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REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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CINCINNATI FINANCIAL CORPORATION
(Exact name of registrant as specified in charter)
OHIO 31-0746871
(State of Incorporation) (IRS Employer Identification No.)
Cincinnati Financial Center
6200 S. Gilmore Road
Fairfield, Ohio 45014
(Address of principal executive offices)
P. O. Box 145496
Cincinnati, Ohio 45250-5496
(Mailing Address)
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CINCINNATI FINANCIAL CORPORATION
TAX-QUALIFIED
SAVINGS PLAN
(Full Title of the Plan)
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THEODORE F. ELCHYNSKI
Senior Vice President
6200 S. Gilmore Road
Fairfield, Ohio 45014
(Name and address of agent for service)
Agent's telephone number, including area code: (513) 870-2000
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Title of Amount Proposed Proposed Amount of
Securities to be maximum maximum Registration
to be Registered offering aggregate Fee
Registered price per offering
share price
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cincinnati 60,000 shares $126.00 $7,560,000 $2,291.00
Financial
Corporation
Common Stock
($2.00 par
value per
share)
(1) (1) (2) (2) (2)
====================================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
(2) The offering price hereinabove is estimated solely for the purpose of
calculating the registration fee under Rule 457 (c), based upon the
average of the highest and lowest prices at which the shares of the
Common Stock were sold on the National Association of Securities
Dealers Quotation System on April 8, 1998.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-8 have
been and will continue to be sent or given to participating employees as
specified by Rule 428(b)(1) under the Securities Act of 1933, as amended (the
"Act"). These documents and the documents incorporated by reference into this
Registration Statement, taken together, constitute a Prospectus that meets the
requirements of Section 10(a) of the Act. Capitalized terms used but not defined
herein shall have the same meanings ascribed to them in the Cincinnati Financial
Corporation Tax-Qualified Savings Plan (sometimes hereinafter described for
convenience as the "Plan").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1997, and the definitive Proxy Statement dated March 2, 1998, with regard to its
Annual Meeting of Shareholders on April 4, 1998, both of which have been filed
with the Securities and Exchange Commission, are, as of their respective dates,
incorporated by reference in this Registration Statement. Also incorporated by
reference is the Annual Report of the Company's Tax-Qualified Savings Plan for
the fiscal year ended December 31, 1996. All other reports filed since December
31, 1997, by the Company pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") are also incorporated by reference.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act, after the date hereof and prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing such documents.
The consolidated financial statements and the related supplemental schedules
incorporated in this Form S-8 by reference from the Company's Annual report on
Form 10-K have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports, which are incorporated herein by reference, and are
included in reliance upon the reports of such firm given upon their authority as
experts in accounting and auditing.
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ITEM 4. DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 200,000,000 shares of
Common Stock, par value $2.00 per share. The holders of Common Stock have equal
rights to participate in dividends, and in case of any distribution of assets,
the holders of Common Stock share pro rata in the distribution of all assets of
the Company remaining after payment of creditors. The holders of Common Stock do
not have conversion or preemptive rights and the Common Stock is not subject to
redemption. The shares of Common Stock issuable from time to time pursuant to
the exercise of options will be, when issued and delivered as contemplated by
the Stock Option Plan, fully paid and non-assessable. The Company acts as
transfer agent for its own stock.
Each share of Common Stock entitles the holder thereof to one vote in elections
of Directors and all other matters submitted to a vote of the shareholders. The
Common Stock does not have cumulative voting rights, which means that the
holders of a majority of the outstanding Common Stock voting for the election of
Directors can elect all Directors then being elected. The Amended Articles of
Incorporation of the Company provide that the Board of Directors shall be
divided into three classes which shall be as nearly equal in number as possible,
with the Directors of each class holding office for staggered terms of 3 years
each. As a result, a shareholder or group of shareholders possessing a majority
of the voting power of the Company would not be able to replace a majority of
the Directors in any one year, since only one-third of the Directors stand for
election each year. It should be noted that one result of this provision is that
it takes longer for shareholders to change a majority of the Board of Directors,
even if they feel such a change is desirable.
The Amended Articles of Incorporation of the Company provide that certain
mergers, consolidations, sales, or other dispositions of assets with any party
which is the beneficial owner of more than 10% of the outstanding shares of the
Company may only be accomplished with the approval of the holders of 75% of the
outstanding shares of the Company, unless the proposed transaction falls within
certain exemptions. The purpose of the provision is to discourage attempts by
other companies or groups to acquire control of the Company without adequate
discussions with management, on behalf of the Company's shareholders; otherwise,
a tender offer or merger might have the effect of forcing some of the
shareholders of the Company to sell their shares at a lower price than that
received by other shareholders. The provision would make it more difficult for
another company or group to effect such a tender offer or merger and may,
therefore, discourage any attempt to do so.
As an Ohio corporation, the Company is subject to the provisions of
Chapter 1704 of the Ohio Revised Code which prohibit a "Chapter 1704
transaction" between an Ohio corporation such as
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the Company and any person with the right to exercise 10% or more of the voting
power of such corporation. A Chapter 1704 transaction is defined to include any
merger, combination or consolidation or any majority share acquisition and any
of certain other sales, leases, distributions, dividends, exchanges, mortgages,
pledges, transfers or other dispositions of assets between the corporation and
any such 10% shareholder. Such prohibition lasts for 3 years following the date
on which such person first became a 10% shareholder unless, prior to the time
such person first became a 10% shareholder, the board of directors of the
corporation approved either the Chapter 1704 transaction in question or the
purchase of shares which resulted in such person first becoming a 10%
shareholder. After the initial three-year moratorium, Chapter 1704 continues to
prohibit such a Chapter 1704 transaction unless one of the above exceptions is
available or the holders of at least 66-2/3% of the voting shares and of at
least a majority of the voting shares not beneficially owned by the 10%
shareholder approve the Chapter 1704 transaction, or the Chapter 1704
transaction meets certain statutory criteria designed to ensure that the
corporation's remaining shareholders receive fair consideration for their
shares.
Ohio law as applied to the Company also provides that any "control share
acquisition" may be made only with the prior authorization of shareholders. A
"control share acquisition" is any acquisition, whether by tender offer, open
market purchase, privately negotiated transaction, or otherwise, of shares of
the Company, which when added to all other shares of the Company owned or
controlled by the acquiror, would entitle the acquiror directly or indirectly,
alone or with others, to exercise or direct the exercise of voting power of the
Company in the election of directors within any of the following ranges:
one-fifth or more but less than one-third; one-third or more but less than a
majority; and a majority or more. The effect of this law is generally to prevent
a person from acquiring control without prior shareholder approval. Approvals
are required by the affirmative vote of (i) a majority of the voting power of
the Company represented at such meeting in person or by proxy; and (ii) a
majority of the voting power excluding shares which may be voted by the
acquiring person, any officer of the Company elected or appointed by the Board
of Directors, or any employee of the Company who is also a director.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1701.13(E) of the Ohio Revised Code provides that a corporation may
indemnify or agree to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit, or proceeding whether civil, criminal, administrative, or investigative,
other
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than an action by or in the right of the corporation, by reason of the fact that
the person is or was a director, officer, employee, or agent of the corporation,
or is or was serving at its request as a director, trustee, officer, employee,
or agent of another corporation, partnership, joint venture, trust, or other
enterprise, against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by the person in
connection with such action, suit, or proceeding if the person is determined
under the procedure described in the Section to have (a) acted in good faith and
in a manner the person reasonably believed to be in or not opposed to the best
interests of the corporation, and (b) had no reasonable cause to believe the
conduct was unlawful in the case of any criminal action or proceeding. However,
with respect to expenses actually and reasonably incurred in connection with the
defense or settlement of any action or suit by or in the right of the
corporation to procure a judgment in its favor, no indemnification is to be made
(i) in respect of any claim, issue, or matter as to which such person was
adjudged liable for negligence or misconduct in the performance of such person's
duty to the corporation unless, and only to the extent that, it is determined by
the court upon application that, despite the adjudication of liability, such
person is fairly and reasonably entitled to indemnity for such expenses as the
court deems proper, or (ii) in respect of any action or suit in which the only
liability asserted against a director is in connection with the alleged making
of an unlawful loan, dividend or distribution of corporate assets. The Section
also provides that such person shall be indemnified against expenses actually
and reasonably incurred by the person to the extent successful in defense of the
actions referred to above, or in defense of any claim, issue, or matter therein.
The Company's Amended Articles of Incorporation provide for the indemnification
of officers and directors of the Company to the fullest extent permitted by law.
The above is a general summary of certain provisions of the Ohio Revised Code
and is subject in all cases to the specific provisions thereof.
The Company maintains an insurance policy covering its directors and officers
against certain civil liabilities, including liabilities under the Securities
Act of 1933.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The following exhibits are included in this Registration Statement on
Form S-8.
(4)(a) Cincinnati Financial Corporation Tax-
Qualified Savings Plan Basic Prototype Plan Document
(4)(b) Cincinnati Financial Corporation
Tax-Qualified Savings Plan
Adoption Agreement
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(23) Consent of Accountants
ITEM 9. UNDERTAKINGS
The undersigned issuer hereby undertakes: (1) to file during any period in which
offers or sales are being made, a post-effective amendment to this Registration
Statement to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement; (2) that for
the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment and each filing of the issuer's annual report
pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the Registration Statement shall be deemed to be
a new Registration Statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and (3) to remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the Plan.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification (except insofar as it provides for the payment by the Company of
expenses incurred or paid by a director or officer in the successful defense of
an action, suit or proceeding) is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities is asserted by such director, officer or controlling
person in connection with the securities being registered, the Company will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8, and has duly caused this S-8 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati, State of Ohio, on this 10th day of April,
1998.
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CINCINNATI FINANCIAL CORPORATION
By /s/ ROBERT B. MORGAN
--------------------------------
Robert B. Morgan
Chief Executive Officer
Pursuant to the requirement of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
CINCINNATI FINANCIAL CORPORATION
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ ROBERT B. MORGAN Chief Executive Officer and April 10, 1998
- --------------------------- Director (Principal Executive
Robert B. Morgan Officer)
/s/ THEODORE F. ELCHYNSKI Senior Vice President April 10, 1998
- --------------------------- (Principal Financial
Theodore F. Elchynski and Accounting Officer)
/s/ WILLIAM F. BAHL Director April 10, 1998
- ---------------------------
William F. Bahl
- --------------------------- Director April __, 1998
Michael Brown
/s/ RICHARD M. BURRIDGE Director April 10, 1998
- ---------------------------
Richard M. Burridge
/s/ JOHN E. FIELD Director April 10, 1998
- ---------------------------
John E. Field
/s/ WILLIAM R. JOHNSON Director April 10, 1998
- ---------------------------
William R. Johnson
/s/ KENNETH C. LICHTENDAHL Director April 10, 1998
- ---------------------------
Kenneth C. Lichtendahl
/s/ JAMES G. MILLER Director April 10, 1998
- ---------------------------
James G. Miller
</TABLE>
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<TABLE>
<S> <C> <C>
- ------------------------- Director April ___, 1998
Jackson H. Randolph
- ------------------------- Director April ___, 1998
John J. Schiff
- ------------------------- Director April ___, 1998
John J. Schiff, Jr.
- ------------------------- Director April ___, 1998
Robert C. Schiff
- ------------------------- Director April ___, 1998
Thomas R. Schiff
/s/ FRANK J. SCHULTHEIS Director April 10, 1998
- -------------------------
Frank J. Schultheis
- -------------------------- Director April ___, 1998
Larry R. Webb
/s/ ALAN R. WEILER Director April 10, 1998
- --------------------------
Alan R. Weiler
</TABLE>
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
4(a) Cincinnati Financial Corporation
Tax-Qualified Savings Plan Basic
Prototype Plan Document
4(b) Cincinnati Financial Corporation
Tax-Qualified Savings Plan Adoption
Agreement
23 Consent of Deloitte & Touche LLP
Independent Certified Public
Accountants
10
<PAGE> 1
Exhibit 4(a)
THE FIFTH THIRD BANK
BASIC PROTOTYPE PLAN DOCUMENT #01
<PAGE> 2
THE FIFTH THIRD BANK
BASIC PROTOTYPE PLAN DOCUMENT #01
TABLE OF CONTENTS
ARTICLES
1. Definitions
2. Eligibility and Participation
3. Contributions and Their Allocation
4. Limitations on Annual Additions
5. Investment of Accounts
6. Vesting and Forfeitures
7. Withdrawals and Distributions
8. Form of Payment to Participants
9. Death Benefits
10. Payment Exceptions
11. Administration
12. Amendment and Termination
13. Miscellaneous
<PAGE> 3
THE FIFTH THIRD BANK
BASIC PROTOTYPE PLAN DOCUMENT #01
ARTICLE 1
DEFINITIONS
As used in the Plan and Adoption Agreement, the following terms, when
capitalized, shall have the following meanings, except when otherwise indicated
by the context:
1.1 ACCOUNT. "Account" means a Participant's allocable share of the Plan Assets.
A Participant's Account may include one or more of the following subaccounts:
(a) Employer Contribution Account;
(b) Employer Matching Account (a subaccount of the Employer Contribution
Account applicable in the case of certain profit sharing plans with Section
401(k) features);
(c) Nondeductible Voluntary Contribution Account;
(d) Section 401(k) Account (in the case of a profit sharing plan with a
Section 401(k) feature);
(e) Nonelective Contribution Account (a subaccount of the Section 401(k)
Account applicable in the case of certain profit sharing plans with Section
401(k) features);
(f) Deductible Voluntary Contribution Account (holding deductible
voluntary contributions which were permitted under prior law); and
(g) Rollover Account.
1.2 ACCOUNTING DATE. "Accounting Date" means the last day of each Plan Year and
such other date or dates as the Administrator may establish from time to time;
provided however, if such last day or any such other date falls on a Saturday,
Sunday or holiday, then the preceding business day shall be the Accounting Date.
1.3 ACTUAL CONTRIBUTION PERCENTAGE.
(a) "Actual Contribution Percentage" for a group of Participants for a
Plan Year is the average of the ratios, calculated separately for each such
Employee in such group, of:
(1) the amount contributed to the Plan for such Plan Year under
Section 3.2 on behalf of each such Employee, plus the amount actually
contributed to the Employee's Nondeductible Voluntary Contribution Account
under Section 3.7 during the Plan Year, to
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(2) the Employee's Compensation for such Plan Year.
(b) If the Plan satisfies the requirements of section 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 such requirements only if aggregated with this Plan,
then such other plans shall be aggregated with this Plan for purposes of
computing the Actual Contribution Percentages and for determining whether the
nondiscrimination rules of Section 3.2(b) are satisfied. For Plan Years
beginning after December 31, 1989 (or such later date as may be prescribed by
the Secretary of the Treasury or his delegate) plans may be aggregated hereunder
only if they have the same plan year.
(c) For purposes of computing the separate ratio under (a) above for any
Highly Compensated Employee, all plans described in section 401(a) of the Code
or arrangements described in section 401(k) of the Code of the Employer (and
other employers taken into account under section 414 of the Code) in which such
Highly Compensated Employee is a participant, shall be treated as one such plan
or arrangement.
(d) For purposes of computing the separate ratio under (a) above for any
Highly Compensated Employee who is a Five-Percent Owner or who is in the group
of the 10 Highly Compensated Employees with the greatest Adjusted Compensation
for the Plan Year, contributions made by or on behalf of such Highly Compensated
Employee under the Plan shall be treated as including such contributions made on
behalf of (or by) Participants who are Family Members with respect to the
particular Highly Compensated Employee; and such Highly Compensated Employee's
Compensation shall be treated as including such Family Member's Compensation.
Family Members with respect to any such Highly Compensated Employee shall be
disregarded as separate Employees in computing the Actual Contribution
Percentage for a group of Participants.
1.4 ACTUAL DEFERRAL PERCENTAGE.
(a) "Actual Deferral Percentage" for a group of Participants for a Plan
Year is the average of the ratios, calculated separately for each such Employee
in such group, of:
(1) the amounts contributed on behalf of each such Employee to the
Plan for such Plan Year under Sections 3.1(a), (b) and (c) to
(2) the Employee's Compensation for such Plan Year.
(b) If the 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 such requirements only if aggregated with this Plan,
then such other plans shall be aggregated with this Plan for purposes of
computing the Actual Deferral Percentages and for determining whether the
nondiscrimination rules of Section 3.1(e) are satisfied. For Plan Years
beginning after December 31, 1989 (or such later date as may be prescribed by
the Secretary of the Treasury or his delegate) plans may be aggregated hereunder
only if they have the same plan year.
(c) For purposes of computing the separate ratio under (a) above for any
Highly Compensated Employee, all cash or deferred arrangements under section
401(k) of the Code of the Employer (and other employers taken into account under
section 414 of the Code) in which such Highly Compensated Employee is a
participant, shall be treated as one cash or deferred arrangement under section
401(k) of the Code. If such arrangements have different plan years,
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<PAGE> 5
this provision shall be applied by treating all such arrangements ending with or
within the same calendar year as a single arrangement.
(d) For purposes of computing the separate ratio under (a) above for any
Highly Compensated Employee who is a Five-Percent Owner or who is in the group
of the 10 Highly Compensated Employees with the greatest Adjusted Compensation
for the Plan Year, contributions made on behalf of such Highly Compensated
Employee under the Plan shall be treated as including such contributions made on
behalf of Participants who are Family Members with respect to the particular
Highly Compensated Employee; and such Highly Compensated Employee's Compensation
shall be treated as including such Family Member's Compensation. Family Members
with respect to any such Highly Compensated Employee shall be disregarded as
separate Employees in computing the Actual Deferral Percentage for a group of
Participants.
1.5 ADJUSTED COMPENSATION. "Adjusted Compensation" means Section 415
Compensation (as defined in Section 4.1(k)) plus elective or salary reduction
amounts which are excludable from gross income under section 125, 402(a)(8),
402(h) or 403(b) of the Code.
1.6 ADMINISTRATOR. "Administrator" means the individual, group of individuals,
or entity appointed as such by the Employer; provided that if none is so
appointed, then it means the first Employer designated in the Adoption
Agreement.
1.7 ADOPTION AGREEMENT. "Adoption Agreement" means the document in which the
Employer specifies the elective provisions of the Plan.
1.8 AFFILIATE. "Affiliate" means each of the following for such period of time
as is applicable under section 414 of the Code:
(a) a corporation which, together with the Employer, is a member of a
controlled group of corporations within the meaning of section 414(b) of the
Code (as modified by section 415(h) thereof for the purposes of Article 5) and
the applicable regulations thereunder;
(b) a trade or business (whether or not incorporated) with which the
Employer is under common control within the meaning of section 414(c) of the
Code (as modified by section 415(h) thereof for the purposes of Article 5) and
the applicable regulations thereunder;
(c) an organization which, together with the Employer, is a member of an
affiliated service group (as defined in section 414(m) of the Code); and
(d) any other entity required to be aggregated with the Employer under
section 414(o) of the Code.
1.9 BENEFICIARY. "Beneficiary" means the person or persons entitled to receive
the distributions, if any, payable under the Plan upon or after a Participant's
death, to such person, or persons as such Participant's Beneficiary. Each
Participant shall designate a Beneficiary by filing the proper form with the
Administrator. A Participant may designate one or more contingent Beneficiaries
to receive any distributions after the death of a prior Beneficiary. A
designation shall be effective upon said filing, provided that it is so filed
during such Participant's lifetime, and may be changed from time to time by the
Participant; provided however, if a Participant has at least one Hour of Service
or at least one hour of paid
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<PAGE> 6
leave from the Employer (or any other employer for whom service is treated as
service for the Employer) on or after August 23, 1984, then, effective August
23, 1984 if he has waived the Preretirement Survivor Annuity or effective as of
the REA Effective Date if he has waived the Qualified Joint and Survivor
Annuity, his spouse must consent to any change of Beneficiary designation in
accordance with Section 9.1(e)(5) or Section 8.2(d)(4) with respect to any
distributions otherwise payable in such forms. If the Plan is a profit sharing
plan and if the Preretirement Survivor Annuity is otherwise inapplicable (under
Section 9.1(a) because the Participant has not elected a life annuity and the
Plan is not a transferee Plan requiring annuities with respect to the
Participant) to a Participant who has at least one Hour of Service or at least
one hour of paid leave from the Employer (or any other employer for whom service
is treated as service for the Employer) on or after August 23, 1984 and is
survived by a Surviving Spouse, then such spouse shall be his Beneficiary unless
the designation of another Beneficiary is consented to by such spouse in a
written consent satisfying the requirements of Section 9.1(e)(5). If there is no
designated Beneficiary to receive any amount that becomes payable to a
Beneficiary, then the Participant's Beneficiary shall be the Participant's
Surviving Spouse or, if none, the legal representative of the last surviving of
the Participant and any properly designated Beneficiaries.
1.10 BREAK IN SERVICE.
(a) Hour-Counting Method. "Break in Service" means, if the hour-
counting method is elected in the Adoption Agreement:
(1) before the REA Effective Date, one or more consecutive
One-Year Breaks during one or more days of the first of which an individual is
not employed by the Employer; provided however, an Employee of the Employer
shall not be deemed to have incurred a Break in Service if he is on an Employer
approved leave of absence, not to exceed one year, provided he returns to the
employment of the Employer on or before the end of such leave of absence; and
(2) on and after the REA Effective Date, five or more consecutive
One-Year Breaks during one or more days of the first of which an individual is
not employed by the Employer; provided however, if as of the day before the REA
Effective Date, service was not required to be taken into account under the
provisions of section 410(a) or 411(a) of the Code, then this paragraph (2)
shall not cause such service to be taken into account.
(b) Elapsed Time Method. "Break in Service" means, if the elapsed time
method is elected in the Adoption Agreement:
(1) before the REA Effective Date, a Severance of at least 12
consecutive months; and
(2) on and after the REA Effective Date, a Severance of at least
60 consecutive months; provided however, if as of the day before the REA
Effective Date, service was not required to be taken into account under the
provisions of section 410(a) or 411(a) of the Code, then this paragraph (2)
shall not cause such service to be taken into account. In the case of an
individual who incurs an absence from work, beginning on or after the REA
Effective Date, for maternity or paternity reasons, as defined in Section
1.34(c), a Break in Service shall not begin earlier than one year after it would
otherwise begin.
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1.11 CODE. "Code" means the Internal Revenue Code of 1986, as amended at the
particular time applicable. A reference to a section of the Code shall include
said section and any comparable section or sections of any future legislation
that amends, supplements or supersedes said section.
1.12 COMPENSATION.
(a) General. "Compensation" shall have the meaning selected in the
Adoption Agreement, excluding such items as may be selected in the Adoption
Agreement and, if elected in the Adoption Agreement, as modified to include the
safe-harbor add-back (described below). Compensation for any part of a Plan Year
in which an Employee is not a Participant shall be taken into account only if so
provided in the Adoption Agreement; and separate elections may be made for
purposes of (1) allocating contributions and generally under the Plan; and (2)
section 401(k) and (m) discrimination testing under Sections 3.1(e), 3.2(b), 1.3
and 1.4. In the case of a Participant whose employment classification changes so
that either he is no longer an Eligible Employee or he becomes an Eligible
Employee, Compensation for all purposes of the Plan shall not be taken into
account for any period that he is not an Eligible Employee. Compensation shall
further be construed in accordance with other selections in the Adoption
Agreement.
(b) Base Definitions. The following base definitions of Compensation
referred to in the Adoption Agreement shall have the following meanings:
(1) "W-2, Total Compensation Box" means the total wages as defined
in section 3401 of the Code and all other payments of compensation by the
Employer (in the course of its 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 but excluding amounts paid or reimbursed for
moving expenses to the extent it is reasonable to believe (at the time of
payment) that the amounts are deductible by the Employee under section 217 of
the Code; 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).
(2) "Earnings Subject To Federal Income Tax Withholding" means the
total wages as defined in section 3401(a) of the Code (for purposes of income
tax withholding at the source) from the Employer 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).
(3) "General Section 415 Definition" means wages, salaries, other
amounts received for personal services actually rendered (including, but not
limited to, commissions paid salesmen, compensation for services on the basis of
a percentage of profits, commissions on insurance premiums, tips, bonuses,
fringe benefits and reimbursements or other expense allowances under a
nonaccountable plan), and earned income (within the meaning of section 401(c)(2)
of the Code) from the Employer and all Affiliates. The term includes income from
sources outside the United States (as defined in section 911(b) of the Code) and
is determined without regard to the exclusions from gross income in sections 931
and 933 of the Code. The term excludes the following:
(A) Employer contributions to a plan of deferred
compensation which are not includible in the Employee's gross income for the
taxable year
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in which contributed, or Employer contributions under a simplified employee
pension plan to the extent such contributions are deductible by the Employee, or
any distributions from a plan of deferred compensation;
(B) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the Employee either
becomes freely transferable or is no longer subject to a substantial risk of
forfeiture;
(C) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(D) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of an annuity contract described in section
403(b) of the Code (whether or not the amounts are actually excludable from the
gross income of the Employee).
(4) "FICA Definition" means the total wages as defined in section
3121(a) of the Code, for purposes of calculating social security taxes, from the
Employer but determined without regard to the wage base limitation in section
3121(a)(1) of the Code, the limitations on the exclusions from wages in section
3121(a)(5)(C) and (D) of the Code for elective contributions and payments by
reason of salary reduction agreements, the special rules in section 3121(v) of
the Code (applicable to certain elective contributions and nonqualified deferred
compensation), any rules that limit covered employment based on the type or
location of an employee's employer, and any rules that limit the remuneration
included in wages based on familial relationship or based on the nature or
location of the employment or the services performed (such as the exceptions to
the definition of employment in section 3121(b)(1) through (20) of the Code).
(c) Safe-Harbor Exclusion. The Safe-Harbor Exclusion, if elected in the
Adoption Agreement, will cause to be excluded from the definition of
Compensation, reimbursements or other expense allowances, fringe benefits (cash
and noncash), moving expenses, deferred compensation and welfare benefits.
(d) Safe-Harbor Add-Back. The Safe-Harbor Add-Back, if elected in the
Adoption Agreement, will cause the definition of Compensation to include amounts
that otherwise would have been included within the definition but for section
402(a)(8) of the Code (relating to a salary reduction election under section
401(k) of the Code), section 125 of the Code (relating to the cafeteria or
flexible benefit plans), section 402(h) of the Code (relating to SEPs), section
403(b) of the Code (relating to certain tax deferred annuities), section 457(b)
of the Code (relating to deferred compensation plans of state and local
governments and tax-exempt organizations) or section 414(h)(2) of the Code
(relating to certain picked-up employee contributions).
(e) Self-Employed Individuals. Notwithstanding any other provision of the
Plan, "Compensation" means with respect to a Self-Employed Individual, his
Earned Income, plus the Safe-Harbor Add-Back if elected in the Adoption
Agreement. In the event any exclusions from Compensation are elected in the
Adoption Agreement, the Administrator shall limit the amount of a Self-Employed
Individual's Earned Income taken into account under the Plan to the same
proportion of Compensation (before the exclusions) that is taken into account
(after giving effect to the exclusions) for other Employees.
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(f) Section 401(a)(17) Limitation. For any Plan Year beginning on or
after January 1, 1989, only the first $200,000 (as adjusted by the Secretary of
Treasury at the same time and in the same manner as under section 415(d) of the
Code) (only the first $150,000 (as adjusted by the Secretary of Treasury in
accordance with section 401(a)(17) of the Code) for any Plan Year beginning on
or after January 1, 1994) of a Participant's Compensation shall be taken into
account; provided, however, that this limitation shall be inapplicable to the
extent provided in Internal Revenue Service Notice 88-131 (or other Internal
Revenue Service pronouncements). In applying this limitation to any Five-Percent
Owner or Highly Compensated Employee who is in the group of the 10 Highly
Compensated Employees with the greatest Adjusted Compensation for the Plan Year,
such Participant's spouse and lineal descendants who have not attained age 19
before the close of the Plan Year shall be aggregated with such Participant and
shall be treated as a single Participant. If, as a result of these rules, the
adjusted $200,000 limitation (adjusted $150,000 limitation for Plan Years
beginning on or after January 1, 1994) is exceeded, then (except for purposes of
determining the portion of Compensation up to the Taxable Wage Base specified in
an Adoption Agreement in the case of a Plan with an integrated allocation
formula), the limitation shall be prorated among the affected individuals in
proportion to each such individual's Compensation prior to application of this
limitation. If a Plan Year consists of less than 12 months, then the adjusted
$200,000 limitation (adjusted $150,000 limitation for Plan Years beginning on or
after January 1, 1994) for such Plan Year shall be 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.
1.13 DEDUCTIBLE VOLUNTARY CONTRIBUTION ACCOUNT. "Deductible Voluntary
Contribution Account" means a subaccount of each Participant's Account which
reflects the Participant's deductible voluntary contributions, as adjusted in
accordance with Article 5.
1.14 DETERMINATION DATE (FOR TOP-HEAVY TEST). "Determination Date" means, for
any Plan Year subsequent to the first Plan Year, the last day of the preceding
Plan Year, and, for the first Plan Year of the Plan, the last day of that Plan
Year.
1.15 DETERMINATION PERIOD (FOR TOP-HEAVY TEST). "Determination Period" means,
with respect to any Plan Year, the five Plan Years ending on the Determination
Date with respect to such Plan Year.
1.16 DISABILITY. "Disability" means a disability caused by an injury or disease
which was not intentionally self-inflicted and which prevents an Employee from
performing his regular duties. The existence of a Disability shall be determined
by the Administrator on the basis of such evidence as it determines to be
satisfactory and under nondiscriminatory rules uniformly and consistently
applicable to all Employees under similar circumstances.
1.17 EARNED INCOME. "Earned Income" means, with respect to a Self-Employed
Individual, the net earnings from self-employment in the trade or business with
respect to which the Plan is established, for which personal services of the
individual are a material income-producing factor. Net earnings will be
determined without regard to items not included in gross income and the
deductions allocable to such items. Net earnings are reduced by contributions by
the Employer to a qualified plan to the extent deductible under section 404 of
the Code. Net earnings shall be determined with regard to the deduction allowed
to the Employer by section 164(f) of the Code for taxable years beginning after
1989.
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1.18 EFFECTIVE DATE. "Effective Date" means the date identified as such in the
Adoption Agreement. If the Plan has not been amended previously to comply with
the Tax Reform Act of 1986 and subsequent Treasury Regulations and legislation
through the Technical and Miscellaneous Revenue Act of 1988, then such earlier
effective dates as are specified in the Plan for particular provisions shall be
applicable.
1.19 ELIGIBLE EMPLOYEE.
(a) "Eligible Employee" means, except as provided below, an Employee of
the Employer meeting the criteria of the Eligible Employee Item of the Adoption
Agreement.
(b) An Employee shall not be an Eligible Employee if he is within a unit
of Employees covered by an agreement determined by the Secretary of Labor to be
a collective bargaining agreement between employee representatives and one or
more Employers if the retirement benefits provided by the Plan were the subject
of good faith bargaining between such employee representatives and such Employer
or Employers and if such agreement does not provide for the inclusion in the
Plan of Employees in such unit or the Adoption Agreement does not specifically
state that such Employees shall be Eligible Employees. In determining whether
there is a collective bargaining agreement between employee representatives and
one or more Employers, the term "employee representatives" shall not include any
organization more than one-half of the members of which are employees who are
owners, officers, or executives of the employer.
(c) Any leased employee shall be treated as an Eligible Employee if the
Employer is the recipient employer but only if the Adoption Agreement
specifically states that leased employees are to be Eligible Employees; however,
contributions or benefits provided by the leasing organization which are
attributable to services performed for the recipient employer shall be treated
as provided by the recipient employer. The preceding sentence shall not apply
(so that leased employees may not be covered by the Plan) to any leased employee
with respect to services performed after December 31, 1986 if leased employees
do not constitute more than 20 percent of the recipient's nonhighly compensated
workforce and if such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least ten
percent of Adjusted Compensation, (2) immediate participation, and (3) full and
immediate vesting. For purposes of this subsection, the term "leased employee"
means any person (other than an employee of the recipient) who pursuant to an
agreement between the recipient and any other person ("leasing organization")
has performed services for the recipient (or for the recipient and related
persons determined in accordance with section 414(n)(6) of the Code) on a
substantially full time basis for a period of at least one year and such
services are of a type historically performed by employees in the business field
of the recipient employer.
(d) An Employee shall not be an Eligible Employee if he is a nonresident
alien who does not receive any earned income from the Employer which constitutes
United States source income unless the Adoption Agreement specifically states
that such Employees shall be Eligible Employees.
1.20 EMPLOYEE. "Employee" means any person (including a Self-Employed
Individual) employed by the Employer.
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1.21 EMPLOYER. "Employer" means the person or entity first designated as such in
the Adoption Agreement and any of the following which are further designated in
the Adoption Agreement, and the successors and assigns of any of them:
(a) any other person or entity which, together with the Employer first
designated, constitute a controlled group of corporations within the meaning of
section 414(b) of the Code or a group of trade or businesses under common
control within the meaning of section 414(c) of the Code; or
(b) an organization which, together with the Employer first designated,
is a member of an affiliated service group (as defined in section 414(m) of the
Code), or any other entity required to be aggregated with the Employer first
designated under section 414(o) of the Code.
1.22 EMPLOYER CONTRIBUTION ACCOUNT. "Employer Contribution Account" means a
subaccount of each Participant's Account which reflects the Employer's
contributions under Sections 3.2 and 3.3 of the Plan and any forfeitures
allocated thereto as adjusted in accordance with Article 5. An Employer
Contribution Account may include a subaccount, the Employer Matching Account.
