As Filed With the Securities and Exchange Commission
on October 15, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
DOLLAR GENERAL CORPORATION
(Exact name of Registrant as Specified in its Charter)
TENNESSEE
(State or Other
Jurisdiction of
Incorporation or
Organization)
61-0502302
(I.R.S.
Employer
Identificat
ion No.)
DOLLAR GENERAL CORPORATION
104 Woodmont Blvd., Suite
500
Nashville, Tennessee
(Address of Principal
Executive Offices)
37205
(Zip Code)
Dollar General Corporation 401(k) Savings and Retirement Plan
(Full title of the plan)
Robert C. Layne
Corporate Secretary
104 Woodmont Blvd., Suite 500
Nashville, Tennessee 37205
(Name and address of agent for service)
(615) 783-2000
(Telephone number, including area code, of agent for service)
Copy to:
Howard H. Lamar, Esq.
Bass, Berry & Sims PLC
2700 First American Center
Nashville, Tennessee 37238
CALCULATION OF REGISTRATION FEE
CALCULATION OF REGISTRATION FEE
Title of securities
to be registered (1) Common Stock, par value $.50 per share
Amount to
be registered 0
Proposed
maximum
offering price
per share n/a
Proposed
maximum
aggregate offering
price n/a
Amount of
registration fee (2) $0
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, as amended, this
registration statement covers an indeterminate amount of interests to be
offered under the employee benefit plan described herein.
(2) Pursuant to Rule 457(h)(2) no registration fee is required to be paid.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents previously filed by Dollar General Corporation
(the "Registrant") with the Commission pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act") are incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended January 30, 1998 filed April 20, 1998;
(b) The Registrant's Quarterly Reports on Form 10-Q
for the fiscal quarters ended April 30, 1998 (filed June 16,
1998) and July 31, 1998 (filed September 14, 1998);
(c) The Registrant's Current Report on Form 8-K filed September
25, 1998; and
(d) The description of the Registrant's Common Stock contained
in the Registrant's Current Report on Form 8-K filed June 8,
1998 as amended by a filing dated June 11, 1998.
All documents and reports subsequently filed by the Registrant pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing
of a post-effective amendment to this Registration Statement which indicates
that all shares covered hereby have been sold or which deregisters all such
shares then remaining unsold shall be deemed to be incorporated by reference
in this Registration Statement and to be a part hereof from the date of filing
of such documents. Any statements contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified
or replaced for purposes hereof to the extent that a statement contained
herein (or in any other subsequently filed document which also is incorporated
or deemed to be incorporated by reference herein) modifies or replaces such
statement. Any statement so modified or replaced shall not be deemed, except
as so modified or replaced, to constitute a part hereof.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Tennessee Business Corporation Act ("TBCA") provides that a
corporation may indemnify any of its directors and officers against liability
incurred in connection with a proceeding if (a) such person acted in good
faith; (b) in the case of conduct in an official capacity with the
corporation, he reasonably believed such conduct was in the corporation's best
interests; (c) in all other cases, he reasonably believed that his conduct was
at least not opposed to the best interests of the corporation; and (d) in
connection with any criminal proceeding, such person had no reasonable cause
to believe his conduct was unlawful. In actions brought by or in the right of
the corporation, however, the TBCA provides that no indemnification may be
made if the director or officer was adjudged to be liable to the corporation.
The TBCA also provides that in connection with any proceeding charging
improper personal benefit to an officer or director, no indemnification may be
made if such officer or director is adjudged liable on the basis that such
personal benefit was improperly received. In cases where the director or
officer is wholly successful, on the merits or otherwise, in the defense of
any proceeding instigated because of his or her status as a director or
officer of a corporation, the TBCA mandates that the corporation indemnify the
director or officer against reasonable expenses incurred in the proceeding.
The TBCA provides that a court of competent jurisdiction, unless the
corporation's charter provides otherwise, upon application, may order that an
officer or director be indemnified for reasonable expenses if, in
consideration of all relevant circumstances, the court determines that such
individual is fairly and reasonably entitled to indemnification,
notwithstanding the fact that (a) such officer or director was adjudged liable
to the corporation in a proceeding by or in the right of the corporation; (b)
such officer or director was adjudged liable on the basis that personal
benefit was improperly received by him; or (c) such officer or director
breached his duty of care to the corporation.
The Registrant's Charter and Bylaws provide that the Registrant shall
indemnify its directors and officers to the fullest extent permitted by
applicable law. The Registrant's Bylaws provide further that the Registrant
shall advance expenses to each director and officer of the Registrant to the
full extent allowed by the laws of the state of Tennessee, both as now in
effect and as hereafter adopted. Under the Registrant's Charter and Bylaws,
such indemnification and advancement of expenses provisions are not exclusive
of any other right that a director or officer may have or acquire both as to
action in his or her official capacity and as to action in another capacity.
The Registrant believes that its Charter and Bylaw provisions are
necessary to attract and retain qualified persons as directors and officers.
The Registrant has in effect a directors' and officers' liability
insurance policy which provides coverage for its directors and officers.
Under this policy, the insurer agrees to pay, subject to certain exclusions,
for any claim made against a director or officer of the Registrant for a
wrongful act by such director or officer, but only if and to the extent such
director or officer becomes legally obligated to pay such claim.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable
ITEM 8. EXHIBITS
See Exhibit Index (Page II-6)
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, as amended (the "Securities
Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment hereof) which
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the total
dollar value of securities would not exceed that which was
registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in th
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 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) 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 Exchange Act, that are incorporated by reference in
the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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 Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange
Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities 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 of whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
D. The undersigned registrant hereby undertakes to submit the Plan and any
amendments thereto to the Internal Revenue Service (the "IRS") in a
timely manner and to make all changes required by the IRS in order to
qualify the Plan under Section 401 of the Internal Revenue Code of 1986,
as amended to date.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Nashville, State of Tennessee, on
the 14th day of October, 1998.
DOLLAR GENERAL CORPORATION
By: /s/ Cal Turner, Jr.
Cal Turner, Jr., President,
Chief Executive
Officer and Chairman
KNOW ALL MEN BY THESE PRESENTS, each person whose signature appears
below hereby constitutes and appoints Cal Turner, Jr. and Phil Richards his or
her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, and to file the same, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and as of the dates indicated.
Signature Title Date
/s/ Cal Turner, Jr.
Cal Turner, Jr.
President, Chief Executive
Officer and Chairman October 14, 1998
/s/ Phil Richards
Phil Richards
Chief Financial Officer and
Treasurer (Principal Financial
and Accounting Officer) October 14, 1998
/s/ Dennis C. Bottorff
Dennis C. Bottorff
Director October 14, 1998
/s/ James L. Clayton
James L. Clayton
Director October 14, 1998
/s/ Reginald D. Dickson
Reginald D. Dickson
Director October 14, 1998
/s/ John B. Holland
John B. Holland
Director October 14, 1998
/s/ Barbara M. Knuckles
Barbara M. Knuckles
Director October 14, 1998
/s/ Cal Turner
Cal Turner
Director October 14, 1998
/s/ David M. Wilds
David M. Wilds
Director October 14, 1998
/s/ William S. Wire, II
William S. Wire, II
Director October 14, 1998
Pursuant to the Requirements of the Securities Act, the Plan
Administrator of the Dollar General 401(k) Savings and Retirement Plan has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Nashville, state of
Tennessee, on October [ ], 1998.
DOLLAR GENERAL 401(k) SAVINGS AND RETIREMENT PLAN
BY: /s/ Bob Layne
Bob Layne, Corporate Secretary for
Dollar General Corporation, the Plan
Administrator
Exhibit Index
Exhibit
No. Exhibit Description
4 Dollar General Corporation 401(k) Savings and Retirement Plan
23.1 Consent of Deloitte & Touce, LLP
23.2 Consent of Price Waterhouse Coopers, LLP
24 Power of Attorney (included at pages II-4 and II-5)
EXHIBIT 4
DOLLAR GENERAL CORPORATION
401(k) SAVINGS AND RETIREMENT PLAN
AN AMENDMENT, COMPLETE RESTATEMENT, CONVERSION AND CONTINUATION OF THE
DOLLAR GENERAL CORPORATION RETIREMENT PLAN
AND THE
DOLLAR GENERAL CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN AS THE ABOVE PLAN
EFFECTIVE JANUARY 1, 1998
TABLE OF CONTENTS
1. INTRODUCTION
2. DEFINITIONS
2.1 "ACCOUNT" OR "ACCOUNTS"
2.2 "ACTUAL DEFERRAL PERCENTAGE"
2.3 "ADMINISTRATIVE COMMITTEE"
2.4 "ADMINISTRATOR"
2.5 "AGGREGATE LIMIT"
2.6 "ALLOCATION DATE"
2.7 "ALLOCATION PERIOD"
2.8 "ANNUITY STARTING DATE:
2.9 "AVERAGE CONTRIBUTION PERCENTAGE"
2.10 "BENEFICIARY"
2.11 "BOARD"
2.12 "BREAK IN SERVICE"
2.13 "CODE"
2.14 "COMMITTEE"
2.15 "COMPANY"
2.16 "COMPENSATION"
2.17 "COMPENSATION FOR TESTING PURPOSES"
2.18 "CONTRIBUTION PERCENTAGE"
2.19 "CONTRIBUTION PERCENTAGE AMOUNT"
2.20 "CONTROLLED GROUP MEMBER"
2.21 "CREDIT BALANCE"
2.22 "DISABILITY"
2.23 "EARLY RETIREMENT DATE"
2.24 "EFFECTIVE DATE"
2.25 "ELECTIVE DEFERRALS"
2.26 "ELIGIBLE EMPLOYEE"
2.27 "EMPLOYEE"
2.28 "EMPLOYEE STOCK OWNERSHIP PLAN"
2.29 "EMPLOYER"
2.30 "EMPLOYER ACCOUNTS"
2.31 "EMPLOYER CONTRIBUTION FORFEITURE"
2.32 "EMPLOYER CONTRIBUTIONS"
2.33 "EMPLOYER MATCHING CONTRIBUTIONS"
2.34 "EMPLOYER PROFIT SHARING CONTRIBUTIONS"
2.35 "ENTRY DATE"
2.36 "ERISA"
2.37 "ESOP"
2.38 "ESOP ACCOUNTS"
2.39 "EXCESS AGGREGATE CONTRIBUTIONS"
2.40 "EXCESS CONTRIBUTIONS"
2.41 "EXCESS ELECTIVE DEFERRALS"
2.42 "FAIR MARKET VALUE"
2.43 "FIVE-PERCENT OWNER"
2.44 "FORFEITURE SUSPENSE ACCOUNT"
2.45 "401(K) DISCRIMINATION FORFEITURES"
2.46 "401(K) PLAN"
2.47 "401(K) PLAN ACCOUNTS"
2.48 "HIGHLY COMPENSATED EMPLOYEE"
2.49 "HOUR OF SERVICE"
2.50 "INACTIVE PARTICIPANT"
2.51 "INVESTMENT COMMITTEE"
2.52 "LEASED EMPLOYEE"
2.53 "LIFE ANNUITY"
2.54 "NON-HIGHLY COMPENSATED EMPLOYEES"
2.55 "NORMAL RETIREMENT AGE"
2.56 "NORMAL RETIREMENT DATE"
2.57 "PARTICIPANT"
2.58 "PLAN ADMINISTRATOR"
2.59 "PLAN"
2.60 "PLAN YEAR"
2.61 "PRIOR PLAN ACCOUNT"
2.62 "QUALIFIED DOMESTIC RELATIONS ORDER"
2.63 "QUALIFIED JOINT AND SURVIVOR ANNUITY"
2.64 "QUALIFIED NONELECTIVE EMPLOYER CONTRIBUTIONS"
2.65 "QUALIFIED PRERETIREMENT SURVIVOR ANNUITY"
2.66 "RETIREMENT PLAN"
2.67 "RETIREMENT PLAN ACCOUNTS"
2.68 "SALARY DEFERRAL AGREEMENT
2.69 "SERVICE"
2.70 "SPOUSE"
2.71 "TRUST"
2.72 "TRUST AGREEMENT"
2.73 "TRUST FUND" OR "FUND"
2.74 "TRUSTEE"
2.75 "VESTED"
2.76 "VESTED BENEFIT"
2.77 "VESTING SCHEDULE"
2.78 "YEAR OF ELIGIBILITY SERVICE"
2.79 "YEAR OF SERVICE"
2.80 "YEAR OF VESTING SERVICE"
3. ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY
3.2 PARTICIPATION
3.3 REEMPLOYMENT
3.4 RETURN TO ELIGIBLE CLASS
3.5 TRANSFERS AMONG EMPLOYERS WHICH ARE CONTROLLED GROUP MEMBERS OR AMONG
EMPLOYERS WHICH ARE MAJORITY OWNED
3.6 ACCEPTANCE
3.7 EMPLOYEES WHO ARE OFFICERS, SHAREHOLDERS OR HIGHLY COMPENSATED
3.8 ABSENCE IN THE ARMED SERVICES
3.9 LEASED EMPLOYEE
4. CONTRIBUTIONS
4.1 ELECTIVE DEFERRALS
4.2 QUALIFIED NONELECTIVE EMPLOYER CONTRIBUTIONS
4.3 EMPLOYER MATCHING CONTRIBUTIONS
4.4 EMPLOYER PROFIT SHARING CONTRIBUTIONS
4.5 INDIRECT ROLLOVERS
4.6 DIRECT ROLLOVERS
4.7 PROHIBITION OF REVERSION
5. PARTICIPANTS' ACCOUNTS
5.1 ESTABLISHMENT OF PARTICIPANTS' ACCOUNTS
5.2 ALLOCATION OF ELECTIVE DEFERRALS CONTRIBUTIONS
5.3 ALLOCATIONS UNDER 401(K) PLAN (OTHER THAN ELECTIVE DEFERRALS)
5.4 VALUATION OF TRUST FUND
5.5 AVERAGE CONTRIBUTION PERCENTAGE TEST: THE AGGREGATE LIMIT FOR EMPLOYER
MATCHING CONTRIBUTIONS AND ELECTIVE CONTRIBUTIONS
5.6 INACTIVE PARTICIPANTS
5.7 LIMITATIONS ON ALLOCATIONS
5.8 ALLOCATION NOT EQUIVALENT TO VESTING
5.9 NOTIFICATION AND CORRECTIONS REGARDING ALLOCATIONS
6. RETIREMENT AND DISABILITY BENEFITS
6.1 NORMAL RETIREMENT
6.2 EARLY RETIREMENT
6.3 DISABILITY RETIREMENT
7. DEATH BENEFITS BEFORE RETIREMENT ELIGIBILITY OR DISABILITY
7.1 DEATH BENEFIT BEFORE RETIREMENT ELIGIBILITY OR DISABILITY IN GENERAL
7.2 DEATH BENEFITS ATTRIBUTABLE TO 401(K) PLAN ACCOUNTS
7.3 DEATH BENEFITS ATTRIBUTABLE TO RETIREMENT PLAN ACCOUNTS
7.4 DEATH BENEFITS ATTRIBUTABLE TO ESOP ACCOUNTS
8. SEVERANCE FROM SERVICE PRIOR TO RETIREMENT, DISABILITY OR DEATH
VESTING AND FORFEITURES
8.1 VESTED BENEFIT
8.2 VESTING SCHEDULE
8.3 EMPLOYER CONTRIBUTION FORFEITURES IN GENERAL
8.4 RESTORATION OF AMOUNTS CREDITED TO EMPLOYER CONTRIBUTION FORFEITURE
SUSPENSE ACCOUNTS AND POSSIBLE REPAYMENT REQUIREMENT FOR PARTICIPANTS' WITH
VESTED BENEFITS
8.5 FORFEITURE AND RESTORATION IF NO VESTED ACCOUNT BALANCE
8.6 VESTED INTEREST IN EMPLOYER ACCOUNT AFTER A DISTRIBUTION OR AFTER
TERMINATION OF EMPLOYMENT
9. SPECIAL PROTECTED BENEFIT DISTRIBUTION RULES RELATING TO THE
401(K) PLAN ACCOUNTS (OTHER THAN THE 401(K) PLAN EMPLOYER STOCK
ACCOUNT)
9.1 PROVISIONS IN GENERAL
9.2 METHOD OF DISTRIBUTION AND RIGHT OF SURVIVING SPOUSE TO DEATH BENEFIT
9.3 CONSENT BY SPOUSE TO DESIGNATION OF NONSPOUSE BENEFICIARY
9.4 DATE OF DISTRIBUTION
10. SPECIAL PROTECTED BENEFIT DISTRIBUTION RULES RELATING TO THE
RETIREMENT PLAN ACCOUNTS
10.1 PROVISIONS IN GENERAL
10.2 METHODS OF DISTRIBUTION UPON TERMINATION OF EMPLOYMENT OR RETIREMENT
10.3 DATE OF DISTRIBUTION
11. SPECIAL PROTECTED BENEFIT DISTRIBUTION RULES RELATING TO ESOP
ACCOUNTS AND THE 401(K) PLAN EMPLOYER STOCK ACCOUNT
11.1 PROVISIONS IN GENERAL
11.2 METHOD OF DISTRIBUTION AND RIGHT OF SURVIVING SPOUSE TO DEATH BENEFIT
11.3 CONSENT BY SPOUSE TO DESIGNATION OF NONSPOUSE BENEFICIARY
11.4 DATE OF DISTRIBUTION
11.5 VALUE OF VESTED INTEREST AND DISTRIBUTION IN CASH OR PROPERTY
11.6 PUT OPTION
11.7 DIVERSIFICATION OF INVESTMENTS
12. LEGAL RESTRICTIONS AND GENERAL REQUIREMENTS ON THE PAYMENT OF
BENEFITS
12.1 TAX REFORM ACT DISTRIBUTION RESTRICTIONS
12.2 VALUE OF VESTED INTEREST AND DISTRIBUTION IN CASH OR PROPERTY
12.3 FORMS AND PROOFS
12.4 DISTRIBUTION OF SMALL ACCOUNT(S) AND FORFEITURE OF NONVESTED AMOUNTS
12.5 DISCLAIMER BY SURVIVING SPOUSE OR OTHER BENEFICIARY
12.6 DETERMINATION OF MARITAL STATUS AND LOCATION OF SURVIVING SPOUSE
12.7 INSTALLMENT DISTRIBUTION
12.8 FAILURE TO LOCATE
13. WITHDRAWALS
13.1 WITHDRAWALS OF ELECTIVE DEFERRALS IN GENERAL
14. LOANS
15. TOP-HEAVY PLANS
15.1 DEFINITIONS
15.2 MINIMUM ALLOCATION
15.3 MINIMUM VESTING SCHEDULE
15.4 SPECIAL LIMITATIONS ON TOP HEAVY ALLOCATIONS IN MULTIPLE PLANS: "CODE
SECTION 415(E) BUY-BACK
16. PLAN ADMINISTRATION
16.1 ADMINISTRATOR
16.2 CLAIMS PROCEDURE
16.3 RECORDS
16.4 DELEGATION OF AUTHORITY
16.5 CORRECTION OF ERRORS
16.6 DOMESTIC RELATIONS ORDERS
17. THE TRUST
17.1 THE TRUST
17.2 CONTRIBUTIONS TO TRUSTEE
17.3 INVESTMENT POWERS
17.4 EMPLOYER-DIRECTED INVESTMENTS
17.5 THE PARTICIPANT-DIRECTED INVESTMENTS, INCLUDING PARTICIPANT LOANS
17.6 CUSTODIAL ROLE
17.7 LIABILITY OF TRUSTEE
17.8 COURT ACTIONS
17.9 PRUDENT MAN RULE
17.10 PROHIBITED TRANSACTIONS
17.11 CONFLICT OF INTEREST
17.12 EXEMPTIONS
17.13 FIDUCIARY INSURANCE
17.14 ACCOUNTS
17.15 REPORTS
17.16 PAYMENTS
17.17 DIRECTION OF COMMITTEE
17.18 IMPOSSIBILITY OF PERFORMANCE
17.19 EXPENSES
17.20 TAXES
17.21 RESIGNATION OR REMOVAL OF TRUSTEE
17.22 TRANSFER OF ASSETS TO A SUCCESSOR TRUSTEE OR OTHER MEDIUM OF FUNDING
17.23 ASSETS OF CONTROLLED GROUP MEMBERS
17.24 DISTRIBUTIONS IN KIND
17.25 PURCHASES AND SALES OF EMPLOYER STOCK
17.26 RESTRICTIONS ON EMPLOYER STOCK
17.27 REGISTRATION OF EMPLOYER STOCK
17.28 INVESTMENTS IN EMPLOYER STOCK
17.29 INDEPENDENT APPRAISALS
18. AMENDMENT OR TERMINATION
18.1 RIGHT TO AMEND PLAN
18.2 LIMITATION OF RIGHT TO AMEND
18.3 TERMINATION OF PLAN BY SPONSORING EMPLOYER
18.4 MERGERS
19. MISCELLANEOUS
19.1 LIABILITY OF EMPLOYER
19.2 SPENDTHRIFT CLAUSE
19.3 SUCCESSOR BUSINESS OF EMPLOYER
19.4 INSURANCE COMPANY NOT RESPONSIBLE
19.5 PERSONS UNDER LEGAL DISABILITY
19.6 CONFLICT OF PROVISIONS
19.7 DEFINITION OF WORDS
19.8 TITLES
19.9 MULTIPLE COPIES
19.10 APPLICABLE LAW
DOLLAR GENERAL 401(K) SAVINGS AND RETIREMENT PLAN
1. INTRODUCTION
This Dollar General Corporation 401(k) Savings and Retirement
Plan (the "401(k) Plan") is established effective January 1, 1998,
to provide benefits for, and to encourage savings by, eligible
Employees of Dollar General Corporation ("Dollar General"), a
Tennessee corporation. This Plan is an amendment, restatement,
conversion and continuation of the Dollar General Retirement Plan
("Retirement Plan"), which is a money purchase pension plan that
was originally effective on January 1, 1982, and last restated
completely effective January 1, 1989. Contemporaneously with the
amendment, restatement, conversion and continuation of the
Retirement Plan into this 401(k) Plan on January 1, 1998, the
Dollar General Employee Stock Ownership Plan that was originally
effective on January 1, 1984, and last restated completely
effective January 1, 1989, was also amended, restated, converted
and continued as this 401(k) Plan on January 1, 1998. The ESOP is
not a leveraged ESOP. No ESOP assets (if any) which were acquired
with an "exempt loan" as defined in Treasury Regulation Section
54.4975-7(b)(1)(iii) remain unallocated in the ESOP Suspense
Account.
Prior to the amendment, restatement, conversion and
continuation of the Retirement Plan and ESOP into this 401(k) Plan,
each of the plans had a plan year beginning on February 1 and
ending on January 31. Therefore such plans had a short plan year
for the plan year beginning February 1, 1997 and ending on December
31, 1997. On and after January 1, 1998 benefits, if any, shall
accrue only under the 401(k) provisions of this Plan, the
Retirement Plan Accounts and the ESOP Accounts being frozen (except
for crediting of investment earnings and debiting of investment
losses or plan expenses as provided herein).
Immediately after the conversion of the Retirement Plan and
the ESOP to the 401(k) Plan, each Participant in the 401(k) Plan
shall be eligible to receive benefits under the 401(k) Plan, if it
were then terminated, at least equal to the benefits payable
immediately before the conversion from the Retirement Plan and the
ESOP, if these plans were being terminated instead of converted.
Furthermore, the Code Section 411(d)(6) "protected benefits"
accrued under the Retirement Plan and the ESOP as of December 31,
1997 shall be continued under this 401(k) Plan.
Also the nonterminable protections and rights relating to
put, call or other options and to buy-sell or similar arrangements
applicable to Plan assets acquired with the proceeds of an exempt
loan from the ESOP shall be continued in this Plan as amended,
restated, converted and continued as, and to the extent, if any,
required by Treasury Regulation 54.4975-11(a)(3)(i). And
accordingly, the ESOP forms a portion of this Plan, the balance of
which includes a qualified pension and profit sharing plan which
are not ESOPs, as described in Treasury Regulation Section 54.4975-
11(a)(5).
As of January 1, 1998, all Employer Contribution Forfeitures
which have arisen under the terms of the Retirement Plan and the
ESOP shall have been allocated. If an Employer Contribution
Forfeiture must later be reestablished because a former Employee is
rehired, the Employer shall contribute an amount to the Plan
sufficient to reestablish that Employer Contribution Forfeiture.
No unallocated amounts due to the limitation on benefits described
at Code Section 415 exist with respect to the Plan.
Consequently, upon the conversion of the Retirement Plan and
the ESOP into the 401(k) Plan, all of the following conditions will
be met:
1. the sum of the balances of the Accounts in the
Retirement Plan and the ESOP as of the conversion equals the Fair
Market Value (determined as of the date of the plan conversion) of
the assets of the 401(K) Plan;
2. the assets of the Retirement Plan, the ESOP and the
401(k) Plan are combined to form the assets of the 401(k) Plan as
converted; and
3. Immediately after the conversion, each Participant in
the 401(k) Plan has account balances equal to the sum of the
Account balances the Participant had in the Retirement Plan and the
ESOP.
On or after the conversion, the balance of a Participant's
Accounts attributable to the conversion from the Retirement Plan
shall be distributable only on or after events that were
permissible under the Retirement Plan. On and after the
conversion, the balance of a Participant's Accounts attributable to
the conversion from the ESOP shall be distributable only on or
after events that were permissible under the ESOP.
All assets held by the Trust associated with the 401(k) Plan
including all assets transferred to the Trust from the Retirement
Plan and the ESOP in the amendment, restatement, conversion and
continuation of the 401(k) Plan effective January 1, 1998, shall be
available to pay benefits accrued under the Retirement Plan and the
ESOP as well as the benefits accrued under this amended, restated,
converted and continued 401(k) Plan.
The provisions of this amended, restated, converted and
continued Plan shall apply to an employee who is actively employed
by the Employer on or after January 1, 1998, which is the date that
this amended and restated, converted and continued Plan becomes
operative. The rights and benefits, if any, of an Employee whose
employment terminated before such date shall be determined in
accordance with the provisions of the Plan that were in effect on
the date that such employment was terminated; provided, however,
that if full distribution of such an Employee's Accounts(s) did not
occur prior to January 1, 1998, then the provisions of the amended,
restated, converted and continued Plan shall apply in determining
the subsequent investment and distribution of such Account(s).
2. DEFINITIONS
Unless otherwise explicitly specified, the following words
and phrases as used herein shall have the meanings set forth below
and shall be interpreted as stated in this ARTICLE.
2.1 "Account" or "Accounts"
shall mean the individual's accounts established and
maintained in the name of each Participant pursuant to Section 5.1.
These Accounts are as follows:
(a) Elective Deferral Account;
(b) Qualified Nonelective Employer Contribution Account;
(c) 401(k) Employer Stock Account;
(d) Employer Matching Account;
(e) Employer Profit Sharing Account;
(f) Indirect Rollover Account;
(g) Direct Rollover Account
(h) 401(k) Forfeiture Suspense Account;
(i) Retirement Plan Account;
(j) Prior Defined Benefit Pension Plan Account;
(k) Retirement Plan Forfeiture Suspense Account;
(l) ESOP Stock Account;
(m) ESOP Investment Account;
(n) PAYSOP Account; and
(o) ESOP Forfeiture Suspense Account
2.2 "Actual Deferral Percentage"
shall mean the average of the ratios (calculated separately
for each Participant employed by the Employer) of:
(a) the amount of Elective Deferrals actually paid
over to the Trust Fund on behalf of such Participant for the
Plan Year to
(b) the Participant's Compensation for Testing
Purposes for such Plan Year.
The term "Elective Deferrals" for purposes of this
calculation shall include Elective Deferrals made pursuant to the
Participant's Salary Deferral Agreement, including the
Participant's Excess Elective Deferrals if the Participant is a
Highly Compensated Employee, but shall exclude Elective Deferrals
that are taken into account in the Contribution Percentage test
(provided the Actual Deferral Percentage test is satisfied both
with and without exclusion of these Elective Deferrals). For
purposes of computing Actual Deferral Percentages, an Eligible
Employee who would be a Participant but for the failure to make
Elective Deferrals shall be treated as a Participant on whose
behalf no Elective Deferrals are made.
2.3 "Administrative Committee"
shall mean the committee which may be appointed by the
Company to oversee the administrative duties of the plan as set
forth in Section 16.1 and 16.2.
2.4 "Administrator"
shall mean, with respect to the Plan, the Company. The Plan
Administrator may from time to time delegate its administrative
duties and responsibilities to the Administrative Committee or to
other individuals in accordance with Section 16.4.
2.5 "Aggregate Limit"
shall mean the sum of:
(a) one hundred twenty-five percent (125%) of the
greater of the Actual Deferral Percentage of the Non-highly
Compensated Employees of the Employer for the Plan Year or the
Average Contribution Percentage of Non-highly Compensated Employees
under the Plan subject to Section 401(m) of the Code for the Plan
Year, and
(b) the lesser of two hundred percent (200%) or two
plus the lesser of such Actual Deferral Percentage or Average
Contribution Percentage.
"Lesser" is substituted for "greater" in subsection (a), and
"greater" is substituted for "lesser" after "two plus the" in
subsection (b) if it would result in a larger aggregate limit.
2.6 "Allocation Date"
shall mean the last day of a Plan Year. The Administrator
may, in its sole discretion, establish other Allocation Dates
during a Plan Year; provided, however, that the use of one or more
special Allocation Dates during a Plan Year shall not be applied so
as to result in discrimination in favor of Employees who are Highly
Compensated Employees.
2.7 "Allocation Period"
shall mean the period between Allocation Dates.
2.8 "Annuity Starting Date:
shall mean the first day of the first period for which an
amount is payable as an annuity or any other form.
2.9 "Average Contribution Percentage"
shall mean the average of the Contribution Percentages of the
Participants of the Employer.
2.10 "Beneficiary"
shall mean the recipient or recipients last designated by the
Participant in writing on properly completed forms provided by the
Employer who shall receive any benefits payable under the Plan upon
the death of such Participant, subject, however, to the
requirements of ARTICLE 7 and Section 7.3(d)(ii). If no such valid
designation of the Beneficiary has been received by the Employer
prior to the date of death of the Participant, then such benefit
shall be payable to the Participant's Spouse. If the Spouse
predeceases the Participant, or the Spouse dies before delivering a
valid designation of Beneficiary of the Spouse's own to the
Employer, then such benefit shall be payable to the natural or
adopted children of the Participant per stirpes. If none of the
contingencies aforementioned herein result in the payment of a
benefit, then such benefit shall be payable to the estate of the
Participant in a single, lump sum. The designation of a
Beneficiary shall be made, changed or revoked in writing in the
form and manner prescribed by the Employer. In the event that a
Beneficiary does not survive the Participant, the description of
the Participant's Spouse as Beneficiary shall remain valid upon the
divorce of the Participant and such Spouse unless the Participant
names a new Beneficiary.
2.11 "Board"
shall mean the Board of Directors of the Company.
2.12 "Break in Service"
shall mean a Plan Year in which the Participant is not
credited with at least five hundred and one (501) Hours of Service
2.13 "Code"
shall mean the Internal Revenue Code of 1986, as amended.
2.14 "Committee"
shall mean the Administrative Committee.
2.15 "Company"
shall mean Dollar General Corporation, with principal offices
at Nashville, Tennessee.
2.16 "Compensation"
shall mean, with respect to each Participant, except as
otherwise provided herein (1) regarding the computation of
Qualifying Nonelective Employer Contributions described below, (2)
the contribution allocation limitations described at Section
5.7(d)(ii) hereof and (3) "Compensation for Testing Purposes"
described at Section 2.17 hereof, for the calendar year in
question, the Participant's wages from the Employer as reportable
on U.S. Treasury Form W-2 from the Employer (wages, tips, other
compensation). More specifically, for purposes of this Section,
such Compensation shall mean wages within the meaning of Section
3401(a) of the Internal Revenue Code and all other payments of
compensation to the Participant by the Employer (in the course of
the Employer's trade or business) for which the Employer is
required to furnish the Participant a written statement under
Sections 6041(d), 6051(a)(3), and 6052 of the Code, determined
without regard to any rules under Section 3401(a) of the Code that
limit remuneration included in wages based on the nature or
location of the employment or the services performed. Compensation
shall include Elective Deferrals and any amount which is contri-
buted by the Employer pursuant to a salary reduction agreement
which is not includable in the gross income of the Employee under
Section 125, 402(e)(3), 402(h) or 403(b) of the Code.
Notwithstanding the foregoing, for purposes of this Section,
"Compensation" shall exclude all of the following items (even if
includable in gross income):
(1) reimbursements or other expense allowances;
(2) fringe benefits (cash and noncash);
(3) moving expenses;
(4) deferred compensation; and
(5) welfare benefits (such as health insurance or group
term life insurance).
The annual Compensation of each Participant taken into
account hereunder for any Year shall not exceed $160,000, as
adjusted for the cost-of-living in accordance with Section
401(a)(17)(B) of the Code. This limitation, however, shall be
adjusted at the same time and in the same manner it is adjusted by
the Secretary under Section 415(d) of the Code, except that the
dollar increase in effect on January 1 of any calendar year is
effective for the Plan Year beginning in such calendar year. The
cost-of-living adjustment in effect for a calendar year applies to
any determination period beginning in such calendar year.
Compensation with respect to an Employee for purposes of
determining the Employee's share as a Participant of either
Employer Profit Sharing Contributions or the Qualified Nonelective
Contribution for any Allocation Period shall include only that
Compensation paid to the Employee while the Employee was a
Participant in that Allocation Period.
If the Plan determines Compensation on a period of time that
contains fewer than 12 calendar months, then the annual
Compensation limit is an amount equal to the annual Compensation
limit for the calendar year in which the Compensation period begins
multiplied by the ratio obtained by dividing the number of full
months in the period by 12.
The term "Compensation" is also defined at Section 5.7(d)(ii)
for purposes of the Contribution allocation limitations described
in that section only.
