policy and practice of conducting its
Trust Division independently of its Commercial Division. In making
investment recommendations for the Fund, Trust Division personnel will not
inquire or take into consideration whether the issuer of securities
proposed for purchase or sale for the Fund's account are customers of the
Commercial Division. In dealing with commercial customers, the Commercial
Division will not inquire or take into consideration whether securities of
those customers are held by the Fund; and
(g) unless and until two years' prior notice has been given
to the Fund and the Fund has chosen a successor Non-Managing General
Partner, Provident shall, in accordance with the Certificate of Limited
Partnership, provide the Fund a Non-Managing General Partner who (i) will
own at all times at least 1% of the Fund's outstanding Shares and will not
tender any Shares owned by it for redemption if, as a result thereof, it
would own less than 1% of the Shares outstanding; (ii) will continue to
stand for re-election as a Non-Managing General Partner; and (iii) will not
withdraw from the Fund as Non-Managing General Partner.
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4. Services Provided by PIMC. Subject to the supervision of the
Managing General Partners of the Fund, PIMC will provide a continuous investment
program for the Fund's portfolio, including investment research and management
with respect to all securities and investments and cash and cash equivalents in
the portfolio. PIMC will determine from time to time what securities and other
investments will be purchased, retained or sold by the Fund, and what portion of
its assets will be invested or held uninvested in cash or cash equivalents. PIMC
will provide the services rendered by it hereunder in accordance with the Fund's
investment objectives, policies and restrictions as stated in the Prospectus and
as they may hereafter be amended. PIMC further agrees that it:
(a) will place orders pursuant to its investment
determinations for the Fund either directly with the issuer or with any
broker or dealer. In placing orders with brokers and dealers, PIMC will
attempt to obtain the best net price and the most favorable execution of
its orders. Consistent with this obligation, when the execution and price
offered by two or more brokers or dealers are comparable, PIMC may, in its
discretion, purchase and sell portfolio securities to and from brokers and
dealers who provide the Fund with research advice and other services. In no
instance will portfolio securities be purchased from or sold to Provident,
PIMC or any affiliated person thereof;
(b) will conform with all applicable Rules, and will in
addition conduct its activities under this Agreement in accordance with the
regulations of the Board of Governors of the Federal Reserve System
pertaining to the investment advisory activities of bank holding companies
to the same extent as if such regulations were by their terms applicable to
the activities of PIMC;
(c) will not invest its assets or the assets of any accounts
advised by it in Shares of the Fund, make loans for the purpose of
purchasing or carrying Shares, or make loans to the Fund; and
(d) will compute the net asset value and the net income of
the Fund on each business day as described in the Prospectus or as more
frequently requested by the Fund.
5. Services Not Exclusive. The investment advisory services rendered
by Provident and PIMC hereunder are not to be deemed exclusive, and Provident
and PIMC shall be free to render similar services to others so long as their
services under this Agreement are not impaired thereby.
6. Books and Records. In compliance with the requirements of Rule
31a-3 of the Rules, the Advisers hereby
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agree that all records which they maintain for the Fund are property of the Fund
and further agree to surrender promptly to the Fund any of such records upon the
Fund's request. The Advisers further agree to preserve for the periods
prescribed by Rule 31a-2 the records required to be maintained by Rule 31a-1 of
the Rules.
7. Expenses. During the term of this Agreement, the Advisers will
pay all expenses incurred by them in connection with their activities under this
Agreement other than the cost of (including brokerage commissions, if any)
securities purchased for the Fund.
In addition, if the expenses borne by the Fund in any fiscal year
exceed the applicable expense limitations imposed by the securities regulations
of any state in which the Shares are registered or qualified for sale to the
public, the Advisers shall reimburse the Fund for any excess up to the amount of
the fees payable to PIMC during such fiscal year pursuant to paragraph 8 hereof.
8. Compensation. For the services provided hereunder by Provident and
PIMC and the expenses assumed pursuant to this Agreement, the Fund will pay
PIMC, and Provident and PIMC will accept as full compensation therefor, a fee
computed daily and paid monthly at the annual rate of 1/2 of 1% of the first
$100,000,000 of the Fund's net assets, plus 4/10 of 1% of net assets exceeding
$100,000,000.
PIMC agrees to pay Provident a monthly fee equal to 75% of each month's
advisory fee received by PIMC from the Fund pursuant to this Agreement.
Notwithstanding the foregoing, the fee payable to the Provident shall be
adjusted each quarter as necessary to assure that PIMC has income from all
sources before application of Federal, State, or other income taxes of at least
$22,500 during each quarter. The fee payable by PIMC to Provident will be paid
at least quarterly.
9. Limitation of Liability of the Advisers. The Advisers shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Fund in connection with the matters to which this Agreement relates,
except a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence by either of them in the performance
of their duties or from reckless disregard by either of them of their
obligations and duties under this Agreement.
10. Duration and Termination. This Agreement, unless sooner
terminated as provided herein, shall continue until approved, disapproved, or
replaced by alternative arrangements by
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action of a majority of the outstanding voting securities of the Fund at the
first meeting of Partners held after the date hereof. Thereafter, if not
terminated, this Agreement shall continue for successive annual periods ending
on March 31, provided, such continuance is specifically approved at least
annually (a) by the vote of a majority of those members of the Board of Managing
General Partners of the Fund who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by the Board of Managing General Partners of
the Fund or by vote of a majority of the outstanding voting securities of the
Fund, provided however, that this Agreement may be terminated by the Fund at any
time, without the payment of any penalty, by the Managing General Partners of
the Fund or by vote of a majority of the outstanding voting securities of the
Fund, on 60 days' written notice to the Advisers, or the Advisers at any time,
without payment of any penalty, on 90 days' written notice to the Fund. This
Agreement will terminate automatically in the event of its assignment. (As used
in this Agreement, the terms "majority of the outstanding voting securities,"
"interested person" and "assignment" shall have the same meaning as such terms
have in the Investment Company Act of 1940.) Notwithstanding anything in this
Agreement to the contrary, no failure to continue and no termination of this
Agreement shall terminate the obligations of Provident under subsection 3(g)
hereof, but the provisions of such subsection shall survive any such failure to
continue or termination and shall continue to be legally binding upon Provident
in accordance with their terms.
11. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement shall be
effective until approved by vote of the holders of a majority of the Fund's
outstanding voting securities.
12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by Delaware law.
13. No Personal Liability. The persons executing this Agreement on
behalf of the Fund have executed the Agreement as Managing General Partners or
officers of the Fund and not individually. The obligations of the Fund
hereunder and any liabilities or claims in connection therewith are not binding
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upon any of the Limited Partners of the Fund individually, but are binding only
upon the assets and property of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
Attest: PROVIDENT NATIONAL BANK
/s/ Walter R. Kron By: /s/ signature illegible
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[corporate seal]
Attest: PROVIDENT INSTITUTIONAL
MANAGEMENT CORPORATION
/s/ signature illegible By: /s/ Walter R. Kron
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[corporate seal]
Attest: CHESTNUT STREET EXCHANGE FUND
/s/ Morgan R. Jones By: /s/ Henry M. Watts, Jr.
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EXHIBIT 7
DRINKER BIDDLE & REATH
REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST AGREEMENT
SPONSORED
BY
DRINKER BIDDLE & REATH
PHILADELPHIA, PENNSYLVANIA
[ FUND OFFICE RETIREMENT PROFIT-SHARING PLAN ]
----------------------------------------------
NAME OF PLAN OF ADOPTING EMPLOYER
[ MUNICIPAL FUND FOR TEMPORARY INVESTMENT ]
-------------------------------------------
NAME OF ADOPTING EMPLOYER
(REV. 06/94)
(C)DRINKER BIDDLE & REATH 1995
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TABLE OF CONTENTS
PART I - PLAN
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Article I DEFINITIONS..................................................... 1
1.1 Accrual Computation Period...................................... 1
1.2 Accrued Benefit................................................. 1
1.3 Adjustment Factor............................................... 1
1.4 Administrative Committee........................................ 1
1.5 Adoption Agreement.............................................. 1
1.6 Affiliated Employer............................................. 1
1.7 Appropriate Form................................................ 1
1.8 Beneficiary..................................................... 2
1.9 Code............................................................ 2
1.10 Compensation.................................................... 2
1.11 Computation Period.............................................. 3
1.12 Controlled Group................................................ 3
1.13 Defined Benefit Plan............................................ 3
1.14 Defined Contribution Plan....................................... 3
1.15 Determination Date.............................................. 4
1.16 Determination Period............................................ 4
1.17 Disability...................................................... 4
1.18 Early Retirement Date........................................... 4
1.19 Earned Income................................................... 4
1.20 Effective Date.................................................. 4
1.21 Elective Deferrals.............................................. 4
1.22 Elective Deferral Account(s).................................... 4
1.23 Elective Deferral Contributions................................. 5
1.24 Eligibility Computation Period(s)............................... 5
1.25 Employee........................................................ 5
1.26 Employee Contributions.......................................... 5
1.27 Employee Pension Benefit Plan................................... 5
1.28 Employer........................................................ 5
1.29 Employer Account................................................ 5
1.30 Employer Contributions.......................................... 6
1.31 Employer Security............................................... 6
1.32 Employment Commencement Date.................................... 6
1.33 Entry Date...................................................... 6
1.34 ERISA........................................................... 6
1.35 Excess Compensation............................................. 6
1.36 Family Member................................................... 6
1.37 Fiduciary....................................................... 6
1.38 Highly Compensated Employee..................................... 6
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1.39 Hour of Service................................................. 8
1.40 Hourly Employee................................................. 10
1.41 Inactive Participant............................................ 10
1.42 Insurance Contracts............................................. 10
1.43 Insurer......................................................... 10
1.44 Investment Manager.............................................. 10
1.45 Key Employee.................................................... 11
1.46 Leased Employee................................................. 11
1.47 Limitation Compensation......................................... 12
1.48 Limitation Year................................................. 13
1.49 Matching Account(s)............................................. 13
1.50 Matching Contribution........................................... 13
1.51 Non-Highly Compensated Employee................................. 13
1.52 Non-Resident Alien.............................................. 13
1.53 Normal Retirement Age........................................... 13
1.54 Normal Retirement Date.......................................... 13
1.55 One-Year Break In Service....................................... 14
1.56 Owner-Employee.................................................. 15
1.57 Participant..................................................... 15
1.58 Participant Account............................................. 15
1.59 Participant Contributions....................................... 15
1.60 Permissive Aggregation Group.................................... 15
1.61 Plan............................................................ 15
1.62 Plan Administrator.............................................. 15
1.63 Plan Sponsor.................................................... 15
1.64 Plan Year....................................................... 16
1.65 Prior Plan...................................................... 16
1.66 Profits......................................................... 16
1.67 QVEC Account(s)................................................. 16
1.68 Qualified Domestic Relations Order.............................. 16
1.69 Qualified Matching Contribution................................. 16
1.70 Qualified Nonelective Contribution.............................. 16
1.71 Qualified Voluntary Employee Contributions...................... 16
1.72 Qualifying Employer Security.................................... 16
1.73 Reemployment Commencement Date.................................. 16
1.74 Required Aggregation Group...................................... 17
1.75 Rollover Account................................................ 17
1.76 Rollover Contributions.......................................... 17
1.77 Salaried Employee............................................... 18
1.78 Self-Employed Person............................................ 18
1.79 Service......................................................... 18
1.80 Sponsoring Organization......................................... 18
1.81 Spouse or Surviving Spouse...................................... 18
1.82 Taxable Wage Base............................................... 18
1.83 Taxable Year.................................................... 18
1.84 Top-Heavy Plan.................................................. 18
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1.85 Top-Heavy Ratio................................................. 19
1.86 Top-Heavy Valuation Date........................................ 20
1.87 Transfer Account................................................ 20
1.88 Trust........................................................... 20
1.89 Trust Agreement................................................. 20
1.90 Trust Fund...................................................... 20
1.91 Trustee......................................................... 20
1.92 Union Employee.................................................. 20
1.93 Valuation Date.................................................. 20
1.94 Vested Accrued Benefit.......................................... 20
1.95 Vesting Computation Period...................................... 21
1.96 Welfare Benefit Fund............................................ 21
1.97 Year of Service for Benefit Accrual............................. 21
1.98 Year of Service for Eligibility................................. 22
1.99 Year of Service for Vesting..................................... 22
Article II PARTICIPATION UNDER PLAN........................................ 23
2.1 Adoption of Plan................................................ 23
2.2 Eligibility Requirements........................................ 23
2.3 Additional Rules Relating to Plan Participation................. 23
2.4 Plans Covering Owner-Employees.................................. 24
Article III CONTRIBUTIONS................................................... 25
3.1 Employer Contributions.......................................... 25
3.2 Participant Contributions....................................... 26
3.3 Qualified Voluntary Employee Contributions...................... 31
3.4 Elective Deferral Contributions................................. 32
3.5 Matching Contributions.......................................... 36
3.6 Contributions Held in Trust..................................... 37
3.7 Return of Employer Contributions................................ 37
3.8 Limitations on Allocations...................................... 39
3.9 Rollover Contributions.......................................... 45
3.10 Transfers of Accounts from and to Other
Qualified Plans................................................. 47
3.11 Top-Heavy Provisions............................................ 48
Article IV ACCOUNTS........................................................ 49
4.1 Separate Accounts............................................... 49
Article V ALLOCATION OF CONTRIBUTIONS, EARNINGS AND FORFEITURES........... 50
5.1 Allocations of Contributions.................................... 50
5.2 Advice to Trustee re Allocations of Contributions and
Direct Transfers................................................ 51
5.3 Valuations...................................................... 51
5.4 Allocation of Increases and Decreases........................... 51
5.5 Forfeitures..................................................... 52
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Article VI INVESTMENT OF ACCOUNTS.......................................... 52
6.1 Investment of Accounts.......................................... 52
6.2 Insurance Contracts............................................. 55
6.3 Voting and Other Actions........................................ 56
Article VII BENEFITS AND DISTRIBUTIONS...................................... 57
7.1 Benefit Determination........................................... 57
7.2 Designation of Beneficiary and Election with Respect to
Death Benefit................................................... 58
7.3 Normal Retirement............................................... 59
7.4 Early Retirement................................................ 59
7.5 Participation after Normal Retirement Date...................... 59
7.6 Separation from Service......................................... 60
7.7 Disability...................................................... 64
7.8 Death........................................................... 65
7.9 Commencement of Payments; Deferral of Payments; Minimum
Distribution Requirements....................................... 65
7.10 Withdrawals during Employment................................... 71
7.11 Loans........................................................... 76
7.12 QVEC Withdrawals................................................ 79
7.13 Incidental Benefit Rule......................................... 79
7.14 Joint and Survivor Annuity Requirements......................... 79
7.15 Waiver of 30-day Notice Requirements for Certain
Distributions................................................... 84
Article VIII NONALIENATION OF BENEFITS....................................... 84
8.1 Benefits Not Alienable.......................................... 84
8.2 Special Provision with Respect to Qualified Domestic Relations
Orders.......................................................... 84
Article IX THE ADMINISTRATIVE COMMITTEE.................................... 85
9.1 Structure....................................................... 85
9.2 Administrative Committee Action................................. 85
9.3 Responsibilities................................................ 85
9.4 Contracting for Service......................................... 86
9.5 Expenses of Administrative Committee............................ 86
Article X CLAIMS PROCEDURE................................................ 86
10.1 Claims for Benefits............................................. 86
10.2 Appeals Procedure............................................... 87
Article XI THE TRUSTEE..................................................... 88
11.1 Acceptance of Trust............................................. 88
11.2 Resignation of Trustee.......................................... 88
11.3 Removal of Trustee.............................................. 88
11.4 Appointment of Successor Trustee upon Occurrence of
Certain Events.................................................. 88
11.5 Successor Trustee............................................... 88
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11.6 Meetings and Actions of Trustee................................. 88
11.7 Compensation.................................................... 89
11.8 Trustee's Liability............................................. 89
11.9 General Powers.................................................. 89
11.10 Payments to Trustee............................................. 89
11.11 Investment of Trust Fund........................................ 89
11.12 Accounts, Reports and Governmental Filings...................... 90
11.13 Information to Trustee.......................................... 90
11.14 Benefit Payments................................................ 90
11.15 Trust Assets.................................................... 90
11.16 Participants Exclusively to Benefit............................. 90
11.17 Employment of Counsel, Agents, etc.............................. 90
11.18 Compromise of Claims............................................ 91
11.19 Suits........................................................... 91
11.20 Execution of Documents.......................................... 91
11.21 No Discrimination............................................... 91
11.22 Decision of Trustee............................................. 91
11.23 Funding Policy.................................................. 91
Article XII THE INSURER..................................................... 91
12.1 Insurer's Liability............................................. 91
12.2 Information to Insurer.......................................... 91
12.3 Benefit Payments................................................ 91
12.4 Annuities Must be Nontransferable............................... 92
12.5 Conflicts....................................................... 92
12.6 Distribution of Insurance Contracts............................. 92
12.7 Conflict with Insurance Contracts............................... 92
12.8 Dividends or Credits............................................ 92
Article XIII THE INVESTMENT MANAGER.......................................... 92
13.1 Appointment..................................................... 92
13.2 Responsibility.................................................. 92
13.3 Act in Interest of Participants................................. 92
13.4 Directions from Investment Manager.............................. 92
Article XIV FIDUCIARY RESPONSIBILITY........................................ 93
14.1 Fiduciary Duties................................................ 93
14.2 Allocation of Responsibility.................................... 93
14.3 Exclusive Responsibility........................................ 94
14.4 Transfer or Maintenance of Indicia of Ownership of Plan
Assets Outside United States Prohibited......................... 94
14.5 Liability of Fiduciary for Breach of Co-Fiduciary............... 94
14.6 Prohibited Transactions......................................... 94
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Article XV PLAN AMENDMENT.................................................. 97
15.1 Amendment....................................................... 97
15.2 Limitations upon Amendment...................................... 97
15.3 Rights of Trustee upon Amendment................................ 98
15.4 Significant Reduction in Rate of Future Benefit
Accruals........................................................ 98
Article XVI PLAN TERMINATION................................................ 99
16.1 Right to Discontinue Contributions and/or to
Terminate Plan and Trust........................................ 99
16.2 Termination of Plan on Happening of Certain Events.............. 99
16.3 Continuance of Trust after Complete Discontinuance of
Contributions to Plan........................................... 99
16.4 Distribution of Trust Assets.................................... 99
16.5 Distributees whose Whereabouts are Unknown...................... 100
Article XVII SUCCESSOR EMPLOYER AND MERGER OR CONSOLIDATION OF PLAN.......... 100
17.1 Successor to Employer under Plan and Trust...................... 100
17.2 Merger or Consolidation......................................... 100
Article XVIII MISCELLANEOUS................................................... 101
18.1 No Right to Employment.......................................... 101
18.2 Gender and Number............................................... 101
18.3 Bonding......................................................... 101
18.4 Agent for Service of Legal Process.............................. 101
18.5 Headings........................................................ 101
18.6 Unclaimed Benefits.............................................. 101
18.7 Reports Furnished to Participants............................... 102
18.8 Reports Available to Participant and Beneficiaries.............. 102
18.9 Reports upon Request............................................ 102
18.10 Controlled Group Employees...................................... 102
18.11 Construction.................................................... 103
18.12 Insurance and Indemnification for Liability..................... 103
18.13 No Retention of Interest in Trust Fund.......................... 103
18.14 Termination of Plan and Trust under Rule Against
Perpetuities.................................................... 103
18.15 Notice to Interested Parties.................................... 103
18.16 Effective Date of Adoption of Plan and Trust
Agreement....................................................... 104
18.17 Restatement of Existing Plan.................................... 104
18.18 Individual Provisions........................................... 104
18.19 Failure of Qualification........................................ 104
Article XIX ADOPTION OF PLAN BY AFFILIATED EMPLOYERS........................ 104
19.1 Adoption of Plan and Trust...................................... 104
19.2 Withdrawal from Plan............................................ 105
19.3 Exclusive Purpose of Trust...................................... 105
19.4 Application of Withdrawal Provisions............................ 105
19.5 Single Plan..................................................... 106
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19.6 Adopting Employer Appointed Agent of Adopting
Affiliated Employers............................................ 106
PART II - ADOPTION AGREEMENTS
PROFIT-SHARING (401(K)) PLAN (REGIONAL PROTOTYPE PLAN NUMBER 001)
ADOPTION AGREEMENT.................................................................. A-1
MONEY PURCHASE PLAN (REGIONAL PROTOTYPE PLAN NUMBER 002) ADOPTION
AGREEMENT........................................................................... B-1
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PART I
DRINKER BIDDLE & REATH
REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST AGREEMENT
ARTICLE I
DEFINITIONS
The following words and phrases, as used in the Plan and
Adoption Agreement, shall have the following meanings unless the context clearly
indicates otherwise:
1.1 ACCRUAL COMPUTATION PERIOD. "ACCRUAL COMPUTATION PERIOD" shall mean
the Plan Year except as otherwise elected in the applicable Adoption Agreement.
1.2 ACCRUED BENEFIT. "ACCRUED BENEFIT" shall mean the amounts credited
to a Participant's Employer, Elective Deferral, Matching, Participant, Rollover,
Transfer and QVEC Accounts and other accounts (e.g., Qualified Matching
Contribution and Qualified Nonelective Contribution accounts) including the
proceeds of Insurance Contracts, if any, on the life of the Participant.
1.3 ADJUSTMENT FACTOR. "ADJUSTMENT FACTOR" shall mean the
cost-of-living adjustment factor prescribed by the Secretary of the Treasury
under section 415(d) of the Code for years beginning after December 31, 1987, as
applied to such items and in such manner as the Secretary shall provide.
1.4 ADMINISTRATIVE COMMITTEE. "ADMINISTRATIVE COMMITTEE" shall mean the
committee appointed by the Employer to administer the Plan. The name(s) of the
member(s) of the Administrative Committee and his (their) address(es) shall be
indicated in the Adoption Agreement.
1.5 ADOPTION AGREEMENT. "ADOPTION AGREEMENT" shall mean the document
executed by the Employer and the Trustee under which the Employer has elected to
establish or continue a qualified retirement plan and trust under the terms of
this Plan and Trust Agreement. If the Employer desires to establish a
profit-sharing or a profit-sharing 401(k) plan, the Employer shall adopt the
Profit-Sharing (401(k)) Plan Adoption Agreement. If the Employer desires to
establish a money purchase plan, the Employer shall adopt the Money Purchase
Plan Adoption Agreement.
1.6 AFFILIATED EMPLOYER. "AFFILIATED EMPLOYER" shall mean the Employer
and any corporation which is a member of a controlled group of corporations (as
defined in section 414(b) of the Code) which includes the Employer; any trade or
business (whether or not incorporated) which is under common control (as defined
in section 414(c) of the Code) with the Employer; any organization (whether or
not incorporated) which is a member of an affiliated service group (as defined
in section 414(m) of the Code) which includes the Employer; and any other entity
required to be aggregated with the Employer pursuant to regulations under
section 414(o) of the Code.
1.7 APPROPRIATE FORM. "APPROPRIATE FORM" shall mean the form prescribed
or provided by the Administrative Committee for the particular purpose.
(C) DRINKER BIDDLE & REATH 1995
<PAGE> 10
1.8 BENEFICIARY. "BENEFICIARY" shall mean the Surviving Spouse of a
Participant, but if there is no Surviving Spouse, or, if the Surviving Spouse
previously consented in a manner conforming to a qualified election as provided
in Article VII, then such other person or persons or legal entity as may be
designated by the Participant to receive benefits payable under the Plan after
the Participant's death, or the personal or legal representative of a deceased
Participant. Prior to August 23, 1984, "Beneficiary" shall mean such person or
persons or legal entity as may be designated by the Participant to receive
benefits payable under the Plan after the Participant's death, or the personal
or legal representative of a deceased Participant.
1.9 CODE. "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
1.10 COMPENSATION. "COMPENSATION" shall mean Limitation Compensation as
that term is defined in Section 1.47. For any Self-Employed Person covered under
the Plan, Compensation shall mean Earned Income. Compensation shall include only
that compensation which is actually paid to the Participant during the
determination period. Except as provided elsewhere in the Plan, the
determination period is the Accrual Computation Period elected by the Employer
in the Adoption Agreement. If no election is made, the determination period is
the Plan Year.
Notwithstanding the above, if elected by the Employer in the Adoption
Agreement, Compensation shall include any amount which is contributed by the
Employer pursuant to a salary reduction agreement and which is not includible in
the gross income of the Employee under sections 125, 402(e)(3), 402(h)(1)(B) or
403(b) of the Code.
(A) LIMITATION FOR PLAN YEARS BEGINNING BEFORE JANUARY 1,
1994. Effective for Plan Years beginning on or after January 1, 1989, and
before January 1, 1994, the annual compensation of each Participant taken
into account for determining all benefits provided under the Plan for any
plan year shall not exceed $200,000, as adjusted by the Adjustment Factor
except that the dollar increase in effect on January 1 of any calendar year
is effective for plan years beginning in such calendar year and the first
adjustment to the $200,000 limitation is effective on January 1, 1990. If the
period for determining compensation used in calculating an Employee's
allocation for a determination period is a short plan year (i.e., shorter
than 12 months) the annual compensation limit is an amount equal to the
otherwise applicable compensation limit multiplied by the fraction, the
numerator of which is the number of months in the short plan year, and the
denominator of which is 12.
If Compensation for any prior determination period is taken
into account in determining an Employee's allocations or benefits for the
current determination period, the compensation for such prior period is
subject to the applicable annual compensation limit in effect for that prior
period. For this purpose, for periods beginning before January 1, 1990, the
applicable annual compensation limit is $200,000.
(B) LIMITATION FOR PLAN YEARS BEGINNING ON OR AFTER JANUARY 1,
1994. In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provisions of the Plan to the contrary, 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 plan year shall not exceed $150,000, as adjusted for
increases in the cost-of-living in accordance with section 401(a)(17)(B) of
the Code. The cost-of-living adjustment in effect for a calendar year applies
to any determination period beginning in such calendar year.
If a determination period consists of fewer than 12 months,
the annual compensation limit is an amount equal to the otherwise applicable
annual compensation limit multiplied by a fraction, the numerator of which is
the number of months in the short determination period, and the denominator
of which is 12.
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<PAGE> 11
For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under section 401(a)(17) of the Code
shall mean the OBRA '93 annual compensation limit set forth in this
provision.
If compensation for any prior determination period is taken
into account in determining a Participant's allocations for the current Plan
Year, the compensation for such prior determination period is subject to
applicable annual compensation limit in effect for that prior determination
period. For this purpose, in determining allocations in plan years beginning
on or after January 1, 1989, the annual compensation limit in effect for
determination periods beginning before that date is $200,000. In addition, in
determining allocations in plan years beginning on or after January 1, 1994,
the annual compensation limit in effect for determination periods beginning
before that date is $150,000.
In determining the Compensation of a Participant for purposes of the
limitations of Section 1.10(A) and (B), the rules of section 414(q)(6) of the
Code shall apply, except 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 limitation is
exceeded, then (except for purposes of determining the portion of Compensation
up to the integration level if this Plan provides for permitted disparity), the
limitation shall be prorated among the affected individuals in proportion to
each such individual's Compensation as determined under this Section 1.10 prior
to the application of this limitation.
1.11 COMPUTATION PERIOD. "COMPUTATION PERIOD" shall mean any 12
consecutive month period.
1.12 CONTROLLED GROUP. "CONTROLLED GROUP" shall mean a group of
employers, of which the Employer is a member and which group constitutes:
(A) A controlled group of corporations (as defined in section
414(b) of the Code);
(B) Trades or businesses (whether or not incorporated) which
are under common control (as defined in section 414(c) of the Code);
(C) Trades or businesses (whether or not incorporated) which
constitute an affiliated service group (as defined in section 414(m) of the
Code); or
(D) Any other entity required to be aggregated with the
Employer pursuant to section 414(o) of the Code and the Treasury regulations
thereunder.
Solely for the purpose of applying Section 3.8, the phrase "more than
50 percent" shall be substituted for the phrase "at least 80 percent" each place
it appears in section 1563(a)(1) of the Code.
If the Employer adopting the Plan is a member of a Controlled Group,
the Employer shall so indicate in the Adoption Agreement.
1.13 DEFINED BENEFIT PLAN. "DEFINED BENEFIT PLAN" shall mean any
Employee Pension Benefit Plan which is not a Defined Contribution Plan.
1.14 DEFINED CONTRIBUTION PLAN. "DEFINED CONTRIBUTION PLAN" shall mean
any Employee Pension Benefit Plan which provides for an individual account for
each Participant and for benefits based solely upon
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<PAGE> 12
the amount contributed to the Participant's account and any income, expenses,
gains and losses, and any forfeitures of accounts of other Participants which
may be allocated to such Participant's account.
1.15 DETERMINATION DATE. "DETERMINATION DATE" shall mean, with respect
to any Employee Pension Benefit Plan, except as otherwise provided in Treasury
regulations, the last day of the preceding plan year or, in the case of the
first plan year of any plan, the last day of such plan year.
1.16 DETERMINATION PERIOD. "DETERMINATION PERIOD" shall mean the Plan
Year containing the Determination Date and the four preceding Plan Years.
1.17 DISABILITY. "DISABILITY" shall mean the inability to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or to be of long
continued or indefinite duration. The permanence and degree of such impairment
shall be supported by medical evidence satisfactory to the Administrative
Committee. If elected by the Employer in the Adoption Agreement, nonforfeitable
contributions shall be made to the Plan on behalf of each disabled Participant
who is a Non-Highly Compensated Employee.
1.18 EARLY RETIREMENT DATE. "EARLY RETIREMENT DATE" shall mean the
date, if any, specified in the Adoption Agreement.
1.19 EARNED INCOME. "EARNED INCOME" shall mean the net earnings of a
Self-Employed Person from self-employment in the trade or business with respect
to which the Plan is established, for which personal services of the
Self-Employed Person are a material income-producing factor. Net earnings will
be determined without regard to items not included in gross income and the
deductions allocable to such items. Net earnings shall be reduced by
contributions by the Employer to a qualified plan to the extent deductible under
section 404 of the Code.
Net earnings shall be determined with regard to the deduction allowed
to the taxpayer by section 164(f) of the Code for Taxable Years beginning after
December 31, 1989.
1.20 EFFECTIVE DATE. "EFFECTIVE DATE" shall mean the date on which the
Employer's Plan becomes effective, as indicated in the Adoption Agreement.
1.21 ELECTIVE DEFERRALS. "ELECTIVE DEFERRALS" shall mean contributions
made to the Plan during the Plan Year by the Employer, at the election of the
Participant, in lieu of cash compensation and shall include contributions made
pursuant to a salary reduction agreement or other deferral mechanism. Moreover,
with respect to any taxable year of a Participant, such Participant's Elective
Deferral is the sum of all employer contributions made on behalf of such
Participant pursuant to an election to defer under any qualified cash or
deferred arrangement as described in section 401(k) of the Code, any simplified
employee pension cash or deferred arrangement as described in section
402(h)(l)(B) of the Code, any eligible deferred compensation plan under section
457 of the Code, any plan as described under section 501(c)(18) of the Code, and
any employer contributions made on the behalf of a Participant for the purchase
of an annuity contract under section 403(b) of the Code pursuant to a salary
reduction agreement. Elective Deferrals shall not include any deferrals properly
distributed as excess annual additions.
1.22 ELECTIVE DEFERRAL ACCOUNT(S). "ELECTIVE DEFERRAL ACCOUNT(S)" shall
mean the account established by the Administrative Committee with the Trustee
for each Participant, which account shall be invested as provided in Article VI
on behalf of the Participant for whom such Elective Deferral Account has
-4-
<PAGE> 13
been established, and to which Elective Deferral Contributions on behalf of such
Participant, and the earnings and losses thereon, shall be allocated.
1.23 ELECTIVE DEFERRAL CONTRIBUTIONS. "ELECTIVE DEFERRAL CONTRIBUTIONS"
shall mean Employer contributions through salary reduction under Section 3.4.
1.24 ELIGIBILITY COMPUTATION PERIOD(S). "ELIGIBILITY COMPUTATION
PERIOD(S)" shall mean the Computation Period(s) determined under (A) or (B)
below.
(A) NORMAL RULE. Unless the Adoption Agreement provides
otherwise, the Eligibility Computation Period(s) shall be the Computation
Period(s) commencing on an Employee's Employment Commencement Date and the
anniversaries of the Employee's Employment Commencement Date.
(B) ALTERNATE RULE. If the Adoption Agreement so provides, the
initial Eligibility Computation Period shall be the Computation Period
commencing on an Employee's Employment Commencement Date and the succeeding
Eligibility Computation Period(s) shall commence with the first Plan Year
which begins prior to the first anniversary of the Employee's Employment
Commencement Date regardless of whether the Employee is entitled to be
credited with the number of Hours of Service required by the Adoption
Agreement (not to exceed 1,000 Hours of Service) during the initial
Eligibility Computation Period. An Employee who is credited with the number
of Hours of Service required by the Adoption Agreement (not to exceed 1,000
Hours of Service) in both the initial Eligibility Computation Period and the
first Plan Year which commences prior to the first anniversary of the
Employee's initial Eligibility Computation Period shall be credited with two
Years of Service for Eligibility for purposes of participation in the Plan.
Years of Service for Eligibility and One-Year Breaks In Service for
eligibility shall be measured by the same Eligibility Computation Periods. This
provision is not applicable if the elapsed time method is selected in Section
A.2.2(B)(2) of the Adoption Agreement.
1.25 EMPLOYEE. "EMPLOYEE" shall mean any employee of the Employer or of
any other employer required to be aggregated with such Employer under sections
414(b), (c), (m) or (o) of the Code and shall also include any Leased Employee
deemed to be an employee of any employer described in the preceding clause as
provided in sections 414(n) or (o) of the Code.
1.26 EMPLOYEE CONTRIBUTIONS. "EMPLOYEE CONTRIBUTIONS" shall mean
contributions to the Plan made by a Participant during the Plan Year.
1.27 EMPLOYEE PENSION BENEFIT PLAN. "EMPLOYEE PENSION BENEFIT PLAN"
shall mean any plan described in section 415(k)(1) of the Code.
1.28 EMPLOYER. "EMPLOYER" shall mean the adopting individual(s) or
business entity(ies). For purposes of applying the provisions of sections 401,
410, 411, 415 and 416 of the Code, all employees of a Controlled Group shall be
treated as employed by a single employer.
1.29 EMPLOYER ACCOUNT. "EMPLOYER ACCOUNT" shall mean the account
established by the Administrative Committee with the Trustee for each
Participant, which shall be invested as provided in Article VI on behalf of the
Participant for whom such Employer Account has been established, and to which
the Employer Contributions on behalf of such Participant and the earnings and
losses thereon shall be allocated.
-5-
<PAGE> 14
1.30 EMPLOYER CONTRIBUTIONS. "EMPLOYER CONTRIBUTIONS" shall mean
Employer contributions under Section 3.1 of the Plan.
1.31 EMPLOYER SECURITY. "EMPLOYER SECURITY" shall mean an employer
security (as such term is defined in section 407(d)(1) of ERISA) issued by an
Employer or other Controlled Group member.
1.32 EMPLOYMENT COMMENCEMENT DATE. "EMPLOYMENT COMMENCEMENT DATE" shall
mean the date on which an Employee first performs an hour of service. For
purposes of this Section 1.32, hour of service shall mean each hour for which an
Employee is paid or is entitled to payment for the performance of services for
the Employer.
1.33 ENTRY DATE. "ENTRY DATE" shall mean the date designated in the
Adoption Agreement as the date on which an Employee shall become an active
Participant in the Plan.
1.34 ERISA. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
1.35 EXCESS COMPENSATION. "EXCESS COMPENSATION" shall mean Compensation
in excess of the lesser of:
(A) The Taxable Wage Base; or
(B) The dollar amount set forth in the Adoption Agreement.
1.36 FAMILY MEMBER. "FAMILY MEMBER" shall mean an individual described
in section 414(q)(6)(B) of the Code.
1.37 FIDUCIARY. "FIDUCIARY" shall mean any person who:
(A) Exercises any discretionary authority or discretionary
control respecting management of the Plan or exercises any authority or
control respecting management or disposition of its assets;
(B) Renders investment advice for a fee or other compensation,
direct or indirect, with respect to any moneys or other property of the Plan
or has authority or responsibility to do so; or
(C) Has any discretionary authority or discretionary
responsibility in administering the Plan.
1.38 HIGHLY COMPENSATED EMPLOYEE. "HIGHLY COMPENSATED EMPLOYEE" shall
mean highly compensated active Employees and highly compensated former
Employees.
(A) ACTIVE EMPLOYEES.
(1) A highly compensated active Employee includes any
Employee who performs services for the Employer during the
determination year and who, during the look-back year:
(a) Received Compensation from the Employer
in excess of $75,000 (as adjusted by the Adjustment Factor);
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<PAGE> 15
(b) Received Compensation from the Employer
in excess of $50,000 (as adjusted by the Adjustment Factor)
and was a member of the top-paid group for such year; or
(c) Was an officer of the Employer and
received Compensation during such year that is greater than 50
percent of the dollar limitation in effect under section
415(b)(l)(A) of the Code. If elected by the Employer in the
Adoption Agreement, Section 1.38(A)(1)(a) shall be modified by
substituting $50,000 for $75,000 and Section 1.38(A)(1)(b)
shall be disregarded. This simplified definition of Highly
Compensated Employee shall apply only to Employers that
maintain significant business activities (and employ
Employees) in at least two significantly separate geographic
areas.
(2) A highly compensated active Employee also
includes any Employee who would be described in Section 1.38(A)(1)(a),
(b) or (c), if the term "determination year" were substituted for the
term "look-back year" and the Employee was one of the 100 Employees who
received the most Compensation from the Employer during the
determination year.
(3) A highly compensated active Employee also
includes any Employee who is a five-percent owner at any time during
the look-back year or determination year.
If elected by the Employer in the Adoption Agreement, Section
1.38(A)(1)(a) and (b) shall be modified by substituting $50,000 for $75,000
in Section 1.38(A)(1)(a) and by disregarding Section 1.38(A)(1)(b). This
simplified definition of Highly Compensated Employee shall apply only to
employers that maintain significant business activities (and employ
employees) in at least two significantly separate geographic areas.
If no officer has satisfied the Compensation requirement of
Section 1.38(A)(1)(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 purposes of this Section 1.38, the determination year
shall be the Plan Year and the look-back year shall be the 12-month period
immediately preceding the determination year. However, the Employer may
elect, in the applicable Adoption Agreement, to make the look-back year
calculation for a determination year on the basis of the calendar year ending
with or within the applicable determination year (or, in the case of a
determination year that is shorter than 12 months, the calendar year ending
with or within the 12-month period ending with the end of the applicable
determination year). In such case, the Employer must make the determination
year calculation for the determination year on the basis of the period (if
any) by which the applicable determination year extends beyond such calendar
year (i.e., the lag period). If the Employer elects to make the calendar year
calculation election with respect to one plan, entity or arrangement, such
election must apply to all plans, entities and arrangements of the Employer
and such election must be provided for in the plan. This election and the
calculation are subject to the requirements and provisions of Treas. Reg.
Section 1.414(q)-1T Q- and A-14, as modified by Proposed Treas. Reg. Section
1.414(q)-1T.
(B) FORMER EMPLOYEES. A highly compensated former Employee
includes any Employee who separated from service (or was deemed to have
separated) prior to the determination year, performs no service for the
Employer during the determination year, and was a highly compensated active
Employee for either the separation year or any determination year ending on
or after the Employee's 55th birthday.
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<PAGE> 16
If an Employee is, during a determination year or look-back
year, a Family Member of either a five-percent owner who is an active or
former Employee or a highly compensated Employee who is one of the ten most
highly compensated Employees ranked on the basis of Compensation paid by the
Employer during such year, then the Family Member and the five-percent owner
or top-ten highly compensated Employee shall be aggregated. In such case, the
Family Member and five-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 five-percent owner or
top-ten highly compensated Employee.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of Employees in the
top-paid group, the top 100 Employees, the number of Employees treated as
officers and the Compensation that is considered, shall be made in accordance
with section 414(q) of the Code and the Treasury regulations thereunder.
1.39 HOUR OF SERVICE. "HOUR OF SERVICE" shall mean an hour of service
determined as follows:
(A) An "Hour of Service" shall mean:
(1) Each hour for which an Employee is paid, or
entitled to payment, for the performance of duties for the Employer;
(2) Each hour for which an Employee is paid, or
entitled to payment, by the Employer on account of a period of time
during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty, military
duty or leave of absence; and
(3) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the Employer,
provided that the same Hours of Service shall not be credited under
Section 1.39(A)(1) or Section 1.39(A)(2) and under Section 1.39(A)(3).
(B) Effective for Plan Years beginning after December 31,
1984, solely for purposes of determining whether a One-Year Break In Service,
as defined in Section 1.55, for participation and vesting purposes has
occurred in a Computation Period, an Employee who is absent from work for
maternity or paternity reasons shall receive credit for the Hours of Service
which would otherwise have been credited to such Employee but for such
absence, or in any case in which such Hours of Service cannot be determined,
eight Hours of Service per day of such absence. For purposes of this Section
1.39(B), an absence from work for maternity or paternity reasons means an
absence:
(1) By reason of the pregnancy of the Employee;
(2) By reason of the birth of a child of the
Employee;
(3) By reason of the placement of a child with the
Employee in connection with the adoption of such child by such
Employee; or
(4) For purposes of caring for such child for a
period beginning immediately following such birth or placement.
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<PAGE> 17
The Hours of Service credited under this Section 1.39(B) shall be credited
(i) in the Computation Period in which the absence begins if the crediting is
necessary to prevent a One-Year Break In Service in that Computation Period,
or (ii) in all other cases, in the following Computation Period.
(C) Notwithstanding Section 1.39(A)(2),
(1) No more than 501 Hours of Service shall be
credited under Section 1.39(A)(2) to an Employee on account of any
single continuous period during which the Employee performs no duties
(whether or not such period occurs in a single Computation Period);
(2) Hours of Service shall not be credited under
Section 1.39(A)(2) to an Employee for payments made or due under a plan
maintained solely for the purpose of complying with any applicable
workers' compensation, unemployment compensation or disability
insurance laws;
(3) Hours of Service shall not be credited under
Section 1.39(A)(2) to an Employee for any payment which solely
reimburses him for medical or medically related expenses he has
incurred; and
(4) Hours of Service shall not be credited under
Section 1.39(A)(2) to an Employee for any payments made or due to him
under this Plan or any other pension or profit-sharing plan maintained
by the Employer.
(D) In the case of a payment which is made, or due, on account
of a period during which an Employee performs no duties, and which results in
the crediting of Hours of Service under Section 1.39(A)(2), or in the case of
an award or agreement for back pay, to the extent that such award or
agreement is made with respect to a period described in Section 1.39(A)(2),
the number of Hours of Service to be credited shall be determined in
accordance with 29 CFR Section 2530.200b-2(b).
(E) Hours of Service described in Section 1.39(A)(1) shall be
credited to the Employee for the Computation Period in which the duties are
performed. Hours of Service under Section 1.39(A)(2) shall be calculated and
credited to service Computation Periods in accordance with 29 CFR Section
2530.200b-2 which is incorporated herein by this reference. Hours of Service
under Section 1.39(A)(3) shall be credited to the Employee for the
Computation Period(s) to which the award or agreement pertains rather than to
the Computation Period in which the award, agreement or payment is made.
(F) This Section 1.39 shall not be construed so as to alter,
amend, modify, invalidate, impair or supersede any law of the United States
or any rule or regulation issued under any such law. The nature and extent of
credit for Hours of Service recognized under this Section 1.39 shall be
determined under such law.
(G) In the case of an Employee who is on leave of absence for
service on active duty in the Armed Forces of the United States, such
Employee shall receive upon return to the service of the Employer, in
addition to credit for Hours of Service to which such Employee is entitled
under this Section 1.39, such other credit as may be prescribed by Federal
laws relating to military service and veterans' reemployment rights.
(H) Hours of Service shall be credited for employment with
other members of an affiliated service group (under section 414(m) of the
Code) and of other members of a Controlled Group of which the
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<PAGE> 18
adopting Employer is a member. Hours of Service shall also be credited for
any individual required under section 414(n) of the Code to be considered an
Employee of any employer aggregated under sections 414(b), 414(c), or 414(m)
of the Code or section 414(o) of the Code and the Treasury regulations
thereunder.
(I) Except as otherwise provided in Section 1.39(B), the
number of Hours of Service to be credited to an Employee in a Computation
Period shall be determined in the following manner:
(1) In the case of an Employee for whom the Employer
maintains records of his hours worked and hours for which payment is
made or due, the number of Hours of Service to be credited to such
Employee in a Computation Period shall be determined from such records.
(2) In the case of an Employee for whom the Employer
does not maintain records of his hours worked and hours for which
payment is made or due, the number of Hours of Service to be credited
to such Employee in a Computation Period shall be determined on the
basis of periods of employment which shall be the payroll periods of
the Employer applicable to such Employee. An Employee shall be credited
with a number of Hours of Service, determined in accordance with the
following table, for each of his payroll periods in which he actually
has at least one Hour of Service:
<TABLE>
<CAPTION>
PAYROLL PERIOD HOURS OF SERVICE CREDITED
-------------- -------------------------
<S> <C>
Daily 10
Weekly 45
Semi-monthly 95
Monthly 190
</TABLE>
1.40 HOURLY EMPLOYEE. "HOURLY EMPLOYEE" shall mean any Employee who is
compensated by the Employer on an hourly-rated basis.
1.41 INACTIVE PARTICIPANT. "INACTIVE PARTICIPANT" shall mean any
Employee or former Employee who has ceased to be a Participant and on whose
behalf an account is maintained under the Plan.
1.42 INSURANCE CONTRACTS. "INSURANCE CONTRACTS" shall mean fixed or
variable annuities, endowments and any other form or type of life insurance
contract or combination thereof issued by an Insurer. Each Insurance Contract
shall be held and owned by the Trustee in accordance with the terms of the Plan.
1.43 INSURER. "INSURER" shall mean any life insurance company which is
licensed to do business in the State where the Employer's principal office is
located.
1.44 INVESTMENT MANAGER. "INVESTMENT MANAGER" shall mean the investment
manager, if any, appointed by the Employer to manage and invest all or any
portion of the assets of the Plan. Such Investment Manager shall:
(A) Have the power to manage, acquire or dispose of any Plan
assets committed to it;
(B) Be registered as an investment adviser under the In-
vestment Advisers Act of 1940; and
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<PAGE> 19
(C) Have acknowledged in writing that it is a Fiduciary with
respect to the Plan and that it is bonded as required by ERISA.
The name(s) and address(es) of any Investment Manager(s) shall
be indicated in the Adoption Agreement.
1.45 KEY EMPLOYEE. "KEY EMPLOYEE" shall mean any Employee or former
Employee of the Employer who, at any time during the Determination Period, is:
(A) An officer of the Employer having an annual compensation
which exceeds 50 percent of the dollar limitation under section 415(b)(1)(A)
of the Code;
(B) An owner (or considered an owner under section 318 of the
Code) of one of the ten largest interests in the Employer if such
individual's compensation from the Employer exceeds 100 percent of the dollar
limitation under section 415(c)(1)(A) of the Code;
(C) A five-percent owner of the Employer; or
(D) A one-percent owner of the Employer having annual
compensation from the Employer of more than $150,000.
For the purposes of this Section 1.45, Key Employees shall
also include their beneficiaries.
Compensation means compensation as defined in Section A.1.47
of the Adoption Agreement, but including amounts contributed by the Employer
pursuant to a salary reduction arrangement which are excludable from the
Employee's gross income under sections 125, 402(e)(3), 402(h)(1)(B) or 403(b)
of the Code.
For purposes of Section 1.45(A), no more than 50 Employees
(or, if less, the greater of three or ten percent of the Employees) shall be
treated as officers.
For purposes of Section 1.45(B), if two Employees have the
same interest in the Employer, the Employee having the greater amount of
compensation from the Employer shall be treated as having the larger
interest.
The determination of who is a Key Employee shall be made in
accordance with section 416(i)(l) of the Code and the Treasury regulations
thereunder.
1.46 LEASED EMPLOYEE. "LEASED EMPLOYEE" shall mean any person (other
than an employee of the recipient) who pursuant to an agreement between the
recipient and any other person ("leasing organization") has performed services
for the recipient (or for the recipient and related persons determined in
accordance with section 414(n)(6) of the Code) on a substantially full-time
basis for a period of at least one year, provided such services are of a type
historically performed by employees in the business field of the recipient
employer. Contributions or benefits provided a Leased Employee by the leasing
organization which are attributable to services performed for the recipient
employer shall be treated as provided by the recipient employer.
A Leased Employee shall not be considered an employee of the recipient
if:
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(A) Such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least ten
percent of compensation, as defined in section 415(c)(3) of the Code, but
including amounts contributed pursuant to a salary reduction agreement which
are excludable from the employee's gross income under section 125, section
402(e)(3), section 402(h)(1)(B) or section 403(b) of the Code, (2) immediate
participation, and (3) full and immediate vesting; and
(B) Leased Employees do not constitute more than 20 percent of
the recipient's nonhighly compensated workforce.
1.47 LIMITATION COMPENSATION. "LIMITATION COMPENSATION" shall mean one
of the following, as elected by the Employer in the Adoption Agreement:
(A) INFORMATION REQUIRED TO BE REPORTED UNDER SECTIONS 6041,
6051, AND 6052 OF THE CODE (WAGES, TIPS AND OTHER COMPENSATION AS REPORTED ON
FORM W-2). Limitation Compensation shall mean wages within the meaning of
section 3401(a) of the Code and all other payments of compensation to an
Employee by the Employer (in the course of the Employer's trade or business)
for which the Employer is required to furnish the Employee a written
statement under sections 6041(d), 6051(a)(3), and 6052 of the Code.
Limitation Compensation must be determined without regard to any rules under
section 3401(a) of the Code that limit the remuneration included in wages
based on the nature or location of the employment or the services performed
(such as the exception for agricultural labor in section 3401(a)(2) of the
Code).
(B) SECTION 3401(A) WAGES. Limitation Compensation shall mean
wages as defined in section 3401(a) of the Code for the purposes of income
tax withholding at the source but determined without regard to any rules that
limit the remuneration included in wages based on the nature or location of
the employment or the services performed (such as the exception for
agricultural labor in section 3401(a)(2) of the Code).
(C) 415 SAFE-HARBOR COMPENSATION. Limitation Compensation
shall mean wages, salaries, fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with the
Employer maintaining the Plan (including, but not limited to, commissions
paid salesmen, compensation on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits and
reimbursements or other expense allowances under a nonaccountable plan (as
described in Treas. Reg. Section 1.62-2(c)) and excluding the following:
(1) Employer contributions to a deferred compensation
plan which are not includible in the Employee's gross income for the
taxable year in which contributed or Employer contributions made on
behalf of the Employee to a simplified employee pension plan to the
extent such contributions are deductible by the Employee or any
distributions from a deferred compensation plan;
(2) Amounts realized from the exercise of a
nonqualified stock option, or when restricted stock (or property) held
by the Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(4) Other amounts which receive special tax benefits,
or Employer contributions (whether or not under a salary reduction
agreement) toward the purchase of an annuity contract described
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in section 403(b) of the Code (whether or not the contributions are
actually excludable from the gross income of the Employee).
For any Self-Employed Person, individual compensation shall mean Earned
Income.
Notwithstanding the above, Limitation Compensation for a Participant in
a Defined Contribution Plan who is permanently and totally disabled (as defined
in section 22(e)(3) of the Code) is the Limitation Compensation such Participant
would have received for the Limitation Year if the Participant had been paid at
the rate of Limitation Compensation paid immediately before becoming permanently
and totally disabled; such imputed Limitation Compensation for the disabled
Participant may be taken into account only if the Participant is not a Highly
Compensated Employee and contributions made on behalf of such Participant are
nonforfeitable when made.
For purposes of this Section 1.47, Limitation Compensation shall only
include compensation actually paid or made available during the applicable
Limitation Year. Notwithstanding the preceding sentence, an Employer may include
in Limitation Compensation amounts earned but not paid in a Limitation Year
because of the timing of pay periods and pay days if these amounts are paid
during the first few weeks of the next Limitation Year, the amounts are included
on a uniform and consistent basis with respect to all similarly situated
Participants, and no compensation is included in more than one limitation
period.
1.48 LIMITATION YEAR. "LIMITATION YEAR" shall mean the calendar year
unless another Computation Period is designated pursuant to a written resolution
adopted by the Employer.
1.49 MATCHING ACCOUNT(S). "MATCHING ACCOUNT(S)" shall mean the account
established by the Administrative Committee with the Trustee for each
Participant, which account shall be invested as provided in Article VI on behalf
of the Participant for whom such Matching Account has been established and to
which Matching Contributions on behalf of such Participant and the earnings and
losses thereon shall be allocated.
1.50 MATCHING CONTRIBUTION. "MATCHING CONTRIBUTION" shall mean any
contribution to the Plan made by the Employer for the Plan Year and allocated to
a Participant's Matching Account by reason of the Participant's Participant
Contributions or other Employee Contributions and/or by reason of the
Participant's Elective Deferral Contributions.
1.51 NON-HIGHLY COMPENSATED EMPLOYEE. "NON-HIGHLY COMPENSATED EMPLOYEE"
shall mean an Employee of the Employer who is neither a Highly Compensated
Employee nor a Family Member.
1.52 NON-RESIDENT ALIEN. "NON-RESIDENT ALIEN" shall mean any
non-resident alien (within the meaning of section 7701(b)(1)(B) of the Code) who
receives no earned income (within the meaning of section 911(d)(2) of the Code),
which constitutes United States source income (within the meaning of section
861(a)(3) of the Code).
1.53 NORMAL RETIREMENT AGE. "NORMAL RETIREMENT AGE" shall mean the age
(not less than age 62 nor more than age 65) and/or time specified in the
Adoption Agreement.
1.54 NORMAL RETIREMENT DATE. "NORMAL RETIREMENT DATE" shall mean the
Valuation Date coincident with, or immediately following, the date on which a
Participant attains his Normal Retirement Age.
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1.55 ONE-YEAR BREAK IN SERVICE. "ONE-YEAR BREAK IN SERVICE" shall mean
a one-year break in service computed under the regular method or the elapsed
time method, as defined below, based on the election made in the Adoption
Agreement.
(A) REGULAR METHOD. A One-Year Break In Service shall mean a
Computation Period during which the Employee has not completed more than the
number of Hours of Service (not to exceed 500 Hours of Service) indicated in
the Adoption Agreement.
(B) ELAPSED TIME METHOD. A One-Year Break In Service shall
mean a one-year period of severance in which an Employee does not have one
Hour of Service.
(1) GENERAL RULES. For purposes of determining an
Employee's initial or continued eligibility to participate in the Plan
or the nonforfeitable interest in the Participant's account balance
derived from Employer contributions (except for "Periods of Service"
(as defined in Section 1.97(B)(4)) which may be disregarded on account
of the "rule of parity" described in Section 2.3 and Section A.7.6(B)
of the Adoption Agreement), an Employee shall receive credit for the
aggregate of all time period(s) commencing with the Employee's
Employment or Reemployment Commencement Date and ending on the date a
break in service begins. An Employee shall also receive credit for any
"Period of Severance" (as defined in Section 1.97(B)(6)) of less than
12 consecutive months. Fractional periods of a year shall be expressed
in terms of days.
Each Employee shall share in Employer contributions
for the period beginning on the date the Employee commences
participation under the Plan and ending on the date on which such
Employee severs employment with the Employer or is no longer a member
of an eligible class of Employees.
If the Employer is a member of an affiliated service group
(under section 414(m) of the Code), a controlled group of corporations
(under section 414(b) of the Code), a group of trades or businesses
under common control (under section 414(c)of the Code), or any other
entity required to be aggregated with the Employer pursuant to section
414(o) of the Code, service shall be credited for any employment for
any period of time for any other member of such group. Service shall
also be credited for any individual required under section 414(n) of
the Code or section 414(o) of the Code to be considered an Employee of
any Employer aggregated under section 414(b), (c), or (m) of the Code.
For purposes of this Section 1.55(B), a One-Year
Break In Service occurs if:
(a) An Employee severs service and does not
return within 12 months from the date of severance (e.g., the
date on which he quits, is discharged or retires); or
(b) An Employee is absent from service
(e.g., by reason of Disability (except as otherwise provided
in the Plan), vacation, or leave of absence) and severs
employment during such absence (e.g., he quits, is discharged
or retires) and does not return to service on or before the
first anniversary of the date on which the Employee was first
absent.
(2) EXCEPTION FOR MATERNITY OR PATERNITY LEAVE. In
the case of an individual who is absent from work for maternity or
paternity reasons, the 12-consecutive month period beginning on the
first anniversary of the first date of such absence shall not
constitute a One-Year Break In Service.
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For purposes of this Section 1.55(B)(2), an absence from work for
maternity or paternity reasons means an absence:
(a) By reason of the pregnancy of an
individual;
(b) By reason of the birth of a child of the
individual;
(c) By reason of the placement of a child
with the individual in connection with the adoption of such
child by such individual; or
(d) For purposes of caring for such child
for a period beginning immediately following such birth or
placement.
In the case of a leave of absence due to service in the Armed Forces or
the United States, the Employee must return to active employment with the
Employer within the period prescribed under the reemployment provisions of the
Title 38, Chapter 43 of the United States Code. Any leave of absence authorized
by the Employer shall be granted under uniform rules so that all Participants
under similar circumstances shall be treated alike.
1.56 OWNER-EMPLOYEE. "OWNER-EMPLOYEE" shall mean a Self-Employed Person
who is a sole proprietor, or who is a partner owning more than ten percent of
either the capital or profits interest of the partnership.
1.57 PARTICIPANT. "PARTICIPANT" shall mean any Employee who, on the
first applicable Entry Date, has met the requirements for participation in the
Plan as provided in Article II.
