<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
JONES INTERCABLE, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Colorado 84-0613514
-------- ----------
(State of Organization) (IRS Employer
Identification No.)
</TABLE>
P.O. Box 3309
Englewood, Colorado 80155-3309
(303) 792-3111
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive office)
JONES INTERCABLE, INC. ET AL PROFIT SHARING/RETIREMENT PLAN
(Full title of the plan)
Glenn R. Jones, 9697 East Mineral Avenue, Englewood, Colorado 80112
(Name and address of agent for service)
(303) 792-3111
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of securities Amount Proposed maximum Proposed maximum Amount of
to be to be offering price aggregate registration
registered registered (1)(2) per share (2) offering price (1)(2) fee (2)
----------- ----------------- ------------- --------------------- -------
<S> <C> <C> <C> <C>
Class A Common Stock, 1,000,000 $15.315 $15,315,000 $5,282.00
$.01 par value per
share
Interests in the Jones (3) (4) (4) (4)
Intercable, Inc. et al
Profit Sharing/
Retirement Plan
</TABLE>
<PAGE> 2
(1) An indeterminate number of shares of the Company's Class A Common
Stock ("Stock) are to be acquired by the Jones Intercable, Inc. et al
Profit Sharing/Retirement Plan (the "Plan"). These shares will be
purchased in the open market. The exact number of shares that may be
purchased cannot be determined.
(2) Estimated solely for the purposes of calculating the amount of the
registration fee. The price per share and aggregate offering price
are based on the average of the high and low price per share of the
Class A Common Stock of Jones Intercable, Inc. on March 18, 1994, as
reported on the National Association of Securities Dealers Automated
Quotation System.
(3) 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 Plan.
(4) Pursuant to Rule 457(h)(2) under the Securities Act of 1933, no
separate fee is required to register plan interests.
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<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Jones Intercable, Inc. (the "Company") and the Jones Intercable, Inc.
et al Profit Sharing/Retirement Plan (the "Plan") hereby state that the
following documents filed with the Securities and Exchange Commission (the
"Commission") are hereby incorporated or deemed to be incorporated in this
Registration Statement by reference as of their date of filing with the
Commission:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended May 31, 1993, filed pursuant to Section 13(a) or 15(d) of the Exchange
Act of 1934 (the "Exchange Act").
2. The Company's Quarterly Reports on Form 10-Q for fiscal
quarters ended August 31, 1993 and November 30, 1993, and the Company's Current
Reports on Form 8-K dated June 10, 1993, December 2, 1993, January 10, 1994 and
February 18, 1994.
3. The description of the Company's Class A Common Stock
contained in the Company's Registration Statement on Form 8-A dated January 21,
1981 and filed under the Securities Exchange Act with the Securities and
Exchange Commission on January 26, 1981, including any amendment or report
filed for the purpose of updating such description.
All other documents filed by the Company and the Plan with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Registration Statement and prior to the filing
of a Post-Effective Amendment to this Registration Statement indicating that
all securities offered under the Registration Statement have been sold, or
deregistering all securities then remaining unsold, are also incorporated
herein by reference and shall be a part hereof from the date of filing of such
documents.
Any statement contained in a document incorporated by, or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
4. DESCRIPTION OF SECURITIES.
See 3 above.
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<PAGE> 4
5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Articles of Incorporation of the Company permit indemnification of
the Company's officers and directors when such are parties or threatened to be
made parties to any proceeding (other than an action by or in the name of the
corporation) by reason of the fact that he or she is or was a director,
officer, employee or agent of the corporation, against losses incurred by him
or her in connection with such proceeding if the officer or director seeking
indemnification acted in good faith and in a manner reasonably believed to be
in the best interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe that his or her
conduct was unlawful. The Articles of Incorporation of the Company further
provide that the corporation will indemnify its officers and directors against
losses incurred as the result of a proceeding by or in the name of the
corporation if the officer or director seeking indemnification acted in good
faith and in a manner reasonably believed to be in the best interests of the
corporation, but no indemnification will be made in such case if the officer or
director seeking indemnification has been adjudged to be liable for negligence
or misconduct in the performance of his or her duty to the corporation unless
and only to the extent that the court in which the action was brought
determines upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnification for such expenses that the court deems proper.
The Colorado Corporation Code requires a Colorado corporation to
indemnify its officers and directors against reasonable expenses under certain
circumstances and permits it to indemnify its officers and directors against
liability and reasonable expenses under certain circumstances. Unless limited
by the corporation's articles of incorporation, the statute requires a
corporation to indemnify its officers and directors against reasonable expenses
incurred in any proceeding to which the officer or director is a party and was
wholly successful, on the merits or otherwise, in defense of the proceeding.
In addition to this mandatory indemnification, the statute provides that a
corporation may indemnify its officers and directors against liability and
reasonable expenses if the officer or director acted in good faith and in a
manner reasonably believed to be in the best interests of the corporation in
the case of conduct in an official capacity, in a manner he reasonably believed
was at least not opposed to the corporation's best interests in all other
cases, or in a manner he had no reasonable cause to believe was unlawful in the
case of criminal proceedings. In actions by or in the name of the corporation,
the statute provides the same standard but limits indemnification to reasonable
expenses incurred by the director and prohibits any indemnification if the
director was adjudged liable to the corporation. The statute also prohibits
indemnification of a director in connection with actions charging improper
personal benefit to the director if the director is adjudged liable on that
basis.
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<PAGE> 5
7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
8. EXHIBITS.
4.1 Jones Intercable, Inc. et al Profit Sharing/Retirement Plan
and Amendment thereto.
15 Letter from Arthur Andersen & Co., independent accountants for
the registrant, regarding unaudited interim financial
information.
23 Consent of Arthur Andersen & Co., independent accountants for
the registrant.
The Plan as previously amended was submitted by the Company to the
Internal Revenue Service ("IRS") in a timely manner and the Plan was
qualified. The Company will submit the Plan to the IRS, if it is
required to do so pursuant to the rules and regulations of the
Internal Revenue Code, the Plan, as amended, and the Company will make
all changes required by the IRS in order to continue the qualification
of the Plan.
9. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this registration statement 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 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 offering.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 and the annual report for the
Jones Intercable, Inc. et al Profit Sharing/Retirement Plan pursuant to Section
15(d) of the Securities Exchange Act of 1934 which are incorporated by
reference in the Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
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<PAGE> 6
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act 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 is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the 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.
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<PAGE> 7
SIGNATURES
Pursuant to the requirement 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
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Englewood, and the State of Colorado on March
21, 1994.
JONES INTERCABLE, INC.
By: /s/ GLENN R. JONES
Glenn R. Jones
Chairman of the Board and Chief
Dated: March 21, 1994 Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Elizabeth M. Steele or Robert S. Zinn,
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and his name, place and
stead, in any and all capacities, to sign any or all amendments to this
registration statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as full and to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
By: /s/ GLENN R. JONES
Glenn R. Jones
Chairman of the Board and Chief
Executive Officer
Dated: March 21, 1994 (Principal Executive Officer)
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<PAGE> 8
By: /s/ KEVIN P. COYLE
Kevin P. Coyle
Group Vice President/Finance
Dated: March 21, 1994 (Principal Financial Officer)
By: /s/ MICHAEL J. BARTOLEMENTI
Michael J. Bartolementi
Controller
Dated: March 21, 1994 (Principal Accounting Officer)
By: /s/ JAMES B. O'BRIEN
James B. O'Brien
Dated: March 21, 1994 President and Director
By: /s/ JAMES J. KREJCI
James J. Krejci
Dated: March 21, 1994 Group Vice President and
Director
By: /s/ RAYMOND L. VIGIL
Raymond L. Vigil
Dated: March 21, 1994 Group Vice President and
Director
By: /s/ PATRICK J. LOMBARDI
Patrick J. Lombardi
Dated: March 21, 1994 Director
By:
George J. Feltovich
Dated: Director
By:
Howard O. Thrall
Dated: Director
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<PAGE> 9
SIGNATURES
The Plan
Pursuant to the requirements of the Securities Act of 1933, the Jones
Intercable, Inc. et al Profit Sharing/Retirement Plan has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Englewood, State of Colorado, on March 21,
1994.
JONES INTERCABLE, INC. ET AL PROFIT
SHARING/RETIREMENT PLAN
By: Jones Intercable, Inc.,
Plan Administrator
By: /s/ GLENN R. JONES
Glenn R. Jones
Chairman of the Board and
Chief Executive Officer
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<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
No. Description Page No.
--- ----------- --------
<S> <C> <C>
4.1 Jones Intercable, Inc. et al Profit Sharing/Retirement 11
Plan and Amendment thereto.
15 Letter from Arthur Andersen & Co., independent 86
accountants for the Company, regarding unaudited
interim financial information.
23 Consent of Arthur Andersen & Co., independent 87
accountants for the registrant.
</TABLE>
<PAGE> 1
AMENDMENT TO
JONES INTERCABLE INC. ET AL PROFIT SHARING/RETIREMENT PLAN
WHEREAS, Jones Intercable, Inc. (hereinafter referred to as the "Employer")
established the Jones Intercable Inc. et al Profit Sharing/Retirement Plan
(hereinafter referred to as the "Plan") effective November 1, 1983 for the
benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Employer reserved the fight to amend the Plan under the terms
thereof; and
WHEREAS, the Employer now desires to amend the Plan and restate its provisions
to comply with the requirements of the Tax Reform Act of 1986 (TRA '86), the
Omnibus Budget Reconciliation Act of 1986 (OBRA '86), and the Unemployment
Compensation Amendment of 1992 (UCA '92) if applicable;
NOW THEREFORE, the Plan is hereby amended and restated in its entirety
effective January 1, 1989 except as follows
1. Effective for calendar years beginning on January 1, 1987, the
provisions regarding limits on Elective Deferral Contributions shall be
amended and governed by the terms of Article IV of the Plan attached
hereto.
2. Effective on the first day of the Plan Year beginning in 1987, the
provisions relating to the special nondiscrimination test for Elective
Deferral Contributions under Code section 401(k), as defined in Article I,
shall be amended and governed by the terms of the Plan attached hereto.
3. Effective on the first day of the Plan Year beginning in 1987, the
provisions relating to the special nondiscrimination test for Matching
Contributions and Employee Contributions under Code section 401 (m), as
defined in Article I, shall be amended and governed by the terms of the
Plan attached hereto.
4. Effective on the first day of the Plan Year beginning in 1987, the
provisions defining Highly Compensated Employee shall be amended and
governed by the terms of Article I of the Plan attached hereto.
5. Effective on the first day of the Plan Year beginning in 1987, the
provisions regarding loans shall be amended and governed by the terms of
Article X-A of the Plan attached hereto. However, prior to October 18,
1989, if a Participant's Vested Interest in his Participant's Account was
less than $20,000, the Participant was able to borrow up to the lesser of
$10,000 or his Vested Interest attributable to contributions which were
available for loans.
6. Effective on the first day of the Plan Year beginning in 1987, the
provisions regarding Limitations on Allocations shall be amended and
governed by the terms of Article V of the Plan attached hereto.
7. Effective on the first day of the Plan Year beginning in 1992, gap
period earnings associated with Excess Contributions shall not be
distributed.
8. Effective on the first day of the Plan Year beginning in 1992, gap
period earnings associated with Excess Aggregate Contributions shall not be
distributed.
9. Effective on the first day of the 1992 Plan Year, the provisions
relating to the determination of a financial need for a Serious Financial
Hardship shall be liberalized in accordance with the rules set forth in the
final 401(k) regulations.
<PAGE> 2
10. Effective on the first day of the 1992 Plan Year, the provisions
relating to the correction of excess Annual Additions shall be amended and
governed by the terms of Article V of the Plan attached hereto.
11. Effective January 1, 1993, the provisions relating to Direct
Rollovers shall be added to the Plan as governed by the terms of Article
VI-A of the Plan attached hereto.
12. The terms of the Plan as heretofore set forth shall no longer
apply with respect to Participants under the Plan who have not terminated
employment (including terminations on account of Retirement, death or
Disability); and the terms of the Plan with respect to such Participants
shall henceforth be as set forth in the Jones Intercable Inc. et al Profit
Sharing/Retirement Plan, a copy of which is attached to and forms a part
of this amendment.
13. The Plan and Trust as amended and restated, shall represent a
continuation of the prior Plan and Trust as heretofore set forth and shall
not abridge or curtail any rights accorded to Participants under said
prior instrument.
IN WITNESS WHEREOF, the Employer, the Administrator and the Trustee have
hereunto affixed their signatures.
Executed at ______________________ on________________________ ,19___
By _____________________________ Title _____________________________
Accepted this______________________________day of_____________, 19__
By _____________________________ Title _____________________________
Accepted this______________________________day of_____________, 19__
By _____________________________ Title _____________________________
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this
document. Prior to execution of this document, you should consult your attorney
on whether this document is appropriate for you.
<PAGE> 3
JONES INTERCABLE INC. ET AL PROFIT SHARING/RETIREMENT PLAN
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this
document. Prior to execution of this document, you should consult your attorney
on whether this document is appropriate for you.
<PAGE> 4
Table Of Contents
<TABLE>
<S> <C> <C>
ARTICLE I Definitions ..................................... 1
ARTICLE II Service ......................................... 15
ARTICLE III Eligibility, Enrollment and Participation ....... 17
ARTICLE IV Contributions ................................... 18
ARTICLE V Limitations on Allocations ...................... 29
ARTICLE VI Distribution of Benefits ........................ 35
ARTICLE VI-A Direct Rollovers ................................ 42
ARTICLE VII Retirement Benefits ............................. 44
ARTICLE VIII Joint and Survivor Annuity Requirements ......... 45
ARTICLE IX Termination of Employment ....................... 50
ARTICLE X Withdrawals ..................................... 51
ARTICLE X-A Loans .......................................... 54
ARTICLE XI Fiduciary Duties and Responsibilities ........... 56
ARTICLE XII The Administrator ............................... 57
ARTICLE XIII Participants' Rights ............................ 59
ARTICLE XIV Amendment or Termination of the Plan ............ 62
ARTICLE XV Substitution of Plans ........................... 64
ARTICLE XVI Miscellaneous ................................... 65
ARTICLE XVI-A Top-Heavy Provisions ............................ 67
</TABLE>
<PAGE> 5
ARTICLE I
DEFINITIONS
1.1 ACCRUED BENEFIT. The term Accrued Benefit means the value on any
applicable date of the Participant's Account.
1.2 ACTIVE PARTICIPANT. The term Active Participant means any
Participant who (a) performs duties as an Employee for the
Employer, and (b) is not an Inactive Participant.
1.3 ACTUAL CONTRIBUTION PERCENTAGE. The term Actual Contribution
Percentage means the average of the Actual Contribution Ratios of
a specified group computed to the nearest one-hundredth of one
percent.
1.4 ACTUAL CONTRIBUTION PERCENTAGE TEST.
(A) For each Plan Year, the Plan shall satisfy the
contribution percentage requirement described in
section 401(m)(2) of the Code and the regulations
thereunder, which are incorporated herein.
The Plan satisfies the Actual Contribution Percentage Test if:
(1) The Actual Contribution Percentage for the group of
eligible Highly Compensated Employees is not more than the
Actual Contribution Percentage for the group of all other
eligible Employees multiplied by 1.25; or
(2) The excess of the Actual Contribution Percentage for the
group of eligible Highly Compensated Employees over the Actual
Contribution Percentage for the group of all other eligible
Employees is not more than two percentage points, and the Actual
Contribution Percentage for the group of eligible Highly
Compensated Employees is not more than the Actual Contribution
Percentage for the group of all other eligible Employees
multiplied by two.
(B) Special Rules.
(1) Matching Contributions and Qualified Nonelective
Contributions will be considered for a Plan Year only if
allocated to the Employee's Account as of any date within the
Plan Year being tested and only if made before the last day of
the twelve month period immediately following the Plan Year to
which such contributions relate.
(2) A Matching Contribution that is forfeited to correct
Excess Aggregate Contributions, or because the contribution to
which it relates is treated as an Excess Contribution, Excess
Deferral, or Excess Aggregate Contribution, shall not be taken
into account for purposes of the Actual Contribution Percentage
Test.
(3) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Actual Contribution Percentage
Test, including records showing the extent to which Qualified
Nonelective Contributions and Elective Deferral Contributions
are taken into account.
1
<PAGE> 6
1.5 ACTUAL CONTRIBUTION RATIO.
(A) An Employee's Actual Contribution Ratio is the sum of the
Contribution Percentage Amounts allocated to the Employee's Account
for the Plan Year (including any amounts required to be taken into
account under subparagraphs (B) (1) and (B) (2) of this section)
divided by the Employee's Compensation for the Plan Year. If no
Matching Contributions, Qualified Nonelective Contributions, or
Elective Deferral Contributions are taken into account with respect
to an eligible Employee, the Actual Contribution Ratio of the
Employee is zero.
(B) Special Rules.
(1) In the event that this Plan is aggregated with one or more
plans for purposes of section 410(b) of the Code (other than for
purposes of the average benefit percentage test), or if one or
more other plans satisfy the requirements of section 410(b) of
the Code (other than the average benefit percentage test) only
if aggregated with this Plan, then this section shall be applied
by determining the Actual Contribution Ratios of Employees as if
all such plans were a single plan. Plans may be aggregated only
if they have the same Plan Year.
(2) The Actual Contribution Ratio of a Highly Compensated
Employee who is eligible to participate in more than one plan of
the Employer to which employee contributions or Matching
Contributions are made shall be calculated by treating all such
plans in which the Employee is eligible to participate as one
plan. For Plan Years beginning after December 31, 1988, if a
Highly Compensated Employee participates in two or more plans
that have different plan years, all plans ending with or within
the same calendar year shall be treated as a single plan.
However, plans that are not permitted to be aggregated under
Treasury Regulation section 1.401(m)-1(b)(3)(ii) shall not be
aggregated for purposes of this section.
(3) For purposes of determining the Actual Contribution Ratio of a
Participant who is a 5-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the Contribution
Percentage Amounts and Compensation of such Participant shall
include the Contribution Percentage Amounts (including any
amounts required to be taken into account under subparagraphs (B)
(1) and (B) (2) of this section) and Compensation for the Plan
Year of all Family Members.
If the Participant is required to be aggregated as a member of
more than one family group under the Plan, all eligible
Employees who are members of those family groups that include
that Employee are aggregated as one family group.
Family Members, with respect to Highly Compensated Employees,
shall be disregarded as separate Employees in determining the
Actual Contribution Ratio both for Participants who are
Nonhighly Compensated Employees and for Participants who are
Highly Compensated Employees.
(4) The determination and treatment of the Actual Contribution Ratio
amounts of any Participant shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
1.6 ACTUAL DEFERRAL PERCENTAGE. The term Actual Deferral Percentage
means the average of the Actual Deferral Ratios of a specified
group, computed to the nearest one-hundredth of one percent.
2
<PAGE> 7
1.7 ACTUAL DEFERRAL PERCENTAGE TEST.
(A) For each Plan Year, the Plan shall satisfy the Actual
Deferral Percentage Test described in section 401(k)(3) and the
regulations thereunder, which are herein incorporated by reference.
The Plan satisfies the Actual Deferral Percentage Test for a Plan
Year only if:
(1) The Actual Deferral Percentage for the group of eligible
Highly Compensated Employees is not more than the Actual
Deferral Percentage for the group of all other eligible
Employees multiplied by 1.25; or
(2) The excess of the Actual Deferral Percentage for the group
of eligible Highly Compensated Employees over the Actual
Deferral Percentage for the group of all other eligible
Employees is not more than two percentage points, and the Actual
Deferral Percentage for the group of eligible Highly Compensated
Employees is not more than the Actual Deferral Percentage for
the group of all other eligible Employees multiplied by two.
(B) Special Rules.
(1) For purposes of determining the Actual Deferral Percentage
Test, Elective Deferral Contributions, Qualified Nonelective
Contributions, and Qualified Matching Contributions must be
allocated to the Employee's Account as of a date within the Plan
Year being tested and must be made before the last day of the
twelve-month period immediately following the Plan Year to which
such contributions relate.
(2) The Excess Deferrals of a Highly Compensated Employee
shall be taken into account for purposes of the Actual Deferral
Percentage Test. Conversely, the Excess Deferrals of an Employee
who is a Nonhighly Compensated Employee shall not be taken into
account for purposes of the Actual Deferral Percentage Test.
(3) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Actual Deferral Percentage Test,
including the extent to which Qualified Nonelective
Contributions and Qualified Matching Contributions are taken
into account.
1.8 ACTUAL DEFERRAL RATIO.
(A) An Employee's Actual Deferral Ratio for the Plan Year is the sum of
the Employee's Deferral Percentage Amounts allocated to
the Employee's Account for the Plan Year (including any amounts
required to be taken into account under subparagraphs (B) (1) and
(B) (2) of this section), divided by the Employee's Compensation
taken into account for the Plan Year. If an eligible Employee makes
no Elective Deferral Contributions, and no Qualified Matching
Contributions or Qualified Nonelective Contributions are taken into
account with respect to the Employee, the Actual Deferral Ratio of
the Employee is zero.
(B) Special Rules.
(1) In the event that this Plan is aggregated with
one or more plans for purposes of section 410(b) of the Code
(other than for purposes of the average benefit percentage
test), or if one or more other plans satisfy the
requirements of section 410(b) of the Code (other than the
average benefit percentage test) only if aggregated with
this Plan, then this section shall be applied by determining
the Actual Deferral Ratio of Employees as if all such plans
3
<PAGE> 8
were a single plan. Plans may be aggregated only if they have
the same Plan Year.
(2) The Actual Deferral Ratio of a Highly Compensated
Employee who is eligible to participate in more than one
cash or deferred arrangement (as described in section 401
(k) of the Code) of the same Employer shall be calculated by
treating all the cash or deferred arrangements in which the
Employee is eligible to participate as one arrangement. If
the cash or deferred arrangements that are treated as a
single arrangement under the preceding sentence are parts of
plans that have different Plan Years, the cash or deferred
arrangements are treated as a single arrangement with
respect to the Plan Years ending with or within the same
calendar year. However, plans that are not permitted to be
aggregated under Treasury Regulation section
1.401(k)-1(b)(3)(ii)(B) are not aggregated for purposes of
this section.