2.17 "Compensation for Testing Purposes"
shall mean total compensation while a Participant as reported
on Participant's Internal Revenue Service Form W-2plus any amount
which is contributed by the Employer pursuant to salary reduction
agreement which is not includable in the gross income of the
Participant under Section 125, 401(e)(3), 401(h) or 403(b) of the
Code. At the election of the Administrator, Compensation for
Testing Purposes shall mean, in the alternative for a Plan Year, a
definition of compensation permitted under Internal Revenue Service
regulations which results, in the opinion of the Administrator, in
the Plan's compliance with the Actual Deferral Percentage test and
Average Contribution Percentage test with the best combination of
the least amount of Excess Contributions and Excess Aggregate
Contributions for the Plan Year.
2.18 "Contribution Percentage"
shall mean the ratio (expressed as a percentage carried out
to two decimal points) of the Participant's Contribution Percentage
Amount to the Participant's Compensation for Testing Purposes for
that portion of the Plan Year during which the Participant was a
Participant.
2.19 "Contribution Percentage Amount"
shall mean the aggregate of Employer Matching Contributions
and Qualifying Non-Elective Employer Contributions made under the
Plan on behalf of the Participant for each Allocation Period for
which testing is done. Such Contribution Percentage Amount shall
also include Forfeitures of Excess Aggregate Contributions or
Matching Contributions allocated to the Participant's Accounts
which shall be taken into account in the Allocation Period in which
such Forfeitures are allocated. The Employer also may elect to
include each Participant's Elective Deferrals in the Contribution
Percentage Amount so long as the Actual Deferral Percentage test is
met before the Elective Deferrals are used in the Average
Contribution Percentage test and continues to be met following the
exclusion of those Elective Deferrals that are used to meet the
Average Contribution Percentage test.
2.20 "Controlled Group Member"
shall mean, except to the extent this term may be modified in
accordance with Section 5.7 (d)(vi), as follows:
(a) any corporation which is a member of a controlled
group of corporations (as defined in Section 414(b) of the
Code) of which the Employer is a member,
(b) any organization which is a member of a group of
trades or businesses (whether or not incorporated) which is
under common control with respect to the Employer (as defined
in Section 414(c) of the Code),
(c) any organization which is a member of an
affiliated service group (as defined by Section 414(m) of the
Code), or
(d) any other entity required to be aggregated with
the Employer pursuant to Section 414(o) of the Code and the
regulations thereunder; but only for the period during which
such other corporation, trade or business, organization or
entity and the Employer are members of such controlled group
of corporations, are under such common control, are serving
as such affiliated service group or are required to be
aggregated.
All employees of Controlled Group Members shall be treated as
employed by a single employer and all Controlled Group Members
shall be considered to be a single Employer.
2.21 "Credit Balance"
shall mean the sum of total of all accounts maintained on
behalf of a Participant.
2.22 "Disability"
shall mean the inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or to be of
continuous and indefinite duration. The permanence and degree of
such impairment shall be supported by medical evidence. The
determination of Disability shall be made by the Administrator, in
its sole discretion based on the available medical evidence.
2.23 "Early Retirement Date"
shall be the date the Participant (i) has attained fifty-five
years of age and (ii) has been credited with at least ten (10)
Years of Service. A Participant who is credited with at least ten
(10) Years of Service, but whose Service has terminated before the
Participant's attaining fifty-five (55) years of age shall be
deemed to have reached the Participant's Early Retirement Date on
the Participant's fifty-fifth birthday.
2.24 "Effective Date"
shall mean January 1, 1998 for this amendment, restatement,
conversion and continuation of the Dollar General Retirement Plan
(originally effective January 1, 1982) and the Dollar General
Corporation Employee Stock Ownership Plan (originally effective
January 1, 1984).
2.25 "Elective Deferrals"
shall mean contributions made to the Plan on behalf of the
Participant by the Employer at the election of the Participant
pursuant to a Salary Deferral Agreement in lieu of cash
Compensation to the Participant, pursuant to Section 4.1.
2.26 "Eligible Employee"
shall mean any Employee who becomes eligible, after
completing such eligibility requirements as are described at
Section 3.1 of this Plan, to make an Elective Deferral (if the
Employer takes such Elective Deferral Contributions into account in
the calculation of the Contribution Percentage), or to receive a
Qualified Matching Contribution or Regular Matching Contribution
(including Forfeitures thereof). If an Elective Deferral is
required as a condition of participation in the Plan, any Employee
who would be a Participant in the Plan if such Employee made such
an Elective Deferral shall be treated as an Eligible Employee on
behalf of whom no Elective Deferrals are made. Although a rollover
will be accepted by the Plan pursuant to its terms anytime after an
individual becomes an Employee, that individual will not be
eligible to share in Employer contributions or make Elective
Deferrals until the Participant becomes an "Eligible Employee".
2.27 "Employee"
shall mean any common law employee of the Employer
maintaining the Plan or of any other employer required to be
aggregated with the Employer under Section 414(b), (c), (m) or (o)
of the Code, other than the following:
(a) Employees included in a unit of employees covered
by a collective bargaining agreement between the Employer and
employee representatives, unless retirement benefits were the
subject of good faith bargaining, if two percent or less of
the employees of the Employer who are covered pursuant to
that agreement are professionals as defined in Section
1.410(b)-9(g) of the Regulations, and if such agreement, by
specific reference to the plan, provides for participation in
the plan. For this purpose, the term "Employee
representatives" does not include any organization more than
half of whose members are employees who are owners, officers
or executives of the Employer.
(b) individuals who would be considered "Leased
Employees", except for the limited purposes described in
Section 3.9 hereof.
(c) An employee who makes a one-time irrevocable
election upon the employee's commencement of employment with
the Employer or upon the employee's first becoming eligible
under the Plan not to receive accruals or other benefits
under this Plan.
2.28 "Employee Stock Ownership Plan"
shall mean the Dollar General Corporation Employee Stock
Ownership Plan which is hereby amended, restated, converted and
continued, together with the Retirement Plan, as of January 1, 1998
as the Dollar General Corporation 401(k) Savings and Retirement
Plan and which remains an ESOP to the extent required by Treasury
Regulation Section 54.4975-11(a)(5) as a portion of this Profit
Sharing Plan.
2.29 "Employer"
shall mean the Company, and any Controlled Group Member that
has adopted the Plan, with the approval of the Board and the Board
of Directors of the Controlled Group Member. Employer shall also
include any partnership in which the Company has an interest and
which is permitted by the Board to adopt the Plan.
2.30 "Employer Accounts"
shall mean the following individual Accounts, which are
subject to the Vesting Schedule:
(a) Employer Matching Account;
(b) Employer Profit Sharing Account;
(c) Retirement Plan Account;
(d) ESOP Stock Account;
(e) ESOP Investment Account; and
(f) ESOP Forfeiture Account
Note that the Qualifying Nonelective Employer Contribution
Account and the 401(k) Employer Stock Account, while both are
Employer Contributions, are fully vested at all times and hence
neither the Qualified Nonelective Employer Contribution Account nor
the 401(k) Employer Stock Account is included as an Employer
Account. Likewise the Prior Defined Benefit Pension Plan Account,
which was transferred from a prior qualified defined pension plan
maintained by the Sponsoring Employer which has been terminated by
the Sponsoring Employer is derived from Employer Contributions and
is fully vested at all times. Hence the Prior Defined Benefit
Pension Plan Account is not included as an Employer Account either.
The 401(k) Forfeiture Suspense Account, the Retirement Plan
suspense Account and the ESOP Suspense Accounts are credited with
nonvested amounts after the application of the Vesting Schedule to
the above Employer Accounts, as described herein, and prior to
forfeiture, and hence such Forfeiture Accounts are not subject to
the Vesting Schedule.
2.31 "Employer Contribution Forfeiture"
shall mean the non-vested portion of a Participant's Employer
Accounts (other than the Forfeiture Suspense Account) which are
forfeited pursuant to the Plan's Vesting Schedule. Such
Forfeitures under this Plan, shall be used to offset targeted
Employer Matching Contributions. Forfeiture shall be computed only
as of the last day of the Plan Year, and not as of any other
Allocation Dates in the Plan Year.
2.32 "Employer Contributions"
shall mean, with respect to the 401(k) Plan, the Qualified
Nonelective Employer Contributions, the Employer Matching
Contributions and the Employer Profit Sharing Contributions.
2.33 "Employer Matching Contributions"
shall mean the Contributions made to the Plan pursuant to
Section 4.3 on behalf of a Participant who makes Elective Deferrals
to the Plan.
2.34 "Employer Profit Sharing Contributions"
shall mean those Employer contributions (other than
Qualifying Nonelective Contributions and Employer Matching
Contributions).
2.35 "Entry Date"
shall mean January 1, April 1, July 1 and October 1 each Plan
Year.
2.36 "ERISA"
shall mean Public Law 93-406, popularly known as the
"Employee Retirement Income Security Act of 1974", as amended.
2.37 "ESOP"
shall mean the Employee Stock Ownership Plan.
2.38 "ESOP Accounts"
shall mean the following individual Accounts:
(a) the ESOP Stock Account;
(b) the ESOP Investment Account;
(c) the PAYSOP Account; and
(d) the ESOP Suspense Account.
2.39 "Excess Aggregate Contributions"
shall mean, with respect to any Plan Year, the excess of:
(a) The aggregate Contribution Percentage Amounts taken
into account in computing the numerator of the
Contribution Percentage actually made on behalf of
Highly Compensated Employees for such Plan Year, over
(b) (b)The maximum Contribution Percentage Amounts permit-
ted by the Average Contribution Percentage test
(determined by reducing contributions made on behalf of
Highly Compensated Employees in order of their
Contribution Percentages beginning with the highest of
such percentages).
Such determination shall be made after first determining
Excess Elective Deferrals pursuant to Section 2.41 and then
determining Excess Contributions pursuant to Section 2.40.
2.40 "Excess Contributions"
shall mean, with respect to any Plan Year, the excess of:
(a) The aggregate amount of Elective Deferrals actually taken
into account in computing the Actual Deferral Percentage of
Highly Compensated Employees for such Plan Year, over
(b) The maximum amount of such Contributions permitted by the
Actual Deferral Percentage test (determined by reducing
Contributions made on behalf of Highly Compensated Employees
in order of the Actual Deferral Percentages, beginning with
the greatest dollar amount of deferrals.
2.41 "Excess Elective Deferrals"
shall mean those Elective Deferrals that are includable in a
Participant's gross income under Section 402(g) of the Code to the
extent such Participant's Elective Deferrals for a taxable year
exceed the dollar limitation under such Code section. Excess
Elective Deferrals shall be treated as Annual Additions under the
Plan.
2.42 "Fair Market Value"
shall mean the with respect to Employer Stock which is a
"registration type class of securities" as described at Code
Section 409(a)(2) and thus has a generally recognized market as
described in ERISA. If the Employer Stock is not a "registration
type class of securities" traded on a "generally recognized market"
the fair market value of Employer Stock shall be made by an
independent party experienced in preparing appraisals of closely
held corporations who met requirements similar to requirements
under Section 170(a)(1) and 401(c)(28)(C) of the Code and any
regulation promulgated thereunder.
2.43 "Five-Percent Owner"
shall mean any person who owns (or is considered as owning
within the meaning of Section 318 of the Code) more than five
percent (5%) of the outstanding stock of a corporate Employer or
stock possessing more than five percent (5%) of the total combined
voting power of all stock of the Employer or more than five percent
(5%) of the interest in the non-corporate Employer.
2.44 "Forfeiture Suspense Account"
shall mean each individually, or in the aggregate, the 401(k)
Forfeiture Suspense Account, the Retirement Plan Forfeiture
Suspense Account and the ESOP Suspense Account which hold Account
balances after a Participant's termination of Service and prior to
such balances becoming Employer Contribution Forfeitures. Provided
records are kept which protect the Participants' benefits, rights
and features as described in Treasury Regulation Section
1.401(a)(4) and the "Section 411(d)(6) protected benefits" as
described in Treasury Regulation Section 1.411(d)-4, the
recordkeeper for the Plan may establish and maintain all such
Accounts, for recordkeeping purposes only, as a single Forfeiture
Suspense Account.
2.45 "401(k) Discrimination Forfeitures"
shall mean, with respect to testing for nondiscrimination
under this Plan, any Excess Contributions distributed pursuant to
Section 5.2(e) and Excess Aggregate Contributions forfeited
pursuant to Section 5.5(b)
2.46 "401(k) Plan"
shall mean this Plan.
2.47 "401(k) Plan Accounts"
shall mean the following individual Accounts:
(a) Elective Deferral Account;
(b) Qualified Nonelective Employer Contribution Account;
(c) 401(k) Employer Stock Account;
(d) Employer Matching Account;
(e) Employer Profit Sharing Account;
(f) Individual Rollover Account; and
(g) Direct Rollover Account.
2.48 "Highly Compensated Employee"
shall mean any Employee who performs Service for the Employer
who:
(a) was a Five Percent Owner at any time during the year
or the preceding year; or
(b) for the preceding year:
(i) had compensation from the Employer in excess of
$80,000, as adjusted pursuant to Section 415(d)
with a base period of September 30, 1996; and
(ii) was in the top-paid group of Employers for such
year.
An Employee shall be deemed in the top-paid group of
Employees for any year in such Employee is in the group consisting
of the top 20 percent of Employees when ranked on the basis of
Compensation paid during the year.
2.49 "Hour of Service"
shall mean the following:
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer during the
applicable computation period.
(b) Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time during
which no duties are performed (irrespective of whether the Service
relationship has terminated, but earned or accrued while employed)
due to vacation, holiday, illness, incapacity (including disability
up to five (5) months), jury duty, military duty or Leave of
Absence; provided, however, that, with respect to this subsection:
(i) no more than five hundred and one (501) Hours of
Service shall be credited to an Employee on account of
any single continuous period during which the Employee
performs no duties (whether or not such period occurs
in a single computation period),
(ii) hours for which an Employee is directly or indirectly
paid, or entitled to payment, on account of a period
during which no duties are performed shall not be
credited if such payment is made or due under a plan
maintained solely for the purpose of complying with
applicable workers' compensation, unemployment
compensation or disability insurance laws, and
(iii) hours shall not be credited for a payment which
solely reimburses an Employee for medical or medically-
related expenses incurred by the Employee.
For purposes of this subsection, a payment shall be deemed to
be made by or due from the Employer regardless of whether such
payment is made by or due from the Employer directly, or indirectly
through, among others, a trust fund, or insurer, to which the
Employer contributes or pays premiums and regardless of whether
contributions made or due to the trust fund, insurer or other
entity are for the benefit of particular Employees or are on behalf
of a group of Employees in the aggregate.
(c) Each hour for which an Employee is absent from work for
any period by reason of the pregnancy of the Employee, the birth of
a child of the Employee, placement of a child with the Employee in
connection with the adoption of such child by such Employee or for
purposes of caring for such child, but solely for determining
whether an Employee has incurred a Break in Service. The hours to
be credited to such Employee in accordance with this subparagraph
shall be the Hours of Service which otherwise would normally have
been credited to such Employee but for such absence, or in any case
in which the Plan Administrator is unable to determine such Hours
of Service, eight (8) Hours of Service per day of such absence;
provided, however, that with respect to this subsection:
(i) no more than five hundred and one (501)
Hours of Service shall be credited to an Employee by
reason of any one (1) such pregnancy or placement,
(ii) such hours shall be treated as Hours of
Service in the Plan Year in which the absence from work
begins, if the Employee would be prevented from
incurring a Break in Service in such Plan Year solely
because periods of absence are treated as Hours of
Service, or in any other case, in the immediately
following year, and
(iii) no Hours of Service will be credited unless
the Employee furnishes to the Plan Administrator such
timely information as the Plan Administrator may
reasonably require to establish that the absence from
work is for reasons referred to in this subsection
including a statement of the number of days for which
there was such an absence.
(d) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the
Employer. The same hours shall not be credited both under
subsection (a), (b) or (c) and under this subsection. Hours
credited for back pay under this subsection with respect to periods
described in subsection (b) shall be subject to the limitations set
forth in subsection (b).
The provisions of paragraph (b) and (c) of 29 CFR 2530.2b-2
shall be observed in crediting Hours of Service under this Section,
which paragraphs are incorporated herein by reference.
2.50 "Inactive Participant"
shall mean a Participant (or former Participant who has a
balance remaining in the Participant's Accounts) who is not
entitled to share in the allocation of Qualified Non-elective
Employer Contributions, Employer Matching Contributions and
Employer Profit Sharing Contributions for a Plan Year because the
Participant has not met the requirements set forth in Sections 4.2,
4.3 and 4.4, respectively.
2.51 "Investment Committee"
shall mean the committee which may be, at its discretion,
appointed by the Board, and accepts the fiduciary duty, to oversee
the investment options (including mutual funds, common trust funds
and group annuity contracts) and Employer Stock provided under the
Plan (other than Employer Stock automatically invested in the
401(k) Employer Stock Account or the ESOP Stock Account to which
Participants may direct investments. Their duties include
development and maintenance of the Plan's investment policy,
selection of appropriate investment funds among which Participants
can choose to allocate their Account balances as described in
Section 0 hereof, and selection of specific investment advisors
within such a fund (if applicable).
2.52 "Leased Employee"
shall mean any person (other than an employee of the
recipient employer) who pursuant to an agreement between the
recipient employer and any other person ("leasing organization")
has performed services for the recipient employer (or for the
recipient and related persons determined in accordance with Section
414(n)(6) of the Code) on a substantially full-time basis for a
period of at least one (1) year, and such services are performed
under the primary direction or control of the service recipient.
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.
2.53 "Life Annuity"
shall mean an immediate annuity provided for payment of a
level monthly amount for the Participant's lifetime.
2.54 "Non-Highly Compensated Employees"
shall mean those Employees who are not Highly Compensated
Employees.
2.55 "Normal Retirement Age"
shall mean sixty-five (65) years of age.
2.56 "Normal Retirement Date"
shall mean the last day of the month in which a Participant
attains the Participant's sixty-fifth (65th) birthday.
2.57 "Participant"
shall mean an Employee who meets all conditions of
eligibility under Section 3.1 and participates in the Plan in
accordance with the sections of ARTICLE 3.
2.58 "Plan Administrator"
shall mean the Administrator.
2.59 "Plan"
shall mean this plan entitled the Dollar General Corporation
401(k) Savings and Retirement Plan, as contained herein and as
amended from time to time.
2.60 "Plan Year"
shall mean the twelve (12) consecutive month period of
January 1 through December 31.
2.61 "Prior Plan Account"
shall mean the accounts derived from a Participant's
participation in the prior defined benefit pension plan maintained
by the Sponsoring Employer which were transferred to the Retirement
Plan on the termination of that prior defined benefit pension plan.
2.62 "Qualified Domestic Relations Order"
shall mean a court order described in Section 16.6 of the
Plan.
2.63 "Qualified Joint and Survivor Annuity"
shall mean an immediate annuity providing a level monthly
amount for the life of the Participant with a survivor annuity for
the life of the spouse which is equal to fifty percent (50%) of the
amount of the annuity that is payable for the joint lives of the
Participant and the spouse; the Qualified Joint and Survivor
Annuity may be waived as provided in Articles 9, 10 and 11.
2.64 "Qualified Nonelective Employer Contributions"
are described at Section 4.2 hereof and shall mean Employer
contributions (other than Employer Matching Contributions, Employer
Profit Sharing Contributions or Employee Elective Deferrals treated
as Employer contributions under Section 401(k)).
2.65 "Qualified Preretirement Survivor Annuity"
shall mean the survivor annuity purchased with one hundred
percent (100%) of the remaining Vested Account balance of a
Participant who dies before receiving full distribution of the
Participant's Vested Account balance in the Plan; the Qualified
Preretirement Survivor Annuity may be waived as provided in
Articles 9, 10 and 11.
2.66 "Retirement Plan"
shall mean the Dollar General Retirement Plan which was a
money purchase pension plan originally effective on January 1, 1982
and last restated completely effective January 1, 1989.
2.67 "Retirement Plan Accounts"
shall mean the following individual Accounts:
(a) the Retirement Plan Account;
(b) the Retirement Plan Forfeiture Account; and
(c) the PAYSOP Account.
2.68 "Salary Deferral Agreement"
shall mean the participation form wherein a Participant
elects to have the Employer make Elective Deferrals of what would
have been the Participant's Compensation to the Plan (but for such
Salary Deferral Agreement).
2.69 "Service"
shall mean the Employee's employment with the Employer. For
purposes of the computation of the "Year of Eligible Service,"
"Year of Service" and "Year of Vesting Service", Service for the
Employer, if any, prior to the Effective Date of this Plan
amendment, restatement, conversion and continuation shall be
included, but only to the extent it was included as a "Year of
Service" for purposes of determining eligibility, service or
vesting, respectively, under either the Retirement Plan or the
ESOP. In no event shall the same Period of Service be counted
twice under this Plan. A Participant's Service past the
Participant's Normal Retirement Date shall continue to be counted
hereunder.
2.70 "Spouse"
shall mean the actual Spouse of a Participant or a former
Spouse of the Participant if and to the extent such former Spouse
is to be treated as a Spouse or surviving Spouse under a qualified
domestic relations order described in Section 414(p) of the Code.
2.71 "Trust"
shall mean the trust established under the Trust Agreement.
2.72 "Trust Agreement"
shall mean the trust instrument established pursuant to and
as an integral part of this Plan, as amended.
2.73 "Trust Fund" or "Fund"
shall mean the assets held by the Trustee pursuant to the
Trust Agreement.
2.74 "Trustee"
shall mean the trustee or co-trustees appointed by the Board
or by other corporate action to hold and invest the assets of the
Trust Fund pursuant to ARTICLE 17. As of the Effective Date of
this Plan amendment, restatement, conversion and continuation,
Capital Guardian Trust Company shall be the Trustee, provided that
another party or parties may also be appointed to serve as co-
trustee of the assets of the Trust Fund for which Capital Guardian
Trust Company does not serve as Trustee.
2.75 "Vested"
shall mean the portion of an Account to which a Participant
has a nonforfeitable interest as determined under Section 8.2
hereof.
2.76 "Vested Benefit"
shall mean the portion of all of the Accounts to which a
Participant has a nonforfeitable interest as determined under
Section 8.2.
2.77 "Vesting Schedule"
shall mean that schedule set out at Section 8.2 hereof, and
the top-heavy vesting schedule set out at Section 15.3, hereof
which describes the Years of Vesting Service required for the
nonforfeitability of Account balances of a Participant.
2.78 "Year of Eligibility Service"
shall mean the twelve (12) consecutive month period measured
from the date of hire during which the Employee is credited with
1,000 or more Hours of Service. If the Employee does not work
1,000 Hours of Service during the first twelve (12) month period as
measured from the date of hire, then the Year of Eligibility
Service be based on a Year of Service definition at Section 2.79
which is based on the Plan Year, beginning with such Year of
Service commencing with or within the initial twelve (12) month
period beginning on date of hire and on each subsequent Plan Year.
The computation of Years of Eligibility Service before and after a
Break in Service are subject to the provisions of Section 3.3
hereof.
2.79 "Year of Service"
shall mean a Plan Year in which an Employee is credited with
1,000 Hours of Service. In computing an Employee's Service after a
Break in Service the Employee's Service before the Break in Service
shall be disregarded until the Employee is credited with a Year of
Service after the Break in Service.
2.80 "Year of Vesting Service"
shall mean the Employee's Years of Service The computation
of Years of Vesting Service before and after a Break in Service are
subject to the provisions of Section 8.4(d) hereof.
3. ELIGIBILITY AND PARTICIPATION
3.1 Eligibility
An Employee shall become an Eligible Employee after the later
of (a) completing one (1) Year of Eligibility Service, and (b)
attaining twenty-one (21) years of age.
3.2 Participation
(a) Every person who was a Participant in either the
Retirement Plan or the ESOP, and who on the Effective Date of this
amendment, restatement, conversion and continuation of this Plan
was an Employee of an Employer shall be eligible to participate in
this Plan according to its terms and conditions, and shall
automatically become a Participant in this Plan as of such
Effective Date by executing an application form in accordance with
ARTICLE 4 and a Salary Deferral Agreement in accordance with
Section 4.1.
(b) Each Employee who is not already a Participant
pursuant to subsection (a) shall become a Participant on the next
Entry Date into the Plan on or next following the date the Employee
becomes an Eligible Employee.
(c) An Eligible Employee shall remain an Eligible
Employee until the Participant retires, dies, or otherwise
terminates employment with the Employer, and shall remain an
Inactive Participant until the Participant no longer maintains any
Account balance in the Plan.
3.3 Reemployment
If an Employee who is an Eligible Employee terminates Service
and then is reemployed by the Employer, the Employee will be
eligible as a Participant as of the date of the Participant's
reemployment, provided the Employee as of termination of Service
had a Vested interest in any Account as a Participant. However, if
the Employee has no Vested Account balance as of termination of
Service and the Employee's Breaks in Service equal or exceed the
Employee's actually credited Years of Service, or if greater, five
(5) Breaks in Service, the Employee must satisfy the requirements
again for eligibility in this Plan and shall begin to participate
only on the next Entry Date on or next following the date the
Employee becomes an Eligible Employee once more.
3.4 Return to Eligible Class
In the event a Participant becomes no longer a member of an
eligible classification of Employees and therefore becomes
ineligible to participate, but has not incurred a Break in Service
before returning to an eligible classification of Employee, such
Employee will participate again immediately upon returning to an
eligible classification of Employees. If such Participant,
however, incurs a Break in Service, eligibility will be determined
pursuant to Section 3.2. In the event an Employee who is not a
member of an eligible classification of Employees becomes a member
of an eligible classification, such Employee will participate
immediately if such Employee has satisfied the minimum age and
service requirements and would have otherwise, but for such
classification, previously become a Participant.
3.5 Transfers Among Employers Which Are Controlled Group
Members or Among Employers which are Majority Owned
A transfer of an Employee directly from one Employer which is
a Controlled Group Member or from a business organization of which
the Company owns the majority thereof (i.e., a majority owned
Employer) to another shall not constitute a termination of
employment or an interruption in Service; provided, however, that
there shall be no duplication of benefits. The Accounts, if any,
attributable to a Participant's Service with the Employer from
which the Participant transferred shall be retained in such
Employer's Plan, shall be credited or charged with earnings, losses
and expenses in accordance with Section 5.4 hereof and shall
continue to vest based on the Participant's continued Years of
Vesting Service under that Employer to which the Participant
transferred. Immediately upon the Participant's transfer, such
Employee shall participate in the plan of the Employer to which the
Participant transferred; provided, however, that the Participant's
Years of Vesting Service for determining the Participant's
nonforfeitable benefit under the Plan of the Employer from which
the Participant transferred shall count as service for purposes of
vesting under the plan of the Employer to which the Participant
transferred.
3.6 Acceptance
The Plan shall not be deemed either to constitute a contract
between the Employer and any Employee or Participant or to be a
consideration or an inducement for the employment of any Employee
or Participant. No provision of the Plan shall be deemed to
abridge or limit any managerial right of the Employer or to give
any Employee or Participant the right to be retained in employment,
or to interfere with the right of the Employer to discharge any
Employee or Participant at any time, regardless of the effect which
such discharge may have upon the Participant as a Participant. By
the Participant's act of participation herein, each Participant, on
behalf of himself, the Participant's heirs, assigns and Beneficiary
or Beneficiaries shall be deemed conclusively to have agreed to and
accepted the terms and conditions of the Plan.
3.7 Employees Who Are Officers, Shareholders or Highly
Compensated
Highly Compensated Employees, officers or shareholders of the
Employer may participate hereunder on and after the Effective Date
only if they meet the same eligibility requirements which must be
met by other Employees as stated in Section 3.2.
3.8 Absence in the Armed Services
If an Employee leaves the Service of the Employer to enter
the uniformed services of the United States of America but returns
to Service with the Employer under circumstances, and within the
time limits, described by Public Law 103-353, popularly called the
"Uniformed Services Employment and Reemployment Rights Act of 1994"
("USERRA"), such as would entitle the Employee to coverage under,
and the protection of, USERRA, then such Employee, to the extent
required by law:
(a) shall be treated as not having incurred a Break
in Service by reason of such person's period or periods of service
in the uniformed services;
(b) shall be treated as if each period served by the
person in the uniformed services constituted Service with the
Employer for purpose of determining the nonforfeitability of the
person's Accounts and for the purpose of determining the person's
eligibility to share in the allocation of contributions under this
Plan; and
(c) shall have the obligation of the Employer under
the Plan to fund benefits as described herein in accordance with
USERRA.
3.9 Leased Employee
(a) Leased Employees shall not be eligible to
participate in the Plan.
(b) However, for purposes of testing compliance of
the Plan with the nondiscrimination rules of section 401(a)(4) of
the Code, the participation rules of section 401(a)(26) of the Code
and the coverage rules of section 410(b) of the Code, Leased
Employees shall be considered to be "Employees." However, an
individual who would otherwise be treated as a Leased Employee for
purposes of this paragraph shall not be treated as an Employee of
the Employer if:
(i) such Leased Employee is covered by a plan
maintained by the leasing organization which is a
qualified non-integrated money purchase pension plan
providing: (i) an employer contribution of at least ten
percent (10%) of the Leased Employee's compensation,
(ii) full and immediate vesting, and (iii) immediate
eligibility to participate for any Leased Employee who,
in each plan year during the four (4)-year period
ending with the current plan year, has compensation in
excess of one thousand dollars ($1,000); and
(ii) the number of Leased Employees do not
constitute more than twenty percent (20%) of the non-
Highly Compensated Employees of the Employer.
4. CONTRIBUTIONS
4.1 Elective Deferrals
(a) In General. Each Participant will be eligible to
make Elective Deferrals under the Plan. Each Participant (or any
Employee who will soon be eligible to become a Participant) who
desires to make Elective Deferrals shall enter into a Salary
Deferral Agreement, which shall be confirmed in writing to the
Participant (or the Employee who will soon be eligible to become a
Participant) by the recordkeeper for the Plan. The terms of the
Salary Deferral Agreement shall provide that the Participant agrees
to accept a reduction in Compensation from the Employer by not less
than one percent (1%) and not more than fifteen percent (15%), in
whole percentage points. (In the future the Administrator shall
have the option to permit specific dollar amounts of Elective
Deferrals when the recordkeeping system can handle such
information.) However, in no event shall the reduction in
Compensation, when added to the amounts allocated, in the
aggregate, to the Participant's Qualified Nonelective Employer
Contributions Account, Matching Contributions Account or the
Employer Profit Sharing Account, exceed the Code 415 limits on
benefits outlined in Section 5.7 for the Limitation Year (as that
term is defined therein).
(b) Salary Deferral Elections. In consideration of
such Salary Deferral Agreement, each payroll period the Employer
will make a contribution equal to each Participant's chosen
Elective Deferral to the Plan for such payroll period within thirty
(30) days from the end of that payroll period. Each Participant's
Compensation shall be reduced correspondingly by the amount of that
Participant's Elective Deferral during the payroll period by the
Employer pursuant to the Salary Deferral Agreement.
A first Salary Deferral Agreement may be entered into by and
between the Employer (or the Employee who will soon be eligible to
become a Participant) and the Employer over the voice response unit
of the recordkeeper for the Plan, unless the Employer provides for
a different procedure to handle Salary Deferral Agreements in the
future. The first Salary Deferral Agreement shall be confirmed in
writing with the Participant (or Employee who will soon be eligible
to become a Participant) by the recordkeeper as soon as
practicable. After a Participant's Salary Deferral Agreement is
confirmed, the recordkeeper shall notify the Employer of the Salary
Deferral Agreement, also as soon as practicable. The first Salary
Deferral Agreement shall then apply to each subsequent payroll
period, beginning as of the first day of the first full payroll
period beginning on or after the next Entry Date after receipt by
the Employer of notice of the Salary Deferral Agreement, and after
entry of the Participant's Elective Deferral amount by the Employer
into the Employer's payroll system as soon as practical thereafter.
The Salary Deferral Agreement shall continue until such time as the
Participant elects otherwise as provided herein or terminates
employment.
Once a Participant has enrolled in the Plan, the
Participant's Salary Deferral Agreement may be amended to change
the amount of Elective Deferral at any time by the Participant by
entering into a new Salary Deferral Agreement. The Participant may
enter into a new Salary Deferral Agreement over the voice response
unit of the recordkeeper. The new Salary Deferral Agreement shall
be effective as of the first day of the first full payroll period
beginning on or after receipt by the Employer of notice of the
amendment from the recordkeeper, and after entry of the
Participant's change of Elective Deferral into the Employer's
payroll system as soon as practical thereafter. The recordkeeper
shall confirm the new Salary Deferral Agreement in writing to the
Participant as soon as practicable.
A Participant may elect to completely stop the Elective
Deferrals at any time by notifying the recordkeeper for the Plan.
A notice of cessation of Elective Deferrals shall be effective as
of the first day of the first payroll period on or after receipt by
the Employer of notice of the suspension from the recordkeeper, and
after entry of the Participant's cessation of Elective Deferrals
into the Employer's payroll system as soon as practical thereafter.
The recordkeeper shall confirm such cessation of Elective Deferrals
in writing to the Participant as soon as practicable. A cessation
of Elective Deferrals shall be considered to continue until the
Participant enters into a new Salary Deferral Agreement with the
recordkeeper through the voice response unit of the recordkeeper
for the Plan.
The Salary Deferral Agreement of a Participant who is a
Highly Compensated Employee may be amended by the Administrator at
any time and from time to time without the consent of the Highly
Compensated Employee to decrease or completely stop the amount of
the Elective Deferrals for the balance of a Plan Year if an interim
or prospective Actual Deferral Percentage test study indicates that
the Participant will have Excess Contributions or Excess Aggregate
Contributions for the Plan Year. Notice of such amendment shall be
given each affected Highly Compensated Employee in writing as soon
as practicable after the amendment by the recordkeeper. A Highly
Compensated Employee affected by the amendment must enter into a
new Salary Deferral Agreement in order to reestablish or change the
Highly Compensated Employee's Elective Deferrals during the next
following Plan Year.
