<PAGE> 1
As filed with the Securities and Exchange Commission January 23, 1998
Registration No. 333________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
LOMAK PETROLEUM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 500 Throckmorton Street 34-1312571
(STATE OR OTHER JURISDICTION OF Ft. Worth Texas 76102 (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) (817) 870-2601 IDENTIFICATION NO.)
(ADDRESS, INCLUDING ZIP CODE, TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
1989 STOCK OPTION PLAN
1997 STOCK PURCHASE PLAN
401(K) PLAN & TRUST
(FULL TITLE OF PLANS)
John H. Pinkerton, President
Lomak Petroleum, Inc.
500 Throckmorton Street, Fort Worth, Texas 76102
(817) 870-2601
(Name, address, including zip code and telephone number of agent for service)
With a copy to:
J. Mark Metts
Vinson & Elkins L.L.P.
1001 Fannin, Suite 2300
Houston, Texas 77002-6760
(713) 758-2222
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Amount to be Offering Price Aggregate Amount of
Title of Each Class of Securities to be Registered Registered(1) Per Share(2) Offering Price Registration Fee(2)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,000,000 $15.31 $15,310,000 $4,639
Common Stock, $.01 par value 424,500 $15.31 $ 6,499,095 $1,969
Common Stock, $.01 par value 200,000 $15.31 $ 3,062,000 $ 928
- --------------------------------------------------------------------------------------------------------------------------------
Total 1,624,500 -- -- $7,536
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)Consists of 1,000,000 shares of Common Stock issuable upon exercise of
options not yet granted under the 1989 Stock Option Plan, as amended, 424,500
shares of Common Stock available for purchase under the 1997 Stock Purchase
Plan and 200,000 shares of Common Stock issuable under the Company's 401(K)
Plan and Trust.
(2)Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933. The price for
the 1,000,000 options granted under the 1989 Stock Option Plan, the 424,500
shares available for purchase under the 1997 Stock Purchase Plan and the
200,000 shares issuable under the Company's 401(K) Plan & Trust was based on
a price of $15.31, the last sale of Common Stock of Lomak Petroleum, Inc.,
reported on the New York Stock Exchange on January 22, 1998.
<PAGE> 2
THE STOCK OPTION PLANS
This Registration Statement relates to an aggregate of 1,624,500 shares of
common stock, $.01 par value (the "Common Stock"), of Lomak Petroleum, Inc.
("Registrant") issuable upon the exercise of stock options that will be granted
under the 1989 Stock Option Plan (the "Option Plan") and Common Stock that
will be issued under the 1997 Stock Purchase Plan (the "Purchase Plan") and
Common Stock that will be issued under the 401(K) Plan and Trust (the "Benefit
Plan") (collectively, the "Plans") of the Registrant to employees of the
Registrant.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The Registrant hereby incorporates by reference in this Registration
Statement the following documents:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as amended by Form 10-K/A, dated March 7, 1997 of the
Registrant, filed pursuant to Section 13(a) of the Securities Exchange Act of
1934 (the "Exchange Act");
(b) All other reports filed by the Registrant since December 31, 1996 with
the Securities and Exchange Commission (the "Commission") pursuant to Section
13(a) or 15(d) of the Exchange Act, including the Registrant's Quarterly Reports
on Form 10-Q for the fiscal quarters ended March 31, 1997, June 30, 1997 and
September 30, 1997 and the Registrant's Current Report on Form 8-K dated
February 26, 1997, as amended by Form 8-K/A dated March 14, 1997;
(c) The description of the Registrant's Common Stock contained in the
Registration Statement on Form 10, dated June 18, 1980, and filed with the
Commission pursuant to Section 12(g) of the Exchange Act, including any
subsequent amendment(s) or report(s) filed for the purpose of updating such
description; and
(d) The Registrant's preceding Registration Statement on Form S-8
(Registration No. 33-66322) and Registration Statement on Form S-8 (Registration
No. 333-10719).
All documents filed by the Registrant pursuant to Section 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Registration
Statement and prior to the filing of a post-effective amendment, which indicates
all shares under the Plans have been sold or which deregisters all shares then
remaining unsold under the Plans, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supercedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement. Upon the written or oral request of any person to whom a
copy of this Registration Statement has been delivered, the Registrant will
provide without charge to such person a copy of any and all documents (excluding
exhibits thereto unless such exhibits are specifically incorporated by reference
into such documents) that have been incorporated by reference into this
Registration Statement but not delivered herewith. Requests for such documents
should be directed to Lomak Petroleum, Inc., 500 Throckmorton Street, Fort
Worth, Texas 76102 Attention: Corporate Secretary, telephone (817) 870-2601.
Item 4. Description of Securities
Not applicable.
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Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
The Registant is a Delaware corporation. Section 145 of the Delaware General
Corporation Law generally provides that a corporation is empowered to indemnify
any person who is made a party to a proceeding or threatened proceeding by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation or was, at the request of the corporation, serving in any of
such capacities in another corporation or other enterprise. This statute
describes in detail the right of the corporation to indemnify any such person.
Article SEVENTH, section (5) the Registrant's Certificate of Incorporation
provides:
"Any former, present or future director, officer or employee of the
Company or the legal representative of any such director, officer, or
employee shall be indemnified by the Company
(a) against reasonable costs, disbursements and counsel fees paid or
incurred where such person has been successful on the merits or
otherwise in any pending, threatened or completed civil, criminal,
administrative or arbitrative action, suit or proceeding, and any
appeal therein and any inquiry or investigation which could lead to
such action, suit or proceeding, or in defense of any claim, issue or
matter therein, by reason of such person being or having been such
director, officer or employee, and
(b) with respect to any such action, suit, proceeding, inquiry or
investigation for which indemnification is not made under (a) above,
against reasonable costs, disbursements (which shall include amounts
paid in satisfaction of settlements, judgments, fines and penalties,
exclusive, however, of any amount paid or payable to the Company) and
counsel fees if such person also had no reasonable cause to believe the
conduct was unlawful, with the determination as to whether the
applicable standard of conduct was met to be made by a majority of the
members of the Board of Directors (sitting as a committee of the Board)
who were not parties to such inquiry, investigation, action, suit or
proceeding or by any one or more disinterested counsel to whom the
question may be referred to the Board of Directors; provided, however,
in connection with any proceeding by or in the right of the Company, no
indemnification shall be provided as to any person adjudged by any
court to be liable for negligence or misconduct except as and to the
extent determined by such court.
The termination of any such inquiry, investigation, action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of
nolo contendere or its equivalent shall not of itself create a
presumption that such person did not meet the standards of conduct set
forth in subsection (b) above.
Reasonable costs, disbursements and counsel fees incurred by such
person in connection with any inquiry, investigation action, suit or
proceeding may be paid by the Company in advance of the final
disposition of such matter if authorized by a majority of the Board of
Directors (sitting as a committee of the Board) not parties to such
matter upon receipt by the Company of an undertaking by or on behalf of
such person to repay such amount unless it is ultimately determined
that such person is entitled to be indemnified as set forth herein.
The Board of Directors may, at any regular or special meeting of the
Board, by resolution, accord similar indemnification (prospective or
retroactive) to any director, trustee, officer or employee of any other
company who is serving as such at the request of the Company because of
the Company's interest in such other company and any officer, director
or employee of any constituent corporation absorbed by the Company in a
consolidation or merger, or the legal representative of any such
director, trustee, officer or employee.
The indemnification herein provided shall not exclude any other rights
to which such person may be entitled as a matter of law or which may be
lawfully granted."
Article EIGHTH of the Registrant's Certificate of Incorporation provides:
"No director of the Corporation shall be liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional
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misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation Law, or (iv) for any transaction from
which the director derived an improper personal benefit. This paragraph
shall not eliminate or limit the liability of a director for any act or
omission occurring prior to the effective date of its adoption. If the
General Corporation Law of the State of Delaware is hereafter amended
to authorize corporate action further limiting or eliminating the
personal liability of directors, then the liability of a director to
the Corporation shall be limited or eliminated to the fullest extent
permitted by the General Corporation Law of the State of Delaware, as
so amended from time to time. No repeal or modification of this Article
VIII, directly or by adoption of an inconsistent provision of this
Certificate of Incorporation, by the stockholders of the Corporation
shall be effective with respect to any cause of action, suit claim or
other matter, but for this Article VIII, would accrue or arise prior to
such repeal or modification.
Article XII of the Company's Bylaws, incorporating the above provisions,
provides for an indemnification agreement to be entered into by directors and
designated officers of the Company. All directors of the Company have executed
an indemnification agreement, the form of which was approved by stockholders at
the Company's 1994 annual stockholder's meeting.
Article XII of the Company's Bylaws also allows the Company to purchase
liability insurance for officers and directors. As of the date hereof, there is
no such insurance in place.
Article XIII of the Company's Bylaws, with certain specified exceptions,
limits the personal liability of the directors to Lomak or its stockholders for
monetary damages for breach of fiduciary duty to the fullest extent permitted by
Delaware law, including any changes in Delaware law adopted in the future.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
Exhibit No. Description
- ------------- -----------------------------------------------------
4.1 Lomak Petroleum, Inc. 1989 Stock Option Plan (filed
as Exhibit 10.1(d) to the Registrant's Registration
Statement on Form S-4, File No. 33-31558 and
incorporated herein by reference)
4.2* Amendment to the Lomak Petroleum, Inc. 1989 Stock
Option Plan, as Amended
4.3* 1997 Stock Purchase Plan
4.4* Lomak Petroleum, Inc. 401(K) Plan & Trust
5.1* Opinion of Vinson & Elkins, L.L.P.
23.1(a)* Consent of Vinson & Elkins, L.L.P. (Included in
Exhibit 5.1).
23.1(b)* Consent of Arthur Andersen LLP
23.1(c)* Consent of Coopers & Lybrand LLP
24.1* Powers of Attorney (included in the signature pages
hereto).
* Filed herewith.
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Item 9. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii)To reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Securities and Exchange
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;
(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
(1)(i) and (1)(ii) do not apply if the information required to
be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in
this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hartville, State of Ohio, January 23, 1998.
LOMAK PETROLEUM, INC.
BY: /S/ THOMAS W. STOELK
---------------------------------------------
Thomas W. Stoelk
Senior Vice President-Finance and Administration
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated. Each person whose signature appears below
constitutes and appoints John H. Pinkerton and Thomas W. Stoelk, or any of them,
each with power to act without the other, his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any or all
subsequent post-effective amendments and supplements to this Registration
Statement, and to file the same, or cause to be filed the same, with all
exhibits thereto, and other documents in connection therewith with the
Securities and Exchange Commission, granting unto each said attorney-in-fact and
agent full power 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 might or could do in person, hereby ratifying and confirming all
that any said attorney-in-fact and agent or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
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<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
------------------------------------------------------------------------------------------
<S> <C> <C>
/s/ Thomas J. Edelman Chairman and Director January 23, 1998
----------------------------
Thomas J. Edelman
/s/ John H. Pinkerton President, Chief Executive Officer and January 23, 1998
---------------------------- Director (Principal Executive Officer)
John H. Pinkerton
/s/ C. Rand Michaels Vice Chairman and Director January 23, 1998
----------------------------
C. Rand Michaels
/s/ Robert E. Aikman Director January 23, 1998
----------------------------
Robert E. Aikman
/s/ Allen Finkelson Director January 23, 1998
----------------------------
Allen Finkelson
/s/ Anthony V. Dub Director January 23, 1998
----------------------------
Anthony V. Dub
/s/ Ben A. Guill Director January 23, 1998
----------------------------
Ben A. Guill
/s/ Thomas W. Stoelk Senior Vice President - Finance and January 23, 1998
---------------------------- Administration
Thomas W. Stoelk (Principal Financial Officer)
/s/ Geoffrey T. Doke Controller and Treasurer (Principal January 23, 1998
---------------------------- Accounting Officer )
Geoffrey T. Doke
</TABLE>
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EXHIBIT INDEX
Exhibit No. Description
- ------------- -----------------------------------------------------
4.1 Lomak Petroleum, Inc. 1989 Stock Option Plan (filed
as Exhibit 10.1(d) to the Registrant's Registration
Statement on Form S-4, File No. 33-31558 and
incorporated herein by reference)
4.2* Amendment to the Lomak Petroleum, Inc. 1989 Stock
Option Plan, as Amended
4.3* 1997 Stock Purchase Plan
4.4* Lomak Petroleum, Inc. 401(K) Plan & Trust
5.1* Opinion of Vinson & Elkins, L.L.P.
23.1(a)* Consent of Vinson & Elkins, L.L.P. (Included in
Exhibit 5.1).
23.1(b)* Consent of Arthur Andersen LLP
23.1(c)* Consent of Coopers & Lybrand LLP
24.1* Powers of Attorney (included in the signature pages
hereto).
* Filed herewith.
<PAGE> 1
Exhibit 4.2
AMENDMENT
TO THE
LOMAK PETROLEUM, INC.
1989 STOCK OPTION PLAN, AS AMENDED
RESOLVED, that the plan agreement of the Company's 1989 Stock Option Plan,
as amended, be further amended by deleting Section 1.01 thereof and substituting
the following therefore:
1.01 Description of Stock and Maximum Shares Allocated. Subject to the
adjustments provided for in Paragraph 5.06 hereof, the stock to which options
granted hereunder give the holder thereof the right to purchase shall be shares
of the Corporation's authorized Common Stock, $.01 par value (together with any
other securities with respect to which options granted hereunder may become
exercisable, hereinafter referred to as the "Stock"), and may become unissued or
reaquired shares, as the Board of Directors of the Corporation (the "Board of
Directors") may, in its sole and absolute discretion, from time to time
determine. Subject to the adjustments provided for in Paragraph 5.06 hereof, the
aggregate number of shares of Stock to be issued pursuant to the exercise of all
options granted hereunder shall not exceed 3,000,000 shares. Notwithstanding the
foregoing, no option may be granted which would result in there being
outstanding aggregate options covering a number of shares of Common Stock
greater than 10% of the Corporation's then outstanding shares of Common Stock
(including for calculation purposes all shares of Common Stock issuable upon
exercise of outstanding warrants and other convertible securities of the
Corporation.)
<PAGE> 1
Exhibit 4.3
LOMAK PETROLEUM, INC.
1997 STOCK PURCHASE PLAN
ARTICLE I
PURPOSE
The purpose of the Plan is to provide Eligible Persons, as defined herein,
of Lomak Petroleum, Inc. (the "Company") with an opportunity to purchase Common
Stock of the Company and thereby participate in the growth and future prospects
of the Company. Each Participant will be entitled to purchase Common Stock at
prices ranging from between 50% to 85% of the then fair market value of Common
Stock. The Plan is not intended to comply with the provisions of Section 423 of
the Internal Revenue Code of 1986, as amended.
ARTICLE II
DEFINITIONS
The following terms, when capitalized, shall have the meanings specified
below unless the context clearly indicates to the contrary.
2.1 "Board of Directors" shall mean the Board of Directors of the
Company.
2.2 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
2.3 "Committee" or "Stock Purchase Plan Committee" shall mean the Stock
Purchase Plan Committee appointed by the Board of Directors in
accordance with Article III of the Plan.
2.4 "Committee Member" shall mean any past, present or future member of
the Committee.
2.5 "Common Stock" shall mean the Common Stock, $.01 par value per
share, of the Company.
2.6 "Company" shall mean Lomak Petroleum, Inc., a Delaware corporation.
2.7 "Effective Date" shall mean the date the Plan is declared operative
by the Board of Directors.
2.8 "Eligible Person" shall, with respect to any Purchase Date, mean
only those persons who are officers, directors, key employees or
consultants of the Company, as determined in the discretion of the
Committee.
2.9 "Offering" shall mean the offering of shares of Common Stock to
Eligible Persons pursuant to the Plan that occurs on each Purchase
Date or on such other date or dates as the Committee may determine.
2.10 "Participant" shall mean an Eligible Person who elects to
participate in the Plan.
2.11 "Plan" shall mean the Lomak Petroleum, Inc. 1997 Stock Purchase
Plan, as amended.
2.12 "Plan Year" shall mean each calendar year during the term of the
Plan commencing on January 1, 1997.
2.13 "Preferred Stock" shall mean the Preferred Stock, $1 par value per
share, of the Company.
2.14 "Purchase Amount" shall mean an amount, not less than $1,000 in any
Plan Year and not more than such amounts as may from time to time be
determined by the Committee, to be applied to the purchase of Common
Stock pursuant to this Plan.
2.15 "Purchase Date" shall mean the last business day of March, June,
September and December in each Plan Year or any such other date or
dates as the Committee may determine.
2.16 "Stock Purchase Account" shall mean each separate account maintained
for a Participant under the Plan, collectively or singly as the
context requires. All Accounts shall be fully vested at all times.
The Committee
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may create special types of Stock Purchase Accounts for
administrative reasons, even though the Stock Purchase Accounts are
not expressly authorized by the Plan.
2.17 "Vested" shall mean non-forfeitable.
The masculine gender, whenever used in this Plan, includes the feminine,
the singular includes the plural and the plural includes the singular unless the
context otherwise requires.
ARTICLE III
ADMINISTRATION OF PLAN
The Plan shall be administered by the Stock Purchase Plan Committee
appointed by the Board of Directors and shall consist of three persons, all of
whom shall be either directors or employees of the Company. Members of the
Committee may be removed at any time by the Board of Directors and the Board of
Directors shall have the power to fill any vacancy which may occur in the
Committee. The Committee shall have full and final authority to make rules and
regulations, subject to the express provisions of the Plan, for the
administration of the Plan, to decide who shall be Eligible Persons and
Participants in the Plan to determine, the maximum Purchase Amount, to determine
the method and times of purchase of shares of Common Stock, to determine the
purchase price of any shares of Common Stock sold to Participants hereunder, and
to settle any disputes which may arise under the terms of the Plan. The
Committee's interpretations and decisions with regard to the provisions of the
Plan and any rules or regulations promulgated thereunder shall be final and
conclusive. A majority of the Committee shall constitute a quorum, and acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee, shall be deemed the
acts of the Committee.
ARTICLE IV
SHARES
There shall be 500,000 shares of Common Stock reserved under the Plan,
subject to adjustment in accordance with Article XIV hereof. The shares of
Common Stock subject to the Plan shall be either shares of authorized but
unissued Common Stock or shares of Common Stock reacquired on the open market or
otherwise for the account of the Participants. The Committee shall determine
from time to time whether the shares of Common Stock shall be authorized but
unissued shares or reacquired shares.
ARTICLE V
ENTRY INTO THE PLAN; PAYMENT FOR SHARES
The Committee shall determine, prior to any Purchase Date, the number of
shares that any Eligible Person shall be entitled to purchase on such Purchase
Date pursuant to the Plan. An Eligible Person may become a Participant in the
Plan only by filing with the Committee, at the address of the Company, a
consent, in such form as the Committee shall approve, to become a Participant.
The method of payment for the purchase of shares of Common Stock shall be
determined by the Committee and may include, without limitation, cash,
promissory notes, payroll deductions or any other method or combination thereof.
No share of the Company's Common Stock may be issued to a Participant until such
time as the Share has been fully paid for as provided above.
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ARTICLE VII
PURCHASE OF SHARES
On each Purchase Date, the amount credited to each Participant's Stock
Purchase Account shall be applied to purchase, in the manner and on the terms
herein provided, the number of whole shares of Common Stock determined by
dividing (a) the amount theretofore contributed by the Participant pursuant to
Article V hereof and not theretofore applied to the purchase of Common Stock by
(b) the purchase price per share of Common Stock as determined pursuant to
Article VIII hereof. Any amount remaining in a Participant's Stock Purchase
Account shall be held in such account and applied to the purchase of shares of
Common Stock on the next Purchase Date, as determined by the Committee. Except
as a holder of shares of Common Stock purchased for a Participant's account, a
Participant shall have no greater rights with respect to his Stock Purchase
Account than an unsecured creditor of the Company.
ARTICLE VIII
PURCHASE PRICE
The purchase price per share of any shares of Common Stock sold to any
Participant hereunder shall, in the discretion of the Committee in respect of
any Purchase Date, be between fifty percent (50%) and eighty-five percent (85%)
of the fair market value (including transaction costs) of shares of Common Stock
on the Purchase Date. In determining the purchase price per share of any shares
of the Company's Common Stock sold to any Participants hereunder, the Committee
may consider a number of factors, including the performance and future prospects
of the Company and the relationship of the fair market value of the Company's
Common Stock to other indicia of value. Anything herein to the contrary
notwithstanding, the purchase price for shares of authorized but unissued Common
Stock of the Company purchased pursuant to this Plan shall not be less than the
par value of the Common Stock. For purposes of the Plan, the fair market value
of shares of Common Stock on any date shall be determined as follows:
(a) If the Common Stock is then listed on a national securities exchange,
the "fair market value" shall be the closing price of a share of Common Stock on
such exchange on the last preceding business day on which shares of Common Stock
were traded.
(b) If the Common Stock is then not listed on a national securities
exchange, the "fair market value" shall be the closing price of a share of
Common Stock in the over-the-counter market as reported by the Nasdaq Stock
Market - National Market System ("Nasdaq") on that date or as reported on such
other similar system then in use.
(c) If the Common Stock is not then reported by Nasdaq or by such other
similar system then in use, the "fair market value" shall be the closing big
price as furnished by a professional market maker making a market in the Common
Stock as selected by the Board of Directors.
(d) If neither (a), (b) nor (c) applies, the "fair market value" shall be
determined in good faith by the Committee. Such determination shall be binding
on all persons.
(e) In any event, the "fair market value" shall be adjusted to include
actual transaction costs and expenses, including broker commissions and fees,
stock transfer taxes and the like, of reaquisition of shares of Common Stock on
the open market or otherwise.
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ARTICLE IX
ISSUANCE OF SHARES; STOCK CERTIFICATES
The shares of Common Stock purchased by a Participant on a Purchase Date
shall, for all purposes, be deemed to have been issued and sold at the close of
business on such Purchase Date. Prior to that time, none of the rights or
privileges of a stockholder of the Company shall exist with respect to such
shares.
As soon as practicable after each Purchase Date, the Company will credit
to each Participant's Stock Purchase Account, all whole shares purchased by each
Participant on such Purchase Date. Certificates representing Common Stock
purchased pursuant to the Plan may be registered in nominee or broker name or in
the name of the Participant, unless the Participant shall otherwise instruct the
Committee. The Company will deliver, or cause to be delivered, a certificate for
the number of shares purchased if requested by the Participant. All dividends
paid with respect to the shares in a Participant's Stock Purchase Account shall
be credited to such account, and, unless the Participant otherwise elects,
dividends credited to his Stock Purchase Account will be automatically applied
to the purchase of whole shares of Common Stock on the next succeeding Purchase
Date. With respect to shares of Common Stock purchased for the account of a
Participant, the Participant shall be entitled to vote or to consent as a
stockholder to any action with respect to which other stockholders of the
Company are entitled to vote or give consent.
ARTICLE X
WITHDRAWAL
A Participant may withdraw from the Plan at any time during a Plan Year,
upon at least thirty days prior written notice, by filing a written notice of
withdrawal. Upon a Participant's withdrawal, the entire amount credited to his
Stock Purchase Account and not previously applied to the purchase of Common
Stock shall be promptly refunded to him. Partial withdrawal will not be
permitted. Any Participant who withdraws from the Plan may again become a
Participant hereunder in accordance with Article V hereof.
ARTICLE XI
TERMINATION OF EMPLOYMENT OR AGENCY RELATIONSHIP
In the event of termination of the employment or retention relationship
between a Participant and the Company, for any reason, including death or
permanent disability (as defined in Section 22(e) (3) of the Code), the entire
amount credited to his Stock Purchase Account and not previously applied to the
purchase of Common Stock shall promptly be refunded to the Participant, or to
the Participant's estate.
ARTICLE XII
PROCEDURE IF INSUFFICIENT SHARES AVAILABLE
In the event that on any Purchase Date the aggregate funds available under
the Plan for the purchase of shares of Common Stock would purchase a greater
number of shares than the number of shares then available for purchase under the
Plan, the Committee shall proportionately reduce the number of shares to be
purchased by each Participant on such Purchase Date in order to eliminate such
deficiency, and the Plan shall terminate immediately after such Purchase Date.
4
<PAGE> 5
ARTICLE XIII
RIGHTS NOT TRANSFERABLE
Neither credit balances in a Participant's Stock Purchase Account nor any
right to purchase shares of Common Stock under the Plan may be assigned,
transferred, pledged, hypothecated or disposed of in any way and any attempted
transfer or disposition thereof shall be null and void. If a Participant
attempts to assign, transfer, pledge, hypothecate or dispose of in any way,
except by will or by the applicable laws of descent and distribution, any such
interest under the Plan, he shall be deemed to have requested withdrawal from
the Plan and the provisions of Article X hereof shall apply with respect to such
Participant.
ARTICLE XIV
RECAPITALIZATION; EFFECT OF CERTAIN TRANSACTIONS
The aggregate number of shares of Common Stock reserved for purchase under
the Plan as provided in Article IV hereof shall be appropriately adjusted by the
Board of Directors to reflect a stock dividend, stock split-up, share
combination, exchange of shares, recapitalization, merger, consolidation,
liquidation or other similar changes or transactions by the Company.
ARTICLE XV
TERMINATION AND AMENDMENT OF THE PLAN
The Plan shall continue in effect through January 1, 2007, unless
terminated prior thereto pursuant to Article XII hereof or pursuant to the next
succeeding sentence. The Board of Directors shall have the right to terminate
the Plan at any time. In the event of expiration or termination of the Plan
pursuant to this Article, the entire amount credited to the Stock Purchase
Account of each Participant hereunder and not theretofore applied to the
purchase of Common Stock shall be refunded to each such Participant.
The Board of Directors may from time to time make such amendments or
modifications to the Plan as it shall deem advisable, provided, however, that no
such action shall prejudice or diminish any right of any Participant hereunder
which shall have theretofore accrued. Other than as expressly set forth herein,
the Board of Directors may not amend the Plan if such amendment would increase
the cost thereof to the Company other than with the affirmative vote of a
majority in interest of the Company's stockholders.
ARTICLE XVI
APPLICATION OF THE FUNDS
All funds withheld by the Company pursuant to the Plan which have not been
applied to the purchase of Common Stock may be used for any corporate purpose by
the Company.
ARTICLE XVII
INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may have as
directors or officers of the Company or as members of the Committee, the members
of the Committee shall be indemnified by the Company against the reasonable
expenses, including attorney's fees actually and necessarily incurred in
connection with the defense of any action, suit or proceeding, or in connection
with any appeal therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plan and
against all amounts paid by them in settlement thereof (provided such settlement
is approved by independent legal counsel selected by the Company) or paid by
them in satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such action,
suit or proceeding that such Committee member is liable for willful misconduct
in the performance of his duties.
