As filed with the Securities and Exchange Commission
on December 28, 1995
Registration No.
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------------------
DEL ELECTRONICS CORP.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 13-1784308
---------------------------- -------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
One Commerce Park, Valhalla, New York 10595
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
DEL ELECTRONICS CORP. AMENDED AND RESTATED STOCK OPTION PLAN
DEL ELECTRONICS CORPORATION 401(k) PLAN, AS AMENDED
- --------------------------------------------------------------------------------
(Full title of the plans)
Leonard A. Trugman
- --------------------------------------------------------------------------------
President and Chief Executive Officer
Del Electronics Corp.
One Commerce Park, Valhalla, NY 10595 (914) 686-3600
- --------------------------------------------------------------------------------
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With a copy to:
Tashlik, Kreutzer & Goldwyn P.C.
833 Northern Boulevard
Great Neck, NY 11021
(516) 466-8005
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ----------------- --------------- --------------- --------------- --------------
Title of each Proposed Proposed
Class of maximum maximum Amount of
Securities to be Amount to be offering price aggregate Registration
registered (1) registered (2) per share (3) offering price Fee
(3)
- ----------------- --------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
Common Stock,
$.10 par value 286,946 shares $6.31 $1,810,629.20 $624.30
per share
- ----------------- --------------- --------------- --------------- --------------
<FN>
(1) The proposed commencement of sales is to be as soon as practicable
after the Registration Statement has become effective and upon the
exercise of any option granted under the Plan.
(2) There are also being registered hereunder such additional shares of the
Registrant's common stock as may be issuable in connection with
adjustments under the Plan and 401(k) Plan, as hereinafter defined, to
reflect certain changes in the Registrant's capital structure,
including stock dividends or stock split-ups.
(3) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 475(h) under the Securities Act of 1933, as amended.
The calculation of the proposed maximum aggregate offering price has
been based upon (a) the registration hereunder of (i) an aggregate of
265,225 additional shares of the Registrant's common stock to be issued
pursuant to options granted under the Del Electronics Corp. Amended and
Restated Stock Option Plan (the "Plan") and (ii) 21,721 shares of the
Registrant's common stock, of which 11,721 shares are issued and of
which 10,000 shares are reserved for issuance pursuant to the Del
Electronics Corporation's 401(k) Plan ("401(k) Plan") and (b) the
proposed maximum offering price per share. The proposed maximum
offering price per share represents the average of the high and low
sales prices $6.375 and $6.25, respectively, of the Registrant's common
stock on the AMEX as reported on the AMEX Composite Tape on December
27, 1995.
</FN>
</TABLE>
2
<PAGE>
EXPLANATORY NOTE
----------------
The Registration Statement has been prepared, in part, in accordance
with the requirements of General Instruction E to Form S-8, as amended. One of
the purposes of this Registration Statement is to register an additional 257,500
shares of Common Stock, $.10 par value per share (the "Common Stock"), of Del
Electronics Corp. (the "Company"), which shares of Common Stock have been
reserved for issuance upon the exercise of options to purchase Common Stock
granted pursuant to the Del Electronics Corp. Amended and Restated Stock Option
Plan (the "Plan"). 1,967,181 shares of Common Stock (including stock dividends)
have been previously registered for issuance under the Plan pursuant to
Registration Statements on Form S-8, on January 25, 1988, File No. 33-19772,
September 17, 1992, File No. 33-52088 and May 13, 1994, File No. 33-78910 (the
"Registration Statements"). On February 15, 1995, the shareholders of the
Company authorized the increase in the number of the Common Stock authorized for
issuance under the Plan to 2,223,648. The contents of such Registration
Statements are incorporated herein by reference.
The Registration Statement has been further prepared to register 11,721
shares of Common Stock issued under the Company's 401(k) Plan (the "401(k)
Plan") and 10,000 shares of Common Stock reserved for issuance under the 401(k)
Plan.
In accordance with General Instruction E to Form S-8, as amended, the
Company has provided the above-referenced information, which information is
required in this Registration Statement. Moreover, as specifically required by
General Instruction E, the necessary opinion and consent are attached hereto as
Exhibits 5.0 and 23.1.
Recent Events
- -------------
The Company reached an Agreement in Principle to acquire selected
assets and the business of the GENDEX Medical Division of DENTSPLY
International, Inc. ("GENDEX"). GENDEX is a designer and manufacturer of medical
x-ray equipment, including high frequency x-ray systems and mammography systems.
GENDEX has sales of approximately twenty million dollars. The acquisition is
subject to the Company's due diligence review, bank financing and the
negotiation of a definitive purchase agreement.
3
<PAGE>
PART II
-------
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
----------------------------------------
The following documents which have heretofore been filed by Del
Electronics Corp. (the "Company") with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act") or
the Securities Act of 1933, as amended (the "1933 Act"), are incorporated by
reference herein and shall be deemed to be a part hereof:
(a) the Company's Annual Report on Form 10-K as amended for the year
ended July 29, 1995 and the Exhibits thereto, filed under
Section 15(d) of the Securities Exchange Act of 1934 as amended
(the "Exchange Act") (File No. 1-10512);
(b) the Company's Quarterly Report on Form 10-Q for the quarter
ended October 28, 1995 and Exhibits thereto, filed under Section
15(d) of the Exchange Act (File No. 1-10512);
(c) all other reports filed by the Company pursuant to Section 13(a)
or 15(d) of the Exchange Act since July 29, 1995 and prior to
the termination of the offering of securities covered by this
Registration Statement; and
(d) the description of the Company's Common Stock contained in a
Registration Statement of the Registrant filed under the
Exchange Act, including any amendments or reports filed for the
purpose of updating such description.
Item 4. Description of Securities.
-------------------------
Not applicable. The Company's Common Stock to be offered pursuant to
this Registration Statement has been registered under Section 12 of the Exchange
Act as described in Item 3 of this Part II.
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
Not applicable.
4
<PAGE>
LEGAL OPINION
The legality of the shares of the Company's Common Stock offered hereby
will be passed upon for the Company by Tashlik, Kreutzer & Goldwyn P.C., 833
Northern Boulevard, Great Neck, New York 11021. Members of such firm own,
directly or indirectly, shares of Common Stock and options to purchase shares of
Common Stock.
EXPERTS
The financial statements incorporated in this prospectus by reference
from the Company's Annual Report on Form 10-K, as amended, for the fiscal year
ended July 29, 1995 have been audited by Deloitte & Touche LLP, independent
auditors as stated in their report which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
(a) Section 722 of the New York Business Corporation Law ("NYBCL")
permits, in general, a New York corporation to indemnify any person made, or
threatened to be made, a party to an action or proceeding by reason of the fact
that he or she was a director or officer of the corporation, or served another
entity in any capacity at the request of the corporation, against any judgment,
fines, amounts paid in settlement and reasonable expenses, including attorney's
fees actually and necessarily incurred as a result of such action or proceeding,
or any appeal therein, if such person acted in good faith, for a purpose he or
she reasonably believed to be in, or in the case of service for another entity,
not opposed to, the best interests of the corporation and, in criminal actions
or proceedings, in addition had no reasonable cause to believe that his or her
conduct was unlawful. Section 723 of the NYBCL permits the corporation to pay in
advance of a final disposition of such action or proceeding the expenses
incurred in defending such action or proceeding upon receipt of an undertaking
by or on behalf of the director or officer to repay such amount as, and to the
extent, required by statute. Section 721 of the NYBCL provides that
indemnification and advancement of expense provisions contained in the NYBCL
shall not be deemed exclusive of any rights to which a director or officer
seeking indemnification or advancement of expenses may be entitled, provided no
indemnification may be made on behalf of any director or officer if a judgment
or other final adjudication adverse to the director or officer establishes that
his or her acts were committed in bad faith or were the result of active or
deliberate dishonesty and were material to the cause of action so adjudicated,
or that he or she personally gained in fact a financial profit or other
advantage to which he or she was not legally entitled.