1.23 EMPLOYER MATCHING ACCOUNT. "Employer Matching Account" means a subaccount
of each Participant's Employer Contribution Account which reflects the
Employer's contributions under Section 3.2 of the Plan and any forfeitures
allocated thereto, as adjusted in accordance with Article 5.
1.24 EMPLOYMENT COMMENCEMENT DATE. "Employment Commencement Date" means, with
respect to an Employee, the first day for which he is paid or entitled to be
paid for the performance of duties.
1.25 ERISA. "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, at the particular time applicable. A reference to a section of ERISA
shall include said section and any comparable section or sections of any future
legislation that amends, supplements or supersedes said section.
1.26 FAMILY MEMBER. "Family Member," with respect to another individual, means
an individual who, at any time during the Plan Year, is an Eligible Employee and
who bears one of the following relationships to the other individual: spouse,
lineal ascendant or descendant or spouse of a lineal ascendant or descendant.
1.27 FIVE-PERCENT OWNER. "Five-Percent Owner" means:
(a) if the Employer is a corporation, any person who owns (or is
considered as owning within the meaning of sections 318 and 416 of the Code)
more than 5 percent of the outstanding stock of the Employer or stock possessing
more than 5 percent of the total combined voting power of all stock of the
Employer; or
(b) if the Employer is not a corporation, any person who owns more than 5
percent of the capital or profits interest in the Employer.
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1.28 HIGHLY COMPENSATED EMPLOYEE.
(a) General. "Highly Compensated Employee," with respect to a Plan Year,
means, as determined under section 414(q) of the Code and the Treasury
Regulations thereunder, an individual who, at any time during the Plan Year is
an Eligible Employee, and who, during the Plan Year or the preceding twelve
month period:
(1) was at any time a Five-Percent Owner;
(2) received Adjusted Compensation from the Employer in excess of
$75,000 (as adjusted pursuant to section 415(d) of the Code);
(3) received Adjusted Compensation from the Employer in excess of
$50,000 (as adjusted pursuant to section 415(d) of the Code) and was in the
group consisting of the top 20 percent of the Employees when ranked on the basis
of Adjusted Compensation paid during the year; or
(4) (effective for Plan Years commencing after December 31, 1986)
was at any time an officer and received Adjusted Compensation from the Employer
greater than 50 percent of the amount in effect under section 415(b)(1)(A) of
the Code for such year.
(b) Operating Rules. The determination of Highly Compensated Employees
shall be made in accordance with the following:
(1) An Employee shall not be treated as described in (a)(2),(3) or
(4) above for the Plan Year under consideration (as opposed to the preceding
twelve-month period) unless such Employee is one of the 100 Employees who
receive the most Adjusted Compensation from the Employer during such Plan Year.
(2) For purposes of (a)(4) above, no more than 50 Employees (or,
if lesser, the greater of 3 Employees or 10% of all Employees) shall be treated
as officers for any Plan Year or for any relevant twelve month period preceding
a Plan Year.
(3) If no officers have Adjusted Compensation sufficient to
qualify under (a)(4) for a particular Plan Year or for a relevant twelve month
period preceding a Plan Year, the highest paid officer during the applicable
period shall be treated as described in (a)(4) above for the applicable period.
(4) For purposes of determining the number of Employees under
(a)(3) or (b)(2), the Employees described in section 414(q)(8) of the Code shall
be disregarded.
(5) The Employer shall be treated as including any other entities
required to be aggregated under section 414 of the Code.
(c) Alternative Definitions. In lieu of the foregoing, the Administrator,
in its discretion, may use the simplified method of identifying Highly
Compensated Employees under Revenue Procedure 93-42 or any other method
permitted by the Internal Revenue Service using such "snapshot day" as it shall
deem appropriate.
1.29 HOUR OF SERVICE. "Hour of Service" means each of the following, determined
(if the hour-counting method is elected in the Adoption Agreement for
eligibility and/or vesting purposes or if a minimum Hours of Service
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requirement is elected in an Adoption Agreement for purposes of sharing in
contributions) on the basis elected in the Adoption Agreement:
(a) each hour for which an Employee is paid, or entitled to payment, for
the performance of duties, which hours shall be credited to such individual for
the computation period or periods in which the duties are performed;
(b) each hour for which an Employee is paid, or entitled to payment, on
account of a period of time during which no work is performed (irrespective of
whether his employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty, military duty or
leave of absence, but excluding any payments which solely reimburse him for
medical or medically related expenses and excluding any payments made or due
under a plan maintained solely for the purposes of complying with applicable
worker's compensation or unemployment compensation or disability insurance laws;
provided however, no more than 501 Hours of Service shall be credited under this
paragraph for any single continuous period (whether or not such period occurs in
a single computation period); and provided further that Hours of Service under
this paragraph shall be calculated and credited pursuant to section 2530.200b-2
of the Department of Labor Regulations which are incorporated herein by this
reference;
(c) each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to with respect to an Employee; provided however,
that the same Hours of Service shall not be credited both under subsection (a)
or subsection (b), as the case may be, and under this subsection (c); and
provided further, that Hours of Service for back pay awarded or agreed to with
respect to periods described in subsection (b) shall be subject to the
limitations set forth therein and shall be calculated pursuant to the
regulations referred to therein; and provided further, that these Hours of
Service shall be credited to such individual for the computation period or
periods to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made; and
(d) each hour for which an Employee would have received credit during
Military Service if his employment status immediately prior thereto had
continued.
(e) For purposes of determining service under (a), (b) and (c) above,
service (including service as a Self-Employed Individual) for the following
shall be treated as if it were service for the Employer:
(1) each Affiliate;
(2) each predecessor employer within the meaning of, and to the
extent required under, section 414(a) of the Code; and
(3) each other employer identified in the Adoption Agreement for
service crediting purposes.
1.30 KEY EMPLOYEE. "Key Employee," with respect to any Plan Year, means, as
determined under section 416(i) of the Code and the regulations thereunder, any
person (including a deceased person) who, at any time during the Determination
Period with respect to such Plan Year, is:
(a) an officer of the Employer (or any other employer taken into account
under section 414 of the Code) who:
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(1) has Adjusted Compensation greater than 50 percent of the
dollar limitation in effect under section 415(b)(1)(A) of the Code for any such
Plan Year, and
(2) is taken into account under section 416(i) of the Code;
(b) one of the 10 Employees who:
(1) owns (or is considered as owning within the meaning of
sections 318 and 416(i) of the Code) both more than a 1/2 percent ownership
interest in value and one of the 10 largest percentage ownership interests in
value of the Employer; and
(2) has (during the Plan Year of ownership) Adjusted Compensation
from the Employer (and any other employers taken into account under section 414
of the Code) of more than the limitation in effect under section 415(c)(1)(A) of
the Code for the calendar year in which such Plan Year ends;
(c) a Five-Percent Owner; or
(d) a 1-percent owner (as defined in section 416(i) of the Code) of the
Employer having Adjusted Compensation from the Employer (and any other employers
taken into account under section 414 of the Code) of more than $150,000.
1.31 MILITARY SERVICE. "Military Service" means, with respect to a person
employed immediately prior thereto by the Employer, the period of time that he
spends in the Armed Forces of the United States, or its equivalent recognized
pursuant to federal law, provided he returns to the service of the Employer
within such period, if any, as is then provided by law for the protection of his
reemployment rights, and provided he has not been employed elsewhere before
returning to work for the Employer.
1.32 NONDEDUCTIBLE VOLUNTARY CONTRIBUTION ACCOUNT. "Nondeductible Voluntary
Contribution Account" means a subaccount of each Participant's Account which
reflects the Participant's nondeductible voluntary contributions, as adjusted in
accordance with Article 5.
1.33 NONELECTIVE CONTRIBUTION ACCOUNT. "Nonelective Contribution Account" means
a subaccount of each Participant's Section 401(k) Account which reflects
contributions on behalf of such Participant under Section 3.1(b) and (c) (which
shall be separately accounted for within this Account) and any forfeitures
allocated thereto, as adjusted in accordance with Article 5.
1.34 NON-HIGHLY COMPENSATED EMPLOYEE. "Non-highly Compensated Employee" means
an individual who is not a Highly Compensated Employee and who, at any time
during the Plan Year, is an Eligible Employee.
1.35 NORMAL RETIREMENT AGE. "Normal Retirement Age" means age 65.
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1.36 ONE-YEAR BREAK.
(a) Hour-Counting Method.
(1) "One-Year Break" means, if the hour-counting method is elected
in the Adoption Agreement, a Service Computation Period (as defined in the
Adoption Agreement) during which an individual does not complete more than 500
Hours of Service.
(2) Solely for purposes of determining whether a One-Year Break
has occurred in a computation period, an individual who incurs an absence from
work, beginning on or after the REA Effective Date, for maternity or paternity
reasons (as defined in (c) below) shall receive credit for the Hours of Service
which would otherwise have been credited to such individual but for such
absence, or in any case in which such Hours of Service cannot be determined, 8
Hours of Service per day of such absence, and such Hours of Service shall be
credited to the computation period in which the absence begins if such crediting
would prevent a One-Year Break in that computation period or, in any other case,
to the following computation period.
(b) Elapsed Time Method.
(1) "One-Year Break" means, if the elapsed time method is elected
in the Adoption Agreement, a Severance of at least 12 consecutive months.
(2) In the case of an individual who incurs an absence from work,
beginning on or after the REA Effective Date, for maternity or paternity
reasons, as defined in (c) below, a One-Year Break shall not begin earlier than
one year after it would otherwise begin.
(c) Maternity or Paternity Reasons. For purposes of (a) and (b) above, an
absence for maternity or paternity reasons means an absence:
(1) by reason of the pregnancy of the individual;
(2) by reason of the birth of a child of the individual;
(3) by reason of the placement of a child with the individual in
connection with the adoption of such child by the individual; or
(4) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
1.37 OWNER-EMPLOYEE. "Owner-Employee" means, if the Employer is not
incorporated, an individual who is a sole proprietor of the Employer, or who is
a partner in the Employer owning more than 10 percent of either the capital or
profits interest of the partnership.
1.38 PARTICIPANT. "Participant" means a person who has become a Participant as
provided under Article 2. Any such person shall remain a Participant as long as
an Account is maintained for him under the Plan. The making of a rollover
contribution under Section 3.9 by an Eligible Employee who has not yet become a
Participant (if elected in the Adoption Agreement)as provided under Article 2
shall not result in the Eligible Employee becoming a Participant any earlier
than provided under Article 2.
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1.39 PERMISSIVE AGGREGATION GROUP (FOR TOP-HEAVY TEST). "Permissive Aggregation
Group" means the Required Aggregation Group of plans plus any other plan or
plans of the Employer (or any other employer taken into account under section
414 of the Code) which the Employer elects to aggregate and 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.
1.40 PLAN. "Plan" means the plan set forth in this document and in the Adoption
Agreement as adopted by the Employer, and if amended at any time, then as so
amended.
1.41 PLAN ASSETS. "Plan Assets" means the assets of the Plan at the
particular time applicable.
1.42 PLAN YEAR. "Plan Year" means the period so designated in the Adoption
Agreement.
1.43 PRESENT VALUE (FOR TOP-HEAVY TEST). "Present Value" means, with respect to
a defined benefit plan, the present value based on the interest and mortality
rates specified in the Adoption Agreement for purposes of computing the
top-heavy ratio. The actuarial assumptions used for all plans within the same
aggregation group must be the same.
1.44 PROFITS (FOR PROFIT SHARING PLANS). "Profits" means the Employer's net
income or profits for its taxable year ending with or within the Plan Year and
for all prior taxable years determined by the Employer upon the basis of its
books of account in accordance with sound accounting practices, without any
deduction for current taxes based upon income and for current contributions made
by the Employer under this Plan or any other plan that is qualified under
section 401 of the Code.
1.45 PROTOTYPE SPONSOR. "Prototype Sponsor" means The Fifth Third Bank of
Cincinnati, Ohio.
1.46 REA EFFECTIVE DATE. "REA Effective Date" means the first day of the first
Plan Year beginning after December 31, 1984.
1.47 REEMPLOYMENT COMMENCEMENT DATE (FOR ELAPSED TIME METHOD). "Reemployment
Commencement Date" means the first day, after a Severance, for which an Employee
is paid or entitled to be paid for the performance of duties.
1.48 REQUIRED AGGREGATION GROUP (FOR TOP-HEAVY TEST). "Required Aggregation
Group" means:
(a) each qualified plan or simplified employee pension of the Employer
(or any other employer taken into account under section 414 of the Code) 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 (or any other employer taken
into account under section 414 of the Code) which enables a plan described in
subsection (a) to meet the requirements of section 401(a)(4) or 410 of the Code.
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1.49 ROLLOVER ACCOUNT. "Rollover Account" means a subaccount of each
Participant's Account which reflects his rollover contributions, if any, as
adjusted in accordance with Article 5. Pursuant to Section 3.9, a Rollover
Account may be established for an Eligible Employee making a rollover
contribution prior to becoming a Participant (if elected in the Adoption
Agreement); and in such a case, the Rollover Account shall represent the
Eligible Employee's allocable share of Plan Assets.
1.50 SECTION 401(k) ACCOUNT. "Section 401(k) Account" means a subaccount of each
Participant's Account which reflects contributions on behalf of such Participant
under Section 3.1 of the Plan and any forfeitures allocated thereto, as adjusted
in accordance with Article 5. A Section 401(k) Account may include a subaccount,
the Nonelective Contribution Account.
1.51 SELF-EMPLOYED INDIVIDUAL. "Self-Employed Individual" means, if the Employer
is not incorporated, any individual who has Earned Income for the Employer's
taxable year ending with or within the Plan Year from the trade or business for
which the Plan is established and any individual who would have had Earned
Income but for the fact that the trade or business had no Profits for such
taxable year.
1.52 SERVICE (FOR ELAPSED TIME METHOD).
(a) "Service" means, with respect to an Employee for purposes of
eligibility and vesting, the sum of the following periods (whether or not
continuous), provided that no period of time shall be counted more than once:
(1) each period beginning on an Employment Commencement Date or
Reemployment Commencement Date and ending with the next Severance;
(2) any separation from service of 12 months or less; and
(3) Military Service.
(b) For purposes of determining service under (a)(1) and (2) above,
service (including service as a Self-Employed Individual) for the following
shall be treated as if it were service for the Employer:
(1) each Affiliate;
(2) each predecessor employer within the meaning of, and to the
extent required under, section 414(a) of the Code; and
(3) each other employer identified in the Adoption Agreement for
service crediting purposes.
(c) Anything in the Plan to the contrary notwithstanding, the following
transition rules shall apply in the case of an individual who transfers from a
class of Employees for whom service has been computed on the basis of Hours of
Service during 12-month computation periods. Such an individual shall receive
credit for a period of service consisting of:
(1) the number of Years of Service credited to him before the
computation period in which the transfer occurs plus
(2) the greater of
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(A) the period of service that would be credited to him
under the elapsed time method under (a) above for his service during the entire
computation period in which the transfer occurs or
(B) the service taken into account under the computation
periods method as of the date of the transfer.
In addition, the individual shall receive credit for service
subsequent to the transfer commencing on the day after the last day of the
computation period in which the transfer occurs.
1.53 SEVERANCE (FOR ELAPSED TIME METHOD). "Severance" means, with respect to an
Employee, an absence from employment from the Employer and all Affiliates
beginning on the earliest of death, quit, discharge, retirement or the first
anniversary of any other absence (with or without pay).
1.54 SURVIVING SPOUSE. "Surviving Spouse" means a Participant's surviving spouse
(who, in the case of the Qualified Joint and Survivor Annuity, is the spouse to
whom the Participant was married on the date on which his benefit payments
commenced) except to the extent that a former spouse is treated as such, for
purposes of the Plan, under a qualified domestic relations order as described in
section 414(p) of the Code.
1.55 TOP-HEAVY PLAN. "Top-Heavy Plan" means the Plan, for any Plan Year
beginning after December 31, 1983, if any of the following conditions exists:
(a) if this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans and the Top-Heavy Ratio for this Plan
exceeds 60 percent;
(b) if this Plan is a part of a Required Aggregation Group of plans but
not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the group
of plans exceeds 60 percent; or
(c) if this Plan is a part of a Required Aggregation Group and part of a
Permissive Aggregation Group of plans and the Top-Heavy Ratio for the Permissive
Aggregation Group exceeds 60 percent.
1.56 TOP-HEAVY RATIO. "Top-Heavy Ratio" means the following:
(a) If the Plan is not aggregated with any defined benefit plan, the
Top-Heavy Ratio is a fraction, the numerator of which is the sum of the account
balances, under this Plan and any aggregated defined contribution plans, of all
Key Employees and the denominator of which is the sum of all account balances of
all participants.
(b) If the Plan is aggregated with one or more defined benefit plans, the
Top-Heavy Ratio is a fraction, the numerator of which is the sum of account
balances under the defined contribution plans for all Key Employees and the
Present Value of accrued benefits under the defined benefit plans for all Key
Employees, and the denominator of which is the sum of the account balances under
the defined contribution plans for all participants and the Present Value of
accrued benefits under the defined benefit plans for all participants.
(c) For purposes of (a) and (b) above, the Top-Heavy Ratio shall be
determined in accordance with section 416 of the Code and the applicable
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regulations thereunder, including, without limitation, the provisions relating
to rollovers and transfers and the following provisions:
(1) The value of account balances under the Plan will be
determined as of the Determination Date with respect to the applicable Plan
Year.
(2) The value of account balances and accrued benefits under plans
aggregated with the Plan shall be calculated with reference to the determination
dates under such plans that fall within the same calendar year as the applicable
Determination Date under the Plan.
(3) The value of account balances and the present value of accrued
benefits will be determined as of the most recent valuation date that falls
within or ends with the 12-month period ending on the applicable determination
date, except as provided in section 416 of the Code and the regulations
thereunder for the first and second plan years of a defined benefit plan.
(4) A simplified employee pension shall be treated as a defined
contribution plan; provided however, at the election of the Employer, the
Top-Heavy Ratio shall be computed by taking into account aggregate employer
contributions in lieu of the aggregate of the accounts of employees.
(5) Distributions (including distributions under a terminated plan
which had it not been terminated would have been included in the Required
Aggregation Group) within the 5-year period ending on a determination date shall
be taken into account.
(6) Defined contribution account balances shall be increased to
reflect any contribution not actually made as of a determination date but
required to be taken into account on that date under section 416 of the Code and
the regulations thereunder.
(7) Deductible voluntary contributions shall not be included.
(8) There shall be disregarded the account balances and accrued
benefits of a Participant
(A) who is not a Key Employee but who was a Key Employee in
a prior Plan Year; or
(B) with respect to a plan year beginning after 1984, who
has not performed services for the employer maintaining the plan at any time
during the 5-year period ending on the determination date.
(9) Effective for Plan Years beginning after December 31, 1986,
the accrued benefit of a Participant other than a Key Employee shall be
determined (A) under the method, if any, which uniformly applies for accrual
purposes under all defined benefit plans of the Employer, or (B) if there is no
such method, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional rule of section 411(b)(1)(C) of the
Code.
1.57 TRUST. "Trust" means the trust established, with respect to the Plan, under
the Trust Agreement.
1.58 TRUST AGREEMENT. "Trust Agreement" means the trust agreement which is
identified in the Adoption Agreement as the trust agreement under which the Plan
Assets are held.
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1.59 TRUSTEE. "Trustee" means the Trustee under the Trust Agreement.
1.60 YEAR OF SERVICE.
(a) General. "Year of Service" means:
(1) if the hour-counting method is elected in the Adoption
Agreement, a Service Computation Period (as defined in the Adoption Agreement)
during which an Employee is credited with at least 1000 Hours of Service; or
(2) if the elapsed time method is elected in the Adoption
Agreement, 12 months of Service. Nonsuccessive periods of Service shall be
aggregated, and less than whole year periods of Service (whether or not
consecutive) shall be aggregated on the basis that 12 months of Service (30 days
are deemed to be a month in the case of aggregation of fractional months) equal
a whole Year of Service.
If a Service Computation Period (if the hour-counting method is elected) is the
Plan Year and if a short Plan Year is created because of an amendment changing
the Plan Year, then for purposes of determining whether an Eligible Employee is
credited with at least 1000 Hours of Service in the Service Computation Period
which otherwise would end on the last day of the short Plan Year (and for
determining whether a One-Year Break has occurred), such Service Computation
Period shall be treated as including the period after such short Plan Year
through the date the Plan Year previously in effect would have ended.
(b) Rule of Parity. If an Employee who does not have any nonforfeitable
right to an Employer Contribution Account or Section 401(k) Account incurs a
Break in Service, then, for purposes of eligibility and vesting, all of his
Years of Service (if the hour-counting method applies) or Service (if the
elapsed time method applies) prior to such Break in Service shall be disregarded
if such Break in Service equals or exceeds his Years of Service or his Service
before such Break in Service, provided that such prior service shall not include
any service disregarded by reason of any prior Breaks in Service.
(c) Eligibility. If it is specified under the Adoption Agreement that
each Participant's Employer Contribution Account is fully vested after not more
than 2 Years of Service, and if an Employee incurs a One-Year Break before
completing 2 Years of Service, then all of his Years of Service credited to him
for eligibility purposes before the commencement of such One-Year Break shall be
disregarded.
(d) Vesting. In addition to any service disregarded pursuant to
selections in the Adoption Agreement, if the Plan was in existence before the
Effective Date, then Years of Service (if the hour-counting method applies) or
Service (if the elapsed time method applies) before the Effective Date shall be
disregarded for vesting purposes if such service would have been disregarded
under the rules of the Plan with regard to breaks in service as in effect on the
applicable date prior to the Effective Date. Such rules mean rules relating to
circumstances under which a period of an employee's service or plan
participation is disregarded, for purposes of determining the extent to which
his rights to his account derived from Employer contributions are unconditional,
if under such rules such service is disregarded by reason of such employee's
failure to complete a required period of service within a specified period of
time.
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<PAGE> 21
(e) Other Federal Law. Anything in the Plan to the contrary
notwithstanding, in determining an Employee's service, he shall be entitled to
such credit, if any, as is required by federal law.
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<PAGE> 22
ARTICLE 2
ELIGIBILITY AND PARTICIPATION
2.1 REQUIREMENTS. Each Eligible Employee shall be a Participant but no earlier
than the first Entry Date (as defined in the Adoption Agreement) coinciding with
or next following the date on which he meets the eligibility age and service
requirements specified in the Adoption Agreement. If an Eligible Employee meets
such age and service requirements on an Entry Date and if (subject to Section
2.2) he is an Eligible Employee on such Entry Date, then he shall become a
Participant on such Entry Date. Anything in the foregoing to the contrary
notwithstanding, if the Plan was in existence before the Effective Date, then
any person who was a Participant therein immediately before the Effective Date
shall continue to be a Participant.
2.2 ABSENCES AND SEVERANCES OF LESS THAN 12 MONTHS (ELAPSED TIME METHOD). If the
elapsed time method is elected in the Adoption Agreement, then:
(a) Absences. If, on the Entry Date determined under Section 2.1, an
Eligible Employee is absent from employment for reasons other than quit,
discharge, or retirement, and if he returns to employment within 12 months,
then, upon the termination of such absence, and provided he is an Eligible
Employee, he shall become a Participant retroactive to such Entry Date.
(b) Severances. If an Employee's Entry Date determined under Section 2.1
falls within a period of Severance of 12 months or less taken into account as
Service under Section 1.52, then, provided he is an Eligible Employee, he shall
become a Participant on the date on which such period of Severance ends.
2.3 SPECIAL RULES FOR PLANS COVERING OWNER-EMPLOYEES.
(a) If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the business for which this Plan is established
and one or more other trades or businesses, then this Plan and the plan
established for the 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 the other trades or businesses.
(b) If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a plan which
satisfies 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.
(c) If an Owner-Employee controls the trade or business for which this
Plan is established and also is covered as an owner-employee (within the meaning
of section 401(c)(3) of the Code) under the plans of two or more trades or
businesses which he does not control, then the contributions for the
Participants under this Plan must be as favorable as those provided for the
Owner-Employee under the most favorable plan of the trade or business which he
does not control.
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(d) For purposes of the preceding subsections, 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:
(1) own the entire interest in an unincorporated trade or
business, or
(2) in the case of a partnership, own more than 50 percent of
either the capital interest or the profits interest in the partnership.
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.
2.4 REEMPLOYMENT. If a former Participant is reemployed as an Eligible Employee,
and if his prior Years of Service are not disregarded under Section 1.60, then
he shall become a Participant immediately upon such reemployment.
2.5 CHANGE OF EMPLOYEE CLASSIFICATION.
(a) In the event a Participant is no longer a member of an eligible class
of Employees and becomes ineligible to participate, but has not incurred a Break
in Service, such individual will participate immediately upon returning to an
eligible class of Employees. If such Participant incurs a Break in Service,
eligibility will be determined under the break in service rules of Section 1.60
of the Plan.
(b) 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 will participate
immediately if such Employee has satisfied the minimum age and service
requirements and would have otherwise previously become a Participant.
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ARTICLE 3
CONTRIBUTIONS AND THEIR ALLOCATION
3.1 SECTION 401(k) CONTRIBUTIONS.
(a) Elective Deferrals.
(1) Salary Reduction. In the case of a profit sharing plan, if a
Section 401(k) feature is elected in the Adoption Agreement, each Participant
who is an Eligible Employee may enter into a salary reduction agreement with the
Employer whereby he authorizes the Employer to reduce his Compensation (which
would otherwise be payable absent such an agreement), or any part thereof, by
such percentage or dollar amount (subject to such limitations as may be imposed
under the Adoption Agreement) as he shall specify. Under the Adoption Agreement,
the Administrator may set uniform maximum and/or minimum limits on the
percentage or dollar amount of a Participant's Compensation that may be reduced
for any Plan Year or for any period during a Plan Year. Contributions of this
type may be referred to in the Plan as elective deferrals or as salary reduction
contributions.
(2) $7,000 Annual Limit. In no event shall a Participant's
Compensation in any calendar year be reduced by a salary reduction agreement
under (1) (and under all other plans, contracts or arrangements of the Employer
which allow elective deferrals within the meaning of section 402(g)(3) of the
Code) in an amount greater than $7,000 (or such greater amount as may be
prescribed by the Secretary of the Treasury or his delegate).
(3) Contribution to the Plan. Subject to the limits under Article
4 of the Plan and (2) above, the Employer shall reduce the Participant's
Compensation (which would otherwise be payable absent such an agreement), or
part thereof, by the percentage or amount elected by the Participant in
accordance with the terms of the Plan and shall contribute such amounts to the
Plan on behalf of such Participant. Such contributions shall be credited to the
Participant's Section 401(k) Account. Such contributions shall be made as soon
as the Employer can reasonably segregate such amounts, not to exceed 90 days
from the date such amounts would have otherwise been payable to the Participant.
(4) Effect of Hardship Withdrawal. In the event an Eligible
Employee makes a hardship withdrawal under Section 7.2(b):
(A) the Participant's salary reduction agreement shall
immediately terminate and the Participant may not enter a new salary reduction
agreement for at least 12 months after receipt of the hardship withdrawal; and
(B) for the Participant's taxable year following the taxable
year of the hardship withdrawal, the Participant's salary reduction
contributions may not exceed the applicable limit under section 402(g) of the
Code for that taxable year less the amount of such Participant's salary
reduction contributions for the taxable year of the hardship withdrawal.
(5) Procedural Matters. A Participant may enter, change or
terminate a salary reduction agreement under (1) in accordance with the
provisions adopted by the Employer in the Adoption Agreement. In no event may a
salary reduction agreement be entered into retroactively. In addition, the
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Employer may require or allow a Highly Compensated Employee or Family Member to
reduce the percentage or amount specified in his salary reduction agreement to
the extent that the Employer reasonably anticipates that without the reduction,
the limits set forth in Section 3.1(e) or Article 4 would be exceeded for the
Plan Year. A Participant's salary reduction agreement shall terminate if his
employment status changes so that he is no longer an Eligible Employee.
(b) QNECs.
(1) Optional QNECs. If elected in the Adoption Agreement, the
Employer shall contribute to the Plan an amount determined pursuant to the
Adoption Agreement for allocation to the Nonelective Contribution Accounts of
those Participants entitled under the Adoption Agreement to receive an
allocation of this type of contribution. Subject to the limitations of Article 4
of the Plan, as of the last Accounting Date for a Plan Year, there shall be
allocated to the Nonelective Contribution Account of each Participant qualified,
under the Adoption Agreement, to receive such an allocation:
(A) if the allocation method selected in the Adoption
Agreement provides for the allocation to be made proportionate to Compensation,
that portion of the Employer's contribution for the Plan Year that bears the
same ratio to the total amount of such contribution as the Compensation of such
Participant for such Plan Year bears to the total amount of the Compensation of
all such Participants for such Plan Year; and/or
(B) the same flat dollar amount allocable to all other
qualified Participants, if this allocation method is selected in the Adoption
Agreement.
(2) Failsafe QNEC.
(A) The Employer, in its sole discretion, may contribute to
the Plan for allocation to the Nonelective Contribution Accounts of those
Participants entitled under (B) below to receive an allocation, such amount as
it determines appropriate to satisfy the nondiscrimination tests of section
401(k)(3)(A) and 401(m)(2) of the Code for a Plan Year. Any such contribution
shall be allocated as of the last Accounting Date for the Plan Year for which
the Employer makes the contribution.
(B) Only Participants who are Eligible Employees at any time
during the Plan Year and who are not Highly Compensated Employees with respect
to the Plan Year shall be qualified to receive an allocation of any contribution
under (A) above for a Plan Year; provided that any such contribution shall be
allocated by making the maximum permissible allocation permitted under Article 4
beginning with the Participant with the least Compensation for the Plan Year and
continuing such maximum permissible allocation to each such Participant in order
of Compensation (least Compensation to highest Compensation) until the entire
contribution is allocated.
The types of contributions under this subsection (b) may be referred to in the
Plan as a qualified nonelective contribution.
(c) Matching Contributions to Nonelective Contribution Accounts. If
elected in the Adoption Agreement, the Employer shall make matching
contributions to the Nonelective Contribution Accounts of those Participants for
whom salary reduction contributions are made under (a) above for the Plan Year
and who also are qualified under the Adoption Agreement to receive such a
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<PAGE> 26
matching contribution. Such a matching contribution shall be allocated under the
method(s) selected in the Adoption Agreement. In the event the rate of matching
contribution (determined after corrective distribution of elective deferrals
under sections 401(k) or (m) or 402(g) of the Code) is determined by the
Administrator to be discriminatory in favor of one or more Highly Compensated
Employees, the Administrator shall forfeit that part of such matching
contribution (as adjusted in accordance with Article 5) as is necessary to make
such rate nondiscriminatory (and in such a case the contributions shall be
disregarded under the Plan's provisions relative to sections 401(k)(3) and
401(m)(2) of the Code).
This type of contribution may be referred to in the Plan as a qualified matching
contribution.
(d) Time for Contributions. Contributions under (b) and (c) for a Plan
Year shall be made no later than the end of the Plan Year following the Plan
Year to which the contributions relate (or such later time as may be permitted
by Treasury Regulations or the Internal Revenue Service).
(e) Limitation on Section 401(k) Contributions. The Actual Deferral
Percentage for any Plan Year for Participants who are Highly Compensated
Employees shall not exceed the greater of:
(1) 1.25 times the Actual Deferral Percentage for the Participants
who are Non-highly Compensated Employees; or
(2) the lesser of:
(A) 2 times the Actual Deferral Percentage for the
Participants who are Non-highly Compensated Employees, provided that the Actual
Deferral Percentage for the Participants who are Highly Compensated Employees
shall not exceed the Actual Deferral Percentage for Participants who are
Non-highly Compensated Employees by more than 2 percentage points; or
(B) such amount as the Secretary of the Treasury or his
delegate may prescribe to prevent multiple use of this alternative limitation
with respect to any Highly Compensated Employee.
(f) Return of Excess Elective Deferrals.
(1) Participant Election. If amounts are includible in a
Participant's gross income under section 402(g) of the Code for a taxable year
of the Participant, the Participant may elect to receive a distribution from his
Section 401(k) Account in an amount up to the sum (or difference) of:
(A) the lesser of:
(i) the amount includible in his gross income under
section 402(g) of the Code for the taxable year; or
(ii) the amount of his salary deferrals under Section
3.1(a) for the taxable year; plus (or minus)
(B) the income (or loss) allocable to the amount determined
under (A) determined by the Administrator in accordance with Treasury
Regulations.
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(2) Procedure. An election under (1) above shall be made in
writing, signed by the Participant, on such form as the Administrator shall
direct and shall be effective only if received by the Administrator no later
than the first March 1st following the close of the Participant's taxable year
to which the election relates. A Participant who has exceeded the limits of
Section 3.1(a)(2) shall be deemed to have made an election hereunder to the
extent of such excess.
(3) Distribution. Any other provisions of the Plan to the contrary
notwithstanding, the amount determined under (1) if properly elected under (2)
shall be paid to the Participant as a lump sum no later than the first April
15th following the close of the Participant's taxable year to which the election
relates.
(4) Effect on Other Provisions. Except to the extent provided by
the Secretary of the Treasury or his delegate, distributions hereunder shall be
taken into account under Sections 3.1(e) and 3.2(b).