5
<PAGE> 6
ARTICLE XVIII
TERMINATION OF RIGHT OF ACTION
Every right of action arising out of or in connection with the Plan by or
on behalf of any Participant under the Plan against the Company, or any
Committee Member will, irrespective of the place where an action may be brought
and irrespective of the place of residence of any such Participant or Committee
Member, cease and be barred by the expiration of three years from the date of
the act or omission in respect of which such right of action is alleged to have
arisen.
ARTICLE XIX
REGULATORY MATTERS
The purchase of Common Stock on behalf of the Participants pursuant to the
Plan, the issuance of Common Stock to the Participants pursuant to the Plan and
the transfer of Common Stock by participants acquired pursuant to the Plan shall
be subject to compliance with the requirements of the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, the requirements of any stock exchange upon which the
Common Stock may then be listed and shall be subject to prior approval by the
Company's legal counsel with respect to all legal matters in connection
therewith.
ARTICLE XX
CONSTRUCTION
This Plan shall be construed and enforced in accordance with the laws of
the State of Delaware.
6
<PAGE> 1
EXHIBIT 4.4
401(k) PROFIT SHARING PLAN
V2.6
<PAGE> 2
ARTICLE I.
ESTABLISHMENT AND PRELIMINARY MATTERS
1.01 Purpose. The purpose of this Plan is to provide additional incentive
and retirement, death and disability, security for Eligible Employees, as
provided herein.
1.02 Compliance with the Law. This Plan, together with the Trust, is
intended to meet the applicable requirements of the following statutes: the
Internal Revenue Code of 1986, as amended ("IRC"); the Employee Retirement
Income Security Act of 1974 ("ERISA"); the Tax Equity and Fiscal Responsibility
Act of 1982 ("TEFRA"); the Deficit Reduction Act of 1984 ("DEFRA"); the
Retirement Equity Act of 1984 ("REA"); the Tax Reform Act of 1986 ("TRA'86");
the Omnibus Budget Reconciliation Act of 1987 ("OBRA"); and the Technical and
Miscellaneous Revenue Act of 1988 ("TAMRA"). This Plan shall be amended from
time to time as may be necessary to conform to the requirements of the IRC,
ERISA, TEFRA, DEFRA, REA, TRA'86, OBRA and TAMRA.
1.03 Adoption Agreement. The Adoption Agreement executed the date hereof
and any amendments thereto are incorporated and made a part of the Plan by
reference.
1.04 Trust. The executed Trust Agreement and any amendments thereto are
incorporated and made a part of the Plan by reference.
<PAGE> 3
ARTICLE II.
DEFINITIONS
In addition to the following definitions, certain words and phrases used
herein are defined in the Adoption Agreement.
2.01 "Account" or "Accrued Benefit". The entire interest of a Participant
in the Trust Fund. A Participant's interest in the Trust Fund shall include one
or more of the following:
"Employer Elective Account" shall consist of the amounts contributed by
the Employer pursuant to either a salary reduction agreement, or an election to
defer under a cash or deferred election agreement, and the net earnings, gains
and losses attributable thereto. The Employer Elective Account shall be fully
vested and nonforfeitable under any circumstances;
"Employer Non-Elective Account" or "Employer Contribution Account" shall
consist of the Participant's allocable share of Employer contributions (other
than those made as Employer Elective Contributions) to the Plan and forfeitures,
if any, and the net earnings, gains and losses attributable thereto;
"Voluntary Contribution Account" shall consist of the amounts contributed
to the Plan by a Participant and the net earnings, gains and losses attributable
thereto;
"Rollover Account" shall consist of the entire amount received by the
Trustee as a qualified rollover distribution (as defined in IRC Section
402(a)(5)) or a direct plan-to-plan transfer from a qualified plan or conduit
Individual Retirement Account and the net earnings, gains and losses
attributable thereto;
"Qualified Voluntary Employee Contribution Account" shall consist of the
amounts contributed to this Plan by a Participant pursuant to Section 8.04
hereof and the net earnings, gains and losses attributable thereto.
For purposes of plan distributions, if an Account is not a Participant
Directed Account, then the amount that is distributable is the value of the
Account determined as of the Valuation Date immediately preceding or coincident
with the date of distribution.
2.02 "Adoption Agreement". The separate document executed the date hereof
together with all amendments thereto which constitutes an integral part of the
Plan and in which the Employer elects certain options.
2.03 "Affiliated Service Group". A group consisting of two or more
organizations as defined in IRC Section 414(m).
2.04 "Anniversary Date". The last day in each Plan Year.
2.05 "Annuity". A series of payments. The following annuity forms have the
following meanings:
"Life Annuity" means an Annuity payable monthly during the lifetime
of the recipient, ceasing with the payment due for the month in which the death
of the recipient occurs.
"Qualified Joint and Survivor Annuity" means an immediate Annuity
payable for the life of the Participant, with a survivor Annuity payable for the
life of the spouse of the Participant which is neither less than one-half (1/2)
of nor greater than the amount of the Annuity payable during the joint lives of
the Participant and the Participant's spouse. The Qualified Joint and Survivor
Annuity will be the amount of benefit which can be purchased with the
Participant's Account balance. The percentage of the survivor Annuity under the
Plan shall be fifty percent (50%).
<PAGE> 4
2.06 "Beneficiary" or "Beneficiaries". Such Person(s) as may be designated
by a Participant or by the terms of the Plan. Wherever the rights of
Participants are stated or limited herein, such provisions shall also apply to
their Beneficiaries.
2.07 "Break in Service" or "One Year Break in Service". The failure by a
Participant or Employee to complete a minimum number of Hours of Service during
the Computation Period selected in Article A2 of the Adoption Agreement, as
determined under (a) or (b) below.
(a) If the Plan uses the "counting of hours" method of computing
Years of Service, a Break in Service shall occur in a Plan Year during which an
Employee or Participant fails to complete more than five hundred (500) Hours of
Service. However, a Break in Service shall not be deemed to have occurred
because of the failure to complete more than five hundred (500) Hours of Service
during the first twelve-month period of employment, or during the Plan Year in
which Disability, death or retirement occurs. A Break in Service shall not be
deemed to have occurred during any period of Leave of Absence if the Employee or
Participant returns to the service of the Employer within the time permitted
pursuant to the provisions of this Plan. Solely for purposes of determining
whether a Break in Service has occurred in a computation period, an individual
who is absent from work for maternity or paternity reasons shall receive credit
for the Hours of Service which would otherwise have been credited to such
individual but for such absence, or in any case in which such hours cannot be
determined, eight (8) Hours of Service per day of such absence. The Hours of
Service credited under this Subsection (a) shall be credited (1) in the
computation period in which the absence begins if the crediting is necessary to
prevent a Break in Service in that period, or (2) in all other cases, in the
following computation period.
(b) If the Plan uses the "elapsed time" method of computing Years of
Service, a Break in Service shall occur if an Employee or Participant fails to
complete one (1) Hour of Service during a period of twelve (12) consecutive
months commencing with the first date of absence. In the case of an individual
who is absent for maternity or paternity reasons, the 12-consecutive month
period beginning on the first anniversary of the first date of such absence
shall not constitute a Break in Service.
(c) For purposes of this Section 2.07, an absence from work for
maternity or paternity reasons means an absence (1) by reason of the pregnancy
of the individual, (2) by reason of the birth of a child of the individual, (3)
by reason of the placement of a child with the individual in connection with the
adoption of such child by such individual, or (4) for purposes of caring for
such child for a period beginning immediately following such birth or placement.
2.08 "Compensation". As elected by the Employer in Article A2 of the
Adoption Agreement, "Compensation" will mean all of each Participant's (a) W-2
earnings or (b) compensation (as that term is defined in IRC Section 415(c)(3)).
For any self-employed individual covered under the Plan, "Compensation" will
mean earned income. "Compensation" shall include only that compensation which is
actually paid to the Participant during the applicable period. Except as
provided elsewhere in this Plan, the applicable period shall be the period
elected by the Employer in the Adoption Agreement. If the Employer makes no
election, the applicable period shall be the Plan Year. Any Highly Compensated
Employee may revocably waive Compensation for calculation of benefit purposes.
2.09 "Controlled Group". Such groups as defined in IRC Sections 414(b) and
414(c), as modified by IRC Section 415 where applicable.
2.10 "Disability". Unless otherwise specifically defined in the Adoption
Agreement, a physical or mental condition arising after an Employee has become a
Participant which totally and permanently prevents the Participant from engaging
in any occupation or employment for remuneration or profit, except for the
purpose of rehabilitation not incompatible with a finding of total and permanent
disability. The determination as to whether a Participant is totally and
permanently disabled shall be made by the Plan Administrator after consideration
of the following: (i) medical evidence by a licensed physician designated by the
Plan Administrator, (ii) whether the Participant is eligible for disability
benefits under any long-term disability plan sponsored by the Employer but
administered by an independent third party, and (iii) whether the Participant is
eligible for total and permanent disability benefits under the Social Security
Act in effect at the date of disability. Total and permanent Disability shall
exclude disabilities arising from:
(a) Chronic or excessive use of intoxicants, drugs, or
narcotics; or
<PAGE> 5
(b) Intentionally self-inflicted injury or intentionally
self-induced sickness; or
(c) An unlawful act or enterprise on the part of the
Participant; or
(d) Military service where the Participant is eligible to receive a
government-sponsored military disability pension.
The above rules with respect to a "disability" shall be uniformly and
consistently applied to all employees in similar circumstances.
2.11 "Eligible Employee". An Employee who, during any Plan Year, satisfies
all of the applicable requirements of Article A3 of the Adoption Agreement.
2.12 "Employee". Any individual employed by the Employer or any other
employer required to be aggregated with the Employer under IRC Sections 414(b),
(c), (m) or (o), and the following individuals:
(a) An "Owner-Employee" is an individual who owns the entire
interest in an unincorporated trade or business, or in the case of a
partnership, is a partner who owns more than ten percent (10%) of either the
capital interest or the profits interest of the Employer and who receives income
for personal services from the Employer.
(b) A "Self-Employed Individual" is an individual described in IRC
Section 401(c)(l) who has compensation from the Employer or who would have
compensation but for the fact that the Employer had no profits for the taxable
year.
(c) A "Leased Employee" is any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with IRC Section
414(n)(6)) on a substantially full-time basis for a period of at least one (1)
year, and such services are of a type historically performed by employees in the
business field of the recipient employer. Contributions or benefits provided a
leased employee by the leasing organization which are attributable to services
performed by the recipient employer shall be treated as provided by the
recipient employer.
A Leased Employee shall not be considered an Employee of the
recipient if (i) such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least ten
percent (10%) of compensation, as defined in IRC Section 415(c)(3), but
including amounts contributed by the Employer pursuant to a salary reduction
agreement which are excludable from the Employee's gross income under IRC
Sections 125, 402(a)(8), 402(h) or 403(b); (2) immediate participation; and (3)
full and immediate vesting; and (ii) leased employees do not constitute more
than twenty percent (20%) of the recipient's nonhighly compensated workforce.
2.13 "Employer". Any organization which has adopted this Plan and Trust.
2.14 "Highly Compensated Employee". The term "Highly Compensated Employee"
includes highly compensated active employees and highly compensated former
employees.
A "highly compensated active employee" includes any Employee
who performs service for the Employer during the determination year and who,
during the look-back year: (i) received Compensation from the Employer in excess
of $75,000 (as adjusted pursuant to IRC Section 415(d)); (ii) received
Compensation from the Employer in excess of $50,000 (as adjusted pursuant to IRC
Section 415(d)) and was a member of the top-paid group for such year; or (iii)
was an officer of the Employer and received Compensation during such year that
is greater than fifty percent (50%) of the dollar limitation in effect under IRC
Section 415(b)(1)(A)). The term "Highly Compensated Employee" also includes: (i)
Employees who are both described in the preceding sentence if the term
"determination year" is substituted for the term "look-back year" and the
Employee is one of the one hundred (100) Employees who received the most
Compensation from the Employer during the determination year; and (ii) Employees
who are five percent (5%) owners at any time during the look-back year or
determination year.
<PAGE> 6
If no officer has satisfied the compensation requirement of
(iii) above during either a determination year or look-back year, the highest
paid officer for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan
Year. The look-back year shall be the twelve-month period immediately preceding
the determination year.
A "highly compensated former employee" includes any Employee
who separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer during the
determination year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the Employee's 55th
birthday.
If an Employee is, during a determination year or look-back
year, a family member of either a five percent (5%) owner who is an active or
former Employee or a Highly Compensated Employee who is one of the ten (10) most
highly compensated employees ranked on the basis of Compensation paid by the
Employer during such year, then the family member and the five percent (5%)
owner or top-ten Highly Compensated Employee shall be treated as a single
Employee receiving Compensation and plan contributions or benefits equal to the
sum of such Compensation and contributions or benefits of the family member and
five percent (5%) owner or top-ten Highly Compensated Employee. For purposes of
this section, family member includes the spouse, lineal ascendants and
descendants of the Employee or former Employee and the spouses of such lineal
ascendants and descendants.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of Employees in the
top-paid group, the top one hundred (100) employees, the number of Employees
treated as officers and the compensation that is considered, will be made in
accordance with IRC Section 414(q) and the regulations thereunder.
For purposes of this Section 2.14, the term "Compensation" has
the meaning given in Section 2.08. However, the Employer may elect to include as
compensation any amount which is contributed by the Employer pursuant to a
salary reduction agreement and which is not includable in the gross income of
the Employee under IRC Sections 125, 402(a)(8), 402(h) or 403(b).
2.15 "Hour of Service".
(a) Each hour for which an Employee is paid or entitled to payment,
for the performance of duties during the applicable computation period. The
Employer may round up hours at the end of a computation period or more
frequently.
(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 employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or Leave of Absence.
Notwithstanding the preceding sentence:
(1) No more than 501 Hours of Service shall be credited under
this paragraph (b) to an Employee on account of any single continuous period
during which the Employee performs no duties (whether or not such period occurs
in a single computation period);
(2) An hour for which an Employee is directly or indirectly
paid, or entitled to payment, on account of a period during which no duties are
performed is not required to be credited to the Employee if such payment is made
or due under a plan maintained solely for the purpose of complying with
applicable worker's compensation, or unemployment compensation or disability
insurance laws; and
(3) Hours of Service 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 paragraph (b) above, 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
<PAGE> 7
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 back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same Hours of
Service shall not be credited both under paragraph (a) and paragraph (b), as the
case may be, and under this paragraph (c). Crediting of Hours of Service for
back pay awarded or agreed to with respect to periods described in paragraph (b)
above shall be subject to the limitations set forth in that paragraph.
In the case of a payment which is made or due on account of a period
during which an Employee performs no duties, and which results in the crediting
of Hours of Service under paragraph (b) above, the number of Hours of Service to
be credited shall be determined in accordance with Department of Labor
Regulations Section 2530.200b-2(b). Hours shall be credited to the applicable
computation period in accordance with Department of Labor Regulations Section
2530.200b-2(c). This Section 2.15 shall be interpreted in a manner consistent
with the aforementioned regulations.
For purposes of this Plan, Hours of Service completed by an
individual in the employ of any enterprise forming, with the Employer, a
Controlled Group, an Affiliated Service Group, and any other entity required to
be aggregated with the Employer pursuant to IRC Section 414(o) and the
regulations thereunder, and Hours of Service completed by an individual
considered an Employee under IRC Section 414(n) or IRC Section 414(o) and the
regulations thereunder, shall be considered services with the Employer.
2.16 "Investment Manager". Any Fiduciary, other than the Trustee or the
Plan Administrator, who:
(a) is delegated the power to manage, acquire or dispose of any
assets of the Plan or the Trust;
(b) is (1) registered as an investment advisor under the Investment
Advisors Act of 1940, (2) a bank as defined in that Act, or (3) an insurance
company qualified to perform services described above under the laws of more
than one state; and
(c) has acknowledged in writing that he or she is a Fiduciary with
respect to the Plan.
2.17 "Leave of Absence". Any of the following:
(a) Absence on leave granted by the Employer for any cause for the
period stated in such leave, or, if no period is stated, then for six (6) months
and any extensions that the Employer may grant in writing. For the purpose of
this subsection, the Employer shall give equal treatment to all Employees in
similar circumstances.
(b) Absence in any circumstances so long as the Employee continues
to receive the Employee's regular compensation from the Employer.
(c) Absence in the armed forces of the United States or government
service in time of war or national emergency.
(d) Absence by reason of illness or disability until such time as
the employment relationship between Employee and Employer is severed.
An absence shall cease to be a "Leave of Absence" and shall be deemed to be a
Break in Service as of the later of (1) and (2):
(1) If the Employee fails to return to the service of the
Employer -
(A) within five (5) days of expiration of any leave
of absence referred to in paragraph (a) hereof,
(B) at such time as the payment of regular
compensation is discontinued as referred to in paragraph (b) hereof,
<PAGE> 8
(C) within six (6) months after the Employee's
discharge or release from active duty, or, if the Employee does not return to
service with the Employer within the six-month period by reason of a disability
incurred while in the armed forces, if the Employee returns to service with the
Employer upon the termination of such disability as evidenced by release from
confinement in a military or veterans hospital, or
(D) upon recovery from illness or disability.
(2) The last day of the Plan Year in which the Employee would
have incurred a Break in Service but for the application of the provisions of
this Section 2.17.
The Plan Administrator shall be the sole judge of whether or not recovery from
illness or disability has occurred for this purpose.
2.18 "Named Fiduciary". The Plan Administrator.
2.19 "Net Profit". The current and accumulated earnings and profits of the
Employer, as determined by the Employer's regularly engaged accountant upon the
basis of the Employer's books of account, but without any deduction being taken
for any of the following: (1) depreciation, (2) extraordinary losses resulting
from the sale of assets not in the ordinary course of business, (3) casualty
losses in excess of recovery, (4) contributions to this or any other qualified
retirement plan, or (5) federal, state, county or city income taxes.
2.20 "Participant". Any person who is or has been an Eligible Employee and
who has become a Participant pursuant to Section 3.01 of the Plan. Participant
shall include the following classes:
"Active Participant" shall mean a Participant who is an
Eligible Employee and may, subject to the provisions of Article V governing
eligibility to share, be eligible to share in any Employer contribution for the
Plan Year (excluding any Participant who receives a Minimum Allocation under the
Plan solely because of Section 15.02).
"Inactive Participant" shall mean a Participant who has ceased
to be an Active Participant pursuant to Section 3.03(a), but who has not yet
incurred a Break in Service.
"Retired Participant" shall mean a Participant who has retired
pursuant to the provisions of this Plan and is currently entitled to or
receiving benefits under this Plan.
"Vested Participant" shall mean a Participant who has incurred
a Break in Service and is entitled to the distribution of benefits from this
Plan at a future date.
"Terminated Participant" shall mean a Participant who has
incurred a Break in Service prior to having become vested in any portion of the
Participant's Employer Contribution Account under this Plan.
2.21 "Person". An individual, partnership, joint venture, corporation,
mutual company, joint-stock company, trust, estate, unincorporated organization,
association or employee organization.
2.22 "Plan". The Plan of the Employer as set forth herein together with
the Adoption Agreement, and amendments thereto.
2.23 "Plan Year". The twelve (12) consecutive month period designated by
the Employer in the Adoption Agreement.
2.24 "Predecessor Entity". The Person which became the Employer and/or any
Person which shall, in either case, be specifically named in Article A2 of the
Adoption Agreement.
2.25 "Trust". The Trust which the Employer has duly adopted, together with
all amendments thereto, to hold the assets of this Plan.
<PAGE> 9
2.26 "Trust Fund". All the assets of the Trust.
2.27 "Trustee". The Person(s) duly appointed by the Employer to serve as
Trustee who has accepted such appointment, or any successor(s).
2.28 "Valuation Date". The last day of the Plan Year or any interim date
as of which the Trust Fund is valued by the Trustee.
2.29 "Vested Interest". The non-forfeitable portion of a Participant's
Accounts under the Plan.
2.30 "Year of Service". A Year of Service shall be determined pursuant to
(a) or (b) below, depending on the election made in Article A2 of the Adoption
Agreement, and shall in either event be subject to the provisions of (c) and
(d), as follows:
(a) If the "counting of hours" method is elected, a Year of Service
shall mean a twelve (12) consecutive month period (the Computation Period)
during which the Employee is credited with one thousand (1,000) (or such lesser
number as set forth in the Adoption Agreement) Hours of Service. The Computation
Period shall be as defined in Article A2 of the Adoption Agreement.
(b) If the "elapsed time" method is elected, a period of Years of
Service shall mean a period of time, measured in years and fractions of a year,
beginning with the date on which an Employee first performed an Hour of Service
and ending on the earlier of the date the Employee quits, is discharged, retires
or dies, or, if the Employee is absent for other reasons, on the first
anniversary of the first date of absence for any other reason. If an Employee is
absent for any reason and returns to the employ of the Employer within a period
of twelve (12) months from the date on which the Employee last performed an Hour
of Service, the Employee shall not be deemed to have had a Break in Service and
the Employee shall receive credit for the period of absence.
(c) All Years of Service with other members of a Controlled Group or
Affiliated Service Group shall be credited for purposes of determining an
Employee's eligibility to participate and the Employee's Vested Interest. Years
of Service shall also be credited for any individual required to be considered
an employee, for purposes of this Plan under IRC Section 414(n), of any employer
aggregated under IRC Sections 414(b), (c) or (m).
(d) If the Employer has continued the plan of a Predecessor Entity,
service with such Predecessor Entity shall be treated as service with the
Employer for purposes of determining Years of Service for all purposes under the
Plan. If the Employer did not continue a plan established by a Predecessor
Entity, service with the Predecessor Entity shall be considered in the
determination of Years of Service only to the extent set forth in Article A2 of
the Adoption Agreement.
<PAGE> 10
ARTICLE III.
PARTICIPATION
3.01 Initial Eligibility. An Eligible Employee shall become a Participant
on the Entry Date on which he or she satisfies all of the applicable
requirements as set forth in Article A3 of the Adoption Agreement.
3.02 Waiver of Participation. An Employee, once having become eligible for
participation in this Plan, shall not have the right to waive such participation
unless the Plan Administrator determines to allow written waivers of
participation. If such waivers are permitted, they shall be permitted on a
nondiscriminatory basis and shall be effective on a year-to-year basis only. If
an Employee waives participation and subsequently elects to become a
Participant, the period of waiver shall be considered as Years of Service under
the Plan. The Plan Administrator retains the right not to permit waivers in any
year or years, even if such waivers have been permitted in prior years.
3.03 Change of Status of Participant. An Active Participant shall cease to
be an Active Participant upon the occurrence of (a) or (b), and a Vested or
Terminated Participant shall resume the status of an Active Participant in
accordance with the provisions of (c), as follows:
(a) No Longer an Active Participant. If (i) a Participant's period
of employment falls below the number of Hours of Service required to accrue a
Year of Service under the Plan; (ii) a Participant is no longer employed by the
Employer, but is employed by a member of a Controlled Group or Affiliated
Service Group that includes the Employer and which is not a Participating
Employer, or (iii) a Participant is transferred to a class of employment which
causes the Participant to no longer be an Eligible Employee, the Participant
shall become an Inactive Participant.
(1) If a Participant who became an Inactive Participant
because of (a)(i) above completes a Year of Service or a Participant who became
an Inactive Participant because of (a)(ii) or (iii) above resumes the status of
an Eligible Employee without having incurred a Break in Service, then the
Participant shall immediately resume the status of an Active Participant.
(2) If an Inactive Participant retires or incurs a Break in
Service, the Participant shall become a Retired, Vested or Terminated
Participant.
(b) Break in Service. If an Active Participant retires or incurs a
Break in Service, he or she shall become a Retired, Terminated, or Vested
Participant.
(c) Active Participation After Break in Service. If a Vested or
Terminated Participant again becomes an Eligible Employee after having incurred
a Break in Service, the following provisions shall apply:
(1) He or she shall again become an Active Participant at the
time set forth in Article A3 of the Adoption Agreement, and shall receive credit
for Years of Service prior to the Break in Service for purposes of Plan
eligibility and vesting if:
(A) he or she had a non-forfeitable right to a
portion of the Employer Contribution Account at the time of the Break in
Service; or
(B) the number of consecutive one-year Breaks in
Service (or the period of Break in Service, if the elapsed time method was
selected) does not exceed the greater of (i) five (5), or (ii) the number of
Years of Service (or the period of Years of Service, if the Plan uses the
elapsed time method).
(2) If none of the provisions of Subsection (c)(l) apply, the
Participant shall be considered a new Employee for all purposes under the Plan,
and shall not receive credit for prior Years of Service for purposes of Plan
eligibility and vesting.
3.04 Participation of Owner-Employees. If this Plan provides contributions
or benefits for one (1) or more Owner-Employees who control both the business
for which this Plan is established and one or more other
<PAGE> 11
trades or businesses, this Plan and the plan established for other trades or
businesses must, when looked at as a single plan, satisfy IRC Section 401(a) and
(d) for the employees of this and all other trades or businesses.
For purposes of the preceding paragraph, an Owner-Employee, or two or more
Owner-Employees, will be considered to control a trade or business if the
Owner-Employee, or two or more Owner-Employees together:
(a) own the entire interest in an unincorporated trade or business,
or
(b) in the case of a partnership, own more than fifty percent (50%)
of either the capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees, shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control within the meaning
of the preceding sentence.
If the Plan provides contributions or benefits for one (1) or more
Owner-Employees who control one (1) or more other trades or businesses, the
Employees of the other trades or businesses must be included in a plan which
satisfies IRC Sections 401(a) and (d) and which provides contributions and
benefits not less favorable than provided for Owner-Employees under this Plan.
If an individual is covered as an Owner-Employee under the Plans of two
(2) or more trades or businesses which are not controlled and the individual
controls a trade or a business, then the contributions or benefits of the
employees under the plan of the trades or businesses which are controlled must
be as favorable as those provided for the individual under the most favorable
plan of the trade or business which is not controlled.
3.05 Participation of Leased Employees. If any Leased Employee is treated
as an Employee of the recipient employer, contributions or benefits provided by
the leasing organization which are attributable to the services performed for
the recipient employer shall be treated as provided by the recipient employer.
<PAGE> 12
ARTICLE IV.
EMPLOYER CONTRIBUTIONS
4.01 Determination of Amount of Contribution. The Employer shall
contribute each year the amount of the salary reduction elections of all
Participants, which amount shall be deemed the Employer's Elective Contribution,
plus any contribution required of the Employer for this Plan under Section
15.02, plus the matching contributions, if any, as specified in the Adoption
Agreement, plus a discretionary amount as may be determined by the Employer each
year, which amount shall be deemed the Employer's Non-Elective Contribution.
This provision shall not be construed as requiring the Employer to make
contributions for any specific Plan Year, even if there exists current or
accumulated Net Profit out of which such contributions could be made. The
Employer's determination of such contribution shall be binding on all
Participants, the Employer and the Trustee.