5
<PAGE>
(b) Paragraph TWELFTH of the Company's Certificate of Incorporation
limits directors' liability as permitted by Section 402(b) of the NYBCL and
reads in its entirety as follows:
"TWELFTH: No director of the Corporation shall be personally
liable to the Corporation or its shareholders for damages for any
breach of duty in such capacity, provided that nothing contained in
this Article shall eliminate or limit:
(a) the liability of any director if a judgment or other final
adjudication adverse to him establishes that his acts or omission were
in bad faith or involved intentional misconduct or a knowing violation
of law or that he personally gained in fact a financial profit or other
advantage to which he was not legally entitled or that his acts
violated section 719 of the New York Business Corporation Law, or
(b) the liability of any director for any act or omission prior
to the adoption of the amendment including this paragraph in the
Certificate of Incorporation of the Corporation."
The Company maintains directors and officers liability insurance
covering all directors and officers of the Company arising against claims
arising out of the performance of their duties.
Item 7. Exemption From Registration Claimed.
-----------------------------------
Not Applicable.
Item 8. Exhibits.
--------
5.0 Opinion of Tashlik, Kreutzer & Goldwyn P.C. to the legality of
the shares being registered
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Tashlik, Kreutzer & Goldwyn P.C. (included in exhibit
5.0)
99.0 Del Electronics Corporation 401(k) Plan
99.1 Internal Revenue Services determination letter, dated June 21,
1995, that the Plan is qualified under Section 401 of the
Internal Revenue Code
6
<PAGE>
Item 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:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
offering range may be reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b), if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
this registration statement.
(2) That for the purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(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 15(d) of the Securities
7
<PAGE>
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14 a-3 or Rule 14 c-3 under the Securities Exchange Act of
1934; and where interim financial information required to be presented by
Article 3 of Regulation S-X is not presented in the prospectus, to deliver or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated in the prospectus
to provide such interim information.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 6
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Mt. Pleasant, State of New York, on the 27th day of
December, 1995.
DEL ELECTRONICS CORP.
By: Leonard A. Trugman
-----------------------------
Leonard A. Trugman, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Leonard A. Trugman
- ------------------
Leonard A. Trugman Chairman of the Board, December 27, 1995
Chief Executive Officer,
President and Director
Natan V. Bertman
- ------------------
Natan V. Bertman Director December 27, 1995
Raymond Kaufman
- ------------------
Raymond Kaufman Director December 27, 1995
David Michael
- ------------------
David Michael Director December 27, 1995
James M. Tiernan
- ------------------
James M. Tiernan Director December 27, 1995
Seymour Rubin
- ------------------
Seymour Rubin Director December 27, 1995
9
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the
trustees which administer the 401(k) Plan of Del Electronics Corp. have duly
caused this Registration Statement to be signed on behalf of the undersigned,
thereunto duly authorized, in the Town of Mt. Pleasant, State of New York, on
the 27th day of December, 1995.
DEL ELECTRONICS CORPORATION
401(k) PLAN, as amended
By: Leonard A. Trugman
------------------------------
Leonard A. Trugman, Trustee
Seymour Rubin
------------------------------
Seymour Rubin, Trustee
Howard Bertan
------------------------------
Howard Bertan, Trustee
10
<PAGE>
EXHIBIT INDEX
-------------
Sequentially
Numbered Pages
--------------
Exhibit 5.0 Opinion of Tashlik, Kreutzer
& Goldwyn PC ...............................................Page 12
Exhibit 23.1 Accountant's Consent ...............................Page 14
Exhibit 23.2 Consent of Counsel .................................Page 15
Exhibit 99.0 Del Electronics Corporation 401(k) Plan ............Page 16
Exhibit 99.1
Internal Revenue Services determination letter,
dated June 21, 1995, that the Plan is qualified under
Section 401 of the Internal Revenue Code ...................Page 130
11
EXHIBIT 5.0
TASHLIK, KREUTZER & GOLDWYN P.C
833 Northern Blvd.
Great Neck, NY 11021
December 28, 1995
Del Electronics Corp.
One Commerce Park
Valhalla, NY 10595
Gentlemen:
This opinion and the consent to use our name are furnished in
connection with the Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act") by Del Electronics Corp., a New
York corporation (the "Company"), for registration under the Act of 265,225
shares of common stock, par value $.10 per share (the "Common Stock"), which may
be issued upon the exercise of options granted or to be granted under the
Company's Amended and Restated Stock Option Plan (the "Plan") and 11,721 shares
which are issued and 10,000 shares which are reserved for issuance under the
Company's 401(k) Plan (the "401(k) Plan").
We have acted as counsel to the Company and have participated in the
preparation and filing of the aforementioned Registration Statement. As such
counsel, we have examined the Certificate of Incorporation and By-Laws of the
Company, the Plan, the 401(k) Plan, the proceedings taken by the Company with
respect to the filing of such Registration Statement and such other documents as
we have deemed necessary and appropriate.
Based upon the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing under
the laws of the State of New York.
2. The 275,225 shares of Common Stock covered by the Registration
Statement have been duly authorized and, when issued and sold in accordance with
the Plan and the 401(k) Plan, will be duly and validly issued, fully paid and
<PAGE>
Del Electronics Corp.
December 28, 1995
Page 2
non-assessable. The 11,721 shares of Common Stock covered by the 401(k) Plan
have been duly authorized and are validly issued, fully paid and non-assessable.
Members of this firm own, directly or indirectly, shares of Common
Stock and options to purchase shares of Common Stock.
We hereby consent to the use of this opinion as an Exhibit to the
aforementioned Registration Statement and to the use of our name under the
caption "Legal Opinion" in the Registration Statement.
Very truly yours,
TASHLIK, KREUTZER & GOLDWYN P.C.
TK&G:jh
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Del Electronics Corp. on Form S-8 of our report dated October 23, 1995,
appearing in the Annual Report on Form 10-K/A of Del Electronics Corp. for the
year ended July 29, 1995, and to the reference to us under the heading "Experts"
in the Prospectus, which is part of such Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
December 27, 1995
EXHIBIT 23.2
CONSENT OF COUNSEL
The consent of Tashlik, Kreutzer & Goldwyn P.C. is contained in their
opinion filed as Exhibit 5.0.
EXHIBIT 99.0
AMENDMENT TO
RFI CORPORATION EMPLOYEE RETIREMENT BENEFIT PLAN
WHEREAS, RFI Corporation (hereinafter referred to as the "Employer")
established the RFI Corporation Employee Retirement Benefit Plan (hereinafter
referred to as the "Plan") effective January 1, 1990 for the benefit of its
eligible Employees and their Beneficiaries; and
WHEREAS, DEL Electronics Corporation established the DEL Electronics
Corporation 401(k) Plan (hereinafter referred to as the "Prior Plan") effective
August 1, 1984 for the benefit of its eligible Employees and their
Beneficiaries; and
WHEREAS, the Employer reserved the right 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, 1990 except as follows:
1. Effective on the first day of the Plan Year beginning in 1992,
gap period earnings associated with Excess Contributions shall
not be distributed.
2. Effective on the first day of the Plan Year beginning in 1992,
gap period earnings associated with Excess Aggregate
Contributions shall not be distributed.
3. 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.
4. 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.
5. 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.
<PAGE>
WHEREAS, the Employers desire to merge and consolidate the Plan and the
Prior Plan; and
NOW THEREFORE, effective October 1, 1993, the Plan is hereby further
amended as follows:
1. The terms of the Prior 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
Prior Plan with respect to such Participants shall henceforth be
as set forth in the DEL Electronics Corporation 401(k) Plan,
copies of which are attached to and form a part of this
amendment.
2. The DEL Electronics Corporation 401 (k) Plan shall represent a
continuation of the Prior Plan as heretofore set forth and shall
not abridge or curtail any rights or privileges accorded to
Participants under the Prior Plan.
3. The Employer does hereby adopt the Plan and agree to be bound by
all of its terms, conditions and amendments.
4. The Employer hereby transfers the assets of the Prior Plan
attributable to the Participants of the Prior Plan to Group
Annuity Contract GA-35448 and the DEL Electronics Corporation
401(k) Plan.
5. Effective October 1, 1993, the term Plan shall be amended to
"DEL Electronics Corporation 401(k) Plan." Such change shall be
governed by the terms of the Plan attached hereto.