1.58 PARTICIPANT ACCOUNT. "PARTICIPANT ACCOUNT" shall mean the account
established by the Administrative Committee with the Trustee for each
Participant, which shall be invested as provided in Article VI on behalf of the
Participant for whom such Participant Account has been established, and to which
the Participant Contributions and the earnings or losses thereon shall be
allocated.
1.59 PARTICIPANT CONTRIBUTIONS. "PARTICIPANT CONTRIBUTIONS" shall mean
Participant contributions under Section 3.2.
1.60 PERMISSIVE AGGREGATION GROUP. "PERMISSIVE AGGREGATION GROUP" shall
mean the Required Aggregation Group of plans plus any other plan or plans of the
Employer which, when considered as a group with the Required Aggregation Group,
would continue to satisfy the requirements of sections 401(a)(4) and 410 of the
Code.
1.61 PLAN. "PLAN" shall mean the Employer's Defined Contribution Plan
and Trust Agreement as set forth in this document and in the applicable Adoption
Agreement, and as it may be amended from time to time. As adopted by the
Employer, the Plan shall be a profit-sharing plan, a profit-sharing 401(k) plan
or a money purchase plan, as indicated in the applicable Adoption Agreement.
1.62 PLAN ADMINISTRATOR. "PLAN ADMINISTRATOR" shall mean the
Administrative Committee.
1.63 PLAN SPONSOR. "PLAN SPONSOR" shall mean the sponsor of the Plan as
designated in the Adoption Agreement.
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1.64 PLAN YEAR. "PLAN YEAR" shall mean the Computation Period indicated
in the Adoption Agreement. Plan Year shall also include any such period
completed before the Effective Date of the Plan.
1.65 PRIOR PLAN. "PRIOR PLAN" shall mean a prior qualified plan of the
Employer which is amended and restated into the Plan under the Adoption
Agreement applicable to such Employer.
1.66 PROFITS. "PROFITS" shall mean, in the case of a for-profit
Employer, the earnings and profits of the Employer for the Taxable Year but
before provision for income taxes (Federal, State and local) and before
deduction of Employer contributions hereunder or under any other pension or
profit-sharing plan of the Employer and/or accumulated earnings and profits as
computed by the Employer in accordance with generally accepted accounting
principles. Profits shall mean, in the case of a not-for-profit Employer, the
excess of such Employer's receipts over expenditures, whether such excess
results from the performance of such Employer's functions for which it is
recognized as exempt from Federal income tax, or from investments or other
business activity.
1.67 QVEC ACCOUNT(S). "QVEC ACCOUNT(S)" shall mean the account(s)
established by the Administrative Committee with the Trustee for each
Participant who has made Qualified Voluntary Employee Contributions to the Plan,
which QVEC Account(s) shall be invested as provided in Article VI on behalf of
the Participant for whom such QVEC Account(s) has (have) been established, and
to which the Participant's Qualified Voluntary Employee Contributions have been
and the earnings or losses thereon shall be, allocated.
1.68 QUALIFIED DOMESTIC RELATIONS ORDER. "QUALIFIED DOMESTIC RELATIONS
ORDER" shall mean a qualified domestic relations order as described in section
414(p) of the Code.
1.69 QUALIFIED MATCHING CONTRIBUTION. "QUALIFIED MATCHING CONTRIBUTION"
shall mean a Matching Contribution which is subject to the distribution and
nonforfeitability requirements of section 401(k) of the Code when made. Any
Qualified Matching Contribution to the Plan shall be credited to a separate
Qualified Matching Contribution account maintained for the Participant on whose
behalf such Qualified Matching Contribution is made.
1.70 QUALIFIED NONELECTIVE CONTRIBUTION. "QUALIFIED NONELECTIVE
CONTRIBUTION" shall mean a contribution (other than Matching Contributions or
Qualified Matching Contributions) made by the Employer and allocated to
Participants' accounts that the Participant may not elect to receive in cash
until distributed from the Plan; that are 100 percent vested and nonforfeitable
when made; and that are distributable only in accordance with the distribution
provisions that are applicable to Elective Deferrals and Qualified Matching
Contributions; Qualified Nonelective Contributions to the Plan shall be credited
to a separate Qualified Nonelective Contribution account maintained for the
Participant on whose behalf such Qualified Nonelective Contribution is made.
1.71 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS. "QUALIFIED VOLUNTARY
EMPLOYEE CONTRIBUTIONS" shall mean qualified voluntary employee contributions
within the meaning of section 219(e)(2) of the Code.
1.72 QUALIFYING EMPLOYER SECURITY. "QUALIFYING EMPLOYER SECURITY" shall
mean an Employer Security which is stock or a marketable obligation as provided
in sections 407(d)(5) and 407(e) of ERISA. The classes of Employer Securities
which are to be considered Qualifying Employer Securities may be limited in the
Adoption Agreement.
1.73 REEMPLOYMENT COMMENCEMENT DATE. "REEMPLOYMENT COMMENCEMENT DATE"
shall mean
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the first day, following a separation from service, on which an Employee
performs an hour of service. For purposes of this Section 1.73, an hour of
service shall mean each hour for which an Employee is paid or is entitled to
payment for the performance of services for the Employer.
1.74 REQUIRED AGGREGATION GROUP. "REQUIRED AGGREGATION GROUP" shall
mean:
(A) Each qualified plan of the Employer in which at least one
Key Employee participates or participated at any time during the
Determination Period (regardless of whether the Plan has terminated);and
(B) Any other qualified plan of the Employer which enables a
plan described in Section 1.74(A) to meet the requirements of sections
401(a)(4) or 410 of the Code.
1.75 ROLLOVER ACCOUNT. "ROLLOVER ACCOUNT" shall mean the account
established by the Administrative Committee with the Trustee for each
Participant or other Employee who has made a Rollover Contribution to the Plan,
which Rollover Account shall be invested as provided in Article VI on behalf of
the Participant or other Employee for whom such Rollover Account has been
established and to which the Participant's or other Employee's Rollover
Contributions and the earnings and losses thereon shall be allocated.
1.76 ROLLOVER CONTRIBUTIONS. "ROLLOVER CONTRIBUTIONS" shall mean, on or
before December 31, 1992, "rollover amounts" which are contributed to the
Trustee on or before the 60th day immediately following the day the contributing
Participant or other Employee receives such "rollover amount". The term
"rollover amount" means:
(A) The entire amount (including money and any other property)
in an Individual Retirement Account or Individual Retirement Annuity (as
defined in section 408 of the Code) maintained for the benefit of the
Participant or other Employee making the Rollover Contribution, which amount
has been distributed from such individual retirement account or individual
retirement annuity; or
(B) Part or all of the amount received by such Participant or
other Employee from an employee's trust described in section 401(a) of the
Code which is exempt from tax under section 501(a) of the Code.
Such amount shall, however, only constitute a "rollover
amount" if the amount described in Section 1.76(A) or 1.76(B) is solely
attributable to a plan termination distribution, as that term is described in
section 402(a)(5) of the Code, or to a lump-sum distribution, as defined in
section 402(e)(4)(A) of the Code, or to an accumulated deductible employee
contribution distribution, as described in section 402(a)(5) of the Code,
from either a trust described in section 401(a) of the Code or from an
annuity plan described in section 403(a) of the Code, plus the earnings
thereon. For purposes of rolling-over property other than money under this
Section 1.76, the transfer of an amount equal to any portion of the proceeds
from the sale of property received in the distribution, including any excess
in fair market value of property on sale over the fair market value on
distribution, shall constitute a "rollover amount".
Effective January 1, 1993, "Rollover Contributions" shall mean eligible
rollover distributions within the meaning of section 402(c)(4) or section
402(f)(2) of the Code, as in effect on and after January 1, 1993, provided such
eligible rollover distributions are transferred to the Plan within 60 days of
the date received by the Participant or other Employee. Effective January 1,
1993, "Rollover Contributions" shall also mean such eligible rollover
distributions within the meaning of section 402(f)(2)(A) and which are made in
the form of a
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direct trustee-to-trustee transfer described in section 401(a)(31) of the Code
as in effect on and after January 1, 1993.
1.77 SALARIED EMPLOYEE. "SALARIED EMPLOYEE" shall mean any Employee who
is not an Hourly Employee.
1.78 SELF-EMPLOYED PERSON. "SELF-EMPLOYED PERSON" shall mean an
individual who has earned income for the Taxable Year from the trade or business
for which the Plan is established or an individual who would have had earned
income but for the fact the trade or business had no Profits for the Taxable
Year.
1.79 SERVICE. "SERVICE" shall mean service with the Employer or any
related employer who adopts this Plan. If the Employer adopting the Plan is
maintaining the Plan of a predecessor employer, then service for such
predecessor shall be treated as Service for the Employer. Service for a
predecessor employer shall otherwise be treated as Service for the Employer only
to the extent provided in Section 2.2 and in the Adoption Agreement.
In the event the Plan is an amendment and restatement of a Prior Plan
in accordance with Section 18.17, if the Prior Plan credited service for
eligibility, and/or vesting on the basis of the elapsed time method (as
described in Treas. Reg. Section 1.410(a)-7), unless and to the extent the
Employer continues to use the elapsed time method under this Plan, a Participant
shall receive Service credit as of the effective date of the amendment, for a
number of Years of Service for Eligibility and/or Years of Service for Vesting
(as applicable) equal to the number of 1-year periods of service credited to the
Participant under the Prior Plan as of the effective date of the amendment. In
addition, if the effective date of the amendment is a date other than the first
day of a Computation Period, a Participant shall receive credit, in the
Computation Period, which includes the effective date of the amendment, for a
number of Hours of Service determined under one of the equivalencies set forth
in Section 1.39(I) (unless the Employer maintains records for the Participant on
an hourly basis, in which case actual hours shall be credited) for the
fractional part of a period of service credited to the Participant under the
elapsed time method as of the effective date of the amendment. The equivalency
to be used for this purpose shall be selected by the Employer in the Adoption
Agreement.
1.80 SPONSORING ORGANIZATION. "SPONSORING ORGANIZATION" shall mean
DRINKER BIDDLE & REATH, a law firm which has its principal office at
Philadelphia National Bank Building, 1345 Chestnut Street, Philadelphia, PA
19107-3496.
1.81 SPOUSE or SURVIVING SPOUSE. "SPOUSE" or "SURVIVING SPOUSE" shall
mean the spouse or surviving spouse of a Participant, provided that a former
spouse shall be treated as the spouse or surviving spouse and a current spouse
shall not be treated as the spouse or surviving spouse to the extent provided
under a Qualified Domestic Relations Order.
1.82 TAXABLE WAGE BASE. "TAXABLE WAGE BASE" shall mean, with respect to
any Plan Year, the maximum amount of earnings which on the first day of such
Plan Year may be considered wages for such Plan Year under section 3121(a)(1) of
the Code.
1.83 TAXABLE YEAR. "TAXABLE YEAR" shall mean the fiscal period adopted
by the Employer for filing its Federal income tax returns.
1.84 TOP-HEAVY PLAN. "TOP-HEAVY PLAN" shall mean this Plan if, for any
Plan Year beginning after December 31, 1983, any of the following conditions
exists:
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(A) If the Top-Heavy Ratio for this Plan exceeds 60 percent
and this Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group;
(B) If 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) If 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.
1.85 TOP-HEAVY RATIO. "TOP-HEAVY RATIO" shall mean a fraction
determined as follows:
(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 Determination
Period, has or has had accrued benefits, the Top-Heavy Ratio for this Plan
alone or for the Required or Permissive Aggregation Group, as appropriate, is
a fraction, the numerator of which is the sum of the account balances of all
Key Employees as of the Determination Date(s) (including any part of any
account balance distributed in the Determination Period), and the denominator
of which is the sum of all account balances (including any part of any
account balance distributed in the Determination Period), both computed in
accordance with section 416 of the Code and the Treasury regulations
thereunder. 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 section 416 of the Code and the Treasury 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 Determination Period has or has had any accrued benefits, the Top-Heavy
Ratio for any Required or Permissive Aggregation Group as appropriate is a
fraction, the numerator of which is the sum of account balances under the
aggregated Defined Contribution Plan or Plans for all Key Employees,
determined in accordance with Section 1.85(A) above, and the present value of
accrued benefits under the aggregated Defined Benefit Plan or Plans for all
Key Employees as of the Determination Date(s), and the denominator of which
is the sum of the account balances under the aggregated Defined Contribution
Plan or Plans for all Participants, determined in accordance with Section
1.85(A) above, and the present value of accrued benefits under the Defined
Benefit Plan or Plans for all Participants as of the Determination Date(s),
all determined in accordance with section 416 of the Code and the Treasury
regulations thereunder. The accrued benefits under a Defined Benefit Plan in
both the numerator and denominator of the Top-Heavy Ratio are increased for
any distribution of an accrued benefit made in the Determination Period.
For purposes of Section 1.85(A) and Section 1.85(B) above, the
value of account balances and the present value of accrued benefits shall be
determined as of the most recent Top-Heavy Valuation Date that falls within
or ends with the 12-month period ending on the Determination Date, except as
provided in section 416 of the Code and the Treasury regulations thereunder
for the first and second plan years of a Defined Benefit Plan. The account
balances and accrued benefits of a Participant (1) who is not a Key Employee
but who was a Key Employee in a prior year, or (2) who has not been credited
with at least one hour of service with any Employer maintaining the plan at
any time during the Determination Period shall be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which distributions,
rollovers, and transfers are taken into account shall be made in accordance
with section 416 of the Code and the Treasury regulations thereunder.
Deductible employee contributions shall not be taken into account for
purposes of computing the Top-Heavy
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Ratio. When aggregating plans, the value of account balances and accrued
benefits shall be calculated with reference to the Determination Dates that
fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee
shall be determined under the method, if any, that uniformly applies for
accrual purposes under all Defined Benefit Plans maintained by the Employer,
or if there is no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional rule of section
411(b)(1)(C) of the Code.
Present value shall be determined in accordance with the
mortality and interest assumptions set forth in the Adoption Agreement.
1.86 TOP-HEAVY VALUATION DATE. "TOP-HEAVY VALUATION DATE" shall mean
the date selected by the Employer in the Adoption Agreement as of which account
balances or accrued benefits are valued for purposes of calculating the
Top-Heavy Ratio.
1.87 TRANSFER ACCOUNT. "TRANSFER ACCOUNT" shall mean the account
established by the Administrative Committee with the Trustee for each
Participant who has had transferred to the Plan assets from another qualified
plan pursuant to Section 3.10, which Transfer Account shall be invested as
provided in Article VI on behalf of the Participant for whom such Transfer
Account was established and the assets and the earnings and losses thereon have
been allocated.
1.88 TRUST. "TRUST" shall mean the legal entity established by this
Plan and Trust Agreement and by the Adoption Agreement by which the Plan
contributions shall be received, held, invested and disbursed to, or for the
benefit of, Participants or Beneficiaries of Participants, or both.
1.89 TRUST AGREEMENT. "TRUST AGREEMENT" shall mean the Trust Agreement
as set forth in this document and as it may be amended from time
to time.
1.90 TRUST FUND. "TRUST FUND" shall mean all funds received by the
Trustee and the property in which said funds shall be invested, together with
all income, profits and increments thereon less any withdrawals and losses
incurred thereon.
1.91 TRUSTEE. "TRUSTEE" shall mean the individual trustee(s) (subject
to the requirements of any applicable Federal Securities laws) or corporate
trustee(s) designated by the Employer in the Adoption Agreement.
1.92 UNION EMPLOYEE. "UNION EMPLOYEE" shall mean any Employee who is
included in a unit of employees covered by an agreement which the Secretary of
Labor finds to be a collective bargaining agreement between the Employer and a
bargaining representative of such person, if there is evidence that retirement
benefits were the subject of good faith bargaining between such bargaining
representative and the Employer.
1.93 VALUATION DATE. "VALUATION DATE" shall mean the last day of each
Plan Year and such other date or dates as may be provided for in the applicable
Adoption Agreement.
1.94 VESTED ACCRUED BENEFIT. "VESTED ACCRUED BENEFIT" shall mean that
portion of a Participant's Accrued Benefit which has become nonforfeitable under
the Plan.
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1.95 VESTING COMPUTATION PERIOD. "VESTING COMPUTATION PERIOD" shall
mean the Computation Period measured by the Plan Year. Years of Service for
Vesting and One-Year Breaks In Service for vesting shall be measured by the
Vesting Computation Period.
1.96 WELFARE BENEFIT FUND. "WELFARE BENEFIT FUND"shall mean a welfare
benefit fund as defined in section 419(e) of the Code.
1.97 YEAR OF SERVICE FOR BENEFIT ACCRUAL. "YEAR OF SERVICE FOR BENEFIT
ACCRUAL" shall mean any Year of Service for Benefit Accrual computed under the
regular method or the elapsed time method, as defined below, based on the
election made in the Adoption Agreement.
(A) REGULAR METHOD. A Year of Service for Benefit Accrual
shall mean any Accrual Computation Period during which a Participant has
completed not less than the number of Hours of Service (not to exceed 1,000
Hours of Service) with the Employer indicated in the Adoption Agreement. If
the Participant has completed a Year of Service for Benefit Accrual but is
not in the service of the Employer at the end of the Accrual Computation
Period, a Year of Service for Benefit Accrual shall be credited except to the
extent otherwise provided in Section 2.3(G), Section 3.11 and in the Adoption
Agreement.
(B) ELAPSED TIME METHOD. A Year of Service for Benefit Accrual
shall mean a "Period of Service," as defined below, (which shall be the
equivalent of a Year of Service for Benefit Accrual under the regular method)
with the Employer based on a Participant's actual period of employment with
the Employer, irrespective of the number of hours actually worked during such
period and during which the Participant completes 12 "Months of Service" as
defined below. All periods of employment with the Employer, including
"Periods of Severance," as defined below, of less than 12 consecutive months
shall be aggregated unless there is a "One-Year Period of Severance". A
"Period of Service" shall be credited for each completed 12 months of service
(365 days) with the Employer, which need not be consecutive. A partial Year
of Service for Benefit Accrual shall be credited for any "Period of Service"
with the Employer of less than 12 months calculated to the nearest 1/12th
based on a fraction, where the numerator shall be the actual "Months of
Service" and the denominator shall be 12 "Months of Service". For purposes of
determining "Periods of Service" under the elapsed time method, the following
terms shall apply:
(1) "DATE OF SEVERANCE (TERMINATION)" shall mean the
earlier of:
(a) The actual date a Participant quits, is
discharged, dies or retires; or
(b) The first anniversary of the date a
Participant is absent from work with the Employer (with or
without pay) for any other reason.
(2) "ELAPSED TIME" shall mean the total "Period of
Service" which has elapsed between a Participant's Employment
Commencement Date or Reemployment Commencement Date with the Employer
and "Date of Severance (Termination)" by the Employer, including
"Periods of Severance" where a "One-Year Period of Severance" does not
occur.
(3) "HOUR OF SERVICE" shall mean each hour for which
an Employee is paid or entitled to payment for the performance of
duties for the Employer.
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(4) "PERIOD OF SERVICE" shall mean each completed 12
"Months of Service" (whether or not consecutive) during the total
"Elapsed Time" while a Participant is employed by the Employer,
regardless of the number of hours worked.
(5) "MONTH OF SERVICE" shall mean 30 days of "Elapsed
Time".
(6) "PERIOD OF SEVERANCE" shall mean the time between
the actual "Date of Severance (Termination)" by the Employer, as
defined above, and the subsequent date, if any, on which the
Participant performs an "Hour of Service", as defined above, with the
Employer.
(7) "ONE-YEAR PERIOD OF SEVERANCE" shall mean a
12-month period following a Participant's "Date of Severance
(Termination)", as defined above, in which a Participant does not have
one "Hour of Service" with the Employer.
1.98 YEAR OF SERVICE FOR ELIGIBILITY. "YEAR OF SERVICE FOR ELIGIBILITY"
shall mean any Eligibility Computation Period in which a Participant has
completed not less than the number of Hours of Service (not to exceed 1,000
Hours of Service) indicated in the Adoption Agreement. For purposes of this
Section 1.98, Service with a Predecessor Employer shall be included to the
extent provided in Sections 1.79 and 2.2 and in the applicable Adoption
Agreement. If less than one Year of Service for Eligibility is required for
participation in the Plan, the eligibility period shall be computed without
regard to the number of Hours of Service completed. This provision is not
applicable if the elapsed time method is selected in Section A.2.2(B)(2) of the
Adoption Agreement.
1.99 YEAR OF SERVICE FOR VESTING. "YEAR OF SERVICE FOR VESTING" shall
mean any Year of Service for Vesting computed under the regular method or the
elapsed time method, as defined below, based on the election made in the
Adoption Agreement.
(A) REGULAR METHOD. A Year of Service for Vesting shall mean
any Vesting Computation Period indicated in the Adoption Agreement during
which an Employee has completed not less than the number of Hours of Service
(not to exceed 1,000 Hours of Service) with the Employer indicated in the
Adoption Agreement.
(B) ELAPSED TIME METHOD. A Year of Service for Vesting shall
mean a "Period of Service", as defined in Section 1.97(B)(4), (which shall be
the equivalent of a Year of Service for Vesting under the regular method)
with the Employer based on an Employee's actual period of employment with the
Employer, irrespective of the number of hours actually worked during such
period and during which the Employee has completed 12 "Months of Service" as
defined in Section 1.97(B)(5) with the Employer. All periods of employment
with the Employer, including "Periods of Severance", as defined in Section
1.97(B)(6), of less than 12 consecutive months shall be aggregated unless
there is a "One-Year Period of Severance", as defined in Section 1.97(B)(7).
A "Period of Service" shall be credited for each completed 12 "Months of
Service" (365 days) with the Employer, which need not be consecutive. A
partial Year of Service for Vesting shall be credited for any "Period of
Service" with the Employer of less than 12 months calculated to the nearest
1/12th based on a fraction, where the numerator shall be the actual "Months
of Service" and the denominator shall be 12 "Months of Service". For purposes
of this Section 1.99, Service with a predecessor employer shall be included
to the extent provided in Sections 1.79 and 2.2 and in the Adoption
Agreement.
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ARTICLE II
PARTICIPATION UNDER PLAN
2.1 ADOPTION OF PLAN. An Employer shall adopt the Plan by executing the
Adoption Agreement.
2.2 ELIGIBILITY REQUIREMENTS. To be eligible for participation in the
Plan, an Employee must satisfy both of the following eligibility requirements:
(A) The Employee must be a member of an eligible class of
Employees as specified by the Employer in the Adoption Agreement; and
(B) The Employee must have completed the period of Service and
attained the age specified by the Employer in the Adoption Agreement.
Upon satisfaction of the requirements of Sections 2.2(A) and 2.2(B) as
specified in the Adoption Agreement, an Employee shall become a Participant in
the Plan on the Entry Date specified in the Adoption Agreement, unless the
Employee separated from service with the Employer before the Entry Date. An
Employee who has met all the requirements for eligibility, as set forth in this
Article II and in the Adoption Agreement, but who separates from service with
the Employer before the Entry Date and has not been rehired before the Entry
Date, shall become a Participant in the Plan on his Reemployment Commencement
Date. In the case of any such eligible Employee who is rehired before the Entry
Date, such eligible Employee shall become a Participant on such Entry Date.
Employees who have completed such requirements prior to the Effective Date shall
become Participants as of the Effective Date. Except as otherwise provided in
Section 1.79, service with a predecessor employer shall be included as Service
with the Employer for purposes of eligibility to participate under the Plan only
to the extent provided in the Adoption Agreement and to the extent required by
the Secretary of the Treasury or his delegate.
2.3 ADDITIONAL RULES RELATING TO PLAN PARTICIPATION. The following
additional rules relating to the Plan Participation apply:
(A) EMPLOYEES REQUIRED TO COMPLETE MORE THAN ONE YEAR OF
SERVICE FOR ELIGIBILITY. If an Employee who is required to complete more than
one Year of Service for Eligibility as an eligibility requirement has a
One-Year Break In Service before satisfying such requirement, Service prior
to such Break shall be disregarded.
(B) REHIRED FORMER PARTICIPANTS WITH NONFORFEITABLE RIGHTS. A
former Participant shall become a Participant immediately upon his return to
the employ of the Employer, if such former Participant had a nonforfeitable
right to all or a portion of his Employer Account at the time of his
termination.
(C) REHIRED FORMER PARTICIPANTS WITHOUT NONFORFEITABLE RIGHTS.
A former Participant who did not have a nonforfeitable right to any portion
of his Employer Account at the time of his termination shall be considered,
upon his reemployment, a new Employee for eligibility purposes, if the number
of consecutive One-Year Breaks In Service equals or exceeds the greater of
(1) five or (2) the aggregate number of Years of Service for Eligibility
before such Breaks. If such former Participant's Years of Service for
Eligibility before his termination may not be disregarded pursuant to the
preceding sentence, such former Participant shall participate immediately
upon his reemployment.
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(D) PARTICIPANTS WHO BECOME INELIGIBLE EMPLOYEES. In the event
a Participant becomes ineligible to participate because he is no longer a
member of an eligible class of Employees, but has not incurred a One-Year
Break In Service, such Employee shall participate immediately upon his return
to an eligible class of Employees. If such Participant incurs a One-Year
Break In Service, his eligibility to participate shall be determined pursuant
to Section 2.3(B) or 2.3(C).
(E) INELIGIBLE EMPLOYEES WHO BECOME ELIGIBLE. In the event an
Employee who is not a member of the eligible class of Employees becomes a
member of the eligible class, such Employee shall participate immediately, if
such Employee has satisfied the minimum age and service requirements and
would have previously become a Participant had he been in the eligible class.
(F) DURATION OF PARTICIPATION. After an Employee becomes a
Participant in the Plan, the Employee's active participation shall continue
until the earlier of the Participant's death, retirement, Disability, or
termination of employment with the Employer. However, except as otherwise
provided in Section 3.11 and in the Adoption Agreement, no Participant shall
share in Employer Contributions in any Plan Year in which such Participant
does not complete a Year of Service for Benefit Accrual and meet the other
eligibility requirements of Sections 2.2 and 2.3.
(G) PARTICIPANTS WHO SEPARATE BEFORE END OF PLAN YEAR. Subject
to Section 3.11, a Participant whose employment is terminated before the end
of a Plan Year but after he has completed the number of Hours of Service
required for a Year of Service for Benefit Accrual shall share in Employer
contributions for such Plan Year only if the Adoption Agreement so provides.
(H) LEASED EMPLOYEES.
(1) GENERAL. If the Employer has Leased Employees,
such Leased Employees shall participate in the Plan only if, and to the
extent, provided in the Adoption Agreement of such Employer.
(2) SAFE-HARBOR. Notwithstanding any other provisions
of the Plan, for purposes of determining the number or identity of
Highly Compensated Employees or for purposes of the pension
requirements of section 414(n)(3) of the Code, the Employees of the
Employer shall include individuals defined as Employees in Section
1.25. This provision was effective December 31, 1986.
2.4 PLANS COVERING OWNER-EMPLOYEES. If this Plan, as adopted by the
applicable Adoption Agreement, provides contributions or benefits for one or
more Owner-Employees who control both the business for which this Plan, as
adopted by the applicable Adoption Agreement, is established and one or more
other trades or businesses, this Plan and the plan established for other trades
or businesses must, when looked at as a single plan, satisfy sections 401(a) and
(d) of the Code for the employees of this and all other trades or businesses.
If the Plan, as adopted by the applicable Adoption Agreement, provides
contributions or benefits for one or more Owner-Employees who control one or
more other trades or businesses, the employees of the other trades or businesses
must be included in a plan which satisfies sections 401(a) and (d) of the Code
and which provides contributions and benefits not less favorable than provided
for Owner-Employees under this Plan.
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If an individual is covered as an Owner-Employee under the plans of two or more
trades or businesses which are not controlled and the individual controls a
trade or business, then the contributions or benefits of the employees under the
plan of the trades or businesses which are controlled must be as favorable as
those provided for him under the most favorable plan of the trade or business
which is not controlled.
For purposes of this Section 2.4, an Owner-Employee, or two or more
Owner-Employees, will be considered to control a trade or business if the
Owner-Employee, or two or more Owner-Employees together:
(A) Own the entire interest in an unincorporated trade or
business; or
(B) In the case of a partnership, own more than 50 percent of
either the capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control within the meaning
of the preceding sentence.
ARTICLE III
CONTRIBUTIONS
3.1 EMPLOYER CONTRIBUTIONS. Employer Contributions shall be determined
as follows:
(A) MONEY PURCHASE PLAN. If the Plan is a money purchase plan,
this Section 3.1(A) applies and the Employer Contribution shall be determined
in accordance with the applicable Money Purchase Plan Adoption Agreement.
(B) PROFIT-SHARING OR PROFIT-SHARING 401(K) PLAN. If the Plan
is a profit-sharing plan or a profit-sharing 401(k) plan, the Profit-Sharing
(401(k)) Adoption Agreement applies and contributions shall be made in
accordance with such Adoption Agreement and this Section 3.1(B).
(1) AMOUNT. Except as otherwise provided in Section
3.11(G), for each Plan Year during the continuance of the Plan, the
Employer shall contribute to the Trustee such amount as shall be
authorized by the Employer, in its sole discretion, provided that the
amount of the Employer Contribution for any Plan Year shall not exceed
the lesser of:
(a) The amount allowable as a deduction, if
the Employer is a for-profit organization, for computing
Federal income tax under the applicable provisions of the Code
for the Taxable Year which ends with or within such Plan Year
or, if the Employer is a not-for-profit organization, an
amount not in excess of reasonable compensation for services
rendered by the Participants for the Employer for the Taxable
Year which ends with or within such Plan Year; or
(b) The limitations set forth in Section 3.8
below.
(2) PROFITS NOT REQUIRED. Unless the Adoption
Agreement provides otherwise, effective for Plan Years beginning after
December 31, 1985, the Employer shall, notwithstanding any
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other provision of the Plan, make all contributions to the Plan without
regard to current or accumulated Profits for the Taxable Year or Years
ending with or within such Plan Year. Notwithstanding the foregoing,
the Plan shall continue to be designed to qualify as a profit-sharing
plan for purposes of sections 401(a), 402, 412 and 417 of the Code.
(3) QUALIFIED NONELECTIVE CONTRIBUTIONS AND QUALIFIED
MATCHING CONTRIBUTIONS.
(a) ELECTION. If the Plan provides for
Elective Deferral Contributions, the Employer may elect to
make Qualified Nonelective Contributions and/or Qualified
Matching Contributions under the Plan on behalf of Employees
as provided in the Adoption Agreement.
In addition, in lieu of distributing "Excess
Contributions" as provided in Section 3.4(B)(4), or "Excess
Aggregate Contributions" as provided in Section 3.2(G), and to
the extent elected by the Employer in the Adoption Agreement,
the Employer may make Qualified Nonelective Contributions
and/or Qualified Matching Contributions on behalf of
Non-Highly Compensated Employees that are sufficient to
satisfy either the "Actual Deferral Percentage" (ADP) (as
defined in Section 3.4(B)) test or the "Average Contribution
Percentage" (ACP) (as defined in Section 3.2(F)) test, or
both, pursuant to Treasury regulations under the Code.
(b) VESTING AND ACCOUNTS. The Participant's
Accrued Benefit derived from Qualified Nonelective
Contributions and Qualified Matching Contributions and the
earnings thereon shall be nonforfeitable at all times.
Separate accounts for Qualified Nonelective Contributions and
Qualified Matching Contributions shall be maintained for each
Participant on whose behalf such contributions are made. Each
account shall be credited with the applicable contributions
and earnings or losses thereon.
(C) TIME AND TYPE OF CONTRIBUTIONS. Employer Contributions,
for any Plan Year, shall be paid to the Trustee if the Employer's Plan is a
profit-sharing or profit-sharing 401(k) plan, no later than the due date
(including extensions of time) for filing the Employer's Federal income tax
return for the Taxable Year which ends with or within such Plan Year or if
the Employer's Plan is a money purchase plan no later than the time required
by the rules of section 412(m) of the Code but in no event later than the due
date (including extensions of time) for filing the Employer's Federal income
tax return for the Taxable Year which ends with or within such Plan Year.
3.2 PARTICIPANT CONTRIBUTIONS. Participant Contributions shall be
determined as follows:
(A) AMOUNT. Unless this Plan is a profit-sharing 401(k) plan,
this Plan shall not accept Employee Contributions and Matching Contributions
for Plan Years beginning after the Plan Year in which this Plan is adopted by
the Employer. Employee Contributions for Plan Years beginning after December
31, 1986, together with any Matching Contributions as defined in section
401(m) of the Code, shall be limited so as to meet the nondiscrimination test
of section 401(m) of the Code. Participant Contributions on or after such
date are only permitted or required if the Plan is a profit-sharing 401(k)
plan. In such case, Participants are not required to make Participant
Contributions under the Plan, unless the Adoption Agreement provides
otherwise. If, however, the Plan is a profit-sharing 401(k) plan and the
Employer has elected in the Adoption Agreement to permit Participant
Contributions, a Participant may, subject to the limitations of Section 3.2
and Section 3.8, make cash contributions under the Plan in any Plan Year in
any amount up to ten percent of the aggregate Compensation (as defined in
Section 1.10 before any modifications thereto in the Adoption
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Agreement) received by such Participant for all periods of participation in
the Plan reduced by any Participant Contributions made by such Participant
under this Plan during such period. This limitation applies in the aggregate
to voluntary contributions by any Participant to two or more qualified plans
maintained by the same Employer. Mandatory Participant Contributions are
subject to the requirements of the Adoption Agreement.
(B) PARTICIPANT CONTRIBUTIONS AND EARNINGS THEREON
NONFORFEITABLE. The interest of each Participant in his Participant
Contributions and the earnings thereon shall be nonforfeitable at all times.
(C) MANNER OF MAKING CONTRIBUTIONS. Participant Contributions
shall be made in cash and paid to the Employer. Participant Contributions may
be made by regular payroll deductions from his Compensation, if the Adoption
Agreement so provides, or in any other way approved by the Employer. For a
Participant Contribution to be deemed to be credited to a Participant's
Participant Account for any particular Limitation Year, such Participant
Contribution must be made to the Plan not later than 30 days following the
end of such Limitation Year. Participant Contributions shall be paid to the
Trustee by the Employer as soon as is administratively possible after receipt
by the Employer.
(D) CHANGE OF PARTICIPANT CONTRIBUTION RATE. If the Adoption
Agreement provides for Participant Contributions by regular payroll
deductions from the Participant's Compensation, a Participant, by 30 days'
written notice to the Administrative Committee, may elect to change his
Participant Contribution rate (but not retroactively) within the limits
specified herein, to discontinue making Participant Contributions, or to
resume Participant Contributions.
(E) RESPONSIBILITY OF TRUSTEE. The Trustee shall be
accountable for Participant Contributions received by it, but shall have no
duty to require any Participant Contributions to be delivered to it nor to
determine that the Participant Contributions received are of the correct
amount or are correctly attributed by the Administrative Committee to the
Participants who made them.
(F) LIMITATIONS ON EMPLOYEE CONTRIBUTIONS AND MATCHING
CONTRIBUTIONS - AVERAGE CONTRIBUTION PERCENTAGE TEST REQUIREMENT.
(1) TEST. The "Average Contribution Percentage" (ACP)
for Participants who are Highly Compensated Employees for each Plan
Year and the ACP for Participants who are Non-Highly Compensated
Employees for the same Plan Year must satisfy one of the following two
tests:
(a) The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
ACP for Participants who are Non-Highly Compensated Employees
for the same Plan Year multiplied by 1.25; or
(b) The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
ACP for Participants who are Non-Highly Compensated Employees
for the same Plan Year multiplied by two, provided that the
ACP for Participants who are Highly Compensated Employees does
not exceed the ACP for Participants who are Non-Highly
Compensated Employees by more than two percentage points.
(2) SPECIAL RULES. The following special rules apply:
(a) MULTIPLE USE. If one or more Highly
Compensated Employees participate in both a cash or deferred
arrangement (CODA) and a plan subject to the ACP test
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maintained by the Employer and the sum of the "Actual Deferral
Percentage" (ADP), as defined below in Section 3.4(B), and the
ACP of those Highly Compensated Employees subject to either or
both tests exceeds the "Aggregate Limit," then the
"Contribution Percentages" of those Highly Compensated
Employees who also participate in a CODA shall be reduced
(beginning with such Highly Compensated Employee whose
"Contribution Percentage" is the highest) so that the limit is
not exceeded. The amount by which each Highly Compensated
Employee's "Contribution Percentage Amount" is reduced shall
be treated as an "Excess Aggregate Contribution." The ADP and
ACP of the Highly Compensated Employees shall be determined
after any corrections required to meet the ADP and ACP tests.
Multiple use does not occur if both the ADP and ACP of the
Highly Compensated Employees do not exceed 1.25 multiplied by
the ADP and ACP of the Non-Highly Compensated Employees.
(b) MULTIPLE PLANS. For purposes of this
Section 3.2(F), the "Contribution Percentage" for any
Participant who is a Highly Compensated Employee and who is
eligible to have "Contribution Percentage Amounts" allocated
to his account under two or more plans described in section
401(a) of the Code, or CODAs that are maintained by the
Employer, shall be determined as if the total of such
"Contribution Percentage Amounts" were made under each plan.
If a Highly Compensated Employee participates in two or more
CODAs that have different plan years, all CODAs 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
pursuant to Treasury regulations under section 401(m) of the
Code.
(c) AGGREGATION. In the event that this Plan
satisfies the requirements of sections 401(m), 401(a)(4) or
410(b) of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements
of such sections of the Code only if aggregated with this
Plan, then this Section 3.2(F) shall be applied by determining
the ACP of Employees as if all such plans were a single plan.
For Plan Years beginning after December 31, 1989, plans may be
aggregated in order to satisfy section 401(m) of the Code only
if they have the same plan year.
(d) FAMILY AGGREGATION. For purposes of
determining the "Contribution Percentage" of a Participant who
is a five-percent owner or one of the ten most highly-paid
Highly Compensated Employees, the "Contribution Percentage
Amounts" and "Applicable Compensation" of such Participant
shall include the "Contribution Percentage Amounts" and
"Applicable 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
ACP both for Participants who are Non-Highly Compensated
Employees and for Participants who are Highly Compensated
Employees.
(e) TIMING. For purposes of the ACP test,
"Employee Contributions" are considered to have been made in
the Plan Year in which contributed to the Trust. Matching
Contributions, Qualified Matching Contributions and Qualified
Nonelective Contributions shall 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.
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(f) RECORDS. The Employer shall maintain
records sufficient to demonstrate satisfaction of the ACP test
and the amount of Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, used in such test.
(g) OTHER REQUIREMENTS. 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.
(3) DEFINITIONS. The following definitions apply:
(a) "AGGREGATE LIMIT" shall mean the sum of
(i) 125 percent of the greater of (AA) the ADP of the
Non-Highly Compensated Employees eligible under the CODA for
the Plan Year or (BB) the ACP of Non-Highly Compensated
Employees eligible under the Plan subject to section 401(m) of
the Code for the Plan Year beginning with or within the Plan
Year of the CODA, and (ii) two plus the lesser of (AA) or (BB)
above, but in no event shall this amount exceed 200 percent of
the lesser of (AA) or (BB) above. However, the "Aggregate
Limit," for Plan Years beginning before the later of January
1, 1992, or the date that is 60 days after publication of
final Treasury regulations under section 401(m) of the Code,
shall be the greater of (aa) the "Aggregate Limit," as
calculated under the preceding sentence, or (bb) the sum of
(AAA) 125 percent of the lesser of (AAAA) the ADP of the
Non-Highly Compensated Employees eligible under the CODA for
the Plan Year, or (BBBB) the ACP of the Non-Highly Compensated
Employees eligible under the Plan subject to section 401(m) of
the Code for the Plan Year beginning with or within the Plan
Year of the CODA, and (BBB) two plus the greater of (AAAA) or
(BBBB) above, but in no event shall this amount exceed 200
percent of the greater of (AAAA) or (BBBB) above.
(b) "AVERAGE CONTRIBUTION PERCENTAGE (ACP)"
shall mean the average of the "Contribution Percentages" of
the "Eligible Participants" in a group.
(c) "CONTRIBUTION PERCENTAGE" shall mean the
ratio (expressed as a percentage) of the Participant's
"Contribution Percentage Amounts" to the Participant's
"Applicable Compensation" for the Plan Year (whether or not
the Employee was a Participant for the entire Plan Year).
(d) "CONTRIBUTION PERCENTAGE AMOUNTS" shall
mean the sum of the "Employee Contributions", Matching
Contributions and Qualified Matching Contributions (to the
extent not taken into account for purposes of the ADP test)
made under the Plan on behalf of the Participant for the Plan
Year. Such Contribution Percentage Amounts shall not include
Matching Contributions that are forfeited either to correct
"Excess Aggregate Contributions" as defined below, or because
the contributions to which they relate are "Excess Elective
Deferrals" under Section 3.4, "Excess Contributions" under
Section 3.4, or "Excess Aggregate Contributions" under this
Section 3.2. If so elected in the Adoption Agreement, the
Employer may include Qualified Nonelective Contributions in
the "Contribution Percentage Amounts." The Employer also may
elect to use Elective Deferrals in the "Contribution
Percentage Amounts" so long as the ADP test is met before the
Elective Deferrals are used in the ACP test and continues to
be met following the exclusion of those Elective Deferrals
that are used to meet the ACP test.
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(e) "ELIGIBLE PARTICIPANT" shall mean any
Employee who is eligible to make an "Employee Contribution" or
an Elective Deferral (if the Employer takes such contributions
into account in the calculation of the "Contribution
Percentage"), or to receive a Matching Contribution (including
forfeitures) or a Qualified Matching Contribution. If an
"Employee Contribution" is required as a condition of
participation in the Plan, any Employee who would be a
Participant in the Plan if such Employee made such an
"Employee Contribution" shall be treated as an "Eligible
Participant" on behalf of whom no "Employee Contributions" are
made.
(f) "EMPLOYEE CONTRIBUTION" shall mean any
contribution made to the Plan by or on behalf of a Participant
that is included in the Participant's gross income in the Plan
Year in which made and that is maintained under a separate
account to which earnings and losses are allocated.
(g) "APPLICABLE COMPENSATION" shall mean
compensation (i) within the meaning of section 414(s)(1) of
the Code for the Plan Year for which a determination under
this Section 3.2(F) is being made, plus (ii) any amount
contributed by the Employer for such Plan Year pursuant to a
salary reduction agreement and which is not includible in
gross income under section 125, 402(e)(3), 402(h)(1)(B) or
403(b) of the Code.
(G) DISTRIBUTION OF "EXCESS AGGREGATE CONTRIBUTIONS".
(1) IN GENERAL. Notwithstanding any other provision
of this Plan, "Excess Aggregate Contributions", plus any income and
minus any loss allocable thereto, shall be forfeited, if forfeitable,
or, if not forfeitable, distributed no later than the last day of each
Plan Year to Participants to whose accounts such "Excess Aggregate
Contributions" were allocated for the preceding Plan Year. If such
"Excess Aggregate Contributions" are distributed more than two and
one-half months after the last day of the Plan Year in which such
"Excess Aggregate Contributions" arose, a ten percent excise tax will
be imposed on the Employer maintaining the plan with respect to such
"Excess Aggregate Contributions". Such distributions shall be made to
Highly Compensated Employees on the basis of the respective portions of
the "Excess Aggregate Contributions" attributable to each of such
Employees. "Excess Aggregate Contributions" of Participants who are
subject to the Family Member aggregation rules of section 414(q)(6) of
the Code shall be allocated among the Family Members in proportion to
the "Employee Contributions" and Matching Contributions (or amounts
treated as Matching Contributions) of each Family Member that is
combined to determine the combined ACP. "Excess Aggregate
Contributions" shall be treated as "Annual Additions" (within the
meaning of Section 3.8(D)(1)) under the Plan.
(2) DETERMINATION OF INCOME OR LOSS. "Excess
Aggregate Contributions" shall be adjusted for any income or loss. The
income or loss allocable to "Excess Aggregate Contributions" is the
income or loss allocable to the Participant's "Employee Contribution"
account, Matching Contribution account, Qualified Matching Contribution
account (if any, and if all amounts therein are not used in the ADP
test) and, if applicable, Qualified Nonelective Contribution account
and Elective Deferral account for the Plan Year multiplied by a
fraction, the numerator of which is such Participant's "Excess
Aggregate Contributions" for the Plan Year and the denominator of which
is the Participant's account balance(s) attributable to "Contribution
Percentage Amounts" without regard to any income or loss occurring
during such Plan Year. Income or loss allocable to the period between
the end of the Plan Year and the date of distribution shall be
disregarded in determining income or loss.
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(3) FORFEITURES OF "EXCESS AGGREGATE CONTRIBUTIONS".
Forfeitures of "Excess Aggregate Contributions" may either be
reallocated to the accounts of Non-Highly Compensated Employees or
applied to reduce Employer contributions, as elected by the Employer in
the Adoption Agreement with respect to Matching Contributions.
(4) ACCOUNTING FOR "EXCESS AGGREGATE CONTRIBUTIONS".
"Excess Aggregate Contributions" shall be forfeited, if forfeitable or
distributed on a pro-rata basis from the Participant's "Employee
Contribution" account, Matching Contribution account and Qualified
Matching Contribution account (and, if applicable, the Participant's
Qualified Nonelective Contribution account or Elective Deferral
account, or both).
(5) DEFINITIONS. The following definitions apply:
(a) "EXCESS AGGREGATE CONTRIBUTIONS" shall
mean, with respect to any Plan Year, the excess of:
(i) The aggregate "Contribution
Percentage Amounts" actually taken into account in
computing the ACP of Highly Compensated Employees for
such Plan Year, over
(ii) The maximum "Contribution
Percentage Amounts" permitted by the ACP test
(determined by reducing contributions made on behalf
of Highly Compensated Employees in order of their
"Contribution Percentages" beginning with the highest
of such percentages).
Such determination shall be made after first
determining "Excess Elective Deferrals" under Section 3.4 and
then determining "Excess Contributions" under Section 3.4.
(6) VESTING AND ACCOUNTS. The Participant's Accrued
Benefit derived from Employee Contributions shall be nonforfeitable at
all times. Separate accounts for Employee Contributions shall be
maintained for each Participant. Each account shall be credited with
the applicable contributions and earnings thereon.
3.3 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS. The rules relating to
Qualified Voluntary Employee Contributions are as follows:
(A) NOT PERMITTED AFTER DECEMBER 31, 1986. No Qualified
Voluntary Employee Contributions shall be permitted after December 31, 1986.
Contributions made prior to that date shall be maintained in separate
accounts. Such accounts shall share in gains or losses of the Trust in the
manner described in Article V. No part of such accounts shall be used to
purchase life insurance. Withdrawals from such accounts are provided for in
Sections 7.10(B) and 7.12.
(B) QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTION AND EARNINGS
THEREON VESTED AT ALL TIMES. The interest of each Participant in any
Qualified Voluntary Employee Contributions made on his behalf before January
1, 1987, and the earnings thereon shall be nonforfeitable at all times.
(C) RESPONSIBILITY OF TRUSTEE. The Trustee shall be
accountable for Qualified Voluntary Employee Contributions received by it,
but shall have no duty to determine that the Qualified Voluntary
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Employee Contributions received are of the correct amount or are correctly
allocated by the Employer to the Participants who made them.
3.4 ELECTIVE DEFERRAL CONTRIBUTIONS. The rules relating to Elective
Deferral Contributions are as follows:
(A) AMOUNT. If the Adoption Agreement provides for Elective
Deferral Contributions, the Employer shall make an Elective Deferral
Contribution to the Plan on behalf of each Participant who has elected to
defer a portion of the Compensation otherwise payable for the Plan Year and
have it contributed to the Plan. Such an election may only be made pursuant
to a written salary reduction agreement between the Employer and the
Participant. The agreement shall be on the Appropriate Form prescribed by the
Administrative Committee, and the agreement shall specify the percentage or
amount of Compensation that the Participant desires to defer (but in no event
may Elective Deferral Contributions exceed for any Plan Year, after taking
into account any Employer Contributions for such Plan Year under this Plan
and under any other qualified profit-sharing or qualified stock-bonus plan
the amount allowable under Section 3.1(B)(1) for the Taxable Year which ends
with or within such Plan Year, or the limitations set forth in Section 3.8
below). A Participant shall not be permitted to enter into more than one
salary reduction agreement in the periods specified in the Adoption
Agreement, and the agreement for any such period must be entered into before
the first day of such period. The Elective Deferral Contribution made for a
Participant shall be in an amount equal to the amount specified in the
Participant's salary reduction agreement; provided, however, that the
Elective Deferral Contribution otherwise to be made for a Participant shall
be reduced if and to the extent necessary to comply with the limitations of
Section 3.4(B). An Elective Deferral Contribution made for a Participant
shall be allocated to his Elective Deferral Account pursuant to Section
5.1(D). In the event the requirements of Section 3.4(B) would not otherwise
be met, but only if the Adoption Agreement so provides, the Employer may
make, on behalf of Non-Highly Compensated Employees, for any Plan Year, such
Qualified Nonelective Contributions as are necessary to meet the requirements
of Section 3.4(B). Such Employer Qualified Nonelective Contributions must be
made by the Employer no later than 30 days after the end of the Plan Year.
Such Employer Qualified Nonelective Contributions shall be separately
accounted for and no portion of such Employer Qualified Nonelective
Contributions attributable to Plan Years beginning after December 31, 1988,
may be withdrawn upon hardship of the Participant. Moreover, such Employer
Qualified Nonelective Contributions must satisfy all other requirements
relating to Qualified Nonelective Contributions as set forth in Section 1.70.
The CODA provisions may not be integrated with social security.
(B) ELECTIVE DEFERRALS.
(1) MAXIMUM AMOUNT OF ELECTIVE DEFERRALS. Effective
as of January 1, 1987, no Employee shall be permitted to have Elective
Deferrals made under this Plan during the taxable year of such Employee
in excess of $7,000 multiplied by the Adjustment Factor as provided by
the Secretary of the Treasury and as in effect at the beginning of such
taxable year of the Employee. The foregoing limit shall not apply to
Elective Deferrals of amounts attributable to service performed in 1986
and described in section 1105(c)(5) of the Tax Reform Act of 1986.
(2) "ACTUAL DEFERRAL PERCENTAGE" TEST REQUIREMENT.
The "Actual Deferral Percentage" (ADP) for Participants who are Highly
Compensated Employees for each Plan Year and the ADP for Participants
who are Non-Highly Compensated Employees for the same Plan Year must
satisfy one of the following tests:
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<PAGE> 41
(a) The ADP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
ADP for Participants who are Non-Highly Compensated Employees
for the same Plan Year multiplied by 1.25; or
(b) The ADP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
ADP for Participants who are Non-Highly Compensated Employees
for the same Plan Year multiplied by 2.0, provided that the
ADP for Participants who are Highly Compensated Employees does
not exceed the ADP for Participants who are Non-Highly
Compensated Employees by more than two percentage points.
(3) SPECIAL RULES. The following special rules apply:
(a) The ADP for any Participant who is a
Highly Compensated Employee for the Plan Year and who is
eligible to have Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if
treated as Elective Deferrals for purposes of the ADP test)
allocated to his accounts under two or more cash or deferred
arrangements described in section 401(k) of the Code (CODAs),
that are maintained by the Employer, shall be determined as if
such Elective Deferrals (and, if applicable, such Qualified
Nonelective Contributions or Qualified Matching Contributions,
or both) were made under a single CODA. If a Highly
Compensated Employee participates in two or more CODAs that
have different Plan Years, all CODAs ending with or within the
same calendar year shall be treated as a single CODA.
Notwithstanding the foregoing, certain CODAs shall be treated
as separate CODAs if mandatorily disaggregated pursuant to
regulations under section 401(k) of the Code.
(b) In the event that this Plan satisfies
the requirements of section 401(k), 401(a)(4), or 410(b) of
the Code only if aggregated with one or more other plans, or
if one or more other plans satisfy the requirements of such
sections of the Code only if aggregated with this Plan, then
this Section shall be applied by determining the ADP of
Employees as if all such plans were a single plan. For Plan
Years beginning after December 31, 1989, plans may be
aggregated in order to satisfy section 401(k) of the Code only
if they have the same Plan Year.
(c) For purposes of determining the ADP of a
Participant who is a five-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the Elective
Deferrals (and Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, if treated as
Elective Deferrals for purposes of the ADP test) and
"Applicable Compensation" of such a Participant shall include
the Elective Deferrals (and, if applicable, Qualified
Nonelective Contributions and Qualified Matching
Contributions, or both) and "Applicable Compensation" for the
Plan Year of Family Members of such Participant. Family
Members, with respect to such Highly Compensated Employees,
shall be disregarded as separate Employees in determining the
ADP both for Participants who are Non-Highly Compensated
Employees and for Participants who are Highly Compensated
Employees.
(d) For purposes of determining the ADP
test, Elective Deferrals, 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 the contributions relate.
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<PAGE> 42
(e) The Employer shall maintain records
sufficient to demonstrate satisfaction of the ADP test and the
amount of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.
(f) The determination and treatment of the
ADP amounts of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
(4) DEFINITIONS. The following definitions apply:
(a) "ACTUAL DEFERRAL PERCENTAGE" shall mean,
for a specified group of Participants for a Plan Year, the
average of the ratios (calculated separately for each
Participant in such group) of (i) the amount of Employer
contributions actually paid over to the Trust on behalf of
such Participant for the Plan Year to (ii) the Participant's
"Applicable Compensation" for such Plan Year (whether or not
the Employee was a Participant for the entire Plan Year).
Employer contributions on behalf of any Participant shall
include any Elective Deferrals made pursuant to the
Participant's deferral election (including "Excess Elective
Deferrals" of Highly Compensated Employees), but excluding
"Excess Elective Deferrals of Non-Highly Compensated Employees
that arise solely from Elective Deferrals made under the plan
or plans of the Employer and excluding Elective Deferrals that
are taken into account in the "Contribution Percentage" test
(provided the ADP test is satisfied both with and without
exclusion of these Elective Deferrals) and, at the election of
the Employer, Qualified Nonelective Contributions and
Qualified Matching Contributions. For purposes of computing
"Actual Deferral Percentages", an Employee who would be a
Participant but for the failure to make Elective Deferrals
shall be treated as a Participant on whose behalf no Elective
Deferrals are made.
(b) "APPLICABLE COMPENSATION" shall have the
meaning set forth in Section 3.2(F)(3)(g).
(5) DISTRIBUTION OF "EXCESS ELECTIVE DEFERRALS".
(a) IN GENERAL. A Participant may assign to
this Plan any "Excess Elective Deferrals" made during such
Participant's taxable year by notifying the Plan
Administrator, in accordance with Section 3.4(B)(5)(c) 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 Deferrals made to this
Plan and any other plans of the Employer.
Notwithstanding any other provision of the
Plan, "Excess Elective Deferrals" 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 taxable year of
such Participant and who claims "Excess Elective Deferrals"
for such taxable year of the Participant.
(b) DEFINITION. For purposes of the Plan,
"EXCESS ELECTIVE DEFERRALS" shall mean those Elective
Deferrals that are includible in a Participant's gross income
under section 402(g) of the Code to the extent such
Participant's Elective Deferrals for a taxable year exceed the
dollar limitation under such Code section. "Excess Elective
Deferrals" shall be
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treated as "Annual Additions" (within the meaning of Section
3.8(D)(1)) under the Plan, unless such amounts are distributed
no later than the first April 15 following the close of the
Participant's taxable year.
(c) CLAIMS. The Participant's claim shall be
in writing; shall be submitted to the Plan Administrator no
later than March 1; shall specify the Participant's "Excess
Elective Deferral" for the preceding taxable year of such
Participant (which shall not exceed the amount of the
Participant's Elective Deferral under this Plan for such
taxable year); and shall be accompanied by the Participant's
written statement that if such amounts are not distributed,
such "Excess Elective Deferral", when added to other Elective
Deferrals exceeds the limit imposed on the Participant by
section 402(g) of the Code for the taxable year of the
Participant in which the Elective Deferral occurred.
(d) DETERMINATION OF INCOME OR LOSS. "Excess
Elective Deferrals" shall be adjusted for income or loss. The
income or loss allocable to "Excess Elective Deferrals" is the
income or loss allocable to the Participant's Elective
Deferrals for the year multiplied by a fraction, the numerator
of which is such Participant's "Excess Elective Deferrals" for
the year and the denominator of which is the Participant's
account balance attributable to Elective Deferrals without
regard to any income or loss occurring during such taxable
year. Income or loss allocable to the period between the end
of the taxable year of the Participant and the date of the
distribution shall be disregarded in determining income or
loss.
(6) DISTRIBUTION OF "EXCESS CONTRIBUTIONS".
(a) IN GENERAL. Notwithstanding any other
provision of the 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 beginning after
December 31, 1987, to Participants to whose accounts such
"Excess Contributions" were allocated for the preceding Plan
Year. If such "Excess Contributions" are distributed more than
two and one-half months after the last day of the Plan Year in
which such "Excess Contributions" arose, a ten percent excise
tax will be imposed on the Employer maintaining the plan with
respect to such "Excess Contributions". Such distributions
shall be made to Highly Compensated Employees on the basis of
the respective portions of the "Excess Contributions"
attributable to each of such Employees. "Excess Contributions"
of Participants who are subject to the Family Member
aggregation rules of section 414(q)(6) of the Code shall be
allocated among the Family Members in proportion to the
Elective Deferrals (and amounts treated as Elective Deferrals)
of each Family Member that is combined to determine the
combined ADP. "Excess Contributions" shall be treated as
"Annual Additions" (within the meaning of Section 3.8(D)(1))
under the Plan.
(b) DETERMINATION OF INCOME OR LOSS. "Excess
Contributions" shall be adjusted for any income or loss. The
income or loss allocable to "Excess Contributions" is the
income or loss allocable to the Participant's Elective
Deferral account (and, if applicable, the Qualified
Nonelective Contribution account or the Qualified Matching
Contributions account or both) for the Plan Year multiplied by
a fraction, the numerator of which is such Participant's
"Excess Contributions" for the Plan Year and the denominator
of which is the Participant's account balance attributable to
Elective Deferrals (and Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, if any of such
contributions are included in the ADP test) without regard to
any income or loss occurring during such Plan Year. Income or
loss
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allocable to the period between the end of the Plan Year and
the date of the distribution shall be disregarded in
determining income or loss.