In accordance with Section 401(k) of the Code, all amounts
withheld from a Participant's Compensation in accordance with this
Section and contributed as Elective Deferrals to the Plan shall not
be included in the gross income for the Participant for federal
ordinary income tax purposes, and shall be deemed for tax purposes
to be an Employer contribution to the Plan. Such Contributions
shall be included in gross income for FICA and FUTA tax purposes.
4.2 Qualified Nonelective Employer Contributions
The Employer may make contributions to the Plan on behalf of
all Participants who are Highly Compensated Employees or Non-Highly
Compensated Employees which shall be treated as Qualified
Nonelective Employer Contributions to the extent, as determined by
the Administrator, such Qualified Nonelective Employer
Contributions may be used to meet the nondiscrimination
requirements of Code Section 401(k)(3)(A)(ii) or the comparability
requirements of Section 401(l) of the Code (in which case, but only
in this case, the contribution shall be considered to be an
Employer Profit Sharing Contribution for purposes of only Section
401(l) of the Code). In this regard all or part of the Qualified
Nonelective Employer Contributions made with respect to any or all
such Participants being tested may be treated as Elective
Deferrals. Qualified Nonelective Employer Contributions, if made,
shall be paid to the Trust on or before the time provided for a
deduction for the contribution: that is, on or before the due
date, plus extensions, of the Employer's annual tax return covering
such Plan Year. Contributions made within such period after the
Plan Year shall still be treated as having been paid in that Plan
Year. The amount of Qualified Nonelective Employer Contributions
shall be determined annually by the Employer as a discretionary
contribution, and the Employer shall not be required to contribute
Qualified Nonelective Employer Contributions to the Plan for any
Plan Year or for every Plan Year. Qualified Nonelective Employer
Contributions shall be allocated pursuant to Section 5.3(a) hereof.
If the Employer so determines, the first one-half (1/2) of one
percent (1%) of the discretionary Qualified Nonelective Employer
Contributions each Plan Year may be made in Employer Stock, or used
to acquire Employer Stock.
4.3 Employer Matching Contributions
The Employer may make Employer Matching Contributions to the
Plan. Employer Matching Contributions, if made, shall be paid to
the Trust with respect to each payroll period on behalf of each
Participant who elects to have the Elective Deferrals made by the
Employer on or before the time provided for a deduction for the
contribution: that is, on or before the due date, plus extensions,
of the Employer's annual tax return covering such Plan Year. While
a targeted rate of Employer Matching Contributions is described in
Section 5.3(b) hereof, the actual amount of Employer Matching
Contributions shall be determined by the Employer for each payroll
period as a discretionary contribution, and the Employer shall not
be required to contribute Employer Matching Contributions to the
Plan at the targeted rate of matching or even for every (or any)
payroll period. Employer Contribution Forfeitures, and 401(k)
Discrimination Forfeitures attributable to forfeitures of Excess
Aggregate Contributions, arising with respect to a Plan Year shall
be used as Employer Matching Contributions, and therefore, to the
extent available, shall reduce the required Employer Matching
Contributions necessary to meet the targeted matching rate pursuant
to Section 5.3(b) hereof for any payroll period. All Employer
Matching Contributions (together with offsetting Employer
Contribution Forfeitures and 401(k) Discrimination Forfeitures as
described herein) shall be invested in the Employer Matching
Account. In accordance with Code Regulation Section 1.401(m)-
1(a)(1)(i), the Plan may limit Employer Matching Contributions in a
manner that prevents Excess Aggregate Contributions.
4.4 Employer Profit Sharing Contributions
(a) In General. In addition to the discretionary
Employer contributions set forth in Sections 4.2 and 4.3 above, the
Employer may contribute additional amounts to the Plan in any Plan
Year out of profits or retained earning as profit sharing
contributions. Such contributions by the Employer shall be
designated as Employer Profit Sharing Contributions. All such
Employer Profit Sharing Contributions shall be paid by the Employer
in cash or in Employer Stock, or in a combination of both, as the
Board of the Sponsoring Employer may from time to time determine.
The Employer shall not be required to make discretionary Employer
Profit Sharing Contributions to the Plan in every Plan Year, or in
any Plan Year, or to contribute the same amount or to contribute in
accordance with the same ratio every Plan Year, but the Employer,
in its sole discretion, shall determine the amount of discretionary
employer profit sharing contributions, if any, to be made to the
Trust under the Plan each Plan Year. Discretionary employer
contributions may be made on any date or dates the Employer elects,
but the total amount of its discretionary contribution for any Plan
Year shall be paid on or before the time provided for a deduction:
that is within the period the Employer has to file its annual tax
return covering such Plan Year, plus extensions provided in the
Code. Notwithstanding the foregoing, the Employer shall not
contribute for any Plan Year an amount which exceeds the maximum
deduction allowable under Section 404 of the Code.
(b) Forfeitures In Excess of Amount Needed for
Targeted Employer Match Used As Profit Sharing Contributions.
Employer Profit Sharing Contributions to the Plan shall be
allocated to Employer Profit Sharing Accounts of all eligible
Participants in accordance with Section 5.3(c) hereof. Employer
Contribution Forfeitures arising under this Plan with respect to
that portion of Accounts forfeited under the Vesting Schedule of
Section 8.2 shall be used first to offset and reduce targeted
Employer Matching Contributions and thereafter shall be allocated
for the Plan Year as if they were Employer Profit Sharing
Contributions for the Plan Year with respect to which they arose.
4.5 Indirect Rollovers
(a) In General. Any Employee, regardless of whether
the Employee has met the eligibility requirements of ARTICLE 3, may
roll over to this Plan the following to be established and
maintained in the Participant's name as a separate account:
(1) Subject to the rules, the Participant's
interest in a pension, profit-sharing or stock bonus
plan qualified under Section 401(a) or 403(a) of the
Code to this Plan, provided that:
(i) the rollover consists of only cash;
(ii) the amount distributed from such plan
is transferred to this Plan no later than the
60th day after such distribution was received by
the Employee;
(iii) the distribution constituted the
Employee's entire nonforfeitable interest in such
plan and was made prior to the Employee's
reaching age 70-1/2 within one taxable year to
the Employee as a lump sum distribution (although
the rollover to this Plan may consist of less
than the full amount of the distribution);
(iv) the amount transferred to this Plan
does not include any voluntary after-tax employee
contributions made by the Employee to the prior
plan.
(2) An Individual Retirement Account ("IRA")
qualified under Section 408 of the Code, where the
Individual Retirement Account was used as a conduit
from a pension, profit-sharing or stock bonus plan
qualified under Section 401(a) or 403(a) of the Code
from which the distribution was initially made and the
rollover is made in accordance with subsection (a),
provided that the amount so transferred does not
include contributions made by the Employee to the
Individual Retirement Account or earnings on such
contributions.
(b) Fully Vested. An Employee's interest in such
rollover and earnings thereon shall remain one hundred percent
(100%) fully vested and nonforfeitable at all times. Payment shall
be made on the same basis as the Voluntary Contributions Account;
provided, however, that at any Allocation Date, each Participant
shall have the right to withdraw any part or all of the
Participant's Rollover Account.
(c) No Effect On Annual Addition Calculation. Such
rollovers shall not be considered either in determining the maximum
Annual Additions permissible under the Plan pursuant to Section
5.7(d)(i) or as Elective Deferrals or Qualified Matching
Contributions and Regular Matching Contributions.
4.6 Direct Rollovers
(a) In General. Any Employee, regardless of whether
the Employee has met the eligibility requirements of ARTICLE 3, may
make a direct rollover of plan assets attributable to the
Participant's participation in a pension, profit-sharing or stock
bonus plan qualified under Section 401(a) of the Code to the Plan
from such other plan by that plan's trustee. No part of such
direct rollovers may consist of voluntary after-tax employee
contributions.
(b) Election of Direct Rollover. At the election of
a Distributee, the Trustee, at the time and in the manner
prescribed by the Administrator, may make a direct rollover of all
or any portion of an Eligible Rollover Distribution to an Eligible
Retirement Plan.
(1) Eligible Rollover Distribution: An
Eligible Rollover Distribution is any distribution of
all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover
Distribution does not include:
(i) 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 expectancy) of the
Distributee or the joint lives (or joint life
expectancies) of the Distributee and the
Distributee's Beneficiary, or for a specified
period of ten years or more; or
(ii) any distribution to the extent such
distribution is required under Section 401(a)(9)
of the Code; and
(iii) the portion of any distribution that
is not includable in gross income (determined
without regard to the exclusion for net
unrealized appreciation with respect to Employer
securities).
(2) Eligible Retirement Plan: An Eligible
Retirement Plan is an individual retirement account
described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the
Code, an annuity plan described in Section 403(a) of
the Code or a qualified trust described in Section
401(a) of the Code which is Employed with a defined
contribution plan, that accepts the Distributee's
Eligible Rollover Distribution. However, in the case
of an Eligible Rollover Distribution to the surviving
Spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
(3) Distributee: A Distributee includes an
Employee or former Employee. In addition, the
Employee's or former Employee's surviving Spouse and
the Employee's or former Employee's Spouse or former
Spouse who is the alternate payee under a Qualified
Domestic Relations Order, as defined in Section 414(p)
of the Code, are Distributees with regard to the
interest of the Spouse or former Spouse.
(4) Direct Rollover: A Direct Rollover is a
payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.
(c) Owner-Employees. Assets attributable to
employment as an Owner-Employee under an H.R.-10 plan (exclusive of
the portion attributable to voluntary after-tax employee
contributions thereunder) shall not begin to be distributed before
the Employee dies, incurs a Disability or attains age 59-1/2, nor
later than the taxable year in which the Employee attains age
70-1/2.
(d) No Effect on Annual Addition Calculation. Direct
Rollovers shall not be considered either in determining the maximum
Annual Additions permissible under the Plan pursuant to Section
5.7(d)(i) or as Qualified Contributions, Employer Matching
Contributions, or Employer Profit Sharing Contributions.
4.7 Prohibition of Reversion
Contributions made by the Employer to the Plan shall be made
irrevocably and it shall be impossible for the assets of the Plan
to inure to the benefit of the Employer or to be used in any manner
other than for the exclusive purpose of providing benefits to
Participants, Inactive Participants, Retired Participants and
Beneficiaries, and for defraying reasonable expenses of adminis-
tering the Plan; provided, however, that nothing herein shall be
construed to prohibit the return to the Employer of all or part of
an Employer Contribution:
(a) which is made by the Employer due to a mistake of
fact, provided the return of such Contribution is made within
one (1) year after the date of payment thereof, or
(b) the extent a deduction thereof under Section 404
of the Code is disallowed, provided the return of such
contribution is limited to the amount disallowed and is made
within one (1) year after the disallowance.
5. PARTICIPANTS' ACCOUNTS
5.1 Establishment of Participants' Accounts
Although the assets of this Plan are commingled in the Trust
and are available to pay any benefit due from this Plan, as
amended, restated, converted and continued effective January 1,
1998, the Trustee shall establish and maintain, or cause to be
established and maintained by a third party, separate bookkeeping
Accounts for each Participant to which will be allocated and
credited contributions and earnings, or debited for distribution of
benefits, losses and expenses. In this regard when the Plan
described contributions or allocations "to" an Account or
disbursements or payments "from," or charges "against," an Account,
what actually is to take place are credits and debits to the
Account on the books of the recordkeeper. The Accounts which will
be created by the recordkeeper with respect to each Participant and
Inactive Participant, and will be maintained with respect to the
Participant and Inactive Participant until all benefits have been
paid or forfeited hereunder. Only one account of each type of
Account described hereunder shall be established and maintained on
behalf of a Participant, except as provided in Sections 8.3(b) and
8.4(b) hereof.
(a) Elective Deferral Account. Elective Deferrals
made on a Participant's behalf by the Employer for a Plan Year
pursuant to Section 4.1 hereof will be credited to an Elective
Deferral Account in the name of the Participant which will be fully
vested and nonforfeitable at all times and subject to the
withdrawal restrictions of Section 13.1.
(b) Qualified Nonelective Employer Contribution
Account. Contributions determined by the Administrator to be
Qualified Nonelective Employer Contributions made by the Employer,
if any, for a Plan Year pursuant to Section 4.2 hereof will be
credited to a Qualified Nonelective Employer Contributions Account
in the name of the Participant which will be fully vested and
nonforfeitable at all times and subject to the withdrawal
restrictions of Section 13.1, provided, however, that the first
one-half (1/2) of one percent (1%) of contributions made with
respect to the Plan Year pursuant to Section 4.2 hereof shall be
allocated to the 401(k) Employer Stock Account as described at
Section 5.2(g) herein.
(c) Employer Matching Account. Employer Matching
Contributions made by the Employer, if any, for a Plan Year
pursuant to Section 4.3, together with Employer Contribution
Forfeitures and 401(k) Discrimination Forfeitures reducing and
offsetting Employer Matching Contributions as described therein,
will be credited to an Employer Matching Account in the name of the
Participant which will be subject to the Vesting Schedule.
(f) 401(k) Employer Stock Account shall mean the
account maintained by the Employer to which shall be credited the
first one-half (1/2) of one percent (1%) of the contribution made,
if any, with respect of a Participant in a Plan year pursuant to
Section 4.2 hereof. Like the Qualified Nonelective Employer
Contributions Account, the 401(k) Employer Stock Account shall be
fully Vested and nonforfeitable at all times.
(e) Employer Profit Sharing Account. Profit sharing
contributions made by the Employer in a Plan Year pursuant to
Section 4.3(a) hereof, and excess Employer Contribution Forfeitures
and 401(k) Discrimination Forfeitures pursuant to Section 4.3(b)
hereof, will be credited to an Employer Profit Sharing Account in
the name of the Participant which will be subject to the Vesting
Schedule.
(f) 401(k) Forfeiture Suspense Account shall mean the
account in the name of the Participant to which shall be credited
any Employer Contribution Forfeiture arising from 401(k) Accounts
under this 401(k) Plan.
(g) Indirect Rollover Account. An Indirect Rollover
made by an Employee pursuant to Section 4.5 hereof will be credited
to an Indirect Rollover Account in the name of the Participant
which will be fully Vested and nonforfeitable at all times.
(h) Direct Rollover Account. Direct Rollovers made
by an Employee pursuant to Section 4.6 will be credited to a Direct
Rollover Account which will be fully Vested and nonforfeitable at
all times.
(i) Retirement Plan Account shall mean the account to
which shall be credited, as of January 1, 1998, the balance, if
any, of the Participant's account in the Retirement Plan (other
than any account maintained in the Retirement Plan attributable to
the participation by the Participant in the terminated defined
benefit pension plan previously created and maintained by the
Sponsoring Employer and transferred by the Participant to the
Retirement Plan. Thereafter this Account shall be credited with
earning, and debited for distributions, losses and expenses as
described herein.
(j) Prior Pension Account shall mean the account to
which shall be credited the balance, if any, of the account
maintained in the Retirement Plan attributable to the participation
by the Participant in the terminated defined benefit pension plan
previously created and maintained by the sponsoring Employer and
transferred by the Participant to the Retirement Plan. This
Account shall be fully Vested and nonforfeitable at all times.
(k) Retirement Plan Forfeiture Suspense Account shall
mean the account in the name of the Participant to which shall be
credited, as of January 1, 1998, the amount equal to the
Participant's Forfeiture Suspense Account, as defined in the
Retirement Plan, as of the day immediately preceding the Effective
Date of this Plan amendment, restatement, conversion and
continuation. Thereafter, this Account shall be credited with any
Employer Contribution Forfeitures arising from Retirement Plan
Accounts under this 401(k) Plan as of the end of each Plan Year.
(l) ESOP Stock Account shall mean the account in the
name of a Participant to which shall be credited the amount of
Employer Stock credited to the balance of the Participant's Stock
Account, as defined in the ESOP, as of the date immediately
preceding the Effective Date of this Plan amendment, restatement,
conversion and continuation of the Plan as a 401(k) Plan.
(m) ESOP Investment Account shall mean the account in
the name of the Participant to which shall be credited the amount
credited to the balance of the Participant's Investment Account, as
defined in the ESOP, as of the date immediately preceding the
Effective Date of this Plan amendment, restatement, conversion and
continuation of the Plan as a 401(k) Plan, and thereafter this ESOP
Investment Account shall be credited with earning, and debited for
distributions, losses and expenses as described herein.
(n) PAYSOP Account shall mean the account in the name
of the Participant to which shall be credited an amount equal to
that credited to the Participant's PAYSOP Account, as of the date
immediately preceding the Effective Date of this Plan amendment,
restatement, conversion and continuation, and thereafter the PAYSOP
Account shall be credited with earning and debited for
distributions, losses and expenses as described herein.
(o) ESOP Forfeiture Suspense Account shall mean the
account in the name of the Participant to which shall be credited
an amount equal to that credited to a Participant's Forfeiture
Suspense Account, as defined in the ESOP, as of the date
immediately preceding the Effective Date of this Plan amendment,
restatement, conversion and continuation. thereafter this Account
shall be credited with earnings and debited for reallocations,
losses and expenses as provided herein.
(p) Basis Account shall mean the account in the name
of a Participant to which shall be credited the amounts credited to
the Participant's Basis Account, as defined in the ESOP, as of the
date immediately preceding the Effective Date of this Plan
amendment, restatement, conversion and continuation.
Each of the Accounts described above will share in the gains
and losses of the Trust Fund, and the expenses of the Plan, in the
manner as described in Section 5.4 herein.
5.2 Allocation of Elective Deferrals Contributions
(a) In General. For each Plan Year, as of the last
day of each payroll period, Elective Deferrals made with respect to
the payroll period by a Participant shall be allocated to the
Elective Deferral Account of that Participant.
(b) Annual Limit on Elective Deferrals.
(i) Limit. No Participant shall be permitted
to have Elective Deferrals 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 such taxable year (note for the
purpose that any Elective Deferrals in excess of the
Code Section 415 limitations which is returned to the
Participant as described in subparagraph (ii) hereof
shall be disregarded). (Such dollar limitation is
$10,000 in 1998.) If a Participant receives a hardship
withdrawal distribution pursuant to Section 13.1, the
dollar limitation described above, for the Partici-
pant's taxable year immediately following the taxable
year of the hardship distribution, shall be reduced by
the amount of the Participant's Elective Deferrals for
the taxable year of the hardship distribution.
(ii) Distribution of Excess Elective Deferrals.
A Participant may assign to this Plan any Excess
Elective Deferrals made during a taxable year of the
Participant by notifying the Administrator before April
15 of the year following the year in which the
deferrals were made of the amount of the Excess
Elective Deferrals to be assigned to the Plan.
Notwithstanding any other provision of the Plan, Excess
Elective Deferrals, plus any income and minus any loss
allocable thereto, shall be distributed no later than
April 15 to any Participant to whose Elective
Contribution Account Excess Elective Deferrals were
assigned for the preceding year and who claims Excess
Elective Deferrals for such taxable year.
(iii) Determination of Income or Loss. Excess
Elective Deferrals shall be adjusted for any income or
loss up to the last day of the Plan Year.
(c) Actual Deferral Percentage Test.
(i) The Actual Deferral Percentage for
participants who are Highly Compensated Employees for
each Plan Year and the Actual Deferral Percentage for
Participants who are Non-highly Compensated Employees
for the same Plan Year must satisfy one of the follow-
ing tests:
(ii) The Actual Deferral Percentage for
Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the Actual Deferral
Percentage for Participants who are Non-highly
Compensated Employees for the same Plan Year multiplied
by 1.25; or
(iii) The Actual Deferral Percentage for
Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the Actual Deferral
Percentage for Participants who are Non-highly
Compensated Employees for the same Plan Year multiplied
by 2.0, provided that the Actual Deferral Percentage
for Participants who are Highly Compensated Employees
does not exceed the Actual Deferral Percentage for
Participants who are Non-highly Compensated Employees
by more than two (2) percentage points.
(d) Special Rules:
(i) The Actual Deferral Percentage for any
Participant who is a Highly Compensated Employee for
the Plan Year and who is eligible to have Elective
Deferrals (and Qualified Nonelective Employer
Contributions, if treated as Elective Deferrals for
purposes of the ADP test) allocated to the
Participant's Accounts under two or more arrangements
described in Section 401(k) of the Code, that are
maintained by the Employer, shall be determined as if
such Elective Deferrals (and, if applicable, such
Qualified Nonelective Employer Contributions) were made
under a single arrangement. If a Highly Compensated
Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all cash
or deferred arrangements ending with or within the same
calendar year shall be treated as a single arrangement.
(ii) In the event that this Plan satisfies the
requirements of Sections 401(k), 401(a)(4), or 410(b)
of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the
requirements of such Sections of the Code only if
aggregated with this Plan, then this Section shall be
applied by determining the Actual Deferral Percentage
of employees as if all such plans were a single plan.
Plans may be aggregated in order to satisfy Section
401(k) of the Code only if they have the same Plan
Year.
(iii) For purposes of determining the Actual
Deferral Percentage of a Participant who is a
Five-Percent Owner or one of the ten most highly-paid
Highly Compensated Employees, the Elective Deferrals
(and Qualified Nonelective Employer Contributions, if
treated as Elective Deferrals for purposes of the ADP
test) and Compensation for Testing Purposes of such
Participant shall include the Elective Deferrals (and
Qualified Nonelective Employer Contributions, if
treated as Elective Deferrals for purposes of the ADP
test) and Compensation for Testing Purposes for the
Plan Year.
(iv) For purposes of determining the Actual
Deferral Percentage test, Elective Deferrals and
Qualified Nonelective Employer Contributions must be
made before the last day of the twelve-month period
immediately following the Plan Year to which
contributions relate.
(v) The Employer shall maintain records suffi-
cient to demonstrate satisfaction of the Actual
Deferral Percentage test and the amount of Qualified
Nonelective Employer Contributions used in such test.
(vi) The determination and treatment of the
Actual Deferral Percentage amounts of any Participant
shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(e) Distribution of Excess Contributions.
(i) Required Distributions. Notwithstanding
any other provision of this plan, Excess Contributions,
plus any income and minus any loss allocable thereto as
described in (e)(ii) which follows, shall be
distributed no later than the last day of each Plan
Year to Participants to whose Elective Deferral
Accounts such Excess Contributions were allocated for
the preceding Plan Year. If such excess amounts are
distributed more than 2-1/2 months after the last day
of the Plan Year in which such excess amounts arose, a
ten percent (10%) excise tax will be imposed on the
Employer maintaining the Plan with respect to such
amounts. Such distributions shall be made to
Participants in the Plan Year who are Highly
Compensated Employees by reducing Excess Contributions
made on behalf of such Highly Compensated Employees so
that the limit is not exceeded, beginning with the
Highly Compensated Employee in the greatest dollar
amount of deferrals and continuing in a like manner so
that the return of such deferred contributions are on
the basis of amounts contributed.
Excess Contributions shall be treated as Annual
Additions under Section 5.7.
(ii) Determination of Income or Loss: Excess
Contributions shall be adjusted for any income or loss
up to the last day of the Plan Year.
(iii) Accounting for Excess Contributions:
Excess Contributions shall be distributed from the
Elective Deferral Account of Participants who are
Highly Compensated Employees in the order described in
subsection (e)(i) hereof.
5.3 Allocations Under 401(k) Plan (Other Than Elective
Deferrals)
(a) Allocation of Qualified Nonelective Employer
Contributions. Qualified Nonelective Employer Contributions made
pursuant to Section 4.2 shall be allocated to the Qualified
Nonelective Employer Contribution Account of each Participant
during the year in the ratio that each such Participant's
Compensation for the Plan Year bears to all the Compensation of all
such Participants eligible for a Qualified Nonelective Employer
Contribution for that Plan Year. Any portion of the Qualified
Nonelective Employer Contributions which are composed of Employer
Stock, or with respect to which the Employer directs the investment
thereof in Employer Stock pursuant to Section 17.4 hereof, shall,
notwithstanding the foregoing, be allocated to the 401(k) Employer
Stock Account of each Participant during the Year, in the greatest
number of whole shares possible, in the same ratio. For purposes
hereof, "Compensation" shall have the meaning described in Section
2.16 hereof.
(b) Allocation of Employer Matching Contributions and
Offsetting Forfeitures. As of the last day of each payroll period
(but no less often than as of the last day of the Plan Year),
Employer Matching Contributions made pursuant to Section 4.3 on
behalf of each Participant who made Elective Deferrals during the
payroll period, together with Employer Contribution Forfeitures and
401(k) Discrimination Forfeitures used to reduce and offset
Employer Matching Contributions, shall be allocated to the
Participant's Employer Matching Contributions Account. Subject to
(i) any limitation on Employer Matching Contributions under Section
4.3 hereof, (ii) the Employer actually making such discretionary
Employer Matching Contributions and (iii) the limitations of the
Average Contribution Percentage Test described in Section 5.6
hereof, the Employer Matching Contribution to be allocated,
together with Employer Contribution Forfeitures and 401(k)
Discrimination Forfeitures, shall be an amount targeted to be equal
to fifty percent (50%) of the first six percent (6%) of Elective
Deferrals of each Participant entitled to share in this allocation.
(c) Allocation of Employer Profit Sharing
Contributions and Forfeitures In Excess of Employer Matching
Target. As of the last day of each Plan Year the Employer Profit
Sharing Contributions shall be allocated to the Participant's
Employer Profit Sharing Account, provided the Participant was
credited with a Year of Service during that Plan Year and was still
in Service on the last day of that Plan Year. As of the last day
of each Plan Year, Employer Profit Sharing Contributions made
pursuant to Section 4.4, together with any Employer Contribution
Forfeiture or 401(k) Discrimination Forfeitures which could be used
to reduce and offset Employer Matching Contributions, but are in
excess of the targeted match, shall be allocated to the
Participant's Employer Profit Sharing Account, provided the
Participant is credited with a Year of Service during that Plan
Year and is still in Service on the last day of the Plan Year.
5.4 Valuation of Trust Fund
(a) In General. The assets of the Trust Fund will be
valued at fair market value no less often than at least annually as
of the last day of the Plan Year. Also no less often than at least
annually, the earnings, losses and expenses of the Trust Fund will
be allocated to or charged against the Participants' and Inactive
Participants' Accounts. In valuing the Employer Stock which are
assets of the Plan, such Employer Stock shall be valued on a
"unitized" basis.
(b) Allocation to Participant-Directed Accounts. As
of each Allocation Date the Accounts with respect to which
Participants are directing investments described in Section 17.5
hereof, shall be allocated and credited with earnings or charged
with losses and expenses as set forth in Section 17.5 hereof.
(c) Allocation to Accounts Not Employer or
Participant-Directed.. As of each Allocation Date (except for
Sections 5.4(c)(1), 5.4(c)(5) and 5.4(c)(6) which shall only be
allocated as of the end of the Plan Year) the Accounts to the
extent the investments therein are not Employer-directed or
Participant-directed shall be allocated and credited with earnings,
or charged and debited for losses and expenses, by the
Administrator as provided hereinafter.
(1) Employer Stock. All Employer Stock acquired by
the Plan or Trustee since the end of the last Plan Year
(including the Employer Stock to be allocated to the 401(k)
Employer Stock Account pursuant to Section 5.3(a) hereof),
and all unallocated Employer Stock, if any, remaining from
the prior Allocation Period, shall be allocated, in the
greatest whole number of shares possible (and fractional
shares, if fractional shares are permissible according to
law, the Company's by-laws and any registration of such
shares with the Security Exchange Commission), to the 401(k)
Employer Stock Account of each Participant in the Plan during
the Plan Year in the proportion that the Participant's
Compensation for such Plan Year bears to the total of the
Compensation of all such Participants entitled to share in
this allocation for such Plan Year. For purposes hereof, the
term "Compensation" is defined at Section 2.16 herein.
(2) Cash Income. Cash income with respect to Plan
assets since the last Allocation Date, including dividends
paid with respect to stock other than Employer Stock, shall
be allocated to the Account of each Participant and Inactive
Participant to which is credited the Plan asset the income is
attributable to, or if the Plan asset is not credited to an
Account, then in the proportion that the aggregate balance of
such Participant's or Inactive Participant's non-directed
Accounts as of such Allocation Date bears to the total
aggregate balances of all such Accounts as of the last
Allocation Date.
(3) Employer Stock Dividend. Any Employer Stock
dividend paid with respect to Employer Stock allocated to a
Participant's Account since the last Allocation Date, or as
of the present Allocation Date, shall be allocated to the
respective Account to which is credited the Employer Stock
with respect to which the dividend is paid.
(4) Cash Dividends on Employer Stock. Subject to
subsection (7) hereof regarding the payment of cash dividends
on Employer Stock held in the ESOP Accounts to Participants,
the total cash dividends received with respect to the
Employer Stock allocated to an Account of a Participant or
Inactive Participant since the last Allocation Date, or as of
the present Allocation Date pursuant to subsection (c)(1)
above, shall be allocated to the Account of the Participant
or Inactive Participant to which is credited the Employer
Stock on which the dividend is paid.
(5) Forfeitures From of a Former Participant's ESOP
Stock Accounts. All Forfeitures consisting of shares of
Employer Stock acquired with an "exempt loan" within the
meaning of Treasury Regulations Section 54.4975-7(b)(1)(iii),
if any, shall be allocated, in the greatest whole number of
shares possible, to the ESOP Stock Account of each
Participant who is credited with a Year of Service that Plan
Year and is still in Service on the last day of the Plan Year
in proportion to the Participant's Compensation in the Plan
Year to the total Compensation in the Plan Year of all
Participants entitled to share in this allocation. For
purposes hereof, "Compensation" shall be defined at Section
2.16 hereof.
(6) Allocation of Excess Amounts. All "excess
amounts" allocated pursuant to Section 5.7(a)(iv)(4) hereof
(which describes the limitation on allocation of Code Section
415) consisting of cash shall not be allocated and
reallocated to Participants, but shall be used to reduce and
offset Employer Matching Contributions.
(7) Cash Dividends Paid to Participants. Any cash
dividends paid with respect to shares of Employer Stock
allocated to a Participant's ESOP Stock Account, whenever
such allocation was made, in the sole discretion of the
Administrator, but only if the recordkeeper of the Plan
agrees, may be paid in cash to each such Participant in the
Plan and any Beneficiary in pay status not later than 90 days
from the end of the Plan Year in which paid, and if so, the
Employer may take the deduction described for such dividends
in Section 404(k) of the Code.
(8) Fractional Shares. All remaining whole or
fractional shares of Employer Stock which are not allocated
because only whole shares of Employer Stock are to be
allocated shall be held unallocated for allocation on the
next Allocation Date.
(9) Other Trust Earnings and Losses. Except as
provided above, as of each Allocation Date earnings shall be
allocated and credited to, and losses debited and charged
against the Accounts which are not Participant-directed in
the proportion that each such Account as of the last
Allocation Date bears to the aggregate of all such Accounts
as of the last Allocation Date. In determining the Account
balances as of the last Allocation Date, each Account balance
shall be reduced by the amount of any disbursements from the
Account since the last Allocation Date. With respect to a
Participant's Elective Deferral Account balance, each such
Account shall be credited with one-half (1/2) the Elective
Deferrals made by the Participant during the Allocation
Period. Alternatively, if approved by the Administrator,
Trust Fund earnings and losses may be allocated in any
equitable, uniform and nondiscriminatory manner which is
selected for the purposes of recognizing the timing of
contributions, withdrawals, distributions, transfers,
Participant or Employer directed investments or other
temporal events affecting Account value as adjustments to
Account balances.
If a Participant indirectly or directly rolls over
funds pursuant to Section 4.5 or 4.6 during the Allocation
Period, then for purposes of allocating the Participant's
share of the Trust Fund earnings and losses for that same
Allocation period, unless the Employee directs the investment
of such Account as provided in Section 17.5 hereof or the
Administrator decides to revoke the last sentence of the
preceding paragraph, the Participant's Account balances as of
the preceding Allocation Date shall include the amount the
Participant indirectly or directly rolls over during the
Allocation Period multiplied by a fraction, the numerator of
which is the number of days in the Allocation Period left
after the rollover subtracted from the number of days in the
Allocation Period, and the denominator of which is the number
of days in the Allocation Period.
(10) Expenses of General Fund Administration. All
expenses of the Plan chargeable thereto in accordance with
ERISA and the Code (other than expenses specifically
chargeable to Participant-directed Accounts pursuant to
Section 17.5(a) hereof) shall be debited to and charged
against each Account, including Accounts which are
Participant directed, on an equal per person basis (i.e., per
capita).
(11) Special Suspense Accounts. The Administrator may
direct that special suspense accounts be established to hold
Employer contributions, income (including stock and cash
dividends), stock or other amounts that are assets of the
Trust Fund, but will not be allocable, or cannot be allocated
because of a limitation herein, until the next Allocation
Date.
5.5 Average Contribution Percentage Test: The Aggregate Limit
For Employer Matching Contributions and Elective
Contributions
(a) The Aggregate Limit In General.
(1) The Average Contribution Percentage for
Participants who are Highly Compensated Employees for
each Plan Year and the Average Contribution Percentage
for Participants who are Non-highly Compensated
Employees for the same Plan Year must satisfy one of
the following tests:
(2) The Average Contribution Percentage for
Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the Average Contribution
Percentage for Participants who are Non-highly Compen-
sated Employees for the same Plan Year multiplied by
1.25; or
(3) The Average Contribution Percentage for
Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the Average Contribution
Percentage for Participants who are Non-highly Compen-
sated Employees for the same Plan Year multiplied by
two (2), provided that the Average Contribution
Percentage for Participants who are Highly Compensated
Employees does not exceed the Average Contribution
Percentage for Participants who are Non-highly
Compensated Employees by more than two (2) percentage
points.
