<PAGE> 1
As filed with the Securities and Exchange Commission on September 9, 1996
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
FABRI-CENTERS OF AMERICA, INC.
------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Ohio 34-0720629
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5555 Darrow Road, Hudson, Ohio 44236
------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Employees' Savings and Profit-Sharing Plan
------------------------------------------
(Full title of the plan )
Betty Rosskamm, Corporate Secretary
5555 Darrow Road, Hudson, Ohio 44236
------------------------------------
(Name and address of agent for service)
(216) 656-2600
--------------
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED (1) REGISTERED PER SHARE (2) (3) OFFERING PRICE REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Shares 450,000 shares $ 13.50 $ 6,075,000 $ 2,094.83
Class B Common Shares 450,000 shares $ 13.125 $ 5,906,250 $ 2,036.64
===================================================================================================================================
<FN>
(1) Pursuant to Rule 416 of the Securities Act of 1933, as amended (the
"Securities Act"), this Registration Statement also covers an
indeterminate amount of interests to be offered or sold pursuant to the
Plan described herein.
(2) Estimated pursuant to paragraphs (c) and (h) of Rule 457 under the
Securities Act, on the basis of the average of the high and low sale
prices for Class A Common Shares and Class B Common Shares on the New York
Stock Exchange - Composite Transactions Tape on Friday, August 30, 1996
and Tuesday, September 3, 1996, respectively.
(3) Estimated solely for the purpose of calculating the registration fee.
</TABLE>
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
- ------- ----------------------------------------
The following documents filed by the Registrant with the Securities and Exchange
Commission are incorporated herein by reference and made a part hereof:
a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended January 27, 1996;
b) The Plan's Annual Report on Form 11-K for the Plan year ended
December 31, 1995;
c) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended April 27, 1996;
d) The descriptions of the Registrant's Class A Common Shares and
Class B Common Shares and rights to purchase Class A Common
Shares and Class B Common Shares under certain circumstances are
contained in the Registrant's Registration Statements filed with
the Commission pursuant to Section 12 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), including any
amendment or report filed for the purpose of updating that
description; and
All documents hereafter filed by the Registrant with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act from the date hereof and
prior to the termination of the issuance of securities registered hereby shall
be deemed to be incorporated by reference herein and to be part hereof from the
date of filing of such documents.
Item 4. Description of Securities.
- ------- --------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
- ------- ---------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
- ------- ------------------------------------------
Article V of the Company's Amended Regulations provides as
follows:
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<PAGE> 3
INDEMNIFICATION
SECTION 1. THIRD PARTY ACTIONS. The Registrant shall indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative (other than an action or suit by or
in the right of the Registrant), by reason of the fact that he is or was a
director, officer, employee, or agent of the Registrant, or is or was serving at
the request of the Registrant as a director, trustee, officer, employee, or
agent of another corporation, partnership, joint venture, trust, or other
enterprise, against expenses (including attorneys' fees), judgments, fines, and
amounts paid in settlement actually and reasonably incurred by him in connection
with the action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Registrant and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement, or conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Registrant or that, with respect to any criminal action or proceeding, he had
reasonable cause to believe that his conduct was unlawful.
SECTION 2. DERIVATIVE ACTIONS. The Registrant shall indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action or suit by or in the right of the
Registrant to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee, or agent of the Registrant, or is or was
serving at the request of the Registrant as a director, trustee, officer,
employee, or agent of another corporation, partnership, joint venture, trust, or
other enterprise, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of the
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Registrant, except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which that person shall have been finally adjudged to be liable for negligence
or misconduct in the performance of his duty to the Registrant unless and only
to the extent that the Court of Common Pleas or the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, that
person is fairly and reasonably entitled to indemnity for such expenses as the
Court of Common Pleas or the other court shall deem proper.
SECTION 3. RIGHTS AFTER SUCCESSFUL DEFENSE. To the extent that
a director, trustee, officer, employee, or agent has been successful on the
merits or otherwise in defense of any action, suit, or proceeding referred to in
Section 1 or Section 2, or in defense of any claim, issue, or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
-3-
<PAGE> 4
SECTION 4. OTHER DETERMINATION OF RIGHTS. Except in a
situation governed by Section 3, any indemnification under Section 1 or Section
2 (unless ordered by a court) shall be made by the Registrant only as authorized
in the specific case upon a determination that indemnification of the director,
trustee, officer, employee, or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in Section 1 or Section 2.
The determination shall be made (a) by a majority vote, at a meeting of
directors, of those directors who constitute a quorum and who were not and are
not parties to or threatened with any such action, suit, or proceeding or (b),
if such a quorum is not obtainable (or even if obtainable) and a majority of
disinterested directors so directs, in a written opinion by independent legal
counsel (compensated by the Registrant) or (c) by the affirmative vote in person
or by proxy of the holders of record of a majority of the shares held by persons
who were not and are not parties to or threatened with any such action, suit, or
proceeding and entitled to vote in the election of directors, without regard to
voting power which may thereafter exist upon a default, failure, or other
contingency or (d) by the Court of Common Pleas or the court in which such
action, suit, or proceeding was brought.
SECTION 5. ADVANCES OF EXPENSES. Expenses (including
attorneys' fees) incurred in defending any action, suit, or proceeding referred
to in Section 1 or Section 2 may be paid by the Registrant in advance of final
disposition of the action, suit, or proceeding, as authorized by the Board of
Directors in the specific case, upon receipt of an undertaking by or on behalf
of the director, trustee, officer, employee, or agent to repay the amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
Registrant.
SECTION 6. PURCHASE OF INSURANCE. The Registrant may purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee, or agent of the Registrant, or is or was serving at the
request of the Registrant as a director, trustee, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise,
against any liability asserted against him and incurred by him in any capacity,
or arising out of his status as such, whether or not the Registrant would have
the power to indemnify him against liability under the provisions of this
Article or of the Ohio General Corporation Law.
SECTION 7. MERGERS. In the case of a merger into this
Registrant of a constituent corporation which, if its separate existence had
continued, would have been required to indemnify directors, trustees, officers,
employees, or agents in specified situations, any person who served as a
director, officer, employee, or agent of the constituent corporation, or served
at the request of the constituent corporation as a director, trustee, officer,
employee, or agent of another corporation, partnership, joint venture, trust, or
other enterprise, shall be entitled to indemnification by this Registrant (as
the surviving corporation) to the same extent he would have been entitled to
indemnification by the constituent corporation if its separate existence had
continued.
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<PAGE> 5
SECTION 8. NON-EXCLUSIVITY; HEIRS. The indemnification
provided by this Article shall not be deemed exclusive of any other rights to
which a person seeking indemnification may be entitled as a matter of law or
under the Articles of Incorporation, these Regulations, any agreement, vote of
shareholders or disinterested directors, any insurance purchased by the
Registrant, or otherwise, both as to action in his official capacity and as to
action in another capacity while holding an office, and shall continue as to a
person who has ceased to be a director, trustee, officer, employee, or agent and
shall inure to the benefits of the heirs, executors, and administrators of such
a person.
The Registrant maintains liability insurance for all of its Directors and
Officers ("D&O Insurance"). The D&O Insurance also insures the Registrant
against amounts payable to indemnify Directors and Officers, subject to policy
limits and retention amounts.
Item 7. Exemption From Registration Claimed.
- ------- ------------------------------------
Not applicable.
Item 8. Exhibits.
- ------- ---------
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
4.1 Fabri-Centers of America, Inc. Employees' Savings and Profit-
Sharing Plan
23.1 Consent of Independent Public Accountants
24.1 Powers of Attorney
</TABLE>
Item 9. Undertakings.
- ------- -------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
-5-
<PAGE> 6
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding
the foregoing, any increase or decrease in 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 and
of the estimated offering range may be reflected in the
form of prospectus filed with the Commission pursuant
to the 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 (a)(1)(i) and (a)(1)(ii) of
this section do not apply if the registration statement is on
Form S-3, Form S-8 or Form F-3, and the information required to
be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities 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.
-6-
<PAGE> 7
(c) The undersigned Registrant hereby undertakes that, insofar as
indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy
as expressed in the 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.
(d) The undersigned Registrant has submitted and hereby undertakes to
continue to submit the Fabri-Centers of America, Inc. Employees'
Savings and Profit-Sharing Plan and any amendment thereto (the "Plan")
to the Internal Revenue Service ("IRS") in a timely manner and has
made and will continue to make all changes required by the IRS in
order to continue the qualification of the Plan.
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 Hudson, State of Ohio, on September 9, 1996.
FABRI-CENTERS OF AMERICA, INC.
By: /s/ Alan Rosskamm
------------------------------
Alan Rosskamm, President
and Chief Executive Officer
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<PAGE> 8
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.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Alan Rosskamm Chairman of the Board and
- --------------------------- Director (Chief Executive
Alan Rosskamm Officer) September 9, 1996
/s/ Robert R. Gerber* Senior Vice President
- --------------------------- (Chief Accounting Officer) September 9, 1996
Robert R. Gerber
/s/ Betty Rosskamm* Director
- ---------------------------
Betty Rosskamm September 9, 1996
/s/ Alma Zimmerman* Director
- ---------------------------
Alma Zimmerman September 9, 1996
/s/ Scott Cowen* Director
- ---------------------------
Scott Cowen September 9, 1996
/s/ Ira Gumberg* Director
- ---------------------------
Ira Gumberg September 9, 1996
/s/ Samuel Krasney* Director
- ---------------------------
Samuel Krasney September 9, 1996
/s/ Frank Newman* Director
- ---------------------------
Frank Newman September 9, 1996
/s/ Gregg Searle* Director
- ---------------------------
Gregg Searle September 9, 1996
</TABLE>
The undersigned, by signing his name hereto, executes this Registration
Statement pursuant to powers of attorney executed by the above-named directors
and officers of the Registrant and filed with the Securities and Exchange
Commission as Exhibit 24.1 hereto.
-8-
<PAGE> 9
*By: /s/ Alan Rosskamm
-----------------------------
Alan Rosskamm, Attorney-in-fact
Pursuant to the requirements of the Securities Act of 1933, the trustee has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio,
on September 9, 1996.
FABRI-CENTERS OF AMERICA, INC. EMPLOYEES'
SAVINGS AND PROFIT-SHARING PLAN
By: /s/ Roberta D. Roth
-----------------------------
Roberta D. Roth
Vice President
Key Trust Company of Ohio, N.A.
-9-
<PAGE> 1
Exhibit 4.1
03/24/95
Basic Plan Document # 05
Plan # 002
IRS Letter Serial No.: D363689a
PRISM(R) PROTOTYPE RETIREMENT PLAN & TRUST
SECTION 401(k) PROFIT SHARING PLAN
(NONSTANDARDIZED)
ADOPTION AGREEMENT(1)
The Employer(2), designated below, hereby establishes a profit-sharing plan
(optionally including a cash or deferred arrangement (as defined in section
401(k) of the Internal Revenue Code)) for all Eligible Employees as defined
in this Adoption Agreement pursuant to the terms of the PRISM(R) PROTOTYPE
RETIREMENT PLAN & TRUST BASIC PLAN DOCUMENT # 05.
A. EMPLOYER INFORMATION:
1. NAME: Fabri-Centers of America, Inc.
---------------------------------
2. ADDRESS: 5555 Darrow Road
------------------------------
3. ADDRESS: Hudson, OH 44236
------------------------------
4. ATTENTION: Rosalind Thompson TELEPHONE: (216) 463-3489
---------------------------- -------------------
5. EMPLOYER TAXPAYER IDENTIFICATION NUMBER(3):
B. BASIC PLAN PROVISIONS:
1. PLAN NAME (SELECT ONE):
a. [ ] This plan is established effective ______, 19__,
(the "Effective Date") as a profit sharing plan and
trust (optionally with a "cash or deferred arrangement"
as defined in Code section 401(k)) to be known as
_____ Plan and Trust (the "Plan") in the form of the
PRISM(R) PROTOTYPE RETIREMENT PLAN & TRUST.
- ----------------------
(1) Footnotes in this Adoption Agreement are not to be construed as part of the
Plan provisions but are explanatory only. To the extent a footnote is
inconsistent with the provisions of the Basic Plan Document or applicable
law, the provisions of the Plan shall be construed in conformity with the
Basic Plan Document or law.
(2) Terms that are capitalized are defined in the PRISM(R) PROTOTYPE
RETIREMENT PLAN & TRUST BASIC PLAN DOCUMENT.
(3) The Plan will have an individual TIN, distinct from the Employer TIN.
<PAGE> 2
b.[x] This plan is an amendment and restatement in the form of the
PRISM(R) PROTOTYPE RETIREMENT PLAN & TRUST, effective July 1,
1996, (the "Effective Date") of the FABRI-CENTERS OF AMERICA,
INC. EMPLOYEES' SAVINGS AND PROFIT-SHARING Plan and Trust (the
"Plan"), originally effective as of JANUARY 17, 1975 (the
"Original Effective Date").
2. EMPLOYER'S THREE DIGIT PLAN NUMBER: 001
3. COMMITTEE MEMBERS(4):
ROSALIND THOMPSON, FRANCIS C. PICCIRILLO
----------------------------------------
4. DEFINITIONS:
a. COMPENSATION for allocation purposes:
i Will be determined over the following applicable period (select
only one):
(a) [ ] the Plan Year
(b) [x] the period of Plan participation during the Plan Year
(c) [ ] a consecutive 12 month period cornmencing on and ending
with, or within, the Plan Year.
ii [x] If selected, Compensation will include Employer contributions
made pursuant to a Salary Reduction Agreement, or other ar-
rangement, which are not includible in the gross income of
the Employee under sections 125, 402(e)(3), 402(h)(1)(B) or
403(b) of the Internal Revenue Code.
iii Shall NOT include (select as many as desired):
(a) [ ] Bonuses
(b) [ ] Commissions
(c) [ ] Taxable fringe benefits identified below:
(d) [x] Other items of remuneration identified below:
DIRECTORS FEES, EXPENSE REIMBURSEMENTS, LIVING AND
SIMILAR ALLOWANCES, MOVING ALLOWANCES, STOCK OPTIONS,
EMPLOYER CONTRIBUTIONS UNDER THIS, OR ANY OTHER PLAN.
iv Shall be limited to $ _____, which shall be the maximum amount of
compensation considered for plan allocation purposes (but not for
- -------------------------
(4) Committee members direct the day to day operation of the Plan. Committee
members serve at the pleasure of the Employer. See section 11.4 for
changes in Committee membership. If no Committee members are specified,
the Employer shall assume responsibility for the operations of the Plan.
PAGE 2
<PAGE> 3
testing purposes), and may not be an amount in excess of the
Internal Revenue Code section 401(a)(17) limit in effect
for the Plan Year(5). If no amount is specified,
Compensation shall be limited to the Internal Revenue Code
section 401(a)(17) amount, as adjusted by the Secretary of
the Treasury from time to time.
b. EARLY RETIREMENT DATE:
i [X] is not applicable to this Plan
ii [ ] is the latter of the date on which the Participant
attains age _____ (not less than 55) and the date on
which the Participant completes __ Years of Service.
c. HOUR OF SERVICE shall be determined on the basis of the
method selected below. Only one method may be selected. The
method shall be applied to all Employees covered under the
Plan as follows (select only one):
i [X] On the basis of actual hours for which an Employee
is paid, or entitled to be paid.
ii [ ] On the basis of days worked. An Employee shall be
credited with ten (10) Hours of Service if under
section 1.1(U) of the Plan such Employee would be
credited with at least one (1) Hour of Service during
the day.
iii [ ] On the basis of weeks worked. An Employee shall be
credited with forty-five (45) Hours of Service if
under section 1.1(U) of the Plan such Employee would
be credited with at least one (1) Hour of Service
during the week.
iv [ ] On the basis of semi-monthly payroll periods. An
Employee shall be credited with ninety-five (95) Hours
of Service if under section 1.1(U) of the Plan such
Employee would be credited with at least one (1) Hour
of Service during the semi-monthly payroll period.
v [ ] On the basis of months worked. An Employee shall be
credited with one hundred ninety (190) Hours of Service
if under section 1.1(U) of the Plan such Employee
would be credited with at least one (1) Hour of
Service during the month.
d. LIMITATION YEAR shall mean the 12 month period commencing on
JANUARY 1 and ending on DECEMBER 31.
e. NORMAL RETIREMENT DATE for each Participant shall mean
(select one):
i [X] the date the Participant attains age: 65 (not to
exceed 65)
- --------------------
(5) If no amount is specified, the maximum amount of Compensation allowed
under Code section 401(a)(17) (the "$150,000 limit" ("$200,000 limit"
prior to the Plan Year beginning before January 1, 1994)), as adjusted
from time to time, shall be used.
PAGE 3
<PAGE> 4
ii [ ] the latter of the date the Participant attains age
______ (not to exceed 65) or the __ (not to exceed 5th)
anniversary of the participation commencement date. If
for the Plan Years beginning before January 1, 1988,
Normal Retirement Date was determined with reference to
the anniversary of the participation commencement date
(more than 5 but not to exceed 10 years), the
anniversary date for Participants who first commenced
participation under the Plan before the first Plan Year
beginning on or after January 1, 1988 shall be the
earlier of (A) the tenth anniversary of the date the
Participant commenced participation in the Plan (or
such anniversary as had been elected by the employer,
if less than 10) or (B) the fifth anniversary of the
first day of the first Plan Year beginning on or after
January 1, 1988. Notwithstanding any other provisions
of the Plan, the participant commencement date is the
first day of the first Plan Year in which the
Participant commenced participation in the Plan.
f. PERMITTED DISPARITY LEVEL, for purposes of allocating
Employer Contributions, shall mean (select only one):
i [X] Not applicable - the Plan does not use permitted
disparity.
ii [ ] The Taxable Wage Base, which is the contribution and
benefit base under section 230 of the Social Security
Act at the beginning of the year.
iii [ ] _____ % (not greater than 100%) of the Taxable Wage
Base as defined in B(4)(f)(ii) above.
iv [ ] $ _____, provided that the amount does not exceed
the Taxable Wage Base as defined in B(4)(f)(ii) above.
g. PLAN YEAR shall mean (select and complete only one of the
following):
i [X] the 12-consecutive month period which coincides with
the Limitation Year. The first Plan Year shall be the
period commencing on the Effective Date and ending on
the last day of the Limitation Year.
ii [ ] the 12-consecutive month period commencing on____,
19__, and each annual anniversary thereof.
iii [ ] the calendar year (January 1 through December 31).
h. QUALIFIED DISTRIBUTION DATE, for purposes of making distributions
under the provisions of a Qualified Domestic Relations Order (as
defined in Internal Revenue Code section 414(p)), [X] SHALL
[ ] SHALL NOT be the date the order is determined to be
qualified. If SHALL is selected, the Alternate Payee will be
entitled to an immediate distribution of benefits as directed
PAGE 4
<PAGE> 5
by the Qualified Domestic Relations Order. If SHALL NOT is
selected, the Alternate Payee may only take a distribution on the
earliest date that the Participant is entitled to a distribution.
i. SPOUSE:
[ ] If selected, Spouse shall mean only that person who has
actually been the Participant's spouse for at least one
year.
j. YEAR OF SERVICE shall mean:
i For ELIGIBILITY purposes (select one of the following):
(a) [x] the 12 consecutive months during which an Employee
is credited with 1000 (not more than 1000) Hours of
Service.
b) [ ] a Period of Service (using the elapsed time method
of counting Service, as described in section 1.1(N)(3)
of the Plan).
ii For ALLOCATION accrual purposes (select one of the
following): N/A
(a) [ ] the 12 consecutive months during which an Employee
is credited with ____ (not more than 1000) Hours of
Service.
(b) [ ] a Period of Service (using the elapsed time method
of counting Service, as described in section
1.1(N)(3) of the Plan).
iii For VESTING service purposes (select one of the following):
(a) [ ] the 12 consecutive months during which an Employee
is credited with ____ (not more than 1000) Hours of
Service.
(b) [x] a Period of Service (using the elapsed time method
of counting Service, as described in section
1.1(N)(3) of the Plan).
iv For purpose of computing Years of Service in plans where
Year of Service is defined in terms of Hours of Service),
the consecutive 12 month period shall be:
(a) For ELIGIBILITY purposes, the first Year of Service shall
be computed using the 12 month period commencing on the
Employee's date of hire and ending on the first annual
anniversary of the Employee's date of hire (the "Initial
Computation Period"). In the event an
PAGE 5
<PAGE> 6
employee does not complete an eligibility Year of Service
during this initial computation period, the computation
period shall be (select only one):
(1) [ ] the period commencing on each annual anniversary of
the Employee's date of hire and ending on the next
annual anniversary of the Employee's date of hire.
(2) [x] the Plan Year, commencing with the Plan Year in
which the Initial Computation Period ends.
(b) For VESTING purposes, Years of Service shall be computed on
the basis of:
(1) [x] the period commencing on each annual anniversary of
the Employee's date of hire and ending on the next
annual anniversary of the Employee's date of hire.
(2) [ ] the Plan Year, commencing with the first Plan Year
an Employee completes an Hour of Service.
(c) For ALLOCATION accrual purposes, Year of Service shall be
computed on the basis of the Plan Year.
v [x] For ELIGIBILITY purposes, Years of Service with the
following Predecessor Employers shall count in
fulfilling the eligibility requirements for this Plan:
SEE ATTACHED ADDENDUM
vi [x] For VESTING purposes, Years of Service with the
following Predecessor Employers shall count for
purposes of determining the nonforfeitable amount of a
Participant's account:
SEE ATTACHED ADDENDUM
5. COVERAGE:
This Plan is extended by the Employer to the following Employees who
have met the eligibility requirements (select as many as appropriate):
i [ ] All Employees
ii [ ] Salaried Employees
iii [ ] Sales Employees
iv [ ] Hourly Employees
v [ ] Leased Employees
vi [ ] All Employees except (select as applicable):
PAGE 6
<PAGE> 7
(a) [ ] those who are members of a unit of Employees covered
by a collective bargaining agreement between the
Employer and Employee representatives, if retirement
benefits were the subject of good faith bargaining and
if two percent or less of the Employees who are covered
pursuant to that agreement are professionals as defined
in Section 1.410(b)-9 of the Regulations. For this
purpose, the term "Employee representative" does not
include any organization more than half of whose
members are Employees who are owners, officers, or
executives of the Employer.