(c) ACCOUNTING FOR "EXCESS CONTRIBUTIONS".
"Excess Contributions" shall be distributed from the
Participant's Elective Deferral account and Qualified Matching
Contribution account (if applicable) in proportion to the
Participant's Elective Deferrals and Qualified Matching
Contributions (to the extent used in the ADP test) for the
Plan Year. "Excess Contributions" shall be distributed from
the Participant's Qualified Nonelective Contribution account
only to the extent that such "Excess Contributions" exceed the
balance in the Participant's Elective Deferral account and
Qualified Matching Contribution account.
(d) DEFINITION. "EXCESS CONTRIBUTION" shall
mean, with respect to any Plan Year, the excess of:
(i) The aggregate amount of
Employer contributions actually taken into account in
computing the ADP of Highly Compensated Employees for
such Plan Year, over
(ii) The maximum amount of such
contributions permitted by the ADP test (determined
by reducing contributions made on behalf of Highly
Compensated Employees in order of the ratios used in
determining the ADP of Highly Compensated Employees,
beginning with the highest of such ratios).
(e) REDUCTION FOR "EXCESS ELECTIVE
DEFERRALS" DISTRIBUTED. The "Excess Contributions" which would
otherwise be distributed to the Participant shall be reduced,
in accordance with regulations, by the amount of "Excess
Elective Deferrals" distributed to the Participant.
(C) VESTING AND ACCOUNTS. The interest of each Participant in
his Accrued Benefit derived from such Participant's Elective Deferral
Contributions and the earnings thereon shall be nonforfeitable at all times.
Separate accounts for Elective Deferral Contributions shall be maintained for
each Participant. Each account shall be credited with the applicable
contributions and earnings thereon.
(D) MANNER OF MAKING ELECTIVE DEFERRAL CONTRIBUTION. The
Employer shall contribute the Elective Deferral Contributions to the Plan
within the earlier of (1) 30 days following the pay period to which such
Elective Deferral Contributions relate, or (2) 30 days following the end of
the Plan Year for which such Elective Deferral Contributions are being made.
(E) RESPONSIBILITY OF TRUSTEE. The Trustee shall be
accountable for Elective Deferral Contributions received by it, but shall
have no duty to determine that the Elective Deferral Contributions received
are of the correct amount or are correctly allocated by the Administrative
Committee to the Participant on whose behalf such Elective Deferral
Contributions were made.
3.5 MATCHING CONTRIBUTIONS. The rules relating to Matching
Contributions are as follows:
(A) AMOUNT. If the Adoption Agreement provides for Matching
Contributions, the Employer shall make a Matching Contribution on behalf of
each Participant who has elected to make Elective Deferral Contributions or
Participant Contributions to the Plan in the amounts set forth in the
Adoption
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Agreement. The amount of the Matching Contribution shall be the amount
selected by the Employer in the Adoption Agreement to match such Elective
Deferral Contributions and/or Participant Contributions. A Matching
Contribution for a Participant shall be allocated to his Matching Account
pursuant to Section 5.1(E). The Employer may also make Qualified Matching
Contributions to the extent permitted by the applicable Adoption Agreement.
(B) TIME. Matching Contributions, for any Plan year, shall be
paid to the Trustee no later than the due date (including extensions of time)
for filing the Employer's Federal income tax return for the Taxable Year
which ends with or within such Plan Year.
(C) RESPONSIBILITY OF TRUSTEE. The Trustee shall be
accountable for Matching Contributions received by it, but shall have no duty
to determine that the Matching Contributions are of the correct amount or are
correctly allocated by the Administrative Committee to the Participant on
whose behalf such Matching Contributions were made.
(D) LIMITATIONS. All Matching Contributions are subject to the
requirements of Sections 3.2(F) and 3.2(G).
(E) VESTING AND ACCOUNTS. Matching Contributions shall be
vested in accordance with Section A.3.5(F) of the Adoption Agreement. In any
event, Matching Contributions shall be fully vested at Normal Retirement Age,
upon the complete or partial termination of the Plan, or upon the complete
discontinuance of Employer contributions. Qualified Matching Contributions
shall be vested when made.
Forfeitures of Matching Contributions, other than "Excess
Aggregate Contributions" (within the meaning of Section 3.2(G)) shall be made
in accordance with Sections 5.5 and 7.6(C) and Section A.7.6(C) of the
Adoption Agreement.
Separate accounts for Matching Contributions shall be
maintained for each Participant. Each account shall be credited with the
applicable contributions and earnings thereon.
Notwithstanding the foregoing, Matching Contributions
(including Qualified Matching Contributions) shall be forfeited if the
contributions to which they relate are "Excess Deferrals", "Excess
Contributions", or "Excess Aggregate Contributions". [SEE TREAS. REG.
SECTION1.401(A)(4)-11(G)(6) EXAMPLE 8]
3.6 CONTRIBUTIONS HELD IN TRUST. The Trustee covenants and agrees that
it holds, and will hold, all sums (including any Employer Contributions, any
Elective Deferral Contributions, any Matching Contributions, any Participant
Contributions, any Qualified Matching Contributions, any Qualified Nonelective
Contributions and, if applicable, prior Qualified Voluntary Employee
Contributions) which, from time to time, have been, or may be, paid to it as
Trustee hereunder, in trust, subject to the provisions of the Plan, for the
purposes and upon the terms, conditions and powers set forth in this Plan and
Trust Agreement.
3.7 RETURN OF EMPLOYER CONTRIBUTIONS. The rules relating to the return
of Employer Contributions are as follows:
(A) EXCLUSIVE BENEFIT RULE AND EXCEPTIONS THERETO. The Trust
Fund shall be held by the Trustee for the exclusive purpose of providing
benefits to Participants in the Plan and their Beneficiaries and defraying
reasonable expenses of administering the Plan. No part of the Trust Fund
shall at any time inure to the benefit of the Employer; provided, however,
that Employer Contributions and/or Elective Deferral
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<PAGE> 46
Contributions and/or Matching Contributions to the Trust Fund shall be
refunded to the Employer, to the extent such refunds do not, in themselves,
deprive the Plan of its qualified status, under the following circumstances
and subject to the following limitations:
(1) MISTAKE OF FACT. In the case of Employer
Contributions and/or Elective Deferral Contributions and/or Matching
Contributions which are made, in whole or in part, by reason of a
mistake of fact (as for example, incorrect information as to the
eligibility or Compensation of a Participant, or a mathematical error),
so much of such Employer Contributions and/or Elective Deferral
Contributions and/or Matching Contributions as is attributable to the
mistake of fact shall be returned to the Employer on demand, upon
presentation to the Trustee of evidence of the mistake of fact and
calculations as to the impact of such mistake. Demand and repayment
must be effected within one year after the date of payment of the
Employer Contributions and/or Elective Deferral Contributions and/or
Matching Contributions to which the mistake applies.
(2) DISALLOWANCE OF DEDUCTION. In the event the
deduction of the contribution made by the Employer is disallowed under
section 404 of the Code, such contribution (to the extent disallowed)
shall be returned to the Employer within one year of the disallowance
of the deduction.
(3) INITIAL DISQUALIFICATION. If any Employer and/or
Elective Deferral Contributions and/or Matching Contributions to the
Plan are conditioned on initial qualification of the Plan under section
401 of the Code and if the Plan receives an adverse determination with
respect to its initial qualification, any such Employer Contributions
and/or Elective Deferral Contributions and/or Matching Contributions
shall be returned to such Employer within one year after such adverse
determination but only if the application for determination is made by
the time prescribed by law for filing the Employer's Federal income tax
return for the Taxable Year in which such Plan was adopted or such
later date as the Secretary of the Treasury shall provide.
(B) REFUND TO BE DEDUCTED AS INVESTMENT LOSS WITH CERTAIN
EXCEPTIONS. In the event that any refund is paid to the Employer hereunder,
such refund shall be made without interest and shall be deducted from the
Employer Accounts and/or Elective Deferral Accounts and/or Matching Accounts
of the Participants as an investment loss except to the extent that the
amount of the refund can be attributed to one or more specific Participants
(as in the case of certain mistakes of fact and disallowances of Compensation
resulting in reduction of deductible Employer Contributions) in which case
the amount of the refund attributable to each such Participant's Employer
Account and/or Elective Deferral Account and/or Matching Account shall be
deducted directly from such Employer Account and/or Elective Deferral Account
and/or Matching Account.
(C) LIMITATIONS ON REFUNDS. Notwithstanding any other
provisions of this Section 3.7, no refund shall be made to the Employer:
(1) To the extent such refund is specifically
chargeable to the Employer Account(s) and/or Elective Deferral
Account(s) and/or Matching Account(s) of any Participant(s) in excess
of 100 percent of the amount in such Account(s);
(2) If the amount otherwise subject to refund
hereunder has been distributed to Participants and/or their
Beneficiaries (in which case the Employer shall have a claim directly
against the distributees to the extent of the refund to which it is
entitled);
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<PAGE> 47
(3) To the extent the amount is not in excess of the
amount which would have been contributed had no mistake of fact or
mistake in determining the deduction occurred (in which case the amount
subject to refund shall be limited to the excess of (a) the amount of
the Employer Contribution and/or Elective Deferral Contribution and/or
Matching Contribution over (b) the amount that the Employer would have
contributed, had there not occurred a mistake of fact or a mistake in
determining the amount of the deduction);
(4) Of earnings attributable to the excess Employer
Contribution and/or Elective Deferral Contribution and/or Matching
Contribution;
(5) To the extent there are losses attributable to
the amount subject to refund (in which case the losses shall reduce the
amount to be returned); and
(6) To the extent the amount subject to refund would
cause the balance of the Employer Account and/or Elective Deferral
Account and/or Matching Account of any Participant to be reduced to
less than the balance which would have been in such Employer Account
and/or Elective Deferral Account and/or Matching Account had the amount
subject to refund not been contributed (in which case the amount to be
refunded to the Employer shall be limited so as to avoid such
reduction).
(D) FURTHER LIMITATIONS ON REFUNDS. All refunds under this
Section 3.7 shall be limited in amount, circumstance and timing to the
provisions of section 403(c) of ERISA, and no such refund shall be made if,
solely on account of such refund, the Plan would cease to be a qualified plan
under section 401(a) of the Code or to meet the requirements of section
401(k) of the Code.
3.8 LIMITATIONS ON ALLOCATIONS. The limitations relating to allocations
under the Plan are as follows:
(A) LIMITATION APPLICABLE WHERE NO OTHER EMPLOYEE PENSION
BENEFIT PLAN OR WELFARE BENEFIT FUND OR INDIVIDUAL MEDICAL BENEFIT ACCOUNT
MAINTAINED.
(1) BASIC LIMITATION. If the Participant does not
participate in, and has never participated in, any other Employee
Pension Benefit Plan maintained by the "Employer" (as defined in
Section 3.8(D)(5)) or Welfare Benefit Fund maintained by the "Employer"
or individual medical benefit account (as defined in section 415(l)(2)
of the Code) maintained by the "Employer" and which provides an "Annual
Addition" (as defined in Section 3.8(D)(1)) by the "Employer", the
amount of the "Annual Additions" which may be allocated under this Plan
to such Participant's accounts during any Limitation Year shall not
exceed the lesser of the "Maximum Permissible Amount" (as defined in
Section 3.8(D)(8)) or any other limitation contained in the Plan. If
the Employer contribution that would otherwise be contributed or
allocated to the Participant's account would cause the "Annual
Additions" for the Limitation Year to exceed the "Maximum Permissible
Amount", the amount contributed or allocated shall be reduced so that
the "Annual Additions" for the Limitation Year will equal the "Maximum
Permissible Amount".
(2) ESTIMATION OF LIMITATION COMPENSATION. Prior to
determining the Participant's actual Limitation Compensation for the
Limitation Year, the Employer may determine the "Maximum Permissible
Amount" for a Participant on the basis of a reasonable estimation of
the Participant's Limitation Compensation for the Limitation Year,
uniformly determined for Participants similarly situated.
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(3) DETERMINATION OF ACTUAL LIMITATION COMPENSATION.
As soon as is administratively feasible after the end of the Limitation
Year, the "Maximum Permissible Amount" for the Limitation Year shall be
determined on the basis of the Participant's actual Limitation
Compensation for the Limitation Year.
(4) DISPOSITION OF "EXCESS AMOUNTS". If, pursuant to
Section 3.8(A)(3), or as a result of the allocation of forfeitures or
under other limited facts and circumstances satisfactory to the
Commissioner of Internal Revenue there is an "Excess Amount" (as
defined in Section 3.8(D)(6)) with respect to a Participant for a
Limitation Year, such "Excess Amount" shall be disposed of as follows:
(a) First, any Participant Contributions, to
the extent their return would reduce the "Excess Amount",
shall be paid to the Participant as soon as is
administratively feasible. The Administrative Committee shall
certify to the Trustee the amount of any such reduction to be
returned to any Participant and the name and address of the
Participant.
(b) Second, if, after the application of
Section 3.8(A)(4)(a), an "Excess Amount" still exists, and the
Participant is covered by the Plan at the end of a Limitation
Year, the "Excess Amount"in the Participant's account shall be
used to reduce Employer contributions (including any
allocation of forfeitures), for such Participant in the next
Limitation Year (and for each succeeding Limitation Year as
necessary).
(c) If, after the application of Section
3.8(A)(4)(a) an "Excess Amount" still exists, and the
Participant is not covered by the Plan at the end of a
Limitation Year, the "Excess Amount" shall be held unallocated
in a suspense account. The suspense account shall be applied
in the next Limitation Year (and succeeding Limitation Years,
as necessary) to reduce Employer contributions for all
remaining Participants.
(d) If a suspense account is in existence at
any time during a Limitation Year pursuant to this Section
3.8(A)(4), it shall not participate in the allocation of the
Trust's investment gains and losses. If a suspense account is
in existence at any time during a particular Limitation Year,
all amounts in the suspense account must be allocated and
reallocated to Participants' accounts before any "Employer"
contributions or any Employee contributions may be made to the
Plan for that Limitation Year. "Excess Amounts" may not be
distributed to Participants or former Participants. In the
event the Plan of an adopting "Employer" is terminated and any
portion of the "Excess Amount" cannot be allocated to
Participants under this Section 3.8(A)(4), such portion of
such "Excess Amount" shall revert to such adopting "Employer".
(B) MULTI-PLAN LIMITATIONS FOR ADDITIONAL REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLANS AND/OR WELFARE BENEFIT FUNDS AND/OR INDIVIDUAL
MEDICAL BENEFIT ACCOUNTS.
(1) LIMITATION. This Section 3.8(B) applies, if, in
addition to this Plan, the Participant is covered under another
qualified "Regional Prototype Plan" which is a Defined Contribution
Plan maintained by the "Employer" and/or a Welfare Benefit Fund
maintained by the "Employer" and/or an individual medical benefit
account (as defined in section 415(l)(2) of the Code) maintained by the
"Employer" which provides an "Annual Addition", during any Limitation
Year. The "Annual Additions" which may be credited under this Plan to a
Participant's account for any such Limitation Year shall not exceed the
lesser of:
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(a) The "Maximum Permissible Amount" reduced
by the sum of any "Annual Additions" credited to such
Participant's accounts under such other Defined Contribution
Plan or Plans and under such other Welfare Benefit Fund or
Funds and under such individual medical benefit account or
accounts for the same Limitation Year; or
(b) Any other limitation contained in this
Plan.
If the "Annual Additions" with respect to the
Participant under other Defined Contribution Plans and Welfare Benefit
Funds maintained by the Employer are less than the "Maximum Permissible
Amount" and the Employer contribution that would otherwise be
contributed or allocated to the Participant's account under this Plan
would cause the "Annual Additions" for the Limitation year to exceed
this limitation, the amount contributed or allocated shall be reduced
so that the "Annual Additions" under all such plans and funds for the
Limitation Year will equal the "Maximum Permissible Amount". If the
"Annual Additions" with respect to the Participant under such other
Defined Contribution Plans and Welfare Benefit Funds in the aggregate
are equal to or greater than the "Maximum Permissible Amount", no
amount shall be contributed or allocated to the Participant's account
under this Plan for the Limitation Year.
(2) ESTIMATION OF LIMITATION COMPENSATION. Prior to
determining the Participant's actual Limitation Compensation for the
Limitation Year, the Employer may determine the "Maximum Permissible
Amount" for a Participant in the manner described in Section 3.8(A)(2).
(3) DETERMINATION OF ACTUAL LIMITATION COMPENSATION.
As soon as is administratively feasible after the end of the Limitation
Year, the "Maximum Permissible Amount" for the Limitation Year shall be
determined on the basis of the Participant's actual Limitation
Compensation for the Limitation Year.
(4) ORDER OF DETERMINING "EXCESS AMOUNTS". If
pursuant to Section 3.8(B)(3) or as a result of the allocation of
forfeitures, a Participant's "Annual Additions" under this Plan and
such other plans would result in an "Excess Amount" for a Limitation
Year, the "Excess Amount" shall be deemed to consist of the "Annual
Additions" last allocated, except that "Annual Additions" attributable
to a Welfare Benefit Fund or to an individual medical benefit account
shall be deemed to have been allocated first regardless of the actual
allocation date.
(5) SIMULTANEOUS ALLOCATION OF "EXCESS AMOUNTS". If
an "Excess Amount" was allocated to a Participant on an allocation date
of this Plan which coincides with an allocation date of another plan,
the "Excess Amount" attributed to this Plan shall be the product of:
(a) The total "Excess Amount" allocated as
of such date; times
(b) The ratio of (i) the "Annual Additions"
allocated to the Participant for the Limitation Year as of
such date under this Plan, to (ii) the total "Annual
Additions" allocated to the Participant for the Limitation
Year as of such date under this and all the other qualified
"Regional Prototype Plans" maintained by the "Employer" which
are Defined Contribution Plans.
(6) DISPOSITION OF "EXCESS AMOUNTS". Any "Excess
Amounts" attributed to this Plan shall be disposed of in accordance
with Section 3.8(A)(4).
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(7) LIMITATION WHERE PARTICIPANT COVERED BY
NON-REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN. If the Participant is
covered under another qualified Defined Contribution Plan maintained by
the "Employer" which is not a "Regional Prototype Plan" (as defined in
Section 3.8(D)(10)), "Annual Additions" which may be credited to the
Participant's account under this Plan for any Limitation Year shall be
limited in accordance with Sections 3.8(B)(1) through 3.8(B)(6) as
though the other plan were a "Regional Prototype Plan" unless the
"Employer" provides other limitations in Section A.3.8.(B) of the
Adoption Agreement.
(C) MULTI-PLAN LIMITATIONS FOR ADDITIONAL PLAN WHICH IS A
DEFINED BENEFIT PLAN.
(1) LIMITATION. If, in addition to this Plan, the
"Employer" maintains or has maintained another plan which is a Defined
Benefit Plan covering any Participant in this Plan, the sum of the
Participant's "Defined Benefit Plan Fraction" and "Defined Contribution
Plan Fraction" shall not exceed 1.0 in any Limitation Year. The "Annual
Additions" which may be credited to the Participant's accounts under
this Plan for any Limitation Year shall be limited as elected in
Section A.3.8(C) of the Adoption Agreement.
(2) ELECTION OF PLAN LIMITATION. If Section
A.3.8(C)(1) of the Adoption Agreement is checked, the "Annual
Additions" which may be credited to a Participant's accounts shall be
reduced to the extent necessary so that they shall not exceed the
limitations in Sections 3.8(A) and 3.8(B) and, in addition, shall be
reduced to the extent necessary to prevent the decimal equivalent of
the sum of the "Defined Benefit Plan Fraction" (as defined in Section
3.8(D)(2)) and of the "Defined Contribution Plan Fraction" (as defined
in Section 3.8(D)(4)) for any Limitation Year beginning after December
31, 1982, with respect to such Participant, from exceeding 1.0.
(3) ORDER OF "ANNUAL ADDITIONS" REDUCTIONS. If, as a
result of Section 3.8(C)(2), the amount of the "Annual Additions" which
may be allocated to the accounts of any Participant under this Plan is
reduced for any Limitation Year, such reduction shall be made as
follows:
(a) The Participant Contribution portion of
such "Annual Additions" of such Participant for such
Limitation Year shall be reduced; and
(b) If the "Annual Additions" allocable to
such Participant Contributions are required to be reduced to
zero, then any Matching Contributions and Employer
Contributions (in that order) on behalf of such Participant
for such Limitation Year shall be reduced; and
(c) If the "Annual Additions" allocable to
Participant Contributions, Matching Contributions and Employer
Contributions are required to be reduced to zero, then the
Elective Deferral Contributions on behalf of such Participant
for such Limitation Year shall be reduced.
(4) TREATMENT OF "ANNUAL ADDITIONS" REDUCTIONS. If as
a result of Section 3.8(C)(2), the amount of the "Annual Additions"
which may be allocated under this Plan to any Participant's accounts
for any Limitation Year is reduced, such reduction shall be treated as
follows:
(a) The amount of such reduction consisting
of Participant Contributions shall be paid to the Participant
as soon as is administratively feasible; and
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(b) The amount of such reduction consisting
of Employer Contributions, Matching Contributions and Elective
Deferral Contributions shall be treated as an "Excess Amount"
and disposed of in accordance with Section 3.8(A)(4).
(D) DEFINITIONS. For purposes of this Article III, the
following terms shall be defined as follows:
(1) "ANNUAL ADDITIONS" shall mean, with respect to
any Participant, the amounts allocated to such Participant's accounts
during the Limitation Year that constitute:
(a) "Employer" contributions;
(b) Employee contributions;
(c) Forfeitures;
(d) Amounts allocated, after March 31, 1984,
to an individual medical benefit account, as defined in
section 415(l)(2) of the Code, which is part of a pension or
annuity plan maintained by the "Employer";
(e) Amounts derived from contributions paid
or accrued after December 31, 1985, in taxable years ending
after such date, which are attributable to post-retirement
medical benefits, allocated to the separate account of a key
employee, as defined in section 419A(d)(3) of the Code, under
a Welfare Benefit Fund, maintained by the "Employer"; and
(f) Any "Excess Amount" applied under
Sections 3.8(A) or 3.8(B) or 3.8(C) (if applicable), in the
Limitation Year to reduce "Employer" contributions for such
Limitation Year.
(2) "DEFINED BENEFIT PLAN FRACTION" shall mean a
fraction, the numerator of which is the sum of the Participant's
"Projected Annual Benefits" (as defined in Section 3.8(D)(9)) under all
the Defined Benefit Plans (whether or not terminated) maintained by the
"Employer", and the denominator of which is the lesser of 125 percent
of the dollar limitation determined for the Limitation Year under
sections 415(b) and (d) of the Code or 140 percent of the Participant's
"Highest Average Compensation" (as defined in Section 3.8(D)(7)),
including any adjustments under section 415(b) of the Code.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year beginning
after December 31, 1986, in one or more Defined Benefit Plans
maintained by the "Employer" which were in existence on May 6, 1986,
the denominator of this fraction shall 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 Defined Benefit Plan after May 5, 1986. The preceding
sentence applies only if the Defined Benefit Plans individually and in
the aggregate satisfied the requirements of section 415 of the Code for
all Limitation Years beginning before January 1, 1987.
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(3) "DEFINED CONTRIBUTION DOLLAR LIMITATION" shall
mean $30,000 or, if greater, one-fourth of the defined benefit dollar
limitation set forth in section 415(b)(1) of the Code as in effect for
the Limitation Year.
(4) "DEFINED CONTRIBUTION PLAN FRACTION" shall mean a
fraction, the numerator of which is the sum of the "Annual Additions"
to the Participant's account under all the Defined Contribution Plans
(whether or not terminated) maintained by the "Employer" for the
current and all prior Limitation Years (including the "Annual
Additions" attributable to the Participant's nondeductible employee
contributions to all Defined Benefit Plans, whether or not terminated,
maintained by the "Employer", and the "Annual Additions" attributable
to all Welfare Benefit Funds, and individual medical benefit accounts
(as defined in section 415(l)(2) of the Code) maintained by the
"Employer"), and the denominator of which is the sum of the maximum
aggregate amounts for the current and all prior Limitation Years of
service with the "Employer" (regardless of whether a Defined
Contribution Plan was maintained by the "Employer"). The maximum
aggregate amount in any Limitation Year is the lesser of 125 percent of
the dollar limitation determined under sections 415(b) and 415(d) of
the Code in effect under section 415(c)(1)(A) of the Code or 35 percent
of the Participant's Limitation Compensation for such Limitation Year.
If the Employee was a Participant as of the end of the first day of the
first Limitation Year beginning after December 31, 1986, in one or more
Defined Contribution Plans maintained by the "Employer" which were in
existence on May 6, 1986, the numerator of this fraction shall be
adjusted if the sum of this fraction and the "Defined Benefit Plan
Fraction" (as defined in Section 3.8(D)(2)) would otherwise exceed 1.0
under the terms of this Plan. Under the adjustment, an amount equal to
the product of (a) the excess of the sum of the fractions over 1.0
times (b) the denominator of this fraction, shall be permanently
subtracted from the numerator of this fraction. The adjustment is
calculated using the fractions as they would be computed as of the end
of the last Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the Plan made
after May 5, 1986, but using the section 415 limitation applicable to
the first Limitation Year beginning on or after January 1, 1987.
The "Annual Addition" for any Limitation Year
beginning before January 1, 1987, shall not be recomputed to treat all
Employee contributions as "Annual Additions".
(5) "EMPLOYER" shall mean the Employer that adopts
the Plan, and all members of a controlled group of corporations (as
defined in section 414(b) of the Code as modified by section 415(h) of
the Code), all commonly controlled trades or businesses (as defined in
section 414(c) of the Code as modified by section 415(h) of the Code)
or affiliated service groups (as defined in section 414(m) of the Code)
of which the adopting Employer is a part, and any other entity required
to be aggregated with the Employer pursuant to Treasury regulations
under section 414(o) of the Code.
(6) "EXCESS AMOUNT" shall mean the excess of the
Participant's "Annual Additions" for the Limitation Year over the
"Maximum Permissible Amount", less loading and other administrative
charges allocable to such excess.
(7) "HIGHEST AVERAGE COMPENSATION" shall mean the
average compensation for the three consecutive Accrual Computation
Periods with the "Employer" that produces the highest average.
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(8) "MAXIMUM PERMISSIBLE AMOUNT" shall mean the
maximum "Annual Addition" that may be contributed or allocated to a
Participant's account under the Plan for any Limitation Year which
maximum is the lesser of:
(a) The "Defined Contribution Dollar
Limitation" (as defined in Section 3.8(D)(3)); or
(b) 25 percent of the Participant's
Limitation Compensation for the Limitation Year.
If a short Limitation Year is created because of an
amendment changing the Limitation Year to a different Computation
Period, the "Maximum Permissible Amount" shall not exceed the "Defined
Contribution Dollar Limitation" multiplied by the following fraction:
NUMBER OF MONTHS IN THE SHORT LIMITATION YEAR
---------------------------------------------
12
(9) "PROJECTED ANNUAL BENEFIT" shall mean the annual
retirement benefit (adjusted to an actuarially equivalent straight life
annuity if such benefit is expressed in a form other than a straight
life annuity or qualified joint and survivor annuity) to which the
Participant would be entitled under the terms of the plan assuming:
(a) The Participant will continue employment
until normal retirement age under the plan (or current age, if
later), and
(b) The Participant's compensation for the
current Limitation Year and all other relevant factors used to
determine benefits under the plan will remain constant for all
future Limitation Years.
(10) "REGIONAL PROTOTYPE PLAN" shall mean a plan the
form of which is the subject of a favorable notification letter from
the Internal Revenue Service.
(E) SPECIAL RULE. The compensation limitation referred to in
Section 3.8(D)(8)(b) shall not apply to any contribution for medical benefits
(within the meaning of section 401(h) or section 419A(f)(2) of the Code)
which is otherwise treated as an "Annual Addition" under section 415(l)(1) or
section 419A(d)(2) of the Code.
3.9 ROLLOVER CONTRIBUTIONS. The rules relating to Rollover
Contributions are as follows:
(A) GENERAL. If permitted by the Adoption Agreement, any
Participant may, with the approval of the Administrative Committee, make a
Rollover Contribution. The Trustee shall credit the amount of any Rollover
Contribution to the Participant's Rollover Account as of the date the
Rollover Contribution is made. A Rollover Contribution shall be fully vested
on the date of contribution. The limitations of Section 3.8 shall not apply
to Rollover Contributions. All Rollover Contributions shall be in cash and/or
other property acceptable to the Trustee. If permitted by the Adoption
Agreement, Employees other than Participants may be permitted to make
Rollover Contributions to the Plan.
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(B) TRUSTEE-TO-TRUSTEE TRANSFERS OF ROLLOVER CONTRIBUTIONS TO
PLAN. Effective January 1, 1993, if the Adoption Agreement provides for
Rollover Contributions and, if the Participant or other Employee eligible to
make a Rollover Contribution to the Plan (1) elects to have such Rollover
Contribution paid directly to the Plan, and (2) specifies the Plan as the
plan to which such Rollover Contribution is to be paid (in such form and at
such time as the Administrative Committee may prescribe), such Rollover
Contribution shall be made in the form of a direct trustee-to-trustee
transfer as described in section 401(a)(31) of the Code, as in effect on and
after January 1, 1993.
(C) ELIGIBLE ROLLOVER DISTRIBUTIONS FROM PLAN. This Section
3.9(C) applies to distributions made on or after January 1, 1993.
(1) ELECTION OF DIRECT ROLLOVER. Notwithstanding any
provision of the Plan to the contrary that would otherwise limit a
"Distributee's" election under this Section 3.9(C), 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" that is equal to at least $500 paid directly to an
"Eligible Retirement Plan" specified by the "Distributee" in a "Direct
Rollover".
(2) DEFINITIONS.
(a) "ELIGIBLE ROLLOVER DISTRIBUTION". An
"Eligible Rollover Distribution" is 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: 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;
any distribution to the extent such distribution is required
under section 401(a)(9) of the Code; 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); and any
other distribution(s) that is reasonably expected to total
less than $200 during a year.
(b) "ELIGIBLE RETIREMENT PLAN". An "Eligible
Retirement Plan" is an individual retirement account described
in section 408(a) of the Code, an individual retirement
annuity described in section 408(b) of the Code, an annuity
plan described in section 403(a) of the Code, or a qualified
plan described in section 401(a) of the Code, that accepts the
"Distributee's" "Eligible Rollover Distribution". However, in
the case of an "Eligible Rollover Distribution" to the
surviving spouse, an "Eligible Retirement Plan" is an
individual retirement account or individual retirement
annuity.
(c) "DISTRIBUTEE". A "Distributee" includes
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 section 414(p) of the Code, are "Distributees" with regard
to the interest of the spouse or former spouse.
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(d) "DIRECT ROLLOVER". A "Direct Rollover"
is a payment by the Plan to the "Eligible Retirement Plan"
specified by the "Distributee".
3.10 TRANSFERS OF ACCOUNTS FROM AND TO OTHER QUALIFIED PLANS. The rules
relating to transfers of accounts are as follows:
(A) TRANSFER OF ACCOUNTS FROM OTHER QUALIFIED PLANS.
(1) GENERAL RULES. If permitted by the Adoption
Agreement, Participants may have the assets in their accounts in other
plans transferred to this Plan provided:
(a) The other plan is a plan which formerly
covered the Participant and is qualified under section 401(a)
of the Code but is not a Defined Benefit Plan or a money
purchase pension plan (including a target benefit plan) or a
plan which provided for distribution or should have provided
for distribution in the form of qualified joint and survivor
annuities or a direct or indirect transferee from any such
plan unless the Plan adopted hereunder by the Employer is a
money purchase plan;
(b) The Administrative Committee approves
such transfer;
(c) The Trustee accepts such transfer; and
(d) The transferred assets consist solely of
cash and/or other property acceptable to the Trustee.
The Trustee shall credit the fair market value of such transferred
assets to the Transfer Account of the Participant on whose behalf such
assets were transferred as of the date of the transfer. The interest of
a Participant in his Transfer Account shall be fully vested on the date
of the transfer. The limitations of Section 3.8 shall not apply to such
transfers. If permitted by the Adoption Agreement, Employees other than
Participants may be permitted to make direct transfers to the Plan.
(2) LIMITATIONS APPLICABLE TO TRANSFERS FROM PLANS
COVERING CERTAIN KEY EMPLOYEES AND FIVE-PERCENT OWNERS. In the event
assets are transferred from a qualified plan covering Key Employees in
a Top-Heavy Plan, or five-percent owners (within the meaning of section
416(i)(1) of the Code) of their former employer, the following
restrictions apply:
(a) Separate Transfer Accounts must be
maintained for the assets transferred by each of the former
Key Employees or five-percent owners;
(b) The former five-percent owners or the
former Key Employees (if they were five-percent owners of
their former employer) may, subject to the terms of the Plan,
receive benefits from such separate Transfer Accounts before
they attain age 59 1/2 or become disabled, but subject to any
penalties provided by the Code for such distributions; and
(c) The former five-percent owners or the
former Key Employees (if they were five-percent owners of
their former employer) must commence receiving benefits from
such separate Transfer Accounts not later than the April 1 of
the calendar year following the calendar year in which they
attain age 70 1/2.
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(B) TRANSFERS OF ACCOUNTS TO OTHER QUALIFIED PLANS. Upon the
request of a Participant who has terminated his services with the Employer or
whose coverage under this Plan has terminated, but only with the approval of
the Administrative Committee, the Trustee shall transfer all amounts held in
the Plan for the account of such Participant to another plan or plans
(including another qualified plan of the Employer) provided such other plan
or plans meet the requirements of section 401(a) of the Code and such other
plan or plans are maintained by the employer of such Participant (or the
Employer) and any required governmental notifications have been made and
further provided that any request is accompanied by an acceptance letter from
the trustee of the transferee plan or plans. Neither the Trustee nor the
Administrative Committee shall have any further liability under this Plan
with respect to amounts so transferred.
3.11 TOP-HEAVY PROVISIONS. If the Plan is or becomes top-heavy in any
Plan Year beginning after December 31, 1983, the provisions of this Section 3.11
shall supersede any conflicting provisions in the Plan or in the Adoption
Agreement. The following provisions shall be effective with respect to any
adopting Employer in any Plan Year in which the Plan, with respect to such
adopting Employer, is determined to be a Top-Heavy Plan.
(A) MINIMUM ALLOCATION.
(1) GENERAL. Except as otherwise provided in Section
3.11(A)(4), the Employer contributions and forfeitures allocated for
any Plan Year in which the Plan is a Top-Heavy Plan on behalf of any
Participant who is not a Key Employee shall not be less than the lesser
of three percent of such Participant's "Compensation" (as defined in
Section 3.11(A)(3)) for such Plan Year or, in the case where the
Employer has no Defined Benefit Plan which designates this Plan to
satisfy section 401 of the Code, the largest percentage of Employer
contributions and forfeitures, as a percentage of the Key Employee's
"Compensation", as limited by section 401(a)(17) of the Code, allocated
on behalf of any Key Employee for that Plan Year. The minimum
allocation shall be determined without regard to any Social Security
contribution. This minimum allocation shall be made even though, under
other Plan provisions, the Participant would not otherwise be entitled
to receive an allocation, or would have received a lesser allocation in
the Plan Year because:
(a) The Participant failed to complete 1,000
Hours of Service (or any equivalent provided in the Plan);
(b) The Participant failed to make mandatory
employee contributions to the Plan; or
(c) The Participant's "Compensation" was
less than a stated amount.
(2) NONFORFEITABILITY OF MINIMUM ALLOCATION. The
minimum allocation required (to the extent required to be
nonforfeitable under section 416(b) of the Code) may not be forfeited
under section 411(a)(3)(B) or 411(a)(3)(D) of the Code.
(3) DEFINITION OF "COMPENSATION". For purposes of
computing the minimum allocation, "Compensation" shall mean Limitation
Compensation, as defined in Section A.1.47 of the Adoption Agreement as
limited by section 401(a)(17) of the Code.
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(4) EXCEPTIONS.
(a) LAST DAY OF PLAN YEAR RULE. The
provisions in Section 3.11(A)(1) shall not apply to any
Participant who was not employed by the Employer on the last
day of the Plan Year.
(b) MINIMUM ALLOCATION OR BENEFIT PROVIDED
UNDER OTHER PLAN. The provisions in Section 3.11(A)(1) shall
not apply to any Participant to the extent the Participant is
covered under any other Employee Pension Benefit Plan(s) of
the Employer and the Employer has provided in Section
A.3.11(A)(2) of the Adoption Agreement that the minimum
allocation or benefit requirements applicable to Top-Heavy
Plans shall be met in the other Employee Pension Benefit
Plan(s). [NOTE: THIS PROVISION MAY CAUSE THE PLAN TO FAIL TO
SATISFY THE UNIFORMITY REQUIREMENT OF TREAS. REG. SECTION
1.401(A)(4)-2(B)(2)(II) FOR PLANS USING A DESIGN-BASED SAFE
HARBOR, EVEN THOUGH ALL OTHER REQUIREMENTS OF THE SAFE HARBOR
ARE MET.]
(5) ELECTIVE DEFERRALS AND MATCHING CONTRIBUTIONS.
Neither Elective Deferrals nor Matching Contributions may be taken into
account for the purpose of satisfying the minimum top-heavy
contribution requirement under Section 3.11(A)(1).
(B) VESTING. For any Plan Year in which this Plan is a
Top-Heavy Plan, one of the minimum vesting schedules as elected by the
Employer in the Adoption Agreement shall automatically apply to the Plan. The
minimum vesting schedule applies to all benefits within the meaning of
section 411(a)(7) of the Code except those attributable to Employee
contributions, including benefits accrued before the effective date of
section 416 of the Code and benefits accrued before the Plan became a
Top-Heavy Plan. Further, no decrease in a Participant's nonforfeitable
percentage may occur in the event the Plan's status as a Top-Heavy Plan
changes for any Plan Year. However, this Section 3.11(B) does not apply to
the account balances of any Employee who does not have an Hour of Service
after the Plan has initially become a Top-Heavy Plan and such Employee's
account balance attributable to Employer contributions and forfeitures shall
be determined without regard to this Section 3.11(B).
Notwithstanding the above, in the event the vesting schedule
selected under Section 7.6 provides for more rapid vesting than the vesting
schedule selected under this Section 3.11(B), the vesting schedule selected
under this Section 3.11(B) shall be superseded by the vesting schedule under
Section 7.6 but only to the extent more rapid vesting is provided in such
schedule.
The Participant shall at all times have a nonforfeitable right
to all of his Accrued Benefit under the Plan attributable to Elective
Deferral Contributions, Participant Contributions and Qualified Voluntary
Employee Contributions.
ARTICLE IV
ACCOUNTS
4.1 SEPARATE ACCOUNTS. The Administrative Committee shall maintain or
cause to be maintained, for each Participant, in accordance with the provisions
of this Section 4.1, a separate Employer Account and, if Matching Contributions
are permitted in accordance with Section 3.5, a separate Matching Account, and
if
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Elective Deferral Contributions are permitted in accordance with Section 3.4, a
separate Elective Deferral Account, and if Participant Contributions are
permitted in accordance with Section 3.2, a separate Participant Account, and,
if Rollover Contributions are made on behalf of a Participant, a separate
Rollover Account, and, if direct transfers are made to the Plan on behalf of a
Participant pursuant to Section 3.10, a separate Transfer Account, and, if
Qualified Voluntary Employee Contributions have been permitted in accordance
with Section 3.3, a separate QVEC Account, to which Employer, Matching, Elective
Deferral, Participant and Rollover Contributions and direct transfers and
Qualified Voluntary Employee Contributions, respectively, shall be credited. The
Administrative Committee shall also maintain or cause to be maintained, for each
such Participant, in accordance with the provisions of this Section 4.1, a
record of the value of the Participant's Employer, Matching, Elective Deferral,
Participant, Rollover, Transfer and QVEC Accounts, which shall represent the
interest of such Participant in the assets of the accounts maintained by the
Trustee for his benefit. Separate accounts shall also be maintained, in
accordance with Section 3.1(B)(3)(b) for any Qualified Matching Contributions
and/or Qualified Nonelective Contributions made to the Plan on behalf of any
Participant.
ARTICLE V
ALLOCATION OF CONTRIBUTIONS, EARNINGS AND FORFEITURES
5.1 ALLOCATIONS OF CONTRIBUTIONS. The rules relating to allocations of
contributions are as follows:
(A) EMPLOYER CONTRIBUTIONS. The Administrative Committee shall
allocate the Employer Contribution for each Plan Year for which an Employer
Contribution is made among the Employer Accounts of each Participant entitled
to receive an allocation, in accordance with the terms of the Adoption
Agreement. Each such allocation shall be effective as of the last day of the
Plan Year, except as otherwise specified in the Plan or Adoption Agreement.
(B) PARTICIPANT CONTRIBUTIONS. The Trustee, upon instructions
from the Administrative Committee, shall, as of the date received from the
Employer, allocate any amounts contributed by a Participant, in accordance
with Section 3.2, to the Participant Account of such Participant.
(C) QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS. No Qualified
Voluntary Employee Contributions are permitted after December 31, 1986.
(D) ELECTIVE DEFERRAL CONTRIBUTIONS. The Trustee, upon
instructions from the Administrative Committee, shall, as of the date
received from the Employer, allocate any Elective Deferral Contributions made
on behalf of any Participant in accordance with Section 3.4, to the Elective
Deferral Account of such Participant.
(E) MATCHING CONTRIBUTIONS. The Trustee, upon instructions
from the Administrative Committee, shall, as of the date received from the
Employer, allocate any Matching Contributions made on behalf of any
Participant, in accordance with Section 3.5 and the Adoption Agreement, to
the Matching Account of such Participant.
(F) ROLLOVER CONTRIBUTIONS. The Trustee, upon instructions
from the Administrative Committee, shall as of the date received from the
Employer or as of the date received in a trustee-to-trustee transfer under
Section 3.9(B), allocate any amounts contributed by a Participant or
transferred to the Trustee
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on his behalf under Section 3.9(B), in accordance with Section 3.9, to the
Rollover Account of such Participant.
(G) DIRECT TRANSFERS. The Trustee shall, as of the date
received from another qualified plan, pursuant to instructions of the
Administrative Committee, allocate any amounts transferred on behalf of a
Participant pursuant to Section 3.10, to the Transfer Account of such
Participant.
(H) QUALIFIED MATCHING AND QUALIFIED NONELECTIVE
CONTRIBUTIONS. The Trustee, upon instructions from the Administrative
Committee, shall, as of the date received from the Employer, allocate any
Qualified Matching and/or Qualified Nonelective Contribution made on behalf
of any Participant, to the separate account or accounts of such Participant
in accordance with Section 3.1(B)(3)(b).
5.2 ADVICE TO TRUSTEE RE ALLOCATIONS OF CONTRIBUTIONS AND DIRECT
TRANSFERS. The Administrative Committee shall, at the time contributions or
direct transfers are transmitted to the Trustee, deliver to the Trustee a
schedule showing the amounts allocated to the Employer, the Matching, the
Elective Deferral, the Participant, the Rollover, the Transfer and the QVEC
Accounts and the Qualified Matching Contribution account and the Qualified
Nonelective Contribution account of each Participant and, if Section 6.1(B) is
applicable to this Plan, indicating the manner in which the Participant has
directed that such contributions or direct transfers be invested.
5.3 VALUATIONS. The Trustee, as of each Valuation Date, shall cause a
valuation to be made of the assets of the Trust Fund and of each Employer,
Matching, Elective Deferral, Participant, Rollover, Transfer and QVEC Account
and of each Qualified Matching Contribution account and Qualified Nonelective
Contribution account in such Fund at their current fair market value. In each
such valuation, the Trustee shall credit all income and profits realized since
the preceding Valuation Date in accordance with Section 5.4 and shall deduct all
losses, costs, charges and expenses of administering the Trust Fund since the
preceding Valuation Date.
The Trustee shall furnish the Administrative Committee with a report of
each such valuation of the Trust Fund.
5.4 ALLOCATION OF INCREASES AND DECREASES. As of each Valuation Date,
in determining the valuation of each Employer, Matching, Elective Deferral,
Participant, Rollover, Transfer and QVEC Account and of each Qualified Matching
Contribution account and Qualified Nonelective Contribution account under
Section 5.3, upon receipt of the Trustee's report, the Administrative Committee
shall allocate the increase or decrease in the fair market value of the assets
of the Trust Fund, after reduction for any forfeitures under Section 7.6, and
any interim Employer, Matching, Elective Deferral, Participant, Rollover and
Qualified Voluntary Employee Contributions and direct transfers and Qualified
Matching and Qualified Nonelective Contributions to the Employer, Matching,
Elective Deferral, Participant, Rollover and QVEC Accounts and Transfer Account
and Qualified Matching Contribution and Qualified Nonelective Contribution
accounts of each Participant in the proportion that the amount in the Employer,
Matching, Elective Deferral, Participant, Rollover and QVEC Accounts and
Transfer Account and Qualified Matching Contribution and Qualified Nonelective
Contribution accounts of each Participant bears respectively to the total amount
in the Employer, Matching, Elective Deferral, Participant, Rollover and QVEC
Accounts and Transfer Accounts and Qualified Matching Contribution and Qualified
Nonelective Contribution accounts of all Participants, all as determined on the
first day or last day (as specified in the Adoption Agreement) of the period in
which the Valuation Date occurs (except that the last day of the period shall be
used for the initial allocation for any Employer). At the discretion of the
Administrative Committee, in allocating increases and decreases, the
Administrative Committee may take into account on a uniform and
nondiscriminatory basis contributions and forfeitures allocated during the
period in which the Valuation Date occurs. For purposes of this Section 5.4, in
the event the Adoption Agreement provides for
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Participant directed investments pursuant to Section 6.1(B), each Account (and
each other account) subject to such Participant directed investments shall be
treated as a separate Trust Fund.
5.5 FORFEITURES. All amounts forfeited by separated Participants of an
adopting Employer in accordance with Section 7.6 shall be debited to the
Employer and/or Matching Accounts of the respective Participants employed by
such adopting Employer who are subject to such forfeitures. Subject to Section
3.8 and, except as otherwise provided in the Adoption Agreement, forfeitures
shall be aggregated with Employer, and/or Matching Contributions for the Plan
Year and shall be allocated to the Accounts of the remaining Participants
employed by such adopting Employer in the same manner as is provided for the
allocation of Employer, and/or Matching Contributions under Section 5.1. Such
allocation shall be effected as of the date specified in the Adoption Agreement.
Notwithstanding the foregoing, the forfeited amounts may first be used to
restore a rehired Participant's non-vested account that was forfeited, as
provided in Section 7.6(C).
ARTICLE VI
INVESTMENT OF ACCOUNTS
6.1 INVESTMENT OF ACCOUNTS. The Employer shall indicate in the Adoption
Agreement whether the Trustee, the Participant (or Beneficiary, if applicable)
and/or an Investment Manager shall have the power to direct investment of
Employer, Matching, Elective Deferral, Participant, Rollover, Transfer and/or
QVEC Accounts and/or of any other account (e.g., Qualified Matching Contribution
account and Qualified Nonelective Contribution account) under the Plan. To the
extent the Participant (or Beneficiary, if applicable) does not have the power
to direct the investment of his accounts under the Plan, such Participant (or
Beneficiary, if applicable) shall have a ratable interest in all assets of the
Trust.
(A) INVESTMENT BY TRUSTEE AND/OR INVESTMENT MANAGER. If the
Trustee or an Investment Manager is selected to direct investment of Employer
and/or Matching and/or Elective Deferral and/or Participant and/or Rollover
and/or Transfer and/or QVEC Accounts and/or Qualified Matching Contribution
account and/or Qualified Nonelective Contribution account and/or other
accounts, the Trustee, subject to the requirements set forth in Article X,
or, if an Investment Manager has been selected to direct investments, the
Trustee, subject to the directions of the Investment Manager and subject to
the requirements set forth in Articles X and XII, shall have full discretion
and authority to invest and reinvest the principal and income of that portion
of the Trust Fund committed to it for investment in any form of property not
prohibited by law (without restriction to investments authorized by State law
for fiduciaries). Consistent with this authority, but not by way of
limitation, the Trustee is hereby specifically empowered with respect to that
portion of the Trust Fund committed to it:
(1) To invest any part or all of the assets in any
common stocks, bonds, insurance contracts, mortgages, notes or other
property of any kind, real or personal. All such investments shall be
diversified as provided by law, unless it is clearly prudent not to do
so;
(2) To invest any part or all of the assets in any
common, collective, pooled or group trust fund meeting the requirements
of Rev. Rul. 81-100, 1981-1 CB 326 and operated by a bank or similar
financial institution (even if such bank or other institution serves as
Trustee) supervised by the United States or any State, provided such
investments are available only to pension and profit-sharing trusts
which meet the requirements of section 401(a) and related Code
sections. So long as any portion
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of the Trust Fund is so invested, the instrument establishing such
common, collective, pooled or group trust fund shall constitute an
integral part of this Plan and Trust Agreement;
(3) To invest all or part of the assets in deposits
which bear a reasonable interest rate, including certificates of
deposit, in any bank, savings or similar financial institution (even if
such bank or other institution serves as Trustee) supervised by the
United States or any State;
(4) To hold cash uninvested for a reasonable period
of time and to deposit such sums in an account of any banking, savings,
or similar financial institution (even if such bank or other
institution serves as Trustee) supervised by the United States or any
State;
(5) To manage, purchase, grant options to purchase,
dispose of, abandon, improve, repair, insure, lease for any future or
present term or otherwise deal with all property, real or personal, on
such terms and conditions as the Trustee shall decide, without
liability on the purchasers to see to the application of the purchase
money or to the propriety of any such disposition;
(6) To borrow money or assume indebtedness, for the
purposes of the Plan, upon such terms as the Trustee deems advisable.
All or part of the assets may be pledged as security for such loans or
mortgages and no person lending to the Trustee need see to the
application of money lent or the propriety of borrowing.
Notwithstanding anything in this Section 6.1(A)(6) to the contrary, in
the event the Trustee borrows against the loan values of Insurance
Contracts purchased under the terms of the Plan, the amounts so
borrowed must be borrowed on a pro rata basis under each Insurance
Contract held by the Trustee;
(7) To extend mortgages or to invest in loans to a
Participant in accordance with, and as provided by, Section 7.11;
(8) To join in or oppose the reorganization,
recapitalization, consolidation, sale or merger of corporations or
properties, including those in which it is interested as Trustee, upon
such terms as deemed appropriate;
(9) To hold investments in nominee or bearer form,
provided the requirements of section 403(a) of ERISA are not violated
by so registering and so holding such investments;
(10) To give proxies;
(11) To provide benefits by annuity contracts issued
by an Insurer, if so instructed by the Administrative Committee;
(12) To deduct from and charge against the Trust Fund
any taxes paid by it, which may be imposed upon the Trust Fund or the
income thereof, or which the Trustee is required to pay with respect to
the interest of any person therein;
(13) To receive and withdraw from the Trust Fund
reasonable compensation for the Trustee's services (unless the Trustee
is a full-time employee of the Employer in which case no additional
compensation shall be paid to the Trustee) and expenses hereunder,
including the compensation of an Investment Manager and legal fees, and
charge the Trust Fund, upon approval by the Administrative Committee,
for the compensation and expenses of any independent accountant or
actuary who may be
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employed from time to time by the Trustee, Employer or Administrative
Committee in connection with this Plan and Trust Agreement;
(14) To invest Trust assets allocable to Employer
contributions in Qualifying Employer Securities but only to the extent
the Plan and Adoption Agreement so provide and only if such Employer
contributions are not subject to Participant directed investment and,
if the Plan, as adopted by the Employer, is a money purchase plan, only
if immediately after the acquisition of such Qualifying Employer
Securities, the aggregate fair market value of such Qualifying Employer
Securities does not exceed ten percent of the fair market value of Plan
assets. In no event shall Trust assets be invested in employer real
property. In no event shall Employer contributions subject to
Participant directed investment or Participant, Matching, Qualified
Matching, Elective Deferral, Rollover or Qualified Voluntary Employee
Contributions or direct transfers be invested in Qualifying Employer
Securities unless such investment is in compliance with applicable
Federal and state securities laws and, if the Plan, as adopted by the
Employer, is a money purchase plan, is in compliance with the ten
percent limit described above;
(15) If the Trustee is a bank, to invest any part or
all of the assets in a common trust fund of said Trustee bank provided
such common trust fund is described in section 584 of the Code; and
(16) If a bank, to accept employment and thereafter
act as agent for the Employer or Administrative Committee to perform
multiple or ancillary services for the Plan, its Participants and
Beneficiaries and to receive and withdraw from the Trust Fund
reasonable compensation therefor. Nothing done by the Trustee as agent
shall enlarge or increase in any manner the responsibilities or
liabilities of the Trustee hereunder which shall be governed solely by
the terms of the Plan and by applicable law.
(B) INVESTMENT BY PARTICIPANT OR BENEFICIARY. If the
Participant or Beneficiary (if applicable) is selected to direct investment
of his Employer and/or Matching and/or Elective Deferral and/or Participant
and/or Rollover and/or Transfer and/or QVEC Accounts and/or Qualified
Matching Contribution accounts and/or Qualified Nonelective Contribution
accounts and/or other accounts, the investment of all sums in the Employer
and/or Matching and/or Elective Deferral and/or Participant and/or Rollover
and/or Transfer and/or QVEC Accounts and/or Qualified Matching Contribution
accounts and/or Qualified Nonelective Contribution accounts and/or other
accounts of any Participant or Beneficiary (if applicable) shall be directed,
subject to any limitations on investments indicated in the Adoption
Agreement, by such Plan Participant or Beneficiary (if applicable), as
provided in Section 6.1(B)(1) below:
(1) Participant or Beneficiary investment
instructions shall be made in writing on the Appropriate Form or
otherwise as determined by the Administrative Committee. Such
instructions, whether in writing or as otherwise determined by the
Administrative Committee, shall be given to the Administrative
Committee or its agent who, in turn, shall notify the Trustee of the
instructions contained therein. The Trustee may, in his or its
discretion, require written confirmation of such instructions from the
Administrative Committee. In any case, the Participant or Beneficiary
shall be given the opportunity to obtain written confirmation from the
Administrative Committee or its agent of the Participant's or
Beneficiary's investment instructions.
(2) No Fiduciary, including, but not limited to, the
Administrative Committee and the Trustee, shall be liable for any loss
or by reason of any breach which results from the Participant's
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or Beneficiary's exercise of control as provided in this Section
6.1(B). It is the intent that any Plan subject to this Section 6.1(B)
shall constitute a plan described in section 404(c) of ERISA and 29 CFR
Section 2550.404c-1.
(3) Any sums for which no adequate Participant or
Beneficiary investment instructions have been received by the Trustee,
in accordance with this Section 6.1(B), shall be deposited in an
interest bearing passbook account of any banking, savings, or similar
financial institution supervised by the United States or any State
until such Participant or Beneficiary investment instructions have been
received.
(4) Notwithstanding any other provision in the Plan
to the contrary, the Participant or Beneficiary may not direct the
investment of his Employer and/or Matching and/or Elective Deferral
and/or Participant and/or Rollover and/or Transfer and/or QVEC Accounts
and/or Qualified Matching Contribution and/or Qualified Nonelective
Contribution accounts and/or other accounts in:
(a) Qualifying Employer Securities unless
such investment is in compliance with applicable Federal and
state securities laws and, if the Plan, as adopted by the
Employer, is a money purchase plan, is in compliance with the
ten percent limit described above;
(b) "Collectibles"; "collectibles" include
any work of art, rug, antique, gem, stamp, coin, alcoholic
beverage, or any other item of tangible personal property
specified by the Secretary of the Treasury pursuant to section
408(m) of the Code;
(c) Any investment which would result in a
prohibited transaction described in section 406 of ERISA or
section 4975 of the Code; or
(d) Any investment which would generate
income that would be taxable to the Plan.
6.2 INSURANCE CONTRACTS. The rules relating to Insurance Contracts are
as follows:
(A) INVESTMENT IN INSURANCE CONTRACTS. The Trustee or the
Investment Manager, if appropriate, if the Trustee or an Investment Manager
has been selected to direct investment of Employer and/or Matching Accounts
and/or Participant Accounts and/or Elective Deferral Accounts and/or Rollover
Accounts and/or Qualified Matching Contribution accounts and/or Qualified
Nonelective Contribution accounts under the Adoption Agreement, may direct
that Employer and/or Participant and/or Elective Deferral and/or Rollover
and/or Matching Contributions and/or Qualified Matching Contributions and/or
Qualified Nonelective Contributions made on behalf of Participants be used to
pay premiums on Insurance Contracts. If the Participant or Beneficiary has
been selected to direct investment of his Employer and/or Matching Accounts
and/or Participant Accounts and/or Elective Deferral Accounts and/or Rollover
Accounts and/or Qualified Matching Contribution accounts and/or Qualified
Nonelective Contribution accounts under the Adoption Agreement, the
Participant or Beneficiary (if applicable) may direct, on the Appropriate
Form furnished by, and returned to, the Administrative Committee, that
Employer and/or Matching and/or Participant and/or Elective Deferral and/or
Rollover Contributions and/or Qualified Matching Contributions and/or
Qualified Nonelective Contributions made on his behalf be used to pay
premiums on Insurance Contracts. Any death benefit payable under any
non-transferable annuity or endowment policies thereunder shall not exceed
100 times the anticipated monthly annuity to be provided thereby. Moreover,
the portion of any Employer,
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Elective Deferral and/or Matching and/or Qualified Matching and/or Qualified
Nonelective Contributions, if used to purchase:
(1) Ordinary life insurance, shall not exceed
one-half of such Employer, Elective Deferral, Matching, Qualified
Matching and Qualified Nonelective Contributions;
(2) Term or universal life insurance, shall not
exceed one-quarter of such Employer, Elective Deferral, Matching,
Qualified Matching and Qualified Nonelective Contributions; or
(3) Both ordinary life and term or universal life
insurance, shall not exceed, after adding the term insurance premium to
one-half of the ordinary life insurance premium, one-quarter of such
Employer, Elective Deferral, Matching, Qualified Matching and Qualified
Nonelective Contributions.