6. Effective October 1, 1993, the term Employer shall be amended to
"DEL Electronics Corporation and subsidiaries." Such change
shall be governed by the terms of the Plan attached hereto.
7. Effective October 1, 1993, the Plan shall no longer allow new
Life Insurance Policies to be issued. Any Participant with an
outstanding Life Insurance Policy may continue to utilize the
Life Insurance investment option.
8. Effective October 1, 1993, the Plan shall no longer allow new
Loans to be issued. Any Participant with an outstanding Loan may
continue to repay the Loan.
9. Effective for Plan Years beginning in 1994, Compensation shall
be limited to a maximum of $150,000.
<PAGE>
WHEREAS, Bertan Associates, Inc. (hereinafter referred to as the "Prior
Employer") established the Bertan Associates, Inc. Profit Sharing and 401(k)
Savings Plan (hereinafter referred to as the "Prior Plan") effective January 1,
1978 for the benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Employers desire to merge and consolidate the Plan and the
Prior Plan; and
NOW THEREFORE, effective December 1, 1994, the Plan is hereby further
amended as follows:
1. The terms of the Prior 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
Prior Plan with respect to such Participants shall henceforth be
as set forth in the DEL Electronics Corporation 401(k) Plan,
copies of which are attached to and form a part of this
amendment.
2. The DEL Electronics Corporation 401 (k) Plan shall represent a
continuation of the Prior Plan as heretofore set forth and shall
not abridge or curtail any rights or privileges accorded to
Participants under the Prior Plan.
3. The Employer does hereby adopt the Plan and agree to be bound by
all of its terms, conditions and amendments.
4. The Employer hereby transfers the assets of the Prior Plan
attributable to the Participants of the Prior Plan to Group
Annuity Contract GA-35448 and the DEL Electronics Corporation
401(k) Plan.
5. Effective December 1, 1994, the Plan shall be amended to allow
Loans as governed by the terms of Article X-A of the Plan
attached hereto.
6. Effective December 1, 1994, the provisions relating to
Eligibility shall be amended to delete the Non-Union Employee
requirement as governed by the terms of Article III of the Plan
attached hereto.
7. Effective December 1, 1994, the provisions relating to
Forfeitures shall be amended to allow Forfeitures to be
reallocated as governed by the terms of Article IV and Article
IX of the Plan attached hereto.
8. Effective December 1, 1994, the provisions relating to
Nonelective Contributions and Employee Contributions shall be
amended as governed by the terms of Article IV of the Plan
attached hereto.
<PAGE>
9. Effective December 1, 1994, the provisions relating to
Distributions shall be amended to allow distributions in the
form of Employer stock as governed by the terms of Article VI of
the Plan attached hereto.
10. Effective December 1, 1994, the provisions relating to
Withdrawals shall be amended as governed by the terms of Article
X of the Plan attached hereto.
11. Effective January 1, 1995, the provisions relating to Investment
of Contributions and Transfers Between Investment Funds shall be
amended to allow investment splits and transfers on any normal
business day of the Insurance Company as governed by the terms
of Article XIII 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 DEL Electronics Corporation 401(k) 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 Employers, the Administrator and the Trustees
have hereunto affixed their signatures.
Executed at Valhalla, New York on December 30, 1994
---------------------- ----------------------------------
DEL ELECTRONICS CORPORATION
AND SUBSIDIARIES
Loretta Friedman By: Leonard Trugman
- ---------------------------------- ----------------------------------
Witness Title: Chairman, CEO & President
----------------------------------
Accepted this 30th day of December, 1994
---- -------- ----
Loretta Friedman By: Michael Taber
- ----------------------------------- ----------------------------------
Witness Administrator
<PAGE>
Accepted this 30th day of December, 1994
---- -------- ----
Loretta Friedman By: Leonard A. Trugman
- ----------------------------------- ----------------------------------
Witness Trustee
Gail Ledman By: Seymour Rubin
- ----------------------------------- ----------------------------------
Witness Trustee
David Engel By: Howard Bertan
- ----------------------------------- ----------------------------------
Witness Trustee
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>
DEL ELECTRONICS CORPORATION 401(k) 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>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ........................................1
ARTICLE II SERVICE ............................................23
ARTICLE III ELIGIBILITY, ENROLLMENT AND PARTICIPATION ..........29
ARTICLE IV CONTRIBUTIONS ......................................30
ARTICLE V LIMITATIONS ON ALLOCATIONS .........................45
ARTICLE VI DISTRIBUTION OF BENEFITS ...........................55
ARTICLE VI-A DIRECT ROLLOVERS ...................................64
ARTICLE VII RETIREMENT BENEFITS ................................66
ARTICLE VIII JOINT AND SURVIVOR ANNUITY REQUIREMENTS ............67
ARTICLE IX TERMINATION OF EMPLOYMENT ..........................74
ARTICLE X WITHDRAWALS ........................................75
ARTICLE X-A LOANS ..............................................80
ARTICLE XI FIDUCIARY DUTIES AND RESPONSIBILITIES ..............82
ARTICLE XII THE ADMINISTRATOR ..................................83
ARTICLE XIII PARTICIPANTS' RIGHTS ...............................86
ARTICLE XIV AMENDMENT OR TERMINATION OF THE PLAN ...............90
ARTICLE XV SUBSTITUTION OF PLANS ..............................93
ARTICLE XVI MISCELLANEOUS ......................................94
ARTICLE XVI-A TOP-HEAVY PROVISIONS ...............................96
ARTICLE XVII TRUST AGREEMENT ....................................103
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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) For purposes of determining the Actual Contribution
Percentage Test, Employee Post-Tax Contributions are
considered to have been made in the Plan Year in
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which contributed to the Plan. 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) 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.
1.5 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 Employee Post-Tax
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 Post-Tax
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,
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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 Non highly 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.
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:
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(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 and
Qualified Nonelective 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 Non highly
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 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
Nonelective Contributions are taken into account with
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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 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)-I(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.
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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 50% of the Participant's Vested Interest.
However, each Participant shall have the right to designate
another Beneficiary in lieu of his Spouse 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 and/or the form of death
benefit at any time, subject to the requirements of the
"Qualified Election" provisions of Article VIII, Joint and
Survivor Annuity Requirements.
In addition, each Participant shall have the fight to designate
a Beneficiary for the balance of his Vested Interest that is not
automatically payable to his Spouse and to specify the form of
death benefit each Beneficiary is to receive. This designation
is not subject to the terms of Article VIII.
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 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.
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If a Participant who has an Hour of Service on or after August
23, 1984 designates a Beneficiary, other than his Spouse, to
receive more than 50% of his Vested Interest and does not obtain
the appropriate spousal consent, 50% of the Participant's Vested
Interest shall first be paid to his Spouse, after which any
remaining benefits shall be paid to the designated Beneficiary.
If a Beneficiary has not been designated for the portion of the
Participant's Vested Interest that is not automatically payable
to his Spouse, 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, salaries, and fees for
professional services and other amounts received (without
regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of
employment with the Employer maintaining the Plan to the
extent that the amounts are includible in gross income
(including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses,
fringe benefits, and reimbursements, or other expense
allowances under a nonaccountable plan (as described in
1.62-2(c)), and foreign earned income (as defined in
section 911 (b) of the Code) whether or not excludable from
gross income under section 911 of the Code. The term
Compensation does not include:
(1) Employer contributions to a plan of deferred
compensation which are not includible in the
Employee's gross income for the taxable year in which
contributed, or employer contributions under a
simplified employee pension plan to the extent such
contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
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(2) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property)
held by the Employee either becomes freely
transferable or is no longer subject to substantial
risk of forfeiture;
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(4) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not
under a salary reduction agreement) towards the
purchase of an annuity contract described in section
403(b) of the Code (whether or not the contributions
are actually excludable from the gross income of the
Employee).
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.
For purposes of the Actual Deferral Percentage Test or the
Actual Contribution Percentage Test, or both, the definition of
Compensation shall be any definition of Compensation that
satisfies Code Section 414(s) or 415(c)(3).
(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
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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 I 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 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
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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.