4.02 Payment of Contributions. Contributions may be made on any date or
dates selected by the Employer within the time prescribed by law, including
extension of time, for the filing of the Employer's federal income tax return
for the fiscal year. Neither the Trustee nor the Plan Administrator shall be
under any duty to inquire into the correctness or timing of the amounts
contributed and paid over to the Trustee or to enforce the payment of any
contribution payable by the Employer.
However, Employer Elective Contributions shall be paid to the
Trustee as of the earliest date on which such contributions can reasonably be
segregated from the Employer's general assets. The provisions of Department of
Labor Regulations Section 2510.3-102 are incorporated herein by reference.
Furthermore, any additional Employer contributions which are allocable to the
Participant's Employer Elective Account for a Plan Year shall be paid to the
Plan no later than the twelve (12)-month period immediately following the close
of such Plan Year.
4.03 Exclusive Benefit; Refund of Contribution. All contributions made by
the Employer are made for the exclusive benefit of the Participants and their
Beneficiaries, and for payment of costs of maintaining and administering the
Plan and Trust, and shall not be used for nor diverted to any other purposes.
Notwithstanding the foregoing, amounts contributed to the Trust by the Employer
may be refunded to the Employer under the following circumstances and subject to
the following limitations:
(a) Initial Non-qualification. If a contribution to the Plan is
conditioned on initial qualification of the Plan under IRC Section 401(a), the
Plan receives an adverse determination with respect to its initial qualification
and the Employer declines to amend the Plan to satisfy such qualification
requirements, contributions made prior to the determination that the Plan has
failed to qualify may be returned to the Employer within one (1) year after such
determination, but only if the application for determination is made by the time
prescribed by law for filing the Employer's return for the taxable year in which
the Plan was adopted, or such later date as the Secretary of the Treasury may
prescribe.
(b) Mistakes. If a contribution to the Trust Fund in whole or in
part is attributable to a good faith mistake of fact, including a good faith
mistake in determining the deductibility of the contribution under IRC Section
404 (due to, for example, incorrect information as to the eligibility or
compensation of a Participant, or a mathematical or actuarial error), then an
amount may be returned to the Employer equal to the excess of (1) the amount
contributed over (2) the amount which would have been contributed had there not
occurred a mistake of fact or a mistake in determining the deduction. Earnings
attributable to the excess contribution shall not be returned to the Employer,
but losses attributable thereto shall reduce the amount to be so returned.
The return to the Employer of the amount involved shall be paid by the
Trustee after demand by the Employer and shall be made within one (1) year of
the mistaken payment of the contribution or disallowance of the deduction, as
the case may be.
Notwithstanding any other provision of this Section 4.03, no refund shall
be made to the Employer which is specifically chargeable to the Account(s) of
any Participant(s) in excess of one hundred percent (100%) of the amount in such
Account(s) nor shall a refund be made by the Trustee of any funds, otherwise
subject to refund hereunder, which have been distributed to Participants and/or
Beneficiaries. In the event that any portion of an amount which is refundable to
the Employer has been distributed to Participants and/or Beneficiaries, the
Employer shall have a claim
<PAGE> 13
directly against the distributees to the extent of the refund to which it would
otherwise be entitled to from the Trust.
All refunds pursuant to this Section 4.03 shall be limited in amount,
circumstance and timing to the provisions of Section 403(c) of ERISA, and no
such refund shall be made if, solely on account of such refund, the Plan would
cease to be a qualified plan pursuant to IRC Section 401(a).
4.04 Types of Contributions. Employer contributions may be made in cash or
other property acceptable to the Trustee.
4.05 Omission of Eligible Employee. If, in any Plan Year, any Employee who
should have been included as a Participant in the Plan is erroneously omitted
and discovery of such omission is not made until after a contribution for the
Plan Year has been made, the Employer may make a subsequent contribution with
respect to the omitted Employee in the amount which would have been contributed
with respect to such Participant regardless of whether or not it is deductible
in whole or in part in any taxable year under applicable provisions of the IRC.
4.06 Excess Deferred Compensation. If a Participant's Deferred
Compensation under this Plan together with any elective deferrals (as defined in
Regulation 1.402(g)-1(b)) under another qualified cash or deferred arrangement
(as defined in IRC Section 401(k)), a simplified employee pension (as defined in
IRC Section 408(k)), a salary reduction arrangement (within the meaning of IRC
Section 3121(a)(5)(D)), a deferred compensation plan under IRC Section 457, or a
trust described in IRC Section 501(c)(18) cumulatively exceed the limitation
imposed by IRC Section 402(g) (as adjusted annually in accordance with the
method provided in IRC Section 415(d) pursuant to the regulations thereunder)
for such Participant's taxable year, the Participant may, not later than March 1
following the close of the Participant's taxable year, notify the Plan
Administrator in writing of such excess and request that the Participant's
Deferred Compensation under this Plan be reduced by an amount specified by the
Participant. In such event, the Plan Administrator may direct the Trustee to
distribute such excess amount (and any Income allocable to such excess amount)
to the Participant not later than the first April 15th following the close of
the Participant's taxable year. Any distribution of less than the entire amount
of Excess Deferred Compensation and Income shall be treated as a pro rata
distribution of Excess Deferred Compensation and Income. The amount distributed
shall not exceed the Participant's Deferred Compensation under the Plan for the
taxable year. Any distribution on or before the last day of the Participant's
taxable year must satisfy each of the following conditions:
(1) the Participant shall designate the distribution as Excess
Deferred Compensation;
(2) the distribution must be made after the date on which the
Plan received the Excess Deferred Compensation; and
(3) the Plan must designate the distribution as a distribution
of Excess Deferred Compensation.
Notwithstanding the above, a Participant's Excess Deferred
Compensation shall be reduced, but not below zero, by any distribution and/or
re-characterization of Excess Contributions pursuant to Section 4.08 for the
Plan Year beginning with or within the taxable year of the Participant.
4.07 Limitation on Employer Elective Contributions.
(a) For each Plan Year, the annual allocation derived from Employer
Elective Contributions to a Participant's Employer Elective Account shall
satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not be more than the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group multiplied by 1.25,
or
(2) The excess of the "Actual Deferral Percentage" for the
Highly Compensated Participant group over the "Actual Deferral Percentage" for
the Non-Highly Compensated Participant group shall not be more than two (2)
percentage points. Additionally, the "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not exceed the "Actual Deferral Percentage"
for the Non-Highly Compensated Participant group multiplied by 2. The provisions
of IRC Section 401(k)(3) and Section 1.401(k)-1(b) of the Income Tax Regulations
are
<PAGE> 14
incorporated herein by reference.
However, for Plan Years beginning after December 31, 1988, in order
to prevent the multiple use of the alternative method described in (2) above and
in IRC Section 401(m)(9)(A), any Highly Compensated Participant eligible to make
elective deferrals pursuant to this Plan and to make Employee contributions or
to receive matching contributions under this Plan or under any other plan
maintained by the Employer or an Affiliated Employer shall have the actual
contribution ratio reduced pursuant to Section 1.401(m)-2 of the Income Tax
Regulations, the provisions of which are incorporated herein by reference.
(b) For the purposes of this Section, "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant group and Non-Highly
Compensated Participant group for a Plan Year, the average of the ratios,
calculated separately for each Participant in such group, of the amount of
Employer Elective Contributions allocated to each Participant's Employer
Elective Account for such Plan Year (including all or any portion of cash
bonuses which may be deferred) to such Participant's "414(s) Compensation" for
such Plan Year. The actual deferral ratio for each Participant and the "Actual
Deferral Percentage" for each group shall be calculated to the nearest
one-hundredth of one percent. Employer Elective Contributions allocated to each
Non-Highly Compensated Participant's Employer Elective Account shall be reduced
by Excess Deferred Compensation to the extent such excess amounts are made under
this Plan or any other plan maintained by the Employer.
(c) For the purposes of determining the actual deferral ratio of a
Highly Compensated Employee who is subject to the Family Member aggregation
rules of IRC Section 414(q)(6) because such Participant is either a "five
percent owner" of the Employer or one of the ten (10) Highly Compensated
Employees paid the greatest "415 Compensation" during the year, the following
shall apply:
(1) The combined actual deferral ratio for the family group
(which shall be treated as one Highly Compensated Participant) shall be the
greater of: (i) the ratio determined by aggregating Employer Elective
Contributions and "414(s) Compensation" of all eligible Family Members who are
Highly Compensated Participants without regard to family aggregation; and (ii)
the ratio determined by aggregating Employer Elective Contributions and "414(s)
Compensation" of all eligible Family Members (including Highly Compensated
Participants). However, in applying the $200,000 limit to "414(s) Compensation",
for Plan Years beginning after December 31, 1988, Family Members shall include
only the affected Employee's spouse and any lineal descendants who have not
attained age nineteen (19) before the close of the Plan Year.
(2) The Employer Elective Contributions and "414(s)
Compensation" of all Family Members shall be disregarded for purposes of
determining the "Actual Deferral Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into account in Paragraph (1)
above.
(3) If a Participant is required to be aggregated as a member
of more than one family group in a plan, all Participants who are members of
those family groups that include the Participant are aggregated as one family
group in accordance with Paragraphs (1) and (2) above.
(d) For the purposes of Section 4.07(a) and Section 4.08, a Highly
Compensated Participant and a Non-Highly Compensated Participant shall include
any Employee eligible to make a deferral election pursuant to the terms of the
Plan, whether or not such deferral election was made or suspended.
(e) For the purposes of this Section, if two or more plans (other
than an employee stock ownership plan as defined in IRC Section 4975(e)(7))
which include cash or deferred arrangements are considered one plan for the
purposes of IRC Section 401(a)(4) or 410(b) (other than IRC Section
410(b)(2)(A)(ii) as in effect for Plan Years beginning after December 31, 1988),
the cash or deferred arrangements included in such plans shall be treated as one
(1) arrangement.
(f) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two (2) or more cash or deferred arrangements
(other than a cash or deferred arrangement which is part of an employee stock
ownership plan as defined in IRC Section 4975(e)(7)) of the Employer or an
Affiliated Employer, all such cash or deferred arrangements shall be treated as
one (1) cash or deferred arrangement for the purpose of determining the deferral
percentage with respect to such Highly Compensated Participant. However, for
Plan Years beginning after December 31, 1988, if the cash or deferred
arrangements have different Plan Years, this paragraph shall be applied by
<PAGE> 15
treating all cash or deferred arrangements ending with or within the same
calendar year as a single arrangement.
(g) For purposes of this Section, the term "Compensation" has the
meaning given in Section 2.08. However, the Employer may elect to include as
compensation any amount which is contributed by the Employer pursuant to a
salary reduction agreement and which is not includable in the gross income of
the Employee under IRC Sections 125, 402(a)(8), 402(h) or 403(b).
4.08 Adjustment to Actual Deferral Percentage Tests. In the event that the
initial allocations of the Employer's Elective Contributions do not satisfy one
of the tests set forth in Section 4.07(a), the Plan Administrator shall adjust
Excess Contributions pursuant to the options set forth below:
(a) On or before the fifteenth day of the third month following the
end of each Plan Year, the Highly Compensated Participant having the highest
actual deferral ratio shall have the Participant's portion of Excess
Contributions distributed to such Participant and/or at the Participant's
election re-characterized as a voluntary Employee contribution pursuant to
Section 8.02 until one of the tests set forth in Section 4.07(a) is satisfied,
or until the Participant's actual deferral ratio equals the actual deferral
ratio of the Highly Compensated Participant having the second highest actual
deferral ratio. This process shall continue until one of the tests set forth in
Section 4.07(a) is satisfied. For each Highly Compensated Participant, the
amount of Excess Contributions is equal to the Employer Elective Contributions
on behalf of such Highly Compensated Participant (determined prior to the
application of this paragraph) minus the amount determined by multiplying the
Highly Compensated Participant's actual deferral ratio (determined after
application of this paragraph) by the Participant's "414(s) Compensation".
However, in determining the amount of Excess Contributions to be distributed
and/or re-characterized with respect to an affected Highly Compensated
Participant as determined herein, such amount shall be reduced by any Excess
Deferred Compensation previously distributed to such affected Highly Compensated
Participant for the Participant's taxable year ending with or within such Plan
Year.
(1) With respect to the distribution of Excess Contributions
pursuant to (a) above, such distribution:
(i) may be postponed but not later than the close
of the succeeding Plan Year;
(ii) shall be made first from unmatched Deferred
Compensation and, thereafter, simultaneously from Deferred Compensation which is
matched and matching contributions which relate to such Deferred Compensation.
However, any matching contributions which are not vested shall be forfeited
instead of distributed;
(iii) shall be made from Qualified Employer
Non-Elective Contributions only to the extent that Excess Contributions exceed
the balance in the Participant's Employer Elective Account attributable to
Deferred Compensation and Employer matching contributions, if any;
(iv) shall be adjusted for Income; and
(v) shall be designated by the Employer as a
distribution of Excess Contributions (and Income).
(2) With respect to the re-characterization of Excess
Contributions pursuant to (a) above, such re-characterized amounts:
(i) shall be deemed to have occurred on the date on
which the last of those Highly Compensated Participants with Excess
Contributions to be re-characterized is notified of the re-characterization and
the tax consequences of such re-characterization;
(ii) for Plan Years ending on or before August 8,
1988, may be postponed but not later than October 24, 1988;
(iii) shall not exceed the amount of Deferred
Compensation on behalf of any
<PAGE> 16
Highly Compensated Participant for any Plan Year;
(iv) shall be treated as voluntary Employee
contributions for purposes of IRC Section 401(a)(4) and Section 1.401(k)-1(b) of
the Income Tax Regulations. However, for purposes of Article XV,
re-characterized Excess Contributions continue to be treated as Employer
contributions that are Deferred Compensation. For Plan Years beginning after
December 31, 1988, Excess Contributions re-characterized as voluntary Employee
contributions shall continue to be nonforfeitable and subject to the same
distribution rules provided for in Section 7.01(j).
(v) which relate to Plan Years ending on or before
October 24, 1988, may be treated as either Employer contributions or voluntary
Employee contributions and therefore shall not be subject to the restrictions of
Section 7.01(j);
(vi) are not permitted if the amount
re-characterized plus voluntary Employee contributions actually made by such
Highly Compensated Participant exceed the maximum amount of voluntary Employee
contributions (determined prior to application of Section 4.09(a)) that such
Highly Compensated Participant is permitted to make under the Plan in the
absence of re-characterization; and
(vii) shall be adjusted for Income.
(3) Any distribution and/or re-characterization of less than
the entire amount of Excess Contributions shall be treated as a pro rata
distribution and/or re-characterization of Excess Contributions and Income.
(b) The determination and correction of Excess Contributions of a
Highly Compensated Participant whose actual deferral ratio is determined under
the family aggregation rules shall be accomplished as follows:
(1) If the actual deferral ratio for the Highly Compensated
Participant is determined in accordance with Section 4.07(c)(1)(ii), then the
actual deferral ratio shall be reduced as required herein and the Excess
Contributions for the family unit shall be allocated among the Family Members in
proportion to the Employer Elective Contributions of each Family Member that
were combined to determine the group actual deferral ratio.
(2) If the actual deferral ratio for the Highly Compensated
Participant is determined under Section 4.07(c)(1)(i), then the actual deferral
ratio shall first be reduced as required herein, but not below the actual
deferral ratio of the group of Family Members who are not Highly Compensated
Participants without regard to family aggregation. The Excess Contributions
resulting from this initial reduction shall be allocated (in proportion to
Employer Elective Contributions) among the Highly Compensated Participants whose
Employer Elective Contributions were combined to determine the actual deferral
ratio. If further reduction is still required, then Excess Contributions
resulting from this further reduction shall be determined by taking into account
the contributions of all Family Members and shall be allocated among them in
proportion to their respective Employer Elective Contributions.
(c) If the Plan Administrator does not elect the options set forth
in Section 4.08(a) and (b) above, within twelve (12) months after the end of the
Plan Year, the Employer shall make a special "Qualified Employer Non-Elective
Contribution" on behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy one of the tests set forth in Section 4.07(a). Such
contribution shall be allocated to the Participant's Employer Elective Account
of each Non-Highly Compensated Participant in the same proportion that each
Non-Highly Compensated Participant's Compensation for the year bears to the
total Compensation of all Non-Highly Compensated Participants.
(d) For purposes of this Section, the term "Compensation" has the
meaning given in Section 2.08. However, the Employer may elect to include as
compensation any amount which is contributed by the Employer pursuant to a
salary reduction agreement and which is not includable in the gross income of
the Employee under IRC Sections 125, 402(a)(8), 402(h) or 403(b).
(e) Excess Contributions shall be adjusted for any income or loss up
to the date of distribution. The income or loss allocable to Excess
Contributions is the sum of: (1) income or loss allocable to the Participant's
Employer Elective Account for the taxable year multiplied by a fraction, the
numerator of which is such Participant's
<PAGE> 17
Excess Contributions for the year and the denominator is the Participant's
Account balance attributable to Employer Elective Contributions without regard
to any income or loss occurring during such taxable year; and (2) ten percent
(10%) of the amount determined under (1) multiplied by the number of whole
calendar months between the end of the Participant's taxable year and the date
of distribution, counting the month of distribution if distribution occurs after
the 15th of such month.
4.09 Actual Contribution Percentage Tests.
(a) The "Actual Contribution Percentage" for Plan Years beginning
after December 31, 1986 for the Highly Compensated Participant group shall not
exceed the greater of:
(1) one hundred twenty-five percent (125%) of such percentage
for the Non-Highly Compensated Participant group; or
(2) the lesser of two hundred percent (200%) of such
percentage for the Non-Highly Compensated Participant group, or such percentage
for the Non-Highly Compensated Participant group plus two (2) percentage points.
However, for Plan Years beginning after December 31, 1988, to prevent the
multiple use of the alternative method described in this paragraph and Section
401(m)(9)(A), any Highly Compensated Participant eligible to make elective
deferrals pursuant to this Plan or any other cash or deferred arrangement
maintained by the Employer or an Affiliated Employer and to make Employee
contributions or to receive matching contributions under this Plan or under any
other plan maintained by the Employer or an Affiliated Employer shall have such
Participant's actual contribution ratio reduced pursuant to Section 1.401(m)-2
of the Income Tax Regulations. The provisions of IRC Section 401(m) and Sections
1.401(m)-1(b) and 1.401(m)-2 of the Income Tax Regulations are
incorporated herein by reference.
(b) For the purposes of this Section and Section 4.10, "Actual
Contribution Percentage" for a Plan Year means, with respect to the Highly
Compensated Participant group and Non-Highly Compensated Participant group, the
average of the ratios calculated separately for each Participant in each group
of:
(1) the sum of Employer matching contributions, if any, made
pursuant to the terms of the Adoption Agreement, voluntary Employee
contributions, if any, and Excess Contributions re-characterized as voluntary
Employee contributions pursuant to Section 4.08(a), to
(2) the Participant's "414(s) Compensation" for such Plan
Year.
(c) For purposes of determining the "Actual Contribution Percentage"
and the amount of Excess Aggregate Contributions pursuant to Section 4.10(d),
only Employer matching contributions contributed to the Plan prior to the end of
the succeeding Plan Year shall be considered. In addition, the Plan
Administrator may elect to take into account, with respect to Employees eligible
to have Employer matching contributions or voluntary Employee contributions
allocated to their accounts, elective deferrals (as defined in Section
1.402(g)-1(b) of the Income Tax Regulations) and qualified non-elective
contributions (as defined in IRC Section 401(m)(4)(C)) contributed to any plan
maintained by the Employer. Such elective deferrals and qualified non-elective
contributions shall be treated as Employer matching contributions subject to
Section 1.401(m)-1(b)(2) of the Income Tax Regulations which is incorporated
herein by reference. However, for Plan Years beginning after December 31, 1988,
the Plan Year must be the same as the plan year of the plan to which the
elective deferrals and the qualified non-elective contributions are made.
In determining the Actual Contribution Percentage for a Plan
Year, contributions will be taken into account as follows:
A contribution to the Plan by an Employee is to be taken into
account if it is paid to the Trust during the Plan Year or paid to an
agent of the Plan and transmitted to the Trust within a reasonable period
after the end of the Plan Year. An Excess Contribution to a cash or
deferred arrangement that is recharacterized is to be taken into account
in the Plan Year in which the excess amount is includable in the
Employee's gross income. A matching contribution is taken into account for
a Plan Year only if it is (i) made on account of the Employee's Elective
or Voluntary Employee Contributions for a Plan Year, (ii) allocated to the
Employee's Account during that year, and (iii) paid to the Trust by the
end of the twelfth (12th) month following the close
<PAGE> 18
of that year. Employer matching contributions which are used to meet the
requirements of IRC Section 401(k)(3)(A) are not to be taken into account
for purposes of the Actual Contribution Percentage Test of IRC Section
401(m).
(d) For the purpose of determining the actual contribution ratio of
a Highly Compensated Employee who is subject to the Family Member aggregation
rules of IRC Section 414(q)(6) because such Employee is either a "five percent
owner" of the Employer or one of the ten (10) Highly Compensated Employees paid
the greatest "415 Compensation" during the year, the following shall apply:
(1) The combined actual contribution ratio for the family
group (which shall be treated as one Highly Compensated Participant) shall be
the greater of: (i) the ratio determined by aggregating Employer matching
contributions, if any, voluntary Employee contributions, if any, Excess
Contributions re-characterized as voluntary Employee contributions pursuant to
Section 4.08(a) and "414(s) Compensation" of all eligible Family Members who are
Highly Compensated Participants without regard to family aggregation; and (ii)
the ratio determined by aggregating Employer matching contributions, if any,
voluntary Employee contributions, if any, Excess Contributions re-characterized
as voluntary Employee contributions pursuant to Section 4.08(a) and "414(s)
Compensation" of all eligible Family Members (including Highly Compensated
Participants). However, in applying the $200,000 limit to "414(s) Compensation"
for Plan Years beginning after December 31, 1988, Family Members shall include
only the affected Employee's spouse and any lineal descendants who have not
attained age nineteen (19) before the close of the Plan Year.
(2) The Employer matching contributions, if any, voluntary
Employee contributions made, if any, Excess Contributions re-characterized as
voluntary Employee contributions pursuant to Section 4.08(a) and "414(s)
Compensation" of all Family Members shall be disregarded for purposes of
determining the "Actual Contribution Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into account in Paragraph (1)
above.
(3) If a Participant is required to be aggregated as a member
of more than one family group in a plan, all Participants who are members of
those family groups that include the Participant are aggregated as one family
group in accordance with Paragraphs (1) and (2) above.
(e) For purposes of this Section, if two or more plans of the
Employer (other than an employee stock ownership plan as defined in IRC Section
4975(e)(7)) or to which matching contributions, Employee contributions, or both,
are made are treated as one plan for purposes of IRC Sections 401(a)(4) or
410(b) (other than the average benefits test under IRC Section
410(b)(2)(A)(ii)), such plans shall be treated as one plan for purposes of this
Section 4.09. In addition, two or more plans of the Employer to which matching
contributions, Employee contributions or elective deferrals are made may be
considered as a single plan for purposes of this Section. In such a case, the
aggregated plans must satisfy IRC Sections 401(a)(4) and 410(b) as though such
aggregated plans were a single plan. Notwithstanding the above, for Plan Years
beginning after December 31, 1988, contributions to an employee stock ownership
plan as defined in IRC Section 4975(e)(7) shall not be aggregated with this
Plan.
(f) If a Highly Compensated Participant participates in two or more
plans (other than an employee stock ownership plan as defined in IRC Section
4975(e)(7) for Plan Years beginning after December 31, 1988) which are
maintained by the Employer or an Affiliated Employer to which matching
contributions, Employee contributions or elective deferrals are made, all such
contributions on behalf of such Highly Compensated Participant shall be
aggregated for purposes of this Section 4.09.
(g) For purposes of Sections 4.09(a) and 4.10, a Highly Compensated
Participant and Non-Highly Compensated Participant shall include any Employee
eligible to have Employer matching contributions, if any, (whether or not a
deferral election was made or suspended) or voluntary Employee contributions
pursuant to Section 8.02 (whether or not voluntary Employee contributions are
made) allocated to the Employee's account for the Plan Year.
(h) For purposes of this Section, the term "Compensation" has the
meaning given in Section 2.08. However, the Employer may elect to include as
compensation any amount which is contributed by the Employer pursuant to a
salary reduction agreement and which is not includable in the gross income of
the Employee under IRC Sections 125, 402(a)(8), 402(h) or 403(b).
<PAGE> 19
4.10 Adjustment to Actual Contribution Percentage Tests.
(a) In the event that the "Actual Contribution Percentage" for the
Highly Compensated Participant group exceeds the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group pursuant to Section
4.09(a), the Plan Administrator (on or before the fifteenth day of the third
month following the end of the Plan Year, but in no event later than the close
of the following Plan Year) shall direct the Trustee to distribute to the Highly
Compensated Participant having the highest actual contribution ratio, the Vested
portion of Excess Aggregate Contributions (and Income allocable to such
contributions) or, if forfeitable, forfeit such non-Vested Excess Aggregate
Contributions attributable to Employer matching contributions (and Income
allocable to such Forfeitures) until either one of the tests set forth in
Section 4.09(a) is satisfied, or until such Participant's actual contribution
ratio equals the actual contribution ration of the Highly Compensated
Participant having the second highest actual contribution ratio. This process
shall continue until one of the tests set forth in Section 4.09(a) is satisfied.
The distribution and/or Forfeiture of Excess Aggregate Contributions shall be
made in the following order:
(1) Employer matching contributions, if any, distributed
and/or forfeited pursuant to Section 4.08(a)(1);
(2) Voluntary Employee contributions including Excess
Contributions re-characterized as voluntary Employee contributions pursuant to
Section 4.08(a)(2);
(3) Remaining Employer matching contributions, if any.
(b) Any distribution and/or Forfeiture of less than the entire
amount of Excess Aggregate Contributions (and Income) shall be treated as a pro
rata distribution and/or Forfeiture of Excess Aggregate Contributions and
Income. Distribution of Excess Aggregate Contributions shall be designated by
the Employer as a distribution of Excess Aggregate Contributions (and Income).
Forfeitures of Excess Aggregate Contributions shall be treated in accordance
with Article A5 of the Adoption Agreement. However, no such Forfeiture may be
allocated to a Highly Compensated Participant whose contributions are reduced
pursuant to this section.
(c) Excess Aggregate Contributions attributable to amounts other
than voluntary Employee contributions, including forfeited matching
contributions, shall be treated as Employer contributions for purposes of IRC
Sections 404 and 415 even if distributed from the Plan.