(3) For purposes of determining the Actual Deferral Ratio of a
Participant who is a 5 percent owner or one of the 10 most
Highly Compensated Employees, the Deferral Percentage Amounts
and Compensation of such Participant shall include the
Deferral Percentage Amounts (including any amounts required to
be taken into account under subparagraphs (B) (1) and (B) (2)
of this section) and Compensation for the Plan Year of Family
Members.
If an Employee is required to be aggregated as a member
of more than one family group under the Plan, all eligible
Employees who are members of those family groups that include
that Employee are aggregated as one family group.
Family Members, with respect to such Highly Compensated
Employees, shall be disregarded as separate Employees in
determining the Actual Deferral Percentage both for
Participants who are Non-highly Compensated Employees and for
Participants who are Highly Compensated Employees.
(4) The determination and treatment of the Actual Deferral Ratio
amounts of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
1.9 ANNUITY. The term Annuity means a series of payments made over a
specified period of time which, for a fixed annuity are, of
equal, specified amounts, and for a variable annuity increase or
decrease to reflect changes in investment performance of the
underlying portfolio.
1.10 ANNUITY STARTING DATE. The term Annuity Starting Date means the
first day of the first period for which an amount is payable as
an Annuity. In the case of a benefit not payable in the form of
an Annuity, the term Annuity Starting Date means the first day on
which all events have occurred which entitle the Participant to
such benefit.
1.11 BENEFICIARY. The Participant's Spouse is the designated
Beneficiary of the Participant's entire Vested Interest.
However, each Participant shall have the fight to designate
another Beneficiary and to specify the form of death benefit the
Beneficiary is to receive, subject to the requirements of the
"Qualified Election" provisions of Article VIII, Joint and
Survivor Annuity Requirements. The Participant may change the
Beneficiary Annuity at any time, subject to the requirements of
the "Qualified Election" provisions of Article VIII, Joint and
Survivor Annuity Requirements.
If any distribution hereunder is made to a Beneficiary in the form of an
Annuity, and if such Annuity provides for a death benefit, then such
Beneficiary shall also have the fight to designate a Beneficiary and
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to change that Beneficiary from time to time. As an alternative to
receiving the benefit in the form of an Annuity, the Beneficiary may
elect to receive a single cash payment or any other form of payment
provided for in the Plan.
If a Beneficiary has not been designated, or if a Beneficiary
designation or change of Beneficiary designation does not meet the
requirements of the "Qualified Election" provisions of Article VIII,
Joint and Survivor Annuity Requirements, (including any designation made
prior to August 23, 1984 by a married Participant who has an Hour of
Service on or after August 23, 1984), or if no designated Beneficiary
survives the Participant, the Participant's entire Vested Interest shall
be distributed to the Participant's Spouse, if living; otherwise in equal
shares to any surviving children of the Participant. In the event none of
the above named individuals survives the Participant, the Participant's
entire Vested Interest shall be paid to the executor or administrator of
the Participant's estate.
1.12 BOARD OF DIRECTORS. The term Board of Directors means the
Employer's board of directors or other comparable governing body.
1.13 CODE. The term Code means the Internal Revenue Code of
1986, as amended from time to time.
1.14 COMPENSATION
(A) Except as otherwise provided in the Plan, the term Compensation
means wages within the meaning of section 3401(a) of the Code for
the purposes of income tax withholding at the source but
determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of
the employment or the services performed (such as the exception
for agricultural labor in section 3401(a)(2) of the Code).
Notwithstanding the foregoing, Compensation shall be reduced by
all of the following items (even if includible in gross income):
reimbursements or other expense allowances, fringe benefits (cash
and noncash), moving expenses, deferred compensation, and welfare
benefits.
(B) Compensation shall include only that Compensation which is
actually paid to the Participant during the determination period.
Except as provided elsewhere in the Plan, the determination
period shall be the Plan Year. However, for the Plan Year in
which an Employee begins participation in the Plan and the Plan
Year in which an Employee ends participation in the Plan, the
determination period is the portion of the Plan Year during which
the Employee is a Participant in the Plan.
(C) Compensation shall not include any amount which is contributed by
the Employer pursuant to a salary reduction agreement and which
is not includible in the gross income of the employee under
sections 125, 402(e)(3), 402(h), or 403(b) of the Code;
Compensation deferred under an eligible deferred compensation
plan within the meaning of section 457(d) of the Code; and
employee contributions described in section 414(h)(2) of the Code
that are picked up by the employing unit and, thus, are treated
as employer contributions.
(D) The annual Compensation of each Participant taken into account
for determining all benefits provided under the Plan for any
determination period shall not exceed $200,000. This limitation
shall be adjusted by the Secretary of the Treasury at the time
and in the same manner as under section 415(d) of the Code,
except that the dollar increase in effect on January 1 of any
calendar year is effective for determination periods beginning in
such calendar year and the first adjustment to the $200,000
limitation is effected on January 1, 1990. If the period for
determining Compensation used in calculating an Employee's
allocation for a determination period is a short Plan Year (i.e.,
shorter than 12 months), the annual Compensation limit is an
amount equal to the
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otherwise applicable annual Compensation limit multiplied by a
fraction, the numerator of which is the number of months in the
short Plan Year, and the denominator of which is 12.
In determining the Compensation of a Participant for purposes
of this limitation, the rules of section 414(q)(6) of the Code shall
apply, except in applying such rules, the term "family" shall
include only the Spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19 before
the close of the year. If, as a result of the application of such
rules, the adjusted $200,000 limitation is exceeded, then either the
limitation shall be prorated among the affected individuals in
proportion to each such individual's Compensation as determined
under this section prior to the application of this limitation, or
the limitation shall be allocated among the affected individuals in
an objective and nondiscriminatory manner based on a reasonable,
good faith interpretation of section 401(a)(17) of the Code. The
method chosen in the preceding sentence shall be uniformly applied
to all affected individuals in a Plan Year and shall be applied
consistently from year to year.
If Compensation for any prior determination period is taken
into account in determining an Employee's allocations or benefits
for the current determination period, the Compensation for such
prior determination period is subject to the applicable annual
Compensation limit in effect for that prior year. For this purpose,
for years beginning before January 1, 1990, the applicable annual
Compensation limit is $200,000.
(E) In addition to other applicable limitations set forth in
the Plan, and notwithstanding any other provision of the Plan to the
contrary, for Plan Years beginning on or after January 1, 1994, the
annual Compensation of each Employee taken into account under the
Plan shall not exceed the OBRA '93 annual Compensation limit. The
OBRA '93 annual Compensation limit is $150,000, as adjusted by the
Commissioner for increases in the cost of living in accordance with
section 401(a)(17)(B) of the Code. The cost-of-living adjustment in
effect for a calendar year applies to any period, not exceeding 12
months, over which Compensation is determined (determination period)
beginning in such calendar year. If a determination period consists
of fewer than 12 months, the OBRA '93 annual Compensation limit will
be multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which is
12. For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under section 401 (a)(17)
of the Code shall mean the OBRA '93 annual Compensation limit set
forth in this provision. If Compensation for any prior determination
period is taken into account in determining an employee's benefits
accruing in the current Plan Year, the Compensation for that prior
determination period is subject to the OBRA '93 annual Compensation
limit in effect for that prior determination period. For this
purpose, for determination periods beginning before the first day of
the first Plan Year beginning on or after January 1, 1994, the OBRA
'93 annual Compensation limit is $150,000.
1.15 CONSIDERED NET PROFITS. The term Considered Net Profits means the
entire amount of the accumulated or current operating profits
(excluding capital gains from the sale or involuntary conversion
of capital or business assets) of the Employer after all expenses
and charges other than (i) the contributions made by the Employer
to the Plan, and (ii) federal or state or local taxes based upon
or measured by income, as determined by the Employer, either on an
estimated basis or a final basis, in accordance with the generally
accepted accounting principles used by the Employer. When the
amount of Considered Net Profits has been determined by the
Employer, and the contributions are made by the Employer on the
basis of such determination, for any Plan Year, such determination
and contribution shall be final and conclusive and shall not be
subject to change because of any adjustments in income or expense
which may be required by the Internal Revenue Service or
otherwise. Such determination and contribution shall not be open
to question by any Participant either before or after the
contributions by the Employer have been made.
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1.16 CONTRIBUTION PERCENTAGE AMOUNTS. The term Contribution Percentage Amounts
means the sum of the Matching Contributions and Qualified Matching
Contributions (to the extent not taken into account for purposes of the
Actual Deferral Percentage Test) made under the Plan on behalf of the
Employee for the Plan Year. The term Contribution Percentage Amounts
also includes Qualified Nonelective Contributions and Elective Deferral
Contributions treated as Matching Contributions and taken into account in
determining the Employee's Actual Contribution Ratio for the Plan Year.
1.17 CONTRIBUTION PERIOD. The term Contribution Period means that regular
period specified by the Employer in Article IV for which contributions
shall be made.
1.18 DEFERRAL PERCENTAGE AMOUNTS. The term Deferral Percentage Amounts means
an Employee's Elective Deferral Contributions for the Plan Year. The term
Deferral Percentage Amounts also includes Qualified Nonelective
Contributions and Qualified Matching Contributions treated as Elective
Deferral Contributions and taken into account in determining the
Employee's Actual Deferral Ratio for the Plan Year.
1.19 DISABILITY. The term Disability means a Participant's incapacity to
engage in any substantial gainful activity because of a medically
determinable physical or mental impairment which can be expected to
result in death, or to be of long, continued and indefinite duration.
Such determination of Disability shall be made by the Administrator with
the advice of competent medical authority. All Participants in similar
circumstances will be treated alike.
1.20 DISABILITY RETIREMENT DATE. The term Disability Retirement Date means the
first day of the month after the Plan Administrator has determined that a
Participant's incapacity is a Disability.
1.21 EFFECTIVE DATE. The term Effective Date means January 1, 1989.
1.22 ELECTIVE DEFERRAL CONTRIBUTION. The term Elective Deferral Contribution
means any Employer Contribution made to the Plan at the election of the
Participant, in lieu of cash compensation, and includes contributions
made pursuant to a Salary Deferral Agreement or other deferral mechanism.
Solely for purposes of the dollar limitation specified in section
402(g) of the Code, with respect to any taxable year, a Participant's
Elective Deferral Contributions are the sum of all employer contributions
made on behalf of such Participant pursuant to an election to defer under
any qualified cash or deferred arrangement as described in section 401(k)
of the Code, any simplified employee pension cash or deferred arrangement
described in section 402(h)(1)(B) of the Code, any plan as described
under section 501 (c)(18) of the Code, and any employer contributions
made on behalf of a Participant for the purchase of a tax sheltered
annuity contract under section 403(b) of the Code pursuant to a salary
reduction agreement.
The term Elective Deferral Contribution shall not include any deferrals
properly distributed as excess annual additions.
1.23 EMPLOYEE. The term Employee means an individual who performs services for
the Employer and who is either a common law employee of the Employer or a
self-employed individual/owner employee treated as an Employee pursuant
to Code section 401 (c)(1). The term Employee also includes a Leased
Employee who is treated as an Employee of the Employer-recipient pursuant
to the provisions of Code section 414(n) or 414(o). For purposes of
determining the Highly Compensated Employees, the Employer may elect, on
a reasonable and consistent basis, to treat such Leased Employees covered
by a plan described in Code section 414(n)(5) as Employees.
1.24 EMPLOYEE CONTRIBUTIONS. The term Employee Contributions means any
contributions to the Plan
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or any other plan that are designated or treated at the time of
contribution as after-tax Employee Contributions and are allocated to a
separate account to which the attributable earnings and losses are
allocated. Such term includes Employee Contributions applied to the
purchase of life insurance policies.
Such term does not include repayment of loans or employee contributions
transferred to this Plan.
1.25 EMPLOYER. The term Employer means Jones Intercable, Inc. and any
successor organization to such Employer which elects to continue the
Plan. In the case of a group of employers which constitutes a controlled
group of corporations (as defined in Code section 414(b)), or which
constitutes trades or businesses (whether or not incorporated) which are
under common control (as defined in Code section 414(c)), or which
constitutes an affiliated service group (as defined in Code section
414(m)), all such employers shall be considered a single employer for
purposes of participation, vesting, Top-Heavy provisions and
determination of Highly Compensated Employees.
1.26 EMPLOYER CONTRIBUTION. The term Employer Contribution means any
contribution made to the Plan by the Employer on behalf of a Participant,
other than a Rollover Contribution or a mandatory or voluntary
contribution made to the Plan by the Employee that is treated at the time
of contribution as an after-tax employee contribution.
1.27 ENTRY DATE. The term Entry Date means either the Effective Date
or the January 1 or July 1 thereafter when an Employee who has fulfilled
the eligibility requirements commences participation in the Plan.
Any Employee who has satisfied the maximum eligibility requirements
permissible under ERISA, shall be eligible to commence participation in
this Plan no later than the earlier of (A) or (B) below, as applicable,
provided that the Employee has not separated from the Service of the
Employer:
(A) The first day of the first Plan Year beginning after the date on
which the Employee satisfied such requirements; or
(B) The date six months after the date on which the Employee satisfied
such requirements.
If an Employee is not in the active Service of the Employer as of his
initial Entry Date, his subsequent Entry Date shall be the date he
returns to the active Service of the Employer, provided he still meets
the eligibility requirements. If an Employee does not enroll as a
Participant as of his initial Entry Date, his subsequent Entry Date shall
be the applicable Entry Date as specified above when the Employee
actually enrolls as a Participant.
1.28 ERISA. The term ERISA means the Employee Retirement Income
Security Act of 1974 (PL 93-406) as it may be amended from time to time,
and any regulations issued pursuant thereto as such Act and such
regulations affect this Plan and Trust.
1.29 EXCESS AGGREGATE CONTRIBUTIONS.
(A) The term Excess Aggregate Contributions means, with respect to any
Plan Year, the excess of the aggregate amount of the Contribution
Percentage Amounts actually made on behalf of Highly Compensated
Employees for the Plan Year (including any amounts required to be
taken into account under subparagraphs (B) (1) and (B) (2) of Section
1.5 of the Plan), over the maximum amount of contributions permitted
under the Actual Contribution Percentage Test. The amount of Excess
Aggregate Contributions for each Highly Compensated Employee is
determined by using the method described in paragraph (B) of this
section.
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(B) The amount of Excess Aggregate Contributions for a Highly
Compensated Employee for a Plan Year is the amount (if any) by which
the Employee's Matching Contributions must be reduced for the
Employee's Actual Contribution Ratio to equal the highest permitted
Actual Contribution Ratio under the Plan.
To calculate the highest permitted Actual Contribution Ratio
under the Plan, the Actual Contribution Ratio of the Highly
Compensated Employee with the highest Actual Contribution Ratio is
reduced by the amount required to cause the Employee's Actual
Contribution Ratio to equal the ratio of the Highly Compensated
Employee with the next highest Actual Contribution Ratio. If a
lesser reduction would enable the Plan to satisfy the Actual
Contribution Percentage Test, only this lesser reduction may be
made. This process shall be repeated until the Plan satisfies the
Actual Contribution Percentage Test. The highest Actual
Contribution Percentage Ratio remaining under the Plan after
leveling is the highest permitted Actual Contribution Ratio.
For each Highly Compensated Employee, the amount of Excess
Aggregate Contributions for a Plan Year is equal to the total
Contribution Percentage Amounts (including any amounts required to
be taken into account under subparagraphs (B) (1) and (B) (2) of
Section 1.5 of the Plan), minus the amount determined by multiplying
the Employees's highest permitted Actual Contribution Ratio
(determined after application of this section) by the compensation
used in determining the ratio.
1.30 EXCESS CONTRIBUTION.
(A) The term Excess Contribution means, with respect to a Plan
Year, the excess of Deferral Percentage Amounts made on behalf of
eligible Highly Compensated Employees for the Plan Year (including
any amounts required to be taken into account under subparagraphs
(B) (1) and (B) (2) of Section 1.8 of the Plan) over the maximum
amount of such contributions permitted under the Actual Deferral
Percentage Test for the Plan Year. The amount of Excess
Contributions for each Highly Compensated Employee is determined by
using the method described in paragraph (B) of this section.
(B) The amount of Excess Contributions for a Highly Compensated
Employee for a Plan Year is the amount (if any) by which the
Employee's Elective Deferral Contributions must be reduced for the
Employee's Actual Deferral Ratio to equal the highest permitted
Actual Deferral Ratio under the Plan.
To calculate the highest permitted Actual Deferral Ratio under
the Plan, the Actual Deferral Ratio of the Highly Compensated
Employee with the highest Actual Deferral Ratio is reduced by the
amount required to cause the Employee's Actual Deferral Ratio to
equal the ratio of the Highly Compensated Employee with the next
highest Actual Deferral Ratio. If a lesser reduction would enable
the arrangement to satisfy the Actual Deferral Percentage Test, only
this lesser reduction shall be made. This process shall be repeated
until the cash or deferred arrangement satisfies the Actual Deferral
Percentage Test. The highest Actual Deferral Ratio remaining under
the Plan after leveling is the highest permitted Actual Deferral
Ratio.
1.31 EXCESS DEFERRALS. The term Excess Deferrals means those Elective
Deferral Contributions that are includible in a Participant's gross
income under section 402(g) of the Code to the extent such Participant's
Elective Deferral Contributions for a taxable year exceed the dollar
limitation under such Code section.
1.32 FAIL-SAFE CONTRIBUTION. The term Fail-Safe Contribution means a
Nonelective Contribution, designated by the Employer at the time of
contribution as a Qualified Nonelective Contribution, which is
contributed to the Plan solely for the purposes of satisfying either the
Actual Deferral Percentage Test or
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the Actual Contribution Percentage Test and is made in accordance with
the provisions of Article IV of this Plan.
1.33 FAMILY MEMBER. The term Family Member means, with respect to any
Employee, such Employee's Spouse and lineal ascendants and descendants
and the spouses of such lineal ascendants and descendants.
1.34 FIDUCIARY. The term Fiduciary means any, or all, of the following, as
applicable:
(A) Any Person who exercises any discretionary authority or control
respecting the management of the Plan or its assets; or
(B) Any Person who renders investment advice for a fee or other
compensation, direct or indirect, respecting any monies or other
property of the Plan or has authority or responsibility to do so;
or
(C) Any Person who has discretionary authority or responsibility in
the administration of the Plan; or
(D) Any Person who has been designated by a Named Fiduciary pursuant
to authority granted by the Plan, who acts to carry out a
fiduciary responsibility, subject to any exceptions granted
directly or indirectly by ERISA.
1.35 HIGHLY COMPENSATED EMPLOYEE. The term Highly Compensated Employee
means any Highly Compensated Active Employee or Highly Compensated Former
Employee as further defined herein.
For purposes of the determination of Highly Compensated Employees, the
term Compensation means Compensation as defined in Article V of the Plan,
but includes the amount of any elective contributions made by the
Employer on the Employee's behalf to a cafeteria plan established in
accordance with the provisions of Code section 125, a qualified cash or
deferred arrangement in accordance with the provisions of Code section
402(e)(3), a simplified employee pension plan in accordance with the
provisions of Code section 402(h), or a tax sheltered annuity plan
maintained in accordance with the provisions of Code section 403(b).
A "Highly Compensated Active Employee" is any Employee who performs
services for the Employer during the current Plan Year and who, during
the current Plan Year or the 12-month period immediately preceding such
Plan Year:
(A) Owns (or is considered to own within the meaning of section 318 of
the Code, as modified by section 416(i)(1)(B)(iii) of the Code),
more than 5% of the outstanding stock of the Employer or stock
possessing more than 5% of the total combined voting power of all
stock of the Employer, or, if the Employer is other than a
corporation, owns more than 5% of the capital or profits interest in
the Employer. The determination of 5% ownership shall be made
separately for each member of a controlled group of corporations (as
defined in Code section 414(b)), or of a group of trades or
businesses (whether or not incorporated) that are under common
control (as defined in Code section 414(c)), or of an affiliated
service group (as defined in Code section 414(m)); or
(B) Receives Compensation in excess of $75,000 multiplied by the
applicable cost-of-living adjustment factor prescribed under Code
section 415(d) and then prorated in the case of a short Plan Year; or
(C) Receives Compensation in excess of $50,000, as adjusted for
cost-of-living increases in accordance with Code section 415(d) and
then prorated in the case of a short Plan Year, and is in the top
20% of Employees ranked by Compensation; or
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(D) Is, at any time, an officer of the Employer and receives
Compensation in excess of 50% of the amount in effect under Code
section 415(b)(1)(A) for the applicable period.
If no officer receives Compensation in excess of the amount
specified above, the highest paid officer for the applicable period
shall be a Highly Compensated Employee.
In no event if there are more than 500 Employees, shall more
than 50 Employees or, if there are less than 500 Employees, shall
the greater of three Employees or 10% of all Employees, be taken
into account as officers.
In determining both the top 20% of Employees ranked by Compensation for
purposes of paragraph (C) above, and officers of the Employer for
purposes of paragraph (D) above, Employees who have not completed six
months of Service by the end of the applicable period, Employees who
normally work less than 17-1/2 hours per week, Employees who normally
work less than six months during a year, Employees who have not attained
21, and nonresident aliens who receive no earned income from U.S. sources
shall be excluded.
Also excluded under the above paragraph are Employees who are covered
by an agreement which the Secretary of Labor finds to be a collective
bargaining agreement. Such Employees will be excluded only if retirement
benefits were the subject of good faith bargaining, 90% of the Employees
of the Employer are covered by the agreement, and the Plan covers only
Employees who are not covered by the agreement.
Notwithstanding the above provisions, an Employee, other than a 5%
owner as described in paragraph (a) above who was not highly compensated
during the 12-month period immediately preceding the current Plan Year
will not be considered to be a Highly Compensated Employee in the current
Plan Year unless such Employee is one of the top 100 Employees ranked by
Compensation for the current Plan Year.
A "Highly Compensated Former Employee" is any former Employee who
separated from Service with the Employer in a Plan Year preceding the
current Plan Year and was a Highly Compensated Active Employee in either:
(A) the Plan Year in which his separation from Service occurred; or
(B) any Plan Year ending on or after such former Employee's 55th
birthday.