1.16 CONTRIBUTION PERCENTAGE AMOUNTS. The term Contribution
Percentage Amounts means the Employee Post-Tax Contributions
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
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 treated as Elective
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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 EARLY RETIREMENT DATE. The term Early 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
on or after the date he attains age 55 and has 10 Years of
Service for any reason other than death or Disability, provided
that on such date the Participant has not attained his Normal
Retirement Age.
For Employees who became Participants in the Bertan Associates,
Inc. Profit Sharing and 401(k) Savings Plan prior to December 1,
1994, the term Early 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 on or after the date
he attains age 55 for any reason other than death or Disability,
provided that on such date the Participant has not attained his
Normal Retirement Age.
1.22 EFFECTIVE DATE. The term Effective Date means January 1, 1990.
1.23 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
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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.
1.24 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.
1.25 EMPLOYEE POST-TAX CONTRIBUTIONS. The term Employee Post-Tax
Contributions means any contributions to the Plan 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 Post-Tax
Contributions applied to the purchase of life insurance
policies. Such term does not include repayment of loans or
employee contributions transferred to this Plan.
1.26 EMPLOYER. The term Employer means DEL Electronics Corporation
and subsidiaries 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 by participation, vesting, Top-Heavy
provisions and determination of Highly Compensated Employees.
1.27 EMPLOYER CONTRIBUTION. The term Employer Contribution means any
contribution made to the Plan by the Employer on behalf of a
Participant, other than an Employee Post-Tax Contribution or
Rollover Contribution.
1.28 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.
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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 90 days 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.
1.29 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.
1.30 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.
(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 Employee Post-Tax 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
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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.
1.31 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
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<PAGE>
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.
1.32 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.
1.33 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 the Actual
Contribution Percentage Test and is made in accordance with the
provisions of Article IV of this Plan.
1.34 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.
1.35 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.
1.36 FORFEITURE. The term Forfeiture means the amount, if any, by
which the value of a Participant's Account exceeds his Vested
Interest following such Participant's Termination of Employment,
and at the time specified in Section 9.1.
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1.37 HIGHLY COMPENSATED EMPLOYEE. The term Highly Compensated
Employee means any Highly Compensated Active Employee or Highly
Compensated Former Employee as further deemed 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
(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.
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<PAGE>
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).
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<PAGE>
1.38 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.
1.39 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 in no
event shall the period certain extend to a period which equals
or exceeds the life expectancy of the Participant.
1.40 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.
1.41 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.
1.42 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. Contributions or benefits provided a Leased
Employee by the leasing organization which are attributable to
services performed for the recipient Employer shall be treated
as provided by the recipient Employer.
A Leased Employee shall not be considered an Employee of the
recipient if: (i) such employee is covered by a money purchase
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pension plan providing: (1) a nonintegrated employer
contribution rate of at least 10 percent of compensation, as
defined in section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are
excludable from the employee's gross income under Section 125,
section 402(e)(3), section 402(h)(1)(B) or section 403(b) of the
Code, (2) immediate participation, and (3) full and immediate
vesting; and (ii) leased employees do not constitute more than
20 percent of the recipient's Non highly compensated work force.
1.43 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 Post-Tax Contributions, if any,
or required contributions, if any. In addition, any Forfeitures
reallocated as a Matching Contribution, pursuant to Article IV,
shall be considered a Matching Contribution for purposes of this
Plan.
1.44 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.
1.45 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. In addition, any Forfeitures reallocated as a Nonelective
Contribution, pursuant to Article IV, shall be considered a
Nonelective Contribution for purposes of this Plan.
1.46 NON HIGHLY COMPENSATED EMPLOYEE. The term Non highly Compensated
Employee means an Employee who is not a Highly Compensated
Employee.
1.47 NORMAL RETIREMENT AGE. The term Normal Retirement Age means the
date the Participant attains age 65.
1.48 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.
1.49 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.
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<PAGE>
1.50 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.
* Nonelective Contributions, if any, and earnings thereon.
* Qualified Nonelective Contributions, if any, and earnings
thereon.
* Prior KDI Corporation Employer Contributions, if any, and
earnings thereon.
* Prior DEL Electronics Corporation Subsidiary Employer
Contributions, if any, and earnings thereon.
* Prior Bertan Associates, Inc. Matching Contributions, if
any, and earnings thereon.
* Employee Post-Tax 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.
1.51 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 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.
1.52 PERSON. The term Person means any natural person, partnership,
corporation, trust or estate.
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1.53 PLAN. The term Plan means DEL Electronics Corporation 401(k)
Plan, the terms of which are set forth herein as it may be
amended from time to time.
1.54 PLAN ADMINISTRATOR. The terms Plan Administrator and
Administrator are used interchangeably throughout the Plan and
Trust and shall mean the Employer.
1.55 PLAN YEAR. The term Plan Year means the 12-month period
commencing on January 1 and ending on the following December 31.
1.56 PRIOR KDI CORPORATION EMPLOYER CONTRIBUTIONS. The term Prior KDI
Corporation Employer Contributions means employer contributions
that were made prior to the Effective Date of this Plan.
1.57 PRIOR DEL ELECTRONICS CORPORATION SUBSIDIARY EMPLOYER
CONTRIBUTIONS. The term Prior DEL Electronics Corporation
Subsidiary Employer Contributions means employer contributions
that were made prior to the Effective Date of the merger between
the RFI Corporation Employee Retirement Benefit Plan and the DEL
Electronics Corporation 401(k) Plan.
1.58 PRIOR BERTAN ASSOCIATES, INC. MATCHING CONTRIBUTIONS. The term
Prior Bertan Associates, Inc. Matching Contributions means
employer contributions that were made prior to the Effective
Date of the merger between the Bertan Associates, Inc. Profit
Sharing and 401(k) Savings Plan and the DEL Electronics
Corporation 401(k) Plan.
1.59 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.
1.60 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.
1.61 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.
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1.62 TERMINATION OF EMPLOYMENT. The term Termination of Employment
means a severance of the Employer-Employee relationship which
occurs prior to a Participant's Normal Retirement Age for any
reason other than Early Retirement, Disability or death.
1.63 TRUST. The term Trust means the trust agreement entered into by
the Employer, the Administrator and the Trustee, which trust
agreement forms a part of, and implements the provisions of this
Plan.
1.64 TRUSTEE. The term Trustee means one or more individuals
collectively appointed and acting under the trust agreement, and
any successor thereto.
1.65 VESTED INTEREST. The term Vested Interest on any date means the
nonforfeitable right to an immediate or deferred benefit in the
amount which is equal to the following:
(A) the value on that date of that portion of the Participant's
Account that is attributable to the following
contributions:
* Elective Deferral Contributions, if any
* Employee Post-Tax Contributions, if any
* Rollover Contributions, if any
* Prior KDI Corporation Employer Contributions, if any,
and earnings thereon.
* Prior DEL Electronics Corporation Subsidiary Employer
Contributions, if any, and earnings thereon.
* Prior Bertan Associates, Inc., Matching
Contributions, if any, and earnings thereon.
* Qualified Nonelective Contributions, if any
(B) plus the value on that date of that portion of the
Participant's Account that is attributable to and derived
from:
* Nonelective Contributions, if any
* Forfeitures, if any
Such contributions pursuant to Subsection (B), plus the
earnings thereon, shall be, at any relevant time, a part of
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the Participant's Vested Interest equal to an amount ("X")
determined by the following formula:
X = P(AB + D) - D
For the purposes of applying this formula:
P= The Participant's Vesting Percentage at the
relevant time.
AB= The account balance attributable to such
contributions, plus the earnings thereon, at
the relevant time.
D= The amount of the distribution.
1.66 VESTING PERCENTAGE. The term Vesting Percentage means the
percentage used to determine a Participant's Vested Interest in
contributions made by the Employer, plus the earnings thereon,
credited to his Participant's Account that are not 100%
immediately vested. The Vesting Percentage for each Participant
shall be determined in accordance with the following schedule
based on Years of Service with the Employer:
<TABLE>
<S> <C> <C>
Years of Service Vesting Percentage
---------------- ------------------
Less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
</TABLE>
However, if an Active Participant dies prior to attaining his
Normal Retirement Age, this Vesting Percentage shall be 100%.