(d) For each Highly Compensated Participant, the amount of Excess
Aggregate Contributions is equal to the total Employer matching contributions,
if any, voluntary Employee contributions, if any, Excess Contributions
re-characterized as voluntary Employee contributions pursuant to Section 4.08(a)
and any Qualified Employer Non-Elective Contributions or elective deferrals
taken into account pursuant to Section 4.09(c) on behalf of the Highly
Compensated Participant (determined prior to the application of this paragraph)
minus the amount determined by multiplying the Highly Compensated Participant's
actual contribution ratio (determined after application of this paragraph) by
the Participant's "414(s) Compensation." The actual contribution ratio must be
rounded to the nearest one-hundredth of one percent for Plan Years beginning
after December 31, 1988. In no case shall the amount of Excess Aggregate
Contribution with respect to any Highly Compensated Participant exceed the
amount of Employer matching contributions, if any, voluntary Employee
contributions, if any, Excess Contributions re-characterized as voluntary
Employee contributions pursuant to Section 4.08(a) and any Qualified Employer
Non-Elective Contributions or elective deferrals taken into account pursuant to
Section 4.09(c) on behalf of such Highly Compensated Participant for such Plan
Year.
(e) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to be treated as voluntary
Employee contributions due to re-characterization for the plan year of any other
qualified cash or deferred arrangement (as defined in IRC Section 401(k))
maintained by the Employer that ends with or within the Plan Year or which are
treated as voluntary Employee contributions due to re-characterization pursuant
to Section 4.08(a).
(f) The determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual contribution
ratio is determined under the family aggregation rules shall be accomplished as
follows:
<PAGE> 20
(1) If the actual contribution ratio for the Highly
Compensated Participant is determined in accordance with Section 4.09(d)(1)(ii),
then the actual contribution ratio shall be reduced and the Excess Aggregate
Contributions for the family unit shall be allocated among the Family Members in
proportion to the sum of Employer matching contributions, if any, voluntary
Employee contributions, if any, Excess Contributions re-characterized as
voluntary Employee contributions pursuant to Section 4.08(a) and any Qualified
Employer Non-Elective Contributions or elective deferrals taken into account
pursuant to Section 4.09(c) of each Family Member that were combined to
determine the group actual contribution ratio.
(2) If the actual contribution ratio for the Highly
Compensated Participant is determined under Section 4.09(d)(1)(i), then the
actual contribution ratio shall first be reduced, as required herein, but not
below the actual contribution ratio of the group of Family Members who are not
Highly Compensated Participants without regard to family aggregation. The Excess
Aggregate Contributions resulting from this initial reduction shall be allocated
among the Highly Compensated Participants whose Employer matching contributions,
if any, voluntary Employee contributions, if any, Excess Contributions
re-characterized as voluntary Employee contributions pursuant to Section 4.08(a)
and any Qualified Employer Non-Elective Contributions or elective deferrals
taken into account pursuant to Section 4.09(c) were combined to determine the
actual contribution ratio. If further reduction is still required, then Excess
Aggregate Contributions resulting from this further reduction shall be
determined by taking into account the contributions of all Family Members and
shall be allocated among them in proportion to their respective Employer
matching contributions, if any, voluntary Employee contributions, if any, Excess
Contributions re-characterized as voluntary Employee contributions pursuant to
Section 4.08(a) and any Qualified Employer Non-Elective Contributions or
elective deferrals taken into account pursuant to Section 4.09(c).
(g) Notwithstanding the above, within twelve (12) months after the
end of the Plan Year, the Employer may make a special "Qualified Non-Elective
Contribution" on behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy one of the tests set forth in Section 4.09(a). Such
contribution shall be allocated to the Participant's Employer Elective Account
of each Non-Highly Compensated Participant in the same proportion that each
Non-Highly Compensated Participant's Compensation for the year bears to the
total Compensation of all Non-Highly Compensated Participants. A separate
accounting shall be maintained for the purpose of excluding such contributions
from the "Actual Deferral Percentage" tests pursuant to Section 4.07(a).
(h) For purposes of this Section, the term "Compensation" has the
meaning given in Section 2.08. However, the Employer may elect to include as
compensation any amount which is contributed by the Employer pursuant to a
salary reduction agreement and which is not includable in the gross income of
the Employee under IRC Sections 125, 402(a)(8), 402(h) or 403(b).
(i) Excess Aggregate Contributions shall be adjusted for any income
or loss up to the date of distribution. The income or loss allocable to Excess
Aggregate Contributions is the sum of: (1) income or loss allocable to the
Participant's Employer Elective Account, Matching Contribution Account (if any,
and if all amounts therein are not used in the Actual Deferral Percentage test)
and, if applicable, Qualified Non-Elective Contribution Account for the Plan
Year multiplied by a fraction, the numerator of which is such Participant's
Excess Aggregate Contributions for the year and the denominator is the
Participant's Account balance(s) attributable to Contribution Percentage Amounts
without regard to any income or loss occurring during such Plan Year; and (2)
ten percent (10%) of the amount determined under (1) multiplied by the number of
whole calendar months between the end of the Plan Year and the date of
distribution, counting the month of distribution if distribution occurs after
the 15th of such month.
<PAGE> 21
ARTICLE V.
ALLOCATIONS
5.01 Allocations.
(a) Allocation of Employer Contributions. As of each Anniversary
Date, there shall be allocated to the Employer Elective Account and Employer
Non-Elective Account of each Active Participant who is eligible to share such
portion of the Employer's contributions and unallocated forfeitures determined
under the formula set forth in Article A5 of the Adoption Agreement.
(b) Allocation of Trust Earnings, Gains and Losses. As of each
Valuation Date, the net earnings, gains and losses of the Trust Fund (whether or
not gains or losses have been realized) since the previous Valuation Date shall
be determined and allocated to the Accounts maintained for the Participants in
proportion to the balances in such Accounts as of the immediately preceding
Valuation Date after reducing such prior Valuation Date balances by the amounts
withdrawn or distributed to a Participant or Beneficiary since such Valuation
Date, if any.
(c) Segregated Accounts. As of each Valuation Date, the net
earnings, gains and losses of any segregated account or Participant Directed
Account, pursuant to Sections 8.05 and 11.02, (whether or not such gains or
losses have been realized) since the immediately preceding Valuation Date shall
be determined and credited to that Account.
5.02 Limitation on Allocations. This Section 5.02 applies if the
Participant does not participate in and has never participated in another
qualified plan maintained by the adopting Employer or a welfare benefit fund, as
defined in IRC Section 419(e), maintained by the Employer, or an individual
medical account, as defined in IRC Section 415(l)(2), maintained by the
Employer, which provides an annual addition as defined in Section 5.04(a).
(a) Annual Additions Limitations. The amount of Annual Additions
which may be credited to the Participant's Account for any Limitation Year will
not exceed the lesser of the Maximum Permissible Amount or any other limitation
contained in this Plan. If the total Annual Additions for the Limitation Year
for any Participant exceeds the Maximum Permissible Amount such excess shall be
an Excess Amount. Any Excess amount shall be disposed of in the manner
prescribed in paragraph (b) below.
(b) Excess Amount. If the Annual Addition for any Participant
exceeds the Maximum Permissible Amount for any Limitation Year, such Excess
Amount shall be disposed of as follows:
(1) any nondeductible Voluntary Employee Contributions, to the
extent they would reduce the Excess Amount, shall be returned to the
Participant;
(2) if after the application of paragraph (1) an Excess Amount
still exists, the Excess Amount shall be disposed of as prescribed in Article A5
of the Adoption Agreement.
5.03 Limitations under Combination of Plans.
(a) This Section 5.03(a) applies if, in addition to this Plan, a
Participant is covered under another qualified defined contribution plan
maintained by the Employer during any Limitation Year, a welfare benefit fund,
as defined in IRC Section 419(e) maintained by the Employer, or an individual
medical account as defined in IRC Section 415(l)(2), maintained by the Employer,
which provides an annual addition as defined in Section 5.04(a). The Annual
Additions which may be credited to a Participant's Account under this Plan for
any such Limitation Year shall not exceed the Maximum Permissible Amount reduced
by the Annual Additions credited to a Participant's account under the other
plans for the same Limitation Year. If the Annual Additions with respect to the
Participant under other defined contribution plans maintained by the Employer
are less than the Maximum Permissible Amount and the Employer contribution that
would otherwise be allocated to the Participant's Account under this Plan would
cause the Annual Additions for the Limitation Year to exceed this limitation,
the amount allocated shall be reduced so that the Annual Additions under all
such plans for the Limitation Year shall equal the Maximum Permissible Amount.
If the Annual Additions with respect to the Participant under such other defined
contribution plans in the aggregate are equal
<PAGE> 22
to or greater than the Maximum Permissible Amount, no amount shall be allocated
to the Participant's Account under this Plan for the Limitation Year. If a
Participant's Annual Additions under this Plan and such other plans shall result
in an Excess Amount for a Limitation Year, the Excess Amount shall be deemed to
consist of the Annual Additions last allocated. If an Excess Amount were
allocated to a Participant on an allocation date of this Plan which coincides
with an allocation date of another plan, the Excess Amount attributed to this
Plan shall be the product of,
(1) the total Excess Amount allocated as of such date, times
(2) the ratio of (i) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this Plan to (ii) the
total Annual Additions allocated to the Participant for the Limitation Year as
of such date under this and all other qualified defined contribution plans.
Any Excess Amount attributed to this Plan shall be disposed of in the manner
prescribed in Section 5.02(b).
(b) This Section 5.03(b) applies if the Employer maintains, or at
any time maintained, a qualified defined benefit plan covering any Participant
in this Plan. The sum of the Participant's Defined Benefit Fraction and the
Defined Contribution Fraction shall not exceed 1.0 in any Limitation Year. The
Annual Additions which may be credited to the Participant's account under this
Plan for any Limitation Year shall be limited in accordance with Article A5 of
the Adoption Agreement.
5.04 Definitions.
(a) "Annual Additions". The sum of the following amounts
allocated to a Participant's Account for the Limitation Year:
(1) Employer contributions;
(2) Employee contributions; and
(3) forfeitures.
For this purpose any Excess Amount applied under Section 5.02(b) in the
Limitation Year to reduce Employer contributions shall be considered Annual
Additions for such Limitation Year. Amounts allocated, after March 31, 1984, to
an individual medical account, as defined in IRC Section 415(1)(2), which is
part of a pension or annuity plan maintained by the Employer shall be 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 IRC Section
419A(d)(3), under a welfare benefit fund, as defined in IRC Section 419(e),
maintained by the Employer shall be treated as Annual Additions to a defined
contribution plan.
(b) "Compensation". For purposes of this Article, a Participant's
earned income, wages, salaries, and fees for professional services, and other
amounts received for personal services actually rendered in the course of
employment with the Employer maintaining the Plan (including, but not limited
to, commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips and bonuses), and
excluding the following:
(1) Employer contributions to a plan of deferred compensation
which are not includable in the Employee's gross income for the taxable year in
which contributed, or Employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
(2) Amounts realized from exercise of a nonqualified stock
option, or when restricted stock (or property) held by Employee either becomes
fully transferable or is no longer subject to a substantial risk of forfeiture;
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
<PAGE> 23
(4) Other amounts which receive special tax benefits such as
premiums for group term life insurance (but only to the extent that the premiums
are not includable in the gross income of the Employee) or contributions made by
the Employer (whether or not under a salary reduction agreement) towards the
purchase of an annuity described in IRC Section 403(b) (whether or not the
amounts are actually excludable from the gross income of the Employee).
Compensation for any Limitation Year is the compensation actually paid or
includable in the gross income during such year.
For Limitation Years beginning after December 31, 1988, Compensation for
purposes of this Article shall be limited to $200,000 (unless adjusted in the
same manner as permitted under IRC Section 415(d)).
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
Compensation limit. The OBRA '93 annual Compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with IRC Section 401(a)(17)(B). The cost-of-living adjustment in effect for a
calendar year applies to any period, not exceeding twelve (12) months, over
which Compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than twelve (12)
months, the OBRA '93 annual Compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination period, and
the denominator of which is twelve (12).
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under IRC Section 401(a)(17) shall mean the OBRA '93
annual Compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into account
in determining an Employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA '93
annual Compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
Compensation limit is $150,000.
Notwithstanding the preceding sentence, Compensation for a participant in
a defined contribution plan who is permanently and totally disabled (as defined
in IRC Section 22(e)(3)) is the compensation such participant would have
received for the limitation year if the participant had been paid at the rate of
compensation paid immediately before becoming totally and permanently disabled.
Such imputed compensation may be taken into account only if the participant is
not a highly compensated employee (as defined in IRC Section 414(q)) and
contributions made on behalf of such participant are nonforfeitable when made.
(c) "Defined Benefit Fraction". A fraction, the numerator of which
is the sum of the Participant's Projected Annual Benefits under all 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 IRC Sections
415(b) and (d) or one hundred forty percent (140%) of the Highest Average
Compensation, including any adjustments under IRC Section 415(b).
Notwithstanding the above, if the Participant was a participant in one or
more defined benefit plans maintained by the Employer which were in existence on
July 1, 1982, the denominator of this fraction shall not be less than one
hundred twenty-five percent (125%) of the sum of the annual benefit under such
plans which the Participant had accrued as of the later of September 30, 1983,
or the end of the last limitation year beginning before January 1, 1983. The
preceding sentence applies only if the defined benefit plans individually and in
the aggregate satisfy the requirements of IRC Section 415 for all prior
limitation years.
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
<PAGE> 24
May 5, 1986. The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of IRC Section 415
for all limitation years beginning before January 1, 1987.
(d) "Defined Contribution Fraction". A fraction, the numerator of
which is the sum of the Annual Additions to the Participant's account under all
the defined contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior limitation years (including the Annual
Additions attributable to the Participant's nondeductible employee contributions
to all defined benefit plans, whether or not terminated, maintained by the
Employer and the annual additions attributable to all welfare benefit funds, as
defined in IRC Section 419(e) and individual medical accounts, as defined in IRC
Section 415(l)(2), maintained by the Employer) and the denominator of which is
the sum of the maximum aggregate amounts for the current and all prior
limitation years of service with the Employer (regardless of whether a defined
contribution plan was maintained by the Employer). The maximum aggregate amount
in any limitation year is the lesser of one hundred twenty-five percent (125%)
of the dollar limitation determined under IRC Sections 415(b) and (d) 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 (i)
the excess of the sum of the Fractions over 1.0 times (ii) 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 IRC Section 415 limitations applicable to the
first limitation year beginning on or after January 1, 1987.
The annual addition for any limitation year beginning before January 1,
1987, shall not be recomputed to treat all employee contributions as annual
additions.
(e) "Employer". The Employer that adopts this Plan, all members of
the Controlled Group or Affiliated Service Group of which the adopting Employer
is a part and any other entity required to be aggregated with the Employer
pursuant to regulations issued under IRC Section 414(o).
(f) "Excess Amount". The excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
(g) "Highest Average Compensation". The average compensation for the
three (3) consecutive years of service with the Employer that produces the
highest average. A year of service with the Employer is the twelve (12)
consecutive month period specified in Article A2 of the Adoption Agreement.
(h) "Maximum Permissible Amount". The lesser of thirty thousand
dollars ($30,000) (or, such larger amount determined by the Commissioner for the
Limitation Year) or twenty-five percent (25%) of the Participant's Compensation
(as defined in paragraph (b) above). If a short Limitation Year is created
because of an amendment changing the Limitation Year to a different twelve (12)
consecutive month period, the Maximum Permissible Amount shall not exceed the
lesser of (i) thirty thousand dollars ($30,000) (or, such larger amount
determined by the Commissioner for the Limitation Year) multiplied by a
fraction, the numerator of which is the number of months in the short Limitation
Year and the denominator of which is twelve (12), or (ii) twenty-five percent
(25%) of the Participant's Compensation for the short Limitation Year. The
compensation limitation referred to in this subsection (h) shall not apply to
any contribution for medical benefits (within the meaning of IRC Section 401(h)
or IRC Section 419A(f)(2) which is otherwise treated as an annual addition under
IRC Section 415(l)(1) or IRC Section 419A(d)(2).
(i) "Projected Annual Benefit". The annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity if such benefit is
expressed in the form other than straight Life Annuity or Qualified Joint and
Survivor Annuity) to which the Participant would be entitled under the terms of
a defined benefit plan (whether or not terminated) maintained by the Employer
assuming:
<PAGE> 25
(1) The Participant would 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.
<PAGE> 26
ARTICLE VI.
VESTING OF PLAN BENEFITS
6.01 Vesting of Interests. Each Participant shall have at all times a
fully vested, non-forfeitable right to the value of the Participant's Voluntary
Contribution and Rollover Accounts. The balance in each Participant's Employer
Elective Account shall be fully vested at all times and shall not be subject to
forfeiture for any reason.
6.02 Retirement Benefits. The Normal Retirement Benefit with respect to
any Participant attaining Normal Retirement Age shall be equal to one hundred
percent (100%) of the Participant's Accounts. For purposes of the preceding
sentence, Normal Retirement shall mean the earlier of the time a Participant
attains Normal Retirement Age under the Plan, or the later of (i) the time a
Participant attains age 65 or (ii) the fifth (5th) anniversary of the time a
Participant commences participation in the Plan. A Participant shall be fully
vested in the Participant's Accounts upon attaining Early Retirement, if
provided for in the Plan.
6.03 Disability Benefit. The Disability Benefit with respect to any
Participant who has suffered a Disability as defined in Article II of this Plan,
and who is separated from service with the Employer by reason of such
Disability, shall be equal to one hundred percent (100%) of the Participant's
Accounts.
6.04 Death Benefit. In the event of the death of a Participant prior to
the commencement of benefit payments, the Participant's Accounts shall become
one hundred percent (100%) vested. In the event of the death of a Retired
Participant whose benefits are in a "pay status," or of a Vested Participant,
the death benefit shall be one hundred percent (100%) of the undistributed
balance of the Participant's Accounts, if any.
6.05 Termination of Employment; Break in Service. Upon the termination of
employment of a Participant for any reason other than Disability, death or
retirement at normal or deferred date, a Participant shall be entitled to that
portion of a Participant's Employer Contribution Account which shall have been
vested pursuant to Article A6 of the Adoption Agreement.
(a) Forfeitures. The non-vested portion of a Participant's Employer
Contribution Account shall be forfeited at the time elected in Article A6 of the
Adoption Agreement, subject to the provisions of Section 6.05(b). For purposes
of this Section, Employer includes all members of the Controlled Group of
Corporations or Affiliated Service Group of which the adopting Employer is a
part.
If a cash-out distribution is not made in accordance with Article A6 of
the Adoption Agreement, the non-vested portion of a Participant's Employer
Contribution Account shall be forfeited as of the first Anniversary Date
coinciding with or subsequent to the time a Participant incurs five (5)
consecutive 1-year Breaks-in-Service.
(b) Active Participation Following Re-employment. All Years of
Service after a Participant has had five (5) consecutive one-year Breaks in
Service shall be disregarded for purposes of determining a Participant's
nonforfeitable percentage in the Employer Contribution Account that accrued
before the first such Break in Service. Years of Service prior to one or more
Breaks in Service shall be counted for purposes of determining a Participant's
nonforfeitable percentage in the Employer Contribution Account accruing after
such Break(s) in accordance with the provisions of Section 3.03(c) of the Plan.
Separate accounts shall be maintained for the Participant's pre-break and
post-break Employer-derived Accrued Benefit. Both accounts will share in the
earnings and losses of the Trust Fund.
If a Participant receives a distribution pursuant to Section 7.01 of the
Plan and the Participant resumes employment covered under this Plan, the
Participant's Employer-derived Account balance will be restored to the amount on
the date of distribution if the Participant repays to the Plan the full amount
of the distribution attributable to Employer contributions before the earlier of
five (5) years after the first date on which the Participant is subsequently
re-employed by the Employer, or the date the Participant incurs five (5)
consecutive one-year Breaks in Service following the date of distribution. If a
Participant is deemed to receive a distribution pursuant to Section 7.01 of the
Plan, and the Participant resumes employment covered under this Plan before the
date the Participant incurs five (5) consecutive one-year Breaks in Service,
upon the reemployment of such Participant, the Employer-derived Account balance
of the Participant will be restored to the amount on the date of such deemed
distribution.
<PAGE> 27
Upon the re-employment of a Participant whose nonforfeitable interest at
the time of termination of employment was less than one hundred percent (100%),
and whose Vested Interest had been distributed, the following provisions shall
apply:
(1) If the Participant repays to the Trust the full amount of
the Participant's distribution attributable to Employer contributions before the
earlier of five (5) years after the first date on which the Participant is
subsequently re-employed by the Employer or the date the Participant incurs five
(5) consecutive 1-year breaks in service following the date of distribution, the
portion of the Employer Contribution Account in which the Participant was not
vested, whether or not such amount had been forfeited and reallocated, shall be
reinstated such that the Employer Contribution Account balance (after repayment
and reinstatement) shall be equal to what it had been at the time of payment.
(2) If the Participant fails to make such repayment within the
specified period, the non-vested portion of the Account shall not be reinstated.
6.06 Beneficiary Designation. Each Participant shall designate, in writing
(and may, from time to time, change the designation of), a Beneficiary to
receive any death benefit that may be payable under this Plan. In the event the
Participant does not designate a Beneficiary, or is not survived by a designated
Beneficiary, any death benefits payable under the Plan shall be paid first to
the Participant's surviving spouse, and if there is no surviving spouse, to the
issue of the Participant by right of representation, and if none, then to the
executor or administrator of the deceased Participant's estate. If the
Participant has elected to provide for a Qualified Pre-Retirement Survivor
Annuity for the Participant's Spouse, with the balance of any benefits payable
in the event of death to be paid to another named Beneficiary, the Participant
may designate and may change the designation of the Beneficiary to receive such
balance. If, however, all or any portion of the amount of benefit which would be
payable as part of a Qualified Pre-Retirement Survivor Annuity is to be paid to
some other designated Beneficiary, the Participant's Spouse shall consent to
such designation, and to any change in such designation, in the form of a
Qualified Election pursuant to Section 7.02(d) of the Plan.
6.07 Amendment of Vesting Schedule. The computation of a Participant's
nonforfeitable percentage of the Participant's Employer Contribution Account
shall not be reduced as the result of any amendment to the vesting schedule of
Article A6 of the Adoption Agreement, as the result of any amendment to the Plan
that directly or indirectly affects the computation of the Participant's
nonforfeitable percentage of the Participant's Employer Contribution Account or
if the Plan is deemed amended by an automatic change to or from a top-heavy
vesting schedule. In the event that the vesting schedule is amended, a
Participant with at least three (3) Years of Service as of the expiration date
of the election period may elect to have the Participant's nonforfeitable
percentage computed under the Plan without regard to such amendment. For
Participants who do not have at least one (1) Hour of Service in any Plan Year
beginning after December 31, 1988, the preceding sentence shall be applied by
substituting "five (5) Years of Service" for "three (3) Years of Service." If a
Participant fails to make such an election, then such Participant shall be
subject to the new vesting schedule. The Participant's election period shall
commence on the date the amendment is adopted or deemed to be made and shall end
sixty (60) days after the latest of:
(a) the adoption date of the amendment,
(b) the effective date of the amendment, or
(c) the date the Participant receives written notice of the
amendment from the Employer or Plan Administrator.
6.08 Amendments Affecting Vested and/or Accrued Benefits. No amendment to
the Plan shall be effective to the extent 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 IRC
Section 412(c)(8). For purposes of this paragraph, a plan amendment which has
the effect of decreasing a Participant's Account balance or eliminating an
optional form of benefit, with respect to benefits attributable to service
before the amendment, shall be treated as reducing an accrued benefit. Further,
no amendment to the Plan shall have the effect of decreasing a Participant's
Vested Interest determined without regard to such amendment as of the later of
the date such amendment is adopted or the date it becomes effective.
<PAGE> 28
ARTICLE VII.
DISTRIBUTION OF PLAN BENEFITS
7.01 Distribution Requirements. Except as otherwise provided in Section
7.02, the requirements of this Section 7.01 shall apply to any distribution of a
Participant's Vested Interest and will take precedence over any inconsistent
provisions of this Plan. Unless otherwise specified, the provisions of this
Article apply to calendar years beginning after December 31, 1984. All
distributions required under this Article shall be determined and made in
accordance with the Income Tax Regulations under IRC Section 401(a)(9),
including the minimum distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the Income Tax Regulations.
(a) Form of Distribution. The vested portion of a Participant's
Account balance shall become payable to the Participant or the Participant's
Beneficiary, in cash or in kind, or any combination thereof, pursuant to the
election of the Participant or the Beneficiary. The Participant may request, in
writing, to have the vested portion of the Account balance distributed in one of
the following forms:
(1) a single lump sum payment;
(2) installments; or
(3) an Annuity, which must be nontransferable and which must
comply in its terms with the requirements of this Plan.
However, no distribution may be made, irrespective of the value of
the Participant's Account balance, after the first day of the first period for
which an amount is received as an Annuity unless the Participant and the
Participant's Spouse (or the Beneficiary of a deceased Participant) consent in
writing to such distribution.
(b) Restrictions on Immediate Distributions. If the value of a
Participant's vested Account balance derived from Employer and Employee
contributions exceeds (or at the time of any prior distribution exceeded) three
thousand five hundred dollars ($3,500) and the Account balance is immediately
distributable, the Participant and the Participant's Spouse (or where either the
Participant or the Spouse has died, the survivor) must consent to any
distribution of such Account balance. The consent of the Participant and the
Participant's Spouse 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 and the
Participant's Spouse of the right to defer any distribution until the
Participant's Account balance is no longer immediately distributable. Such
notification shall include a general description of the material features, and
an explanation of the relative values of, the optional forms of benefit
available under the Plan in a manner that would satisfy the notice requirements
of IRC Section 417(a)(3), and shall be provided no less than thirty (30) days
and no more than ninety (90) days prior to the annuity starting date.
Notwithstanding the foregoing, only the Participant need consent to
the commencement of a distribution in the form of a qualified joint and survivor
annuity while the Account balance is immediately distributable. (Furthermore, if
payment in the form of a qualified joint and survivor annuity is not required
with respect to the Participant pursuant to Section 7.02 of the Plan, only the
Participant need consent to the distribution of an Account balance that is
immediately distributable.) Neither the consent of the Participant nor the
Participant's Spouse shall be required to the extent that a distribution is
required to satisfy IRC Section 401(a)(9) or IRC Section 415. In addition, upon
termination of this Plan if the Plan does not offer an annuity option (purchased
from a commercial provider), the Participant's Account balance may, without the
Participant's consent, be distributed to the Participant or transferred to
another defined contribution plan (other than an employee stock ownership plan
as defined in IRC Section 4975(e)(7)) within the same Controlled Group.
An Account balance is immediately distributable if any part of the
Account balance could be distributed to the Participant (or surviving Spouse)
before the Participant attains (or would have attained if not deceased) the
later of Normal Retirement Age or age 62.
For purposes of determining the applicability of the foregoing
consent requirements to distributions made before the first day of the first
Plan Year beginning after December 31, 1988, the Participant's vested Account
<PAGE> 29
balance shall not include amounts attributable to accumulated deductible
employee contributions within the meaning of IRC Section 72(o)(5)(B).
(c) Limits on Settlement Options. Distributions, if not made in a
lump sum, may only be made over one of the following periods (or a combination
thereof):
(1) the life of the Participant,
(2) the life of the Participant and a designated Beneficiary,
(3) a period certain not extending beyond the life expectancy
of the Participant, or
(4) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated Beneficiary.