(g) Excess Section 401(k) Contributions.
(1) Excess Actual Deferral Percentage. If the Actual Deferral
Percentage for a Plan Year for the Participants who are Highly Compensated
Employees exceeds the maximum amount allowable under Section 3.1(e), then the
Administrator shall distribute to each Highly Compensated Employee specified in
(b) below from his Section 401(k) Account the sum (or difference) of:
(A) subject to (2) below, the smallest amount (if any)
which, had such amount not been contributed, would have resulted in the maximum
permissible Actual Deferral Percentage for the Plan Year for Participants who
are Highly Compensated Employees not being exceeded; plus (or minus)
(B) the income (or loss) allocable to the amount determined
under (A) determined by the Administrator in accordance with Treasury
Regulations; minus
(C) that part of the distribution (if any) under (f) above
attributable to salary deferrals under Section 3.1(a) of the Plan during the
Plan Year.
(2) Required Distributees. Those Highly Compensated Employees
subject to receiving a distribution under this subsection (g) shall be
determined by applying (1)(A), until satisfied, to the Highly Compensated
Employees on an individual basis (or, in the case of two or more Highly
Compensated Employees with the same ratio, on a pro rata basis) in order of the
ratios calculated separately for each such Participant (under Section 1.4
beginning with the Highly Compensated Employees with the greatest such ratio on
the basis that the ratio (as if redetermined after application of this Section)
for any such Participant shall not be reduced below the ratio (as if
redetermined after application of this Section) of any Highly Compensated
Employee whose ratio prior to the application of this Section was less than or
equal to such Highly Compensated Employee's ratio prior to the application of
this Section. Family Members who are disregarded as separate Employees for
purposes of the Actual Deferral Percentage test under Section 3.1(e) shall
receive a share of the distribution otherwise allocable to the related Highly
Compensated Employee in accordance with applicable Treasury Regulations.
(3) Alternative Limitation. If the alternative limitation referred
to in Section 3.1(e)(2)(B) is exceeded, then the Administrator shall take
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corrective action under either this Section, Section 3.8, or a combination of
the two, as determined by the Administrator.
(4) Allocation of Excess. Distributions hereunder shall be from
the Participant's Section 401(k) Account (other than his Nonelective
Contribution Account) and Nonelective Contribution Account (in proportion to the
Participant's salary deferral contributions under Section 3.1(a) for the Plan
Year and the matching contributions under Section 3.1(c) thereto for the Plan
Year) to the extent of the contributions thereto for the Plan Year plus the
income allocable to such contributions and the excess (if any) shall be
distributed from the Participant's Nonelective Contribution Account from the
amounts attributable to discretionary Employer contributions under Section
3.1(b).
(5) Distribution. Any other provisions of the Plan to the contrary
notwithstanding, the Administrator shall distribute the amount determined under
(1) and (2) above to each Highly Compensated Employee as a lump sum no later
than the last day of the following Plan Year; provided however, the Employer
shall be subject to a 10% excise tax under section 4979 of the Code if the
distributions are not made before the close of the first 2-1/2 months of such
following Plan Year.
(6) Effect on Other Provisions. If distributions are made in
accordance with this Section 3.1(g) with respect to a Plan Year, then the
limitations of Section 3.1(e) shall be deemed satisfied for the Plan Year.
Except to the extent provided by the Secretary of the Treasury, distributions
hereunder shall be taken into account under Article 4.
3.2 EMPLOYER MATCHING CONTRIBUTIONS TO EMPLOYER MATCHING ACCOUNTS.
(a) Employer Matches.
(1) 401(k) Plan. In the case of a profit sharing plan, if a
Section 401(k) feature is part of the Plan pursuant to the Adoption Agreement,
and if elected in the Adoption Agreement, the Employer shall make matching
contributions to the Employer Matching Accounts of those Participants for whom
salary reduction contributions are made under Section 3.1(a) for the Plan Year
and who also are qualified under the Adoption Agreement to receive such a
matching contribution. Such a matching contribution shall be allocated under the
method(s) selected in the Adoption Agreement. In the event the rate of matching
contribution (determined after corrective distribution of elective deferrals
under sections 401(k) or (m) or 402(g) of the Code) is determined by the
Administrator to be discriminatory in favor of one or more Highly Compensated
Employees, the Administrator shall forfeit that part of such matching
contribution (as adjusted in accordance with Article 5) as is necessary to make
such rate nondiscriminatory (and in such a case the contributions shall be
disregarded under the Plan's provisions relative to sections 401(k)(3) and
401(m)(2) of the Code).
(2) Tax-exempt Employer's 403(b) Match. In the case of a profit
sharing plan, if a tax-exempt Employer elects, pursuant to the Adoption
Agreement, to make matching contributions based on an Employee's salary
reduction contributions under section 403(b) of the Code, the Employer shall
make matching contributions to the Employer Matching Accounts of those
Participants who make salary reduction contributions (while an Employee and a
Participant in this Plan) and who are qualified under the Adoption Agreement to
receive such a matching contribution. Such a matching contribution shall be
allocated under the method(s) selected in the Adoption Agreement. In the
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event the rate of matching contribution (determined after corrective
distribution of elective deferrals under the Code) is determined by the
Administrator to be discriminatory in favor of one or more Highly Compensated
Employees, the Administrator shall forfeit that part of such matching
contribution (as adjusted in accordance with Article 5) as is necessary to make
such rate nondiscriminatory (and in such a case the contributions shall be
disregarded under the Plan's provisions relative to sections 401(k)(3) and
401(m)(2) of the Code).
(b) Limitation on Employer Matching and Nondeductible Voluntary
Contributions. The Actual Contribution Percentage for any Plan Year for
Participants who are Highly Compensated Employees shall not exceed the greater
of:
(1) 1.25 times the Actual Contribution Percentage for the
Participants who are Non-highly Compensated Employees; or
(2) the lesser of:
(A) 2 times the Actual Contribution Percentage for the
Participants who are Non-highly Compensated Employees, provided that the Actual
Contribution Percentage for the Participants who are Highly Compensated
Employees shall not exceed the Actual Contribution Percentage for Participants
who are Non-highly Compensated Employees by more than 2 percentage points; or
(B) such amount as the Secretary of the Treasury or his
delegate may prescribe to prevent multiple use of this alternative limitation
with respect to any Highly Compensated Employee.
To the extent necessary to avoid a violation of this limitation, amounts
contributed under Section 3.1, shall be treated as contributions taken into
account under Section 1.3; but only if, and to the extent, the limitations in
Section 3.1(e) would not be violated if such amounts were not taken into account
under Section 1.4. The determination and treatment of the separate ratios under
Section 1.3 of the Plan for each Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury or his
delegate.
(c) Time for Matches and Nondeductible Contributions. Contributions under
this Section 3.2 for a Plan Year shall be made no later than the end of the Plan
Year following the Plan Year to which the contributions relate (or such later
time as may be permitted by Treasury Regulations).
3.3 EMPLOYER CONTRIBUTION.
(a) Profit Sharing Plans.
(1) General. In the case of a profit sharing plan, in addition to
amounts otherwise contributed (if any) under Sections 3.1 and 3.2, the Employer
shall contribute to the Plan an amount determined pursuant to the Adoption
Agreement, and such contribution shall be allocated among the Participants as
provided in the Adoption Agreement. Unless specifically provided for in an
Adoption Agreement in the case of a profit sharing plan, contributions,
including contributions to a profit sharing plan for Plan Years beginning after
December 31, 1985, shall not be conditioned on Profits.
(2) Non-Integrated Allocation Formula. If the Adoption Agreement
provides for the Employer contributions under this Section 3.3 to be allocated
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on a non-integrated basis, then subject to the limitations of Article 4, and
subject to the top-heavy minimum if applicable, as of the last Accounting Date
for a Plan Year, there shall be allocated to the Employer Contribution Account
of each Participant entitled to receive such an allocation (determined pursuant
to the Adoption Agreement), that portion of the Employer's contribution and any
forfeitures allocated with such contribution for such Plan Year that bears the
same ratio to the total amount of such contribution and forfeitures as the
Compensation of such Participant for such Plan Year bears to the total amount of
the Compensation of all such Participants for such Plan Year.
(3) Integrated Allocation Formula.
(A) General. If the Adoption Agreement provides for the
Employer contributions under this Section 3.3 to be allocated on an integrated
basis, then subject to the limitations of Article 4 and the overall permitted
disparity limits of (E) below, and subject to the top-heavy minimum if
applicable, as of the last Accounting Date for a Plan Year, the Employer
contribution under Section 3.3 of the Plan and any forfeitures allocated with
such contribution for such Plan Year shall be allocated under the method
specified in the Adoption Agreement.
(B) Excess Compensation. "Excess Compensation" means
Compensation for a particular Plan Year in excess of the Taxable Wage Base for
that Plan Year.
(C) Taxable Wage Base. "Taxable Wage Base" has the meaning
determined under the Adoption Agreement.
(D) Maximum Disparity Rate.
(i) In General. "Maximum Disparity Rate" for a Plan
Year, subject to (ii) below, means the greater of --
(I) 5.7 percent, or
(II) the rate of tax under section 3111(a) of the
Code (in effect as of the beginning of the Plan Year) which is attributable to
the old age portion of the Old Age, Survivors and Disability Insurance
provisions of the Social Security Act.
(ii) Special Rule for Reduced Taxable Wage Base. If
a reduced Taxable Wage Base is elected in the Adoption Agreement and the amount
specified therein is greater than the greater of $10,000 or one-fifth of the
contribution and benefits base under section 230 of the Social Security Act as
of the first day of the particular Plan Year, the 5.7 percent factor under
(i)(I)above, shall be reduced to 4.3 percent if the amount specified in the
Adoption Agreement is not more than 80 percent of the contribution and benefit
base under section 230 of the Social Security Act and to 5.4 percent if the
amount so specified is greater than 80 percent of such base amount; and the
factor under (i)(II)above shall be reduced proportionately.
(E) Overall Permitted Disparity Limits.
(i) Annual Overall Permitted Disparity Limit. If, for
any Plan Year, a Participant participates in this Plan and another plan of the
Employer that provides for permitted disparity (or imputed disparity), the
Participant's total annual disparity fraction (as defined in Treasury
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Regulation section 1.401(l)-5(b)) may not exceed one. If such fraction would
exceed one, the amount allocated to such Participant shall be reduced to the
extent necessary to satisfy such limit.
(ii) Cumulative Permitted Disparity Limit. Effective
for Plan Years beginning on or after January 1, 1995, in the case of a
Participant who has benefited under a defined benefit plan or target benefit
plan of the Employer for a plan year beginning on or after January 1, 1994, such
participant's cumulative disparity fraction (as defined in Treasury Regulation
section 1.401(l)-5(c)) may not exceed 35. If such fraction would exceed 35, the
amount allocated to such Participant shall be reduced to the extent necessary to
satisfy such limit.
(b) Money Purchase Pension Plans. In the case of a money purchase pension
plan, the Employer shall contribute to the Plan an amount determined pursuant to
the Adoption Agreement, and such contribution shall be allocated among the
Participants as provided in the Adoption Agreement.
3.4 TOP-HEAVY MINIMUMS. If, for any Plan Year, the Plan is a Top-Heavy Plan,
then the following provisions shall apply for such Plan Year:
(a) Except as otherwise provided in (b) and (c) below, the Employer
contributions and forfeitures allocated on behalf of any Participant who is not
a Key Employee shall not be less than the lesser of three percent of such
Participant's Section 415 Compensation or in the case where the Employer has no
defined benefit plan which designates this Plan to satisfy section 401 of the
Code, the largest percentage of Employer contributions and forfeitures,
expressed as a percentage of Section 415 Compensation, allocated on behalf of
any Key Employee for that year. For these purposes and for purposes of Section
3.4(f), "Section 415 Compensation" shall mean the first $200,000 (as adjusted by
the Secretary of Treasury at the same time and in the same manner as under
section 415(d) of the Code)(the first $150,000 (as adjusted by the Secretary of
Treasury in accordance with section 401(a)(17) of the Code) for any Plan Year
beginning on or after January 1, 1994) of a Participant's Section 415
Compensation (as defined in Section 4.1(k). The minimum allocation is determined
without regard to any Social Security contribution and, if the Plan is a profit
sharing plan, without regard to Profits. This minimum allocation shall be made
even though, under other Plan provisions, the Participant would not otherwise be
entitled to receive an allocation, or would have received a lesser allocation
for the year because of (1) the Participant's failure to complete 1,000 Hours of
Service or (2) compensation of less than a stated amount.
(b) The provision in (a) above shall not apply to any Participant who was
not an Eligible Employee on the last day of the Plan Year.
(c) The provision in (a) above shall not apply to any Participant to the
extent the Participant is covered under any other plan or plans and the Employer
has provided in the Adoption Agreement that the minimum allocation or benefit
requirement applicable to top-heavy plans will be met in the other plan or
plans.
(d) In the case of a profit sharing plan, if a Section 401(k) feature has
been adopted in the Adoption Agreement by the Employer, to the extent required
by Treasury Regulations, contributions under Section 3.1(a) allocated to a Key
Employee shall be taken into account in determining the minimum required
contribution under (a) above; provided however, such contributions under Section
3.1(a) allocated to Participants other than Key Employees shall
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not count toward satisfying the minimum contribution required under (a) above.
(e) In the case of a profit sharing plan, if a Section 401(k) feature has
been adopted in the Adoption Agreement by the Employer, to the extent necessary
to prevent a violation of the nondiscrimination requirements under section
401(a)(4) of the Code, matching contributions under Sections 3.1(c) and 3.2
shall not count toward satisfying the minimum contribution required under (a)
above.
(f) If a Participant participates in one or more defined benefit plans
which are aggregated with the Plan under section 416 of the Code for purposes of
determining top heaviness, and if such defined benefit plan or plans do not
satisfy the minimum benefit requirements of section 416 of the Code with respect
to such Participant, then, with respect to such Participant, the words "five
percent of such Participant's Section 415 Compensation" shall be substituted for
the words "the lesser of three percent of such Participant's Section 415
Compensation or in the case where the Employer has no defined benefit plan which
designates this Plan to satisfy section 401 of the Code, the largest percentage
of Employer contributions and forfeitures, expressed as a percentage of Section
415 Compensation, allocated on behalf of any Key Employee for that year" in (a)
above.
3.5 ALLOCATION AMONG EMPLOYERS. If more than one Employer has adopted the Plan,
each Employer shall contribute under the Plan the same proportion of the total
contribution as the proportion allocated to its Employees of the total
contribution.
3.6 RETURN OF EMPLOYER CONTRIBUTIONS.
(a) Mistake of Fact. If a contribution by the Employer to the Plan is
made by reason of a mistake of fact, then, subject to (d) below, such
contribution may be returned to the Employer within 1 year after the payment of
such contribution.
(b) Qualification. Contributions by the Employer to the Plan are
conditioned upon initial qualification of the Plan under section 401 of the
Code. If the Plan receives an adverse determination with respect to its initial
qualification under the Code, then the entire assets attributable to the
Employer's contributions may be returned to the Employer within 1 year after
such determination, but only if the application for the qualification is made by
the time prescribed by law for filing the Employer's return for the taxable year
in which the Plan is adopted, or such later date as the Secretary of the
Treasury may prescribe.
(c) Deductibility. Contributions by the Employer to the Plan (other than
any contributions allocable to the purchase of life insurance for a
Self-Employed Individual) are conditioned upon the deductibility of such
contributions under section 404 of the Code, and, subject to (d) below, such
contributions (to the extent disallowed) may be returned to the Employer within
1 year after the disallowance of the deduction.
(d) Limitation on Return. The amount of the contribution which may be
returned to the Employer under subsection (a) or (c) above shall be limited to
the excess of the amount contributed over the amount that would have been
contributed had there not occurred a mistake of fact or a mistake in determining
the deduction. Earnings attributable to such excess may not be returned to the
Employer, but losses attributable thereto must reduce the amount to be so
returned. Furthermore, the amount of the contribution which
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may be returned shall be limited so as not to cause the balance to the credit of
a Participant's Account to be reduced to less than the balance which would have
been credited to his Account had such contribution not been made.
3.7 VOLUNTARY PARTICIPANT CONTRIBUTIONS.
(a) General. If the Adoption Agreement provides for voluntary Participant
contributions, then each Employee who is a Participant may make voluntary
contributions in cash to the Plan, subject to the limitations in subsection (c)
below.
(b) Designation. Effective for taxable years beginning after December 31,
1986, qualified voluntary employee contributions (as defined in section
219(e)(2)(A) of the Code prior to amendment by the Tax Reform Act of 1986) are
no longer permitted. Amounts credited to the Participant's Deductible Voluntary
Contribution Account as of December 31, 1986 as adjusted in accordance with
Article 5 shall continue to be held until withdrawal or distribution in
accordance with the terms of the Plan. A Participant's contributions for tax
years after December 31, 1986 shall be considered nondeductible contributions
and shall be credited to the Participant's Nondeductible Voluntary Contribution
Account.
(c) Limitations. Subject to the applicable limitations of Article 4, the
aggregate amount of a Participant's contributions to his Nondeductible Voluntary
Contribution Account (together with his nondeductible voluntary contributions to
any other qualified plans maintained by the Employer) for all Plan Years since
he became a Participant shall not exceed 10 percent of the aggregate
compensation that he has received for all such Plan Years.
(d) Recordkeeping. If the Adoption Agreement provides for voluntary
Participant contributions, and if a Section 401(k) feature is not a part of the
Plan, then the Trustee shall be obligated to:
(1) maintain records that enable it to monitor compliance with the
requirements of section 401(m) of the Code;
(2) perform the section 401(m) actual contribution percentage test
for the Plan on an annual basis; and
(3) notify the Employer if a correction of excess aggregate
contributions is required.
3.8 EXCESS MATCHING AND PARTICIPANT CONTRIBUTIONS.
(a) Excess Actual Contribution Percentage. If the Actual Contribution
Percentage for a Plan Year for the Participants who are Highly Compensated
Employees exceeds the maximum amount allowable under Section 3.2(b) (after
application of Section 3.1(f) and (g)), then the Administrator shall distribute
to (or, if forfeitable, forfeit from) each Highly Compensated Employee specified
in (b) below from his Nondeductible Voluntary Contribution Account and/or his
Employer Matching Account, the sum (or difference) of:
(1) subject to (b) below, the smallest amount (if any) which, had
such amount not been contributed, would have resulted in the maximum permissible
Actual Contribution Percentage for the Plan Year for Participants who are Highly
Compensated Employees not being exceeded; plus (or minus)
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(2) the income (or loss) allocable to the amount determined under
(1) determined by the Plan Administrator in accordance with Treasury
Regulations.
(b) Required Distributees and Forfeitures. Those Highly Compensated
Employees subject to receiving a distribution or incurring a forfeiture under
this Section 3.8 shall be determined by applying (a)(1), until satisfied, to the
Highly Compensated Employees on an individual basis (or, in the case of two or
more Highly Compensated Employees with the same ratio, on a pro rata basis) in
order of the ratios calculated separately for each such Participant (under
Section 1.3) beginning with the Highly Compensated Employees with the greatest
such ratio on the basis that the ratio (as if redetermined after application of
this Section) for any such Participant shall not be reduced below the ratio (as
if redetermined after application of this Section) of any Highly Compensated
Employee whose ratio prior to the application of this Section was less than or
equal to such Highly Compensated Employee's ratio prior to the application of
this Section. Family Members who are disregarded as separate Employees for
purposes of the Actual Contribution Percentage test under Section 3.2(b) shall
receive a share of the distribution (or incur a forfeiture, as the case may be)
otherwise allocable to the related Highly Compensated Employee in accordance
with applicable Treasury Regulations.
(c) Alternative Limitation. If the alternative limitation referred to in
Section 3.2(b)(2)(B) is exceeded, then the Administrator shall take corrective
action under either this Section, Section 3.1(g), or a combination of the two,
as determined by the Administrator.
(d) Allocation of Excess. The amount determined under (a) above shall be
distributed from the Participant's Nondeductible Voluntary Contribution Account
to the extent of the contributions thereto for the Plan Year plus the income
allocable to such contributions and the excess (if any) shall be distributed or
forfeited from the Participant's Employer Matching Account in accordance with
the vested percentage of the Participant's Employer Matching Account.
(e) Distribution and Forfeiture. Any other provisions of the Plan to the
contrary notwithstanding, no later than the last day of the following Plan Year,
the Administrator shall distribute the distributable amount determined under (a)
and (b) above to each Highly Compensated Employee as a lump sum and forfeit the
forfeitable amount determined under (a) and (b) above; provided however, the
Employer shall be subject to a 10% excise tax under section 4979 of the Code if
the distributions and forfeitures are not made before the close of the first
2-1/2 months of such following Plan Year. Any forfeitures under this Section 3.8
may not be allocated to Participants who receive a distribution or incur a
forfeiture under this Section 3.8.
(f) Effect on Other Provisions. If distributions are made in accordance
with this Section 3.8 with respect to a Plan Year, then the limitations of
Section 3.2(b) shall be deemed satisfied for the Plan Year. Except to the extent
provided by the Secretary of the Treasury, distributions hereunder shall be
taken into account under Article 4 of the Plan.
3.9 ROLLOVER CONTRIBUTIONS.
(a) General. If elected in the Adoption Agreement, a Participant may
contribute to the Plan money and/or other property (acceptable to the Trustee)
that qualifies for such a rollover under the provisions of section 402(c) or
403(a)(4) of the Code or that qualifies as a rollover contribution under
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<PAGE> 35
section 408(d)(3) of the Code. Any such contribution shall be credited to such
Participant's Rollover Account. Anything in the foregoing to the contrary
notwithstanding, amounts constituting accumulated deductible employee
contributions, as defined in section 72(o)(5) of the Code, may not be rolled
over to the Plan.
(b) Pre-Participation Rollovers. If elected in the Adoption Agreement, an
Eligible Employee, prior to satisfying the Plan's eligibility requirements and
becoming a Participant, may make a rollover contribution in accordance with (a)
above (if the availability of rollovers is elected in the Adoption Agreement).
Any such contribution shall be credited to a Rollover Account established for
the Eligible Employee in which the Eligible Employee's interest is
nonforfeitable at all times. Making such a rollover contribution, however, shall
not result in the Eligible Employee becoming a Participant any earlier than
otherwise provided in the Plan (and, in particular an Eligible Employee prior to
becoming a Participant, will not be entitled to make any other, or share in any
other, types of contributions under the Plan). For purposes of investments
(including the allocation of earnings and losses), withdrawals and
distributions, an Eligible Employee with a Rollover Account shall have the same
rights as a Participant with a Rollover Account.
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<PAGE> 36
ARTICLE 4
LIMITATIONS ON ANNUAL ADDITIONS
4.1 DEFINITIONS. As used in this Article 4, the following terms shall have the
following meanings.
(a) Annual Additions. "Annual Additions" means the sum of the following
amounts credited to a Participant's account for the Limitation Year:
(1) Employer contributions;
(2) forfeitures; and
(3) (A) for Limitation Years beginning before January 1, 1987, the
lesser of:
(i) one-half of the nondeductible employee
contributions or
(ii) the nondeductible employee contributions in
excess of 6 percent of the Participant's Section 415 Compensation for the
Limitation Year; and
(B) for Limitation Years beginning after December 31, 1986,
100 percent of the nondeductible employee contributions.
For this purpose, any excess amount applied under Sections 4.2(d) or
4.3(e) in the Limitation Year to reduce Employer contributions will be
considered Annual Additions for such Limitation Year.
Amounts allocated, in years beginning 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 or an
Affiliate are treated as Annual Additions to a defined contribution plan. Also,
amounts derived from contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable to post-retirement
medical benefits allocated to the separate account of a key employee, as defined
in section 419A(d)(3) of the Code, under a welfare benefits fund, as defined in
section 419(e) of the Code, maintained by the Employer or an Affiliate, are
treated as Annual Additions to a defined contribution plan.
(b) Defined Benefit Fraction. "Defined Benefit Fraction" means a
fraction, the numerator of which is the sum of the Participant's Projected
Annual Benefits under all the defined benefit plans (whether or not terminated)
maintained by the Employer and all Affiliates, and the denominator of which is
the lesser of 125 percent of the dollar limitation determined for the Limitation
Year under sections 415(b) and (d) of the Code or 140 percent of the Highest
Average Compensation, including any adjustments under section 415(b) of the
Code.
If a Limitation Year contains any portion of a Plan Year for which the
Plan is a Top-Heavy Plan, then "100 percent" shall be substituted for "125
percent"; provided however, any limitation which results from the application of
this sentence may be exceeded so long as there are no defined benefit plan
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<PAGE> 37
accruals for the individual and no employer contributions, forfeitures, or
voluntary nondeductible contributions allocated to the individual; and provided
further, this sentence shall not apply if the sum, for the applicable
aggregation group, of the Key Employees' benefits from all defined benefit plans
and defined contribution plans does not exceed 90 percent of the total of all
participants' benefits and if the Employer contribution would satisfy the
requirements of Section 3.4 if "four percent" were substituted for "three
percent" and "7-1/2 percent" were substituted for "five percent".
Notwithstanding the above, if the Participant was a participant as of
the first day of the first Limitation Year beginning after December 31, 1986, in
one or more defined benefit plans maintained by the Employer which were in
existence on May 6, 1986, the denominator of this fraction will not be less than
125 percent of the sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last Limitation Year beginning
before January 1, 1987, disregarding any changes in the terms and conditions of
the plan after May 5, 1986. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the requirements of
section 415 of the Code for all Limitation Years beginning before January 1,
1987.
(c) Defined Contribution Fraction. "Defined Contribution Fraction" means
a fraction, the numerator of which is the sum of the Annual Additions to the
Participant's account under all the defined contribution plans (whether or not
terminated) maintained by the Employer or an Affiliate 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 or an Affiliate, and the
Annual Additions attributable to all welfare benefits funds, as defined in
section 419(e) of the Code, and individual medical benefit accounts, as defined
in section 415(l)(2) of the Code, maintained by the Employer or an Affiliate),
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 or an
Affiliate (regardless of whether a defined contribution plan was maintained by
the Employer or an Affiliate). The maximum aggregate amount in any Limitation
Year is the lesser of 125 percent of the dollar limitation in effect under
section 415(c)(1)(A) of the Code or 35 percent of the Participant's Section 415
Compensation for such year.
If a Limitation Year contains any portion of a Plan Year for which the
Plan is a Top-Heavy Plan, then "100 percent" shall be substituted for "125
percent"; provided however, any limitation which results from the application of
this sentence may be exceeded so long as there are no defined benefit plan
accruals for the individual and no employer contributions, forfeitures, or
voluntary nondeductible contributions allocated to the individual; and provided
further, this sentence shall not apply if the sum, for the applicable
aggregation group, of the Key Employees' benefits from all defined benefit plans
and defined contribution plans does not exceed 90 percent of the total of all
participants' benefits and if the Employer contribution would satisfy the
requirements of Section 3.4 if "four percent" were substituted for "three
percent" and "7-1/2 percent" were substituted for "five percent".
If the Employee was a participant as of the end of the first day of the
first Limitation Year beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which were in existence on May 6,
1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the Defined Benefit Fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the
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<PAGE> 38
product of (1) the excess of the sum of the fractions over 1.0 times (2) the
denominator of this fraction, will be permanently subtracted from the numerator
of this fraction. The adjustment is calculated using the fractions as they would
be computed as of the end of the last Limitation Year beginning before January
1, 1987, and disregarding any changes in the terms and conditions of the Plan
made after May 5, 1986, but using the section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987. The Annual Addition
for any Limitation Year shall not be recomputed to treat all nondeductible
employee contributions as Annual Additions.
(d) Employer. "Employer" means the employer that adopts this 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), all 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.
(e) Excess Amount. "Excess Amount" means the excess of the
Participant's Annual Additions for the Limitation Year over the Maximum
Permissible Amount.
(f) Highest Average Compensation. "Highest Average Compensation" means
the average Section 415 Compensation for the three consecutive years of service
with the Employer that produces the highest average. A year of service with the
Employer is the calendar year or any other 12-consecutive month period defined
pursuant to the Adoption Agreement.
(g) Limitation Year. "Limitation Year" means a calendar year, or the
12-consecutive month period elected by the Employer in the Adoption Agreement.
All qualified plans maintained by the Employer must use the same Limitation
Year. If the Limitation Year is amended to a different 12-consecutive month
period, the new Limitation Year must begin on a date within the Limitation Year
in which the amendment is made.
(h) Master or Prototype Plan. "Master or Prototype Plan" means a plan the
form of which is the subject of a favorable opinion letter from the Internal
Revenue Service.
(i) Maximum Permissible Amount. "Maximum Permissible Amount" means the
lesser of (1) $30,000 (or, if greater, one-fourth of the dollar limitation in
effect for the Limitation Year under section 415(b)(1)(A) of the Code) or (2) 25
percent of the Participant's Section 415 Compensation for the Limitation Year.
The Section 415 Compensation limitation in (2) shall not apply to
any contribution for medical benefits (within the meaning of section 401(h) or
419A(f)(2) of the Code) which is otherwise treated as an Annual Addition.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12-consecutive month period, the
Maximum Permissible Amount will not exceed $30,000 (or, if greater, one-fourth
of the dollar limitation in effect for the Limitation Year under section
415(b)(1)(A) of the Code) multiplied by the following fraction:
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<PAGE> 39
Number of months in the short Limitation Year
12
(j) Projected Annual Benefit. "Projected Annual Benefit" means the annual
retirement benefit (adjusted to an actuarially equivalent straight life annuity
if such benefit is expressed in a form other than a straight life annuity or
qualified joint and survivor annuity) to which the Participant would be entitled
under the terms of the plan assuming:
(1) the participant will continue employment until normal
retirement age under the plan (or current age, if later), and
(2) 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.
(k) Section 415 Compensation. "Section 415 Compensation" shall have the
meaning selected in the Adoption Agreement.
Section 415 Compensation actually paid or made available by the Employer to a
Participant within a Limitation Year (including, at the election of the
Employer, 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 Employees and no amount
is included in more than one Limitation Year) shall be used unless, for
Limitation Years beginning before December 31, 1991 (or such later date as may
be prescribed by Treasury Regulations), the Employer had elected to use the
Section 415 Compensation accrued for an entire Limitation Year.
4.2 LIMITATION IN CASE OF NO OTHER PLAN.
(a) Limitation. If the Participant does not participate in, and has never
participated in another qualified plan, or a welfare benefits fund as defined in
section 419(e) of the Code, maintained by the Employer, 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, the amount of Annual Additions which
may be credited to the Participant's Account for any Limitation Year will not
exceed the lesser of the Maximum Permissible Amount or any other limitation
contained in this Plan. If the Employer contribution that would otherwise be
contributed or allocated to the Participant's Account would cause the Annual
Additions for the Limitation Year to exceed the Maximum Permissible Amount, the
amount contributed or allocated will be reduced so that the Annual Additions for
the Limitation Year will equal the Maximum Permissible Amount.
(b) Estimated. Prior to determining the Participant's actual Section 415
Compensation for the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant on the basis of a reasonable estimation of
the Participant's Section 415 Compensation for the Limitation Year, uniformly
determined for all Participants similarly situated.
(c) Actual. As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation Year will be
determined on the basis of the Participant's actual Section 415 Compensation for
the Limitation Year.
(d) Disposition of Excess. If, pursuant to (c) above, as a result of the
allocation of forfeitures, a reasonable error in determining the amount of
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<PAGE> 40
elective deferrals (within the meaning of section 402(g)(3) of the Code) that
may be made within the limits of section 415 of the Code, or under other facts
and circumstances which the Commissioner of Internal Revenue finds justify the
availability of the rules set forth herein, there is an Excess Amount, the
excess will be disposed of as follows:
(1) elective deferrals (within the meaning of section 402(g) of
the Code) and employee contributions to the extent matching contributions were
not made with respect thereto together with any gains allocated thereto shall be
returned to the extent that the return would reduce the excess amount (and in
such a case the contributions shall be disregarded under the Plan's provisions
relative to sections 402(g), 401(k)(3) and 401(m)(2) of the Code);
(2) elective deferrals (within the meaning of section 402(g) of
the Code) and employee contributions together with any gains allocated thereto
shall be returned to the extent that the return and the forfeiture of any
matching contributions made with respect to such contributions would reduce the
excess amount (and in such a case the contributions shall be disregarded under
the Plan's provisions relative to sections 402(g), 401(k)(3) and 401(m)(2) of
the Code);
(3) If after the application of paragraphs (1) and (2) an Excess
Amount still exists, and the Participant is covered by the Plan at the end of
the Limitation Year, the Excess Amount in the Participant's Account will be used
to reduce Employer contributions (including any allocation of forfeitures) for
such Participant in the next Limitation Year, and each succeeding Limitation
Year if necessary.
(4) If after the application of paragraphs (1) and (2) an Excess
Amount still exists, and the Participant is not covered by the Plan at the end
of a Limitation Year, the Excess Amount will be held unallocated in a suspense
account. The suspense account will be applied to reduce future Employer
contributions (including allocation of any forfeitures) for all remaining
Participants in the next Limitation Year, and each succeeding Limitation Year if
necessary;
(5) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section, it will not participate in the
allocation of the Plan's investment gains and losses. If a suspense account is
in existence at any time during a particular Limitation Year and paragraph (5)
above is applicable, all amounts in the suspense account must be allocated and
reallocated to Participants' Accounts before any Employer or employee
contributions may be made to the Plan for that Limitation Year. Except as
provided in paragraphs (1) and (2), excess amounts may not be distributed to
Participants or former Participants.