(b) [ ] those who are nonresident aliens (within the meaning of
Internal Revenue Code section 7701(b)(1)(B)) and who
receive no earned income (within the meaning of
Internal Revenue Code section 911(d)(2)) from the
Employer which constitutes income from sources within
the United States (within the meaning of Internal
Revenue Code section 861(a)(3)).
vii [ ] Union Employees (who are members of the following unions or
union affiliates:
viii[x] Other Employees, described as follows:
ALL EMPLOYEES EXCEPT FOR LEASED EMPLOYEES OR THOSE DESCRIBED IN
ITEM B(5)(vi)(a) ABOVE.
6. ELIGIBILITY:
An Employee covered by the Plan may become a Participant upon completion of
the following eligibility requirements:
a. Service(6) :
i [ ] There shall be no minimum service requirement for an Em-
ployee to become a Participant.
ii [ ] The Employee must complete ____ MONTHS of Service (not more
than 2 years) to be a Participant for purposes of receiving
allocations of Employer Profit Sharing Contributions.
- ---------------------
(6) If a fractional year is elected, the elapsed time method of computing
service shall be used for the fractional year. Eligibility provisions for
optional cash or deferred arrangements are contained in Item C of this
Adoption Agreement.
PAGE 7
<PAGE> 8
b. AGE:
i [ ] There shall be no minimum age requirement for an Em-
ployee to become a Participant.
ii [x] The Employee must attain age 21 (not more than 21) to be
a Participant in the Plan.
c. WAIVER OF AGE AND SERVICE REQUIREMENTS:
i [ ] Notwithstanding the provisions of Items B(6)(a) and
(b), Employees who have not satisfied the age and
service requirements, but would otherwise be eligible to
participate in the plan, shall be eligible to
participate on the Effective Date.
ii [ ] For new Plans, notwithstanding the provisions of
Items B(6)(a) and (b), Employees who have not satisfied
the age and service requirements, but would otherwise be
eligible to participate in the plan, shall be eligible
to participate on the Effective Date.
d. ENTRY DATES:
Upon completion of the eligibility requirements, an Employee shall
commence participation in the Plan (select only one):
i [ ] As soon as practicable under the payroll practices
utilized by the Employer, and consistently applied to
all Employees, or if earlier, the first day of the Plan
Year(7).
ii [ ] As of the first day of the month following the
completion of the eligibility requirements.
iii [x] As of the earliest of the first day of the Plan Year,
fourth, seventh or tenth month of the Plan Year next
following completion of the eligibility requirements.
iv [ ] As of the earliest of the first day of the Plan Year or
seventh month of the Plan Year next following completion
of the eligibility requirements.
v [ ] As of the first day of the Plan Year next following
completion of the eligibility requirements (may only be
selected if the eligibility year of service requirement
is 6 months or less).
- ----------------------------
(7) Notwithstanding the foregoing, an Employee who has met the eligibility
requirements may not enter the Plan later than six months following the
date on which the Employee first completes the eligibility requirements.
PAGE 8
<PAGE> 9
7. VESTING:
a. The percentage of a Participant's Employer Contribution Account
(attributable to Employer Profit Sharing Contributions) to be vested
in him or her upon termination of employment prior to attainment of
the Plan's Normal Retirement Date shall be(8):
<TABLE>
<CAPTION>
COMPLETED YEARS OF SERVICE
1 2 3 4 5 6 7
--- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C>
i [ ] 100%
--- ---
ii [ ] 100%
--- --- ---
iii [ ] 20% 40% 60% 80% 100%
--- --- --- --- --- ---
iv [ ] 20% 40% 60% 80% 100%
--- --- --- --- --- --- ---
V [ ] 10% 20% 30% 40% 60% 80% 100%
--- --- --- --- --- --- ---
vi [ ] 100%
--- --- --- --- ---
vii [ ] 100%
--- --- --- --- --- --- ---
viii [ ] Full and immediate vesting upon entry into the Plan(9)
<FN>
Notwithstanding anything to the contrary in the Plan, the amount inserted in the
blanks above shall not exceed the limits specified in Code section 411(a)(2).
</TABLE>
b. For purposes of computing a Participant's vested account balance,
Years of Service for vesting purposes [x] SHALL [ ] SHALL NOT include
Years of Service before the Employer maintained this Plan or any
predecessor plan, and [x] SHALL [ ] SHALL NOT include Years of Service
before the Employee attained age 18.
c. Notwithstanding the provisions of this Item B(7)(c) of the Adoption
Agreement, a Participant shall become fully vested in his
Participant's Employer Contribution if: (10)
i [ ] the Participant's job is eliminated without the Participant
being offered a comparable position elsewhere with the Employer.
ii[ ] for such reason as is described below:
- ------------------------
(8) Notwithstanding the selection made in this Item B(7)(a), a Participant
shall be fully vested in his or her Employer Contribution Accounts if the
Participant dies or becomes Disabled while in the employ of the Employer.
(9) If more than one Year of Service is an eligibility requirement, Item viii
MUST be selected.
(10) The provisions of this section will be administered by the Employer on a
consistent and nondiscriminatory basis.
PAGE 9
<PAGE> 10
8. EMPLOYER PROFIT SHARING CONTRIBUTIONS:
N/A
a. CONTRIBUTIONS:
i [ ] In its discretion, the Employer may contribute Employer
Profit Sharing Contributions to the Plan.
ii [ ] The Employer shall contribute Employer Profit Sharing
Contributions to the Plan in the amount of _____ % of
the Compensation of all Eligible Participants under the
Plan.
iii [ ] If selected, the Employer may make Employer Profit
Sharing Contributions without regard to current or
accumulated Net Profits of the Employer for the taxable
year ending with, or within the Plan Year.
iv [ ] If selected, the Employer may designate all or any
part of the Employer Profit Sharing Contributions as
Qualified Nonelective Contributions, provided, however,
that contributions so designated will be subject to the
same vesting, distribution, and withdrawal restrictions
as Before Tax Contributions(11).
b. ALLOCATIONS:
Employer Profit Sharing Contributions shall be allocated to the accounts of
eligible Participants according to the following selected allocation
formula:
i [ ] The Employer Profit Sharing Contributions shall be
allocated to each eligible Participant's account in the
ratio which the Participant's Compensation bears to the
Compensation of all eligible Participants. Employer
Profit Sharing Plan Contributions, shall be allocated to
the accounts of Participants who have completed a Year
of Service(12) (select one):
(a) [ ] as of the last day of the month preceding the month
in which the contribution was made.
(b) [ ] as of the last day of the Plan quarter preceding
the quarter in which the contribution was made.
(c) [ ] as of the last day of the Plan Year.
- ----------------------
(11) Amounts designated as Qualified Nonelective Contributions will be allocated
pursuant to section 3.1(A)(14) of the Basic Plan Document.
(12) In the event contributions are allocated on a basis other than a full plan
year, the Year of Service shall be based on the elapsed time method of
calculation, and a Participant shall be deemed to have completed an
appropriate Period of Service for allocation purposes if the Participant
has completed a pro-rata Period of Service corresponding to the interval on
which contributions are allocated.
PAGE 10
<PAGE> 11
ii [ ] The Employer Profit Sharing Contributions shall be allocated
in accordance with the following formula:
(a) If the Plan is Top-Heavy, the contribution shall be first
credited to each eligible Participant's Account in the ratio
which the Participant's Compensation bears to the total
Compensation of all eligible Participants, up to 3% of each
Participant's Compensation.
(b) If the Plan is Top-Heavy, any Employer Profit Sharing
Contribution remaining after the allocation in (a) above
shall be credited to each eligible Participant's account in
the ratio which the Participant's Excess Compensation(13)
bears to the total Excess Compensation of all eligible
Participants, up to 3% of each eligible Participant's Excess
Compensation.
(c) Any contributions remaining after the allocation in (b)
above shall be credited to each eligible Participant's
account in the ratio which the sum of the Participant's
total Compensation and Excess Compensation bears to the sum
of the total Compensation and Excess Compensation of all
eligible Participants, up to an amount equal to the maximum
Excess Percentage times the sum of the Participant's
Compensation and Excess Compensation. If the Plan is
Top-Heavy, the maximum Excess Percentage is N/A % (insert
percentage). If the Plan is not Top-Heavy, the maximum
Excess Percentage is N/A % (insert percentage, which
shall not exceed the prior Excess Percentage limitation
specified by more than 3).
NOTE: If the Permitted Disparity Level defined at Item B(4)(f) is
the Taxable Wage Base (which is the contribution and benefit
base under section 230 of the Social Security Act at the
beginning of the year), then the maximum Excess Percentage
should be 2.7% if the Plan is Top-Heavy and 5.7% if the Plan
is not Top-Heavy.
If the Permitted Disparity Level defined at Item B(4)(f) is
greater than 80% but less than 100% of the Taxable Wage
Base, then the maximum Excess Percentage should be 2.4% if
the Plan is Top-Heavy and 5.4% if the Plan is not Top-Heavy.
- ------------------------------
(13) Excess Compensation means a Participant's Compensation in excess of the
Permitted Disparity Level specified in the Definitions section of this
Adoption Agreement.
PAGE 11
<PAGE> 12
If the Permitted Disparity Level defined at Item B(4)
(f) is greater than the greater of $10,000 or 20% of
the Taxable Wage Base, but not more than 80%, then the
maximum Excess Percentage should be 1.3% if the Plan is
Top-Heavy and 4.3% if the Plan is not Top-Heavy.
(d) Any remaining Employer Profit Sharing Contribution
shall be allocated among eligible Participants'
accounts in the ratio which the Participant's
Compensation bears to the total Compensation of all
Participants.
iii [ ] If selected, and the Employer has elected to allocate
Employer Profit Sharing Plan Contributions as of the
last day of the Plan Year, a Participant must be
employed by the Employer on the last day of the Plan
Year in order to receive an allocation(14).
iv [ ] A Participant who terminates before the end of the
period for which contributions are allocated shall share
in the allocation of Employer Profit Sharing
Contributions if termination of employment was the
result of (select all that apply):
(a) [ ] retirement
(b) [ ] disability
(c) [ ] death
(d) [ ] other, as specified below:
--------
9. ROLLOVER & TRANSFER CONTRIBUTIONS (SELECT ONE):
a. [x] Subject to policies, applied in a consistent and
nondiscriminatory manner, adopted by the Committee, each
Employee, who would otherwise be eligible to participate
in the Plan except that such Employee has not yet met
the eligibility requirements, and each Participant may
make a Rollover Contribution as described in Internal
Revenue Code sections 402(a)(5), 403(a)(4) or 408(d)(3).
b. [ ] Subject to policies, applied in a consistent and
nondiscriminatory manner, adopted by the Committee, each
Participant may make a Rollover Contribution as
described in Internal Revenue Code sections 402(a)(5),
403(a)(4) or 408(d)(3).
c. [ ] No Employee shall make Rollover Contributions to the
Plan.
- --------------------------
(14) This option shall only be effective if Item 8(b)(i)(c) has been selected.
Even if this Item is selected, the provisions of section 4.8 of the Basic
Plan Document may supersede this requirement if necessary to satisfy Code
Sections 401(a)(26) and 410(b).
PAGE 12
<PAGE> 13
10. DISTRIBUTIONS:
a. DISTRIBUTIONS UPON SEPARATION FROM SERVICE:
The Normal Form of Benefit under the Plan shall be a single lump sum
distribution, made [x] (if selected) as soon as administratively
practical after receipt of a distribution request from a Participant
entitled to a distribution or[ ] (if selected) upon the Participant's
attainment of the Plan's Early Retirement Date or the Plan's Normal
Retirement Date, whichever is earlier.
In addition to the Normal Form of Benefit, the Participant shall be
entitled to select from among the following optional forms of benefit
specified by the employer (select as many as apply):
i [ ] Installment payments
ii [x] Such other forms as may be specified below:
SEE ATTACHED ADDENDUM
b. IN-SERVICE DISTRIBUTIONS (SELECT AS MAY BE APPROPRIATE):
N/A
i [ ] There shall be no in-service distribution of
Participant account balances derived from Employer
Profit Sharing Contributions.
ii [ ] Participants may request an in-service distribution of
their account balance attributable to Employer Profit
Sharing Contributions, for the following reasons:
(a) [ ] For purposes of satisfying a financial hardship,
as determined in accordance with the uniform
nondiscriminatory policy of the Committee;
(b) [ ] Attainment of age 59 1/2 by the Participant; or
(c) [ ] Attainment of the Plan's Normal Retirement Date by the
Participant.
11. FORFEITURES:
N/A
a. Forfeitures of amounts attributable to Employer Profit Sharing
Contributions shall be reallocated as of:
i [ ] the last day of the Plan Year in which the Forfeiture
occurred.
ii [ ] the last day of the Plan Year following the Plan Year in
which the Forfeiture occurred.
PAGE 13
<PAGE> 14
iii [ ] the last day of the Plan Year in which the Participant
suffering the Forfeiture has incurred five consecutive
One Year Breaks in Service.
b. Forfeitures of Employer Profit Sharing Contributions shall be
reallocated as follows:
i [ ] Not applicable as Employer Profit Sharing Contributions
are always 100% vested and nonforfeitable.
ii [ ] Used first to pay the expenses of administering the
Plan, and then allocated pursuant to one of the
following two options(15):
iii [ ] Forfeitures shall be allocated to Participant's
accounts in the same manner as Employer Profit Sharing
Contributions, Employer Matching Contributions,
Qualified Nonelective Contributions or Qualified
Matching Contributions, in the discretion of the
Employer, for the year in which the Forfeiture arose.
iv [ ] Forfeitures shall be applied to reduce the Employer
Profit Sharing Contributions, Employer Matching
Contributions, Qualified Nonelective Contributions or
Qualified Matching Contributions, in the discretion of
the Employer, for the Plan Year following the Plan Year
in which the Forfeiture arose.
12. LIMITATIONS ON ALLOCATIONS:
If the Employer maintains or ever maintained another qualified retirement
plan in which any Participant in this Plan is (or was) a participant, or
could possibly become a participant, the Employer must complete the
following:
a. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer other than a Master or
Prototype Plan:
i [ ] The provisions of this Plan shall apply as if the other
plan were a Master or Prototype plan; or,
ii [ ] The following provisions will be effective to limit
the total Annual Additions to the Maximum Permissible
Amount, and will properly reduce any Excess Amounts, in
a manner that precludes Employer discretion:
b. If the Participant is or ever has been a participant in a qualified
defined benefit plan maintained by the Employer, the following
provisions will be
- ------------------------
(15) If this option is selected, iii or iv must be selected to reallocate
Forfeitures of Employer Profit Sharing Contributions remaining after
expenses of administering the Plan have been paid.
PAGE 14
<PAGE> 15
effective to satisfy the 1.0 limitation of Internal Revenue Code
section 415(e), in a manner that precludes Employer discretion:
13. INTERNAL REVENUE CODE SECTION 411(d)(6) PROTECTED BENEFITS:
[x] If selected, the Plan has Internal Revenue Code section
411(d)(6) Protected Benefits from a prior plan that this Plan
amends, that must be protected.
14. TOP-HEAVY PLAN PROVISIONS:
For each Plan Year in which the Plan is a Top-Heavy Plan the following
provisions will apply:
a. The percentage of a Participant's Employer Contribution Account to be
vested in him upon termination of employment prior to retirement shall
be:
i [ ] a percentage determined in accordance with the following
schedule:
Years of Service Percentage
---------------- ----------
Less than two 0
Two but less than three 20
Three but less than four 40
Four but less than five 60
Five but less than six 80
Six or more 100;
ii [ ] 100% vesting after __ (not to exceed 3) Years of
Service; provided, however, that Years of Service may
not exceed two (2) if the service requirement for
eligibility exceeds 1 year; or
iii [x] computed in accordance with the vesting schedule
selected by the Employer in Items B(7)(a) or C(4)(d), as
long as the benefits under the vesting schedule in Items
B(7)(a) or C(4)(d) vest at least as rapidly as the two
options specified in this Item B(14)(a), above.
If the vesting schedule under the Plan shifts in or out of the
schedules above for any Plan Year because of the Plan's Top-Heavy
status, such shift is an amendment to the vesting schedule and the
election in section 2.2 of the Basic Plan Document applies.
b. For purposes of minimum Top-Heavy allocations, contributions and
forfeitures equal to 3 % (not less than 3%) of each Non-key Employee's
Compensation will be allocated to each Participant's Contribution
Account
PAGE 15
<PAGE> 16
when the Plan is a Top-Heavy Plan, except as otherwise provided in the
Basic Plan Document. This Item 14 will not apply to any Participant to
the extent the Participant is covered under any other plan or plans of
the Employer and the Employer completes the following: (Insert the
name of the plan or plans which will meet the minimum allocation or
benefit requirement applicable to Top-Heavy plans.)
c. The Valuation Date as of which account balances or accrued benefits
are valued for purposes of computing the Top-Heavy Ratio shall be the
last day of each Plan Year.
d. If the Employer maintains or has ever maintained one or more defined
benefit plans which have covered or could cover a Participant in this
Plan, complete the following:
Present Value: For purposes of establishing Present Value to compute
the Top-Heavy Ratio, any benefit shall be discounted only for
mortality and interest based on the following:
Interest rate ______ % Mortality table
15. INVESTMENTS:
a. Investments made pursuant to the investment direction provisions of
the Basic Plan Document shall be made into any appropriate Investment
Fund as selected by the Employer. In addition, investment of Plan
assets is expressly authorized, as required by Revenue Ruling 81-100,
in each of the following common or collective funds sponsored by
the Trustee, or an affiliate of the Trustee(16) :
SOCIETY NATIONAL BANK EB MANAGED GUARANTEED INCOME CONTRACT
FUND, THE SOCIETY NATIONAL BANK MULTIPLE INVESTMENT TRUST
FOR EMPLOYEE BENEFIT TRUSTS, AND OTHER COLLECTIVE TRUSTS
EXEMPT FROM TAX UNDER IRC SECTION 501 AND AS DESCRIBED IN
REV. RUL. 81-100.
b. [x] If selected, an Employer Stock Fund shall be available as an In
vestment Fund pursuant to the terms of the Basic Plan Document.
[ ] If selected, and an Employer Stock Fund is available as an
Investment Fund, Participants will have the right,
notwithstanding any other provisions of the Plan, to direct
that a portion of the Plan assets held for their benefit and
invested in the Employer Stock Fund be diversified pursuant
to the provisions of section 10.7(F) of the Basic Plan
Document.
- --------------------------
(16) This Item is for use in identifying collective trust funds, which, pursuant
to Revenue Ruling 81-100 must be specifically referenced in the Plan.
Actual Investment Funds are referenced on the Investment Fund Designation
form attached to this Adoption Agreement.
PAGE 16
<PAGE> 17
c. Participants may make changes of existing account balances and future
contributions from among the Investment Funds offered:
i [ ] Once during each business day that the Trustee and
the New York Stock Exchange are open.
ii [x] Once during each calendar month.
iii [ ] Once during each quarter of the Plan Year.
iv [ ] Once during each rolling ___ day period.
d. [x] If selected, the Participant shall be restricted in making changes
of existing account balances from any Investment Fund, as specified
in the terms or conditions of such Investment Fund, and the
Employer shall attach an addendum specifying such restriction.
e. The Participant will designate into which Investment Funds all
contributions to their accounts are made, except the following:
i [ ] Employer Profit Sharing Contributions
ii [x] Employer Mandatory Matching Contributions
iii [x] Employer Discretionary Matching Contributions
iv [ ] Qualified Matching Contributions
v [ ] Qualified Nonelective Contributions
f. [x] If selected, and to the extent a selection is made
above, the Employer shall attach an Investment
Direction Addendum specifying how the contributions so
specified shall be invested among the Investment Fund.
g. [ ] If selected, the Participant shall be restricted in the
use of the Employer Stock Fund as an Investment Fund for
designating the investment of contributions in the
Participant's account, as follows:
i [ ] The Participant may not direct the investment of
Plan assets held in their account into the
Employer Stock Fund.
ii [ ] The Participant may direct ___ % of the
following contributions into the Employer
Stock Fund:
(a) [ ] Employer Profit Sharing Contribu-
tions
(b) [ ] Employer Mandatory Matching Con-
tributions
(c) [ ] Employer Discretionary Matching
Contributions
(d) [ ] Qualified Matching Contributions
(e) [ ] Qualified Nonelective Contributions
PAGE 17
<PAGE> 18
iii [ ] ____ % of the following contributions will be in-
vested into the Employer Stock Fund, with the bal-
ance invested among:
(a) [ ] the other Investment Funds, including
the Employer Stock Fund
(b) [ ] the other Investment Funds, not including
the Employer Stock Fund
16. LOANS (SELECT ONE):
a. [x] Loans may be made from the Plan in accordance with the Basic
Plan Document and such policies and procedures as the
Committee may adopt and apply on a consistent and
nondiscriminatory basis(17).
b. [ ] No loans shall be made from the Plan.
17. TRUSTEE:
The Trustee of this Plan shall be KEY TRUST COMPANY OF OHIO, N.A. (a bank
or trust company affiliated with KeyCorp within the meaning of Internal
Revenue Code section 1504).
18. EFFECTIVE DATE ADDENDUM:
[ ] If selected, the following provisions shall have the specified
effective dates (which are different from the date specified in Item
B(1)):
- -------------------------------
(17) If this option is selected, the Employer must establish appropriate
procedures for implementation of the Plan's loan program.