(d) Vesting on Distribution Before Break in Service. If an Employee
terminates service, and the value of the Employee's vested Account balance
derived from Employer and Employee contributions is not greater than Three
Thousand Five Hundred Dollars ($3,500), the Employee will receive a distribution
of the value of the entire vested portion of such Account balance and the
non-vested portion will be treated as a forfeiture. For purposes of this
section, if the value of an Employee's vested Account balance is zero, the
Employee shall be deemed to have received a distribution of such vested Account
balance. A Participant's vested Account balance shall not include accumulated
deductible employee contributions within the meaning of IRC Section 72(o)(5)(B)
for Plan Years beginning prior to January 1, 1989.
If an Employee terminates service and elects, in accordance with the
requirements of Section 7.02, to receive the value of the Employee's vested
Account balance, the non-vested portion will be treated as a forfeiture. If the
Employee elects to have distributed less than the entire vested portion of the
Account balance derived from Employer contributions, the part of the non-vested
portion that will be treated as a forfeiture is the total non-vested portion
multiplied by a fraction, the numerator of which is the amount of the
distribution attributable to Employer contributions and the denominator of which
is the total value of the vested portion of the Account balance derived from
Employer contributions.
If an Employee receives or is deemed to receive a distribution
pursuant to this section and the Employee resumes employment covered under this
Plan, the Employee's Employer-derived Account balance will be restored to the
amount on the date of distribution if the Employee repays to the Trust the full
amount of the distribution attributable to Employer contributions before the
earlier of five (5) years after the first date on which the Participant is
subsequently re-employed by the Employer, or the date the Participant incurs
five (5) consecutive 1-year breaks in service following the date of the
distribution.
If a distribution is made at a time when a Participant has a
non-forfeitable right to less than one hundred percent (100%) of the Account
balance derived from Employer Contributions or in the case of a forfeiture that
is delayed until the Participant incurs a Break in Service or an In-Service
Distribution, the following method for computing Account balances, with respect
to which the non-forfeitable percentage in the Account may increase and from
which distributions are made, will be used:
(1) A separate account will be established for the
Participant's interest in the Plan as of the time of the distribution, and
(2) At any relevant time, the Participant's non-forfeitable
portion of the separate account will be equal to an amount ("X") determined by
the formula:
X = P(AB + (R x D)) - (R x D).
For purposes of applying the formula, P is the non-forfeitable
percentage at the relevant time, AB is the Account balance at the relevant time,
D is the amount of the distribution, R is the ratio of the Account balance at
the relevant time to the Account balance after distribution, and the relevant
time is the time at which, under the Plan, the vested percentage in the Account
cannot increase.
<PAGE> 30
(e) Minimum Amounts to be Distributed. If the Participant's entire
Vested Interest is to be distributed in other than a lump sum, the following
minimum distribution rules shall apply on or after the required beginning date:
(1) Individual Account.
(A) If a Participant's Vested Interest is to be
distributed over (1) a period not extending beyond the life expectancy of the
Participant or the joint life and last survivor expectancy of the Participant
and the Participant's designated Beneficiary or (2) a period not extending
beyond the life expectancy of the designated Beneficiary, the amount required to
be distributed for each calendar year, beginning with distributions for the
first distribution calendar year, must at least equal the quotient obtained by
dividing the Participant's Vested Interest by the applicable life expectancy.
(B) For calendar years beginning before January 1,
1989, if the Participant's Spouse is not the designated Beneficiary, the method
of distribution selected must assure that at least fifty percent (50%) of the
present value of the amount available for distribution is paid within the life
expectancy of the Participant.
(C) For calendar years beginning after December 31,
1988, the amount to be distributed each year, beginning with distributions for
the first distribution calendar year shall not be less than the quotient
obtained by dividing the Participant's Vested Interest by the lesser of (1) the
applicable life expectancy or (2) if the Participant's Spouse is not the
designated Beneficiary, the applicable divisor determined from the table set
forth in Q&A-4 of Section 1.401(a)(9)-2 of the Income Tax Regulations.
Distributions after the death of the Participant shall be distributed using the
applicable life expectancy in Section 7.01(e)(1)(A) above as the relevant
divisor without regard to Section 1.401(a)(9)-2 of the Income Tax Regulations.
(D) The minimum distribution required for the
Participant's first distribution calendar year must be made on or before the
Participant's required beginning date. The minimum distribution for other
calendar years, including the minimum distribution for the distribution calendar
year in which the Employee's required beginning date occurs, must be made on or
before December 31st of that distribution calendar year.
(2) Other Forms. If the Participant's Vested Interest is
distributed in the form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with the requirements of
IRC Section 401(a)(9) and the Income Tax Regulations thereunder.
(f) Commencement of Benefits.
(1) General Rule. Distribution of a Participant's Vested
Interest upon termination of employment for any reason or upon attaining Normal
or Early Retirement Age shall commence at such time as elected by the
Participant; provided, however, that unless the Participant elects otherwise,
distribution of benefits will begin no later than the sixtieth (60th) day after
the close of the Plan Year in which occurs the latest of the following:
(A) the Participant attains age sixty-five (65) (or
Normal Retirement Age, if earlier);
(B) the tenth (10th) anniversary of the year in
which the Participant commenced participation in the Plan; or
(C) the Participant terminates service with the
Employer.
Notwithstanding the above, if a Participant separates from
service before satisfying the age requirement for Early Retirement, but has
satisfied the Years of Service requirement, the Participant will be entitled to
elect an Early Retirement benefit upon satisfaction of such age requirement. The
failure of a Participant and the Participant's Spouse to consent to a
distribution while a benefit is immediately distributable, within the meaning of
Section 7.01(b) above, shall be deemed to be an election to defer commencement
of payment of any benefit sufficient to satisfy this section.
<PAGE> 31
(2) Required Beginning Date.
(A) General Rule. The required beginning date of a
Participant is the first day of April of the calendar year following the
calendar year in which the Participant attains age seventy and one-half
(70-1/2).
(B) Transitional Rules. The required beginning
date of a Participant who attains age seventy and one-half (70-1/2) before
January 1, 1988, shall be determined in accordance with (1) or (2) below:
(1) Non-five Percent (5%) Owners. The required
beginning date of a Participant who is not a five percent (5%) owner is the
first day of April of the calendar year following the calendar year in which the
later of retirement or attainment of age seventy and one-half (70-1/2) occurs.
(2) Five-Percent (5%) Owners. The required
beginning date of a Participant who is a five percent (5%) owner during any year
beginning after December 31, 1979, is the first day of April following the later
of:
(i) the calendar year in which the
Participant attains age seventy and one-half (70-1/2), or
(ii) the earlier of the calendar year with
or within which ends the Plan Year in which the Participant becomes a five
percent (5%) owner, or the calendar year in which the Participant retires.
The required beginning date of a Participant
who is not a five percent (5%) owner who attains age seventy and one-half
(70-1/2) during 1988 and who has not retired as of January 1, 1989, is April 1,
1990.
(C) Five percent (5%) Owner. A Participant is
treated as a five percent (5%) owner for purposes of this section if such
Participant is a five percent (5%) owner as defined in IRC Section 416(i)
(determined in accordance with IRC Section 416 but without regard to whether the
Plan is top-heavy) at any time during the Plan Year ending with or within the
calendar year in which such owner attains age sixty-six and one-half (66-1/2) or
any subsequent Plan Year.
(D) Once distributions have begun to a five percent
(5%) owner under this section, they must continue to be distributed, even if the
Participant ceases to be a five percent (5%) owner in a subsequent year.
(g) Death Distribution Provisions. Upon the death of the
Participant, the following distribution provisions shall take effect:
(1) Distribution Beginning Before Death. If the Participant
dies after distribution of the Participant's Vested Interest has commenced, the
remaining portion of such interest will continue to be distributed at least as
rapidly as under the method of distribution being used prior to the
Participant's death.
(2) Distribution Beginning After Death. If the Participant
dies before distribution of the Participant's Vested Interest has commenced,
distribution of the Participant's entire Vested Interest shall be completed by
December 31st of the calendar year containing the fifth (5th) anniversary of the
Participant's death except to the extent that an election is made to receive
distributions in accordance with (A) or (B) below:
(A) if any portion of the Participant's Vested
Interest is payable to a designated Beneficiary, distributions may be made over
the life or over a period certain not greater than the life expectancy of the
designated Beneficiary commencing on or before December 31st of the calendar
year immediately following the calendar year in which the Participant died.
(B) if the designated Beneficiary is the Participant's
surviving Spouse, the
<PAGE> 32
date distributions are required to begin in accordance with (A) above shall not
be earlier than the later of (1) December 31st of the calendar year immediately
following the calendar year in which the Participant died and (2) December 31st
of the calendar year in which the Participant would have attained age seventy
and one-half (70-1/2). If the Participant has not made an election pursuant to
this Section 7.01(g)(2) by the time of the Participant's death, the
Participant's designated Beneficiary must elect the method of distribution no
later than the earlier of (1) December 31st of the calendar year in which
distributions would be required to begin under this section, or (2) December
31st of the calendar year which contains the fifth (5th) anniversary of the
Participant's death. If the Participant has no designated Beneficiary, or if the
designated Beneficiary does not elect a method of distribution, distribution of
the Participant's entire Vested Interest must be completed by December 31st of
the calendar year containing the fifth (5th) anniversary of the Participant's
death.
(C) For the purposes of 7.01(g)(2)(B), if the
surviving Spouse dies after the Participant but before payments to such Spouse
begin, the provisions of 7.01(g)(2), with the exception of Paragraph (B) above,
shall be applied as if the surviving Spouse were the Participant.
(D) For the purposes of this Section 7.01(g), any
amount paid to a child of the Participant will be treated as if it had been paid
to the surviving Spouse if the amount becomes payable to the surviving Spouse
when the child reaches the age of majority.
(E) For the purposes of this Section 7.01(g),
distribution of a Participant's Vested Interest is considered to begin on the
Participant's required beginning date or the date distribution is required to
begin to the surviving Spouse pursuant to Section 7.01(g). If distribution in
the form of an annuity described in 7.01(e)(2) above irrevocably commences to
the Participant before the required beginning date, the date distribution is
considered to begin is the date the distribution actually commences.
(h) Transitional Rule.
(1) Notwithstanding the other requirements of this Section
7.01 and subject to the requirements of Section 7.02, distribution on behalf of
any Employee, including a five percent (5%) owner, may be made in accordance
with a method of distribution designated pursuant to Section 242(b) of TEFRA
subject to all of the following requirements (regardless of when such
distribution commences):
(A) The distribution by the Trust is one which would
not have disqualified the Trust under IRC Section 401(a)(9) as in effect prior
to amendment by the Deficit Reduction Act of 1984.
(B) The distribution is in accordance with a method
of distribution designated by the Employee whose interest in the Trust is being
distributed or, if the Employee is deceased, by a Beneficiary of such Employee.
(C) Such designation was in writing, was signed by
the Employee or Beneficiary, and was made before January 1, 1984.
(D) The Employee had accrued a benefit under the
Plan as of December 31, 1983.
(E) The method of distribution designated by the
Employee or the Beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made, and in the case of
any distribution upon the Participant's death, the Beneficiaries of the Employee
are listed in order of priority.
(2) A distribution upon death will not be covered by this
transitional rule unless the information in the designation contains the
required information described above with respect to the distributions to be
made upon the death of the Employee.
(3) For any distribution which commences before January 1,
1984, but continues after December 31, 1983, the Employee, or the Beneficiary,
to whom such distribution is being made, will be presumed to have designated the
method of distribution under which the distribution is being made if the method
of distribution was
<PAGE> 33
specified in writing and the distribution satisfies the requirements in Sections
7.01(h)(1)(A) and 7.01(h)(1)(E).
(4) If a designation is revoked any subsequent distribution
must satisfy the requirements of IRC Section 401(a)(9) and the regulations
thereunder. If a designation is revoked subsequent to the date distributions are
required to begin, the Trust must distribute by the end of the calendar year
following the calendar year in which the revocation occurs the total amount not
yet distributed which would have been required to have been distributed to
satisfy IRC Section 401(a)(9) and the regulations thereunder, but for the
Section 242(b)(2) election. For calendar years beginning after December 31,
1988, such distributions must meet the minimum distribution incidental benefit
requirements in Section 1.401(a)(9)-2 of the Income Tax Regulations. Any changes
in the designation will be considered to be a revocation of the designation.
However, the mere substitution or addition of another beneficiary (one not named
in the designation) under the designation will not be considered to be a
revocation of the designation, so long as such substitution or addition does not
alter the period over which distributions are to be made under the designation,
directly or indirectly (for example, by altering the relevant measuring life).
In the case in which an amount is transferred or rolled over from one plan to
another plan, the rules in Q&A J-2 and Q&A J-3 shall apply.
(i) Definitions.
(1) Applicable Life Expectancy. The life expectancy (or joint
and last survivor expectancy) calculated using the attained age of the
Participant (or designated Beneficiary) as of the Participant's (or designated
Beneficiary's) birthday in the applicable calendar year reduced by one (1) for
each calendar year which has elapsed since the date life expectancy was first
calculated. If life expectancy is being recalculated, the applicable life
expectancy shall be the life expectancy as so recalculated. The applicable
calendar year shall be the first distribution calendar year, and if life
expectancy is being recalculated such succeeding calendar year. If annuity
payments commence in accordance with Section 7.01(e)(2) before the required
beginning date, the applicable calendar year is the year such payments commence.
If distribution is in the form of an immediate annuity purchased after the
Participant's death with the Participant's remaining interest, the applicable
calendar year is the year of purchase.
(2) Designated Beneficiary. The individual who is designated
as the Beneficiary under the Plan in accordance with IRC Section 401(a)(9) and
the regulations thereunder.
(3) Distribution Calendar Year. A calendar year for which a
minimum distribution is required. For distributions beginning before the
Participant's death, the first distribution calendar year is the calendar year
immediately preceding the calendar year which contains the Participant's
required beginning date. For distributions beginning after the Participant's
death, the first distribution calendar year is the calendar year in which
distributions are required to begin pursuant to Section 7.01(g) above.
(4) Life Expectancy. Life expectancy and joint and last
survivor expectancy are computed by use of the expected return multiples in
Tables V and VI of Section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or the
Participant's Spouse, in the case of distributions described in Section
7.01(g)(2)(B) above) by the time distributions are required to begin, life
expectancies shall be recalculated annually. Such election shall be irrevocable
as to the Participant (or the Participant's Spouse) and shall apply to all
subsequent years. The life expectancy of a nonspouse Beneficiary may not be
recalculated.
(5) Participant's Benefit.
(A) The Account balance as of the last valuation
date in the calendar year immediately preceding the distribution calendar year
(valuation calendar year) increased by the amount of any contributions or
forfeitures allocated to the Account balance as of dates in the valuation
calendar year after the valuation date and decreased by distributions made in
the valuation calendar year after the valuation date.
(B) Exception for second distribution calendar
year. For purposes of Paragraph (A) above, if any portion of the minimum
distribution for the first distribution calendar year is made in the second
distribution calendar year on or before the required beginning date, the amount
of the minimum distribution made in the second distribution calendar year shall
be treated as if it had been made in the immediately preceding distribution
calendar year.
<PAGE> 34
(j) Distribution of Participant Employer Elective Account.
(1) Amounts held in the Participant's Employer Elective
Account may not be distributable earlier than:
(i) a Participant's termination of employment, Total
and Permanent Disability, or death;
(ii) a Participant's attainment of age 59-1/2;
(iii) the termination of the Plan without the existence
at the time of termination of another defined contribution plan (other than an
employee stock ownership plan as defined in IRC Section 4975(e)(7)) or the
establishment of a successor defined contribution plan (other than an employee
stock ownership plan as defined in IRC Section 4975(e)(7)) by the Employer or an
Affiliated Employer within the period ending twelve (12) months after
distribution of all assets from the Plan maintained by the Employer;
(iv) the date of the sale by the Employer to an
entity that is not an Affiliated Employer of substantially all of the assets
(within the meaning of IRC Section 409(d)(2)) with respect to a Participant who
continues employment with the corporation acquiring such assets;
(v) the date of the sale by the Employer or an
Affiliated Employer of its interest in a subsidiary (within the meaning of IRC
Section 409(d)(3)) to an entity which is not an Affiliated Employer with respect
to a Participant who continues employment with such subsidiary; or
(vi) the proven financial hardship of a Participant,
subject to the limitations of Section 7.06, if a hardship distribution is
permitted under the terms of the Adoption Agreement.
7.02 Joint and Survivor Annuity Requirements. Except as may be provided in
Section 7.02(f) the provisions of this Section 7.02 shall take precedence over
any conflicting provision in this Plan. The provisions of this Section 7.02
shall apply to any Participant who is credited with at least one (1) Hour of
Service with the Employer on or after August 23, 1984, and such other
Participants as provided in Section 7.02(g).
(a) Qualified Joint and Survivor Annuity. 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, a married Participant's vested
Account balance will be paid in the form of a Qualified Joint and Survivor
Annuity and an unmarried Participant's vested Account balance will be paid in
the form of a Life Annuity. The Participant may elect to have such annuity
distributed upon attainment of the earliest retirement age under the Plan.
(b) Qualified Pre-Retirement Survivor Annuity. Unless an optional
form of benefit is selected within the Election Period pursuant to a Qualified
Election, if a Participant dies before the Annuity Starting Date then fifty
percent (50%) of the Participant's Vested Interest shall be applied toward the
purchase of an annuity for the life of the surviving Spouse. Such annuity shall
be purchased at the direction of the surviving Spouse within a reasonable time
after the Participant's death. The remaining fifty percent (50%) shall be
payable in the form and to the Beneficiary as designated by the Participant.
(c) Effect of Plan Loans. For purposes of determining the amount of
a Qualified Joint and Survivor Annuity or a Qualified Pre-Retirement Survivor
Annuity, a Participant's Vested Interest shall be reduced by any security
interest held by the Plan by reason of a loan outstanding to the Participant at
the time of payment or death, if the security interest is treated as payment in
satisfaction of the loan under the Plan.
(d) Definitions.
(1) Election Period. The period which begins on the first day
of the Plan Year in which the Participant attains age thirty-five (35) and ends
on the date of the Participant's death. If a Participant separates from service
prior to the first day of the Plan Year in which age thirty-five (35) is
attained, with respect to the Account balance as of the date of separation, the
Election Period shall begin on the date of separation.
(2) Earliest Retirement Age. The earliest date on which, under
the Plan, the
<PAGE> 35
Participant could elect to receive retirement benefits.
(3) Qualified Election. A waiver of a Qualified Joint and
Survivor Annuity or a Qualified Pre-Retirement Survivor Annuity. Any waiver of a
Qualified Joint and Survivor Annuity or a Qualified Pre-Retirement Survivor
Annuity shall not be effective unless: (a) the Participant's Spouse consents in
writing to the election; (b) the election designates a specific beneficiary,
including any class of beneficiaries or any contingent beneficiaries, which may
not be changed without spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal consent); (c) the
Spouse's consent acknowledges the effect of the election; and (d) the Spouse's
consent is witnessed by a plan representative or notary public. Additionally, a
Participant's waiver of the Qualified Joint and Survivor Annuity shall not be
effective unless the election designates a form of benefit payment which may not
be changed without spousal consent (or the Spouse expressly permits designations
by the Participant without any further spousal consent). If it is established to
the satisfaction of a plan representative that there is no Spouse or that the
Spouse cannot be located, a waiver will be deemed a Qualified Election.
Any consent by a Spouse (or establishment that the consent
of a Spouse may not be obtained) shall be effective only with respect to such
Spouse. A consent that permits designations by the Participant without any
requirement of further consent by such Spouse must acknowledge that the Spouse
has the right to limit consent to a specific beneficiary, and a specific form of
benefit where applicable, and that the Spouse voluntarily elects to relinquish
either or both of such rights. A revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any time before the
commencement of benefits. The number of revocations shall not be limited. No
consent obtained under this provision shall be valid unless the Participant has
received notice as provided in Section 7.02(e).
(4) Qualified Joint and Survivor Annuity. An immediate Annuity
for the life of the Participant which, for a Participant who is single shall be
a Life Annuity, and for a Participant who is married shall be an Annuity for the
life of the Participant with a survivor annuity for the life of the Spouse which
is not less than fifty percent (50%) and not more than one hundred percent
(100%) of the amount of annuity which is payable during the joint lives of the
Participant and the Spouse, and in either case is the amount of benefit which
can be purchased with the Participant's Vested Interest.
(5) Spouse (Surviving Spouse). The Spouse or Surviving Spouse
of the Participant, provided that a former Spouse will be treated as the Spouse
or Surviving Spouse and a current Spouse will not be treated as the Spouse or
Surviving Spouse to the extent provided under a qualified domestic relations
order as described in IRC Section 414(p).
(6) Annuity Starting Date. The first day of the first period
for which an amount is paid as an annuity or any other form.
(7) Vested Account Balance. The aggregate value of the
Participant's vested Account balances derived from Employer and Employee
contributions (including rollovers), whether vested before or upon death,
including the proceeds of insurance contracts, if any, on the Participant's
life. The provisions of this Article shall apply to a Participant who is vested
in amounts attributable to Employer contributions, Employee contributions (or
both) at the time of death or distribution.
(e) Notice Requirements.
(1) In the case of a Qualified Joint and Survivor Annuity
described in 7.02(a) above, the Plan Administrator shall no less than thirty
(30) days and no more than ninety (90) days prior to the Annuity Starting Date
provide each Participant a written explanation of: (i) the terms and conditions
of a Qualified Joint and Survivor Annuity; (ii) the Participant's right to make
and the effect of an election to waive the Qualified Joint and Survivor Annuity
form of benefit; (iii) the rights of a Participant's Spouse; and (iv) the right
to make, and the effect of, a revocation of a previous election to waive the
Qualified Joint and Survivor Annuity.
(2) In the case of a Qualified Pre-Retirement Survivor Annuity
described in 7.02(b) above, the Plan Administrator shall provide each
Participant within the applicable period a written explanation of the Qualified
Pre-Retirement Survivor Annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the requirements of Section
7.02(e)(1) applicable to a Qualified Joint and Survivor
<PAGE> 36
Annuity. The applicable period for a Participant is whichever of the following
periods ends last: (i) the period beginning with the first day of the Plan Year
in which the Participant attains age thirty-two (32) and ending with the close
of the Plan Year preceding the Plan Year in which the Participant attains age
thirty-five (35); (ii) a reasonable period ending after the individual becomes a
Participant; (iii) a reasonable period ending after the exception for a plan
that fully subsidizes costs in IRC Section 417(a)(5) ceases to apply to the
Participant; (iv) a reasonable period ending after this Article first applies to
the Participant. Notwithstanding the foregoing, notice must be provided within a
reasonable period ending after separation from service in the case of a
Participant who separates from service before attaining age thirty-five (35).
For purposes of applying the preceding paragraph, a
reasonable period ending after the enumerated events described in (ii), (iii),
and (iv) is the end of the two-year period beginning one (1) year prior to the
date the applicable event occurs, and ending one (1) year after that date. In
the case of a Participant who separates from service before the Plan Year in
which age thirty-five (35) is attained, notice shall be provided within the
two-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.
(3) If a distribution is one to which IRC Sections 401(a)(11)
and 417 do not apply, such distribution may commence less than thirty (30) days
after the notice required under Section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(i) the Plan Administrator clearly informs the
Participant that the Participant has a right to a period of at least thirty (30)
days after receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution option); and
(ii) the Participant, after receiving the notice,
affirmatively elects a distribution.
(f) Safe Harbor Rules. This section shall apply to a Participant in
a profit sharing plan, and to any distribution, made on or after the first day
of the first Plan Year beginning after December 31, 1988, from or under a
separate account attributable solely to accumulated deductible employee
contributions, as defined in IRC Section 72(o)(5)(B), and maintained on behalf
of a Participant in a money purchase pension plan (including a target benefit
plan), if the following conditions are satisfied: (1) the Participant does not
or cannot elect payments in the form of a life annuity; and (2) on the death of
a Participant, the Participant's vested Account balance will be paid to the
Participant's Surviving Spouse, but if there is no Surviving Spouse, or if the
Surviving Spouse has consented in a manner conforming to a Qualified Election,
then to the Participant's designated Beneficiary. The Surviving Spouse may elect
to have distribution of the vested Account balance commence within the ninety
(90) day period following the date of the Participant's death. The Account
balance shall be adjusted for gains or losses occurring after the Participant's
death in accordance with the provisions of the Plan governing the adjustment of
Account balances for other types of distributions. This section shall not be
operative with respect to a Participant in a profit sharing plan if the plan is
a direct or indirect transferee of a defined benefit plan, money purchase
pension plan, a target benefit plan, stock bonus, or profit sharing plan which
is subject to the survivor annuity requirements of IRC Section 401(a)(11) and
IRC Section 417. If this section is operative, then the provisions of this
Article, other than Section (g) shall be inoperative.
(1) The Participant may waive the spousal death benefit
described in this section at any time provided that no such waiver shall be
effective unless it satisfies the conditions (described in Section 7.02(d)(3))
that would apply to the Participant's waiver of the Qualified Pre-Retirement
Survivor Annuity.
(2) For purposes of this Subsection (f), vested Account
balance shall mean, in the case of a money purchase pension plan or a target
benefit plan, the Participant's separate Account balance attributable solely to
accumulated deductible employee contributions within the meaning of IRC Section
72(o)(5)(B). In the case of a profit sharing plan, vested Account balance shall
have the same meaning as provided in Section 7.02(d)(7).
<PAGE> 37
(g) Transitional Rules.
(1) Any living Participant not receiving benefits on August
23, 1984, who would otherwise not receive the benefits prescribed hereunder must
be given the opportunity to elect to have the prior Subsections of this Section
7.02 apply if such Participant is credited with at least one (1) Hour of Service
under this Plan or a predecessor plan in a Plan Year beginning on or after
January 1, 1976, and such Participant had at least ten (10) years of vesting
service when the Participant separated from service.
(2) Any living Participant not receiving benefits on August
23, 1984, who was credited with at least one (1) Hour of Service under this Plan
or a predecessor plan on or after September 2, 1974, and who is not otherwise
credited with any service in a Plan Year beginning on or after January 1, 1976,
must be given the opportunity to have the benefits paid in accordance with
Section 7.02(g)(4).
(3) The respective opportunities to elect (as described in
Section 7.02(g)(1) and 7.02(g)(2) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984, and ending on the
date benefits would otherwise commence to the Participants.