The Trustee shall purchase only such Insurance Contracts from
an Insurer as shall conform with the requirements of the Plan. In the event
of any conflict between the provisions of the Plan and the terms of any
Insurance Contract issued thereunder, the Plan provisions shall control.
All Insurance Contracts other than annuity policies shall
provide settlement options for conversion into annuity policies, either
directly or through conversion into cash and thereupon purchase of annuity
policies, in accordance with the terms of the Plan. When benefits become
payable, the Trustee shall direct the Insurer to convert such policies to
cash or distribute them, in accordance with the provisions of the Plan, to a
Participant. All Employer, Participant, Elective Deferral, Rollover,
Matching, Qualified Matching and Qualified Nonelective Contributions applied
to purchase Insurance Contracts shall be credited to the Participant's
Employer, Participant, Elective Deferral, Rollover, Matching, Qualified
Matching Contribution and Qualified Nonelective Contribution accounts and
shall be held by the Trustee until distributed in accordance with the terms
of the Plan. No direct transfers may be used to purchase any type of life
insurance.
(B) INSURANCE CONTRACTS TO BE HELD AND OWNED BY TRUSTEE. The
Trustee shall apply for, hold and own each Insurance Contract purchased
pursuant to the Plan. The Trustee shall exercise any right contained in the
Insurance Contract. The Insurance Contracts shall provide that the proceeds
shall be payable to the Trustee. The Trustee, however, shall be required to
pay over all proceeds of the Insurance Contract(s) to the Participant's
designated Beneficiary in accordance with the distribution provisions of the
Plan. A Participant's Spouse shall be the designated Beneficiary of the
proceeds in all circumstances unless a qualified election has been made in
accordance with Section 7.2(B). Under no circumstances shall the Trust retain
any part of the proceeds. If, upon the Disability, retirement or termination
of employment of the Participant, or upon the termination of the Plan, if
earlier, the Insurance Contract is not converted into cash, it shall, subject
to the terms of the Plan, be delivered to the Participant covered thereunder.
6.3 VOTING AND OTHER ACTIONS. The rules pertaining to voting of
securities and other related rules are as follows:
(A) TRUSTEE AND/OR INVESTMENT MANAGER DIRECTED INVESTMENTS. If
the Trustee and/or an Investment Manager is selected to direct investment of
Employer and/or Matching and/or Elective Deferral and/or Participant and/or
Rollover and/or Transfer and/or QVEC Accounts and/or Qualified Matching
Contribution and/or Qualified Nonelective Contribution accounts and/or other
accounts under the Adoption Agreement, the Trustee shall have, with respect
to the accounts committed to it for investment, all of the rights of an
individual owner, including the power to vote stock held in such accounts, to
give proxies, to participate
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in any voting trusts, mergers, consolidations or liquidations and to receive
or sell stock subscriptions or conversion rights. Moreover, the Trustee may
hold any securities in its or its nominee's name, or in another form as is
deemed appropriate. This may be done with or without disclosing the trust
relationship.
(B) PARTICIPANT OR BENEFICIARY DIRECTED INVESTMENTS. If the
Participant or Beneficiary is selected to direct investment of his Employer
and/or Matching and/or Elective Deferral and/or Participant and/or Rollover
and/or Transfer and/or QVEC Accounts and/or Qualified Matching Contribution
and/or Qualified Nonelective Contribution accounts and/or other accounts
under the Adoption Agreement, the Participant or Beneficiary shall be
accorded all rights and powers described in Section 6.3(A) above with respect
to such accounts.
ARTICLE VII
BENEFITS AND DISTRIBUTIONS
7.1 BENEFIT DETERMINATION. The rules pertaining to benefit
determinations and certain other related matters are as follows:
(A) AMOUNT OF BENEFITS. The amount of any benefits payable
under this Article VII shall be determined as of the Valuation Date
coincident with, or if the Valuation Date does not coincide with the benefit
commencement date, the Valuation Date immediately preceding the benefit
commencement date. Except as otherwise provided in Section 7.9, all amounts
then credited to such Participant's Employer, Matching, Elective Deferral,
Participant, Rollover and/or QVEC Accounts and/or Transfer Account and/or
Qualified Matching Contribution and/or Qualified Nonelective Contribution
accounts and/or other account, including any Employer, Matching, Elective
Deferral, Participant, Rollover, QVEC, Qualified Matching Contribution and
Qualified Nonelective Contribution and other Employer contribution and direct
transfer not yet paid by the Employer to the Trustee but due the Participant,
shall be paid to the Participant in accordance with the provisions of this
Article VII.
(B) MANNER OF DISTRIBUTION.
(1) PROFIT-SHARING OR PROFIT-SHARING 401(K) PLAN.
Except as otherwise provided in this Article VII, if the Plan, as
adopted by the Employer, is a profit-sharing or profit-sharing 401(k)
plan, benefits shall be paid in one lump sum to the Participant unless
the Participant elects, no later than 30 days prior to the Valuation
Date immediately preceding the benefit commencement date, to receive
his benefits in equal or substantially equal monthly, quarterly,
semi-annual or annual installment payments over a period certain
specified by the Participant in such election, but in no event may such
period (a) extend beyond the life expectancy of the Participant or the
joint life expectancies of the Participant and his Beneficiary,
provided such Beneficiary is an individual or (b) violate the
requirements of Section 7.13. If a Participant's Accrued Benefit is to
be paid in installments, the Administrative Committee, in its sole
discretion, may direct the Trustee to segregate such Accrued Benefit
from other Trust assets and place it in a separate account. Such
separate account shall, until final payment to the Participant is made,
be invested in one or more accounts in one or more Federally insured
banks or saving institutions or a similar interest bearing account
allowing periodic withdrawals without penalty, as determined by the
Trustee, with all interest earned on such investment(s) credited to
such separate account and all disbursements charged thereto. Interest
earned during any period shall be paid with the next scheduled
installment payment. The installment election shall not be available to
any Participant whose Accrued
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Benefit is not more than $3,500. In such case the Participant shall
only be entitled to receive a lump sum payment of his Accrued Benefit.
(2) MONEY PURCHASE PLAN. Except as otherwise provided
in this Article VII, if the Plan, as adopted by the Employer is a money
purchase plan, benefits shall be paid in accordance with the provisions
of Section 7.14.
(C) ELECTIONS. An election under Section 7.1(B)(1) shall be
made on the Appropriate Form which the Administrative Committee shall furnish
to the Participant before the Valuation Date immediately preceding the
benefit commencement date. Any such election may, subject to the approval of
the Administrative Committee, be revoked and a new election made at any time
prior to the benefit commencement date. Any election under Section 7.1(B)(2)
shall be made in accordance with Section 7.14.
7.2 DESIGNATION OF BENEFICIARY AND ELECTION WITH RESPECT TO DEATH
BENEFIT. This Section 7.2 shall apply if the Plan, as adopted by the Employer is
a profit-sharing or profit-sharing 401(k) Plan. This Section 7.2 shall apply if
the Plan, as adopted by the Employer, is a money purchase plan only to the
extent not otherwise provided in Section 7.14.
(A) DESIGNATION OF BENEFICIARY. Effective August 23, 1984, in
the event a Participant has a Surviving Spouse at his death, such Surviving
Spouse shall be the Participant's Beneficiary, unless the Participant's
Spouse has previously consented during the election period provided in
Section 7.2(C), in a manner conforming to a qualified election, as described
in Section 7.2(B), to the payment of the Participant's Accrued Benefit
(reduced by any security interest held by the Plan by reason of any loans
outstanding to such Participant) to a Participant-designated Beneficiary
other than the Surviving Spouse, except as otherwise provided in the next
succeeding sentence. In the event the Participant has no Surviving Spouse at
his death (or in the case of the Participant's death prior to August 23,
1984, even if the Participant had a Surviving Spouse), the Beneficiary shall
be the Beneficiary designated by the Participant or, in the event no
Beneficiary has been designated or survives the Participant, the Beneficiary
shall be determined in accordance with Section 7.8(B). Such Beneficiary
(other than a Surviving Spouse, effective August 23, 1984) must be designated
on the Appropriate Form furnished by the Administrative Committee, executed
by the Participant and returned to the Administrative Committee. Any such
designation of Beneficiary may include contingent or successive
Beneficiaries, and need not designate individuals. Except as otherwise
provided with respect to a Surviving Spouse, a Participant may, at any time,
change his designation of Beneficiary by completing a new designation form,
but a designation of Beneficiary shall remain in effect until such new form
is received by the Administrative Committee.
(B) QUALIFIED ELECTION. For the consent by a Spouse to payment
of a Participant's Accrued Benefit (reduced by any security interest held by
the Plan by reason of any loans outstanding to such Participant) to a
Beneficiary other than the Spouse upon the Participant's death to be valid,
such consent must be made in writing on the Appropriate Form filed with the
Administrative Committee during the election period provided in Section
7.2(C) and must be witnessed by a member of the Administrative Committee as
Plan representative or a notary public. Notwithstanding this consent
requirement, if the Participant establishes to the satisfaction of such Plan
representative that such written consent may not be obtained because there is
no Spouse or the Spouse cannot be located, the Spouse will be deemed to have
consented to the payment of the Participant's Accrued Benefit (reduced by any
security interest held by the Plan by reason of any loans outstanding to such
Participant) to a Beneficiary other than the Spouse. Any consent necessary
under this provision shall be valid only with respect to the Spouse who signs
the consent, or in the event of a deemed consent, with respect to the Spouse
who is deemed to have so consented. Any spousal consent must
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acknowledge the specific non-spouse Beneficiary or contingent Beneficiary,
including any class of Beneficiaries or contingent Beneficiaries and if a
Beneficiary, contingent Beneficiary, or class of Beneficiaries or contingent
Beneficiaries is changed, the Spouse must consent to such change in the
manner provided above. Additionally, a revocation of a prior consent may be
made by a Participant without the consent of the Spouse at any time before
the commencement of benefits. The number of revocations or consents shall not
be limited. This Section 7.2(B) is effective August 23, 1984.
(C) ELECTION PERIOD. The election period for purposes of the
consent of the Spouse provided for in Section 7.2(B) shall be the period
which begins on the first day of the Plan Year in which the Participant
commences to participate in the Plan and ends on the date of the
Participant's death. This Section 7.2(C) is effective August 23, 1984.
7.3 NORMAL RETIREMENT. A Participant shall be fully vested in his
Accrued Benefit when he reaches his Normal Retirement Age. A Participant may
retire when he reaches his Normal Retirement Date. If he then retires, payment
of his Accrued Benefit shall be made or shall commence, unless otherwise elected
pursuant to Section 7.9(B), within 60 days following the Valuation Date
coincident with, or if the Valuation Date does not coincide with the date he
retires, the Valuation Date next succeeding, the date he retires. Payment shall
be made in one lump sum if the value of such Participant's Accrued Benefit does
not exceed (and, at the time of any prior distribution did not exceed) $3,500
and otherwise in any of the methods described in Section 7.1(B) except as
otherwise provided in Section 7.14.
7.4 EARLY RETIREMENT. A Participant shall be fully vested in his
Accrued Benefit on his Early Retirement Date, if the Adoption Agreement provides
for an Early Retirement Date. A Participant may retire on his Early Retirement
Date, if the Adoption Agreement provides for an Early Retirement Date. If he
then retires, payment of his Accrued Benefit shall be made or shall commence,
within 60 days following the Valuation Date coincident with, or if the Valuation
Date does not coincide with the date he retires, the Valuation Date next
succeeding, the date he retires, if the value of the Participant's Vested
Accrued Benefit does not exceed (and, at the time of any prior distribution did
not exceed) $3,500, but otherwise only if the Participant so requests in writing
and if Section 7.14 applies, the Participant's spouse consents thereto in
accordance with Section 7.14 on the Appropriate Form. If payment of a
Participant's Accrued Benefit does not commence under the preceding sentence,
payment of such Participant's Accrued Benefit shall commence within sixty days
following the date the Participant would have attained his Normal Retirement
Date had he remained in the employ of the Employer, unless the Participant
requests earlier distribution, in writing on the Appropriate Form, and if
Section 7.14 applies, the Participant's spouse consents thereto in accordance
with Section 7.14, or unless otherwise elected pursuant to Section 7.9(B). Any
requests for payment under this Section 7.4 shall be made within the 90-day
period preceding the date payment is to commence. Payment shall be made in one
lump sum if the value of such Participant's Vested Accrued Benefit does not
exceed (and, at the time of any prior distributions did not exceed) $3,500 and
otherwise in any of the methods described in Section 7.1(B) except as otherwise
provided in Section 7.14.
7.5 PARTICIPATION AFTER NORMAL RETIREMENT DATE. If a Participant does
not retire when he reaches his Normal Retirement Date, but continues thereafter
in the service of the Employer, he shall continue to participate in the Plan
until he actually retires. The Accrued Benefit of a Participant who retires on,
or after, his Normal Retirement Date shall continue to be fully vested and shall
be made or shall commence, unless otherwise elected pursuant to Section 7.9(B),
within 60 days following the Valuation Date coincident with, or if the Valuation
Date does not coincide with the date he retires, the Valuation Date next
succeeding, the date he actually retires. Payment shall be made in one lump sum
if the value of such Participant's Vested Accrued Benefit does not exceed (and
at the time of any prior distribution did not exceed) $3,500 and otherwise in
any
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of the methods described in Section 7.1(B) except as otherwise provided in
Section 7.14. In no event, however, shall payment commence later than the date
specified in Section 7.9(C). In the event such date is earlier than the
Valuation Date specified in the third preceding sentence, the amount to be
distributed shall be determined as of the Valuation Date immediately preceding
the date of the required distribution.
7.6 SEPARATION FROM SERVICE. The rules pertaining to benefit
determinations and certain other related matters upon separation from service
for any reason other than death, Disability or retirement are as follows:
(A) PAYMENT OF VESTED ACCRUED BENEFIT. If a Participant
separates from service for any reason other than death, Disability or
retirement on his Early Retirement Date (if the Adoption Agreement provides
for an Early Retirement Date) before he reaches his Normal Retirement Date,
his Vested Accrued Benefit shall be paid to him at such time as the Adoption
Agreement provides. When distribution is made, payment shall be made in one
lump sum if the value of such Participant's Vested Accrued Benefit does not
exceed (and at the time of any prior distribution did not exceed)$3,500 and
otherwise in any of the methods described in Section 7.1(B) except as
otherwise provided in Section 7.14.
(B) DETERMINATION OF VESTED ACCRUED BENEFIT.
(1) ELECTIVE DEFERRAL, PARTICIPANT, ROLLOVER,
TRANSFER AND QVEC ACCOUNTS. The portion of such Participant's Accrued
Benefit consisting of his interest in his Elective Deferral,
Participant, Rollover, Transfer, Qualified Matching Contribution,
Qualified Nonelective Contribution and QVEC Accounts shall at all times
be fully vested.
(2) EMPLOYER AND MATCHING ACCOUNTS. The portion of
such Participant's Accrued Benefit consisting of his interest in his
Employer and Matching Accounts shall vest in accordance with the
vesting schedule selected by the Employer in the Adoption Agreement.
(C) FORFEITURES.
(1) TIME OF FORFEITURES.
(a) NORMAL RULE.
(i) Unless the Adoption Agreement
provides otherwise, any portion of the Participant's
Employer and/or Matching Account which is not vested
in accordance with Section 7.6(B)(2) at the time of
his separation from service with the Employer shall
be forfeited and reallocated to the Employer and/or
Matching Accounts of the remaining Participants in
accordance with Section 5.5 as of the last day of the
Plan Year coinciding with, or if the last day of the
Plan Year does not so coincide, the last day of the
Plan Year next following, the date the Participant
incurs five consecutive One-Year Breaks In Service.
(ii) If a distribution is made to a
Participant at a time when such Participant has a
nonforfeitable right to less than 100 percent of his
Employer and/or Matching Account and, at the time of
such distribution, the Participant has not incurred
five consecutive One-Year Breaks In Service, the
Trustee shall retain the nonvested portion of the
Participant's Employer and/or Matching Account in his
Employer and/or
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Matching Account. Such Employer and/or Matching
Account may be invested in a Federally insured
savings account or invested as otherwise provided by
the Plan, as determined by the Administrative
Committee. In such case, the Participant's vested
interest in the Employer and/or Matching Account at
any relevant time shall not be less than an amount
("X") determined by the formula: X = P(AB + (RxD)) -
(RxD), where "P" is the vested percentage at the
relevant time; "AB" is the account balance (i.e., the
amount in the Employer and/or Matching Account) at
the relevant time; "D" is the amount of the payment;
"R" is the ratio of the account balance at the
relevant time to the account balance after payment;
and the relevant time is the time at which, under the
Plan, the Participant's vested interest in the amount
in the Employer and/or Matching Account cannot
increase.
(iii) If the Participant returns to
the service of the Employer before incurring five
consecutive One-Year Breaks In Service, the
Participant shall continue to vest in the amount in
his Employer and/or Matching Account in accordance
with the provisions set forth above.
(iv) If the Participant incurs five
consecutive One-Year Breaks In Service, the amount in
the Participant's Employer and/or Matching Account,
as determined under Section 7.6(C)(1)(a)(ii), shall
be forfeited under Section 7.6(C)(1)(a) and shall be
reallocated to the Employer and/or Matching Accounts
of the remaining Participants in accordance with
Section 5.5. Such reallocation shall be effected on
the last day of the Plan Year coincident with, or if
the last day of the Plan Year does not so coincide,
the last day of the Plan Year next following, the
date the Participant incurs five consecutive One-Year
Breaks In Service.
(b) SPECIAL RULE.
(i) PROFIT-SHARING OR
PROFIT-SHARING 401(K) PLAN. This Section
7.6(C)(1)(b)(i) applies to the Plan if the Plan, as
adopted by the Employer, is a profit-sharing or
profit-sharing 401(k) plan. If the Adoption Agreement
so provides, if a Participant separates from the
service of the Employer, and the value of the
Participant's Vested Accrued Benefit derived from
Employer and Employee contributions does not exceed
(or at the time of any prior distribution did not
exceed) $3,500 and Section A.7.6(A)(2) of the
Adoption Agreement is checked, the Participant shall
receive a distribution of the value of his entire
Vested Accrued Benefit (and if his entire Vested
Accrued Benefit is $-0-, he shall be deemed to have
received, as a cash-out of his Vested Accrued Benefit
under the Plan, such $0) at the time provided in the
Adoption Agreement and the nonvested portion of his
Accrued Benefit shall be forfeited at the time of
such distribution; if the value of the Participant's
Vested Accrued Benefit derived from Employer
contributions exceeds (or at the time of any prior
distribution exceeded) $3,500 and if Section
A.7.6(A)(1)(b) of the Adoption Agreement is checked
and if the Participant separates from the service of
the Employer, and elects to receive no less than the
entire value of the Participant's Vested Accrued
Benefit derived from Employer contributions,
distribution shall be made at the time provided in
the Adoption Agreement and the nonvested portion
shall be treated as a forfeiture at the time of
distribution to the Participant of his Vested Accrued
Benefit; if the Participant elects to have
distributed less than his entire Vested Accrued
Benefit derived from Employer
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contributions, the part of the nonvested portion that
will be treated as a forfeiture is the total
nonvested portion multiplied by a fraction, the
numerator of which is the amount of the distribution
attributable to Employer contributions and the
denominator of which is the total value of his Vested
Accrued Benefit derived from Employer contributions.
To the extent the nonvested portion is not or cannot
be forfeited at the time of a Participant's
separation from service because of the rules set
forth in this Section 7.6(C)(1)(b)(i), the rules of
Section 7.6(C) (1)(a) shall apply. If a Participant
receives a distribution pursuant to this Section
7.6(C)(1)(b)(i) (except as otherwise provided in the
immediately preceding sentence) and resumes
employment covered under the Plan, the Participant's
Accrued Benefit derived from Employer contributions
shall be restored to the amount on the date of
distribution if the Participant repays to the Plan
the full amount of the distribution attributable to
Employer contributions on or before the earlier of
the fifth anniversary of the Participant's resumption
of covered employment or the date the Participant
incurs five consecutive One-Year Breaks In Service.
If an Employee is deemed to receive a distribution
pursuant to this Section, and the Employee resumes
employment covered under this Plan before the earlier
of the fifth anniversary of the Participant's
resumption of covered employment or the date the
Participant incurs five consecutive One-Year Breaks
In Service, upon the reemployment of such Employee,
the Employer-derived account balance of the Employee
shall be restored to the amount on the date of such
deemed distribution. Forfeitures under this Section
7.6(C)(1)(b)(i) shall be reallocated to the Employer
contribution accounts of the remaining Participants
in accordance with Section 5.5 or, if the Adoption
Agreement so provides, used to reduce Employer
contributions. Such reallocation (or, if applicable,
reduction in Employer contributions) shall be
effected no earlier that the first Valuation Date
coincident with or next following the date of the
forfeiture and no later than the last day of the Plan
Year, in which occurred the date of the forfeiture
under this Section 7.6(C)(1)(b) (i). A Participant's
Vested Accrued Benefit shall not, for purposes of the
cash out provisions, include accumulated deductible
employee contributions within the meaning of section
72(o)(5)(B) of the Code for Plan Years beginning
prior to January 1, 1989.
(ii) MONEY PURCHASE PLAN. This
Section 7.6(C)(1)(b)(ii) applies to the Plan if the
Plan, as adopted by the Employer, is a money purchase
plan. If the Adoption Agreement so provides, if a
Participant separates from the service of the
Employer, and the value of the Participant's Vested
Accrued Benefit derived from Employer and Employee
contributions does not exceed (or at the time of any
prior distribution did not exceed) $3,500 and Section
A.7.6(A)(2) of the Adoption Agreement is checked, the
Participant shall receive a distribution of the value
of the entire Vested Accrued Benefit (and if his
entire Vested Accrued Benefit is $-0-, he shall be
deemed to have received, as a cash-out of his Vested
Accrued Benefit under the Plan, such $0) at the time
provided in the Adoption Agreement and the nonvested
portion of his Accrued Benefit shall be forfeited at
the time of such distribution. If the value of a
Participant's Vested Accrued Benefit derived from
Employer and Employee contributions exceeds (or at
the time of any prior distribution exceeded) $3,500,
and the Vested Accrued Benefit is immediately
distributable, the Participant and the Participant's
Spouse (or where either the Participant or the Spouse
has died, the survivor) must consent to any
distribution of such Vested Accrued Benefit. The
consent of the Participant and the Participant's
Spouse shall be obtained in writing
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within the 90-day period ending on the annuity
starting date. The annuity starting date is the first
day of the first period for which an amount is paid
as an annuity or any other form. The Plan
Administrator shall notify the Participant and the
Participant's Spouse of the right to defer any
distribution until the Participant's Vested Accrued
Benefit is no longer immediately distributable. Such
notification shall include a general description of
the material features, and an explanation of the
relative values of, the optional forms of benefit
available under the Plan in a manner that would
satisfy the notice requirements of section 417(a)(3)
of the Code and shall be provided no less than 30
days and no more than 90 days prior to the annuity
starting date.
Notwithstanding the foregoing, only
the Participant need consent to the commencement of a
distribution in the form of a "Qualified Joint and
Survivor Annuity" (within the meaning of Section
7.14(D)(4)) while the account balance is immediately
distributable. (Furthermore, if payment in the form
of a "Qualified Joint and Survivor Annuity" is not
required with respect to the Participant pursuant to
Section 7.14, only the Participant need consent to
the distribution of an account balance that is
immediately distributable.) Neither the consent of
the Participant nor the Participant's Spouse shall be
required to the extent that a distribution is
required to satisfy section 401(a)(9) of the Code or
section 415 of the Code.
An Accrued Benefit is immediately
distributable if any part of the Accrued Benefit
could be distributed to the Participant (or surviving
Spouse) before the Participant attains or would have
attained if not deceased) the later of Normal
Retirement Age or age 62.
For purposes of determining the
applicability of the foregoing consent requirements
to distributions made before the first day of the
first Plan Year beginning after December 31, 1988,
the Participant's Vested Accrued Benefit shall not
include amounts attributable to accumulated
deductible employee contributions within the meaning
of section 72(o)(5)(B) of the Code. If the value of
the Participant's Vested Accrued Benefit derived from
Employer and Employee contributions exceeds (or at
the time of any prior distribution exceeded) $3,500
and if Section A.7.6(A)(1)(b) of the Adoption
Agreement is checked and if the Participant separates
from the service of the Employer and elects, with the
consent of his Spouse as provided above, to receive
no less than the entire value of the Participant's
Vested Accrued Benefit derived from Employer and
Employee contributions, distribution shall be made at
the time provided in the Adoption Agreement and the
nonvested portion shall be treated as a forfeiture at
the time of distribution to the Participant of his
Vested Accrued Benefit; if the Participant elects,
with the consent of his Spouse as provided above, to
have distributed less than his entire Vested Accrued
Benefit derived from Employer contributions, the part
of the nonvested portion that will be treated as a
forfeiture is the total nonvested portion multiplied
by a fraction, the numerator of which is the amount
of the distribution attributable to Employer
contributions and the denominator of which is the
total value of his Vested Accrued Benefit derived
from Employer contributions. To the extent the
nonvested portion is not or cannot be forfeited at
the time of a Participant's termination of service
because of the rules set forth in this Section
7.6(C)(1)(b)(ii), the rules of Section 7.6(C)(1)(a)
shall apply. If a Participant receives a distribution
pursuant to this Section 7.6(C)(1) (b)(ii) (except as
otherwise provided in the
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immediately preceding sentence) and resumes
employment covered under the Plan, the Participant's
Accrued Benefit derived from Employer contributions
shall be restored to the amount on the date of
distribution if the Participant repays to the Plan
the full amount of the distribution attributable to
Employer contributions on or before the earlier of
the fifth anniversary of the Participant's resumption
of covered employment or the date the Participant
incurs five consecutive One-Year Breaks In Service.
If an Employee is deemed to receive a distribution
pursuant to this Section, and the Employee resumes
employment covered under this Plan before the earlier
of the fifth anniversary of the Participant's
resumption of covered employment or the date the
Employee incurs five consecutive One-Year Breaks In
Service, upon the reemployment of such Employee, the
Employer-derived account balance of the Employee
shall be restored to the amount on the date of such
deemed distribution. Forfeitures under this Section
7.6(C)(1) (b)(ii) shall be reallocated to the
Employer contribution accounts of the remaining
Participants in accordance with Section 5.5 or, if
the Adoption Agreement so provides, used to reduce
Employer contributions. Such reallocation (or, if
applicable, reduction in Employer contributions)
shall be effected no earlier that the first Valuation
Date coincident with or next following the date of
the forfeiture and no later than the last day of the
Plan Year , in which occurred the date of the
forfeiture under this Section 7.6(C)(1)(b)(ii).
(D) TERMINATION OF PLAN. If, upon termination of this Plan,
the Plan does not offer an annuity option (purchased from a commercial
provider), and if the Employer or any entity within the same controlled group
as the Employer does not maintain another Defined Contribution Plan (other
than an employee stock ownership plan described in section 4975(e)(7) of the
Code), the Participant's Vested Accrued Benefit shall, without the
Participant's consent, be distributed to the Participant. However, if any
entity within the same controlled group as the Employer maintains another
Defined Contribution Plan (other than an employee stock ownership plan as
defined in section 4975(e)(7) of the Code) then the Participant's Vested
Accrued Benefit shall be transferred, without the Participant's consent, to
the other plan if the Participant does not consent to an immediate
distribution.
(E) NO DIVESTMENT FOR CAUSE. There shall be no divestment of a
Participant's Vested Accrued Benefit under the Plan for cause.
7.7 DISABILITY. If, before reaching his Normal Retirement Date, a
Participant in the service of the Employer becomes subject to Disability as
established by competent medical proof satisfactory to the Administrative
Committee, such Participant shall then retire, and his Accrued Benefit shall be
fully vested and shall be paid to him, within 60 days following the Valuation
Date coincident with, or if the Valuation Date does not coincide with the date
of determination of Disability, the Valuation Date next succeeding, the date of
determination of Disability, by the Administrative Committee of his Disability,
if the value of such Accrued Benefit does not exceed (and at the time of any
prior distribution did not exceed) $3,500, but otherwise only if the Participant
so requests, and if Section 7.14 is applicable, with the consent of the
Participant's Spouse as provided in Section 7.14 in writing on the Appropriate
Form. If payment of a Participant's Accrued Benefit does not commence under the
preceding sentence, payment of such Participant's Accrued Benefit shall commence
within sixty days following the date the Participant would have attained his
Normal Retirement Date had he remained in the employ of the Employer, unless the
Participant requests, in writing on the Appropriate Form, earlier distribution
or unless otherwise elected pursuant to Section 7.9(B). Any requests for payment
under this Section 7.7 shall be made within the 90-day period preceding the date
payment is to commence. Payment shall be made in one lump sum if the value of
such Participant's Accrued Benefit does not exceed (and
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at the time of any prior distribution did not exceed) $3,500 and otherwise in
any of the methods described in Section 7.1(B), except as otherwise provided in
Section 7.14.
7.8 DEATH. This Section shall only apply to the extent Section 7.14
does not provide otherwise.
(A) AMOUNT AND DISTRIBUTION OF BENEFIT. If a Participant dies
while in the service of the Employer, his Accrued Benefit (reduced by any
security interest held by the Plan by reason of any loans outstanding to such
Participant) shall be fully vested and distribution thereof to the
Beneficiary or Beneficiaries provided under Section 7.2(A) shall be made or
commence no later than 60 days following the Valuation Date coincident with,
or if the Valuation Date does not coincide with the date of Death, the
Valuation Date immediately following, the date of death. If a Participant
dies before complete distribution to him of the Vested Accrued Benefit to
which he is entitled under Sections 7.3, 7.4, 7.5, 7.6 or 7.7, the
distribution of the remainder of such Vested Accrued Benefit (reduced by any
security interest held by the Plan by reason of any loans outstanding to such
Participant) to the Beneficiary or Beneficiaries provided under Section
7.2(A) shall be made or commence no later than 60 days following the
Valuation Date coincident with, or if the Valuation Date does not coincide
with the date of death, the Valuation Date immediately following, the date of
death.
(B) RECIPIENT OF BENEFIT WHERE NO BENEFICIARY DESIGNATED. In
the case of a Participant who is married on the date of his death and who has
not designated a Beneficiary, such Vested Accrued Benefit (reduced by any
security interest held by the Plan by reason of any loans outstanding to such
Participant) shall be distributed to such Participant's Surviving Spouse. If
no Beneficiary is designated or survives the Participant and if the
Participant has no Surviving Spouse, then such Vested Accrued Benefit
(reduced by any security interest held by the Plan by reason of any loans
outstanding to such Participant) shall be distributed to the Participant's
estate.
(C) MANNER OF DISTRIBUTION. Subject to Section 7.9(C), any
distributions under this Section 7.8 shall be made in a lump sum or in
installments as elected by the Participant in accordance with the terms of
Sections 7.1 and 7.2. In the absence of such a Participant election,
distributions shall be made in a lump sum to the Participant's Beneficiary,
as provided in Section 7.2(A).
7.9 COMMENCEMENT OF PAYMENTS; DEFERRAL OF PAYMENTS; MINIMUM
DISTRIBUTION REQUIREMENTS. The rules relating to commencement of payments,
deferral of payments and minimum distribution requirements are as follows:
(A) DATE PAYMENT TO COMMENCE. Payment under this Plan shall
commence no later than 60 days after the close of the Plan Year in which
occurs the latest of the following:
(1) The Participant's attainment of Normal Retirement
Age;
(2) The tenth anniversary of the date the Participant
commenced participation in the Plan; or
(3) The Participant's separation from service with
the Employer.
Notwithstanding the immediately preceding paragraph, if the
amount of payment required to otherwise commence on a date determined under
this Section 7.9(A) or under any other Section of the Plan cannot be
ascertained by such date or if the Administrative Committee is unable to
locate the Participant or Beneficiary after making reasonable efforts to do
so, a payment retroactive to such date may be made no later
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than 60 days after the later of (a) the earliest date on which the amount of
such payment can be ascertained under the Plan or (b) the earliest date on
which the Participant or Beneficiary is located.
Notwithstanding the foregoing, the failure of a Participant
and, if spousal consent is required, his Spouse to consent to a distribution
while a benefit is immediately distributable, shall be deemed to be an
election to defer commencement of payment of any benefit sufficient to
satisfy this Section.
(B) DEFERRAL OF PAYMENTS. If the Adoption Agreement so
provides, a Participant may irrevocably elect, subject to Section 7.9(C), the
deferral of the payment of benefits under Sections 7.3, 7.4, 7.5, and 7.7, by
filing with the Administrative Committee, the Appropriate Form signed by such
Participant, describing the benefit and the date on which payment of such
benefit shall commence. Such Appropriate Form shall be filed with the
Administrative Committee no later than 30 days prior to such Participant's
separation from service with the Employer under Sections 7.3, 7.4, 7.5 or
7.7. No such election may be made if the exercise of such election will cause
the violation of the requirements of Section 7.13 or Section 7.14. Moreover,
no such election may defer payment of benefits beyond the date specified in
Section 7.9(C).
(C) MINIMUM DISTRIBUTION REQUIREMENTS.
(1) GENERAL RULES.
(a) Subject to Section 7.14 relating to
joint and survivor annuity requirements, the requirements of
this Section 7.9(C) shall apply to any distribution of a
Participant's interest and shall take precedence over any
inconsistent provisions of this Plan. Unless otherwise
specified, the provisions of this Section 7.9(C) apply to
calendar years beginning after December 31, 1984.
(b) All distributions required under this
Section 7.9(C) shall be determined and made in accordance with
the proposed Treasury regulations under section 401(a)(9) of
the Code, including the minimum distribution incidental
benefit requirement of Prop. Treas. Reg. Section
1.401(a)(9)-2.
(2) REQUIRED BEGINNING DATE. The entire interest of a
Participant must be distributed or begin to be distributed no later
than the Participant's "Required Beginning Date".
(3) LIMITS ON DISTRIBUTION PERIODS. 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 a
combination thereof):
(a) The life of the Participant,
(b) The life of the Participant and a
"Designated Beneficiary",
(c) A period certain not extending beyond
the "Life Expectancy" of the Participant, or
(d) A period certain not extending beyond
the "Joint and Last Survivor Expectancy" of the Participant
and a "Designated Beneficiary".
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(4) DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH
YEAR. 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":
(a) INDIVIDUAL ACCOUNT.
(i) If a "Participant's Benefit" is
to be distributed over (AA) 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 (BB) a period not extending beyond
the "Life Expectancy" of the "Designated
Beneficiary", the amount required to be distributed
for each calendar year, beginning with distributions
for the first "Distribution Calendar Year", must at
least equal 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
percent of the present value of the amount available
for distribution is paid within the "Life Expectancy"
of the Participant.
(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 (AA) the "Applicable Life
Expectancy" or (BB) if the Participant's Spouse is
not the "Designated Beneficiary", the applicable
divisor determined from the table set forth in Q&A-4
of Prop. Treas. Reg. Section 1.401(a)(9)-2.
Distributions after the death of the Participant
shall be distributed using the "Applicable Life
Expectancy" in Section 7.9(C)(4)(a)(i) above as the
relevant divisor without regard to Prop. Treas. Reg.
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 other calendar years, including the
minimum distribution for the "Distribution Calendar
Year" in which the Employee's "Required Beginning
Date" occurs, must be made on or before December 31
of that "Distribution Calendar Year".
(b) OTHER FORMS.
(i) If the "Participant's Benefit"
is distributed in the form of an annuity purchased
from an Insurer, distributions thereunder shall be
made in accordance with the requirements of section
401(a)(9) of the Code and the proposed Treasury
regulations thereunder.
(5) DEATH DISTRIBUTION PROVISIONS.
(a) DISTRIBUTION BEGINNING BEFORE DEATH. If
the Participant dies after distribution of his interest has
begun, the remaining portion of such interest shall continue
to be
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distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
(b) 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;
(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 (AA) December 31 of the calendar year
immediately following the calendar year in which the
Participant died and (BB) December 31 of the calendar
year in which the Participant would have attained age
70 1/2.
If the Participant has not made an election pursuant to this
Section 7.9(C)(5)(b) by the time of his death, the
Participant's "Designated Beneficiary" must elect the method
of distribution no later than the earlier of (AA) December 31
of the calendar year in which distributions would be required
to begin under this Section, or (BB) 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.
(c) DEATH OF SURVIVING SPOUSE PRIOR TO
BENEFIT COMMENCEMENT. For purposes of Section 7.9(C)(5)(b)
above, if the Surviving Spouse dies after the Participant, but
before payments to such Spouse begin, the provisions of
Section 7.9(C)(5)(b), with the exception of Section
7.9(C)(5)(b)(ii), shall be applied as if the Surviving Spouse
were the Participant.
(d) TREATMENT OF AMOUNTS PAID TO CHILDREN.
For purposes of this Section 7.9(C)(5), 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
when the child reaches the age of majority.
(e) DEEMED BENEFIT COMMENCEMENT. For the
purposes of this Section 7.9(C)(5), distribution of a
Participant's interest is considered to begin on the
Participant's "Required Beginning Date" (or, if Section
7.9(C)(5)(c) above is applicable, the date distribution is
required to begin to the Surviving Spouse pursuant to Section
7.9(C)(5)(b) 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.
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(6) DEFINITIONS. For purposes of this Section 7.9(C),
the following definitions apply:
(a) "APPLICABLE LIFE EXPECTANCY" shall mean
the "Life Expectancy" (or "Joint and Last Survivor
Expectancy") calculated using the attained age of the
Participant (or "Designated Beneficiary") as of the
Participant's (or "Designated Beneficiary's") birthday in the
applicable calendar year reduced by one for each calendar year
which has elapsed since the date "Life Expectancy" was first
calculated. If "Life Expectancy" is being recalculated, the
"Applicable Life Expectancy" shall be the "Life Expectancy" as
so recalculated. The applicable calendar year shall be the
first "Distribution Calendar Year", and if "Life Expectancy"
is being recalculated, such succeeding calendar year.
(b) "DESIGNATED BENEFICIARY" shall mean the
individual who is designated as the Beneficiary under the Plan
in accordance with section 401(a)(9) of the Code and the
Treasury regulations thereunder.
(c) "DISTRIBUTION CALENDAR YEAR" shall mean
a calendar year for which a minimum distribution is required.
For distributions beginning before the Participant's death,
the first "Distribution Calendar Year" is the calendar year
immediately preceding the calendar year which contains the
Participant's "Required Beginning Date". For distributions
beginning after the Participant's death, the first
"Distribution Calendar Year" is the calendar year in which
distributions are required to begin pursuant to Section
7.9(C)(5) above.
(d) "LIFE EXPECTANCY" shall mean the life
expectancy and "Joint and Last Survivor Expectancy" as
computed by use of the expected return multiples in Tables V
and VI of Treas. Reg. Section 1.72-9. Unless otherwise elected
by the Participant (or Spouse, in the case of distributions
described in Section 7.9(C)(5)(b)(ii) above) 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.
(e) "PARTICIPANT'S BENEFIT" shall mean 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 dates in the "Valuation Calendar Year" after the
Valuation Date and decreased by distributions made in the
"Valuation Calendar Year" after the Valuation Date. For
purposes of this Section 7.9(C)(6)(e), 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".
(f) "REQUIRED BEGINNING DATE" shall mean,
with respect to any Participant, except as provided below, the
first day of April of the calendar year following the calendar
year in which the Participant attains age 70 1/2.
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Notwithstanding the foregoing the "Required
Beginning Date" of a Participant who attains age 70 1/2 before
January 1, 1988, shall be determined in accordance with (i) or
(ii) below:
(i) NON-FIVE-PERCENT OWNERS. The
"Required Beginning Date" of a Participant who is not
a five-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.
(ii) FIVE-PERCENT OWNERS. The
"Required Beginning Date" of a Participant who is a
five-percent owner during any year beginning after
December 31, 1979, is the first day of April
following the later of:
(AA) The calendar year in
which the Participant attains age 70 1/2, or
(BB) The earlier of the
calendar year with or within which ends the
Plan Year in which the Participant becomes a
five-percent owner, or the calendar year in
which the Participant retires.
The "Required Beginning Date" of a Participant who is
not a five-percent owner 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
five-percent owner for purposes of this Section if
such Participant is a five-percent owner as defined
in section 416(i) of the Code (determined in
accordance with section 416 but without regard to
whether the Plan is a Top-Heavy Plan) 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
five-percent owner under this Section, they must
continue to be distributed, even if the Participant
ceases to be a five-percent owner in a subsequent
year.
(7) TRANSITIONAL RULE.
(a) Notwithstanding the other requirements
of this Section 7.9(C) and subject to the requirements of
Section 7.14 relating to joint and survivor annuity
requirements, distribution on behalf of any Employee,
including a five-percent owner, may be made in accordance with
all of the following requirements (regardless of when such
distribution commences):
(i) The distribution by the Plan is
one which would not have disqualified such Plan under
section 401(a)(9) of the Code as in effect prior to
amendment by the Deficit Reduction Act of 1984.
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(ii) The distribution is in
accordance with a method of distribution designated
by the Employee whose interest in the Plan is being
distributed or, if the Employee is deceased, by a
Beneficiary of such Employee.
(iii) Such designation was in
writing, was signed by the Employee or the
Beneficiary, and was made before January 1, 1984.
(iv) The Employee had accrued a
benefit under the Plan as of December 31, 1983.
(v) The method of distribution
designated by the Employee or the Beneficiary
specifies the time at which distribution will
commence, the period over which distributions will be
made, and in the case of any distribution upon the
Employee's death, the Beneficiaries of the Employee
listed in order of priority.
(b) A distribution upon death will not be
covered by this transitional rule unless the information in
the designation contains the required information described
above with respect to the distributions to be made upon the
death of the Employee.
(c) For any distribution which commences
before January 1, 1984, but continues after December 31, 1983,
the Employee, or the Beneficiary, to whom such distribution is
being made, will be presumed to have designated the method of
distribution under which the distribution is being made if the
method of distribution was specified in writing and the
distribution satisfies the requirements in Sections
7.9(C)(7)(a)(i) and (v).
(d) If a designation is revoked, any
subsequent distribution must satisfy the requirements of
section 401(a)(9) of the Code and the proposed Treasury
regulations thereunder. If a designation is revoked subsequent
to the date distributions are required to begin, the Trust
must distribute, by the end of the calendar year following the
calendar year in which the revocation occurs, the total amount
not yet distributed which would have been required to have
been distributed to satisfy section 401(a)(9) of the Code and
the proposed Treasury regulations thereunder, but for the
election under section 242(b)(2) of the Tax Equity and Fiscal
Responsibility Act of 1982. For calendar years beginning after
December 31, 1988, such distributions must meet the minimum
distribution incidental benefit requirements in Prop. Treas.
Reg. Section 1.401(a)(9)-2. Any changes in the designation
will be considered to be a revocation of the designation.
However, the mere substitution or addition of another
Beneficiary (one not named in the designation) under the
designation will not be considered to be a revocation of the
designation, so long as such substitution or addition does not
alter the period over which distributions are to be made under
the designation, directly or indirectly (for example, by
altering the relevant measuring life). In the case in which an
amount is transferred or rolled over from one plan to another
plan, the rules in Q&A J-2 and Q&A J-3 of Prop. Treas. Reg.
Section 1.401(a)(9)-1 shall apply.
7.10 WITHDRAWALS DURING EMPLOYMENT. This Section 7.10, other than
Section 7.10(B), shall apply to the Plan only if the Plan, as adopted by the
Employer, is a profit-sharing or profit-sharing 401(k) plan. Moreover,
withdrawals by a Participant of his Vested Accrued Benefit while such
Participant is employed by the Employer shall be permitted only if the
applicable Adoption Agreement so provides and then only in accordance with the
following rules:
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(A) PARTICIPANT ACCOUNTS. A Participant may elect to withdraw,
as of any Valuation Date in the Plan Year, but not more frequently than once
each Plan Year, any portion or all of the amount then credited to the
Participant's Participant Account (other than the portion attributable to
required Participant Contributions and to Participant Contributions which are
matched by the Employer). Such withdrawal election shall be made at least 30
days prior to the effective date of the withdrawal on the Appropriate Form
furnished by the Administrative Committee for such purpose.
(B) QVEC ACCOUNTS. Subject to the joint and survivor annuity
requirements of Section 7.14 (if applicable), a Participant may elect,
subject to Section 7.12, to withdraw, as of any Valuation Date in the Plan
Year, but not more frequently than once each Plan Year, any portion or all of
the amount then credited to the Participant's QVEC Account. Such withdrawal
election shall be made at least 30 days prior to the effective date of the
withdrawal on the Appropriate Form furnished by the Administrative Committee
for such purposes.
(C) ROLLOVER ACCOUNTS. A Participant may elect to withdraw, as
of any Valuation Date in the Plan Year, but not more frequently than once
each Plan Year, any portion or all of the amount then credited to the
Participant's Rollover Account. Such withdrawal election shall be made at
least 30 days prior to the effective date of the withdrawal on the
Appropriate Form furnished by the Administrative Committee for such purpose.
(D) OTHER ACCOUNTS.
(1) AFTER ATTAINMENT OF AGE 59 1/2. A Participant who
is age 59 1/2 or older may elect to withdraw, as of any Valuation Date
in the Plan Year, but not more frequently than once each Plan Year, any
portion or all of such Participant's Vested Accrued Benefit. Such
withdrawal election shall be made at least 30 days prior to the
effective date of the withdrawal on the Appropriate Form furnished by
the Administrative Committee for such purpose.
(2) BEFORE ATTAINMENT OF AGE 59 1/2. Except as
provided in Section 7.10(D)(3), Section 7.10(D)(4) or Section
7.10(D)(5), no withdrawals of such Participant's Accrued Benefit shall
be permitted while such Participant is employed by the Employer if the
Participant has not attained age 59 1/2.
(3) HARDSHIP WITHDRAWALS. A Participant who incurs a
hardship may elect to withdraw, as of any Valuation Date in the Plan
Year, but not more frequently than once each Plan Year, any portion or
all of the amount then credited to the Participant's Elective Deferral
Account which is attributable to Elective Deferral Contributions (and
of income allocable thereto credited to such Elective Deferral Account
as of the end of the last Plan Year ending before July 1, 1989), any
portion or all of the vested amount then credited to the Participant's
Employer Account, any portion or all of the vested amount then credited
to the Participant's Matching Account and any portion or all of the
Participant's Participant, Rollover and Transfer Accounts, but a
Participant may not elect to withdraw by reason of hardship, any amount
attributable to Qualified Nonelective Contributions or Qualified
Matching Contributions. For purposes of this Section 7.10(D)(3), the
Administrative Committee shall determine that a hardship has occurred
only if the distribution both is made on account of an immediate and
heavy financial need of the Participant and is necessary to satisfy
such financial need in accordance with the following standards:
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(i) IMMEDIATE AND HEAVY FINANCIAL NEED.
(AA) IN GENERAL. The determination
of whether a Participant has an immediate and heavy
financial need is to be made on the basis of all
relevant facts and circumstances. A determination of
an immediate and heavy financial need will generally
be made by the Administrative Committee if the
inability to satisfy the financial need would have a
severe adverse effect upon the health, livelihood or
well-being of a Participant or of a member of the
Participant's immediate family. A financial need
shall not fail to qualify as immediate and heavy
merely because such need was reasonably foreseeable
or voluntarily incurred by the Participant.
(BB) DEEMED IMMEDIATE AND HEAVY
FINANCIAL NEED. A distribution will be deemed to be
made on account of an immediate and heavy financial
need of the Participant if the distribution is on
account of:
(AAA) Expenses incurred or
necessary for medical care described in
section 213(d) of the Code of the
Participant, the Participant's Spouse, or
any dependents of the Participant (as
defined in section 152 of the Code);
(BBB) Purchase (excluding
mortgage payments) of a principal residence
for the Participant;
(CCC) Payment of tuition
and related educational fees for the next 12
months of post-secondary education for the
Participant, his Spouse, children, or
dependents; or
(DDD) The need to prevent
the eviction of the Participant from his
principal residence or foreclosure on the
mortgage of the Participant's principal
residence.
(ii) DISTRIBUTION NECESSARY TO SATISFY
FINANCIAL NEED.
(AA) IN GENERAL. A distribution
will be considered as necessary to satisfy an
immediate and heavy financial need of a Participant
only if:
(AAA) The Participant has
obtained all distributions, other than
hardship distributions, and all nontaxable
loans under all plans maintained by the
Employer;
(BBB) All plans (within
the meaning of Treas. Reg. Section
1.401(k)-1(d)(2)(iv)(B)(4)) maintained by
the Employer provide that the Participant's
Elective Deferrals (and Employee
Contributions) will be suspended for 12
months after the receipt of the hardship
distribution;
(CCC) The distribution is
not in excess of the amount of an immediate
and heavy financial need (including amounts
necessary to pay any
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federal, state or local income taxes or
penalties reasonably anticipated to result
from the distribution); and
(DDD) All plans maintained
by the Employer provide that the Participant
may not make Elective Deferrals for the
Participant's taxable year immediately
following the taxable year of the hardship
distribution in excess of the applicable
limit under section 402(g) of the Code for
such taxable year less the amount of such
Participant's Elective Deferrals for the
taxable year of the hardship distribution.
Such withdrawal election shall be made at least 30 days prior
to the effective date of the withdrawal on the Appropriate
Form furnished by the Administrative Committee for such
purpose.
(4) OTHER LIMITATIONS ON DISTRIBUTIONS.
(i) GENERAL RULES. Notwithstanding any other
provision in the Plan, no Elective Deferral, Qualified
Nonelective Contribution or Qualified Matching Contribution
and income allocated to each shall be distributable earlier
than upon one of the following events:
(AA) The Participant's retirement,
death, disability or separation from service;
(BB) The termination of the Plan
without the maintenance or establishment of another
Defined Contribution Plan (other than an employee
stock ownership plan as defined in section 4975(e) of
the Code or section 409 of the Code) or a simplified
employee pension plan as defined in section 408(k) of
the Code;
(CC) The date of the sale or other
disposition by a corporate Employer to an unrelated
corporation of substantially all of the assets
(within the meaning of section 409(d)(2) of the Code)
used by such Employer in a trade or business of such
Employer with respect to a Participant who continues
employment with the corporation acquiring such
assets. The sale of 85 percent of the assets used in
a trade or business will be deemed a sale of
"substantially all" the assets used in such trade or
business;
(DD) The date of the sale or other
disposition by a corporate Employer of such
Employer's interest in a subsidiary (within the
meaning of section 409(d)(3) of the Code) to an
unrelated entity. This Section 7.10(D)(4)(i)(DD)
applies only to a Participant who continues
employment with such subsidiary;
(EE) The Participant's attainment
of age 59 1/2; or
(FF) In the case of distributions
of Elective Deferrals (and of income allocable
thereto credited to a Participant's account as of
December 31, 1988) but not of amounts treated as
Elective Deferrals (and of income allocable thereto),
the Participant's hardship.
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<PAGE> 83
(ii) OTHER RULES.
(AA) ESTABLISHMENT OF PLANS. For
purposes of Section 7.10(D)(4)(i)(BB), the
establishment of a plan means the existence at the
time the plan (including this Plan) with the cash or
deferred arrangement is terminated or the
establishment within the period ending 12 months
after distribution of all assets from the arrangement
of any other Defined Contribution Plan (other than an
employee stock ownership plan as defined in section
4975(e)(7) of the Code) maintained by the Employer. A
plan maintained by an unrelated employer (i.e., an
employer other than the employer maintaining the
terminating plan and other than an employer related
at the time of plan termination to the employer
maintaining the terminating plan within the meaning
of section 414(b), (c), (m), and (o) of the Code)
will be treated as the establishment of a plan only
if, as of the date of termination, the Employer knows
or has reason to know that such unrelated employer
will become related to the Employer.
(BB) LIMITATIONS APPLY AFTER
TRANSFER. The limitations of Section 7.10(D)(4)
continue to apply to amounts attributable to Elective
Deferrals, Qualified Nonelective Contributions and
Qualified Matching Contributions and income allocated
to each even if such amounts are transferred to
another qualified plan of any employer.
(CC) OTHER BENEFITS NOT CONTINGENT
UPON ELECTIVE DEFERRALS. For Plan Years beginning
after December 31, 1988, no other Employer benefit
may be conditioned (other than Matching or Qualified
Matching Contributions) (directly or indirectly)
within the meaning of section 401(k) of the Code and
the Treasury regulations issued thereunder upon the
Employee's electing to make or not to make Elective
Deferrals under the arrangement.
(DD) LUMP SUM DISTRIBUTION
REQUIRED. An event shall not be treated as described
in Section 7.10((D)(4)(i)(BB), (CC) or (DD) with
respect to any Participant unless, with respect to
distributions after March 31, 1988, the Participant
receives a lump sum distribution within the meaning
of section 401(k)(10)(B)(ii) of the Code by reason of
the event.
(EE) TRANSFEROR CORPORATION MUST
MAINTAIN PLAN. An event shall not be treated as
described in Section 7.10(D)(4)(i)(CC) or (DD) unless
the transferor corporation continues to maintain the
plan after the disposition.
(FF) SUSPENSION OF ELECTIVE
DEFERRALS AND EMPLOYEE CONTRIBUTIONS. A Participant's
Elective Deferrals and Employee Contributions shall
be suspended for a period of 12 months following the
receipt of a hardship distribution. Moreover, the
Participant shall not make Elective Deferrals for his
taxable year immediately following the taxable year
of the distribution in excess of the applicable limit
under section 402(g) of the Code for such taxable
year less the amount of such Participant's Elective
Deferrals for the taxable year of the distribution.
(GG) CONSENT REQUIREMENTS. All
distributions that may be made pursuant to one or
more of the foregoing distributable events in Section
7.10(D)(4)(i)
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are subject to the spousal and Participant consent
requirements (if applicable) contained in sections
401(a)(11) and 417 of the Code.
(5) OTHER IN-SERVICE WITHDRAWALS BEFORE AGE 59-1/2.
If the Adoption Agreement so provides, a Participant may withdraw
during employment, prior to attaining age 59 1/2, his Vested Accrued
Benefit attributable to Employer Contributions, Participant
Contributions and Matching Contributions but not to Qualified
Nonelective Contributions or Qualified Matching Contributions or the
income allocable thereto after such Participant completes five or more
Years of Service for Benefit Accrual.
(6) DETERMINATION OF VESTED INTEREST IN CASE OF
CERTAIN WITHDRAWALS. No forfeitures shall occur solely as a result of
an Employee's withdrawal of Employee Contributions. In the event a
Participant makes a withdrawal under the Plan and his interest in the
Plan is not fully vested, such Participant's vested interest in the
portion of his Accrued Benefit remaining in the Plan shall be
determined in accordance with the rules of Section 7.6(C)(1)(a)(ii).
(7) DISTRIBUTIONS UPON PLAN TERMINATION. Subject to
Section 7.10(D)(4), the balances of Participants' Accounts shall be
distributed to Participants or their Beneficiaries as soon as
administratively feasible after the termination of the Plan.
(8) DISTRIBUTIONS UPON SALE OF ASSETS. Subject to
Section 7.10(D)(4), the balances of Participants' Accounts shall be
distributed to Participants as soon as administratively feasible after
the disposition, to an entity that is not a related entity, of
substantially all of the assets (within the meaning of section
409(d)(2) of the Code) used by the Employer in the trade or business in
which the Participant is employed, but only if the Participant
continues employment with the corporation acquiring such assets.
(9) DISTRIBUTION UPON SALE OF SUBSIDIARY. Subject to
Section 7.10(D)(4), the balances of Participants' Accounts shall be
distributed as soon as administratively feasible after the disposition,
to an entity that is not a related entity, of an incorporated
Employer's interest in a subsidiary (within the meaning of section
409(d)(3) of the Code) to Participants who continue employment with
such subsidiary.
7.11 LOANS. The rules relating to loans are as follows:
(A) LIMITATIONS. If the Adoption Agreement so provides, upon
the filing of an application with the Administrative Committee by a
Participant or Beneficiary but only if the Beneficiary is a "party in
interest" with respect to the Plan (within the meaning of section 3(14) of
ERISA) on the Appropriate Form, the Administrative Committee shall, within 90
days from the date of receipt of such application, direct the Trustee to make
a loan or loans to such Participant or Beneficiary, provided such loan or
loans:
(1) Are available to all such Participants and
Beneficiaries on a reasonably equivalent basis;
(2) Are not made available to Highly Compensated
Employees and their Beneficiaries, in an amount greater than the amount
made available to other Employees and their Beneficiaries;
(3) Bear a reasonable rate of interest within the
meaning of 29 CFR Section 2550.408b-1;
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(4) Are adequately secured within the meaning to 29
CFR Section 2550.408b-1;
(5) Do not exceed (when added to the outstanding
balance of all other loans to the Participant or Beneficiary) the
lesser of:
(a) $50,000 (reduced by the excess (if any)
of (i) the highest outstanding balance of loans from the Plan
during the one-year period ending on the day before the date
on which such loan was made, over (ii) the outstanding balance
of loans from the Plan on the date on which such loan was
made), or
(b) One-half of the present value of the
Participant's Vested Accrued Benefit under the Plan (but, if
the Adoption Agreement so provides, not less than the lesser
of (i) $10,000 or (ii) the Participant's Vested Accrued
Benefit);
(6) Are repayable, except as otherwise provided in
Section 7.11(D), by their terms within five years from the date of the
loans;
(7) Shall not be made to any Owner-Employee or
shareholder-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 section 318(a)(1) of the Code) on any day
during the taxable year of that corporation more than five percent of
the outstanding stock of the corporation);
(8) Require amortization (of both principal and
interest) in level payments made not less frequently than quarterly
over the term of the loan;
(9) If Section 7.14 is applicable and if the
Participant's Vested Accrued Benefit is to be used as security for part
or all of the loan and only in such cases, shall not be made unless the
Participant obtains the consent of his Spouse, if any, to the use of
the Participant's Vested Accrued Benefit as security for the loan; such
spousal consent shall be obtained no earlier than the beginning of the
90-day period that ends on the date on which the loan is to be so
secured; such consent must be in writing, must acknowledge the effect
of the loan, and must be witnessed by a Plan representative or notary
public; such consent shall thereafter be binding with respect to the
consenting Spouse or any subsequent Spouse with respect to that loan; a
new consent shall be required if the Vested Accrued Benefit is used for
renegotiation, extension, renewal, or other revision of the loan; and
(10) Comply with any other limitations on loans
specified in the Adoption Agreement.