PAGE 18
<PAGE> 19
C. SECTION 401(K) PLAN PROVISIONS:
1. SERVICE:
An Eligible Employee shall be required to fulfill the following
eligibility service requirements in order to participate in the Plan
through a salary reduction agreement and for purposes of receiving an
allocation of Employer Matching Contributions:
a. [x] The Employee must complete 1 YEAR of Service (not
more than 1 year) to be a Participant for purposes of
receiving allocations of Employer Matching
Contributions.
b. [x] The Employee must complete 1 YEAR of Service (not
more than 1 year) to be a Participant for purposes of
entering into a Salary Reduction Agreement and having
Employee Before Tax Contributions or Employee After Tax
Contributions contributed to the Plan on the Employee's
behalf.
2. EMPLOYEE SALARY DEFERRALS:
a. [x] Participants shall be entitled to enter into a Salary
Reduction Agreement providing for Before Tax
Contributions to be made to the Plan.
i The minimum Before Tax Contribution shall be 1 % of the
Participant's Compensation.
ii The maximum Before Tax Contribution shall be 10 % of
the Participant's Compensation.
b. [ ] Participants shall be entitled to enter into a Salary
Reduction Agreement providing for After Tax
Contributions to be made to the Plan.
i The minimum After Tax Contribution shall be ___ % of
the Participant's Compensation.
ii The maximum After Tax Contribution shall be ___ % of
the Participant's Compensation.
iii [ ] If selected, notwithstanding the above, a
Participant shall not be able to enter into a Salary
Reduction Agreement providing for After Tax
Contributions to be made to the Plan unless the
Participant has entered into a Salary Reduction
Agreement that provides for Before Tax Contributions
to be made to the Plan in an amount of at least____%
of the Participant's Compensation.
PAGE 19
<PAGE> 20
c.[ ] If selected, a Participant shall be entitled to enter into a
Salary Reduction Agreement providing that any extraordinary item
of compensation, not yet payable (including bonuses), be
withheld from the Participant's Compensation and contributed to
the Plan as either a Before Tax Contribution, or After Tax
Contribution (provided such contributions are authorized above,
and to the extent that such contribution, when aggregated with
either the Participants other Before Tax Contributions or After
Tax Contributions do not exceed the limitations specified above,
on an annual basis).
3. CONTRIBUTION CHANGES:
a. Participants may increase or decrease the amount of contributions
made to the Plan pursuant to a Salary Reduction Agreement once
each:
i [ ] Plan Year
ii [ ] Semi-annual period, based on the Plan Year
iii [x] Quarter, based on the Plan Year
iv [ ] Month
v [ ] Other, as specified below (provided that it is at
least once per year):
-----------
b. Claims for returns of Excess Before Tax Contributions for the
Participant's preceding taxable year must be made in writing, and
submitted to the Committee by APRIL 15 (specify a date between
March 1 and April 15). (18)
4. EMPLOYER MATCHING CONTRIBUTIONS(19):
a. MANDATORY MATCHING CONTRIBUTIONS:
The Employer shall make contributions to the Plan, in an amount as
specified below:
i [x] An amount, equal to 50 % of each Participant's Before
Tax Contributions, however, no match shall be made on
Participant's Before Tax Contributions in excess of 4%
(or $ _____ ) of the Participant's Compensation.
- -----------------------
(18) The date specified is for the refund of amount deferred in excess of the
Code section 402(g) limit (the $7,000 limit) for the Participant's taxable
year.
(19) The Employer shall have the right to designate all, or any portion of
Employer Matching Contributions as Qualified Matching Contributions, which
shall then be subject to the same vesting, distribution, and withdrawal
restrictions as Before Tax Contributions.
PAGE 20
<PAGE> 21
ii [ ] An amount, equal to ______ % of each Participant's
After Tax Contributions, but not to exceed _____ % of
the Participant's Compensation, or $ _____.
iii [ ] An amount, equal to ______ % of each Participant's
contributions made pursuant to a Salary Reduction
Agreement (including both Before Tax Contributions and
After Tax Contributions), but only if the Participant
has entered into a Salary Reduction Agreement providing
for Before Tax Contributions of at least _____ % of the
Participant's Compensation, but not to exceed _____ % of
the Participant's Compensation, or $ _____.
iv [ ] An amount equal to the sum of the following:
(a) [ ] _____ % of the first _____ % of the Participant's
Compensation deferred pursuant to a Salary Reduction
Agreement; plus,
b) [ ] _____ % of the next _____ % of the Participant's
Compensation deferred pursuant to a Salary Reduction
Agreement; plus,
(c) [ ] _____ % of the next _____ % of the Participant's
Compensation deferred pursuant to a Salary Reduction
Agreement, but not to exceed _____% of the
Participant's Compensation, or $ _____.
v [ ] An amount equal to $ _____, for each Participant who
enters into a Salary Reduction Agreement providing for
[ ] Before Tax Contributions,[ ] After Tax
Contributions, or [ ] either Before Tax Contributions
or After Tax Contributions (or a combination of both)
equal to or exceeding _____ % of the Participant's
Compensation. Such contributions shall be made and
allocated:
(a) [ ] only during the first Plan Year the Plan is in
effect, or if a restatement, for the first Plan Year
beginning with, or containing the restatement
Effective Date.
(b) [ ] each Plan Year that a Participant has in force a
Salary Reduction Agreement meeting the criteria
specified above.
(c) [ ] during the first Plan Year that the Participant
participates through a Salary Reduction Agreement
meeting the criteria specified above.
PAGE 21
<PAGE> 22
b. DISCRETIONARY MATCHING CONTRIBUTIONS:
[X] The Employer shall make contributions to the Plan, in an amount
determined by resolution of the Board of Directors on an annual basis.
The Board resolution shall provide for the percentage and/or amount of
Before Tax Contributions and/or After Tax Contributions to be matched
and the maximum percentage and/or amount of Before Tax Contributions
and/or After Tax Contributions eligible for matching.
c. ALLOCATION OF MATCHING CONTRIBUTIONS:
Employer Matching Contributions shall be allocated pursuant to the terms of
the Basic Plan Document, notwithstanding the foregoing:
i [ ] A Participant who terminates before the end of the
period for which contributions are allocated shall share
in the allocation of Employer Matching Contributions if
termination of employment was the result of (select all
that apply):
(a) [ ] retirement
(b) [ ] disability
(c) [ ] death
(d) [ ] other, as specified below:
------
ii [x] Employer Matching Contributions shall be allocated to
the accounts of Participants (select one):
SEE ATTACHED ADDENDUM
(a) [ ] as of each pay period for which a contribution
was made pursuant to a Salary Reduction
Agreement.
(b) [ ] semi-monthly.
(c) [ ] as of the last day of the month preceding the
month in which the contribution was made.
(d) [ ] as of the last day of the Plan quarter
preceding the quarter in which the
contribution was made.
(e) [ ] as of the last day of the Plan year.
PAGE 22
<PAGE> 23
iii [x] If selected, the Employer may make Employer Matching
Contributions without regard to current or accumulated
Net Profits of the Employer for the taxable year ending
with, or within the Plan Year (20).
d. The percentage of a Participant's Employer Matching Contribution Ac-
count (21) (attributable to Employer Matching Contributions) to be
vested in him or her upon termination of employment prior to
attainment of the Plan's Normal Retirement Date shall be (22):
<TABLE>
<CAPTION>
COMPLETED YEARS OF SERVICE
1 2 3 4 5 6 7
--- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C>
i [ ] 100%
--- ---
ii [ ] 100%
--- --- ---
iii [ ] 20% 40% 60% 80% 100%
--- --- --- --- --- ---
iv [ ] 20% 40% 60% 80% 100%
--- --- --- --- --- --- ---
v [ ] 10% 20% 30% 40% 60% 80% 100%
--- --- --- --- --- --- ---
vi [x] 0% 33% 67% 100% 100%
--- --- --- --- ---
vii [ ] 100%
--- --- --- --- --- --- ---
vii [ ] Full and immediate vesting upon entry into the Plan
<FN>
Notwithstanding anything to the contrary in the Plan, the amount
inserted in the blanks above shall not exceed the limits
specified in Code section 411(a)(2).
</TABLE>
e. Notwithstanding the provisions of this Item C(4)(e) of the Adoption
Agreement, a Participant shall become fully vested in his
Participant's Employer Matching Contribution Account if (23):
i [ ] the Participant's job is eliminated without the
Participant being offered a comparable position
elsewhere with the Employer.
ii [ ] for such reason as is described below:
------
- --------------------------------
(20) Net Profits will never be required for the contribution of Before Tax
Contributions, After Tax Contributions, Qualified Nonelective
Contributions or Qualified Matching Contributions.
(21) Notwithstanding anything in the Adoption Agreement to the contrary,
amounts in a Participant's account attributable to Before Tax
Contributions, Qualified Nonelective Contributions, and Qualified
Matching Contributions shall be 100% vested and nonforfeitable at
all time.
(22) Not withstanding the selection made in this Item B(7)(b), a Participant
shall be fully vested in his or her Employer Contribution Accounts if the
Participant dies or becomes Disabled while in the employ of the Employer.
(23) The provisions of this section will be administered by the Employer on a
consistent and nondiscriminatory basis.
PAGE 23
<PAGE> 24
f. CORRECTIVE CONTRIBUTIONS:
i [ ] If selected, the Employer shall be authorized to make
Qualified Matching Contributions, subject to the terms
of the Basic Plan Document, in an amount determined by
resolution of the Board of Directors on an annual basis.
ii [ ] If selected, the Employer shall be authorized to make
Qualified Nonelective Contributions, subject to the
terms of the Basic Plan Document, in an amount
determined by resolution of the Board of Directors on an
annual basis.
5. GAP EARNINGS:
[ ] If selected, Gap Earnings, as defined in section 3.2(G)(1) of
the Basic Plan Document, will be calculated for Excess Elective
Deferrals, Excess Contributions and Excess Aggregate
Contributions, and refunded to the Participant as provided for
in Article III of the Basic Plan Document.
6. FORFEITURES:
a. Forfeitures of amounts attributable to Employer Matching Contributions
shall be reallocated as of:
i [x] the last day of the Plan Year in which the Forfeiture
occurred.
ii [ ] the last day of the Plan Year following the Plan Year in
which the Forfeiture occurred.
iii [ ] the last day of the Plan Year in which the Participant
suffering the Forfeiture has incurred the fifth
consecutive One Year Break in Service.
b. Forfeitures of Employer Matching Contributions shall be reallocated as
follows:
i [ ] Not applicable as Employer Matching Contributions are
always 100% vested and nonforfeitable.
ii [x] Used first to pay the expenses of administering the
Plan, and then allocated pursuant to one of the
following two options:
iii [ ] Forfeitures shall be allocated to Participant's
accounts in the same manner as Employer Profit Sharing
Contributions, Employer Matching Contributions,
Qualified Nonelective Contributions or Qualified
Matching Contributions, in the discretion of the
Employer, for the year in which the Forfeiture arose.
PAGE 24
<PAGE> 25
iv [x] Forfeitures shall be applied to reduce the Employer
Profit Sharing Contributions, Employer Matching
Contributions, Qualified Nonelective Contributions or
Qualified Matching Contributions, in the discretion of
the Employer, for the Plan Year following the Plan Year
in which the Forfeiture arose.
c. Forfeitures of Excess Aggregate Contributions shall be:
i [x] Applied to reduce Employer contributions for the Plan
Year in which the excess arose, but allocated as below
to the extent the excess exceeds Employer contributions
for the Plan Year, or the Employer has already
contributed for such Plan Year.
ii [ ] Allocated after all other forfeitures under the Plan:
(a) [x] to the Matching Contribution account of each
Non-highly Compensated Participant who made Before Tax
Contributions or After Tax Contributions in the ratio
which each such Participant's Compensation for the Plan
Year bears to the total Compensation of all such
Participants for the Plan Year; or,
(b) [ ] to the Matching Contribution account of each
Non-highly Compensated Eligible Participant in the
ratio which each Eligible Participant's Compensation
for the Plan Year bears to the total Compensation of
all Eligible Participants for the Plan Year.
7. IN-SERVICE DISTRIBUTIONS (SELECT AS MAY BE APPROPRIATE):
a. [ ] There shall be no in-service distribution of
Participant account balances derived from Before Tax
Contributions (including Qualified Nonelective
Contributions and Qualified Matching Contributions
treated as Before Tax Contributions under the terms of
the Basic Plan Document), or Employer Matching
Contributions.
b. [x] Participants may request an in-service distribution of
their account balance attributable to Employer Matching
Contributions, for the following reasons:
BUT ONLY AS SPECIFIED IN THE ATTACHED ADDENDUM FOR ITEM B(13)
i [x] For purposes of satisfying a financial hardship, as
determined in accordance with the uniform
nondiscriminatory policy of the Committee;
ii [x] Attainment of age 59 1/2 by the Participant; or
PAGE 25
<PAGE> 26
iii [ ] Attainment of the Plan's Normal Retirement Date
by the Participant.
c. [x] Participants may request an in-service distribution of their
account balance attributable to Employee Before Tax Contributions,
for the following reasons:
BUT ONLY AS SPECIFIED IN THE ATTACHED ADDENDUM FOR ITEM B(13)
i [ ] For purposes of satisfying a financial hardship, as
determined by the facts and circumstances of an
Employee's situation, in accordance with the
provisions of section 3.9 of the Basic Plan Document;
ii [X] For purposes of satisfying a financial hardship,
using the "safe harbor" provisions of section 3.9
of the Basic Plan Document.
iii [x] Attainment of age 59 1/2 by the Participant; or
iv [ ] Attainment of the Plan's Normal Retirement Date
by the Participant.
PAGE 26
<PAGE> 27
NOTICE: The adopting Employer may not rely on an opinion letter issued by the
National Office of the Internal Revenue Service as evidence that the Plan is
qualified under the provisions of section 401 of the Internal Revenue Code. In
order to obtain reliance with respect to the Plan's qualification, the Employer
must apply to the Key District Office of the Internal Revenue Service for a
determination letter.
This Adoption Agreement may only be used in conjunction with Basic Plan
Document # 05.
This Plan document may only be used under the express authority of KeyCorp, its
subsidiaries and affiliates, and is not effective as completed until executed by
a duly authorized officer of KeyCorp, one of its subsidiaries or affiliates, and
approved by KeyCorp's counsel.
KeyCorp, as sponsor, may amend or discontinue this prototype plan document upon
proper notification to all adopting Employers pursuant to Revenue Ruling 89-13.
Failure to properly fill out an Adoption Agreement may result in
disqualification of the Plan, and adverse tax consequences to the Employer and
Plan Participants.
This Plan is sponsored by:
KeyCorp, on behalf of its operating subsidiaries, banking and
trust company affiliates
127 Public Square
Cleveland,Ohio 44114
(800) 982-3811
PAGE 27
<PAGE> 28
IN WITNESS WHEREOF, the Employer and the Trustee, by their respective duly
authorized officers, have caused this Adoption Agreement to be executed on this
28th day of June, 1996.
- --- ---- ----
EMPLOYER: Fabri-Centers of America, Inc.
-------------------------------------
By: /s/ Rosalind Thompson
-------------------------------------------
Title: Senior Vice President, Human Resources
----------------------------------------
TRUSTEE: Key Trust Company of Ohio, N.A.
--------------------------------------
By: /s/ Roberta D. Roth
-------------------------------------------
Title: Vice President
----------------------------------------
and
By: /s/ MA Meger
-------------------------------------------
Title: Vice President
----------------------------------------
APPROVED ON BEHALF OF TRUSTEE:
Initials: MJO Date: 7/1/96
----- --------
PAGE 28
<PAGE> 29
INVESTMENT FUND DESIGNATION
FABRI-CENTERS OF AMERICA, INC. (the "Named Fiduciary"), as an
independent fiduciary with respect to the FABRI-CENTERS OF AMERICA, INC.
EMPLOYEES' SAVINGS AND PROFIT-SHARING PLAN (the "Plan"), an employee pension
benefit plan covered by the applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and its employees who
participate therein (the "Participants"), hereby designates the following
investment funds from among the investment fund options available for adopting
employers of the PRISM(R) PROTOTYPE RETIREMENT PLAN & TRUST (as defined in
section 10.7 of the Plan), available for selection by Participants for the
investment of Plan assets held for their benefit:
(a) EB MaGIC Fund
----------------------------------
(b) Victory Intermediate Income Fund
----------------------------------
(c) Victory Stock Index Fund
----------------------------------
(d) Fidelity Magellan Fund
----------------------------------
(e) FCA Stock Type A
----------------------------------
(f) FCA Stock Type B
----------------------------------
(g)
(h)
[ ] In addition, if selected, an Employer Stock Fund will also be available.
In making the selection of Investment Funds, the Named Fiduciary hereby confirms
and acknowledges that:
o The Named Fiduciary has had made available to it copies of the pro-
spectuses (to the extent required under applicable federal securities law
and regulation) for each investment fund available for selection by
adopting employers of the PRISM(R) PROTOTYPE RETIREMENT PLAN & TRUST, and
has received copies of each such prospectus for the Investment Funds
selected;
o The Named Fiduciary acknowledges that the Trustee of the Plan may receive
certain fees for services provide to, or on behalf of an Investment Fund,
or the sponsors or distributors thereof pursuant to plans of distribution
adopted by the fund under the provisions of Rule 12b-1 of the Investment
Company Act of 1940, and further acknowledges that (i) such fee, if paid,
is appropriate for services rendered to the fund, and when aggregated with
other fees for service payable to the Trustee constitutes reasonable
compensation for the Trustee's services to the Plan; and (ii) the Plan will
be able to redeem its interest in any such Investment Fund on reasonably
short notice without penalty;
o The Named Fiduciary further acknowledges that it has selected the
Investment Funds on its determination, after due inquiry, that the
Investment Funds are appropriate vehicles for the investment of Plan assets
pursuant to the terms of the Plan, considering all relevant facts and
circumstances, including but not limited to (i) the investment policy and
philosophy of the Named Fiduciary developed pursuant to ERISA section
404; (ii) the ability of Participants, using an appropriate mix of
Investment Funds, to diversify the investment of Plan as-
PAGE 29
<PAGE> 30
sets held for their benefit; and, (iii) the ability of Participants to,
utilizing an appropriate mix of Investment Funds, to structure an
investment portfolio within their account in the Plan with risk and return
characteristics within the normal range of risk and return characteristics
for individuals with similar investment backgrounds, experience and
expectations; and,
o The Named Fiduciary acknowledges that it has not relied on any
representations or recommendations from the Trustee or any of its employees
in selecting the Investment Funds.
The Trustee agrees to follow the Named Fiduciary's direction with respect to
offering the Investment Funds available for selection by the Participants in the
Plan for the investment of Plan assets held for their benefit:
IN WITNESS WHEREOF, the Employer, by its duly authorized
representative, has executed this document in connection with adoption of the
Plan utilizing the PRISM(R) PROTOTYPE RETIREMENT PLAN & TRUST documents, as
provided by the Trustee.
NAMED FIDUCIARY: Fabri-Centers of America, Inc
-----------------------------------------
By: /s/ Rosalind Thompson
-----------------------------------------
Title: Senior Vice President, Human Resources
-----------------------------------------
Seen and accepted by the Trustee, who shall provide the
Investment Funds selected by the Employer pursuant to the terms of this
document, and pursuant to the Plan.
TRUSTEE: Key Trust Company of Ohio, N A
-------------------------------------------------
By: /s/ Roberta D. Roth
-----------------------------------------
Title: Vice President
-----------------------------------------
PAGE 30
<PAGE> 31
FABRI-CENTERS OF AMERICA, INC.
EMPLOYEES' SAVING
AND
PROFIT SHARING PLAN
ADDENDUM
ITEM B(4)(j)(v): ELIGIBILITY YEAR OF SERVICE:
Persons who became Employees on October 2, 1994 and were employed by
Brown Group, Inc. or Cloth World, Inc. immediately prior to that date shall be
given credit for Eligibility Years of Service for the period of time employed
by Brown Group, Inc. or Cloth World, Inc.
ITEM B(4)(j)(vi): VESTING YEAR OF SERVICE:
Persons who became Employees on October 2, 1994 and were employed by
Brown Group, Inc. or Cloth World, Inc. immediately prior to that date shall be
given credit for Vesting Years of Service for the period of time employed
by Brown Group, Inc. or Cloth World, Inc.
ITEM B(10)(a)(ii): OTHER FORMS OF DISTRIBUTION:
o As provided for in the Plan, distributions to Participants shall be
made in the form of a single lump sum payment, with the exception of
distributions made solely as a result of the application of Required
Beginning Date rules contained in Code section 401(a)(9)(A)(ii) which shall
be in the form of a series of equal or substantially equal annual
installments over a period not exceeding the life expectancy of the
Participant and his or her Beneficiary if the Participant so elects. For
the purposes of these distributions, life expectancies shall be determined
and minimum distributions will be made in accordance with Treasury
Regulations under section 401(a)(9) of the Code; provided, however, that
life expectancies shall be recalculated annually unless the Participant
elects prior to the receipt of the first distributions required hereunder
that life expectancies shall not be recalculated.