(4) Special Rules:
(i) Multiple Use: If the sum of the
Actual Deferral Percentage and Average
Contribution Percentage of Highly Compensated
Employees exceeds the Aggregate Limit described
in subsection (a) above, then the Average
Contribution Percentage of those Highly
Compensated Employees will be reduced by
forfeiting such excess with respect to such
Highly Compensated Employees, beginning with the
Highly Compensated Employee who is a Participant
that Plan Year whose Employer Matching
Contribution is the highest and continuing in
accordance with Code Section 401(m)(6)(a) until
the excess with respect to the Plan Year will no
longer exist. The amount by which each Highly
Compensated Employee's Contribution Percentage
Amounts is reduced shall be treated as an Excess
Aggregate Contribution and shall be a 401(k)
Discrimination Forfeiture. The Actual Deferral
Percentage and Average Contribution Percentage of
the Highly Compensated Employees are determined
after any corrections (including the
determination by the Administrator as to which
contributions made pursuant to Section 4.2 hereof
are to be treated as Qualified Nonelective
Employer Contributions) required to meet the
Actual Deferral Percentage and Average Contribu-
tion Percentage tests. Multiple use does not
occur if either the Actual Deferral Percentage
and Average Contribution Percentage of the Highly
Compensated Employees does not exceed 1.25
multiplied by the Actual Deferral Percentage and
Average Contribution Percentage of the Non-highly
Compensated Employees.
(ii) For purposes of this Section, the
Contribution Percentage for any Participant who
is a Highly Compensated Employee and who is
eligible to have Contribution Percentage Amounts
allocated to the Participant's account under two
or more plans described in Section 401(a) of the
Code, or arrangements described in Section 401(k)
of the Code that are maintained by the Employer,
shall be determined as if the total of such
Contribution Percentage Amounts was made under
each plan. If a Highly Compensated Employee
participates in two or more cash or deferred
arrangements that have different plan years, all
cash or deferred arrangements ending with or
within the same calendar year shall be treated as
a single arrangement.
(iii) In the event that this Plan satisfies
the requirements of Sections 401(m), 401(a)(4) or
410(b) of the Code only if aggregated with one or
more other plans, or if one or more other plans
satisfy the requirements of such sections of the
Code only if aggregated with this Plan, then this
Section shall be applied by determining the
Contribution Percentage of employees as if all
such plans were a single plan. Plans may be
aggregated in order to satisfy Section 401(m) of
the Code only if they have the same plan year.
(iv) For purposes of determining the
Contribution Percentage test, Employer Matching
Contributions will be considered made for a Plan
Year if they are made no later than the end of
the twelve (12) consecutive month period
beginning on the day after the close of the Plan
Year.
(v) The Employer shall maintain records
sufficient to demonstrate satisfaction of the
Average Contribution Percentage test and the
amount of Qualified Nonelective Employer
Contributions used in such test.
(vi) The determination and treatment of
the Contribution Percentage of any Participant
shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(b) Distribution of Excess Aggregate Contributions.
(1) In General. Notwithstanding any other
provision of this Plan, Excess Aggregate Contributions
attributable to a Highly Compensated Employee, plus any
income and minus any loss allocable thereto as
described in subsection (ii), shall be forfeited under
the Vesting Schedule, if forfeitable, or if not
forfeitable, distributed no later than the last day of
each Plan Year to Participants who are Highly
Compensated Employees to whose Matching Employer
Accounts such Excess Aggregate Contributions were
allocated for the preceding Plan Year. If such Excess
Aggregate Contributions are distributed more than two
and one-half (2-1/2) months after the last day of the
Plan Year in which such excess amounts arose, a ten
percent (10%) excise tax will be imposed on the
Employer with respect to which those amounts arose.
Excess Aggregate Contributions shall be treated as
Annual Additions under Section 5.7(d)(i) of the Plan.
(2) Determination of Income or Loss. Excess
Aggregate Contributions shall be adjusted for any
income or loss up to the last day of the Plan Year.
(3) Forfeitures of Excess Aggregate
Contributions. Forfeitures of Excess Aggregate
Contributions (i.e., 401(k) Discrimination Forfeitures)
shall be used, together with Employer Contributions
Forfeitures, to reduce and offset Employer Matching
Contributions. However, if these forfeitures exceed
the target match described in Section 5.2, then such
forfeitures shall be allocated like Employer Profit
Sharing Contributions pursuant to Section 5.3 hereof.
(4) Accounting for Excess Aggregate
Contributions. Excess Aggregate Contributions shall be
forfeited, if forfeitable, or if not forfeitable,
distributed from the Employer Matching Contributions
Account of Highly Compensated Employees who are
Participants that Plan Year in the order described in
subsection (a)(iv) hereof.
5.6 Inactive Participants
An Inactive Participant shall not be entitled to share in
Qualified Nonelective Employer Contributions, Employer Matching
Contributions, Employer Profit Sharing Contributions or Employer
Contribution Forfeiture or 401(k) Discrimination Forfeiture for a
Plan Year. Nevertheless, the Participant's Accounts shall be
maintained and credited, or charged, with Trust Fund earnings,
distributions, losses and expenses in accordance with Section 5.4
hereof, until the balance thereof (to the extent Vested) shall have
been fully distributed.
5.7 Limitations on Allocations
(a) If the Employer Maintains a Single Defined
Contribution Plan.
(i) If the Participant does not participate in,
and has never participated in, another qualified plan
maintained by the Employer, a welfare benefit fund as
described in Section 419(e) of the Code maintained by
the Employer, or an individual medical account as
described in Section 415(1)(2) of the Code maintained
by the Employer, which provides an Annual Addition as
defined in subsection (d)(i), the amount of Annual
Addition which may be credited to the Participant's
Accounts in the aggregate for any Limitation Year will
not exceed the lesser of the Maximum Permissible Amount
or any other limitation contained in this Plan.
(ii) Prior to determining the Participant's
actual Compensation for the Limitation Year, the
Employer may determine the Maximum Permissible Amount
for a Participant on the basis of a reasonable
estimation of the Participant's Compensation for the
Limitation Year, uniformly determined for all
Participants similarly situated.
(iii) As soon as is administratively feasible
after the end of the Limitation Year, the Maximum
Permissible Amount for the Limitation Year will be
determined on the basis of the Participant's actual
Compensation for the Limitation Year.
(iv) If pursuant to subsection (iii) or as a
result of the allocation of Forfeitures, there is an
Excess Amount, the excess will be disposed of as
follows:
(1) Any Elective Deferrals, together
with gains attributable to those Elective
Deferrals, to the extent they would reduce the
Excess Amount, will be returned to the
Participant. These retirement amounts of
Elective Deferrals shall be disregarded for
purposes of Code Section 402(g), the Actual
Deferral Percentage Test of Section 5.2 hereof
and the Average Contribution Percentage Test of
Section 5.5 hereof.
(2) If after the application of paragraph
(1) above an Excess Amount still exists, and the
Participant is covered by the Plan at the end of
the Limitation Year, the Excess Amount first in
the Participant's Profit Sharing Account and then
if necessary in the Participant's Employer
Matching Account, and finally, if necessary, in
the Participant's Qualified Nonelective Employer
Contributions Account, will be used to reduce
such Employer Contributions (together with any
allocation of Forfeitures) for such Participant
in the next Limitation Year, and each succeeding
Limitation Year if necessary.
(3) If after the application of paragraph
(1) above an Excess Amount still exists, and the
Participant is not covered by the Plan at the end
of a Limitation Year, the Excess Amount will be
held unallocated in a suspense account. The
suspense account (together with allocation of any
Forfeitures) will be applied to reduce future
Employer Matching Contributions for all remaining
Participants in the next Limitation Year, and
each succeeding Limitation Year, if necessary.
For purposes of this subsection (a)(iv)(3),
excess amounts may not be distributed to
Participants or former Participants.
(4) If a suspense account is in existence
at any time during a Limitation Year pursuant to
this Section, it will not participate in the
allocation of the Trust's investment earnings and
losses. If a suspense account is in existence at
any time during a particular Limitation Year, all
amounts in the suspense account must be allocated
and reallocated to Participants' Accounts before
any Elective Deferrals, Qualified Nonelective
Employer Contributions, or Employer Matching
Contributions may be made prior.
(b) If the Employer Should Maintain Another Defined
Contribution Plan.
(i) This Section applies if, in addition to
this Plan, the Participant is covered under another
defined contribution plan maintained by the Employer, a
welfare benefit fund as defined in Section 419(e) of
the Code maintained by the Employer, or an individual
medical account, as defined in Section 415(1)(2) of the
Code, maintained by the Employer, which provides an
Annual Addition as defined in subsection (d)(i), during
any Limitation Year. The Annual Additions which may be
credited to a Participant's Accounts under this Plan
for any such Limitation Year will not exceed the
Maximum Permissible Amount reduced by the Annual
Additions credited to a Participant's individual
account under the other plans and welfare benefit funds
for the same Limitation Year. If the Annual Additions
with respect to the Participant under other defined
contribution plans and welfare benefit funds maintained
by the Employer are less than the Maximum Permissible
Amount, and the Qualified Nonelective Employer
Contributions, the Employer Matching Contributions and
Employer Profit Sharing Contributions that would
otherwise be contributed or allocated to the
Participant's Qualified Nonelective Employer
Contributions Account, Employer Matching Contribution
Account or Employer Profit Sharing Contributions
Accounts under this Plan would cause the Annual
Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated will be
reduced so that the Annual Additions under all such
plans and funds for the Limitation Year will equal the
Maximum Permissible Amount. If the Annual Additions
with respect to the Participant under such other
defined contribution plans and welfare benefit funds in
the aggregate are equal to or greater than the Maximum
Permissible Amount, no amount will be contributed or
allocated to the Participant's Accounts under this Plan
for the Limitation Year.
(ii) Prior to determining the Participant's
actual Compensation for the Limitation Year, the
Employer may determine the Maximum Permissible Amount
for a Participant in the manner described in subsection
(a) (ii).
(iii) As soon as is administratively feasible
after the end of the Limitation Year, the Maximum
Permissible Amount for the Limitation Year will be
determined on the basis of the Participant's actual
Compensation for the Limitation Year.
(iv) If, pursuant to subparagraph (iii) or as a
result of the allocation of Forfeitures, a Partic-
ipant's Annual Additions under this Plan and such other
plans would result in an Excess Amount for a Limitation
Year, the Excess Amount will be deemed to consist of
the Annual Additions last allocated, except that Annual
Additions attributable to a welfare benefit fund or
individual medical account will be deemed to have been
allocated first, regardless of the actual Allocation
Date.
(v) If an Excess Amount was allocated to a
Participant on an Allocation Date of this Plan which
coincides with an allocation date of another plan, the
Excess Amount attributed to this Plan will be the
product of (1) the total Excess Amount allocated as of
such date, times (2) the ratio of (A) the Annual
Additions allocated to the Participant for the
Limitation Year as of such date under this Plan to (B)
the total Annual Additions allocated to the Participant
for the Limitation Year as of such date under this and
all the other qualified defined contribution plans.
(vi) Any Excess Amount attributed to this Plan
will be disposed in the manner described in subsection
(a) (iv).
(c) If the Employer Should Maintain a Defined Benefit
Plan. Participant Covered Under A Defined Benefit Plan. If the
Employer maintains, or at any time maintained, a qualified Defined
Benefit Plan covering any Participant in this Plan, the sum of the
Participant's Defined Benefit Plan Fraction and Defined Contribu-
tion Plan Fraction will not exceed 1.0 in any Limitation Year. The
Annual Additions which may be credited to the Participant's
Accounts under this Plan for any Limitation Year will be limited by
reducing Annual Additions under the Defined Contribution Plan
Fraction. However, the matters as set forth in this subparagraph
(c) shall have no effect for Plan Years beginning after December
31, 1999.
(d) Definitions.
(i) Annual Additions: The sum of the following
amounts credited to a Participant's Accounts for the
Limitation Year:
(1) Elective Deferrals (including Excess
Contributions);
(2) Qualified Nonelective Employer
Contributions;
(3) Employer Matching Contributions;
(4) Employer Profit Sharing
Contributions;
(5) voluntary before tax employee
contributions (if the Plan should ever be
amended to permit such contributions);
(6) Employer Contribution Forfeitures
401(k) Discrimination
Forfeitures to the extent not
returned to the Highly
Compensated Employees responsible for
Excess Aggregate
Contributions as described herein.;
and
(7) Amounts allocated after March 31,
1984 to an individual medical account as
defined in Section 415(1)(2) of the Code,
which is part of a pension or annuity
plan maintained by the Employer are
treated as Annual Additions to a defined
contribution plan. Also, amounts
derived from contributions paid or
accrued after December 31, 1985, in taxable
years ending after such date, which
are attributable to post-retirement
medical benefits, allocated to the
separate account of a Key Employee, as
defined in Section 419A(d)(3) of the Code,
under a welfare benefit fund as
defined in Section 419(e) of the Code
maintained by the Employer, are
treated as Annual Additions to a
defined contribution plan.
For this purpose, any Excess Amount applied under subsection
(a)(iv) or (b)(iv) in the Limitation Year to reduce (i) Qualified
Nonelective Employer Contributions, (ii) Employer Matching
Contributions and (iii) Employer Profit Sharing Contributions will
be considered Annual Additions for such Limitation Year.
(ii) Compensation: Compensation is defined as
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 (including, but not
limited to, commissions paid to salesmen, compensation
for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses,
fringe benefits, reimbursements or other expense
allowances under a nonaccountable plan (as described in
Treasury Regulations Sect 1.62-2(c) and any amount which is
contributed by the Employer pursuant to a salary
reduction agreement which is not includable in the
gross income of the Employee under Section 125, 401(h)
or 401(b) of the Code, and excluding the following:
(1) Amounts realized from the exercise of
a non-qualified stock option, or when restricted
stock (or property) held by the Employee either
becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(2) Amounts realized from the sale,
exchange or other disposition of stock acquired
under a qualified stock option; and
For purposes of applying the limitations of this
Section 5.7, Compensation for a Limitation Year is the
Compensation actually paid or made available during
such Limitation Year.
Notwithstanding the preceding sentence,
Compensation for a Participant in a defined
contribution plan who has incurred a Disability is the
Compensation such Participant would have received for
the Limitation Year if the Participant had been paid at
a rate of Compensation paid immediately before
incurring the Disability; such imputed Compensation for
the disabled Participant may be taken into account only
if the Participant is not a Highly Compensated Employee
and contributions made on behalf of such Participant
are nonforfeitable when made.
(iii) Defined Benefit Fraction: A fraction, the
numerator of which is the sum of the Participant's
Projected Annual Benefits under all the Defined Benefit
Plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser of
one hundred twenty-five percent (125%) of the dollar
limitation determined for the Limitation Year under
Sections 415(b) and (d) of the Code or one hundred
forty percent (140%) of the Highest Average
Compensation, including any adjustments under Section
415(b) of the Code.
Notwithstanding the above, if the Participant was
a Participant as of the first day of the first
Limitation Year beginning after December 31, 1986, in
one or more Defined Benefit Plans maintained by the
Employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than one
hundred twenty-five percent (125%) of the sum of the
Annual Benefits under such plans which the Participant
had accrued as of the close of the last Limitation Year
beginning before January 1, 1987, disregarding any
changes in the terms and conditions of the Plan after
May 5, 1986. The preceding sentence applies only if
the Defined Benefit Plans individually and in the
aggregate satisfied the requirements of Section 415 for
all Limitation Years beginning before January 1, 1987.
(iv) Defined Contribution Dollar Limitation:
$30,000 or if greater, one-fourth of the defined
benefit dollar limitation set forth in Section
415(b)(1) of the Code as in effect for the Limitation
Year.
(v) Defined Contribution Fraction: A fraction,
the numerator of which is the sum of the Annual
Additions to the Participant's accounts under all the
defined contribution plans (whether or not terminated)
maintained by the Employer for the current and all
prior Limitation Years (including the Annual Additions
attributable to the Participant's nondeductible volun-
tary employee contributions to all Defined Benefit
Plans, whether or not terminated, maintained by the
Employer, if any, and the Annual Additions attributable
to all welfare benefit funds, as defined in Section
419(e) of the Code, and individual medical accounts, as
defined in Section 415(1)(2) of the Code, maintained by
the Employer), and the denominator of which is the sum
of the Maximum Aggregate Amounts for the current and
all prior Limitation Years with the Employer
(regardless of whether a defined contribution plan was
maintained by the Employer). The Maximum Aggregate
Amount in any Limitation Year is the lesser of one
hundred twenty-five percent (125%) of the dollar
limitation determined under Sections 415(b) and (d) of
the Code in effect under Section 415(c)(1)(A) of the
Code or thirty-five percent (35%) of the Participant's
Compensation for such year.
If the Employee was a Participant as of the end
of the first day of the first Limitation Year beginning
after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which
were in existence on May 6, 1986, the numerator of this
fraction will be adjusted if the sum of this fraction
and the Defined Benefit Fraction would otherwise exceed
1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the
excess of the sum of the fractions over 1.0 times (2)
the denominator of this fraction, will be permanently
subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they
would be computed as of the end of the last Limitation
Year beginning before January 1, 1987, and disregarding
any changes in the terms and conditions of the Plan
made after May 6, 1986, but using the Section 415
limitation applicable to the first Limitation Year
beginning on or after January 1, 1987.
The Annual Addition for any Limitation Year
beginning before January 1, 1987, shall not be
recomputed to treat all Participant contributions as
Annual Additions.
(vi) Employer: For purposes of this Section,
Employer shall mean each individual Employer,
considered separately, that adopts this Plan, and all
Controlled Group Members as that term is modified by
Section 415(h) of the Code.
(vii) Excess Amount: The excess of the Partici-
pant's Annual Additions for the Limitation Year over
the Maximum Permissible Amount.
(viii) Highest Average Compensation: The
Average Compensation for the three consecutive Years of
Service that produces the highest average.
(ix) Limitation Year: A calendar year. All
qualified plans maintained by the Employer must use the
same Limitation Year. If the Limitation Year is
amended to a different 12-consecutive month period, the
new Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.
(x) Maximum Permissible Amount: The maximum
Annual Addition that may be contributed or allocated to
a Participant's Accounts under the Plan for any
Limitation Year shall not exceed the lesser of (1) The
Defined Contribution dollar limitation, or (2) twenty-
five percent (25%) of the Participant's Compensation
for the Limitation Year.
The Compensation limitation referred to in (2)
shall not apply to any contribution for medical
benefits (within the meaning of Section 401(h) or
419A(f)(2) of the Code) which is otherwise treated as
an Annual Addition under Section 415(1)(1) or
419A(d)(2) of the Code.
If a short Limitation Year is created because of
an amendment changing the Limitation Year to a
different twelve consecutive-month period, the Maximum
Permissible Amount will not exceed the Defined
Contribution Dollar Limitation multiplied by the
following fraction:
number of months in the short Limitation
Year
12
(xi) Projected Annual Benefit: The annual
retirement benefit (adjusted to an actuarially
equivalent straight-life annuity if such benefit is
expressed in a form other than a straight-life annuity
or Qualified Joint and Survivor Annuity) to which the
Participant would be entitled under the terms of the
Plan assuming (1) the Participant will continue
employment until Normal Retirement Age under the Plan
(or current age, if later), and (2) the Participant's
Compensation for the current Limitation Year and all
other relevant factors used to determine benefits under
the Plan will remain constant for all future Limitation
Years.
5.8 Allocation Not Equivalent to Vesting
The fact that an allocation shall be made and credited to the
Account of a Participant shall not vest in the Participant any
right, title or interest in and to any assets except at the time or
times and upon the terms and conditions expressly set forth in this
Plan.
5.9 Notification and Corrections Regarding Allocations
(a) If a final allocation because of the
Participant's termination of Service is required to be made on
behalf of a Participant for a Plan Year, it shall be the duty of
the Employer to so notify the recordkeeper before allocations are
made to Participants for such Plan Year. If the Employer fails to
notify the recordkeeper of such final allocations until after
allocations for the Plan Year are made, the Employer shall make
additional Employer contributions in the amount of the required
final allocations, plus earnings (if earnings are appropriate) and
instruct the recordkeeper to adjust the records to reflect the
actual allocation.
(b) It shall be the duty of the Employer to notify
the recordkeeper in the event of a mistake in allocations due to an
inadvertent error such as, but not limited to, the omission of a
Participant or an error in the calculation of Compensation or
Service. The Employer may direct the recordkeeper to correct such
mistake by an adjustment to the following Plan Year's allocations
or by an additional Employer contribution in an amount necessary to
correct the Participant's Accounts, plus earnings at a reasonable
rate to be determined by the Plan Administrator or Trustee. Any
additional contribution made by the Employer pursuant to this
Section 5.9 shall be deductible by the Employer in the year in
which such correction is made subject to the limitations of Section
404 of the Code.
6. RETIREMENT AND DISABILITY BENEFITS
6.1 Normal Retirement
A Participant shall be eligible to retire on or after the
Participant's Normal Retirement Date. As of the Participant's
Normal Retirement Date, notwithstanding the Vesting Schedule
described in Section 8.2, the balance of all such Participant's
Accounts shall be fully Vested and nonforfeitable and the
Participant's Accounts shall be payable in accordance with ARTICLES
9, 10 and 11. Notwithstanding the other requirements of this Plan,
a Participant who reaches the Participant's Normal Retirement Date
may elect to continue in Service subject to Section 19.1 hereof and
the Employer's retirement policy, if any, and the provisions of the
Age Discrimination in Employment Act of 1986. If such Participant
continues in Service, then the Participant shall be eligible to
continue in all respects as a Participant in the Plan eligible for
the Normal Retirement benefits described herein until actual
retirement. A Participant who continues in Service past the
Participant's Normal Retirement Date may elect to have the
Participant's Accounts payable in accordance with ARTICLES 9, 10
and 11 even though the Participant is still in Service. The Plan
Administrator may establish a policy regarding the ordering of
Accounts from which payments are available to a Participant who
continues in Service past the Participant's Normal Retirement Date.
6.2 Early Retirement
A Participant shall be eligible to retire on or after the
Participant's Early Retirement Date. As of the Participant's Early
Retirement Date, notwithstanding the Vesting Schedule described in
Section 8.2, the balance of all such Participant's Accounts shall
be fully Vested and nonforfeitable and the Participant's Accounts
shall be payable in accordance with ARTICLES 9, 10 and 11.
Notwithstanding the other requirements of this Plan, a Participant
who reaches the Participant's Early Retirement Date may elect to
continue in Service subject to Sections 3.6 and 19.1 hereof. If
such Participant continues in Service, then the Participant shall
be eligible to continue in all respects as a Participant in the
Plan eligible for the Early Retirement benefits described herein
(unless and until the Participant becomes eligible for the Normal
Retirement benefits described in Section 6.1 hereof.)until actual
retirement.
6.3 Disability Retirement
Following the Administrator's determination of the
Participant's Disability, a Participant who has been found to have
incurred a Disability shall be fully Vested and nonforfeitable in
the Participant's Accounts, notwithstanding the Vesting Schedule
described in Section 8.2. The Participant's Accounts shall be
payable in accordance with ARTICLES 9, 10 and 11.
7. DEATH BENEFITS BEFORE RETIREMENT ELIGIBILITY OR DISABILITY
7.1 Death Benefit Before Retirement Eligibility or Disability
in General
In the event of the death of a Participant before benefits
commence to the Participant for Early Retirement, Normal Retirement
or Disability as provided in ARTICLE 6, prior to the Participant's
termination of Service (for any reason, whether voluntary or
involuntary), the balance in the deceased Participant's Accounts
shall be fully Vested and nonforfeitable, and payable in accordance
with Sections 7.2, 7.3 and 7.4 hereof.
7.2 Death Benefits Attributable to 401(k) Plan Accounts
The following provisions describe the death benefits under
this Article, if any, attributable to a deceased Participant's
401(k) Plan Accounts (other than the Participant's 401(k) Employer
Stock Account):
(a) Unmarried Participants. Upon the death of an
unmarried Participant, the entire amount of the Participant's
Vested balance in the Participant's 401(k) Plan Accounts (other
than the 401(k) Employer Stock Account) shall be paid as soon as
practicable (unless deferred as described herein at subsection (c))
in a lump sum to the Participant's Beneficiary. Except to the
extent that a Qualified Domestic Relations Order may be applicable,
an unmarried Participant may designate any Beneficiary to receive
such death benefit. A Beneficiary of an unmarried Participant may
elect an installment form of benefits described at Section 9.2(c)
hereof.
(b) Married Participants. Upon the death of a
married Participant, the entire amount of the deceased
Participant's Vested balance in the Participant's 401(k) Plan
Accounts (other than the 401(k) Employer Stock Account) shall be
paid as soon as practicable (unless deferred) in a lump sum to the
deceased Participant's Beneficiary. A married Participant's
surviving Spouse must be the Beneficiary for one hundred percent
(100%) of such death benefit, except to the extent that the
surviving Spouse has consented to the designation of a nonspouse
Beneficiary pursuant to Section 9.3 of the Plan. For purposes of
this subsection 7.2 (b), a former Spouse will be treated as a
Participant's surviving Spouse to the extent provided under a
Qualified Domestic Relations Order.
(c) Deferral of Receipt of Death Benefit. Any person
entitled to receive a death benefit pursuant to this ARTICLE may
defer the receipt of such death benefit, as described in the
provisions of Section 7.3(c). During any period of deferral, the
portion of the deceased Participant's Accounts payable as a death
benefit to such person shall be entitled to receive allocations of
gain or loss in the same manner as other Accounts.
(d) Effect of Beneficiary's Death. In the event that
a Beneficiary survives the Participant but dies before full payment
of the Participant's Vested Account balances, the remaining
balances of such Accounts shall be paid as soon as practicable to
the Beneficiary, if any, designated by such deceased Beneficiary,
or to the Beneficiary's estate if the Beneficiary made no such
beneficiary designation. Section 2.10 contains additional rules
regarding Beneficiary designation, including the provision that if
a Beneficiary fails to survive the Participant, then the
Beneficiary designation is null and void.
7.3 Death Benefits Attributable to Retirement Plan Accounts
The following provisions describe the death benefits under
this Article, if any, attributable to a deceased Participant's
Retirement Plan Accounts:
(a) Unmarried Participants. Upon the death of an
unmarried Participant, the entire amount of the Participant's
vested balance in the Participant's Retirement Accounts shall be
paid as soon as practicable (unless deferred) in a lump sum to the
Participant's designated Beneficiary. Except to the extent that a
Qualified Domestic Relations Order may be applicable, an unmarried
Participant may designate any Beneficiary to receive such death
benefits. The Beneficiary of an unmarried Participant may elect
any optional form of payment described at Section 10.2(e).
(b) Married Participants. Upon the death of a
married Participant who dies before the Participant's benefits
under the Plan commence, and who leaves a surviving Spouse, a
Qualified Preretirement Survivor Annuity shall be made available to
the Participant's surviving Spouse. Payment of such Qualified
Preretirement Survivor Annuity shall begin within a reasonable time
after the Participant's death, unless it is waived by the
Participant with spousal consent as provided in the following
subsection (g). However, the Spouse may elect an optional form of
payment as provided in subsection (e) of this Section. Any such
annuity payable to a surviving Spouse shall commence on any date
elected by the surviving Spouse, subject to any rules applicable to
the maximum period of deferral under Section 12.1 hereof.
(c) Deferral of Receipt of Death Benefit. Any person
entitled to receive a death benefit pursuant to this Section may
defer the receipt of such death benefit subject to the provisions
of ARTICLE 12. During any period of deferral, the portion of the
unpaid balance of the Participant's Vested Accounts payable as a
death benefit to such person shall receive allocations of gain or
loss in the same manner as other Accounts.
(d) Effect of Beneficiary's Death. In the event that
a Beneficiary survives the Participant but dies before full payment
of the balance of the Participant's Vested Accounts, the unpaid
balance of the Participant's Vested Accounts shall be paid as soon
as practicable to the beneficiary, if any, designated by such
deceased Beneficiary or to the Beneficiary's estate if the
Beneficiary made no such beneficiary designation. Section 2.10
contains additional rules regarding Beneficiary designation,
including the provision that if a Beneficiary fails to survive the
Participant, then the Beneficiary designation is null and void.
(e) Right to Elect a Different Form of Death Benefit.
If a Qualified Preretirement Survivor Annuity form of death benefit
becomes payable, a surviving Spouse shall have the right to elect a
different form of payment, provided it is available under the Plan
with respect to the portion of the balance of the Participant's
Vested Accounts that are payable to the surviving Spouse, further
provided that such election is in writing and is witnessed by a
Plan representative or a notary public. Payment pursuant to any
such election shall be in lieu of the Preretirement Survivor
Annuity death benefit otherwise payable to the surviving Spouse.
A nonspouse Beneficiary of a married Participant may
also elect a different form of payment that is available under the
Plan in lieu of a lump sum.
(f) Effect of Qualified Domestic Relations Order.
For purposes of this Section a former Spouse will be treated as the
Spouse or surviving Spouse to the extent provided under a Qualified
Domestic Relations Order.
(g) Waiver of Qualified Preretirement Survivor
Annuity. A married Participant may waive the Qualified
Preretirement Survivor Annuity otherwise provided in accordance
with this Section, provided that the Participant's Spouse consents
in writing to the Participant's waiver and election to designate a
nonspouse Beneficiary to receive the unpaid portion of the balance
of the Participant's Vested Accounts otherwise payable to such
Spouse. The following rules shall apply regarding notice to
Participants of the right to such election and the requirement that
the Participant's Spouse consent to any such election:
(1) Notice Requirement. The Employer shall
provide each Participant, within the applicable period for
such Participant a written explanation of the Qualified
Preretirement Survivor Annuity in such terms and in such
manner as would be comparable to the explanation provided
pursuant to Section 10.2 with respect to the standard method
of distribution in the form of a Qualified Joint and Survivor
Annuity.
The applicable period for a Participant is the
later of (A) the period beginning with the first day of the
Plan Year in which the Participant attains age thirty-two
(32) and ending on the close of the Plan Year in which the
Participant attains age thirty-five (35), or (B) a reasonable
period ending after the individual becomes a Participant.
Notwithstanding the foregoing, notice must be provided within
a reasonable period ending after separation from service in
the case of a Participant who separates from service before
attaining age thirty-five (35).
For purposes of applying the event described in
(B) of the preceding paragraph, a reasonable period ending
after the individual becomes a Participant is the end of the
two (2)-year period beginning one (1) year prior to the
Participant's Participation Date, and ending one (1) year
after such Participation Date. In the case of a Participant
who separates from service before the Plan Year in which the
Participant attains age thirty-five (35), notice shall be
provided within the two (2)-year period beginning one (1)
year prior to separation and ending one (1) year after
separation. If such a Participant thereafter returns to
employment with the Employer, the applicable period for such
Participant shall be redetermined.
(2) Spousal Consent and Qualified Election. At
any time prior to the Participant's Annuity Starting Date (as
defined in Section 2.8), a Participant may make a qualified
election in writing, within the election period beginning on
the first day of the Plan Year in which the Participant
attains age thirty-five (35) (or beginning on the date of the
Participant's separation from service if the Participant's
separation occurs prior to such date) and ending on the date
of the Participant's death, to waive the Qualified
Preretirement Survivor Annuity form of death benefit and to
designate a nonspouse Beneficiary to receive the death
benefit otherwise payable to such Spouse. Any such waiver of
a Qualified Preretirement Survivor Annuity form of death
benefit 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. If it
is established to the satisfaction of a Plan representative
that there is no Spouse or that the Spouse cannot be located,
a waiver will be deemed a qualified election.
Any consent by a Spouse obtained under this
provision (or the 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 that the Spouse
voluntarily elects to relinquish such right. 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.
However, once the Spouse has consented to the Participant's
election, such Spouse's consent cannot be revoked unless the
Participant also revokes the Participant's election. No
consent obtained under this provision with regard to waiver
of a Qualified Preretirement Survivor Annuity form of benefit
shall be valid unless the Participant has received notice as
provided in the preceding paragraph (1).
7.4 Death Benefits Attributable to ESOP Accounts
The following provisions describe the death benefits under
this Article, if any, attributable to a deceased Participant's ESOP
Accounts and 401(k) Employer Stock Account:
(a) Unmarried Participants. Upon the death of an
unmarried Participant, the entire amount of the Participant's
Vested Account balance shall be paid as soon as practicable (unless
deferred) in a lump sum to the Participant's Beneficiary. Except
to the extent that a Qualified Domestic Relations Order may be
applicable. The Beneficiary of an unmarried Participant may elect
an installment form of payment described at Section 11.2(c).
(b) Married Participants. Upon the death of a
married Participant, the entire amount of the Participant's Vested
Account balance shall be paid as soon as practicable (unless
deferred) in a lump sum to the Participant's Beneficiary. A
married Participant's surviving Spouse must be the Beneficiary for
one hundred percent (100%) of such death benefit, except to the
extent that the surviving Spouse has consented to the designation
of a nonspouse Beneficiary pursuant to Section 11.3 of the Plan.
For purposes of this subsection (b), a former Spouse will be
treated as a Participant's surviving Spouse to the extent provided
under a Qualified Domestic Relations Order.
(c) Deferral of Receipt of Death Benefit. Any person
entitled to receive a death benefit pursuant to this Section may
defer the receipt of such death benefit, as described in the
provisions of Section 7.3(c). During any period of deferral, the
portion of the deceased Participant's Account(s) payable as a death
benefit to such person shall be entitled to receive allocations of
gain or loss in the same manner as other Accounts.
(d) Effect of Beneficiary's Death. In the event that
a Beneficiary survives the Participant but dies before full payment
of the Participant's Vested Account balance, the remaining balance
of such Account(s) shall be paid as soon as practicable to the
Beneficiary, if any, designated by such deceased Beneficiary, or to
the Beneficiary's estate if the Beneficiary made no such
beneficiary designation. Section 2.10 contains additional rules
regarding Beneficiary designation, including the provision that if
a Beneficiary fails to survive the Participant, then the
Beneficiary designation is null and void.
8. SEVERANCE FROM SERVICE PRIOR TO RETIREMENT, DISABILITY OR DEATH:
VESTING AND FORFEITURES
8.1 Vested Benefit
If as of a Participant's date of termination of Service
with the Employer the Participant is not entitled to a benefit
under ARTICLE 6 (i.e., a Retirement or Disability benefit, or 7
(i.e., a Death benefit), the Participant may be entitled to a
Vested Benefit under this Section. Such Vested Benefit shall be
equal to the Vested and nonforfeitable percentage of the aggregate
of Participant's Employer Accounts determined in accordance with
the Vesting Schedule described in Section 8.2, together with one
hundred percent (100%) of all of the Participant's other Accounts.