(4) Any Participant who has elected pursuant to Section
7.02(g)(2) and any Participant who does not elect under Section 7.02(g)(1) or
who meets the requirements of such Section 7.02(g)(1) except that such
Participant does not have at least ten (10) years of vesting service when the
Participant separates from service, shall have benefits distributed in
accordance with all of the following requirements if benefits would have been
payable in the form of a Life Annuity:
(A) Automatic Joint and Survivor Annuity. If benefits
in the form of a Life Annuity become payable to a married Participant who:
(i) begins to receive payments under the Plan
on or after Normal Retirement Age; or
(ii) dies on or after Normal Retirement Age
while still working for the Employer; or
(iii) begins to receive payments on or after
the Qualified Early Retirement Age; or
(iv) separates from service on or after
attaining Normal Retirement Age (or the Qualified Early Retirement Age) and
after satisfying the eligibility requirements for the payment of benefits under
the Plan and thereafter dies before beginning to receive such benefits;
then such benefits will be received under this Plan
in the form of a Qualified Joint and Survivor Annuity, unless the Participant
has elected otherwise during the Election Period. The Election Period must begin
at least six (6) months before the Participant attains Qualified Early
Retirement Age and end not more than ninety (90) days before the commencement of
benefits. Any election hereunder shall be in writing and may be changed by the
Participant at any time.
(B) Election of Early Survivor Annuity. A Participant
who is employed after attaining the Qualified Early Retirement Age shall be
given the opportunity to elect, during the Election Period, to have a survivor
annuity payable on death. If the Participant elects the survivor annuity,
payments under such annuity must not be less than the payments which would have
been made to the Spouse under the Qualified Joint and Survivor Annuity if the
Participant had retired on the day before the Participant's death. Any election
under this provision will be in writing and may be changed by the Participant at
any time. The Election Period begins on the later of (1) the ninetieth (90th)
day before the Participant attains the Qualified Early Retirement Age, or (2)
the date on which participation begins, and ends on the date the Participant
terminates employment.
(C) For purposes of this Section 7.02(g)(4):
<PAGE> 38
(i) Qualified Early Retirement Age is the
latest of (1) the earliest date, under the Plan, on which the Participant may
elect to receive retirement benefits; (2) the first day of the one-hundred
twentieth (120th) month beginning before the Participant reaches Normal
Retirement Age; or (3) the date the Participant begins participation.
(ii) Qualified Joint and Survivor Annuity is
an annuity for the life of the Participant with a survivor annuity for the life
of the Spouse, as described in Section 7.02(d)(4).
7.03 Segregation and Commutation. If the Plan Administrator determines to
pay the Vested Interest by installments from the Trust, the Participant's Vested
Interest may be segregated and invested separately from the remainder of the
Trust Fund. At any time, the Plan Administrator may accelerate the payment of
installments or may pay the entire balance of the segregated account to the
Participant or the Beneficiary.
7.04 Acquittance. The Plan Administrator and/or the Trustee may require
the Participant or the Participant's legal representative or Beneficiary to sign
an acquittance as a condition of final payment of his Plan benefit, in full
satisfaction of all claims against the Plan, the Trust, the Trustee, the Plan
Administrator, and the Employer.
7.05 Order of Distribution of Participant Interest. In the event
distribution of a Participant's Vested Interest in the Plan is made in multiple
or periodic payments, unless specifically elected otherwise in writing by the
Participant, the amounts distributed shall be deemed to be received as follows
in the order listed below:
(a) As a recovery of any basis; then
(b) Amounts taxable as ordinary income; and then, if any,
(c) Amounts subject to a premature distributions penalty.
7.06 Distribution Upon Hardship. If provided for in Article A7 of the
Adoption Agreement, upon the Application of any Participant, the Plan
Administrator may direct the Trustee to distribute to the Participant the
portion of the Participant's Vested Interest that the Plan Administrator
determines to be necessary due to the Participant's financial hardship. A
distribution is on account of hardship only if the distribution both is made on
account of an immediate and heavy financial need of the Participant and is
necessary to satisfy such financial need. The determinations of the existence of
an immediate and heavy financial need and of the amount necessary to meet the
need must be made in accordance with the non-discriminatory and objective
standards set forth in this Plan.
(a) Immediate and Heavy Financial Need. The determination of whether
a Participant has an immediate and heavy financial need is to be made on the
basis of all relevant facts and circumstances. A financial need shall not fail
to qualify as immediate and heavy merely because the need was reasonably
foreseeable or voluntarily incurred by the Participant. A distribution will be
considered to be made on account of an immediate and heavy financial need of the
Participant if the distribution is on account of:
(1) Medical expenses, as described in IRC Section 213(d),
incurred by the Participant, the Participant's spouse, or any dependents, as
defined in IRC Section 152, of the Participant;
(2) The purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Payment of tuition for the next semester or quarter of
post-secondary education for the Participant, the Participant's spouse,
children, or dependents;
(4) The need to prevent the eviction of the Participant from
the Participant's principal residence or foreclosure on the mortgage of the
Participant's principal residence; or
(5) Other circumstances as determined by the Commissioner of
the Internal Revenue Service through the publication of revenue rulings, notices
and other documents of general applicability.
<PAGE> 39
(b) Distribution Necessary to Satisfy Financial Need. A distribution
will not be treated as necessary to satisfy an immediate and heavy financial
need of a Participant to the extent the amount of the distribution is in excess
of the amount required to relieve the financial need or to the extent the need
may be satisfied from other resources which are reasonably available to the
Participant. This determination is to be made on the basis of all relevant facts
and circumstances. A distribution generally may be treated as necessary to
satisfy a financial need if the Plan Administrator reasonably relies upon the
Participant's representation that the need cannot be relieved:
(1) Through reimbursement or compensation by insurance or
otherwise,
(2) By reasonable liquidation of the Participant's assets, to
the extent such liquidation would not itself cause an immediate and heavy
financial need,
(3) By cessation of elective contributions or Participant
contributions under the Plan, or
(4) By other distributions or non-taxable (at the time of the
loan) loans from plans maintained by the Employer or by any other employer, or
by borrowing from commercial sources on reasonable commercial terms.
For purposes of this paragraph (b), the Participant's resources
shall be deemed to include those assets of the Participant's spouse and minor
children which are reasonably available to the Participant. Property held for
the Participant's child under an irrevocable trust or under the Uniform Gifts To
Minors Act will not be treated as a resource of the Participant.
(c) Amount of Distribution Necessary to Satisfy Financial Need. A
distribution will be considered to be necessary to satisfy an immediate and
heavy financial need of a Participant if all of the following requirements are
satisfied:
(1) The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant,
(2) The Participant has obtained all distributions, other than
hardship distributions, and all non-taxable loans currently available under all
plans maintained by the Employer,
(3) The Plan, and all other plans maintained by the Employer,
provide that the Participant's elective contributions and Participant's other
contributions, if applicable, will be suspended for at least twelve (12) months
after receipt of the hardship distribution, and
(4) The Plan, and all other plans maintained by the Employer,
provide that the Participant may not make elective contributions for the
Participant's taxable year immediately following the taxable year of the
hardship distribution in excess of the applicable limit on elective deferrals
under IRC Section 402(g) for the next taxable year less the amount of the
Participant's elective contributions for the taxable year of the hardship
distribution.
An Employee shall not fail to be treated as an Eligible Employee for
the purposes of this Plan or any other plan merely because the Employee is
suspended in accordance with the provisions of this section.
(d) Joint and Survivor Annuity Requirements. Any distribution under
this Section 7.06 shall require the prior written consent of the Participant's
Spouse in a form which conforms to a Qualified Election pursuant to Section
7.02(d).
7.07 In-Service Distribution. If provided for in Article A7 of the
Adoption Agreement, upon the application of any Participant who is one hundred
percent (100%) vested in the Participant's Employer Non-Elective Account, the
Plan Administrator may, pursuant to a uniform and nondiscriminatory policy,
direct the Trustee to distribute all or a portion of the Employer Non-Elective
Account to the Participant in a manner provided for in Section 7.01. If the
Participant has attained age fifty-nine and one-half (59-1/2), the Participant
may make similar application with respect to the Employer Elective Account. In
the event that the Plan Administrator elects to make such a
<PAGE> 40
distribution of all or a portion of a Participant's Employer Non-Elective and/or
Employer Elective Account, the Participant shall continue to be eligible to
participate in the Plan on the same basis as any other Employee. No distribution
shall be made pursuant to this Section unless the amount to be distributed from
the Participant's Employer Non-Elective Account or Employer Elective Account has
accumulated for at least two (2) years or the Participant has completed five (5)
years of participation in the Plan.
Any distribution under this Section 7.07 shall require the prior written
consent of the Participant's Spouse in a form which conforms to a Qualified
Election pursuant to Section 7.02(d).
7.08 Optional Forms of Benefit. In addition, each optional form of benefit
provided under a Plan must be made available to all Participants on a
nondiscriminatory basis (i.e., they must not discriminate in favor of the highly
compensated group.) This is the case regardless of whether a particular form of
benefit is the actuarial equivalent of any other optional form of benefit under
the plan. Note: IRC Section 411(d)(6) prevents a plan from retroactively
reducing or eliminating optional forms of benefits and any other "Section
411(d)(6) protected benefits".
<PAGE> 41
ARTICLE VIII.
EMPLOYEE CONTRIBUTIONS AND TRANSFERS FROM QUALIFIED PLANS
8.01. In General. A Participant may, if permitted under the Adoption
Agreement or by the Plan Administrator, as applicable, supplement the
Participant's benefits hereunder through the use of voluntary non-deductible
contributions pursuant to Section 8.02 or rollover contributions from another
plan or IRA pursuant to Section 8.03. In any such case, the contributions or
rollover amounts shall be invested together with the other assets of the Trust.
Each such Account shall be valued at least annually on the Valuation Date and
credited with its share of Trust earnings, gains and losses, unless segregated
and separately invested pursuant to Section 8.05. Any such amounts shall be
distributed according to the provisions of Section 8.06.
8.02. Voluntary Employee Contributions. If permitted under Article A8 of
the Adoption Agreement, and subject to the limitations on Annual Additions of
Sections 5.02 or 5.03, a Participant may elect to make Voluntary Employee
Contributions to the Plan. Such contributions shall be paid to the Trustee no
later than thirty (30) days after the end of the Plan Year for which it is
deemed paid. A separate account will be maintained by the Trustee for the
Voluntary Employee Contributions of each Participant.
(a) Voluntary contributions may be made in cash or in other property
acceptable to the Trustee. The balance in a Participant's Voluntary Contribution
Account shall be fully vested and nonforfeitable at all times.
(b) If permitted under Article A8 of the Adoption Agreement, a
Participant may, upon reasonable prior written notice to the Plan Administrator,
withdraw from the Trust all or any portion of the Participant's Voluntary
Contribution Account. Such notice shall specify the date of the withdrawal and
the amount to be withdrawn. Each such withdrawal shall constitute first a
withdrawal of contributions actually made by the Participant up to the total of
the aggregate of such contributions, reduced by any prior withdrawals, and the
excess, if any, up to the asset value of the Participant's Voluntary
Contribution Account balance, shall constitute a withdrawal of earnings and
appreciation attributable to such account. Any withdrawal under this Section
8.02(b) shall require the prior written consent of the Participant's spouse in a
form which conforms to a Qualified Election pursuant to Section 7.02(d).
(c) The Plan Administrator shall have authority to make any and all
necessary rules or regulations, binding upon all Participants, to effectuate the
provisions of Section 8.02, provided such rules and regulations are not
inconsistent with this Plan.
(d) The "Contribution Percentage" for Plan Years beginning after
December 31, 1986 for the Highly Compensated Participant group shall not exceed
the greater of:
(1) one hundred twenty-five percent (125%) of such percentage
for the Non-Highly Compensated Participant group; or
(2) the lesser of two hundred percent (200%) of such
percentage for the Non-Highly Compensated Participant group, or such percentage
for the Non-Highly Compensated Participant group plus two (2) percentage points
or such lesser amount determined pursuant to Regulations to prevent the multiple
use of this alternative limitation with respect to any Highly Compensated
Participant.
(e) For the purposes of this Section and Section 8.02(f),
"Contribution Percentage" for a Plan Year means, with respect to the Highly
Compensated Participant group and Non-Highly Compensated Participant group, the
average of the ratios (calculated separately for each Participant in each group)
of:
(1) the sum of Voluntary Employee Contributions paid under the
Plan on behalf of each such Participant for such Plan Year; to
(2) the Participant's Compensation for such Plan Year.
(f) For purposes of determining the "Contribution Percentage," the
Plan Administrator may elect pursuant to regulations to take into account
elective deferrals (as defined in IRC Section 402(g)(3)(A)) and
<PAGE> 42
qualified non-elective contributions (as defined in IRC Section 401(m)(4)(C))
contributed to any plan maintained by the Employer. In addition, the
"Contribution Percentage" for a Highly Compensated Participant shall be
determined by including Voluntary Employee Contributions and Compensation of
Family Members, and such affected Family Members shall be disregarded in
determining the "Contribution Percentage" of Non-Highly Compensated
Participants. In all cases 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.
(g) For purposes of this Section, if two or more plans of the
Employer to which matching contributions, Voluntary Employee Contributions, or
elective deferrals are made are treated as one plan for purposes of IRC Section
410(b), such plans shall be treated as one plan for purposes of this Section
8.02. In addition, if a Highly Compensated Participant participates in two or
more plans described in IRC Section 401(a) or arrangements described in IRC
Section 401(k) which are maintained by the Employer or an Affiliated Employer to
which such contributions are made, all such contributions shall be aggregated
for purposes of this Section 8.02.
(h) For purposes of Sections 8.02(d) and 8.02(i), a Highly
Compensated Participant and Non-Highly Compensated Participant shall include any
Employee eligible to have Voluntary Employee Contributions allocated to
the Employee's Account for the Plan Year.
(i) In the event that the "Contribution Percentage" for the Highly
Compensated Participant group exceeds the "Contribution Percentage" for the
Non-Highly Compensated Participant group pursuant to Section 8.02(d), the Plan
Administrator (on or before the fifteenth day of the third month following the
end of the Plan Year, but in no event later than the close of the following Plan
Year) shall direct the Trustee to distribute to the Highly Compensated
Participant group the amount of "Excess Aggregate Contributions" (and any income
allocable to such contributions) or, if forfeitable, forfeit such "Excess
Aggregate Contributions." Such distribution or forfeiture shall be made on
behalf of the Highly Compensated Participant group in order of their
"Contribution Percentages" beginning with the highest of such percentages.
Forfeitures of "Excess Aggregate Contributions" shall be treated in accordance
with Section 6.05(a). However, no such forfeiture may be allocated to a Highly
Compensated Participant whose contributions are reduced pursuant to this
Section. If there is a loss allocable to such excess amount, the distribution or
forfeiture shall in no event be less than the lesser of the Participant's
Voluntary Contribution Account or the Participant's voluntary contributions for
the Plan Year.
Determination of Income or Loss: Excess Aggregate
Contributions shall be adjusted for any income or loss up to the date of
distribution. The income or loss allocable to Excess Aggregate Contributions is
the sum of: (1) income or loss allocable to the participant's Employee
Contribution account, Matching Contribution account (if any, and if all amounts
therein are not used in the ADP test) and, if applicable, Qualified Non-elective
Contribution account and Elective Deferral account for the Plan Year multiplied
by a fraction, the numerator of which is such participant's Excess Aggregate
Contributions for the year and the denominator is the participant's account
balance(s) attributable to Contribution Percentage Amounts without regard to any
income or loss occurring during such Plan Year; and (2) ten percent (10%) of the
amount determined under (1) multiplied by the number of whole calendar months
between the end of the Plan Year and the date of distribution, counting the
month of distribution if distribution occurs after the 15th of such month.
In the case of a Highly-Compensated Participant whose
Contribution Percentage is determined under the family aggregation rules, the
determination of the amount of Excess Aggregate Contributions shall be made as
follows:
(1) If the Highly Compensated Participant's "Contribution
Percentage" is determined by combining the Voluntary Employee Contributions and
Compensation of all Family Members, then the "Contribution Percentage" is
reduced in accordance with the "leveling" method described in Section
1.401(m)-1(e)(2) of the Income Tax Regulations and the "Excess Aggregate
Contributions" for the family unit are allocated among the Family Members in
proportion to the Voluntary Employee Contributions of each Family Member that
have been combined.
(2) If the Highly Compensated Participant's "Contribution
Percentage" is determined by combining the Voluntary Employee Contributions and
Compensation of only those Family Members who are highly compensated without
regard to family aggregation, then the "Contribution Percentage" is reduced in
accordance with the "leveling" method but not below the "Contribution
Percentage" of eligible non-highly-compensated Family Members. "Excess Aggregate
Contributions" are determined by taking into account the Voluntary Employee
<PAGE> 43
Contributions of the eligible Family Members who are highly compensated without
regard to family aggregation and are allocated among such Family Members in
proportion to their Voluntary Employee Contributions. If further reduction of
the "Contribution Percentage" is required, "Excess Aggregate Contributions"
resulting from this reduction are determined by taking into account the
Voluntary Employee Contributions of all eligible Family Members and are
allocated among such Family Members in proportion to their Voluntary Employee
Contributions.
(j) For the purposes of Section 8.02(i), "Excess Aggregate
Contributions" means, with respect to any Plan Year, the excess of:
(1) the aggregate amount of contributions pursuant to Sections
8.02(e)(1) and 8.02(f) actually made on behalf of the Highly Compensated
Participant group for such Plan Year, over
(2) the maximum amount of such contributions permitted under
the limitations of Section 8.02(d).
8.03. Rollover Contributions. Any Participant may, with the written
consent of the Plan Administrator, transfer amounts to the Trust in accordance
with the provisions of this Section 8.03.
(a) Direct Inter-Plan Transfers; Rollovers. Any Participant may (if
permitted) direct a trustee or fiduciary of any qualified retirement plan to
transfer directly to the Trustee such Participant's interest in the retirement
plan, exclusive of any nondeductible employee contributions under such plan. Any
amount presented by a Participant to the Trustee within sixty (60) days of the
receipt of a qualifying rollover distribution (as defined in IRC Section
402(a)(5)) shall be treated, upon receipt by the Trustee, as having been
directly received from the appropriate disbursing officers or fiduciary of the
distributing plan, subject to the limitations of paragraph (c) below.
(b) IRA Transfers; Rollovers. Any Participant who has established an
Individual Retirement Account (IRA) (pursuant to IRC Section 408) solely for the
purpose of serving as a repository for rollover contributions received from
qualified retirement plans of former employers, exclusive of nondeductible
contributions by the Employee as a Participant therein, and who has not made any
contributions to such conduit IRA on the Participant's own behalf, may, with the
consent of the Plan Administrator, transfer directly all or a portion of the
assets of such conduit IRA to the Trustee, subject to the limitations of
paragraph (c) below. Any amount presented by a Participant to the Trustee within
sixty (60) days of the receipt of a distribution from such conduit IRA shall be
treated, upon receipt by the Trustee, as having been directly received from the
trustee of the conduit IRA.
(c) IRA Transfer and Rollover Conditions and Limitations. The
Trustee shall not accept a rollover distribution from any other plan or IRA
unless all of the following conditions are met:
(1) The amount so received shall constitute the Participant's
full or partial interest in the distributing plan (or conduit IRA), exclusive of
any (i) nondeductible contributions made to the plan and (ii) contributions made
to an IRA by the Participant on the Participant's own behalf.
(2) The Participant shall present evidence satisfactory to the
Plan Administrator to the effect that (i) the amount distributed to the
Participant from such other qualified plan is eligible as a qualifying rollover
distribution under IRC Section 402(a)(5) and (ii) if such amount is being
transferred by the Participant personally to this Plan, it was received within
the prior sixty (60) calendar days as a qualified total distribution from such
other plan.
(3) No rollover contribution will be accepted which consists,
in whole or in part, of insurance contracts with respect to which future premium
payments are or may become due unless the Plan Administrator is satisfied that
there are sufficient other segregated account assets being transferred so as to
make maintenance of such contract(s) feasible without violation of any
limitations on assets which may be applied for that purpose.
(4) A Participant's Rollover Account(s) shall be fully vested
and nonforfeitable at all times, and may not be withdrawn by, or distributed to,
the Participant, in whole or in part, except upon the Participant's becoming
eligible for distribution of benefits under the Plan. Notwithstanding the
foregoing, with respect to a Rollover Account which was a Qualified Voluntary
Employee Contribution, a Participant may, upon written request delivered to the
Plan Administrator, make withdrawals from the Qualified Voluntary Employee
Contribution Rollover Account at
<PAGE> 44
any time.
(5) No amount may be transferred to the Trust if, in the
opinion of the Plan Administrator, such a transfer could jeopardize the
qualification of the Plan or Trust, or could create adverse tax consequences or
excessive administrative costs for the Employer or Trust.
(d) Transfer on Behalf of A Five-Percent (5%) Owner. Notwithstanding
the above, no amount may be rolled over from any other plan or transferred from
an IRA to the Trust if any part of the distribution is attributable to
contributions made on behalf of the Participant while the Participant was a
five-percent (5%) owner (as described in IRC Section 416(i)) in a Top-Heavy
plan. Such Participant may (if permitted) direct a trustee or fiduciary of any
qualified plan to transfer directly to the Trustee such Participant's interest
in the plan; provided, however, that the amount in such account shall be treated
as an amount contributed on behalf of a five-percent (5%) owner in a Top-Heavy
plan regardless of whether such Participant is a Key Employee in this Plan or
whether this Plan is a Top-Heavy Plan.
8.04. Qualified Voluntary Employee Contributions. The Plan Administrator
will not accept Qualified Voluntary Employee Contributions which are made for a
taxable year beginning after December 31, 1986. Contributions made prior to that
date will be maintained in a separate account which will be nonforfeitable at
all times. The account will share in the gains and losses of the trust in the
same manner as described in Section 5.01(b). No part of the Qualified Voluntary
Employee Contribution Account will be used to purchase life insurance. A
Participant may, upon reasonable prior written notice to the Plan Administrator,
withdraw from the Trust any portion of the Qualified Voluntary Employee
Contribution Account. Such notice shall specify the date of the withdrawal and
the amount to be withdrawn. Any withdrawal under this Section 8.04 shall require
the prior written consent of the Participant's spouse in a form which conforms
to a Qualified Election pursuant to Section 7.02(d).
8.05. Participant Directed Investments. Notwithstanding anything to the
contrary herein contained, if provided for under Article All of the Adoption
Agreement, the Plan Participants shall, by written direction, direct the
investment of their Voluntary Contribution Account, Rollover Account, or
Qualified Voluntary Employee Contribution Account, or any or all of such
Accounts. In the event that individual investment direction is provided, the
applicable provisions of Section 11.02 shall apply.
8.06. Distribution of Employee Contribution and Rollover Accounts. Except
as otherwise specifically provided in this Article VIII, distribution or
transfer of the balance of a Participant's Voluntary Contribution Account,
Rollover Account, or Qualified Voluntary Employee Contribution Account (or any
or all of such accounts, as the case may be) shall be made as soon as
administratively feasible following the end of the Plan Year during which the
Participant's employment with the Employer is terminated for any reason.
(a) The Participant must elect, in writing, to have the Account
balance distributed in one of the following forms. If the Participant has more
than one Account under this Article VIII, an election must be made with respect
to each such Account balance. Account(s) may be distributed in:
(1) A single lump sum payment; or
(2) Payments over a period of years not longer than the life
expectancy of the Participant, or the joint and last survivor expectancy of the
Participant and the Participant's spouse. Such life expectancy, or joint and
last survivor expectancy, shall be determined at the time the first payment is
to be made from Treasury Regulations 1.72-9.
(b) If a Participant's Account is to be distributed over a period
described in Subsection (a)(2) above, then the minimum distribution in the first
year shall be the Participant's Account balance divided by the life expectancy
(or joint and last survivor expectancy). In the second and subsequent years, the
minimum distribution shall be the then Account balance divided by the life
expectancy (or joint and last survivor expectancy) for the previous year minus
one. However, no distribution need be made, or a lesser amount may be made, if
the aggregate amounts distributed by the end of that Plan Year are at least
equal to the aggregate of the minimum amounts required to be distributed by this
Subsection (b).
(c) If no timely election is made by the Participant with respect to
any Account, as provided
<PAGE> 45
above, the distribution or transfer of the balance of such Account shall be in a
single lump sum payment.
(d) If at the time of distribution of any portion of an Account
which is attributable to Qualified Voluntary Employee Contributions the
Participant has not attained age fifty-nine and one-half (59 1/2), the
Participant may be subject to a Federal income tax penalty unless the
distribution is rolled over to a qualified plan or individual retirement account
within sixty (60) days of distribution.
(e) Any distribution under this Section 8.06 shall require the prior
written consent of the Participant's spouse in a form which conforms to a
Qualified Election pursuant to Section 7.02(d).
8.07 This Section applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this Section 8.07, a Distributee
may elect, at the time and in the manner prescribed by the Plan Administrator,
to have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Distributee in a Direct Rollover.
(a) Definitions.
(1) "Eligible Rollover Distribution". Any distribution of all or any
portion of the balance to the credit of the Distributee, except that an Eligible
Rollover Distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the Distributee or the joint lives (or
joint life expectancies) of the Distributee and the Distributee's designated
beneficiary, or for a specified period of ten (10) years or more; any
distribution to the extent such distribution is required under IRC Section
401(a)(9); and 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 individual retirement account
described in IRC Section 408(a), an individual retirement annuity described in
IRC Section 408(b), an annuity plan described in IRC Section 403(a), or a
qualified trust described in IRC Section 401(a), 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 IRC Section
414(p), are Distributees with regard to the interest of the spouse or former
spouse.
(4) "Direct Rollover". A payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
<PAGE> 46
ARTICLE IX.
PARTICIPATING EMPLOYERS
9.01 Adoption by Other Employers. Notwithstanding any provisions herein to
the contrary, with the consent of the Employer and Trustee, any Person may adopt
this Plan and all of the provisions hereof, and participate herein and be known
as a Participating Employer, by executing documents evidencing such intent of
the Employer, the Participating Employer, and the Trustee.
9.02 Requirements of Participating Employers.
(a) The Participating Employer shall be required to use the same
Trustee.
(b) The Trustee may, but shall not be required to, commingle, hold
and invest as one Trust Fund all contributions made by Participating Employers,
as well as all increments thereof.
(c) The transfer of any Participant from or to an Employer
participating in the Plan, whether the Participant is an Employee of the
Employer or a Participating Employer, shall not affect such Participant's rights
under the Plan. Such Participant's Accrued Benefit as well as accumulated
service time with the transferor or predecessor and length of participation in
the Plan shall continue to the Participant's credit.
(d) Any contributions made by a Participating Employer, as provided
for in this Plan, shall be paid to and held by the Trustee for the exclusive
benefit of the Employees of such Participating Employer and the Beneficiaries of
such Employees, subject to all the terms and conditions of this Plan.
(e) All rights and values forfeited by termination of employment
shall inure only to the benefit of the Participants of the Employer or
Participating Employer by which the forfeiting Participant was employed.
(f) Any expenses of the Trust which are to be paid by the Employer
or borne by the Trust Fund shall be paid by the Employer and each Participating
Employer in the amounts determined by the Plan Administrator.