A former Employee is an Employee who performs no services for the
Employer during a Plan Year (for example, by reason of a leave of
absence).
1.36 INACTIVE PARTICIPANT. The term Inactive Participant means any
Participant who does not currently meet the requirements to be an Active
Participant due to a suspension of the performance of duties for the
Employer.
In addition, a Participant who ceases to meet the eligibility
requirements in accordance with Section 3.1 shall be considered an
Inactive Participant.
1.37 INSTALLMENT REFUND ANNUITY. The term Installment Refund Annuity
means an annuity which provides fixed monthly payments for a period
certain of not less than three nor more than 15 years. If the Participant
dies before the period certain expires, the annuity will be paid to the
Participant's Beneficiary for the remainder of the period certain. The
period certain shall be chosen by the Participant at the time the annuity
is purchased, and the Installment Refund Annuity will be the amount of
benefit which can be purchased with the Participant's Vested Interest.
The Installment Refund Annuity is not a life annuity and
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in no event shall the period certain extend to a period which equals or
exceeds the life expectancy of the Participant.
1.38 JOINT AND SURVIVOR ANNUITY. The term Joint and Survivor Annuity
means an Annuity for the life of the Participant with a survivor Annuity
for the life of the Participant's Spouse which is not less than one-half,
nor greater than, the amount of the Annuity payable during the joint
lives of the Participant and the Participant's Spouse. The Joint and
Survivor Annuity will be the amount of benefit which can be purchased
with the Participant's vested account balance. In the case of an
unmarried Participant, Joint and Survivor Annuity means an Annuity
payable over the Participant's life.
1.39 LATE RETIREMENT DATE. The term Late Retirement Date means the
first day of the month coinciding with or next following the date a
Participant is separated from Service with the Employer after his Normal
Retirement Age, for any reason other than death.
1.40 LEASED EMPLOYEE. 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 Employer and related
persons determined in accordance with Code section 414(n)(6)) on a
substantially full-time basis for a period of at least one year, and such
services are of a type historically performed by employees in the
business field of the recipient Employer.
1.41 MATCHING CONTRIBUTIONS. The term Matching Contributions means
contributions made by the Employer to the Plan on behalf of a Participant
on account of either Elective Deferral Contributions, if any, Employee
Contributions, if any, or required contributions, if any.
1.42 NAMED FIDUCIARY. The term Named Fiduciary means the Plan
Administrator, the Trustee and any other Fiduciary designated in writing
by the Employer, and any successor thereto.
1.43 NONHIGHLY COMPENSATED EMPLOYEE. The term Nonhighly Compensated
Employee means an Employee who is not a Highly Compensated Employee.
1.44 NONELECTIVE CONTRIBUTIONS. The term Nonelective Contributions
means contributions made by the Employer (other than Matching
Contributions) that the Participant may not elect to have paid in cash or
other benefits instead of being contributed to the Plan.
1.45 NORMAL RETIREMENT AGE. The term Normal Retirement Age means the
date the Participant attains age 65.
1.46 NORMAL RETIREMENT DATE. The term Normal Retirement Date means the
first day of the month coinciding with or next following the date a
Participant attains his Normal Retirement Age.
1.47 PARTICIPANT. The term Participant means any Employee of the
Employer, who is or becomes eligible to participate under this Plan in
accordance with its provisions and shall include an Active Participant
and an Inactive Participant.
1.48 PARTICIPANT'S ACCOUNT. The term Participant's Account means the
sum of the following sub-accounts held on behalf of each Participant:
. Elective Deferral Contributions, if any, and earnings thereon.
. Matching Contributions, if any, and earnings thereon.
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. Qualified Matching Contributions, if any, and earnings thereon.
. Qualified Nonelective Contributions, if any, and earnings thereon.
. Rollover Contributions, if any, and earnings thereon.
A Participant's Account shall be invested in accordance with the rules
established by the Plan Administrator, which shall be applied in a
consistent and nondiscriminatory manner.
1.48A PARTICIPANT'S EMPLOYER STOCK ACCOUNT. The term Participant's
Employer Stock Account means that portion, if any, of the Participant's
Account which is invested in shares of the Employer's stock. Such
Participant's Employer Stock Account shall be credited with dividends
paid, if any. Such Participant's Employer Stock Account will be valued
on the last day of each month that the public exchange over which the
Employer's stock is traded is open for unrestricted trading.
Amounts which are to be invested in the Participant's Employer Stock
Account may be invested in any short term account prior to actual
investment in the Participant's Employer Stock Account.
The Trustee under direction of the Employer will vote the shares of the
Employer's stock invested in the Participant's Employer Stock Account.
The Trustee may request voting instructions from the Participants,
provided this is done in a consistent and nondiscriminatory manner.
1.49 PERSON. The term Person means any natural person, partnership,
corporation, trust or estate.
1.50 PLAN. The term Plan means Jones Intercable Inc. et al Profit
Sharing/Retirement Plan, the terms of which are set forth herein as it
may be amended from time to time.
1.51 PLAN ADMINISTRATOR. The terms Plan Administrator and Administrator are
used interchangeably throughout the Plan and shall mean the Employer.
1.52 PLAN YEAR. The term Plan Year means the 12-month period commencing on
January 1 and ending on the following December 31.
1.53 QUALIFIED MATCHING CONTRIBUTIONS. The term Qualified Matching
Contributions shall mean Matching Contributions which are subject to the
distribution and nonforfeitability requirements under section 401(k) of
the Code when made.
1.54 QUALIFIED NONELECTIVE CONTRIBUTIONS. The term Qualified Nonelective
Contributions shall mean Nonelective Contributions which are subject to
the distribution and nonforfeitability requirements under section 401(k)
of the Code when made.
1.55 ROLLOVER CONTRIBUTION. The term Rollover Contribution means an amount
representing all or part of a distribution from a pension or
profit-sharing plan meeting the requirements of Code section 401(a) that
is eligible for rollover to this Plan in accordance with the requirements
set forth in Code section 402 or Code section 408(d)(3), whichever is
applicable.
1.56 SALARY DEFERRAL AGREEMENT. The term Salary Deferral Agreement
means an agreement between a Participant and the Employer to defer the
Participant's Compensation for the purpose of making Elective Deferral
Contributions to the Plan.
1.57 TERMINATION OF EMPLOYMENT. The term Termination of Employment means a
severance of the
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Employer-Employee relationship which occurs prior to a Participant's
Normal Retirement Age for any reason other than Disability or death.
1.58 TRUST. The term Trust means the trust agreement entered into by the
Employer, the Administrator and the Trustee.
1.59 TRUSTEE. The term Trustee means one or more persons collectively
appointed and acting under the trust agreement, and any successor thereto.
1.60 VESTED INTEREST. The term Vested Interest on any date means the
nonforfeitable fight to an immediate or deferred benefit in the amount
which is equal to the value on that date of the Participant's Account.
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ARTICLE II
SERVICE
2.1 SERVICE. The term Service means active employment with the
Employer as an Employee. For purposes of determining Service, employment
with any company which is under common control with the Employer as
specified in section 414 of the Internal Revenue Code shall be treated as
employment with the Employer.
2.2 ABSENCE FROM EMPLOYMENT. Absence from employment on account of a
leave of absence authorized by the Employer pursuant to the Employer's
established leave policy will be counted as employment with the Employer
provided that such leave of absence is of not more than two years'
duration. Absence from employment on account of active duty with the Armed
Forces of the United States will be counted as employment with the
Employer. If the Employee does not return to active employment with the
Employer, his Service will be deemed to have ceased on the date the
Administrator receives notice that such Employee will not return to the
active Service of the Employer. The Employer's leave policy shall be
applied in a uniform and nondiscriminatory manner to all Participants
under similar circumstances.
FOR PURPOSES OF ELIGIBILITY, THE FOLLOWING PROVISIONS SHALL APPLY:
2.3 HOUR OF SERVICE. The term Hour of Service means a period of
Service during which an Employee shall be credited with one Hour of
Service as described in (A), (B), (C), and (D) below:
(A) Each hour for which an Employee is directly or indirectly
paid, or entitled to payment, by the Employer for the performance of
duties. These hours shall be credited to the Employee for the
computation period or periods in which the duties are performed; and
(B) Each hour for which an Employee is directly or indirectly
paid, or entitled to payment, by the Employer for reasons (such as
vacation, sickness or Disability) other than for the performance of
duties. Hours under this Subsection shall be calculated and credited
pursuant to section 2530.200b-2 of the Department of Labor
Regulations which are incorporated herein by this reference; and
(C) Each hour for which back pay, irrespective of mitigation
of damages, has been either awarded or agreed to by the Employer.
These hours shall be credited to the Employee 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 is on an authorized unpaid
leave (such as service with the Armed Forces, jury duty, educational
leave). These hours shall be credited to the Employee for the
computation period or periods in which such authorized leave takes
place. However, no more than 501 hours shall be credited under this
subparagraph (D).
Hours of Service will be credited for employment with other members of
an affiliated service group (under Internal Revenue Code section 414(m)),
a controlled group of corporations (under Internal Revenue Code section
414(b)), or a group of trades or businesses under common control (under
Internal Revenue Code section 414(c)), of which the adopting employer is a
member. Hours of Service will also be credited for any individual
considered an Employee under Internal Revenue Code section 414(n).
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Solely for purposes of determining whether a One-Year Break in Service,
as defined in Section 2.4, for participation and vesting purposes has
occurred in a computation period, an individual who is absent from work
for maternity or paternity reasons shall receive credit for the Hours of
Service which would otherwise have been credited to such individual but
for such absence, or in any case in which such hours cannot be determined,
eight Hours of Service per day of such absence. For purposes of this
paragraph, an absence from work for maternity or paternity reasons means
an absence (1) by reason of the pregnancy of the individual, (2) by
reason of a 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 such individual, or (4) for purposes of caring for such
child for a period beginning immediately following such birth or
placement. The Hours of Service credited under this paragraph shall be
credited (1) in the computation period in which the absence begins if the
crediting is necessary to prevent a Break in Service in that period, or
(2) in all other cases, in the following computation period.
2.4 ONE-YEAR BREAK IN SERVICE. Except as provided below regarding
eligibility, the term One-Year Break in Service means any Plan Year during
which an Employee fails to complete more than 500 Hours of Service.
2.5 YEAR(S) OF SERVICE. The term Year(s) of Service means a
12-consecutive-month period during which an Employee has completed at
least 1,000 Hours of Service.
For purposes of determining Years of Service and Breaks in Service for
eligibility, the twelve-consecutive-month period shall begin with the date
on which an Employee's employment commenced and, where additional periods
are necessary, on succeeding anniversaries of his employment commencement
date. The employment commencement date is the date on which the Employee
first performs an Hour of Service for the Employer maintaining the Plan.
The eligibility requirement specified in Article III is one or more
full Years of Service. Such requirement shall be met upon completion of at
least 1,000 Hours of Service for each Year of Service specified.
2.6 PREDECESSOR ORGANIZATION SERVICE. For purposes of this Article,
Service with a predecessor organization of the Employer shall be treated
as Service with the Employer in any case in which the Employer maintains
the Plan of such predecessor organization.
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ARTICLE III
ELIGIBILITY, ENROLLMENT AND PARTICIPATION
3.1 ELIGIBILITY. Each Employee who was a Participant prior to the
Effective Date and who is in the Service of the Employer on the Effective
Date shall continue as a Participant in the Plan. Each other Employee,
including a Leased Employee, shall be eligible to become a Participant as
of the Entry Date when he first meets the following requirement(s):
. One Year of Service
. Not in a unit of Employees covered by an agreement which the
Secretary of Labor finds to be a collective bargaining agreement
between Employee representatives and the Employer, unless the
collective bargaining agreement provides for coverage under this
Plan.
3.2 ENROLLMENT AND PARTICIPATION. Each eligible Employee may enroll as
of his Entry Date by completing and delivering to the Administrator an
enrollment form and, if applicable, a Salary Deferral Agreement. He will
then become a Participant as of his Entry Date.
3.3 RE-EMPLOYED EMPLOYEE. In the case of an individual who ceases to
be an Employee and is subsequently rehired as an Employee, the following
provisions shall apply in determining his eligibility to again participate
in the Plan:
(A) If the Employee had met the eligibility requirement(s)
specified in Section 3.1 prior to his separation from employment, he
shall become an Active Participant in the Plan as of the date he is
re-employed, after completing the applicable form(s), in accordance
with Section 3.2.
(B) If the Employee had not met the eligibility requirement(s)
specified in Section 3.1 prior to his separation from employment, he
shall be eligible to participate in the Plan on the first Entry Date
following his fulfillment of such eligibility requirement(s).
For purposes of this Subsection, all Years of Service with the
Employer, including any Years of Service prior to any Breaks in Service,
shall be taken into account.
3.4 ELIGIBLE CLASS. In the event a Participant becomes ineligible to
participate because he is no longer a member of an eligible class of
Employees, such Employee shall participate immediately upon his return to
an eligible class of Employees.
In the event an Employee who is not a member of the eligible class of
Employees becomes a member of the eligible class, such Employee shall
participate immediately if such Employee has satisfied the minimum service
requirement and would have previously become a Participant had he been in
the eligible class.
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ARTICLE IV CONTRIBUTIONS
4.1 ELECTIVE DEFERRAL CONTRIBUTIONS. Each Active Participant may enter
into a written Salary Deferral Agreement with the Employer in an amount
equal to not less than 1% nor more than 20% of his Compensation for the
Contribution Period. In consideration of such agreement, the Employer will
make a contribution for each Contribution Period on behalf of the
Participant in an amount equal to the total amount by which the
Participant's Compensation from the Employer was deferred during the
Contribution Period pursuant to the Salary Deferral Agreement then in
effect. Elective Deferral Contributions shall be paid by the Employer to
the Trust not less frequently than monthly, but in no event later than 90
days following the date the amounts were deferred.
Salary Deferral Agreements shall be governed by the following provisions:
(A) Amounts contributed pursuant to a Salary Deferral
Agreement shall be 100% vested and non-forfeitable at all times.
(B) No Participant shall be permitted to have Elective
Deferral Contributions made under this Plan, or any other qualified
plan maintained by the Employer, during any taxable year, in excess
of the dollar limitation contained in section 402(g) of the Code in
effect at the beginning of the taxable year. However, this $7,000
limit shall not apply to certain amounts deferred in 1987 that were
attributable to Service performed in 1986.
(C) Amounts contributed pursuant to a Salary Deferral
Agreement, which are not in excess of the limit described in
Subsection (B) above, shall be subject to the Limitations on
Allocations in accordance with Article V. Elective Deferral
Contributions that are in excess of the limit described in Subsection
(B) shall also be subject to the Limitations on Allocations in
accordance with Article
(D) A Salary Deferral Agreement may be changed by a
Participant twice during the Plan Year, at any time, by filing
written notice thereof with the Administrator. Such notice shall be
effective, and the Salary Deferral Agreement shall be changed on the
date specified in such notice or as soon as administratively
possible, which date must be at least 15 days after such notice is
filed.
(E) Elective Deferral Contributions shall be subject to the
Actual Deferral Percentage Test limitations.
(F) Correction of Excess Contributions.
(1) If the Employer determines prior to the end of the Plan
Year that the Actual Deferral Percentage Test may not be
satisfied, the Employer may take the corrective action specified
in Section 4.10 of the Plan.
(2) If, after the end of the Plan Year, the Employer
determines that the Plan will fail the Actual Deferral
Percentage Test, the Employer shall take the corrective action
specified in Section 4.12 or Section 4.15 of the Plan, or a
combination of such corrective actions, in order to ensure that
the Plan does not fail the Actual Deferral Percentage Test for
the Plan Year being tested.
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4.2 MATCHING CONTRIBUTIONS. There are two types of Matching
Contributions that the Participant may choose from. First, the Employer
shall make a Matching Contribution in an amount equal to $20.00 per pay
period for the first $10.00 per pay period by which a Participant defers
his Compensation pursuant to a Salary Deferral Agreement, subject to the
Limitations on Allocations specified in Article V. The Participant may
either elect this form of Matching Contribution, or elect to receive from
the Employer $.50 for each $1.00 by which the Participant defers their
compensation, up to 6% of their compensation, pursuant to a Salary
Deferral Agreement, which is also subject to the Limitations on
Allocations specified in Article V. Matching Contributions shall be
subject to the Actual Contribution Percentage Test. The Employer may
designate at the time of contribution that all or a portion of such
Matching Contributions be treated as Qualified Matching Contributions.
If the Employer determines prior to the end of the Plan Year that the
Actual Contribution Percentage Test may not be satisfied, the Employer
may take the corrective action specified in Section 4.11 of the Plan.
If, after the end of the Plan Year, the Employer determines that the Plan
will fail the Actual Contribution Percentage Test, the Employer shall
take the corrective action specified in Section 4.13 or Section 4.15 of
the Plan, or a combination of such corrective actions, in order to ensure
that the Plan does not fail the Actual Contribution Percentage Test for
the Plan Year being tested.
4.3 FAIL-SAFE CONTRIBUTION. The Employer reserves the fight to make a
discretionary Nonelective Contribution to the Plan for any Plan
Year, if the Employer determines that such a contribution is
necessary to ensure that either the Actual Deferral Percentage
Test or the Actual Contribution Percentage Test will be satisfied
for that Plan Year. Such amount shall be designated by the
Employer at the time of contribution as a Qualified Nonelective
Contribution and shall be known as a Fail-Safe Contribution.
The Fail-Safe Contribution shall be made on behalf of all eligible
non-Highly Compensated Employees who are Participants and who are
considered under the Actual Deferral Percentage Test or the Actual
Contribution Percentage Test. This contribution shall be allocated to the
Participant's Account of each such Participant in an amount equal to a
fixed percentage of such Participant's Compensation. The fixed percentage
shall be equal to the minimum fixed percentage necessary to be contributed
by the Employer on behalf of each eligible non-Highly Compensated Employee
who is a Participant so that the Actual Deferral Percentage Test or the
Actual Contribution Percentage Test is satisfied.
The Fail-Safe Contribution for any Plan Year as determined above shall
be paid to the Trust at the end of the Plan Year, or as soon as possible
on or after the last day of such Plan Year, but in no event later than the
date which is prescribed by law for filing the Employer's income tax
return, including any extensions thereof.
4.4 PROFITS NOT REQUIRED. Contributions to this Plan shall not be
precluded because the Employer does not have Considered Net
Profits. Notwithstanding the existence of Considered Net Profits,
the Employer may determine in its sole discretion that it will
make no contributions for such Plan Year.
4.5 PAYMENT OF EXPENSES. The Employer may contribute to the Plan the
amount necessary, to pay any applicable expense charges and
administration charges. In lieu of the Employer's contributing
the amount necessary to pay such charges, these expenses may be
paid from the Trust fund.
4.6 CREDITING OF ELECTIVE DEFERRAL AND OTHER CONTRIBUTIONS. Elective
Deferral Contributions and other contributions made by the
Employer shall be credited to the Participant Account of each
Participant for whom such contributions are made, in accordance
with the provisions of Article XIII.
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4.7 ROLLOVER CONTRIBUTIONS. The Plan may receive Rollover
Contributions on behalf of an Employee. Receipt of a Rollover
Contribution shall be subject to the approval of the Plan
Administrator. Before approving the receipt of a Rollover
Contribution, the Plan Administrator may request any documents or
other information from an Employee or opinions of counsel which
the Plan Administrator deems necessary to establish that such
amount is a Rollover Contribution.
A Participant's Account shall be maintained on behalf of each Employee
from whom Rollover Contributions are received, regardless of such
Employee's eligibility to participate in the Plan in accordance with the
requirements of Article III, and Rollover Contributions may be invested in
any manner authorized under the provisions of this Plan.
Rollover Contributions received from an Employee who is not otherwise
eligible to participate in the Plan may not be withdrawn in accordance
with the provisions of Article X until such Employee becomes a
Participant, except that such Employee may receive a distribution of his
Participant's Account if his Termination of Employment occurs.
Rollover Contributions shall be credited to the Participant's Account
and may be invested in any manner authorized under the provisions of this
Plan.
4.8 TRANSFERS. Without regard to the Limitations on Allocations
imposed under Article V, the Plan may receive, directly from
another qualified pension or profit sharing plan meeting the
requirements of Internal Revenue Code section 401 (a), all or part
of the entire amount distributable on behalf of a Participant from
such plan. Likewise, the Plan may receive Transfers representing
the assets of any predecessor plan.
Transfers may be invested in any manner authorized under the provisions
of this Plan.
4.9 SUSPENSION OF ELECTIVE DEFERRAL CONTRIBUTIONS. The following
provisions shall apply with respect to suspension of Elective
Deferral Contributions.
(A) Elective Suspension. An Active Participant may elect to
suspend his Salary Deferral Agreement for Elective Deferral
Contributions by filing a written notice thereof with the
Administrator at any time. The Salary Deferral Agreement shall be
suspended on the date specified in such notice, which date must be at
least 15 days after such notice is filed. The notice shall specify
the period for which such suspension shall be effective. Such period
may extend indefinitely.
(B) Suspension for Leave. A Participant who is absent from
employment on account of an authorized leave of absence or military
leave shall have his Salary Deferral Agreement suspended during such
leave. Such suspension of contributions shall be effective on the
date payment of Compensation by the Employer to him ceases, and shall
remain in effect until payment of Compensation is resumed.
(C) Withdrawal Suspension. An Active Participant who elects a
withdrawal in accordance with Article X may have his Salary Deferral
Agreement suspended on the date such election becomes effective. Such
suspension shall remain in effect for the number of months specified
therein.
(D) Non-Elective Suspension. An Active Participant who ceases
to meet the eligibility requirements as specified in Section 3.1 but
who remains in the employ of the Employer, shall have his Salary
Deferral Agreement suspended, effective as of the date he ceases to
meet the eligibility requirements. Such suspension shall remain in
effect until he again meets such eligibility requirements.
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The Participant may elect to reactivate his Salary Deferral
Agreement for Elective Deferral Contributions by filing a written
notice thereof with the Plan Administrator. The Salary Deferral
Agreement shall be reactivated on the January 1 or July 1 following
the expiration of the suspension period described above.