ITEM B(13): PROTECTED BENEFITS:
Notwithstanding anything in the Plan to the contrary, the following
features shall continue to be available to Participants, pursuant to this
addendum and the provisions of Code section 411(d)(6):
o Mode of Distributions:
<PAGE> 32
All distributions from the Plan shall be made in cash, except that
distributions made to the Participant (or Beneficiary) of his or her
interest in the "Stock Ownership Fund" or the "Company Stock Fund" shall be
made in the form of full shares of Company Stock (in the form of Class A
Common Shares, if distributions in made from Company Stock Fund - Class A
or the Stock Ownership Fund - Class A, and in the form of Class B Common
Shares, if distribution is made from Company Stock Fund - Class B or the
Stock Ownership Fund - Class B), with the balance of such interest, if any,
to be distributed in cash, except that a Participant (or Beneficiary) may
elect, by written notice delivered to the Plan Administrator in accordance
with it's rules, to receive distributions of the amount distributable from
the Stock Ownership Fund or the Company Stock Fund, or both, in the form of
cash. For purposes of this addendum, the "Company Stock Fund" shall
mean either of the funds established to primarily hold shares of Company
stock, in which contributions derived from Employee Salary Deferrals or
Employer Matching Contributions, and designated in the Investment Fund
Designation form as FCA Stock Type A and FCA Stock Type B. The "Stock
Ownership Fund" shall mean the fund in which "Stock Ownership Contributions"
were credited prior to January 1, 1987, pursuant to the terms of the Plan as
in existence at the time the contributions were made. The Stock Ownership
Fund shall consist (as of August 2, 1995) of two sub-funds, consisting of
investments in Class A and Class B shares of Company common stock.
o In-Service Distributions:
Notwithstanding any other provisions of the Plan, upon written notice to
the Committee, a Participant may elect to withdraw an amount equal to all,
or a portion equal to at least $100, of the aggregate value of his Before Tax
Contributions Account, the vested portion of his Employer Contribution
Account, and his Rollover Contributions Account; provided, however, that a
Participant must have attained age 59 1/2 at the time of any such
withdrawal, and that a Participant may only make one such withdrawal in any
12-consecutive months. No withdrawals are permitted from the Stock Ownership
Contributions Account.
All withdrawals pursuant to this provision shall be made first from the
Participant's Before Tax Contributions Account and then from his Rollover
Contributions Account, each to the extent sufficient, and finally from his
Employer Matching Contributions Account, in each case being withdrawn from
such of the Participant's sub-accounts thereunder invested in the various
Investment Funds as provided for in the Plan and designated by the
Participant; provided, however, that if any amount to be withdrawn is
invested in the Company Stock Fund, amounts shall be written first from the
Participant's sub-account invested in the sub-fund primarily invested in
Company Stock - Class B before any amount is withdrawn from the Participant's
sub-account invested primarily in Common Stock - Class A.
<PAGE> 33
The provisions of this addendum shall control, and supersede all such
in-service distributions (other than Hardship Distributions) provisions of
the Plan, including those provisions contained in sections 3.11 and
4.5(A)(2).
o Hardship Distributions:
Pursuant to the terms of the Plan, a Participant may request a hardship
distribution. In the event a Participant is entitled to a hardship
distribution, the distributions shall first be made from the vested portion
of the Participant's Employer Matching Contributions Account, to the extent
sufficient, and then from his Before Tax Contributions Account (excluding,
in the case of a Participant who has not attained age 59 1/2, that portion
of his Before Tax Contributions Account attributable to earnings credited as
of a date after December 31, 1988), in each case being withdrawn from such
of the Participant's sub-accounts thereunder invested in the various
Investment Funds as provided for in the Plan and designated by the
Participant; provided, however, that if any amount to be withdrawn is
invested in the Company Stock Fund, amounts shall be withdrawn first from
the Participant's sub-account invested in the sub-fund primarily invested in
Company Stock - Class B before any amount is withdrawn from the
Participant's sub-account invested primarily in Company Stock - Class A.
o Administration of Certain Sub-Accounts Invested in Company Stock:
For Plan Years beginning on and after January 1, 1987, the Company
shall make no further Stock Ownership Contributions to the Plan, and no
allocations of Stock Ownership Contributions shall be made, and no amendment
shall be made to the Plan governing the amount, price, and timing of any
grant or award of Company Stock pursuant to the Stock Ownership
Contributions feature of the Plan more frequently than once every six
months, other than to comport with changes in the Code, ERISA, or the rules
thereunder. However, the Trustee shall continue to maintain the Stock
Ownership Contributions Fund, and accounts thereunder to account for Stock
Ownership Contributions made to the Plan, distinguishing between those made
before January 1, 1987 and those made after December 31, 1986. Dividends and
other distributions received on Company Stock held in the Stock Ownership
Fund shall be reinvested in Company Stock. Each Qualified Participant (as
defined below) shall be permitted to elect distribution of 25 percent of the
value of the portion of his Stock Ownership Contribution Account that is
attributable to Company Stock acquired by the Plan after December 31, 1986,
as determined below, within 90 days after the last day of each Plan Year
during the Qualified Participant's Qualified Election Period (as defined
below).
Within 90 days after the close of the last Plan Year in the Qualified
Participant's Qualified Election Period, a Qualified Participant may elect
distribution of 50 percent of the value of such portion of such Account. The
Qualified Participant's election shall be provided to the Company in writing
and shall be effective no later than 180
<PAGE> 34
days after the close of the Plan Year to which it relates. In the event a
Qualified Participant makes such an election, the Trustee shall distribute
(notwithstanding section 409(d) of the Code) the portion of the Qualified
Participant's Stock Ownership Contributions Account balance that is covered
by the election within 90 days after the last day of the period during which
the election can be made. This provision shall apply notwithstanding any
other provisions of the Plan other than such provisions as require the
consent of the Participant to a distribution with a present value in excess
of $3,500. If the Qualified Participant does not consent to a distribution
under this provision, such amount shall be retained in the Trust. Any
distribution under this provision shall be made first from Company Stock
allocated to the Qualified Participant's Stock Ownership Contribution
Account at least 84 months before the month in which the distribution
occurs. For purposes of this provision, in determining the portion of a
Qualified Participant's Stock Ownership Contribution Account attributable to
Company Stock which were acquired by the Plan after December 31, 1986, the
following Company Stock shall be disregarded:
1. Company Stock acquired by or contributed to the Plan on or before
December 31, 1986, but allocated to Participant's accounts after that
date;
2. Company Stock acquired by or contributed to the Plan after December 31,
1986, if with respect to such Company Stock a tax credit was calculated
with reference to compensation paid or accrued prior to January 1, 1987,
such Company Stock was acquired or contributed within the time period
provided in section 404(a)(6) of the Code plus such additional time
allowed for contributions to the Plan under sections 41(c)(2) and
41(c)(4) of the Internal Revenue Code of 1954, and the Company Stock was
allocated as of a date no later than the last day of the Plan year ending
within the Company's first taxable year ending on or after December 31,
1986;
3. Company Stock acquired after December 31, 1986, which was purchased with
contributions made to the Plan in cash on or before December 31, 1986, if
such contributions were used to purchase Company Stock within 60 days
after the date of the contributions;
4. Company Stock acquired after December 31, 1986, which was purchased with
earnings or dividends paid in cash on or before December 31, 1986, if such
earnings or dividends were used to purchase Company Stock within 60 days
from the date of payment to the Plan; and,
5. Any other Company Stock permitted to be disregarded for this purpose under
federal regulations or other administrative pronouncement of the Internal
Revenue Service.
In determining the Company Stock subject to the diversification
election under this provision, it shall be presumed that Company Stock
allocated to separate accounts after December 31, 1986, consists first of
those acquired or contributed after such date. To the extent that the fair
market value, determined at the Valuation Date immediately preceding the
first day on which a Qualified Participant is eligible to make a
diversification election, of the Company Stock acquired or contributed to
the Plan after December 31, 1986, and allocated to a Qualified Participant's
Stock Ownership
<PAGE> 35
Contribution Account is $500 or less, then the foregoing provisions
permitting a diversification election shall not apply with respect to such
Qualified Participant for such year. The portion of a Qualified
Participant's Stock Ownership Contribution Account subject to the
diversification election in each year in the Qualified Election Period shall
be determined by computing either 25 percent or 50 percent, as the case may
be, of the shares of Company Stock subject to the diversification election
that have ever been allocated to his Stock Ownership Contribution Account on
or before the most recent allocation date and reducing such amount by the
number of shares previously distributed to him pursuant to diversification
election.
For purposes of this provision, a "Qualified Participant" shall mean a
Participant or former Participant who has attained age 55 and completed at
least ten years of participation in the Plan, and the "Qualified Election
Period" shall mean the six-Plan Year-period beginning with the later of the
first Plan Year in which an individual becomes a Qualified Participant or the
first Plan Year beginning after December 31, 1986.
ITEM B(15)(d): INVESTMENT RESTRICTIONS:
Notwithstanding anything in the Plan to the contrary, a Participant may not
elect to invest any interest he or she may have in the Plan in certain
Confederation Life Insurance Company investment contracts ("Contracts"), nor
reinvest any interest the Participant may have currently invested in the
Contracts until such time as the Trustee may receive from Confederation Life
Insurance Company cash proceeds from the liquidation of all or any portion
of the Contracts pursuant to a plan of rehabilitation or plan of
liquidation under which Confederation Life Insurance Company will honor, at
least in part, its obligations under the terms of the Contracts.
ITEM B(15)(f): INVESTMENT DIRECTION ADDENDUM:
Notwithstanding any provision of the Plan to the contrary, if a Participant
does not direct that Before Tax Contributions to the Plan be invested in
either Company Stock Fund, the Employer Matching Contribution allocated to
that Participant's account shall be invested in the sub-fund of the Employer
Stock Fund invested in the sub-fund invested in Company Stock - Class B. In
the event that a Participant designates a portion of his future Before Tax
Contributions be invested in the sub-fund of the Company Stock Fund invested
primarily in Company Stock - Class A (but no portion for investment in the
sub-fund invested in Company Stock - Class B), then Employer Matching
Contributions shall be invested in the sub-fund invested in Company Stock -
Class A. In the event that a Participant designates a portion of his future
Before Tax Contributions be invested in the sub-fund of the Company Stock
Fund invested primarily in Company Stock - Class B (but no portion for
investment in the sub-fund invested in Company Stock - Class A), then
Employer Matching Contributions shall be invested in the sub-fund invested in
Company Stock - Class B. In the event that a Participant designates a portion
of his future Before Tax Contributions be invested in each of the sub-funds
investing in Company Stock - Class A and Company Stock-
<PAGE> 36
Class B, Employer Matching Contributions made on such Participant's behalf
shall be invested proportionately in each of the sub-funds investing primarily
in Company Stock - Class A and Company Stock - Class B.
ITEM C(4)(c)(ii): ALLOCATION OF EMPLOYER MATCHING CONTRIBUTIONS:
Notwithstanding anything in the Plan to the contrary, contributions
attributed to Employer Matching Contributions made pursuant to Item C(4)(a)
of the Adoption Agreement shall be allocated to the accounts of the
Participants as of the same time as the Participant's Before Tax
Contributions to which the Employer Matching Contributions relate are
allocated to Participant accounts. Notwithstanding the foregoing, for
purposes of computing Annual Additions pursuant to section 6.6(A)(1), ADP
pursuant to section 3.1(A)(1), or ACP pursuant to section 3.1(A)(4), of the
Basic Plan Document, contributions made after the end of a Plan Year that
relate to a Participant's Compensation paid before the end of the Plan Year
shall be allocated as of the last day of the Plan Year in which the
Participant was paid the Compensation to which the contribution relates.
Employer Matching Contributions made pursuant to Item C(4)(b) of the Adoption
Agreement shall be allocated as of the last day of the Plan Year, and only to
those Participant's otherwise eligible to receive an allocation of an
Employer Matching Contribution who are employed on the last day of the Plan
Year.
MODIFICATIONS OF PROVISIONS IN THE BASIC PLAN DOCUMENT:
o Eligibility One Year Hold Out:
The Eligibility One Year Hold-Out Rule of Participants who incur a 1-year
Break in Service contained in section 2.1(D)(1) (and (4)) of the Basic Plan
Document shall not be applicable to this Plan. A Participant who incurs a
Break in Service (of any period) shall be immediately eligible to recommence
participation in the Plan.
o Vesting One Year Hold Out
The Vesting One Year Hold Out Rule for Participants who incur a 1-year Break
in Service contained in section 2.2(C) of the Basic Plan Document shall not be
applicable to this Plan. For a Participant with one Hour of Service on or
after January 1, 1989, Years of Service for vesting purposes shall mean his
total Years of Service (whether performed prior to or after a Break in
Service).
<PAGE> 37
Basic Plan Document No.05
PRISM(R)
PROTOTYPE RETIREMENT
PLAN AND TRUST
<PAGE> 38
PRISM(R) PROTOTYPE RETIREMENT PLAN AND TRUST
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Article Page
<S> <C> <C>
I DEFINITIONS............................................................... 1
1.1 Definitions....................................................... 1
1.2 Gender and Number................................................. 11
1.3 Control of Trades or Businesses by Owner-Employee................. 11
II ELIGIBILITY AND VESTING................................................... 11
2.1 Eligibility....................................................... 11
2.2 Vesting........................................................... 13
III CODE 401(k) AND CODE 401(m) ARRANGEMENTS.................................. 15
3.1 Provision Relating to Both Before Tax Contributions and After
Tax Contributions............................................. 15
3.2 Before Tax Contributions (Elective Deferrals)..................... 18
3.3 After Tax Contributions (Employee Contributions).................. 22
3.4 Employer Contributions............................................ 23
3.5 Limitations on After Tax Contributions (Employee Contributions)
and Matching Contributions.................................... 25
3.6 Net Profits Not Required if So Elected in Adoption Agreement...... 28
3.7 Form, Payment and Allocation of Contributions..................... 28
3.8 Distribution Requirements for Before Tax Contribution Account..... 28
3.9 Hardship Distribution............................................. 29
3.10 Withdrawal of After Tax Contributions............................. 30
3.11 Withdrawal of Matching Contributions.............................. 31
IV OTHER CONTRIBUTIONS....................................................... 31
4.1 Employer Contributions............................................ 31
4.2 Separate Accounts................................................. 31
4.3 Vesting........................................................... 31
4.4 Limitation on Employer Contributions.............................. 31
4.5 Employee Contributions............................................ 32
4.6 Exclusive Benefit................................................. 33
</TABLE>
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4.7 Form, Payment and Allocation of Contributions..................... 34
4.8 Safe Harbor Allocation............................................ 34
V PERIOD OF PARTICIPATION................................................... 34
5.1 Termination Dates................................................. 34
5.2 Restricted Participation.......................................... 35
VI ACCOUNTING................................................................ 36
6.1 Accounts Established.............................................. 36
6.2 Employer Contributions Considered Made on Last Day of
Plan Year..................................................... 36
6.3 Accounting Steps.................................................. 36
6.4 Allocation of Employer Contributions.............................. 36
6.5 Allocation of Forfeitures......................................... 37
6.6 Limitation on Allocations......................................... 37
6.7 Reports to Participants........................................... 45
VII PAYMENT OF ACCOUNT BALANCES............................................... 45
7.1 Termination of Employment Upon Disability or Death................ 45
7.2 Timing for Determining Account Balance Upon Termination
of Employment Prior to Retirement, Disability or Death........ 45
7.3 Vesting on Distribution Before Break-in-Service; Cash-Outs........ 45
7.4 Restrictions on Immediate Distributions........................... 46
7.5 Commencement of Benefits.......................................... 47
7.6 Timing and Modes of Distribution.................................. 47
7.7 Designation of Beneficiary........................................ 54
7.8 Optional Forms of Benefit......................................... 55
7.9 Distribution Upon Disability...................................... 55
7.10 Joint and Survivor Annuity Requirements........................... 55
7.11 Distributions to Qualified Plans.................................. 61
7.12 Profit Sharing Plans and 401(k) Profit Sharing Plans Only -
Withdrawal of Employer Contributions.......................... 61
7.13 Prohibition Against Alienation.................................... 61
7.14 Missing Participant or Beneficiary................................ 62
7.15 Limitation on Certain Distributions............................... 62
7.16 Form of Distributions and Withdrawals............................. 62
VIII DIRECT ROLLOVERS.......................................................... 63
8.1 General........................................................... 63
8.2 Definitions....................................................... 63
</TABLE>
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<TABLE>
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IX TOP-HEAVY PROVISIONS...................................................... 64
9.1 Use of Top-Heavy Provisions....................................... 64
9.2 Top-Heavy Definitions............................................. 64
9.3 Minimum Allocation................................................ 67
9.4 Minimum Vesting Schedules......................................... 67
X TRUSTEE................................................................... 68
10.1 Trustee........................................................... 68
10.2 Records and Accounts of Trustee................................... 68
10.3 Reports to Employer............................................... 68
10.4 Powers of Trustee................................................. 68
10.5 Trustee's Fees and Expenses....................................... 70
10.6 Trustee May Resign or Be Removed.................................. 71
10.7 Separate Investment Funds......................................... 72
10.8 Registration, Distribution and Voting of Employer Stock and
Procedures Regarding Tender Offers............................ 75
10.9 Valuation of Investment Funds and Accounts........................ 78
XI ADMINISTRATION............................................................ 79
11.1 Committee Membership.............................................. 79
11.2 Powers and Duties of Committee.................................... 79
11.3 Actions of the Committee.......................................... 80
11.4 Resignation, Removal and Designation of Successors................ 81
11.5 Committee Review.................................................. 81
11.6 Records........................................................... 81
11.7 Compensation...................................................... 81
11.8 Designation of Named Fiduciaries and Allocation of
Responsibility Among Fiduciaries.............................. 81
11.9 Notice by Committee or Employer................................... 82
11.10 Loans to Participants............................................. 82
XII FAILURE TO ATTAIN OR RETAIN QUALIFIED STATUS.............................. 85
12.1 Failure to Qualify as a Prototype................................. 85
12.2 Failure of Employer to Attain or Retain Qualification............. 85
XIII MISCELLANEOUS............................................................. 85
13.1 Employer Action................................................... 85
13.2 No Guarantee of Interests......................................... 85
13.3 Employment Rights................................................. 85
13.4 Interpretations and Adjustments................................... 86
</TABLE>
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<TABLE>
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13.5 Uniform Rules..................................................... 86
13.6 Evidence.......................................................... 86
13.7 Waiver of Notice.................................................. 86
13.8 Controlling Law................................................... 86
13.9 Tax Exemption of Trust............................................ 86
13.10 Counterparts...................................................... 86
13.11 Annual Statement of Account....................................... 86
13.12 No Duty to Inquire................................................ 86
13.13 Invalidity........................................................ 86
13.14 Titles............................................................ 86
13.15 No Duty of Trustee to Collect Contributions....................... 86
13.16 Trustee Distributes by Committee Direction........................ 87
XIV AMENDMENT OR TERMINATION.................................................. 87
14.1 Amendment by the Sponsor.......................................... 87
14.2 Amendment by Adopting Employer.................................... 87
14.3 Vesting - Plan Termination........................................ 87
14.4 Vesting - Complete Discontinuance of Contributions................ 88
14.5 Plan Merger - Maintenance of Benefit.............................. 88
14.6 Direct Transfer................................................... 88
14.7 Termination of Participation by Employer.......................... 88
14.8 Notice of Amendment, Termination or Partial Termination........... 88
14.9 Substitution of Trustee........................................... 88
XV DISCHARGE OF DUTIES BY FIDUCIARIES........................................ 89
15.1 Discharge of Duties............................................... 89
XVI AMENDMENT AND CONTINUATION OF ORIGINAL PLAN............................... 89
16.1 Amendment and Continuation........................................ 89
</TABLE>
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PRISM(R) PROTOTYPE RETIREMENT PLAN AND TRUST
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. Unless the context indicates otherwise, the following
terms, when used herein with initial capital letters, shall have the
meanings set forth below:
(A) ACCOUNTING DATE: The date which is the last business day of
each month of the Employer's Plan Year or such other date as may
be agreed upon between the Employer and the Trustee, but only if
the Employer has specifically requested the Trustee to prepare
an accounting on or before such date. Notwithstanding the
foregoing, the Trustee shall value the assets held in the Trust
on each business day that the Trustee and the New York Stock
Exchange are open for business.
(B) ADOPTION AGREEMENT: The Adoption Agreement adopting this Plan
which has been executed by the Employer and accepted by the
Trustee, including any amendment thereof, which is incorporated
herein by reference.
(C) BASIC PLAN DOCUMENT: This document, which, in connection with
the Adoption Agreement forms the Plan.
(D) BENEFICIARY: The person or persons to whom a deceased
Participant's benefits are payable under the Plan.
(E) BREAK IN SERVICE: A 12-consecutive month period during which the
Participant does not complete more than one-half of the Hours of
Service with the Employer required for a Year of Service, as
elected in the Adoption Agreement. For eligibility purposes, the
initial 12-consecutive month period is the period beginning on
the Employees date of hire. Subsequent 12-consecutive month
periods for eligibility purposes will be either the period
ending on the annual anniversary of the Employee's date of hire
or the Plan Year, as selected in the Adoption Agreement. For
all other purposes, the 12-consecutive month period shall be the
Plan Year, or other computation period as selected in the
Adoption Agreement. If the elapsed time method of crediting
service is elected in the Adoption Agreement, "Break In Service"
will mean a Period of Severance of at least 12 consecutive
months.
(F) CODE: The Internal Revenue Code of 1986, and amendments thereto.
(G) COMMITTEE: The Committee provided for in Article XI, which
shall be a Named Fiduciary as defined in the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). To the extent
that the Employer does not appoint a Committee, the Employer
shall have the duty of the day to day administration of the Plan
and shall be the Named Fiduciary for that purpose.
(H) COMPENSATION: Compensation shall have the following various
definitions, as may be appropriate within the context of the
Plan:
<PAGE> 43
(1) Compensation as that term is defined in Section 6.6(A)
of the Plan. 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
determination period. Except as provided elsewhere in
this Plan, the determination period shall be the period
elected by the Employer in the Adoption Agreement. If
the Employer makes no election, the determination period
shall be the Plan Year. For purposes of allocations of
Employer Profit Sharing or Matching Contributions, the
definition of Compensation in Section 6.6(A)(2)(a)
shall be used, as modified in the Adoption Agreement.