ARTICLE II
SERVICE
2.1 SERVICE. The term Service means active employment with the
Employer as an Employee. For purposes of determining Service,
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<PAGE>
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 VESTING AND CONTRIBUTIONS, 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
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<PAGE>
(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).
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. 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 DETERMINING VESTING PERCENTAGE. Vesting credit shall be given
for each Year of Service except those periods specified in
Section 2.7.
If a Participant completes less than 1,000 Hours of Service
during a Plan Year while remaining in the Service of the
Employer, his Vesting Percentage shall not be increased for such
Plan Year. However, at such time as the Participant again
completes at least 1,000 Hours of Service in any subsequent Plan
Year, his Vesting Percentage shall then take into account all
Year(s) of Service with the Employer except those specified in
Section 2.7.
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<PAGE>
If an individual who ceases to be an Employee and is
subsequently rehired as an Employee enrolls (or re-enrolls) in
the Plan, upon his participation (or subsequent participation)
his Vesting Percentage shall then take into account all Year(s)
of Service except those specified in Section 2.7.
2.6 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.
(A) Vesting Computation Period.
In computing Years of Service and Breaks in Service for
vesting, the 12-consecutive-month period shall be the Plan
Year. However, active participation as of the last day of
the Plan Year is not required in order for a Participant to
be credited with a Year of Service for vesting purposes.
For purposes of the Vesting Computation Period, if any Plan
Year is less than 12-consecutive months, and if a
Participant would have been credited with a Year of Service
during the 12-consecutive-month period beginning on the
first day of the short Plan Year, then the Participant will
receive a Year of Service for the short Plan Year. The
Participant receives credit for an additional Year of
Service if the Participant would have been credited with a
Year of Service for the Plan Year immediately following,
the short Plan Year.
(B) Contribution Computation Period.
For purposes of determining a Participant's eligibility to
receive a contribution made by the Employer, pursuant to
Article IV, which is conditioned upon a Year of Service
requirement, the twelve-consecutive-month period shall be
any Plan Year during which the Active Participant is
credited with at least 1,000 Hours of Service. However,
when an Employee first becomes a Participant or resumes
active participation in the Plan following a One-Year Break
in Service on a date other than the first day of the Plan
Year, all Hours of Service credited to the Participant
during that Plan Year, including those hours credited prior
to the date the Employee enrolls (or re-enrolls) as an
Active Participant in the Plan, shall be counted.
For purposes of the Contribution Computation Period, if any
Plan Year is less than 12 consecutive months, the number of
Hours of Service required to accrue a Year of Service, in
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<PAGE>
such short Plan Year, shall bear the same ratio to 1000 as
the number of days in the short Plan Year bears to 365.
2.7 EXCLUDED YEARS OF SERVICE. In determining the Vesting Percentage
of an Employee, all Years of Service with the Employer shall be
taken into account except:
* Plan Years during which a Participant did not complete at
least 1,000 Hours of Service.
FOR PURPOSES OF ELIGIBILITY, THE FOLLOWING PROVISIONS SHALL APPLY:
2.8 PERIOD OF SERVICE. The term Period of Service or Service means
the Employer-Employee relationship which begins on the
Employee's employment date and continues until his Severance
from Service Date.
An Employee's Period of Service shall include any Period of
Severance beginning on his Severance from Service Date, which is
less than 12 months.
2.9 PERIOD OF SEVERANCE. The term Period of Severance means a period
of time commencing on the Participant's Severance from Service
Date and ending on the date such individual is re-employed by
the Employer.
2.10 SEVERANCE FROM SERVICE DATE. The Severance from Service Date
shall be the earliest of (A), (B), or (C) below.
(A) The date the Employee terminates employment by reason of a
quit, discharge, permanent Disability, retirement or death.
(B) The second anniversary of the first day the Employee is
absent from Service for maternity or paternity reasons, as
described in the following Section 2.11.
(C) The first anniversary of the first day the Employee
separates from Service for any other reason such as an
authorized leave of absence, sickness, vacation, etc.,
after which the Employee does not return to work.
2.11 ONE-YEAR BREAK IN SERVICE. The term One-Year Break in Service
shall mean a 12-consecutive-month Period of Severance, beginning
on the Employee's Severance from Service Date.
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<PAGE>
In the case of an individual who is absent from Service for
maternity or paternity reasons, the 12-consecutive-month period
beginning on the first anniversary of the first date of such
absence shall not constitute a One-Year Break in Service. An
absence from Service for maternity or paternity reasons means an
absence (1) by reason of the pregnancy of the individual, (2) by
reason of the birth of a child of the individual, (3) by reason
of the placement of a child with the individual in connection
with the adoption of such child by such individual, or (4) for
purposes of caring for such child for a period beginning
immediately following such birth or placement.
2.12 YEAR(S) OF SERVICE. The term Year(s) of Service means a Period
of Service equaling 12 months. Service counted in computing
Years of Service need not be consecutive or continuous, and all
fractional Periods of Service shall be aggregated.
2.13 SERVICE UPON RE-EMPLOYMENT. An Employee shall be considered a
re-employed Employee when he is rehired following a One-Year
Break in Service. Upon re-employment, all Service, including
Service prior to any One-Year Break in Service, shall be
aggregated in determining such re-employed Employee's
eligibility to participate in the Plan.
2.14 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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<PAGE>
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 requirements:
* 1/4 Year of Service
* Age 21.
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.
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<PAGE>
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 I % nor more than 15% 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
V.
(D) A Salary Deferral Agreement may be changed by a Participant
twice during the Plan Year, on January I and July 1, 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
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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 4.14 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 4.16 or
Section 4.19 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.
4.2 NONELECTIVE CONTRIBUTIONS. The Employer may make a contribution
under the Plan for any Plan Year of an amount out of Considered
Net Profits that the Employer's Board of Directors shall
determine by resolution. Such resolution shall either specify a
fixed amount or specify a definite formula by which a fixed
amount can be determined. Nonelective Contributions, if any,
shall be made in Employer stock.
The Employer may designate at the time of contribution that all
or a portion of such Nonelective Contribution be treated as a
Qualified Nonelective Contribution.
Such Nonelective Contribution shall be allocated as of the last
day of the Employer's fiscal year for which such contribution is
made to each Participant who:
* has a Year of Service for contribution purposes, as defined
in Article II.
* is an Active Participant as of the last day of the Plan
Year.
* is employed for the entire fiscal year.
For each Employer's fiscal year the contribution shall be
allocated (by operating unit) to each Participant in the
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proportion that the Compensation paid to each Participant (in
the operating unit) during the Employer's fiscal year bears to
the Compensation paid to all such Participants (in the operating
unit), subject to the Limitations on Allocations specified in
Article V.
The contribution as described above, for any of the Employer's
fiscal year, 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 any event not later than the date which is
prescribed by law for filing the Employer's income tax return,
including any extension thereof.
4.3 FAIL-SAFE CONTRIBUTION. The Employer reserves the right 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 MAXIMUM CONTRIBUTION LIMITATIONS. The maximum amount of
contributions, including Elective Deferral Contributions,
Employee Post-Tax Contributions and Nonelective Contributions,
that may be contributed to the Plan on behalf of a Participant,
is 25% of the Participant's Compensation for that Plan Year.
4.5 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
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Profits, the Employer may determine in its sole discretion that
it will make no contributions for such Plan Year.
4.6 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.
4.7 ALLOCATION OF FORFEITURES. Forfeitures available for
reallocation in accordance with Section 9.3 shall be considered
as part of Nonelective Contributions made by the Employer, as
more fully described in this Article IV.
4.8 CREDITING OF ELECTIVE DEFERRAL AND OTHER CONTRIBUTIONS. Elective
Deferral Contributions and other contributions made by the
Employer (and any Forfeitures available for reallocation in
accordance with Section 9.3) shall be credited to the
Participant Account of each Participant for whom such
contributions are made, in accordance with the provisions of
Article XIII.
4.9 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.