4.10 LIMITATION OF ELECTIVE DEFERRAL CONTRIBUTIONS. If the Employer
determines prior to the end of the Plan Year that the Plan may not
satisfy the Actual Deferral Percentage Test for the Plan Year, the
Employer may require that the amount of Elective Deferral
Contributions being allocated to the accounts of Highly
Compensated Employees be reduced to the extent necessary to
prevent Excess Contributions from being made to the Plan.
Although the Employer may reduce the amount of Elective Deferral
Contributions that may be allocated to the Participant's Account of
Highly Compensated Employees, the affected Employees shall continue to
participate in the Plan. When the situation that resulted in the
reduction of Elective Deferral Contributions ceases to exist, the
Employer shall reinstate the amount of Elective Deferral Contributions
elected by the Participant in the Salary Deferral Agreement to the
fullest extent possible for all affected Participants in a
nondiscriminatory manner.
4.11 LIMITATION OF MATCHING CONTRIBUTIONS. If the Employer determines
prior to the end of the Plan Year that the Plan may not satisfy
the Actual Contribution Percentage Test for the Plan Year, the
Employer may require that the amount of Matching Contributions
being allocated to the Accounts of Highly Compensated Employees be
reduced to the extent necessary to prevent Excess Aggregate
Contributions from being made to the Plan.
4.12 CORRECTIVE DISTRIBUTION OF EXCESS CONTRIBUTIONS.
(A) The Employer may distribute Excess Contributions (and
income allocable thereto) to the appropriate Highly Compensated
Employee after the close of the Plan Year in which the Excess
Contribution arose and within 12 months after the close of that Plan
Year.
(B) The income allocable to Excess Contributions is equal to
the sum of the allocable gain or loss for the Plan Year and shall be
determined as follows:
(1) The income allocable to Excess Contributions is determined
by multiplying the income for the Plan Year allocable to
Deferral Percentage Amounts by a fraction. The numerator of the
fraction is the Excess Contributions attributable to the
Employee for the Plan Year. The denominator of the fraction is
equal to the sum of (A) the total account balance of the
Employee attributable to Deferral Percentage Amounts as of the
beginning of the Plan Year, plus (B) the Employee's Deferral
Percentage Amounts for the Plan Year.
(2) The allocable gain or loss for the period between the end
of the Plan Year and the date of distribution shall not be taken
into consideration when determining the income allocable to
Excess Contributions.
(C) The amount of Excess Contributions to be distributed with
respect to an Employee for a Plan Year shall be reduced by Excess
Deferrals previously distributed to the Employee for the Employee's
taxable year ending with or within the Plan Year.
(D) The distribution of Excess Contributions made to the
Family Members of a family group that was combined for purposes of
determining a Highly Compensated Employee's Actual Deferral Ratio
shall be allocated among the Family Members in proportion to the
Elective Deferral Contribution (including any amounts required to be
taken into account under subparagraphs (B) (1) and (B) (2)
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<PAGE> 26
of Section 1.8 of the Plan) of each Family Member that is
combined to determine the Actual Deferral Ratio.
(E) A corrective distribution of Excess Contributions (and
income) shall be made without regard to any Participant or spousal
consent or any notice otherwise required under sections 411(a)(11)
and 417 of the Code.
(F) Any Matching Contributions or Qualified Matching
Contributions that relate to the Excess Contribution being
distributed shall be forfeited. The Matching Contribution so
forfeited shall be in proportion to the applicable Employee's vested
and nonvested interest in Matching Contributions under the Plan for
the Plan Year in which the Excess Contribution arose. Forfeitures of
Matching Contributions or Qualified Matching Contributions that
relate to Excess Contributions shall be applied to reduce Employer
contributions or pay Plan expenses.
(G) In no case may the amount of Excess Contributions to be
distributed for a Plan Year with respect to any Highly Compensated
Employee exceed the amount of Elective Deferral Contributions made on
behalf of the Highly Compensated Employee for the Plan Year.
(H) In the event of a complete termination of the Plan during
the Plan Year in which an Excess Contribution arose, the corrective
distribution must be made as soon as administratively feasible after
the date of the termination of the Plan, but in no event later than
12 months after the date of termination.
(I) Any distribution of less than the entire amount of Excess
Contributions with respect to any Highly Compensated Employee shall
be treated as a pro-rata distribution of Excess Contributions and
allocable income or loss.
4.13 CORRECTION OF EXCESS AGGREGATE CONTRIBUTIONS.
(A) Excess Aggregate Contributions may be corrected using one
of the methods described in subparagraphs (1) and (2) below. The
Employer shall elect the method of correction to be used and shall
apply such method to the correction of the Excess Annual Contribution
for the Plan Year.
(1) Method 1:
(a) The Excess Aggregate Contribution (and income)
shall be forfeited, if forfeitable, or distributed on a
pro-rata basis from the Employee's Account attributable to
Contribution Percentage Amounts. The distribution or
forfeiture shall be made after the close of the Plan Year
in which the Excess Aggregate Contribution arose and within
12 months after the close of that Plan Year. Whether an
amount is distributed or forfeited under this subparagraph
(a) shall be determined based on the rules set forth in
paragraph (B) of this section.
(2) Method 2
(a) Any Matching Contributions (and Qualified Matching
Contributions, to the extent not taken into account for
purposes of the Actual Deferral Percentage Test), and
income allocable thereto, shall be forfeited, if
forfeitable, or distributed to the appropriate Highly
Compensated Employee. The distribution or forfeiture shall
be made after the close of the Plan Year in which the
Excess Aggregate Contribution arose and within 12 months
after the close of that Plan Year.
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<PAGE> 27
Whether an amount is forfeited or distributed shall be
determined under the rules set forth in paragraph (B) of
this section.
(B) Determination of Distributable and Forfeitable Amounts.
For purposes of paragraph (A) of this section:
(1) An Excess Aggregate Contribution attributable to vested
Matching Contributions, Qualified Matching Contributions (and,
if applicable, Qualified Nonelective Contributions and Elective
Deferral Contributions) shall be distributed to the appropriate
Highly Compensated Employee in accordance with the terms of this
section.
(2) An Excess Aggregate Contribution attributable to an
Employee's nonvested Matching Contributions shall be forfeited
in accordance with the terms of this section.
(3) A Highly Compensated Employee's vested and nonvested
interest in. Matching Contributions (and income allocable
thereto) attributable to Excess Aggregate Contributions shall
be based on the proportion that represents the Employee's Vested
Interest in Matching Contributions under the Plan for the Plan
Year in which the Excess Aggregate Contribution arose.
(C) Forfeited Excess Aggregate Contributions. In accordance
with paragraph (B) of this section, the amount that represents the
Employee's nonvested interest in Matching Contributions (and income),
and is attributable to Excess Aggregate Contributions, shall be
forfeited and, as such, shall be applied to reduce Employer
contributions or pay expenses.
(D) Income Allocable to Excess Aggregate Contributions. For
purposes of this section, the income allocable to Excess Aggregate
Contributions is equal to the sum of the allocable gain or loss for
the Plan Year, and shall be determined as follows:
(1) The income allocable to Excess Aggregate Contributions is
determined by multiplying the income for the Plan Year allocable
to Contribution Percentage Amounts by a fraction. The numerator
of the fraction is the Excess Aggregate Contributions for the
Employee for the Plan Year. The denominator of the fraction is
equal to the sum of (A) the total account balance of the
Employee attributable to Contribution Percentage Amounts as of
the beginning of the Plan Year, plus (B) the Contribution
Percentage Amounts for the Plan Year.
(2) The allocable gain or loss for the period between the end
of the Plan Year and the date of correction shall not be taken
into consideration when determining the income allocable to
Excess Aggregate Contributions.
(E) The distribution of Excess Aggregate Contributions (and
income) made to Family Members of a family group that was combined
for purposes of determining a Highly Compensated Employee's Actual
Contribution Ratio shall be allocated among Family Members in
proportion to the Contribution Percentage Amounts (including any
amounts required to be taken into account under subparagraphs (B) (1)
and (B) (2) of Section 1.5 of the Plan) of each Family Member that
are combined to determine the Actual Contribution Ratio.
(F) In the event of a complete termination of the Plan during
the Plan Year in which an Excess Aggregate Contribution arose, the
corrective distribution or forfeiture shall be made as soon as
administratively feasible after the date of termination of the Plan,
but in no event later than 12
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months after the date of termination.
(G) If the entire account balance of a Highly Compensated
Employee is distributed during the Plan Year in which the Excess
Aggregate Contribution arose, the distribution shall be deemed to
have been a corrective distribution of Excess Aggregate
Contributions (and income) to the extent that a corrective
distribution would otherwise have been required.
(H) Any distribution of less than the entire amount of Excess
Aggregate Contributions (and income) shall be treated as a pro-rata
distribution of Excess Aggregate Contributions and allocable income
or loss.
(I) In no case may the amount of Excess Aggregate
Contributions distributed to a Highly Compensated Employee exceed
the amount of Matching Contributions made on behalf of the Highly
Compensated Employee for the Plan Year.
(J) A distribution of Excess Aggregate Contributions (and
income) shall be made under this section without regard to any
notice or consent otherwise required under sections 411(a)(11) and
417 of the Code.
4.14 CORRECTIVE DISTRIBUTION OF EXCESS DEFERRALS. Notwithstanding any
other provision of the Plan, Excess Deferrals, plus any income and minus
any loss allocable thereto, may be distributed to any Participant to
whose account Excess Deferrals were allocated for the individual's
taxable year. Such a corrective distribution shall be made in accordance
with this section.
(A) Correction of Excess Deferrals After Taxable Year.
(1) Not later than the March 15 following the close of
a Participant's taxable year, the Participant may notify the
Plan of the amount of Excess Deferrals received by the Plan
during that taxable year. The notification shall be in writing,
shall specify the Participant's Excess Deferrals, and shall be
accompanied by the Participant's written statement that if such
amounts are not distributed, these amounts, when added to all
other Elective Deferral Contributions made on behalf of the
Participant during the taxable year, shall exceed the dollar
limitation specified in section 402(g) of the Code.
(2) The Participant is deemed to have notified the
Plan of Excess Deferrals if, not later than the March 1
following the close of a Participant's taxable year, the
Employer notifies the Plan on behalf of the Participant of the
Excess Deferrals. Such Excess Deferrals shall be calculated by
taking into account only Elective Deferral Contributions under
the Plan and any other plans of the Employer.
(3) Not later than the April 15 following the close of
the taxable year, the Plan shall distribute to the Participant
the amount of Excess Deferrals designated under subparagraphs
(1) or (2) above.
(B) Correction of Excess Deferrals During the Taxable Year. A
Participant who has an Excess Deferral during a taxable year may
receive a corrective distribution during the same year. Such a
corrective distribution shall be made if:
(1) The Participant designates the distribution as an
Excess Deferral. The designation shall be made in the same
manner as the notification described in subparagraph (A) (1) of
this section. The Participant will be deemed to have designated
the distribution as an Excess
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<PAGE> 29
Deferral if the Employer makes the designation on
behalf of the Participant to the extent that the Participant
has Excess Deferrals for the taxable year calculated by taking
into account only Elective Deferral Contributions to the Plan
and other plans of the Employer.
(2) The corrective distribution is made after the date
on which the Plan received the Excess Deferral.
(3) The Plan designates the distribution as a distribution of
Excess Deferrals.
(C) If the Participant provides the Employer with satisfactory
evidence and written notice to demonstrate that all Elective
Deferral Contributions by the participant in this Plan and any
other qualified plan exceed the applicable limit under section
402(g) of the Code for such individual's taxable year, then the Plan
Administrator may (but is not required to) distribute sufficient
Elective Deferral Contributions (not to exceed the amount of
Elective Deferral Contributions actually contributed on behalf of
the Participant to this Plan during the Participant's taxable year)
from this Plan to allow the Participant to comply with the
applicable limit. The evidence provided by the Participant must
establish clearly the amount of Excess Deferrals. The Participant
must present this evidence to the Plan Administrator by the March 1
following the end of the calendar year in which the Excess Deferrals
occurred.
(D) Income Allocable to Excess Deferrals. The income allocable
to Excess Deferrals is equal to the sum of allocable gain or loss
for the taxable year of the individual and shall be determined as
follows:
(1) The gain or loss allocable to Excess Deferrals is
determined by multiplying the income for the taxable year
allocable to Elective Deferral Contributions by a fraction. The
numerator of the fraction is the Excess Deferrals by the
Employee for the taxable year. The denominator of the fraction
is equal to the sum of:
(a) The total account balance of the Employee
attributable to Elective Deferral Contributions as of the
beginning of the Plan Year, plus
(b) The Employee's Elective Deferral Contributions for the
taxable year.
(2) The income allocable to Excess Deferrals
shall not include the allocable gain or loss for the period
between the end of the taxable year and the date of
distribution.
(E) No Employee or Spousal Consent Required. A corrective
distribution of Excess Deferrals (and income) shall be made without
regard to any notice or consent otherwise required under sections
411(a)(11) and 417 of the Code.
(F) Any Matching Contributions or Qualified Matching
Contributions that relate to the Excess Deferral being distributed
shall be forfeited. The Matching Contribution so forfeited shall be
in proportion to the applicable Employee's vested and nonvested
interest in Matching Contributions under the Plan for the Plan Year
in which the Excess Deferral arose. Forfeitures of Matching
Contributions or Qualified Matching Contributions that relate to
Excess Deferrals shall be applied to reduce Employer contributions or
pay Plan expenses.
4.15 QUALIFIED CONTRIBUTIONS. In lieu of distributing Excess
Contributions as provided in Section 4.12 of the Plan, or Excess
Aggregate Contributions as provided in Section 4.13 of the Plan, the
Employer may take the actions specified below in order to satisfy the
Actual Deferral Percentage Test or the Actual
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Contribution Percentage Test, or both, pursuant to the regulations
under the Code.
(A) At the election of the Employer, Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, may be
taken into account as Elective Deferral Contributions for purposes
of calculating the Actual Deferral Ratio of a Participant.
The amount of Qualified Nonelective Contributions or Qualified
Matching Contributions made under the terms of this Plan and taken
into account as Elective Deferral Contributions for purposes of
calculating the Actual Deferral Ratio, subject to such other
requirements as may be prescribed by the Secretary of the Treasury,
shall be such Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, that are needed to meet the Actual
Deferral Percentage Test.
(B) At the election of the Employer, Qualified Nonelective
Contributions or Elective Deferral Contributions, or both, may be
taken into account as Matching Contributions for purposes of
calculating the Actual Contribution Ratio of a Participant.
The amount of Qualified Nonelective Contributions or Elective
Deferral Contributions made under the terms of this Plan and taken
into account for purposes of calculating the Actual Contribution
Ratio, subject to such other requirements as may be prescribed by
the Secretary of the Treasury, shall be such Qualified Nonelective
Contributions or Elective Deferral Contributions, or both, that are
needed to meet the Actual Contribution Percentage Test.
(C) Any Qualified Nonelective Contribution, Qualified Matching
Contribution, and Elective Deferral Contribution taken into account
under paragraphs (A) or (B) must be allocated to the Employee's
Account as of a date within the Plan Year in which the Excess
Contribution or Excess Aggregate Contribution arose and must be paid
to the Plan no later than the 12-month period immediately following
the Plan Year to which the contribution relates.
4.16 MULTIPLE USE OF ALTERNATIVE LIMITATION.
(A) Multiple use of the alternative limitation occurs if all
of the conditions of this paragraph (A) are satisfied:
(1) One or more Highly Compensated Employee of the
Employer are eligible employees in both a cash or deferred
arrangement subject to section 401(k) and a plan maintained by
the Employer subject to section 401(m).
(2) The sum of the Actual Deferral Percentage of the
entire group of eligible Highly Compensated Employees under the
arrangement subject to section 401(k) and the Actual
Contribution Percentage of the entire group of eligible Highly
Compensated Employees under the Plan subject to section 401(m)
exceeds the aggregate limit of paragraph (C) of this section.
(3) Actual Deferral Percentage of the entire group of
eligible Highly Compensated Employees under the arrangement
subject to section 401 (k) exceeds the amount described in
section 401 (k)(3)(A)(ii)(I).
(4) The Actual Contribution Percentage of the entire
group of eligible Highly Compensated Employees under the
arrangement subject to section 401 (m) exceeds the amount
described in section 401(m)(2)(A)(i).
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(B) For purposes of this section, the aggregate limit is the greater of:
(1) The sum of-
(a) 1.25 times the greater of the relevant Actual Deferral
Percentage or the relevant Actual Contribution Percentage,
and
(b) Two percentage points plus the lesser of the relevant
Actual Deferral Percentage or the relevant Actual
Contribution Percentage. In no event, however, may this
amount exceed twice the lesser of the relevant Actual
Deferral Percentage or the Actual Contribution Percentage;
or
(2) The sum of-
(a) 1.25 times the lesser of the relevant Actual Deferral
Percentage or the relevant Actual Contribution Percentage,
and
(b) Two percentage points plus the greater of the relevant
Actual Deferral Percentage or the relevant Actual
Contribution Percentage. In no event, however, may this
amount exceed twice the greater of the relevant Actual
Deferral Percentage or the relevant Actual Contribution
Percentage.
(C) For purposes of paragraph (B) of this section, the term
"relevant Actual Deferral Percentage" means the Actual Deferral
Percentage of the group of Nonhighly Compensated Employees under the
arrangement subject to section 401(k) for the Plan Year, and the term
"relevant Actual Contribution Percentage" means the Actual
Contribution Percentage of the group of Nonhighly Compensated
Employees eligible under the Plan subject to section 401(m) for the
Plan Year beginning with or within the Plan Year of the arrangement
subject to section 401(k).
(D) The Actual Deferral Percentage and Actual Contribution
Percentage of the group of eligible Highly Compensated Employees are
determined after use of Qualified Nonelective Contributions and
Qualified Matching Contributions to meet the requirements of the
Actual Deferral Percentage Test and after use of Qualified
Nonelective Contributions and Elective Deferral Contributions to meet
the requirements of the Actual Contribution Percentage Test. The
Actual Deferral Percentage and Actual Contribution Percentage of the
group of Highly Compensated Employees are determined after any
corrective distribution or forfeiture of Excess Deferrals, Excess
Contributions, or Excess Aggregate Contributions and after
recharacterization of Excess Contributions required without regard to
this section. Only plans and arrangements maintained by the Employer
are taken into account under paragraph (B). If the Employer
maintains two or more cash or deferred arrangements subject to
section 401(k) that must be mandatorily disaggregated pursuant to
section 401(k)-1(g)(11)(iii) multiple use is tested separately with
respect to each plan.
(E) If multiple use of the alternative limit occurs with respect
to two or more plans or arrangements maintained by the Employer, it
shall be corrected by reducing the Actual Contribution Percentage of
Highly Compensated Employees in the manner described in paragraph (F)
of this section. Instead of making this reduction, the Employer may
eliminate the multiple use of the alternative limitation by making
Qualified Nonelective Contributions to the Plan.
(F) The amount of the reduction by which each Highly Compensated
Employee's Actual Contribution Ratio is reduced shall be treated as
an Excess Aggregate Contribution. The Actual Contribution Percentage
of all Highly Compensated Employees under the plan subject to
reduction shall be
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reduced so that there is no multiple use of the alternative
limitation.
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ARTICLE V
LIMITATIONS ON ALLOCATIONS
5.1 LIMITATIONS ON ALLOCATIONS. Definitions - The following
definitions are atypical terms which refer only to terms
used in the Limitations on Allocations Sections of this
Article V.
(A) Annual Additions. The term Annual Additions shall
mean the sum of the following amounts allocated on
behalf of a Participant for a Limitation Year:
(1) all contributions made by the Employer which shall include:
. Elective Deferral Contributions, if any;
. Matching Contributions, if any;
. Qualified Matching Contributions, if any;
. Nonelective Contributions, if any;
. Qualified Nonelective Contributions, if any;
(2) all Forfeitures, if any;
(3) all Employee Contributions, if any.
For the purposes of this Article, Excess Amounts reapplied
under Section 5.2 (D) shall also be included as Annual Additions.
Also, for the purposes of this Article, Employee Contributions are
determined without regard to deductible employee contributions within
the meaning of section 72(0)(5) of the Code.
Amounts allocated after March 31, 1984, to an individual
medical account, as defined in Internal Revenue Code section
415(1)(1), which is part of a defined benefit plan maintained by the
Employer, are treated as Annual Additions to a defined contribution
plan. Also, amounts derived from contributions paid or accrued
attributable to post-retirement medical benefits allocated to the
separate account of a key employee, as defined in Internal Revenue
Code section 419A(d)(3), under a welfare benefit fund, as defined in
Internal Revenue Code section 419(e), maintained by the Employer, are
treated as Annual Additions to a defined contribution plan.
Contributions do not fail to be Annual Additions merely because
they are Excess Deferrals, Excess Contributions or Excess Aggregate
Contributions or merely because Excess Contributions or Excess
Aggregate Contributions are corrected through distribution or
recharacterization. Excess Deferrals that are distributed in
accordance with Section 4.14 of the Plan are not Annual Additions.
Forfeited Matching Contributions that are forfeited because the
contributions to which they relate are treated as Excess Aggregate
Contributions, Excess Contributions, or Excess Deferrals and that are
reallocated to the Participant Accounts of other Participants for the
Plan Year in which the forfeiture occurs, are treated as Annual
Additions for the Participants to whose accounts they are
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reallocated and for the Participants from whose accounts they
are forfeited.
(B) Compensation. The term Compensation means wages within the meaning
of section 3401(a) of the Code for the purposes of income tax
withholding at the source but determined without regard to any rules
that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the
exception for agricultural labor in section 3401(a)(2) of the Code).
For Limitation Years beginning after December 31, 1991, for
purposes of applying the limitations of this article, Compensation
for a Limitation Year is the Compensation actually paid or made
available during such Limitation Year.
(C) Defined Contribution Dollar Limitation. The term Defined
Contribution Dollar Limitation shall mean $30,000 or, if greater,
one-fourth of the defined benefit dollar limitation set forth in
Internal Revenue Code section 415(b)(1) as in effect for the
Limitation Year.