In the event of default, if the security for the loan
is the Participant's Vested Accrued Benefit, foreclosure on the note and
attachment of security shall not occur until a distributable event occurs in
the Plan.
For purposes of this Section 7.11, the rules of section
414(b), (c), (m) and (o) of the Code shall apply and all plans of the
Employer (determined after the application of section 414(b), (c), (m) and
(o) of the Code) shall be treated as one plan.
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An assignment or pledge of any portion of the Participant's
interest in the Plan and a loan, pledge, or assignment with respect to any
Insurance Contract purchased by the Plan, shall be treated as a loan under
this Section 7.11.
If a valid spousal consent is required and has been obtained
in accordance with Section 7.11(A)(9) then, notwithstanding any other
provision of this Plan, the portion of the Participant's Vested Accrued
Benefit used as a security interest held by the Plan by reason of a loan
outstanding to the Participant shall be taken into account for purposes of
determining the amount of the Accrued Benefit payable at the time of death or
distribution, but only if the reduction is used as repayment of the loan. If
less than 100 percent of the Participant's Vested Accrued Benefit (determined
without regard to the preceding sentence) is payable to the Surviving Spouse,
then the Accrued Benefit shall be adjusted by first reducing the Vested
Accrued Benefit by the amount of the security used as repayment of the loan,
and then determining the benefit payable to the Surviving Spouse.
The Administrative Committee, provided the above requirements
are met, shall grant such request within 90 days following such request. In
such event the Administrative Committee shall be responsible for complying
with any legal requirements affecting said loan, such as Federal Reserve
regulations.
(B) INTEREST. All such loans shall bear a reasonable rate of
interest, which shall, in accordance with 29 CFR Section 2550.408b-1, provide
the Plan with a return commensurate with the interest rates charged by
persons engaged in the business of lending money for loans which would be
made in similar circumstances. Such rate of interest shall be determined in
accordance with the provisions of the Adoption Agreement. Every loan
applicant shall receive a clear statement of the charges involved in each
loan transaction. This statement shall include the dollar amount and the
annual interest rate of the finance charge.
(C) REPAYMENT-COLLECTION. Any such loan or loans shall be
repaid by the Participant or Beneficiary within the period certain requested
by the Participant or Beneficiary but not to exceed, except in the case of
loans subject to Section 7.11(D), a period of five years from the date the
loan or loans are made and such loan or loans shall by their terms require
repayment within such period. The loan or loans shall be evidenced by a
promissory note, shall be secured by payroll deduction if the Participant is
in the active service of the Employer and by such collateral as shall be
specified in the Adoption Agreement. If the Participant's Vested Accrued
Benefit is specified in the Adoption Agreement as collateral for a loan, no
more than 50 percent of the present value of such Vested Accrued Benefit may
be so used. In the event the Participant or Beneficiary does not repay the
loan within the period certain, the Trustee shall, subject to the spousal
consent requirements of Section 7.11(A)(9) (if applicable), deduct the total
amount of such loan or loans or any portion thereof, if the collateral for
the loan is the Participant's Vested Accrued Benefit, from that portion (if
any) of the Vested Accrued Benefit which serves as collateral for the loan
but only when a distributable event occurs under the Plan and, if collateral
other than the Participant's Vested Accrued Benefit secures such loan, from
such other collateral at the time of the default. In the event the amount of
any such payment, distribution or collateral is insufficient to repay the
remaining balance on the loan or loans including interest, the Participant or
Beneficiary shall be liable for, and continue to make, payments on any
balance still due from such Participant or Beneficiary. Subject to the terms
of the Plan, the Participant or Beneficiary shall repay the loan or loans by
payroll deduction or in installments in such manner as shall comply with
Section 7.11(A).
(D) EXCEPTION FOR HOME LOANS. Section 7.11(A)(6) shall not
apply to any loan used to acquire any dwelling unit which within a reasonable
time is to be used (determined at the time the loan is made) as the principal
residence of the Participant.
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(E) LOANS - INDIVIDUAL INVESTMENTS. Except as provided in this
paragraph, loans shall be treated as general investments of the Trust Fund.
However, if the Adoption Agreement provides for Participant directed
investments pursuant to Section 6.1(B) or if the Adoption Agreement provides
that loans are to be treated as investments of the Participant's or
Beneficiary's accounts only, until a loan to a Participant or Beneficiary is
repaid, the outstanding balance of the loan shall be treated as an investment
by such Participant or Beneficiary for his accounts only and the interest
paid by such Participant or Beneficiary shall be credited to the accounts, as
applicable, of such Participant or Beneficiary. Such Participant's or
Beneficiary's accounts shall not share in any other earnings of the Plan with
respect to the amount of the loan. The amount of each repayment shall be
invested in accordance with the regular investment provisions selected by the
Employer in the Adoption Agreement applicable to such Employer.
7.12 QVEC WITHDRAWALS. Except in the case of the Participant's death or
disability (as defined in section 72(m)(7) of the Code) or attainment of age 59
1/2, before distributing an amount from a Participant's QVEC Account, the
Employer shall receive from such Participant a declaration of the Participant's
intention as to the disposition of the amount distributed. The Participant shall
execute such forms as the Employer may require with respect to the Participant's
liability for Federal income tax which may result from the distribution of
amounts from such Participant's QVEC Account.
7.13 INCIDENTAL BENEFIT RULE. This provision is contained in Section
7.9(C)(1)(b).
7.14 JOINT AND SURVIVOR ANNUITY REQUIREMENTS. This Section 7.14 shall
apply only if the Plan, as adopted by the Employer, is a money purchase plan.
(A) APPLICATION. The provisions of this Section 7.14 shall
apply to any Participant in the Plan if the Plan, as adopted by the Employer,
is a money purchase plan and the Participant is one who is credited with at
least one Hour of Service with the Employer on or after August 23, 1984, and
such other Participants as provided in Section 7.14(G).
(B) QUALIFIED JOINT AND SURVIVOR ANNUITY. Unless an optional
form of benefit under Section 7.14(H) is selected pursuant to a "Qualified
Election" within the 90-day period ending on the "Annuity Starting Date", a
married Participant's "Vested Account Balance" shall be paid in the form of a
"Qualified Joint and Survivor Annuity" and an unmarried Participant's "Vested
Account Balance" will be paid in the form of a life annuity. The Participant
may elect to have such annuity distributed upon attainment of the "Earliest
Retirement Age" under the Plan.
(C) QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. Unless an
optional form of benefit under Section 7.14(H) has been selected within the
"Election Period" pursuant to a "Qualified Election", if a Participant dies
before the "Annuity Starting Date" then the Participant's "Vested Account
Balance" shall be applied toward the purchase of an annuity for the life of
the Surviving Spouse. The Surviving Spouse may elect to have such annuity
distributed within a reasonable period after the Participant's death.
(D) DEFINITIONS.
(1) "ELECTION PERIOD" shall mean the period which
begins on the first day of the Plan Year in which the Participant
attains age 35 and ends on the date of the Participant's death. If a
Participant separates from service prior to the first day of the Plan
Year in which age 35 is attained, with respect to the account balance
as of the date of separation, the "Election Period" shall begin on the
date of separation.
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A Participant who will not yet attain age 35 as of
the end of any current Plan Year may make a special qualified election
("Pre-age 35 Waiver") to waive the qualified preretirement survivor
annuity for the period beginning on the date of such election and
ending on the first day of the Plan Year in which the Participant will
attain age 35. Such election shall not be valid unless the Participant
receives a written explanation of the qualified preretirement survivor
annuity in such terms as are comparable to the explanation required
under Section 7.14(E)(1). Qualified preretirement survivor annuity
coverage will be automatically reinstated as of the first day of the
Plan Year in which the Participant attains age 35. Any new waiver on or
after such date shall be subject to the full requirements of this
Section.
(2) "EARLIEST RETIREMENT AGE" shall mean the earliest
date on which, under the plan, the Participant could elect to receive
retirement benefits.
(3) "QUALIFIED ELECTION" shall mean a waiver of a
"Qualified Joint and Survivor Annuity" or a qualified preretirement
survivor annuity. Any waiver of a "Qualified Joint and Survivor
Annuity" or a qualified preretirement survivor annuity shall not be
effective unless: (a) the Participant's Spouse consents in writing to
the election; (b) the election designates a specific Beneficiary,
including any class of Beneficiaries or any contingent Beneficiaries,
which may not be changed without spousal consent (or the Spouse
expressly permits designations by the Participant without any further
spousal consent); (c) the Spouses's consent acknowledges the effect of
the election; and (d) the Spouse's consent is witnessed by a Plan
representative or notary public. Additionally, a Participant's waiver
of the "Qualified Joint and Survivor Annuity" shall not be effective
unless the election designates a form of benefit payment which may not
be changed without spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal consent).
If it is established to the satisfaction of a Plan representative that
there is no Spouse or that the Spouse cannot be located, a waiver will
be deemed a "Qualified Election".
Any consent by a Spouse obtained under this provision (or establishment
that the consent of a Spouse may not be obtained) shall be effective
only with respect to such Spouse. A consent that permits designations
by the Participant without any requirement of further consent by such
Spouse must acknowledge that the Spouse has the right to limit consent
to a specific Beneficiary, and a specific form of benefit where
applicable, and that the Spouse voluntarily elects to relinquish either
or both of such rights. A revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any time before the
commencement of benefits. The number of revocations shall not be
limited. No consent obtained under this provision shall be valid unless
the Participant has received notice as provided in Section 7.14(E)
below.
(4) "QUALIFIED JOINT AND SURVIVOR ANNUITY" shall mean
an immediate annuity for the life of the Participant with a survivor
annuity for the life of the Spouse which is not less than 50 percent
and not more than 100 percent of the amount of the annuity which is
payable during the joint lives of the Participant and the Spouse and
which is the amount of benefit which can be purchased with the
Participant's "Vested Account Balance". The percentage of the survivor
annuity under the Plan shall be 50 percent.
(5) "ANNUITY STARTING DATE" shall mean the first day
of the first period for which an amount is paid as an annuity or any
other form.
(6) "VESTED ACCOUNT BALANCE" shall mean the aggregate
value of the Participant's vested account balances derived from
Employer and Employee contributions (including rollovers and
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direct transfers), whether vested before or upon death, including the
proceeds of insurance contracts, if any, on the Participant's life. The
provisions of this Section 7.14 shall apply to a Participant who is
vested in amounts attributable to Employer contributions, Employee
contributions (or both) at the time of death or distribution.
(E) NOTICE REQUIREMENTS.
(1) In the case of a "Qualified Joint and Survivor
Annuity", the Plan Administrator shall no less than 30 days and no more
than 90 days prior to the "Annuity Starting Date" provide to each
Participant a written explanation of: (a) the terms and conditions of a
"Qualified Joint and Survivor Annuity"; (b) the Participant's right to
make and the effect of an election to waive the "Qualified Joint and
Survivor Annuity" form of benefit; (c) the rights of a Participant's
Spouse; and (d) the right to make, and the effect of, a revocation of a
previous election to waive the "Qualified Joint and Survivor Annuity".
(2) In the case of a qualified preretirement survivor
annuity as described in Section 7.14(C), the Plan Administrator shall
provide each Participant within the applicable period for such
Participant a written explanation of the qualified preretirement
survivor annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the requirements of
Section 7.14(E)(1) applicable to a "Qualified Joint and Survivor
Annuity".
The applicable period for a Participant is whichever of the following
periods ends last: (a) the period beginning with the first day of the
Plan Year in which the Participant attains age 32 and ending with the
close of the Plan Year preceding the Plan Year in which the Participant
attains age 35; (b) a reasonable period ending after the individual
becomes a Participant; (c) a reasonable period ending after Section
7.14(C) ceases to apply to the Participant; (d) a reasonable period
ending after this Section 7.14 first applies to the Participant.
Notwithstanding the foregoing, notice must be provided within a
reasonable period ending after separation from service in the case of a
Participant who separates from service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable period
ending after the enumerated events described in (b), (c) and (d) is the
end of the two-year period beginning one year prior to the date the
applicable event occurs, and ending one year after that date. In the
case of a Participant who separates from service before the Plan Year
in which age 35 is attained, notice shall be provided within the
two-year period beginning one year prior to separation and ending one
year after separation. If such a Participant thereafter returns to
employment with the Employer, the applicable period for such
Participant shall be redetermined.
(3) Notwithstanding the other requirements of this
Section 7.14(E), the respective notices prescribed by this Section need
not be given to a Participant if (a) the plan "fully subsidizes" the
costs of a "Qualified Joint and Survivor Annuity" or qualified
preretirement survivor annuity, and (b) the plan does not allow the
Participant to waive the "Qualified Joint and Survivor Annuity" or
qualified preretirement survivor annuity and does not allow a married
Participant to designate a nonspouse Beneficiary. For purposes of this
Section 7.14(E)(3), a plan fully subsidizes the costs of a benefit if
no increase in cost, or decrease in benefits to the Participant may
result from the Participant's failure to elect another benefit.
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(F) SAFE HARBOR RULES.
(1) This Section 7.14(F) shall apply to a Participant
in a profit-sharing plan, and to any distribution made on or after the
first day of the first Plan Year beginning after December 31, 1988,
from or under a separate account attributable solely to accumulated
deductible employee contributions, as defined in section 72(o)(5)(B) of
the Code, and maintained on behalf of a participant in a money purchase
pension plan (including a target benefit plan), if the following
conditions are satisfied:
(a) The Participant does not or cannot elect
payments in the form of a life annuity; and
(b) On the death of a Participant, the
Participant's "Vested Account Balance" will be paid to the
Participant's Surviving Spouse, but if there is no Surviving
Spouse, or if the Surviving Spouse has consented in a manner
conforming to a "Qualified Election", then to the
Participant's "Designated Beneficiary". The Surviving Spouse
may elect to have distribution of the "Vested Account Balance"
commence within the 90-day period following the date of the
Participant's death. The "Vested Account Balance" shall be
adjusted for gains or losses occurring after the Participant's
death in accordance with the provisions of the Plan governing
the adjustment of account balances for other types of
distributions. This Section 7.14(F) shall not be operative
with respect to a Participant in a profit-sharing plan if the
plan is a direct or indirect transferee of a Defined Benefit
Plan, money purchase plan, a target benefit plan, stock bonus,
or profit-sharing plan which is subject to the survivor
annuity requirements of section 401(a)(11) and section 417 of
the Code (other than, effective January 1, 1993,
trustee-to-trustee transfers described in Section 3.9(B)). If
this Section 7.14(F) is operative, then the provisions of this
Section 7.14, other than Section 7.14(G), shall be
inoperative.
(2) The Participant may waive the spousal death
benefit described in this Section 7.14(F) at any time provided that no
such waiver shall be effective unless it satisfies the conditions of
Section 7.14(D)(3) (other than the notification requirement referred to
therein) that would apply to the Participant's waiver of the qualified
preretirement survivor annuity.
(3) For purposes of this Section 7.14(F), "Vested
Account Balance" shall mean, in the case of a money purchase pension
plan or a target benefit plan, the Participant's separate account
balance attributable solely to accumulated deductible employee
contributions within the meaning of section 72(o)(5)(B) of the Code. In
the case of a profit-sharing plan, "Vested Account Balance" shall have
the same meaning as provided in Section 7.14(D)(6).
(G) TRANSITIONAL RULES.
(1) Any living Participant not receiving benefits on
August 23, 1984, who would otherwise not receive the benefits
prescribed by the previous provisions of this Section 7.14 must be
given the opportunity to elect to have the prior provisions of this
Section 7.14 apply if such Participant is credited with at least one
Hour of Service under this Plan or a predecessor plan in a Plan Year
beginning on or after January 1, 1976, and such Participant had at
least ten Years of Service for Vesting when he separated from service.
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(2) Any living Participant not receiving benefits on
August 23, 1984, who was credited with at least one Hour of Service
under this Plan or a predecessor plan on or after September 2, 1974,
and who is not otherwise credited with any service in a Plan Year
beginning on or after January 1, 1976, must be given the opportunity to
have his or her benefits paid in accordance with Section 7.14(G)(4).
(3) The respective opportunities to elect (as
described in Sections 7.14(G)(1) and (2) above) must be afforded to the
appropriate Participants during the period commencing on August 23,
1984, and ending on the date benefits would otherwise commence to said
Participants.
(4) Any Participant who has elected pursuant to
Section 7.14(G)(2) and any Participant who does not elect under Section
7.14(G)(1) or who meets the requirements of Section 7.14(G)(1) except
that such Participant does not have at least ten Years of Service for
Vesting when he separates from service, shall have his benefits
distributed in accordance with all of the following requirements if
benefits would have been payable in the form of a life annuity:
(a) AUTOMATIC JOINT AND SURVIVOR ANNUITY. If
benefits in the form of a life annuity become payable to a
married Participant who:
(1) Begins to receive payments
under the Plan on or after Normal Retirement Age; or
(2) Dies on or after Normal
Retirement Age while still working for the Employer;
or
(3) Begins to receive payments on
or after the "Qualified Early Retirement Age"; or
(4) Separates from service on or
after attaining Normal Retirement Age (or the
"Qualified Early Retirement Age") and after
satisfying the eligibility requirements for the
payment of benefits under the plan and thereafter
dies before beginning to receive such benefits;
then such benefits shall be received under this Plan in the
form of a "Qualified Joint and Survivor Annuity", unless the
Participant has elected otherwise during the election period.
The election period must begin at least six months before the
Participant attains "Qualified Early Retirement Age" and end
not more than 90 days before the commencement of benefits. Any
election hereunder shall be in writing and may be changed by
the Participant at any time.
(b) ELECTION OF EARLY SURVIVOR ANNUITY. A
Participant who is employed after attaining the "Qualified
Early Retirement Age" shall be given the opportunity to elect,
during the election period, to have a survivor annuity payable
on death. If the Participant elects the survivor annuity,
payments under such annuity must not be less than the payments
which would have been made to the Spouse under the "Qualified
Joint and Survivor Annuity" if the Participant had retired on
the day before his death. Any election under this provision
shall be in writing and may be changed by the Participant at
any time. The election period begins on the later of (1) the
90th day before the Participant attains the "Qualified Early
Retirement Age",
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or (2) the date on which participation begins, and ends on the
date the Participant terminates employment.
(c) DEFINITIONS. For purposes of this
Section 7.14(G)(4):
(1) "QUALIFIED EARLY RETIREMENT
AGE" is the latest of:
(i) The earliest date,
under the Plan, on which the Participant may
elect to receive retirement benefits,
(ii) The first day of the
120th month beginning before the Participant
reaches Normal Retirement Age, or
(iii) The date the
Participant begins participation.
(2) "QUALIFIED JOINT AND SURVIVOR
ANNUITY" is an annuity for the life of the
Participant with a survivor annuity for the life of
the Spouse as described in Section 7.14(D)(4).
(H) OPTIONAL FORMS OF BENEFIT. The only optional forms of
benefit under the Plan are the forms of benefit provided under Section
7.1(B).
7.15 WAIVER OF 30-DAY NOTICE REQUIREMENTS FOR CERTAIN DISTRIBUTIONS. If
a distribution is one to which sections 401(a)(11) and 417 of the Code do not
apply, such distribution may commence less than 30 days after the notice
required under Treas. Reg. Section 1.411(a)-11(c) is given, provided that:
(A) The Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution option); and
(B) The Participant, after receiving the notice, affirmatively
elects a distribution.
ARTICLE VIII
NONALIENATION OF BENEFITS
8.1 BENEFITS NOT ALIENABLE. The right of any Participant or Beneficiary
to any benefit payment under the Plan shall not be subject to attachment,
execution, garnishment, any voluntary or involuntary alienation or assignment or
to any other legal or equitable process. The preceding sentence shall also apply
to the creation, assignment, or recognition of a right to any benefit payable
with respect to a Participant pursuant to a domestic relations order, unless
such order is determined to be a Qualified Domestic Relations Order or any
domestic relations order entered before January 1, 1985.
8.2 SPECIAL PROVISION WITH RESPECT TO QUALIFIED DOMESTIC RELATIONS
ORDERS. If the Adoption Agreement so provides and if the Qualified Domestic
Relations Order so provides:
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(A) Plan assets allocated to an alternate payee shall be
placed in a separate account established for such alternate payee and such
alternate payee shall be entitled, with respect to such separate account, to
all the rights including but not limited to, the investment direction rights,
if any, of a Participant under the Plan; and
(B) Distribution of the vested amount in such separate account
shall be made to such alternate payee at such time as the Qualified Domestic
Relations Order provides, even if such date precedes the date on which a
Participant is entitled to payment under the Plan, but such distribution
shall only be made in one lump sum payment if made prior to the date the
Participant would otherwise be first entitled to receive payment.
ARTICLE IX
THE ADMINISTRATIVE COMMITTEE
9.1 STRUCTURE. The Employer shall appoint an Administrative Committee
consisting of one or more persons to administer the Plan. The member or the
members of the Administrative Committee, if in the full-time employ of the
Employer, shall serve without additional compensation and at the pleasure of the
Employer. The Employer may, in its sole discretion, discharge or remove any
member from the Administrative Committee at any time. Any member may resign by
delivering his written resignation to the Employer and such resignation shall
become effective at delivery or at any later date specified therein. In the
event of the death, discharge, resignation or removal of any member of the
Administrative Committee, the Employer may appoint a successor. The Employer
shall notify the Trustee of the appointment of the member or members of the
Administrative Committee and of any successor member or members thereto.
9.2 ADMINISTRATIVE COMMITTEE ACTION. On all matters within the
jurisdiction of the Administrative Committee the decision of a majority of the
members of the Administrative Committee shall govern and control. The
Administrative Committee may take action either at a meeting or in writing
without a meeting, provided that in the latter instance all members of the
Administrative Committee shall have been advised of the action contemplated and
that the written instrument evidencing the action shall be signed by a majority
of the members. If there is more than one member, the Employer shall appoint a
chairman. If there is more than one member, the Administrative Committee may
appoint, either from among its members or otherwise, a secretary who shall keep
a record of all meetings and actions taken by the Administrative Committee.
Either the Chairman or any member of the Administrative Committee designated by
the Chairman shall execute any certificate, instrument or other written
direction on behalf of the Administrative Committee.
9.3 RESPONSIBILITIES. The Administrative Committee shall have sole
responsibility and discretion for administration of the Plan, and shall
supervise and control the operation of the Plan in accordance with its terms.
The Administrative Committee shall have the responsibility, the discretion, the
power and the authority to do all things necessary to accomplish that purpose,
including, but not limited to, the responsibility, discretion, power and
authority to do the following:
(A) To construe and interpret the terms and provisions of the
Plan including, but not limited to, disputed or doubtful terms;
(B) To adopt such rules and regulations under the Plan as it
may consider desirable for the administration of the Plan;
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(C) To determine all questions of eligibility for partici-
pation under the Plan;
(D) To determine all questions concerning the amount, time and
manner of payment of benefits under the Plan;
(E) To prescribe procedures to be followed by Employees,
Participants, and Beneficiaries under the Plan;
(F) To prepare and distribute appropriate information
concerning the Plan;
(G) To issue directions to the Trustee concerning all benefits
which are to be paid from the Trust pursuant to the Plan;
(H) To bring suit in a court of competent jurisdiction, or to
take any other action necessary to ascertain the proper actions to be taken
in the event that a reasonable interpretation of applicable law precludes the
Administrative Committee from satisfying its requirements under this Plan or
the Trust;
(I) To establish a funding policy and method to carry out the
Plan objectives in light of the short- and long-run financial needs of the
Plan and to communicate such policy and method to the Trustee;
(J) To keep such records, make such reports (including, but
not limited to, reports to Participants and the Internal Revenue Service
concerning Qualified Voluntary Employee Contributions, as may be required by
Treasury regulations) and do such other acts as it deems appropriate in order
to comply with ERISA and government regulations thereunder; and
(K) To do such other acts as may be necessary and/or desirable
in order to administer the Plan.
To the maximum extent permitted by law, the Administrative Committee's
determinations on all such matters shall be final and binding upon the
Employer, Participants, other employees, Beneficiaries and all other parties.
9.4 CONTRACTING FOR SERVICE. The Administrative Committee may contract
for legal, accounting, clerical and other services necessary to carry out its
responsibilities under the Plan.
9.5 EXPENSES OF ADMINISTRATIVE COMMITTEE. Unless paid by the Employer,
any expenses incurred in administering the Plan, including but not limited to,
expenses incurred by the Administrative Committee and Trustee's fees, shall be
deducted from the Accounts to which such expenses relate or proportionately from
all Accounts, if such expenses do not relate to any specific Accounts.
ARTICLE X
CLAIMS PROCEDURE
10.1 CLAIMS FOR BENEFITS. All claims for benefits under the Plan shall
be made in writing and shall be signed by the applicant. Claims shall be
submitted to a representative designated by the Administrative Committee and
hereinafter referred to as the "Claims Coordinator".
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Each claim hereunder shall be acted on and approved or
disapproved by the Claims Coordinator within 60 days following the receipt by
the Claims Coordinator of the information necessary to process the claim.
In the event the Claims Coordinator denies a claim for
benefits, in whole or in part, the Claims Coordinator shall notify the
applicant in writing of the denial of the claim and notify such applicant of
his right to a review of the Claims Coordinator's decision by the
Administrative Committee. Such notice by the Claims Coordinator shall also
set forth, in a manner calculated to be understood by the applicant, the
specific reason for such denial, the specific Plan provisions on which the
denial is based, a description of any additional material or information
necessary to perfect the claim, with an explanation of why such material or
information is necessary, and an explanation of the Plan's claim review
procedure as set forth in this Article X.
If no action is taken by the Claims Coordinator on an
applicant's claim within 60 days after receipt by the Claim Coordinator, such
application shall be deemed to be denied for purposes of the following
appeals procedure.
10.2 APPEALS PROCEDURE. Any applicant whose claim for benefits is
denied in whole or in part (such applicant being hereinafter referred to as the
"Claimant") may appeal from such denial to the Administrative Committee for a
review of the decision by the entire Administrative Committee. Such appeal must
be made within six months after the Claimant has received written notice of the
denial as provided above in Section 10.1. An appeal must be submitted in writing
within such period and must:
(A) Request a review by the entire Administrative Committee of
the claim for benefits under the Plan;
(B) Set forth all of the grounds upon which the Claimant's
request for review is based and any facts in support thereof; and
(C) Set forth any issues or comments which the Claimant deems
pertinent to the appeal.
The Administrative Committee shall regularly review appeals by
Claimants. The Administrative Committee shall act upon each appeal within 60
days after receipt thereof unless special circumstances require an extension
of the time for processing the Claimant's request for review. If such an
extension of time for processing is required, written notice of the extension
shall be forwarded to the Claimant prior to the commencement of the
extension. In no event shall such extension exceed a period of 120 days after
the request for review is received by the Administrative Committee.
The Administrative Committee shall make a full and fair review
of each appeal and any written materials submitted by the Claimant and/or the
Employer in connection therewith. The Administrative Committee may require
the Claimant and/or the Employer to submit such additional facts, documents
or other evidence as the Administrative Committee in its discretion deems
necessary or advisable in making its review. The Claimant shall be given the
opportunity to review pertinent documents or materials upon submission of a
written request to the Administrative Committee, provided the Administrative
Committee finds the requested documents or materials are pertinent to the
appeal.
On the basis of its review, the Administrative Committee shall
make an independent determination of the Claimant's eligibility for benefits
under the Plan. The decision of the Administrative Committee on any claim for
benefits shall be final and conclusive upon all parties thereto.
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In the event the Administrative Committee denies an appeal, in
whole or in part, the Administrative Committee shall give written notice of
the decision to the Claimant, which notice shall set forth, in a manner
calculated to be understood by the Claimant, the specific reasons for such
denial and which shall make specific reference to the pertinent Plan
provisions on which the Administrative Committee's decision was based.
It is intended that the claims procedure of this Plan be
administered in accordance with the claims procedure regulations of the
Department of Labor set forth in 29 CFR Section 2560.503-1.
ARTICLE XI
THE TRUSTEE
11.1 ACCEPTANCE OF TRUST. The Trustee hereby accepts the Trust herein
expressed, and agrees to carry out the provisions hereof on its part to be
performed.
11.2 RESIGNATION OF TRUSTEE. Any Trustee may resign his duties
hereunder by delivering a written resignation to the Employer. Such resignation
shall take effect on the date provided therein, but not before the sixtieth day
after delivery thereof unless, prior to such sixtieth day, a successor Trustee
shall have been appointed and shall have accepted such appointment, or unless
the Employer shall otherwise consent to such earlier resignation. If, within 60
days after notice of resignation shall have been given under the provisions of
this Section 11.2, a successor Trustee shall not have been appointed by the
Employer, the resigning Trustee or the Employer, as appropriate, may apply to
any court of competent jurisdiction for the appointment of a successor Trustee.
11.3 REMOVAL OF TRUSTEE. Any Trustee may be removed by the Employer at
any time, upon notice to the Trustee. Such removal shall be effected by
delivering to the Trustee a notice from the Employer removing the Trustee, and
may include notification to the Trustee of the appointment of a successor
Trustee in the manner hereinafter set forth in Section 11.5. Such notice of
removal shall be effective on the date specified therein, but not before the
actual date of such notice.
11.4 APPOINTMENT OF SUCCESSOR TRUSTEE UPON OCCURRENCE OF CERTAIN
EVENTS. In the event of the death or resignation of a Trustee or the inability
of a Trustee to serve as such after the Employer or any successor thereto shall
have gone out of business or ceased to exist, or been dissolved, a successor
Trustee shall be appointed by election of a majority of the Participants under
the Plan who were Employees of the Employer at the time the Employer or
successor thereto went out of business or ceased to exist, or was dissolved, as
the case may be. Such successor Trustee shall have the same powers as are
granted to successor Trustees under Section 11.5.
11.5 SUCCESSOR TRUSTEE. In the event of the death, resignation or
removal of a Trustee or Trustees hereunder, one or more successor Trustees shall
be appointed by the Employer, and such successor Trustee, upon accepting such
appointment by an instrument in writing delivered to the Employer, shall become
vested with the same powers, duties, privileges and immunities as if it had
originally been named in this Plan as Trustee.
11.6 MEETINGS AND ACTIONS OF TRUSTEE. In the event there is more than
one Trustee, the Trustee shall hold meetings upon such notice (which may be
waived), at such place or places and at such times as it may from
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time to time determine and shall act by majority vote of all the Trustees. Any
one or more Trustees designated by a majority vote of all the Trustees may
execute any certificate, instrument or other written document on behalf of all
the Trustees.
11.7 COMPENSATION. No fee or compensation shall be paid to the Trustee
for its services as such if such Trustee is an Employee of, or is otherwise
compensated by, the Employer and, if not, such Trustee shall receive such
reasonable compensation as may be agreed to by the Employer and such Trustee.
11.8 TRUSTEE'S LIABILITY. In the exercise of its powers and the
performance of its duties as Trustee under the Plan, the Trustee shall act
solely in the interest of the Participants and their Beneficiaries and in
accordance with the provisions of Article XIV. The Trustee, however, shall not
be liable for any mistake in judgment or other action taken in good faith, or
for loss unless resulting from a breach of any of the responsibilities,
obligations or duties imposed upon the Trustee by the Plan or by Title I of
ERISA.
11.9 GENERAL POWERS. Subject to the provisions and limitations herein
expressly set forth, the Trustee shall have the duty and authority to do and
perform any and all acts and things which, in its judgment, shall be necessary
and/or reasonable to carry out the purposes of the Plan and Trust. No
enumeration of specific powers herein made shall be construed as a limitation
upon the foregoing general powers.
11.10 PAYMENTS TO TRUSTEE. All Participant, Matching, Elective
Deferral, Employer, Rollover, Qualified Matching, Qualified Nonelective, and
Qualified Voluntary Employee Contributions and direct transfers shall be paid to
the Trustee as provided in Article III. The Trustee shall be responsible only
for such funds as shall be accepted and received by it from the Employer. The
Trustee shall not be responsible for the collection of any contributions to the
Plan, or for the acceptance of any contribution in property other than cash
except as otherwise provided under Sections 3.9 and 3.10.
11.11 INVESTMENT OF TRUST FUND. Except to the extent that any Trust
assets have been committed by the Employer to the management of an Investment
Manager and subject to the Participant's right to direct the investment of his
Employer and/or Matching and/or Elective Deferral and/or Participant and/or
Rollover and/or Transfer and/or QVEC Accounts and/or Qualified Matching
Contribution and/or Qualified Nonelective Contribution accounts and subject to
the requirements of Article XIV, the Trustee shall invest and reinvest the
principal and income of the Employer, Matching, Elective Deferral, Participant,
Rollover, Transfer, and QVEC Accounts and Qualified Matching Contribution and
Qualified Nonelective Contribution accounts as provided in Article VI. No part
of the Trust Fund shall be invested in Employer real property. Except to the
extent provided in the Adoption Agreement, no part of the Trust Fund shall be
invested in Employer Securities. Notwithstanding the preceding sentence, no
portion of Participant, Matching, Elective Deferral, Rollover, Qualified
Matching, Qualified Nonelective, or Qualified Voluntary Employee Contributions
or direct transfers shall be invested in Employer Securities (unless in
compliance with applicable Federal and state securities laws); moreover, no
portion of Employer Contributions shall be invested in Employer Securities if
such Employer Contributions are subject to the investment direction of the
Participants (unless in compliance with Federal and state securities laws). In
any event, investment in Employer Securities shall be limited to investment in
Qualifying Employer Securities. Notwithstanding the above, in no event may the
Plan, if it is a money purchase plan with respect to the adopting Employer,
invest in Qualifying Employer Securities in excess of the ten percent limit
described in Section 6.1(A)(14) above.
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11.12 ACCOUNTS, REPORTS AND GOVERNMENTAL FILINGS. Rules relating to
certain accounting and reporting requirements are as follows:
(A) ACCOUNTS AND REPORTS. The Trustee shall keep accounts and
detailed records of all receipts, investments, disbursements and other
transactions required to be performed hereunder. The Trustee shall prepare a
written report reflecting the receipts, disbursements and other transactions
effected by it during the Plan Year (or period ending with its resignation or
removal) and the fair market value of the assets in each Participant's
Employer, Matching, Elective Deferral, Participant, Rollover, Transfer, and
QVEC Accounts and Qualified Matching Contribution and Qualified Nonelective
Contribution accounts as of the Valuation Date in accordance with Section
5.3. Such report shall be filed with the Administrative Committee within 60
days following such Valuation Date (or following the Trustee's resignation or
removal pursuant to Section 11.2 or 11.3). The Trustee shall not be obligated
to take any action on any individual account except upon the written
instructions forwarded by the Administrative Committee and shall have no
obligation to inquire into the propriety of any such written instructions and
shall be fully protected in acting in accordance with such written
instructions.
(B) GOVERNMENTAL FILINGS BY TRUSTEE. The Trustee shall keep
such records, make such reports and file such returns and other information
as may be required of the Trustee with respect to the Trust under the Code,
ERISA and the regulations issued or forms adopted thereunder. The Trustee
shall make such of its records as may pertain solely to a particular
Participant available to such Participant, upon request, for examination by
such Participant.
(C) GOVERNMENTAL FILINGS BY ADMINISTRATIVE COMMITTEE. The
Administrative Committee shall be solely responsible for the filing of any
reports or information required, with respect to the Plan, under the Code,
ERISA or any other Federal or State law and regulations issued or forms
adopted thereunder.
11.13 INFORMATION TO TRUSTEE. The Administrative Committee shall
furnish to the Trustee any information required by the Plan. The Trustee shall
be fully protected in relying upon such information.
11.14 BENEFIT PAYMENTS. The Trustee shall make or, in the case of
Insurance Contracts, cause to be made all benefit payments under the Plan upon
written instructions of the Administrative Committee. The Trustee shall not be
liable for following proper Administrative Committee directions which are in
accordance with the terms of the Plan.
11.15 TRUST ASSETS. The Trust Fund shall consist of all amounts
contributed by, or on behalf of, Participants under the Plan, and the earnings
and appreciation thereon, less depreciation and payments made by the Trustee
under the Plan.
11.16 PARTICIPANTS EXCLUSIVELY TO BENEFIT. Except as provided in
Section 3.7, Trust Fund assets shall be held by the Trustee for the exclusive
purpose of providing benefits to Participants under the Plan and their
Beneficiaries and defraying reasonable expenses of administering the Plan.
11.17 EMPLOYMENT OF COUNSEL, AGENTS, ETC. The Trustee, upon notice to
the Administrative Committee, may employ such counsel, accountants and agents
and such clerical and other help as it may deem necessary in carrying out the
Trust, and pay the fees, charges and cost of the same from the Trust Fund as an
expense of the Plan, unless the Employer shall pay the same.
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11.18 COMPROMISE OF CLAIMS. The Trustee, upon notice to the
Administrative Committee, may compromise, arbitrate, or settle any suit or legal
proceeding, claim, debt, damage or undertaking due or owing from, or to, the
Trust Fund.
11.19 SUITS. The Trustee is authorized, upon notice to the
Administrative Committee, to sue or to defend any suit or legal proceedings by
or against the Trust. In the case of any suit or proceeding regarding this Plan
and Trust Agreement, to which the Trustee may be a party, said Trustee shall
have a lien upon the Trust Fund for any and all costs, attorneys' fees (whether
such attorneys shall be regularly retained or specifically employed by the said
Trustee), and for other expenses which it may incur or become liable for on
account thereof, or on account of any other legal expense incurred in the
administration of this Trust, and it shall be entitled to reimburse itself for
any of said expenses out of the Trust Fund.
11.20 EXECUTION OF DOCUMENTS. The Trustee shall have the power to make,
execute, acknowledge and deliver any and all documents, agreements, insurance
policies, annuity contracts and, without limitation by the foregoing, any and
all other instruments that may be necessary or appropriate to carry out the
powers herein granted.
11.21 NO DISCRIMINATION. The Trustee shall not take any action which
would result in benefiting one Participant or group of Participants at the
expense of another, or in discrimination as between Participants similarly
situated, or by the application of different rules to substantially similar sets
of facts.
11.22 DECISION OF TRUSTEE. The decision of the Trustee in matters
within its jurisdiction shall be final, binding and conclusive upon the
Administrative Committee and upon each Employee, Participant, Beneficiary and
every other person or party interested or concerned.
11.23 FUNDING POLICY. From time to time the Administrative Committee
shall communicate to the Trustee in writing the current funding policy and
methods that have been established, pursuant to Section 9.3(I) by the
Administrative Committee to carry out the objectives of the Plan.
ARTICLE XII
THE INSURER
12.1 INSURER'S LIABILITY. The Insurer shall not be deemed to be a party
to this Plan, nor shall it be responsible for the validity of this Plan, or for
the completion and/or submission of any returns or reports required to be filed
by the Trustee, the Employer or the Administrative Committee under the
provisions of the Code or ERISA. The Insurer shall, however, furnish to the
Trustee, upon request of the Trustee, such information as it may require with
respect to the Insurance Contracts to enable the Trustee to complete the annual
or more frequent valuation of Plan assets required by Section 5.3 and to file
such reports as may be required by ERISA and the Code.
12.2 INFORMATION TO INSURER. The Trustee shall furnish to the Insurer
such information as may be required by the Insurer to maintain Insurance
Contracts hereunder. The Insurer shall be fully protected in relying upon such
information.
12.3 BENEFIT PAYMENTS. The Insurer shall make all benefit payments by
it under the Plan only upon written instructions of the Trustee. The Insurer
shall not be liable for following such written instructions.
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12.4 ANNUITIES MUST BE NONTRANSFERABLE. Any annuity contract
distributed herefrom must be nontransferable.
12.5 CONFLICTS. 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.
12.6 DISTRIBUTION OF INSURANCE CONTRACTS. Subject to Section 7.14,
relating to joint and survivor annuity requirements, the Insurance Contracts on
a Participant's life shall be converted to cash or an annuity or distributed to
the Participant upon commencement of benefits.
12.7 CONFLICT WITH INSURANCE CONTRACTS. The Trustee shall apply for and
shall be the owner of any Insurance Contract purchased under the terms of this
Plan. The Insurance Contract(s) must provide that proceeds will be payable to
the Trustee; however, the Trustee shall be required to pay over all proceeds of
the Insurance Contract(s) to the Participant's designated Beneficiary in
accordance with the distribution provisions of this Plan. The Spouse of a
married Participant and otherwise the Participant's Beneficiary shall be the
designated Beneficiary of the proceeds in all circumstances unless the Plan, as
adopted by the Employer, is a money purchase plan and a qualified election has
been made in accordance with Section 7.14 relating to joint and survivor annuity
requirements, if applicable. Under no circumstances shall the Trust retain any
part of the proceeds. In the event of any conflict between the terms of this
Plan and the terms of any Insurance Contract purchased hereunder, the Plan
provisions shall control.
12.8 DIVIDENDS OR CREDITS. Any dividends or credits earned on Insurance
Contracts shall be allocated to the Participant's account derived from Employer
contributions for whose benefit the Insurance Contract is held.
ARTICLE XIII
THE INVESTMENT MANAGER
13.1 APPOINTMENT. The Employer may appoint one or more Investment
Managers, which shall serve at the pleasure of the Employer, to manage, control
and invest any or all of the assets held by the Trustee in the Trust. Any
Investment Manager, so appointed, shall signify in writing to the Employer that
it accepts the appointment and acknowledges its status as a Fiduciary.
13.2 RESPONSIBILITY. Subject only to the funding procedures established
by the Administrative Committee, such Investment Manager shall have full
responsibility, power and authority to manage and invest the assets held by the
Trustee in the Trust committed to it.
13.3 ACT IN INTEREST OF PARTICIPANTS. In carrying out its
responsibilities, the Investment Manager shall act solely in the interest of the
Participants and their Beneficiaries and in accordance with the provisions of
Article XIV.
13.4 DIRECTIONS FROM INVESTMENT MANAGER. Whenever the Trustee must or
may act upon the direction or approval of the Investment Manager, the Trustee
may act upon a written communication or oral communication followed by a written
communication signed by the representative of the Investment Manager, as
previously agreed upon in writing by the Trustee and the Investment Manager.
Until otherwise notified in
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writing by the proper officers of the Investment Manager, the Trustee shall be
fully protected in relying upon the last such direction or directions received
by it from the Investment Manager.
ARTICLE XIV
FIDUCIARY RESPONSIBILITY
14.1 FIDUCIARY DUTIES. A Fiduciary, as defined in Section 1.37, shall
discharge its duties with respect to the Plan and Trust in the interest of the
Participants and their Beneficiaries:
(A) For the exclusive purpose of:
(1) Providing benefits to Participants and their
Beneficiaries; and
(2) Defraying reasonable expenses of administering
the Plan and Trust;
(B) With the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in like capacity and
familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims;
(C) Except for any Trust assets committed to investment by a
Participant, by diversifying the investments of the Plan and Trust so as to
minimize the risk of large losses, unless under the circumstances it is
clearly prudent not to do so; and
(D) In accordance with the documents and instruments governing
the Plan and Trust insofar as they are consistent with the provisions of
ERISA.
14.2 ALLOCATION OF RESPONSIBILITY. Authority and responsibility for
management of the Plan and Trust shall be allocated among the following persons:
(A) The Employer shall have sole responsibility for the
appointment and removal of the Administrative Committee described in Article
IX, of the Trustee described in Article XI and of any Investment Manager
described in Article XIII. To the extent that it is carrying out this
responsibility, the Employer shall be a "named Fiduciary" of the Plan;
(B) The Administrative Committee shall have sole
responsibility for the administration of the Plan, as set forth in Article
IX. To the extent that it is carrying out this responsibility, the
Administrative Committee shall be a "named Fiduciary" of the Plan;
(C) The Trustee shall have sole responsibility for the
management and control of the Trust assets, except to the extent such assets
have been committed to investment by a Participant or by any Investment
Manager. To the extent it is carrying out this responsibility, the Trustee
shall be a "named Fiduciary" of the Plan;
(D) Any Investment Manager appointed under Article XIII to
manage and invest Trust assets shall have sole responsibility for the
investment and management of Trust assets held by the Trustee in the Trust
which have been committed to such Investment Manager, subject only to the
funding procedures
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established by the Administrative Committee. To the extent it is carrying out
this responsibility, an Investment Manager shall be a Fiduciary of the Plan;
and
(E) The Participants shall have sole responsibility for the
investment of the assets in their Employer, Matching, Elective Deferral,
Participant, Rollover, Transfer and/or QVEC Accounts and/or Qualified
Matching Contribution and/or Qualified Nonelective Contribution accounts in
the event the Employer indicates in the Adoption Agreement applicable to such
Employer that the Participants have the power to direct investment of
Employer, Matching, Elective Deferral, Participant, Rollover, Transfer and/or
QVEC Accounts and/or Qualified Matching Contribution and/or Qualified
Nonelective Contribution accounts.
14.3 EXCLUSIVE RESPONSIBILITY. It is the purpose of this Plan and Trust
Agreement to allocate to each of the Fiduciaries identified in Section 14.2
exclusive responsibility for prudent execution of the functions assigned to him
(or to the entity of which he is a member) and no responsibility for execution
of functions assigned to others. Whenever one such Fiduciary is required by the
Plan and Trust Agreement to follow the directions of another such Fiduciary, the
two Fiduciaries shall not be deemed to have been assigned a shared
responsibility, but the Fiduciary giving the directions shall have sole
responsibility for the functions assigned to him, including issuing such
directions, and the Fiduciary receiving the directions shall have sole
responsibility for the functions assigned to him, including following such
directions insofar as they are, on their face, proper under this Plan and Trust
Agreement and under applicable law.
14.4 TRANSFER OR MAINTENANCE OF INDICIA OF OWNERSHIP OF PLAN ASSETS
OUTSIDE UNITED STATES PROHIBITED. Except as authorized by the Secretary of Labor
by regulation, no Fiduciary shall maintain the indicia of ownership of any
assets of the Plan or Trust outside the jurisdiction of the district courts of
the United States.
14.5 LIABILITY OF FIDUCIARY FOR BREACH OF CO-FIDUCIARY. A Fiduciary
with respect to the Plan or Trust shall not be liable for a breach of Fiduciary
responsibility of another Fiduciary with respect to the Plan or Trust except
under the following circumstances:
(A) He or it participates knowingly in, or knowingly
undertakes to conceal, an act or omission of such other Fiduciary, knowing
such act or omission is a breach;
(B) By his or its failure to properly discharge his or its own
Fiduciary responsibilities, he or it has enabled such other Fiduciary to
commit a breach; or
(C) He or it has knowledge of a breach by such other
Fiduciary, unless he or it makes reasonable efforts under the circumstances
to remedy the breach.
14.6 PROHIBITED TRANSACTIONS. The rules relating to prohibited
transactions are as follows:
(A) Unless otherwise exempted by the Secretary of Labor, a
Fiduciary with respect to the Plan or Trust shall not cause the Plan or Trust
to engage in a transaction if he or it knows, or should know, that such
transaction constitutes a direct or indirect:
(1) Sale or exchange, or leasing, of any property
between the Plan or Trust and a party in interest or a disqualified
person;
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(2) Lending of money or other extension of credit
between the Plan or Trust and a party in interest or a disqualified
person;
(3) Furnishing of goods, services, or facilities
between the Plan or Trust and a party in interest or a disqualified
person; or
(4) Transfer to, or use by or for the benefit of, a
party in interest or a disqualified person, of any assets of the Plan
or Trust.
(B) Unless otherwise exempted by the Secretary of Labor, a
Fiduciary with respect to the Plan or Trust shall not:
(1) Deal with the assets of the Plan or Trust in his
or its own interest or for his or its own account;
(2) In his or its individual or any other capacity,
act in any transaction involving the Plan or Trust on behalf of a party
(or represent a party) whose interests are adverse to the interests of
the Plan or Trust or the interests of the Participants or their
Beneficiaries; or
(3) Receive any consideration for his or its own
personal account from any party dealing with the Plan or Trust in
connection with a transaction involving the assets of the Plan or
Trust.
(C) Notwithstanding anything to the contrary set forth in this
Section 14.6, a Fiduciary shall be entitled to:
(1) Receive any benefit to which the Fiduciary may be
entitled as a Participant or Beneficiary in the Plan or Trust, so long
as the benefit is computed and paid on a basis which is consistent with
the terms of the Plan and Trust as applied to all Participants and
their Beneficiaries;
(2) Receive any reasonable compensation for services
rendered, except that no person so serving who already receives
full-time pay from the Employer and/or Controlled Group member, from an
employee organization whose employees are Participants in the Plan, or
from an association of employers whose employees are Participants in
the Plan, shall receive compensation from the Plan or Trust, except for
reimbursement of expenses properly and actually incurred;
(3) Receive reimbursement of expenses properly and
actually incurred in the performance of his or its duties with the Plan
and Trust;
(4) Serve as a Fiduciary in addition to being an
officer, employee, agent, or other representative of a party in
interest or disqualified person;
(5) Make loans to a party in interest or a
disqualified person who is a Participant or Beneficiary of the Plan
under Section 7.11, provided such loans are made in accordance with the
specific provisions of Section 7.11; and
(6) To the extent the Plan and applicable Adoption
Agreement so provide, acquire or sell Qualifying Employer Securities
if:
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(a) Such acquisition or sale is for adequate
consideration (as such term is defined in section 3(18) of
ERISA); and
(b) No commission is charged with respect to
such acquisition or sale.
(D) For purposes of this Article XIV, the words "party in
interest" or "disqualified person" mean:
(1) Any Fiduciary, counsel or employee of the Plan or
Trust;
(2) A person providing services to the Plan or Trust;
(3) The Employer;
(4) An employee organization any of whose members are
covered by the Plan;
(5) An owner, direct or indirect, of 50 percent or
more of:
(a) The combined voting power of all classes
of stock entitled to vote or the total value of shares of all
classes of stock of a corporation,
(b) The capital interest or the profits
interest of a partnership, or
(c) The beneficial interest of a trust or
unin- corporated enterprise, which is an employer or employee
organization described in Section 14.6(D)(3) or (4);
(6) A spouse, ancestor, lineal descendant, or spouse
of a lineal descendant of any individual described in Section
14.6(D)(1), (2), (3) or (5);
(7) A corporation, partnership, or trust or estate of
which (or in which) 50 percent or more of:
(a) The combined voting power of all classes
of stock entitled to vote or the total value of shares of all
classes of stock of such corporation,
(b) The capital interest or profits interest
of such partnership, or
(c) The beneficial interest of such trust or
estate,
is owned directly or indirectly, or held by, persons described in
Section 14.6(D)(1), (2), (3), (4) or (5);
(8) An employee, officer, director (or an individual
having powers or responsibilities similar to those of officers or
directors), or a ten percent or more shareholder, directly or
indirectly, of a person described in Section 14.6(D)(2), (3), (4), (5)
or (7), or of the Plan or Trust; or
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(9) A ten percent or more (directly or indirectly in
capital or profits) partner or joint venturer of a person described in
Section 14.6(D)(2), (3), (4), (5) or (7).
ARTICLE XV
PLAN AMENDMENT
15.1 AMENDMENT. The rules relating to the amendment of the Plan and
Trust Agreement are as follows:
(A) SPONSORING ORGANIZATION'S POWER TO AMEND. The Sponsoring
Organization may amend any part of the Plan at any time with respect to all
Adopting Employers. Such amendment shall be applicable to all Employers that
have adopted the Plan and each such Employer shall be deemed to have adopted
such amendment as of the date of the notification letter from the Internal
Revenue Service which relates to such amendment. This provision shall be
interpreted in accordance with section 6.01(1) of Rev. Proc. 89-13. The
Sponsoring Organization shall notify each Adopting Employer of any such
amendment.
(B) AMENDMENT BY ADOPTING EMPLOYER. The Employer may (1)
change the choice of options in the Adoption Agreement, (2) add overriding
language in the Adoption Agreement when such language is necessary to satisfy
section 415 or section 416 of the Code because of the required aggregation of
multiple plans, and (3) add certain model amendments published by the
Internal Revenue Service which specifically provide that their adoption will
not cause the Plan to be treated as individually designed. An Employer that
amends the Plan for any other reason, including a waiver of the minimum
funding requirement under section 412(d) of the Code, will no longer
participate in the DRINKER BIDDLE & REATH REGIONAL PROTOTYPE DEFINED
CONTRIBUTION PLAN and will be considered to have an individually designed
plan.
(C) REV. PROC. 92-41 - DEEMED AMENDMENT OF ADOPTING EMPLOYERS'
PLANS. The changes made by this amendment and restatement of the Plan and
Trust Agreement, pursuant to Rev. Proc. 92-41, shall be deemed adopted by
each Adopting Employer on the date the notification letter is issued by the
District Office of the Internal Revenue Service with respect to this
amendment and restatement without further action on the part of the Adopting
Employer. However, each such Adopting Employer must send a notice not earlier
that six days, if by mail (nine days if by posting or in person) and not more
than 20 days, if by mail (23 days if by posting or in person) from the date
of the Internal Revenue Service notification letter to all interested parties
in accordance with Part II of Rev. Proc. 92-6 informing such interested
parties that the Plan and Trust Agreement have been amended. The Adopting
Employer may also change its Adoption Agreement with respect to the
amendments described in section 5.05 of Rev. Proc. 92-41 without resubmission
of such Adopting Employer's Plan to the Internal Revenue Service. Any other
changes made by the Adopting Employer will require resubmission of such
Adopting Employer's Plan to the Internal Revenue Service for a determination
as to the continuing qualification under section 401(a) of the Code of the
Adopting Employer's Plan as thus amended.
15.2 LIMITATIONS UPON AMENDMENT. Notwithstanding the above, no
1amendment shall be made which shall cause or permit:
(A) Any part of the assets of the Trust under the Plan to be
diverted to purposes other than for the exclusive benefit of Participants or
their Beneficiaries;
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(B) Any part of such assets to revert to, or become the
property of, the Employer;
(C) Any Participant or his Beneficiary to be deprived of any
benefit to which he was entitled under the Plan by reason of contributions
made by the Employer or Participant prior to such amendment, unless such
amendment is necessary either to conform the Plan to, or satisfy the
conditions of, any law, governmental regulation or ruling, or to permit the
Plan to meet the requirements of the Code, or ERISA;
(D) The account balance of a Participant to be decreased or,
effective for Plan amendments made after July 30, 1984, an optional form of
distribution to be restricted or eliminated with respect to any benefits
accrued prior to such amendment; notwithstanding the preceding clause, a
Participant's account balance may be reduced to the extent permitted under
section 412(c)(8) of the Code; for purposes of this provision, a Plan
amendment which has the effect of decreasing a Participant's account balance
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;
(E) Any responsibilities of the Trustee under this Plan and
Trust Agreement to be increased without its prior written consent;
(F) In the event the vesting schedule of the Plan is amended
in the case of an Employee who is a Participant on (1) the date the amendment
is adopted, or (2) the date the amendment is effective, if later, the
nonforfeitable percentage (determined as of the date specified in (1) or (2))
of such Employee's right to his Accrued Benefit derived from Employer
contributions to be less than his percentage computed under the Plan without
regard to such amendment; or
(G) The computation of a Participant's nonforfeitable right to
his Accrued Benefit derived from Employer contributions to be affected by the
amendment of the Plan's vesting schedule or to be directly or indirectly
affected by any other Plan amendment or by a deemed amendment resulting from
an automatic change to or from a top-heavy vesting schedule unless a
Participant with three or more Years of Service for Vesting is permitted to
elect, within 60 days after the latest of (1) the date the amendment is
adopted, (2) the date the amendment becomes effective, or (3) the date
written notification of such amendment is issued to the Participant by an
Employer or by the Administrative Committee, to have his nonforfeitable
percentage computed under the Plan without regard to such amendment,
provided, however, that no election shall be given to any Participant whose
nonforfeitable percentage under the Plan as amended cannot at any time be
less than such percentage determined without regard to such amendment. For
Participants who do not have at least one Hour of Service in any Plan Year
beginning after December 31, 1988, the preceding sentence shall be applied by
substituting "five Years of Service for Vesting" for "three Years of Service
for Vesting" where such language appears.
15.3 RIGHTS OF TRUSTEE UPON AMENDMENT. No amendment may be made to the
Plan and Trust Agreement which affects the rights, duties or responsibilities of
the Trustee without its prior written consent. A certified copy of any amendment
shall be delivered to the Trustee by the Employer.
15.4 SIGNIFICANT REDUCTION IN RATE OF FUTURE BENEFIT ACCRUALS. This
Section 15.4 shall only apply if the Plan, as adopted by the Employer, is a
money purchase plan. In such event the Plan may not be amended so as to provide
for a significant reduction in the rate of future benefit accruals, unless,
after adoption of the Plan amendment and not less than 15 days before the
effective date of the Plan amendment, the Administrative Committee, as Plan
administrator, provides a written notice, setting forth the Plan amendment and
its effective date, to:
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(A) Each Participant in the Plan;
(B) Each Beneficiary who is an alternate payee (within the
meaning of section 206(d)(3)(K) of ERISA) under an applicable Qualified
Domestic Relations Order; and
(C) Each employee organization representing Participants in
the Plan, except that such notice shall instead be provided to a person
designated in writing to receive such notice on behalf of any person referred
to in Section 15.4(A), (B) or (C).
This Section 15.4 is to be administered in accordance with the provisions of
section 204(h) of ERISA. This provision also applies upon termination of the
Plan.