4.3 LIMITATION IN CASE OF ANOTHER MASTER OR PROTOTYPE DEFINED CONTRIBUTION
PLAN.
(a) General. This Section applies if, in addition to this Plan, the
Participant is covered under another qualified master or prototype defined
contribution plan maintained by the Employer, or a welfare benefits fund as
defined in section 419(e) of the Code, maintained by the Employer, 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 to a Participant's
Account under this Plan for any such Limitation Year will not exceed the Maximum
Permissible Amount reduced by the Annual Additions credited
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to a Participant's account under the other plans and welfare benefits funds for
the same Limitation Year. If the Annual Additions with respect to the
Participant under other defined contribution plans and welfare benefits funds
maintained by the Employer are less than the Maximum Permissible Amount and the
Employer contribution that would otherwise be contributed or allocated to the
Participant's Account under this Plan would cause the Annual Additions for the
Limitation Year to exceed this limitation, the amount contributed or allocated
will be reduced so that the Annual Additions under all such plans and funds for
the Limitation Year will equal the Maximum Permissible Amount. If the Annual
Additions with respect to the Participant under such other defined contribution
plans and welfare benefits funds in the aggregate are equal to or greater than
the Maximum Permissible Amount, no amount will be contributed or allocated to
the Participant's Account under this Plan for the Limitation Year.
(b) Estimated. Prior to determining the Participant's actual Section 415
Compensation for the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant in the manner described in Section 4.2(b).
(c) Actual. As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation Year will be
determined on the basis of the Participant's actual Section 415 Compensation for
the Limitation Year.
(d) Allocation of Excess Among Plans. If, pursuant to (c) above, as a
result of the allocation of forfeitures, a reasonable error in determining the
amount of elective deferrals (within the meaning of section 402(g)(3) of the
Code) that may be made within the limits of section 415 of the Code, or under
other facts and circumstances which the Commissioner of Internal Revenue finds
justify the availability of the rules set forth herein, a Participant's Annual
Additions under this Plan and such other plans and funds would result in an
Excess Amount for a Limitation Year, the Excess Amount will be deemed to consist
of the following (in the following order of priority):
(1) first, employee contributions under any plan of the Employer
to the extent matching contributions were not made with respect thereto;
(2) second, elective deferrals (within the meaning of section
402(g)(3) of the Code) under any plan of the Employer to the extent matching
contributions were not made with respect thereto;
(3) third, employee contributions under any plan of the Employer
proportionate with matching contributions made with respect thereto;
(4) fourth, elective deferrals (within the meaning of section
402(g)(3) of the Code) under any plan of the Employer proportionate with
matching contributions made with respect thereto;
(5) fifth, any other allocations under the Employer's profit
sharing plan;
(6) sixth, any other allocations under the Employer's money
purchase pension plan; and
(7) seventh, any other Annual Additions under all other plans.
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(e) Disposition of Excess. Any Excess Amount attributed to this Plan will
be disposed in the manner described in Section 4.2(d).
4.4 LIMITATION IN CASE OF ANOTHER DEFINED CONTRIBUTION PLAN OTHER THAN A MASTER
OR PROTOTYPE PLAN. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a Master or Prototype
Plan, Annual Additions which may be credited to the Participant's Account under
this Plan for any Limitation Year will be limited in accordance with Section 4.3
as though the other plan were a Master or Prototype Plan unless the Employer
provides other limitations under the Adoption Agreement.
4.5 LIMITATION IN CASE OF ANOTHER DEFINED BENEFIT PLAN. If the Employer
maintains, or at any time maintained, a qualified defined benefit plan covering
any Participant in this Plan, the sum of the Participant's Defined Benefit
Fraction and Defined Contribution Fraction will not exceed 1.0 in any Limitation
Year. The Annual Additions which may be credited to the Participant's Account
under this Plan for any Limitation Year will be limited in accordance with the
Adoption Agreement.
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ARTICLE 5
INVESTMENT OF ACCOUNTS
5.1 GENERAL. Accounts shall be invested as provided in the Adoption Agreement
and the Trust Agreement.
5.2 INVESTMENT ELECTIONS. If elected in the Adoption Agreement, each Participant
shall elect the manner in which either his entire Account or the selected
subaccounts, as elected in the Adoption Agreement, and any future contributions
and forfeitures allocated thereto are to be invested. In such a case, each
Participant may choose from among such funds as the Administrator directs the
Trustee to make available and, if elected in the Adoption Agreement, any other
legally permissible investments which the Trustee agrees to hold. Such an
election shall be made in writing and shall be given to the Employer, who shall
deliver it to the Trustee. Elections relating to existing Account (or
subaccount) balances may be changed only effective as of an Accounting Date if
the change would involve one or more of the funds made available by the Trustee
unless the daily valuation option is elected in the Adoption Agreement for the
entire Account (or particular subaccount). The Administrator may prescribe rules
deemed appropriate for administering this provision including but not limited to
rules which limit the frequency of changes to elections, prescribe times for
making elections, regulate the amount or increment a Participant may allocate to
a particular fund, require or allow an election (or election change) to relate
only to future contributions and forfeitures and provide for the investment of
an Account (or subaccount) of a Participant who fails to make an investment
election.
5.3 INVESTMENT ADJUSTMENT.
(a) Investment Elections. If the availability of Participant investment
elections is elected in the Adoption Agreement, then this provision shall apply
with respect to the entire Accounts of Participants or with respect to only the
subaccounts of Participants for which Participant investment elections are
available, as elected in the Adoption Agreement.
(1) Investment Funds.
(A) Balance Forward Valuation. If the daily valuation option
is not applicable to the entire Account or to particular subaccounts, as of each
Accounting Date, each of the separate funds comprising the Plan Assets
(attributable to the entire Account or such subaccounts, as the case may be)
shall be valued at fair market value and on the basis of such value, earnings or
losses in the respective funds since the preceding Accounting Date shall be
determined and reflected in the Participants' Accounts (in the appropriate
subaccounts) in a fair and nondiscriminatory manner on the basis of their
varying interests therein since the preceding Accounting Date.
(B) Daily Valuation. If the daily valuation option is
applicable to the entire Account or to particular subaccounts, then the Trustee
shall account for the investments and investment transactions attributable to
each Account or such subaccount, as the case may be, separately. Earnings or
losses on Plan Assets attributable to a particular Account or subaccount shall
be allocated solely to that Account or subaccount.
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(2) Outright Participant Investment Discretion. If, under the
Adoption Agreement, a Participant may choose any legally permissible investments
which the Trustee agrees to hold, and if the Participant directs the investment
of the Account, or any portion thereof, in any investment other than the funds
made available by the Trustee under Section 5.2, the Trustee shall account for
such investments and investment transactions of such Participant separately.
Earnings or losses on Plan Assets attributable to a particular Account shall be
allocated solely to that Account. A Participant will be entitled to receive a
statement of his Account value at least one time per Plan Year.
(b) No Investment Elections. If the availability of Participant
investment elections is not elected in the Adoption Agreement, or is elected but
only with respect to some (but not all) subaccounts, then this provision shall
apply.
(1) Balance Forward Valuation. If the daily valuation option is
not applicable to the entire Account or to particular subaccounts, as of each
Accounting Date, the Plan Assets (excluding insurance contracts and excluding
Plan Assets subject to investment elections under (a) above) (attributable to
the entire Account or such subaccounts, as the case may be) shall be valued at
fair market value and on the basis of such value, earnings or losses on the Plan
Assets not subject to investment elections under (a) above since the preceding
Accounting Date shall be determined and reflected in the Participants' Accounts
(in the appropriate subaccounts) in a fair and nondiscriminatory manner on the
basis of their varying interests therein since the preceding Accounting Date.
(2) Daily Valuation. If the daily valuation option is applicable
to the entire Account or to particular subaccounts, then the Trustee shall
account for the investments and investment transactions attributable to each
Account or such subaccounts, as the case may be, separately. Earnings or losses
on Plan Assets attributable to a particular Account or subaccount shall be
allocated solely to that Account or subaccount. A Participant will be entitled
to receive a statement of his Account value at least one time per Plan Year.
(c) Special Rule for Non-Publicly Traded Qualifying Employer Securities.
In the event Plan Assets are invested in qualifying employer securities for
which there is no generally recognized market, notwithstanding a selection of
the daily valuation option in the Adoption Agreement, the Administrator may
determine to use (in a consistent and non-discriminatory manner) the balance
forward valuation method with respect to such qualifying employer securities.
5.4 INSURANCE.
(a) Trust Agreement. If the Trust Agreement provides for the purchase of
life insurance, then the Employer may direct that, subject to the limitations in
(d) below, a Participant's Account be applied to the purchase of life insurance
on the life of such Participant. If any part of a Participant's Deductible
Voluntary Contribution Account is used to purchase life insurance, the amount so
used will be treated as a distribution.
(b) Earmarking. If insurance contracts are so acquired, then either such
acquisition shall be only at the Participant's request or the amount devoted to
such purpose shall be a uniform percentage of each Participant's interest in the
Employer's contribution. If such percentage of the Account of
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any Participant will provide an amount which is insufficient to purchase an
insurance contract as above provided, then such purchase shall be deferred until
the amount available therefor is sufficient; in the meantime retaining such
amount as a reserve, in cash or invested so as to be readily converted into
cash, for the benefit of such Participant.
(c) Accounting. For purposes of Section 5.3, an Account shall be reduced
by any insurance premiums allocable thereto. The proceeds or, if the policy is
surrendered, the cash value of any such insurance policy shall be allocated, in
proportion to the premium paid, to the subaccount or subaccounts to which the
premiums were charged. Any dividends or credits earned on insurance contracts
will be allocated to the Account of the Participant for whose benefit the
contract is held.
(d) Limitations.
(1) General. Payments for life insurance premiums from a
Participant's Employer Contribution Account shall be limited as follows:
(A) Ordinary life - For purposes of these incidental
insurance provisions, ordinary life insurance contracts are contracts with both
nondecreasing death benefits and nonincreasing premiums. If such contracts are
purchased, less than one-half of the aggregate Employer contributions allocated
to any Participant will be used to pay the premiums attributable to them.
(B) Term and universal life - No more than one- fourth of
the aggregate Employer contributions allocated to any Participant will be used
to pay the premiums on term life insurance contracts, universal life insurance
contracts, and all other life insurance contracts which are not ordinary life.
(C) Combination - The sum of one-half of the ordinary life
insurance premiums and all other life insurance premiums will not exceed
one-fourth of the aggregate Employer contributions allocated to any Participant.
(2) Non-integrated Profit Sharing Plan. If the Plan is a profit
sharing plan and if, under the Adoption Agreement, Employer contributions are
allocated on a non-integrated basis, then, at any time, the aggregate payments
for life insurance premiums from a Participant's Employer Contribution Account
shall be limited to:
(A) the aggregate Employer contributions made at least 2
years before such time, plus
(B) the limitation determined under (1) above with respect
to Employer contributions made less than 2 years prior to such time.
(e) Termination of Employment. Upon a Participant's termination of
employment, the entire value of the life insurance contract or contracts shall,
subject to Section 8.2, be converted into cash or to provide periodic income,
pursuant to one of the forms of payment provided under the Plan, without life
insurance protection beyond retirement, or the contract or contracts shall be
distributed at retirement to the Participant; provided however, unless the
Adoption Agreement provides for an annuity as a form of payment, no contract may
be converted to a life annuity.
(f) Ownership. The Trustee shall apply for and will be the owner of any
insurance contract purchased under the Plan. The insurance contract(s) must
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provide that the proceeds will be payable to the Trustee. Any proceeds shall be
applied pursuant to the applicable provisions of Article 9.
(g) Conflict. In the event of any conflict between the terms of this Plan
and the terms of any insurance contracts hereunder, the Plan provisions shall
control.
5.5 LOANS.
(a) Eligibility. If the Plan is a profit sharing plan and if the Adoption
Agreement provides for loans, then, upon written application filing the proper
form with the Administrator by a Participant, the Administrator may authorize
and direct the Trustee to grant a loan to such Participant, subject to the
conditions set forth below.
(b) Conditions. Loans under (a) above shall meet all of the following
requirements:
(1) Loans shall be made available to all Participants on a
reasonably equivalent basis. If the Adoption Agreement provides that loans are
available only to Participants while they are Employees, loans nevertheless
shall be available to former Employees who are parties in interest.
(2) Loans shall not be made available to Highly Compensated
Employees in an amount greater than the amount made available to other
Participants.
(3) Loans shall bear a reasonable rate of interest.
(4) Loans shall be adequately secured, which security may,
notwithstanding Section 13.2, consist of up to 50 percent (100 percent for loans
granted or renewed prior to October 19, 1989) of an assignment of a borrowing
Participant's accrued nonforfeitable benefit under the Plan (excluding any
Deductible Voluntary Contribution Account).
(5) If such a loan is secured by a Participant's accrued
nonforfeitable benefit under the Plan and if the Qualified Joint and Survivor
Annuity would be the automatic form of benefit to the Participant under Section
8.2 of the Plan at the time such accrued nonforfeitable benefit is used as
security, then, with respect to any loan made after August 18, 1985, such loan
and the possible reduction in the Participant's benefit must, within the 90-day
period prior to making the loan, be consented to by the Participant and (if he
is married) his spouse. A new consent is required if the Participant's Account
balance is used for any increase in the amount of security or if a loan is
renegotiated, extended, renewed or otherwise revised. The consent shall comply
with the requirements of Section 8.2(d)(4) but shall be deemed to meet any
requirements contained therein even though the Participant is married to a
different spouse at the time of any setoff.
(6) No Participant loan shall exceed the limitations under (c)
below.
(7) In the event of default, foreclosure on the Participant's
accrued nonforfeitable benefit, to the extent used as security for the loan,
will not occur until a distributable event occurs under the Plan, which (for
purposes hereof) shall include satisfaction of the limitations in (d) below.
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<PAGE> 47
Events constituting default shall be specified in the promissory note or
security agreement executed by the Participant.
(8) No loans will be made to any Owner-Employee or, if the
Employer is an electing small business (Subchapter S) corporation, to any
employee or officer of the Employer 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 the Employer, more than 5 percent of the outstanding stock of the
Employer.
(c) Limitation on Amount. A loan under the Plan (when added to any other
loans outstanding under the Plan and any other plans taken into account under
section 72(p)(2)(D) of the Code) to a Participant made, renewed, renegotiated,
modified or extended after December 31, 1986 shall not exceed the lesser of:
(1) $50,000 reduced by the excess (if any) of -
(A) the highest outstanding balance of loans from the Plan
(and other plans taken into account) during the one-year period ending on the
day before the date on which such loan was made, over
(B) the outstanding balance of loans from the Plan (and
other plans taken into account) on the date such loan was made, or
(2) the greater of
(A) for loans granted or extended prior to October 19, 1989,
the present value of the nonforfeitable portion of the Participant's Account
(excluding any Deductible Voluntary Contribution Account) not in excess of
$10,000 or
(B) one-half of the present value of the nonforfeitable
portion of the Participant's Account (excluding any Deductible Voluntary
Contribution Account).
(d) Profit Sharing Plan Distributable Event. Solely for purposes of
foreclosure on the Participant's accrued nonforfeitable benefit, to the extent
used as security for the loan, default on a Participant's note shall be deemed
to be a distributable event for a Participant who has been a Participant for at
least 60 months, and for any other Participant except to the extent of the
portion of his Account attributable to Employer contributions actually made to
the Plan during the 2-year period preceding the foreclosure; provided, however,
with respect to a Participant's Section 401(k) Account, such a default shall be
deemed a distributable event if, and only if, the Participant has attained age
59-1/2.
(e) Repayment Period. Each loan, by its terms, shall be required to be
repaid within 5 years; provided, however, such requirement shall not apply to
any loan made, renewed, renegotiated, modified or extended after December 31,
1986 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.
(f) Level Amortization. Each loan made, renewed, renegotiated, modified
or extended after December 31, 1986 shall be subject to substantially level
amortization, with payments of principal and interest not less frequently than
quarterly, over the term of the loan.
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(g) Earmarking. Anything in the Plan to the contrary notwithstanding, if
a loan is made to a Participant pursuant to (a) above, then his interest in
other Plan Assets shall be reduced by the amount of the loan, the loan shall be
an investment of his Account, and interest and other amounts allocable to such
loan shall be allocated only to his Account. If the Participant's Account
represented by a loan becomes payable to him in accordance with the terms of the
Plan (and the Participant has not repaid the loan at the time the distribution
is to be made) the Administrator shall either include the loan in the
distribution or cancel the loan and treat the unpaid loan balance as a
distribution.
(h) Effect of Default on Benefits. For purposes of determining the amount
of the Qualified Joint and Survivor Annuity or Preretirement Survivor Annuity
otherwise payable under Section 8.2 or 9.1, a Participant's Account shall be
reduced by that part of his Account held as security for the loan and treated as
payment in satisfaction of the loan (including accrued interest). Upon a
Participant's death, if less than 100 percent of his Account is payable to his
Surviving Spouse, then, in determining the amount payable to the Surviving
Spouse, the amount treated as payment in satisfaction of any loan (including
accrued interest) shall first be treated as reducing the Account.
(i) Assignments. As assignment or pledge of any portion of a
Participant's interest in the Plan and a loan, pledge or assignment with respect
to an insurance contract purchased under the Plan, will be treated as a loan
under this Section.
(j) Administration. The Administrator is authorized to administer the
loan program. Loans will be approved if the proper forms and documentation are
completed and delivered to the Administrator, the amount of the loan requested
does not exceed the limits specified in this Section or the Adoption Agreement,
adequate security authorized in this Section is delivered to the Trustee, and
the other provisions of this Section are satisfied.
5.6 SEPARATELY ALLOCABLE PLAN EXPENSES. The Administrator may direct that any
expenses, including but not limited to Trustee fees, taxes and administrative
fees, attributable to specific Participants' accounts due to investment
elections under Section 5.2 (if elected in the Adoption Agreement), life
insurance under Section 5.4, loans under Section 5.5 (if elected in the Adoption
Agreement) or otherwise, be deducted directly from the Account for which the
expense was incurred to the extent paid from Plan Assets.
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ARTICLE 6
VESTING AND FORFEITURES
6.1 VESTING PROVISIONS.
(a) Voluntary Contribution Accounts. A Participant's rights to his
Deductible Voluntary Contribution Account and/or his Nondeductible Voluntary
Contribution Account shall be nonforfeitable at all times.
(b) Rollover Account. A Participant's right to his Rollover Account shall
be nonforfeitable at all times.
(c) Section 401(k) Account. A Participant's right to his Section 401(k)
Account shall be nonforfeitable at all times.
(d) Employer Contribution Account.
(1) At Normal Retirement Age. Upon and after a Participant's
attainment of Normal Retirement Age, if he is then in the service of the
Employer or an Affiliate, he shall have a nonforfeitable right to his Employer
Contribution Account.
(2) At Early Retirement Age. If the Adoption Agreement provides
for early retirement, then, upon and after a Participant's satisfaction of the
requirements thereunder, if he is then an Employee, he shall have a
nonforfeitable right to his Employer Contribution Account.
(3) Prior to Normal Retirement Age.
(A) Vesting Schedule. A Participant with at least one Hour
of Service in a Plan Year beginning after December 31, 1988 shall have a
nonforfeitable right to a percentage of his Employer Contribution Account on the
basis of the vesting schedule specified in the Adoption Agreement. A Participant
who does not receive credit for at least one Hour of Service in a Plan Year
beginning After December 31, 1988 shall have the vested percentage of his
Employer Contribution Account determined under the applicable provisions of the
Plan in effect prior to the Plan Year beginning in 1989. If a Participant incurs
a forfeiture and is rehired, then separate accounts shall be maintained for the
Participant's pre-forfeiture and post-forfeiture Employer-derived accrued
benefit, both accounts shall share in the earnings and losses of the Plan, and
the pre-forfeiture account shall be fully vested.
(B) Vested Percentage Prior to Effective Date.
Notwithstanding (A) above, if the Plan was in existence prior to the Effective
Date, then the vested percentage of a Participant's Employer Contribution
Account shall not be less than such percentage computed under the Plan as of the
later of the Effective Date or the date of adoption of the Adoption Agreement.
(C) Death or Disability. If a Participant's employment as an
Employee terminates because of his death or incurrence of a Disability, then his
Employer Contribution Account shall be fully vested.
(D) Top-Heavy Rules. For any Plan Year in which this Plan is
a Top-Heavy Plan, and if the Plan's vesting schedule does not satisfy section
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416 of the Code, one of the minimum vesting schedules as elected by the Employer
in the Adoption Agreement will automatically apply to the Plan; provided
however, no Participant's vested percentage (as of the day before the Plan's
becoming a Top-Heavy Plan) shall be reduced. 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 subparagraph (D) does
not apply to the account balances of any Employee who does not have an Hour of
Service after the Plan has become a Top-Heavy Plan, and such Employee's account
balance attributable to Employer contributions and forfeitures will be
determined without regard to this subparagraph (D).
(4) Forfeiture for Break in Service. If a Participant incurs a
Break in Service, and if he has not already incurred a forfeiture under (6) or
(8) below, then his forfeitable interest (as of such incurrence) in his Employer
Contribution Account shall be forfeited.
(5) Effect of Certain Distributions. Except as provided in
paragraph (6), if a Participant who is not fully vested in his Employer
Contribution Account receives an amount therefrom prior to his incurrence of a
forfeiture, then, at any relevant time after such distribution and prior to his
incurrence of a forfeiture, the vested portion ("X") of his Employer
Contribution Account ("AB") after the distribution shall be an amount determined
by the formula
X = P (AB + D) - D
where "P" is the vested percentage at the relevant time and "D" is the amount
of the distribution.
(6) Effect of Cash-Out Distributions.
(A) Forfeiture. If a Participant, who is not fully vested in
his Employer Contribution Account, terminates service and, pursuant to Article
7, receives a distribution of the present value of his entire nonforfeitable
interest, then, if elected in the Adoption Agreement, his forfeitable interest
therein shall be forfeited immediately or upon the incurrence of a One-Year
Break as provided in the Adoption Agreement; provided however, there shall be no
forfeiture hereunder unless:
(i) the Participant has voluntarily requested to
receive such distribution; or
(ii) the value (determined as of the date of
distribution) of the Participant's nonforfeitable benefit under the Plan
(excluding any Deductible Voluntary Contribution Account) does not exceed
$3,500.
(B) Restoration. Effective as of the REA Effective Date, any
amount that a Participant forfeited under (A) above shall be restored,
unadjusted for any gains or losses, if such Participant resumes employment with
the Employer covered by the Plan and if he repays to the Plan the full amount of
such distribution before the earlier of:
(i) his incurrence of a Break in Service, or
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(ii) the end of the five-year period beginning with
his resumption of employment with the Employer covered by the Plan.
(C) Source of Restoration. Any restoration under (B) above
shall be made from available forfeitures before any other allocation thereof,
and, if such forfeitures are insufficient, then the Employer (whether or not it
has Profits) shall contribute the difference.
(D) Special Rule. A Participant, who has no vested interest
in his Account and who terminates service, shall be treated for purposes of (A)
above as if he had received a distribution of the present value of his entire
nonforfeitable interest as of the date of his termination of service. Such a
Participant who resumes employment with the Employer covered by the Plan before
he incurs a Break in Service, shall be treated under (B) above as if he had
repaid to the Plan the full amount of that distribution as of the date of his
resumption of employment.
(7) Forfeiture for Dishonesty.
(A) General. Anything in the foregoing to the contrary
notwithstanding, but subject to Section 6.3, if, under rules uniformly and
consistently applied in a nondiscriminatory manner to all Participants under
similar circumstances, the Employer determines that a Participant described in
(B) below has committed any act of dishonesty whatsoever against or with respect
to the Employer during his course of employment with the Employer, and
notwithstanding the fact that such determination shall be made after he shall
have been terminated for any cause whatsoever, then all amounts which are
attributable to his Employer Contribution Account shall not be distributable to
him and shall be treated as a forfeiture upon the later of such determination or
his incurrence of a Break in Service. For purposes hereof, any distribution made
to such a Participant shall be deemed to have been made first from the portion
of his Account other than his Employer Contribution Account.
(B) Participant Subject. A Participant shall be subject to
the application of (A) above only if:
(i) he has ceased to be in the employ of the
Employer and any Affiliate prior to attaining Normal Retirement Age;
(ii) he is credited with less than 4 Years of
Service for vesting purposes;
(iii) it is not specified in the Adoption Agreement
that more than one Year of Service is required for eligibility purposes; and
(iv) he has not participated in the Plan for any
Plan Year in which it was, or was deemed to be, a Top-Heavy Plan.
(8) Forfeiture for Death After Separation from Service. If a
Participant dies after his separation from service with the Employer and if the
Administrator has notice of such death, then any forfeitable portion of such
Participant's Account shall be forfeited.
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6.2 APPLICATION OF FORFEITURES.
(a) Profit Sharing Plans.
(1) No 401(k) Feature. If the Plan is a profit sharing plan and if
a Section 401(k) feature is not elected in the Adoption Agreement, then
forfeitures occurring during a Plan Year (unadjusted for gain or loss during
such Plan Year) shall be applied as determined by the Employer either to the
reduction of the Employer's contributions to the Plan or, added to the
Employer's contributions for such Plan Year and, subject to Article 4, shall be
allocated to Participants' Employer Contribution Accounts as if they were part
of such contributions.
(2) With 401(k) Feature. If the Plan is a profit sharing plan and
if a Section 401(k) feature is elected in the Adoption Agreement, then, subject
to Article 4, forfeitures occurring during a Plan Year shall be applied as
determined by the Employer either to the reduction of the Employer's
contributions to the Plan or, added to the Employer's contributions for such
Plan Year under such of the following Sections of the Plan as the Employer shall
determine, and shall be allocated as if they were part of such contributions:
(A) Section 3.1(b);
(B) Section 3.1(c);
(C) Section 3.2; or
(D) Section 3.3.
Amounts allocated under (A), (B), or (C) shall be treated as Employer
contributions under the applicable Section for purposes of determining the
Actual Deferral Percentage or Actual Contribution Percentage.
(b) Money Purchase Pension Plans. If the Plan is a money purchase pension
plan, then forfeitures (unadjusted for gain or loss) shall be applied as elected
by the Employer in the Adoption Agreement either to the reduction of the
Employer's contributions to the Plan or, added to the Employer's contributions
for such Plan Year and, subject to Article 4, shall be allocated to
Participant's Employer Contribution Accounts as if they were part of such
contribution.
(c) Plan Expenses. In the discretion of the Employer, prior to the
application of forfeitures under (a) or (b) above, forfeitures may be used to
pay administrative expenses of the Plan.
6.3 VESTING UPON TERMINATION OR PARTIAL TERMINATION OF THE PLAN OR
DISCONTINUANCE OF CONTRIBUTIONS. Notwithstanding the provisions of Section 6.1,
upon the termination or partial termination of the Plan, or (if the Plan is a
profit sharing plan) upon the complete discontinuance of contributions under the
Plan, the amounts then credited to all affected Participants' Accounts shall be
nonforfeitable.
6.4 UNCLAIMED BENEFITS. Anything in the Plan to the contrary notwithstanding, if
a Participant or other person entitled to a benefit has not been found within 5
years after such payment becomes due, then such benefit shall be forfeited.
However, if such Participant or other person is
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thereafter located, then, no later than 60 days after the date on which such
Participant or other person is located, the Employer shall contribute the amount
of such benefit to the Plan, and such contribution shall be used to restore such
benefit retroactively and shall be in the same amount as was payable at the time
such benefit became due without any adjustment for the time between the date
such benefit became due and such restoration.
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ARTICLE 7
WITHDRAWALS AND DISTRIBUTION
7.1 WITHDRAWALS FROM VOLUNTARY CONTRIBUTION ACCOUNT AND ROLLOVER ACCOUNT.
(a) Election. A Participant shall have the right to make withdrawals from
his Deductible Voluntary Contribution Account, Nondeductible Voluntary
Contribution Account and Rollover Account, except to the extent that a loan is
secured thereby. In no event, however, may the amount of a withdrawal from his
Nondeductible Voluntary Contribution Account, when added to the amount of any
prior withdrawals therefrom by the Participant, exceed the aggregate amount of
his contributions thereto. The Participant's exercise of his rights of
withdrawal shall be made on such forms and subject to such time and other
limitations as the Administrator shall prescribe.
(b) Payment. Any withdrawal pursuant to this Section shall be payable as
soon as administratively feasible after the Participant requests a withdrawal.
(c) One Withdrawal Per Plan Year. A Participant may receive a withdrawal
under this Section from his Deductible Voluntary Contribution Account and/or his
Nondeductible Voluntary Contribution Account only once per Plan Year. A
Participant may receive a withdrawal under this Section from his Rollover
Account only once per Plan Year.
(d) No Effect on Employer Contributions. No part of a Participant's
Employer Contribution Account (whether or not otherwise nonforfeitable) shall be
forfeited because of any withdrawal under this Section 7.1.
7.2 WITHDRAWALS FROM SECTION 401(k) ACCOUNT.
(a) Election. If elected in the Adoption Agreement, during his employment
with the Employer as an Eligible Employee, and subject to filing such forms and
following such time and other limitations as the Administrator shall prescribe,
a Participant may make withdrawals from his Section 401(k) Account except to the
extent a loan is secured thereby:
(1) in case of hardship; or
(2) after his attainment of age 59-1/2.
(b) Hardship.
(1) General. For purposes of (a)(1) above, "hardship" means an
immediate and heavy financial need of an Eligible Employee, determined in
accordance with (2) below. A withdrawal based upon financial hardship cannot
exceed the amount necessary to satisfy the financial need (including taxes and
penalties on the withdrawal) determined in accordance with (3) below. A
withdrawal in case of hardship may not be made from amounts credited to a
Participant's Nonelective Contribution Account after the later of December 31,
1988 or the end of the last Plan Year ending before July 1, 1989 or from
earnings on the Participant's aggregate salary deferrals after such date.
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(2) Immediate and Heavy Financial Need. A withdrawal will be
deemed to be made on account of an immediate and heavy financial need of an
Eligible Employee if and only if the withdrawal is on account of:
(A) medical expenses described in section 213(d) of the Code
incurred by the Eligible Employee, the Eligible Employee's spouse, or any
dependents of the Eligible Employee (within the meaning of section 152 of the
Code);
(B) purchase (excluding mortgage payments) of a principal
residence of the Eligible Employee;
(C) payment of tuition for the next semester or quarter of
post-secondary education for the Eligible Employee, his spouse, children, or
other dependents; or
(D) the need to prevent the eviction of the Eligible
Employee from his principal residence or foreclosure on the mortgage on the
Eligible Employee's principal residence.
In the discretion of the Administrator, the hardship criteria specified in (A)
may be expanded to include the need for any of such persons to obtain such
medical care; and the hardship criteria in (C) may be expanded to include
related educational fees, room and board expenses and tuition for the next 12
months (rather than the next semester or quarter).
(3) Necessity of the Withdrawal. A withdrawal will be deemed
necessary to satisfy an immediate and heavy financial need of an Eligible
Employee if and only if all of the following requirements are satisfied:
(A) the withdrawal is not in excess of the amount of the
immediate and heavy financial need of the Eligible Employee;
(B) the Eligible Employee has obtained all withdrawals and
distributions (other than hardship withdrawals) and all nontaxable loans
currently available under all plans maintained by the Employer;
(C) the Plan, and all other plans maintained by the
Employer, provide that the Eligible Employee's salary reduction contributions
under section 401(k) of the Code and nondeductible employee contributions will
be suspended for at least 12 months after receipt of the hardship withdrawal;
and
(D) the Plan, and all other plans maintained by the
Employer, provide that the Eligible Employee may not make salary reduction
contributions under section 401(k) of the Code for the Eligible Employee's
taxable year immediately following the taxable year of the hardship withdrawal
in excess of the applicable limit under section 402(g) of the Code for such next
taxable year less the amount of such Eligible Employee's elective contributions
for the taxable year of the hardship withdrawal.
(c) Time of Payment. Any withdrawal pursuant to this Section shall be
payable in a reasonable time (giving consideration to the nature of the Plan
investments) after the Trustee receives notice of such withdrawal from the
Administrator.
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7.3 WITHDRAWALS ON OR AFTER ATTAINMENT OF AGE 59-1/2.
(a) Election. If elected in the Adoption Agreement, during his employment
with the Employer as an Eligible Employee, and subject to filing such forms and
following such time and other limitations as the Administrator shall prescribe,
a Participant may make withdrawals from his Account (from such subaccounts as he
may elect) except to the extent a loan is secured thereby after his attainment
of age 59-1/2 or such later age as may be elected in the Adoption Agreement. The
Participant's exercise of his rights of withdrawal shall be made on such forms
and subject to such time and other limitations as the Administrator shall
prescribe.
(b) Payment. Any withdrawal pursuant to this Section shall be payable at
the time selected in the Adoption Agreement.
(c) Limitations. The amount of any withdrawal from a subaccount may not
exceed the Participant's vested and nonforfeitable interest in that subaccount.
A Participant may receive a withdrawal under this Section only once per Plan
Year.
(d) No Effect on Employer Contributions. No part of a Participant's
Employer Contribution Account (whether or not otherwise nonforfeitable) shall be
forfeited because of any withdrawal under this Section 7.3.