Notwithstanding the above, if elected by the Employer in
the Adoption Agreement, Compensation for allocation
purposes shall include any amount which is contributed
by the Employer pursuant to a salary reduction agreement
and which is not includible in the gross income of the
employee under Sections 125, 402(e)(3), 402(h)(1)(B) or
403(b) of the Code.
(2) For years beginning after December 31, 1988, and prior
to January 1, 1994, the annual Compensation of each
Participant taken into account for determining all
benefits provided under the Plan for any determination
period shall not exceed $200,000. This limitation shall
be adjusted by the Secretary at the same time and in the
same manner as under Section 415(d) of the Code except
that the dollar increase in effect on January 1 of any
calendar year is effective for plan years beginning in
such calendar year and the first adjustment to the
$200,000 limitation is effective on January 1, 1990.
After December 31, 1993, the annual Compensation of
each Participant taken into account for determining all
benefits provided under the Plan for any determination
period shall not exceed $150,000, or such other lesser
amount as may be specified in the Adoption Agreement.
This limitation shall be adjusted by the Secretary at
the same time and in the same manner as under Section
415(d) of the Code. If a Plan determines Compensation
on a period of time that contains fewer than 12
calendar months, then the annual Compensation limit is
an amount equal to the annual Compensation limit for
the calendar year in which the Compensation period
begins multiplied by a ratio obtained by dividing the
number of full months in the period by 12.
In determining the Compensation of a Participant for
purposes of this limitation, the rules of Section
414(q)(6) of the Code shall apply, except in applying
such rules, the term "family" shall include only the
Spouse of the Participant and any lineal descendants of
the Participant who have not attained age 19 before the
close of the year. If, as a result of the application of
such rules the adjusted annual compensation limitation
is exceeded, then (except for purposes of determining
the portion of Compensation up to the integration level
if this Plan provides for permitted disparity), the
limitation shall be prorated among the affected
individuals in proportion to each such individual's
Compensation as determined under this Section prior to
the application of this limitation.
If compensation for any prior determination period is
taken into account in determining an Employee's
allocations or benefits for the current determination
period, the compensation for such prior year is subject
to the applicable annual
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compensation limit in effect for that prior year. For
this purpose, for years beginning before January 1,
1990, the applicable compensation limit is $200,000.
In addition, in determining allocations in plan years
beginning on or after January 1, 1994, the annual
compensation limit in effect for determination
periods beginning before that date is $150,000.
(I) DISABILITY: The inability to engage in any substantial gainful
activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous
period of not less than twelve (12) months. The permanence and
degree of such impairment shall be supported by medical
evidence. The Employer shall determine the existence of a
Disability based on its current disability policy, applied on a
uniform and nondiscriminatory basis.
(J) EARNED INCOME: The net earnings from self-employment in the
trade or business with respect to which the Plan is established,
for which personal services of the individual are a material
income-producing factor. Net earnings will be determined without
regard to items not included in gross income and the deductions
allocable to such items. Net earnings are reduced by
contributions by the Employer to a qualified Plan to the extent
deductible under Section 404 of the Code. Net earnings shall be
determined with regard to the deduction allowed to the taxpayer
by Section 164(f) of the Code for taxable years beginning after
December 31, 1989.
(K) EARLY RETIREMENT DATE: The date specified in the Adoption
Agreement at which a participating Employee may receive an early
retirement benefit.
(L) EFFECTIVE DATE: The date specified in the Adoption Agreement
which shall be the effective date of the provisions of this
Plan, unless modified through an effective date addendum, as
specified in Item A(18) of the Adoption Agreement. If the Plan
is a restatement of an existing Plan, the original effective
date of the Plan shall be as specified in the Adoption
Agreement.
(M) ELIGIBLE EMPLOYEE: Any Employee who is eligible to receive an
Employer contribution (including forfeitures), as defined in
Item B(6) of the Adoption Agreement.
(N) ELIGIBILITY COMPUTATION PERIOD: For purposes of determining
Years of Service and Breaks in Service for purposes of
eligibility, the initial Eligibility Computation Period is the
12-consecutive month period beginning on the Employee's
Employment Commencement Date.
(1) For plans in which the Eligibility Computation Periods
commence on the 12-consecutive month anniversary of
the Employee's Employment Commencement Date, the
succeeding 12-consecutive month periods commence with
the first anniversary of the Employee's Employment
Commencement Date.
(2) For plans in which the Eligibility Computation Period
shifts to the Plan Year, the succeeding 12-consecutive
month periods commence with the first Plan Year which
commences prior to the first anniversary of the
Employee's Employment Commencement Date regardless of
whether the Employee is entitled to be credited with
number of Hours of Service specified in the Adoption
Agreement
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<PAGE> 45
during the initial Eligibility Computation Period. An
Employee who is credited with number of Hours of Service
specified in the Adoption Agreement in both the initial
Eligibility Computation Period and the first Plan Year
which commences prior to the first anniversary of the
Employee's initial Eligibility Computation Period will
be credited with two Years of Service for purposes of
eligibility to participate.
Years of Service and Breaks in Service will be measured
on the same Eligibility Computation Period.
(3) Notwithstanding any other provisions of this section, if
the elapsed time method of crediting service is elected
in the Adoption Agreement for purposes of eligibility,
an Employee will receive credit for the aggregate of all
time periods completed (as may be elected in the
Adoption Agreement) beginning with the Employee's
Employment Commencement Date or Reemployment
Commencement Date and ending on the date a Break In
Service begins. The Employee will receive credit for any
Period of Severance of less than 12 consecutive months.
(0) EMPLOYEE: Any employee, including any Self Employed Individual,
of the Employer maintaining the Plan or of any other employer
required to be aggregated with such Employer under Sections
414(b), (c), (m) or (o) of the Code.
The term Employee shall also include any Leased Employee deemed
to be an Employee of any Employer described in the previous
paragraph as provided in Sections 414(n) or (o) of the Code.
(P) EMPLOYER: The Employer specified in the Adoption Agreement and
any successor to the business of the Employer establishing the
Plan, which shall be the Plan Administrator for purposes of
Section 3(16) of ERISA, a Named Fiduciary as defined in ERISA,
and which may delegate all or any part of its powers, duties and
authorities in such capacity without ceasing to be such Plan
Administrator.
(Q) EMPLOYMENT COMMENCEMENT DATE: The date on which an Employee
first performs an Hour of Service for the Employer.
(R) ENTRY DATE: The date selected by the Employer in Item B(6)(d) of
the Adoption Agreement, which shall be:
(1) The Effective Date of the Plan, for any Employee who has
satisfied the eligibility requirements set forth in the
Adoption Agreement;
(2) The first day of the month which coincides with or
immediately follows the date on which the Employee
satisfies the eligibility requirements set forth in the
Adoption Agreement;
(3) The first day of the Plan Year or the fourth, seventh,
or tenth month of the Plan
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<PAGE> 46
Year which coincides with or immediately follows the
date on which the Employee satisfies such eligibility
requirements;
(4) The first day of the Plan Year or the seventh month of
the Plan Year which coincides with or immediately
follows the date on which the Employee satisfies such
eligibility requirements;
(5) The first day of the Plan Year, but only if the
eligibility service requirements specified in Item
B(6)(d) are six months or less; or,
(6) As soon as practicable after the Employee satisfies such
eligibility requirements specified in the Adoption
Agreement, but in no event beyond the date which would
be six months following the date on which the Employee
first completes the eligibility requirements specified
in the Adoption Agreement.
(S) ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
(T) 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
Section 415(d) of the Code); (ii) received Compensation from the
Employer in excess of $50,000 (as adjusted pursuant to Section
415(d) of the Code) 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 50 percent of
the dollar limitation in effect under section 415(b)(1)(A) of
the Code. 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 100 Employees
who receive the most compensation from the Employer during the
determination year; and (ii) Employees who are 5 percent owners
at any time during the look-back year or determination year.
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
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either a 5 percent owner who is an active or former employee or
a Highly Compensated Employee who is one of the 10 most Highly
Compensated Employees ranked on the basis of Compensation paid
by the Employer during such year, then the family member and the
5 percent owner or top-ten Highly Compensated Employee shall be
aggregated. In such case, the family member and 5 percent
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 5
percent 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 100 Employees, the
number of Employees treated as officers and the Compensation
that is considered, will be made in accordance with Section
414(q) of the Code and the regulations thereunder.
(U) HOUR OF SERVICE:
(1) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the
Employer. These hours shall be credited to the Employee
for the computation period in which the duties are
performed; and
(2) 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. No more than 501 Hours of Service shall be
credited under this paragraph for any single continuous
period (whether or not such period occurs in a single
computation period). Hours under this paragraph shall be
calculated and credited pursuant to Section 2530.200b-2
of the Department of Labor Regulations which are
incorporated herein by reference; and
(3) 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 subparagraph (1) or subparagraph
(2), as the case may be, and under this subparagraph
(3). These hours shall be credited to the Employee for
the computation period or periods to which the award or
agreement pertains rather than for the computation
period in which the award, agreement or payment is made.
Hours of Service will be credited for employment with
other members of an affiliated service group (under
Section 414(m)), a controlled group of corporations
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<PAGE> 48
(under Section 414(b)), or a group of trades or
businesses under common control (under Section 414(c))
of which the adopting Employer is a member, and any
other entity required to be aggregated with the Employer
pursuant to Section 414(o).
Hours of Service will also be credited for any
individual considered an Employee for purposes of this
Plan under Sections 414(n) or 414(o).
(4) Where the Employer maintains the Plan of a predecessor
employer, service for such predecessor employer shall be
treated as service for the Employer. If the Employer
does not maintain the Plan of a predecessor employer,
the Plan does not credit service with the predecessor
employer, unless the Employer identifies the predecessor
in its Adoption Agreement and specifies the purposes for
which the Plan will credit service with that predecessor
employer.
(5) Solely for purposes of determining whether a
Break-in-Service, as defined in Section 1.1(E), for
participation and vesting purposes has occurred in a
computation period, an individual who is absent from
work for maternity or paternity reasons shall receive
credit for the Hours of Service which would otherwise
have been credited to such individual but for such
absence, or in any case in which such hours cannot be
determined, 8 Hours of Service per day of such absence.
For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (1) by
reason of the pregnancy of the individual, (2) by reason
of a birth of a child of the individual, (3) by reason
of the placement of a child with the individual in
connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child
for a period beginning immediately following such
birth or placement. The Hours of Service credited under
this paragraph shall be credited (1) in the computation
period in which the absence begins if the crediting is
necessary to prevent a Break-in-Service in that period,
or (2) in all other cases, in the following computation
period.
(6) Hours of Service will be determined on the basis of the
method selected in the Adoption Agreement.
(V) INVESTMENT FUND: One of the funds provided for in Section 10.7,
and as selected by the Employer, as a Named Fiduciary, on the
Investment Fund Designation portion of the Adoption Agreement.
(W) LEASED EMPLOYEE: Any person (other than an employee of the
recipient) who pursuant to an agreement between the recipient
and any other person ("leasing organization") has performed
services for the recipient (or for the recipient and related
persons determined in accordance with Section 414(n)(6) of the
Code) on a substantially full time basis for a period of at
least one year, and such services are of a type historically
performed by employees in the business field of the recipient
employer. Contributions or benefits provided a leased employee
by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as
provided by the recipient employer.
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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 10 percent of compensation, as
defined in Section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are
excludable from the employee's gross income under Section 125,
Section 402(e)(3), Section 402(h)(1)(b) or Section 403(b) of
the Code, (2) immediate participation, and (3) full and
immediate vesting; and (ii) leased employees do not constitute
more than 20 percent of the recipient's nonhighly compensated
workforce.
(X) NET PROFITS: Current and accumulated earnings of the Employer
before Federal and state taxes and contributions to this and any
other qualified Plan, determined by the Employer in accordance
with generally accepted accounting principles.
(Y) NONHIGHLY COMPENSATED EMPLOYEE: An Employee of the Employer who
is neither a Highly Compensated Employee nor a Family Member.
(Z) NORMAL RETIREMENT DATE: The date specified in the Adoption
Agreement at which a participant shall become fully vested in
his account balances, as provided for in this document.
(AA) OWNER-EMPLOYEE: An individual who is a sole proprietor, or who
is a partner owning more than 10 percent of either the capital
or profits interest of the partnership.
(BB) PAIRED PLANS: The Employer has adopted Plan #001 and Plan # 003,
both using this basic Plan document, which constitutes a set of
"paired plans" as defined by the Internal Revenue Service in
Revenue Procedure 89-9, or any successor thereto.
(CC) PARTICIPANT: A person who becomes eligible to participate in
accordance with the provisions of Article II, and whose
participation has not been terminated.
(DD) PERMITTED DISPARITY LEVEL: The level selected in the Adoption
Agreement, not to exceed the Taxable Wage Base in effect at the
beginning of the Plan Year
(EE) PERIOD OF SERVICE: The period beginning on the Employee's
Employment Commencement Date or Reemployment Commencement Date,
and ending on the date a Period of Severance begins. The
Employee will receive credit for any Period of Service of less
than 12 consecutive months. Fractional periods of a year will be
expressed in days.
(FF) PERIOD OF SEVERANCE: A continuous period of time during which
the Employee is not employed by the Employer. A Period of
Severance begins on the date the Employee retires, quits, or is
discharged, or dies, or if earlier, the twelve month anniversary
of the date on which the Employee was first absent from work for
any other reason; provided, that is an Employee is absent from
work for any other reason and retires, quits, is discharged, or
dies within 12 months, the Period of Severance begins on the day
the Employee quits, retires, is discharged, or dies.
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(GG) PLAN: This Plan established by the Employer as embodied in this
agreement and in the Adoption Agreement, and all subsequent
amendments thereto.
(HH) PLAN YEAR: The 12-consecutive month period designated by the
Employer in the Adoption Agreement. In the event that the
original Effective Date is not the first day of the Plan Year,
the first Plan Year shall be a short Plan Year, beginning on the
original Effective Date, and ending on the last day of the Plan
Year as specified in the Adoption Agreement.
(II) QUALIFIED DISTRIBUTION DATE: For purposes of Section 7.13, the
Qualified Distribution Date, if selected in the Adoption
Agreement, shall be the earliest retirement date specified in
Code Section 414(p) and shall operate to allow a distribution to
an Alternate Payee at the time a domestic relations order is
determined to be qualified.
(JJ) REEMPLOYMENT COMMENCEMENT DATE: The date on which an Employee
completes an Hour of Service with the Employer after a Break In
Service or a Period of Severance.
(KK) RELATED EMPLOYERS: Any employer related to the Employer as a
controlled group of corporations (as defined in Section 414(b)
of the Code), a group of trades or businesses (whether or not
incorporated) which are under common control (as defined in
Section 414(c)) or an affiliated service group (as defined in
Section 414(m) or in Section 414(o) of the Code). If the
Employer is a member of a related group, the term "Employer"
includes the related group members for purposes of crediting
Hours of Service, determining Years of Service and Breaks in
Service under Article II, applying participation and coverage
testing, applying the limitations on allocations in Section 6.6,
applying the top heavy rules and the minimum allocation
requirements of Article IX, the definitions of Employee, Highly
Compensated Employee, Compensation and Leased Employee, and for
any other purpose required by the applicable Code section or by
a Plan provision. However, an Employer may contribute to the
Plan only by signing the Adoption Agreement or a Participation
Agreement to the Employer's Adoption Agreement. If one or more
of the Employer's related group members become Participating
Employers by executing a Participation Agreement to the
Employer's Adoption Agreement, the term "Employer" includes the
participating related group members for all purposes of the
Plan, and "Plan Administrator" means the Employer that is the
signatory to the Adoption Agreement.
If the Employer's Plan is a standardized Plan, all Employees of
the Employer or of any member of the Employer's related group,
are eligible to participate in the Plan, irrespective of whether
the related group member directly employing the Employee is a
Participating Employer. If the Employer's Plan is a
nonstandardized Plan, the Employer must specify in Item B(5) of
its Adoption Agreement, whether the Employees of related group
members that are not Participating Employers are eligible to
participate in the Plan. Under a nonstandardized Plan, the
Employer may elect to exclude from the definition of
"Compensation" for allocation purposes any Compensation received
from a related employer that has not executed a Participation
Agreement and whose Employees are not eligible to participate in
the Plan.
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(LL) SELF-EMPLOYED INDIVIDUAL: An individual who has Earned Income
for the taxable year from the trade or business for which the
Plan is established; also, an individual who would have had
Earned Income but for the fact that the trade or business had no
Net Profits for the taxable year.
(MM) SPOUSE: The person to whom the Participant is legally married at
the relevant time. Notwithstanding the foregoing, if selected
in the Adoption Agreement, Spouse shall only refer to an
individual to whom a Participant has been married to for a
period of at least one year, ending at the relevant time.
(NN) STOCKHOLDER-EMPLOYEE: An employee or officer of an electing
small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of Section 318(a)(1) of
the Code), on any day during the taxable year of such
corporation, more than 5% of the outstanding stock of the
corporation.
(00) TERMINATION DATE: The date on which a Participant's employment
is terminated as provided in Section 5.1.
(PP) TRUSTEE: The entity specified in Item B(17) of the Adoption
Agreement, which shall be any bank or trust company which is
affiliated with KeyCorp within the meaning of Section 1504 of
the Code, each of which with full trust powers, and its
successors by merger or reorganization.
(QQ) TRUST FUND: All assets held under the Plan by the Trustee.
(RR) VALUATION DATE. The date on which the assets of the Trust shall
be valued, as provided for herein, with earning or losses since
the previous Valuation Date being credited, as appropriate to
Participant accounts. Notwithstanding anything to the contrary
in the Plan, the Valuation date shall be each business day that
the Trustee and the New York Stock Exchange are each open for
business, provided, however, that the Trustee shall not be
obligated to value the Trust in the event, through circumstances
beyond its control, appropriate prices may not be obtained for
the assets held in the Investment Funds.
(SS) VESTING COMPUTATION PERIOD. The Vesting Computation Period shall
be the 12-consecutive month period selected by the Employer in
the Adoption Agreement.
(TT) YEAR OF PARTICIPATION: For purposes of vesting, a twelve (12)
month period in which an Employee has a balance in an account
established under a 401(k)/401(m) arrangement regardless of
whether the Employee is currently making contributions under the
arrangement.
(UU) YEAR OF SERVICE: (i) If the elapsed time method of crediting
service is elected in the Adoption Agreement, a Year of Service
will mean a one-year Period of Service. If the actual hours
method of crediting service is elected in the Adoption
Agreement, a Year of Service will mean a 12-consecutive month
period as specified in the Adoption Agreement
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during which the Employee completes the number of Hours of
Service (not to exceed 1000) specified in the Adoption
Agreement.
1.2 GENDER AND NUMBER. Unless the context indicates otherwise, the masculine
shall include the feminine, and the use of any words herein in the
singular shall include the plural and vice versa.
1.3 CONTROL OF TRADES OR BUSINESSES BY OWNER-EMPLOYEE. If this Plan provides
contributions or benefits for one or more Owner-Employees who control
both the business for which this Plan is established and one or more
other trades or businesses, this Plan and the Plan established for other
trades or businesses must, when looked at as a single Plan, satisfy
Sections 401(a) and (d) for the employees of this and all other trades
or businesses.
If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a Plan
which satisfies Sections 401(a) and (d) 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
or more trades or businesses which are not controlled and the individual
controls a trade or 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 him under the
most favorable Plan of the trade or business which is not controlled.
For purposes of the preceding paragraphs, an Owner-Employee, or two or
more Owner-Employees, will be considered to control a trade or business
if the Owner-Employee, or two or more Owner-Employees together:
(1) Own the entire interest in an unincorporated trade or business,
or
(2) In the case of a partnership, own more than 50 percent of either
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.
ARTICLE II
ELIGIBILITY AND VESTING
2.1 ELIGIBILITY.
(A) PARTICIPATION. Every Employee who meets the eligibility
requirements specified by the Employer in the Adoption Agreement
shall become eligible to commence participation in this Plan.
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(B) COMMENCEMENT OF PARTICIPATION.
(1) For purposes of Money Purchase Pension Plans, Profit
Sharing Plans and 401(k) Plans with Profit Sharing
Contributions, each Eligible Employee shall commence
participation on the Entry Date.
(2) For purposes of 401(k) and 401(m) arrangements, an
Eligible Employee may, but is not required to, enroll as
a Participant as of the Entry Date on which such Em-
ployee is initially eligible by filing with the
Committee before such date, an enrollment form
prescribed by the Committee. The time period for filing
an enrollment form shall be determined by the
Committee. The form shall include an authorization and
request to the Employer to deduct from such
Participant's Compensation in each pay period the
designated After Tax Contributions, and/or to reduce
such Participant's Compensation in each pay period by
the amount of the designated Before Tax Contributions.
(C) YEARS OF SERVICE COUNTED TOWARDS ELIGIBILITY. All Years of
Service with the Employer are counted toward eligibility except
the following:
(1) In a Plan which (a) requires an Employee to complete
more than one Year of Service as an eligibility
requirement and (b) provides immediate 100% vesting in a
Participant's Employer Contribution Account after not
more than two (2) Years of Service, if an Employee has
a 1-year Break in Service before satisfying the Plan's
requirement for eligibility, service before such break
will not be taken into account.
(2) In the case of a Participant who does not have any
nonforfeitable right to the account balance derived
from Employer contributions, Years of Service before a
period of consecutive 1-year Breaks in Service will not
be taken into account in computing eligibility service
if the number of consecutive 1-year Breaks in Service in
such period equals or exceeds the greater of 5 or the
aggregate number of Years of Service. Such aggregate
number of Years of Service will not include any Years of
Service disregarded under the preceding sentence by
reason of prior Breaks in Service.
(3) If a Participant's Years of Service are disregarded
pursuant to the preceding paragraph, such Participant
will be treated as a new Employee for eligibility
purposes. If a Participant's Years of Service may not be
disregarded pursuant to the preceding paragraph, such
Participant shall continue to participate in the Plan,
or, if terminated, shall participate immediately upon
reemployment.