Notwithstanding such Vesting Schedule, a Participant's right to all
of the Participant's Accounts, including the Participant's Employer
Accounts described in Section 8.2 hereof shall be nonforfeitable
upon the attainment of the Participant's Normal Retirement Date or
Early Retirement Date. Furthermore, all of a Participant's
Accounts become fully vested and nonterminable in the Plan Year of
Plan termination.
8.2 Vesting Schedule
At the Participant's Normal Retirement Date or Early
Retirement Date, or at the time a Participant terminates Service by
reason of Disability or death, or if the Plan is terminated, the
amount of the Participant's Employer Matching Account, Employer
Profit Sharing Account, Retirement Plan Accounts and ESOP Accounts
shall be fully vested and nonforfeitable. Upon the termination of
a Participant's Service for any other reason, the amount in the
Participant's Employer Matching Contributions Account, Employer
Profit Sharing Account, Retirement Plan Account and ESOP Accounts
shall be vested in the Participant according to the following
schedule:
Years of Vesting Service Percentage of Each
Employer Account Vested
Less than 4 years
0%
4 years
40%
5 years or more
100%
The amount credited to the Participant's other Accounts shall
be fully vested and non-forfeitable at all times.
8.3 Employer Contribution Forfeitures in General
(a) Transfer of Forfeitures to Forfeiture Suspense
Account. Upon the termination of Service with the Employer of a
Participant who is not fully Vested in the value of all the
Participant's Accounts, the value of the Participant's Accounts as
of the Allocation Date immediately preceding such termination which
is in excess of the amount which is Vested and which are therefore
forfeitable in accordance with the provisions of the Vesting
Schedule shall be credited to the Participant's Forfeiture Suspense
Account associated with the type of Employer contribution which is
being forfeited. It is noted that a Participant who has terminated
Service shall be treated as fully Vested in the remaining value of
the Participant's Accounts during the period after the forfeiture
is credited to the Participant's Forfeiture Suspense Account. Gain
or loss shall be allocated to such Forfeiture Suspense Account in
accordance with Section 5.4 hereof.
(b) Forfeiture on Distributions and Rehire in Plan
Year of Distributions. In the event of distribution of the entire
Vested balance of a Participant's Accounts, any amount credited to
the Participant's Forfeiture Suspense Account shall be forfeited as
of the date of such distribution. However, if the Participant is
reemployed by the Employer as an Employee, prior to the end of the
Plan Year in which such distribution occurs, the amount credited to
each Participant's Forfeiture Suspense Account shall be restored to
the Participant's Account with respect to which the forfeiture was
made and accounted for separately thereunder. Thereafter the value
of the Vested interest in these restored Participant's Accounts
shall be determined in accordance with Section 8.2.
(c) Forfeiture on Five Breaks In Service. Any amount
credited to a Participant's Forfeiture Suspense Account that has
not been previously forfeited in accordance with the foregoing
subsection (b) shall be forfeited as of the Allocation Date
coincident with or next following the date when the Participant
incurs five (5) consecutive one (1) year Breaks in Service.
(d) All amounts credited to a Forfeiture Suspense
Account shall continue to be held until a forfeiture occurs
pursuant to the foregoing subsection (b) or subsection (c) and
shall receive allocations of gain or loss pursuant to Section 5.4
hereof.
(e) Neither the Participant whose interest has been
forfeited as provided in the preceding subsection (b) or (c), nor
the Participant's Beneficiary, executor, administrator or other
person claiming on the Participant's behalf shall thereafter be
entitled to any such forfeited interest.
(f) The amounts forfeited under the provisions of
subsection (b) or (c) of this Section shall be applied as soon as
possible to reduce Matching Employer Contributions, or in excess of
the amount needed to meet the targeted match, then allocated as
Employer Profit Sharing Contributions under the Plan, and for all
purposes of the Plan, including allocation, shall be treated as an
Employer contribution for the Plan Year in which they are so
applied; provided, however, that Employer Contribution Forfeitures
may also be used to restore a reemployed Participant's Accounts as
provided in Section 8.4.
8.4 Restoration of Amounts Credited to Employer Contribution
Forfeiture Suspense Accounts and Possible Repayment
Requirement for Participants' With Vested Benefits
(a) Reemployment Before Five Breaks In Service If
Forfeiture Did Not Occur. In the event of a Participant's
reemployment prior to incurring five (5) consecutive one (1) year
Breaks in Service after the Participant's termination of Service,
any amount credited to the Participant's 401(k) Forfeiture Suspense
Account, Retirement Plan Forfeiture Suspense Account and ESOP
Forfeiture Suspense Account that has not yet been forfeited
pursuant to Section 8.3(b) of the Plan shall be restored to the
Participant's Accounts from which the forfeitures occurred as of
the date of the Participant's reemployment.
(b) Reemployment Before Five Breaks In Service If
Forfeitures Did Occur. In the event of a Participant's
reemployment prior to incurring five (5) consecutive one (1) year
Breaks in Service after such termination of employment, any amount
that was credited to a Forfeiture Suspense Account and actually
forfeited as a result of a distribution of the entire Vested
balance of the Participant's Accounts shall be restored to the
Participant's Accounts if and only if the Participant repays to the
Trust a single sum equal to the full amount of such distribution
prior to the earlier of the fifth (5th) anniversary of the
Participant's reemployment or the date that the Participant incurs
five (5) consecutive one (1) year Breaks in Service after the date
of distribution. Thereafter, these restored Participant's Accounts
shall be accounted for separately. Any Employer Contribution
Forfeitures occurring with respect to other Participants in the
Plan Year the Participant makes the required repayment shall first
be used to restore the amount that the Participant forfeited. If
Employer Contribution Forfeitures with respect to other
Participants in the current Plan Year are insufficient to provide
the necessary funds for all required restoration of forfeitures,
then the Employer shall contribute the additional amount to the
Plan that is necessary for such purpose.
(c) Reemployment After Five Breaks In Service. A
Participant who terminated employment with the Employer and is only
reemployed after incurring five (5) consecutive one (1) year Breaks
in Service shall not have any forfeiture restored to the
Participant's Accounts and shall not be permitted to repay any
amounts distributed.
(d) "Pre- and Post-1985 Rule of Parity," as applied
to Vesting Service, means that the rules stated in this paragraph
shall be applied to disregard certain Years of Vesting Service. If
a former Participant had no right to a deferred vested percentage
of all or any portion of the Participant's Accounts subject to the
Vesting Schedule upon termination of employment and the Participant
incurred a Break in Service prior to the Participant's reemployment
and prior to the first day of the Plan Year beginning in 1985, then
the Participant's Years of Vesting Service, which was earned prior
to the Participant's Break in Service shall be disregarded if and
only if the total of the Participant's consecutive Breaks in
Service as of the last day of the Plan Year beginning in 1984
equals or exceeds the Participant's Vesting Service earned prior to
such consecutive Breaks in Service. If a former Participant had no
right to a deferred vested percentage of all or any portion of the
Participant's Accounts subject to the Vesting Schedule upon the
Participant's termination of employment, then the Participant's
Years of Vesting Service, which was earned prior to the
Participant's Break in Service and not disregarded in accordance
with the preceding sentence shall be disregarded if and only if (1)
the total of the Participant's consecutive Breaks in Service prior
to the Participant's reemployment equals or exceeds the
Participant's Years of Vesting Service earned prior to such
consecutive Breaks in Service and (2) the Participant has not
incurred at least five (5) consecutive Breaks in Service
immediately prior to such reemployment. If a former Participant
had a right to a deferred vested percentage of all or any portion
of his accounts subject to the Vesting Schedule as of the date of
the Participant's termination of employment, then upon reemployment
the Participant shall receive credit for the Participant's Years of
Vesting Service earned prior to such Break in Service and not
previously disregarded.
8.5 Forfeiture and Restoration if No Vested Account Balance
(a) In General. This Section 8.5 shall apply in lieu
of Sections 8.3, 8.4 and 8.6 upon the termination of a
Participant's Service who has no Vested balance in any of the
Participant's Employer Accounts pursuant to the Vesting Schedule.
The value of such Accounts of the Participant, including any final
allocation which the Participant would have been entitled to
receive, shall be deemed to have been distributed to the
Participant and shall be forfeited upon the Participant's
termination of employment. The amount forfeited in accordance with
this Section shall be utilized as provided in Section 8.3(f),
unless such Employer Contribution Forfeitures are used to restore a
re-employed Participant's Accounts as provided in the following
subsection (b). Neither the Participant whose interest has been
forfeited as provided in this Section 8.5(a), nor the Participant's
Beneficiary, executor, administrator or other person claiming on
the Participant's behalf shall thereafter be entitled to any such
forfeited interest, except as otherwise provided in the following
subsection (b).
(b) Restoration of Forfeited Accounts. In the event
of a Participant's reemployment with the Employer prior to
incurring five (5) consecutive one (1) year Breaks in Service after
the Participant's termination of employment, any amount forfeited
as of the date of the Participant's reemployment shall be restored
as provided herein. Any Employer Contribution Forfeitures
occurring in the Plan Year the Participant is re-employed shall
first be used to restore the amount that the Participant forfeited.
If Employer Contribution Forfeitures in the current Plan Year are
insufficient to provide the necessary funds for all required
restoration of Employer Contribution Forfeitures, then the Employer
shall contribute the additional amount to the Plan that is
necessary for such purpose. A Participant who terminated
employment with the Employer and is only reemployed after incurring
five (5) consecutive one (1) year Breaks in Service shall not have
any forfeiture restored to the Participant's Accounts.
8.6 Vested Interest in Employer Account after a Distribution
or after Termination of Employment
(a) This Section 8.6 shall be inapplicable to the
extent a Participant terminates Service with a zero percent (0%)
Vested interest in the Participant's Employer Account.
(b) Except as provided in the following subsection
(c), at any time after a distribution has been charged in whole or
in part against a Participant's Employer Accounts as described in
Section 8.2 hereof and before such Participant is fully Vested in
accordance with the provisions of the Vesting Schedule hereof, the
value of a Participant's Vested interest in the Participant's
Employer Accounts as of any Valuation Date for any purpose,
including the determination of the amount which is to be allocated
to an Employer Contribution Forfeiture Suspense Account upon a
subsequent termination of the Participant's employment, shall be
equal to (1) minus (2), but not less than zero (0), where:
(1) equals the Participant's
Vested percentage, determined in
accordance with the Vesting Schedule,
multiplied by the sum of (A) the value
of the Participant's Employer Account as
of the Allocation Date plus (B) the
aggregate amount of all distributions as
of such Allocation Date; and
(2) equals the aggregate amount
of all prior distributions chargeable
against the Participant's Employer
Accounts under Section 8.2 hereof.
(c) A Participant who has terminated Service shall be
treated as fully Vested in the remaining value of the Participant's
Employer Accounts during the period when an amount is credited to a
Forfeiture Suspense Account of the Participant. A Participant who
has forfeited the value of the Participant's Employer Accounts that
was transferred to the Participant's Forfeiture Suspense Accounts
shall at all times thereafter be fully Vested in the value of
nonforfeited amounts in the Participant's Employer Accounts;
provided, however, that if the Participant exercises the
Participant's repayment right, if any, under Section 8.4 hereof,
then the regular Vesting Schedule shall apply thereafter to the
Participant's restored Employer Accounts. Also, if a Participant
who has forfeited the value of the Participant's Employer Accounts
that was transferred to the Forfeiture Suspense Account of the
Participant is reemployed by the Employer and either has not yet
exercised the Participant's repayment rights under Section 8.4(b)
hereof or has no such repayment rights because the Participant was
only reemployed after incurring five (5) consecutive one (1) year
Breaks in Service, then any subsequent Employer contributions to
which the Participant is entitled shall be allocated to a separate
Qualified Nonelective Employer Account, Employer Matching Account
or Employer Profit Sharing Account, as the case may be, until such
time as the Participant is fully Vested in accordance with the
provisions of Section 8.2 hereof. In any event, the Vested value
of a Participant's Employer Accounts shall only be distributed in
accordance with the following ARTICLE 12.
9. SPECIAL PROTECTED BENEFIT DISTRIBUTION RULES RELATING TO THE
401(K) PLAN ACCOUNTS (OTHER THAN THE 401(K) PLAN EMPLOYER STOCK
ACCOUNT)
9.1 Provisions in General
The Provisions of this Article shall apply only to the 401(k)
Plan Accounts (except the 401(k) Employer Stock Account to which
Article 11 is applicable) after January 1, 1998 and shall be
effective as opposed to the other provisions of the Plan applicable
to the Retirement Plan Accounts in ARTICLE 10 and the ESOP Accounts
in ARTICLE 11. However, the distribution provisions herein shall
be subject to the legal restrictions and general distribution rules
set forth in ARTICLE 12 (i.e., Code Section 401(a)(9) rules
applicable to all plans qualified for tax favorable treatment under
Section 401(a) of the Code.
9.2 Method of Distribution and Right of Surviving Spouse to
Death Benefit
(a) Normal Method of Distribution. The normal method
of distribution of the Vested balance of a Participant's 401(k)
Plan Accounts (other than the Participant's 401(k) Employer Stock
Account to which Article 10 is applicable) shall be a lump sum:
provided, however, that a Participant (or the Participant's
Beneficiary in the event of the Participant's death) may elect to
receive payment in installments in accordance with Section 9.2(b)
hereof. Except as otherwise provided herein, the Beneficiary of a
married Participant must be the Participant's Spouse with respect
to any distribution of death benefits that is made on or after
August 23, 1984. Any designation of a nonspouse Beneficiary to
receive a death benefit under this Article by a Participant who has
a surviving Spouse, whether the designation was made before or
after the date of adoption of this amended and restated Plan
effective as of January 1, 1998, shall be ineffective unless the
surviving Spouse consents to the Participant's designation of a
nonspouse Beneficiary as provided in the following Section 9.3 or
files a disclaimer as provided in the following Section 12.5. For
purposes of this Section 9.2 and the following Section 9.3, a
former Spouse will be treated as the Participant's surviving Spouse
to the extent required by a Qualified Domestic Relations Order.
(b) Installment Method of Distributions. The
installment method of distribution specifying the number and
frequency of such installments shall be determined in accordance
with Section 12.7 over a period selected by the Participant (or the
Participant's Beneficiary) and not exceeding the maximum
permissible period determined in accordance with Section 12.1
hereof.
(c) No Annuity Distribution Option. Since no annuity
option is associated with the Plan's 401(k) Plan Accounts (other
than the Participant's 401(k) Employer Stock Account) and since
this Plan provides that a Participant's remaining Vested balance of
the Participant's 401(k) Plan Accounts (other than the
Participant's 401(k) Employer Stock Account) is payable in full to
the Participant's surviving Spouse, if any, this Plan is not
required by the Retirement Equity Act of 1984 to provide payment of
benefits in the form of a Qualified Joint and Survivor Annuity or a
Qualified Preretirement Survivor Annuity with respect to benefits
derived from the 401(k) Plan Accounts (other than the Participant's
401(k) Employer Stock Account).
9.3 Consent by Spouse to Designation of Nonspouse Beneficiary
(a) The Vested balance of a Participant's 401(k)
Accounts (other than the Participant's 401(k) Employer Stock
Account) shall be distributed to a nonspouse Beneficiary of a
married Participant if and only if the Participant's surviving
Spouse has consented in writing to the Participant's election to
designate a nonspouse Beneficiary as provided in this Section 9.3
(or has filed a disclaimer as provided in the following Section
12.5). Such spousal consent shall not be required if the
Participant had earlier established to the satisfaction of the
Employer that the consent could not be obtained because the Spouse
could not be located or because of such other circumstances as the
Secretary of the Treasury may prescribe by regulations.
(b) Any such written consent by a Participant's
surviving Spouse shall acknowledge the effect of the Participant's
designation of a nonspouse Beneficiary, must be limited to a
benefit for a specific alternate Beneficiary, and must be witnessed
by a Plan representative or by a notary public.
9.4 Date of Distribution
(a) Distribution of a Participant's Vested balance of
the Participant's 401(k) Plan Accounts (other than the
Participant's 401(k) Employer Stock Account to which Article 11 is
applicable) shall be made or commenced by the Trustee as soon as
practicable after the Participant has terminated employment with
the Employer and files a written request for such a distribution on
a form provided by the Plan Administrator for such purpose. Such a
written request shall be treated as a claim for benefits and shall
be processed as required by Section 16.2. Such a request shall
specify the form of payment desired by the Participant and the
requested date of distribution, which should allow a reasonable
period of time for processing the request pursuant to Section 16.2.
The Employer and the Trustee shall comply with any reasonable
request to the extent possible. The value of any distribution made
in Employer Stock shall be based on the value of the Stock as of
the last business day of the month immediately prior to the
requested date of distribution. However, the Employer may delay
distribution until valuation information is available as of the
next Allocation Date if that is deemed in the best interests of
other Participants. Additionally, distribution may be delayed a
reasonable period of time if necessary to liquidate sufficient
assets to make such distribution without incurring unreasonable
losses.
Notwithstanding the foregoing, a Participant who has
been reemployed by the Employer (or is employed by any other
employer required to be aggregated with the Employer under Section
414(b), (c), (m) or (o) of the Code) shall not be entitled to
receive a distribution from the Plan as long as the Participant
remains employed by the Employer, except as required by Section
12.1 hereof.
If a Participant is entitled to a final allocation at
termination of employment, distribution of the Vested balance of
the Participant's 401(k) Plan Accounts in the Plan (other than the
Participant's 401(k) Employer Stock Account to which Article 11 is
applicable) shall normally be delayed until the final allocation of
the Plan Year in which termination of Service occurred reflecting
all allocations which respect to the Participant are completed. A
Participant who is entitled to a final allocation at termination of
Service may request an earlier distribution based on the Vested
balance in the Participant's 401(k) Plan Accounts in the Plan
(other than the Participant's 401(k) Employer Stock Account) as of
the Allocation Date immediately preceding the Participant's
termination of Service (to be followed as soon as practicable after
such final allocations have been made with a supplemental
distribution for the Allocation Period in which termination of
employment occurred). The Plan Administrator shall authorize
distribution as soon as practicable after receiving such a request
for an earlier distribution.
(b) A Participant may defer the date of distribution
until a distribution is required in accordance with the minimum
distribution rules of Section 401(a)(9) of the Code, as reflected
in Section 12.4 by requesting such deferral in writing delivered to
the Employer. During such period of deferment such Participant
shall share in allocation of Trust Fund gain or loss as described
in Section 5.4 hereof.
(c) Unless the distribution is deferred by the
Participant, then it must commence within sixty (60) days after the
latest of (1) the Participant's termination of employment, (2) the
Participant's attainment of the earlier of age sixty-five (65) or
the Participant's Normal Retirement Date, or (3) the tenth (10th)
anniversary of the Participant's initial date of Plan
participation.
(d) Pursuant to Section 411(a)(11) of the Code,
written consent by the Participant is required prior to the
commencement of a distribution at any time prior to the date that
the Participant attains the later of age sixty-two (62) or the
Participant's Normal Retirement Date, without regard to whether or
not the value of the Participant's Vested Account balance derived
from the Participant's aggregate Accounts exceeds (or at the time
of any prior distribution exceeded) five thousand dollars ($5,000).
Any such required consent by a Participant shall be
obtained in writing within the ninety (90)-day period ending on the
Annuity Starting Date. The Plan Administrator shall notify the
Participant of the right to defer any distribution until the
Participant attains the later of age sixty-two (62) or the
Participant's Normal Retirement Date (or until such later date as
the Plan may permit deferral). Such notification shall include a
general description of the material features and an explanation of
the relative values of the optional forms of benefit available
under the Plan in a manner that would satisfy the notice
requirements of Section 417(a)(3) of the Code, and shall be
provided no less than thirty (30) days and no more than ninety (90)
days prior to the annuity starting date.
In any event, 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. In addition, upon termination of this Plan if the
Plan does not offer an annuity option (purchased from a commercial
provider), any distribution to a Participant shall not require the
consent of such Participant (or the Participant's Spouse) unless
another qualified defined contribution plan (other than the ESOP)
is ever in the future maintained by the Employer in the future or
an employer required to be aggregated with the Employer under
Section 414(b), (c), (m) or (o) of the Code. If such a qualified
defined contribution plan is ever in the future maintained by the
Employer or an employer required to be aggregated with the Employer
under Section 414(b), (c), (m) or (o) of the Code, then, upon
termination of the Plan, distribution to a Participant, without
regard to whether or not the Participant's total Vested Account
balances exceeds five thousand dollars ($5,000), shall only be made
if such Participant consents in writing to such distribution;
provided however that if the Participant fails to consent in
writing to such distribution within thirty (30) days after an
appropriate notice explaining the availability of such a
distribution is given to the Participant, the Employer may direct,
without the written consent of the Participant (or the
Participant's Spouse), that the Participant's Vested Account
balance be transferred to such other defined contribution plan (or
any of them if there is more than one) maintained by the Employer
or an employer required to be aggregated with the Employer under
Section 414(b), (c), (m) or (o) of the Code.
(e) In the event of a Participant's death before
receipt of the Participant's entire Vested Account balance, any
balance shall be payable to the Participant's Beneficiary in
accordance with the rules governing death benefits set forth in
Section 7.2. The consent provisions of the preceding subsection
(d) do not apply after the death of the Participant.
10. SPECIAL PROTECTED BENEFIT DISTRIBUTION RULES RELATING TO THE
RETIREMENT PLAN ACCOUNTS
10.1 Provisions In General
The provisions of this Article shall apply only to the
Retirement Plan Accounts after January 1, 1998 and shall be
effective in lieu of the other distribution provisions of this Plan
specifically to the 401(k) Plan Accounts in ARTICLE 9 and the ESOP
Accounts in ARTICLE 11. However, the distribution provisions
herein shall be subject to the general distribution rules (i.e.,
the Code Section 401(a)(9) rules applicable to all plans qualified
for tax favorable treatment under Section 401(a) of the Code) set
forth in ARTICLE 12.
10.2 Methods of Distribution upon Termination of Employment
or Retirement
(a) Normal Form of Benefit Payment. Unless an
optional form of benefit is selected pursuant to a qualified
election within the ninety (90)-day period ending on the "Annuity
Starting Date" (as defined in the following subsection (e)) a
married Participant's Retirement Plan Accounts will be paid in the
form of Qualified Joint and Survivor Annuity and an unmarried
Participant's Account will be paid in the form of a Life Annuity.
The Participant may elect such an annuity distribution whenever the
Participant is entitled to elect a date of distribution pursuant to
Section 10.3. However, certain small benefits shall be cashed out
pursuant to Section 12.3.
(b) The Purchase of an Annuity to Pay Benefits. Such
Life Annuity or Qualified Joint and Survivor Annuity shall be
provided by a nontransferable annuity contract purchased by the
Trustee with the lump sum value of the Participant's entire
Retirement Plan Accounts from an insurance company (based on unisex
purchase rates) approved by the Employer. Only the Spouse to whom
the Participant is married at the time that benefits commence shall
be entitled to receive payments under such a survivor annuity,
except to the extent that a Qualified Domestic Relations Order may
have provided that a former Spouse is treated as the Participant's
Spouse for such purpose prior to the time that benefits commence.
The terms of any annuity contract purchased or distributed by the
Plan to a Participant or a Participant's Spouse shall comply with
the requirements of Section 401(a)(9) of the Code and the
regulations thereunder set forth in Section 12.1 hereof.
(c) Spouse Automatically Beneficiary. The
Beneficiary of a married Participant under the Plan must be the
Participant's Spouse, as provided in this Section, unless a
nonspouse Beneficiary is validly designated as provided herein.
Any designation of a nonspouse Beneficiary to receive a death
benefit under this ARTICLE by a Participant who has a surviving
Spouse shall be ineffective unless the surviving Spouse consents in
writing to the Participant's designation of a nonspouse Beneficiary
or files a disclaimer as provided in Section 12.5. Any such
written consent by a Participant's surviving Spouse shall
acknowledge the effect of the Participant's designation of a
nonspouse Beneficiary, must be limited to a benefit for a specific
alternate Beneficiary (unless the Spouse expressly permits a later
change of Beneficiary by the Participant without any further
spousal consent), and must be witnessed by a Plan representative or
notary public. Such spousal consent shall not be required if the
Participant establishes to the satisfaction of the Employer that
the consent cannot be obtained because the Spouse cannot be located
or because of such other circumstances as the Secretary of the
Treasury may prescribe by regulations. For purposes of this
Section 10.2, a former Spouse will be treated as the Participant's
surviving Spouse to the extent required by a Qualified Domestic
Relations Order.
(d) Death Before Commencement of Benefits. If a
married Participant dies before commencement of the Participant's
benefits, distribution of any benefits to which this Section 10.2
applies shall be payable solely according to the provisions of
Sections 7.3, which include provision for a Qualified Preretirement
Survivor Annuity unless waived by the Participant with the
requisite spousal consent. If an unmarried Participant dies before
commencement of the Participant's benefits, distribution of the
Participant's benefits hereunder also shall be subject to the
provisions of Section 7.3 hereof.
(e) Optional Form of Benefit Distribution. Subject
to the provisions of this Section, a Participant (or, in the event
of the Participant's death, a Beneficiary entitled to receive a
distribution under the Plan) may elect, as provided in this
subsection (e), an optional method of distribution of the value of
the Participant's Account(s) from among the following methods:
(1) a lump sum; or
(2) installments determined in accordance with
Section 12.7(c) of the Plan over a period selected by the
Participant (or the Participant's Beneficiary) of an amount
not less than the minimum payment required under Section 12.1
hereof and not exceeding the period permitted under Section
12.7(c) or the maximum permissible period determined in
accordance with Section 12.1 hereof; or
(3) level monthly payments under a
nontransferable annuity contract purchased by the Trustee
with the lump sum value of such vested interest (or the
portion thereof being distributed in this method) from an
insurance company (based on unisex purchase rates) as
directed by the Plan Administrator payable:
(i) for the lifetime of the Participant
(or if the Participant has already died, for the
Beneficiary's lifetime),
(ii) for the Participant's lifetime with a
guaranteed minimum number of payments not exceeding the
Participant's life expectancy at the annuity
commencement date, or
(iii) for the Participant's lifetime with
provisions for continuing level monthly payments of a
specified percentage (not exceeding one hundred percent
(100%)) of the amount of such Participant's monthly
payments for the lifetime of the Participant's
Beneficiary; provided, however, if the Beneficiary is
other than the Participant's Spouse, the present value
of payments expected to be made to the Participant must
exceed fifty percent (50%) of the present value of
total payments expected to be made to the Participant
and the Participant's Beneficiary; or
(4) any combination of the foregoing which in
the aggregate is equivalent to the lump sum value of such
Vested Retirement Plan Accounts.
A Participant (or, in the event of the Participant's
death, a Beneficiary entitled to receive a distribution under the
Plan) may elect, from among the methods specified in this
subsection (e), an optional method of distribution of the
Participant's Vested Retirement Plan Accounts. Such election and
the revocation or change of such election shall be made in writing,
in the form and manner prescribed by the Plan Administrator. The
period for making such election shall begin on a Participant's
Participation Date and end on the date that distribution of
benefits to the Participant commences. Notwithstanding the
foregoing, a Participant may only elect an optional method of
distribution pursuant to the rules and conditions stated in the
following subsection (f).
(f) Spousal Notice Requirement in General. Except
for small benefit cashouts made pursuant to Section 12.4, the
following rules and conditions shall apply regarding notice to
Participants of the right to elect not to receive distribution in
the form otherwise provided pursuant to the preceding subsection
(a) and regarding the requirement that a married Participant's
Spouse consent to any such election:
(1) Timing and Context of Notice. A Participant
shall receive election information from the Employer
regarding a Qualified Joint and Survivor Annuity if the
Participant is married (or a Life Annuity if the Participant
is unmarried) no less than thirty (30) days and no more than
ninety (90) days prior to the Annuity Starting Date. Such
election information shall contain a written explanation of
(i) the terms and conditions of the Qualified Joint and
Survivor Annuity if the Participant is married or the Life
Annuity if the Participant is unmarried, (ii) the
Participant's right to make and the effect of an election to
waive the Qualified Joint and Survivor Annuity if the
Participant is married or the Life Annuity if the Participant
is unmarried, (iii) the rights of a married Participant's
Spouse to consent in writing to such election or to withhold
such consent, and (iv) the Participant's right to revoke an
election and the effect of such revocation.
(2) Spousal Consent and Qualified Election. A
Participant may elect in writing, within the election period
beginning ninety (90) days prior to the Participant's Annuity
Starting Date not to have the Participant's benefits from
Vested Retirement Plan Accounts paid in the form of a
Qualified Joint and Survivor Annuity if the Participant is
married or in the form of a Life Annuity if the Participant
is unmarried. Any such waiver of a Qualified Joint and
Survivor Annuity form of benefit by a married Participant
with respect to Vested Retirement Plan Accounts shall not be
effective unless: (A) the married 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 a 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 the
Employer that there is no Spouse or that the Spouse cannot be
located, a waiver will be deemed a qualified election. It is
noted that spousal consent is not required pursuant to
Section 12.4 if the vested value of the Participant's
Accounts in the aggregate are less than five thousand dollars
($5,000).
Any consent by a Spouse obtained under this provision
(or the 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. However, once a Spouse has consented to a
Participant's election, such Spouse's consent cannot be
revoked unless the Participant also revokes the Participant's
election. No consent obtained under this provision with
regard to waiver of a Qualified Joint and Survivor Annuity
form of benefit shall be valid unless the Participant has
received notice as provided in the preceding paragraph (1).
If a Participant is divorced prior to the Annuity Starting
Date, any election made hereunder while the Participant was
married shall remain in force unless the Participant changes
such election, the Participant is remarried, or a Qualified
Domestic Relations Order provides to the contrary.
(3) Notwithstanding the foregoing provisions of
this subsection (f) and in addition to the exception for
certain small benefit cashouts made pursuant to Section 12.4,
certain exceptions to these consent rules are specified in
Section 10.3(d) hereof.
(g) For purposes of this Section, if a Participant
dies after the Annuity Starting Date, the Spouse to whom the
Participant was married on the Annuity Starting Date shall be the
Spouse who is entitled to any survivor annuity hereunder, even if
the Participant is not married to such Spouse on the date of the
Participant's death, unless otherwise provided in a Qualified
Domestic Relations Order. A former Spouse will be treated as the
Spouse to whom the Participant is married on the Annuity Starting
Date to the extent provided under a Qualified Domestic Relations
Order.
(h) Notwithstanding the foregoing, with respect to
benefits from the Retirement Plan which commenced prior to August
23, 1984, only the forms of distribution available under the
provisions of the Retirement Plan which were in effect as of the
date of distribution, disregarding this Plan as amended and
completely restated effective as of January 1, 1989, are required
to have been made available, and the consent of a surviving Spouse
shall not be required with respect to any such benefit which
actually commenced prior to August 23, 1984.
10.3 Date of Distribution
(a) General Rule. A Participant who terminates
employment with the Employer shall be entitled to request
distribution of the Participant's Vested interest in the Plan at
any time after the Participant's termination of employment. Actual
distribution to a Participant who is entitled to request a
distribution in accordance with this subsection shall be made or
commenced as soon as practicable after such a Participant has filed
a written application requesting a distribution, and the
distribution shall be made or commenced in accordance with the date
of distribution requested to the extent practicable. No
distribution shall be made to a Participant during the
Participant's continued employment with the Employer. In addition,
a Participant who has been reemployed shall not be entitled to
receive a distribution from the Plan as long as the Participant
remains employed by the Employer, except as required by Section
12.1. Also, it should be noted that certain small benefits will
automatically be cashed out in accordance with the provisions of
Section 12.4 without any request by the Participant.
The Employer and the Trustee shall comply with any
reasonable request to the extent possible, but they may delay the
distribution until valuation information is available as of the
next Valuation Date if that is deemed in the best interests of
other Participants. Furthermore, distribution may be delayed a
reasonable period of time if necessary to liquidate sufficient
assets to make such distribution without incurring unreasonable
losses.
(b) Right to Defer Distribution. Prior to the
receipt of the value of the Participant's Account(s), a Participant
who terminates employment prior to age seventy and one-half
(70-1/2) may elect, by written election on a form approved by the
Administrator, to defer receipt of the value of the Participant's
Account(s) for any period of time, provided that distribution must
be made in compliance with the provisions of Section 12.1 hereof.
(c) ERISA Distribution Rules. In order to comply
with ERISA, if a Participant has neither requested distribution nor
elected to defer, then distribution must be made or commenced not
later than sixty (60) days after the end of the Plan Year in which
occurs the latest of (1) the Participant's termination of Service,
(2) the Participant's Normal Retirement Date, or (3) the tenth
(10th) anniversary of the Participant's initial participation date.
(d) Requirement for Consent by Participant (and
Spouse). Pursuant to Section 411(a)(11) of the Code, written
consent by the Participant is required prior to the commencement of
a distribution at any time prior to the Participant's Normal
Retirement Date if the value of the Participant's Vested Account
balances in the aggregate exceeds (or at the time of any prior
distribution exceeded) five thousand dollars ($5,000).
Any such required consent by a Participant shall be
obtained in writing within the ninety (90)-day period ending on the
annuity starting date. The Administrator shall notify the
Participant of the right to defer any distribution until the
Participant's Normal Retirement Date (or until such later date as
permitted under Section 12.1 hereof). Such notification shall
include a general description of the material features and an
explanation of the relative values of the optional forms of benefit
available under the Plan in a manner that would satisfy the notice
requirements of Section 417(a)(3) of the Code, and shall be
provided no less than thirty (30) days and no more than ninety (90)
days prior to the Annuity Starting Date.
The Participant and the Participant's Spouse (or where
either the Participant or the Spouse has died, the survivor) must
consent to any distribution of the Vested Account balance which is
payable in any form other than a Qualified Joint and Survivor. The
rules governing such consent as contained in Section 10.2, which
reflect the requirements of Section 417 of the Code, must be
complied with to the extent they are applicable. However, such
rules are not applicable to small benefit cashouts made pursuant to
Section 12.4.