ARTICLE XVI
PLAN TERMINATION
16.1 RIGHT TO DISCONTINUE CONTRIBUTIONS AND/OR TO TERMINATE PLAN AND
TRUST. The Employer has established the Plan with the intention and expectation
that from year to year it will be able to make its contributions as herein
provided. However, the Employer realizes that circumstances not now foreseen or
circumstances beyond its control may make it either impossible or inadvisable to
continue to make its contributions as herein provided. In such event, the
Employer shall have the power, subject to Section 15.4 in the case the Plan is a
money purchase plan, to discontinue contributions to the Plan and Trust or to
terminate the Plan and/or Trust by an appropriate resolution or, in the case of
non-corporate Employers, by other action, which shall specify the date of
termination. A certified copy of such resolution or other action shall be
delivered to the Administrative Committee and the Trustee.
16.2 TERMINATION OF PLAN ON HAPPENING OF CERTAIN EVENTS. The Plan
herein shall automatically terminate upon the happening of any of the following
events:
(A) Discontinuance or liquidation of the Employer's business;
or
(B) The merger or consolidation of the Employer with any other
corporation or business organization, or the sale or transfer by the Employer
of substantially all of its assets to any corporation or business
organization, if the successor corporation or business organization shall
fail to adopt this Plan within 90 days from the effective date of such
consolidation, merger or sale or transfer of assets. If such successor
corporation or business organization shall adopt this Plan, within 90 days
from the effective date of such consolidation, merger or sale or transfer of
assets, such successor corporation or business organization shall be deemed
to succeed to the position of the Employer under this Plan.
16.3 CONTINUANCE OF TRUST AFTER COMPLETE DISCONTINUANCE OF
CONTRIBUTIONS TO PLAN. Upon complete discontinuance of contributions to the
Plan, the rights of affected Employees under the Plan and Trust shall become
fully vested and nonforfeitable, notwithstanding any other provisions of the
Plan, but in all other respects the Plan and Trust shall continue in effect, and
be administered in accordance with the provisions of the Plan and Trust
Agreement.
16.4 DISTRIBUTION OF TRUST ASSETS. Upon termination or partial
termination of the Plan, notwithstanding any other provisions of the Plan, the
rights under the Plan and Trust of the affected Employees
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or, in the case of a partial termination, of the affected Employees in the
terminated portion of the Plan, shall become vested and nonforfeitable. The
Trustee, at the direction of the Administrative Committee, shall make payment of
such amounts in accordance with Section 7.1, no later than the time prescribed
for the commencement of such payments provided in Section 7.9. Upon final
termination of the Trust, at such time as shall be determined by the Employer
after notification to the Administrative Committee, the Administrative Committee
shall direct the Trustee to liquidate the assets held in Employer, Matching,
Elective Deferral, Participant, Rollover, Transfer and QVEC Accounts and
Qualified Matching Contribution and Qualified Nonelective Contribution accounts
and, after payment of all expenses and proportional adjustment of each Employer,
Matching, Elective Deferral, Participant, Rollover, Transfer and QVEC Account
and Qualified Matching Contribution and Qualified Nonelective Contribution
account to reflect income or losses to the date of termination, to distribute,
subject to the requirements of Section 7.14, if applicable, the balance of each
Participant's Accrued Benefit to each Participant, retired Participant, or, if
appropriate, to the Participant's Beneficiary.
16.5 DISTRIBUTEES WHOSE WHEREABOUTS ARE UNKNOWN. In the case of any
distributee described herein at the time of distribution upon termination of the
Plan or Trust whose whereabouts are unknown, the Administrative Committee shall
notify such individual at the last known address by certified mail with return
receipt requested advising such individual of the right to such a benefit. If
the distributee cannot be located in this manner, the Trustee shall establish a
custodial account for such individual's benefit in a Federally insured bank,
savings and loan association or credit union in which the individual's account
balance shall be deposited. Upon the distribution of all Plan assets, the
Trustee shall be discharged from all obligations under the Plan and Trust and no
Participant or Beneficiary shall have any further rights or claims thereunder.
ARTICLE XVII
SUCCESSOR EMPLOYER AND MERGER
OR CONSOLIDATION OF PLAN
17.1 SUCCESSOR TO EMPLOYER UNDER PLAN AND TRUST. Subject to the
limitations described in Section 17.2, this Plan and Trust may be adopted by any
successor corporation or other business organization upon the merger or
consolidation of the Employer with such corporation or other business
organization, or upon the sale by the Employer of substantially all its assets
to such corporation or business organization, if such successor corporation or
other business organization:
(A) Adopts this Plan and Trust effective upon the date of such
merger, consolidation or sale of assets, and
(B) Agrees to continue and maintain this Plan and Trust.
Upon the adoption of the Plan and Trust Agreement by the
successor, such successor shall have all the powers, duties and
responsibilities of the Employer under the Plan and Trust Agreement.
17.2 MERGER OR CONSOLIDATION. In the event of any merger or
consolidation of the Plan with, or transfer, in whole or in part, of the assets
and liabilities of the Trust to another trust held under any other plan of
deferred compensation maintained or to be established for the benefit of all or
some of the Participants of this Plan, the assets of the Trust applicable to
such Participants shall be transferred to the other trust only if:
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(A) Each Participant would (if either this Plan or the other
plan then terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to, or greater than, the benefit he
would have been entitled to receive immediately before the merger,
consolidation or transfer (if this Plan had then terminated); and
(B) Resolutions of the Board of Directors or other governing
entity of the Employer under this Plan, and of any new or successor employer
of the affected Participants, shall authorize such transfer of assets; and,
in the case of the new or successor employer of the affected Participants,
its resolutions shall include an assumption of liabilities with respect to
such Participant's inclusion in the new employer's plan; and
(C) Such other plan and trust are qualified under sections
401(a) and 501(a) of the Code.
ARTICLE XVIII
MISCELLANEOUS
18.1 NO RIGHT TO EMPLOYMENT. Participation in the Plan shall not be
deemed to be consideration for, or an inducement to, or a condition of the
employment of any Employee. Nothing contained in this Plan shall be deemed to
give any Participant the right to be retained in the employment of the Employer,
nor shall any Participant, retired Participant, deceased Participant, disabled
Participant, or terminated Participant have any right to any payment, except as
such payment may be provided under the terms of the Plan and then only to the
extent that assets are available under the Plan.
18.2 GENDER AND NUMBER. Whenever any words are used herein in any
specific gender, they shall be construed as though they were also used in any
other applicable gender. The singular form, whenever used herein, shall mean or
include the plural form where applicable.
18.3 BONDING. Except as provided in section 412 of ERISA with respect
to certain banks and other financial institutions, every Fiduciary of the Plan
and every person who handles funds or other property of the Plan shall be bonded
as provided in such section 412. The amount of such bond shall be fixed at the
beginning of each Plan Year and shall not be less than ten percent of the amount
of funds handled. In no case shall the bond be less than $l,000 nor more than
$500,000, except as otherwise prescribed by the Secretary of Labor, after due
notice and opportunity for hearing to all interested parties.
18.4 AGENT FOR SERVICE OF LEGAL PROCESS. The name and address of the
person designated for the service of legal process with respect to the Plan
shall be indicated in the Adoption Agreement.
18.5 HEADINGS. The headings are for reference only. In the event of a
conflict between a heading and the content of an Article or Section, the content
of the Article or Section shall control.
18.6 UNCLAIMED BENEFITS. Except as otherwise provided in Section 16.5,
any benefits payable to a Participant or Beneficiary which are not claimed for a
period of five years from the date of entitlement as determined by the
Administrative Committee and following a diligent effort to locate such
Participant or Beneficiary and with the approval of the Administrative
Committee, shall be forfeited and applied in accordance with the terms of
Section 5.5; provided, however, that such forfeited benefits shall be reinstated
if a claim for such forfeited benefits is made by the Participant or
Beneficiary.
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18.7 REPORTS FURNISHED TO PARTICIPANTS. The Administrative Committee
shall furnish to each Participant, and to each Beneficiary receiving benefits
under the Plan, within the time limits specified in the Code and ERISA, each of
the following:
(A) A Summary Plan Description and periodic revisions;
(B) Notification of amendments to the Plan;
(C) A Summary Annual Report which summarizes the Annual Report
filed with the Department of Labor;
(D) An annual status report of his Plan Accounts;
(E) A notice regarding a qualifying rollover distribution, as
prescribed in section 402(f) of the Code; and
(F) Any other reports, documents or information required by
the Code, ERISA or the regulations thereunder.
18.8 REPORTS AVAILABLE TO PARTICIPANT AND BENEFICIARIES. The
Administrative Committee shall make copies of the following documents available
at the principal office of the Employer and at such other locations as may be
required by ERISA for examination by any Participant or Beneficiary:
(A) The Plan and Trust Agreement;
(B) The Summary Plan Description;
(C) The latest Annual Report; and
(D) Any other documents required by the Code, ERISA or the
regulations thereunder.
18.9 REPORTS UPON REQUEST. The Administrative Committee shall furnish
to any Participant or Beneficiary who so requests in writing, once during any
twelve-month period, a statement indicating, on the basis of the latest
available information:
(A) The total benefits accrued; and
(B) The nonforfeitable benefits, if any, which have accrued,
or the earliest date on which benefits will become nonforfeitable.
The Administrative Committee shall also furnish to any Participant or
Beneficiary who so requests in writing, at a reasonable charge as prescribed by
regulation of the Secretary of Labor, any document referred to in Section 18.8.
18.10 CONTROLLED GROUP EMPLOYEES. Except as otherwise provided in
Section 3.8(F), all employees of all corporations, trades or businesses which
are members of a Controlled Group shall be treated as employed by a single
employer.
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18.11 CONSTRUCTION. Construction and administration of this Plan and
Trust Agreement shall be governed by ERISA and other applicable Federal law and,
to the extent not governed by Federal law, by the law of the State in which the
Trustee, if a corporate Trustee, maintains its principal place of business or,
if there is no corporate Trustee, by the law of the State in which the Employer
maintains its principal place of business.
18.12 INSURANCE AND INDEMNIFICATION FOR LIABILITY. The rules relating
to the insurance and indemnification for liability are as follows:
(A) INSURANCE. The Employer may, in its discretion, obtain,
pay for, and keep current a policy or policies of insurance, insuring members
of the Administrative Committee, the Trustee (if an employee) and other
employees to whom any Fiduciary responsibility with respect to administration
of the Plan and/or investment of Plan assets has been delegated against any
and all liabilities, costs and expenses incurred by such persons as a result
of any act, or omission to act, in connection with the performance of their
duties, responsibilities and obligations under the Plan and any applicable
Federal or state law.
(B) INDEMNITY. If the Employer does not obtain, pay for, and
keep current the type of insurance policy or policies referred to in Section
18.12(A) above, or if such insurance is provided but any of the members of
the Administrative Committee, the Trustee (if an employee) or other employees
referred to in Section 18.12(A) above incur any costs or expenses which are
not covered under such policies, then, in either event, the Employer shall,
to the extent permitted by law, indemnify and hold harmless such parties
against any and all costs, expenses and liabilities incurred by such parties
in performing their duties and responsibilities under this Plan, provided
such party or parties were acting in good faith within what was reasonably
believed to have been in the best interests of the Plan and its Participants.
18.13 NO RETENTION OF INTEREST IN TRUST FUND. Neither the Employer nor
the Trustee guarantees the Trust Fund from losses or from decline in value.
Except as provided in Section 3.7, the Employer does not retain any beneficial
or reversionary interest in any contributions to the Trust Fund or in any of the
assets, profits, earnings or increment thereof, and all Employer obligations in
any respect, except the supplying of information to the Trustee, as herein
provided, shall cease upon the payment of contributions to the Trustee. The
Employer shall not be in any way responsible for the acts of the Trustee.
18.14 TERMINATION OF PLAN AND TRUST UNDER RULE AGAINST PERPETUITIES.
Except as may be limited by the law of the State governing the administration of
the Trust Fund, in no event shall the Plan and Trust hereby created continue
beyond the last to survive of those persons born before the Effective Date of
this Plan and Trust who shall die while Participants or Former Participants
hereunder, and 21 years thereafter. This Plan and the Trust hereby created shall
be deemed to have been terminated on the day before the lapse of this ultimate
term determined under this Section 18.14.
Notwithstanding the above, this Section 18.14 shall be inapplicable if
ERISA requires otherwise or if, under the law of the State governing the
administration of the Trust Fund, the Rule against Perpetuities is not
applicable to said Trust Fund.
18.15 NOTICE TO INTERESTED PARTIES. Prior to submitting this Plan to
the Internal Revenue Service for a determination that it qualifies under section
401 of the Code, the Employer shall provide written notice to all interested
parties, in accordance with section 7476 of the Code, and the regulations
thereunder, that such a submission will be made.
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18.16 EFFECTIVE DATE OF ADOPTION OF PLAN AND TRUST AGREEMENT. The
effective date of adoption of the Plan and Trust Agreement by an adopting
Employer shall be indicated in Section A.1.20 of the Adoption Agreement
applicable to such Employer.
18.17 RESTATEMENT OF EXISTING PLAN. If the adoption of the Plan and
Trust Agreement is as a restatement of an Employer's Prior Plan and trust
agreement, the Employer shall so indicate in the Adoption Agreement applicable
to such Employer. If the Prior Plan provided for participation and/or vesting
standards which were different from those provided in this Plan, as adopted by
the Employer, and the standards, as adopted by the Employer, in this Plan are to
be given prospective application only, the Employer shall so indicate in the
Adoption Agreement applicable to such Employer. If the Prior Plan contained
terms which the adopting Employer desires to make applicable to this Plan, the
provisions of the Prior Plan shall be inserted in the Adoption Agreement
applicable to such adopting Employer. Moreover, any necessary and/or desirable
transitional rules shall be inserted in the Adoption Agreement applicable to
such adopting Employer.
18.18 INDIVIDUAL PROVISIONS. Any provisions applicable to the adopting
Employer only and not otherwise provided for in the Plan and Adoption Agreement
shall be inserted in the Adoption Agreement applicable to such adopting
Employer.
18.19 FAILURE OF QUALIFICATION. If the Plan, as adopted by the
Employer, fails to attain or retain qualification, such Plan shall no longer
participate in the DRINKER BIDDLE & REATH REGIONAL PROTOTYPE DEFINED
CONTRIBUTION PLAN and shall be considered an individually designed plan.
18.20 WAIVER OF MINIMUM FUNDING STANDARDS. Any Employer adopting this
Plan as a money purchase plan that amends this Plan because of a waiver of the
minimum funding standards under section 412(d) of the Code shall be considered
to have an individually designed plan and such plan may no longer participate in
the DRINKER BIDDLE & REATH REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN.
ARTICLE XIX
ADOPTION OF PLAN BY AFFILIATED EMPLOYERS
19.1 ADOPTION OF PLAN AND TRUST. If the Adoption Agreement so provides,
the terms of this Plan, as adopted by the adopting Employer indicated in the
applicable Adoption Agreement, may be adopted by any Affiliated Employer of the
adopting Employer provided:
(A) The Board of Directors or other governing entity of the
adopting Employer consents to such adoption;
(B) The Board of Directors or other governing entity of the
adopting Affiliated Employer adopts this Plan by appropriate action;
(C) The adopting Affiliated Employer executes the Adoption
Agreement; and
(D) The adopting Affiliated Employer executes such other
documents as may be required to make such adopting Affiliated Employer a
party to the Plan and Trust as an Employer (except as provided below).
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An adopting Affiliated Employer that adopts the Plan and Trust
Agreement is thereafter an Employer with respect to its employees for
purposes of the Plan and Trust Agreement except that such adopting Affiliated
Employer delegates to the adopting Employer the power to amend, after the
adopting Affiliated Employer's initial adoption of the Adoption Agreement,
the Adoption Agreement with respect to such adopting Affiliated Employer and
the power to terminate the Plan and Trust Agreement as set forth in Section
19.6.
19.2 WITHDRAWAL FROM PLAN. Subject to the requirements of Article XVII,
any adopting Affiliated Employer may, at any time, withdraw from the Plan upon
giving the Board of Directors or other governing entity of the adopting
Employer, the Administrative Committee and the Trustee at least 30 days notice
in writing of its intention to withdraw. Upon the withdrawal of an adopting
Affiliated Employer pursuant to this Section 19.2, the Trustee shall segregate a
portion of the assets in the Trust as set forth below, the value of which shall
equal the total amount credited to the accounts of Participants employed by the
withdrawing adopting Affiliated Employer. Subject to the requirements of Article
XVII, the determination of which assets are to be so segregated shall be made by
the Trustee in its sole discretion as set forth below.
The Administrative Committee may, at any time, direct the Trustee to
segregate from the Trust such part thereof as the Administrative Committee shall
determine to be held for the benefit of the employees of an adopting Affiliated
Employer, and shall give a copy of such directions to the adopting Employer and
each adopting Affiliated Employer. Such directions shall specify the assets of
the Trust to be segregated. Unless the adopting Employer or any adopting
Affiliated Employer files with the Trustee a written protest within 30 days
after delivery of such directions to the Trustee, such directions shall
conclusively establish that the assets specified therein represent the part of
the Trust held for the benefit of the Employees of the adopting Employer and of
each adopting Affiliated Employer.
After the expiration of such 30 day period, and after settlement of any
such protest, the Trustee shall follow the Administrative Committee's
directions, including any modification thereof adopted in settlement of any
protest. Any part of the Trust segregated pursuant to such directions shall
thereafter be held in a separate trust identical in terms to the Trust hereby
established or maintained, except that, with respect to such separate trust,
this Plan and Trust Agreement shall be construed as if such adopting Affiliated
Employer were the adopting Employer and all powers and authority conferred upon
the adopting Employer or its Board or other governing entity and the
Administrative Committee shall devolve upon such adopting Affiliated Employer or
its Board of Directors or other governing entity. At any time thereafter, such
adopting Affiliated Employer and the Trustee may (but they shall not be required
to) enter into a separate agreement stating the terms of such separate plan and
trust agreement which may be the DRINKER BIDDLE & REATH REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST AGREEMENT. If the DRINKER BIDDLE & REATH
REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN AND TRUST AGREEMENT is not so
adopted, the plan and trust agreement with respect to the withdrawing adopting
Affiliated Employer shall be considered an individually designed plan.
19.3 EXCLUSIVE PURPOSE OF TRUST. Neither the segregation and transfer
of the Trust assets upon the withdrawal of an adopting Affiliated Employer nor
the execution of a new plan and trust agreement by such withdrawing adopting
Affiliated Employer shall operate to permit any part of the Trust to be used
for, or diverted to, purposes other than for the exclusive benefit of the
Participants or their Beneficiaries.
19.4 APPLICATION OF WITHDRAWAL PROVISIONS. The withdrawal provisions
contained in Section 19.2 and Section 19.3 shall be applicable only if the
withdrawing adopting Affiliated Employer continues to cover its Participants and
eligible Employees in another plan and trust qualified under sections 401 and
501 of the Code. Otherwise, the termination provisions of the Plan and Trust
Agreement shall apply.
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19.5 SINGLE PLAN. Notwithstanding any other provision set forth herein,
the Plan, as adopted pursuant to this Article XIX by the adopting Employer and
each adopting Affiliated Employer, shall constitute a single plan, as such term
is defined in Treas. Reg. Section 1.414(1)-1(b)(1), as to the adopting Employer
and each adopting Affiliated Employer.
19.6 ADOPTING EMPLOYER APPOINTED AGENT OF ADOPTING AFFILIATED
EMPLOYERS. Each adopting Affiliated Employer appoints the Board of Directors or
other governing entity of the adopting Employer as its agent to exercise on its
behalf all of the power and authority conferred upon the adopting Employer by
this Plan and Trust Agreement, including, without limitation, the power to amend
this Plan and Trust Agreement as set forth in Article XV and the power to
terminate this Plan and/or the Trust Agreement as set forth in Article XVI. The
authority of the Board of Directors or other governing entity of the adopting
Employer to act as agent of any adopting Affiliated Employer shall terminate
only if the part of the Plan's assets held for the benefit of the employees of
such adopting Affiliated Employer shall be segregated in a separate trust as
provided in Section 19.2 and such adopting Affiliated Employer thereupon
withdraws from the Plan in accordance with Section 19.2.
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PART II
[MUNICIPAL FUND FOR TEMPORARY INVESTMENT]
-----------------------------------------
NAME OF ADOPTING EMPLOYER
DEFINED CONTRIBUTION PLAN
(PROFIT-SHARING OR PROFIT-SHARING 401(K))
REGIONAL PROTOTYPE PLAN NUMBER 001
ADOPTION AGREEMENT
DRINKER BIDDLE & REATH
REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN AND TRUST AGREEMENT
[ FUND OFFICE RETIREMENT PROFIT-SHARING PLAN ]
----------------------------------------------
NAME OF PLAN
(REV. 06/94)
(C) DRINKER BIDDLE & REATH 1995
<PAGE> 116
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
31 HOPKINS PLAZA
BALTIMORE, MD 21201-0000
Employer Identification Number:
Date: JAN 04, 1993 23-1423089
File Folder Number:
DRINKER BIDDLE & REATH 521006125
PHILADELPHIA NATIONAL BANK BLDG Person to Contact:
C/O HOMER L ELLIOTT ESQUIRE G.N. Wallace
DRINKER BIDDLE & REATH Contact Telephone Number:
1345 CHESTNUT STREET PH NAT BK BLDG (410) 962-2973
PHILADELPHIA, PA 19107-3496 Plan Name:
REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN
Plan Number: 001
Letter Serial Number:
D8520005
Dear Applicant:
The amendment to the form of the plan identified above is acceptable
under section 401(a) or 403(a) of the Internal Revenue Code. This letter relates
only to the amendment to the form of the plan. It is not a determination of any
other amendment or of the form of the plan as a whole, or on the effect of other
federal or local statutes.
You must furnish a copy of this letter and the enclosed publication to
each employer who adopts this plan. You must also send a copy of this letter, a
copy of the approved form of the plan, and any approved amendments and related
documents to each key District Director of the Internal Revenue Service in whose
jurisdiction there are adopting employers.
The acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). To adopt the form of the plan, the employer should apply for a
determination letter by filing an application with the key District Director of
the Internal Revenue Service on Form 5307, Application for Determination for
Adopters of Master or Prototype, Regional Prototype or Volume Submitter Plans.
For purposes of sections 15.02 and 15.03 of Rev. Proc. 89-13, 1989-1
C.B. 801, your application was received before March 31, 1991.
Please advise those adopting the plan to contact you if they have any
questions about the operation of the plan.
We have sent a copy of this letter to your representative as indicated
in your Power of Attorney.
If you have any questions on our processing of this case, please call
the above telephone number. If you write, please provide your telephone number
and the most convenient time for us to call in case we need more information.
Whether you call or write, please refer to the Letter Serial Number and File
Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record.
Sincerely yours,
/s/ H.J. Hightower
------------------
District Director
Enclosure(s)
Publication 1488 Letter 2026/DO/CG)
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Department of the Treasury Internal Revenue Service
PUBLICATION 1488
(Rev. February 1991)
FAVORABLE NOTIFICATION LETTER
INTRODUCTION
This publication is issued in conjunction with a favorable notification letter.
It explains the significance of your letter, points out some features that may
affect the qualified status of the plan, and provides information on the
reporting requirements for the plan.
An employee retirement plan qualified under Internal Revenue Code
section 401(a) or 403(a) (qualified plan) is entitled to favorable tax
treatment. For example, contributions made in accordance with the plan document
are generally currently deductible. Participants will not include these
contributions into income until the time they receive a distribution from the
plan, at which time special income averaging rates for lump sum distributions
may serve to reduce the tax liability. In some cases, taxation may be further
deferred by rollover to another qualified plan or individual retirement
arrangement. See Publication 575, Pension and Annuity Income (Including
Simplified General Rule), for further details. Finally, plan earnings may
accumulate free of tax.
Employee retirement plans that fail to satisfy the requirements under
section 401(a) or 403(a) are not entitled to this favorable tax treatment.
Therefore, many employers desire advance assurance that the terms of their plans
satisfy the qualification requirements. The Service provides such advance
assurance for regional prototype plans by issuing favorable notification
letters. However, in some cases, a determination letter is also required for
reliance.
SIGNIFICANCE OF A FAVORABLE NOTIFICATION LETTER
Notification letters are issued by the Service to sponsors of regional prototype
plans. Plan sponsors then make the plan available to employers who may adopt the
plans for the benefit of their employees.
The significance of a favorable notification letter differs for
standardized plans and nonstandardized plans. A standardized plan can be
identified by the number 2, 5, or 7 appearing in the second position of the
letter serial number (the number following the alpha character which appears in
the upper right portion of the letter). A nonstandardized plan may be identified
by the number 3, 6, or 8 appearing in the second position.
STANDARDIZED PLANS. A standardized plan is designed to be automatically
acceptable under any fact pattern, except as indicated below. Therefore, there
is no need to request a determination letter for such plans, provided the
employer does not amend the plan and chooses only those options in the adoption
agreement that were approved by the Service. Although a determination letter is
not requested, the employer must still inform interested parties of the
establishment or amendment of the plan. However, a determination letter is
required for advance assurance that the provisions of the plan satisfy the
qualification requirements if the employer maintains or has maintained another
qualified plan. The Employer is not considered to have maintained another plan
merely because the plan was previously not a standardized plan. Under certain
circumstances, employers who have adopted standardized defined benefit plans may
wish to request a determination letter that their plans prior benefit structure
satisfies the requirements of Internal Revenue Code section 401(a)(26).
Paired plans are standardized plans that are designed to work together.
A paired plan may be recognized by the phrase "other than a specified paired
plan" appearing in the fifth or sixth paragraph of the notification letter. If
the employer maintains and has maintained only paired plans, a determination
letter is not needed.
NONSTANDARDIZED PLANS. It is possible that the unique fact patterns applicable
to a specific employer may cause a nonstandardized plan to fail qualification.
Therefore, to obtain advance assurance that the plan is qualified, the plan must
be submitted for a determination letter. A determination letter is similar to an
insurance policy that will, in many cases, protect the employer and plan
beneficiaries from adverse tax consequences if the plan is later found to be
nonqualified in the absence of a change in law, provided the plan is being
operated in good faith in accordance with plan provisions. This advance
assurance is a service provided by the Internal Revenue Service, and is not
required for qualification. Form 5307, Application for Determination for
Adopters of Master or Prototype Regional Prototype or Volume Submitter Plans, is
used to request a determination letter, along with Form 5302, Employee Census,
Form 8717 (explained later), a copy of the adoption agreement, a copy of the
notification letter, a certification from the plan sponsor that the plan has not
been withdrawn and is still in effect, and a copy of any separate trust or
custodial account document.
USER FEE. There is a charge for requesting a determination letter, but the
charge is significantly reduced for regional prototype plans. Please complete
and attach Form 8717, User Fee for Employee Plan Determination Letter Request,
to Form 5307 when requesting a determination letter.
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LAW CHANGES AFFECTING THE PLAN. Plans must be amended to retain their qualified
status if any plan provision fails qualification requirements because of changes
in the law becoming effective subsequent to the issuance of the notification
letter. If the plan is not amended, the plan will become nonqualified without
specific notice from the Service. This will occur even if the employer has
received a favorable determination letter in addition to the notification
letter. The employer and plan participants may be subject to adverse tax
consequences if the plan is nonqualified.
The first character of the serial number assigned to the plan indicates
the latest law change for which the plan had been amended. For example, the
letter "D" indicates the plan was amended for the Tax Reform Act of 1986, which
generally became effective for plan years after the 1988 plan year.
A notification letter will not be applicable after a change in
qualification requirements unless the plan sponsor requests a new notification
letter within 12 months after the change. The plan sponsor must provide those
employers for whom the employer is continuing to sponsor the plan with a copy of
the amendments and the new notification letter within 60 days of the receipt of
the new letter. If a change requires modification of the adoption agreement,
employers must execute the new agreement by the later of 6 months after issuance
of the new notification letter, or the end of the period specified in Internal
Revenue Code section 401(b).
If the application for a notification letter was submitted to the
Service within certain time frames, the plan generally need not be amended again
unless required to do so by legislation. The application was submitted to the
Service within these time frames, if the following paragraph appears in the
notification letter: "For purposes of sections 15.02 and 15.03 of Rev. Proc.
89-13, 1989-1 C.B. 801, your application was received timely".
REQUIRED NOTIFICATIONS TO ADOPTING EMPLOYERS. The plan sponsor must provide
adopting employers with annual notifications indicating whether the sponsor
intends to continue to sponsor the plan, and whether amendments have been made
to the plan. The plan sponsor must also notify employers within 60 days if the
plan sponsor discontinues its sponsoring of the plan.
REQUIRED NOTIFICATIONS TO THE INTERNAL REVENUE SERVICE. On each anniversary of
the date of issuance of the notification letter, the plan sponsor must advise
the Service whether the sponsor has made any changes to the plan, and whether
the plan is still being made available for adoption by employers. The plan
sponsor must also provide a listing of adopting employers, and a statement that
the plan sponsor has provided employers with the notification described in the
above paragraph.
REPORTING REQUIREMENTS. Most plan administrators or employers who maintain an
employee benefit plan must file an annual return/report with the Internal
Revenue Service. The following forms should be used for this purpose:
FORM 5500EZ - generally for a "One-Participant Plan," which is a plan that
covers only: (1) an individual, or an individual or his or her spouse who wholly
owns a business, whether incorporated or not, or (2) partner(s) in a partnership
or the partner(s) and their spouse(s). If Form 5500EZ cannot be used, the
one-participant plan should use 5500-C or 5500-R, whichever applies. NOTE: Keogh
(H.R. 10) plans are required to file an annual return even if the only
participants are owner-employees. The term "owner-employee" includes a partner
who owns more than 10% interest in either the capital or the profits of the
partnership. This applies to both defined contribution and defined benefit
plans.
FILING EXCEPTION FOR PLANS THAT HAVE NO MORE THAN $100,000 IN ASSETS. An annual
return is not required to be filed for one participant plans having less than
$100,000 in assets that otherwise qualify for filing Form 5500EZ.
FORM 5500 - for a pension benefit plan with 100 or more participants at the
beginning of the plan year.
FORM 5500-C - for a pension benefit plan with more than one but fewer than 100
participants at the beginning of the plan year.
FORM 5500-R - for a pension benefit plan with more than one but fewer than 100
participants at the start of the plan year for which 5500-C is not filed. NOTE:
For 1989 and subsequent years Form 5500-R is part of the Form 5500C/R package.
Filing only the first two pages of the Form 5500C/R package constitutes the
filing of a Form 5500-R.
WHEN TO FILE. Forms 5500 and 5500EZ must be filed annually. Form 5500-C must be
filed for (i) the initial plan year, (ii) the year a final return/report would
be filed, and (iii) at three-year intervals. Form 5500-R must be filed in the
years when Form 5500-C is not filed (See Note above). However, 5500-C will be
accepted in place of 5500-R.
DISCLOSURE. The Internal Revenue Service will process the returns and provide
the Department of Labor and the Pension Benefit Guarantee Corporation with the
necessary information and copies of the returns on microfilm for disclosure
purposes.
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PART II
[MUNICIPAL FUND FOR TEMPORARY INVESTMENT]
DEFINED CONTRIBUTION PLAN
(PROFIT-SHARING OR PROFIT-SHARING 401(K))
REGIONAL PROTOTYPE PLAN NUMBER 001
ADOPTION AGREEMENT
DRINKER BIDDLE & REATH
REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN AND TRUST AGREEMENT
NOTES TO ADOPTING EMPLOYERS AND TO ADOPTING AFFILIATED EMPLOYERS:
THIS ADOPTION AGREEMENT MAY ONLY BE USED WITH THE DRINKER BIDDLE & REATH
REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN.
FAILURE TO PROPERLY FILL OUT THIS ADOPTION AGREEMENT MAY RESULT IN THE
DISQUALIFICATION OF THE PLAN AS ADOPTED BY THE EMPLOYER.
A CASH OR DEFERRED ARRANGEMENT MAY NOT BE ADOPTED BY A TAX EXEMPT OR
GOVERNMENTAL ORGANIZATION WITH THE EXCEPTION OF CERTAIN PRE-EXISTING PLANS.
DRINKER BIDDLE & REATH, THE SPONSORING ORGANIZATION OF THIS PLAN, WILL INFORM
THE ADOPTING EMPLOYER AND/OR ADOPTING AFFILIATED EMPLOYER OF ANY AMENDMENTS MADE
TO THE PLAN OR OF THE DISCONTINUANCE OR ABANDONMENT OF THE PLAN.
DRINKER BIDDLE & REATH IS THE SPONSORING ORGANIZATION OF THIS PLAN. ITS ADDRESS
IS PHILADELPHIA NATIONAL BANK BUILDING, 1345 CHESTNUT STREET, PHILADELPHIA, PA
19107-3496 AND ITS TELEPHONE NUMBER IS (215) 988-2855.
(FILL IN BLANKS AND INDICATE SELECTION WHERE REQUIRED)
The undersigned Employer hereby (check applicable box)
/ / adopts
/X/ adopts, as an amendment to a predecessor plan and trust
agreement of the Employer,
the DRINKER BIDDLE & REATH REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN AND
TRUST AGREEMENT, consisting of Part I, the Plan and Trust Agreement, and Part
II, this Adoption Agreement. The Plan and Trust Agreement, as so adopted, shall
be known as the [FUND OFFICE RETIREMENT PROFIT-SHARING PLAN AND TRUST AGREEMENT]
(the "Plan"), a DEFINED CONTRIBUTION PLAN (PROFIT-SHARING OR PROFIT-SHARING
401(K)) AND TRUST AGREEMENT. The Employer and Trustee, by signing this Adoption
Agreement, mutually agree and consent to the terms of the Plan and Trust,
consisting of Part I, the Plan and Trust Agreement, and Part II, this Adoption
Agreement.
(C) DRINKER BIDDLE & REATH 1995
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NAME OF ADOPTING EMPLOYER: MUNICIPAL FUND FOR TEMPORARY INVESTMENT
ADDRESS OF ADOPTING EMPLOYER: BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
ADOPTING EMPLOYER'S EMPLOYER IDENTIFICATION NUMBER: 6742
ADOPTING EMPLOYER'S BUSINESS CODE NUMBER: 51-0241021
TYPE OF ENTITY (check one): / / Corporation / / S Corporation
/ / Sole Proprietor / / Partnership / /] Church
/ / Tax Exempt Organization / / Governmental Organization
/ / Professional Corporation
/X/ Other (Specify): BUSINESS TRUST
PLACE OF INCORPORATION OR OTHER ORGANIZATION (SPECIFY): PENNSYLVANIA
DATE OF INCORPORATION OR DATE BUSINESS BEGAN: 1979
ADMINISTRATIVE COMMITTEE EMPLOYER IDENTIFICATION NUMBER: 23-2118138
PLAN NAME: FUND OFFICE RETIREMENT PROFIT-SHARING PLAN
PLAN IDENTIFICATION NUMBER: 001 (333 FOR FORM 5500C/R)
TRUST NAME: FUND OFFICE RETIREMENT PROFIT-SHARING PLAN TRUST
TRUST EMPLOYER IDENTIFICATION NUMBER (IF ANY): 23-2487197
REGIONAL PROTOTYPE (PROFIT-SHARING (401(K)) PLAN NOTIFICATION
LETTER NUMBER: D8520005 (PN:001 JANUARY 4, 1993)
FROZEN PLAN: If the Employer has discontinued all further contributions
to the Plan, check here [ ]. The Employer and the Trustee shall,
however, continue to maintain the Plan and Trust in accordance with the
requirements of the Internal Revenue Code and the Treasury regulations
thereunder.
TYPE PLAN: The Plan, as adopted under this Adoption Agreement, is a
(check one):
/X/ (A) Profit-Sharing Plan.
/ / (B) Profit-Sharing 401(k) Plan.
A.1.1 ACCRUAL COMPUTATION PERIOD. The Accrual Computation Period is the
(check one):
/X/ (A) Plan Year
/ / (B)(A consecutive 12-month period ending with or within
the Plan Year.) Enter the day and the month this period
begins: [ ](day) [ ](month). For Employees whose date of
hire is less than 12 months before the end of the 12-month
period designated, Compensation will be determined over
the Plan Year.
A.1.4 ADMINISTRATIVE COMMITTEE. The name(s) and address(es) of the
member(s) of the Administrative Committee are:
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(A) EDWARD H. ROACH
BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
(B)
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(C)
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
A.1.10 COMPENSATION. Compensation shall be determined over the Accrual
Computation Period elected in Section A.1.1.
(A) Compensation shall (check one):
/X/ (1) Include / / (2) Not include
Employer contributions made pursuant to a salary reduction agreement
which are not includible in the gross income of the Employee under
sections 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code.
(B) Compensation shall exclude (specify): N/A
(Note that this exclusion applies only to the manner of determining
contributions to the Plan and for no other purpose; if not applicable,
insert letters N/A in blanks).
A.1.12 CONTROLLED GROUP.
(A) Is the adopting Employer a member of a Controlled Group
(check one)?
/ / (1) Yes /X/ (2) No
(B) If Section A.1.12(A)(1) is checked, is the adopting
Employer a member of an affiliated service group (check one)?
/ / (1) Yes / / (2) No /X/ (3) N/A
If Section A.1.12(A)(1) is checked, list the name and address of each
member in the following blanks (and if Section A.1.12(B)(1) is also
checked, indicate whether the member is an affiliated service group
member): N/A
(If Section A.1.12(A)(2) is checked, the letters N/A should be inserted
in these blanks)
A.1.17 CONTRIBUTIONS ON BEHALF OF DISABLED PARTICIPANTS. The
Employer (check one):
/ / (A) Will /X/ (B) Will not
make contributions on behalf of disabled Participants on the basis of
the compensation each such Participant would have received for the
Limitation Year if the Participant had been paid at the rate of
compensation paid immediately before becoming permanently and totally
disabled.
Such imputed compensation for the disabled Participant may be taken
into account only if the Participant is not a Highly Compensated
Employee, and
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contributions made on behalf of such Participant shall be
nonforfeitable when made.
A.1.18 EARLY RETIREMENT DATE.
(A) Shall the Plan provide for an Early Retirement
Date (check one)?
/ / (1) Yes /X/ (2) No
If Section A.1.18(A)(1) is checked, complete the following:
(B) Early Retirement Date shall mean the (check one):
/ / (1) Last day of the Plan Year
/ / (2) Last day of the month (must coincide with a
Valuation Date)
/ / (3) [________] (fill in date) (must coincide with
a Valuation Date)
in which the Participant attains age [ ] (not later than age 64) and
completes [ ] Years of Service for Benefit Accrual with the Employer.
A.1.19 EARNED INCOME. This Section shall apply only if the
Plan, as adopted by the adopting Employer, covers Self-Employed Persons.
A.1.20 EFFECTIVE DATE. If the adoption of this Plan and Trust
Agreement constitutes the adoption of a new plan and trust agreement, check (A)
and fill in blank. If the adoption of this Plan and Trust Agreement constitutes
the restatement of an existing plan and trust agreement (including a prior
version of this Plan and Trust Agreement), check (B) and fill in blanks.
/ / (A) NEW PLAN. The Effective Date of the Plan and Trust
Agreement is [___________].
/X/(B) RESTATED PLAN. The original effective date of the
predecessor plan and trust agreement was SEPTEMBER 18,
1981. Except as otherwise specifically provided
herein, the Effective Date of the Plan and Trust
Agreement, as restated herein, is DECEMBER 1, 1989.
A.1.24 ELIGIBILITY COMPUTATION PERIOD. If Section A.1.33(A)(4)
is checked or if the elapsed time method is checked under Section A.2.2(B)(2),
check here / / and do NOT complete the remainder of this Section A.1.24.
Otherwise, the Eligibility Computation Period shall be calculated as follows:
(A) COMPUTATION PERIOD. The Eligibility Computation
Period shall be calculated pursuant to (check (1) or (2)):
/X/ (1) NORMAL RULE. The Eligibility Computation
Period(s) shall be determined under Section
1.24(A) of the Plan.
/ / (2) ALTERNATE RULE. The Eligibility
Computation Period(s) shall be determined
under Section 1.24(B) of the Plan.
(B) HOURS OF SERVICE REQUIRED. The number of Hours of
Service which must be completed in order to meet the Eligibility
Computation Period requirements of the Plan is 1 (fill in blank but not
to exceed 1,000 Hours of Service).
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A.1.27 EMPLOYEE PENSION BENEFIT PLAN. Does the Employer or any member
of its Controlled Group maintain or has the Employer or any member of its
Controlled Group maintained any other Employee Pension Benefit Plan (check one)?
/X/ (A) Yes / / (B) No
If Section A.1.27(A) is checked, list such Employee Pension Benefit
Plan(s) in the following lines: CHESTNUT STREET EXCHANGE FUND
RETIREMENT PROFIT-SHARING PLAN; INDEPENDENCE SQUARE INCOME SECURITIES,
INC. RETIREMENT PROFIT-SHARING PLAN; TEMPORARY INVESTMENT FUND, INC.
RETIREMENT PROFIT-SHARING PLAN; AND TRUST FOR SHORT TERM FEDERAL
SECURITIES RETIREMENT PROFIT-SHARING PLAN. ALL OF THE FOREGOING PLANS
WERE MERGED INTO THIS PLAN EFFECTIVE DECEMBER 1, 1987.
(If Section A.1.27(B) is checked, the letters N/A should be inserted in
these blanks).
A.1.33 ENTRY DATE. Entry Date shall mean (check (A) or (B)):
/X/ (A) REGULAR METHOD.
/ / (1) The first day of the Plan Year (this option
cannot be used unless the maximum age and service
requirements are reduced by 1/2 year (i.e., age 20
1/2 or less must be selected in Section
A.2.2(B)(1)(a)(ii) and the service requirement in
Section A.2.2(B)(1)(a) (i) must be reduced by 1/2
year), coincident with, or, if the first day of
the Plan Year does not so coincide, the first day
of the Plan Year next following, the date on which
an Employee meets the eligibility requirements of
Article II of the Plan.
/ / (2) The first day of the Plan Year or the date six
months after the first day of the Plan Year
(whichever date is earlier), coincident with, or
if such dates do not so coincide, the first day of
the Plan Year or the date six months after the
first day of the Plan Year (whichever date is
earlier) next following, the date on which an
Employee meets the eligibility requirements of
Article II of the Plan.
/ / (3) The first day of the month coincident with, or
if the first day of the month does not so
coincide, the first day of the month next
following, the date on which an Employee meets the
eligibility requirements of Article II of the
Plan.
/ / (4) The Employee's date of hire.
/X/ (5) The date on which the eligibility requirements
of Article II of the Plan are met.
/ / (6) The first day of the quarter (in the Plan
Year) coincident with, or if the first day of the
quarter does not so coincide, the first day of the
quarter (in the Plan Year) next following, the
date on which an Employee meets the eligibility
requirements of Article II of the Plan.
/ / (7) The first day of the Plan Year in which an
Employee meets the eligibility requirements of
Article II of the Plan.
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<PAGE> 124
/ / (B) ELAPSED TIME METHOD. The Employee's first day
of employment or reemployment in accordance with
the rules of Section 1.55(B) of the Plan.
A.1.35 EXCESS COMPENSATION. Excess Compensation shall mean Compensation
in excess of (check applicable block):
/ / (A) Taxable Wage Base.
/ / (B) [$________] (if (B) is checked, insert dollar
amount not to exceed the Taxable Wage Base).
/X/ (C) N/A (The Plan is not integrated with Social
Security).
A.1.38 HIGHLY COMPENSATED EMPLOYEE.
(A) CALENDAR YEAR ELECTION. Does the Employer
desire to make the calendar year election provided in Section 1.38 of
the Plan for purposes of determining the look-back year calculation
(check one)?
/ / (1) Yes /X/ (2) No
IF THIS ELECTION IS MADE, SUCH ELECTION MUST APPLY TO ALL PLANS, ENTITIES AND
ARRANGEMENTS OF THE EMPLOYER.
(B) SIMPLIFIED DEFINITION. If the Employer
maintains significant business activities (and employs Employees) in at
least two significantly separate geographic areas, the Employer may
elect the simplified definition of Highly Compensated Employee in
Section 1.38 of the Plan. Does the Employer desire to make this
election (check one):
/ / (1) Yes /X/ (2) No
A.1.44 INVESTMENT MANAGER. The name and address of the Investment
Manager are: N/A
(If no Investment Manager has been appointed by the Employer, the letters N/A
should be inserted in these blanks).
A.1.46 LEASED EMPLOYEES. Does the Employer have any Leased Employees
(check one)?
/ / (A) Yes /X/ (B) No
If Section A.1.46(A) is checked, complete Section A.2.3(H) below.
A.1.47 LIMITATION COMPENSATION. Limitation Compensation shall mean all
of each Participant's (check one):
/X/ (A) Wages, Tips and Other Compensation as
Reported on Form W-2.
/ / (B) Code Section 3401(a) Wages.
/ / (C) Code Section 415 Safe-Harbor Compensation.
A.1.48 LIMITATION YEAR. The Limitation Year is the (check applicable
block):
/ / (A) Calendar year.
/X/ (B) Twelve-consecutive month period ending
(insert month and day) NOVEMBER 30.
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A.1.53 NORMAL RETIREMENT AGE. Normal Retirement Age shall mean (check
one):
/X/ (A) Age 65 (fill in blank but not earlier than age 62 and
not later than age 65).
/ / (B) The later of age [___] fill in blank but not earlier
than age 62 and not later than age 65) or the [___] (fill
in blank but not to exceed 5th) anniversary of the first
day of the first Plan Year in which the Participant
commenced participation in the Plan.
A.1.55 ONE-YEAR BREAK IN SERVICE. A One-Year Break In Service shall be
determined by the following method (check one):
/X/ (A) REGULAR METHOD. If this method is selected, a
One-Year Break In Service shall occur in any Computation
Period in which the Employee completes not more than 100
(fill in blank, but not to exceed 500) Hours of Service.
/ / (B) ELAPSED TIME METHOD.
A.1.56 OWNER-EMPLOYEES OR SHAREHOLDER-EMPLOYEES.
(A) Does the Plan cover any Owner-Employees, as defined in
Section 1.56 of the Plan (check one)?
/ / (1) Yes / / (2) No
/X/ (3) N/A (This Plan does not cover any Self-Employed
Persons)
If Section A.1.56(A)(1) is checked, see Section 2.4 of the Plan.
(B) Does the Plan cover any shareholder-employees, as
defined in Section 7.11(A)(7) of the Plan (check one)?
/ / (1) Yes / / (2) No
/X/ (3) N/A (The Employer is not an electing S
corporation)
If Section A.1.56(B)(1) is checked, see Section 7.11(A)(7) of the Plan.
A.1.63 PLAN SPONSOR. The name(s) and address(es) of the Plan Sponsor(s)
are: MUNICIPAL FUND FOR TEMPORARY INVESTMENT
BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
A.1.64 PLAN YEAR. The Plan Year shall be the Computation Period ending
(insert month and day) NOVEMBER 30.
A.1.72 QUALIFYING EMPLOYER SECURITIES. If this Adoption Agreement
provides for investments in Qualifying Employer Securities, the Employer may
restrict the types of Employer Securities so qualifying by indicating the
restrictions in the following blanks: NO RESTRICTIONS
(If investment in Qualifying Employer Securities is not restricted to type,
insert in the blanks the words "No Restrictions"; if investment in Qualifying
Employer Securities is not permitted, insert the letters N/A in the blanks).
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A.1.78 SELF-EMPLOYED PERSONS. Does the Plan cover Self-Employed Persons
(check one)?
/ / (A) Yes /X/ (B) No
A.1.79 SERVICE.
(A) If not otherwise required by the Plan, shall service with
predecessor employer(s) (to the extent specified in Section A.1.79 (B) and
(C)) be treated as Service with the Employer (check one)?
/ / (1) Yes / / (2) No
/X/ (3) N/A (No predecessor employer)
(B) If Section A.1.79(A)(1) is checked, service with the
predecessor employer(s) specified in Section A.1.79 (C) shall be treated as
Service with the Employer for purposes of (check applicable blank(s)):
/ / (1) Eligibility for Participation
/ / (2) Vesting
/X/ (3) N/A
(C) If Section A.1.79(A)(1) is checked, indicate the name of
the predecessor employer(s) in the following blanks: N/A
(If Section A.1.79(A)(2) or (3) is checked, insert the letters N/A in the
blanks).
(D) If Section A.18.17(A) is checked, and the Prior Plan
credited service under the elapsed time method, indicate the equivalency (if
any) which is to be used to credit service in the Computation Period in which
the amendment is effective, if the effective date of the amendment is other
than the first day of the Computation Period (check one):
/ / Daily / / Monthly
/ / Weekly /X/ N/A
/ / Semi-Monthly
A.1.83 TAXABLE YEAR. The Employer's Taxable Year is the year ending
(insert month and day) NOVEMBER 30.
A.1.85 TOP-HEAVY RATIO. For purposes of establishing present value to
compute the Top-Heavy Ratios of Section 1.85 of the Plan, any benefit shall be
discounted only for mortality and interest based on the following:
(A) INTEREST RATE (check one):
/X/ (1) APPLICABLE INTEREST RATE (For purposes of this Section
A.1.85, "Applicable Interest Rate" shall mean the interest
rate or rates which would be used, as of the date
distribution commences under a Defined Benefit Plan, by
the Pension Benefit Guaranty Corporation for purposes of
determining the present value of a participant's benefits
under such Defined Benefit Plan if such Defined Benefit
Plan had terminated on the date distribution commences
with insufficient assets to provide benefits guaranteed by
the Pension Benefit Guaranty Corporation on that date. For
purposes of this
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provision, the "date distribution commences" shall mean
the Top-Heavy Valuation Date).
/ / (2) OTHER (specify) [____________]%
(B) MORTALITY TABLE: 1984 UNISEX MORTALITY TABLE
A.1.86 TOP-HEAVY VALUATION DATE. The Top-Heavy Valuation Date, for
purposes of calculating the Top-Heavy Ratios shall be (fill in blank) THE LAST
DAY of each Plan Year.
A.1.91 TRUSTEE(S). The name(s) and address(es) of the Trustee(s) are:
(A) ROBERT R. FORTUNE
BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
(B) EDWARD J. ROACH
BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
(C)
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A.1.93 VALUATION DATE. Valuation Date shall mean:
(A) For purposes of determining a Participant's Accrued
Benefit which is distributable in accordance with Article VII of the Plan
(check one):
/ / (1) Last day of Plan Year.
/X/ (2) Last day of Plan Year and THE LAST DAY OF EVERY OTHER
CALENDAR MONTH DURING THE PLAN YEAR (insert date(s)).
(B) For purposes of determining the fair market value of
assets in the Trust Fund and allocating the increase or decrease in the
assets in accordance with Sections 5.3 and 5.4 of the Plan (check one):
/X/ (1) The date(s) specified in Section A.1.93(A).
/ / (2) Last day of Plan Year and [________] (insert date(s)).
A.1.97 YEAR OF SERVICE FOR BENEFIT ACCRUAL.
(A) GENERAL. A Year of Service for Benefit Accrual shall be
determined by the following method (check one):
/X/ (1) REGULAR METHOD. (This method must be selected if
Section A.1.55(A) is checked). In order for a Participant
to have a Year of Service for Benefit Accrual for any Plan
Year, the Participant must complete the number of Hours of
Service indicated (check either (a) and fill in blank or
(b)):
/X/ (a) The number of Hours of Service which must be
completed with the Employer in order for a Participant
to have a Year of Service for Benefit Accrual is 200
(fill in blank but not to exceed 1,000 Hours of
Service).
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/ / (b) The number of Hours of Service which must be
completed with the Employer in order for a Participant
to have a Year of Service for Benefit Accrual for a
Plan Year is 501 if the Participant is not an active
Employee on the last day of the Plan Year; if the
Participant is an active Employee on the last day of
the Plan Year, only one Hour of Service with the
Employer must be completed in order for the
Participant to have a Year of Service for Benefit
Accrual for such Plan Year.
NOTE: UNDER PROPOSED TREAS. REG. SECTIONSECTION 1.410(B) AND
1.401(A)(26), IT MAY BE NECESSARY TO PROVIDE THAT NO MORE THAN
501 HOURS OF SERVICE ARE REQUIRED FOR A YEAR OF SERVICE FOR
BENEFIT ACCRUAL FOR ANY PARTICIPANT WHO HAS TERMINATED EMPLOYMENT
AND IS NOT AN ACTIVE EMPLOYEE ON THE LAST DAY OF THE PLAN YEAR
AND THAT NO MORE THAN ONE HOUR OF SERVICE IS REQUIRED FOR A YEAR
OF SERVICE FOR BENEFIT ACCRUAL FOR ANY PARTICIPANT WHO IS AN
ACTIVE EMPLOYEE ON THE LAST DAY OF THE PLAN YEAR. (PROPOSED
TREAS. REG. SECTIONSECTION 1.410(B)-3(C) AND
1.401(A)(26)-3(B)(8)).
/ / (2) ELAPSED TIME METHOD. (This method must be selected if
Section A.1.55(B) is checked).
(B) ELECTIVE DEFERRAL CONTRIBUTIONS. If Elective Deferral
Contributions are provided for under Section A.3.4 of the Adoption Agreement,
the number of Hours of Service which a Participant must complete in a Year of
Service for Benefit Accrual is N/A (fill in blank but not to exceed 1,000
Hours of Service unless Section A.1.97(A)(2) is checked, in which case insert
letters "ET" and the elapsed time rules apply; if there are no Elective
Deferral Contributions, insert letters "N/A") in order for the Participant to
have Elective Deferral Contributions made on his behalf under the Plan.
(C) MATCHING CONTRIBUTIONS. If Matching Contributions by the
Employer are provided for under Section A.3.5 of the Adoption Agreement, the
number of Hours of Service which a Participant must complete in a Year of
Service for Benefit Accrual is N/A (fill in blank (if there are no Matching
Contributions, insert letters "N/A") but not to exceed 1,000 Hours of Service
unless Section A.1.97(A)(2) is checked, in which case insert letters "ET" and
the elapsed time rules apply) in order for the Employer to match Participant
Contributions or Elective Deferral Contributions of such Participant under
Section A.3.5 of the Adoption Agreement.
Except as provided in Sections A.1.97(B) and A.1.97(C), a Year of Service for
Benefit Accrual shall be determined under Section A.1.97(A).
A.1.98 YEAR OF SERVICE FOR ELIGIBILITY. The number of Hours of Service
which must be completed in order for an Employee to have a Year of Service for
Eligibility is 1 (fill in blank, but not to exceed 1,000 Hours of Service;
insert letters N/A if Section A.1.33(A)(4) is checked or if the elapsed time
method is selected under Section A.2.2.(B)(2).
A.1.99 YEAR OF SERVICE FOR VESTING. A Year of Service for Vesting shall
be determined by the following method (check one):
/X/ (A) REGULAR METHOD. (This method must be selected if
Section A.1.55(A) is checked). The number of Hours of
Service which must be completed in order for a Participant
to have a Year of Service for Vesting is 200 (fill in
blank but not to exceed 1,000 Hours of Service).
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<PAGE> 129
/ / (B) ELAPSED TIME METHOD. (This method must be selected if
Section A.1.55(B) is checked).
/ / (C) N/A (Plan provides 100% immediate vesting).
A.2.2 ELIGIBILITY REQUIREMENTS.
(A) ELIGIBLE CLASSES OF EMPLOYEES:
(1) Except as provided in (2) below, the following
Employees are or shall be eligible to participate in
the Plan (check one):
/X/ (a) All Employees
/ / (b) Salaried Employees only (as defined in Section
1.77 of the Plan)
/ / (c) Hourly Employees only (as defined in Section
1.40 of the Plan)
/ / (d) All Employees except (specify class or classes
of Employees to be excluded):
[__________________________________]
(2) The following Employees shall not be eligible to
participate in the Plan (check block(s) if such
Employees are to be excluded):
/X/ (a) Union Employees (as defined in Section 1.92 of
the Plan)
/X/ (b) Non-Resident Aliens (as defined in Section
1.52 of the Plan)
(B) LENGTH OF SERVICE; MINIMUM AGE: Participation in the
Plan shall be determined under either the regular method or the
elapsed time method (check (1) or (2)):
/X/ (1) REGULAR METHOD. If the regular method is
selected, check (a) or (b):
/ / (a) SERVICE AND AGE REQUIREMENT. In order to
participate in the Plan, an Employee shall
meet the following requirements (complete
blanks):
(i) SERVICE.
(AA) ELECTIVE DEFERRAL CONTRIBUTIONS. An
Employee shall have completed [__] Year of
Service for Eligibility (not more than one
Year of Service for Eligibility) to be
eligible to make Elective Deferral
Contributions.
(BB) MATCHING CONTRIBUTIONS. An Employee
shall have completed [__] Year(s) of
Service for Eligibility (not more than two
Years of Service for Eligibility) to be
eligible for Matching Contributions.
(CC) EMPLOYER CONTRIBUTIONS AND ALL OTHER
PURPOSES. An Employee shall have completed
[__] Year(s) of Service
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<PAGE> 130
for Eligibility (not more than two Years
of Service for Eligibility) for Employer
Contributions and for all other purposes
of the Plan.
Note that in Section A.2.2(B)(1)(a)(i)(BB) and
(CC) not more than one Year of Service for
Eligibility may be selected, if the option
under Section A.7.6(B)(1)(a) is not elected
nor more than two Years of Service for
Eligibility if the option under Section
A.7.6(B)(1)(a) is elected. For purposes of
this Section A.2.2(B)(1)(a)(i), Service
includes service with a predecessor employer
if the Employer adopting the Plan is
maintaining the plan of a predecessor
employer. Such Service also includes
predecessor service to the extent required by
the Secretary of the Treasury or his delegate.
Service for purposes of eligibility also
includes service with a predecessor employer
if such service is not otherwise required to
be included under Sections 1.79 and 2.2 of the
Plan to the extent provided in Section A.1.79.
(ii) AGE. An Employee shall have attained
[___] years of age (not more than age 21).
/X/ (b) NO SERVICE OR AGE REQUIREMENT. The Plan
shall cover Employees in eligible classes
effective on the first Entry Date coinciding
with, or next following, their date of hire.