7.4 EVENTS OF DISTRIBUTION TO PARTICIPANTS. A Participant's benefit shall become
distributable to him upon:
(a) retirement on or after Normal Retirement Age;
(b) early retirement, if applicable and as defined under the Adoption
Agreement;
(c) retirement for Disability;
(d) other termination of employment; or
(e) the date required under Section 7.6(d).
7.5 AMOUNT OF PAYMENT.
(a) Balance Forward Valuation. If the daily valuation option is not
applicable to the entire Account or to particular subaccounts, the amount of a
distribution attributable to such Account or subaccounts, as the case may be,
shall be based on the nonforfeitable percentage of the Participant's Account or
subaccounts, as the case may be, valued as of the Accounting Date coinciding
with or last preceding the payment, increased by any nonforfeitable
contributions made by or on behalf of such Participant after such Accounting
Date but not yet credited to such Account or subaccounts, as the case may be,
and reduced by any payments and/or withdrawals after such Accounting Date. If,
under the Adoption Agreement, a Participant has the discretion to choose any
legally permissible investments which the Trustee agrees to hold, in determining
the amount of a distribution (other than a distribution occurring on an
Accounting Date), the Participant's Account valued as of the preceding
Accounting Date shall be adjusted to reflect any earnings or losses after such
Accounting Date with respect to Plan Assets separately allocable to such
Participant's Account.
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<PAGE> 57
(b) Daily Valuation. If the daily valuation option is applicable to the
entire Account or to particular subaccounts, the amount of a distribution
attributable to such Account or subaccounts, as the case may be, shall be based
on the nonforfeitable percentage of the Participant's Account or subaccounts, as
the case may be, at the cash value of the Plan Assets allocable to such Account
or subaccounts, as the case may be, as said Plan Assets are converted to cash
(after taking into account all prior payments and/or withdrawals and the
allocation of all contributions to which the Participant is entitled).
7.6 TIME OF PAYMENT TO A PARTICIPANT.
(a) General. Subject to (b), (c) and (d) below, Section 7.7 and Article
10, distribution to a Participant whose benefit has become distributable shall
commence in accordance with the Adoption Agreement.
(b) Satisfaction of Early Retirement Requirements. If the Adoption
Agreement provides for early retirement, and if a Participant separates from
service before satisfying the age requirement but after satisfying the service
requirement, the Participant will be entitled to elect to receive distribution
of his benefit as provided in the Adoption Agreement as if he had separated from
service upon satisfaction of such age requirement.
(c) Consent.
(1) General. If the value of a Participant's nonforfeitable
benefit (excluding any Deductible Voluntary Contribution Account) under the Plan
exceeds $3,500 (or at the time of any prior distribution exceeded $3,500), then
no part of such benefit may be distributed to him prior to Normal Retirement Age
unless he consents in writing to the distribution. If a Participant's Deductible
Voluntary Contribution Account exceeds $3,500 (or at the time any prior
distribution exceeded $3,500), then no part of such benefit may be distributed
to him on or after the Effective Date prior to Normal Retirement Age unless he
consents to the distribution in writing.
(2) Written Explanation. The Administrator shall provide to each
Participant whose consent is required under (1) above, no less than 30 days and
no more than 90 days prior to the commencement of benefit payments, a written
explanation of the material features and relative values of the optional forms
of benefit under the Plan, and his right (if any) to defer receipt of the
distribution. A Participant may elect to commence his distribution in less than
thirty days (if administratively feasible) from the date he is provided with the
explanation provided he is informed of his right to the 30-day period.
(3) Time of Consent. A Participant's consent to a distribution
must not be made before he receives the written explanation under (2) above and
must not be made more than 90 days before benefit payments commence. This
Section 7.6(c) shall be deemed to have been satisfied with respect to any setoff
of a Participant loan against the Participant's Account if the Participant
agreed to use his Account as security for the loan.
(d) Latest Date of Payment. The payment of a Participant's distribution
under the Plan shall begin not later than the earlier of:
(1) the later of:
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(A) the 60th day after the close of the Plan Year in which
occurs the latest of
(i) the attainment by the Participant of Normal
Retirement Age,
(ii) the 10th anniversary of the date on which the
Participant commenced participation in the Plan, or
(iii) the termination of the Participant's service
with the Employer and all Affiliates; or
(B) such date as the Participant may elect (but not earlier
than the consent of a Participant if required under (c) above); or
(2) the April 1 of the calendar year following the later of
(A) the calendar year in which the Participant attains age
70-1/2 or
(B) the calendar year in which the Participant retires;
provide however, subject to Section 10.1, this paragraph (B) shall not apply in
the following circumstances:
(i) with respect to a Participant who attains age
70-1/2 on or after January 1, 1988; provided that a Participant (other than a
Participant who was a Five-Percent Owner at any time during the Plan Year ending
with or within the calendar year in which he attained age 66-1/2 or any
subsequent Plan Year) who attained age 70-1/2 during 1988 shall be treated as if
he had attained age 70-1/2 in 1989; and
(ii) with respect to a Participant who attained age
70-1/2 before January 1, 1988, but who was a Five-Percent Owner at any time
during the Plan Year ending with or within the calendar year in which he
attained age 66-1/2 or any subsequent Plan Year; provided that with respect to
such a Participant who first becomes a Five-Percent Owner in a Plan Year after
the Plan Year ending in the calendar year in which he attains age 70-1/2, the
calendar year in which such subsequent Plan Year ends shall be the applicable
time for purposes of this subparagraph (B).
7.7 RESTRICTIONS ON SECTION 401(k) WITHDRAWALS AND DISTRIBUTIONS.
Notwithstanding any other provisions to the contrary, a Participant's Section
401(k) Account shall not be withdrawn or distributed earlier than one of the
following:
(a) the Participant's separation from service;
(b) the Participant's death;
(c) the Participant's incurrence of a Disability;
(d) the termination of the Plan without the establishment or maintenance
of another defined contribution plan (other than an employee stock ownership
plan, as defined in section 4975(e) or 409 of the Code, or a simplified employee
pension, as defined in section 408(k) of the Code);
(e) the date of the disposition by a corporation of substantially all of
the assets (within the meaning of section 409(d)(2) of the Code) used by such
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corporation in a trade or business of such corporation if the corporation
continues to maintain the Plan, and if the purchaser is unrelated and does not
adopt or maintain the Plan, but only with respect to an Employee who continues
employment with the corporation acquiring such assets;
(f) the date of the disposition by a corporation of such corporation's
interest in a subsidiary (within the meaning of section 409(d)(3) of the Code)
if the corporation continues to maintain the Plan, and if the purchaser is
unrelated and does not adopt or maintain the Plan, but only with respect to an
Employee who continues employment with such subsidiary;
(g) to the extent provided in Section 7.2 or 7.3, attainment of age 59-
1/2 or incurrence of a hardship.
An event described in (d), (e) or (f) shall qualify as an event allowing a
withdrawal or distribution only if the payment after March 31, 1988 is in a lump
sum.
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ARTICLE 8
FORM OF PAYMENT TO PARTICIPANTS
8.1 ALTERNATIVE FORMS OF DISTRIBUTION AND WITHDRAWAL.
(a) Optional Forms. Subject to the provisions of Section 8.2, the amount
of the distribution or withdrawal to which a Participant is entitled shall be
paid in such one or a combination of the following forms as are made a part of
the Plan under the Adoption Agreement, as the Participant elects:
(1) a single sum;
(2) periodic installment payments, not less frequently than
annually, with any installments remaining unpaid at the Participant's death to
be paid to his Beneficiary;
(3) in the case of a Participant who has attained age 70-1/2 and
who is required to commence benefit payments under Section 7.6(d) while employed
by the Employer, periodic installment payments sufficient in amount and
frequency to satisfy the minimum distribution requirements of Section 8.5, with
a lump sum distribution of his remaining Account balance upon termination of
employment;
(4) a single life annuity;
(5) a Qualified Joint and Survivor Annuity;
(6) a joint and survivor annuity for the Participant and his
Surviving Spouse under which the survivor annuity is more than one-half of, but
not greater than, the annuity payable during the joint lives of the Participant
and such spouse; or
(7) any other optional form of benefit available under the Plan
prior to amendment or available under a transferor plan which, pursuant to
Treasury Regulation Section 1.411(d)-4, cannot be eliminated from the Plan.
(b) In-Kind Payment in Fountain Square Funds. Subject to Section 10.2, if
a Participant's benefit is payable other than in an annuity form, and if his
Account is invested in whole or in part in the Fountain Square Funds, he may
elect to receive any payment to which he is entitled in shares of the Fountain
Square Funds in which his Account is invested. In the absence of a valid
election to take such shares by the date payments are to commence, the payments
shall be in cash.
(c) In-Kind Payment in Qualifying Employer Securities. If elected in the
Adoption Agreement, subject to Section 10.2, if a Participant's benefit is
payable other than in an annuity form, and if his Account is invested in whole
or in part in qualifying employer securities, he may elect to receive any
payment to which he is entitled in such qualifying employer securities. In the
absence of a valid election to take such securities by the date payments are to
commence, the payments shall be in cash.
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<PAGE> 61
8.2 QUALIFIED JOINT AND SURVIVOR ANNUITY.
(a) Applicability. Subject to Section 10.2, this Section 8.2 shall apply
to any distribution to a Participant (regardless of when the Participant
separated from service) unless:
(1) the Plan is a profit sharing plan;
(2) such Participant does not elect a payment of benefits in the
form of a life annuity; and
(3) with respect to such Participant, the Plan is not a direct or
indirect transferee of a transfer made on or after January 1, 1985 by a defined
benefit plan, a defined contribution plan which is subject to the funding
standards of section 412 of the Code, or any other defined contribution plan to
which the joint and survivor requirements of section 401(a)(11) of the Code, as
amended by the Retirement Equity Act of l984, applied with respect to such
Participant; unless, for transfers on or after August 10, 1988, the elective
transfer rules of Treasury Regulation section 1.411(d)-4, A-3(b) are satisfied.
(b) Automatic Form of Payment. Subject to the cash-out rules of Section
10.2 of the Plan, unless the waiver provided for in (d) below is effective with
respect to such Participant, the form of payment to him under the Plan shall be
a Qualified Joint and Survivor Annuity (defined in (c) below); provided however,
the entitlement to and payment of the Qualified Joint and Survivor Annuity with
respect to distributions commencing on or after the Effective Date and prior to
the REA Effective Date shall continue to be governed by the provisions, if any,
of the Plan in existence on August 22, 1984 and applicable to the qualified
joint and survivor annuity under section 401(a)(11) of the Code prior to the
Retirement Equity Act of 1984, subject to (d)(4) below.
(c) Definition of Qualified Joint and Survivor Annuity.
(1) Married Participant. For a Participant who is married
(including a Participant who is subject to an applicable qualified domestic
relations order as described in section 414(p) of the Code), "Qualified Joint
and Survivor Annuity" means an immediate annuity for the life of the Participant
with a survivor annuity for the life of the Participant's Surviving Spouse which
is equal to one-half of the annuity payable during the joint lives of the
Participant and such spouse.
(2) Single Participant. For a Participant who is not married,
"Qualified Joint and Survivor Annuity" means an immediate annuity for the life
of the Participant.
(3) Amount. The Qualified Joint and Survivor Annuity will be the
amount of benefit which can be purchased with the Participant's nonforfeitable
Account balance.
(d) Waiver.
(1) Election Period. A Participant may waive the Qualified Joint
and Survivor Annuity form of benefit at any time during a 90-day election period
ending on the date benefit payments commence. Such a waiver must be in writing
and must specify the optional form of benefit elected and the specific
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<PAGE> 62
Beneficiary or Beneficiaries, if any, to whom any death benefits under the Plan
will be payable.
(2) Revocation. A Participant may also revoke any waiver under (1)
above during the election period thereunder. There shall be no limitation on the
number of such waivers and revocations permitted during such election period.
(3) Written Explanation. The Administrator shall provide to each
Participant, no less than 30 days and no more than 90 days prior to the
commencement of his benefit payments (and consistent with such regulations as
the Secretary of the Treasury may prescribe), a written explanation of:
(A) the terms and conditions of the 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 the Participant's spouse under (4) below,
(D) the right to make, and the effect of, a revocation of an
election, and
(E) the eligibility requirements, material features and
relative values of any optional forms of benefit under the Plan.
(4) Spousal Consent. A waiver (including any new waiver after any
revocation of a prior waiver) of the Qualified Joint and Survivor Annuity shall
not take effect with respect to a spouse of a Participant unless:
(A) such spouse consents in writing to such election, and
such spouse's consent:
(i) acknowledges the effect of such election,
(ii) acknowledges the specific Beneficiary or
Beneficiaries, if any, to whom any death benefits under the Plan will be
payable, which may not be changed without spousal consent (or the consent of the
spouse expressly permits designations by the Participant without any requirement
of further consent by the spouse),
(iii) for waivers made in Plan Years beginning after
December 31, 1986, acknowledges the specific optional form of benefit elected
which may not be changed without spousal consent (except back to the Qualified
Joint and Survivor Annuity) (or the consent of the spouse expressly permits
changes by the Participant without any requirement of further consent by the
spouse), and
(iv) is witnessed by a Plan representative or a
notary public; or
(B) it is established to the satisfaction of a Plan
representative that the consent required under (A) above may not be obtained
because there is no spouse, because the spouse cannot be located, or because of
such other circumstances as may be provided in regulations of the Internal
Revenue Service.
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General consents referred to in the parentheticals under (A)(ii) and (iii) above
executed after October 21, 1986 must acknowledge that the spouse has the right
to limit consent to a specific Beneficiary or Beneficiaries and a specific
optional form or forms of benefit and that the spouse voluntarily elects to
relinquish the rights so relinquished.
8.3 INCIDENTAL BENEFITS.
(a) Pre-1989. For calendar years beginning before 1989 (and for annuity
contracts distributed before 1989) either the requirements in (b) below must be
satisfied or the cost or present value of the payments to be made to a
Participant shall be more than 50 percent of the present value of the total
payments to be made to such Participant and his beneficiary unless each periodic
payment to his beneficiary will be no greater than each payment to such
Participant during his lifetime and the payment of survivor benefits to such
beneficiary will be limited to the period over which such Participant's spouse
survives him.
(b) Post-1988. For calendar years beginning after 1988, (excluding
annuity contracts distributed before 1989), in determining the minimum
distributions during the Participant's lifetime for years in which minimum
distributions are required under Section 8.5, if the Participant's benefit is
distributed other than as a single life annuity and if the participant has a
Beneficiary other than his spouse, in no event shall the divisor specified in
section 8.5(a) exceed the divisor specified in Treasury Regulations under
section 401(a)(9) of the Code applicable for the incidental benefit requirement.
If the Participant's Account is used to purchase an annuity contract (other than
a single life annuity) from an insurance company in order to provide the
Participant's benefit, the maximum period certain and the maximum survivor
annuity permissible in the case of a non-spouse Beneficiary, shall be determined
in accordance with Treasury Regulations under section 401(a)(9) of the Code. In
the case of a change in Beneficiaries the minimum distributions required shall
be determined in accordance with applicable Treasury Regulations under section
401(a)(9) of the Code.
8.4 DISTRIBUTION PERIODS.
(a) General. Except to the extent that distribution is made in the form
of a lump sum, and subject to the provisions of Section 8.2 (relating to the
Qualified Joint and Survivor Annuity), distribution to a Participant must be
made over any of the following periods (or any combination thereof):
(1) the life of the Participant;
(2) the lives of the Participant and his Beneficiary (if the
Beneficiary is an individual);
(3) a period certain not extending beyond the life expectancy of
the Participant; or
(4) a period certain not extending beyond the joint life and last
survivor expectancy of the Participant and his Beneficiary (if the Beneficiary
is an individual).
(b) Determination of Distribution Periods. For purposes of determining
minimum distributions under Section 8.5, the determination of distribution
periods under (a) above shall be made in accordance with section 401(a)(9) of
the Code, the Treasury Regulations thereunder and the following:
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<PAGE> 64
(1) the Beneficiary as of the date benefits are required to
commence under Section 7.6(d), shall be determinative; provided that if annuity
payments commence to a Participant on or before the date benefits are required
to commence, the Beneficiary determined as of any date during the 90 days before
the commencement of annuity payments shall be determinative;
(2) if more than one individual would be a Participant's
Beneficiary as of the date benefits are required to commence under Section
7.6(d), the individual Beneficiary with the shortest life expectancy shall be
determinative; provided that if the Participant's spouse is a Beneficiary and
the spouse's life expectancy is recalculated pursuant to Section 8.6, that
recalculated life expectancy shall be compared annually to the remaining life
expectancies of the other Beneficiaries, not recalculated, and the shortest life
expectancy shall be used for determining the minimum distribution for that
calendar year;
(3) if, as of the date benefits are required to commence under
Section 7.6(d), at least one of the Participant's Beneficiaries would be other
than an individual (other than a trust satisfying the requirements of (5)
below), the distribution periods specified in (a)(2) and (4) above shall not be
available;
(4) any Beneficiary whose entitlement, as of that date, is
contingent on the death of a prior Beneficiary shall be disregarded;
(5) if a trust is a Participant's Beneficiary, the beneficiaries
of that trust (and not the trust itself) shall be treated as the Participant's
Beneficiaries if all of the following requirements are met:
(A) the trust is valid under state law (or would be but for
the fact that there is no corpus);
(B) the trust is irrevocable;
(C) the trust's beneficiaries are identifiable from the
trust instrument; and
(D) a copy of the trust instrument is provided to the Plan.
(c) Change in Beneficiaries. If, after the date benefits are required to
commence under Section 7.6(d), there is a new or additional Beneficiary or other
change in Beneficiaries, the distribution periods under (a) shall be affected as
provided in section 401(a)(9), the Treasury Regulations thereunder and the
following:
(1) if the new Beneficiary is an individual with a life expectancy
shorter than the life expectancy of the Beneficiary whose life expectancy was
used for determining the maximum distribution periods under (a) above, the
maximum distribution period shall be recalculated as of the date benefits were
required to commence under Section 7.6(d), effective for calendar years
subsequent to the year of the Beneficiary change; provided that if one of the
beneficiaries involved is the Participant's spouse and the spouse's life
expectancy is recalculated pursuant to Section 8.6, that recalculated life
expectancy shall be compared annually to the remaining life expectancies of the
other Beneficiaries, not recalculated, and the shortest life expectancy shall be
used for determining the minimum distribution for that year and each succeeding
year.
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<PAGE> 65
(2) if the new Beneficiary is an individual with a life expectancy
longer than the life expectancy of the Beneficiary whose life expectancy was
being used, there shall be no effect on the maximum distribution periods even
though the old beneficiary is no longer a Beneficiary; provided that if one of
the beneficiaries involved is the Participant's spouse and the spouse's life
expectancy is recalculated pursuant to Section 8.6, that recalculated life
expectancy shall be compared annually to the remaining life expectancies of the
other Beneficiaries, not recalculated, and the shortest life expectancy shall be
used for determining the minimum distribution for that year and each succeeding
year;
(3) if the change results in the Participant having a Beneficiary
which is not an individual (other than a trust meeting the requirements of
(b)(5) above), or, if a trust satisfying the requirements of (b)(5) above as of
the date benefits were required to commence under Section 7.6(d) later fails to
satisfy those requirements, the distribution periods specified in (a)(2) and (4)
above shall no longer be available and the maximum distribution periods under
(a) shall be recalculated as of the date benefits were required to commence
under Section 7.6(d), effective for the calendar years subsequent to the year of
the Beneficiary change, or trust change, as the case may be;
(4) if the Beneficiary whose life expectancy was used for
determining the maximum distribution periods under (a) dies, such Beneficiary's
remaining life expectancy (deemed to be zero in the case of a Participant's
spouse if life expectancies had been recalculated pursuant to Section 8.6) shall
continue to apply whether or not a Beneficiary with a shorter life expectancy
receives the benefits.
8.5 MINIMUM DISTRIBUTION.
(a) General. For Plan Years beginning after December 31, l984, subject to
Section 10.1, if the Participant's entire interest is to be distributed in a
form other than a lump sum or a Qualified Joint and Survivor Annuity, then the
minimum amount to be distributed beginning with the first calendar year for
which distributions are required and for each succeeding calendar year, will, to
the extent of his Account balance, be the amount equal to the quotient obtained
by dividing his Account balance by the life expectancy of the Participant or the
joint life and last survivor expectancy of the Participant and his Beneficiary.
The first calendar year for which distributions are required is the calendar
year in which the Participant attains age 70-1/2, retires or becomes a
Five-Percent Owner (whichever is determinative of the latest commencement date
under Section 7.6(d)(2)).
(b) Time for Distributions. The distribution for the first calendar year
for which distributions are required shall be made on or before the applicable
April 1 determined under Section 7.6(d)(2). The minimum distribution for
succeeding calendar years (including the calendar year in which such applicable
April 1 falls) shall be made on or before December 31 of each such year.
(c) Account Balance. For purposes of determining required minimum
distributions, the relevant Account balance shall be the Account balance as of
the last Accounting Date in the calendar year immediately preceding the calendar
year for which the required distributions are being determined, increased by the
amount of any contributions and forfeitures made by or on behalf of the
Participant as of dates in such immediately preceding calendar year after such
last Accounting Date, reduced by any payments or withdrawals in such immediately
preceding calendar year after such last Accounting Date,
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and, in the case of minimum distributions for the second calendar year for which
distributions are required, reduced by distributions made in such second
calendar year on or before the required benefit commencement date (under Section
7.6(d)) that are not in excess (when added to amounts distributed in the first
calendar year) of the amount required to meet the minimum distribution for the
first calendar year; provided that, in no event shall an amount greater than the
Participant's nonforfeitable percentage be distributed.
(d) Transitional Rules. In the case of a Participant whose benefit
commencement date under Section 7.6(d) would have been April 1, 1986, or April
1, 1987, the minimum distributions for 1985 and 1986 need not be made until
December 31, 1987. The amount of such distributions and subsequent distributions
(including distribution of survivor benefits under (e) below) shall be made in
accordance with applicable Treasury Regulations under section 401(a)(9) of the
Code.
(e) Survivor Benefits. Any survivor benefits under this Article 8 shall
be distributed at least as rapidly as under the method of distribution being
used prior to the Participant's death; provided that if the Participant dies
before the latest commencement date for benefits under Section 7.6(d) and has
been receiving benefits in a form other than an annuity, the remaining survivor
benefits must also be distributed as rapidly as provided in Section 9.2.
(f) Annuity Contracts. If a Participant's Account is used to purchase an
annuity contract from an insurance company in order to provide the Participant's
benefit, notwithstanding the foregoing, the minimum distribution requirements
will be satisfied if the annuity provides for periodic payments at intervals not
longer than one year, commencing on or before the date a minimum distribution
would otherwise be required over a period not exceeding the maximum period
described in Section 8.4 remaining (without recalculation of life expectancies
after the annuity purchase). Any such annuity contract must satisfy the
requirements of the applicable Treasury Regulations under section 401(a)(9) of
the Code.
8.6 LIFE EXPECTANCY.
(a) General. For purposes of Sections 8.4 and 8.5, life expectancy and
joint life and last survivor expectancy will be computed in accordance with
applicable Treasury Regulations under section 401(a)(9) of the Code and by the
use of the return multiples contained in Tables V and VI of Treasury Regulation
1.72-9 and, except as provided in (b) and (c) below, will be determined as of
the Participant's (and Beneficiary's) birthday in the calendar year in which the
Participant attains age 70-1/2, retires or becomes a Five-Percent Owner
(whichever is determinative of the latest commencement date under Section
7.6(d)(2)), and such multiple shall be reduced by one for each subsequent
taxable year.
(b) Recalculation. If the Participant so elects, the life expectancy of a
Participant and/or his spouse may be recalculated no more frequently than
annually if such election is irrevocable, is made no later than the date
benefits must commence under Section 7.6(d), and is applicable to all subsequent
years. If recalculation is applicable, the life expectancy of the participant or
spouse shall be determined using his or her age as of his or her birthday in
each succeeding calendar year.
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(c) Annuity Contracts. If annuity payments commence to a Participant
before the latest commencement date under Section 7.6(d), life expectancies of
the Participant and Beneficiary shall be determined as of their birthdays in the
calendar year in which payments commence.
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ARTICLE 9
DEATH BENEFITS
9.1 PRERETIREMENT SURVIVOR ANNUITY.
(a) Applicability. This Section 9.1 shall apply upon the death of any
Participant covered under (c) below unless:
(1) the Plan is a profit sharing plan;
(2) such Participant does not elect a payment of benefits in the
form of a life annuity; and
(3) with respect to such Participant, the Plan is not a direct or
indirect transferee of a transfer made on or after January 1, 1985 by a defined
benefit plan, a defined contribution plan which is subject to the funding
standards of Section 412 of the Code, or any other defined contribution plan to
which the joint and survivor requirements of section 401(a)(11) of the Code, as
amended by the Retirement Equity Act of l984, applied with respect to such
Participant; unless for transfers on or after August 10, 1988, the elective
transfer rules of Treasury Regulation section 1.411(d)-4, A-3(b) are satisfied.
(b) General.
(1) Death After August 22, 1984. If a Participant dies before the
commencement of benefit payments, if he has a Surviving Spouse, and if he is
covered under (c) below by the Preretirement Survivor Annuity, then his
Surviving Spouse shall be entitled to the Preretirement Survivor Annuity,
provided that the Participant and such Surviving Spouse were married throughout
the 1-year period ending on the date of the Participant's death or, if such
Surviving Spouse is a former spouse treated as a Surviving Spouse pursuant to a
qualified domestic relations order as described in section 414(p) of the Code,
that the Participant and such Surviving Spouse were married for at least 1 year.
(2) Death Before August 23, 1984. Anything in the Plan to the
contrary notwithstanding, the entitlement to and payment of the Preretirement
Survivor Annuity with respect to a Participant who dies prior to August 23,
1984, shall continue to be governed by the provisions, if any, of the Plan in
existence on August 22, l984 and applicable to the qualified joint and survivor
annuity under section 401(a)(11) of the Code prior to the Retirement Equity Act
of l984.
(c) Coverage.
(1) Service on or After August 23, 1984. Subject to the cash-out
rules of Section 10.2, the Preretirement Survivor Annuity applies to any
Participant:
(A) who has at least 1 Hour of Service or at least 1 hour of
paid leave from the Employer (or any other employer for whom service is treated
as service for the Employer) on or after August 23, 1984;
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(B) who has a nonforfeitable right to any portion of his
Employer Contribution Account; and
(C) who has not elected, under (e) below, to waive the
Preretirement Survivor Annuity.
(2) Entitlement Under Pre-REA Provisions of Plan. If the Plan was
in existence on August 22, l984, the Preretirement Survivor Annuity applies to
any Participant:
(A) to whom (1) above does not apply;
(B) on whose behalf benefits were accrued on or after the
first day of the first Plan Year beginning on or after January 1, 1976;
(C) who separated from service on or after becoming entitled
to the qualified joint and survivor annuity under the applicable Plan and Code
provisions prior to the Retirement Equity Act of 1984; and
(D) who has not elected, under (e) below, to waive the
Preretirement Survivor Annuity.
(3) Election for Certain Separated Participants. If the Plan was
in existence on August 22, l984, the Preretirement Survivor Annuity applies to
any Participant:
(A) to whom neither (1) nor (2) above applies;
(B) who has at least 1 Hour of Service in the first Plan
Year beginning on or after January l, 1976;
(C) who separated from service with at least 10 Years of
Service and had a nonforfeitable right to all or part of his Employer
Contribution Account;
(D) who is alive on August 23, 1984;
(E) whose benefit payments have not commenced prior to
August 23, 1984; and
(F) who elects the coverage of such Annuity during the
period beginning on August 23, 1984 and ending on the earlier of the date his
benefit payments commence or the date of his death.
(d) Definition of Preretirement Survivor Annuity. The "Preretirement
Survivor Annuity" is an annuity which is for the life of a Participant's
Surviving Spouse, which is the actuarial equivalent of 50 percent of the
Participant's nonforfeitable Account balance as of the date of his death,
whether vested before or upon death and including the proceeds of any insurance
contracts, and under which annuity payments commence as of a date (not later
than December 31 of the calendar year in which the Participant would have
attained age 70-1/2) elected by such Surviving Spouse.
(e) Waiver of Preretirement Survivor Annuity.
(1) General. A Participant to whom (c)(1) or (2) above applies may
waive coverage of the Preretirement Survivor Annuity at any time during his
election period under (3) below. Such a waiver must be in writing and must
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specify the specific Beneficiary or Beneficiaries, if any, to whom any death
benefits under the Plan will be payable.
(2) Revocation. Any waiver under (1) above may be revoked at any
time during the Participant's election period under (3) below. There shall be no
limitation on the number of such waivers and revocations permitted during such
election period.
(3) Election Period. For purposes of (1) and (2) above, the
election period shall be the period
(A) beginning on the earlier of
(i) the first day of the Plan Year in which the
Participant attains age 35, or
(ii) the date of the Participant's separation from
service; provided however, if the Participant returns to service, then any
election made prior to the first day of the Plan Year in which he attains age 35
shall be voided; and
(B) ending on the Participant's date of death.
(4) Written Explanation.
(A) The Administrator shall provide to each Participant,
within the "Applicable Period," as defined below, and consistent with such
regulations as the Secretary of the Treasury may prescribe, a written
explanation of:
(i) the terms and conditions of the Preretirement
Survivor Annuity;
(ii) the Participant's right to make, and the effect
of, an election under (1) above to waive the coverage of the Preretirement
Survivor Annuity;
(iii) the rights of the Participant's spouse under (5)
below;
(iv) the right to make, and the effect of, a
revocation of an election under (2) above; and
(v) the eligibility conditions, material features and
relative values of any optional forms of benefit under the Plan.
(B) "Applicable Period" means, with respect to a
Participant, whichever of the following periods ends last:
(i) 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;
(ii) the period beginning one year prior to, and
ending one year after, the date the individual becomes a Participant, or
(iii) the period beginning one year before, and ending
one year after, Section 8.2 first applies to the Participant.
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In the case of a Participant who separates from
service before attaining age 35, the "Applicable Period" means in all events the
period beginning one year before the separation from service and ending one year
after such separation; provided that if such a Participant returns to service,
the provisions of (i), (ii) and (iii) above shall again apply.
(5) Spousal Consent. A waiver under (1) above (including any new
waiver after any revocation of a prior waiver) shall not be effective with
respect to a spouse of a Participant unless:
(A) such spouse consents in writing to such election, and
such spouse's consent (effective for Plan Years beginning after October 22,
1986):
(i) acknowledges the effect of such election,
(ii) acknowledges the specific Beneficiary or
Beneficiaries to whom any death benefits under the Plan will be payable, which
may not be changed without spousal consent (or the consent of the spouse
expressly permits designations by the Participant without any requirement of
further consent by the spouse) and
(iii) is witnessed by a Plan representative or a
notary public; or
(B) it is established to the satisfaction of a Plan
representative that the consent required under (A) above may not be obtained
because there is no spouse, because the spouse cannot be located, or because of
such other circumstances as may be provided in regulations of the Internal
Revenue Service.
General consents referred to in the parenthetical of (A)(ii) above executed
after October 21, 1986 must acknowledge that the spouse has the right to limit
consent to a specific Beneficiary or Beneficiaries and that the spouse
voluntarily elects to relinquish such right.
(6) Election Under Pre-REA Provisions of Plan. Anything in the
foregoing to the contrary notwithstanding, in the case of a Participant to whom
(c)(2) above applies, any waiver of the Preretirement Survivor Annuity prior to
January 1, 1985 shall be governed by the applicable Plan and Code provisions
prior to the Retirement Equity Act of 1984.
(f) Spouse's Election of Lump Sum Payment. A Surviving Spouse entitled to
a Preretirement Survivor Annuity may elect to receive a lump sum payment of the
amount that would otherwise be applied to the purchase of such Annuity. Such
election shall be in writing, shall acknowledge its effect, and shall be
witnessed by a Plan representative or a notary public.
9.2 BALANCE OF DEATH BENEFIT.
(a) Entitlement. Upon the death of a Participant, prior to the
application of his Account for his benefit, his Beneficiary shall be entitled to
a benefit equal to:
(1) (A) if the daily valuation option is not applicable to the
entire Account or to particular subaccounts, the nonforfeitable balance to the
credit of such Participant's Account or subaccounts, as the case may be, valued
as of the Accounting Date coinciding with or last preceding the date on which
such benefit payments begin and if, under the Adoption Agreement, a
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<PAGE> 72
Participant has the discretion to choose any legally permissible investments
which the Trustee agrees to hold, in determining the amount of death benefit
hereunder, the Participant's Account valued as of the preceding Accounting Date
shall be adjusted to reflect any earnings or losses after such Accounting Date
with respect to Plan Assets separately allocable to such Participant's Account;
plus
(B) if the daily valuation option is applicable to the
entire Account or to particular subaccounts, the nonforfeitable percentage of
such Participant's Account or subaccounts, as the case may be, at the cash value
of the Plan Assets allocable to such Account or subaccounts, as the case may be,
as said Plan Assets are converted to cash; plus
(2) any nonforfeitable contributions made by or on behalf of such
Participant after such Accounting Date but not yet credited to such Account or
subaccounts, as the case may be; plus
(3) any life insurance proceeds received after such Accounting
Date for the Account of such Participant but not yet credited to his Account;
minus
(4) any amount applied for the benefit of the Participant's
Surviving Spouse pursuant to Section 9.1; minus
(5) any payments to and/or withdrawals by such Participant not yet
taken into account.
(b) Payment of Death Benefits.