(D) Employer. The term Employer shall mean the Employer that
adopts this Plan. In the case of a group of employers which
constitutes a controlled group of corporations (as defined in
Internal Revenue Code section 414(b) as modified by section 415(h)),
or which constitutes trades or business (whether or not incorporated)
which are under common control (as defined in section 414(c) as
modified by section 415(h)), or affiliated service groups (as defined
in section 414(m)) of which the adopting Employer is a part, all such
employers shall be considered a single Employer for purposes of
applying the limitations of this Article.
(E) Excess Amount. The term Excess Amount shall mean the excess of the
Participant's Annual Additions for the Limitation Year over the
Maximum Permissible Amount.
(F) Limitation Year. The term Limitation Year shall mean the Plan Year.
(G) Maximum Permissible Amount. The term Maximum Permissible Amount
shall mean the lesser of (1) the Defined Contribution Dollar
Limitation, or (2) 25% of the Participant's Compensation for the
Limitation Year.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different period of 12 consecutive
months, the Maximum Permissible Amount for the short Limitation Year
will be the lesser of (1) the Defined Contribution Dollar Limitation
multiplied by a fraction, the numerator of which is the number of
months in the short Limitation Year, and the denominator of which is
12, or (2) 25% of the Participant's Compensation for the short
Limitation Year.
5.2 LIMITATIONS ON ALLOCATIONS. If the Employer does not maintain any
qualified plan in addition to this Plan:
(A) The amount of Annual Additions which may be allocated under this
Plan on a Participant's behalf for a Limitation Year shall not
exceed the lesser of the Maximum Permissible Amount or any other
limitation contained in this Plan.
(B) Prior to the determination of the Participant's actual Compensation
for a Limitation Year, the Maximum Permissible Amount may be
determined on the basis of the Participant's estimated annual
Compensation. Such Compensation shall be determined on a reasonable
basis and shall be uniformly determined for all Participants
similarly situated. Any employer contributions based on
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<PAGE> 35
estimated annual Compensation shall be reduced by any Excess
Amounts carried over from prior years.
(C) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such
Limitation Year shall be determined on the basis of the Participant's
actual Compensation for such Limitation Year. In the event a
Participant separates from the Service of the Employer prior to the
end of the Limitation Year, the Maximum Permissible Amount for such
Participant shall be determined prior to any distribution of his
Participant's Account on the basis of his actual Compensation. Any
Excess Amounts shall be disposed of in accordance with Section 5.2
(D).
(D) If there is an Excess Amount with respect to a Participant for a
Limitation Year as a result of a reasonable error in estimating
the Participant's annual compensation, an 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 with respect to any individual under the limits of section 415
of the Code, or under other limited facts and circumstances which the
commissioner finds justified, such Excess Amount shall be disposed of
as follows:
(1) If an Excess Amount exists, the Excess Amount in the
Participant's Account (excluding Elective Deferral
Contributions) shall be held unallocated in a suspense account
for the Limitation Year and allocated and reallocated in the
next Limitation Year to all Participants in the Plan. The
excess amount must be used to reduce Employer Contributions for
the next Limitation Year (and succeeding Limitation Years, as
necessary) for all of the Participants in the Plan. For purposes
of this subparagraph, the Excess Amount may not be distributed
to Participants or former Participants.
(2) If, after the application of subparagraph (1) an Excess
Amount still exists, then the Participant's Elective Deferral
Contributions (including earnings and losses thereon) allocated
for the Limitation Year shall be returned to the Participant to
the extent that an Excess Amount exists. This distribution shall
be made as soon as administratively feasible after the Excess
Amount is determined. Any Elective Deferral Contributions
returned under this paragraph shall be disregarded for purposes
of the Actual Deferral Percentage Test.
(3) Alternatively, the Plan Administrator may elect to dispose
of the Excess Amount by applying the procedure in subparagraph
(2) before applying the procedure in subparagraph (1). If the
Plan Administrator makes this election, the Plan Administrator
must apply it uniformly to all Participants in a Limitation
Year.
(4) If a suspense account is in existence at any time during a
Limitation Year pursuant to this section, it will not
participate in the allocation of investment gains or losses. If
a suspense account is in existence at any time during a
particular Limitation Year, all amounts in the suspense account
must be allocated and reallocated to Participants' Accounts
before any Employer Contributions which would constitute Annual
Additions may be made to the Plan for that Limitation Year.
5.3 LIMITATIONS ON ALLOCATIONS. If the Employer maintains one or more
defined contribution plans in addition to this Plan:
(A) The amount of Annual Additions which may be allocated under this
Plan on a Participant's behalf for a Limitation Year, shall not
exceed the lesser of:
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<PAGE> 36
(1) The Maximum Permissible Amount, reduced by the sum of any
Annual Additions allocated to the Participant's Account for the
same Limitation Year under this Plan and such other defined
contribution plan; or
(2) Any other limitation contained in this Plan.
Prior to the determination of the Participant's actual
Compensation for the Limitation Year, the amounts referred to in
Subsection (1) above may be determined on the basis of the
Participant's estimated annual Compensation for such Limitation Year.
Such estimated annual Compensation shall be determined for all
Participants similarly situated.
Any contribution made by the Employer based on estimated annual
Compensation shall be reduced by any Excess Amounts carried over from
prior years, if applicable.
(B) As soon as is administratively feasible after the end of the
Limitation Year, the amounts referred to in Section 5.3 (A) shall
be determined on the basis of the Participant's actual Compensation
for such Limitation Year.
(C) If amounts are contributed to a Participant's Account under this
Plan on an allocation date which does not coincide with the
allocation date(s) for all such other plans, and if a Participant's
Annual Additions under this Plan and all such other plans result
in an Excess Amount, such Excess Amount shall be deemed to have
derived from those contributions last allocated.
(D) If an Excess Amount was allocated to a Participant on an allocation
date of this Plan which coincides with an allocation date of another
plan, the Excess Amount attributable to this Plan will be the
product of (1) and (2) below:
(1) The total Excess Amount allocated as of such date (including
any amount which would have been allocated but for the
limitations of Internal Revenue Code section 415).
(2) The ratio of (1) the amount allocated to the Participant as of
such date under this Plan, divided by (2) the total amount
allocated as of such date under all qualified defined
contribution plans (determined without regard to the limitations
of Internal Revenue Code section 415).
(E) Any Excess Amounts attributed to this Plan shall be
disposed of as provided in Section 5.2 (D).
5.4 LIMITATIONS ON ALLOCATIONS. If the Employer maintains a defined
benefit plan in addition to this Plan:
(A) If an individual is a Participant at any time in both this Plan and
a defined benefit plan maintained by the Employer, the sum of the
Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction for any year may not exceed 1.0. In the event that the sum
of the Defined Contribution Plan Fraction and the Defined Benefit
Plan Fraction exceeds 1.0, the Defined Contribution Plan Fraction
will be reduced until the sum of the Defined Contribution Plan
Fraction and the Defined Benefit Plan Fraction does not exceed 1.0.
If an individual was a Participant in this Plan or in any other
defined contribution plan maintained by the Employer which was in
existence on July 1, 1982, the numerator of the Defined Contribution
Plan Fraction will be adjusted if the sum of the Defined Contribution
Plan Fraction and the Defined Benefit Plan Fraction would otherwise
exceed 1.0 under the terms of this Plan.
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<PAGE> 37
Under the adjustment, an amount equal to the product of (1) the
excess of the sum of the Fractions over 1.0 times (2) the denominator
of the Defined Contribution Plan Fraction, will be permanently
subtracted from the numerator of the Defined Contribution Plan
Fraction. The adjustment is calculated using the Fractions as they
would be computed as of the later of the end of the last Limitation
Year beginning before January 1, 1983, or June 30, 1983. This
adjustment also will be made if at the end of the last Limitation
Year beginning before January 1, 1984, the sum of the Fractions
exceeds 1.0 because of accruals or additions that were made before
the limitations of this Article became effective to any plans of the
Employer in existence on July 1, 1982.
In addition, if an individual was a Participant in this Plan or
in any other defined contribution plan maintained by the Employer
which was in existence on May 6, 1986, the numerator of the Defined
Contribution Plan Fraction will be adjusted if the Employer's defined
benefit plan was also in existence on May 6, 1986, and the sum of the
Defined Contribution Plan Fraction and the Defined Benefit Plan
Fraction would otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, an amount equal to the product of (1) the
excess of the sum of the Fractions over 1.0 times (2) the denominator
of the Defined Contribution Plan Fraction, will be permanently
subtracted from the numerator of the Defined Contribution Plan
Fraction. This 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. In the event that a Participant's accrued
benefit as of December 31, 1986, under the defined benefit plan
exceeds the defined benefit dollar limitation set forth in Internal
Revenue Code section 415(b)(1), the amount of that accrued benefit
shall be used in both the numerator and the denominator of the
Defined Benefit Plan Fraction in making this adjustment.
For purposes of this Section 5.4, all defined benefit plans of
the Employer, whether or not terminated, will be treated as one
defined benefit plan and all defined contribution plans of the
Employer, whether or not terminated, will be treated as one defined
contribution plan.
(B) The Defined Benefit Plan Fraction for any year is a fraction, the
numerator of which is the Participant's Projected Annual Benefit
under the defined benefit plan (determined as of the close of the
Limitation Year), and the denominator of which is the lesser of (1)
or (2) below:
(1) 1.25 times the dollar limitation in effect under Internal
Revenue Code section 415(b)(1)(A) on the last day of the
Limitation Year; or
(2) 1.4 times the amount which may be taken into account under
Internal Revenue Code section 415(b)(1)(B) with respect to such
Participant for the Limitation Year.
Notwithstanding the above, if the Participant was a participant
in one or more defined benefit plans maintained by the Employer which
were in existence on July 1, 1982, the denominator of the Defined
Benefit Plan Fraction will not be less than 125% of the sum of the
annual benefits under such plans which the Participant had accrued as
of the later of the end of the last Limitation Year beginning before
January 1, 1983 or June 30, 1983. The preceding sentence applies only
if the defined benefit plans individually and in the aggregate
satisfied the requirements of Internal Revenue Code section 415 as in
effect at the end of the 1982 Limitation Year.
(C) A Participant's Projected Annual Benefit is equal to the annual
benefit to which the Participant would be entitled under the terms
of the defined benefit plan based upon the following assumptions:
(1) The Participant will continue employment until reaching Normal
Retirement Age as determined under the terms of the plan (or
current age, if that is later);
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(2) The Participant's Compensation for the Limitation Year
under consideration will remain the same until the date the
Participant attains the age described in sub-division (1) of
this subparagraph; and
(3) All other relevant factors used to determine benefits
under the plan for the Limitation Year under consideration will
remain constant for all future Limitation Years.
(D) The Defined Contribution Plan Fraction for any Limitation
Year is a fraction, the numerator of which is the sum of the Annual
Additions to the Participant's Accounts in such Limitation Year and
for all prior Limitation Years, and the denominator of which is the
lesser of (1) or (2) below for such Limitation Year and for all prior
Limitation Years of such Participant's employment (assuming for this
purpose, that Internal Revenue Code section 415(c) had been in effect
during such prior Limitation Years):
(1) 1.25 times the dollar limitation in effect under Internal
Revenue Code section 415(c)(1)(A) on the last day of the
Limitation Year; or
(2) 1.4 times the amount which may be taken into account under
Internal Revenue Code section 415(c)(1)(B) with respect to such
Participant for the Limitation Year.
For the purposes of determining these Limitations on Allocations,
any non-deductible employee contributions made under a defined
benefit plan will be considered to be a separate defined
contribution plan and will be considered to be part of the Annual
Additions for the appropriate Limitation Year.
Annual Additions for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all Employee
Contributions as Annual Additions.
(E) Notwithstanding the foregoing, at the election of the Plan
Administrator, in computing the Defined Contribution Plan Fraction
with respect to any Plan Year ending after December 31, 1982, the
denominator shall be an amount equal to the product of:
(1) The denominator of the Defined Contribution Plan Fraction,
computed in accordance with the rules in effect for the Plan
Year ending in 1982; and
(2) the transition fraction, which is a fraction
(a) the numerator of which is the lesser of:
(i) $51,875, or
(ii) 1.4 times 25% of the Compensation of the
Participant for the Plan Year ending in 1981, and
(b) the denominator of which is the lesser of
(i) $41,500, or
(ii) 25% of the Compensation of the Participant for the
Plan Year ending in 1981.
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ARTICLE VI
DISTRIBUTION OF BENEFITS
6.1 DISTRIBUTIONS IN GENERAL. Each Participant may elect, with his
Spouse's consent if required, a distribution in the form of an
Annuity, a single sum cash payment, or a combination of the above.
All distributions are subject to the provisions of Article VIII,
Joint and Survivor Annuity Requirements.
6.2 TIMING OF DISTRIBUTIONS. If the value of a Participant's Vested
Interest exceeds (or at the time of any prior distribution
exceeded) $3,500 and is immediately distributable (as defined in
Section 8.5), the Participant and his Spouse, if required, must
consent to the distribution before it is made.
Instead of consenting to a distribution, the Participant may make a
written election to defer the distribution for a specified period of time
ending no later than the Participant's Normal Retirement Age. Such
election to defer shall be irrevocable.
If the Participant and Spouse, if applicable, do not consent to a
distribution or if no election to defer is made within 90 days after
receiving a written explanation of the optional forms of benefit available
pursuant to Income Tax Regulation 1.411(a)(11), all benefits shall be
deferred to, and distribution shall be made as of the Participant's Normal
Retirement Age. The distribution will be made in the form of a single sum
cash payment (in the case of a Participant's meeting the requirements of
Section 8.1 (A)) or in accordance with Section 8.2 (in the case of a
Participant's not meeting the requirements of Section 8.1 (A)), unless the
Participant elects another form of benefit within the 90-day period prior
to the date the distribution is made.
A Participant whose actual retirement date is on or after his Normal
Retirement Age may not elect to defer distribution of his benefit beyond
the date of his actual retirement.
If the value of a Participant's Vested Interest is $3,500 or less at
the time it becomes payable, the distribution shall be made in the form of
a single sum cash payment and shall be made upon such Participant's
Termination of Employment. Such a distribution may not be deferred.
Unless the Participant elects otherwise, the payment of benefits under
this Plan to the Participant shall begin not later than the 60th day after
the close of the Plan Year in which the later of (A) or (B), below,
occurs:
(A) the date on which the Participant attains his Normal Retirement Age
or age 62, if later; or
(B) the date on which the Participant terminates his Service (including
Termination of Employment, death or Disability) with the Employer.
Notwithstanding the foregoing, the failure of a Participant and
Spouse, if required, to consent to a distribution while a benefit is
immediately distributable shall be deemed to be an election to defer
commencement of payment of any benefit sufficient to satisfy the
above paragraph.
6.3 DISTRIBUTION LIMITATION. Elective Deferral Contributions,
Qualified Nonelective Contributions and Qualified Matching
Contributions, and income allocable to each, are not distributable
to a Participant or a Beneficiary, in accordance with such
Participant's or Beneficiary's election, earlier than upon the
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Participant's Termination of Employment, death, or disability.
Such amounts may also be distributed upon:
(A) Termination of the Plan without the establishment or maintenance
of a successor plan.
For purposes of this paragraph, a successor plan is any other
defined contribution plan maintained by the same employer. However,
if fewer than two percent of the Employees who are eligible under the
Plan at the time of its termination are or were eligible under
another defined contribution plan at any time during the 24 month
period beginning 12 months before the time of the termination, the
other plan is not a successor plan. The term "defined contribution
plan" means a plan that is a defined contribution plan as defined in
section 414(i) of the Code, but does not include 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.
A plan is a successor plan only if it exists at the time the Plan is
terminated or within the period ending 12 months after distribution
of all assets from the Plan.
After March 31, 1988, a distribution may be made under this
paragraph only if it is a lump sum distribution. The term "lump sum
distribution" has the same meaning provided in section 402(e)(4) of
the Code, without regard to subparagraphs (A)(i) through (iv), (B),
and (H) of that section.
(B) The disposition by the Employer to an unrelated corporation of
substantially all the assets (within the meaning of section
409(b)(2) of the Code) used in the trade or business of the Employer
if the Employer continues to maintain this Plan after the
disposition. However, a distribution may be made under this paragraph
only to an Employee who continues employment with the corporation
acquiring such assets.
In addition, this requirement is satisfied only if the purchaser
does not maintain the Plan after the disposition. A purchaser
maintains the plan of the seller if it adopts the plan or otherwise
becomes an employer whose employees accrue benefits under the Plan.
A purchaser also maintains the Plan if the Plan is merged or
consolidated with, or any assets or liabilities are transferred
from the Plan to a plan maintained by the purchaser in a transaction
subject to section 414(1)(1) of the Code. A purchaser is not treated
as maintaining the Plan merely because the Plan that it maintains
accepts rollover contributions of amounts distributed by the Plan.
For purposes of this paragraph, the sale of "substantially all"
the assets used in a trade or business means the sale of at least 85
percent of the assets.
After March 31, 1988, a distribution may be made under this
paragraph only if it is a lump sum distribution. The term "lump sum
distribution" has the same meaning provided in section 402(e)(4) of
the Code, without regard to subparagraphs (A)(i) through (iv), (B),
and (H) of that section.
(C) The disposition by the Employer to an unrelated entity or individual
of the Employer's interest in a subsidiary (within the meaning of
section 409(d)(3) of the Code) if the Employer continues to maintain
this Plan. However, a distribution may be made under this paragraph
only to an Employee who continues employment with such subsidiary.
In addition, this requirement is satisfied only if the purchaser
does not maintain the Plan after the disposition. A purchaser
maintains the plan of the seller if it adopts the plan or otherwise
becomes
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<PAGE> 41
an employer whose employees accrue benefits under the Plan. A
purchaser also maintains the Plan if the Plan is merged or
consolidated with, or any assets or liabilities are transferred from
the Plan to a plan maintained by the purchaser in a transaction
subject to section 414(1)(1) of the Code. A purchaser is not treated
as maintaining the Plan merely because the Plan that it maintains
accepts rollover contributions of amounts distributed by the Plan.
After March 31, 1988, a distribution may be made under this
paragraph only if it is a lump sum distribution. The term "lump sum
distribution" has the same meaning provided in section 402(e)(4) of
the Code, without regard to subparagraphs (A)(i) through (iv), (B),
and (H) of that section.
(D) In the case of Elective Deferral Contributions only, the
attainment of age 59-1/2, as described in Section 10.1 of the Plan.
(E) In the case of Elective Deferral Contributions only, the hardship
of the Participant, as described in Section 10.3 of the Plan.
6.4 COMMENCEMENT OF DISTRIBUTIONS. Notwithstanding the provisions of the
preceding Timing of Distributions Section, distributions to a Participant
will commence no later than the date determined in accordance with the
provisions of this Section.
Distribution to a Participant must commence no later than the required
beginning date. The first required beginning date of a Participant is the
first day of April of the calendar year following the calendar year in
which the Participant attains age 70-1/2.
The required beginning date of a Participant who attains age 70-1/2
before January 1, 1988, shall be the first day of April of the calendar
year following the calendar year in which the later of retirement or
attainment of age 70-1/2 occurs, provided the Participant was not a 5%
owner in the Plan Year ending in the year in which the Participant
attained age 66-1/2 or any later Plan Year. A Participant is treated as a
5% owner for purposes of this section if such Participant is a 5% owner as
defined in section 416(i) of the Code (determined in accordance with
section 416 but without regard to whether the Plan is Top-Heavy). The
required beginning date of a Participant who is a 5% owner during any year
beginning after December 31, 1979, is the first day of April following the
later of:
(A) the calendar year in which the Participant attained age 70-1/2, or
(B) the earlier of the calendar year with or within which ends the Plan
Year in which the Participant becomes a 5% owner, or the calendar
year in which the Participant retires.
Once distributions have begun to a 5% owner under this section, they
must continue to be distributed, even if the Participant ceases to be a 5%
owner in a subsequent year. Distribution to such Participant must commence
no later than the first day of April following the calendar year in which
the Participant's Termination of Employment occurs.
If distribution to any Participant is made in other than a single sum
payment, the second payment shall be distributed no later than the
December 31 following the April 1 by which the first payment was required
to be distributed. Each succeeding payment shall be distributed no later
than each December 31 thereafter.
6.5 DISTRIBUTION REQUIREMENTS.
(A) Except as otherwise provided in Article VIII, the requirements of
this Section shall apply to any
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distribution of a Participant's Accrued Benefit.
(B) All distributions required under this Article shall be determined
and made in accordance with the Income Tax Regulations under
section 401(a)(9), including the minimum distribution incidental
benefit requirement of section 1.401(a)(9)-2 of the regulations.
(C) Limits on Settlement Options. Distributions, if not made in a
lump sum, may only be made over one of the following periods (or
a combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a designated Beneficiary,
(3) a period certain not extending beyond the life expectancy of
the Participant, or
(4) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
Beneficiary.
(D) Minimum Amounts to be Distributed.
If the Participant's entire Vested Interest is to be
distributed in other than a lump sum, then the amount to be
distributed each year must be at least an amount equal to the
quotient obtained by dividing the Participant's entire Vested
Interest by the life expectancy of the Participant or the joint and
last survivor expectancy of the Participant and designated
Beneficiary. Life expectancy and joint and last survivor expectancy
are computed by the use of the retum multiples contained in section
1.72-9 of the Income Tax Regulations. For purposes of this
computation, a Participant's life expectancy may be recalculated no
more frequently than annually; however, the life expectancy of a
Beneficiary other than the Participant's Spouse may not be
recalculated.
(1) If the Participant's Spouse is not the designated Beneficiary,
the method of distribution selected must assure that at least
50% of the present value of the amount available for
distribution is paid within the life expectancy of the
Participant.
(2) For calendar years beginning after December 31,
1988, the amount to be distributed each year, beginning with
distributions for the first distribution calendar year, shall
not be less than the quotient obtained by dividing the
Participant's benefit by the lesser of (1) the applicable life
expectancy or (2) if the Participant's Spouse is not the
designated Beneficiary, the applicable divisor determined from
the table set forth in Q&A-4 of section 1.401(a)(9)-2 of the
Income Tax Regulations. Distributions after the death of the
Participant shall be distributed using the applicable life
expectancy in subsection (d)(1) above as the relevant divisor
without regard to regulations section 1.401(a)(9)-2.