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4.10 TRANSFERS. Without regard to the Limitations on Allocations
imposed under Article V, the Trustee 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 Trustee may receive
Transfers representing the assets of any predecessor plan.
Transfers may be invested in any manner authorized under the
provisions of this Plan.
4.11 EMPLOYEE POST-TAX CONTRIBUTIONS. As of his Entry Date each
Active Participant may elect to make periodic Employee Post-Tax
Contributions under the Plan in an amount equal to not less than
I % nor more than 10% of his Compensation by completing and
delivering to the Administrator a payroll deduction order. Each
Active Participant may redesignate a new permissible amount as
an Employee Post Tax Contribution twice each Plan Year, on
January I and July 1, by notifying the Plan Administrator 15
days before such date. Such redesignation shall be made as if it
were an original designation and shall be effective as of such
date. Employee Post-Tax Contributions shall be subject to the
terms of Article V.
Employee Post-Tax Contributions shall be deducted by the
Employer from the Participant's earnings while he has a payroll
deduction order in effect and shall be paid by the Employer to
the Trust not less frequently than monthly.
Employee Post-Tax Contributions shall be subject to the Actual
Contribution Percentage Test.
However, the total amount of a Participant's Elective Deferral
Contributions and Employee Post-Tax Contributions may not exceed
20% of the Participant's Compensation.
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 4.15 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
4.17 or Section 4.19 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.
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4.12 CREDITING OF EMPLOYEE POST-TAX CONTRIBUTIONS. Each Participant's
Employee Post-Tax Contributions, if any, shall be credited to
his Participant's Account.
4.13 SUSPENSION OF ELECTIVE DEFERRAL AND EMPLOYEE POST-TAX
CONTRIBUTIONS. The following provisions shall apply with respect
to suspension of Elective Deferral and Employee Post-Tax
Contributions.
(A) Elective Suspension. An Active Participant may elect to
suspend his Salary Deferral Agreement for Elective Deferral
Contributions or payroll deduction order for Employee
Post-Tax Contributions by filing a written notice thereof
with the Administrator at any time. The Salary Deferral
Agreement or payroll deduction order, as the case may be,
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 and
payroll deduction order 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 or payroll deduction order, as
applicable, suspended on the date such election becomes
effective. Such suspension shall remain in effect for the
number of months specified therein.
The Participant may elect to reactivate his Salary Deferral
Agreement for Elective Deferral Contributions or payroll
deduction order for Employee Post-Tax Contributions by filing a
written notice thereof with the Plan Administrator. The Salary
Deferral Agreement or payroll deduction order, as the case may
be, shall be reactivated on the January I or July I following
the expiration of the suspension period described above.
4.14 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
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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.
4.15 LIMITATION OF EMPLOYEE POST-TAX 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 Employee
Post-Tax 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.
4.16 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.
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(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) 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) 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.
(G) 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.
(H) 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.
4.17 CORRECTION OF EXCESS AGGREGATE CONTRIBUTIONS.
(A) Excess Aggregate Contributions may be corrected using the
method described below.
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(1) The Excess Aggregate Contribution (and income) shall
be distributed from the Employee's Account
attributable to Employee Post-Tax Contributions (and,
if applicable, Qualified Nonelective Contributions).
The distribution 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.
(B) 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.
(C) 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.
(D) 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
months after the date of termination.
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(E) 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.
(F) 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.
(G) In no case may the amount of Excess Aggregate Contributions
distributed to a Highly Compensated Employee exceed the
amount of Employee Post-Tax Contributions made on behalf of
the Highly Compensated Employee for the Plan Year.
(H) 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.
4.18 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 I
following the close of a Participant's taxable year,
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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 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.
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(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.
4.19 QUALIFIED CONTRIBUTIONS. In lieu of distributing Excess
Contributions as provided in Section 4.16 of the Plan, or Excess
Aggregate Contributions as provided in Section 4.17 of the Plan,
the Employer may take the actions specified below in order to
satisfy the Actual Deferral Percentage Test or the Actual
Contribution Percentage Test, or both, pursuant to the
regulations under the Code.
(A) At the election of the Employer, Qualified Nonelective
Contributions 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 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
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Treasury, shall be such Qualified Nonelective Contributions
that are needed to meet the Actual Deferral Percentage
Test.
(B) Any Qualified Nonelective Contribution taken into account
under paragraph (A) must be allocated to the Employee's
Account as of a date within the Plan Year in which the
Excess 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.
(C) Any Qualified Nonelective 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.
4.20 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 Non highly 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 Non highly 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
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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 desegregated
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 alterative 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
reduced so that there is no multiple use of the alterative
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 Post-Tax 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
Post-Tax Contributions are determined without regard to
deductible employee contributions within the meaning of
section 72(o)(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
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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 4.18 of the Plan are not Annual Additions.
(B) Compensation. The term Compensation means wages, salaries,
and fees for professional services and other amounts
received (without regard to whether or not an amount is
paid in cash) for personal services actually rendered in
the course of employment with the Employer maintaining the
Plan to the extent that the amounts are includible in gross
income (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums,
tips, bonuses, fringe benefits, and reimbursements, or
other expense allowances under a nonaccountable plan (as
described in 1.62-2(c)), and foreign earned income (as
defined in section 911(b) of the Code) whether or not
excludable from gross income under section 911 of the Code.
The term Compensation does not include:
(1) Employer Contributions to a plan of deferred
compensation which are not includible in the
employee's gross income for the taxable year in which
contributed, or Employer Contributions under a
simplified employee pension plan to the extent such
contributions are deductible by the employee, or any
distributions from a plan of deferred compensation;
(2) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property)
held by the Employee either becomes freely
transferable or is no longer subject to substantial
risk of forfeiture;
(3) Amounts realized from the sale, exchange, or other
disposition of stock acquired under a qualified stock
option; and
(4) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not
under a salary reduction agreement) towards the
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purchase of an annuity contract described in section
403(b) of the Code (whether or not the contributions
are actually excludable from the gross income of the
Employee).
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.
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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 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) Any Employee Post-Tax Contributions (including
earnings and losses thereon) shall be returned to the
Participant, to the extent that the return would
reduce the Excess Amount. This distribution shall be
made as soon as administratively feasible after the
Excess Amount is determined. Employee Post-Tax
Contributions so returned shall be disregarded for
purposes of the Actual Contribution Percentage Test.
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(2) If, after the application of subparagraph (1), an
Excess Amount still exists, (excluding Elective
Deferral Contributions) such Excess Amount 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.
(3) If, after the application of subparagraph (2) 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.
(4) Alternatively, if after the application subparagraph
(1) an Excess Amount still exists, the Plan
Administrator may elect to dispose of the Excess
Amount by applying the procedure in subparagraph (3)
before applying the procedure in subparagraph (2). If
the Plan Administrator makes this election, the Plan
Administrator must apply it uniformly to all
Participants in a Limitation Year.
(5) If a suspense account is in existence at any time
during a Limitation Year pursuant to this section, it
will not participate in the allocation of 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 or Employee
Post-Tax 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:
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(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:
(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
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(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 Deferred 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. 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
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<PAGE>
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.
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(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);
(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 Post-Tax Contributions as Annual Additions.
(E) Notwithstanding the foregoing, at the election of the Plan
Administrator, in computing the Defined Contribution Plan
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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. However, that portion, if any, of a Participant's Account
that is invested in shares of the Employer's stock shall be
distributed in the form of stock certificates and any partial
shares of Employer's stock will be valued in accordance with
Section 1.51 and paid in cash. All distributions are subject to
the provisions of Article VIII, Joint and Survivor Annuity
Requirements.
Distributions of Employer stock are limited to the value of the
Participant's Employer Stock Account and shall be made by the
Trustee.
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 deemed 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 accordance with
Section 8.2.
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
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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 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 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
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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 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
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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.
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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
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.
(1) 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
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Beneficiary. Life expectancy and joint and last
survivor expectancy are computed by the use of the
return 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.
(2) 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.
(3) 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.
(4) 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 right 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.
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:
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(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 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.
(2) 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 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:
(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.
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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.
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6.9 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 $500 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.
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(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
Distributees 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.