/ / (2) ELAPSED TIME METHOD. The Employee shall be
eligible to participate in the Plan on his first
day of employment or reemployment in accordance
with the rules of Section 1.55(B) of the Plan.
A.2.3 ADDITIONAL RULES.
(A)-(F) RESERVED.
(G) ALLOCATIONS TO PARTICIPANTS. Except as otherwise
provided below, a Participant shall share in Employer contributions in any
Plan Year if the Participant completes a Year of Service for Benefit
Accrual during such Plan Year. Notwithstanding any other provision of the
Plan or this Adoption Agreement, any Participant making Elective Deferral
or Participant Contributions to the Plan for any Plan Year shall be
entitled to such Elective Deferral or Participant Contributions.
(1) EMPLOYER CONTRIBUTIONS. This provision shall
only apply if Section A.1.97(A)(1) is checked and
then only to the extent permitted by Section 3.11
of the Plan.
(a) SEPARATION FROM SERVICE FOR REASONS OTHER
THAN DISABILITY, DEATH OR RETIREMENT.
(i) Shall Participants who separate from
the service of the Employer (for reasons
other than Disability, death or
retirement) before the end of the Plan
Year even if they have completed a Year of
Service for Benefit Accrual share in
Employer
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<PAGE> 131
contributions for such Plan Year (check
one)?
/X/ (AA) Yes / / (BB) No
/ / (CC) N/A (Section A.1.97(A)(2)
checked)
NOTE THAT SECTION A.2.3(G)(1)(A)(I)(AA) MUST BE
CHECKED IF SECTION A.1.97(A)(1)(B) IS CHECKED.
(ii) If Section A.2.3(G)(1)(a)(i)(AA) is
checked, shall such Participant share in
Employer contributions for such Plan Year
if such Participant has not completed a
Year of Service for Benefit Accrual (check
one)?
/X/ (AA) Yes / / (BB) No
/ / (CC) N/A (Section A.2.3 (G)(1)
(a)(i)(AA) not checked)
(b) DISABILITY, DEATH OR RETIREMENT.
(i) Shall Participants who separate from
the service of the Employer because of
Disability, death or retirement before the
end of the Plan Year even if they have
completed a Year of Service for Benefit
Accrual share in Employer contributions
for such Plan Year (check one)?
/X/ (AA) Yes / / (BB) No
/ / (CC) N/A (Section A.1.97(A)(2)
checked)
NOTE THAT SECTION A.2.3(G)(1)(B)(I)(AA) MUST BE
CHECKED IF SECTION A.1.97(A)(1)(B) IS CHECKED.
(ii) If Section A.2.3(G)(1)(b)(i)(AA) is
checked, shall such Participant share in
Employer contributions for such Plan Year
if such Participant has not completed a
Year of Service for Benefit Accrual (check
one)?
/X/ (AA) Yes / / (BB) No
/ / (CC) N/A (Section A.2.3 (G)(1)
(b)(i)(AA) not checked)
(2) MATCHING CONTRIBUTIONS. This provision shall
only apply if Section A.1.97(A)(1) is checked.
(a) SEPARATION FROM SERVICE FOR REASONS OTHER
THAN DISABILITY, DEATH OR RETIREMENT.
(i) Shall Participants who separate from
the service of the Employer (for reasons
other than Disability, death or
retirement) before the end of the (check
one) [___] (aa) month [___] (bb) quarter
[___] (cc) Plan Year for which the
Matching Contribution is being made even
if they have completed a Year of Service
for
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<PAGE> 132
Benefit Accrual share in Matching Contributions for
such period (check one)?
/ / (AA) Yes / / (BB) No
/ X / (CC) N/A (No Matching Contributions or Section
A.1.97(A)(2) checked)
NOTE THAT SECTION A.2.3(G)(2)(a)(i)(AA) MUST BE CHECKED IF SECTION
A.1.97 (A)(1)(b) IS CHECKED.
(ii) If Section A.2.3(G)(2)(a)(i) (AA) is checked,
shall such Participant share in Matching Contributions
for such (check one) / / (aa) month / / (bb) quarter
/ / (cc) Plan Year if such Participant has not
completed a Year of Service for Benefit Accrual (check
one)?
/ / (AA) Yes / / (BB) No
/ X / (CC) N/A (Section A.2.3(G)(2)(a)(i) (AA) not
checked)
(b) DISABILITY, DEATH OR RETIREMENT.
(i) Shall Participants who separate from the service of
the Employer because of Disability, death or retirement
before the end of the (check one) / / (aa) month / /
(bb) quarter / / (cc) Plan Year for which the Matching
Contribution is being made even if they have completed
a Year of Service for Benefit Accrual share in Matching
Contributions for such period (check one)?
/ / (AA) Yes / / (BB) No
/ X / (CC) N/A (no Matching Contributions or Section
A.1.97(A)(2) checked)
NOTE THAT SECTION A.2.3(G)(2)(b)(i)(AA) MUST BE CHECKED IF SECTION
A.1.97(A)(1)(b) IS CHECKED.
(ii) If Section A.2.3(G)(2)(b) (i)(AA) is checked,
shall such Participant share in Matching Contributions
for such (check one) / / (aa) month / / (bb) quarter
/ / (cc) Plan Year if such Participant has not
completed a Year of Service for Benefit Accrual (check
one):
/ / (AA) Yes / / (BB) No
/ X / (CC) N/A (Section A.2.3(G)(2)(b)(i)(AA) not
checked.
(H) LEASED EMPLOYEES. Shall Leased Employees be eligible to
participate in the Plan (check applicable block)?
/ / (1) Yes / / (2) No / X / (3) N/A
If Section A.2.3(H)(1) is checked, describe Leased Employees to be covered
by the Plan and conditions and other limitations on such coverage in the
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<PAGE> 133
following lines: [ N/A ]
(If not applicable, insert letters N/A in these blanks)
A.2.4 PLANS COVERING OWNER-EMPLOYEES. Section 2.4 of the Plan does not
apply unless Section A.1.56(A) is checked.
A.3.1 EMPLOYER CONTRIBUTIONS.
(A) EMPLOYER CONTRIBUTIONS.
(1) GENERAL. Shall the Employer, in its sole discretion, be
permitted to make Employer Contributions to the Plan (check
one)?
/ X / (a) Yes / / (b) No
If Section A.3.1(A)(1)(a) is checked, such Employer
Contributions shall be allocated under Section A.5.1(A).
(2) PROFIT REQUIREMENTS. Shall Profits be required for
Employer Contributions to the Plan (check one)?
/ / (a) Yes / X / (b) No
(B) QUALIFIED NONELECTIVE CONTRIBUTIONS.
(1) ELECTION. May the Employer be permitted to make, in its
sole discretion, Qualified Nonelective Contributions to the
Plan (check one)?
/ / (a) Yes / / (b) No
/ X / (c) N/A (No Elective Deferral or Participant
Contributions)
(2) AMOUNT. If the Employer does make such contributions to
the Plan, then the amount of such contributions for each
Plan Year shall be (check one):
/ / (a) [ ] percent (not to exceed 15 percent) of the
Compensation of all Participants eligible to share in
the allocation.
/ / (b) [ ] percent of the Profits, but in no event more
than [$ ] for any Plan Year.
/ / (c) An amount determined by the Employer.
/ X / (d) N/A (Qualified Nonelective contributions not
permitted).
(3) PARTICIPANTS ELIGIBLE FOR ALLOCATION. Allocation of
Qualified Nonelective Contributions shall be made to the
accounts of (check one):
/ / (a) All Participants
/ / (b) Only Participants who are Non-Highly Compensated
Employees
/ / (c) Only Participants who are Non-Highly Compensated
Employees and who are (specify group to which
allocations are to be made) [_________________________
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<PAGE> 134
______________________________________________________
_____________________________________________________/
/ X / (d) N/A (Qualified Nonelective Contributions not
permitted)
(4) MANNER OF ALLOCATION. Allocation of Qualified
Nonelective Contributions shall be made (check one):
/ / (a) In the ratio which each affected Participant's
Compensation for the Plan Year bears to the total
Compensation of all affected Participants for such
Plan Year.
/ / (b) In the ratio which each affected Participant's
Compensation not in excess of [$ ] for the Plan
Year bears to the total Compensation of all affected
Participants not in excess of [$ ] for such Plan
Year.
/ X / (c) N/A (Qualified Nonelective Contributions not
permitted).
(C) QUALIFIED MATCHING CONTRIBUTIONS.
(1) ELECTION. May the Employer be permitted to make
Qualified Matching Contributions to the Plan?
/ / (a) Yes / / (b) No
/ X / (c) N/A (No Elective Deferrals or Participant
Contributions)
(2) ALLOCATION. The Employer shall, in its sole discretion,
make Qualified Matching Contributions to the Plan on behalf
of (check one):
/ / (a) All Participants
/ / (b) All Participants who are Non-Highly Compensated
Employees
/ / (c) All Participants who are Non-Highly Compensated
Employees and who are (specify group to which
allocations are to be made) [_________________________
_____________________________________________________]
/ X / (d) N/A (No Qualified Matching Contributions)
If Section A.3.1(C)(2)(a), (b) or (c) is checked, the
allocation shall be made to applicable Participants who make
(check (i) and/or (ii) or (iii)):
/ / (i) Elective Deferral Contributions
/ / (ii) Participant Contributions
/ X / (iii) N/A (No Qualified Matching Contributions)
(3) AMOUNT. The Employer shall contribute and allocate to
each Participant's Qualified Matching
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Contribution account an amount determined as follows (check
applicable block(s)):
/ / (a) ELECTIVE DEFERRAL CONTRIBUTIONS. The Employer
shall contribute an amount equal to (check one):
/ / (i) [ ] percent of the Participant's
Elective Deferral Contributions; or
/ / (ii) that percent of the Participant's Elective
Deferral Contributions, as determined by
the Employer, in its sole discretion, for
the Plan Year.
/ / (b) PARTICIPANT CONTRIBUTIONS. The Employer shall
contribute an amount equal to (check one):
/ / (i) [ ] percent of the Participant's
Participant Contributions; or
/ / (ii) that percent of the Participant's
Participant Contributions, as determined
by the Employer, in its sole discretion,
for the Plan Year.
/ X / (c) N/A (No Qualified Matching Contributions).
The Employer shall not match amounts provided above in excess of
[$ N/A ], or in excess of [N/A] percent of the Participant's
Compensation (if there are no limitations or if this provision is not
otherwise applicable, insert letters N/A in blank(s)).
A.3.2 PARTICIPANT CONTRIBUTIONS.
(A) PERMISSIBILITY. Participant Contributions shall (check (1),
(2) or (3)):
/ X / (1) Not be permitted under the Plan (NOTE: THIS BLOCK MUST
BE CHECKED UNLESS THE PLAN HAS A CODA AS INDICATED BY
CHECKING SECTION A.3.4(A)(2)).
/ / (2) Be permitted (but not required) in the amounts provided
by Section 3.2 of the Plan but subject to the limitations
of Section 3.8 of the Plan.
/ / (3) Be required in order for an Employee to participate in
the Plan. Such Participant Contributions shall be made by
payroll deduction and shall equal no less than [ ]
percent but shall not exceed [ ] percent (not to exceed 6
percent) of the Participant's Compensation for the Plan
Year. The Employee shall enter into an agreement with the
Employer providing for Participant Contributions in any
amount from [ ] percent to [ ] percent (not to exceed 6
percent) of the Participant's Compensation for the Plan
Year. In addition, the Employee may, but is not required
to, make voluntary Participant Contributions in the amounts
provided
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for in Section 3.2 of the Plan subject to the limitations
of Section 3.8 of the Plan.
(B) PAYROLL DEDUCTION. Participant Contributions by payroll
deduction (check (1), (2) or (3)):
/ / (1) Shall not be permitted.
/ / (2) Shall be permitted.
/ X / (3) Are N/A (No Participant Contributions).
A.3.4 ELECTIVE DEFERRAL CONTRIBUTIONS.
(A) ELECTION. Elective Deferral Contributions shall (check (1) or
(2)):
/ X / (1) Not be permitted under the Plan.
/ / (2) Be permitted in accordance with the provisions of
Section 3.4 of the Plan.
If Section A.3.4(A)(2) is checked, a salary reduction agreement must be
completed and filed by the Participant with the Administrative Committee
prior to the date the Elective Deferral Contributions are made.
(B) ELECTION CHANGES. If Section A.3.4(A)(2) is checked, the
Participant shall be permitted to enter into a new salary reduction
agreement (check one):
/ / (1) Monthly / / (2) Quarterly
/ / (3) Semi-Annually / / (4) Annually
/ / (5) Other (Specify): [__________________________]
/ X / (6) N/A
A salary reduction agreement shall remain in effect until revoked or
changed.
(C) REVOCATION OF ELECTION. A Participant shall be permitted to
revoke his salary reduction agreement (check one):
/ / (1) Only as permitted under Section A.3.4(B).
/ / (2) Upon 15 days' written notice to the Administrative
Committee on the Appropriate Form.
/ X / (3) N/A.
(D) INCLUSION OF QUALIFIED MATCHING AND QUALIFIED NONELECTIVE
CONTRIBUTIONS. Qualified Matching Contributions and Qualified Nonelective
Contributions may be taken into account as Elective Deferral Contributions
for purposes of calculating the "Actual Deferral Percentages." In
determining Elective Deferral Contributions for the purpose of the ADP
test, the Employer shall include, under the Plan or any other plan of the
Employer as provided by Treasury regulations under the Code, (check one):
/ / (1) Qualified Matching Contributions.
/ / (2) Qualified Nonelective Contributions.
/ X / (3) N/A (Elective Deferral Contributions are not permitted
or Employer does not desire to make this election or no
Qualified Matching or Qualified Nonelective Contributions
are permitted).
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(E) QUALIFIED MATCHING CONTRIBUTIONS - AMOUNT. The amount of
Qualified Matching Contributions made under Sections 3.1 of the Plan and
A.3.1 of this Adoption Agreement and taken into account as Elective
Deferral Contributions for purposes of calculating the "Actual Deferral
Percentages," subject to such other requirements as may be prescribed by
the Secretary of the Treasury, shall be (check one):
/ / (1) All such Qualified Matching Contributions.
/ / (2) Such Qualified Matching Contributions that are needed
to meet the "Actual Deferral Percentage" test stated in
Section 3.4(B)(2) of the Plan.
/ X / (3) N/A (Elective Deferral Contributions not permitted
and/or Qualified Matching Contributions not permitted).
(F) QUALIFIED NONELECTIVE CONTRIBUTIONS - AMOUNT. The amount of
Qualified Nonelective Contributions made under Sections 3.1 of the Plan and
A.3.1 of this Adoption Agreement and taken into account as Elective
Deferral Contributions for purposes of calculating the "Actual Deferral
Percentages," subject to such other requirements as may be prescribed by
the Secretary of the Treasury, shall be (check one):
/ / (1) All such Qualified Nonelective Contributions.
/ / (2) Such Qualified Nonelective Contributions that are
needed to meet the Actual Deferral Percentage test stated
in Section 3.4(B)(2) of the Plan.
/ X / (3) N/A (Elective Deferral Contributions and/or Qualified
Nonelective Contributions not permitted).
A.3.5 MATCHING CONTRIBUTIONS.
(A) ELECTION. Matching Contributions by the Employer (check (1),
(2) or (3)):
/ / (1) Shall not be permitted under the Plan.
/ / (2) Shall be permitted in accordance with the provisions of
Section 3.5 of the Plan and Section A.3.5(B) of the
Adoption Agreement.
/ X / (3) Are N/A (No Elective Deferral or Participant
Contributions).
If Section A.3.5(A)(2) is checked, the Employer may, in its sole
discretion, match, in accordance with Section A.3.5(B), the Elective
Deferral Contributions of a Participant made pursuant to Section A.3.4
or Participant Contributions made pursuant to Section A.3.2.
(B) ALLOCATION OF MATCHING CONTRIBUTIONS.
(1) AMOUNT. If Section A.3.5(A)(2) is checked, Matching
Contributions for the Plan Year shall be allocated to the
Matching Account of each Participant, on whose behalf
Elective Deferral Contributions for the Plan Year are being
made, in an amount equal to (check one):
/ / (a) [ ] (insert percentage) percent of the (check
applicable block): (i) [ ] Elective Deferral
Contribution; (ii)[ ]
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Participant Contribution made on behalf of each
Participant for such Plan Year; or
/ / (b) that percent of the (check applicable block):
(i) [ ] Elective Deferral Contribution; (ii) [ ]
Participant Contribution made on behalf of each
Participant for such Plan Year as determined by the
Employer, in its sole discretion, for such Plan Year.
/ X / (c) N/A (No Matching Contributions).
In no event shall such Matching Contribution exceed the
lesser of (aaa) (insert percentage) [ ] percent of such
Participant's Compensation for such Plan Year or (bbb)
(insert amount, if any, of dollar limitation) [$ ].
(2) ALLOCATION DATE. Shall Matching Contributions be
allocated effective as of a date or dates other than the
last day of the Plan Year (check one)?
/ / (a) Yes / / (b) No / X /(c) N/A
(aaa) If Section A.3.5(B)(2)(a) is checked, list
the date(s) (month and day) in each Plan Year as
of which Matching Contributions shall be
allocated: [_____________________________________
__________________________________________________
__________________________________________________
__________________________________________________
________________________________________________].
(bbb) If Section A.3.5(B)(2)(a) is checked, a
Participant who is employed as of a date specified
for the allocation of Matching Contributions and
on whose behalf Elective Deferral Contributions or
Participant Contributions are being made shall
receive an allocation of Matching Contributions as
of such date regardless of the number of Hours of
Service credited to the Participant for purposes
of a Year of Service for Benefit Accrual as of
such date, notwithstanding anything in the Plan to
the contrary.
(C) VESTING. Matching Contributions shall be vested in accordance
with the following schedule (check one):
/ / (1) Nonforfeitable when made.
/ / (2) The Plan's general vesting schedule, other than that
for Elective Deferral Contributions.
/ / (3) [The sponsor may add elections for one or more of the
vesting schedules that comply with section 411(a)(2) of the
Code: [____________________________________________________
_____________________________________________________
___________________________________________________].
/ X / (4) N/A (No Matching Contributions).
A-24
<PAGE> 139
(D) "AVERAGE CONTRIBUTION PERCENTAGE" COMPUTATIONS.
(1) In computing the "Average Contribution Percentage" with
respect to Participant Contributions and Matching
Contributions, the Employer shall take into account, under
this Plan or any other plan of the Employer, as provided by
Treasury regulations, and include as "Contribution
Percentage Amounts" (check applicable block or blocks):
/ / (a) Elective Deferral Contributions.
/ / (b) Qualified Nonelective Contributions.
/ X / (c) N/A (There are no Participant or Matching
Contributions, or Employer does not desire to make
this election).
(2) The amount of Qualified Nonelective Contributions that
are made under Section 3.1 of the Plan and Section A.3.1
and taken into account as "Contribution Percentage Amounts"
for purposes of calculating the "Average Contribution
Percentage," subject to such other requirements as may be
prescribed by the Secretary of the Treasury, shall be
(check one):
/ / (a) All such Qualified Nonelective Contributions.
/ / (b) Such Qualified Nonelective Contributions that are
needed to meet the "Average Contribution Percentage"
test stated in Section 3.2 of the Plan.
/ X / (c) N/A (No Participant or Matching Contributions or
Employer does not desire to make this election).
(3) The amount of Elective Deferral Contributions made
under Section 3.4 of the Plan and Section A.3.4 and taken
into account as "Contribution Percentage Amounts" for
purposes of calculating the "Average Contribution
Percentage", subject to such other requirements as may be
prescribed by the Secretary of the Treasury, shall be:
/ / (a) All such Elective Deferral Contributions.
/ / (b) Such Elective Deferral Contributions that are
needed to meet the "Average Contribution
Percentage" test stated in Section 3.2 of the
Plan.
/ X / (c) N/A (There are no Elective Deferral Contributions
under the Plan or Employer did not make election
under Section A.3.5(D)(1)).
(4) To the extent forfeitable, forfeitures of "Excess
Aggregate Contributions" shall be:
/ / (a) Applied to reduce Employer contributions.
A-25
<PAGE> 140
/ / (b) Allocated, after all other forfeitures under the
Plan, to each Participant's Matching Account in the
ratio which each Participant's Compensation for the
Plan Year bears to the total Compensation of all
Participants for such Plan Year. Such forfeitures
shall not be allocated to the account of any Highly
Compensated Employee.
/ X / (c) N/A (No Matching Contributions).
A.3.8 LIMITATIONS ON ALLOCATIONS.
(A) GENERAL RULES. If the Employer maintains or ever maintained
another qualified plan (other than a paired defined contribution regional
prototype plan) in which any Participant in this Plan is (or was) a participant
or could become a participant, the Employer must complete this Section A.3.8.
The Employer must also complete this Section A.3.8 if it maintains a Welfare
Benefit Fund or an individual medical benefit account, as defined in section
415(l)(2) of the Code, under which amounts are treated as "Annual Additions"
with respect to any Participant in this Plan. Does the Employer maintain or has
the Employer maintained any such plan(s) (check one):
/ / (1) Yes / X / (2) No
If Section A.3.8(A)(1) is checked, complete Section A.3.8(B) and/or (C).
(B) MAINTENANCE OF OTHER DEFINED CONTRIBUTION PLAN. If the
Participant is covered under another qualified Defined Contribution Plan
maintained by the Employer, other than a regional prototype plan (check
applicable provisions as necessary):
/ / (1) The provisions of Section 3.8(B) of the Plan shall
apply as if the other plan were a regional prototype
plan.
/ X / (2) Provide the method under which the plans will limit
the total "Annual Additions" to the "Maximum Permissible
Amount", and will properly reduce any "Excess Amounts",
in a manner that precludes Employer discretion: [CERTAIN
OF THE PARTICIPATING EMPLOYERS HAVE MAINTAINED OTHER
QUALIFIED DEFINED CONTRIBUTION PLANS. ALL SUCH PLANS WERE
MERGED INTO THIS PLAN EFFECTIVE DECEMBER 1, 1987. TO THE
EXTENT REQUIRED, ALL ADJUSTMENTS SHALL BE MADE UNDER THIS
PLAN.].
/ / (3) N/A (No other qualified Defined Contribution Plan
(other than a regional prototype plan), Defined Benefit
Plan, Welfare Benefit Fund or individual medical benefit
account maintained).
(C) MAINTENANCE OF A DEFINED BENEFIT PLAN. If a Participant is or
has ever been a participant in a Defined Benefit Plan maintained by the
Employer, check either (1) or (2) and complete as necessary:
/ / (1) The limitations set forth in Section 3.8(C)(2)
through (4) of the Plan shall apply.
/ / (2) Provide the method under which the Plan will satisfy
the 1.0 limitation of section 415(e) of the Code (such
language must preclude employer discretion; see Treas.
Reg. Section 1.415-1 for guidance) in the following
blanks: [________________________________________________
A-26
<PAGE> 141
_________________________________________________________
_______________________________________________________].
IF ADDITIONAL SPACE IS REQUIRED THE EMPLOYER IS TO INSERT
APPLICABLE LIMITATIONS IN AN ATTACHMENT TO THIS ADOPTION
AGREEMENT. SUCH ATTACHMENT SHALL BE ADDED TO, AND MADE A PART OF,
THIS ADOPTION AGREEMENT.
A.3.9 ROLLOVERS.
(A) PARTICIPANT ROLLOVERS. May Participants be permitted to
make Rollover Contributions to the Plan (check one)?
/ X / (1) Yes / / (2) No
(B) NON-PARTICIPANT ROLLOVERS. May Employees other than
Participants be permitted to make Rollover Contributions to the Plan (check
one)?
/ / (1) Yes / X / (2) No
A.3.10 TRANSFERS.
(A) PARTICIPANT DIRECT TRANSFERS. May Participants be
permitted to have direct transfers made on their behalf to the Plan (check
one)?
/ X / (1) Yes / / (2) No
(B) NON-PARTICIPANT DIRECT TRANSFERS. May Employees other
than Participants be permitted to have direct transfers made on their
behalf to the Plan (check one)?
/ / (1) Yes / X / (2) No
(C) TRANSFERS OF ACCOUNTS. Are assets being transferred to
this Plan from a qualified plan covering Key Employees in a Top-Heavy Plan
or five-percent owners (within the meaning of section 416(i)(1) of the
Code) (check one)?
/ / (1) Yes / X / (2) No
If such assets are transferred, the restrictions of Section 3.10(B) of the
Plan apply.
A.3.11 TOP-HEAVY PROVISIONS.
(A) APPLICATION OF PROVISIONS AND ADJUSTMENTS.
(1) APPLICATION. Is the Plan a Top-Heavy Plan on the
Effective Date (check one):
/ / (a) Yes / X / (b) No
/ / (c) Uncertain (Note that if this box is checked
and the Plan is a Top-Heavy Plan, the Top-Heavy
Plan provisions as set forth herein shall apply)
(2) ADJUSTMENTS. If the Employer maintains more than one
plan in a Permissive or Required Aggregation Group, set
forth here any adjustments to be made for Employer
contributions or benefits attributable to Employer
contributions under such other plan(s) in determining
the amount of contributions to be made under the
Top-Heavy
A-27
<PAGE> 142
provisions of this Plan (if not applicable, insert
letters N/A)): [ N/A ]
(B) VESTING. The nonforfeitable interest of each Employee in
his account balance attributable to Employer contributions shall be
determined on the basis of the following (check either (1) or (2) and fill
in blank(s):
/ / (1) 100% vesting after [ ] (not to exceed 3) Years
of Service for Vesting;
/ X / (2) [ 10 ]% (no minimum) vesting after 1 Year of
Service for Vesting;
[ 25 ]% (not less than 20) vesting after 2 Years
of Service for Vesting;
[ 50 ]% (not less than 40) vesting after 3 Years
of Service for Vesting;
[ 75 ]% (not less than 60) vesting after 4 Years
of Service for Vesting;
[ 100 ]% (not less than 80) vesting after 5 Years
of Service for Vesting;
100% vesting after 6 Years of Service for Vesting.
If the vesting schedule under the Plan shifts in or out of the above
schedule for any Plan Year because of the Plan's top-heavy status, such
shift is an amendment to the vesting schedule and the election in Section
15.2(G) of the Plan applies.
A.5.1 ALLOCATIONS. If Section A.3.1(A)(1)(a) is checked, complete the
following:
(A) ALLOCATION OF EMPLOYER CONTRIBUTIONS.
(1) METHOD. Shall Employer Contributions (if any) to
the Employer Accounts of Participants be integrated
with Social Security contributions, subject to the
overall permitted disparity limits set forth below
(check (a) if integrated, (b) if not integrated)?
/ / (a) Yes
The annual Employer Contribution shall not exceed the
limitations set forth in Section A.5.1(A)(2). In any
Plan Year in which there are Employer Contributions,
such Employer Contributions shall, subject to the
Top-Heavy Plan provisions, be allocated to each
Participant's Employer Account as follows:
(i) ALLOCATION OF EMPLOYER CONTRIBUTIONS FOR PLAN
YEARS IN WHICH PLAN IS A TOP-HEAVY PLAN. If the
Plan is a Top-Heavy Plan for the Plan Year, the
Employer Contribution for such Plan Year shall be
allocated to each Participant's Employer Account
as follows:
A-28
<PAGE> 143
(aa) "BASE CONTRIBUTION PERCENTAGE". First,
(check either (aaa) or (bbb))(percent in
either (aaa) or (bbb) must not be less than
the "Minimum Top-Heavy Rate"):
/ / (aaa) [ ] (insert percent), or
/ / (bbb) that percent determined by
the Employer for the Plan Year
of the Participant's "Base Compensation" for
such Plan Year shall be allocated to the
Employer Account of such Participant;
(bb) "EXCESS CONTRIBUTION PERCENTAGE".
Second, (check either (aaa) or (bbb))(percent
in either (aaa) or (bbb) must not be less
than the "Minimum Top-Heavy Rate" and must
not exceed the "Maximum Excess Allowance"):
/ / (aaa)[ ] (insert percent)
percent, or
/ / (bbb) that percent determined by
the Employer for the Plan Year
of the Participant's Excess Compensation for
such Plan Year shall be allocated to the
Employer Account of such Participant (for
purposes of this allocation, forfeitures
allocated to a Participant in the Plan Year
shall be treated as Employer Contributions);
however, in the case of any Participant who
has exceeded the cumulative permitted
disparity limit described below, the Employer
shall contribute for such Participant an
amount equal to the "Excess Contribution
Percentage" multiplied by the Participant's
total Compensation for the Plan Year; and
(cc) "ADDITIONAL CONTRIBUTION PERCENTAGE".
Lastly, any excess over (aa) and (bb) shall
be allocated to each Participant's Employer
Account in the same ratio as his Compensation
for such Plan Year bears to the Compensation
of all Participants for such Plan Year.
(ii) ALLOCATION OF EMPLOYER CONTRIBUTIONS FOR PLAN
YEARS IN WHICH PLAN IS NOT A TOP-HEAVY PLAN. The
Employer Contribution for the Plan Year, if the
Plan is not a Top-Heavy Plan for the Plan Year,
shall be allocated as follows:
(aa) "BASE CONTRIBUTION PERCENTAGE". First,
(check either (aaa) or (bbb)):
A-29
<PAGE> 144
/ / (aaa)[ ] (insert percent)
percent, or
/ / (bbb) that percent determined by
the Employer for the Plan Year
of the Participant's "Base Compensation" for
such Plan Year shall be allocated to the
Employer Account of such Participant;
(bb) "EXCESS CONTRIBUTION PERCENTAGE".
Second, (check either (aaa) or (bbb))(percent
in either (aaa) or (bbb) must not exceed the
"Maximum Excess Allowance"):
/ / (aaa)[ ] (insert percent)
percent, or
/ / (bbb) that percent determined by
the Employer for the Plan Year
of the Participant's Excess Compensation for
such Plan Year shall be allocated to the
Employer Account of such Participant (for
purposes of this allocation, forfeitures
allocated to a Participant in the Plan Year
shall be treated as Employer Contributions);
however, in the case of any Participant who
has exceeded the cumulative permitted
disparity limit described below, the Employer
shall contribute for such Participant an
amount equal to the "Excess Contribution
Percentage" multiplied by the Participant's
total Compensation for the Plan Year; and
(cc) "ADDITIONAL CONTRIBUTION PERCENTAGE".
Lastly, any excess over (aa) and (bb) shall
be allocated to each Participant's Employer
Account in the same ratio as his Compensation
for such Plan Year bears to the Compensation
of all Participants for such Plan Year.
With respect to any Employee who is a Participant in
the Plan for only a portion of the Plan Year for
which the Employer Contribution is made, the
allocation to such Employee of the Employer
Contribution (other than the Top-Heavy portion, if
the Plan is a Top-Heavy Plan), shall be (check one):
/ / (AA) Based only upon the amount of "Base
Compensation", Excess Compensation and/or
Compensation earned by such Employee and all
other Employees during the portion of the
Plan Year in which they are or were Plan
Participants.
/ / (BB) Based upon the amount of "Base
Compensation", Excess Compensation and/or
Compensation earned by such Employee and all
other Employees during the entire Plan Year.
A-30
<PAGE> 145
NOTE THAT THIS PLAN MAY NOT PROVIDE FOR PERMITTED DISPARITY IF THE EMPLOYER
MAINTAINS ANY OTHER PLAN THAT PROVIDES FOR PERMITTED DISPARITY AND BENEFITS ANY
OF THE SAME PARTICIPANTS.
/ X / (b) No
The annual Employer Contributions (if any) shall be determined
by the Employer for each Plan Year but shall not exceed the
limitations of Section A.5.1(A)(2). In any Plan Year in which
there are Employer Contributions, such Employer Contributions
shall, subject to the Top-Heavy Plan provisions, be allocated
to such Participant's Employer Account as follows:
(i) ALLOCATION OF EMPLOYER CONTRIBUTIONS
FOR PLAN YEARS IN WHICH PLAN IS A TOP-HEAVY
PLAN. If the Plan is a Top-Heavy Plan for the
Plan Year, the Employer Contribution for such
Plan Year shall be first allocated to each
Participant's Employer Account in the same
ratio as his Compensation for such Plan Year
bears to the Compensation of all Participants
for such Plan Year, in an amount which is not
less than the "Minimum Top-Heavy Rate". The
balance of the Employer Contribution for such
Plan Year shall be allocated to each
Participant's Employer Account as follows
(check one):
/ / (aa) In the same ratio as his
Compensation for such Plan Year
bears to the Compensation of all
Participants for such Plan Year.
/ X / (bb) In the same ratio as his
Compensation for the portion of
the Plan Year in which he was a
Participant bears to the
Compensation of all Participants
for the portion of the Plan Year
in which they were Participants.
(ii) ALLOCATION OF EMPLOYER CONTRIBUTIONS
FOR PLAN YEARS IN WHICH PLAN IS NOT A
TOP-HEAVY PLAN. The Employer Contribution for
the Plan Year, if the Plan is not a Top-Heavy
Plan for the Plan Year, shall be allocated to
each Participant's Employer Account as
follows (check one):
/ / (aa) In the same ratio as his
Compensation for such Plan Year
bears to the Compensation of all
Participants for such Plan Year.
/ X / (bb) In the same ratio as his
Compensation for the portion of
the Plan Year in which he was a
Participant bears to the
Compensation of all Participants
for the portion of the Plan Year
in which they were Participants.
/ / (c) N/A (Section A.3.1(A)(1)(b) checked)
A-31
<PAGE> 146
(2) LIMITATIONS ON EMPLOYER CONTRIBUTIONS. The following
limitations on Employer Contributions apply:
(a) DEDUCTION LIMITATIONS. The annual Employer,
Matching, and Elective Deferral Contributions and any
other Employer contribution shall, in the aggregate,
not exceed the greater of:
(i) the Employer's "Primary Limitation" (as
defined below) for the Taxable Year which
ends with or within the Plan Year for
which the Employer, Matching, and/or
Elective Deferral Contribution and/or
other Employer contribution is being made:
or
(ii) the Employer's "Secondary Limitation" (as
defined below) for the Taxable Year which
ends with or within the Plan Year for
which the Employer, Matching, and/or
Elective Deferral Contribution and/or
other Employer contribution is being made.
(b) CODE SECTION 415 LIMITATION. The allocation of
the Employer contributions for the Plan Year shall be
further limited by Section 3.8 of the Plan
(Limitations on Allocations).
(c) OVERALL PERMITTED DISPARITY LIMITS.
(i) ANNUAL OVERALL PERMITTED DISPARITY LIMIT.
Notwithstanding the preceding paragraphs,
for any Plan Year this Plan "Benefits" any
Participant who "Benefits" under another
qualified plan or simplified employee
pension, as defined in section 408(k) of
the Code, maintained by the Employer that
provides for permitted disparity (or
imputes disparity), Employer contributions
and forfeitures shall be allocated to the
account of every Participant otherwise
eligible to receive an allocation in the
ratio that such Participant's total
Compensation bears to the total
Compensation of all Participants.
(ii) CUMULATIVE PERMITTED DISPARITY LIMIT.
Effective for Plan Years beginning on or
after January 1, 1995, the cumulative
permitted disparity limit for a
Participant is 35 total cumulative
permitted disparity years. Total
cumulative permitted years means the
number of years credited to the
Participant for allocation or accrual
purposes under this Plan, any other
qualified plan or simplified employee
pension plan (whether or not terminated)
ever maintained by the Employer. For
purposes of determining the Participant's
cumulative permitted disparity limit, all
years ending in the same calendar year are
treated as the same year. If the
Participant has not "Benefitted" under a
defined benefit or target benefit plan for
A-32
<PAGE> 147
any year beginning on or after January 1,
1994, the Participant has no cumulative
disparity limit.
(3) DEFINITIONS. For purposes of this Section A.5.1(A),
the following definitions apply:
(a) "BASE CONTRIBUTION PERCENTAGE" means, for any
Plan Year, the percentage of Compensation contributed
under the Plan with respect to that portion of each
Participant's Compensation up to the "Integration
Level" (i.e., with respect to such Participant's "Base
Compensation") specified in the Plan for such Plan
Year.
(b) "BASE COMPENSATION" means, for any Plan Year,
Compensation up to the "Integration Level" for such
Plan Year.
(c) "BENEFIT" OR" BENEFITING" means, with respect to
a Participant, that such Participant is treated as
benefiting under the Plan for any Plan Year during
which the Participant received or is deemed to receive
an allocation in accordance with Treas. Reg. Section
1.410(b)-3(a).
(d) "EXCESS CONTRIBUTION PERCENTAGE" means, for any
Plan Year, the percentage of Compensation which is
contributed under the Plan with respect to that
portion of each Participant's Compensation in excess
of the "Integration Level" (i.e., with respect to such
Participant's Excess Compensation) specified in the
Plan for such Plan Year.
(e) "INTEGRATION LEVEL" means the amount of
Compensation specified in the Plan at or below which
the rate of contributions (expressed as a percentage
of such Compensation) provided under the Plan is less
than the rate of contributions (expressed as a
percentage of Compensation) provided under the Plan
with respect to Compensation above such level. The
"Integration Level" for any Plan Year may in no event
exceed the Taxable Wage Base as in effect on the first
day of such Plan Year.
(f) "MAXIMUM EXCESS ALLOWANCE" means, for any Plan
Year beginning before January 1, 1989, the "Base
Contribution Percentage" plus 5.7% and for any Plan
Year beginning after December 31, 1988, the percentage
determined under either (i) or (ii):
(i) If the "Integration Level" for such Plan
Year is equal to the Taxable Wage Base, in effect
on the first day of such Plan Year, or if the
"Integration Level" is a uniform dollar amount
for all Participants which is no greater than the
greater of $10,000 or 1/5 of the Taxable Wage
Base in effect on the first day of such Plan
Year, then the "Maximum Excess
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<PAGE> 148
Allowance" for such Plan Year is the lesser of:
(aa) The "Base Contribution Percentage",
or
(bb) The greater of (AA) 5.7% or (BB)
the percentage equal to the rate of tax
under section 3111(a) of the Code (in
effect on the first day of the Plan Year)
which is attributable to the old age
insurance portion of the Old Age,
Survivors and Disability Insurance
provisions of the Social Security Act.
(ii) If the "Integration Level" for such Plan
Year is greater than the greater of $10,000 or
1/5 of the Taxable Wage Base in effect on the
first day of such Plan Year but less than the
Taxable Wage Base in effect on the first day of
such Plan Year then the "Maximum Excess
Allowance" shall be determined as follows:
<TABLE>
<CAPTION>
---------------------------------------------------------
| IF THE "INTEGRATION LEVEL" | THE "MAXIMUM EXCESS |
|--------------------------------| |
|IS MORE THAN BUT NOT MORE THAN| ALLOWANCE" IS |
|-------------------------------- ----------------------|
<S> <C>
|(1) X* 80% OF TAXABLE | |
| WAGE BASE | 4.3% |
| | |
|(2) 80% OF Y** | |
| TAXABLE | |
| WAGE BASE | 5.4% |
| | |
---------------------------------------------------------
</TABLE>
* x = The greater of $10,000 or 1/5 of Taxable Wage Base
**y = Any amount more than 80% of Taxable Wage Base but
less than 100% of Taxable Wage Base.
(g) "MINIMUM TOP-HEAVY RATE" means a rate of at least
three percent (unless the total Employer contribution
to the Plan is less than three percent), or, in certain
cases where a Defined Benefit Plan is maintained, five
percent or seven and one-half percent (whichever is
applicable) of each Participant's Compensation for such
Plan Year; if the Plan is integrated with Social
Security, the "Base Contribution Percentage" plus the
"Excess Contribution Percentage" plus the "Additional
Contribution Percentage" (if any) must be no less than
the "Minimum Top-Heavy Rate" as set forth in the
preceding clause.
(h) "PRIMARY LIMITATION" means 15 percent of the
Compensation otherwise paid or accrued by the Employer
during such Taxable Year to, or for, the Participants
in the Plan.
A-34
<PAGE> 149
(i) "SECONDARY LIMITATION" means the lesser of:
(i) 25 percent of the Participants'
Compensation for the Taxable Year which ends with
or within the Plan Year for which the Employer,
Matching, and/or Elective Deferral Contribution
or other Employer contribution is being made, or
(ii) Any excess of (aa) the aggregate of the
"Primary Limitations" for all Taxable Years
beginning before January 1, 1987, over (bb) the
aggregate of the deductions allowed or allowable
(for Employer, Matching, and Elective Deferral
Contributions or other Employer contributions
paid or deemed paid to the Plan) under section
404(a)(3)(A) of the Code for all Taxable Years
beginning before January 1, 1987, which excess is
available as a carryforward to the current
Taxable Year from such prior Taxable Year(s)
under said section 404(a)(3)(A).
(B) OTHER ALLOCATIONS. Other contributions shall be
allocated in accordance with the Plan document.
A.5.4 ALLOCATION OF INCREASES AND DECREASES. Allocation of increases
or decreases in the fair market value of assets described in Section 5.4 of the
Plan shall be made on the basis of the amounts in the Accounts under the Plan
(as adjusted under Section 5.4 of the Plan) as determined on (check either (A)
or (B)):
/ X / (A) First day of the period in which the Valuation
Date occurs (except that the last day of the period
shall be used for the initial allocation).
/ / (B) Last day of the period in which the Valuation
Date occurs.
A.5.5 ALLOCATION OF FORFEITURES.
(A) Shall forfeitures be allocated in accordance with
Section 5.5 of the Plan (check one)?
/ X / (1) Yes / / (2) No
/ / (3) N/A (No forfeitures)
If Section A.5.5(A)(1) is checked, such allocation shall be effected as of
the last day of the (check one): / / (a) month / / (b) quarter / X / (c)
Plan Year in which the forfeiture occurs under Section 7.6(c) of the Plan,
in proportion to the Employer and/or Matching Contributions (as applicable)
allocated to the remaining Participants for the period for which the
allocation is effected.
(B) If Section A.5.5(A)(2) is checked, forfeitures
shall be allocated as follows (check applicable block):
/ / (1) Matching Account forfeitures shall be used
to reduce Matching Contributions for the Plan
Year in which such forfeitures occur but
otherwise the provisions of Section 5.5 of the
Plan shall apply.
A-35
<PAGE> 150
/ / (2) All Matching and Employer Account
forfeitures shall be used to reduce Matching and
Employer Contributions for the Plan Year in
which such forfeitures occur.
/ X / (3) N/A (Forfeitures shall be allocated under
Section 5.5 of Plan or no forfeitures).
A.6.1 INVESTMENT OF ACCOUNTS.
(A) INVESTMENT POWER. Investment of Trust assets
shall be directed as follows (check (1), (2) or (3)):
/ X / (1) Subject to the terms of the Plan, the
Trustee shall, subject to any limitations
indicated below, have the sole power and
authority to direct investment of Trust assets.
/ / (2) Subject to the terms of the Plan, the
Investment Manager shall, subject to any
limitations indicated below, have the sole power
and authority to direct investment of Trust
assets held in (check applicable block(s)):
/ / Employer Accounts / / Matching Accounts
/ / Participant Accounts / / Elective Deferral
Accounts
/ / QVEC Accounts / / Rollover Accounts
/ / Transfer Accounts / / Other Accounts
Subject to the terms of the Plan, the Trustee shall have the
sole power and authority to direct investment of Trust assets
not committed to the direction of the Investment Manager.
/ / (3) Subject to the terms of the Plan, each
Plan Participant or Beneficiary shall, subject
to any limitations indicated below, have the
sole power and authority to direct investment of
the Trust assets held in (check applicable
block(s)):
/ / Employer Accounts / / Matching Accounts
/ / Participant Accounts / / Elective Deferral
Accounts
/ / QVEC Accounts / / Rollover Accounts
/ / Transfer Accounts / / Other Accounts
The investments which the Participant or Beneficiary may select
are any one or more of the following (specify investment
selections available): ________________________________________
_______________________________________________________________
_______________________________________________________________
Investment instructions shall be given by the Participant or
Beneficiary on the Appropriate Form to the Administrative
Committee not later than (fill in blank) / / days before the
Valuation Date preceding the effective date of the investment
direction. The Administrative Committee shall deliver such
instructions to the Trustee. Such investment instructions shall
be effected by the Trustee not later than (fill in blank) / /
days following the Valuation Date coincident with or next
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following the date on which the investment instructions are
delivered to the Administrative Committee.
Subject to the terms of the Plan, the Trustee shall have the
sole power and authority to direct investment of Trust assets
not committed to the direction of the Participant or
Beneficiary.
(B) LIMITATIONS. List any limitations on types of
investments and transitional investment rules (if none, write "none"):
NONE
(C) QUALIFYING EMPLOYER SECURITIES. May Plan assets be
invested in Qualifying Employer Securities (check one)?
/ X / (1) Yes / / (2) No
In no event may Employer, Participant, Elective Deferral, Matching,
Rollover or Qualified Voluntary Employee Contributions or other Employer
contributions or direct transfers or Employer, Participant, Elective
Deferral, Matching, Rollover, Transfer or QVEC Accounts or other accounts
be invested in Qualifying Employer Securities unless such investment is in
compliance with applicable Federal and state securities laws (including any
necessary filings under such Federal and state securities laws) and the
requirements of the Plan.
If such investment is in compliance with such laws (including any required
filings) and Plan requirements, the prohibition on investment of Plan
assets in Qualifying Employer Securities does not apply and up to / 100 /
(insert percentage; if not applicable, insert letters N/A in blank) percent
of Plan assets may be so invested.
If any such required filings have not been made, only Employer
Contributions and Employer Accounts not subject to Participant or
Beneficiary directed investment may be invested in Qualifying Employer
Securities. In such case, indicate the percentage of Employer Contributions
and Employer Accounts which may be invested in Qualifying Employer
Securities in the following blank: / 100 / percent (insert percentage; if
not applicable, insert letters N/A in blank).
A.7.6 SEPARATION FROM SERVICE.
(A) DISTRIBUTION OF ACCRUED BENEFITS UPON SEPARATION
FROM SERVICE.
(1) NORMAL RULES. Upon separation of a Participant
from the service of his Employer under Section
7.6(A) of the Plan, distribution of such
Participant's Vested Accrued Benefit shall be made
(check only one block (i.e., (a), (b) or (c)):
/ / (a) Upon the request of the Participant in
writing on the Appropriate Form, within 60
days following the last day of the Plan Year
in which such Participant incurs five
consecutive One-Year Breaks In Service but if
distribution is not so requested by the
Participant, distribution shall be made on
the date the Participant would have attained
his Normal Retirement Age had he remained in
the employ of the Employer;
/ X / (b) Upon the request of the Participant in
writing on the Appropriate Form, at any time
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following the first Valuation Date coincident
with or next following the date such
Participant separates from the service of the
Employer; however, if distribution is not so
requested by the Participant earlier,
distribution shall be made no later than 60
days following the date the Participant would
have attained his Normal Retirement Age had
he remained in the employ of the Employer; or
/ / (c) Within 60 days following the date the
Participant would have attained his Normal
Retirement Age had he remained in the employ
of the Employer.
Notwithstanding any other provision in the Plan or Adoption Agreement, if
the Plan provides for distribution on an Early Retirement Date and if a
separated Participant met the service but not the age requirement for such
Early Retirement Date on the date of his separation from the service of his
Employer, upon meeting such age requirement after separation, such
Participant, if he so requests in writing on the Appropriate Form, shall
commence receiving his deferred Vested Accrued Benefit no later than the
date which would have been his Early Retirement Date had he continued in
the service of the Employer. If no such request is made, distribution shall
be made in accordance with Section A.7.6(A)(1)(a), (b) or (c), as elected
by the Employer in this Adoption Agreement. All requests for payment under
this Section A.7.6(A) shall be made within the 90-day period preceding the
date payment is to commence.
(2) EXCEPTION. If a Participant separates from
the service of the Employer and the value of the
Participant's Vested Accrued Benefit does not exceed
and at the time of any prior distribution did not
exceed $3,500, the Participant shall automatically,
whether or not he requests distribution, receive, in
one lump sum, a distribution of his entire Vested
Accrued Benefit (and if the Vested Accrued Benefit
is $-0-, he shall be deemed to have received such
Vested Accrued Benefit) within 60 days following the
first Valuation Date coincident with or next
following the date such Participant separates from
the service of the Employer.
This provision shall only apply if this block is checked / X /.
If the above block is not checked or if the value of the Participant's
Vested Accrued Benefit exceeds or at the time of a prior distribution
exceeded $3,500, the election made under Section A.7.6(A)(1) shall apply to
the distribution of the Participant's Vested Accrued Benefit under the
Plan.
(B) VESTING UPON SEPARATION FROM SERVICE.
(1) Except as otherwise provided in the Plan and
in Sections A.3.5 and A.3.11, the interest of
each Participant in his Employer Account and
Matching Account shall vest as follows (check
one and complete applicable blanks):
/ / (a) 100 percent vesting immediately. (This
alternative must be chosen if a period of
more than one year has been designated in
Section A.2.2(B)(1)(a)(i)).
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/ / (b) / / percent for each Year of Service
for Vesting (not less than 20 percent for
each Year of Service for Vesting, but not
more than 100 percent).
/ / (c) Nothing for the first five Years of
Service for Vesting and 100 percent
thereafter.
/ / (d) Nothing for the first / / Years of
Service for Vesting, then / / percent for
each Year of Service for Vesting thereafter,
but not more than 100 percent. (Full vesting
must occur after five Years of Service for
Vesting).
/ / (e) In accordance with the following table:
IF YEARS OF SERVICE
FOR VESTING THEN THE VESTED
EQUAL OR EXCEED PERCENTAGE IS
3................................ 20
4................................ 40
5................................ 60
6................................ 80
7 or more........................ 100
/ X / (f) Other. (This alternative, if chosen,
must provide a percentage of vesting which is
not less than the percentage that would be
provided under options (c) or (e) used
consistently) - Specify:
IF YEARS OF SERVICE
FOR VESTING THEN THE VESTED
EQUAL OR EXCEED PERCENTAGE IS
1................................ 10
2................................ 25
3................................ 50
4................................ 75
5 OR MORE........................ 100
(2) For purposes of Section A.7.6(B)(1) above and
for purposes of Section A.3.5 and Section 3.11(B) of
the Plan, Years of Service for Vesting attributable
to the following shall be disregarded (check
applicable blocks):
/ / (a) Service prior to the attainment of age
18, exclusive of the year within which the
Employee attained age 18.
/ / (b) Service during any period for which the
Employer did not maintain this Plan or a
predecessor trust or plan.
/ / (c) Service before January 1, 1971, unless
the Employee has had at least three years of
credited service after December 31, 1970,
determined without application of paragraphs
(a), (b), (d) and (e) hereof if selected by
the Employer.
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/ X / (d) If an Employee is reemployed by the
Employer following a One-Year Break In
Service, service before such One-Year Break
In Service, if the Employee has not completed
a Year of Service for Vesting after such One-
Year Break In Service, for the purpose of
determining the vested percentage in his
Employer-derived Accrued Benefit which
accrues after such One-Year Break In Service.
/ X / (e) If an Employee is reemployed by the
Employer following five consecutive One-Year
Breaks In Service (check only (i) or (ii)
whichever is to apply):
/ / (i) Service after such five
consecutive One-Year Breaks In
Service, for the purpose of
determining the vested percentage in
his Employer-derived Accrued Benefit
which accrued before such five
consecutive One-Year Breaks In
Service but both pre-Break and post-
Break service will count for
purposes of determining the vested
percentage in his Employer-derived
Accrued Benefit which accrued after
such Break.
/ X / (ii) Service after such five
consecutive One-Year Breaks In
Service, for the purpose of
determining the vested percentage in
his Employer-derived Accrued Benefit
which accrued before such five
consecutive One-Year Breaks In
Service and, if the Employee had no
vested interest in his Employer-
derived Accrued Benefit prior to
such Break(s) and the number of
consecutive One-Year Breaks In
Service equals or exceeds the
aggregate Years of Service for
Vesting, service before such five
consecutive One-Year Breaks In
Service for the purpose of
determining the vested percentage in
his Employer-derived Accrued Benefit
which accrues after such five
consecutive One-Year Breaks In
Service.
To the extent required by the Plan, separate accounts
shall be maintained for the Participant's pre-Break and
post-Break Employer-derived account balances.
(3) Except as otherwise provided in Section
7.6(C) of the Plan relating to benefits accruing
before a separation from service, if a Participant
separates from service and thereafter returns to
employment with the Employer without incurring five
consecutive One-Year Breaks In Service, he shall
continue to vest in his Accrued Benefit.
(4) In the event that an Employee who is not a
member of the eligible class of Employees becomes a
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member of the eligible class, such Employee shall,
subject to any applicable limitation set forth in
this Section A.7.6, receive credit, for vesting
purposes, for Service with the Employer while such
Employee was not a member of the eligible class.
(5) Service, for purposes of Section A.7.6(B)(1),
includes service with a predecessor employer if the
Employer adopting the Plan is maintaining the Plan
as a plan of a predecessor employer.
Service, for purposes of Section A.7.6(B)(1), also includes service
with a predecessor employer whose plan is not being continued by the
Employer to the extent provided in Section A.1.79.
(C) FORFEITURES. If the provisions of Section
7.6(C)(1)(b) of the Plan are to apply, check this block / X /; otherwise
the provisions of Section 7.6(C)(1)(a) of the Plan shall apply.
A.7.9 COMMENCEMENT OF PAYMENTS; DEFERRAL OF PAYMENTS; MINIMUM
DISTRIBUTION REQUIREMENTS.
(A) DATE PAYMENTS TO COMMENCE. This provision is
contained in the Plan.
(B) DEFERRAL OF PAYMENTS. Shall a Participant, to the
extent permitted by the Plan, be permitted to defer payment of benefits
under Sections 7.3, 7.4, 7.5 and 7.7 of the Plan (check one)?
/ X / (1) Yes / / (2) No
(C) MINIMUM DISTRIBUTION REQUIREMENTS. This provision
is contained in the Plan.
A.7.10 WITHDRAWALS DURING EMPLOYMENT.
(A) WITHDRAWALS FROM PARTICIPANT ACCOUNTS. Shall
withdrawals of Participant Accounts (other than the portion of such
Participant Accounts attributable to required Participant Contributions and
to Participant Contributions which are matched by the Employer) be
permitted (check one)?
/ / (1) Yes / / (2) No / X / (3) N/A
(B) WITHDRAWALS FROM QVEC ACCOUNTS. Shall withdrawals
of QVEC Accounts be permitted (check one)?
/ / (1) Yes / / (2) No / X / (3) N/A
(C) WITHDRAWALS FROM ROLLOVER ACCOUNTS. Shall
withdrawals of Rollover Accounts be permitted (check one)?
/ / (1) Yes / X / (2) No / / (3) N/A
(D) HARDSHIP AND POST - 59 1/2 WITHDRAWALS FROM
ELECTIVE DEFERRAL ACCOUNTS. Shall withdrawals of Elective Deferral Accounts
be permitted (if such withdrawals are to be permitted, check either (1) or
(2) or both) / / (1) on account of hardship / / (2) after reaching age
59-1/2 (check one)?
/ / (a) Yes / / (b) No / X / (c) N/A
(E) HARDSHIP AND POST - 59 1/2 WITHDRAWALS FROM
EMPLOYER, PARTICIPANT, ROLLOVER AND TRANSFER ACCOUNTS. Shall withdrawals
of Employer, Participant, Rollover and Transfer Accounts be permitted (if
such withdrawals
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are to be permitted, check either (1) or (2) or both) / / (1) on account of
hardship / / (2) after reaching age 59-1/2 (check one)?
/ / (a) Yes / X / (b) No
(F) HARDSHIP AND POST - 59 1/2 WITHDRAWALS FROM
MATCHING ACCOUNTS. Shall hardship and post - age 59 1/2 withdrawals of
Matching Accounts be permitted (if such withdrawals are to be permitted,
check either (1) or (2) or both) / / (1) on account of hardship / / (2)
after reaching age 59-1/2 (check one)?
/ / (a) Yes / / (b) No / X / (c) N/A
(G) OTHER PRE-59-1/2 IN-SERVICE WITHDRAWALS. Shall
withdrawals of a Participant's Vested Accrued Benefit attributable to
Participant Contributions, Employer Contributions, and Matching
Contributions after such Participant completes five Years of Service for
Benefit Accrual but before he attains age 59 1/2 be permitted (check one)?
/ / (1) Yes / X / (2) No
WITHDRAWALS SHALL ONLY BE MADE IN ACCORDANCE WITH THE PROVISIONS OF SECTION
7.10 OF THE PLAN.
A.7.11 LOANS.
(A) Shall loans to Participants and Beneficiaries if
such Beneficiaries are parties-in-interest (as defined in the Plan) be
permitted (check one)?
/ X / (1) Yes / / (2) No
NOTE: NO LOANS MAY BE MADE TO OWNER-EMPLOYEES OR TO
SHAREHOLDER EMPLOYEES (AS DEFINED IN SECTION 7.11(A)(7) OF THE PLAN).
(B) The interest rate shall be determined as follows:
THE INTEREST RATE SHALL EQUAL ONE PERCENTAGE POINT ABOVE THE PRIME INTEREST
RATE AS PUBLISHED IN THE WALL STREET JOURNAL ON THE FIRST BUSINESS DAY OF THE
WEEK IN WHICH THE LOAN IS MADE.
(C) Shall the exception to the 50% of Vested Accrued
Benefit limitation on loans not in excess of $10,000 apply?
/ / (1) Yes / X / (2) No
/ / (3) N/A (No loans permitted)
If the exception is to apply, note that only 50% of the Vested Accrued
Benefit may be used as security for the loan. Additional security must
be provided by the Participant or Beneficiary. Specify the type of
additional collateral which will be used to secure the remainder of the
loan: N/A
(D) Specify the types of collateral to be used to
secure loans under the Plan: ONE HALF OF THE PRESENT VALUE OF THE
PARTICIPANT'S OR BENEFICIARY'S VESTED ACCRUED BENEFIT UNDER THE PLAN.