(D) ELIGIBILITY BREAK IN SERVICE, ONE YEAR HOLD-OUT RULE. If the
Plan is a nonstandardized Plan, then:
(1) In the case of any Participant who has a 1-year Break in
Service or Severance, years of eligibility service
before such break will not be taken into account until
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the Employee has completed a Year of Service after
returning to employment.
(2) For plans in which the eligibility computation is
measured with reference to the Employment Commencement
Date, such Year of Service will be measured beginning
on the Employee's Reemployment Commencement Date and, if
necessary, subsequent 12-consecutive month periods
beginning on anniversaries of the Reemployment
Commencement Date.
(3) For plans which shift the Eligibility Computation period
to the Plan Year, such Year of Service will be measured
by the 12-consecutive month period beginning on the
Employee's Reemployment Commencement Date and, if
necessary, Plan Years beginning with the Plan Year which
includes the first anniversary of the Reemployment
Commencement Date.
(4) If a Participant completes a Year of Service in
accordance with this provision, his or her participation
will be reinstated as a Participant as of the
Reemployment Commencement Date.
(E) PARTICIPATION UPON RETURN TO ELIGIBLE CLASS.
(1) In the event a Participant is no longer a member of an
eligible class of Employees and becomes ineligible to
participate but has not incurred a Break In Service,
such Employee shall participate immediately upon
returning to an eligible class of Employees. If such
Participant incurs a Break In Service eligibility will
be determined under the Break in Service rules of the
Plan.
(2) In the event an Employee who is not a member of an
eligible class of Employees becomes a member of an
eligible class, such Employee will participate imme-
diately if such Employee has satisfied the minimum age
and service requirements and would have otherwise
previously become a Participant.
2.2 VESTING.
(A) VESTING SCHEDULE. In the case of an Employee who terminates
participation under this Plan for any reason other than death,
Disability, or employment at the Normal Retirement Date, such
Participant, as of the last day of his participation under this
Plan, shall have a vested interest in his Employer Contribution
Account pursuant to the formula specified by the Employer in the
Adoption Agreement.
(B) VESTING UPON NORMAL RETIREMENT DATE. Notwithstanding the vesting
schedule elected by the Employer in Items B(7)(a) or C(4)(d) of
the Adoption Agreement, an Employee's right to his or her
Employer Contribution balance shall be nonforfeitable at the
Employee's Normal Retirement Date.
(C) VESTING BREAK IN SERVICE - 1 YEAR HOLDOUT. In the case of any
Participant who has incurred a 1-year Break in Service, Years
of Service before such break will not be taken into account
until the Participant has completed a Year of Service after such
Break in
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Service.
(D) VESTING FOR PRE-BREAK AND POST-BREAK ACCOUNT. In the case of a
Participant who has 5 or more consecutive 1-year Breaks in
Service, all service after such Breaks in Service will be
disregarded for the purpose of vesting the employer-derived
account balance that accrued before such Breaks in Service. Such
Participant's pre-break service will count in vesting the
post-break employer-derived account balance only if either:
(1) such Participant has any nonforfeitable interest in the
account balance attributable to employer contributions
at the time of separation from service; or
(2) upon returning to service the number of consecutive
1-year Breaks in Service is less than the number of
Years of Service. Separate accounts will be maintained
for the Participant's pre-break and post-break Employer
Contribution Account balance. Both accounts will share
in the earnings and losses of the Trust Fund.
(E) AMENDMENT OF VESTING SCHEDULE. If the Plan's vesting schedule is
amended, or the Plan is amended in any way that directly or
indirectly affects the computation of the Participant's
nonforfeitable percentage or if the Plan is deemed amended by an
automatic change to or from a top-heavy vesting schedule, each
Participant with at least three (3) Years of Service with the
Employer may elect within a reasonable period after the adoption
of the amendment or change, to have the nonforfeitable
percentage computed under this Plan without regard to such
amendment or change. For Participants who do not have at least
1 Hour of Service in any Plan Year beginning after December 31,
1988, the preceding sentence shall be applied by substituting "5
Years of Service" for "3 Years of Service" where such language
appears.
This period during which the election may be made shall commence
with the date the amendment is adopted or deemed to be made and
shall end on the latest of:
(1) Sixty (60) days after the amendment is adopted;
(2) Sixty (60) days after the amendment becomes effective; or
(3) Sixty (60) days after the Participant is issued written
notice of the amendment by the Employer or Committee.
(F) AMENDMENT AFFECTING VESTED AND/OR ACCRUED BENEFITS. No
amendment to the Plan shall be effective to the extent that it
has the effect of decreasing a Participant's accrued benefit.
Notwithstanding the preceding sentence, a Participant's account
balance may be reduced to the extent permitted under Section
412(c)(8) of the Code. For purposes of this 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. Furthermore, if
the vesting schedule of a Plan is amended, in the case of an
Employee who is a Participant as of the later of the date such
amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such
Employee's Employer-derived accrued benefit will not be less
than the percentage computed under the Plan without regard to
such amendment.
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ARTICLE III
CODE 401(k) AND CODE 401(m) ARRANGEMENTS
3.1 PROVISION RELATING TO BOTH BEFORE TAX CONTRIBUTIONS AND AFTER TAX
CONTRIBUTIONS.
(A) DEFINITIONS: The following definitions are applicable to this
Article of the Plan.
(1) ACTUAL DEFERRAL PERCENTAGE OR ADP: for a specified group
of Participants for a Plan Year, the average of the
ratios (calculated separately for each Participant in
such group) of (1) the amount of Employer contributions
actually paid over to the trust on behalf of such
Participant for the Plan Year to (2) the Participant's
Compensation for such Plan Year (whether or not the
Employee was a Participant for the entire Plan Year, but
limited to that portion of the Plan Year in which the
Employee was an Eligible Participant if the Employer so
elects for such Plan Year to so limit Compensation for
all Eligible Employees). Employer contributions on
behalf of any Participant shall include (1) any Before
Tax Contributions made pursuant to the Participant's
deferral election, including Excess Before Tax
Contributions, but excluding Before Tax Contributions
that are taken into account in the Contribution
Percentage test (provided the ADP test is satisfied
both with and without exclusion of these Before Tax
Contributions); and (2) at the election of the
Employer, Qualified Non-elective Contributions and
Qualified Matching Contributions. For purposes of
computing Actual Deferral Percentages, an Employee who
would be a Participant but for the failure to make
Before Tax Contributions shall be treated as a
participant on whose behalf no Before Tax Contributions
are made.
(2) AFTER TAX CONTRIBUTIONS ("EMPLOYEE CONTRIBUTIONS"): Any
contribution made to the Plan by or on behalf of a
Participant that is included in the Participant's gross
income in the year in which made and that is maintained
under a separate account to which earnings and losses
are allocated.
(3) AGGREGATE LIMIT: The sum of (i) 125 percent of the
greater of the ADP of the Non-highly Compensated
Employees for the Plan Year or the ACP of Non-highly
Compensated Employees under the Plan subject to Code
Section 401(m) for the Plan Year beginning with or
within the Plan Year of the cash or deferred arrangement
and (ii) the lesser of 200% or two plus the lesser of
such ADP or ACP. "Lesser" is substituted for "greater"
in "(i)", above, and "greater" is substituted for
"lesser" after "two plus the" in "(ii)" if it would
result in a larger Aggregate Limit.
(4) AVERAGE CONTRIBUTION PERCENTAGE OR ACP: the average
(expressed as a percentage) of the Contribution
Percentages of the Eligible Participants in a group.
(5) BEFORE TAX CONTRIBUTIONS ("ELECTIVE DEFERRALS"):
Employer contributions made to the Plan at the election
of the Participant, in lieu of cash compensation, which
shall include contributions made pursuant to a salary
reduction agreement or other deferral mechanism. With
respect to any taxable year, a Participant's
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Before Tax Contributions are the sum of all Employer
contributions made on behalf of such Participant
pursuant to an election to defer under any qualified
cash or deferred arrangement as described in Section
401(k) of the Code, any simplified employee pension cash
or deferred arrangement as described in Code Section
402(h)(1)(B), any eligible deferred compensation Plan
under Code Section 457, any Plan as described under Code
Section 457, any Plan as described under Code Section
501(c)(18), and any Employer contributions made on
behalf of a Participant for the purchase of an annuity
contract under Code Section 403(b) pursuant to a salary
reduction agreement.
(6) CONTRIBUTION PERCENTAGE: The ratio (expressed as a
percentage) of the Participant's Contribution Percentage
Amounts to the Participant's Compensation for the Plan
Year (whether or not the Employee was a Participant for
the entire Plan Year, but limited to that portion of the
Plan Year in which the Employee was an Eligible
Participant if the Employer so elects for such Plan
Year to so limit Compensation for all Eligible
Employees).
(7) CONTRIBUTION PERCENTAGE AMOUNTS: The sum of the After
Tax Contributions, Matching Contributions, and Qualified
Matching Contributions (to the extent not taken into
account for purposes of the ADP test) made under the
Plan on behalf of the Participant for the Plan Year.
Such Contribution Percentage Amounts shall not include
Matching Contributions that are forfeited either to
correct Excess Aggregate Contributions or because the
contributions to which they relate are Excess Before Tax
Contributions, Excess Contributions or Excess Aggregate
Contributions. If so elected in the Adoption Agreement
the Employer may include Qualified Non-elective
Contributions in the Contribution Percentage Amounts.
The Employer also may elect to use Before Tax
Contributions in the Contribution Percentage Amounts so
long as the ADP test is met before the Before Tax
Contributions are used in the ACP test and continues to
be met following the exclusion of those Before Tax
Contributions that are used to meet the ACP test.
(8) ELIGIBLE PARTICIPANT: Any Employee who is eligible to
make an After Tax Contribution or a Before Tax
Contribution (if the Employer takes such contributions
into account in the calculation of the Contribution
Percentage), or to receive a Matching Contribution
(including forfeitures) or a Qualified Matching
Contribution. If an After Tax Contribution is required
as a condition of participation in the Plan, any
Employee who would be a Participant in the Plan if such
Employee made such a contribution shall be treated as an
eligible Employee on behalf of whom no After Tax
Contributions are made.
(9) EXCESS AGGREGATE CONTRIBUTIONS: With respect to any Plan
Year, the excess of:
(a) The aggregate Contribution Percentage Amounts
taken into account in computing the numerator of
the Contribution Percentage actually made on
behalf of Highly Compensated Employees for such
Plan Year, over
(b) The maximum Contribution Percentage Amounts
permitted by the ACP
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test (determined by reducing contributions made
on behalf of Highly Compensated Employees in
order of their Contribution Percentages
beginning with the highest of such percentages).
Such determination shall be made after first
determining Excess Before Tax Contributions
pursuant to Section 3.2(D) and (E) and then
determining Excess Contributions pursuant to
section 3.2(F), (G) and (H).
(10) EXCESS BEFORE TAX CONTRIBUTIONS ("EXCESS ELECTIVE
DEFERRALS"): Those Before Tax Contributions that are
includible in a Participant's gross income under Section
402(g) of the Code to the extent such Participant's
Before Tax Contributions for a taxable year exceed the
dollar limitation under such Code section. Excess Before
Tax Contributions shall be treated as Annual Additions
under the Plan, unless such amounts are distributed no
later than the first April 15 following the close of the
Participants taxable year. Excess Before Tax
Contributions shall be adjusted for income or loss up to
the end of the taxable year of the Employee, and if
elected in the Adoption Agreement, for the income or
loss attributable to the period from the end of the
Employee's taxable year to the date of distribution (the
"Gap Period"). The income or loss allocable to Excess
Before Tax Contributions is (1) the income or loss
allocable to the Participant's Before Tax Contribution
Account for the taxable year multiplied by a fraction,
the numerator of which is such Participant's Excess
Before Tax Contributions for the year and the
denominator is the Participant's account balance
attributable to Before Tax Contributions without regard
to any income or loss occurring during such taxable year
plus, (2) if Gap Period income or loss applies, ten
percent 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.
(11) EXCESS CONTRIBUTIONS: With respect to any Plan Year, the
excess of:
(1) The aggregate amount of Employer contributions
actually taken into account in computing the ADP
of Highly Compensated Employee for such Plan
Year, over
(2) The maximum amount of such contributions
permitted by the ADP test (determined by
reducing contributions made on behalf of Highly
Compensated Employee in order of the ADPs,
beginning with the highest of such percentages).
(12) MATCHING CONTRIBUTIONS: An Employer contribution made to
this or any other defined contribution Plan on behalf of
a Participant on account of an After Tax Contribution
made by such Participant, or on account of a
Participant's Before Tax Contribution, under a Plan
maintained by the Employer.
(13) QUALIFIED MATCHING CONTRIBUTIONS: Matching Contributions
which are subject to
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the distribution and nonforfeitability requirements
under Section 401(k) of the Code when made. Qualified
Matching Contributions shall be allocated, in the
discretion of Employer, to the accounts of all
Employees, or only to the accounts of Non-highly
Compensated Employees.
(14) QUALIFIED NON-ELECTIVE CONTRIBUTIONS: Contributions
(other than Matching Contributions or Qualified Matching
Contributions) made by the Employer and allocated to
Participants' accounts that the Participants may not
elect to receive in cash until distributed from the
Plan; that are nonforfeitable when made; and that are
distributable only in accordance with the distribution
provisions that are applicable to Before Tax
Contributions and Qualified Matching Contributions.
Qualified Non-elective Contributions shall be allocated,
in the discretion of Employer, to the accounts of all
Employees, or only to the accounts of Non-highly
Compensated Employees.
(B) NONFORFEITABILITY AND VESTING. The Participant's accrued
benefits derived from Before Tax Contributions and After Tax
Contributions are nonforfeitable and fully vested.
(C) NOTICE TO COMMITTEE. The Committee shall set the time period
during which a Participant may provide written notice to
increase, decrease or terminate Before Tax Contributions and
After Tax Contributions.
(D) SUSPENSION AFTER RECEIPT OF HARDSHIP DISTRIBUTION. If the
Employer has elected in the Adoption Agreement to have the "safe
harbor" hardship rules apply, an Employee's Before Tax
Contributions and After Tax Contributions shall be suspended for
twelve months after the receipt by such Employee of a Hardship
distribution (as defined in Section 3.9) from this Plan or any
other Plan maintained by the Employer.
(E) SEPARATE ACCOUNTS. Separate accounts for Before Tax
Contributions and After Tax Contributions will be maintained for
each Participant. Each account will be credited with the
applicable contributions and earnings thereon.
3.2 BEFORE TAX CONTRIBUTIONS. (ELECTIVE DEFERRALS).
(A) ALLOCATION OF BEFORE TAX CONTRIBUTIONS. If the Employer selects
Item C(2) in the Adoption Agreement, for each Plan Year the
Employer will contribute and allocate to each Participant's
Before Tax Contribution Account an amount equal to the amount of
the Participant's Before Tax Contributions. The provisions of
the cash or deferred arrangement may be made effective as of the
first day of the Plan Year in which the cash or deferred option
is adopted, however, under no circumstances may a salary
reduction agreement or other deferral mechanism be adopted
retroactively. Before Tax Contributions must be contributed
and allocated to the Plan no later than thirty (30) days after
the close of the Plan Year for which the contributions are
deemed to be made, or such other time as provided in applicable
regulations under the Code.
(B) BEFORE TAX CONTRIBUTIONS PURSUANT TO A SALARY REDUCTION
AGREEMENT. To the extent provided in the Adoption Agreement, a
Participant may elect to have Before Tax
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Contributions made under this Plan. Before Tax Contributions
shall be continuing contributions through payroll deduction made
pursuant to a salary reduction agreement.
(1) COMMENCEMENT OF BEFORE TAX CONTRIBUTIONS. An Employee
may elect to commence Before Tax Contributions as of his
or her Entry Date as described in Section 2.1(B). Such
election shall not become effective before the Entry
Date. Such election may not be made retroactively.
(2) MODIFICATION AND TERMINATION OF BEFORE TAX
CONTRIBUTIONS. A Participant's election to commence
Before Tax Contributions shall remain in effect until
modified or terminated. A Participant may increase or
decrease his or her Before Tax Contributions as of any
date as selected by the Employer in Item C(3) of the
Adoption Agreement upon notice to the Committee. A
Participant may terminate his or her election to make
Before Tax Contributions as of the Participant's next
wage payment date upon notice to the Committee. Any
Participant who terminates Before Tax Contributions may
elect to recommence making Before Tax Contributions as
of the date selected by the Employer in Item C(3) of the
Adoption Agreement following his or her suspension of
contributions.
(C) CASH BONUSES. If Item C(2) of the Adoption Agreement is
selected, a Participant may also enter into a salary reduction
agreement on cash bonuses that, directing that the amount of
such salary reduction be contributed to the Plan as a Before Tax
Contribution, or received by the Participant in cash. A
Participant shall be afforded a reasonable period to elect to
defer amounts described in this Section 3.2 to the Plan. Such
election shall not become effective before the Participant's
Entry Date.
(D) MAXIMUM AMOUNT OF BEFORE TAX CONTRIBUTIONS. A Participant's
Before Tax Contributions are subject to any limitations imposed
in Item C(2) of the Adoption Agreement, calculated on an annual
basis, and any further limitations under the Plan. No
Participant shall be permitted to have Before Tax Contributions
made under this Plan, or any other qualified Plan maintained by
the Employer, during any taxable year in excess of the dollar
limitation contained in Code Section 402(g) in effect at the
beginning of such taxable year. Furthermore, if an Employee
receives a Hardship distribution (as defined in Section 3.9,
utilizing the "safe harbor" rules) from this Plan or any other
Plan maintained by the Employer, the Employee may not make
Before Tax Contributions for the Employee's taxable year
immediately following the taxable year of the Hardship
distribution in excess of the applicable limit under Section
402(g) of the Code for such taxable year less the amount of the
Employee's Before Tax Contributions for the taxable year of the
Hardship distribution.
(E) DISTRIBUTION OF EXCESS BEFORE TAX CONTRIBUTIONS. If a
Participant makes Before Tax Contributions to this Plan and to
another Plan, and the Participant has made Excess Before Tax
Contributions to one or more of the plans, the Participant may
assign the amount of any such Excess Before Tax Contributions
among the plans under which such Before Tax Contributions were
made. The Participant may assign to this Plan any Excess Before
Tax Contributions made during a taxable year of the Participant
to this Plan by notifying the Committee on or before the date
specified in the Adoption Agreement of
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the amount of the Excess Before Tax Contributions to be assigned to the
Plan. A Participant is deemed to notify the Committee of any Excess
Before Tax Contributions that arise by taking into account only those
Before Tax Contributions made under the Plan or plans of this Employer.
Notwithstanding any other provision of the Plan, Excess Before Tax
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than April 15 to any Participant to whose
account Excess Before Tax Contributions were assigned for the preceding
year and who claims Excess Before Tax Contributions for such taxable
year.
The Participant's claim shall be in writing; shall be submitted to the
Committee not later than the date elected in Item CC of the Adoption
Agreement; shall specify the amount of the Participant's Excess Before
Tax Contribution for the preceding calendar year; and shall be
accompanied by the Participant's written statement that if such amounts
are not distributed, such Excess Before Tax Contributions, when added to
amounts deferred under other plans or arrangements described in Sections
401(k), 408(k), or 403(b) of the Code, will exceed the limit imposed on
the Participant by Section 402(g) of the Code for the year in which the
deferral occurred.
(F) ACTUAL DEFERRAL PERCENTAGE. The ADP for Participants who are Highly
Compensated Employees for each Plan Year and the ADP for Non-highly
Compensated Employees for the same Plan Year must satisfy one of the
following tests:
(1) 1.25 LIMIT. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for
Participants who are Non-highly Compensated Employees for the
same Plan Year multiplied by 1.25; or
(2) 2.0 LIMIT. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for
Participants who are Non-highly Compensated Employees for the
same Plan Year multiplied by 2.0, provided that the ADP for
Participants who are Highly Compensated Employees does not
exceed the ADP for Participants who are Non-highly Compensated
Employees by more than two (2) percentage points.
(3) SPECIAL RULES.
(a) The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have
Before Tax Contributions (and Qualified Non-elective
Contributions, or Qualified Matching Contributions, or
both, if treated as Elective Deferrals for purposes of
the ADP test) allocated to his or her accounts under two
or more arrangements described in Section 401(k) of the
Code, that are maintained by the Employer, shall be
determined as if such Before Tax Contributions (and, if
applicable, such Qualified Non-elective Contributions or
Qualified Matching Contributions, or both,) were made
under a single arrangement. If a Highly Compensated
Employee participates in two or more cash or
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deferred arrangements that have different Plan Years,
all cash or deferred arrangements ending with or within
the same calendar year shall be treated as a single
arrangement.
(b) In the event that this Plan satisfies the requirements
of Sections 401(k), 401(a)(4), or 410(b) of the Code
only if aggregated with one or more other plans, or if
one or more other plans satisfy the requirements of such
Sections of the Code only if aggregated with this Plan,
then this section shall be applied by determining the
ADP of Employees as if all such plans were a single
Plan. For Plan Years beginning after December 31, 1989,
plans may be aggregated in order to satisfy Section
401(k) of the Code only if they have the same Plan Year.
(c) For purposes of determining the ADP of a Participant who
is a 5-percent owner or one of the ten most highly-paid
Highly Compensated Employees, the Before Tax
Contributions (and Qualified Non-elective Contributions
or Qualified Matching Contributions, or both, if treated
as Before Tax Contributions for purposes of the ADP
test) and Compensation of such Participant shall include
the Before Tax Contributions (and, if applicable,
Qualified Non-elective Contributions) and Compensation
for the Plan Year of Family Members (as defined in
Section 414(q)(6) of the Code). Family Members, with
respect to such Highly Compensated Employees, shall be
disregarded as separate employees in determining the ADP
both for Participants who are Non-highly Compensated
Employees and for Participants who are Highly
Compensated Employees.