9.03 Designation of Agent. Each Participating Employer shall be deemed to
be a part of this Plan; provided, however, that with respect to all of its
relations with the Trust and Plan Administrator for purposes of the Plan, each
Participating Employer shall be deemed to have designated irrevocably the
Employer as its agent. Unless the context of the Plan clearly indicates the
contrary, the word "Employer" shall be deemed to include each Participating
Employer as related to its adoption of the Plan.
9.04 Amendment. Amendment of the Plan by the Employer while there shall be
a Participating Employer hereunder shall only be by the written action of each
and every Participating Employer and with the consent of the Trustee where such
consent is necessary in accordance with the terms of the Plan.
9.05 Discontinuance of Participation. Any Participating Employer shall be
permitted to discontinue or revoke its participation in the Plan. At the time of
any such discontinuance or revocation, satisfactory evidence thereof shall be
delivered to the Trustee. The Trustee shall thereafter transfer the Trust Fund
assets allocable to the Participants of such Participating Employer to such
trustee as shall have been designated by such Participating Employer in the
event that it has established a separate qualified retirement plan for its
employees. In no event shall any part of the corpus or income of the Trust as it
relates to such Participating Employer be used for or diverted for purposes
other than for the exclusive benefit of the Employees of such Participating
Employer.
9.06 Plan Administrator's Authority. The Plan Administrator shall have
authority to make any and all necessary rules or regulations, binding upon all
Participating Employers and all Participants, to effectuate the purposes of this
Article IX, provided such rules and regulations are not inconsistent with this
Plan.
<PAGE> 47
ARTICLE X.
THE PLAN ADMINISTRATOR
10.01 Administration by Plan Administrator. This Plan shall be
administered by the Plan Administrator. The Plan Administrator shall be
designated by the Employer and serve at the pleasure of the Employer.
10.02 Control of Plan by Plan Administrator. The Plan Administrator shall
have complete control of the administration of the Plan herein embodied, with
all powers necessary to enable it properly to carry out its duties in that
respect. Not in limitation, but in application of the foregoing, the Plan
Administrator shall have power to construe the Plan and to determine all
questions that shall arise thereunder, and shall also have all the powers
elsewhere in this instrument conferred upon it. It shall decide all questions
relating to the eligibility of Employees to participate in the benefits of this
Plan. It shall be responsible for the administration and maintenance of
Participant's Accounts. All disbursements by the Trustee, except for the
ordinary expenses of administration of the Trust, shall be made upon, and in
accordance with, the instructions of the Plan Administrator. The decisions of
the Plan Administrator upon all matters within the scope of its authority shall
be binding upon all persons interested in this Plan.
10.03 Authority and Responsibility of the Plan Administrator. The Plan
Administrator shall have the following duties and responsibilities:
(a) To maintain and retain records relating to Plan Participants and
each of their Beneficiaries;
(b) To prepare and furnish to Participants all information required
under federal law or provisions of this Plan to be furnished to them;
(c) To prepare and furnish to the Trustee sufficient Employee data
and the amount of contributions received from all sources so that the Trustee
may maintain separate accounts for Plan Participants and make required payments
for benefits;
(d) To prepare and file or publish with the Secretary of Labor, the
Secretary of the Treasury, their delegates and all other appropriate government
officials all reports and other information required under law to be so filed or
published;
(e) To provide directions to the Trustee with respect to the
purchase of life insurance, methods of benefit payment, valuations at dates
other than Anniversary Dates and on all other matters where called for in the
Plan or requested by the Trustee;
(f) To provide direction to the Trustee regarding investment of the
Trust Fund pursuant to Section 10.08;
(g) To construe the provisions of the Plan, to correct any defects,
errors or omissions thereto;
(h) To engage assistants and professional advisors;
(i) To arrange for bonding;
(j) To provide procedures for determination of claims for benefits,
all as further set forth herein.
10.04 Reporting and Disclosure. The Plan Administrator shall keep all
individual and group records relating to Active, Inactive, Terminated, Vested or
Retired Plan Participants and to Beneficiaries, and all other records necessary
for the proper operation of the Plan. Such records shall be made available to
each Participant and Beneficiary for examination during business hours except
that a Participant or Beneficiary shall examine only such records as pertain
exclusively to the examining Participant or Beneficiary and the Plan and Trust
Agreement. The Plan Administrator shall prepare and file as required by law or
regulation all reports, forms, documents and other items
<PAGE> 48
required by ERISA and/or the IRC, and every relevant statute, each as amended,
and all regulations thereunder. This provision shall not be construed as
imposing upon the Plan Administrator the responsibility or authority for the
preparation, preservation, publication or filing of any document required to be
prepared, preserved or filed by the Trustee or by any other Named Fiduciary to
whom such responsibilities are delegated by law or by this Plan.
10.05 Construction of the Plan. The Plan Administrator shall take such
steps as are considered necessary and appropriate to remedy any inequity that
results from incorrect information received or communicated in good faith or as
the consequence of an administrative error. The Plan Administrator shall
interpret the Plan and shall determine any questions arising in the
administration, interpretation and application of the Plan. It shall endeavor to
act, whether by general rules or by particular decisions, so as to treat all
persons in similar circumstances uniformly. The Plan Administrator shall correct
any defects, errors or omissions with respect to the Plan.
10.06 Engagement of Assistants and Advisors. The Plan Administrator shall
have the right to hire, at the expense of the Employer, such professional
assistants and consultants as it, in its sole discretion, deems necessary or
advisable including, but not limited to:
(a) Accountants;
(b) Actuaries;
(c) Attorneys;
(d) Clerical and office personnel;
(e) Consultants;
(f) Investment Managers and/or advisors; and
(g) Medical practitioners.
To the extent that the costs for such assistants and advisors are not paid by
the Employer, they shall be paid from the Trust Fund as an expense of the Trust
Fund at the direction of the Plan Administrator.
10.07 Investment of the Trust Fund. The Plan Administrator should adopt an
investment philosophy and should communicate same to the Trustee, or such other
advisors who may be in charge of investment selection. In discharging this duty,
the Plan Administrator shall act solely in the interest of the Participants and
their Beneficiaries. For the exclusive purpose of providing benefits to such
Participants and Beneficiaries and defraying reasonable expenses of
administering the Plan and Trust, the Plan Administrator should provide for
diversifying the investment of the Plan so as to minimize the risk of large
losses, unless under those circumstances it is clearly prudent not to do so,
with the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and familiar with
such matters and with similar investment philosophy would use in the conduct of
an enterprise of like character and with like aims, and in accordance with the
documents and instructions governing this Plan and Trust insofar as such
documents and instructions are consistent with ERISA. In discharging this duty,
the overall make-up of the Trust Fund should be considered so that some
percentage of the Trust Fund may be in speculative or illiquid investments so
long as these investments, when considered in relation to the total Trust Fund,
do not make the Trust Fund imprudently invested.
10.08 Directed Investments by Plan Administrator. The Trustee shall be
subject to the directions of the Plan Administrator with respect to investment
and reinvestment of Trust Fund assets; provided, however, that such directions
are made in accordance with the terms of this Plan and are not contrary to
ERISA. To the extent the authority under this Section 10.08 is used, the Trustee
shall not be liable for following such directions, as provided in Section
405(b)(3)(B) of ERISA.
10.09 Prohibited Transactions. Notwithstanding anything to the contrary
herein contained, the Plan Administrator shall have no authority to direct the
Trustee to engage in the prohibited transactions set forth in Section 406 and
407 of ERISA and IRC Section 4975, as added by Section 2003(a) of ERISA.
<PAGE> 49
10.10 Investment in Savings Accounts and Trust Funds. Pursuant to Section
408(b)(4) of ERISA and IRC Section 4975(d)(4), as added by Section 2003(a) of
ERISA, the Plan Administrator shall have the power to instruct the Trustee to
invest all or part of the Trust assets in deposits which bear a reasonable
interest rate in a bank or similar financial institution supervised by the
United States or a State, even though such bank or other institution is a
fiduciary of the Plan. Furthermore, pursuant to Section 408(b)(8) of ERISA and
IRC Section 4975(d)(8), the Plan Administrator may expressly permit a
transaction between the Plan and a common or collective trust or pooled
investment fund maintained by a party in interest and/or a disqualified person
which is a bank or trust company supervised by a State or Federal agency if such
transaction is a sale or purchase of an interest in the fund and the bank or
trust company receives no more than reasonable compensation.
10.11 Prohibited Persons. Pursuant to Section 411 of ERISA, no person
shall serve or be permitted to act on behalf of the Plan Administrator, or serve
as a Named Fiduciary, officer, Trustee, custodian, counsel, agent or employee of
the Plan, or as a consultant to the Plan, if such person has been convicted of,
or has been imprisoned as the result of the conviction of, any of the offenses
enumerated in the section.
10.12 Bonding. The Plan Administrator shall arrange for such bonding as is
required by law, but no bonding in excess of the amount required by law shall be
considered required by this Plan.
10.13 Indemnification of the Plan Administrator. Each person who acts
within the scope of the person's duties on behalf of the Plan Administrator
shall be indemnified by the Employer against expenses (other than amounts paid
in settlement to which the Employer does not consent) reasonably incurred by
such person in connection with any action to which the person may be a party by
reason of service on behalf of the Plan Administrator except in relation to
matters as to which the person shall be adjudged in such action to be personally
guilty of negligence or willful misconduct in the performance of the person's
duties. The foregoing right to indemnification shall be in addition to such
other rights as such person may enjoy as a matter of law or by reason of
insurance coverage of any kind. Rights granted hereunder shall be in addition to
and not in lieu of any rights to indemnification to which such person may be
entitled pursuant to the bylaws of the Employer or as a matter of law. Service
on behalf of the Plan Administrator shall be deemed in partial fulfillment of
such person's function as an employee, officer and/or director of the Employer,
if the person serves in such other capacity as well.
10.14 Meetings of Plan Administrator. The Plan Administrator shall hold
meetings upon notice, at such place and time as it may from time to time
determine. A majority of the members of the Plan Administrator shall constitute
a quorum for the transaction of business. The members of the Plan Administrator
shall elect a chairman from their number and a secretary who may, but need not,
be one of the members of the Plan Administrator. The secretary shall keep
minutes of the meetings. All resolutions of the Plan Administrator at any
meeting shall be by the vote of the majority of the members present at the
meeting.
10.15 Compensation of the Plan Administrator. The Plan Administrator shall
not receive compensation for the administration of this Plan.
<PAGE> 50
ARTICLE XI.
ADMINISTRATION OF FUNDS
11.01 Investment of Assets. All contributions shall be paid over to the
Trustee and shall be held by the Trustee in accordance with the Plan and Trust
Agreement.
11.02 Participant Directed Investments. If provided for in Article All of
the Adoption Agreement, Participant directed investments shall be permitted and
the following provisions shall apply:
(a) Each Participant shall direct the investment of the assets in
the Participant's account. For purposes of this Section 11.02 "account" shall
refer to each account which is permitted to be directed under Article All of the
Adoption Agreement and by the Plan Administrator.
(b) The Participant shall direct the Trustee in writing with respect
to the investments of the Participant's account.
(c) All gains, earnings and losses of each individually directed
account shall be credited solely to that account. Expenses attributable to a
Participant's individually directed account shall be paid by the Participant
either by payment to the Trustee or by deducting such expense directly from the
Participant's account.
(d) The right to individually direct investments by each Participant
shall be absolute and shall not be subject to approval by the Plan Administrator
or by the Trustee; provided, however, that the Plan Administrator or the Trustee
shall have the right to refuse to make any investment which could, in the Plan
Administrator's or Trustee's discretion, disqualify the Plan or cause the income
of the Trust to be subject to income tax. Pursuant to Section 404(c)(2) of
ERISA, the Trustee and the Plan Administrator, when so directed by a
Participant, shall not be liable for any loss, or by reason of any breach, which
results from the Participant's direction of the Participant's investments.
11.03 Valuations. The Trust Fund shall be valued annually by the Trustee
at fair market value as of the close of business on the Anniversary Date. A
similar valuation of the Trust Fund may be made at any time upon direction of
the Plan Administrator.
11.04 Annuity and Insurance Contracts. Notwithstanding anything in this
Plan to the contrary, the Plan Administrator may, but is not required to, direct
the Trustee to invest Trust funds in insurance or annuity contracts (hereinafter
referred to as "Contracts") from any legal reserve life insurance company
(hereinafter referred to as "Insurer"), under the following conditions:
(a) If the Plan Administrator elects to purchase or to continue
existing Contracts, it shall apply a uniform nondiscriminatory policy in a
consistent manner.
(b) Any Insurer who shall issue Contracts hereunder shall not have
any responsibility for the validity of this Plan or for the tax or legal aspects
of this Plan. The Insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee and/or the Plan
Administrator, and shall have no duty to see to the application of any funds
paid to the Trustee, nor be required to question any actions directed by the
Plan Administrator. Regardless of any provision of this Plan, the Insurer shall
not be required to take or permit any action or allow any benefit or privilege
contrary to the terms of any Contract of the Insurer.
(c) In the event that Contracts are purchased for the benefit of any
Participants, the amount of employer contribution expended for such purpose or
purposes for any plan year shall be subject to the following limitations:
(i) If only ordinary life insurance contracts are purchased,
the aggregate premiums in the case of each Participant must be less than
one-half (1/2) of the total contributions and forfeitures allocated to such
Participant's account.
<PAGE> 51
(ii) If only term life insurance contracts are purchased, the
aggregate premiums in the case of each Participant must be less than one quarter
(1/4) of the total contributions and forfeitures allocated to such Participant's
account.
(iii) If only accident and/or health insurance contracts
(including hospitalization, major medical, or similar types of insurance
contracts) are purchased, the amount expended for the accident and/or health
insurance plus one-half (1/2) of the amount expended for ordinary life insurance
premiums may not together exceed twenty five percent (25%) of the funds
allocated to such Participant's account.
(d) Any annuity contract distributed herefrom must be
nontransferable.
(e) The terms of any annuity contract purchased and distributed by
the Plan to a Participant or Spouse shall comply with the requirements of this
Plan.
(f) Subject to Section 7.02, the contracts on a Participant's life
will be converted to cash or an annuity or distributed to the Participant upon
commencement of benefits.
(g) The Trustee shall apply for and will be the owner of any
Contract purchased under the terms of this Plan. The Contracts must provide that
proceeds will be payable to the Trustee. However; the Trustee shall be required
to pay over all proceeds of the Contracts to the Participant's designated
Beneficiary in accordance with the distribution provisions of this Plan. A
Participant's Spouse will be the designated Beneficiary of the proceeds in all
circumstances unless a Qualified Election has been made in accordance with
Section 7.02, if applicable. Under no circumstances shall the Trust retain any
part of the proceeds. In the event of any conflict between the terms of this
Plan and the terms of any Contract purchased hereunder, the Plan provisions
shall control.
11.05 Loans to Participants. If provided for in Article All of the
Adoption Agreement, upon the application of any Participant, the Plan
Administrator, in accordance with its uniform and non-discriminatory policies,
may direct the Trustee to make a loan or loans to such Participant, subject to
the following provisions:
(a) The following limitations shall apply:
(1) Loans shall be made available to all Participants and
Beneficiaries on a reasonably equivalent basis.
(2) Loans shall not be made available to Highly Compensated
Employees (as defined in IRC Section 414(q)) in an amount greater than the
amount made available to other Employees.
(3) Loans must be adequately secured and bear a reasonable
interest rate.
(4) No Participant loan shall exceed the present value of the
Participant's Vested Interest.
(5) A Participant must obtain the consent of the Participant's
Spouse, if any, to use of the Vested Interest as security for the loan. Spousal
consent shall be obtained no earlier than the beginning of the ninety (90)-day
period that ends on the date on which the loan is to be so secured. The consent
must be in writing, must acknowledge the effect of the loan, and must be
witnessed by a plan representative or notary public. Such consent shall
thereafter be binding with respect to the consenting spouse or any subsequent
spouse with respect to that loan. A new consent shall be required if the Vested
Interest is used for renegotiation, extension, renewal, or other revision of the
loan.
(6) In the event of default, foreclosure on the note and
attachment of security will not occur until a distributable event occurs in the
Plan.
(7) No loans will be made to any Shareholder-Employee or
Owner-Employee. For purposes of this requirement, a Shareholder-Employee means
an Employee or officer of an electing small business (Subchapter S) corporation
who owns (or is considered as owning within the meaning of IRC Section
318(a)(1)), on any day during the taxable year of such corporation, more than
five percent (5%) of the outstanding stock of the
<PAGE> 52
corporation.
If a valid spousal consent has been obtained in
accordance with Paragraph (5), then, notwithstanding any other provision of this
Plan, the portion of the Participant's Vested Interest 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 Vested
Interest 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 Interest (determined without regard to the preceding
sentence) is payable to the surviving Spouse, then the Vested Interest shall be
adjusted by first reducing the Vested Interest by the amount of the security
used as repayment of the loan, and then determining the benefit payable to the
surviving Spouse.
(b) 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 (a) fifty thousand
dollars ($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 (b) one-half the present value of the Vested Interest of the
Participant or, if greater, the total accrued benefit up to ten thousand dollars
($10,000). For the purpose of the above limitation, all loans from all plans of
the Employer and other members of a group of employers described in IRC Sections
414(b), 414(c), 414(m) and 414(o) 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 (5) 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. An assignment
or pledge of any portion of the Participant's interest in the plan and a loan,
pledge, or assignment with respect to any insurance contract purchased under the
Plan, will be treated as a loan under this paragraph.
<PAGE> 53
ARTICLE XII.
ALLOCATION OF AUTHORITY AND RESPONSIBILITIES
12.01 Authority and Responsibilities of Employer. The Employer, as Plan
sponsor, shall serve as a "Named Fiduciary" having the following (and only the
following) authority and responsibility:
(a) To establish and communicate to the Trustee a funding policy for
the Plan;
(b) To appoint, discharge and replace the Trustee and the Plan
Administrator and to monitor each of their performances;
(c) To appoint an Investment Manager (or to refrain from such
appointment), to monitor the performance of the Investment Manager so appointed,
and to terminate such appointment. More than one Investment Manager may be
appointed and in office at any time pursuant hereto;
(d) To communicate such information to the Plan Administrator and to
the Trustee as each needs for the proper performance of its duties. The Plan
Administrator and the Trustee shall be protected in relying on such information
without the need for verification.
(e) To provide channels and mechanisms through which the Plan
Administrator and/or the Trustee can communicate with Participants and their
Beneficiaries.
In addition, the Employer shall perform such duties as are imposed by law or by
regulation and shall serve as Plan Administrator in the absence of an appointed
Plan Administrator.
12.02 Authority and Responsibilities of the Plan Administrator. The Plan
Administrator shall have authority and responsibilities imposed by Article X
hereof. With respect to the said authority and responsibility, the Plan
Administrator shall be a "Named Fiduciary," and as such, shall have no authority
or responsibility other than as granted in this Plan, or as imposed as a matter
of law.
12.03 Authority and Responsibility of the Trustee. The Trustee shall be a
"Named Fiduciary" with respect to investment of Trust Fund assets and shall have
the powers and duties set forth in the Trust Agreement.
12.04 Limitations on Obligations of Named Fiduciaries. No Named Fiduciary
shall have authority or responsibility to deal with matters other than as
delegated to it under this Plan, under the Trust Agreement, or by operation of
law. A Named Fiduciary shall not in any event be liable for breach of fiduciary
responsibility or obligation by another fiduciary (including Named Fiduciaries)
if the responsibility or authority of the act or omission deemed to be a breach
was not within the scope of the said Named Fiduciary's authority or delegated
responsibility.
<PAGE> 54
ARTICLE XIII.
CLAIMS PROCEDURE
13.01 Applications for Benefits. All applicants for benefits shall be
submitted in writing on forms provided by the Plan Administrator and must be
signed by the Participant and the Participant's spouse and, in the case of a
death benefit, by the Beneficiary or legal representative of the deceased
Participant. Such application shall include all information and exhibits deemed
necessary by the Plan Administrator to properly evaluate the merit of the claim
for benefits and to make such determinations as are necessary with respect
thereto.
13.02 Appeals of Denied Claims for Benefits. In the event that any claim
for benefits is denied in whole or in part, the Participant or Beneficiary whose
claim for benefits has been so denied shall be notified of such denial in
writing by the Plan Administrator. The notice advising of the denial shall
specify the reason or reasons for denial, make specific reference to pertinent
Plan provisions, describe any additional material or information necessary for
the claimant to perfect the claim (explaining why such material or information
is needed), and shall advise the Participant or Beneficiary, as the case may be,
of the procedure for the appeal of such denial. All appeals shall be made by the
following procedure:
(a) The Participant or Beneficiary whose claim has been denied shall
file with the Plan Administrator a notice of desire to appeal the denial. Such
notice shall be filed within sixty (60) days of notification by the Plan
Administrator of claim denial, shall be made in writing, and shall set forth all
of the facts upon which appeal is based. Appeals not timely filed shall be
barred.
(b) The Plan Administrator shall, within twenty (20) days of receipt
of the Participant's or Beneficiary's notice of appeal, establish a hearing date
on which the Participant or Beneficiary may make an oral Presentation to the
Named Appeals Fiduciary in support of the appeal. The Participant or Beneficiary
shall be given not less than ten (10) days' notice of the date set for the
hearing.
(c) The Named Appeals Fiduciary shall consider the merits of the
claimant's written and oral presentations, the merits of any facts or evidence
in support of the denial of benefits, and such other facts and circumstances as
the Named Appeals Fiduciary shall deem relevant. If the claimant elects not to
make an oral presentation, such election shall not be deemed adverse to the
claimant's interest, and the Named Appeals Fiduciary shall proceed as set forth
below as though an oral presentation of the contents of the claimant's written
presentation had been made.
(d) The Named Appeals Fiduciary shall render a determination upon
the appealed claim which determination shall be accompanied by a written
statement as to the reasons therefor. The determination so rendered by the Named
Appeals Fiduciary shall be binding upon all parties.
13.03 Appointment of the Named Appeals Fiduciary. The Named Appeals
Fiduciary shall be the person or persons named as such by the Employer, or if no
such person or persons be named, then the person or persons named by the Plan
Administrator as the Named Appeals Fiduciary. Any Named Appeals Fiduciaries may
at any time be removed by the Employer, and any Named Appeals Fiduciary named by
the Plan Administrator may be removed by it. All such removals may be with or
without cause and shall be effective on the date stated in the notice or
removal. The Named Appeals Fiduciary, if there be more than one determining the
merits of any appeal, shall act by a majority vote on each matter coming before
it. The Named Appeals Fiduciary shall be a "Named Fiduciary" within the meaning
of ERISA, and, unless appointed to other fiduciary responsibilities, shall have
no authority, responsibility or liability with respect to any matter other than
the proper discharge of the functions of the Named Appeals Fiduciary as set
forth herein.
<PAGE> 55
ARTICLE XIV.
AMENDMENT, TERMINATION, MERGER AND
CONSOLIDATION OF THE PLAN
14.01 Amendment. The Provisions of this Plan may be amended at any time
and from time to time by the Employer, provided, however, that:
(a) No amendment shall increase the duties or liabilities of the
Plan Administrator or of the Trustee without the consent of such party;
(b) No amendment shall deprive any Participant or Beneficiary of a
deceased Participant of any of the benefits to which he or she is entitled under
this Plan with respect to contributions previously made, nor shall any amendment
decrease the amount of any Participant's Accrued Benefit, except to the extent
permitted under IRC Section 412(c)(8); and
(c) No amendment shall provide for the use of funds or assets held
to provide benefits under this Plan other than for the exclusive benefit of
Employees and their Beneficiaries.
Each amendment shall be approved by the Employer in writing.
14.02 Employer's Right to Terminate.
(a) The Employer expects to continue this Plan and the corresponding
Trust indefinitely, but reserves the right to terminate either or both at any
time without the consent of any Participant or Beneficiary. Such termination
shall be effected by an instrument in writing executed by the Employer and filed
with the Trustee and the Plan Administrator.
(b) The bankruptcy, insolvency or dissolution of the business
carried on by the Employer shall be deemed to have automatically caused the
termination of this Plan, effective as of the expiration of a thirty (30) day
period after the date of bankruptcy, insolvency or dissolution, unless positive
action to the contrary has been taken in such period by a party having authority
to do so.
(c) If this Plan is terminated in whole or in part or upon complete
discontinuance of contributions under the Plan, all Participants hereunder
affected by such termination or discontinuance shall be fully vested and
nonforfeitable in their Accrued Benefits as of the date of termination or
discontinuance.
14.03 Application of Trust Funds Upon Termination of the Plan. Upon
termination of the Plan, the Employer, by written notice to the Plan
Administrator and the Trustee, may direct either:
(a) To continue the Trust created, and distribute the benefits at
such time and in such manner as though the Plan had not been terminated;
(b) To complete distribution of the assets in the Trust Fund to the
Participants in accordance with the terms of the Plan, in cash or in kind, in
the form that the Plan Administrator shall decide as soon as the Trustee deems
it in the best interest of the Participants; or
(c) To merge or consolidate with, or transfer the assets or
liabilities to, any other plan.
14.04 Partial Termination. In the event of a partial termination of this
Plan, this Article XIV shall be considered as applying at such time only to
those Participants with respect to whom the Plan has been terminated. All other
Participants shall be unaffected by such partial termination to the fullest
extent allowable by then current law and regulations.
14.05 Mergers or Consolidations of Plans. In the event of any merger or
consolidation with, or transfer of assets or liabilities to, any other plan,
each Participant shall have a benefit in the surviving or transferee plan
<PAGE> 56
(determined as if such plan were then terminated immediately after such merger,
etc.) that is equal to or greater than the benefit the Participant would have
been entitled to receive immediately before such merger, etc., in the plan in
which he or she was then a Participant had such plan been terminated at that
time. For the purposes hereof, Vested and Retired Participants and Beneficiaries
shall be considered Participants. Accounts merged or consolidated into this Plan
shall be treated as rollover accounts pursuant to the provisions of Section
8.03, except where inapplicable.
<PAGE> 57
ARTICLE XV.
ADDITIONAL REQUIREMENTS FOR TOP-HEAVY PLANS
If the Plan is or becomes a Top-Heavy Plan in any Plan Year beginning
after December 31, 1983, the provisions of this Article XV and Article A15 of
the Adoption Agreement shall supersede any conflicting provisions in the Plan or
the Adoption Agreement.
15.01 Definitions. For purposes of this Article XV the following terms
shall have the meanings given:
(a) Key-Employee. Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the determination period
was:
(1) an officer of the Employer if such individual's annual
compensation exceeds fifty percent (50%) of the dollar limitation under IRC
Section 415(b)(1)(A);
(2) an owner (or considered an owner under IRC Section 318) of
one of the ten (10) largest interests in the Employer if such individual's
compensation exceeds one hundred percent (100%) of the dollar limitation under
IRC Section 415(c)(1)(A);
(3) a five percent (5%) owner of the Employer; or
(4) a one percent (1%) owner of the Employer who has an annual
compensation of more than $150,000.