(E) If Section A.7.11(A)(1) is checked, indicate any
additional limitations to be placed on loans (if none, so state; if not
applicable, insert letters N/A): LOANS FROM THE PLAN WILL BE PERMITTED
ONLY IN THE EVENT OF A PERSONAL EMERGENCY OR FINANCIAL HARDSHIP IN
ACCORDANCE WITH THE GUIDELINES SET FORTH IN SECTION 7.10(C)(3) OF THE PLAN.
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(F) Shall loans to a Participant be treated as an
investment by such Participant for his Accounts only (check one)?
/ X / (1) Yes / / (2) No
/ / (3) N/A (No loans permitted)
A.7.14 JOINT AND SURVIVOR ANNUITY. The provisions of Section
7.14 of the Plan shall not apply to the Plan, as adopted under this Adoption
Agreement.
A.8.2 SPECIAL PROVISION WITH RESPECT TO QUALIFIED DOMESTIC
RELATIONS ORDERS. Shall the special provision of Section 8.2 of the Plan with
respect to Qualified Domestic Relations Orders apply to the Plan as adopted by
the Employer (check one)?
/ X / (A) Yes / / (B) No
A.15.1 AMENDMENT. THE CHANGES MADE BY THIS AMENDMENT AND
RESTATEMENT SHALL BE DEEMED ADOPTED BY EACH ADOPTING EMPLOYER ON THE DATE THE
NOTIFICATION LETTER IS ISSUED BY THE DISTRICT OFFICE OF THE INTERNAL REVENUE
SERVICE WITHOUT FURTHER ACTION ON THE PART OF THE ADOPTING EMPLOYER EXCEPT THAT
SUCH ADOPTING EMPLOYER MUST SEND A NOTICE TO INTERESTED PARTIES INFORMING SUCH
INTERESTED PARTIES THAT THE PLAN HAS BEEN AMENDED. SUCH NOTICE MUST BE GIVEN IN
ACCORDANCE WITH THE RULES OF SECTION 15.1(C) OF THE PLAN. SEE SECTION 15.1(C) OF
THE PLAN FOR FURTHER INFORMATION.
A.18.4 AGENT FOR SERVICE OF LEGAL PROCESS. The name(s) and
address(es) of the agent(s) for service of legal process under the Plan are:
ADMINISTRATIVE COMMITTEE, FUND OFFICE RETIREMENT PROFIT-SHARING PLAN
C/O MUNICIPAL FUND FOR TEMPORARY INVESTMENT
BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
A.18.17 RESTATEMENT.
(A) RESTATEMENT OF EXISTING PLAN. The Employer may
adopt the Plan as an amendment and restatement of any Prior Plan (including
a prior version of this Plan and Trust Agreement). Adoption shall not
require termination of the Prior Plan, except that amendment and
restatement of an existing Defined Benefit Plan into the Plan shall be
deemed to be a termination of such Prior Plan for the purposes of Title IV
of ERISA. Upon adoption of this Plan, the assets of the Prior Plan shall be
invested in accordance with the provisions of this Plan. Check if
applicable:
/ X / This is an amendment and restatement of the FUND
OFFICE RETIREMENT PROFIT-SHARING PLAN, an existing qualified
PROFIT-SHARING plan, which was adopted effective as of
SEPTEMBER 18, 1981.
(B) LIMITATIONS APPLICABLE TO PLAN PROVISIONS. Except
as otherwise provided in Section 3.11 of the Plan, the participation and/or
vesting provisions of the Plan, as adopted by the Employer, shall apply as
follows (check applicable block or blocks; to the extent not checked, the
Plan shall apply in accordance with the terms set forth herein):
/ / (1) The participation provisions of this Plan,
as adopted by the Employer, shall apply only to
Employees hired on or after the date the Plan is
adopted by the Employer. The participation
provisions of the Prior Plan shall otherwise
apply.
/ / (2) The vesting provisions of this Plan, as
adopted by the Employer, shall apply only to
Employees hired on or after the date the Plan is
adopted by the
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Employer. The vesting provisions of the Prior
Plan shall otherwise apply.
/ X / (3) N/A.
(C) INCORPORATION OF APPLICABLE PRIOR PLAN PROVISIONS
AND TRANSITIONAL RULES. If the Employer checked A.18.17(A), such Employer
shall insert here any Prior Plan provisions and any transitional rules
which such Employer desires or is required to make applicable to this Plan
(if none, write the word "none"):
(1) MERGER OF PLANS. EFFECTIVE DECEMBER 1, 1987, THE CHESTNUT
STREET EXCHANGE FUND RETIREMENT PROFIT-SHARING PLAN, THE INDEPENDENCE SQUARE
INCOME SECURITIES, INC. RETIREMENT PROFIT-SHARING PLAN, THE TEMPORARY INVESTMENT
FUND, INC. RETIREMENT PROFIT-SHARING PLAN, AND THE TRUST FOR SHORT-TERM FEDERAL
SECURITIES RETIREMENT PROFIT-SHARING PLAN WERE MERGED INTO, AND THEIR ASSETS
TRANSFERRED INTO, THE PLAN.
(2) CHANGE IN ACCRUAL COMPUTATION PERIODS, LIMITATION YEARS, PLAN
YEARS AND VESTING COMPUTATION PERIODS. AS A RESULT OF THE MERGER AND TRANSFER OF
ASSETS, THE ACCRUAL COMPUTATION PERIODS, LIMITATION YEARS, PLAN YEARS AND
VESTING COMPUTATION PERIODS FOR THE CHESTNUT STREET EXCHANGE FUND, INDEPENDENCE
SQUARE INCOME SECURITIES, INC., TEMPORARY INVESTMENT FUND, INC., AND TRUST FOR
FEDERAL SECURITIES RETIREMENT PROFIT-SHARING PLANS HAVE BEEN CHANGED AS FOLLOWS:
PLAN OLD (UNDER OLD PLAN) NEW (UNDER THIS PLAN)
CHESTNUT STREET EX-
CHANGE FUND 1/1 TO 12/31 12/1 TO 11/30
INDEPENDENCE SQUARE
INCOME SECURITIES,
INC. 1/1 TO 12/31 12/1 TO 11/30
TEMPORARY INVESTMENT
FUND, INC. 10/1 TO 9/30 12/1 TO 11/30
TRUST FOR FEDERAL
SECURITIES 11/1 TO 10/31 12/1 TO 11/30
THIS RESULTED IN THE FOLLOWING SHORT ACCRUAL COMPUTATION
PERIODS,LIMITATION YEARS, PLAN YEARS AND VESTING COMPUTATION PERIODS:
PLAN SHORT PERIOD/YEAR
CHESTNUT STREET 1/1/87 TO 11/30/87
INDEPENDENCE SQUARE INCOME SECURITIES, INC. 1/1/87 TO 11/30/87
TEMPORARY INVESTMENT FUND, INC. 10/1/87 TO 11/30/87
TRUST FOR FEDERAL SECURITIES 11/1/87 TO 11/30/87
(A) CHANGE IN VESTING COMPUTATION PERIODS. EACH PARTICIPANT IN THE
ABOVE LISTED PLANS RECEIVED VESTING CREDIT FOR TWO YEARS OF
SERVICE FOR VESTING PROVIDED SUCH PARTICIPANT COMPLETED 200 OR
MORE HOURS OF SERVICE IN BOTH THE OLD VESTING COMPUTATION
PERIOD AND THE NEW VESTING COMPUTATION PERIOD AS SET FORTH
ABOVE.
(B) CHANGE IN ACCRUAL COMPUTATION PERIODS. ANY PARTICIPANT IN THE
ABOVE LISTED PLANS WHO COMPLETED 200 HOURS OF SERVICE
MULTIPLIED BY THE NUMBER OF MONTHS IN THE SHORT ACCRUAL
COMPUTATION PERIOD DIVIDED BY TWELVE RECEIVED HIS
PROPORTIONATE SHARE OF EMPLOYER CONTRIBUTIONS DURING THE SHORT
ACCRUAL COMPUTATION PERIOD SET FORTH ABOVE.
(C) CHANGE IN LIMITATION YEARS. FOR THE SHORT LIMITATION YEARS,
THE DOLLAR LIMITATIONS UNDER SECTION 415(c)(1)(a) OF THE CODE
WERE ADJUSTED AS PROVIDED UNDER TREAS. REG. SECTION
1.415-2(b)(4).
THE ABOVE CHANGES WERE MADE PURSUANT TO THE AUTOMATIC APPROVAL
PROVISIONS OF REV. PROC. 87-27, 1987-25 I.R.B. 41.
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A.18.18 INDIVIDUAL PROVISIONS. Any provisions applicable to the
adopting Employer only should be inserted here (if none, write the word "none"):
(A) EMPLOYER AMENDMENT OF PLAN AND/OR TRUST. ANY EMPLOYER AMENDMENT OF THE
PLAN AND/OR TRUST PERMITTED BY SECTION 15.1 OF THE PLAN AND TRUST AGREEMENT
SHALL BE EFFECTED BY RESOLUTION OF THE EMPLOYER'S BOARD OF DIRECTORS ADOPTED AT
A DULY HELD MEETING OF SAID BOARD OR BY UNANIMOUS WRITTEN CONSENT OF SAID BOARD,
IF THE EMPLOYER IS INCORPORATED AND OTHERWISE BY APPROPRIATE WRITTEN ACTION OF
EMPLOYER'S OWNER OR OTHER GOVERNING ENTITY UNDER STATE LAW. A CERTIFIED COPY OF
SUCH RESOLUTIONS OR OTHER WRITTEN ACTION SHALL BE DELIVERED TO THE
ADMINISTRATIVE COMMITTEE AND THE TRUSTEE.
(B) TERMINATION OR PARTIAL TERMINATION OF PLAN AND/OR TRUST. TERMINATION
OR PARTIAL TERMINATION OF THE PLAN AND/OR TRUST UNDER ARTICLE XVI OF THE PLAN
AND TRUST AGREEMENT SHALL BE EFFECTED BY RESOLUTION OF THE EMPLOYER'S BOARD OF
DIRECTORS ADOPTED AT A DULY HELD MEETING OF SAID BOARD OR BY UNANIMOUS WRITTEN
CONSENT OF SAID BOARD, IF SUCH EMPLOYER IS INCORPORATED AND OTHERWISE BY
APPROPRIATE WRITTEN ACTION OF EMPLOYER'S OWNER OR OTHER GOVERNING ENTITY UNDER
STATE LAW. A CERTIFIED COPY OF SUCH RESOLUTIONS OR OTHER WRITTEN ACTION SHALL BE
DELIVERED TO THE ADMINISTRATIVE COMMITTEE AND THE TRUSTEE.
(C) ADOPTION OF PLAN BY OTHER EMPLOYERS.
(1) EFFECTIVE DATE. THIS SECTION A.18.18(c) SHALL BE EFFECTIVE AS OF
DECEMBER 1, 1989.
(2) ADOPTION OF PLAN AND TRUST. ANY OTHER EMPLOYER MAY ADOPT THE
TERMS OF THIS PLAN AS ADOPTED BY THE ADOPTING EMPLOYER, AND THEREBY BECOME A
"PARTICIPATING EMPLOYER," PROVIDED:
(a) THE BOARD OF DIRECTORS OR OTHER GOVERNING ENTITY OF THE
ADOPTING EMPLOYER CONSENTS TO SUCH ADOPTION;
(b) THE BOARD OF DIRECTORS OR OTHER GOVERNING ENTITY OF THE
ADOPTING PARTICIPATING EMPLOYER ADOPTS THIS PLAN BY APPROPRIATE ACTION;
(c) THE ADOPTING PARTICIPATING EMPLOYER EXECUTES THE ADOPTION
AGREEMENT; AND
(d) THE ADOPTING PARTICIPATING EMPLOYER EXECUTES SUCH OTHER
DOCUMENTS AS MAY BE REQUIRED TO MAKE SUCH ADOPTING PARTICIPATING
EMPLOYER A PARTY TO THE PLAN AND TRUST AS A PARTICIPATING EMPLOYER
(EXCEPT AS PROVIDED BELOW).
A PARTICIPATING EMPLOYER WHICH ADOPTS THE PLAN AND TRUST AGREEMENT IS
THEREAFTER AN EMPLOYER WITH RESPECT TO ITS EMPLOYEES FOR PURPOSES OF THE
PLAN, THE TRUST AGREEMENT AND THIS ADOPTION AGREEMENT EXCEPT THAT SUCH
PARTICIPATING EMPLOYER DELEGATES TO THE ADOPTING EMPLOYER THE POWER TO
AMEND THE ADOPTION AGREEMENT ON ITS BEHALF AND ON BEHALF OF THE ADOPTING
EMPLOYER AND EACH OTHER PARTICIPATING EMPLOYER, PROVIDED SUCH AMENDMENT
DOES NOT MATERIALLY AFFECT THE SUBSTANCE OF THE PLAN WITH RESPECT TO THE
ADOPTING EMPLOYER OR ANY PARTICIPATING EMPLOYER OR MATERIALLY AFFECT THE
COSTS OF THE ADOPTING EMPLOYER OR ANY PARTICIPATING EMPLOYER. A
PARTICIPATING EMPLOYER RESERVES THE POWER TO WITHDRAW FROM THE PLAN, AS
PROVIDED IN SECTION A.18.18(c)(3), AND TO TERMINATE THE PLAN AND TRUST
AGREEMENT WITH RESPECT TO SUCH PARTICIPATING EMPLOYER, AS PROVIDED IN
SECTION A.18.18(5).
(3) WITHDRAWAL FROM PLAN. SUBJECT TO THE REQUIREMENTS OF ARTICLE XVII,
ANY PARTICIPATING EMPLOYER MAY, AT ANY TIME, WITHDRAW FROM THE PLAN UPON
GIVING THE BOARD OF DIRECTORS OR OTHER GOVERNING ENTITY OF THE ADOPTING
EMPLOYER, THE ADMINISTRATIVE COMMITTEE AND THE TRUSTEE AT LEAST 30 DAYS
NOTICE IN WRITING OF ITS INTENTION TO WITHDRAW. UPON THE WITHDRAWAL OF A
PARTICIPATING EMPLOYER PURSUANT TO THIS SECTION A.18.18(c)(3), THE TRUSTEE
SHALL SEGREGATE A PORTION OF THE ASSETS IN THE TRUST AS SET FORTH BELOW,
THE VALUE OF WHICH SHALL EQUAL THE TOTAL AMOUNT CREDITED TO THE ACCOUNTS OF
PARTICIPANTS EMPLOYED BY THE WITHDRAWING PARTICIPATING EMPLOYER. SUBJECT TO
THE REQUIREMENTS OF ARTICLE XVII, THE DETERMINATION OF WHICH ASSETS ARE TO
BE
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SO SEGREGATED SHALL BE MADE BY THE TRUSTEE IN ITS SOLE DISCRETION AS SET
FORTH BELOW.
THE ADMINISTRATIVE COMMITTEE MAY, AT ANY TIME, DIRECT THE TRUSTEE TO
SEGREGATE FROM THE TRUST SUCH PART THEREOF AS THE ADMINISTRATIVE COMMITTEE
SHALL DETERMINE TO BE HELD FOR THE BENEFIT OF THE EMPLOYEES OF A
PARTICIPATING EMPLOYER, AND SHALL GIVE A COPY OF SUCH DIRECTIONS TO THE
ADOPTING EMPLOYER AND EACH PARTICIPATING EMPLOYER. SUCH DIRECTIONS SHALL
SPECIFY THE ASSETS OF THE TRUST TO BE SEGREGATED. UNLESS THE ADOPTING
EMPLOYER OR ANY PARTICIPATING EMPLOYER FILES WITH THE TRUSTEE A WRITTEN
PROTEST WITHIN 30 DAYS AFTER DELIVERY OF SUCH DIRECTIONS TO THE TRUSTEE,
SUCH DIRECTIONS SHALL CONCLUSIVELY ESTABLISH THAT THE ASSETS SPECIFIED
THEREIN REPRESENT THE PART OF THE TRUST HELD FOR THE BENEFIT OF THE
EMPLOYEES OF THE ADOPTING EMPLOYER AND OF EACH PARTICIPATING EMPLOYER.
AFTER THE EXPIRATION OF SUCH 30 DAY PERIOD, AND AFTER SETTLEMENT OF ANY
SUCH PROTEST, THE TRUSTEE SHALL FOLLOW THE ADMINISTRATIVE COMMITTEE'S
DIRECTIONS, INCLUDING ANY MODIFICATION THEREOF ADOPTED IN SETTLEMENT OF ANY
PROTEST. ANY PART OF THE TRUST SEGREGATED PURSUANT TO SUCH DIRECTIONS SHALL
THEREAFTER BE HELD IN A SEPARATE TRUST IDENTICAL IN TERMS TO THE TRUST
HEREBY ESTABLISHED OR MAINTAINED, EXCEPT THAT, WITH RESPECT TO SUCH
SEPARATE TRUST, THIS PLAN AND TRUST AGREEMENT SHALL BE CONSTRUED AS IF SUCH
PARTICIPATING EMPLOYER WERE THE ADOPTING EMPLOYER AND ALL POWERS AND
AUTHORITY CONFERRED UPON THE ADOPTING EMPLOYER OR ITS BOARD OR OTHER
GOVERNING ENTITY AND THE ADMINISTRATIVE COMMITTEE SHALL DEVOLVE UPON SUCH
PARTICIPATING EMPLOYER OR ITS BOARD OF DIRECTORS OR OTHER GOVERNING ENTITY.
AT ANY TIME THEREAFTER, SUCH PARTICIPATING EMPLOYER AND THE TRUSTEE MAY
(BUT THEY SHALL NOT BE REQUIRED TO) ENTER INTO A SEPARATE AGREEMENT STATING
THE TERMS OF SUCH SEPARATE PLAN AND TRUST AGREEMENT WHICH MAY BE THE
DRINKER BIDDLE & REATH REGIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN AND
TRUST AGREEMENT. IF THE DRINKER BIDDLE & REATH REGIONAL PROTOTYPE DEFINED
CONTRIBUTION PLAN AND TRUST AGREEMENT IS NOT SO ADOPTED, THE PLAN AND TRUST
AGREEMENT WITH RESPECT TO THE WITHDRAWING PARTICIPATING EMPLOYER SHALL BE
CONSIDERED AN INDIVIDUALLY DESIGNED PLAN.
(4) EXCLUSIVE PURPOSE OF TRUST. NEITHER THE SEGREGATION AND
TRANSFER OF THE TRUST ASSETS UPON THE WITHDRAWAL OF A PARTICIPATING
EMPLOYER NOR THE EXECUTION OF A NEW PLAN AND TRUST AGREEMENT BY SUCH
WITHDRAWING PARTICIPATING EMPLOYER SHALL OPERATE TO PERMIT ANY PART OF THE
TRUST TO BE USED FOR, OR DIVERTED TO, PURPOSES OTHER THAN FOR THE EXCLUSIVE
BENEFIT OF THE PARTICIPANTS OR THEIR BENEFICIARIES.
(5) APPLICATION OF WITHDRAWAL PROVISIONS. THE WITHDRAWAL
PROVISIONS CONTAINED IN SECTION A.18.18(c)(3) AND (4) SHALL BE APPLICABLE
ONLY IF THE WITHDRAWING PARTICIPATING EMPLOYER CONTINUES TO COVER ITS
PARTICIPANTS AND ELIGIBLE EMPLOYEES IN ANOTHER PLAN AND TRUST QUALIFIED
UNDER SECTIONS 401 AND 501 OF THE CODE. OTHERWISE, THE TERMINATION
PROVISIONS OF THE PLAN AND TRUST AGREEMENT SHALL APPLY WITH RESPECT TO THE
WITHDRAWING PARTICIPATING EMPLOYER.
(6) SINGLE PLAN. NOTWITHSTANDING ANY OTHER PROVISION SET FORTH
HEREIN, THE PLAN, AS ADOPTED PURSUANT TO THIS SECTION A.18.18(c) BY THE
ADOPTING EMPLOYER AND EACH PARTICIPATING EMPLOYER, SHALL CONSTITUTE A
SINGLE PLAN, AS SUCH TERM IS DEFINED IN TREAS. REG. SECTION
1.414(1)-1(b)(1), AS TO THE ADOPTING EMPLOYER AND EACH PARTICIPATING
EMPLOYER.
(7) QUALIFYING EMPLOYER SECURITIES. FOR PURPOSES OF SECTIONS
A.1.72 AND A.6.1(b), AND FOR ALL OTHER PURPOSES OF THE PLAN AND TRUST
AGREEMENT, THE STOCK OF ANY ADOPTING EMPLOYER AND ANY PARTICIPATING
EMPLOYER SHALL BE TREATED AS QUALIFYING EMPLOYER SECURITIES.
(8) ADOPTING EMPLOYER APPOINTED AGENT OF PARTICIPATING EMPLOYERS.
EACH PARTICIPATING EMPLOYER APPOINTS THE BOARD OF DIRECTORS OR OTHER
GOVERNING ENTITY OF THE ADOPTING EMPLOYER AS ITS AGENT TO EXERCISE ON ITS
BEHALF ALL OF THE ADMINISTRATIVE POWER AND AUTHORITY CONFERRED UPON THE
ADOPTING EMPLOYER BY THIS PLAN AND TRUST AGREEMENT, INCLUDING THE POWER TO
AMEND THE ADOPTION AGREEMENT ON ITS BEHALF AND ON BEHALF OF THE ADOPTING
EMPLOYER AND
A-46
<PAGE> 161
EACH OTHER PARTICIPATING EMPLOYER AS SET FORTH IN ARTICLE XV, PROVIDED SUCH
AMENDMENT DOES NOT MATERIALLY AFFECT THE SUBSTANCE OF THE PLAN WITH RESPECT
TO THE ADOPTING EMPLOYER OR ANY PARTICIPATING EMPLOYER OR MATERIALLY AFFECT
THE COST OF THE ADOPTING EMPLOYER OR ANY PARTICIPATING EMPLOYER. THE
AUTHORITY OF THE BOARD OF DIRECTORS OR OTHER GOVERNING ENTITY OF THE
ADOPTING EMPLOYER TO ACT AS AGENT OF ANY PARTICIPATING EMPLOYER, IN
ACCORDANCE WITH SECTIONS A.18.18(c)(2) AND A.18.18(c)(8), SHALL TERMINATE
ONLY IF THE PART OF THE PLAN'S ASSETS HELD FOR THE BENEFIT OF THE EMPLOYEES
OF SUCH PARTICIPATING EMPLOYER SHALL BE SEGREGATED IN A SEPARATE TRUST AS
PROVIDED IN SECTION A.18.18(c)(3) AND SUCH PARTICIPATING EMPLOYER THEREUPON
WITHDRAWS FROM THE PLAN IN ACCORDANCE WITH SECTION A.18.18(c)(3). ANY
MATERIAL AMENDMENT (I.E., ANY AMENDMENT MATERIALLY AFFECTING THE SUBSTANCE
OF THE PLAN WITH RESPECT TO THE ADOPTING EMPLOYER OR ANY PARTICIPATING
EMPLOYER OR MATERIALLY AFFECTING THE COSTS OF THE ADOPTING EMPLOYER OR ANY
PARTICIPATING EMPLOYER CAN ONLY BE ADOPTED BY THE ADOPTING EMPLOYER AND ALL
PARTICIPATING EMPLOYERS. EACH PARTICIPATING EMPLOYER EXCLUSIVELY RESERVES
THE POWER TO TERMINATE THIS PLAN AND/OR THE TRUST AGREEMENT AS SET FORTH IN
ARTICLE XVI WITH RESPECT TO SUCH PARTICIPATING EMPLOYER. THE COMPLETE
TERMINATION OF THE PLAN CAN ONLY BE EFFECTED BY ACTION OF THE ADOPTING
EMPLOYER AND ALL PARTICIPATING EMPLOYERS.
(9) NAME OF ADOPTING EMPLOYER. THE MUNICIPAL FUND FOR TEMPORARY
INVESTMENT IS THE ADOPTING EMPLOYER.
(10) PARTICIPATING EMPLOYERS. THE NAMES AND PERTINENT DATA FOR THE
PARTICIPATING EMPLOYERS ARE AS FOLLOWS:
(A) CHESTNUT STREET EXCHANGE FUND:
ADDRESS: BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
EMPLOYER IDENTIFICATION NUMBER:51-0199471
TAXABLE YEAR: JANUARY 1 - DECEMBER 31
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: PARTNERSHIP
PLACE OF ORGANIZATION: CALIFORNIA
(B) INDEPENDENCE SQUARE INCOME SECURITIES, INC.:
ADDRESS: ONE ALDWYN CENTER
VILLANOVA, PA 19085
EMPLOYER IDENTIFICATION NUMBER:23-1861553
TAXABLE YEAR: JANUARY 1 - DECEMBER 31
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: CORPORATION
PLACE OF ORGANIZATION: MARYLAND
(C) TEMPORARY INVESTMENT FUND, INC.:
ADDRESS: BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
EMPLOYER IDENTIFICATION NUMBER:52-0983343
A-47
<PAGE> 162
TAXABLE YEAR: OCTOBER 1 - SEPTEMBER 30
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: CORPORATION
PLACE OF ORGANIZATION: MARYLAND
(D) TRUST FOR FEDERAL SECURITIES:
ADDRESS: BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
EMPLOYER IDENTIFICATION NUMBER:52-1036683
TAXABLE YEAR: NOVEMBER 1 - OCTOBER 31
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: BUSINESS TRUST
PLACE OF ORGANIZATION: PENNSYLVANIA
(E) MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC.:
ADDRESS: BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
EMPLOYER IDENTIFICATION NUMBER:51-0266273
TAXABLE YEAR: FEBRUARY 1 - JANUARY 31
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: CORPORATION
PLACE OF ORGANIZATION: MARYLAND
(F) MUNICIPAL FUND FOR NEW YORK INVESTORS, INC.:
ADDRESS: BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
EMPLOYER IDENTIFICATION NUMBER:51-0270312
TAXABLE YEAR: AUGUST 1 - JULY 31
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: CORPORATION
PLACE OF ORGANIZATION: MARYLAND
(G) PORTFOLIOS FOR DIVERSIFIED INVESTMENT:
ADDRESS: BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
EMPLOYER IDENTIFICATION NUMBER:51-0300345
TAXABLE YEAR: JULY 1 - JUNE 30
A-48
<PAGE> 163
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: BUSINESS TRUST
PLACE OF ORGANIZATION: MASSACHUSETTS
(H) THE PNC(R) FUND:
ADDRESS: BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
EMPLOYER IDENTIFICATION NUMBER:51-0318674
TAXABLE YEAR: OCTOBER 1 - SEPTEMBER 30
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: BUSINESS TRUST
PLACE OF ORGANIZATION: MASSACHUSETTS
(I) THE RBB FUND, INC.:
ADDRESS: BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
EMPLOYER IDENTIFICATION NUMBER:51-0312196
TAXABLE YEAR: SEPTEMBER 1 - AUGUST 31
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: CORPORATION
PLACE OF ORGANIZATION: MARYLAND
(J) PROVIDENT INSTITUTIONAL FUNDS, INC. (EFFECTIVE FEBRUARY
16, 1995):
ADDRESS: BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY, SUITE 100
WILMINGTON, DE 19809
EMPLOYER IDENTIFICATION NUMBER:41-1769812
TAXABLE YEAR: JANUARY 1 - DECEMBER 31
BUSINESS CODE NUMBER: 6742
TYPE OF ENTITY: CORPORATION
PLACE OF ORGANIZATION: MARYLAND
A.19.1 ADOPTION OF PLAN AND TRUST BY AFFILIATED EMPLOYERS. Shall
Article XIX of the Plan apply (check one)?
/ / (A) Yes / / (B) No
/ X / (C) N/A (No Affiliated Employers adopting Plan)
A-49
<PAGE> 164
If Section A.19.1(A) is checked, fill in the following blanks:
Name of Adopting Employer: / /
Name(s), Address(es), Type of Entity and Tax Identification Number(s) of
Adopting Affiliated Employer(s): /
/
The adopting Employer and each adopting Affiliated Employer must adopt the Plan
and execute the Adoption Agreement upon the initial adoption by an adopting
Affiliated Employer of the Plan. Thereafter the adopting Affiliated Employer,
pursuant to Article XIX of the Plan, authorizes the adopting Employer to take
all further action including, but not limited to, the amendment and/or
termination of the Plan, on behalf of the adopting Affiliated Employer under the
Plan (unless such adopting Affiliated Employer withdraws from the Plan pursuant
to Article XIX of the Plan) and such adopting Affiliated Employer need not be a
party to this Adoption Agreement with respect to any such subsequent action
relating to the Plan and Trust Agreement and/or Adoption Agreement.
THE ADOPTING EMPLOYER OR ADOPTING AFFILIATED EMPLOYER MAY NOT RELY ON THE
NOTIFICATION LETTER ISSUED BY THE NATIONAL OR DISTRICT DIRECTOR OF THE INTERNAL
REVENUE SERVICE AS EVIDENCE THAT THE PLAN IS QUALIFIED UNDER SECTION 401 OF THE
INTERNAL REVENUE CODE. IN ORDER TO OBTAIN RELIANCE WITH RESPECT TO PLAN
QUALIFICATION, THE ADOPTING EMPLOYER AND/OR ADOPTING AFFILIATED EMPLOYER MUST
APPLY TO THE APPROPRIATE KEY DISTRICT OFFICE FOR A DETERMINATION LETTER.
Executed at WILMINGTON, DELAWARE, on this the / / day of
/ /, 1995.
ADOPTING EMPLOYER:
ATTEST: MUNICIPAL FUND FOR TEMPORARY
INVESTMENT
/SEAL/ NAME OF ADOPTING EMPLOYER
By:
- --------------------------------- -------------------------------
Morgan R. Jones, Secretary G. Willing Pepper, President
PARTICIPATING EMPLOYERS:
ATTEST: CHESTNUT STREET EXCHANGE FUND
Name of Participating Employer
/SEAL/
By:
- --------------------------------- -------------------------------
Morgan R. Jones, Secretary Robert R. Fortune, President
ATTEST: INDEPENDENCE SQUARE INCOME
SECURITIES, INC.
/SEAL/ Name of Participating Employer
By:
- --------------------------------- -------------------------------
Gary M. Gardner, Secretary Robert R. Fortune, President
ATTEST: TEMPORARY INVESTMENT FUND, INC.
Name of Participating Employer
/SEAL/
By:
- --------------------------------- -------------------------------
W. Bruce McConnel, III, Secretary G. Willing Pepper, President
A-50
<PAGE> 165
ATTEST: TRUST FOR FEDERAL SECURITIES
Name of Participating Employer
/SEAL/
By:
- --------------------------------- -------------------------------
W. Bruce McConnel, III, Secretary G. Willing Pepper, President
ATTEST: MUNICIPAL FUND FOR CALIFORNIA
INVESTORS, INC.
/SEAL/ Name of Participating Employer
By:
- --------------------------------- -------------------------------
Morgan R. Jones, Secretary G. Willing Pepper, President
ATTEST: MUNICIPAL FUND FOR NEW YORK
INVESTORS, INC.
/SEAL/ Name of Participating Employer
By:
- --------------------------------- -------------------------------
Morgan R. Jones, Secretary Edward J. Roach, Vice President
ATTEST: PORTFOLIOS FOR DIVERSIFIED
INVESTMENT
/SEAL/ Name of Participating Employer
By:
- --------------------------------- -------------------------------
W. Bruce McConnel, III, Secretary G. Willing Pepper, President
ATTEST: THE PNC(R) FUND
/SEAL/ Name of Participating Employer
By:
- --------------------------------- -------------------------------
Morgan R. Jones, Secretary G. Willing Pepper, President
ATTEST: THE RBB FUND, INC.
/SEAL/ Name of Participating Employer
By:
- --------------------------------- -------------------------------
Morgan R. Jones, Secretary Edward J. Roach, President
ATTEST: PROVIDENT INSTITUTIONAL FUNDS, INC.
/SEAL/ Name of Participating Employer
By:
- --------------------------------- -------------------------------
W. Bruce McConnel, III, Secretary G. Willing Pepper, President
The undersigned hereby agree(s) to serve as the Trustee(s) under the Plan and
Trust Agreement.
EDWARD J. ROACH ROBERT R. FORTUNE
- --------------------------------- -------------------------------
Name of Trustee Name of Trustee
- --------------------------------- -------------------------------
Witness Signature
- --------------------------------- -------------------------------
Witness Signature
13671 95FUNDPS.AA
021495
A-51
<PAGE> 1
Exhibit 8
AMENDED AND RESTATED
CUSTODIAN AGREEMENT
AMENDED AND RESTATED AGREEMENT made as of October 15, 1983, between
CHESTNUT STREET EXCHANGE FUND, a California Limited Partnership (the "Fund"),
and WILMINGTON TRUST COMPANY, a Delaware corporation ("Custodian"),
W I T N E S S E T H :
WHEREAS, the Fund and Custodian entered into an agreement dated as of
September 15, 1976 (the "Custodian Agreement"), as amended July 7, 1978, whereby
Custodian agreed to provide services as depositary and custodian and act as
dividend disbursing agent for the Fund;
WHEREAS, the Fund and Custodian desire to amend said agreement to
permit direct or indirect participation by Custodian in The Depository Trust
Company, a wholly owned subsidiary of the New York Stock Exchange ("DTC");
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree to amend and restate the Custodian Agreement in its entirety as
follows:
1. Appointment. The Fund hereby appoints Custodian to act as
custodian of the Fund's portfolio securities, cash, and other property,
including all income thereon and proceeds from the sale thereof (collectively,
the "Property"), for the period and on the terms set forth herein. Custodian
accepts such appointment and agrees to render the services described herein in
<PAGE> 2
return for reasonable compensation as from time to time agreed to in writing by
the parties. Custodian agrees to comply with all relevant provisions of the
Investment Company Act of 1940 and all applicable rules and regulations
thereunder.
2. Registration of the Property. Securities at the time included in
the Property shall be in bearer form or registered in the name of a nominee of
Custodian (with or without indication of fiduciary status) or shall be properly
endorsed and in form for transfer satisfactory to Custodian, provided, however,
that where Custodian participates in DTC in connection with the custody of
Property pursuant to Section 8 hereof, such securities may be registered in the
name of DTC or its nominee.
3. Receipts and Disbursement of Money.
(a) Custodian shall open and maintain a separate account or
accounts in the name of the Fund, subject only to draft or order by Custodian
acting pursuant to the terms of this Agreement. Custodian shall hold in such
account or accounts all cash received by it for the account of the Fund. Subject
to the transfer or other disposition of securities by bookkeeping entry in
connection with Custodian's participation in DTC pursuant to Section 8 hereof,
Custodian shall make payments of cash to, or for the account of, the Fund from
such cash only (i) upon the purchase of securities for the portfolio of the Fund
and delivery of such securities to Custodian in proper form for transfer; (ii)
for the purchase or redemption of shares of partnership interest ("Shares") of
the Fund upon delivery thereof to Custodian and
-2-
<PAGE> 3
cancellation by the Fund's transfer agent; (iii) for the payment of interest,
distributions, taxes, and administration, advisory, or other operating expenses
(including, without limitation, fees for legal, accounting, and auditing
services); (iv) for payment in connection with the conversion, exchange, or
surrender of securities owned or subscribed to by the Fund; (v) for payment
pursuant to a specified agreement for loaning the Fund's securities; (vi) for
the payment to a bank of the principal of or interest on bank loans made to the
Fund; or (vii) for other proper Fund purposes. In making any such payment,
Custodian shall first receive Instructions requesting such payment and stating
the clause of this subsection (a) pursuant to which such payment is permitted
and any additional evidence specifically called for in this subsection (a). For
the purposes of clause (v) above, the Instructions shall identify the loan
agreement under which the payment is to be made, the date of payment, the name
of the borrower, and the securities to be received, if any, in exchange for the
payment. For the purposes of clause (vii) above, Custodian shall also receive a
resolution of the Board of Managing General Partners of the Fund, signed by an
officer of the Fund and certified by its Secretary, setting forth the purposes
of such payment, declaring such purposes to be proper Fund purposes, and naming
the person or persons to which such payment is to be made. No payment pursuant
to (i), (iii) (except distributions), or (vii) above shall be made unless
Custodian has
-3-
<PAGE> 4
received a copy of the broker's confirmation or the payee's invoice, as
appropriate.
(b) Custodian is hereby authorized to endorse and collect all
checks, drafts, or other orders for the payment of money received by it for the
account of the Fund.
4. Receipt of Securities. Subject to Section 8 hereof, Custodian
shall receive and hold in a separate account, physically segregated at all times
from those of any other person, firm, or corporation, all securities delivered
to it for the account of the Fund. Subject to Section 8, all such securities
shall be held or disposed of by Custodian for, and subject at all times to the
Instructions of, the Fund pursuant to the terms of this Agreement. Custodian
shall have no power or authority to deliver, assign, hypothecate, pledge, or
otherwise dispose of any such securities and investments, except pursuant to the
terms of this Agreement. In no case may any Managing or Non-Managing General
Partner, officer, employee, or agent of the Fund withdraw any Property.
5. Instructions. Unless otherwise provided in this Agreement,
Custodian shall act only upon Instructions. As used in this Agreement,
"Instructions" shall mean instructions in writing or by tested telegram, cable,
or telex, signed in the name of the Fund by the President or Treasurer or such
other officer(s) or person(s) who may be designated in writing as authorized
signatories of the Fund. The Fund shall furnish Custodian with the genuine
signatures of the officers and any
-4-
<PAGE> 5
other person(s) authorized to give Instructions, and shall from time to time
advise Custodian in writing of the number of such signatures which may be
required for Instructions. Custodian shall have no liability for assuming in
good faith that the person(s) designated by the Fund to give Instructions
actually have such authority, and shall not be charged with any notice of the
revocation of such authority unless and until it shall have actually received
Notice from the Fund to that effect.
6. Transfer, Exchange, or Delivery of Securities. Custodian shall
have sole power to release or deliver any securities included in the Property.
Custodian agrees to transfer, exchange, or deliver such securities only:
(a) Upon sales of such securities for the account of the Fund
against receipt of payment therefor and a confirmation from a broker or dealer
with respect to such transaction;
(b) When such securities are called, redeemed, or retired or
otherwise become payable;
(c) For examination by any broker selling any such securities
in accordance with "street delivery" custom and against written receipt
therefor;
(d) Upon conversion of such securities pursuant to their
terms into other securities;
(e) Upon exercise of subscription, purchase, or other similar
rights represented by such securities;
-5-
<PAGE> 6
(f) For the purpose of exchanging interim receipts or
temporary securities for definitive securities;
(g) For the purpose of redeeming in kind Shares of the Fund;
(h) For the purpose of loaning securities against receipt of
a certified or bank cashier's check; or
(i) For other proper Fund purposes, but only, for the
purposes of this clause (i), upon receipt of a resolution of the Board of
Managing General Partners of the Fund, signed by an officer of the Fund and
certified by its Secretary, specifying the securities to be delivered, setting
forth the purposes for which such delivery is to be made, declaring such
purposes to be proper Fund purposes, and naming the person or persons (each of
whom, if an individual and if an officer or employee of the Fund, shall be
stated in such resolution to be bonded against larceny or embezzlement) to whom
delivery of such securities shall be made. In making any such transfer,
exchange, or delivery, Custodian shall first receive Instructions requesting
such transfer, exchange, or delivery, stating the clause of this Section 6
pursuant to which such transfer, exchange, or delivery is permitted, and any
additional evidence specifically called for in this Section 6. For the purposes
of clause (h) above, the Instructions shall also identify the securities to be
delivered and shall state the loan agreement under which the delivery is to be
made, the date of delivery, the name of the borrower, and the amount of cash to
be received in exchange therefor.
-6-
<PAGE> 7
7. Transactions Not Requiring Instructions. In the absence of
contrary Instructions, Custodian is authorized to use DTC in connection with
custody of the Property in accordance with the provisions of Section 8 hereof,
and to take the following action:
(a) Collect and receive, for the account of the Fund, all
income and other payments and distributions, including (without limitation)
stock dividends, rights, warrants, and similar items included or to be included
in the Property, and promptly advise the Fund of such receipt;
(b) Take any action which may be necessary and proper in
connection with the collection and receipt of such income and other payments and
the endorsement for collection of checks, drafts, and other negotiable
instruments;
(c) Receive and hold for the account of the Fund all
securities received as a distribution on securities held by the Fund as a result
of a stock dividend, share split-up, or reorganization, recapitalization,
readjustment, or other rearrangement or distribution of rights or similar
securities issued with respect to any securities of the Fund held by Custodian
hereunder; and
(d) Deliver or cause to be delivered Property for payment
when such Property has been called, redeemed, or retired, or has otherwise
become payable at the option of the holder thereof against receipt of such
payment.
-7-
<PAGE> 8
8. Participation in DTC. In accordance with the provisions of this
Section 8, Custodian may at its own expense arrange for custody of the Property
by participating in DTC directly or indirectly through a bank which is qualified
under Section 17(f) of the Investment Company Act of 1940 and the rules
thereunder to serve as custodian to a management investment company registered
under the Investment Company Act of 1940 (the "intermediary bank") and which
shall, acting for Custodian, participate directly in DTC. The participation of
Custodian in DTC shall be subject to the following requirements:
(a) Custodian shall send the Fund confirmation of any
purchase or sale of securities and by book entry or otherwise identify as
belonging to the Fund a quantity of securities which constitute or are part of a
fungible bulk of securities either registered in the name of Custodian or its
nominee or shown on the account of Custodian on the books of the intermediary
bank or DTC.
(b) Custodian shall take such action as may be necessary to
ensure that the arrangement pursuant to which the Fund participates in DTC
through Custodian fully complies with all of the provisions set forth in
Proposed Rule 17f-4(b)(4)(i) through (vi) under the Investment Company Act of
1940, and with such provisions as they may be amended upon the effective date of
the Rule. Such provisions, as proposed and as they may be so amended, are
incorporated herein by reference and made a part of this Agreement.
-8-
<PAGE> 9
(c) Notwithstanding any provisions contained in this
Agreement to the contrary, Custodian shall be liable to the Fund for any loss or
damage suffered by the Fund or any of its partners resulting from the use of DTC
arising by reason of:
(i) Any negligence, misfeasance, or misconduct on the
part of Custodian, its agents, or its employees;
(ii) A failure of Custodian to enforce effectively
such rights as it may have against the intermediary bank or DTC;
(iii) The delivery of a security without receipt of
payment for it or the making of payment for a security without its
delivery; or
(iv) Any other cause for which Custodian has assumed
responsibility.
(d) In the event that Custodian is participating in DTC
indirectly, the intermediary bank shall act for Custodian under an agreement
which makes the intermediary bank liable to Custodian for any loss or damage
suffered by the Fund or any of its partners resulting from the use of DTC
arising by reason of:
(i) Any negligence, misfeasance, or misconduct on the
part of the intermediary bank, its agents, or its employees; or
(ii) A failure of the intermediary bank to enforce
effectively such rights as it may have against DTC.
The agreement between the intermediary bank and Custodian shall require the
intermediary bank to pay over to Custodian for the
-9-
<PAGE> 10
account of the Fund any amounts recovered by the intermediary bank from DTC for
any loss or damage suffered by the Fund or any of its partners. Custodian agrees
in turn to pay over to the Fund any such amounts, together with any amounts
recovered by it from the intermediary bank, for any loss or damage suffered by
the Fund or any of its partners.
9. Communications with Shareholders. Custodian will address and mail
such communications by the Fund to its shareholders, including reports to
shareholders, distribution payments, and notices and proxy materials for
meetings of shareholders, as the Fund may reasonably request.
10. Reports. Custodian shall render to the Fund such periodic and
special reports as the Fund may reasonably request, including a weekly statement
summarizing all transactions and entries for the account of the Fund, a monthly
report of portfolio securities showing the adjusted average cost of each issue
and the market value at the end of such month, and a quarterly report of the
cash account of the Fund showing disbursements.
11. Responsibility of Custodian.
(a) Custodian shall have no responsibility or liability:
(i) Except as provided by Section 8 hereof, to
institute any suit or proceeding for the collection of any principal,
interest, dividends, and other income of any nature arising from, or to
institute, appear in, or defend
-10-
<PAGE> 11
any suit or proceeding of any kind with respect to, any of the Property
(excluding, however, any suits or proceedings involving the performance
of or the failure to perform its obligations hereunder), unless and
until it shall have received from the Fund Instructions so to do and it
shall have had advanced or guaranteed to it funds sufficient to meet
any expenses incident thereto.
(ii) To invest or reinvest any Property other than
pursuant to its obligations under this Agreement.
(iii) For any depreciation in principal of any
Property.
(b) Custodian shall be responsible to the Fund for
Custodian's performance of its obligations hereunder with reasonable care and
diligence.
12. Voting and Other Action. Neither Custodian nor any nominee or
agent of Custodian shall vote any securities included in the Property by or for
the account of the Fund except in accordance with Instructions. Without further
Instructions, Custodian shall (i) promptly deliver, or cause to be executed and
delivered, to the Fund all notices, proxies, and proxy soliciting materials
relating to such securities, such proxies to be executed by the registered
holder of the securities (if registered otherwise than in the name of the Fund),
but without indicating the manner in which the proxies are to be voted; (ii)
transmit promptly to the Fund all written information (including pendency of
calls and maturities of securities and expirations of
-11-
<PAGE> 12
rights in connection therewith) received by Custodian from issuers of the
securities included in the Property; and (iii) with respect to tender or
exchange offers for securities included in the Property, transmit promptly to
the Fund all written tender or exchange offer information received by Custodian
from issuers of such securities or from the offeror or its agent.
13. Termination or Assignment. This Agreement may be terminated by the
Fund, or by Custodian, on sixty days' Notice sent by registered mail to
Custodian or to the Fund, as the case may be. Upon any termination of this
Agreement, pending appointment of a successor custodian or a vote of the
shareholders of the Fund to dissolve or to function without a custodian,
Custodian shall not deliver cash, securities, or other Property of the Fund to
the Fund, but may deliver them to a bank or trust company in Wilmington,
Delaware, of its own selection, having an aggregate capital, surplus, and
undivided profits, as shown by its last published report of not less than
$5,000,000, as a custodian for the Fund, to be held subject to the same terms as
this Agreement, provided, however, that Custodian shall not be required to make
any such delivery or payment until full payment shall have been made by the Fund
of all liabilities constituting a charge on or against the Property then held by
the Custodian or on or against Custodian, and until full payment shall have been
made to Custodian of all its fees, compensation, costs, and expenses then due
hereunder.
-12-
<PAGE> 13
This Agreement may not be assigned by Custodian without the consent of
the Fund, authorized or approved by a resolution of its Board of Managing
General Partners.
14. Notices. All notices and other communications hereunder
(collectively referred to as "Notices") and Instructions shall be in writing or
by confirming telex or telegram. Notices shall be addressed (i) if to Custodian,
at Custodian's address at Rodney Square North, Wilmington, Delaware 19890, and
(ii) if to the Fund, at the address of the Fund, Suite 204, Webster Building,
Concord Plaza, 3411 Silverside Road, Wilmington, Delaware 19810, or (iii) if to
either of the foregoing, at such other address as shall have been specified in a
Notice given to the other party.
15. Miscellaneous.
(a) This is a Delaware contract and shall be construed in
accordance with the laws of the State of Delaware. Custodian shall be deemed to
be acting as the Fund's agent pursuant to this Agreement and shall not be
required to take any action outside of the State of Delaware except as may be
required in connection with its participation in DTC pursuant to Section 8.
(b) This document constitutes the entire agreement between
the Fund and Custodian, and no representative or agent of the Fund shall be
deemed to be a representative of or acting on behalf of Custodian, nor shall any
such representative
-13-
<PAGE> 14
or agent have any authority to make representations or to bind Custodian beyond
the terms of this Agreement.
(c) The obligations of the Fund hereunder and any liabilities
or claims in connection therewith are not binding upon any of the limited
partners of the Fund individually, but are binding only upon the assets and
property of the Fund and of its general partners.
(d) This Agreement may be amended or waived only by an
instrument in writing signed by the party against which enforcement of such
amendment or waiver is sought.
IN WITNESS WHEREOF, the Fund has caused this Agreement to be signed in
its name by its duly authorized representatives, and Custodian has caused it to
be signed in its name by one of its Assistant Vice Presidents and its corporate
seal to be hereunto affixed by one of its Assistant Secretaries, as of the day
and year first above written.
CHESTNUT STREET EXCHANGE FUND
/s/ Barbara G. Fraser
Witness By /s/ Edward J. Roach
-----------------------
Edward J. Roach
Treasurer
WILMINGTON TRUST COMPANY
Attest:
By: /s/ signature illegible
-----------------------
Vice President
/s/ signature illegible
- ------------------------
Assistant Secretary
-14-
<PAGE> 1
Exhibit 13(a)
AGREEMENT
AGREEMENT made this 15th day of September, 1976 between Chestnut Street
Exchange Fund (a California Limited Partnership) hereinafter the "Fund") and The
Sandridge Corporation, a Delaware Corporation (hereinafter "Sandridge").
WHEREAS, the Fund is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940 (the "1940 Act"),
and intends to offer and sell to the public a minimum of 1,000,000 and maximum
of 4,000,000 units of partnership interest of the Fund ("Shares"); and
WHEREAS, Section 14(a) of the 1940 Act requires a registered investment
company to have a net worth of at least $100,000 prior to making a public
offering of its securities; and
WHEREAS, the Fund expects that the grant by the Internal Revenue
Service of a ruling that the Fund will be classified as a partnership for
federal income tax purposes will be conditioned upon the General Partners of the
Fund maintaining in the aggregate an interest of at least 1% in each material
item of Fund income, gain, loss, deduction and credit;
NOW THEREFORE, the parties hereto intending to be legally bound hereby
agree as follows:
1. Purchase of Shares. In connection with the organization of the
Fund and for the purpose of providing pursuant to Rule 22d-1(h) under the 1940
Act the initial capital
<PAGE> 2
required by Section 14(a) thereof, (a) the Fund hereby offers Sandridge and
Sandridge hereby purchases for its own account 4,000 Shares at a price payable
in cash of $25 per Share, and (b) subject to the receipt by the Fund and
Sandridge of the exemptive order requested by them from certain provisions of
Section 17(a) of the 1940 Act, the Fund agrees to sell to Sandridge and
Sandridge agrees to purchase that number of additional Shares at a price of $25
per Share payable by Sandridge in shares of common stock of Johnson & Johnson
(or in cash to the extent necessary common stock the purchase price to the whole
dollar amount), which will result in the ownership by Sandridge for its own
account of not less than 1.2% of the total Shares outstanding upon consummation
of the Fund's exchange of Shares for deposited securities and cash as described
in its Prospectus. Upon receipt of the exemptive order referred to in clause (b)
above, Sandridge shall have the right to substitute securities of Johnson &
Johnson having a value of $100,000 and upon such substitution shall receive back
from the Fund the $100,000 (or any appreciation or depreciation therein by
reason of the Fund having invested such amount prior to such substitution) paid
by Sandridge for the 4,000 shares referred to in (a) above. Such substitution
shall not be considered a redemption for any purpose including that of paragraph
7 hereof. The Fund agrees to accept from Sandridge shares of Johnson & Johnson
common stock, subject to applicable legal restrictions on their resale, in
exchange for Shares and Sandridge agrees that the Fund may value such Johnson
<PAGE> 3
& Johnson common stock for purposes of the substitution and exchange at a
discount of 29% from the current market value of such securities. Sandridge
shall pay no subscription fees in connection with the purchase of Shares
hereunder and shall purchase such Shares as Non-Managing General Partner of the
Fund. Sandridge hereby acknowledges receipt of the 4,000 Shares purchased
pursuant to clause (a), and the Fund hereby acknowledges receipt from Sandridge
of $100,000 in full payment of their purchase price.
2. Service as Non-Managing General Partner. Sandridge agrees that at
all times while serving as Non-Managing General Partner of the Fund and unless
and until its successor is chosen and two years' prior notice has been given to
the Fund it (a) will own at least 1% of the Fund's outstanding Shares and will
not tender any Shares owned by it for redemption if, as a result thereof, it
would own less than 1% of the Shares outstanding, (b) will continue to stand for
re-election as a Non- Managing General Partner, and (c) will not withdraw from
the Fund as Non-Managing General Partner.
3. Fee Payable to Non-Managing General Partner. In consideration for
its acting as Non-Managing General Partner in accordance with the provisions of
this Agreement, the Fund shall pay Sandridge during the period it shall act as
Non-Managing General Partner a fee computed daily and payable monthly at the
annual rate of 1/10 of 1% of the Fund's net asset value as determined in
accordance with the Investment Company Act of 1940.
<PAGE> 4
4. No Call Options on Securities Exchanged by Sandridge. The Fund
agrees not to write call options on any of the securities of Johnson & Johnson
substituted and exchanged by Sandridge pursuant to this Agreement.
5. Investment Representations. Subject to the redemption of the
Shares purchased pursuant to clause (a) of Section 1 hereof, Sandridge
represents and warrants to the Fund that the Shares purchased hereunder are or
will be acquired for investment and not with a view to their distribution within
the meaning of the Securities Act of 1933. The Fund represents and warrants to
Sandridge that the securities of Johnson & Johnson substituted and exchanged by
Sandridge will be acquired for investment and not with a view to their
distribution within the meaning of such Act.
6. Limited Liability. No shareholder, officer or director of
Sandridge shall have any obligation hereunder. The persons executing this
Agreement on behalf of the Fund have executed the Agreement as Managing General
Partners or officers of the Fund and not individually. The obligations of the
Fund hereunder and any liabilities or claims in connection therewith are not
binding upon any of the officers, Managing General Partners or Limited Partners
of the Fund individually, but are binding only upon the assets and property of
the Fund.
7. Payment of Proportionate Share of Unamortized Expenses. Sandridge
agrees that if it redeems any Shares before September 16, 1981, it will pay to
the Fund an amount equal to
<PAGE> 5
the number resulting from multiplying the total unamortized expenses incurred by
the Fund in connection with its organization and registration by a fraction, the
numerator of which is equal to the number of Shares redeemed and the denominator
of which is equal to the total number of Shares outstanding at the time of such
redemption.
8. Miscellaneous. This Agreement shall not be assignable and shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors in interest. This Agreement shall be governed by the laws
of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives designated below as of the day
and year first above written.
CHESTNUT STREET EXCHANGE FUND
(a California Limited Partnership)
By:
-------------------------------
C. Canby Balderston,
President and Managing
General Partner
/s/ Morgan R. Jones
- ---------------------------
Morgan R. Jones, Secretary
THE SANDRIDGE CORPORATION
By: /s/ Neale C Bringharst
-------------------------------
Neale C. Bringharst,
President
- ---------------------------
Warrin C. Meyers, Secretary
<PAGE> 1
Exhibit 13(b)
AMENDMENT No. 1
to
AGREEMENT
CHESTNUT STREET EXCHANGE FUND (a California Limited Partnership) (the
"Fund") and THE SANDRIDGE CORPORATION, a Delaware Corporation ("Sandridge"),
having entered into an Agreement dated September 15, 1976 (the "Agreement"),
hereby agree to amend the Agreement as follows:
1. Section 1 of the Agreement is amended to read in its entirety as
follows:
"1. Purchase of Shares. In connection with the organization of the
Fund and for the purpose of providing pursuant to Rule 22d-1(h) under the 1940
Act the initial capital required by Section 14(a) thereof, (a) the Fund hereby
offers Sandridge and Sandridge hereby purchases for its own account as a
Non-Managing General Partner of the Fund 4,000 Shares at a price payable in cash
of $25 per Share, and (b) subject to the receipt by the Fund and Sandridge of
the exemptive order requested by them from certain provisions of Section 17(a)
of the 1940 Act, the Fund agrees to sell to Sandridge as Non-Managing General
Partner that number of additional Shares at a price of $25 per Share payable by
Sandridge in restricted shares of common stock of Johnson & Johnson (or in cash
to the extent necessary to round the purchased price to the whole dollar
amount), which will result in the ownership by Sandridge for its own account of
not less than 1.2% of the total Shares outstanding upon consummation of the
Fund's exchange of Shares for deposited securities and cash as described in its
Prospectus. Upon receipt of the exemptive order referred to in clause (b) above,
Sandridge shall have the right to substitute securities of Johnson & Johnson
having a value of $100,000 and upon such substitution shall receive back from
the Fund the $100,000 (or any appreciation or depreciation therein by reason of
the Fund having invested such amount prior to such substitution) paid by
Sandridge for the 4,000 Shares referred to in (a) above. Such substitution shall
not be considered a redemption for any purpose including that of paragraph 5
hereof. The Fund agrees to accept from Sandridge
<PAGE> 2
shares of Johnson & Johnson common stock, subject to applicable legal
restrictions on their resale, in exchange for Shares and Sandridge agrees that
the Fund may value such Johnson & Johnson common stock for purposes of the
substitution and exchange at a discount of 29% from the then current market
value of such securities. No subscription fee shall be payable by Sandridge in
connection with the purchase of Shares hereunder. Sandridge acknowledges receipt
of the 4,000 Shares purchased pursuant to clause (a), and the Fund acknowledges
receipt from Sandridge of $100,000 in full payment of their purchase price."
2. Sections 2 and 3 of the Agreement are deleted and Sections 4, 5,
6, 7 and 8 are redesignated Sections 2, 3, 4, 5 and 6, respectively.
IN WITNESS WHEREOF, the parties thereto have caused amendment to the
Agreement to be executed by their duly appointed representatives as of October
22, 1976.
CHESTNUT STREET EXCHANGE FUND
(a California Limited Partnership)
By: /s/ C. Canby Balderston
-----------------------------
President and Managing
General Partner
/s/ Morgan R. Jones
- ---------------------------
Morgan R. Jones, Secretary
THE SANDRIDGE CORPORATION
By: /s/ Neale C. Bringhurst
-----------------------------
Neal C. Bringhurst
President
/s/ Warrin C. Meyers
- ---------------------------
Warrin C. Meyers, Secretary
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<NAME> CHESTNUT STREET EXCHANGE FUND
<S> <C>
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<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 54166293
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<DISTRIBUTIONS-OF-INCOME> 4194988
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