(d) For purposes of determining the ADP test, Before Tax
Contributions if treated as Before Tax Contributions and
Qualified Non-elective Contributions must be made before
the last day of the twelve-month period immediately
following the Plan Year to which contributions relate.
(e) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount
of Qualified Non-elective Contributions used in such
test.
(f) The determination and treatment of the ADP Amounts of
any Participant shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
(G) DISTRIBUTION OF EXCESS CONTRIBUTIONS. Notwithstanding any other
provision of the Plan, Excess Contributions, plus any income and minus
any loss allocable thereto, shall be distributed no later than the last
day of each Plan Year to Participants to whose accounts Excess
Contributions were allocated for the preceding Plan Year. If such
excess amounts are distributed more than 2-1/2 months after the last day
of the Plan Year in which such excess amounts arose, a ten (10) percent
excise tax will be imposed on the Employer maintaining the Plan with
respect to such amounts. Such distributions shall be
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made to Highly Compensated Employees on the basis of the respective
portions of the Excess Contributions attributable to each of such
Employees. Excess Contributions of Participants who are subject to the
Family Member aggregation rules shall be allocated among the Family
Members in proportion to the Before Tax Contributions (and amounts
treated as Before Tax Contributions) of each Family Member that is
combined to determine the combined ADP.
Excess Contributions (including the amounts recharacterized) shall be
treated as Annual Additions under the Plan.
(1) DETERMINATION OF INCOME OR LOSS. The Excess Contributions shall
be adjusted for income or loss up to the date of distribution.
The income or loss allocable to Excess Contributions is (1) the
income or loss allocable to the Participant's Before Tax
Contribution Account (and, if applicable, the Qualified
Non-elective Contribution Account or the Qualified Matching
Contribution Account or both) multiplied by a fraction, the
numerator of which is such Participant's Excess Contribution for
the year and the denominator is the Participant's account
balance attributable to Before Tax Contributions (and Qualified
Non-Elective Contributions or Qualified Matching Contributions
or both, if any of such contributions are included in the ADP
test) without regard to any income or loss occurring during such
taxable year, plus, (2) if Gap Period income or loss applies, as
elected in the Adoption Agreement, ten percent 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.
(2) ACCOUNTING FOR EXCESS CONTRIBUTIONS. Excess Contributions shall
be distributed from the Participant's Before Tax Contribution
Account and Qualified Matching Contribution Account (if
applicable) in proportion to the Participant's Before Tax
Contributions and Qualified Matching Contributions (to the
extent used in the ADP test) for the Plan Year. Excess
Contributions shall be distributed from the participant's
Qualified Non-elective Contribution Account only to the extent
that such Excess Contributions exceed the balance in the
Participant's Before Tax Contribution Account.
(H) RECHARACTERIZATION. If the Plan permits After Tax Contributions
(Employee Contributions), Excess Contributions may be recharacterized
pursuant to this subsection. Recharacterized amounts may be used in the
Plan from which Excess Contributions arose or in another Plan of the
employer with the same Plan Year.
(1) TREATMENT OF AMOUNTS RECHARACTERIZED. A Participant may treat
his or her Excess Contributions as an amount distributed to the
Participant and then contributed by the Participant to the Plan.
Recharacterized amounts will remain nonforfeitable and subject
to the same distribution requirements as Before Tax
Contributions. Amounts may not be recharacterized by a Highly
Compensated Employee to the extent that such amount in
combination with other After Tax Contributions made by that
Employee would exceed any stated limit under the
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Plan on After Tax Contributions.
(2) TIMING OF RECHARACTERIZATION. Recharacterization must
occur no later than two and one-half months after the
last day of the Plan Year in which such Excess
Contributions arose and is deemed to occur no earlier
than the date the last Highly Compensated Employee is
informed in writing of the amount recharacterized and
the consequences thereof. Recharacterized amounts will
be taxable to the Participant for the Participant's tax
year in which the Participant would have received them
in cash.
(I) ADJUSTMENTS TO BEFORE TAX CONTRIBUTION PERCENTAGES. Anything to
the contrary in this Article III notwithstanding, the Committee
shall have the right to reduce the percentages designated
pursuant to Section 3.2(B), of any one or more Highly
Compensated Employees in a manner prescribed or approved by the
Committee to the extent necessary or convenient to ensure that
at least one of the ADP tests set forth in Section 3.2(F) is
satisfied, but in no event shall such reduction result in a
percentage less than zero. Any such reduction shall be effected
quarterly, or more frequently as the Committee may determine and
each affected Highly Compensated Employee shall be deemed to
have elected the permissible percentage determined by the
Committee. The Committee may, on a prospective basis, and
subject to the percentage limits of Section 3.3 below, treat
amounts contributed to the Plan pursuant to a salary reduction
agreement as After Tax Contributions by each affected Highly
Compensated Employee; provided that if any such reduction cannot
be so treated because of the said percentage limits or because
of the nondiscrimination requirements of Code Section 401(m) or
otherwise, then the amount of such reduction (and any income
allocable thereto) shall be distributed to each affected Highly
Compensated Employee pursuant to Code Section 401(k)(8) or Code
Section 401(m)(6), if applicable, not later than the close of
the first 2-1/2 months of the Plan Year following the Plan Year
in which the contribution was made.
3.3 AFTER TAX CONTRIBUTIONS. (EMPLOYEE CONTRIBUTIONS).
(A) ALLOCATION OF AFTER TAX CONTRIBUTIONS. If the Employer selects
Item C(2)(b) in the Adoption Agreement, the Employer will deduct
from the Participant's pay and allocate to each Participant's
After Tax Contribution Account an amount equal to the percentage
of Compensation authorized by the Participant as an After Tax
Contribution. The Employer shall transmit After Tax
Contributions to the Trustee within thirty (30) days after the
month end in which such deductions are made.
(B) EMPLOYEE AUTHORIZES AFTER TAX CONTRIBUTIONS. To the extent
provided in the Adoption Agreement, a Participant may elect to
make After Tax Contributions under the Plan.
(1) ELECTION TO MAKE AFTER TAX CONTRIBUTIONS. An Employee
may elect to make After Tax Contributions as of his or
her Entry Date as described in Section 2.1(B). Such
election will not become effective before the Entry
Date.
(2) MODIFICATION AND TERMINATION OF AFTER TAX CONTRIBUTIONS.
A Participant's election to commence After Tax
Contributions shall remain in effect until
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modified or terminated. A Participant may increase or
decrease his or her After Tax Contributions as selected
by the Employer in Item C(3) of the Adoption Agreement
upon written notice to the Committee. A Participant may
terminate his or her election to make After Tax
Contributions at any time as of the Participant's next
wage payment date upon written notice to the Committee.
Any Participant who terminates After Tax Contributions
may elect to recommence making After Tax Contributions
as of the date selected by the Employer in Item C(3) of
the Adoption Agreement following his or her suspension
of contributions.
(C) MAXIMUM AMOUNT OF AFTER TAX CONTRIBUTIONS. A Participant's After
Tax Contributions are subject to any limitations imposed in Item
C(3) of the Adoption Agreement, calculated on an annual basis,
and any further limitations under the Plan.
(D) CASH BONUSES. If Item C(2)(c) of the Adoption Agreement is
selected, a Participant may also enter into a salary reduction
agreement on cash bonuses, directing that the amount of
such salary reduction be contributed to the Plan as an After Tax
Contribution, or received by the Participant in cash. A
Participant shall be afforded a reasonable period to elect to
defer amounts described in this Section 3.3 to the Plan. Such
election shall not become effective before the Participant's
Entry Date.
3.4 EMPLOYER CONTRIBUTIONS.
(A) MATCHING CONTRIBUTIONS. If elected by the Employer in the
Adoption Agreement, the Employer will or may make Matching
Contributions to the Plan. The amount of such Matching
Contributions shall be calculated by reference to the
Participants' Before Tax Contributions and/or After Tax
Contributions as specified by the Employer in the Adoption
Agreement.
(B) QUALIFIED MATCHING CONTRIBUTIONS. If elected by the Employer in
the Adoption Agreement, the Employer may make Qualified Matching
Contributions to the Plan.
In addition, in lieu of distributing Excess Contributions as
provided in Section 3.2(G) of the Plan, the Employer may make
Qualified Matching Contributions on behalf of Employees that are
sufficient to satisfy either the Actual Deferral Percentage or
the Average Contribution Percentage test, or both, pursuant to
regulations under the Code.
(C) QUALIFIED NON-ELECTIVE CONTRIBUTIONS. If elected by the
Employer in the Adoption Agreement, the Employer may make
Qualified Non-elective Contributions to the Plan.
In addition, in lieu of distributing Excess Contributions as
provided in Section 3.2(G) of the Plan, or Excess Aggregate
Contributions as provided in Section 3.5(C)) of the Plan, the
Employer may make Qualified Non-elective Contributions on behalf
of Employees that are sufficient to satisfy either the Actual
Deferral Percentage or the Average Contribution Percentage test,
or both, pursuant to regulations under the Code.
(D) SEPARATE ACCOUNTS. An Employer Matching Account shall be
maintained for a Participant's accrued benefit attributable to
Matching Contributions. A Qualified
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Matching Contribution Account shall be maintained for a
Participant's accrued benefit attributable to Qualified Matching
Contributions. A Qualified Non-elective Contribution Account
shall be maintained for a Participant's accrued benefit
attributable to Qualified Non-elective Contributions. Such
accounts shall be credited with the applicable contributions,
earnings and losses, distributions, and other adjustments.
(E) VESTING. Matching Contributions will be vested in accordance
with the Employer's election in Items C(4)(d) and C(4)(e) of the
Adoption Agreement. In any event, Matching Contributions shall
be fully vested at Normal Retirement Date, upon the complete or
partial termination of the Plan, or upon the complete
discontinuance of Matching Contributions, as applicable.
Qualified Non-elective Contributions and Qualified Matching
Contributions are nonforfeitable when made.
(F) FORFEITURES. Forfeitures of Matching Contributions shall be used
to reduce such contributions, or shall be allocated to
Participants, in accordance with the Employer's election in Item
C(6) of the Adoption Agreement.
(G) ALLOCATION OF DISCRETIONARY MATCHING CONTRIBUTIONS. If the
Employer selects Item C(4)(b) in the Adoption Agreement, any
discretionary Matching Contributions shall be allocated as of
the allocation date specified in Item C(4)(c)(ii) of the
Adoption Agreement, to the Employer Matching Account of each
Participant who has made Before Tax Contributions and/or After
Tax Contributions eligible for matching. If Item C(4)(c)(ii)(e)
has been selected (imposing a last day of the Plan Year
requirement) the allocation shall be made to a Participant who
(1) if a Participant in a nonstandardized Plan, is employed or
on leave of absence on the last day of the Plan Year, and (2) if
a Participant in a standardized Plan, either completes more than
500 Hours of service during the Plan Year or is employed on the
last day of the Plan Year. The following Participants will also
share in the Matching Contributions for the year, if elected in
the Adoption Agreement: (1) Participants in a nonstandardized
Plan whose employment terminated before the end of the Plan Year
because of retirement, death, disability or as specified in the
Adoption Agreement, and (2) Participants in a standardized Plan
whose employment terminated before the end of the Plan Year
because of retirement, death, disability or as specified in the
Adoption Agreement, and completed 500 Hours of Service or less.
Notwithstanding the foregoing, if the Employer makes a
contribution prior to the end of the Plan Year, Participants
shall be entitled to an allocation of that contribution when
made, without regard to any end of the Plan Year requirement.
(H) LIMITATION ON EMPLOYER CONTRIBUTIONS. The Employer's
contributions for any Plan Year shall not exceed the maximum
amount which the Employer may deduct pursuant to Section 404 of
the Code.
3.5 LIMITATIONS ON AFTER TAX CONTRIBUTIONS (EMPLOYEE CONTRIBUTIONS) AND
MATCHING CONTRIBUTIONS.
(A) CONTRIBUTION PERCENTAGE. The ACP for Participants who are Highly
Compensated Employees for each Plan Year and the ACP for
Participants who are Non-highly Compensated Employees for the
same Plan Year must satisfy one of the following tests:
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(1) 1.25 LIMIT. The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed
the ACP for Participants who are Non-highly Compensated
Employees for the same Plan Year by 1.25, or
(2) 2.0 LIMIT. The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed
the ACP for Participants who are Non-highly Compensated
Employees for the same Plan Year multiplied by two (2),
provided that the ACP for Participants who are Highly
Compensated Employees does not exceed the ACP for
Participants who are Non-highly Compensated Employees by
more than two (2) percentage points.
(B) SPECIAL RULES.
(1) MULTIPLE USE. If one or more Highly Compensated Employees
participate in both a cash or deferred arrangement and a Plan
subject to the ACP test maintained by the Employer and the sum
of the ADP and ACP of those Highly Compensated Employees subject
to either or both tests exceeds the Aggregate Limit, then the
ACP of those Highly Compensated Employees who also participate
in a cash or deferred arrangement will be reduced (beginning
with such Highly Compensated Employee whose ACP is the highest)
so that the limit is not exceeded. The amount by which each
Highly Compensated Employee's Contribution Percentage amounts is
reduced shall be treated as an Excess Aggregate Contribution.
The ADP and ACP of the Highly Compensated Employees are
determined after any corrections required to meet the ADP and
ACP tests. Multiple use does not occur if either the ADP and ACP
of the Highly Compensated Employees does not exceed 1.25
multiplied by the ADP and ACP of the Non-highly Compensated
Employees.
(2) AGGREGATION OF CONTRIBUTION PERCENTAGES. For purposes of this
section, the Contribution Percentage for any Participant who is
a Highly Compensated Employee and who is eligible to have
Contribution Percentage Amounts allocated to his or her accounts
under two or more plans described in Section 401(a) of the Code,
or arrangements described in Section 401(k) of the Code, that
are maintained by the Employer, shall be determined as if the
total of such Contribution Percentage Amounts was made under
each Plan. If a Highly Compensated Employee participates in two
or more cash or deferred arrangements that have different Plan
years all cash or deferred arrangements ending with or within
the same calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be treated as
separate if mandated to be disaggregated under regulations under
Section 401(m) of the Code.
(3) AGGREGATION OF PLANS. In the event that this Plan satisfies the
requirements of Sections 401(m), 401(a)(4) or 410(b) of the Code
only if aggregated with one or more other plans, or if one or
more other plans satisfy the requirements of such sections of
the Code only if aggregated with this Plan, then this section
shall be
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applied by determining the Contribution Percentage of Employees
as if all such plans were a single Plan. For Plan Years
beginning after December 31, 1989, plans may be aggregated in
order to satisfy Section 401(m) of the Code only if they have
the same Plan Year.
(4) FAMILY AGGREGATION. For purposes of determining the Contribution
Percentage of a Participant who is a five-percent owner or one
of the ten most highly-paid Highly Compensated Employees, the
Contribution Percentage Amounts and Compensation of such
Employee shall include the Contribution Percentage Amounts and
Compensation for the Plan Year of Family Members, as defined in
Section 414(q)(6) of the Code. Family Members, with respect to
Highly Compensated Employees, shall be disregarded as separate
employees in determining the Contribution Percentage both for
Participants who are Non-highly Compensated Employees and for
Participants who are Highly Compensated Employees.
(5) TIME OF CONTRIBUTIONS. For purposes of determining the
Contribution Percentage test, After Tax Contributions are
considered to have been made in the Plan Year in which
contributed to the Trust. Matching Contributions and Qualified
Non-elective Contributions will be considered made for a Plan
Year if made no later than the end of the twelve-month period
beginning on the day after the close of the Plan Year.
(6) RECORDS. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the amount of
Qualified Non-elective Contributions or Qualified Matching
Contributions, or both, used in such test.
(7) REGULATIONS. 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.
(C) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
(1) GENERAL RULE. Notwithstanding any other provision of this Plan,
Excess Aggregate Contributions, plus any income and minus any
loss allocable thereto, shall be forfeited, if forfeitable, or
if not forfeitable, distributed no later than the last day of
each Plan Year to Participants to whose accounts Excess
Aggregate Contributions were allocated for the preceding Plan
Year. Excess Aggregate Contributions of Participants who are
subject to the Family Member aggregation rules shall be
allocated among the Family Members in proportion to the After
Tax and Matching Contributions (or amounts treated as Matching
Contributions) of each Family Member that is combined to
determine the combined ACP. If such Excess Aggregate
Contributions are distributed more than 2-1/2 months after the
last day of the Plan Year in which such excess amounts arose, a
ten (10) percent excise tax will be imposed on the Employer
maintaining the Plan with respect to those amounts. Excess
Aggregate Contributions shall be treated as Annual Additions
under the Plan.
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(2) DETERMINATION OF INCOME OR LOSS. Excess Aggregate Contributions
shall be adjusted for 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 After Tax Contribution Account, Matching
Contribution Account, Qualified Matching Contribution Account,
(if any, and if all amounts therein are not used in the ADP
test) and, if applicable, the Qualified Non-elective
Contribution Account and Before Tax 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 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.
(3) FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS. Forfeitures of
Excess Aggregate Contributions may either be reallocated to the
accounts of Non-Highly Compensated Employees or applied to
reduce Employer Contributions, as elected by the Employer in
Item HH(4) of the Adoption Agreement.
(4) ACCOUNTING FOR EXCESS AGGREGATE CONTRIBUTIONS. Excess
Aggregate Contributions shall be forfeited, if forfeitable, or
distributed on a pro-rata basis from the Participant's After Tax
Contribution Account and Matching Contribution Account and
Qualified Matching Contribution Account (and, if applicable, the
Participant's Qualified Non-elective Contribution Account and
Before Tax Contribution Account, or both).
3.6 NET PROFITS NOT REQUIRED IF SO ELECTED IN ADOPTION AGREEMENT. If the
Employer elects, Matching Contributions may be made without regard to
Net Profits in accordance with Item C(4)(c)(iii) of the Adoption
Agreement. If the Plan is a profit-sharing Plan, the Plan shall
continue to be designed to qualify as a profit-sharing Plan for
purposes of Sections 401(a), 402, 412, and 417 of the Code. Net Profits
shall not be required for Before Tax Contributions or After Tax
Contributions to be made to the Plan.
3.7 FORM, PAYMENT AND ALLOCATION OF CONTRIBUTIONS. All contributions under
this Article III made for a Plan Year shall be made in cash, and shall
be delivered to the Trustee at such time or times as shall be agreed
upon between the Committee and the Trustee. The Committee shall instruct
the Trustee as to the allocation of contributions to the Participant's
accounts.
3.8 DISTRIBUTION REQUIREMENTS FOR BEFORE TAX CONTRIBUTION ACCOUNT. Before
Tax Contributions, Qualified Non-elective Contributions and Qualified
Matching Contributions, and income allocable to each are not
distributable to a Participant or his or her Beneficiary or
Beneficiaries, in accordance with such Participant's, Beneficiary's or
Beneficiaries' election, earlier than upon separation from service,
death, disability, or as selected in the Adoption Agreement. Such
amounts may not be distributed unless in
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accordance with the Participant's election made pursuant to rules
established by the Committee as authorized in the Adoption Agreement,
and upon:
(A) Termination of The Plan without the establishment of another
defined contribution Plan, other than an employee stock
ownership Plan (as defined in Section 4975(e) or Section 409 of
the Code) or a simplified employee pension Plan as defined in
Section 408(k).
(B) The disposition by a corporation to an unrelated corporation of
substantially all of the assets (within the meaning of Section
409(d)(2) of the Code) used in a trade or business of such
corporation if such corporation continues to maintain this Plan
after the disposition, but only with respect to Employees who
continue employment with the corporation acquiring such assets.
(C) The disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary (within the meaning of
Section 409(d)(3) of the Code) if such corporation continues to
maintain this Plan, but only with respect to Employees who
continue employment with such subsidiary.
(D) The attainment of age 59-1/2 in the case of a profit-sharing
Plan, or the attainment of the Plan's Normal Retirment Date, if
either or both are selected in the Adoption Agreement.
(E) The Hardship of the Participant as described in Section 3.9, if
selected in the Adoption Agreement.
All distributions that may be made pursuant to one or more of
the foregoing distributable events are subject to the spousal
and Participant consent requirements (if applicable) contained
in Sections 411(a)(11) and 417 of the Code. In addition,
distributions after March 31, 1988, that are triggered by any of
the first three events above, in Sections 3.8(A), (B) and (C)
must be made in a lump sum.
3.9 HARDSHIP DISTRIBUTION.
(A) AMOUNT AVAILABLE FOR WITHDRAWAL. Upon the written request of a
Participant received and approved by the Committee, a
Participant may withdraw, in cash, up to one hundred per cent
(100%) of the amount of such Participant's Before Tax
Contributions (and any earnings credited to a Participant's
account as of the end of the last Plan Year ending before July
1, 1989) or such lesser amount as the Committee may approve, in
the event of Hardship. For purposes of this Section, Hardship is
defined as immediate and heavy financial need of the Employee
where such Employee lacks other available resources. Hardship
distributions are subject to the spousal consent requirements
contained in Sections 401(a)(11) and 417 of the Code. The
Committee is authorized to and shall request from the
Participant making such a request such evidence as the Committee
deems necessary and appropriate to substantiate a Hardship, the
amount of expenses resulting from such Hardship and the other
resources of the Participant reasonably available to meet such
expenses.
(B) SPECIAL RULES:
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(1) IMMEDIATE AND HEAVY NEED. The following are the only
financial needs considered immediate and heavy: expenses
incurred or necessary for medical care, described in
Section 213(d) of the Code, of the Employee, the
Employee's Spouse or dependents; the purchase (excluding
mortgage payments) of a principal residence for the
Employee; payment of tuition and related educational
fees for the next twelve months of post-secondary
education for the Employee, the Employee's Spouse,
children or dependents; or the need to prevent the
eviction of the Employee from, or a foreclosure on the
mortgage of, the Employee's principal residence.