(1) General. Death benefits under (a) above shall, subject to the
subsections below, be payable to a Participant's Beneficiary in such form
(otherwise available under the Plan under the Adoption Agreement but excluding
the joint and survivor annuity forms) as the Participant or Beneficiary elects.
Subject to (c) below, distribution of death benefits under (a) above shall
commence at such time as the Participant or Beneficiary elects and, unless
administratively impractical, shall first be available for distribution within
90 days after the Participant's death.
(2) Election. An election by a Participant or Beneficiary under
(1) above must be made no later than the earliest date specified in (c)(1) and
(2) below for the commencement of death benefits. As of such date, the election
must be irrevocable with respect to the Beneficiary (and all subsequent
Beneficiaries) and must apply to all subsequent years. In the absence of a valid
election by the required date, the death benefits under (a) shall be distributed
as soon as administratively feasible after the date by which the election would
have been required in a single sum.
(c) Distribution Periods. Death benefits under (a) above shall be
distributed to a Participant's Beneficiary:
(1) no later than December 31 of the calendar year containing the
fifth anniversary of the Participant's death; or
(2) if the Beneficiary is an individual:
(A) beginning not later than December 31 of the calendar
year immediately following the calendar year of the Participant's death (or, if
later, and if the Beneficiary is the Participant's spouse, not later than
December 31 of the calendar year in which the Participant would have attained
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<PAGE> 73
age 70-1/2, and if such spouse dies before payments are required to commence,
then the distribution period hereunder shall be determined as if such spouse
were the Participant); and
(B) (i) over the life of such Beneficiary (if the
Beneficiary is an individual) or
(ii) over a period not extending beyond the life
expectancy of such Beneficiary (if the Beneficiary is an individual).
(d) Determination of Distribution Periods. The determination of
distribution periods under (c)(2) above shall be made in accordance with section
401(a)(9) of the Code, the Treasury Regulations thereunder and the following:
(1) the Beneficiary as of the date of the Participant's death (or,
if applicable, the surviving spouse's death) shall be determinative;
(2) if more than one individual would be a Participant's (or
surviving spouse's) Beneficiary as of the date of the Participant's death (or,
if applicable, the surviving spouse's death) the individual Beneficiary with the
shortest life expectancy shall be determinative; provided that if the
Participant's spouse is a Beneficiary and the spouse's life expectancy is
recalculated pursuant to (f) below, that recalculated life expectancy shall be
compared annually to the remaining life expectancies of the other Beneficiaries,
not recalculated, and the shortest life expectancy shall be used for determining
the minimum distribution for that calendar year;
(3) if, as of the date of the Participant's death, at least one of
the Participant's Beneficiaries is other than an individual (other than a trust
satisfying the requirements of (5) below), the distribution periods specified in
(c)(2) above shall not be available;
(4) any Beneficiary whose entitlement, as of the date of the
Participant's death, is contingent on the death of a prior Beneficiary shall be
disregarded;
(5) if a trust is a Participant's Beneficiary as of the date of
the Participant's death, the beneficiaries of that trust (and not the trust
itself) shall be treated as the Participant's Beneficiaries if all of the
following requirements are met:
(A) the trust is valid under state law (or would be but for
the fact that there is no corpus);
(B) the trust is irrevocable;
(C) the trust's beneficiaries are identifiable from the
trust instrument; and
(D) a copy of the trust instrument is provided to the Plan.
(e) Minimum Distribution.
(1) General. For Plan Years beginning after December 31, 1984,
subject to such transitional rules as may be provided in Treasury Regulations
for the purposes of (c)(2)(B) above the minimum amount to be distributed
beginning with the first calendar year for which distributions are required
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<PAGE> 74
and for each succeeding calendar year, will, to the extent of the Participant's
Account balance, be the amount equal to the quotient obtained by dividing his
Account balance by the life expectancy of the Beneficiary. The first calendar
year for which distributions are required is the calendar year in which the
Participant dies or a spouse dies (whichever is applicable).
(2) Time for Distributions. Distributions which are required shall
be made on or before December 31 each year commencing with the calendar year
specified in (c)(2)(A) above.
(3) Account Balance. For purposes of determining required minimum
distributions, the relevant Account balance shall be the Account balance as of
the last Accounting Date in the calendar year immediately preceding the calendar
year for which the required distributions are being determined, increased by the
amount of any contributions and forfeitures made by or on behalf of the
Participant as of dates in such immediately preceding calendar year after such
last Accounting Date, reduced by any payments or withdrawals in such immediately
preceding calendar year after such last Accounting Date; provided that, in no
event shall an amount greater than the Participant's nonforfeitable percentage
be distributed.
(4) Annuity Contracts. If a Participant's Account is used to
purchase an annuity contract from an insurance company in order to provide the
Beneficiary's benefit hereunder, notwithstanding the foregoing, the minimum
distribution requirements will be satisfied if the annuity provides for periodic
payments at intervals not longer than one year, commencing on or before the date
a minimum distribution would otherwise be required over a period not exceeding
the maximum period described in (c)(2)(B) above remaining (without recalculation
of life expectancies after the annuity purchase). Any such annuity contract must
satisfy the requirements of the applicable Treasury Regulations under section
401(a)(9) of the Code.
(f) Life Expectancy.
(1) General. For purposes of Sections (c),(d) and (e) above, life
expectancy will be computed in accordance with applicable Treasury Regulations
under section 401(a)(9) of the Code and by the use of the return multiples
contained in Tables V and VI of Treasury Regulation 1.72-9 and, except as
provided in (2) and (3) below, will be determined as of the Beneficiary's
birthday in the calendar year in which distributions are required to commence
under (c)(2) above, and such multiple shall be reduced by one for each
subsequent taxable year.
(2) Recalculation. If a Beneficiary who was the Participant's
spouse so elects, the life expectancy of such spouse may be recalculated no more
frequently than annually if such election is irrevocable, is made no later than
the date benefits must commence under (c)(2) above, and is applicable to all
subsequent years. If recalculation is applicable, the life expectancy of the
spouse shall be determined using his or her age as of his or her birthday in
each succeeding calendar year.
(3) Annuity Contracts. If annuity payments commence irrevocably to
a Beneficiary before the latest commencement date under (c)(2) above, the
Beneficiary's life expectancy shall be determined as of his birthday in the
calendar year in which payments commence.
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ARTICLE 10
PAYMENT EXCEPTIONS
10.1 PRE-1984 DESIGNATIONS.
(a) General. Anything in the Plan (other than the provisions relating to
the Qualified Joint and Survivor Annuity and the Preretirement Survivor Annuity)
to the contrary notwithstanding, distribution on behalf of any Participant may
be made in accordance with the following requirements (regardless of when such
distribution commences):
(1) the distribution is one which would not have disqualified the
Plan under section 401(a)(9) of the Code as in effect prior to amendment by the
Deficit Reduction Act of 1984;
(2) the distribution is in accordance with a method of
distribution designated by the Participant whose interest is being distributed
or, if the Participant is deceased, by a beneficiary of such Participant;
(3) such designation was in writing, was signed by the Participant
or beneficiary, and was made before January 1, 1984;
(4) the Participant had accrued a benefit under the Plan as of
December 31, 1983; and
(5) the method of distribution designated by the Participant or
the beneficiary specifies the form of the distribution, the time at which
distribution will commence, the period over which distributions will be made,
and in the case of any distribution upon the Participant's death, the
beneficiaries of the Participant listed in order of priority.
(b) Distributions Upon Death. 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 Participant.
(c) Distributions Commencing Before January 1, 1984. For any distribution
which commences before January 1, 1984, but continues after December 31, 1983,
the Participant, or the beneficiary, to whom such distribution is being made,
will be presumed to have designated the method under which the distribution is
being made if the method of distribution was specified in writing and the
distribution satisfies the requirements in paragraphs (1) and (5) of (a) above.
(d) Effect of Revocation. If a designation is revoked, any subsequent
distribution must satisfy the requirements of section 401(a)(9) of the Code as
in effect at the time and the Treasury Regulations thereunder. If a designation
is revoked, the Plan shall 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 under section 401(a)(9) of the Code
(including, for calendar years after 1988, the minimum distribution incidental
benefit requirement), had the designation not been in effect. Any changes in the
designation will be considered to be a revocation of the designation; provided
however, the mere substitution or addition of
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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).
10.2 CASH-OUT DISTRIBUTIONS. Any other provisions of the Plan to the contrary
notwithstanding, any amount payable to a Participant or any Preretirement
Survivor Annuity payable to a Surviving Spouse (with respect to a Participant
who has at least one Hour of Service or one hour of paid leave on or after
August 23, 1984), shall be paid in a cash lump sum; provided that:
(a) If elected in the Adoption Agreement:
(1) in the case of an amount payable to a Participant, the value
(determined as of the date of distribution or any prior distribution) of his
nonforfeitable benefit under the Plan does not exceed $3,500 and such payment is
made before payment otherwise begins; or
(2) in the case of a Preretirement Survivor Annuity, the value
(determined as of the date of distribution) of such Preretirement Survivor
Annuity does not exceed $3,500 and such payment is made before payment otherwise
begins; or
(b) (1) in the case of a payment to a Participant, the Participant
consents in writing to the distribution and (if the Qualified Joint and Survivor
Annuity applies to him under Section 8.2(a)) his spouse consents, in the manner
described in Section 8.2(d)(4), to the distribution; or
(2) in the case of a Preretirement Survivor Annuity, the Surviving
Spouse consents in writing to the distribution.
For purposes of (a)(1) and (2) above, a Participant's nonforfeitable benefit
under the Plan and the value of the Preretirement Survivor Annuity shall be
determined by excluding any Deductible Voluntary Contribution Account; and such
rules shall be applied separately to any Deductible Voluntary Contribution
Account as if such Account was the Participant's sole benefit under the Plan.
10.3 DIRECT ROLLOVER.
(a) General. This Section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this Section, but subject
to such exceptions permitted by the Internal Revenue Service, a distributee may
elect, at the time and in the manner prescribed by the Administrator, to have
any portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
(b) Definitions.
(1) 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
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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; and 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).
(2) Eligible retirement plan. An eligible retirement plan is an
individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible rollover distribution
to the surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
(3) 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.
(4) Direct rollover. A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the distributee.
10 - 3
<PAGE> 78
ARTICLE 11
ADMINISTRATION
11.1 PURPOSES OF THE PLAN. The purposes of the Plan are to provide retirement
and other benefits for Participants and their respective beneficiaries. Except
as otherwise provided by Sections 3.6 and 12.6 and by law, the assets of the
Plan shall be held for the exclusive purpose of providing benefits to
Participants and their beneficiaries and defraying reasonable expenses of
administering the Plan, and it shall be impossible for any part of the assets or
income of the Plan to be used for, or diverted to, purposes other than such
exclusive purposes.
11.2 ADMINISTRATOR.
(a) Named Fiduciary. The Administrator shall be the "Named Fiduciary"
for the Plan.
(b) Responsibilities. The Administrator shall discharge its
responsibilities with respect to the Plan in accordance with the documents and
instruments governing the Plan insofar as such documents and instruments are
consistent with the provisions of title I of ERISA.
(c) Powers. In addition to the powers and responsibilities which are
expressly provided in the Plan, the Administrator shall have the power and
authority in its sole, absolute and uncontrolled discretion to control and
manage the operation and administration of the Plan and shall have all powers
necessary to accomplish these purposes including, but not limited to the
following:
(1) the power to determine who is a Participant;
(2) the power to determine allocations, balances, and
nonforfeitable percentages with respect to Participants' Accounts; provided
however, it may be specified in the Adoption Agreement that the Trustee shall
have the ministerial function of maintaining Participants' Accounts in
accordance with information, interpretations, and directions from the
Administrator;
(3) the power to determine when, to whom, in what amount, and in
what form distributions are to be made; and
(4) such powers as are necessary, appropriate or desirable to
enable it to perform its responsibilities, including the power to establish
rules, regulations and forms with respect thereto.
11.3 PROCEDURES FOR DELEGATION.
(a) Delegations. The Administrator or the Employer may delegate to one or
more persons or entities certain of its fiduciary responsibilities (other than
duties involving the management or control of the Plan Assets) under an
arrangement whereby it shall have the opportunity for such periodic review of
the delegate's performance as is appropriate under the circumstances and at such
times and in such manner as it may choose for the purpose of its evaluation of
continuing such designation and delegation and whereby it can promptly terminate
the delegate's services.
11 - 1
<PAGE> 79
(b) Advisors. The Administrator shall have the right to employ one or
more persons or entities to render advice with regard to any responsibility it
has under the Plan.
(c) Removal, Resignation, and Vacancies. A holder of a delegated position
of fiduciary responsibility (including an individual member of a group holding
such position) may be removed therefrom at any time and without cause by the
person or entity making the delegation and may resign at any time upon prior
written notice to such person or entity. Vacancies in any such positions created
by removal, resignation, death or other cause may be filled by such person or
entity or the fiduciary responsibilities for such position may be retained
and/or redelegated by such person or entity.
11.4 MISCELLANEOUS ADMINISTRATION PROVISIONS.
(a) Written Records. The Administrator shall maintain all such books of
account and other records and data as are necessary for the proper performance
of its responsibilities under the Plan.
(b) Administrative Expenses. The Employer may pay the reasonable expenses
of administering the Plan, including any expenses incident to the functioning of
the Administrator and the professional fees of any consultants or advisors with
respect to the Plan; provided however, any expenses not so paid by the Employer
shall be paid from the Plan Assets; and provided further, no person who already
receives full-time pay from the Employer shall receive any compensation from the
Plan, except for reimbursement of expenses properly and actually incurred.
(c) Incompetency or Disability. Each person to whom a distribution is
payable under the Plan shall be conclusively presumed to be mentally competent
and not under a disability that renders him unable to care for his affairs,
until the date on which the Administrator receives a written notice, in a form
and manner acceptable to the Administrator, indicating that a guardian,
conservator, or other party legally vested with the care of the person or the
estate of such person has been appointed by a court of competent jurisdiction,
and any payment of a distribution due thereafter shall be made to the same,
provided that proper proof of his appointment and continuing qualification is
furnished in a form and manner acceptable to the Administrator. The
Administrator shall not be required to look to the application of any such
payment so made.
(d) Indemnification. The Employer may indemnify, through insurance or
otherwise, some or all of the fiduciaries with respect to the Plan against
claims, losses, damages, expenses and liabilities arising from their performance
of their responsibilities under the Plan.
(e) Effectiveness of Elections, etc. An election, designation, request or
revocation provided for in the Plan shall be made in writing and shall not
become effective until it has been properly filed with the Administrator.
(f) Administration Consistent with ERISA and the Code. The Plan is
intended to comply with the provisions of ERISA and of the Code, and the Plan
shall be interpreted and administered consistently with such provisions and with
the applicable regulations and rulings thereunder.
(g) Interpretations. All interpretations of the Plan and questions
concerning its administration and application as determined by the
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<PAGE> 80
Administrator in its sole, absolute and uncontrolled discretion shall be binding
on all persons having an interest under the Plan.
(h) Uniform and Non-Discriminatory Application. All determinations and
actions under the Plan shall be uniformly and consistently applied in a
non-discriminatory manner to all persons under similar circumstances.
(i) Service in More Than One Fiduciary Capacity. Any person or entity may
serve in more than one fiduciary capacity for the Plan.
(j) Qualified Domestic Relations Order Procedures. The Administrator
shall establish reasonable procedures to determine the qualified status, under
section 4l4(p) of the Code, of domestic relations orders and to administer
distributions under such qualified orders.
11.5 INITIAL CLAIMS PROCEDURE.
(a) Claim.
(1) Filing. In order to present a complaint regarding the
nonpayment of a Plan benefit or a portion thereof (a "Claim"), a Participant or
beneficiary under the Plan (a "Claimant") or his duly authorized representative
must file such Claim by mailing or delivering a writing stating such Claim to
the Administrator.
(2) Acknowledgement. Upon such receipt of a Claim, the
Administrator shall furnish to the Claimant a written acknowledgement which
shall inform such Claimant of the time limit set forth in (b)(1) below and of
the effect, pursuant to (b)(3) below, of failure to decide the Claim within such
time limit.
(b) Initial Decision.
(1) Time Limit. The Administrator shall decide upon a Claim within
a reasonable period of time after receipt of such Claim; provided however, that
such period shall in no event exceed 90 days, unless special circumstances
require an extension of time for processing. If such an extension of time for
processing is required, then the Claimant shall, prior to the termination of the
initial 90-day period, be furnished a written notice indicating such special
circumstances and the date by which the Administrator expects to render a
decision. In no event shall an extension exceed a period of 90 days from the end
of the initial period.
(2) Notice of Denial. If the Claim is wholly or partially denied,
then the Administrator shall furnish to the Claimant, within the time limit
applicable under (1) above, a written notice setting forth in a manner
calculated to be understood by the Claimant:
(A) the specific reason or reasons for such denial;
(B) specific reference to the pertinent Plan provisions on
which such denial is based;
(C) a description of any additional material or information
necessary for such Claimant to perfect his Claim and an explanation of why such
material or information is necessary; and
11 - 3
<PAGE> 81
(D) appropriate information as to the steps to be taken if
such Claimant wishes to submit his Claim for review pursuant to Section 11.6,
including notice of the time limits set forth in Section 11.6(b)(2).
(3) Deemed Denial for Purposes of Review. If a Claim is not
granted and if, despite the provisions of (1) and (2) above, notice of the
denial of a Claim is not furnished within the time limit applicable under (1)
above, then the Claimant may deem such Claim denied and may request a review of
such deemed denial pursuant to the provisions of Section 11.6.
11.6 CLAIM REVIEW PROCEDURE.
(a) Claimant's Rights. If a Claim is wholly or partially denied under
Section 11.5, then the Claimant or his duly authorized representative shall have
the following rights:
(1) to obtain, subject to (b) below, a full and fair review by the
Administrator;
(2) to review pertinent documents; and
(3) to submit issues and comments in writing.
(b) Request for Review.
(1) Filing. To obtain a review pursuant to (a) above, a Claimant
entitled to such a review or his duly authorized representative shall, subject
to (2) below, mail or deliver a writing requesting such a review (a "Request for
Review") to the Administrator.
(2) Time Limits for Requesting a Review. A Request for Review must
be mailed or delivered within 60 days after receipt by the Claimant of written
notice of the denial of the Claim or within such longer period as is reasonable
and related to the nature of the benefit which is the subject of the Claim and
to other attendant circumstances.
(3) Acknowledgement. Upon such receipt of a Request for Review,
the Administrator shall furnish to the Claimant a written acknowledgement which
shall inform such Claimant of the time limit set forth in (c)(1) below and of
the effect, pursuant to (c)(3) below, of failure to furnish a decision on review
within such time limit.
(c) Decision on Review.
(1) Time Limit. If, pursuant to (b) above, a review is requested,
then the Administrator shall make a decision promptly and no later than 60 days
after receipt of the Request for Review; except that, if special circumstances
require an extension of time for processing, then the decision shall be made as
soon as possible but not later than 120 days after receipt of the Request for
Review. The Administrator must furnish the Claimant written notice of any
extension prior to its commencement.
(2) Notice of Decision. The Administrator shall furnish to the
Claimant, within the time limit applicable under (1) above, a written notice
setting forth in a manner calculated to be understood by the Claimant:
(A) the specific reason or reasons for the decision on
review; and
11 - 4
<PAGE> 82
(B) specific reference to the pertinent Plan provisions on
which the decision on review is based.
(3) Deemed Denial. If, despite the provisions of (1) and (2)
above, the decision on review is not furnished within the time limit applicable
under (1) above, then the Claimant shall be deemed to have exhausted his
remedies under the Plan and he may deem the Claim to have been denied on review.
11 - 5
<PAGE> 83
ARTICLE 12
AMENDMENT AND TERMINATION
12.1 AMENDMENT OF THE PLAN BY THE PROTOTYPE SPONSOR. The Employer delegates to
the Prototype Sponsor full authority and right, at any time and from time to
time, to amend the Plan in any manner which the Prototype Sponsor deems
desirable, subject to Section 12.3. A copy of any such amendment shall be given
to the Employer.
12.2 AMENDMENTS BY THE EMPLOYER. The Employer shall have the right to adopt:
(a) changes to the choice of options in the Adoption Agreement (and may
do so by completing a new Adoption Agreement or by a separate document
specifying the choices in the Adoption Agreement being changed);
(b) overriding language stated in the Adoption Agreement which allows the
Plan to satisfy section 415 of the Code or to avoid duplication of minimums
under section 416 of the Code because of the required aggregation of multiple
plans; and
(c) model amendments published by the Internal Revenue Service which
specifically provide that their adoption will not cause a plan to be treated as
individually designed.
If the adopting employer amends the Plan for any other reason, including a
waiver of the minimum funding requirement under section 412(d) of the Code, it
will no longer participate in the prototype plan, but will be considered to have
an individually designed plan.
If the Plan is maintained by more than one Employer, the first Employer
designated in the Adoption Agreement shall have the right to amend the Plan on
behalf of all Employers. If, at any time, by reason of the adoption of an
amendment or modification of the Plan, the provisions of the Plan with respect
to any of the other Employers differ from those that are applicable to the first
Employer designated in the Adoption Agreement, such other Employer or Employers
shall be deemed to have adopted a separate plan.
If the Employer (or the first Employer designated in the Adoption Agreement) is
a corporation, the amendments may be made by action of its Board of Directors.
For any other entity, the amendments may be made on behalf of the Employer by
the person or persons having the legal authority to act on behalf of the entity.
An Employer may adopt different amendment procedures by attachment to the
Adoption Agreement.
12.3 LIMITATIONS ON AMENDMENTS.
(a) General. Neither the Prototype Sponsor nor the Employer shall have
the right to amend the Plan in the following respects:
(1) to vest in the Employer, directly or indirectly, any interest
in, or ownership of, or control of the Plan Assets; or
12 - 1
<PAGE> 84
(2) to provide that the Plan Assets, or any part thereof, may or
shall be used for or diverted to purposes other than for the exclusive benefit
of Participants or for the payment of administration expenses of the
Administrator and of the Trustee; or
(3) to reduce any then vested or accrued interest of a Participant
unless permitted under section 412(c)(8) of the Code or necessary to comply with
a ruling to qualify the Plan or keep the Plan qualified under the Code.
(b) Treatment of Certain Amendments. For purposes of (a)(3) above, an
amendment which has the effect, with respect to benefits attributable to
service before the amendment, of -
(1) eliminating or reducing an early retirement benefit or a
retirement-type subsidy or
(2) (except as otherwise provided by Treasury Regulations)
eliminating an optional form of benefit shall be treated as reducing accrued
benefits. In the case of a retirement-type subsidy, the preceding sentence shall
apply only with respect to a Participant who satisfies (either before or after
the amendment) the preamendment conditions for the subsidy.
(c) Changes in Vesting Schedule. No amendment shall reduce the
nonforfeitable percentage of a Participant's accrued benefit (determined as of
the later of the date such amendment is adopted or the date such amendment
becomes effective). Further, if the Plan's vesting schedule is amended, or the
Plan is amended in any way that directly or indirectly affects the computation
of the Participant's nonforfeitable percentage, or if the Plan is deemed amended
by an automatic change to or from a top-heavy vesting schedule, each Participant
with at least 5 Years of Service (3 Years of Service for Plan Years beginning
after December 31, 1988 with respect to Participants with at least one Hour of
Service in a Plan Year beginning after December 31, 1988) with the Employer may
elect, within a reasonable period after the adoption of the amendment, to have
the nonforfeitable percentage computed under the Plan without regard to such
amendment. The period during which the election may be made shall commence with
the date the amendment is adopted and shall end on the latest of:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective; or
(3) 60 days after the Participant is issued written notice of the
amendment by the Employer or Administrator.
12.4 TERMINATION.
(a) Voluntary. The Employer shall have the right to terminate the Plan.
If the Plan is maintained by more than one Employer, the First Employer
designated in the Adoption Agreement shall have the right to terminate the Plan
on behalf of all Employers. Otherwise, a termination with respect to one
Employer shall not cause a termination with respect to any other Employer.
(b) Automatic Termination of the Plan. The Plan shall automatically
terminate upon the discontinuance or liquidation of the Employer's business or
the merger or consolidation of the Employer with or into any other business
organization or the sale by the Employer of substantially all of its assets
12 - 2
<PAGE> 85
unless a successor business organization agrees with the Employer to continue
the Plan.
12.5 DISTRIBUTION OF PLAN ASSETS UPON TERMINATION OF THE PLAN. If the Plan is
terminated, then distributions and withdrawals shall continue to be made as
provided in the Plan; provided however, the Administrator may cause
Participants' Accounts to be paid to them on account of such termination of the
Plan.
12.6 DISPOSITION OF UNALLOCATED FORFEITURES AND SUSPENSE ACCOUNT AMOUNTS UPON
TERMINATION.
(a) Profit Sharing Plans. If the Plan is a profit sharing plan, then any
unallocated forfeitures or suspense account amounts remaining at the time the
Plan terminates shall be allocated among the Participants in an equitable and
nondiscriminatory manner, subject to the provisions of Article 4.
(b) Pension Plans. If the Plan is a pension plan, then any unapplied
forfeitures or suspense account amounts remaining at the time the Plan
terminates shall be paid to the Employer.
12 - 3
<PAGE> 86
ARTICLE 13
MISCELLANEOUS
13.1 ARTICLE AND SECTION REFERENCE. Except as otherwise indicated by the
context, all references to Articles or Sections in the Plan refer to Articles or
Sections of the Plan. The titles thereto are for convenience of reference only
and the Plan shall not be construed by reference thereto.
13.2 ASSIGNMENT OR ALIENATION OF BENEFITS.
(a) General. Except as provided in (b) below, benefits provided under the
Plan may not be anticipated, assigned (either at law or in equity), alienated or
subject to attachment, garnishment, levy, execution or other legal or equitable
process. Except as provided in the foregoing, if any attempt shall be made to
reach the beneficial interest of any Participant or beneficiary by legal process
not preempted by ERISA, the Administrator may suspend any rights of distribution
which any Participant or beneficiary may have, and may direct that such person's
beneficial interest hereunder be paid over or applied for the benefit of
dependents of such person, as the Administrator shall determine.
(b) QDRO. Notwithstanding (a) above, benefits shall be paid in accordance
with the applicable requirements of any domestic relations order which is a
qualified domestic relations order (as defined in section 206(d) of ERISA or
section 414(p) of the Code); and provided further that benefits shall be paid
pursuant to any domestic relations order was entered before January 1, 1985 if
either the Plan is paying benefits pursuant to such order on such date or the
Administrator elects to treat such order as a qualified domestic relations
order.
(1) Immediate Single Sum Distribution. If a qualified domestic
relations order so provides, the Alternate Payee's entire benefit shall be paid
as soon as administratively feasible after the Administrator's receipt of the
order, determination of its qualified status and determination of the amount
payable thereunder; or, if the Participant's benefit, upon becoming
distributable to him, would commence only after the first Accounting Date
following his election, the payment to the Alternate Payee may not be made until
after the first Accounting Date following the Administrator's receipt of the
order, determination of its qualified status and determination of the amount
payable thereunder.
(2) Alternate Payee's Beneficiary. In the event an Alternate Payee
who is entitled to a benefit hereunder pursuant to a qualified domestic
relations order dies prior to the receipt of the entire benefit due, the
Alternate Payee's remaining benefit shall be payable to the Alternate Payee's
beneficiary designated in the order or on a form specified by the Administrator
and received by the Administrator prior to the Alternate Payee's death. In the
event there is no designated beneficiary to receive any such amount then such
amount shall be payable to the estate of the Alternate Payee.
(3) Alternate Payee Defined. "Alternate Payee" shall have the
meaning given in section 414(p)(8) of the Code.
13 - 1
<PAGE> 87
13.3 DATA.
(a) Obligation to Furnish. Each person who participates or claims
benefits under the Plan shall furnish to the Administrator, the Trustee, or any
insurance company involved in the funding of the benefits under the Plan, such
signatures, documents, evidence, or information as the Administrator, the
Trustee, or such insurance company shall consider necessary or desirable for the
purpose of administering the Plan.
(b) Mistakes or Misstatements. In the event of a mistake or a
misstatement as to any item of such information, as is furnished pursuant to (a)
above, which has an effect on the amount of benefits to be paid under the Plan,
or in the event of a mistake or misstatement as to the amount of payments to be
made to a person entitled to receive a benefit under the Plan, then the
Administrator shall cause such amounts to be withheld or accelerated, as shall
in its judgment accord to such person the payment to which he is properly
entitled under the Plan.
13.4 EMPLOYMENT RELATIONSHIP.
(a) No Enlargement of Rights. Except as otherwise provided by law or
legally enforceable contract, the establishment of the Plan or of any fund or
any insurance contract thereunder, any amendment of the Plan, participation in
the Plan, or the payment of any distribution under the Plan, shall not be
construed as giving any person whomsoever any legal or equitable claims or
rights against any other person or against any entity or organization, or as
giving any person the right to be retained in the employment of the Employer.
(b) Employer's Rights. The right of the Employer to discipline or
discharge an employee shall not be effected by reason of any of the provisions
of the Plan.
13.5 GENDER AND NUMBER. As used in the Plan, except when otherwise indicated by
the context, the genders of pronouns and the singular and plural numbers of
terms shall be interchangeable.
13.6 GOVERNING LAW. The Plan and all rights and duties under the Plan shall be
governed, construed and administered in accordance with the laws of the state of
the Employer's principal place of business, except as governed separately by or
preempted by federal law.
13.7 MERGER OR CONSOLIDATION OF THE PLAN. In the case of any merger or
consolidation of the Plan with, or transfer of assets or liabilities of the Plan
to, any other plan, each Participant in the Plan shall (if the surviving plan
terminated immediately after the merger, consolidation, or transfer) be entitled
to receive a benefit which is equal to or greater than the benefit he would have
been entitled to receive immediately before the merger, consolidation, or
transfer (if the Plan had then terminated). The Employer shall have the power to
direct such a merger, consolidation or transfer and the Trustee shall follow
such instructions as it may receive from the Employer in order to implement the
transaction. The Employer, and not the Trustee, shall have sole responsibility
for maintaining the qualified status of the Plan in connection with such a
transaction. The Trustee shall have no liability or responsibility for acting
pursuant to the direction of the Employer in implementing a merger,
consolidation or transfer.
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<PAGE> 88
13.8 ANNUITIES. Any annuity contract distributed from the Plan must be
nontransferable. The terms of any such annuity contract shall comply with the
requirements of the Plan.
13.9 ACCEPTANCE OF TRANSFERS AND MERGERS. The Employer may direct that the Plan
accept transfers of assets and benefit liabilities from other qualified plans
and mergers of other qualified plans into the Plan. In the event of any such
transfer or merger, the Plan Assets received shall be held in such subaccounts
as are appropriate to reflect the vesting provisions, distribution limitations
and optional forms of benefit applicable to the transferred or merged benefits.
The Employer shall amend the Plan as necessary to reflect the appropriate
vesting and optional forms of benefit applicable with respect to such
transferred benefits and to make such other amendments as it deems necessary or
appropriate in order to maintain the qualified status of the Plan. The Employer,
and not the Trustee, shall have sole responsibility for maintaining the
qualified status of the Plan in connection with such a transaction. The Trustee
shall have no liability or responsibility for acting pursuant to the direction
of the Employer in accepting a merger or transfer.
13.10 FAILURE TO QUALIFY. If the Plan fails to attain or retain qualification
under the Code, the Plan will no longer participate in this prototype plan and
will be considered an individually designed plan. The Employer is responsible
for the qualified status of the Plan.
13.11 SEVERABILITY. In case any provision of the Plan shall be held illegal or
invalid for any reason, such illegality or invalidity shall not affect the
remaining provisions of this Plan, and this Plan shall be construed and
interpreted as if such illegal or invalid provision had never been a part of it.
13 - 3
<PAGE> 1
Exhibit 4(b)
THE FIFTH THIRD BANK
PROTOTYPE PROFIT SHARING PLAN #003
ADOPTION AGREEMENT
(STANDARDIZED-PAIRED)
CINCINNATI FINANCIAL CORPORATION
TAX-QUALIFIED SAVINGS PLAN
--------------------------
(FILL IN NAME OF PLAN)
The Plan and Trust consist of:
o This Adoption Agreement
o The Fifth Third Bank Basic Prototype Plan Document #01
o The Fifth Third Bank Prototype Trust Agreement
IRS Opinion Letter Serial Number: D247435b
<PAGE> 2
INSTRUCTIONS AND PROTOTYPE INFORMATION
1. INSTRUCTIONS. For each item in this Adoption Agreement:
(a) if there are boxes, then, except as otherwise noted, check
one box; and
(b) fill in any blank lines (other than blanks applicable to
unchecked boxes).
FAILURE TO PROPERLY FILL OUT THIS ADOPTION AGREEMENT MAY
RESULT IN DISQUALIFICATION OF THE PLAN.
2. NEED TO APPLY TO THE IRS. The Fifth Third Bank recommends that
an adopting Employer apply to the appropriate Key District
Office of the Internal Revenue Service for a determination
that the Plan is qualified under section 401 of the Internal
Revenue Code unless the Employer is entitled to rely on the
opinion letter issued by the National Office of the IRS with
respect to this prototype plan (see Reliance section of this
Adoption Agreement).
3. PAIRED PLANS. The Fifth Third Bank Prototype Money Purchase
Pension Plan #004 or #006, but only one of them, may be
adopted as a "paired plan."