In any event, 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. If a qualified defined contribution plan (other
than the ESOP) is ever in the future maintained by the Employer or
an employer required to be aggregated with the Employer under
Section 414(b), (c), (m) or (o) of the Code, upon termination of
the Plan distribution to a Participant, without regard to whether
or not the Participant's total Vested Account balances exceeds five
thousand dollars ($5,000), shall only be made if such Participant
consents in writing to such distribution. However, if the
Participant fails to consent in writing to such distribution within
thirty (30) days after an appropriate notice explaining the
availability of such a distribution is given to the Participant,
the Employer may direct, without the written consent of the
Participant (or the Participant's Spouse), that the Participant's
Vested Account balances be transferred to such other defined
contribution plan (or any of them if there is more than one) ever
in the future maintained by the Employer or an employer required to
be aggregated with the Employer under Section 414(b), (c), (m) or
(o) of the Code.
(e) Participant's Death Before Receiving Full
Distribution. In the event of a Participant's death after
commencement of benefit distribution, but prior to receiving full
payment of the Participant's entire Vested Account balances,
distribution of the unpaid balance of such Vested interest shall be
made to the Participant's Beneficiary in accordance with the
benefit payment option applicable to the distribution. The consent
provisions of subsection (d) do not apply after the death of the
Participant.
11. SPECIAL PROTECTED BENEFIT DISTRIBUTION RULES RELATING TO ESOP
ACCOUNTS AND THE 401(K) PLAN EMPLOYER STOCK ACCOUNT
11.1 Provisions in General
The Provisions of this Article shall apply only to the ESOP
Accounts and the 401(k) Employer Stock Account after January 1,
1998 and shall be effective in lieu of the other provisions of the
Plan specifically relating to the 401(k) Plan Accounts (other than
the 401(k) Employer Stock Account) in ARTICLE 9 and the Retirement
Plan Accounts in ARTICLE 10. However, the distribution provisions
herein shall be subject to the legal restrictions (i.e., Code
Section 401(a)(9) rules applicable to all plans qualified for tax
favorable treatment under Section 401(a) of the Code) and general
distribution rules set forth in ARTICLE 12.
11.2 Method of Distribution and Right of Surviving Spouse to
Death Benefit
(a) The normal method of distribution of the Vested
balance of a Participant's ESOP Accounts shall be a lump sum:
provided, however, that a Participant (or the Participant's
Beneficiary in the event of the Participant's death) may elect to
receive payment in installments in accordance with Section 11.2(b)
hereof. Except as otherwise provided herein, the Beneficiary of a
married Participant must be the Participant's Spouse with respect
to any distribution of death benefits that is made on or after
August 23, 1984. Any designation of a nonspouse Beneficiary to
receive a death benefit under this Article by a Participant who has
a surviving Spouse, whether the designation was made before or
after the date of adoption of this amended and restated Plan
effective as of January 1, 1998, shall be ineffective unless the
surviving Spouse consents to the Participant's designation of a
nonspouse Beneficiary as provided in the following Section 11.3 or
files a disclaimer as provided in the following Section 12.5. For
purposes of this Section and the following Section 11.3, a former
Spouse will be treated as the Participant's surviving Spouse to the
extent required by a Qualified Domestic Relations Order.
(b) The election of an installment method of
distribution specifying the number and frequency of such
installments shall be determined in accordance with Section 12.7
over a period selected by the Participant (or the Participant's
Beneficiary) and not exceeding the maximum permissible period
determined in accordance with Section 12.1 of the Plan.
(c) Since no annuity option is associated with the
Plan's ESOP Accounts and since this Plan provides that a
Participant's remaining Vested balance of the Participant's ESOP
Accounts is payable in full to the Participant's surviving Spouse,
if any, this Plan is not required by the Retirement Equity Act of
1984 to provide payment of benefits in the form of a Qualified
Joint and Survivor Annuity or a Qualified Preretirement Survivor
Annuity with respect to benefits derived from the ESOP Accounts.
11.3 Consent by Spouse to Designation of Nonspouse
Beneficiary
(a) The vested balance of a Participant's Account(s)
shall be distributed to a nonspouse Beneficiary of a married
Participant if and only if the Participant's surviving Spouse has
consented in writing to the Participant's election to designate a
nonspouse Beneficiary as provided in this Section (or has filed a
disclaimer as provided in the following Section 12.5). Such
spousal consent shall not be required if the Participant had
earlier established to the satisfaction of the Employer that the
consent could not be obtained because the Spouse could not be
located or because of such other circumstances as the Secretary of
the Treasury may prescribe by regulations.
(b) Any such written consent by a Participant's
surviving Spouse shall acknowledge the effect of the Participant's
designation of a nonspouse Beneficiary, must be limited to a
benefit for a specific alternate Beneficiary, and must be witnessed
by a Plan representative or by a notary public.
11.4 Date of Distribution
(a) Distribution of a Participant's Vested balance of
the Participant's ESOP Accounts shall be made or commenced by the
Trustee as soon as practicable after the Participant has terminated
employment with the Employer and files a written request for such a
distribution on a form provided by the Plan Administrator for such
purpose. Such a written request shall be treated as a claim for
benefits and shall be processed as required by Section 16.2. Such
a request shall specify the form of payment desired by the
Participant and the requested date of distribution, which should
allow a reasonable period of time for processing the request
pursuant to Section 16.2. The Employer and the Trustee shall
comply with any reasonable request to the extent possible. The
value of any distribution made in Employer Stock shall be based on
the value of the Stock as of the last business day of the month
immediately prior to the requested date of distribution. However,
the Employer may delay distribution until valuation information is
available as of the next Valuation Date if that is deemed in the
best interests of other Participants. Additionally, distribution
may be delayed a reasonable period of time if necessary to
liquidate sufficient assets to make such distribution without
incurring unreasonable losses.
Notwithstanding the foregoing, a Participant who has
been reemployed by the Employer (or is employed by any other
employer required to be aggregated with the Employer under Section
414(b), (c), (m) or (o) of the Code) shall not be entitled to
receive a distribution from the Plan as long as the Participant
remains employed by the Employer, except as required by Section
12.1 hereof.
If a Participant is entitled to a final allocation at
termination of employment, distribution of the Vested balances of
the Participant's ESOP Accounts in the Plan shall normally be
delayed until the final allocation of the Plan Year in which
termination of employment occurred reflecting all allocations which
respect to the Participant are completed. A Participant who is
entitled to a final allocation at termination of employment may
request an earlier distribution based on the Vested balance in the
Participant's ESOP Accounts in the Plan as of the Allocation Date
immediately preceding the Participant's termination of employment
(to be followed as soon as practicable after such final allocations
have been made with a supplemental distribution for the Allocation
Period in which termination of employment occurred). The Plan
Administrator shall authorize distribution as soon as practicable
after receiving such a request for an earlier distribution.
(b) A Participant may defer the date of distribution
until a distribution is required in accordance with the minimum
distribution rules of Section 401(a)(9) of the Code, as reflected
in Section 12.1 by requesting such deferral in writing delivered to
the Employer. During such period of deferment such Participant
shall share in allocation of Trust gain or loss.
(c) Unless the distribution is deferred by the
Participant, then it must commence within sixty (60) days after the
latest of (1) the Participant's termination of employment, (2) the
Participant's attainment of the earlier of age sixty-five (65) or
the Participant's Normal Retirement Date, or (3) the tenth (10th)
anniversary of the Participant's Participation Date. It is noted
that subsection (f) of this section may require an earlier
distribution date.
(d) Pursuant to Section 411(a)(11) of the Code,
written consent by the Participant is required prior to the
commencement of a distribution at any time prior to the date that
the Participant attains the later of age sixty-two (62) or Normal
Retirement Age, without regard to whether or not the value of the
Participant's Vested Account balance derived from Employer and
Employee contributions exceeds (or at the time of any prior
distribution exceeded) five thousand dollars ($5,000).
Any such required consent by a Participant shall be
obtained in writing within the ninety (90)-day period ending on the
annuity starting date. The "annuity-starting date" is the first
day Of the first period for which an amount is paid as an annuity
or any other form. The Plan Administrator shall notify the
Participant of the right to defer any distribution until the
Participant attains the later of age sixty-two (62) or Normal
Retirement Age (or until such later date as the Plan may permit
deferral). Such notification shall include a general description
of the material features and an explanation of the relative values
of the optional forms of benefit available under the Plan in a
manner that would satisfy the notice requirements of Section
417(a)(3) of the Code, and shall be provided no less than thirty
(30) days and no more than ninety (90) days prior to the annuity
starting date.
In any event, 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. In addition, upon termination of this Plan if the
Plan does not offer an annuity option (purchased from a commercial
provider), any distribution to a Participant shall not require the
consent of such Participant (or the Participant's Spouse) unless
another qualified defined contribution plan (other than an employee
stock ownership plan as defined in Section 4975(e)(7) of the Code)
is ever in the future maintained by the Employer or an employer
required to be aggregated with the Employer under Section 414(b),
(c), (m) or (o) of the Code. If such a qualified defined con-
tribution plan is maintained by the Employer or an employer
required to be aggregated with the Employer under Section 414(b),
(c), (m) or (o) of the Code, then, upon termination of the Plan,
distribution to a Participant, without regard to whether or not the
Participant's total Vested Account balance exceeds five thousand
dollars ($5,000), shall only be made if such Participant consents
in writing to such distribution; provided however that if the
Participant fails to consent in writing to such distribution within
thirty (30) days after an appropriate notice explaining the
availability of such a distribution is given to the Participant,
the Employer may direct, without the written consent of the
Participant (or the Participant's Spouse), that the Participant's
Vested Account balance be transferred to such other defined contri-
bution plan (or any of them if there is more than one) maintained
by the Employer or an employer required to be aggregated with the
Employer under Section 414(b), (c), (m) or (o) of the Code.
(e) In the event of a Participant's death before
receipt of the Participant's entire Vested Account balance, any
balance shall be payable to the Participant's Beneficiary in
accordance with the rules governing death benefits set forth in
Section 7.4. The consent provisions of the preceding subsection
(d) do not apply after the death of the Participant.
(f) In order to comply with Section 409(o) of the
Code, a Participant may elect to have any Employer Stock that is
subject to this subsection (f), and that has been allocated to the
Participant's ESOP Stock Account, distributed in accordance with
the following rules:
(1) If the Participant separates from Service by
reason of the reaching the Normal Retirement Date under the
Plan, death, or Disability, distribution of the Participant's
ESOP Stock Account will begin not later than one year after
the close of the Plan Year in which such event occurs unless
the Participant otherwise elects under the provisions of the
Plan other than this subsection (f).
(2) If the Participant separates from Service for any
reason other than those enumerated in subparagraph (1) above,
and is not reemployed by the Employer before the end of the
fifth (5th) Plan Year following the Plan Year of such
separation from Service, distribution of the Participant's
Stock Account will begin not later than one year after the
close of the fifth (5th) Plan Year following the Plan Year in
which the Participant separated from Service unless the
Participant otherwise elects under the provisions of this
Plan other than this subsection (f).
(3) If the Participant separates from Service for a
reason other than those described in subparagraph (1) of this
subsection, and is reemployed by the Employer before
distribution is required to commence pursuant to this
subsection, any distribution to the Participant, prior to any
subsequent separation from Service, shall only be made in
accordance with the terms of the Plan other than this
subsection.
(4) Distribution pursuant to this subsection shall be
subject to such provisions as require the consent of the
Participant and the Participant's Spouse to a distribution
with a vested value in excess of five thousand dollars
($5,000) and such provisions as may require an earlier dis-
tribution.
(g) Distributions required under the preceding
subsection (f) shall be made in substantially equal annual payments
over a period of five (5) years unless the Participant otherwise
elects under applicable provisions of this Plan. In no event shall
such distribution period exceed the period permitted under Section
401(a)(9) of the Code, as reflected in Section 12.1 of this Plan.
11.5 Value of Vested Interest and Distribution in Cash or
Property
(a) Determination of the value of a Participant's
Vested Account balance for purposes of distribution shall be based
on the most recent valuation information available, subject to such
adjustments as are made in accordance with rules adopted by the
Employer for this purpose and taking into account the provisions of
this Section 11.5 regarding the determination of the value of the
Employer Stock. Less than the entire value of a Participant's Ac-
count Balance as so determined may be distributed initially if it
seems likely that the Trust Fund has incurred a loss that has not
yet been reflected in the value of such Vested Account balance. In
this event, a supplemental distribution shall be made as soon as
possible following the next allocation. The Plan Administrator
shall treat all Participants in a reasonable and nondiscriminatory
manner under this subsection (a).
(b) Any full shares of Employer Stock allocated to a
Participant's Stock Account or PAYSOP Account shall be distributed
in kind; provided, however, that a Participant may request that
distribution of all or any part of such Employer Stock be made in
cash based on the Fair Market Value of such Employer Stock as of
the last business day of the month immediately preceding the date
of distribution. The Plan Administrator shall comply with such a
request to receive a distribution in cash if a put option would
have been available to the Participant pursuant to Section 11.7 if
the Participant had chosen to receive the Participant's
distribution in Employer Stock. Any fractional share shall be
converted to cash based on the value of Employer Stock as of the
last business day of the month immediately preceding the date of
distribution.
(c) Each Participant shall have the right to request
that any distribution to which the Participant may be entitled
under the Plan be made entirely in Employer Stock, provided that
cash shall be distributed in lieu of any fractional share.
However, this right shall not apply to the portion of a
Participant's Account which the Participant has elected to reinvest
in accordance with Section 11.7(c)(2). The Plan Administrator and
the Trustee shall ensure that any such request is complied with
insofar as possible by purchasing additional Employer Stock, if
available, or reallocating shares of Employer Stock in other ESOP
Stock Accounts to the extent necessary; any shares purchased in
accordance with this subsection shall be charged against the
Participant's Investment Account based on the purchase price
(including any transaction costs) and any shares reallocated from
other Stock Accounts shall be charged against the Participant's
Investment Account based on the Fair Market Value of such shares as
determined by the Trustee as of the last business day of the month
immediately preceding the date of distribution.
11.6 Put Option
(a) Except as otherwise provided in the following
subsection (b), a Participant, or the Participant's Beneficiary,
who receives shares of Employer Stock distributed from the ESOP
Stock Accounts or 401(k) Employer Stock Account pursuant to this
ARTICLE 11, shall have the right to require the Employer to
purchase back such shares at any time during the following put
option periods. The first put option period shall be for at least
sixty (60) days, beginning on the date of the distribution of the
Employer Stock. The second put option period shall be for at least
sixty (60) days beginning after the determination of Fair Market
Value of the Employer Stock in the following Plan Year has been
made (and after the delivery of notice thereof to the Participant
or Beneficiary). In computing such periods, there shall be
excluded any period of time during which the put option is not
exercisable because the Employer is prohibited from honoring it by
applicable federal or state law.
To exercise such right, written notice of intent to exercise
this put option must be delivered to the Plan Administrator before
the expiration of such option period. If both the Trustee and
Employer agree, the Trustee may be the one to purchase back such
Employer Stock. The purchase price shall be the Fair Market Value
of the Employer Stock as of the last Allocation Date of the Plan
Year immediately preceding the date that the written notice of
intent to exercise the put option is delivered to the Plan
Administrator, except that if the put option is exercised by a
"disqualified person" (as defined in the following subsection (c)),
such value shall be determined as of the date that the written
notice is delivered to the Plan Administrator by causing a special
valuation of Employer Stock to be made.
The Employer or the Trustee, as the case may be, shall pay
the purchase price, as follows:
(1) If the distribution constitutes a Total
Distribution (as hereinafter defined), payment of the Fair
Market Value of a Participant's Vested balance in the
Participant's ESOP Accounts and 401(k) Employer Account and
the 401(k) Employer Stock Account shall be made in
substantially equal payments, not less frequently than
annually, over a period not exceeding five (5) years. The
first installment shall be paid not later than thirty (30)
days after the Participant exercises the put option. The
Plan will pay a reasonable rate of interest and provide
adequate security on amounts not paid after thirty (30) days.
(2) If the distribution does not constitute a
Total Distribution (as hereinafter defined), the Plan shall
pay the Participant an amount equal to the Fair Market Value
of the Employer Stock repurchased no later than thirty (30)
days after the Participant exercises the put option.
For purposes of this Section, "Total Distribution" shall mean a
distribution to a Participant or a Participant's beneficiary,
within one taxable year of such recipient, of the entire balance to
the credit of the Participant.
(b) The provisions of the foregoing subsection (a)
shall not be applicable, and no put option shall exist with regard
to shares of Employer Stock distributed from a Participant's ESOP
Accounts and 401(k) Employer Stock Account under this Plan, if such
Employer Stock was publicly traded and not subject to a trading
limitation when it was distributed. For purposes of this
subsection (b), Employer Stock is deemed to be "publicly traded" as
of a particular date if (as of such date) it is listed on a
national securities exchange registered under Section 6 of the
Securities Exchange Act of 1934 or is quoted on a system sponsored
by a national securities association registered under Section
15A(b) of the Securities Exchange Act. For purposes of this
subsection (b), a "trading limitation" on a security is a
restriction under any federal or state securities law, any
regulation thereunder, or an agreement, not prohibited by
applicable regulations, affecting the security which would make the
security not as freely tradable as one not subject to such
restriction.
In the case of a security which is publicly traded without
restriction when distributed but ceases to be so traded before the
end of either put option period described in subsection (a) above,
then the Employer Stock from a Participant's ESOP Accounts and
401(k) Employer Stock Account so distributed shall be subject to a
put option for the remainder of the option period. The Employer
must notify the Stock holder in writing as soon as practicable (and
in no event later than the tenth (10th) day after the Stock ceases
to be publicly traded without restriction of the distributee's
rights regarding the put option. If notice is given after the
tenth (10th) day following the date the Stock ceases to be publicly
traded, then the number of days between such tenth (10th) day and
the date on which notice is actually given must be added to the
duration of the put option period.
(c) For purposes of this Section, the term
"disqualified person" means a person who is a fiduciary, a person
providing services to the Plan, an employer any of whose employees
are covered by the Plan, an employee organization any of whose
members are covered by the Plan, an owner, direct or indirect, of
fifty percent (50%) or more of the total combined voting power of
all classes of voting stock or of the total value of all classes of
the stock, or an officer, director, ten percent (10%) or more
shareholder, a highly compensated Employee, or any other person
that would be a disqualified person within the meaning of Section
4975(e)(2) of the Code.
11.7 Diversification of Investments
(a) The following definitions shall be applicable for
purposes of this Section 11.7:
(1) "Qualified Participant" shall mean a
Participant who has attained age fifty-five (55) and
who has completed at least ten (10) years of
participation in the Plan.
(2) "Qualified Election Period" shall
mean the six (6) Plan Year period beginning with the
later of (i) the first Plan Year in which the
individual first became a Qualified Participant, or
(ii) the first Plan Year beginning after December 31,
1986.
(b) Each Qualified Participant shall be permitted to
direct the investment of that portion of the Participant's ESOP
Stock Account and PAYSOP Account which is equal to twenty-five
percent (25%) of the total number of shares of Employer Stock
acquired by the Plan after December 31, 1986, and allocated to such
Accounts on or before the most recent Allocation Date ending the
Plan Year, reduced by the number of shares of Employer Stock
previously distributed, transferred or diversified pursuant to a
prior diversification election made by such Participant after
December 31, 1986.
Such direction shall be made within ninety (90) days
after the last day of each Plan Year during the Participant's
Qualified Election Period. Within ninety (90) days after the close
of the last Plan Year in the Participant's Qualified Election
Period, `fifty percent (50%)' shall apply in lieu of `twenty-five
percent (25%)' in determining the number of shares that are subject
to a diversification election under the foregoing provisions of
this subsection (b). The Participant's direction shall be provided
to the Plan Administrator in writing and shall be implemented as
provided in the following subsection (c). The Participant's
direction shall further specify which, if any, of the options set
forth in the following subsection (c) the Participant selects.
(c) The following options shall be available to a
Participant who is entitled to make an election in accordance with
this Section 11.7:
(1) At the election of the Qualified
Participant, the Plan shall distribute (notwithstanding
Section 409(d) of the Code) the portion of the
Participant's Accounts that is covered by the election
within ninety (90) days after the last day of the
ninety (90) day period during which the election can be
made. Such distribution shall be subject to such
requirements of this Article of the Plan concerning put
options as would otherwise apply to a distribution of
Employer Stock from the ESOP Accounts under the Plan.
This Section 11.7 shall apply notwithstanding any other
provision of the Plan other than such provisions as
require the consent of the Participant and the
Participant's Spouse to a distribution with a present
value in excess of five thousand dollars ($5,000). If
the Participant and the Participant's Spouse do not
consent, such amount shall be retained in this Plan.
The Plan as amended and restated effective as of
January 1, 1998 offers investment options which meet
the requirements of Section 401(a)(28) of the Code
(instead of distribution) to any Qualified Participant
who is entitled to make an election regarding
diversification.
(2) In lieu of distribution under the preceding
paragraph (i), the Qualified Participant who has the
right to receive a cash distribution thereunder may
direct the Plan to transfer the portion of the
Participant's ESOP Stock Account and PAYSOP Account
that is covered by the election to another qualified
plan of the Employer which accepts such transfers
(should such a plan ever be adopted), provided that
such plan permits employee-directed investment with at
least three (3) investment choices which meet the
requirements of Section 401(a)(28) of the Code and does
not invest in Employer Stock to a substantial degree.
Such transfer shall be made no later than ninety (90)
days after the last day of the ninety (903 day period
during which the election can be made.
(d) If the Fair Market Value (determined as of the
Allocation Date immediately preceding the first day on which a
Qualified Participant is eligible to make a diversification
election) of the Employer Stock allocated to a Qualified
Participant's ESOP Account or PAYSOP Account (in the aggregate) is
five hundred dollars ($500) or less, then such Employer Stock will
be considered to constitute a de minimis amount of Employer Stock
that is not subject to the diversification of investments
requirement of this Section.
For purposes of determining whether the amount of
Employer Stock allocated to a Qualified Participant's ESOP Stock
Account or PAYSOP Account (in the aggregate) exceeds the de minimis
amount, Employer Stock held under all ESOPs or tax credit ESOPs
maintained by the Employer and members of a controlled group of
corporations which includes the Employer shall be considered as
held by the same plan.
Notwithstanding any provisions of the Plan to the
contrary, if the Sponsoring Employer so directs, the election
provided in this Section 11.7 may be applied to all Employer Stock
without regard to the date such Stock was acquired provided that
all Participants are treated in a reasonable nondiscriminatory
manner.
12. LEGAL RESTRICTIONS AND GENERAL REQUIREMENTS ON THE PAYMENT OF
BENEFITS
12.1 Tax Reform Act Distribution Restrictions
Notwithstanding any provisions of the Plan to the contrary,
the provisions in this Section 12.1 shall govern all distributions,
in order to comply with the Tax Reform Act of 1986 and Section
401(a)(9) of the Code and the regulations thereunder. The
applicable rules are as follows:
(a) The rules applicable to a living Participant are
as follows:
(1) Distribution to a living Participant must
be commenced not later than the required beginning date. For
purposes of this Section 12.1, "required beginning date"
shall mean April 1 of the calendar year following the
calendar year in which the Participant attains age seventy
and one-half (70-1/2). In no event shall any distribution be
required hereunder prior to the earliest date required under
applicable regulations issued under the Code.
(2) In the case of a distribution that
commences during a Participant's lifetime, the form of
payment must be in accordance with regulations issued under
the Code either (i) over the life of the Participant or over
the lives of the Participant and the Participant's
Beneficiary or (ii) over a period not extending beyond the
life expectancy of the Participant or the life expectancy of
the Participant and the Participant's Beneficiary.
(3) The amount to be distributed each year must
be at least an amount equal to the quotient obtained by
dividing the Participant's entire interest by the lesser of
(A) the life expectancy of the Participant or joint and
survivor life expectancy of the Participant and the
Participant's designated Beneficiary computed by the use of
the return multiples contained in Tables V and VI of Section
1.72-9 of the Income Tax Regulations or (B) if the
Participant's Spouse is not the designated Beneficiary, the
applicable divisor determined from the table set forth in
Q&A-4 of Section 1.401(a)(9)-2 of the Income Tax Regulations.
For purposes of this computation, neither a Participant's
life expectancy nor the joint life expectancy of the
Participant and the Participant's Beneficiary shall be
recalculated, and after the year in which the initial
determination is made, life expectancy shall be determined by
subtracting one (1) from the life expectancy as determined
for the prior year. However, any applicable rules in the
regulations regarding change of beneficiary or multiple
beneficiaries shall be taken into account.
(4) If a minimum distribution is required
pursuant to this Section 12.1 while the Participant is
still employed by the Employer, the Participant may
elect any of the forms of distribution otherwise
available to terminated Participants provided that at
least the minimum amounts required to be distributed
pursuant to this Section 12.1 are distributed. Payment
under this subsection (a)(4) may occur at any time on
or after the first day of the calendar year in which
the Participant attains age seventy and one-half
(70-1/2).
(b) The rules applicable to a distribution to a
Participant's Beneficiary are as follows:
(1) In the event that distribution of a
Participant's benefits under the Plan had begun but had
not been completed prior to the Participant's date of
death, then the remaining portion of such benefits
shall be distributed at least as rapidly as under the
method of distribution being used as of the date of the
Participant's death.
(2) In the event that distribution of a
Participant's benefits under the Plan had not begun prior to
the Participant's date of death, then any remaining benefits
shall be paid in full not later than December 31 of the
calendar year containing the fifth (5th) anniversary of the
death of the Participant; provided, however, that payments
may extend beyond such December 31 if such payments are made
over the life of the Participant's Beneficiary (or over a
period not extending beyond the life expectancy of such
Beneficiary) and such payments to the Participant's
Beneficiary begin not later than December 31 of the calendar
year of the Participant's death. If the Participant's
Beneficiary is the Participant's surviving Spouse, payments
need not begin to such Spouse until December 31 of the
calendar year in which the Participant would have attained
age seventy and one-half (70-1/2). If the surviving Spouse
dies before the distribution to such Spouse commences, then
the distribution rules contained in this Section 12.1(b)
shall be applied as if such Spouse were the Participant.
(3) For purposes of this Section 12.1(b), life
expectancy shall be computed by the use of the return
multiples contained in Tables V and VI of Section 1.72-9 of
the Income Tax Regulations as the relevant divisor without
regard to Section 1.401(a)(9)-2 of the Income Tax
Regulations. In the case of any designated Beneficiary,
including a surviving Spouse, life expectancy shall be
calculated at the time payment first commences without
recalculations thereafter. Life expectancy for subsequent
years shall be determined by subtracting one (1) from the
life expectancy for the prior year.
(4) For purposes of this Section 12.1(b), in
the event death benefits are to be paid to a Beneficiary who
is a child until the child reaches the age of majority and
then any remaining death benefits are to be paid to the
Participant's surviving Spouse, the amount of payments to the
child shall be treated as if the payments were being made to
the surviving Spouse.
12.2 Value of Vested Interest and Distribution in Cash or
Property
Determination of the value of a Participant's Vested Account
balance for purposes of distribution shall be based on the most
recent allocation available, subject to such adjustments as are
made in accordance with rules adopted by the Employer for this
purpose and taking into account the provisions of Section 17.5
regarding the determination of the "unitized" value of the Employer
Stock. Less than the entire value of a Participant's Account
balances as so determined may be distributed initially if it seems
possible to the Administrator, in its sole discretion, that the
Trust Fund has incurred a loss that has not yet been reflected in
the allocation of such Vested Account balance. In this event, a
supplemental distribution shall be made as soon as possible
following the next allocation. The Plan Administrator shall treat
all Participants in a reasonable and nondiscriminatory manner under
this section.
12.3 Forms and Proofs
Each Participant or Beneficiary eligible to receive any
benefit hereunder shall complete such forms and furnish such
proofs, receipts and releases as shall be required by the Trustee
or the Employer.
12.4 Distribution of Small Account(s) and Forfeiture of
Nonvested Amounts
(a) If a Participant terminates employment with the
Employer (or the Plan terminates), and the value of the Vested
balance of all of the Participant's Accounts is not greater than
five thousand dollars ($5,000) (and was not greater than such
amount as of the date of any prior distribution from the Plan to
such Participant), the Participant may elect to receive, but does
not automatically receive as a "cash out," a distribution of the
entire Vested balance of the Participant's Accounts. If the
Employee so elects to receive the Vested balance of all of the
Participant's Accounts the nonvested portion of the Participant's
Employer Account balances will be treated as an Employer
Contribution Forfeiture in accordance with Section 8.2. Such dis-
tribution shall be made in cash. Spousal consent shall not be
required with respect to such an election.
Unless made sooner pursuant to a request made in
accordance with Section 9.4, such distribution shall be made as
soon as practicable following the Allocation Date coincident with
or immediately following the date the Participant terminates
employment with the Employer. Payment of small benefit amounts
shall be made automatically and shall not require any consent by
the Participant (or by the Spouse of a married Participant).
For purposes of determining whether the five thousand
dollars ($5,000) amount is exceeded, a Participant's Vested Account
balance shall not include accumulated deductible Employee
contributions within the meaning of Section 72(o)(5)(B) of the Code
for Plan Years beginning prior to January 1, 1989. If the present
value determined at the time of distribution to a Participant
exceeds five thousand dollars ($5,000), then the present value at
any subsequent time shall be deemed to exceed five thousand dollars
($5,000).
Notwithstanding the foregoing, the Plan Administrator
shall not be required to make any lump sum distribution pursuant to
this Section which would not have been required under the
provisions of the Retirement Plan or ESOP in effect prior to the
Effective Date of this amendment, restatement, conversion and
continuation until sixty (60) days after such date of adoption.
In any event, a Participant who has been reemployed by
the Employer (or is employed by any other employer required to be
aggregated with the Employer under Section 414(b), (c), (m) or (o)
of the Code) shall not be entitled to receive a distribution from
the Plan as long as the Participant remains employed by the
Employer, except as required by Section 12.1 hereof.
(b) Any such payment shall be made to the Participant
if the Participant is living, or to the Participant's Beneficiary
if the Participant is deceased; provided, however, that if a
deceased Participant has a surviving Spouse, such surviving Spouse
shall be entitled to receive such payment unless the Spouse has
consented to the Participant's election to designate a nonspouse
Beneficiary as provided in Sections 9.3, 10.2(c) and 11.2(a)
hereof. If a Participant's total Vested Account balance is
distributed in a lump sum pursuant to this Section, then such
distribution shall be in full satisfaction of any amount otherwise
due to the Participant or to any other person claiming through the
Participant under any other provision of this Plan.
(c) If the value of the Participant's Vested Account
balance derived from the Participant's Accounts in the aggregate
(other than that portion of any Account attributable to accumulated
deductible Employee contributions should the Plan ever be amended
to permit such contributions) exceeds (or at the time of any prior
distribution exceeded) five thousand dollars ($5,000), the
Participant must consent to any distribution of the Participant's
Vested Account balances and spousal consent will be required
pursuant to Sections 9.3, 10.2(c) and 11.2(a) hereof for any form
of payment other than a joint and survivor annuity.
12.5 Disclaimer by Surviving Spouse or Other Beneficiary
A surviving Spouse or other Beneficiary who is entitled to
receive any benefits under the provisions of the Plan may disclaim
all or any portion of such benefits by filing a written disclaimer
with the Employer at any time after the death of the Participant.
Any such disclaimer shall be irrevocable and shall be witnessed by
a Plan representative or notary public. In the event that such a
disclaimer is received by the Employer prior to the payment of all
remaining benefits under the Plan due such surviving Spouse or
other Beneficiary, then notwithstanding any other provisions of the
Plan, any disclaimed benefits otherwise payable to the person
filing such disclaimer shall be paid to the person designated by
the Participant to receive such benefits in the event of such a
disclaimer, or if the Participant has made no such designation,
then to the person who would be the Participant's Beneficiary
determined in accordance with the provisions of Section 2.10 as if
the disclaiming person had predeceased the Participant.
12.6 Determination of Marital Status and Location of
Surviving Spouse
(a) Marital Status. The Employer shall have a duty
to make a review of its own internal records, but no other inquiry,
regarding whether a Participant who is to commence receiving
retirement benefits is married and whether a Participant who dies
before commencement of the Participant's benefits has a surviving
Spouse. In all events the Employer shall be entitled to rely upon a
statement made by the Participant regarding the Participant's
marital status as long as such reliance is in good faith. After
reasonable efforts, as described herein, to determine whether a
Participant is married, the Administrator determines that the
Participant is not married, then for all purposes under the Plan
the Participant shall be regarded as unmarried except as otherwise
required by any applicable regulations under ERISA or the Code.
(b) Location of Surviving Spouse. If a Participant's
surviving spouse cannot be located and after reasonable efforts to
locate the Participant's surviving Spouse, as determined solely in
the judgment of the Administrator, the Administrator determines
that such Spouse cannot be located, then for all purposes under the
Plan the Participant shall be regarded as unmarried except as
otherwise required by any applicable regulations under ERISA or the
Code.
Notwithstanding the foregoing, however, no arrangement
may be made by a Participant which would result in periodic
payments of less than fifty dollars ($50). Also, no arrangement
may be made by a Beneficiary of a deceased Participant which would
result in periodic payments of less than fifty dollars ($50) or for
payment for a period of time which exceeds the lesser of ten (10)
years or the life expectancy of such Beneficiary.
(c) Rehire of Former Participant In-Pay Status. In
the event that a former Employee who participated in the Plan is
reemployed by the Employer after five (5) consecutive Breaks in
Service, any such installment distributions to the Employee shall,
at the discretion of the Participant, be (1) continued
notwithstanding such reemployment or (2) discontinued and any
balance restored to the Participant's Account where it shall be
separately accounted for. If a Participant is reemployed before
incurring five (5) consecutive Breaks in Service, any such
installment distributions to the Participant shall be suspended and
the balance held in segregated accounts for such Participant
pursuant to this Section shall be restored to the Participant's
Account. Thereafter the value of the vested interest in the
Participant's Account shall be determined in accordance with
Section 8.2.