(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 Distributees 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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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 EARLY RETIREMENT. A Participant who retires from the Service of
the Employer on his Early Retirement Date 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 Early Retirement Date.
7.3 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.
7.4 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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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.
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 married 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 PRE-RETIREMENT 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 50% of
the Participant's 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.
A Participant who has not attained age 35 as of the end of
a Plan Year, may make a special Qualified Election to waive
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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.
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Any consent by a Spouse obtained under this provision
(or establishment that the consent of a Spouse may
not be obtained) shall be effective only with respect
to such Spouse. A consent that permits designations
by the Participant without any requirement of further
consent by such Spouse must acknowledge that the
Spouse has the right to limit consent to a specific
Beneficiary, and a specific form of benefit where
applicable, and that the Spouse voluntarily elects to
relinquish either or both of such rights. A
revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any
time before the commencement of benefits. The number
of revocations shall not be limited. No consent
obtained under this provision shall be valid unless
the Participant has received notice as provided in
Section 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%.
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 50% of the Participant's
Vested Interest. Such Annuity shall be provided
proportionately from both employer contributions and
Employee Post-Tax Contributions.
(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
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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,
no less than 30 days and no more than 90 days prior to the
Annuity Starting Date, provide each Participant with a
written explanation of: (i) the terms and conditions of a
Qualified Joint and Survivor Annuity; (ii) the
Participant's right 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.
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8.7 TRANSITIONAL RULES.
(A) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive 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 Nominal 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
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(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 on the date the Participant terminates
employment.
(3) For purposes of this Section 8.7 (D) :
(a) Qualified Early Retirement Acre 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.
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(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.
If at the time of his Termination of Employment the
Participant's Vesting Percentage is not 100%, the non-vested
portion of his Participant's Account will become a Forfeiture
upon the date the Participant incurs five consecutive One-Year
Breaks in Service.
If the Participant is later rehired by the Employer and
re-enrolls in the Plan before incurring five consecutive
One-Year Breaks in Service, the non-vested portion of his
Participant's Account will not become a Forfeiture.
9.2 NO FURTHER RIGHTS OR INTEREST. A Participant shall have no
further interest in or any rights to any portion of his
Participant's Account that becomes a Forfeiture due to his
Termination of Employment once the Participant incurs five
consecutive One-Year Breaks in Service in accordance with
Article II.
9.3 APPLICATION OF FORFEITURES. Any Forfeiture arising in accordance
with the provisions of Section 9.1 shall be credited and
allocated to the Participants' Accounts in the manner set forth
in Section 4.7 for the reallocation of Forfeitures.
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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, at
any time, 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
* Prior Bertan Associates, Inc. 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:
* Prior Bertan Associates, Inc. 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.
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(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);
(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 and Employee Post-Tax
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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
Post-Tax 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:
(a) Through reimbursement or compensation by
insurance or otherwise;
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(b) By liquidation of the Employee's assets;
(c) By cessation of Elective Deferral Contributions
or Employee Post-Tax 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 EMPLOYEE POST-TAX CONTRIBUTIONS. A Participant may
elect to withdraw from his Participant's Account, at any time,
an amount equal to any whole percentage (not exceeding 100%) of
his Vested Interest in his Participant's Account attributable to
the value of his Employee Post-Tax Contributions, including
earnings.
10.5 WITHDRAWAL OF ROLLOVER CONTRIBUTIONS. Once during a Plan Year, a
Participant who is an Employee of Bertan Associates, Inc. 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.
10.6 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
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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.
10.7 NON-REPAYMENT. Withdrawals made in accordance with this Article
X may not be repaid.
10.8 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.
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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) 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.
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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;
(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 EXCESS AGGREGATE CONTRIBUTIONS. 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.
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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.
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 and
Trust. 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.
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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.
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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 rights 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 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 right 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:
* Employee Post-Tax Contributions
* 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:
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(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. In accordance with the
procedures established by the Plan Administrator, the
Participant shall elect to have a specified percentage invested
in one or more investment funds, as long as the designated
percentage for each fund is a whole number divisible by five,
and the sum of the percentages allocated is equal to 100%. In
addition, the Participant may change such election on any normal
business day of the Insurance Company. All investment changes
are subject to the rules of the investment fund(s) in which the
Participant's Account is or is to be invested.
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13.11 TRANSFERS BETWEEN INVESTMENT FUNDS. A Participant may designate
amounts invested pursuant to the section above to be transferred
between the investment funds, as long as the designated
percentage for each fund is a whole number divisible by five, on
any normal business day of the Insurance Company, in accordance
with the procedures established by the Plan Administrator.
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, the Administrator and the
Trustee. 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.
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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 FULL VESTING. Upon the termination or partial termination of the
Plan, or upon complete discontinuance of Employer contributions,
the rights of all affected Participants in and to the amounts
credited to each such Participant's Account shall be 100% vested
and nonforfeitable.
14.5 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 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.
14.6 APPLICATION OF FORFEITURES. Upon the termination of the Plan,
any Forfeitures which have not been allocated as of such
termination shall be allocated and credited to each
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Participant's Account of the then Active Participants in the
same manner as the last contribution made by the Employer under
the Plan.
14.7 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 hereunder
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.
14.8 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 fully vested and
nonforfeitable and 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 and the Trustee 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 14.7,
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,
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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 judgment 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 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 earlier
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
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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 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 I % of the total combined voting
power of all stock of the Employer, and whose annual
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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 Post-Tax Contributions made
pursuant to Internal Revenue Code section 219 or Unrelated
Rollovers made to the Plan after December 31, 1983.
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A Related Rollover is a Rollover Contribution or Transfer
that either was not initiated by the 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;
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(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.
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:
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(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
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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 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 whet her 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. In
computing the Minimum Employer Contribution under
this Subsection for Plan Years beginning after
December 31, 1984, Forfeitures allocated to a
Participant's Account shall be included in the
Minimum Employer Contribution.
(C) Minimum Vesting Requirements. The vesting provisions set
forth in the definition of Vesting Percentage 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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ARTICLE XVII
TRUST AGREEMENT
17.1 CREATION AND ACCEPTANCE OF TRUST. The Trustee, by joining in the
execution of the Plan and trust agreement, accepts the Trust
hereby created and agrees to act in accordance with the express
terms and conditions herein stated.
17.2 TRUSTEE CAPACITY; CO-TRUSTEES. The Trustee may be a bank, trust
company or other corporation possessing trust powers under
applicable state or federal law or one or more individuals or
any combination thereof.
When two or more persons serve as Trustee, they are specifically
authorized, by a written agreement between themselves, to
allocate specific responsibilities, obligations or duties among
themselves. An original copy of such written agreement is to be
delivered to the Administrator.
17.3 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE. Any
Trustee may resign at any time by delivering to the
Administrator 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 Trustee may be removed with or without cause by the Board of
Directors by delivery of a written notice of removal, to take
effect at a date specified therein, which shall not be less than
30 days after delivery thereof, unless such notice shall be
waived.
In the case of the resignation or removal of a Trustee, the
Trustee shall have the right to a settlement of its account,
which may be made, at the option of the Trustee, either (1) by
judicial settlement in an action instituted by the Trustee in a
court of competent jurisdiction, or (2) by written agreement of
settlement between the Trustee and the Administrator.
Upon such settlement, all right, title and interest of such
Trustee in the assets of the Trust and all rights and privileges
under this Agreement theretofore vested in such Trustee shall
vest in the successor Trustee, and thereupon all future
liability of such Trustee shall terminate; provided, however,
that the Trustee shall execute, acknowledge and deliver all
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documents and written instruments which are necessary to
transfer and convey the right, title and interest in the Trust
assets, and all rights and privileges to the successor Trustee.
The Board of Directors, upon receipt of notice of the
resignation or removal of the Trustee, shall promptly designate
a successor Trustee, whose appointment is subject to acceptance
of this Trust in writing and shall notify in writing the
insurance company of such successor Trustee.
17.4 TAXES, EXPENSES AND COMPENSATION OF TRUSTEE. The Trustee shall
deduct from and charge against the Trust fund any taxes paid by
it which may be imposed upon the Trust fund or the income
thereof or which the Trustee is required to pay with respect to
the interest of any person therein.