INSTRUCTIONS AND PROTOTYPE INFORMATION
<PAGE> 3
EMPLOYER INFORMATION
EMPLOYER: Cincinnati Financial Corporation
ADDRESS: 6200 South Gilmore Road
Fairfield, Ohio 45014
EMPLOYER IDENTIFICATION NUMBER: 31-0542366
EMPLOYER'S FISCAL YEAR END: 12/31
NATURE OF EMPLOYER:
[X] Corporation other than S Corporation [ ] S Corporation
[ ] Sole Proprietor [ ] Partnership
Nature of Business (if not incorporated):
_____________
__________________________________________________________________
[ ] Tax-exempt Organization [ ] Governmental
[ ] Other ______________________________________________________
The following additional Employers related to the above Employer also adopt the
Plan (use additional pages, if necessary):
CFC Investment Company
The Cincinnati Insurance Company
The Cincinnati Life Insurance Company
The Cincinnati Casualty Company
The Cincinnati Indemnity Company
(A related Employer can adopt the Plan later than the "Effective Date" (below)
by attaching a separate page to this Adoption Agreement reflecting its adoption
of the Plan and the effective date of its adoption.)
EMPLOYER INFORMATION
PAGE 2
<PAGE> 4
BASIC PLAN INFORMATION
1. PLAN STATUS AND EFFECTIVE DATE. This Plan:
[ ] is a new Plan with an "Effective Date" of
_____________________ ; or
[X] is a complete amendment and restatement of an existing
Plan. (If selected, complete each of the following.)
o The "Effective Date" of the amendment and
restatement is July 1, 1997 (not earlier
than the first day of the first Plan Year
beginning on or after January 1, 1989).
o The original effective date for the Plan was
January 1, 1996.
o The Fifth Third Bank (or its authorized
affiliate):
[X] was the Trustee on the "Effective Date;" or
[ ] shall become the Trustee on
_________________; and prior to that date,
the Trustee(s) since the "Effective Date" was
(were):
____________________________________________
____________________________________________
2. PLAN NUMBER. The Plan number (three digits) of the Plan is
002.
3. PLAN YEAR. The "Plan Year" is the 12-consecutive month period
beginning on January 1 and on each anniversary thereof.
4. LIMITATION YEAR. The "Limitation Year" is the 12-consecutive
month period beginning on January 1 and on each anniversary
thereof.
5. PLAN ADMINISTRATOR. The Administrator is:
[X] the Employer; or
[ ]
_______________________
o The Administrator's telephone number is:
(513) 870-2000.
BASIC PLAN INFORMATION
PAGE 3
<PAGE> 5
6. MAINTENANCE OF ACCOUNTS. The Trustee shall have the
ministerial function of maintaining Participants' Accounts in
accordance with information, interpretations, and directions
from the Administrator.
[X] Yes
[ ] No
BASIC PLAN INFORMATION
PAGE 4
<PAGE> 6
TYPE OF PLAN AND AUTHORIZED CONTRIBUTIONS
7. TYPE OF PLAN:
[ ] PROFIT SHARING ONLY. This Plan permits discretionary
(profit sharing) contributions but has no Section
401(k) feature (skip Items 13-23); or
[X] 401(k) ONLY. This Plan has a Section 401(k) feature
but does not provide for discretionary (profit
sharing) contributions (except for any required
minimum top-heavy contributions) (skip Items 24-28);
or
[ ] PROFIT SHARING AND 401(k). This Plan permits
discretionary (profit sharing) contributions and also
has a Section 401(k) feature; or
[ ] TAX-EXEMPT EMPLOYER'S 403(b) MATCH. This Plan permits
the tax-exempt Employer to make matching
contributions based on Employee salary reduction
contributions pursuant to Section 403(b)
arrangements.
[ ] PROFIT SHARING FEATURE. This Plan also permits the
tax-exempt Employer to make discretionary (profit
sharing) contributions.
[ ] Yes (complete Items 24-28)
[ ] No (skip Items 24-28)
8. VOLUNTARY (AFTER-TAX) PARTICIPANT CONTRIBUTIONS. Voluntary
(after-tax) Participant contributions are:
[X] not permitted; or
[ ] permitted on a nondeductible basis only. (If
voluntary Participant contributions are permitted,
then Item 6 must be answered "Yes" if a Section
401(k) feature is not a part of the Plan.)
9. ROLLOVER CONTRIBUTIONS:
[X] BY PARTICIPANTS AND ELIGIBLE EMPLOYEES. The Plan
shall accept rollover contributions from Participants
(and Eligible Employees prior to becoming
Participants); or
[ ] BY PARTICIPANTS ONLY. The Plan shall accept rollover
contributions from Participants (but not from
Eligible Employees prior to becoming Participants);
or
TYPE OF PLAN AND AUTHORIZED CONTRIBUTIONS
PAGE 5
<PAGE> 7
[ ] NOT PERMITTED. The Plan shall not accept rollover
contributions from Participants or Eligible
Employees.
TYPE OF PLAN AND AUTHORIZED CONTRIBUTIONS
PAGE 6
<PAGE> 8
ELIGIBILITY
10. ELIGIBLE EMPLOYEE. "Eligible Employee" means any employee of
the Employer, any employee of any other employer required to
be aggregated under section 414(b), (c), (m) or (o) of the
Code, or any individual deemed under section 414(n) of the
Code to be an employee of the Employer or any such employer.
(All aggregated Employers should adopt this Plan by executing
the Adoption Agreement.)
Note: Employees subject to a collective bargaining agreement
not providing for their coverage by this Plan shall not be
considered Eligible Employees. Nonresident aliens with no US
source income shall not be considered Eligible Employees.
(See Section 1.19 of the Plan.)
11. ENTRY DATE. "Entry Date" means the Effective Date if the Plan
is a new plan and also means each of the following occurring
on or after the Effective Date:
[ ] each _____ (either the first day or last day of the
Plan Year) and ____ (the date six months after the
other Entry Date); or
[ ] the date on which the Employee satisfies the
eligibility age and service requirements; or
[ ] the first day of each month; or
[X] the first day of each Plan Year quarter.
12. AGE AND SERVICE REQUIREMENTS. The eligibility age and service
requirements are (complete all blanks; specify "0" if there
is no requirement):
(a) for a person who is an Eligible Employee on the
Effective Date:
(1) attainment of age 21 and
(2) completion of 0 Years of Service;
(b) for a person who is not an Eligible Employee on the
Effective Date:
(1) attainment of age 21 and
(2) completion of 0 Years of Service.
(Note: The age requirement cannot be greater than 21. The
service requirement cannot exceed 1 year, except that up to
2 years may be required if the Plan provides for full
vesting after not more than 2 Years of Service and a Section
401(k) feature is not adopted. If a fractional Year of
Service is specified, an Employee will not be
ELIGIBILITY
PAGE 7
<PAGE> 9
required to complete any specified number of Hours of Service
to receive credit for such fractional year.)
ELIGIBILITY
PAGE 8
<PAGE> 10
SECTION 401(k) FEATURE
(THE FOLLOWING ITEMS 13 THROUGH 23 SHOULD BE COMPLETED ONLY IF
A SECTION 401(k) FEATURE IS PART OF THE PLAN PURSUANT TO ITEM 7.
A TAX-EXEMPT EMPLOYER MATCHING 403(b) SALARY REDUCTION AMOUNTS
PURSUANT TO ITEM 7 SHOULD COMPLETE ITEMS 21 THROUGH 23. OTHERWISE,
SKIP TO ITEM 24.)
13. TYPES OF SECTION 401(k) CONTRIBUTIONS. In addition to Section
401(k) elective deferrals, the Plan shall allow the Employer
to make the following types of contributions in connection
with its Section 401(k) feature: (Select all that apply.)
[X] QNECS. This Plan permits the Employer to make
qualified nonelective contributions (which are fully
vested and subject to the 401(k) distribution
limitations) to be taken into account in determining
the Actual Deferral Percentage.
[ ] QUALIFIED MATCHING CONTRIBUTIONS SUBJECT TO ADP. This
Plan permits the Employer to make qualified matching
contributions (which are fully vested and subject to
the 401(k) distribution limitations) to be taken into
account in determining the Actual Deferral
Percentage.
[ ] MATCHING CONTRIBUTIONS SUBJECT TO ACP. This Plan
permits the Employer to make matching contributions
to the Employer Matching Accounts (which are subject
to the vesting schedule selected in Item 41) to be
taken into account in determining the Actual
Contribution Percentage.
SECTION 401(k) FEATURE
PAGE 9
<PAGE> 11
SECTION 401(k) FEATURE
ELECTIVE DEFERRALS
14. LIMITATIONS ON ELECTIVE DEFERRALS.
(a) PLAN YEAR LIMITATIONS. (Select only one and complete
as necessary.)
[ ] A Participant's elective deferrals for a
Plan Year may not exceed the lesser of ___%
of his Compensation for the Plan Year or
$______; or
[ ] No Plan Year limitations other than those
otherwise imposed under the Plan; or
[X] The Administrator may set a maximum and/or
minimum limit (which may change from time to
time) to be applied uniformly to the
Participants on the percentage or dollar
amount of a Participant's Compensation that
may be reduced for any Plan Year under a
salary reduction election hereunder.
(b) PAY PERIOD LIMITATION. (Select only one and complete
as necessary.)
[ ] A Participant's salary reductions for a pay
period or with respect to a bonus or other
special payment may not exceed the lesser of
___% of his Compensation otherwise payable
for such pay period or as a bonus or special
payment or $______; or
[ ] No pay period limitations other than those
otherwise imposed under the Plan or the law;
or
[X] The Administrator may set a maximum and/or
minimum limit (which may change from time to
time) to be applied uniformly to the
Participants on the percentage or dollar
amount of a Participant's Compensation that
may be reduced under a salary reduction
agreement hereunder for any pay period or
for a bonus or special payment.
15. ELECTION, CHANGE AND TERMINATION OF SALARY DEFERRALS.
(a) ELECTIONS. A Participant may enter (or re-enter
following a termination under (d) below) into a
salary reduction agreement by providing the
prescribed election form to the Employer on or before
one of the following applicable dates and the
election shall become effective as soon after the
applicable date
SECTION 401(k) FEATURE
ELECTIVE DEFERRALS
PAGE 10
<PAGE> 12
coinciding with or first following the Employer's
receipt of the Participant's election form as is
administratively feasible: (Select only one of the
following and complete as necessary.)
[ ] Each of the following dates: (Fill in one or
more dates during a year.)
_________________________________________
___________________________________________;
or
[ ] Any time; or
[X] Such dates (at least one each calendar year)
as may be prescribed by the Administrator
from time to time.
(b) CHANGES. A Participant may change a salary reduction
agreement by providing the prescribed election form
to the Administrator on or before one of the
following applicable dates and the change shall
become effective as soon after the applicable date
coinciding with or first following the
Administrator's receipt of the Participant's election
form as is administratively feasible: (Select only
one of the following and complete as necessary.)
[ ] Each of the following dates: (Fill in one or
more dates during a year.)
______________________________________; or
[ ] Any time; or
[X] Such dates (at least one each calendar year)
as may be prescribed by the Administrator
from time to time.
(c) LIMIT ON NUMBER OF CHANGES. A Participant may make
changes to his salary reduction agreement no more
frequently than: (Select only one of the following
and complete as necessary.)
[ ] __times per Plan Year (Fill in number (at
least one)); or
[X] The Administrator may prescribe limits from
time to time on the number of changes that
can be made per Plan Year, provided that at
least one change shall be permitted each
Plan Year.
(d) TERMINATIONS. A Participant may terminate a salary
reduction agreement by providing the prescribed
election form to the Administrator at any time and
the termination shall become effective as soon after
the Administrator's receipt of the Participant's
election form as is administratively feasible.
SECTION 401(k) FEATURE
ELECTIVE DEFERRALS
PAGE 11
<PAGE> 13
(e) SPECIAL BONUS ELECTIONS. The Administrator may allow
Participants to enter special salary reduction
agreements effective only with respect to the next
bonus or other special payment due and payable after
the Administrator's receipt of the election form.
[X] Yes ("Yes" may not be elected if bonuses are
excluded from the definition of Compensation
under Item 32 of the Adoption Agreement.)
[ ] No
Pre-existing salary reduction elections under (a) and (b) above
shall not be affected by a special election hereunder and a
special election hereunder shall be disregarded for purposes of
(c), (d) and (e) above.
SECTION 401(k) FEATURE
ELECTIVE DEFERRALS
PAGE 12
<PAGE> 14
SECTION 401(k) FEATURE
QNECS
(THE FOLLOWING ITEMS 16 AND 17 SHOULD BE COMPLETED ONLY IF THE
BOX IN ITEM 13 ENTITLED "QNECS" IS SELECTED.)
16. QNEC ALLOCATION METHOD AND AMOUNT. The Employer shall be
authorized to make annual qualified nonelective contributions
to the Plan to the Nonelective Contribution Accounts for
allocation as follows: (Select (a) and/or (b) and complete.
An Employer may elect to make contributions under one or both
QNEC allocation methods.)
(a) [X] proportionate to the Compensation for the
Plan Year of all Participants eligible under
Item 17 below and in the following amount:
(Select one and complete.)
[ ] ___% of the Compensation of all
Participants who are entitled under
Item 17 below to receive an
allocation for the Plan Year; or
[X] such other amount (if any) as may be
properly determined by the Employer
for such Plan Year.
(b) [X] an equal flat dollar amount for each
Participant eligible under Item 17 below in
the following amount: (Select one and
complete.)
[ ] $______ for each Participant who is
entitled under Item 17 below to
receive an allocation for the Plan
Year; or
[X] such other flat dollar amount (if
any) as may be properly determined
by the Employer for such Plan Year.
17. PARTICIPANTS ENTITLED TO RECEIVE A QNEC.
(a) "HIGHLY COMPENSATED" STATUS. (Select only one.)
[ ] Only Participants who are Non-highly
Compensated Employees eligible under (b) or
(c) below shall be entitled to share in the
Employer contribution under Item 16 to the
Nonelective Contribution Accounts for a Plan
Year; or
SECTION 401(k) FEATURE
QNECS
PAGE 13
<PAGE> 15
[ ] All Participants who are eligible under (b)
or (c) below shall be entitled to share in
the Employer contribution under Item 16 to
the Nonelective Contribution Accounts for a
Plan Year; or
[X] On a year to year basis, the Administrator
shall determine whether all Participants
eligible under (b) or (c) below or only
those Participants who are Non-highly
Compensated Employees eligible under (b) or
(c) below shall be entitled to share in the
Employer contribution under Item 16 to the
Nonelective Contribution Accounts for the
Plan Year.
(b) EMPLOYMENT STATUS. A Participant eligible under (a)
above shall be entitled to share in the Employer
contribution under Item 16 to the Nonelective
Contribution Accounts for a Plan Year if: (Select
only one.)
[ ] he is an Eligible Employee at any time
during the Plan Year;
[ ] he is an Eligible Employee on the last day
of the Plan Year;
[ ] he receives credit for at least 500 Hours of
Service during the Plan Year or he is an
Eligible Employee on the last day of the
Plan Year;
[ ] he receives credit for at least 1,000 Hours
of Service during the Plan Year, regardless
of whether he is an Eligible Employee on the
last day of the Plan Year; or
[X] he receives credit for at least 1,000 Hours
of Service during the Plan Year and he is an
Eligible Employee on the last day of the
Plan Year.
(c) CERTAIN FORMER EMPLOYEES. In addition, a Participant
eligible under (a) above who has Compensation for a
Plan Year shall be entitled to share in such Employer
contribution for such Plan Year if he is on an
approved leave of absence at the end of such Plan
Year or if his employment by the Employer terminates
during such Plan Year on account of death,
Disability, retirement at or after Normal Retirement
Age, or (if provided for in Item 40) early
retirement.
[X] Yes
[ ] No
SECTION 401(k) FEATURE
QNECS
PAGE 14
<PAGE> 16
SECTION 401(k) FEATURE
QUALIFIED MATCHING CONTRIBUTIONS SUBJECT TO ADP
(THE FOLLOWING ITEMS 18 THROUGH 20 SHOULD BE COMPLETED ONLY IF
THE BOX IN ITEM 13 ENTITLED "QUALIFIED MATCHING CONTRIBUTIONS
SUBJECT TO ADP" IS SELECTED.)
18. QUALIFIED MATCHING CONTRIBUTIONS ALLOCATION METHOD AND
AMOUNT. The Employer shall be authorized to make matching
contributions to the Nonelective Contribution Accounts of
those Participants who both make elective deferrals hereunder
for the Plan Year and who are entitled under Item 19 below to
receive this type of matching contribution for the year for
allocation as follows: (Select any that apply and complete. An
Employer may elect to make more than one type of matching
contribution selecting more than one of the following
options.)
(a) [ ] As a percentage of Participants' Section
401(k) elective deferrals;
(b) [ ] Proportionate to the Compensation for the
Plan Year of all Participants who are
entitled to this type of matching
contribution for the Plan Year, in the
following amount: (Select one and complete.)
[ ] ___% of the Compensation of all
Participants who are entitled to
receive this type of matching
contribution for the Plan Year; or
[ ] such other amount (if any) as may be
properly determined by the Employer
for such Plan Year;
[ ] An equal flat dollar amount for each
Participant who is entitled to this type of
matching contribution for the Plan Year in
the following amount: (Select one and
complete.)
[ ] $______ for each Participant who is
entitled to receive this type of
matching contribution for the Plan
Year; or
[ ] such other flat dollar amount (if
any) as may be properly determined
by the Employer for such Plan Year.
19. PARTICIPANTS ENTITLED TO RECEIVE A QUALIFIED MATCHING
CONTRIBUTION.
(a) "HIGHLY COMPENSATED" STATUS. (Select only one.)
SECTION 401(k) FEATURE
QUALIFIED MATCHING CONTRIBUTIONS SUBJECT TO ADP
PAGE 15
<PAGE> 17
[ ] Only Participants who are Non-highly
Compensated Employees eligible under (b) or
(c) below (and who make elective deferrals
hereunder for the Plan Year) shall be
entitled to receive the qualified matching
contribution under Item 18 to the
Nonelective Contribution Accounts for a Plan
Year; or
[ ] All Participants who are eligible under (b)
or (c) below (and who make elective
deferrals hereunder for the Plan Year) shall
be entitled to receive the qualified
matching contribution under Item 18 to the
Nonelective Contribution Accounts for a Plan
Year; or
[ ] On a year to year basis, the Administrator
shall determine whether all Participants
eligible under (b) or (c) below or only
those Participants who are Non-highly
Compensated Employees eligible under (b) or
(c) below (and who make elective deferrals
hereunder for the Plan Year) shall be
entitled to receive the qualified matching
contribution under Item 18 to the
Nonelective Contribution Accounts for the
Plan Year.
(b) EMPLOYMENT STATUS. A Participant eligible under (a)
above shall be entitled to receive a qualified
matching contribution under Item 18 to the
Nonelective Contribution Account for a Plan Year if:
(Select only one.)
[ ] he is an Eligible Employee at any time
during the Plan Year;
[ ] he is an Eligible Employee on the last day
of the Plan Year;
[ ] he receives credit for at least 500 Hours of
Service during the Plan Year or he is an
Eligible Employee on the last day of the
Plan Year;
[ ] he receives credit for at least 1,000 Hours
of Service during the Plan Year, regardless
of whether he is an Eligible Employee on the
last day of the Plan Year; or
[ ] he receives credit for at least 1,000 Hours
of Service during the Plan Year and he is an
Eligible Employee on the last day of the
Plan Year.
(c) CERTAIN FORMER EMPLOYEES. In addition, a Participant
eligible under (b) above who makes elective deferrals
for the Plan Year shall be entitled to receive such a
qualified matching contribution for such Plan Year if
he is on an approved leave of absence at the end of
such Plan Year or if his employment by the Employer
terminates during such Plan Year on account of death,
Disability, retirement at or after Normal Retirement
Age, or (if provided for in Item 40) early
retirement.
SECTION 401(k) FEATURE
QUALIFIED MATCHING CONTRIBUTIONS SUBJECT TO ADP
PAGE 16
<PAGE> 18
[ ] Yes
[ ] No
20. MATCHES AS A PERCENTAGE OF ELECTIVE DEFERRALS. (Complete this
Item only if box (a) under Item 18 is selected.)
(a) AMOUNT. Subject to (b) and (c) below, the Employer's
annual qualified matching contribution (if any) to
the Plan to the Nonelective Contribution Account of
each Participant entitled to receive this type of
matching contribution for the Plan Year shall be an
amount equal to: (Select only one and complete as
necessary.)
[ ] ___% of the Participant's elective deferrals
hereunder for the Plan Year not in excess of
% of the Participant's Compensation for the
Plan Year; or
[ ] ___% of the portion of the Participant's
elective deferrals hereunder for the Plan
Year not in excess of ___% of the
Participant's Compensation for the Plan Year
plus ___% (must be less than first tier
match) of the portion of the Participant's
elective deferrals hereunder for the Plan
Year in excess of that amount but not in
excess of ___% of the Participant's
Compensation for the Plan Year; or
[ ] such other percentage of such portion of the
Participant's elective deferrals hereunder
for the Plan Year as may be properly
determined by the Administrator for such
Plan Year and applied uniformly with respect
to those Participants entitled to receive
this type of matching contribution
hereunder.
(b) PAY PERIOD LIMITATIONS. The same percentage-of-
Compensation limitations specified under (a) above
also shall be applied on a pay period basis (and with
respect to bonuses or other special payments) such
that the Employer's qualified matching contributions
shall be with respect to only such percentage of
Compensation otherwise payable for a pay period (or
as a bonus or other special payment).
[ ] Yes
[ ] No
(c) BONUSES SUBJECT TO MATCH. Elective deferrals with
respect to bonuses or other special payments shall be
matched to the same extent and subject to the same
limitations as any other part of a Participant's
Compensation.
SECTION 401(k) FEATURE
QUALIFIED MATCHING CONTRIBUTIONS SUBJECT TO ADP
PAGE 17
<PAGE> 19
[ ] Yes -- elective deferrals with respect to
bonuses and special payments shall be
matched
[ ] No -- elective deferrals with respect to
bonuses and special payments shall not be
matched
SECTION 401(k) FEATURE
QUALIFIED MATCHING CONTRIBUTIONS SUBJECT TO ADP
PAGE 18
<PAGE> 20
SECTION 401(k) FEATURE
MATCHING CONTRIBUTIONS SUBJECT TO ACP
(THE FOLLOWING ITEMS 21 THROUGH 23 SHOULD BE COMPLETED ONLY IF
THE BOX IN ITEM 13 ENTITLED "MATCHING CONTRIBUTIONS SUBJECT TO
ACP" IS SELECTED.)
(NOTE TO TAX-EXEMPT EMPLOYERS MATCHING 403(b) SALARY REDUCTION
AMOUNTS PURSUANT TO ITEM 7: COMPLETE ITEMS 21 THROUGH 23 TO
ESTABLISH THE TERMS OF YOUR MATCH. FOR THESE PURPOSES, THE
TERMS "SECTION 401(k) ELECTIVE DEFERRALS," "ELECTIVE DEFERRALS
HEREUNDER" AND "ELECTIVE DEFERRALS" REFERRED TO BELOW SHALL BE
INTERPRETED AS REFERRING TO SALARY REDUCTION CONTRIBUTIONS OF
AN EMPLOYEE PURSUANT TO SECTION 403(b) OF THE CODE AFTER
BECOMING A PARTICIPANT IN THIS PLAN).
21. EMPLOYER MATCHING CONTRIBUTIONS TO EMPLOYER MATCHING ACCOUNTS.
The Employer shall be authorized to make matching
contributions to the Employer Matching Accounts of those
Participants who both make elective deferrals hereunder for
the Plan Year and who are entitled under Item 22 below to
receive this type of matching contribution for the year for
allocation as follows: (Select any that apply and complete. An
Employer may elect to make more than one type of matching
contribution by selecting more than one of the following
options.)
(a) [ ] As a percentage of Participants' Section
401(k) elective deferrals (complete Items 22
and 23);
(b) [ ] Proportionate to the Compensation for the
Plan Year of all Participants who are
entitled to this type of matching
contribution for the Plan Year, in the
following amount: (Select one and complete.)
[ ] __% of the Compensation of all
Participants who are entitled to
receive this type of matching
contribution for the Plan Year; or
[ ] such other amount (if any) as may be
properly determined by the Employer
for such Plan Year;
(c) [ ] An equal flat dollar amount for each
Participant who is entitled to this type of
matching contribution for the Plan Year in
the following amount: (Select one and
complete.)
SECTION 401(k) FEATURE
MATCHING CONTRIBUTIONS SUBJECT TO ADP
PAGE 19
<PAGE> 21
[ ] $_____for each Participant who is
entitled to receive this type of
matching contribution for the Plan
Year; or
[ ] such other flat dollar amount (if
any) as may be properly determined
by the Employer for such Plan Year.
22. PARTICIPANTS ENTITLED TO RECEIVE EMPLOYER MATCHING
CONTRIBUTION TO EMPLOYER MATCHING ACCOUNTS.
(a) "HIGHLY COMPENSATED" STATUS. (Select only one.)
[ ] Only Participants who are Non-highly
Compensated Employees eligible under (b) or
(c) below (and who make elective deferrals
hereunder for the Plan Year) shall be
entitled to receive the matching
contribution under Item 21 to the Employer
Matching Accounts for a Plan Year; or
[ ] All Participants who are eligible under (b)
or (c) below (and who make elective
deferrals hereunder for the Plan Year) shall
be entitled to receive the matching
contribution under Item 21 to the Employer
Matching Accounts for a Plan Year; or
[ ] On a year to year basis, the Administrator
shall determine whether all Participants
eligible under (b) or (c) below or only
those Participants who are Non-highly
Compensated Employees eligible under (b) or
(c) below (and who make elective deferrals
hereunder for the Plan Year) shall be
entitled to receive the matching
contribution under Item 21 to the Employer
Matching Accounts for the Plan Year.
(b) EMPLOYMENT STATUS. A Participant eligible under (a)
above shall be entitled to receive a matching
contribution under Item 21 to the Employer Matching
Account for a Plan Year if: (Select only one.)
[ ] he is an Eligible Employee at any time
during the Plan Year;
[ ] he is an Eligible Employee on the last day
of the Plan Year;
[ ] he receives credit for at least 500 Hours of
Service during the Plan Year or he is an
Eligible Employee on the last day of the
Plan Year;
[ ] he receives credit for at least 1,000 Hours
of Service during the Plan Year, regardless
of whether he is an Eligible Employee on the
last day of the Plan Year; or
SECTION 401(k) FEATURE
MATCHING CONTRIBUTIONS SUBJECT TO ADP
PAGE 20
<PAGE> 22
[ ] he receives credit for at least 1,000 Hours
of Service during the Plan Year and he is an
Eligible Employee on the last day of the
Plan Year.
(c) CERTAIN FORMER EMPLOYEES. In addition, a Participant
eligible under (b) above who makes elective deferrals
for the Plan Year shall be entitled to receive such a
matching contribution for such Plan Year if he is on
an approved leave of absence at the end of such Plan
Year or if his employment by the Employer terminates
during such Plan Year on account of death,
Disability, retirement at or after Normal Retirement
Age, or (if provided for in Item 40) early
retirement.
[ ] Yes
[ ] No
23. MATCHES AS A PERCENTAGE OF ELECTIVE DEFERRALS. (Complete this
Item only if box (a) under Item 21 is selected.)
(a) AMOUNT. Subject to (b) and (c) below, the Employer's
annual matching contribution (if any) to the Plan to
the Employer Matching Account of each Participant
entitled to receive this type of matching
contribution for the Plan Year shall be an amount
equal to: (Select only one and complete as
necessary.)
[ ] ___% of the Participant's elective deferrals
hereunder for the Plan Year not in excess of
___% of the Participant's Compensation for
the Plan Year; or
[ ] ___% of the portion of the Participant's
elective deferrals hereunder for the Plan
Year not in excess of ___% of the
Participant's Compensation for the Plan Year
plus ___% (must be less than first tier
match) of the portion of the Participant's
elective deferrals hereunder for the Plan
Year in excess of that amount but not in
excess of ___% of the Participant's
Compensation for the Plan Year; or
[ ] such other percentage of such portion of the
Participant's elective deferrals hereunder
for the Plan Year as may be properly
determined by the Administrator for such
Plan Year and applied uniformly with respect
to those Participants entitled to receive
this type of matching contribution
hereunder.
(b) PAY PERIOD LIMITATIONS. The same percentage-of-
Compensation limitations specified under (a) above
also shall be applied on a pay period basis (and with
respect to bonuses or other special payments) such
that the Employer's
SECTION 401(k) FEATURE
MATCHING CONTRIBUTIONS SUBJECT TO ADP
PAGE 21
<PAGE> 23
matching contributions shall be with respect to only
such percentage of Compensation otherwise payable for
a pay period (or as a bonus or other special
payment).
[ ] Yes
[ ] No
(c) BONUSES SUBJECT TO MATCH. Elective deferrals with
respect to bonuses or other special payments shall be
matched to the same extent and subject to the same
limitations as any other part of a Participant's
Compensation.
[ ] Yes -- elective deferrals with respect to
bonuses and special payments shall be
matched
[ ] No -- elective deferrals with respect to
bonuses and special payments shall not be
matched
SECTION 401(k) FEATURE
MATCHING CONTRIBUTIONS SUBJECT TO ACP
PAGE 22
<PAGE> 24
DISCRETIONARY (PROFIT SHARING) CONTRIBUTIONS
(THE FOLLOWING ITEMS 24 THROUGH 28 SHOULD BE COMPLETED ONLY IF A
DISCRETIONARY (PROFIT SHARING) CONTRIBUTION FEATURE IS PART OF
THE PLAN PURSUANT TO ITEM 7.)
24. DETERMINATION. The Employer's annual discretionary (profit
sharing) contribution (if any) to the Plan for a Plan Year for
allocation to the Employer Contribution Accounts shall be an
amount equal to:
[ ] ___% of the Compensation of all Participants who are
entitled to receive an allocation for such Plan Year;
[ ] ___% of the Employer's current Profits for such Plan
Year;
[ ] ___% of the Employer's current Profits in excess of
$______ for such Plan Year; or
[ ] such other amount as may be properly determined by
the Employer for such Plan Year.
25. PARTICIPANTS ENTITLED TO RECEIVE AN ALLOCATION OF EMPLOYER
CONTRIBUTION (PART 1). A Participant shall be entitled to
share in the Employer contribution to the Employer
Contribution Accounts for a Plan Year if: (Select only one.)
[ ] he is an Eligible Employee at any time during the
Plan Year;
[ ] he is an Eligible Employee on the last day of the
Plan Year;
[ ] he receives credit for at least 500 Hours of Service
during the Plan Year or he is an Eligible Employee on
the last day of the Plan Year;
[ ] he receives credit for at least 1,000 Hours of
Service during the Plan Year, regardless of whether
he is an Eligible Employee on the last day of the
Plan Year; or
[ ] he receives credit for at least 1,000 Hours of
Service during the Plan Year and he is an Eligible
Employee on the last day of the Plan Year.
26. PARTICIPANTS ENTITLED TO RECEIVE AN ALLOCATION OF EMPLOYER
CONTRIBUTION (PART 2). In addition, a Participant who has
Compensation for a Plan Year shall be entitled to share in the
Employer contribution for such Plan Year if he is on an
approved leave of absence at the end of such Plan Year or if
his employment by the Employer terminates during such Plan
Year on account of death, Disability, retirement at or
DISCRETIONARY (PROFIT SHARING) CONTRIBUTIONS
PAGE 23
<PAGE> 25
after Normal Retirement Age, or (if provided for in Item 40 of
this Adoption Agreement) early retirement.
[ ] Yes
[ ] No
27. ALLOCATION OF EMPLOYER CONTRIBUTIONS. This type of Employer
contribution shall be allocated on:
[ ] a non-integrated basis (see Section 3.3(a)(2) of the
Plan) (skip to Item 29), or
[ ] an integrated basis (see Section 3.3(a)(3) of the
Plan) (complete Item 28).
Note: You may not elect an integrated basis if you maintain
any other integrated plan.
28. INTEGRATED ALLOCATION FORMULA.
(a) INTEGRATION FORMULA. Employer contributions under
Section 3.3 of the Plan (and any forfeitures
allocated with this type of contribution) shall be
allocated, as follows, among the Employer
Contribution Accounts of those Participants entitled
to receive such an allocation: (Select only one.)
[ ] MAXIMUM DISPARITY METHOD. First, such
contribution (and forfeitures) shall be
allocated in the same ratio that the sum of
such Participants' Compensation plus Excess
Compensation for the Plan Year bears to the
sum of all such Participants' Compensation
plus Excess Compensation, but the amount so
allocated, expressed as a percentage, shall
not exceed the Maximum Disparity Rate.
Second, the balance, if any, of such
contribution (and forfeitures) shall be
allocated in proportion to such
Participants' Compensation for the Plan
Year.
[ ] FOUR-TIER METHOD. First, such contribution
(and forfeitures) shall be allocated in
proportion to the Participants' Compensation
for such Plan Year, but not in excess of 3
percent of each Participant's Compensation.
Second, any remaining contribution (and
forfeitures) shall be allocated in
proportion to the Participants' Excess
Compensation for the Plan Year but not in
excess of 3 percent of each Participant's
Excess Compensation. Third, any remaining
contribution (an forfeitures) shall be
allocated in the same ratio that the sum of
such Participants' Compensation plus Excess
Compensation for the Plan Year bears to the
sum of all such Participants' Compensation
plus Excess Compensation, but the amount so
allocated, expressed as a
DISCRETIONARY (PROFIT SHARING) CONTRIBUTIONS
PAGE 24
<PAGE> 26
percentage, shall not exceed the Maximum
Disparity Rate less three percentage points.