(3) The minimum distribution required for the Participant's first
distribution calendar year must be made on or before the
Participant's required beginning date. The minimum
distribution for other calendar years, including the
minimum distribution for the distribution calendar year in
which the Employee's required beginning date occurs, must be
made on or before December 31 of that distribution calendar
year.
6.6 NON-TRANSFERABLE. The Participant's fight to any Annuity payments,
benefits, and refunds is not transferable and shall be free from the
claims of all creditors to the fullest extent permitted by law.
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<PAGE> 43
6.7 DEATH DISTRIBUTION PROVISIONS. If the Participant dies before
distribution of his Vested Interest commences, the following provisions
shall apply:
(A) If a distribution is to be made to a Beneficiary other than the
Surviving Spouse:
(1) If the present value of the Participant's Vested Interest
exceeds (or at the time of any prior distribution exceeded)
$3,500, unless the Beneficiary elects another form of
distribution, that portion of the Participant's Vested Interest
payable to the Beneficiary will be distributed in the form of a
single sum cash payment within a reasonable period of time
after the Plan Administrator is notified of the Participant's
death.
(2) If the present value of the Participant's Vested Interest is
$3,500 or less at the time it becomes payable, the distribution
shall always be made in the form of a single sum cash payment
and shall be paid within a reasonable period of time after the
Plan Administrator is notified of the Participant's death.
(B) If the distribution is to be made to a Beneficiary who is
the Surviving Spouse, such distribution will be made in accordance
with the following:
(1) If the Participant had never elected a life Annuity form of
distribution under the Plan:
(a) If the present value of the Participant's Vested Interest
exceeds (or at the time of any prior distribution exceeded)
$3,500, unless the surviving spouse elects another form of
distribution, that portion of the Participant's Vested
Interest payable to the Surviving Spouse will be
distributed in the form of a single sum cash payment
within a reasonable period of time after the Plan
Administrator is notified of the Participant's death.
(b) If the present value of the Participant's Vested Interest
payable to the Surviving Spouse is $3,500 or less at the
time it becomes payable, the distribution shall always be
made in the form of a single sum cash payment and shall be
made within a reasonable period of time after the Plan
Administrator is notified of the Participant's death.
(2) If the Participant had previously elected a life Annuity form of
distribution under the Plan:
(a) If the present value of the Participant's Vested Interest
exceeds (or at the time of any prior distribution exceeded)
$3,500 and is immediately distributable (as defined in
Section 8.5), the Surviving Spouse must consent to the
distribution before it is made. If the Surviving Spouse
does not consent to a distribution, all benefits shall be
deferred to a date that complies with the terms of Section
6.8 (B).
The distribution shall be made in accordance with the
provisions of Section 8.3.
(b) If the present value of the Participant's Vested Interest is
$3,500 or less at the time it becomes payable, the
distribution shall always be made in the form of a single
sum cash payment and shall be paid within a reasonable
period of time after the Plan Administrator is notified of
the Participant's death.
6.8 DEATH DISTRIBUTION COMMENCEMENT DATE. Upon the death of the Participant,
the following distribution provisions shall take effect:
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<PAGE> 44
(A) If the Participant dies after distribution of his entire
Vested Interest has commenced, the remaining portion of such Vested
Interest will continue to be distributed at least as rapidly as
under the method of distribution being used prior to the
Participant's death.
In no event shall distribution of the Participant's remaining
Vested Interest be made in a lump sum after the Participant's death
unless such distribution is consented to, in writing, by the
Participant's Surviving Spouse, if any.
(B) If the Participant dies before distribution of his Vested
Interest commences, the Participant's entire Vested Interest will be
distributed no later than five years after the Participant's death
except to the extent that an election is made to receive
distributions in accordance with (1) or (2) below:
(1) If any portion of the Participant's Vested Interest is payable
to a designated Beneficiary, distributions may be made in
substantially equal installments over the life or life
expectancy of the designated Beneficiary (or over a period not
extending beyond the life expectancy of such Beneficiary),
commencing no later than one year after the Participant's death;
(2) If the designated Beneficiary is the Participant's Surviving
Spouse, the date distributions are required to begin in
accordance with (1) above shall not be earlier than the date on
which the Participant would have attained age 70-1/2. However,
the Surviving Spouse may elect, at any time following the
Participant's death, to defer the date on which distributions
will begin until no later than the date on which the Participant
would have attained age 70-1/2 and, if the Spouse dies before
payments begin, subsequent distributions shall be made as if the
Spouse had been the Participant.
(C) For purposes of (B) above, payments will be calculated by
use of the return multiples specified in section 1.72-9 of the
Income Tax Regulations. Life expectancy of a Surviving Spouse may be
recalculated annually; however, in the case of any other designated
Beneficiary, such life expectancy will be calculated at the time
payment first commences without further recalculation.
(D) For purposes of this Section (Death Distribution Commencement Date)
any amount paid to a child of the Participant will be treated as if
it had been paid to the Surviving Spouse if the amount becomes
payable to the Surviving Spouse when the child reaches the age of
majority.
6.9 TRANSITIONAL RULE.
(A) Notwithstanding the other requirements of this Article and subject
to the requirements of Article VIII, distribution on behalf of any
Employee may be made in accordance with all of the following
requirements (regardless of when such distribution commences):
(1) The distribution by the Plan is one which would not have
disqualified such Plan under Internal Revenue Code section
401(a)(9) 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 Employee whose interest in the trust is being
distributed or, if the Employee is deceased, by a Beneficiary of
such Employee.
(3) Such designation was in writing, was signed by the Employee or
the Beneficiary, and was made before January 1, 1984.
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<PAGE> 45
(4) The Employee had accrued a benefit under the Plan as of December
31, 1983.
(5) The method of distribution designated by the Employee or the
Beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made, and
in the case of any distribution upon the Employee's death, the
Beneficiaries of the Employee listed in order of priority.
(B) A distribution upon death will not be covered by this
Transitional Rule unless the information in the designation contains
the required information described above with respect to the
distribution to be made upon the death of the Employee.
(C) For any distribution which commences before January 1, 1984,
but continues after December 31, 1983, the Employee or the
Beneficiary, to whom such distribution is being made, will be
presumed to have designated the method of distribution under which
the distribution is being made if the method of distribution was
specified in writing and the distribution satisfies the
requirements in Subsections (A) (1) and (A) (5).
(D) If a designation is revoked, any subsequent distribution
must satisfy the requirements of Internal Revenue Code section
401(a)(9) as amended. Any changes in the designation will be
considered to be a revocation of the designation. However, the mere
substitution or addition of another Beneficiary (one not named in
the designation) under the designation will not be considered to be
a revocation of the designation, so long as such substitution or
addition does not alter the period over which distributions are to
be made under the designation, directly or indirectly (for example,
by altering the relevant measuring life).
6.10 ALTERNATE PAYEE SPECIAL DISTRIBUTION. Distributions pursuant to Section
16.8 may be made without regard to the age or employment status of the
Participant.
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ARTICLE VI-A
DIRECT ROLLOVERS
6A.1 Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Distributee's election under this Article, a
Distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover, except as otherwise provided by the
Employer's administrative procedures as permitted by regulations. In
addition, a Distributee's election of a Direct Rollover shall be subject
to the following requirements:
(A) If the Distributee elects to have only a portion of an Eligible
Rollover Distribution paid to an Eligible Retirement Plan in a
Direct Rollover, that portion must be equal to at least $500.
(B) If the entire amount of a Distributee's Eligible Rollover
Distribution is $5'00 or less, the distribution may not be
divided. Instead, the entire amount must either be paid to the
Distributee or to an Eligible Retirement Plan in a Direct
Rollover.
(C) A Distributee may not elect a Direct Rollover if the Distributee's
Eligible Rollover Distributions during a year are reasonably
expected by the Plan Administrator to total less than $200 (or any
lower minimum amount specified by the Plan Administrator).
(D) A Distributee may not elect a Direct Rollover of an Offset Amount.
(E) A Distributee's election to make or not make a Direct Rollover
with respect to one payment in a series of periodic payments shall
apply to all subsequent payments in the series, except that a
Distributee shall be permitted at any time to change, with respect
to subsequent payments in the series of periodic payments, a
previous election to make or not make a Direct Rollover. A change
of election shall be accomplished by the Distributee notifying the
Plan Administrator of the change. Such notice must be in the form
and manner prescribed by the Plan Administrator.
6A.2 Definitions.
(A) Direct Rollover: A Direct Rollover is a payment by the plan to the
Eligible Retirement Plan specified by the Distributee.
(B) 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 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.
(C) 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 an individual retirement annuity.
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<PAGE> 47
(D) Eligible Rollover Distribution: An Eligible Rollover
Distribution is any distribution of all or any portion of the
balance to the credit of the Distributee, except that an Eligible
Rollover Distribution does not include: any distribution that is one
of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of
the Distributee or the joint lives (or joint life expectancies) of
the Distributee and the Distributee's designated beneficiary, or for
a specified period of ten years or more; any distribution to the
extent such distribution is required under section 401(a)(9) of the
Code; 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).
(E) Offset Amount: An Offset Amount is the amount by which a
Participant's Account is reduced to repay a loan from the Plan
(including the enforcement of the Plan's security interest in the
Participant's Account).
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<PAGE> 48
ARTICLE VII RETIREMENT BENEFITS
7.1 NORMAL RETIREMENT. A Participant who attains his Normal Retirement
Age shall have a vesting percentage of 100%. If a Participant retires
from the active Service of the Employer on his Normal Retirement Date, he
shall be entitled to receive a distribution of the entire value of his
Participant's Account as of his Normal Retirement Date.
7.2 LATE RETIREMENT. A Participant may continue in the Service of the
Employer after his Normal Retirement Age, and in such event he shall
retire on his Late Retirement Date. Such Participant shall continue as a
Participant under this Plan until such Late Retirement Date. The
Participant shall have a vesting percentage of 100% and shall be entitled
to receive a distribution of the entire value of his Participant's Account
as of his Late Retirement Date.
7.3 DISABILITY RETIREMENT. A Participant who retires from the Service
of the Employer on account. of Disability shall have a vesting percentage
of 100% and shall be entitled to receive a distribution of the entire
value of his Participant's Account as of his Disability Retirement Date.
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<PAGE> 49
ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 GENERAL. The provisions of this Article shall take precedence over any
conflicting provision in this Plan.
The provisions of this Article shall apply to any Participant who is
credited with at least one Hour of Service with the Employer on or after
August 23, 1984, and such other Participants as provided in Section 8.7,
unless:
(A) upon the death of the Participant the Participant's entire Vested
Interest will be paid to the Participant's Surviving Spouse, but if
there is no Surviving Spouse, or, if the Surviving Spouse has already
consented in a manner conforming to a Qualified Election, then to
the Participant's designated Beneficiary;
(B) the Participant does not elect payments in the form of a
Life Annuity and has not previously elected payments in the form of a
Life Annuity under the Plan, and
(C) as to the Participant, the Plan is not a direct or indirect
transferee of a defined benefit plan, money purchase pension plan
(including a target benefit plan), stock bonus, or profit-sharing
plan which would otherwise provide for a Life Annuity form of
payment to the Participant.
8.2 PAYMENT OF QUALIFIED JOINT AND SURVIVOR ANNUITY. Unless an
optional form of benefit is selected pursuant to a Qualified Election
within the ninety-day period ending on the first day on which all events
have occurred which entitle the Participant to a benefit, a mamed
Participant's Vested Interest will be paid in the form of a Qualified
Joint and Survivor Annuity.
An unmarried Participant will be provided a single Life Annuity unless
the Participant elects another form of benefit during the applicable
Election Period.
8.3 PAYMENT OF QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. Unless an
optional form of benefit has been selected within the Election Period
pursuant to a Qualified Election, if a married Participant dies before his
Annuity Starting Date, then the Participant's entire Vested Interest, less
the amount of any unpaid loan balance outstanding under the terms of
Article X-A, shall be applied toward the purchase of an immediate Annuity
for the life of the Surviving Spouse. As an alternative to receiving the
benefit in this form of an Annuity, the Surviving Spouse may elect to
receive a single cash payment or any other form of payment provided for in
the Plan within a reasonable time after the Participant's death.
8.4 DEFINITIONS.
(A) Election Period: The period which begins on the first day of the
Plan Year in which the Participant attains age 35 and ends on the
date of the Participant's death. If a Participant separates from
Service prior to the first day of the Plan Year in which age 35 is
attained, with respect to the account balance as of the date of
separation, the Election Period shall begin on the date of
separation.
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<PAGE> 50
A Participant who has not attained age 35 as of the end of a
Plan Year, may make a special Qualified Election to waive the
Qualified Preretirement Survivor Annuity for the period beginning on
the date of such election and ending on the first day of the Plan
Year in which the Participant will attain age 35. Such election
shall not be valid unless the Participant receives a written
explanation of the Qualified Preretirement Survivor Annuity in such
terms as are comparable to the explanation required under Section
8.6 (A). Qualified Preretirement Survivor Annuity coverage will be
automatically reinstated as of the first day of the Plan Year in
which the Participant attains age 35. Any new waiver on or after
such date shall be subject to the full requirements of this Article.
(B) Qualified Election: A waiver of a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity. Any
waiver of a Qualified Joint and Survivor Annuity or a Qualified
Preretirement Survivor Annuity shall not be effective unless: (a)
the Participant's Spouse consents in writing to the election; (b)
the election designates a specific Beneficiary, including any class
of Beneficiaries or any contingent Beneficiaries, which may not be
changed without spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal
consent); (c) the Spouse's consent acknowledges the effect of the
election; and (d) the Spouse's consent is witnessed by a Plan
representative or notary public. Additionally, a Participant's
waiver of the Qualified Joint and Survivor Annuity shall not be
effective unless the election designates a form of benefit payment
which may not be changed without spousal consent (or the Spouse
expressly permits designations by the Participant without any
further spousal consent). If it is established to the satisfaction
of a Plan representative that such written consent cannot be
obtained because:
(1) there is no Spouse;
(2) the Spouse cannot be located;
(3) the Participant is legally separated or has been abandoned
within the meaning of local law, and the Participant has a
court order to such effect;
(4) of other circumstances as the Secretary of the Treasury may by
regulations prescribe,
the Participant's election to waive coverage will be considered a
Qualified Election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained)
shall be effective only with respect to such Spouse. A consent that
permits designations by the Participant without any requirement of
further consent by such Spouse must acknowledge that the Spouse has
the right to limit consent to a specific Beneficiary, and a specific
form of benefit where applicable, and that the Spouse voluntarily
elects to relinquish either or both of such fights. A revocation of
a prior waiver may be made by a Participant without the consent of
the Spouse at any time before the commencement of benefits. The
number of revocations shall not be limited. No consent obtained
under this provision shall be valid unless the Participant has
received notice as provided in Section 8.6 below.
(C) Qualified Joint and Survivor Annuity: An immediate Annuity for the
life of the Participant with a survivor Annuity for the life of the
Spouse which is not less than 50% and not more than 100% of the
amount of the Annuity which is payable during the joint lives of the
Participant and the Spouse and which is the amount of benefit which
can be purchased with the Participant's entire Vested Interest. If
no survivor Annuity percentage has been specified in an election,
the percentage payable to the Spouse will be 50%.
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<PAGE> 51
Notwithstanding the above paragraph, a Qualified Joint and Survivor
Annuity for an unmarried Participant shall mean an Annuity for the
life of the Participant.
(D) Qualified Preretirement Survivor Annuity: A survivor Annuity for
the life of the Spouse in the amount which can be purchased
with the Participant's entire Vested Interest.
(E) Spouse (Surviving Spouse): The Spouse or Surviving Spouse of the
Participant. A former Spouse may be treated as the Spouse or
Surviving Spouse to the extent provided under a Qualified Domestic
Relations Order as described in Internal Revenue Code section 414(p).
8.5 CONSENT REQUIREMENTS. Only the Participant need consent to the
commencement of a distribution in the form of a Qualified Joint
and Survivor Annuity while the account balance is immediately
distributable. Neither the consent of the Participant nor the
Participant's Spouse shall be required to the extent that a
distribution is required to satisfy section 401(a)(9) or section
415 of the Code. An account balance is immediately distributable
if any part of the account balance could be distributed to the
Participant (or Surviving Spouse) before the Participant attains
(or would have attained if not deceased) the later of Normal
Retirement Age or age 62.
8.6 NOTICE REQUIREMENTS.
(A) In the case of a Qualified Joint and Survivor Annuity as described
in Section 8.4 (C), the Plan Administrator shall provide each
Participant within a reasonable period prior to the commencement of
benefits a written explanation of: (i) the terms and conditions of a
Qualified Joint and Survivor Annuity; (ii) the Participant's fight to
make and the effect of an election to waive the Qualified Joint and
Survivor Annuity form of benefit; (iii) the rights of a Participant's
Spouse; (iv) the right to make, and the effect of, a revocation of a
previous election to waive the Qualified Joint and Survivor Annuity;
(v) a general description of the eligibility conditions and other
material features of the optional forms of benefit; and (vi)
sufficient additional information to explain the relative values of
the optional forms of benefit available to them under this Plan.
(B) In the case of a Qualified Preretirement Survivor Annuity as
described in Section 8.4 (D), the Plan Administrator shall
provide each Participant within the period beginning on 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, a written explanation of the Qualified
Preretirement Survivor Annuity in such terms and in such manner as
would be comparable to the explanation provided for meeting the
requirements of Section 8.6 (A) to a Qualified Joint and Survivor
Annuity.
If a Participant enters the Plan after the first day of the
Plan Year in which the Participant attained age 32, the Plan
Administrator shall provide notice no later than the close of the
second Plan Year succeeding the entry of the Participant in the Plan.
If a Participant enters the Plan after he has attained age 35,
the Plan Administrator shall provide notice within a reasonable
period of time following the entry of the Participant in the Plan.
If a Participant's Termination of Employment occurs before the
Participant attains age 35, the Plan Administrator shall provide
notice within one year of such Termination of Employment.
8.7 TRANSITIONAL RULES.
(A) Any living Participant not receiving benefits on August 23, 1984,
who would otherwise not receive
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the benefits prescribed by the previous Sections of this Article
must be given the opportunity to elect to have the prior
Sections of this Article relating to the Qualified Preretirement
Survivor Annuity apply if such Participant is credited with at least
one Hour of Service under this Plan or a predecessor plan in a Plan
Year beginning on or after January 1, 1976, and such Participant had
at least 10 Years of Service for vesting purposes when he separated
from Service.
(B) Any living Participant not receiving benefits on August
23, 1984, who was credited with at least one Hour of Service
under this Plan or a predecessor plan on or after September 2, 1974,
and who is not otherwise credited with any Service in a Plan Year
beginning on or after January 1, 1976, must be given the opportunity
to have his or her benefits paid in accordance with Section 8.7 (D).
(C) The respective opportunities to elect (as described in
Sections 8.7 (A) and 8.7 (B) above) must be afforded to the
appropriate Participants during the period commencing on August 23,
1984, and ending on the date benefits would otherwise commence to
said Participants.
(D) Any Participant who has elected pursuant to Section 8.7 (B) of
this Article and any Participant who does not elect under Section
8.7 (A) or who meets the requirements of Section 8.7 (A) except that
such Participant does not have at least 10 Years of Service for
vesting purposes when he separates from Service, shall have his
benefits distributed in accordance with all of the following
requirements if benefits would have been payable in the form of a
life annuity:
(1) Automatic Joint and Survivor Annuity. If benefits in the form
of a life annuity become payable to a married Participant who:
(a) begins to receive payments under the Plan on or after
Normal Retirement Age; or
(b) dies on or after Normal Retirement Age while still working
for the Employer; or
(c) begins to receive payments on or after the Qualified Early
Retirement Age; or
(d) separates from Service on or after attaining Normal
Retirement Age (or the Qualified Early Retirement Age) and
after satisfying the eligibility requirements for the
payment of benefits under the Plan and thereafter dies
before beginning to receive such benefits;
then such benefits will be received under this Plan in the form
of a Qualified Joint and Survivor Annuity, unless the
Participant has elected otherwise during the election period.
The election period must begin at least six months before the
Participant attains Qualified Early Retirement Age and end not
more than 90 days before the commencement of benefits. Any
election hereunder will be in writing and may be changed by the
Participant at any time.
(2) Election of Early Survivor Annuity: A Participant who is
employed after attaining the Qualified Early Retirement
Age will be given the opportunity to elect, during the election
period, to have a survivor annuity payable on death. If the
Participant elects the survivor annuity, payments under such
Annuity must not be less than the payments which would have
been made to the Spouse under the Qualified Joint and Survivor
Annuity if the Participant had retired on the day before his or
her death. Any election under this provision will be in
writing and may be changed by the Participant at any time. The
election period begins on the later of (1) the 90th day before
the Participant attains the Qualified Early Retirement Age, or
(2) the date on which participation begins, and ends
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on the date the Participant terminates employment.
(3) For purposes of this Section 8.7 (D):
(a) Qualified Early Retirement Age is the latest of:
(i) the earliest date, under the Plan, on which the
Participant may elect to receive retirement benefits;
or
(ii) the first day of the 120th month beginning before the
Participant reaches Normal Retirement Age; or
(iii) the date the Participant begins participation.
(b) Qualified Joint and Survivor Annuity is an Annuity for the
life of the Participant with a survivor annuity for the
life of the Spouse as described in Section 8.4 (C).
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ARTICLE IX
TERMINATION OF EMPLOYMENT
9.1 DISTRIBUTION. As of a Participant's Termination of Employment, he shall be
entitled to receive a distribution of his entire Vested Interest. Such
distribution shall be further subject to the terms and conditions of
Article VI.
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ARTICLE X
WITHDRAWALS
10.1 WITHDRAWAL AFTER AGE 59-1/2. A Participant who has attained age 59-1/2,
may elect to withdraw from his Participant's Account, once every
12-consecutive months, an amount which is equal to any whole percentage
(not exceeding 100%) of his Vested Interest in his Participant's Account
attributable to:
. Elective Deferral Contributions, including earnings
. Matching Contributions, including earnings.