12.7 Installment Distribution
(a) Segregation Requested by Participant. If a
distribution to a Participant or the Participant's Beneficiary will
be paid in installments, the Employer will, but only if requested
in writing to do so by the Participant (or the Participant's
Beneficiary), direct the Trustee to transfer the Participant's
Vested Account balance in cash to be held as a segregated account
pursuant to this Section. The Trustee upon receipt of such
direction shall invest such segregated subaccount to provide for
such installment payments hereunder in one (1) or more separate
savings accounts or certificates of deposit in banking or savings
institutions, including savings accounts or certificates of deposit
issued or maintained by the Trustee, its parent or its subsidiary.
Such segregated subaccounts shall be credited with interest at the
interest rates applicable to such savings accounts or certificates
of deposit of each depository, and such interest shall be added to
the amount distributable. Such subaccounts shall be a segregated
part of the Trust Fund and shall be subject to all the provisions
of the Plan, except that no allocations of Qualified Nonelective
Employer Contribution Employer Matching Contributions, Employer
Profit Sharing Contributions, Employer Contributions Forfeitures or
401(k) Discrimination Forfeitures or general Trust Fund gain or
loss shall be made thereto.
(b) Segregation Not Required. In any case in which a
Participant (or the Participant's Beneficiary) who elects an
installment distribution does not request segregation pursuant to
the foregoing subsection (a), the Participant's Vested Account
balances shall continue to be held and invested as an unsegregated
part of the Trust Fund.
(c) Calculation of Installment Amount. If all or part
of a distribution is to be made in installments, the amount to be
distributed in each year shall equal the balance to the credit of
the Participant as of the first day of such year multiplied by a
fraction, the numerator of which shall be one (1), and the
denominator of which shall be the number of years then remaining
during which installments are to be made; provided that a
Participant may elect to have an amount distributed in any year in
excess of the minimum required distribution and any such excess may
be used as directed by the Participant to reduce the minimum
required distribution in any subsequent year.
(d) Lump Sum Still Available. In any case in which,
in accordance with the provisions of this Section, all or part of
any distribution is being made in installments at any time before
full payment of the installments has been made, the Participant (or
the Participant's Beneficiary) may request the Employer to change
the method of distribution from such installment method to a lump
sum. In any case in which such request is made, the Employer shall
comply with such request.
(e) In the event that a former Participant is
reemployed by the Employer after five (5) consecutive Breaks in
Service, any such installment distributions to the Participant
shall, at the discretion of the Participant, be (1) continued
notwithstanding such reemployment or (2) discontinued and any
balance restored to the Participant's Account where it shall be
separately accounted for. If a Participant is reemployed before
incurring five (5) consecutive Breaks in Service, any such install-
ment distributions to the Participant shall be suspended and the
balance held in segregated accounts for such Participant pursuant
to this Section 12.7 shall be restored to the Participant's
Account. Thereafter the value of the Vested interest in the
Participant's Account shall be determined in accordance with
Section 8.2.
12.8 Failure to Locate
If the Participant or Beneficiary to whom benefits are to be
distributed cannot be located, and reasonable efforts have been
made to find him, including the sending of notification by
certified or registered mail to the Participant's last known
address, the Administrator may direct the Trustee to treat the
benefits as an Employer Contribution Forfeiture of the
Participant's or Beneficiary's Employer Accounts for the Plan Year
in which the Participant or Beneficiary is determined to be lost
(provided, however, that if a benefit is forfeited pursuant to this
Section, such benefit will be reinstated if a claim is made by the
Participant or Beneficiary.)
13. WITHDRAWALS
13.1 Withdrawals of Elective Deferrals In General
(a) In General. Withdrawals of Elective Deferrals
may be made by a Participant subject to the non-discriminatory
criteria developed by the Administrator, including criteria
determining the order of Accounts from which withdrawal may be
made. For the purposes of this Section, "hardship" is defined as
an immediate and heavy financial need of the Participant where such
Participant lacks other available resources.
(b) Heavy Financial Need Defined. The following are
the only financial needs considered immediate and heavy:
(i) expenses for medical care described in
Section 213(d) of the Code previously incurred by the
Participant, the Participant's Spouse, or dependent;
(ii) costs directly related to the purchase
(excluding mortgage payments) of a principal residence,
as defined in Section 152 of the Code;
(iii) payment of tuition, related educational
fees, and room and board expenses, for the next twelve
(12) months of post-secondary education for the
Participant, the Participant's Spouse, children or
dependents; or
(iv) payments necessary to prevent the eviction
of the Participant from the Participant's principal
residence, or a foreclosure on the mortgage on that
residence.
(c) "Necessary" Defined. A distribution will be
considered as necessary to satisfy an immediate and heavy financial
need of the Participant only if:
(i) The distribution is not in excess of the
amount of an immediate and heavy financial need,
including any amount necessary to pay any federal,
state or local income taxes and penalties reasonably
expected to result from the distribution;
(ii) The Participant has obtained all
distributions, other than hardship distributions, and
all nontaxable (at the time of the loan) loans under
all plans maintained by the Employer;
(iii) All plans maintained by the Employer
provide that the Participant may not make pre-tax
elective contributions, as described in Treasury
Regulation Section 1.401(k) and 1(d)(2)(iv)(A)(4), for
the Participant's taxable year immediately following
the taxable year of the hardship distribution in excess
of the applicable limit under Section 402(g) of the
Code for such taxable year less the amount of such
Participant's Elective Deferrals for the taxable year
of the hardship distribution.
(iv) All plans maintained by the Employer
provide that the Participant's pre-tax elective
contributions (and voluntary after-tax employee
contributions, if any become available under this Plan
or any other plan sponsored by the Employer, or udner a
Code Section 125 Cafeteria Plan which permits such pre-
tax employee contributions, including qualified and
nonqualified plans, stock option plans, stock purchase
plans or similar plans will be suspended for twelve
months after the receipt of the hardship distribution
(after which suspension the Employee may being to make
Elective Deferrals on the next Entry Date);
14. LOANS
The Employer, may, in its sole discretion, authorize and
direct the Trustee to make a loan from the Trust Fund to the
Participant. All loans shall comply with the loan policy
established by the Plan's recordkeeper, as approved by the
Employer. Such policy shall comply with the following terms and
conditions:
(a) Loans shall be made available to all Participants and
Beneficiaries on a reasonably equivalent basis.
(b) Loans shall not be made available to Highly Compensated
Employees in an amount greater than the amount made available to
other Employees.
(c) Loans must be adequately secured and bear a reasonable
interest rate.
(d) If any part of a loan is to be from an Account with
respect to which a joint and survivor annuity may be payable at
retirement to a married Participant, then the Participant must
obtain the consent of the Participant's Spouse, if any, to use of
the Account balance 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 current Spouse or any subsequent Spouse with respect to that
loan. A new consent shall be required if such Account balance is
used for security with respect to a renegotiation, extension,
renewal, or other revision of the loan.
(e) In the event of default, foreclosure on the note and
attachment of security will not occur until a distributable event
occurs in the Plan.
(f) No laons will be made to any shareholder-employee or
owner-employee. For purpose of this requirement, a shareholder-
employee means an employee or officer of an electing small business
(Subchapter S) corporation who owns (or is considered as owning
within the meaning of Section 318(a)(1) of the Code), on any day
during the taxable year of such corporation, more than five percent
(5%) of the outstanding stock of the Employer. An owner-employee
means an employee who owns the entire interest in an unincorporated
trade or business, or in the case of proprietorship, is a partner
who owns more than ten percent (10%) of either the capital interest
or the profits interest in such partnership.
If a valid spousal consent is necessary and has been obtained
in accordance with (d), then, notwithstanding any other provision
of this Plan, the portion of the Participant's vested Account
balance subject to spousal consent used as a security interest held
by the Plan by reason of a loan outstanding to the Participant
shall be taken into account for purposes of determining the amount
of the Account balance payable at the time of death or
distribution, but only if the reduction is used as repayment of the
loan. If less than one hundred percent (100%) of the Participant's
vested Account balance subject to spousal consent (determined
without regard to the preceding sentence) is payable to the
surviving Spouse, then the Account balance shall be adjusted by
first reducing the vested Account balance by the amount of the
security used as repayment of the loan, and then determining the
benefit payable to the surviving Spouse.
(g) No loan to any Participant or Beneficiary can be made
to the extent that such loan when added to the outstanding balance
of all other loans to the Participant or Beneficiary would exceed
the lesser of (i) $50,000 reduced by the excess (if any) of the
highest outstanding balance of loans during the one year period
ending on the day before the loan is made, over the outstanding
balance of loans from the Plan on the date the loan is made, or
(ii) one-half the present value of the Vested balance of the
Accounts of the Participant. For the purpose of the above
limitation, all loans from all plans of the Employer and other
Controlled Group Members are aggregated. Furthermore, any loan
shall by its terms require that repayment (principal and interest)
be amortized in level payments, not less frequently than quarterly,
over a period not extending beyond five years from the date of the
loan, unless such loan is used to acquire a dwelling unit which
within a reasonable time (determined at the time the loan is made)
will be used as the principal residence of the Participant.
15. TOP-HEAVY PLANS
If the Plan is or becomes Top-Heavy in any Plan Year the
provisions of this ARTICLE will supersede any conflicting
provisions in the Plan.
15.1 Definitions
(a) Key Employee: Any Employee or former Employee
(and the Beneficiaries of such Employee) who at any time during the
determination period was (i) an officer of the Employer if such
individual's Compensation exceeds fifty percent (50%) of the dollar
limitation under Section 415(b)(1)(A) of the Code, (ii) an owner
(or considered an owner under Section 318 of the Code) of one of
the ten largest interests in the Employer if such individual's
Compensation exceeds the dollar limitation under Section 415(c)
(1)(A) of the Code, (iii) a Five-Percent Owner, or (iv) a one-
- -percent owner of the Employer who has Compensation of more than
$150,000. For purposes of this subsection (a), Compensation means
compensation as defined in Section 415(c)(3) of the Code, but
including amounts contributed by the Employer pursuant to a salary
reduction agreement which are excludable from the Employee's gross
income under Section 125, 402(a)(8), 402(h) or 403(b) of the Code.
The determination period is the Plan Year containing the Deter-
mination Date and the four (4) preceding Plan Years. The
determination of who is a Key Employee will be made in accordance
with Section 416(i)(1) of the Code and the regulations thereunder.
(b) Top-Heavy Plans: The Plan is Top-Heavy if any of
the following conditions exists:
(i) If the Top-Heavy Ratio for this Plan
exceeds sixty percent (60%) and this Plan is not part
of any Required Aggregation Group or Permissive
Aggregation Group of plans.
(ii) If this Plan is a part of a Required
Aggregation Group of plans but not part of a Permissive
Aggregation Group and the Top-Heavy Ratio for the group
of plans exceeds sixty percent (60%).
(iii) If this Plan is a part of a Required
Aggregation Group and part of a Permissive Aggregation
Group of plans and the Top-Heavy Ratio for the
Permissive Aggregation Group exceeds sixty percent
(60%).
(c) Top-Heavy Ratio:
(i) If the Employer maintains one or more
defined contribution plans (including any simplified
employee pension plan) and the Employer has not
maintained any Defined Benefit Plans which during the
five (5) year period ending on the Determination
Date(s) has or has had accrued benefits, the Top-Heavy
Ratio for this Plan alone or for the Required or
Permissive Aggregation Group as appropriate is a
fraction, the numerator of which is the sum of the
account balances of all Key Employees as of the
Determination Date(s) (including any part of any
account balance distributed in the five (5) year period
ending on the Determination Date(s)), and the
denominator of which is the sum of all account balances
(including any part of any account balance distributed
in the five (5) year period ending on the Determination
Date(s)), both computed in accordance with Section 416
of the Code and the regulations thereunder. Both the
numerator and denominator of the Top-Heavy Ratio are
increased to reflect any contribution not actually made
as of the Determination Date, but which is required to
be taken into account on that date under Section 416 of
the Code and the regulations thereunder.
(ii) If the Employer maintains one or more
defined contribution plans (including any simplified
employee pension plan) and the Employer maintains or
has maintained one or more Defined Benefit Plans which
during the five (5) year period ending on the
Determination Date(s) has or has had any accrued
benefits, the Top-Heavy Ratio for any Required or
Permissive Aggregation Group as appropriate is a
fraction, the numerator of which is the sum of the
account balances under the aggregate defined
contribution plan or plans for all Key Employees
determined in accordance with (i), and the present
value of accrued benefits under the aggregated Defined
Benefit Plan or plans for all Key Employees as of the
Determination Date(s), and the denominator of which is
the sum of the account balances under the aggregated
defined contribution plan or plans for all Partici-
pants, determined in accordance with (i), and the
present value of accrued benefits under the Defined
Benefit Plan or plans for all Participants as of the
Determination Date(s), all determined in accordance
with Section 416 of the Code and the regulations
thereunder. The accrued benefits under a Defined
Benefit Plan in both the numerator and denominator of
the Top-Heavy Ratio are increased for any distribution
of an accrued benefit made in the five (5) year period
ending on the Determination Date.
(iii) For purposes of (i) and (ii), the value of
account balances and the present value of accrued bene-
fits will be determined as of the most recent Valuation
Date that falls within or ends with the twelve (12)
month period ending on the Determination Date, except
as provided in Section 416 of the Code and the
regulations thereunder for the first and second plan
years of a Defined Benefit Plan. The account balances
and accrued benefits of a Participant (1) who is not a
Key Employee but who was a Key Employee in a prior
year, or (2) who has not been credited with at least
one Hour of Service with any Employer maintaining the
Plan at any time during the five (5) year period ending
on the Determination Date will be disregarded. The
calculation of the Top-Heavy Ratio and the extent to
which distributions, rollovers and transfers are taken
into account will be made in accordance with Section
416 of the Code and the regulations thereunder. When
aggregating plans, the value of account balances and
accrued benefits will be calculated with reference to
the Determination Dates that fall within the same
calendar year.
The accrued benefit of a Participant other than a Key
Employee shall be determined under (A) the method, if any, that
uniformly applies for accrual purposes under all Defined Benefit
Plans maintained by the Employer, or (B) if there is no such
method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Section
411(b)(1)(C) of the Code.
(d) Permissive Aggregation Group: The Required
Aggregation Group of plans plus any other plan or plans of the
Employer which, when considered as a group with the Required
Aggregation Group, would continue to satisfy the requirements of
Sections 401(a)(4) and 410 of the Code.
(e) Required Aggregation Group: (i) Each qualified
plan of the Employer in which at least one Key Employee partici-
pates, or participated at any time during the Determination Period
(regardless of whether the Plan has terminated), and (ii) any other
qualified plan of the Employer which enables a Plan described in
(i) to meet the requirements of Section 401(a)(4) or 410 of the
Code.
(f) Determination Date: For any Plan Year subsequent
to the first Plan Year, the last day of the preceding Plan Year.
For the first Plan Year, the last day of that Plan Year.
(g) Valuation Date: The last day of any Plan Year.
(h) Super Top Heavy Plan: The Plan if it would be a
Top Heavy Plan under subsection (b) if the words "ninety percent
(90%)" were substituted for the words "sixty percent (60%)" in
subsection (b).
15.2 Minimum Allocation
(a) Except as otherwise provided in subsections (b)
and (c), the Regular Matching Contributions and Forfeitures
allocated on behalf of any Participant who is not a Key Employee
shall not be less than the lesser of three percent (3%) of such
Participant's Compensation or in the case where the Employer has no
Defined Benefit Plan which designates this Plan to satisfy Section
401 of the Code, the largest percentage of Employer Contributions
and Forfeitures, as a percentage of the first $150,000 of the Key
Employee's Compensation, allocated on behalf of any Key Employee
for that Plan Year. The minimum allocation is determined without
regard to any Social Security contribution. This minimum alloca-
tion shall be made even though, under other Plan provisions, the
Participant would not otherwise be entitled to receive an alloca-
tion, or would have received a lesser allocation for the Plan Year
because of (i) the Participant's failure to complete one thousand
(1,000) Hours of Service (or any equivalent provided in the Plan),
or (ii) in the case of a CODA, the Participant's failure to have
Elective Deferrals made to the Plan on the Participant's behalf, or
(iii) Compensation less than a stated amount.
(b) For purposes of computing the minimum allocation,
Compensation shall mean compensation as defined in Section
5.7(d)(ii).
(c) The provision in subsection (a) shall not apply
to any Participant who was not employed by the Employer on the last
day of the Plan Year.
(d) The minimum allocation required (to the extent
required to be nonforfeitable under Section 416(b) of the Code) may
not be forfeited under Section 411(a)(3)(B) or (D) of the Code.
15.3 Minimum Vesting Schedule
For any Plan Year in which this Plan is Top-Heavy, the
following minimum Vesting Schedule will automatically apply to the
Plan:
Percentage of Regular
Matching
Years of Service Contributions Account
Vested
Less than 2 years 0%
2 years 20%
3 years 40%
4 years 60%
5 years or more 100%
The minimum vesting schedule applies to all benefits within
the meaning of Section 411(a)(7) of the Code except those attribut-
able to Elective Deferrals, Qualified Matching Contributions and
Voluntary Contributions, including benefits accrued before the
effective date of Section 416 of the Code and benefits accrued
before the Plan became Top-Heavy. Further, no decrease in a
Participant's nonforfeitable percentage may occur in the event the
Plan's status as Top-Heavy changes for any Plan Year. However,
this Section does not apply to the Account balances of any Employee
whose Severance from Service Date occurs after the Plan has
initially become Top-Heavy and such Employee's Account balance
attributable to Regular Matching Contributions and Forfeitures will
be determined without regard to this Section.
15.4 Special Limitations on Top Heavy Allocations in Multiple
Plans: "Code Section 415(e) Buy-Back
If for any Plan Year the Plan is a Top Heavy Plan, and the
Employer maintains or has ever maintained a qualified defined
benefit pension plan, then in applying the limitations of Section
5.7 the words "one hundred percent (100%)" shall be substituted for
the words "one hundred twenty-five percent (125%)" in both the
Defined Benefit Fraction and the Defined Contribution Fraction, as
such terms are defined in Section 5.7, unless the Employer elects
to "buy-back" the use of the "one hundred twenty-five percent
(125%)" limit with respect to any Plan Year in which the Plan is
not Super Top Heavy by providing minimum benefits in excess of
those otherwise required pursuant to the provisions of Section
15.2. The Employer accomplishes this "Code Section 415(e)
Buy-Back" by electing to retain the use of the "one hundred twenty-
five percent (125%)" limit and by agreeing to provide the required
increased minimum benefits pursuant to Section 416(f) of the Code.
16. PLAN ADMINISTRATION
16.1 Administrator
Except that such responsibility is delegated pursuant to
Section 16.4, the Sponsoring Company shall be the Administrator of
the Plan and shall have the sole power, duty and responsibility of
directing the administration of the Plan in accordance with the
provisions herein set forth. The Administrative Committee serves
at the pleasure of the Administrator. The Administrator shall have
the sole and absolute right and power reserved to the "named
fiduciary" as defined in ERISA for the management of the Plan
including, but not limited to, the following powers and duties:
(a) to interpret any provision of the Plan, supply
any omission or reconcile any inconsistencies, and determine
fact applicable to eligibility for benefits hereunder in such
manner as it deems proper;
(b) to determine eligibility to become a Participant
in the Plan in accordance with its interpretation and
continuation of the Plan's terms (to the extent in compliance
with ERISA), including determination of all issues of fact
relative to the vesting and payment of benefits hereunder;
(c) to decide all questions of eligibility for, and
determine the amount, manner, and time of payment of any
benefits hereunder, and to afford any person dissatisfied
with such decision or determination, upon written notice
thereof, the right to a full and fair hearing thereon;
(d) to establish uniform rules and procedures to be
followed by Participants and Beneficiaries in filing
applications for benefits, in furnishing and verifying proofs
necessary to determine age, and in any other matters required
to administer the Plan;
(e) to adopt such reasonable accounting methods as it
deems necessary or desirable, to receive and review the
annual allocation report on the Plan and to bring up to date
the balances of all Accounts;
(f) to receive and review reports of the financial
condition and of the receipts and disbursements of the Trust
Fund from the Trustee, and to determine and communicate to
the Trustee the long-term and short-term financial goals of
the Plan;
(g) to file such reports and statements, and to make
such disclosures as required by law; and
(h) to furnish to Participants and Beneficiaries such
information and statements, with respect to the Plan and
their individual interests therein as required by law, and
any additional information as deemed to be appropriate by the
Administrator.
All directions by the Administrator shall be conclusive on
all parties concerned; including the Trustee, and all decisions of
the Administrator as to the facts of any case and the meaning,
intent, or proper construction of any provision of the Plan, or as
to any rule or regulation in its application to any case shall be
final and conclusive; provided, however, that all rules and
decisions of the Administrator shall be uniformly and consistently
applied to all Employees in similar circumstances, and the
Administrator shall have no power to administratively add to,
subtract from or modify any of the terms of the Plan, or to change,
add to or subtract from any benefits provided by the Plan, or to
waive or fail to apply any requirements of eligibility for
participation or for benefits under the Plan.
16.2 Claims Procedure
If, upon application for benefits made by a Participant or
Beneficiary, the Administrator shall determine that benefits
applied for shall be denied either in whole or in part, the
following provisions shall govern:
(a) Notice of Denial. The Administrator shall, upon
its denial of a claim for benefits under the Plan, provide
the applicant with written notice of such denial setting
forth (i) the specific reason or reasons for the denial, (ii)
specific reference to pertinent Plan provisions upon which
the denial is based, (iii) a description of any additional
material or information necessary for the claimant to perfect
the claim, and (iv) an explanation of the claimant's rights
with respect to the claims review procedure as provided in
subsection (b) of this Section.
(b) Claims Review. Every claimant with respect to
whom a claim is denied shall, upon written notice of such
denial, have the right to (i) request a review of the denial
of benefits by written notice delivered to the Administrator,
(ii) review pertinent documents, and (iii) submit issues and
comments in writing.
(c) Decision on Review. The Administrator shall,
upon receipt of a request for review submitted by the
claimant in accordance with subsection (b), conduct such
review, and provide the claimant with written notice of the
decision reached by the said committee setting forth the
specific reasons for the decision and specific references to
the provisions of the Plan upon which the decision is based.
Such notice shall be delivered to the claimant not later than
60 days following the receipt of the claimant's request, or,
in the event that the Administrator shall determine that a
hearing is needed, no later than 120 days following the
receipt of such request.
16.3 Records
All acts, determinations and correspondence with respect to
the Plan shall be duly recorded and all such records, together with
such other documents, including the Plan and all amendments
thereto, if any, pertinent to the Plan or the administration
thereof, shall be preserved in the custody of the Administrator and
shall at all reasonable times be made available to Participants and
Beneficiaries for examination.
16.4 Delegation of Authority
The administrative duties and responsibilities of the
Administrator as set forth in this ARTICLE and elsewhere in the
Plan may be delegated by the Administrator in whatever manner it
chooses, in whole or in part, to such persons as the Administrator
shall select. The Administrator shall certify to the Trustee in
writing the extent of authority of such persons and any changes
relative thereto as may occur from time to time. The authority of
such persons shall be deemed to be that of the Administrator to the
extent so certified by the Administrator. The Trustee shall be
entitled to rely on the last such certification received and to
continue to rely thereon until subsequent written certification to
the contrary is received from the Administrator. The Administrator
shall indemnify and hold harmless such persons and each of them,
from any liability arising from the effects and consequences of
their acts, omissions and conduct in their official capacity with
respect to the Plan and the administration thereof, except to the
extent that such liability shall result from their own willful
misconduct or gross negligence.
The Administrator, or such persons to whom it has delegated
its duties and responsibilities hereunder, may employ such
competent agent or agents as it may deem appropriate or desirable
to perform such ministerial duties or consultative, actuarial, or
other services as the Administrator or such persons may in their
discretion deem necessary to facilitate the efficient and proper
administration of the Plan. The Administrator and such persons
shall be entitled to rely upon all reports, advice and information
furnished by such agent or agents, and all action taken or suffered
by them in good faith in reliance thereon shall be conclusive upon
all such agents, Participants, Beneficiaries and other persons
interested in the Plan.
16.5 Correction of Errors
If any change in records or error results in any Participant,
Retired Participant or Beneficiary receiving from the Plan more or
less than the Participant would have been entitled to receive had
the records been correct or had the error not been made, the
Employer, upon discovery of such error, shall correct the error by
adjusting, as far as is practicable, the payments in such a manner
that the benefits to which such person was correctly entitled shall
be paid.
16.6 Domestic Relations Orders
(a) If the Trustee or the Administrator receives a
domestic relations order that purports to require the payment of a
Participant's benefits to a person other than the Participant, the
Administrator shall take the following steps:
(i) If benefits are in pay status, the
Administrator shall direct the Trustee to account
separately for the amounts that will be payable to the
Alternate Payees (defined below) if the order is a
Qualified Domestic Relations Order (defined below).
(ii) The Administrator shall promptly notify the
named Participant and any Alternate Payees of the
receipt of the domestic relations order and of the
Administrator's procedures for determining if the order
is a Qualified Domestic Relations Order.
(iii) The Administrator shall determine whether
the order is a Qualified Domestic Relations Order under
the provisions of Section 414(p) of the Code.
(iv) The Administrator shall notify the named
Participant and any Alternate Payees of its
determination as to whether the order meets the
requirements of a Qualified Domestic Relations Order.
(b) If, within 18 months beginning on the date the
first payment would be made under the domestic relations order (the
"18-Month Period"), the order is determined to be a Qualified
Domestic Relations Order, the Administrator shall direct the
Trustee to pay the specified amounts to the persons entitled to
receive the amounts pursuant to the order.
(c) If, within the 18-Month Period (i) the order is
determined not to be a Qualified Domestic Relations Order or (ii)
the issue as to whether the order is a Qualified Domestic Relations
Order has not been resolved, the Administrator shall direct the
Trustee to pay the amounts (and any interest thereon) to the Par-
ticipant or other person who would have been entitled to such
amounts if there had been no order.
(d) If an order is determined to be a Qualified
Domestic Relations Order after the end of the 18-Month Period, the
determination shall be applied prospectively only.
(e) A Qualified Domestic Relation Order shall not
require (i) the Plan to provide any type or form of benefits, or
any option, not otherwise provided under the Plan, or (ii) the
payment of benefits to an Alternate Payee which are required to be
paid to another Alternate Payee under another order previously
determined to be a Qualified Domestic Relations Order.
(f) In the case of any payment before a Participant
has terminated employment, a Qualified Domestic Relations Order
shall not be treated as failing to meet the requirements of sub-
paragraph (e)(i) above solely because such order requires that
payment of benefits be made to an Alternate Payee (i) on or after
the date on which the Participant attains (or would have attained)
the earliest retirement date, or (ii) as if the Participant had
retired on the date on which such payment is to begin under such
order (but taking into account only the value of the Participant's
Account on such date).
For this purpose, "earliest retirement date" shall mean the
earlier of: (1) the date on which the Participant is entitled to a
distribution under the Plan, or (2) the later of the date the
Participant attains age fifty (50), or the earliest date on which
the Participant could begin receiving benefits under the Plan if
the Participant terminated employment.
(g) To the extent provided in a Qualified Domestic
Relations Order, the former Spouse of a Participant shall be
treated as a Surviving Spouse for purposes of Sections 401(a)(11)
and 417 of the Code.
(h) For the purposes of this Section, the following
terms shall have the following definitions:
(i) Alternate Payee. Any Spouse, former
Spouse, child or other dependent of a Participant who
is recognized by a domestic relations order as having a
right to all or a portion of the benefits payable under
the Plan to the Participant.
(ii) Qualified Domestic Relations Order. Any
domestic relations order or judgment that meets the
requirements set forth in Section 414(p) of the Code.
(i) In addition to the right to all or a portion of
the benefits payable under the Plan to a Participant, an Alternate
Payee shall have the same option of directing the investment of the
Participant's Account, pursuant to Section 0(a).
(j) After the award of benefits under the QDRO is
made, the Administrator may offer the alternate payee the option of
a lump sum distribution.
17. THE TRUST
17.1 The Trust
By execution of this document the Employer hereby amends,
restates, consolidates and continues the Trusts associated with the
Retirement Plan and the ESOP as a single Trust, now associated with
this 401(k) Plan. The provisions of this ARTICLE shall relate to
such consolidated and continued Trust, unless the Employer adopts a
separate trust document which shall evidence the Trust, but only to
extent that the provisions of that separate trust document are not
materially inconsistent with this Article 17. By execution of this
document the Trustee accepts the position of trustee hereof, and
all the duties and responsibilities of that position. The Trust
Fund shall consist of such cash and other property as shall be paid
or delivered from time to time by the Employer to the Trustee,
together with the earnings and profits thereon. The Trust Fund
shall be held, managed and administered by the Trustee in trust
without distinction between principal and income in accordance with
the provisions of this Plan.
17.2 Contributions to Trustee
Contributions shall be paid to the Trustee in accordance with
the terms of the Plan. It shall be the duty of the Trustee to
receive, hold, invest, reinvest and distribute each Trust Fund in
accordance with the provisions of this Plan. The Trustee shall be
under no duty to enforce payment of any contribution to the Trust
Fund and shall not be responsible for the adequacy of the Trust
Fund to meet and discharge any liabilities under the Plan.
17.3 Investment Powers
The Trustee, upon its own discretion with respect to Trust
Fund investments, shall, except as otherwise restricted by law and
as provided in the provisions hereof at Section 17.4 and 17.5, be
authorized and empowered with respect to the general assets of the
Trust Fund:
(a) to invest and reinvest the principal and income
of the Trust Fund in any and all stocks, bonds, mutual funds,
notes, debentures, mortgages, equipment trust certificates,
insurance company contracts and in such other property, real
or personal, investments and securities of any kind, class or
character, including investments and qualifying securities or
realty of the Employer, whether income-producing or not,
units of any commingled, pooled or group trust fund
maintained by a bank (including the Trustee, if it is a bank)
within the meaning of Code Section 581 (the description of
any such fund being incorporated herein by reference), or the
savings accounts, certificates of deposit and time deposits
of such a bank; and in making such investments and reinvest-
ments, the Trustee shall not be restricted to properties and
securities authorized for investment by Trustees or other
fiduciaries by the applicable statutory legal list of such
properties and securities;
(b) to keep such portion of the Trust Fund in cash or
cash balances as deemed to be in the best interest of the
Trust;
(c) to sell, purchase and acquire put or call options
(including such options employed with other investment
combinations such as "collars") if the options (and
investment combinations) are traded on and purchased through
a national securities exchange registered under the
Securities Exchange Act of 1934, as amended, or, if the
options are not traded on a national securities exchange, are
guaranteed by a member firm of the New York Stock Exchange.
(d) to sell, exchange, convey, transfer grant options
to purchase or otherwise dispose of any securities or other
property held by it, by private contract or at public auction
(and no person dealing with the Trustee shall be bound to see
the application of the purchase money or to inquire into the
validity, expediency or propriety of any such sale or other
disposition, with or without advertisement);
(e) to vote or to refrain from voting upon any
stocks, bonds or other securities; to give general or special
proxies or powers of attorney with or without power of
substitution; to exercise any conversion privileges, sub-
scription rights, or other options and to make any payments
incidental thereto; to consent to or otherwise participate in
corporate reorganizations or other changes affecting
corporate securities and to delegate discretionary powers and
to pay any assessments or charges in connection therewith,
and generally to exercise any of the powers of any owner with
respect to stocks, bonds, securities or other property held
in the Fund;
(f) to make, execute, acknowledge and deliver any and
all documents of transfer and conveyance and any and all
other instruments that may be necessary or appropriate to
carry out the powers herein granted;
(j) to register any investment of the Trust Fund in
its own name or in the name of a nominee or nominees and to
hold any investment in bearer form, but the books and records
of the Trustee shall at all times show that all such
investments are part of the Trust Fund;
(k) to employ suitable agents and counsel, and to pay
their reasonable expenses and compensation; and
(l) to borrow money from time to time for the
purposes of the Trust on such terms and conditions as may be
deemed to be advisable, and for any sum so borrowed to issue
its promissory note as Trustee and to secure the repayment
thereof by pledging all of any part of the Fund.
Provided, however, that notwithstanding any provision
of the Plan to the contrary, no Trust Fund assets attributable to
individually directed account amounts shall be invested in
"collectibles" (as defined by Section 408(m) of the Code).
17.4 Employer-Directed Investments
Notwithstanding any other provision of this Plan except
Section 17.5, the Employer shall have the right to direct in
writing the Trustee from time to time to invest the assets of the
Fund in such securities or other investments as the Employer shall
specify in its direction, which may include, but shall not be
limited to, specifying the investment funds to be offered to
Participants pursuant to Section 17.5 and the percentage of assets
to be invested in and among the investment options authorized for
investment under Section 17.3. Such direction shall be made in
such form and manner as shall be required by the Trustee of the
individual or individuals duly authorized by the Employer.
Directed investments shall be made by the Trustee as soon as
reasonably possible after actual receipt of such direction;
provided, however, the Trustee shall not be liable for losses due
to reasonable delay in the execution of such directions.
Notwithstanding the foregoing, in no event shall a directed
investment be permitted in such an investment that the Trustee, in
its sole discretion, deems itself unable to administer efficiently,
properly and conveniently with respect thereto; provided, however,
that the Trustee's acceptance of the administration of a directed
investment shall not be unreasonably withheld. The Trustee shall
be under no duty to question any such direction of the Employer
with respect to investments, nor shall the Trustee be required to
review any securities or other property held pursuant to written
notice. The Trustee shall not have any liability whatsoever for
any losses which may result from either the Employer's direction or
any investment decision made pursuant to this Section, or for any
loss which may result by reason of the failure of the Company to
make such directions. Nor shall the Trustee have any liability or
responsibility whatsoever for any disparity between the performance
or rates of investment return of Employer-directed investments and
the Trust Fund in general.