The Trustee shall be paid such reasonable compensation as shall
from time to time be agreed upon in writing by the Employer and
the Trustee. An individual serving as Trustee who already
receives full-time pay from the Employer shall not receive
compensation from the Plan. In addition, the Trustee shall be
reimbursed for any reasonable expenses, including reasonable
counsel fees incurred by it as Trustee. Such compensation and
expenses shall be paid from the Trust fund unless paid or
advanced by the Employer.
17.5 TRUSTEE ENTITLED TO CONSULTATION. The Trustee shall be entitled
to advice of counsel, which may be counsel for the Plan or the
Employer, in any case in which the Trustee shall deem such
advice necessary. With the exception of those powers and duties
specifically allocated to the Trustee by the express terms of
this Plan, it shall not be the responsibility of the Trustee to
interpret the terms of the Plan or Trust and the Trustee may
request, and is entitled to receive guidance and written
direction from the Administrator on any point requiring
construction or interpretation of the Plan documents.
17.6 RIGHTS, POWERS AND DUTIES OF TRUSTEE. The Trustee shall have the
following rights, powers, and duties:
(A) The Trustee shall be responsible for the safekeeping and
administering of the assets of this Plan and Trust in
accordance with the provisions of this Agreement and any
amendments thereto. The duties of the Trustee under this
Agreement shall be determined solely by the express
provisions of this Agreement and no further duties or
responsibility shall be implied. Subject to the terms of
this Plan and Trust, the Trustee shall be fully protected
and shall incur no liability in acting in reliance upon the
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written instructions or directions of the Administrator or
a duly designated Investment Manager or any other Named
Fiduciary.
(B) The Trustee shall have all powers necessary or convenient
for the orderly and efficient performance of its duties
hereunder, including but not limited to those specified in
this section. The Trustee may appoint one or more
administrative agents or contract for the performance of
such administrative and service functions as it may deem
necessary for the effective installation and operation of
the Plan and Trust.
(C) The Trustee shall have the power to collect and receive any
and all monies and other property due hereunder and to give
full discharge and acquittance therefor; to settle,
compromise or submit to arbitration any claims, debits or
damages due or owing, to or from the Trust; to commence or
defend suits or legal proceedings wherever, in its
judgment, any interest of the Trust requires it; and to
represent the Trust in all suits or legal proceedings in
any court of law or equity or before any other body or
tribunal. It shall have the power generally to do all acts,
whether or not expressly authorized, which the Trustee in
the exercise of its Fiduciary responsibility may deem
necessary or desirable for the protection of the Trust and
the assets thereof.
(D) The Trustee may temporarily hold cash balances and shall be
entitled to deposit any such funds received in a bank
account or bank accounts in the name of the Trust in any
bank or banks selected by the Trustee, including the
banking department of the Trustee, pending disposition of
such funds in accordance with the Trust. Any such deposit
may be made with or without interest.
(E) The Trustee shall deal with any assets of this Trust held
or received under this Plan only in accordance with the
written directions from the Administrator. The Trustee
shall be under no duty to determine any facts or the
propriety of any action taken or omitted by it in good
faith pursuant to instructions from the Administrator.
(F) If the whole or any part of the Trust shall become liable
for the payment of any estate, inheritance, income or other
tax which the Trustee shall be required to pay, the Trustee
shall have full power and authority to pay such tax out of
any monies or other property in its hands for the account
of the person whose interest hereunder is so liable. Prior
to making any payment, the Trustee may require such
releases or other documents from any lawful taxing
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authority as it shall deem necessary. The Trustee shall not
be liable for any nonpayment of tax when it distributes an
interest hereunder on instructions from the Administrator.
(G) The Trustee shall keep a full, accurate and detailed record
of all transactions of the Trust which the Administrator
shall have the right to examine at any time during the
Trustee's regular business hours. Following the close of
the fiscal year of the Trust, or as soon as practical
thereafter, the Trustee shall furnish the Administrator
with a statement of account. This account shall set forth
all receipts, disbursements and other transactions effected
by the Trustee during said year.
The Administrator shall promptly notify the Trustee in
writing of its approval or disapproval of the account. The
Administrator's failure to disapprove the account within 60
days after receipt shall be considered an approval. The
approval by the Administrator shall be binding as to all
matters embraced in any statement to the same extent as if
the account of the Trustee had been settled by judgment or
decree of a court of competent jurisdiction under which the
Trustee, Administrator, Employer and all persons having or
claiming any interest in the Trust were parties; provided,
however, that the Trustee may have its account judicially
settled if it so desires.
(H) If, at any time, there shall be a dispute as to the person
to whom payment or delivery of monies or property should be
made by the Trustee, or regarding any action to be taken by
the Trustee, the Trustee may postpone such payment,
delivery or action, retaining the funds or property
involved, until such dispute shall have been resolved in a
court of competent jurisdiction or the Trustee shall have
been indemnified to its satisfaction or until it has
received written direction from the Administrator.
(I) Anything in this instrument to the contrary
notwithstanding, it shall be understood that the Trustee
shall have no duty or responsibility with respect to the
determination of matters pertaining to the eligibility of
any Employee to become or remain a Participant hereunder,
the amount of benefit to which any Participant or
Beneficiary shall be entitled hereunder, all such
responsibilities being vested in the Administrator. The
Trustee shall have no duty to collect any contribution from
the Employer and shall not be concerned with the amount of
any contribution nor the application of the contribution
formula.
17.7 EVIDENCE OF TRUSTEE ACTION. In the event that the Trustee is
comprised of two or more Trustees, then those Trustees may
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designate one such Trustee to transmit all decisions of the
Trustee and to sign all necessary notices and other reports on
behalf of the Trustee. All notices and other reports bearing the
signature of the individual Trustee so designated shall be
deemed to bear the signatures of all the individual Trustees and
all parties dealing with the Trustee are to rely on any such
notices and other reports as authentic and as representing the
action of the Trustee.
17.8 INVESTMENT POLICY. This Plan has been established for the sole
purpose of providing benefits to the Participants and their
Beneficiaries. In determining its investments hereunder, the
Trustee shall take account of the advice provided by the
Administrator as to funding policy and the short and long range
needs of the Plan based on the evident and probable requirements
of the Plan as to the time benefits shall be payable and the
requirements therefor.
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EXHIBIT 99.1
INTERNAL REVENUE SERVICE DEPARTMENT OF TREASURY
DISTRICT DIRECTOR
G.P.O. BOX 1680
BROOKLYN, NY 11202
Employer Identification Number:
Date: June 21, 1995 13-1784308
File Folder Number:
133004429
DEL ELECTRONICS CORPORATION Person to Contact:
C/O MICHAEL TABER JOHN LILJEHULT
1 COMMERCE PARK Contact Telephone Number:
VALHALLA, NY 10595 (718) 488-2411
Plan Name:
DEL ELECTRONICS CORPORATION
401(K) PLAN
Plan Number: 002
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend
on its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal or
local statutes.
This determination letter is applicable for the amendment(s) adopted on
December 30, 1994.
This determination letter is applicable for the plan adopted on June
28, 1994.
<PAGE>
DEL ELECTRONICS CORPORATION
This plan satisfies the nondiscrimination in amount requirement of
section 1.401(a)(4)-1(b)(2) of the regulations on the basis of a design based
safe harbor described in the regulations.
This letter is issued under Rev. Proc. 93-39 and considers the
amendments required by the Tax Reform Act of 1986 except as otherwise specified
in this letter.
This plan satisfies the nondiscriminatory current availability
requirements of section 1.401(a) (4)-4(b) of the regulations with respect to
those benefits, rights, and features that are currently available to all
employees in the plan's coverage group. For this purpose, the plan's coverage
group consists of those employees treated as currently benefiting for purposes
of demonstrating that the plan satisfies the minimum coverage requirements of
section 410(b) of the Code.
This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by the Uruguay Round
Agreements Act, Pub. L. 103-465.
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
S/Herbert J. Huff
-----------------------------------
Herbert J. Huff
District Director
Enclosures:
Publication 794
Reporting & Disclosure Guide
for Employee Benefit Plans