10.2 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF CONTRIBUTIONS OTHER THAN
ELECTIVE DEFERRAL CONTRIBUTIONS. In the event a Participant suffers a
Serious Financial Hardship, such Participant may withdraw a portion of
his Vested Interest attributable to the following to meet such need:
. Matching Contributions that are not designated as Qualified Matching
Contributions, including earnings.
In no event may any such withdrawal exceed the amount required to meet
the immediate financial need created by the Serious Financial Hardship.
Such Serious Financial Hardship must be shown by positive evidence
submitted to the Plan Administrator that the hardship is of sufficient
magnitude to impair the Participant's financial security. Withdrawals
shall be determined in a consistent and nondiscriminatory manner, and
shall not affect the Participant's right under the Plan to make
additional withdrawals or to continue to be a Participant.
10.3 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF ELECTIVE
DEFERRAL CONTRIBUTIONS. Distributions of Elective Deferral
Contributions may be made to a Participant in the event of a hardship.
For purposes of this section, a distribution is made on account of
hardship only if the distribution is made both on account of an immediate
and heavy financial need of the Employee and is necessary to satisfy the
financial need. In addition, for Plan Years beginning after December 31,
1988 any distribution on account of hardship shall be limited to the
distributable amount described in paragraph (C) of this section.
(A) The following are the only financial needs considered immediate
and heavy for purposes of this section:
(1) Expenses for medical care described in section 213(d) of the
Code previously incurred by the Employee, the Employee's
Spouse, or any dependents of the Employee (as defined in
section 152 of the Code) or necessary for these persons to
obtain medical care described in section 213(d) of the Code;
(2) Payment of tuition and related educational fees for the next
12 months of post-secondary education for the Employee, his
Spouse, children, or dependents (as defined in section 152 of
the Code);
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(3) Costs directly related to the purchase of a principal
residence for the Employee (excluding mortgage payments); or
(4) Payments necessary to prevent the eviction of the Employee from
the Employee's principal residence or foreclosure on the
mortgage on that residence.
(B) The Participant shall specify on the application for a hardship
withdrawal whether the Participant elects the provision of (1) or
(2) below to be used in determining the necessity of the hardship.
(1) A distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Employee only if all of
the following requirements are satisfied:
(a) The hardship distribution is not in excess of the amount of
the immediate and heavy financial need of the Employee. The
amount of an immediate and heavy financial need may include
the amounts necessary to apply any federal, state, or local
income taxes or penalties reasonably anticipated to result
from the distribution.
(b) The Employee had obtained all distributions, other than
hardship distributions, and all nontaxable (at the time of
the loan) loans currently available under all plans
maintained by the Employer.
(c) The Employee is suspended from making Elective Deferral
Contributions to the Plan for at least 12 months after
receipt of the hardship distribution. In addition, the
Employee must be prohibited under the terms of the plan or
an otherwise enforceable agreement from making Elective
Deferral Contributions and Employee Contributions to all
other plans maintained by the Employer for at least 12
months after receipt of the hardship distribution.
For this purpose, the phrase "all other plans of the
Employer" means all qualified and nonqualified plans of
deferred compensation maintained by the Employer. The
phrase includes a stock option, stock purchase, or similar
plan, or a cash or deferred arrangement that is part of a
cafeteria plan within the meaning of section 125 of the
Code. However, it does not include the mandatory employee
contribution part of a defined benefit plan. It also does
not include a health or welfare benefit plan, including one
that is part of a cafeteria plan within the meaning of
section 125 of the Code.
(d) The Employee may not make Elective Deferral Contributions
to the Plan for the Employee's taxable year immediately
following the taxable year of the hardship distribution in
excess of the applicable limit under section 402(g) of the
Code for such taxable year less the amount of such
Employee's Elective Deferral Contributions for the taxable
year of the hardship distribution. In addition, all other
plans maintained by the Employer must limit the Employee's
Elective Deferral Contributions for the next taxable year
to the applicable limit under section 402(g) of the Code
for that year minus the Employee's Elective Deferral
Contributions for the year of the hardship distribution.
(2) A distribution will be treated as necessary to satisfy a
financial need if the Employer relies upon the Employee's
written representation, unless the Employer has actual knowledge
to the contrary, that the need cannot reasonably be relieved:
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(a) Through reimbursement or compensation by insurance or
otherwise;
(b) By liquidation of the Employee's assets;
(c) By cessation of Elective Deferral Contributions under the
Plan; or
(d) By other distributions or nontaxable (at the time of the
loan) loans from plans maintained by the Employer or by
any other employer, or by borrowing from commercial
sources on reasonable commercial terms in an amount
sufficient to satisfy the need.
A need cannot reasonably be relieved by one of the actions
listed above if the effect would be to increase the amount of
the need.
The amount of an immediate and heavy financial need may
include any amounts necessary to pay any federal, state, or
local income taxes or penalties reasonably anticipated to
result from the distribution.
(C) The distributable amount is equal to the Employee's total Elective
Deferral Contribution as of the date of distribution, reduced by the
amount of previous distributions of Elective Deferral Contributions
on account of hardship. The Employee's total Elective Deferral
Contributions shall be increased by income allocable to Elective
Deferral Contributions. In the case of income allocable to
Elective Deferral Contributions, the distributable amount may only
include amounts that were credited to the Employee's Account as of
December 31, 1988.
10.4 WITHDRAWAL OF ROLLOVER CONTRIBUTIONS. Once during a Plan Year a
Participant may elect to withdraw from his Participant's Account an
amount up to 100% of the value of that portion of his account
attributable to his Rollover Contributions as defined in Article IV.
Such an election shall become effective in accordance with the
Notification Section below.
10.5 NOTIFICATION. The Participant shall notify the Administrator in
writing of his election to make a withdrawal under the preceding
provisions of this Article X. Any such election shall be effective as of
the date specified in such notice, which date must be at least 15 days
after such notice is filed. Payment of the withdrawal shall be subject
to the terms and conditions of Article VI.
10.6 NON-REPAYMENT. Withdrawals made in accordance with this Article X
may not be repaid.
10.7 SPOUSAL CONSENT TO WITHDRAWAL. Prior to obtaining a withdrawal in
accordance with this Article X, a married Participant must obtain
spousal consent in accordance with the provisions of Article VIII
unless such Participant meets the requirements set forth in
Sections 8.1 (A), (B) and (C).
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ARTICLE X-A
LOANS
10A.1 LOANS TO PARTICIPANTS. The Plan Administrator may make a bona fide loan
to a Participant, in an amount which, when added to the outstanding
balance of all other loans to the Participant from all qualified plans of
the Employer, does not exceed the lesser of $50,000 reduced by the excess
of the Participant's highest outstanding loan balance during the 12
months preceding the date on which the loan is made over the outstanding
loan balance on the date the new loan is made, or 50% of the
Participant's Vested Interest in his Participant's Account. The loan
shall be made under such terms, security interest, and conditions as the
Plan Administrator deems appropriate, provided, however, that all loans
granted hereunder:
(A) are available to all Participants and Beneficiaries, who are
parties-in-interest pursuant to section 3(14) of ERISA, on a
reasonably equivalent basis;
(B) are not made available to Highly Compensated Employees on a basis
greater than the basis made available to other Employees;
(C) bear a reasonable rate of interest;
(D) are adequately secured;
(E) unless a Participant meets the requirements set forth in Sections
8.1 (A), (B) and (C), are made only after a Participant obtains
the consent of his Spouse, if any, to use his Participant's
Account as security for the loan. Spousal consent shall be obtained
no earlier than the beginning of the 90-day period that ends on the
date on which the loan is to be so secured. The consent must be in
writing, must acknowledge the effect of the loan, and must be
witnessed by a plan representative or notary public. Such consent
shall thereafter be binding with respect to the consenting Spouse
or any subsequent Spouse with respect to that loan. A new consent
shall be required if the Participant's Account is used for
renegotiation, extension, renewal or other revision of the loan.
(F) are made in accordance with and subject to all of the provisions of
this Article.
10A.2 LOAN PROCEDURES. The Plan Administrator shall establish a written set of
procedures, set forth in the summary plan description, by which all
loans will be administered. Such rules, which are incorporated herein
by reference, will include, but not be limited to, the following:
(A) the person or persons authorized to administer the loan program,
identified by name or position;
(B) the loan application procedure;
(C) the basis for approving or denying loans;
(D) any limits on the types of loans permitted;
(E) the procedure for determining a "reasonable" interest rate;
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(F) acceptable collateral;
(G) default conditions; and
(H) steps which will be taken to preserve Plan assets in the event
of default.
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ARTICLE XI
FIDUCIARY DUTIES AND RESPONSIBILITIES
11.1 GENERAL FIDUCIARY STANDARD OF CONDUCT. Each Fiduciary of the Plan shall
discharge his duties hereunder solely in the interest of the
Participants and their Beneficiaries and for the exclusive purpose of
providing benefits to Participants and their Beneficiaries and defraying
reasonable expenses of administering the Plan. Each Fiduciary shall act
with the care, skill, prudence, and diligence under the circumstances
that a prudent man acting in a like capacity and familiar with such
matters would use in conducting an enterprise of like character and with
like aims, in accordance with the documents and instruments governing
this Plan, insofar as such documents and instruments are consistent with
this standard.
11.2 SERVICE IN MULTIPLE CAPACITIES. Any Person or group of persons may serve
in more than one fiduciary capacity with respect to this Plan.
11.3 LIMITATIONS ON FIDUCIARY LIABILITY. Nothing in this Plan shall be
construed to prevent any Fiduciary from receiving any benefit to which
he may be entitled as a Participant or Beneficiary in this Plan, so long
as the benefit is computed and paid on a basis which is consistent with
the terms of this Plan as applied to all other Participants and
Beneficiaries. Nor shall this Plan be interpreted to prevent any
Fiduciary from receiving any reasonable compensation for services
rendered, or for the reimbursement of expenses properly and actually
incurred in the performance of his duties with the Plan; except that no
Person so serving who already receives full-time pay from an Employer
shall receive compensation from this Plan, except for reimbursement of
expenses properly and actually incurred.
11.4 INVESTMENT MANAGER. When an Investment Manager has been appointed, he is
required to acknowledge in writing that he has undertaken a Fiduciary
responsibility with respect to the Plan.
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ARTICLE XII
THE ADMINISTRATOR
12.1 DESIGNATION AND ACCEPTANCE. The Employer shall designate a person
or persons to serve as Administrator under the Plan and such
person, by joining in the execution of this Plan and Trust
Agreement accepts such appointment and agrees to act in
accordance with the terms of the Plan.
12.2 DUTIES AND AUTHORITY. The Administrator shall administer the Plan
in a nondiscriminatory manner for the exclusive benefit of
Participants and their Beneficiaries.
The Administrator shall perform all such duties as are necessary to
operate, administer, and manage the Plan in accordance with the terms
thereof, including but not limited to the following:
(A) To determine all questions relating to a Participant's
coverage under the Plan;
(B) To maintain all necessary records for the administration
of the Plan;
(C) To compute and authorize the payment of retirement income
and other benefit payments to eligible Participants and
Beneficiaries;
(D) To interpret and construe the provisions of the Plan and to make
regulations which are not inconsistent with the terms thereof; and
(E) To advise or assist Participants regarding any rights, benefits,
or elections available under the Plan.
The Administrator shall take all such actions as are necessary to
operate, administer, and manage the Plan as a retirement program which is
at all times in full compliance with any law or regulation affecting this
Plan.
The Administrator may allocate certain specified duties of plan
administration to an individual or group of individuals who, with respect
to such duties, shall have all reasonable powers necessary or appropriate
to accomplish them.
12.3 EXPENSES AND COMPENSATION. All expenses of administration may be
paid out of the Trust fund unless paid by the Employer. Such expenses
shall include any expenses incident to the functioning of the
Administrator, including, but not limited to, fees of accountants,
counsel, and other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall constitute a
liability of the Trust fund. However, the Employer may reimburse the
Trust fund for any administration expense incurred. Any administration
expense paid to the Trust fund as a reimbursement shall not be
considered an Employer Contribution. Nothing shall prevent the
Administrator from receiving reasonable compensation for services
rendered in administering this Plan, unless the Administrator already
receives full-time pay from any Employer adopting the Plan.
12.4 INFORMATION FROM EMPLOYER. To enable the Administrator to
perform his functions, the Employer shall supply full and timely
information to the Administrator on all matters relating to this
Plan as the Administrator may require.
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12.5 ADMINISTRATIVE COMMITTEE; MULTIPLE SIGNATURES. In the event that
more than one person has been duly nominated to serve on the
Administrative Committee and has signified in writing the
acceptance of such designation, the signature(s) of one or more
persons may be accepted by an interested party as conclusive
evidence that the Administrative Committee has duly authorized
the action therein set forth and as representing the will of and
binding upon the whole Administrative Committee. No person
receiving such documents or written instructions and acting in
good faith and in reliance thereon shall be obliged to ascertain
the validity of such action under the terms of this Plan. The
Administrative Committee shall act by a majority of its members
at the time in office and such action may be taken either by a
vote at a meeting or in writing without a meeting.
12.6 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. The
Administrator, or any member of the Administrative Committee, may
resign at any time by delivering to the Employer a written notice
of resignation, to take effect at a date specified therein, which
shall not be less than 30 days after the delivery thereof, unless
such notice shall be waived.
The Administrator may be removed with or without cause by the Employer
by delivery of written notice of removal, to take effect at a date
specified therein, which shall be not less than 30 days after delivery
thereof, unless such notice shall be waived.
The Employer, upon receipt of or giving notice of the resignation or
removal of the Administrator, shall promptly designate a successor
Administrator who must signify acceptance of this position in writing. In
the event no successor is appointed, the Board of Directors of the
Employer will function as the Administrative Committee until a new
Administrator has been appointed and has accepted such appointment.
12.7 INVESTMENT MANAGER. The Administrator may appoint, in writing,
an Investment Manager or Managers to whom is delegated the
authority to manage, acquire, invest or dispose of all or any
part of the Trust assets. With regard to the assets entrusted to
his care, the Investment Manager shall provide written
instructions and directions to the Trustee, who shall in turn be
entitled to rely upon such written direction. This appointment
and delegation shall be evidenced by a signed written agreement.
12.8 DELEGATION OF DUTIES. The Administrator shall have the power, to
the extent permitted by law, to delegate the performance of such
Fiduciary and non-Fiduciary duties, responsibilities and
functions as the Administrator shall deem advisable for the
proper management and administration of the Plan in the best
interests of the Participants and their Beneficiaries.
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ARTICLE XIII
PARTICIPANTS' RIGHTS
13.1 GENERAL RIGHTS OF PARTICIPANTS AND BENEFICIARIES. The Plan is
established and the Trust assets are held for the exclusive
purpose of providing benefits for such Employees and their
Beneficiaries as have qualified to participate under the terms of
the Plan.
13.2 FILING A CLAIM FOR BENEFITS. A Participant or Beneficiary or the
Employer acting in his behalf, shall notify the Administrator of a
claim of benefits under the Plan. Such request shall be in writing
to the Administrator and shall set forth the basis of such claim
and shall authorize the Administrator to conduct such examinations
as may be necessary to determine the validity of the claim and to
take such steps as may be necessary to facilitate the payment of
any benefits to which the Participant or Beneficiary may be
entitled under the terms of the Plan.
A decision by the Administrator shall be made promptly and not later
than 90 days after the Administrator's receipt of the claim of benefits
under the Plan, unless special circumstances require an extension of the
time for processing, in which case a decision shall be rendered as soon
as possible, but not later than 180 days after the initial receipt of the
claim of benefits.
13.3 DENIAL OF CLAIM. Whenever a claim for benefits by any Participant
or Beneficiary has been denied by a Plan Administrator, a written
notice, prepared in a manner calculated to be understood by the
Participant, must be provided, setting forth (1) the specific
reasons for the denial; (2) the specific reference to pertinent
Plan provisions on which the denial is based; (3) a description of
any additional material or information necessary for the claimant
to perfect the claim and an explanation of why such material or
information is necessary; and (4) an explanation of the Plan's
claim review procedure.
13.4 REMEDIES AVAILABLE TO PARTICIPANTS. A Participant or Beneficiary
may (1) request a review by a Named Fiduciary, other than the
Administrator, upon written application to the Plan; (2) review
pertinent Plan documents; and (3) submit issues and comments in
writing to a Named Fiduciary. A Participant or Beneficiary shall
have 60 days after receipt by the claimant of written notification
of a denial of a claim to request a review of a denied claim.
A decision by a Named Fiduciary shall be made promptly and not later
than 60 days after the Named Fiduciary's receipt of a request for review,
unless special circumstances require an extension of the time for
processing, in which case a decision shall be rendered as soon as
possible, but not later than 120 days after receipt of a request for
review. The decision on review by a Named Fiduciary shall be in writing
and shall include specific reasons for the decision, written in a manner
calculated to be understood by the claimant, and specific references to
the pertinent Plan provisions on which the decision is based.
A Participant or Beneficiary shall be entitled, either in his own name
or in conjunction with any other interested parties, to bring such
actions in law or equity or to undertake such administrative actions or
to seek such relief as may be necessary or appropriate to compel the
disclosure of any required information, to enforce or protect his rights,
to recover present benefits due to him, or to clarify his fights to
future benefits under the Plan.
13.5 REINSTATEMENT OF BENEFIT. In the event any portion of a distribution
which is payable to a Participant or a Beneficiary shall remain unpaid
on account of the inability of the Plan Administrator, after
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diligent effort, to locate such Participant or Beneficiary, the amount
so distributable shall be treated as a Forfeiture under the Plan. If a
claim is made by the Participant or Beneficiary for any benefit forfeited
under this section, such benefit shall be reinstated.
13.6 LIMITATION OF RIGHTS. Participation hereunder shall not grant any
Participant the fight to be retained in the Service of the
Employer or any other rights or interest in the Plan or Trust fund
other than those specifically herein set forth.
13.7 PARTICIPANT CONTRIBUTIONS. Each Participant, regardless of his
length of Service with the Employer, shall be fully vested (100%)
at all times in any portion of his Participant's Account
attributable to the following:
. Rollover Contributions.
13.8 MERGERS OR TRANSFERS. In the case of any merger or consolidation
with or transfer of assets or liabilities to any other qualified
plan after September 2, 1974, the following conditions must be
met:
(A) The sum of the account balances in each plan shall equal the fair
market value (determined as of the date of the merger or transfer
as if the plans had then terminated) of the entire plan assets.
(B) The assets of each plan shall be combined to form the assets of
the plan as merged (or transferred).
(C) Immediately after the merger (or transfer), each Participant in
the plan merged (or transferred) shall have an account balance
equal to the sum of the account balances the Participant had in
the plans immediately prior to the merger (or transfer).
(D) Immediately after the merger (or transfer) each Participant in
the plan merged (or transferred) shall be entitled to the same
optional benefit forms as he was entitled to immediately prior to
the merger (or transfer).
In the case of any merger or consolidation with or transfer of assets
or liabilities to any defined benefit plan after September 2, 1974, one
of the plans before such merger, consolidation, or transfer shall be
converted into the other type of plan and either the rules described
above, applicable to the merger of two defined contribution plans, or the
rules applicable to the merger of two defined benefit plans, as
appropriate, shall be applied.
13.9 PARTICIPANT'S ACCOUNT AND VALUATION. A Participant's Account shall
be maintained on behalf of each Participant until such account is
distributed in accordance with the terms of this Plan. At least
once per year, as of the last day of the Plan Year, each
Participant's Account shall be adjusted for any earnings, gains,
losses, contributions, withdrawals, loans, and expenses,
attributable to such Plan Year, in order to obtain a new valuation
of the Participant's Account.
13.10 INVESTMENT OF CONTRIBUTIONS. Each Participant shall have the
exclusive authority to direct the investment of contributions made
to his Participant's Account among the investment funds designated
by the Employer. The Participant shall elect, by written notice to
the Plan Administrator, to have a specified percentage invested in
one or more investment fund(s), as long as the designated
percentage for each fund is a whole number, and the sum of the
percentages allocated is equal to 100%.
At any time during the Plan Year, the Participant may change the amount
of the contributions pursuant to the above paragraph to be invested in a
particular investment fund, subject to the rules of the investment funds
in which the Participant's Account is invested or is to be invested.
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The Plan Administrator shall provide each Participant with
a form which the Participant may use to select among the
investment funds designated by the Employer.
13.11 TRANSFERS BETWEEN INVESTMENT FUNDS. A Participant may designate
the amount of the contributions pursuant to Section 13.10 above
to be transferred between the investment funds designated by the
Employer at any time during the Plan Year.
Notwithstanding the above, the transfer of amounts between
investment funds shall be subject to the rules of the
investment funds in which the Participant's Account is
invested or is to be invested.
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ARTICLE XIV
AMENDMENT OR TERMINATION OF THE PLAN
14.1 AMENDMENT OF PLAN. The Employer shall have the right from time to
time to modify or amend, in whole or in part, any or all
provisions of the Plan, provided that a Board of Directors'
resolution pursuant to such modification or amendment shall first
be adopted and provided further that the modification or
amendment is signed by the Employer and the Administrator. Upon
any such modification or amendment the Administrator and the
Trustee shall be furnished a copy thereof. No amendment shall
deprive any Participant or Beneficiary of any Vested Interest
hereunder. Any Participant having not less than three Years of
Service shall be permitted to elect, in writing, to have his
Vesting Percentage computed under the Plan without regard to such
amendment.
The period during which the election must be made by the Participant
shall begin no later than the date the Plan Amendment is adopted and
end no later than after the latest of the following dates:
(A) The date which is 60 days after the day the amendment is adopted; or
(B) The date which is 60 days after the day the amendment becomes
effective; or
(C) The date which is 60 days after the day the Participant is issued
written notice of the amendment by the Employer or Administrator.
Such written election by a Participant shall be made to the Administrator.
No amendment to the Plan shall decrease a Participant's Account balance
or eliminate an optional form of distribution. Notwithstanding the
preceding sentence, a Participant's Account balance may be reduced to the
extent permitted under Internal Revenue Code section 412(c)(8).