17.5 The Participant-Directed Investments, Including
Participant Loans
(a) Investment Direction to the Trustee. Each
Participant may direct the Trustee (or the recordkeeping agent for
the Trustee) as to the type of investment (including Participant
loans permitted pursuant to a loan policy established by the
Employer, at its discretion, then in effect) to invest the Plan
assets credited to the Participant's Accounts (other than the
Participant's ESOP Stock Account, PAYSOP Account, Forfeiture
Accounts and 401(k) Stock Account) under investment options
selected pursuant to Section 17.4 hereof by the Employer (or the
Investment Committee, if appointed) as described in subsection (b)
hereof. Any directions to the Trustee with respect to investments
shall be delivered in writing or telephonically to the Trustee (or
the recordkeeping agent for the Trustee) and shall be on a form for
such purpose provided by the Trustee. Directed investments to be
executed by the Trustee (or the recordkeeping agent for the
Trustee) shall be made by the Trustee (or the recordkeeping agent
for the Trustee) as soon as reasonably possible after actual
receipt of such direction; provided, however, that the Trustee (or
the recordkeeping agent for the Trustee) shall not be liable for
any loss to the Account due to reasonable delay in the execution of
such directions. Such directed investments shall be limited to
those investments selected by the Employer (or the Investment
Committee, if selected), pursuant to Section 17.4 hereof subject to
the duty to offer a diversity of investments, among the other
duties imposed by ERISA, if the Employer wishes to invoke the
protection of Section 404(c) of ERISA. The Trustee may leave
earnings on any securities so obtained for reinvestment in
accordance with the direction of the Participant.
Notwithstanding the foregoing, in no event shall a directed
investment of a Participant be permitted in such an investment that
the Trustee, in its sole discretion, deems itself unable to
administer efficiently, properly and conveniently with respect
thereto; provided, however, that the Trustee's acceptance of the
administration of a directed investment shall not be unreasonably
withheld.
Upon establishing separate investment subaccounts pursuant to
the next subsection hereof, each such subaccount shall be credited
or charged only with the increases or decreases resulting from the
investment thereof as a separate unit as well as the fees and
expenses properly chargeable only to each such segregated
subaccount. The Trustee shall also charge against each such
subaccount a pro rata portion of the fees and expenses incurred in
the administration of the Plan in general, as described in
subsection (b) below and Section 5.4(c)(9). Thereafter, the value
of the Accounts of a Participant who directs the investment thereof
under this Section shall be determined by reference to the value of
the subaccounts as of any applicable date of determination less
such fees and expenses, notwithstanding any other provision of the
Plan.
Neither the Employer nor the Trustee shall be under any duty
to question any such direction of a Participant with respect to
investment options, nor shall the Employer or Trustee be required
to review any securities or the property held in any Account with
respect to which investment options may be made. Neither the
Trustee nor the Employer shall have any liability or responsibility
whatsoever for any disparity between the performance or rates of
investment return of Participant-Directed Accounts and the
remainder of the Trust Fund in general.
A Participant shall be entitled to direct the investment of
the Participant's Accounts subject to investment hereunder at such
time and in such manner as may be nondiscriminatorily established
by the Employer.
(b) Valuation of Subaccounts. The Trustee shall
maintain a set of investment option subaccounts for each of the
Accounts described at subsection (c) hereof on the books of the
Trust. The Accounts shall indicate separately the dollar amounts
of all contributions made to each investment option and the value
of such investment option under the Account from time to time with
respect to each Participant. If a permitted investment option is a
mutual fund valued on a "daily" basis, the value of such mutual
fund as of any day in the Plan Year shall be treated as the
reported net asset value of a share of the fund. Interests in a
collective (i.e., common) trust fund shall be valued on a quarterly
basis The value of Employer Stock, however, shall be reported for
purposes of Plan under ERISA's reporting and disclosure requirement
on a "unitized basis." To the extent the expenses of the
administration of the Plan and Trust are not directly attributable
to a specific investment in a subaccount of a Participant-directed
Account as described in subsection (a) above, the expenses shall be
prorated among all the Accounts on the basis of the respective
value of each Account to the value of all Accounts in the aggregate
as of the most recent Allocation Date preceding the expense as
provided in Section 5.4(c)(9) hereof.
(c) Investment of Elective Deferrals, Matching
Employer Contributions, Employer Profit Sharing Contributions,
Qualified Nonelective Employer Contributions (Not Invested In
Employer Stock), Indirect Rollovers, Direct Rollovers, Retirement
Plan Accounts, and ESOP Investment Accounts. Before each Plan Year
in time to communicate the investment options to Employees, the
Employer (or the Investment Committee, if appointed) may select
investment options (including collective funds and mutual funds)
which will be offered to Participants. Each Participant may choose
to invest all of the balances of the Participant's Elective
Deferral Account, Matching Employer Account, Employer Profit
Sharing Account, that portion of the Qualified Nonelective Employer
Contribution Account not invested in Employer Stock as described in
subsection (e) hereof, and the Participant's Retirement Accounts
(including the Prior Defined Benefit Pension Plan Account) and ESOP
Investment Account in these investment options according to rules
established by the Administrator (or the Investment Committee, if
selected). However, if any portion of an Account is invested
pursuant to the direction of a Participant, the entire Account must
be Participant-directed, or the Participant directions shall be
void and the Account will be invested as part of the general Trust
Fund. The Trustee shall establish and maintain investment
subaccounts for each investment option for each Participant who
elects to direct investment of these Accounts. Investment options
offered by the Employer may be changed from time to time as it
deems necessary or advisable, in its sole discretion, and the
Administrator may elect not to offer any investment options during
any period.
The Trustee may establish nondiscriminatory
administrative procedures as to the processing of transfers and
changes in the allocation of future contributions to the Accounts
in which the investment may be Participant directed.
(d) Forfeiture Accounts. Forfeiture Accounts shall
not be subject to individual Participant direction, and to the
extent forfeitures in such Accounts cannot reduce and offset
Employer Matching Contributions or can be allocated like Employer
Profit Sharing Contributions, such Forfeiture Accounts shall be
invested by the Trustee as general assets of the Trust Fund.
(e) Investment of one half (1/2) of one percent (1%)
of the Qualified Nonelective Employer Contributions. The first one
half (1/2) of one percent (1%) of the contributions made to the
Trust Fund by the Employer pursuant to Section 4.2 in Employer
Stock or in cash, but then invested in Employer Stock at the
direction of the Employer, shall be held in each Participant's
401(k) Stock Account.
(f) Investment of the ESOP Stock Account and PAYSOP
Account in Employer Stock. The assets of the ESOP Stock Account
and PAYSOP Account shall remain invested in Employer Stock and
these Accounts shall not be subject to Participant-directed
investment, but shall be considered an Employer-directed
investments.
The Administrator shall retain an appraiser to make a
determination of the Fair Market Value of the Employer Stock held
in the Plan in a fair, nondiscriminatory fashion as of the end of
each Plan Year.
(g) Segregation of Funds. All investment subaccounts
shall be part of the commingled Trust Fund as regards any interest
of the Participants and Beneficiaries therein. No one has or shall
have any exchangeable or assignable interest in the subaccounts,
which are merely bookkeeping accounts of the Trust Fund, prior to
the time when a distribution is required to be made from the Trust,
and then only to the extent that such distribution or distributions
are from time to time payable. Nothing contained in the Plan shall
have, or be deemed to have, the effect of creating a separate trust
or trusts for the benefit of any Participant, Inactive Participant
or Beneficiary.
(h) Payment of Expenses. The Employer does not and
will not guaranty the Trust Fund against loss. The Employer shall
pay the settlor expenses of the Plan and Trust, including the fees
of consultants and lawyers, and other expenses, in connection with
the amending, restating, converting and continuing the Plan and
Trust as a 401(k) Plan. The Employer, however, shall not be
obligated to pay, although it may do so in its sole discretion, the
fees of the Trustee (provided the Trustee is not a paid employee of
an Employer) from time to time for acting as such or other costs
and expenses of administering the Plan and Trust, the taxes imposed
upon the Trust, if any, and the fees, charges, or commissions with
respect to the purchase and sale of trust investments. Such other
costs and expenses, taxes (if any), and fees, charges, and
commissions shall be a charge upon the Trust Fund and allocated on
a per capita basis as described at Section 5.4(c)(9) hereof.
(i) Minimum Beginning Credit Balances. The credit
balances of each Participant in the investment funds of this Plan
as of the effective date of this amendment, restatement, conversion
and continuation of the Plan shall be equal to the Participant's
respective credit balances in the funds in the aggregate of the
Retirement Plan and ESOP of the day immediately prior to such
amendment, restatement, conversion and continuation.
17.6 Custodial Role
Notwithstanding any other provisions in this Plan, if the
Trustee is a bank and the bank does not have trust powers under
State and/or Federal banking laws and regulations, but otherwise
qualifies as a Bank under Section 581 of the Code, then the Trustee
will assume the role as a custodian under this Plan, and all
investments shall be handled in accordance with Section 17.4 or
Section 17.5 as applicable. Furthermore, a bank or trust company
having trust powers shall act as custodian where Participant or
Employer-directed investments are made under Sections 17.4 or
Participant-directed Investments are made under Section 17.5. In
such cases the Trustee's responsibilities will be as provided in
Sections 17.4 and 17.5.
17.7 Liability of Trustee
The Trustee shall not be liable for its failure to carry out
the terms of this Plan, or any instruction or direction of the
Employer (or its agent), the Administrator (or Committee) or a
Participant, when issued in accordance with this Plan, or for
relying upon advice given by any competent counsel or other agent
employed by the Trustee or Employer or the Administrator, or for
the making, retention or sale of any investment or reinvestment, or
for any loss to or diminution of the Trust Fund, except due to its
own negligence, misfeasance, nonfeasance or malfeasance, lack of
good faith or conduct otherwise constituting a breach of fiduciary
duty under ERISA.
17.8 Court Actions
As a prerequisite to taking any action hereunder, the Trustee
shall neither be required to receive either any order to consent of
any court, nor shall the Trustee be required to file any court
return or to report to any court.
17.9 Prudent Man Rule
In discharging its duties, the Trustee shall act with the
skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enter-
prise of like character and with like aims:
(a) by diversifying the investments of the Trust, to
the extent the Trustee has the discretionary authority and
responsibility for such investments, so as to minimize the
risk of large losses, unless under the circumstances it is
clearly prudent not to do so; and
(b) in accordance with the documents and instruments
governing the Plan, insofar as such documents and instruments
are consistent with the provisions of ERISA.
17.10 Prohibited Transactions
Any other provisions of the Plan and Trust Agreement to the
contrary notwithstanding, neither the Employer, the Administrator,
the Trustee nor any Disqualified Person as defined in Section
4975(d) of the Code may engage, directly or indirectly, in any of
the acts or transactions under Section 4975(c) of the Code and
Section 406 of ERISA for which no exemption is provided by Section
4975(d) of the Code or Section 408 of ERISA.
17.11 Conflict of Interest
The Trustee shall not (a) deal with the assets of the Plan in
its own interest or for its own account, (b) in its individual or
in any other capacity, act in any transaction involving the Plan
(or on behalf of a party or representing a party) where interests
are adverse to the interest of the Plan or the interest of its
Participants or Beneficiaries, or (c) receive any consideration for
its own account from any party dealing with the Plan in connection
with a transaction involving the assets of the Plan.
Provided, however, that nothing in this Section shall be
construed to preclude the Trustee from receiving reasonable
compensation for services rendered, or for reimbursement of
expenses properly and actually incurred in the performance of its
duties under the Plan.
17.12 Exemptions
Nothing in this ARTICLE shall be construed to preclude a
transaction which is otherwise prohibited hereunder or under the
Act, provided that the Trustee, or any other interested party or
parties, shall first apply to, and secure from the Secretary of
Labor, an exemption with respect to such transaction.
17.13 Fiduciary Insurance
The Trustee may purchase insurance to insure itself, the
Trust Fund, or other fiduciary against liability or losses occur-
ring by reason of an act or omission of any fiduciary, provided
that such insurance shall permit recourse by the insurer against
the fiduciary in the case of a breach of fiduciary duty.
17.14 Accounts
The Trustee shall keep accurate and detailed accounts of all
investments, receipts, disbursements and other transactions
hereunder, and all accounts, investment subaccounts, books and
records relating thereto shall be open to inspection and audit at
all reasonable times by any person designated by the Employer. The
Trust Fund may, at the Trustee's discretion, be administered on a
unit accounting basis and the value of a unit on the date of
adoption or amendment of the Plan shall be as determined by the
Trustee.
17.15 Reports
Annually, or more frequently if determined by either the
Employer or the Trustee, or as shall be required by law, the
Trustee shall cause a valuation to be made of the Trust Fund at its
Fair Market Value. Within 120 days after the end of the Plan Year
(or on such other date as may be prescribed under regulations of
the Secretary of Labor) and at the time of each valuation during
the Plan Year, the Trustee shall file with the Employer and certify
the accuracy of a written statement setting forth, for the
valuation period, all investments, receipts, disbursements, and
such other information as the Trustee maintains which the Employer
may require from time to time in order to fulfill its obligations
under applicable law. Upon expiration of 90 days from the date of
filing of the statement as provided herein, the Trustee's liability
for any inaccuracies or omissions appearing upon the face of such
statement shall cease, except as otherwise may be provided by law,
and except with respect to any inaccuracies or omissions as to
which the Employer shall file with the Trustee written objection
before the expiration of such 90-day period.
To the extent consistent with applicable law, each
transaction, whether an increase or a decrease to the Trust Fund,
may be expressed in terms of a number of units computed on the
basis of the unit value determined on the preceding Allocation
Date. In the event that transactions are reported in this manner,
the Trustee shall state, in addition to such other information as
is required by law, the number of units in the Trust Fund and the
value of a unit on the date of the statement.
17.16 Payments
The Trustee shall make payment from the Trust Fund to such
persons, in such manner and in such amounts as the Administrator
may direct in writing from time to time. The Trustee shall be
fully protected in acting upon any such written direction without
inquiry or investigation, and shall have no duty or authority to
determine the rights or benefits of any Participant or Beneficiary
under the Plan, or to inquire into the right or power of the
Employer to direct any payment from the Fund.
17.17 Direction of Committee
The Trustee shall be fully protected in relying upon the
written certification of the Employer as to the membership and
extent of authority of any committee duly authorized to act on its
behalf and in continuing to rely thereon until subsequent
certification has been delivered to the Trustee. The Trustee shall
be fully protected in relying and acting upon any written direction
of such committee whose membership and authority has been certified
to the Trustee, and in continuing to so act and rely until
subsequent certification that said authority has been revoked or
modified has been delivered to the Trustee.
17.18 Impossibility of Performance
In case it becomes impossible for either the Employer or the
Trustee to perform any act under this ARTICLE, that act shall be
performed which in the judgment of the Trustee will most nearly
carry out the intent and purpose of the Plan. All parties to this
Plan or all parties in any way interested in the Plan shall be
bound by any acts performed under such conditions.
17.19 Expenses
The expenses incurred by the Employer in the installation,
administration and amendment of the Plan shall be paid from the
Trust Fund, unless paid directly by the Employer. Such compensa-
tion to the Trustee as may be agreed upon in writing from time to
time between the Employer and the Trustee and the expenses incurred
by the Trustee in the performance of its duties, including
professional fees of any person, firm or agent employed by the
Trustee to carry out the investment, management or administrative
functions hereunder, and all other proper charges and disbursements
of the Trustee, shall be paid from the Trust Fund, unless paid
directly by the Employer in its sole discretion.
17.20 Taxes
The Trustee shall pay out of the Trust Fund taxes of any and
all kinds including, without limiting the generality of the
foregoing, property taxes and income taxes levied or assessed under
existing or future laws upon or with respect to the Trust, or any
moneys, securities or other property forming a part thereof, or the
income therefrom, subject to the terms of any agreements or
contracts made with respect to trust investments which make other
provisions for such tax payments. The Trustee may assume that any
taxes assessed on or with respect to the Trust or its income are
lawfully assessed unless the Employer shall in writing advise the
Trustee that in the opinion of counsel for the Employer, such taxes
are or may be unlawfully assessed. In the event that the Employer
shall so advise the Trustee, the Trustee shall, if so requested in
writing by the Employer, contest the validity of such taxes in any
manner deemed appropriate by the Employer or its counsel for the
refund, abatement, reduction or elimination of any such taxes.
17.21 Resignation or Removal of Trustee
The Trustee may resign at any time upon 90 days' written
notice to the Employer (or such other shorter notice as may be
accepted by the Employer). The Trustee may be removed by the
Employer, or the Employer may increase or decrease the number of
Trustees, at any time upon 90 days' written notice delivered to the
Trustee (or such shorter notice as may be accepted by the Trustee).
In the event of such removal or resignation, the Employer shall
designate a Successor Trustee or other medium of funding under an
agreement executed for such purpose. If the Employer does not so
designate such Successor Trustee or medium of funding within 60
days, the Trustee may apply to a court of competent jurisdiction
for the purpose of securing the designation of same. Upon the
expiration of 90 days from resignation or removal of the Trustee
(or such shorter period as agreed upon), the Trustee's liability
for any inaccuracies or omissions shall cease, except as otherwise
may be provided by law, and except with respect to any inaccuracies
or omissions as to which the Employer shall file with the Trustee
written objection before the expiration of such 90-day period (or
such shorter period as agreed upon).
17.22 Transfer of Assets to a Successor Trustee or Other
Medium of Funding
In the event the Employer wishes to continue the Plan through
a Successor Trustee or through another medium of funding, it may,
upon 90 days' written notice (or shorter notice if agreed by the
Successor Trustee) and upon furnishing evidence of the continuation
of the Plan through a Successor Trustee or medium of funding,
direct the Trustee to transfer the assets of the Trust Fund to such
Successor Trustee or medium of funding, in which event the Trustee
shall deliver in cash or in kind the assets of the Trust Fund (less
reasonable and contracted for expenses), including such instruments
of conveyance and further assurance as may be reasonably required
for vesting in such Successor Trustee or other medium of funding
all right, title and interest of the Trustee in assets of the Trust
Fund attributable to the Employer. The transfer of assets under
the circumstances above shall not, within itself, be deemed a
termination of the Plan, or a cessation of Qualified Nonelective
Employer Contributions, Employer Matching Contributions or Employer
Profit Sharing Contributions to the Plan. Upon completion of such
transfer of assets, the terms and provisions of the Plan shall
continue to control with respect to the Employer or the Plan (or
its successor) as it may be continued by the Employer.
17.23 Assets of Controlled Group Members
A Controlled Group Member with the written approval of the
other Controlled Group Members may direct the Trustee to commingle
the Trust Fund assets with those of the assets of other Controlled
Group Members held by the Trustee in a mutual, commingled, pooled
or common Trust Fund; provided, however, that adequate records
shall be maintained at all times so that it is possible to
ascertain and separate the Trust Fund assets of each Controlled
Group Member.
17.24 Distributions in Kind
The Administrator may direct the Trustee (or its
recordkeeping agent) to make distributions in kind rather than in
cash, provided any such distribution is to an Individual Retirement
Account described in Section 408 of the Code and established with
the Plan's recordkeeper, and provided such distribution shall not
favor a Highly Compensated Employee of the Spouse of a Highly
Compensated Employee who is an Alternate Payee under a Qualified
Domestic Relations Order described in Section 16.6.
17.25 Purchases and Sales of Employer Stock
All purchases of shares of Employer Stock shall be made at
prices which, in the judgment of the Plan Administrator, do not
exceed the Fair Market Value of such stock. All sales of shares of
Employer Stock shall be made at prices which, in the judgment of
the Plan Administrator, are not less than the Fair Market Value of
such stock. The determination of Fair Market Value shall be made
in good faith by the Plan Administrator in accordance with the Plan
and in accordance with any applicable provisions of ERISA. The
Plan Administrator shall direct the Trustee when to buy or sell
Employer Stock and at what price, and the Trustee shall have no
duty to question the directions of the Plan Administrator in this
respect or to advise the Plan Administrator regarding the purchase,
retention or sale of Employer Stock; provided, however, that the
Plan Administrator shall not direct the Trustee to act otherwise
than in accordance with the Plan and Trust Agreement and in
accordance with any applicable provisions of ERISA, including any
applicable rules regarding prohibited transactions.
17.26 Restrictions on Employer Stock
(a) Shares of Employer Stock distributed by the
Trustee which are not publicly traded at the time the right may be
exercised shall be restricted by a right of first refusal. If any
Participant or Beneficiary to whom shares of Employer Stock have
been distribute by the Trustee shall desire to sell some or all of
such shares (or any shares derived from such shares) to a third
party (i.e., someone other than the Trustee or the Employer), the
Participant shall give written notice of such desire to the
Employer and the Trustee. This notice shall set forth the number
of shares offered for sale, the proposed terms of the sale and the
name and address of the third party.
For a period of fourteen (14) days from the date such
notice is given, the Trustee and the Employer shall have an option
to buy all or any of the offered shares on the same terms offered
by the third party and at the price determined pursuant to the
following subsection (b) in accordance with Treasury Regulation
Section 54.4975-11l(d)(5). As between the Trustee and the
Employer, the Employer shall have priority to acquire the offered
shares pursuant to such option. Such option may be exercised by
the Trustee or the Employer, as the case may be, by giving written
notice of such exercise to the selling Participant or Beneficiary.
The closing pursuant to any exercise of such option shall take
place within ten (10) days after the giving of such notice of
exercise. At such closing, the selling Participant or Beneficiary
shall deliver certificates representing the offered shares duly
endorsed in blank for transfer, or with stock powers attached duly
executed in blank.
If the Trustee and the Employer do not exercise their
option to buy the offered shares, the selling Participant or
Beneficiary shall have the right, at any time within sixty (60)
days after the expiration of such fourteen (14) day period, to sell
the offered shares to such third party for a price and on terms no
more favorable to the third party than those set forth in the
written notice given by the selling Participant or Beneficiary to
the Trustee and the Employer. If no sale of the offered shares
meeting the foregoing requirements is made within such period of
sixty (60) days, the shares shall again become subject to such
right of first refusal as though no notice had been given pursuant
to this Section.
Such option may be exercised at any time within
fourteen (14) days after the Trustee and the Employer have actual
knowledge of such death. Such option may be exercised by the
Trustee or the Employer, as the case may be, by giving written
notice of such exercise to the personal representative of the
deceased Participant or Beneficiary or to the distributees of the
estate of the deceased Participant or Beneficiary if no personal
representative has been appointed. The closing pursuant to any
exercise of such option shall take place within ten (10) days after
the giving of such notice of exercise. At such closing, the
personal representative or distributees of the deceased Participant
or Beneficiary shall deliver certificates representing the offered
shares duly endorsed in blank for transfer, or with stock powers
attached duly executed in blank.
A Participant or Beneficiary to whom shares of Employer Stock
have been distributed by the Trustee may not transfer or dispose of
any shares so received (or any shares derived from shares so
received) otherwise than as expressly permitted by this Section.
Shares of Employer Stock distributed by the Trustee may include
such legend restrictions on transferability as may be necessary to
preserve the foregoing rights of first refusal and options or as
the Employer may reasonably require in order to assure compliance
with applicable federal and state securities laws.
(b) The exercise price for any Employer Stock
acquired pursuant to the above subsection (a) from a person other
than a "disqualified person" (as defined in the following Section
11.6(c)) shall be the greater of: (i) the Fair Market Value of
such Employer Stock as of the most recent Valuation Date; or (ii)
the purchase price offered by an independent party making a bona
fide offer to purchase such Employer Stock.
The exercise price for any Employer Stock acquired
pursuant to the above subsection (a) from a person who is a
disqualified person (as defined in the following Section 11.6(c))
shall be the greater of: (i) the Fair Market Value of such
Employer Stock determined as of the date written notice is given by
the Participant or Beneficiary of the Participant's desire to sell
some or all of such person's shares of Employer Stock; or (ii) the
purchase price offered by an independent party making a bona fide
offer to purchase such Employer Stock.
17.27 Registration of Employer Stock
If the Plan Administrator directs the Trustee to dispose of
any Employer Stock under circumstances which require registration
and/or qualification of the securities under applicable federal or
state securities laws, then the Employer, at its expense, will
take, or cause to be taken, any and all such actions as may be
necessary or appropriate to effect such registration and/or
qualification.
17.28 Investments in Employer Stock
(a) The Trustee shall have all powers and authority
necessary for the performance of its duties, including those powers
designated in the Trust Agreement and in this Plan. However, such
powers shall not include the power to borrow to purchase Employer
Stock.
(b) Any cash received by the Trustee or credited to
the ESOP Investment Account, PAYSOP Account or the 401(k) Employer
Stock Account of any Participant shall be invested to the extent
practicable in shares of Employer Stock. The Trustee is
specifically authorized to invest and hold up to one hundred
percent (100%) of the Trust assets credited to these Accounts in
"qualifying employer securities" (as that term is defined in
Section 407(d)(5) of ERISA). The Trustee may purchase such
Employer Stock directly from the Employer in accordance with
Section 401(e) of ERISA or from any other available source (also in
compliance with ERISA). Such stock or securities may be
outstanding, newly issued or treasury securities. All such
purchases must be made at not more than their Fair Market Values.
(c) In the event that Employer Stock is purchased
with any assets of the Trust, such Employer Stock shall be
allocated in accordance with Section 5.4(2)(a) hereof.
17.29 Independent Appraisals
All valuations of Employer Stock which is not readily
tradable on an established securities market for Plan purposes
shall be made by an independent appraiser meeting requirements
similar to those contained in Treasury regulations under Section
170(a)(1) of the Code.
18. AMENDMENT OR TERMINATION
18.1 Right to Amend Plan
(a) Only the Sponsoring Employer may amend this Plan.
The Plan may be amended at any time and from time to time;
provided, however, that no amendment shall limit or remove the
authority of the Sponsoring Employer to terminate the Plan, or
shall change the duties or liabilities of any of the parties
without their consent. No amendment shall have any retroactive
effect so as to deprive any Participant of any vested interest
except that no amendment made to conform to the Code or any federal
or state statute, regulation or ruling shall be considered
prejudicial to any Participant, and that no amendment shall ever
cause any reversion of funds to the Employer.
(b) If the Plan's Vesting Schedule is amended, or the
Plan is amended in any way that directly or indirectly affects the
computation of the Participant's nonforfeitable percentage or if
the Plan is deemed amended by an automatic change to or from a
Top-Heavy Vesting Schedule, each Participant with at least three
(3) Years of Service with the Employer may elect, within a
reasonable period after the adoption of the amendment or change, to
have the nonforfeitable percentage computed under the Plan without
regard to such amendment or change.
The period during which the election may be made shall
commence with the date the amendment is adopted or deemed to be
made and shall end on the latest of:
(i) sixty (60) days after the amendment is
adopted;
(ii) sixty (60) days after the amendment becomes
effective; or
(iii) sixty (60) days after the Participant is
issued written notice of the amendment by the Employer
or Administrator.
(c) No amendment to the Plan shall be effective to
the extent that it has the effect of decreasing a Participant's
accrued benefit. Notwithstanding the preceding sentence, a
Participant's Account balance may be reduced to the extent
permitted under Section 412(c)(8) of the Code. For purposes of
this subsection, a Plan amendment which has the effect of decreas-
ing a Participant's Account balance or eliminating an optional form
of benefit, with respect to benefits attributable to Service before
the amendment shall be treated as reducing an accrued benefit.
Furthermore, if the vesting schedule of a Plan is amended, in the
case of an Employee who is a Participant as of the later of the
date such amendment is adopted or the date it becomes effective,
the nonforfeitable percentage (determined as of such date) of such
Employee's Employer-derived Accrued Benefit will not be less than
the percentage computed under the Plan without regard to such
amendment.
18.2 Limitation of Right to Amend
No amendment shall have the effect of causing or permitting
any part of the Trust Fund to be used for or diverted to, purposes
other than for the exclusive benefit of Participants, former
Participants and Beneficiaries, and no amendment shall have the
effect of revesting in the Employer any portion of the Trust Fund.
18.3 Termination of Plan by Sponsoring Employer
(a) Right Reserved. Although the Sponsoring Employer
expects the Plan to be continued indefinitely, it reserves the
right to terminate the Plan at any time by action of the Board and
to discontinue all contributions hereunder. The Sponsoring
Employer reserves the right to temporarily suspend contributions
from time to time as it shall deem appropriate and necessary, and
such suspension of contributions shall not be considered to be a
termination of the Plan. In the event of termination or partial
termination of the Plan, or a complete discontinuance of
contributions to the Plan, the Sponsoring Employer shall notify the
Trustee in writing of such termination and, prior to any
distribution of assets hereunder, shall file notice, in such form
and manner as is required by law, if any, with the Internal Revenue
Service.
(b) Distribution Upon Termination. In the event of
the termination or partial termination of the Plan, the Account
balances of each affected Participant shall be nonforfeitable. In
the event of a complete discontinuance of contributions, the
Account balances of each affected Participant will be nonfor-
feitable. The Sponsoring Employer, by written notice of terminat-
ion of the Plan, shall direct the Trustee to reduce such assets of
the Trust Fund to cash which are not designated by the Employer,
or, in the case of illiquid assets, by the Trustee, to be retained
for distribution in kind. The Trustee shall cause a valuation of
the Trust Fund to be made as of the date such assets are reduced to
cash, at which time the balances of Accounts shall be brought up to
date. Upon completion of such accounting and receipt from the
Sponsoring Employer of directions as to the form of distributions,
the Trustee shall distribute the assets of the Trust Fund to the
Participants or Beneficiaries, as the case may be, in accordance
with such directions. Each Participant or Beneficiary who is
entitled to receive a distribution from an Account may elect to
receive the payment of such Account in a lump sum or through an
annuity purchased from a commercial insurance carrier licensed in
the State of Tennessee.
18.4 Mergers
In the event of any merger or consolidation with, or transfer
of assets to any other plan, each Participant will receive a
benefit immediately after such merger, consolidation or transfer
(if the Plan then terminated) which is at least equal to the
benefit the Participant was entitled to immediately before such
merger, consolidation or transfer (if the Plan had then
terminated).
19. MISCELLANEOUS
19.1 Liability of Employer
No Employee, Participant, Inactive or Retired Participant or
Beneficiary shall have any right or claim to any benefit under the
Plan except in accordance with its provisions. The adoption of the
Plan shall neither be construed as creating any contract of
employment between the Employer and any Employee or otherwise
conferring upon any Employee or other person any legal right to
continuation of employment, nor as limiting or qualifying the right
of the Employer to discharge any Employee without regard to the
effect that such discharge might have upon the Participant's rights
under the Plan.
19.2 Spendthrift Clause
No benefit or interest available hereunder will be subject to
assignment or alienation, either voluntarily or involuntarily. The
preceding sentence shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such
order is determined to be a Qualified Domestic Relations Order, or
any domestic relations order entered before January 1, 1985.
19.3 Successor Business of Employer
Unless this Plan is sooner terminated, any incorporated
successor to the business of the Employer may continue the Plan and
such successor shall thereupon succeed to all the rights, powers
and duties of the Employer hereunder. The employment of any
Employee who has continued in the employ of such successor shall
not be deemed to have been terminated or severed for any purpose
hereunder.
In the event that the Employer is reorganized or dissolved
for any reason without any provision being made for the continuance
of this Plan by a successor to the business of the Employer, the
Plan shall terminate and the assets shall be distributed as
provided in Section 18.3(b).
19.4 Insurance Company Not Responsible
No insurance company which may issue any policy upon the
application of the Trustee shall be required to take or permit any
action contrary to the provisions of such policy; or be bound to
allow any benefit or privilege to any person interested in any
policy it has issued which is not provided in such policy; or be
deemed to be a party to this Agreement for any purpose; or be
responsible for the validity of this Agreement; or be required to
look into the terms of this Agreement or question any act of the
Trustee hereunder; or be required to see that any action of the
Trustee is authorized by this Agreement. Any such issuing company
shall be fully discharged from any and all liability for any amount
paid to the Trustee, or in accordance with its direction; and no
issuing company shall be obligated to see to the application of any
moneys so paid by it. Any such issuing company shall be fully
protected in taking or permitting any action on the faith of any
instrument executed by the Trustee, and shall incur no liability
for so doing.
19.5 Persons Under Legal Disability
In the case of any distribution to a minor or other person
under a legal disability, the Plan Administrator, in its
discretion, may determine and shall so direct the Trustee that
benefit payments shall either (1) be made directly to such person
under a legal disability or (2) be made directly to the person who
has assumed the care of such person to be used for the support,
maintenance or education of such person, or (3) be made to the duly
appointed guardian or other representative, if any, of such person.
Any action taken by a duly appointed guardian or other legally
authorized representative on behalf of an individual under a legal
disability, including any consent given by such guardian or
representative, shall have the effect of action taken or consent
given by the individual.
19.6 Conflict of Provisions
If any provision or term of this Plan, or of the Trust
Agreement entered into pursuant hereto, is deemed to be at variance
with, or contrary to, any law of the United States or applicable
state law, said provision shall be severable to the extent it does
not disqualify the Plan under Sections 401(a) and 501(a) of the
Code and the provision of the law shall be deemed to govern.
19.7 Definition of Words
Feminine or neuter pronouns shall be substituted for those of
the masculine form, and the plural shall be substituted for the
singular, in any place or places herein where the context may
require such substitution or substitutions.
19.8 Titles
The titles of ARTICLES and Sections are included only for
convenience and shall not be construed as a part of the Plan or in
any respect to affect or modify its provisions.
19.9 Multiple Copies
This Plan may be executed in counterparts, each of which
shall be considered an original.
19.10 Applicable Law
Except with respect to a separate trust document adopted by
the Employer which contains a provision that other state law
applies to that document, the laws of the State of Tennessee shall
apply with respect to the interpretation and construction of the
provisions of the Plan, to the extent not preempted by ERISA or
given over herein under ERISA to the interpretation or construction
of the Administrator under Section 16.1.
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Dollar General Corporation on Form S-8 of our report dated
February 24, 1998, appearing in the Annual Report on Form 10-K of Dollar
General Corporation for the year ended January 30, 1998.
/s/Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Nashville, Tennessee
October 9, 1998
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the registration
statements of Dollar General Corporation on Form S-8 (Nos.
33-23796,33-31827, 33-51589 and 33-51591) or our report dated March 5,
1997 on our audits of the consolidated financial statements of Dollar
General Corporation and Subsidiaries as of January 31, 1997 and for the
years ended January 31, 1997 and 1996, which report is included in the
Annual Report on Form 10-K filed April 20, 1998.
/s/PriceWaterhouseCoopers LLP
October 9, 1998