Fourth, any remaining contribution (and
forfeitures) shall be allocated in
proportion to the Participants' Compensation
for the Plan Year.
(b) TAXABLE WAGE BASE. For purposes of allocating on an
integrated basis, "Taxable Wage Base" means:
[ ] the contribution and benefit base under
section 230 of the Social Security Act, as
of the first day of the particular Plan
Year; or
[ ] $__________ (not to exceed the contribution
and benefit base under section 230 of the
Social Security Act, as of the first day of
the Plan Year in which the Effective Date
falls); or
[ ] _______ % (not to exceed 100%) of the
contribution and benefit base under section
230 of the Social Security Act, as of the
first day of the particular Plan Year.
If a Plan Year consists of less than 12 months, then the Taxable
Wage Base for such Plan Year shall be 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.
DISCRETIONARY (PROFIT SHARING) CONTRIBUTIONS
PAGE 25
<PAGE> 27
COMPENSATION TAKEN INTO ACCOUNT UNDER THE PLAN
29. BASE DEFINITION.
INSTRUCTIONS: Complete Column A for the definition of "Compensation" generally
applicable under the Plan, including for the allocation of contributions.
Complete Column B for the definition of "Section 415 Compensation" (Section
4.1(k) of the Plan) applicable in determining the section 415 limitations.
FOR SELF-EMPLOYED INDIVIDUALS (INCLUDING PARTNERS IN A PARTNERSHIP),
SEE SECTION 1.12(e) OF THE PLAN.
-----------------------------------------------------------------
A B
"SECTION 415
"COMPENSATION" COMPENSATION"
-------------- -------------
IRS SAFE HARBORS
o W-2, Total Compensation Box [X] [X]
o Earnings subject to Federal
Income Tax Withholding [ ] [ ]
o General Section 415 definition [ ] [ ]
OTHER CHOICE
o FICA definition [ ] N/A
30. SAFE-HARBOR ADD-BACK. The Compensation definition will include
amounts that would have been included in Compensation but for
Section 401(k), Section 125 and similar Compensation reduction
elections (Section 1.12(a) of Plan).
[X] Yes
[ ] No
COMPENSATION TAKEN INTO ACCOUNT UNDER THE PLAN
PAGE 26
<PAGE> 28
31. PARTIAL YEAR OF PARTICIPATION. Compensation for any part of a
Plan Year during which an Employee is not a Participant:
(Select one.)
[ ] shall be taken into account for all purposes under
the Plan except for section 401(k) and (m)
discrimination testing; or
[X] shall be taken into account solely for purposes of
section 401(k) and (m) discrimination testing under
Sections 3.1(e), 3.2(b), 1.3 and 1.4 of the Plan; or
[ ] shall be taken into account for all purposes under
the Plan (including section 401(k) and (m)
discrimination testing); or
[ ] shall not be taken into account for any purpose under
the Plan.
32. EXCLUSIONS. Compensation shall exclude the following:
[ ] No exclusions; or
[X] Safe-harbor exclusion of allowances, reimbursements
and fringe benefits (Section 1.12(c) of Plan)
33. CASH OR ACCRUED BASIS. Compensation should be taken into
account in the Plan Year in which it is actually paid.
34. EFFECTIVE DATE. If the selections in Item 29 change the Plan's
base definition of Compensation or Section 415 Compensation,
or if the selections in Items 30-33 otherwise change the
Plan's provisions as of a date later than the Effective Date,
fill in the effective date of the change, identify the change
and specify or attach the provisions in effect prior to the
change: ______________________________________________
COMPENSATION TAKEN INTO ACCOUNT UNDER THE PLAN
PAGE 27
<PAGE> 29
SERVICE TAKEN INTO ACCOUNT UNDER THE PLAN
35. METHOD OF DETERMINATION. For eligibility and vesting purposes,
service shall be determined on the basis of:
[ ] the elapsed time method (skip to Item 39 unless a
minimum Hours of Service requirement for sharing in
certain contributions is elected in Item 17, 19, 22
or 25), or
[X] the hour-counting method.
36. DETERMINATION OF HOURS OF SERVICE. An Employee's Hours of
Service shall be determined on the basis of:
[X] the actual hours for which he is paid or entitled to
payment, determined from records of hours worked and
hours for which payment is made or due;
[ ] 10 Hours of Service for each day for which he would
be required to be credited with at least one Hour of
Service;
[ ] 45 Hours of Service for each week for which he would
be required to be credited with at least one Hour of
Service;
[ ] 95 Hours of Service for each semi-monthly payroll
period for which he would be required to be credited
with at least one Hour of Service;
[ ] 190 Hours of Service for each month for which he
would be required to be credited with at least one
Hour of Service.
37. SERVICE COMPUTATION PERIOD (ELIGIBILITY). "Service Computation
Period" means, for eligibility purposes: (Complete only if the
hour-counting method is elected in Item 35.)
[X] the 12 consecutive month period beginning on an
Employee's Employment Commencement Date or on an
anniversary thereof; or
[ ] the 12 consecutive month period beginning on an
Employee's Employment Commencement Date and,
thereafter in all cases, each Plan Year, beginning
with the Plan Year containing the first anniversary
of such Employment Commencement Date. An Employee who
is credited with 1,000 Hours of Service in both the
initial eligibility computation period and the first
Plan Year which commences prior to the first
anniversary of the Employee's Employment Commencement
Date will be credited with two Years of Service for
purposes of eligibility to participate.
SERVICE TAKEN INTO ACCOUNT UNDER THE PLAN
PAGE 28
<PAGE> 30
38. SERVICE COMPUTATION PERIOD (VESTING). "Service Computation
Period" means, for purposes of determining Years of Service
and One-Year Breaks for vesting purposes: (Complete only if
the hour-counting method is elected in Item 35.)
[X] the Plan Year, or
[ ] the 12 consecutive month period beginning on an
Employee's Employment Commencement Date or on an
anniversary thereof.
39. PREDECESSOR EMPLOYERS. For purposes of the Plan, service for
the Employer shall be deemed to include service (including
service as a self-employed individual) for the following
organization(s):
[X] None
[ ] ------------------------------------------
40. EARLY RETIREMENT. May Participants retire early with full
vesting and immediate entitlement to benefits?
[ ] Yes, upon attainment of age __ and completion of at
least __ Years of Service for vesting purposes.
[X] No
SERVICE TAKEN INTO ACCOUNT UNDER THE PLAN
PAGE 29
<PAGE> 31
VESTING IN EMPLOYER CONTRIBUTIONS
41. VESTING SCHEDULE. The vesting schedule applicable, under
Section 6.1(d)(3)(A) of the Plan, to a Participant's Employer
Contribution Account, for Participants with at least one Hour
of Service in a Plan Year beginning after 1988 shall be as
follows: ( Do not complete unless the Plan authorizes Employer
contributions subject to a vesting schedule.)
NONFORFEITABLE PERCENTAGE
<TABLE>
<CAPTION>
Option Option Option Option Option
Years 1 2 3 4 5
of
Service [ ] [ ] [ ] [ ] [ ]
(2 to 6) (3 to 7) (2 year (5 year (other)
cliff) cliff)
<S> <C> <C> <C> <C> <C>
less than 1 0 0 0 0 ____
1 0 0 0 0 ____
2 20 0 100 0 ____
3 40 20 0 ____
4 60 40 0 ____
5 80 60 100 ____
6 100 80 ____
7 100 ____
</TABLE>
NOTE: (1) Vesting must be at least as rapid as Option 3 if more than 1
Year of Service is required for eligibility.
(2) Any vesting schedule elected under Option 5 must be at least
as rapid, at every point, as Option 2, Option 4, or (if more
than 1 Year of Service is required for eligibility) Option 3.
42. SERVICE DISREGARDED IN DETERMINATION OF NONFORFEITABLE
PERCENTAGE. In addition to service disregarded in determining
Years of Service under Section 1.60 of the Plan, the following
service shall be disregarded in determining an Employee's
service for vesting purposes (check any boxes that apply):
[ ] Years of Service (if the hour-counting method
applies) or Service (if the elapsed time method
applies) before age 18 (age 22 for a Participant who
does not have at least 1 Hour of Service on or after
the REA Effective Date).
[ ] Years of Service (if the hour-counting method
applies) or Service (if the elapsed time method
applies) during any period for which the Employer did
not maintain the Plan or a predecessor plan, as
defined in the applicable regulations of the
Secretary of the Treasury.
VESTING IN EMPLOYER CONTRIBUTIONS
PAGE 30
<PAGE> 32
43. FORFEITURE UPON CASH-OUT. Upon the distribution to a
terminated Participant, his forfeitable interest in his
Account shall be forfeited in accordance with Section
6.1(d)(6) of the Plan (select only one):
[X] immediately;
[ ] upon the incurrence of a One-Year Break; or
[ ] not applicable -- forfeiture delayed until the
incurrence of a Break in Service (as defined in
Section 1.10 of the Plan).
VESTING IN EMPLOYER CONTRIBUTIONS
PAGE 31
<PAGE> 33
INVESTMENT OF PLAN ASSETS AND PLAN LOANS
44. PARTICIPANT INVESTMENT ELECTIONS.
(a) AVAILABILITY OF INVESTMENT ELECTIONS. Each
Participant shall elect the manner in which his
entire Account (or such subaccounts selected in (b)
below) and any contributions and forfeitures
allocated thereto are to be invested:
[X] Yes (If Yes, complete (b) and (c).)
[ ] No (Skip to Item 45.)
(b) SUBACCOUNTS SUBJECT TO PARTICIPANT INVESTMENT
DISCRETION.
[X] Investment elections apply to entire
Account, or
[ ] Investment elections apply only to the
following subaccount(s): (Select all that
apply.)
[ ] Section 401(k) Account (including
the Nonelective Contribution
Account) (applicable only if a
Section 401(k) feature is part of
the Plan)
[ ] Nondeductible Voluntary Contribution
Account (and Deductible Voluntary
Contribution Account)
[ ] Rollover Account
[ ] Employer Contribution Account
(excluding the Employer Matching
Account unless selected below)
[ ] Employer Matching Account
(c) EXTENT OF PARTICIPANT INVESTMENT DISCRETION. In
determining how his Account (or selected subaccounts)
shall be invested, each Participant may: (Select only
one.)
[X] choose from among such investment funds as
the Administrator directs the Trustee to
make available; or
[ ] select any legally permissible investments
which the Trustee agrees to hold for his
Account (including such investment funds as
the Administrator directs the Trustee to
make available).
INVESTMENT OF PLAN ASSETS AND PLAN LOANS
PAGE 32
<PAGE> 34
Pending execution of investment directions, the Trustee shall be authorized to
hold balances in short-term, liquid deposit accounts or other investments.
45. QUALIFYING EMPLOYER SECURITIES. Subject to the other
provisions of the Plan and Trust Agreement, Plan Assets may be
invested in qualifying employer securities (as defined in
ERISA section 407):
[X] Yes
[ ] No (Skip to Item 46.)
(a) DISTRIBUTION AND WITHDRAWAL OF QUALIFYING EMPLOYER
SECURITIES. (Select one.)
[X] To the extent a Participant's Account is
invested in qualifying employer securities,
a Participant may elect to take a
distribution or withdrawal to which he is
otherwise entitled under the Plan in
qualifying employer securities.
[ ] A Participant may not take a distribution or
withdrawal in qualifying employer
securities.
[ ] To the extent a Participant's Account is
invested in qualifying employer securities,
a Participant may elect to take a
distribution or withdrawal to which he is
otherwise entitled under the Plan in
qualifying employer securities, except as
follows:
____________________________________________
____________________________________________
____________________________________________
(b) VOTING OF QUALIFYING EMPLOYER SECURITIES. To the
extent a Participant's Account is invested in
qualifying employer securities, the following shall
have the right to exercise any voting rights with
respect to such securities: (Select one.)
[X] The Participant (or in the event of his
death, his Beneficiary); or
[ ] The Employer (if more than one Employer has
adopted the Plan, the first Employer named
in this Adoption Agreement); or
[ ] The Plan Administrator; or
[ ] An investment manager appointed under the
terms of the Trust Agreement; or
INVESTMENT OF PLAN ASSETS AND PLAN LOANS
PAGE 33
<PAGE> 35
[ ] The Trustee; or
[ ] Other: _____________________________________
____________________________________________
____________________________________________
46. VALUATION METHOD. (Select only one.)
[X] DAILY VALUATION METHOD FOR ENTIRE ACCOUNT. For Plan
accounting purposes, Plan Assets shall be allocable
separately to each Participant's Account and the
value of a Participant's Account at any particular
time shall be equal to the value of the Plan Assets
so allocated to his Account at that time; or
[ ] BALANCE FORWARD VALUATION METHOD FOR ENTIRE ACCOUNT.
For Plan accounting purposes, Plan Assets shall be
valued as of each Accounting Date and the value of
each Participant's Account shall be adjusted only as
of each Accounting Date; or
[ ] DAILY VALUATION METHOD FOR CERTAIN SUBACCOUNTS. For
Plan accounting purposes, the daily valuation method
shall apply to the Plan Assets attributable to the
following subaccounts (and the balance forward
valuation method shall apply to the other
subaccounts). (Select all to which daily valuation
will apply.)
[ ] Section 401(k) Account (including the
Nonelective Contribution Account)
(applicable only if a Section 401(k) feature
is part of the Plan)
[ ] Nondeductible Voluntary Contribution Account
(and Deductible Voluntary Contribution
Account)
[ ] Rollover Account
[ ] Employer Contribution Account (excluding the
Employer Matching Account unless selected
below)
[ ] Employer Matching Account
47. LOANS. Are Participant loans permitted?
[X] Yes (Complete (a) through (f) below.)
[ ] No (Skip to Item 48.)
INVESTMENT OF PLAN ASSETS AND PLAN LOANS
PAGE 34
<PAGE> 36
(a) LOANS ONLY TO EMPLOYEES. A loan is available to a
Participant only while an Employee and loans shall be
due and payable in full upon a Participant's
termination of employment.
[X] Yes
[ ] No
(b) PAYROLL WITHHOLDING REQUIRED. Loans shall be repaid
only by payroll withholding properly authorized by
the Participant; provided that the Administrator may
allow prepayment through other means; and if the
available amount of payroll withholding is
insufficient to meet the payments, the Administrator
may authorize other means.
[ ] Yes
[X] No
(c) MINIMUM LOAN AMOUNT. The minimum loan amount for any
single loan shall be:
[X] $1,000
[ ] Other $________ (fill-in but not to exceed
$1,000)
[ ] N/A - No loan minimum
(d) SECURITY. The following types of collateral may
secure a Participant loan: (Select only one.)
[X] 50% of the Participant's accrued
nonforfeitable benefit under the Plan
(excluding any Deductible Voluntary
Contribution Account)
[ ] 50% of the Participant's accrued
nonforfeitable benefit under the Plan
(excluding any Deductible Voluntary
Contribution Account) and the following:
________________________________________
________________________________________
________________________________________
(e) NUMBER OF LOANS. A Participant may have no more than
the following number of loans outstanding at any
given time:
[X] 1
INVESTMENT OF PLAN ASSETS AND PLAN LOANS
PAGE 34
<PAGE> 37
[ ] 2
[ ] other ______ (fill in)
[ ] N/A - no maximum number of loans
(f) OTHER SPECIFIC LOAN PROVISIONS. In addition to the
provisions governing loans in Section 5.5 of the Plan
and above, the following provisions apply to Plan
loans (attach additional pages, if necessary):
(1) limitations (if any) in addition to limits
in Section 5.5 and above on the types and
amounts of loans offered:
___________________________________________
___________________________________________
___________________________________________
(2) procedure for determining reasonable rate of
interest: The rate the Trustee's commercial
loan division would charge on a comparable
loan.
INVESTMENT OF PLAN ASSETS AND PLAN LOANS
PAGE 36
<PAGE> 38
WITHDRAWALS AND DISTRIBUTIONS
IN-SERVICE WITHDRAWALS BY PLAN PARTICIPANTS
48. WITHDRAWALS FROM SECTION 401(k) ACCOUNT. (Complete only if a
Section 401(k) feature is part of the Plan pursuant to Item
7.)
(a) HARDSHIP. Subject to the limits of Section 7.2 of the
Plan, withdrawals from a Participant's Section 401(k)
Account by an Eligible Employee shall be permitted in
the event of hardship.
[X] Yes
[ ] No
(b) AGE 59-1/2. Withdrawals from a Participant's Section
401(k) Account by an Eligible Employee shall be
permitted after his attainment of age 59-1/2.
[ ] Yes
[X] No
49. WITHDRAWALS ON OR AFTER ATTAINMENT OF AGE 59-1/2.
(a) WITHDRAWAL RIGHT. Withdrawals from a Participant's
Account (from such subaccounts as he may elect), to
the extent vested and nonforfeitable, by an Eligible
Employee prior to termination of employment shall be
permitted after his attainment of the age specified
in (b) below.
[ ] Yes (If Yes, complete (b) and (c) below.)
[X] No (Skip to Item 50.)
(b) AGE REQUIREMENT.
[ ] 59-1/2
[ ] ______ (Must be older than age 59-1/2.)
(c) TIME OF WITHDRAWAL. A Participant's withdrawal shall
be payable as soon as administratively feasible:
[ ] after the Participant makes the withdrawal
election; or
WITHDRAWALS AND DISTRIBUTIONS
IN-SERVICE WITHDRAWALS BY PLAN PARTICIPANTS
PAGE 37
<PAGE> 39
[ ] after the first Accounting Date coincident
with or next following the Participant makes
the withdrawal election.
50. OTHER WITHDRAWAL RIGHTS. Is this an amendment to an existing
Plan or a transferee of another plan with additional
withdrawal rights which cannot now be eliminated from the
Plan?
[ ] Yes (Describe the applicable withdrawal rights in
detail in an attachment.)
[X] No
Note: The above withdrawal rights (and those listed on any attachment) are
considered protected optional forms of benefit which cannot be changed with
respect to benefits already accrued by a participant.
WITHDRAWALS AND DISTRIBUTIONS
IN-SERVICE WITHDRAWALS BY PLAN PARTICIPANTS
PAGE 38
<PAGE> 40
WITHDRAWALS AND DISTRIBUTIONS
EVENTS OF DISTRIBUTION AND TIME OF PAYMENT
51. TIME OF PAYMENT. Subject to Sections 7.6 and 7.7 and Article
10 of the Plan, distribution to a Participant whose benefit
has become distributable shall commence in accordance with the
following: (Check (a) or (b) and the applicable box(es) under
the Item selected.)
(a) [X] SIMPLIFIED OPTION. Upon the Participant's
termination of employment, as soon as
administratively feasible (check the box
that applies):
[X] after the Participant elects
commencement of his benefit; or
[ ] after the first Accounting Date
coincident with or next following
the Participant's election to
commence benefits.
(b) [ ] DETAILED OPTION.
(1) NORMAL RETIREMENT. Upon a Participant's
termination of employment on or after
attaining Normal Retirement Age, as soon as
administratively feasible (check the box
that applies):
[ ] after such termination of
employment;
[ ] after the first Accounting Date
coincident with or next following
such termination of employment;
[ ] after the Participant elects
commencement of his benefit; or
[ ] after the first Accounting Date
coincident with or next following
the Participant's election to
commence benefits.
(2) EARLY RETIREMENT. (Complete only if the
early retirement provision in Item 40 is
elected.) Upon a Participant's termination
of employment on or after satisfying the
criteria in Item 40 for early retirement but
before attaining Normal Retirement Age, as
soon as administratively feasible (check the
box that applies):
[ ] after the Participant elects
commencement of his benefit;
[ ] after the first Accounting Date
coincident with or next following
the Participant's election to
commence benefits; or
WITHDRAWALS AND DISTRIBUTIONS
EVENTS OF DISTRIBUTION AND TIME OF PAYMENT
PAGE 39
<PAGE> 41
[ ] other (specify time or times)
____________________________________
____________________________________
____________________________________
(3) DISABILITY RETIREMENT. Upon a Participant's
termination of employment, prior to Normal
Retirement Age and prior to satisfying the
criteria for early retirement (if the Plan
has an early retirement provision), on
account of the incurrence of a Disability,
as soon as administratively feasible (check
the box that applies):
[ ] after the Participant elects
commencement of his benefit;
[ ] after the first Accounting Date
coincident with or next following
the Participant's election to
commence benefits; or
[ ] other (specify time or times)
____________________________________
____________________________________
____________________________________
(4) OTHER TERMINATION. Upon a Participant's
termination of employment prior to Normal
Retirement Age, prior to satisfying the
criteria for early retirement (if the Plan
has an early retirement provision) and prior
to incurring a Disability, as soon as
administratively feasible (check the box
that applies):
[ ] after the Participant elects
commencement of his benefit;
[ ] after the first Accounting Date
coincident with or next following
the Participant's election to
commence benefits;
[ ] after the first Accounting Date
coincident with or next following
the Participant's termination of
employment, if elected by the
Participant, but if not elected,
after the first Accounting Date
coincident with or next following
the Participant's attainment of
Normal Retirement Age; or
other (specify time or times):
____________________________________
____________________________________
____________________________________
WITHDRAWALS AND DISTRIBUTIONS
EVENTS OF DISTRIBUTION AND TIME OF PAYMENT
PAGE 40
<PAGE> 42
(5) OTHER WITHDRAWAL RIGHTS. Is this an amendment to an
existing Plan or a transferee of another plan with
additional commencement dates which cannot now be
eliminated from the Plan?
[ ] Yes (Describe the applicable withdrawal
rights in detail in an attachment.)
[ ] No
Note: The above commencement dates (and those listed on any attachment) are
considered protected optional forms of benefit which cannot be changed with
respect to benefits already accrued by a participant.
WITHDRAWALS AND DISTRIBUTIONS
EVENTS OF DISTRIBUTION AND TIME OF PAYMENT
PAGE 41
<PAGE> 43
WITHDRAWALS AND DISTRIBUTIONS
FORM OF PAYMENT
52. FORMS OF BENEFIT PAYMENT. The following alternative forms of
distribution and withdrawal are available under the Plan
(check any boxes that apply):
[X] a single sum,
[ ] periodic installment payments, not less frequently
than annually, with any installments remaining unpaid
at the Participant's death to be paid to his
Beneficiary,
[ ] in the case of a Participant who has attained age
70-1/2 and who is required to commence benefit
payments under Section 7.6(d) while employed by the
Employer, periodic installment payments sufficient in
amount and frequency to satisfy the minimum
distribution requirements of Section 8.5, with a lump
sum distribution of his remaining Account balance
upon termination of employment,
[ ] a single life annuity,
[ ] a Qualified Joint and Survivor Annuity,
[ ] a joint and survivor annuity for the Participant and
his Surviving Spouse under which the survivor annuity
is more than one-half of, but not greater than, the
annuity payable during the joint lives of the
Participant and such spouse,
[ ] this is an amendment of an existing Plan or a
transferee of another plan with additional forms
which cannot now be eliminated from the Plan.
(Describe the applicable forms in detail in an
attachment.)
(NOTE: For a plan which is a transferee of a plan required to have annuities,
the Qualified Joint and Survivor Annuity and the single life annuity will
automatically be available. Refer to Section 8.2 of the Plan.)
NOTE: The above alternative forms of benefit (and those listed on any
attachment) are considered protected forms of benefit which cannot be changed
with respect to benefits already accrued by a participant.
WITHDRAWALS AND DISTRIBUTIONS
FORM OF PAYMENT
PAGE 42
<PAGE> 44
WITHDRAWALS AND DISTRIBUTIONS
CASH-OUT
53. $3500 CASH-OUT. Notwithstanding the benefit commencement dates
otherwise adopted in Item 51 and the alternative forms of
benefit otherwise adopted in Item 52, any amount payable to a
Participant or any Preretirement Survivor Annuity payable to a
Surviving Spouse shall be paid in a lump sum if such payment
is made before payment otherwise begins and if, in the case of
an amount payable to a Participant, the value (determined as
of the date of distribution) of his nonforfeitable benefit
does not exceed $3500 or, in the case of a Preretirement
Survivor Annuity, the value (determined as of the date of
distribution) of such annuity does not exceed $3500, and such
lump sum shall be paid as soon as administratively feasible
(whether or not the Participant or his spouse has consented to
the distribution) (check the applicable box):
[X] after the Participant's termination of employment
(death, in the case of the Preretirement Survivor
Annuity);
[ ] after the first Accounting Date following the
Participant's termination of employment (death, in
the case of the Preretirement Survivor Annuity); or
[ ] Not Applicable -- This provision shall not be a part
of the Plan.
This provision, if adopted, shall be applied by treating any Deductible
Voluntary Contribution Account separately from other portions of the
Participant's benefit.
WITHDRAWALS AND DISTRIBUTIONS
CASH-OUT
PAGE 43
<PAGE> 45
TOP-HEAVY RULES AND SECTION 415 LIMITATIONS
54. TOP-HEAVY TESTING. For purposes of the provisions of the Plan
applicable if the Plan is a Top-Heavy Plan:
[ ] the Plan shall be deemed always to be a Top-Heavy
Plan; or
[X] the Plan shall be tested each year to determine
whether it is a Top-Heavy Plan.
55. TOP-HEAVY MINIMUMS. If a Participant is covered under any
other plan or plans of the Employer, then:
[ ] Section 3.4 of the Plan shall apply as if such
Participant were not so covered; or
[X] Section 3.4 shall be modified by the attached
provisions, in order to prevent duplication.
56. DEFINED BENEFIT ACTUARIAL ASSUMPTIONS. (Complete only if
second option under Item 54 is selected and if there is one or
more defined benefit plans in the Permissive Aggregation Group
or the Required Aggregation Group.) The interest and mortality
rates, for purposes of establishing Present Value to compute
the Top-Heavy Ratio, with respect to any defined benefit plans
in the Permissive Aggregation Group or the Required
Aggregation Group shall be:
Interest Rate: 4.50%
-----
Mortality Table: 1983 GAM
--------
57. TOP-HEAVY VESTING. For any Plan Year in which the Plan is a
Top-Heavy Plan, the vesting schedule, applicable under Section
6.1(d)(3)(A) of the Plan, to a Participant's Employer
Contribution Account, shall be as follows: (Skip this Item if
the general vesting schedule elected in Item 41 is at least as
fast as Option 1 or 3 in Item 41.)
[ ] 100% vesting after ___ (not to exceed 3) Years of
Service.
[ ] ___% (not less than 20) vesting after 2 Years of
Service,
[ ] ___% (not less than 40) vesting after 3 Years of
Service,
[ ] ___% (not less than 60) vesting after 4 Years of
Service,
[ ] ___% (not less than 80) vesting after 5 Years of
Service,
[ ] 100% vesting after 6 Years of Service.
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 12.3(c) of the
Plan applies.
TOP-HEAVY RULES AND SECTION 415 LIMITATIONS
PAGE 44
<PAGE> 46
LIMITATIONS ON ANNUAL ADDITIONS. If the Employer maintains or ever maintained
another qualified plan in which any Participant in this Plan is (or was) a
participant or could possibly become a participant, the following two items must
be completed. They must also be completed if the Employer maintains a welfare
benefit fund, as defined in section 419(e) of the Code, 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 the
Plan.
58. If a Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a
Master or Prototype Plan:
[X] the provisions of Section 4.3 of the Plan will apply
as if the other plan were a Master or Prototype Plan;
or
[ ] the attached provisions will apply. (Provide the
method under which the plans will limit total Annual
Additions to the Maximum Permissible Amount and will
properly reduce any excess amounts, in a manner that
precludes employer discretion.)
59. If any Participant is, or has ever been, a participant in a
qualified defined benefit plan maintained by the Employer (as
defined in Section 4.1 of the Plan), then the attached
provisions shall apply. (Attach provisions which will satisfy
the 1.0 limitation of section 415(e) of the Code. Such
provisions must preclude employer discretion.)
TOP-HEAVY RULES AND SECTION 415 LIMITATIONS
PAGE 45
<PAGE> 47
MISCELLANEOUS
REVIEW BY COUNSEL. The Employer acknowledges that it has been advised by the
Trustee that the Plan should not be adopted without the review and approval of
the Employer's attorney.
SPONSORING ORGANIZATION. The sponsor of this prototype is: The Fifth Third Bank,
38 Fountain Square Plaza, Cincinnati, Ohio 45263; (513) 579-5300 or
800-336-6782. Affiliates of The Fifth Third Bank are also authorized to make the
prototype available to their customers and to serve as Trustee.
FURTHER DEVELOPMENTS. If The Fifth Third Bank amends the Plan or discontinues or
abandons sponsorship of the prototype documents, the Employer will be notified.
RELIANCE. This prototype plan has been approved as to form by the Internal
Revenue Service, in Opinion Letter Serial Number D247435b. An employer who has
ever maintained or who later adopts any plan (including, after December 31,
1985, a welfare benefit fund, as defined in section 419(e) of the code, which
provides post-retirement medical benefits allocated to separate accounts for key
employees, as defined in section 419A(d)(3) of the Code or an individual medical
benefit account as defined in section 415(l)(2) of the Code), other than paired
plan #004 or #006, in addition to the Plan, may not rely on the opinion letter
issued by the National Office of the Internal Revenue Service as evidence that
the Plan is qualified under section 401 of the Internal Revenue Code. If the
employer who adopts or maintains multiple plans wishes to obtain reliance that
his plan(s) are qualified, application for a determination letter should be made
to the appropriate Key District Director of Internal Revenue.
In the case of an Employer adopting this Plan with a retroactive Effective Date
in order to retroactively amend a plan not previously qualified under the Tax
Reform Act of 1986 (or other laws referred to in section 1 of Revenue Procedure
93-39) so as to comply with such laws, the Employer may not rely on the opinion
letter issued by the National Office of the Internal Revenue Service as evidence
that this Plan is qualified under section 401 of the Code for any period prior
to its adoption unless the terms of the Plan, as herein adopted or amended, that
pertain to the requirements of sections 401(a)(4), 401(a)(17), 401(l),
401(a)(5), 410(b) and 414(s) of the Code, as amended by the Tax Reform Act of
1986 (or other laws referred to in section 1 of Revenue Procedure 93-39): (a)
are made effective retroactively to the first day of the first Plan Year
beginning after December 31, 1988 (or such other date on which these
requirements first become effective with respect to this Plan); or (b) are made
effective no later than the first day on which the Employer is no longer
entitled, under regulations, to rely on a reasonable, good faith interpretation
of these requirements, and the prior provisions of the Plan constitute such an
interpretation.
ADOPTION OF PLAN. This Adoption Agreement may be used only in conjunction with
The Fifth Third Bank Basic Prototype Plan Document #01. By this Agreement
between the Employer and The Fifth Third Bank or an authorized affiliate of The
Fifth Third Bank, as specified below (the "Trustee"), the Employer hereby adopts
The Fifth Third Bank Basic Prototype Plan Document #01, as supplemented by this
Adoption Agreement, and The Fifth Third Bank Prototype Trust Agreement, as said
Plan Document, Adoption Agreement, and Trust Agreement are now in effect or may
be hereafter
MISCELLANEOUS
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<PAGE> 48
amended, for the purpose of establishing or amending a profit-sharing plan and
hereby accepts all the terms and conditions thereof. Pursuant to section
401(a)(27) of the Code, this Plan is designated a profit-sharing plan.
PERSONS AUTHORIZED TO INSTRUCT THE TRUSTEE. The following persons, whose
signatures appear opposite their names, are authorized to give directions,
statements, or certificates to the Trustee on behalf of the Administrator and
the Employer:
NAME SIGNATURE
Gregory J. Ziegler /s/ GREGORY J. ZIEGLER
-----------------------------
Rebecca Knight /s/ REBECCA KNIGHT
-----------------------------
The Employer will notify the Trustee in writing of any changes in this
information.
Signed on the following date: 9/15/97.
-----------------------------
EMPLOYER TRUSTEE
Cincinnati Financial Corporation The Fifth Third Bank
Name of Employer (The Fifth Third Bank or an authorized
Fifth Third affiliate only)
By /s/ GREGORY J. ZIEGLER
------------------------------ By
Other Employers Adopting the Plan: -------------------------
CFC Investment Company
Name of Employer
By /s/ GREGORY J. ZIEGLER
------------------------------
The Cincinnati Insurance Company
Name of Employer
By /s/ GREGORY J. ZIEGLER
------------------------------
MISCELLANEOUS
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<PAGE> 49
The Cincinnati Life Insurance Company
Name of Employer
By /s/ GREGORY J. ZIEGLER
------------------------------
The Cincinnati Casualty Company
Name of Employer
By /s/ GREGORY J. ZIEGLER
------------------------------
The Cincinnati Indemnity Company
Name of Employer
By /s/ GREGORY J. ZIEGLER
------------------------------
MISCELLANEOUS
PAGE 48
<PAGE> 1
Exhibit 23
[DELOITTE & TOUCHE LLP LETTERHEAD]
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Cincinnati Financial Corporation on Form S-8 of our reports dated February 4,
1998, appearing in and incorporated by reference in the Annual Report on Form
10-K of Cincinnati Financial Corporation for the year ended December 31, 1997
and to the reference to us as experts in this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
- ------------------------------
Deloitte & Touche LLP
Cincinnati, Ohio
April 10, 1998