Furthermore, no amendment to the Plan shall have the effect of decreasing
a Participant's Vested Interest determined without regard to such
amendment as of the later of the date such amendment is adopted or the
date it becomes effective.
14.2 CONDITIONS OF AMENDMENT. The Employer shall not make any
amendment which would cause the Plan to lose its status as a
qualified plan within the meaning of section 401(a) of the Code.
14.3 TERMINATION OF THE PLAN. The Employer intends to continue the
Plan indefinitely for the benefit of its Employees, but reserves
the right to terminate the Plan at any time by resolution of its
Board of Directors. Upon such termination, the liability of the
Employer to make contributions hereunder shall terminate.
14.4 DISTRIBUTIONS UPON PLAN TERMINATION. If this Plan is terminated
and the Employer does not maintain or establish another defined
contribution plan, pursuant to Code section 401 (k)(10)(A)(i),
each Participant shall receive a total distribution, in the form
of a lump-sum distribution as defined in Code section
401(k)(10)(B)(ii), of his Participant's Account in accordance
with the terms and conditions of Article VI.
However, if this Plan is terminated and the Employer does maintain or
establish another defined contribution plan as discussed in the above
paragraph, or if the Plan is only partially terminated, each Participant
shall receive a total distribution of his Participant's Account,
excluding any amounts attributable
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to Elective Deferral Contributions and contributions made by the
Employer designated as 401(k) contributions in accordance with the terms
and conditions of Article VI. In such a situation, any amounts in a
Participant's Account attributable to Elective Deferral Contributions and
contributions made by the Employer designated as 401(k) contributions may
be distributed only upon the occurrence of an event described in Article
VI.
No Participant and/or spousal consent will be required for a
distribution where no successor plan exists. However, if the Employer
does maintain a successor plan, Participant and/or spousal consent is
required for a distribution exceeding $3,500. The Participant's Account
will be transferred to such successor plan if the required consents are
not received.
14.5 APPROVAL BY THE INTERNAL REVENUE SERVICE. Notwithstanding any
other provisions of this Plan, the Employer's adoption of this
Plan is subject to the condition precedent that the Employer's
Plan shall be approved and qualified by the Internal Revenue
Service as meeting the requirements of section 401(a) of the
Internal Revenue Code and that the Trust established in connection
herewith shall be entitled to exemption under the provisions of
section 501(a). In the event the Plan initially fails to qualify
and the Internal Revenue Service issues a final ruling that the
Employer's Plan or Trust fails to so qualify as of the Effective
Date, all liability of the Employer to make further contributions
hereunder shall cease. The Plan Administrator, Trustee and any
other Named Fiduciary shall be notified immediately by the
Employer, in writing, of such failure to qualify. Upon such
notification, the value of the Participants' Accounts shall be
distributed in cash to the Employer, subject to the terms and
conditions of Article VI.
That portion of such distribution which is attributable to Participant
Contributions as specified in Section 13.7, if any, shall be paid to the
Participant, and the balance of such distribution shall be paid to the
Employer.
14.6 SUBSEQUENT UNFAVORABLE DETERMINATION. If the Employer is notified
subsequent to initial favorable qualification that the Plan is no
longer qualified within the meaning of section 401(a) of the
Internal Revenue Code, or that the Trust is no longer entitled to
exemption under the provisions of section 501(a), and if the
Employer shall fail within a reasonable time to make any necessary
changes in order that the Plan and/or Trust shall so qualify, the
Participants' Accounts shall be disposed of as if the Plan had
terminated, in the manner set forth in this Article XIV.
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ARTICLE XV
SUBSTITUTION OF PLANS
15.1 SUBSTITUTION OF PLANS. Subject to the provisions of Section 13.8
the Employer may substitute an individually designed plan or a
master or prototype plan for this Plan without terminating this
Plan as embodied herein and this shall be deemed to constitute an
amendment and restatement in its entirety of this Plan as
heretofore adopted by the Employer; provided, however, that the
Employer shall have certified to the Trustee that this Plan is
being continued on a restated basis which meets the requirements
of section 401(a) of the Internal Revenue Code and ERISA.
15.2 TRANSFER OF ASSETS. Upon 90 days written notification from the
Employer that a different plan meeting the requirements set forth
in Section 15.1 above has been executed and entered into by the
Administrator and the Employer, and after the Trustee has been
furnished the Employer's certification in writing that the
Employer intends to continue the Plan as a qualified Plan under
section 401(a) of the Internal Revenue Code and ERISA, assets
which represent the value of all Participant's Accounts may be
transferred in accordance with the instructions received from or
on behalf of the Employer. The Trustee may rely fully on the
representations or directions of the Employer with respect to any
such transfer and shall be fully protected and discharged with
respect to any such transfer made in accordance with such
representations, instructions, or directions.
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ARTICLE XVI
MISCELLANEOUS
16.1 NON-REVERSION. This Plan has been established by the Employer for
the exclusive benefit of the Participants and their Beneficiaries.
Except as otherwise provided in Sections 14.5, 16.7, and 16.8,
under no circumstances shall any funds contributed hereunder, at
any time, revert to or be used by the Employer, nor shall any such
funds or assets of any kind be used other than for the benefit of
the Participants or their Beneficiaries.
16.2 GENDER AND NUMBER. When necessary to the meaning hereof, and except
when otherwise indicated by the context, either the masculine or
the neuter pronoun shall be deemed to include the masculine, the
feminine, and the neuter, and the singular shall be deemed to
include the plural.
16.3 REFERENCE TO THE CODE AND ERISA. Any reference to any section of
the Internal Revenue Code, ERISA, or to any other statute or law
shall be deemed to include any successor law of similar import.
16.4 GOVERNING LAW. The Plan and Trust shall be governed and construed
in accordance with the laws of the state where the Trustee has its
principal office if the Trustee is a corporation or an association,
otherwise under the laws of the state where the Employer has its
principal office.
16.5 COMPLIANCE WITH THE CODE AND ERISA. This Plan is intended to comply
with all requirements for qualification under the Internal Revenue
Code and ERISA, and if any provision hereof is subject to more than
one interpretation or any term used herein is subject to more than
one construction, such ambiguity shall be resolved in favor of that
interpretation or construction which is consistent with the Plan
being so qualified. If any provision of the Plan is held invalid
or unenforceable, such invalidity or unenforceability shall not
affect any other provisions, and this Plan shall be construed and
enforced as if such provision had not been included.
16.6 NON-ALIENATION. It is a condition of the Plan, and all rights of
each Participant shall be subject thereto, that no right or
interest of any Participant in the Plan shall be assignable or
transferable in whole or in part, either directly or by operation
of law or otherwise, including, but without limitation, execution,
levy, garnishment, attachment, pledge, bankruptcy or in any other
manner, and no right or interest of any Participant in the Plan
shall be liable for or subject to any obligation or liability of
such Participant. The preceding sentence shall not preclude the
enforcement of a federal tax levy made pursuant to section 6331 of
the Code or the collection by the United States on a judgement
resulting from an unpaid tax assessment.
16.7 CONTRIBUTION RECAPTURE. Notwithstanding any other provisions of
this Plan, (1) in the case of a contribution which is made by an
Employer by a mistake of fact, Section 16.1 shall not prohibit the
return of such contribution to the Employer within one year after
the payment of the contribution, and (2) if a contribution is
conditioned upon the deductibility of the contribution under
section 404 of the Code, then, to the extent the deduction is
disallowed, Section 16.1 shall not prohibit the return to the
Employer of such contribution (to the extent disallowed) within one
year after the disallowance of the deduction. The amount which may
be returned to the Employer is the excess of (1) the amount
contributed over (2) 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 the excess
contribution may not be returned to the Employer, but losses
attributable thereto must reduce the amount to be so returned.
Furthermore, if the withdrawal of the amount attributable to the
mistaken contribution would cause the balance of the
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individual account of any Participant to be reduced to
less than the balance which would have been in the account
had the mistaken amount not been contributed, then the
amount to be returned to the Employer would have to be
limited so as to avoid such reduction.
16.8 QUALIFIED DOMESTIC RELATIONS ORDERS. Notwithstanding any other
provisions of this Plan, the Participant's Account may be
segregated and distributed pursuant to a Qualified Domestic
Relations Order within the meaning of Internal Revenue Code
section 414(p). The Plan Administrator shall establish procedures
for determining if a Domestic Relations Order is qualified within
the meaning of section 414(p).
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ARTICLE XVI-A TOP-HEAVY PROVISIONS
16A.1 DEFINITIONS. The following definitions are atypical terms used only in
this Article XVI-A.
(A) Compensation. The term Compensation, whenever used in this
Article XVI-A, means Compensation as defined in Article V of
the Plan, but includes the amount of any elective contributions
made by the Employer on the Employee's behalf to a cafeteria plan
established in accordance with the provisions of Code section 125,
a qualified cash or deferred arrangement in accordance with the
provisions of Code section 402(e)(3), a simplified employee pension
plan in accordance with the provisions of Code section 402(h), or a
tax sheltered annuity plan maintained in accordance with the
provisions of Code section 403(b).
(B) Key Employee. The term Key Employee means any Employee or
former Employee (including deceased Employees) of the Employer who
at any time during the Plan Year or the four preceding Plan Years
was:
(1) An officer of the Employer, but in no event if there are
more than 500 Employees, shall more than 50 Employees
be considered Key Employees. If there are less than 500
Employees, in no event shall the greater of three Employees
or 10% of all Employees, be taken into account under this
Subsection as Key Employees. If the number of officers is
limited by the terms of the preceding sentence, the Employees
with the highest Compensation will be considered to be
officers.
In no event shall an officer whose annual Compensation
is less than 50% of the dollar limitation in effect under Code
section 415(b)(1)(A) as adjusted from time to time, be a Key
Employee for any such Plan Year.
In making a determination under this Subsection, Employees
who have not completed six months of Service by the end
of the applicable Plan Year, Employees who normally work
less than 17-1/2 hours per week, Employees who normally work
less than six months during a year, Employees who have not
attained 21, and nonresident aliens who receive no earned
income from U.S. sources, shall be excluded.
Also excluded under the above paragraph are Employees
who are covered by an agreement which the Secretary of Labor
finds to be a collective bargaining agreement. Such Employees
will be excluded only if retirement benefits were the subject
of good faith bargaining, 90% of the Employees of the Employer
are covered by the agreement, and the Plan covers only
Employees who are not covered by the agreement.
(2) One of the 10 Employees who has annual Compensation greater
than the amount in effect under Internal Revenue Code section
415(c)(1)(A) and who owns (or is considered to own within the
meaning of Internal Revenue Code section 318, as modified by
section 416(i)(1)(B)(iii)) both more than 1/2% interest and
the largest interest in the Employer. If two or more
Employees own equal interests in the Employer, the ranking
of ownership share will be in descending order of such
Employees' Compensation. If the Employer is other than a
corporation, the term "interest" as used herein shall refer
to capital or profits
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interest.
(3) An Employee who owns (or is considered to own within
the meaning of Internal Revenue Code section 318, as
modified by section 416(i)(1)(B)(iii)) more than 5% of the
outstanding stock of the Employer or stock possessing more
than 5% of the total combined voting power of all stock of the
Employer. If the Employer is other than a corporation, an
Employee who owns, or is considered to own, more than 5% of
the capital or profits interest in the Employer. The
determination of 5% ownership shall be made separately for
each member of a controlled group of corporations (as defined
in Code section 414(b)), or of a group of trades or
businesses (whether or not incorporated) that are under
common control (as defined in Code section 414(c)), or of
an affiliated service group (as defined in Code section
414(m)).
(4) An Employee who owns (or is considered to own within the
meaning of Internal Revenue Code section 318, as modified
by section 416(i)(1)(B)(iii)) more than 1% of the outstanding
stock of the Employer or stock possessing more than 1% of the
total combined voting power of all stock of the Employer, and
whose annual Compensation is more than $150,000. If the
Employer is other than a corporation, an Employee who owns,
or is considered to own, more than 1% of the capital or
profits interest in the Employer, and whose annual
Compensation is more than $150,000.
For the purposes of paragraphs (2), (3) and (4) above, if an
Employee's ownership interest changes during a given Plan Year, his
ownership interest for that Plan Year is the largest interest owned
at any time during the Plan Year.
The Beneficiary of any deceased Employee who was a Key Employee
shall be considered a Key Employee for the same period as the
deceased Employee would have been so considered.
(C) Non-Key Employee. The term Non-Key Employee means any Employee or
former Employee of the Employer who is not a Key Employee. The
Beneficiary of any deceased Employee who is a Non-Key Employee
shall be considered a Non-Key Employee for the same period as
the deceased Employee would have been so considered.
(D) Determination Date. The term Determination Date means, with
respect to a Plan Year, the last day of the preceding Plan Year,
or, in the case of the first Plan Year of a plan, the last day
of the first Plan Year.
(E) Valuation Date. The term Valuation Date means, with respect to
a Plan Year, the last day of the preceding Plan Year and is the
date on which Account Balances are valued for the purpose of
determining the Plan's Top-Heavy status.
(F) Account Balance. The term Account Balance means the value
of the Participant's Account standing to the credit of a
Participant, a former Participant, or the Beneficiary of a former
Participant, as the case may be, as of the Valuation Date. Such
Account Balance shall include any contributions due as of the
Determination Date and all distributions made to the Participant
(or former Participant or Beneficiary, as the case may be) during
the Plan Year or the preceding four Plan Years, except for
distributions of Related Rollovers. However, the Account Balance
shall not include any deductible Employee Contributions made
pursuant to Internal Revenue Code section 219 or Unrelated
Rollovers made to the Plan after December 31, 1983.
A Related Rollover is a Rollover Contribution or Transfer that
either was not initiated by the
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Employee or was made to a plan maintained by the same Employer.
An Unrelated Rollover is a Rollover Contribution or Transfer
that was initiated by the Employee and was made from a plan
maintained by one employer to a plan maintained by another
employer.
For purposes of this Subsection (F), the term Employer shall
include all employers that are required to be aggregated in
accordance with Internal Revenue Code sections 414(b), (c) or (m).
(G) Required Aggregation Group. The term Required Aggregation
Group means all of the plans of the Employer which cover a Key
Employee, including any such plan maintained by the Employer
pursuant to the terms of a collective bargaining agreement, and
each other plan of the Employer which enables any plan in which a
Key Employee participates to satisfy the requirements of Internal
Revenue Code sections 401(a)(4) or 410.
(H) Permissive Aggregation Group. The term Permissive Aggregation
Group means all of the plans of the Employer which are included
in the Required Aggregation Group plus any plans of the Employer
which provide comparable benefits to the benefits provided by the
plans in the Required Aggregation Group and are not included
in the Required Aggregation Group, but which satisfy the
requirements of Internal Revenue Code sections 401(a)(4) and 410
when considered together with the Required Aggregation Group,
including any plan maintained by the Employer pursuant to a
collective bargaining agreement which does not include a Key
Employee.
(I) Top-Heavy Plan. The Plan is Top-Heavy if it meets the
requirements of Section 16A.2.
(J) Super Top-Heavy Plan. The Plan is Super Top-Heavy if it
meets the requirements of Section 16A.3.
(K) Terminated Plan. A plan shall be considered to be a
Terminated Plan if it:
(1) has been formally terminated;
(2) has ceased crediting service for benefit accruals and
vesting; or
(3) has been or is distributing all plan assets to Participants (or
Beneficiaries) as soon as administratively possible.
With the exception of the Minimum Employer Contribution
Requirements and the Minimum Vesting Requirements, the
Top-Heavy provisions of this Article XVI-A will apply to any
Terminated Plan which was maintained at any time during the
five years ending on the Determination Date.
(L) Frozen Plan, A plan shall be considered to be a Frozen
Plan if all benefit accruals have ceased but all assets have not
been distributed to Participants or Beneficiaries. The Top-Heavy
provisions of this Article XVI~A will apply to any such Frozen
Plan.
16A.2 TOP-HEAVY PLAN STATUS. This Plan shall be determined to be
Top-Heavy if, as of the Determination Date, the aggregate of the Account
Balances of Key Employees exceeds 60% of the aggregate of the Account
Balances of all Employees covered by the Plan. The determination of
whether the Plan is Top-Heavy shall be made after aggregating all plans
in the Required Aggregation Group, and after aggregating any other plans
which are in the Permissive Aggregation Group, if such permissive
aggregation thereby eliminates the Top-Heavy status of any plan within
such Required Aggregation Group.
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In determining whether this Plan is Top-Heavy, the Account Balance of a
former Key Employee who is now a Non-Key Employee will be disregarded.
Likewise, for Plan Years beginning after December 31, 1984, the Account
Balance of any Employee who has not performed an Hour of Service during
the five-year period ending on the Determination Date will be excluded.
16A.3 SUPER TOP-HEAVY PLAN STATUS. This Plan shall be determined to be
Super Top-Heavy if, as of the Determination Date, the Plan would
meet the test specified in Section 16A.2 above, if 90% were
substituted for 60% in each place where it appears. The Plan may
be permissively aggregated in order to avoid being Super
Top-Heavy.
16A.4 TOP-HEAVY REQUIREMENTS. Notwithstanding anything in the Plan to
the contrary, if the Plan is Top-Heavy with respect to any Plan
Year beginning after December 31, 1983, then the Plan shall meet
the following requirements for such Plan Year:
(A) Compensation Limit. The annual Compensation of each Participant
taken into account under the Plan shall not exceed $150,000;
however, such dollar limitation shall be adjusted to take into
account any adjustments made by the Secretary of the Treasury
or his delegate pursuant to Internal Revenue Code section
416(d)(2).
(B) Minimum Employer Contribution Requirements. A Minimum Employer
Contribution of 3% of each Eligible Employee's Compensation will
be made on behalf of each Eligible Employee in the Plan.
If the actual Employer Contribution made or required to be made
for Key Employees is less than 3%, the Minimum Employer
Contribution required hereunder shall not exceed the percentage
contribution made for the Key Employee for whom the percentage of
Employer Contributions and Forfeitures relative to the first
$150,000 of Compensation is the highest for the Plan Year after
taking into account contributions or benefits under other qualified
plans in the Plan's Required Aggregation Group.
However, if a Participant in this Plan is also a participant in
a defined benefit plan maintained by the Employer, such Participant
shall receive the Top-Heavy minimum benefit under the defined
benefit plan in lieu of the Minimum Employer Contribution described
herein. Such minimum benefit will be equal to the Participant's
average yearly Compensation during his five highest-paid
consecutive years, multiplied by the lesser of 2% per Year of
Service or 20%. Compensation periods and Years of Service to be
taken into account in the calculation of this benefit shall be
subject to any limitations set forth in the defined benefit plan.
For any Limitation Year in which this Plan is Top-Heavy but not
Super Top-Heavy, the Minimum Employer Contribution shall be
increased to 4% of each Eligible Employee's Compensation in order
to preserve the use of the factor 1.25 in the denominators of the
fractions described in Section 5.4(B)(1) and Section 5.4(D)(1). A
Participant who receives the Top-Heavy minimum benefit in lieu of
the Minimum Employer Contribution shall receive an increased
minimum benefit equal to the Participant's average yearly
Compensation during his five highest-paid consecutive years,
multiplied by the lesser of 3% per Year of Service or 20% plus one
percentage point (to a maximum of 10 percentage points) for each
year that this Plan is maintained. Compensation periods and Years
of Service to be taken into account in the calculation of this
increased minimum benefit shall be subject to any limitations set
forth in the defined benefit plan.
For any Limitation Year in which this Plan is Super Top-Heavy,
the factor of 1.25 in the denominators of the fractions described
in Sections 5.4(B)(1) and 5.4(D)(1) shall be reduced
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to 1.0. The Minimum Employer Contribution payable in such years
shall be 3% of each Eligible Employee's Compensation and the
defined benefit Top-Heavy minimum benefit shall be average
Compensation multiplied by the lesser of 2% per Year of Service or
20%.
Eligible Employees are all Non-Key Employees who are Participants
in the Plan as of the last day of the Plan Year regardless of
whether they had completed 1,000 Hours of Service during the Plan
Year. Also included are Non-Key Employees who would have been
Participants as of the last day of the Plan Year except:
. The Employee's Compensation was below a required minimum level;or
. The Employee chose not to make Elective Deferral Contributions
when he was eligible to do so.
Elective Deferral Contributions and Matching Contributions made
to Key Employees shall be taken into account as Employer
Contributions allocated to such Key Employees when determining
whether a lower Minimum Employer Contribution is permissible for
purposes of this section. However, Elective Deferral Contributions
made by Non-Key Employees shall not be used towards satisfying the
Minimum Employer Contribution required to be allocated to Non-Key
Employees pursuant to this section.
Matching Contributions made on behalf of Non-Key Employees may,
at the option of the Employer, be used to satisfy the Minimum
Employer Contribution requirement. However, for Plan Years
beginning after December 31, 1988, to the extent that Matching
Contributions are used for this purpose, they shall not be used to
satisfy the Actual Contribution Percentage Test.
(C) Minimum Vesting Requirements. The vesting provisions set forth in
the definition of Vested Interest in Article I shall continue to
apply whether or not the Plan is a Top-Heavy Plan. Such vesting
provisions satisfy the requirements of section 416(b) of the
Internal Revenue Code, as applicable to Top Heavy-Plans.
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Exhibit 15
March 25, 1994
Jones Intercable, Inc. and Subsidiaries:
We are aware that Jones Intercable, Inc. and subsidiaries has incorporated by
reference in this Registration Statement its Form 10-Qs for the quarters ended
August 31, 1993 and November 30, 1993, which include our reports dated October
8, 1993 and January 12, 1994, respectively, covering the unaudited interim
financial information contained therein. Pursuant to Regulation C of the
Securities Act of 1933, these reports are not considered a part of the
Registration Statement prepared or certified by our firm or reports prepared or
certified by our firm within the meaning of Sections 7 and 11 of the Securities
Act of 1933.
Very truly yours,
/s/ ARTHUR ANDERSEN & CO.
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated August 16, 1993 included in Jones Intercable, Inc. and subsidiaries Form
10-K for the year ended May 31, 1993 and to all references to our firm included
in or made a part of this Registration Statement.
ARTHUR ANDERSEN & CO.
/s/ ARTHUR ANDERSEN & CO.
Denver, Colorado,
March 25, 1994