Annual compensation means compensation as defined in IRC Section
415(c)(3), but including amounts contributed by the Employer pursuant to a
salary reduction agreement that are excludable from the Employee's gross income
under IRC Sections 125, 402(a)(8), 402(h) or 403(b).
The determination period of the Plan is the Plan Year containing the
Determination Date and the four (4) preceding Plan Years. The determination of
who is a Key Employee will be made in accordance with IRC Section 416(i)(1) and
the regulations promulgated pursuant to it.
(b) Top-Heavy Plan. For any Plan Year beginning after December 31,
1983, this Plan is a Top-Heavy Plan if any of the following conditions exists:
(1) 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,
(2) 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%), or
(3) If this Plan is a part of a Required Aggregation Group of
plans and part of a Permissive Aggregation Group and the Top-Heavy Ratio for the
Permissive Aggregation Group exceeds sixty percent (60%).
(c) Top-Heavy Ratio.
(1) If the Employer maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and the Employer has not
maintained any defined benefit plan which during the five-year period ending on
the Determination Date 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 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 year
period ending on the Determination Date(s)), both computed in accordance with
IRC Section 416 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
<PAGE> 58
Determination Date, but which is required to be taken into account on that date
under IRC Section 416 and the regulations thereunder.
(2) 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-year period ending on the Determination Date has or has had any accrued
benefits, the Top-Heavy Ratio for any required or permissive aggregation group
as appropriate is a fraction, the numerator of which is the sum of Account
balances under the defined contribution plans for all Key Employees determined
in accordance with (a) above, and the present value of accrued benefits under
the aggregated defined benefit plan or plans for all Key Employees as of the
Determination Date(s), and the denominator of which is the sum of the Account
balances under the aggregated defined contribution plan or plans for all
Participants, determined in accordance with (a) above, and the present value of
accrued benefits under the defined benefit plan or plans for all Participants as
of the Determination Date(s), all determined in accordance with IRC Section 416
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-year period ending
on the Determination Date.
(3) For purposes of (a) and (b) above, the value of Account
balances and the present value of accrued benefits will be determined as of the
most recent valuation date that falls within or ends with the twelve-month
period ending on the Determination Date, except as provided in IRC Section 416
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 (i) who
is not a Key Employee but who was a Key Employee in a prior year, or (ii) who
has not been credited with at least one (1) Hour of Service with any employer
maintaining the Plan at any time during the five-year period ending on the
Determination Date shall be disregarded. The calculation of the Top-Heavy Ratio,
and the extent to which distributions, rollovers, and the transfers are taken
into account will be made in accordance with IRC Section 416 and the regulations
thereunder. Deductible employee contributions will not be taken into account for
purposes of computing the Top-Heavy Ratio. 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 IRC Section
411(b)(1)(C).
(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 IRC Sections 401(a)(4) and 410.
(e) Required Aggregation Group. (1) Each qualified plan of the
Employer in which at least one (1) Key Employee participates or participated at
any time during the determination period (regardless of whether the plan has
terminated) and (2) any other qualified plan of the Employer which enables a
plan described in (1) to meet the requirements of IRC Sections 401(a)(4) and
410.
(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 of
the Plan, the last day of that year.
(g) Valuation Date. The date elected by the Employer in Article A15
of the Adoption Agreement as of which account balances or accrued benefits are
valued for purposes of calculating the Top-Heavy Ratio.
(h) Present Value. Present value shall be based on the interest and
mortality rates specified in the applicable defined benefit plan for purposes of
determining its top-heavy status.
<PAGE> 59
15.02 Minimum Allocation
(a) Except as provided in (c) and (d) below, for any Plan Year in
which this Plan is top-heavy, the Employer contributions and forfeitures
allocated on behalf of any Participant who is not a Key Employee shall not be
less than the lesser of three percent (3%) of such Participant's Compensation or
in the case where the Employer has no defined benefit plan which designates this
Plan to satisfy IRC Section 401, the largest percentage of Employer
contributions and forfeitures, as a percentage of the first one hundred fifty
thousand dollars ($150,000) of the Key Employee's Compensation, allocated on
behalf of any Key Employee for that year. The Minimum Allocation is determined
without regard to any Social Security contribution. This minimum allocation
shall be made even though, under other Plan provisions, the Participant would
not otherwise be entitled to receive an allocation, or would have received a
lesser allocation for the year because (i) the Participant's failure to complete
one thousand (1,000) hours of service (or any equivalent provided in the Plan),
or (ii) the Participant's failure to make mandatory employee contributions to
the Plan or (iii) compensation is less than the stated amount.
(b) For purposes of computing the Minimum Allocation, Compensation
shall mean compensation as defined in Section A2.01 of the Plan.
(c) the provision in (a) above shall not apply to any Participant
who is not employed by the Employer on the last day of the Plan Year.
(d) The provision in (a) above shall not apply to any Participant to
the extent that the Participant is covered under any other plan or plans of the
Employer and the Employer has provided in Article A15 of the Adoption Agreement
that the Minimum Allocation or benefit requirement applicable to this TopHeavy
Plan will be met in the other plan or plans.
(e) The Minimum Allocation required (to the extent required to be
nonforfeitable under IRC Section 416(b)) may not be forfeited under IRC Section
411(a)(3)(B) or 411(a)(3)(D).
(f) If the formula for determining the allocation in Article A5 of
the Adoption Agreement is an integrated formula, the allocation of Employer
contributions and forfeitures, if any, shall be performed as follows:
(1) First, each Participant eligible to share (including those
entitled to a Minimum Allocation under paragraph (a) above) shall be allocated
an amount in the ratio that such Participant's compensation bears to the total
compensation of all such Participants, but not to exceed that percentage of
compensation required to be allocated under the Minimum Allocation or additional
minimum benefit provisions, as applicable. For purposes of this Subsection
(f)(l), compensation shall be as defined in Section 15.03(b) above.
(2) Second, each Participant eligible to share shall be
allocated a share of the remaining amount to be allocated, if any, in the same
proportion that such Participant's Excess Compensation bears to the total Excess
Compensation of all such Participants, not to exceed the maximum percentage of
the Participant's Excess Compensation as defined in Article A5 of the Adoption
Agreement.
(3) Third, the balance shall be allocated to each Participant
eligible to share (other than those entitled to share under the Minimum
Allocation provisions only) in the same proportion that such Participant's
Compensation bears to the total Compensation for all such Participants.
15.03 Minimum Vesting Schedules. For any Plan Year in which this Plan is
top-heavy, one of the minimum vesting schedules as elected by the Employer in
Article A15 of the Adoption Agreement will automatically apply to the Plan. The
minimum vesting schedule applies to all benefits within the meaning of IRC
Section 411(a)(7) except those attributable to Employee contributions, including
benefits accrued before the effective date of IRC Section 416 and benefits
accrued before the Plan became top-heavy. If the Plan shifts in or out of
top-heavy status, and the Plan's vesting schedule would be affected thereby, the
provisions of Section 6.07 shall apply. However, this Section 15.03 does not
apply to the Accrued Benefits of any Employee who does not have an Hour of
Service after the Plan has initially become top-heavy and such Employee's
Accrued Benefits attributable to Employer contributions will be determined
without regard to this Section 15.03.
<PAGE> 60
15.04 Non-Duplication of Benefits Where Employer Has More Than One Defined
Contribution Plan. For any Plan Year in which this Plan is top-heavy and a
Participant is covered under any other defined contribution plan or plans, the
Minimum Allocation of Section 15.02 or the additional minimum benefit of Section
15.05(c), if elected, shall be satisfied in the plan designated in Section
A15.04.
15.05 Coordination Where Employer Has More Than One Plan. If the Employer
maintains two or more plans, and one or more Participants in this Plan also
participate in any other plan, the provisions of this Section 15.05 shall apply.
(a) Adjustment to Fractions. In any Plan Year in which the Top-Heavy
Ratio exceeds ninety percent (90%) (i.e., becomes super top-heavy), or in which
the Plan is top-heavy and the Employer elects in Article A15 of the Adoption
Agreement that the additional minimum benefit of Section 15.05(c) shall not
apply, the denominators of the Defined Benefit Fraction (as defined in Section
5.04(c) of the Plan) and Defined Contribution Fraction (as defined in Section
5.04(d) of the Plan) shall be computed using one-hundred percent (100%) of the
dollar limitation instead of one-hundred twenty-five percent (125%).
(b) No Additional Minimum Benefit. If the Plan is super top-heavy,
or top-heavy and the Employer elects not to provide the additional minimum
benefit of Section 15.05(c), then either Subsection (1) or (2) below shall apply
as selected in Article A15 of the Adoption Agreement.
(1) If all plans are defined contribution plans, the Minimum
Allocation described in Section 15.02 shall be provided under this Plan or any
other defined contribution plan as selected in Article A15 of the Adoption
Agreement.
(2) If one or more plans are defined benefit plans, then the
minimum top-heavy benefits shall be from (A) or (B) below, as selected in
Article A15 of the Adoption Agreement:
(A) Each non-Key Employee who is a Participant in
this Plan and in a defined benefit plan sponsored by the Employer shall receive
a minimum nonintegrated accrued benefit under the defined benefit plan named in
Article A15 of the Adoption Agreement of two percent (2%), not to exceed a
cumulative accrued benefit of twenty percent (20%), of the highest
five-consecutive year average compensation for each Plan Year in which the
Employee has completed one thousand (1,000) hours of service, and no Minimum
Allocation under this Plan. Each non-Key Employee who is a Participant in this
Plan but not in the defined benefit plan(s) shall receive a Minimum Allocation
described in Section 15.02 under this Plan or any other defined contribution
plan as selected in Article A15 of the Adoption Agreement.
(B) Each non-Key Employee who is a Participant in
this Plan and in a defined benefit plan shall receive a minimum non-integrated
allocation of five percent (5%) of total compensation under this Plan or any
other defined contribution plan selected in Article A15 of the Adoption
Agreement, and no minimum accrued benefit under the defined benefit plan. Each
non-Key Employee who is a Participant in this Plan but not in the defined
benefit plan(s) shall receive a Minimum Allocation described in Section 15.02
under this Plan or any other defined contribution plan as selected in Article
A15 of the Adoption Agreement.
(c) Additional Minimum Benefit. If the Plan is topheavy, but not
super top-heavy, and the Employer elects in Article A15 of the Adoption
Agreement to provide the additional minimum benefit of this Subsection 15.05(c),
then Subsection (1) or (2) below shall apply, as selected by the Employer in
Article A15 of the Adoption Agreement:
(1) If all Plans are defined contribution plans, each non-Key
Employee shall receive a minimum nonintegrated allocation of four percent (4%)
under this Plan or any other defined contribution plan as selected in Article
A15 of the Adoption Agreement.
(2) If one or more plans are defined benefit plans, then the
additional minimum benefit shall be from (A) or (B) below, as selected in
Article A15 of the Adoption Agreement.
(A) Each non-Key Employee who is a Participant in
this Plan and in a defined benefit plan shall receive a minimum accrued benefit
under the defined benefit plan named in the Adoption
<PAGE> 61
Agreement of three percent (3%), not to exceed a cumulative accrued benefit of
thirty percent (30%), of the highest five-consecutive year average compensation
for each Plan Year in which the Employee has completed one thousand (1,000)
hours of service, and no Minimum Allocation under this Plan shall be provided. A
non-Key Employee who is a Participant in this Plan but not in any defined
benefit plan(s) shall receive a minimum nonintegrated allocation of four percent
(4%) of total compensation under this Plan or any other defined contribution
plan as selected in Article A15 of the Adoption Agreement.
(B) Each non-Key Employee who is a Participant in
this Plan and in a defined benefit plan(s), shall receive a minimum
non-integrated allocation of seven and one-half percent (7-1/2%) of total
compensation under this Plan or any other defined contribution plan as selected
in Article A15 of the Adoption Agreement, and no minimum accrued benefit under
the defined benefit plan. Each non-key Employee who is a Participant in this
Plan but not in the defined benefit plan shall receive a minimum nonintegrated
allocation of four percent (4%) of total compensation under this Plan or any
other defined contribution plan as selected in the Adoption Agreement.
<PAGE> 62
ARTICLE XVI.
MISCELLANEOUS PROVISIONS
16.01 Non-Alienation of Benefits.
(a) General. Except as provided in Subsection (b) and (c) of this
Section 16.01, none of the payments, benefits, or rights of any Participant or
Beneficiary shall be subject to any claim of any creditor, and, in particular,
to the fullest extent permitted by law, all such payments, benefits and rights
shall be free from attachment, garnishment, trustee's process, or any other
legal or equitable process available to any creditor of such Participant or
Beneficiary. Except as provided in Subsection 16.01(b), no Participant or
Beneficiary shall have the right to alienate, anticipate, commute, pledge,
encumber or assign any of the benefits or payments which the Participant or
Beneficiary may expect to receive, contingently or otherwise, under this Plan,
except the right to designate a Beneficiary or Beneficiaries as hereinbefore
provided.
(b) Exception. Loans made by the Trustee to any Participant or
Beneficiary which are secured by a pledge of the borrower's accrued
nonforfeitable benefit shall give the Trustee a first lien in such interest to
the extent of the entire outstanding amount of such loan, unpaid interest
thereon, and all costs of collection. In addition, the Trustee may comply with a
court order which is determined to be a qualified domestic relations order, as
defined in IRC Section 414(p).
(c) Qualified Domestic Relations Order. The Plan Administrator and
Trustee may comply with a court order which is determined to be a qualified
domestic order, as defined in IRC Section 414(p), including the establishment of
a separate account or distribution of benefits, to the extent permitted by
applicable law.
16.02 No Contract of Employment. Neither the establishment of the Plan,
nor any modification thereof, nor the creation of any fund, trust or account,
nor the payment of any benefits shall be construed as giving any Participant or
Employee, or any person whomsoever the right to be retained in the service of
the Employer, and all Participants and other Employees shall remain subject to
discharge to the same extent as if the Plan had never been adopted.
16.03 Severability of Provisions. If any provision of this Plan shall be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and this Plan shall be construed and
enforced as if such provisions had not been included.
16.04 Heirs, Assigns and Personal Representatives. This Plan shall be
binding upon the heirs, executors, administrators, successors and assigns of the
parties, including each Participant and Beneficiary, present and future.
16.05 Headings and Captions. The headings and captions herein are provided
for reference and convenience only, shall not be considered part of the Plan,
and shall not be employed in the construction of the Plan.
16.06 Insurance Companies. No insurance company which shall issue any
policy as provided for in this Plan shall be a party to this Plan or have any
responsibility for the validity of this Plan. The liability of any such
insurance company shall be only as provided in any policy which it may issue.
Any insurance company shall be fully protected from all liabilities in accepting
premium payments from the Trustee and in making payments to or on direction of
the Trustee, without liability as to the application of such payments. Such
insurance company shall be fully protected in dealing with the Trustee as the
sole owner of policies held under this Plan, and shall not be liable in assuming
that the Plan has not been amended or terminated until notice of any amendment
or termination of the Plan has been received by the insurance company at its
home office. No amendment of the Plan shall deprive the insurance company of any
protection except as to policies issued by it after receipt at its home office
of notice of the terms of such amendment. The insurance company shall be fully
protected in dealing with the Trustee according to the latest notification
received by it at its home office. The Plan Administrator shall furnish each
insurance company with the name(s) and address(es) of the Trustee and shall
furnish each insurance company with any changes of same.
16.07 Transfers to and from Other Qualified Plans. Notwithstanding
anything herein to the contrary, there may be transferred to the Trustee all or
any assets held on behalf of any other plan which satisfies the requirements of
IRC Section 401 and which is maintained for the benefit of any person who is or
is about to become a Participant in this
<PAGE> 63
Plan; provided that such assets and earnings thereon shall be allocated to the
Participant and shall be one hundred percent (100%) vested at all times and
shall not be forfeitable for any cause. Further, the Trustee may transfer the
Vested Interest of any Participant whose employment by the Employer is
terminated to any other plan which satisfies the requirements of IRC Section 401
and in which such Participant is or is about to become a Participant.
16.08 Separate Trust Agreement. The Employer shall establish a Trust
pursuant to which the Trustee shall hold, invest, administer and distribute the
Trust Fund and the income therefrom, in accordance with the provisions of the
separate Trust Agreement between the Employer and the Trustee. The Trust
Agreement constitutes a part of the Plan, and its terms are incorporated into
the Plan. The Plan constitutes a part of the Trust Agreement, and its terms are
incorporated into the Trust Agreement.
16.09 Gender and Number. Except where otherwise clearly indicated by
context, the masculine and the neuter shall include the feminine and the neuter,
the singular shall include the plural, and vice versa.
16.10 Controlling Law. This Plan shall be construed and enforced according
to the laws of the State in which the Employer maintains the Employer's
principal place of business, to the extent not preempted by Federal law.
16.11 Title to Assets. No Participant or Beneficiary shall have any right
to, or interest in, any assets of the Trust Fund upon termination of the
Participant's employment or otherwise, except as provided from time to time
under this Plan, and then only to the extent of the benefits payable under the
Plan to such Participant or out of the assets of the Trust Fund. All payments of
benefits as provided for in this Plan shall be made from the assets of the Trust
Fund, and neither the Employer nor any other person shall be liable therefor in
any manner.
16.12 Payments to Minors, etc. Any benefits payable to or for the benefit
of a minor, an incompetent person or other person incapable of receipting
therefor shall be deemed paid when paid to such person's guardian or to the
party providing or reasonably appearing to provide for the care of such person,
and such payment shall fully discharge the Trustee, the Plan Administrator, the
Employer and all other parties with respect thereto.
16.13 Benefits of Persons Who Cannot be Located. If the Plan Administrator
determines in good faith that a person entitled to receive payment of a
distribution hereunder cannot be located, the Plan Administrator shall,
nevertheless, give written notice to such person of the fact that such benefit
is payable. Such written notice shall be given by U.S. mail to the person
entitled to payment {according to the records of the Plan Administrator) at the
last known address of such person. If such person makes no claim for such
benefit before the earlier of two (2) years after the giving of such written
notice or the termination of the Plan, then the Trustee is authorized to declare
a forfeiture of the benefit otherwise payable to such person, provided such
person has not yet been located. Notwithstanding the foregoing, if a claim for
payment of such benefit is thereafter made by such person or any successor in
interest of such person who would qualify as a Beneficiary thereof, such benefit
shall be reinstated and paid in full.
16.14 Mechanical Reproduction. Only one (1) set of the pages constituting
this Plan has been executed and shall be deemed the original, even though
physically produced by the use of automatic printing or copying machines, if
such set bears the original signatures of the parties hereto.
16.15 Discrepancies. In the event of any discrepancy or conflict in
interpretation occurs between the provisions of this Plan and the provisions of
the Adoption Agreement, the Adoption Agreement shall control.
<PAGE> 64
AMENDMENT NUMBER ONE TO THE
LOMAK PETROLEUM, INC.
401(k) PLAN AND TRUST
The following Amendment in the form of deletions, substitutions, and
additions is hereby made to the LOMAK PETROLEUM, INC. 401(k) PLAN AND TRUST:
1. Section A4.02, CHANGE IN RATE OF ELECTIVE CONTRIBUTIONS, shall be
amended in its entirety as follows:
A4.02 CHANGE IN RATE OF ELECTIVE CONTRIBUTIONS. A Participant may
increase, decrease, commence or cease the rate of salary reduction in
accordance with the following:
(a) The rate of salary reduction may be increased or
decreased on the first day of each quarter of the Plan Year.
(b) A Participant may commence salary reduction
contributions only on the first day of the Plan Year (or on the Entry Date
as of which the Participant first becomes an Active Participant, if other
than the first day of the Plan Year). A Participant may discontinue salary
reduction contributions on January 1st and July 1st of each Plan Year,
however, if discontinued, the Participant may not recommence salary
reduction contributions during the same Plan Year.
2. Section A11.01, PARTICIPANT DIRECTED ACCOUNTS, shall be amended in its
entirety as follows:
A11.01 PARTICIPANT DIRECTED ACCOUNTS. Participant Directed
Investments shall be permitted.
Investments shall be limited to those investment options selected by
the Plan Administrator.
Participants shall be permitted to invest up to fifty percent (50%)
of Participant's current Contribution in Qualifying Employer Securities of
the Employer as defined in ERISA ?407(d)(5). In no event shall more than
fifty percent (50%) of a Participant's Account balance be invested in
Qualifying Employer Securities at the time the election is made.
The effective date of the Amendment shall be, and hereby is______________.
ADOPTED this ________ day of _______________, 19____.
LOMAK PETROLEUM, INC.
By:_____________________________________
(Authorized Signature)
________________________________________
(Printed Name and Title)
<PAGE> 65
ACCEPTED this _______ day of _________________, 1996, by the Trustee of
the LOMAK PETROLEUM, INC. 401(k) PLAN AND TRUST.
BANK ONE, TEXAS, N.A.
By:_____________________________________
(Authorized Signature)
________________________________________
(Printed Name and Title)
<PAGE> 66
AMENDMENT NUMBER TWO TO THE
LOMAK PETROLEUM, INC.
401(k) PLAN AND TRUST
The following Amendment in the form of deletions, substitutions, and
additions is hereby made to the LOMAK PETROLEUM, INC. 401(k) PLAN AND TRUST:
1. Section A11.01, PARTICIPANT DIRECTED ACCOUNTS, shall be amended in its
entirety as follows:
A11.01 PARTICIPANT DIRECTED ACCOUNTS. Participant directed
accounts shall be permitted.
Investments shall be limited to those investment options selected by
the Plan Administrator.
Participants shall be permitted to invest up to the following
maximum percentages in Qualifying Employer Securities of the Employer as defined
in ERISA Section 407(d)(5): one hundred percent (100%) in the Participant's
Employer Non-Elective Accounts and fifty percent (50%) in the Participant's
Employer Elective Accounts.
The effective date of the Amendment shall be, and hereby is January 1,
1997.
ADOPTED this ________ day of _______________, 19____.
Lomak Petroleum, Inc.
By:_____________________________________
(Authorized Signature)
________________________________________
(Printed Name and Title)
ACCEPTED this _______ day of _________________, 19___, by the Trustee
of the LOMAK PETROLEUM, INC. 401(k) PLAN AND TRUST.
Bank One, Texas, N.A.
By:_____________________________________
(Authorized Signature)
________________________________________
(Printed Name and Title)
<PAGE> 1
Exhibit 5.1
[VINSON & ELKINS LETTERHEAD]
ATTORNEYS AT LAW
VINSON & ELKINS L.L.P.
1001 FANNIN STREET
SUITE 2300
HOUSTON, TEXAS 77002-6760
TELEPHONE (713) 758-2222
FAX (713) 758-2346
WRITER'S TELEPHONE WRITER'S FAX
(713) 758-2222 (713) 758-2346
January 23, 1998
Lomak Petroleum, Inc.
500 Throckmorton Street, Suite 2104
Fort Worth, Texas 76102
Ladies and Gentlemen:
We have acted as counsel for Lomak Petroleum, Inc., a Delaware
corporation (the "Company"), in connection with the Company's registration under
the Securities Act of 1933, as amended (the "Act"), of 1,624,500 shares of
common stock, par value $0.01 per share (the "Common Stock"), of the Company
pursuant to the Company's Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange Commission (the
"Commission") on January 23, 1998. Of the shares of Common Stock to be
registered under the Registration Statement, (i) 1,000,000 shares (the "Option
Shares") are issuable upon the exercise of options (the "1989 Options") to be
granted pursuant to the Company's 1989 Stock Option Plan (the "1989 Plan"), (ii)
424,500 shares (the "1997 Shares") may be purchased from time to time pursuant
to the Company's 1997 Stock Purchase Plan (the "1997 Plan") and (iii) 200,000
shares (the "401(k) Shares" and collectively with the Option Shares and the 1997
Shares, the "Shares") are to be contributed by the Company to the trust
established by the Company pursuant to the Company's 401(k) Profit Sharing Plan
(the "401(k) Plan" and collectively with the 1989 Plan and the 1997 Plan, the
"Plans").
In reaching the opinions set forth herein, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of such documents and records of the Company and such statutes,
regulations and other instruments as we deemed necessary or advisable for
purposes of this opinion, including (i) the Registration Statement, (ii) the
Certificate of Incorporation of the Company, as filed with the Secretary of
State of the State of Delaware, (iii) the Bylaws of the Company, (iv) certain
minutes of meetings of, and resolutions adopted by, the Board of Directors of
the Company and the Company's stockholders, and (v) the Plans.
We have assumed that (i) all information contained in all documents we
reviewed is true, correct and complete, (ii) all signatures on all documents we
reviewed are genuine, (iii) all documents submitted to us as originals are true
and complete, (iv) all documents submitted to us as copies are true and complete
copies of the originals thereof, and (v) all persons executing and delivering
the documents we examined were competent to execute and deliver such documents.
In
<PAGE> 2
Lomak Petroleum, Inc.
January 23, 1998
Page 2
addition, we have assumed that, upon exercise of the 1989 Options, (i) the
shares of Common Stock to be issued thereunder will be issued in accordance with
the 1989 Plan, (ii) the full consideration for each share of Common Stock shall
be paid to the Company and in no event will be less than the par value for each
such share, and (iii) certificates evidencing such shares will be properly
executed and delivered by the Company in accordance with the Delaware General
Corporation Law (the "DGCL").
Based on the foregoing, and having due regard for the legal
considerations we deem relevant, we are of the opinion:
1. The Option Shares, when issued by the Company upon exercise of the
1989 Options in accordance with the Option 1989 Plan, will be validly issued,
fully paid and non-assessable.
2. The 1997 Shares and the 401(k) Shares, when issued by the Company
pursuant to the terms of the 1997 Plan and the 401(k) Plan, respectively, will
be validly issued, fully paid and non-assessable.
This opinion is limited in all respects to the DGCL and the federal
laws of the United States of America. For purposes of this opinion, we assume
that the Shares will be issued in compliance with all applicable state
securities or Blue Sky laws.
We hereby consent to the filing of this as an exhibit to the
Registration Statement. In giving this consent, however, we do not hereby admit
that we come within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933 or the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
Very truly yours,
/s/ Vinson & Elkins L.L.P.
<PAGE> 1
Exhibit 23.1(b)
ARTHUR ANDERSEN
Arthur Andersen LLP
Suite 1800
200 Public Square
Cleveland, OH 44114
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in, or incorporated by reference,
in this registration statement.
/s/ ARTHUR ANDERSEN LLP
Cleveland, Ohio
January 19, 1998
<PAGE> 1
Exhibit 23.1(c)
[COOPERS & LYBRAND LETTERHEAD]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of our report dated February 7, 1997, on our audits of the Statements
of revenues and direct operating expenses of the American Cometra Interests, for
the years ended December 31, 1994, 1995 and 1996. We also consent to the
reference to our firm under the caption "Experts".
/s/ COOPERS & LYBRAND L.L.P.
Forth Worth, Texas
January 19, 1998