(2) SATISFACTION OF NEED. A distribution will be considered
as necessary to satisfy an immediate and heavy financial
need of the Employee only if:
(a) The Employee has obtained all distributions, other than
Hardship distributions, and all nontaxable loans under
all plans maintained by the Employer;
(b) All plans maintained by the Employer provide that the
Employee's Before Tax Contributions (and After Tax
Contributions) will be suspended for twelve months
after the receipt of the Hardship distribution;
(c) The distribution is not in excess of an immediate and
heavy financial need (including amounts necessary to
pay any federal, state or local income taxes or
penalties reasonably anticipated to result from the
distribution); and
(d) All plans maintained by the Employer provide that the
Employee may not make Before Tax Contributions for the
Employee's taxable year immediately following the
taxable year of the Hardship distribution in excess of
the applicable limit under Section 402(g) of the Code
for such taxable year less the amount of such
Employee's Before Tax Contributions for the taxable
year of the Hardship distribution.
(3) TAXES AND PENALTIES. The amount of an immediate and heavy
financial need may include any amounts necessary to pay any
federal, state or local income taxes or penalties reasonably
anticipated to result from the distribution.
3.10 WITHDRAWAL OF AFTER TAX CONTRIBUTIONS. Subject to the provisions of the
Plan, in accordance with rules for giving notice as determined by the
Committee, a Participant may withdraw as of the first Accounting Date
subsequent to receipt by the Committee of such notice:
(A) MAXIMUM AMOUNT. An amount equal to not more than 100% of the
Participant's After Tax Contribution Account determined as of
such Accounting Date. No Participant who has made any withdrawal
of After Tax Contributions in the twelve (12) months preceding
the giving of such notice may make a withdrawal under this
Section. A Participant who makes a withdrawal of After Tax
Contributions shall be required to suspend After Tax
Contributions for a period of six (6) months, commencing with
the
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effective date of such withdrawal. A Participant may, pursuant
to Article III, elect to commence After Tax Contributions as of
the first day of the first payroll period of the month following
the conclusion of such suspension period, or the first payroll
period of any month thereafter, upon advance written notice to
the Committee.
(B) MINIMUM AMOUNT. Notwithstanding anything to the contrary in this
Section 3.10, any withdrawal made pursuant to Section 3.10(A)
shall be for a minimum whole dollar amount not less than Five
Hundred Dollars ($500.00); except that if the amount available
for withdrawal is less than Five Hundred Dollars ($500.00) then
the minimum amount of the withdrawal shall be the amount
available.
(C) FORFEITURES. No forfeitures will occur solely as a result of an
Employee's withdrawal of After Tax Contributions.
(D) LOAN SECURITY. Notwithstanding anything to the contrary in this
Section 3.10, a Participant may not make a withdrawal pursuant
to this Section of any portion of the Participants vested
interest which has been assigned to secure repayment of a loan
in accordance with Section 11.10, below, until such time as the
Committee shall have released said portion so assigned.
3.11. WITHDRAWAL OF MATCHING CONTRIBUTIONS. Subject to the provisions of the
Plan, in accordance with rules for giving notice as determined by the
Committee, and as elected in the Adoption Agreement, a Participant may
withdraw as of the first Accounting Date subsequent to receipt by the
Committee of such notice:
(A) MAXIMUM AMOUNT. An amount equal to not more than 100% of the
vested amounts in the Participant's Matching Contribution
Account determined as of such Accounting Date. No Participant
who has made any withdrawal of Matching Contributions in the
twelve (12) months preceding the giving of such notice may make
a withdrawal under this Section.
(B) MINIMUM AMOUNT. Notwithstanding anything to the contrary in this
Section 3.11, any withdrawal made pursuant to Section 3.11(A)
shall be for a minimum whole dollar amount not less than Five
Hundred Dollars ($500.00); except that if the amount available
for withdrawal is less than Five Hundred Dollars ($500.00) then
the minimum amount of the withdrawal shall be the amount
available.
(C) FORFEITURES. No forfeitures will occur solely as a result of an
Employee's withdrawal of Matching Contributions.
(D) LOAN SECURITY. Notwithstanding anything to the contrary in this
Section 3.11, a Participant may not make a withdrawal, pursuant
to this Section of any portion of the Participant's vested
interest which has been assigned to secure repayment of a loan
in accordance with Section 11.10, below, until such time as the
Committee shall have released said portion so assigned.
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ARTICLE IV
OTHER CONTRIBUTIONS
4.1 EMPLOYER CONTRIBUTIONS.
A MONEY PURCHASE PENSION PLANS ONLY. As elected by the Employer in
the Adoption Agreement, the Employer shall make contributions to
the Plan.
B PROFIT SHARING PLANS AND 401(k) PLANS ONLY.
(1) EMPLOYER CONTRIBUTIONS. For each Plan Year, the
Employer, shall or may make contributions to the Plan in
an amount as selected in the Adoption Agreement or
determined by Resolution of the Board of Directors of
the Employer.
(2) NET PROFITS NOT REQUIRED IF SO ELECTED IN ADOPTION
AGREEMENT. If the Employer elects, Employer
Contributions under a profit sharing Plan may be made
without regard to Net Profits in accordance with Item
B(8)(a)(iii) of the Adoption Agreement. The Plan shall
continue to be designed to qualify as a profit-sharing
Plan for purposes of Sections 401(a), 402, 412, and 417
of the Code.
4.2 SEPARATE ACCOUNTS. An Employer Contribution Account shall be maintained
for each Participant to which will be credited the employer pension or
profit sharing contributions ("Employer Contributions"). Such accounts
shall be credited with the applicable contributions, earnings and
losses, distributions, and other adjustments.
4.3 VESTING. Employer Contributions will be vested in accordance with the
Employer's election in Item B(7), as applicable, of the Adoption
Agreement. In any event, Employer Contributions shall be fully vested at
Normal Retirement Date, upon the complete or partial termination of the
Plan, and, in profit sharing plans, upon the complete discontinuance of
Employer Contributions.
4.4 LIMITATION ON EMPLOYER CONTRIBUTIONS. The Employer's Contribution for
any Plan Year shall not exceed the maximum amount which the Employer may
deduct pursuant to Section 404 of the Code. The Employer Contributions
shall be payable not later than the time for filing the Employer's
federal income tax return, including extensions.
4.5 EMPLOYEE CONTRIBUTIONS.
(A) DISTRIBUTIONS FROM QUALIFIED PLANS--ROLLOVERS.
(1) If the Employer selects Item B(9) in the Adoption
Agreement, an Employee who is entitled to make a
rollover contribution described in Section 402(a)(5),
Section 403(a)(4) or Section 408(d)(3) of the Code
("Rollover Contribution"), may elect, with the approval
of the Committee, to make such a Rollover Contribution
to the Plan. The Employee shall deliver or cause to be
delivered, to the Trustee the cash which constitutes
such Rollover Contribution at such time or times and in
such manner as shall be specified by the Committee. As
of the date of receipt of such property by the Trustee,
a Rollover Account shall be established in the name
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of the Employee who has made a Rollover Contribution as
provided in this Section 4.5 and shall be credited with
such assets on such date. A Rollover Contribution shall
not be deemed to be a contribution of such Employee for
any purpose of this Agreement. All Rollover
Contributions and the earnings on these contributions
shall be immediately fully vested and nonforfeitable.
(2) Subject to the provisions of the Plan, on advance notice
given to the Committee in accordance with rules
established by the Committee a Participant in a profit
sharing Plan or 401(k) profit sharing Plan may withdraw
all or any part (in any whole dollar amount specified by
the Participant) of the value of any Rollover Account,
provided no Participant who has made any withdrawal
under Section 4.5(A) during the calendar year in which
such notice is given may make an additional withdrawal
under this Section 4.5(A) during the remainder of such
year.
(B) NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS AND MATCHING CONTRIBUTIONS
NO LONGER ACCEPTED.
(1) This Plan will not accept nondeductible employee
contributions and matching contributions except pursuant
to a 401(m) arrangement described in Article III.
Employee contributions for Plan Years beginning after
December 31, 1986, together with any matching
contributions as defined in Section 401(m) of the Code,
will be limited so as to meet the nondiscrimination test
of Section 401(m).
(2) A separate account will be maintained by the Trustee for
the previously made nondeductible employee contributions
of each Participant.
(3) Employee contributions and earnings thereon will be
nonforfeitable at all times. No forfeitures will occur
solely as a result of an Employee's withdrawal of
Employee contributions.
(C) DEDUCTIBLE EMPLOYEE CONTRIBUTIONS NO LONGER ACCEPTED. The
Committee will not accept deductible 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 Fund
in the same manner as described in Article VI of the Plan. No
part of the deductible voluntary contribution account will be
used to purchase life insurance. Subject to Section 7.10, Joint
and survivor annuity requirements (if applicable), the
Participant may withdraw any part of the deductible voluntary
contribution account by making a written application to the
Committee.
4.6 EXCLUSIVE BENEFIT. Except as provided in the Plan, the Employer has no
beneficial interest in the Trust Fund, and no part of the Trust Fund
shall revert or be repaid to the Employer, directly or indirectly, or
diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries, except that (1) any contribution
made by the Employer because of a mistake of fact must be returned to
the Employer within one year of the contribution; (2) in the event the
deduction of a contribution made by the Employer is disallowed under
Section 404 of the Code,
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such contribution (to the extent disallowed) must be returned to the
Employer within one year of the disallowance of the deduction; and (3)
in the event that the Commissioner of Internal Revenue determines that
the Plan is not initially qualified under the Internal Revenue Code, any
contribution made incident to that initial qualification by the Employer
must be returned to the Employer within one year after the date the
initial qualification is denied, but only if the application for the
qualification is made by the time prescribed by law for filing the
Employer's return for the taxable year in which the Plan is adopted or
such later date as the Secretary of the Treasury may prescribe.
4.7 FORM, PAYMENT AND ALLOCATION OF CONTRIBUTIONS. Contributions made for a
Plan Year shall be made in cash; provided, however, that if the Plan has
an Employer Stock Fund, contributions for the Employer Stock Fund may be
made in Employer Stock. Contributions shall be delivered to the Trustee
at such time or times as shall be agreed upon between the Committee and
the Trustee. The Committee shall instruct the Trustee as to the
allocation of contributions to the Participant's accounts pursuant to
the elections made in the Adoption Agreement. Employer Stock contributed
to the Plan shall be valued at fair market value at the time of its
transfer to the Plan.
4.8 SAFE HARBOR ALLOCATION. Notwithstanding anything to the contrary in the
Adoption Agreement, in the event the requirements of Code Sections
401(a)(16) or 410(b) are not met during the Plan Year, Employer
Contributions will be allocated to Eligible Employees in the following
order until the applicable requirements are met:
(A) Eligible Employees employed by the Employer on the last day of
the Plan Year and who have completed more than 750 Hours of
Service during the Plan Year;
(B) Eligible Employees employed by the Employer on the last day of
the Plan Year and who have completed more than 500 but less than
750 Hours of Service during the Plan Year;
(C) Eligible Employees employed by the Employer on the last day of
the Plan Year and who have completed 500 or fewer Hours of
Service during the Plan Year;
(D) Eligible Employees who have completed 750 or more Hours of
Service during the Plan Year;
(E) Eligible Employees who have completed more than 500 but less
than 750 Hours of Service during the Plan Year.
In no event will Employees who have terminated employment with
the Employer during the Plan Year and who have completed 500 or
fewer Hours of Service during the Plan Year receive any
allocation of Employer Profit Sharing Contributions.
ARTICLE V
PERIOD OF PARTICIPATION
5.1 TERMINATION DATES. A Participant's Termination Date will be the date on
which his employment with the Employer is terminated because of the
first to occur of the following
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events:
(A) NORMAL RETIREMENT. The Participant retires from the employ of
the Employer upon attaining the Normal Retirement Date selected
in the Adoption Agreement. If the Employer enforces a mandatory
retirement age the Normal Retirement Date is the date the
Participant attains the lesser of that mandatory age or the age
specified in the Adoption Agreement.
(B) EARLY RETIREMENT. The Participant retires from the employ of
the Employer upon attaining the Early Retirement Date selected
in the Adoption Agreement. If a Participant terminates
employment prior to meeting any minimum age specified in the
Adoption Agreement but after having completed the specified
minimum service requirement, the terminated Participant shall be
entitled to an early retirement benefit upon attaining the
minimum age required.
(C) LATE RETIREMENT. The Participant retires from the employ of the
Employer after the Normal Retirement Date. A Participant who
continues to work beyond the Normal Retirement Date shall
continue participation in the Plan on the same basis as the
other Participants.
(D) DISABILITY RETIREMENT. The Participant is terminated from the
employ of the Employer because of Disability, as determined by
the Committee, as defined in Section 1.1(I), irrespective of his
age.
(E) DEATH. The Participant's death.
(F) OTHER TERMINATION. The Participant terminates employment before
Normal, Early, Late or Disability Retirement.
If a Participant continues in the employ of the Employer but no
longer is a member of a class of Employees to which the Plan has
been and continues to be extended by the Employer, the
Participant's Termination Date nevertheless will be as stated
above and his or her accounts will be held as stated in Section
5.2.
5.2 RESTRICTED PARTICIPATION. When distribution of part or all of the
benefits to which a Participant is entitled under the Plan is deferred
beyond or cannot be made until after the Participant's Termination Date,
or during any period that a Participant continues in the employ of the
Employer but no longer is a member of a class of Employees to which the
Plan has been and continues to be extended by the Employer, the
Participant, or in the event of his or her death such Participant's
Beneficiary, will be considered and treated as a Participant for all
purposes of the Plan, except that no share of contributions or
forfeitures will be credited to his or her Accounts (a) for any period
such Participant continues in the employ of the Employer but no longer
is a member of a class of Employees to which the Plan has been and
continues to be extended by the Employer, or (b) after the Participant's
Termination Date.
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ARTICLE VI
ACCOUNTING
6.1 ACCOUNTS ESTABLISHED. There shall be established and maintained for each
Participant such accounts as are applicable, to reflect such
Participant's interest in each Investment Fund.
All income, expenses, gains and losses attributable to each account
shall be separately accounted for. The interest of each Participant in
the Trust Fund at any time shall consist of the amount credited to his
or her accounts as of the last preceding Valuation Date plus credits and
minus debits to such accounts since that date.
6.2 EMPLOYER CONTRIBUTIONS CONSIDERED MADE ON LAST DAY OF PLAN YEAR. Unless
otherwise elected in the Adoption Agreement, for purposes of this
Article VI, the Employer's Contribution under Article IV will be
considered to have been made on the last day of the Plan Year for which
contributed.
6.3 ACCOUNTING STEPS. As of each Valuation Date, the Trustee shall:
(A) Charge to the prior account balances all previously uncharged
payments or distributions made from Participants' accounts since
the last preceding Valuation Date.
(B) Adjust the net credit balances in Participants' accounts upward
or downward, pro rata, so that the total of such net credit
balances will equal the then adjusted net worth of the Trust
Fund;
(C) Allocate and credit Employer Contributions and any forfeitures
(as described in Section 7.3) that are to be allocated and
credited as of that date in accordance with Sections 6.5 and
6.6.
Notwithstanding the preceding, the Trustee shall be authorized
to utilize such other method of accounting for the gains or
losses experience by the Trust as may accurately reflect each
Participant's interest therein.
6.4 ALLOCATION OF EMPLOYER CONTRIBUTIONS.
(A) DISCRETIONARY PROFIT SHARING CONTRIBUTIONS.
(1) NONSTANDARDIZED PLANS. If the Plan is a nonstandardized
Plan, Employer Contributions for the Plan Year shall be
allocated among and credited to the Employer
Contribution Accounts of each Participant, including a
Participant on leave of absence, who is entitled to
receive a contribution as elected by the Employer in the
Adoption Agreement, pursuant to the formula elected by
the Employer in Item B(8)(b) of the Adoption Agreement.
If elected in the Adoption Agreement, Participants whose
employment terminated because of retirement, death or
disability before the end of the Plan Year will share in
the contributions for the year if elected in the
Adoption Agreement.
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(2) STANDARDIZED PLANS. Employer Contributions for the Plan
Year shall be allocated among and credited to the
Employer Contribution Account of each Participant who
either completes more than 500 Hours of Service during
the Plan Year (or such lesser number of Hours of Service
as may be specified in the Adoption Agreement) or is
employed on the last day of the Plan Year pursuant to
the formula elected by the Employer in Item B(8)(b) of
the Adoption Agreement. If elected in the Adoption
Agreement, Participants whose employment terminated
before the end of the Plan Year because of retirement,
death or disability will share in the contributions for
the year if elected in the Adoption Agreement.
(B) MONEY PURCHASE PENSION PLANS. Employer Contributions will be
made and allocated to the Employer Contribution Accounts of
Participants for the Plan Year as elected in the Adoption
Agreement.
(C) PAIRED PLANS. Notwithstanding anything in the Plan to the
contrary, if the Employer maintains two plans which are Paired
Plans, only one may contain an allocation, as elected in the
Adoption Agreement, utilizing permitted disparity as defined in
Code Section 401(l).
6.5 ALLOCATION OF FORFEITURES. As elected in Items B(11) and/or C(6) of the
Adoption Agreement, as of the last day of the Plan Year, any forfeitures
which arose under the Plan during that year shall be used to: (i) pay
the expenses of the Plan; (ii) reduce Employer Contributions; or, (iii)
be allocated to Participants accounts, as may be selected in the
Adoption Agreement. Forfeitures under (iii) shall be allocated as
provided in Section 6.4.
6.6 LIMITATION ON ALLOCATIONS.
(A) DEFINITIONS: For purposes of limiting allocations pursuant to
this section, the following definitions shall apply:
(1) ANNUAL ADDITIONS: The sum of the following amounts
credited to a Participant's account for the Limitation
Year:
(a) Employer Contributions;
(b) Employee Contributions;
(c) forfeitures;
(d) amounts allocated, after March 31, 1984, to an
individual medical account, as defined in
Section 415 (l)(2) of the Code, which is part of
a pension or annuity Plan maintained by the
Employer are treated as Annual Additions to a
defined contribution Plan. Also amounts derived
from contributions paid or accrued after
December 31, 1985, in taxable years ending after
such date, which are attributable to
post-retirement medical benefits, allocated to
the separate account of a Key Employee, as
defined in Section 419A(d)(3) of the Code, under
a welfare benefit
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fund, as defined in Section 419(e) of the Code,
maintained by the Employer are treated as Annual
Additions to a defined contribution Plan; and,
(e) allocations under a simplified employee pension.
For this purpose, any Excess Amount applied under
Sections 6.6(B)(4) or 6.6(C)(6) in the Limitation Year
to reduce Employer Contributions will be considered
Annual Additions for such Limitation Year.
(2) COMPENSATION: Compensation as described below,
interpreted consistently with the provisions of Code
Section 414(s) and the regulations issued thereunder,
as may be selected by the Employer, and uniformly
applied for testing purpose:
(a) W-2 COMPENSATION (WAGES, TIPS, AND OTHER
COMPENSATION - required to be reported under
Sections 6041, 6051, and 6052 of the Code, as
reported on Form W-2). Compensation is
defined as wages within the meaning of Section
3401(a) and all other payments of compensation
to an Employee by the Employer (in the course of
the Employer's trade or business) for which the
Employer is required to furnish the Employee a
written statement under Sections 6041(d),
6051(a)(3) and 6052 of the Code. Compensation
must be determined without regard to any rules
under Section 3401(a) that limit the
remuneration included in wages based on the
nature or location of the employment or the
services performed (such as the exception for
agricultural labor in Section 3401(a)(2).
(b) WITHHOLDING COMPENSATION (SECTION 3401(a)).
Compensation is defined as wages within the
meaning of Section 3401(a) for the purposes of
income tax withholding at the source but
determined without regard to any rules that
limit the remuneration included in wages based
on the nature or location of the employment or
the services performed (such as the exception
for agricultural labor in Section 3401(a)(2)).
(c) SECTION 415 SAFE-HARBOR COMPENSATION.
Compensation is defined as wages, salaries, and
fees for professional services and other amounts
received (without regard to whether or not an
amount is paid in cash) for personal services
actually rendered in the course of employment
with the Employer maintaining the Plan to the
extent that the amounts are includible in gross
income (including, but not limited to,
commissions paid salesman, compensation for
services on the basis of a percentage of
profits, commissions on insurance premiums,
tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under
a nonaccountable Plan (as described in
1.62-2(c)), and excluding the following:
(i) Employer contributions to a Plan of
deferred compensation which are not
includible in the Employee's gross
income for the taxable year in which
contributed, or Employer contributions
under a simplified employee pension Plan
to the extent such contributions
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are deductible by the Employee, or any
distributions from a Plan of deferred
compensation;
(ii) amounts realized from the exercise of
a non-qualified stock option, or
when restricted stock (or property)
held by an Employee becomes freely
transferable or is no longer subject
to a substantial risk of forfeiture;
(iii) amounts realized from the sale,
exchange or other disposition of stock
acquired under a qualified stock option;
and
(iv) other amounts which received special
tax benefits, or contributions made by
the Employer (whether or not under a
salary reduction agreement) towards the
purchase of an annuity contract
described in Section 403(b) of the
Code (whether or not the contributions
are actually excludable from the gross
income of the Employee).
Notwithstanding anything in the definitions of
Compensation preceding, at the discretion of the
Employer, uniformly applied, Compensation shall, for
purposes of ADP and ACP testing as provided for in
Article III, include amounts not currently includible in
income pursuant to Code Sections 125, 402(a)(8), 402(h)
and 403(b). For allocation purposes, such amounts shall
be includible is elected in the Adoption Agreement.
For any self-employed Individual, Compensation will
mean Earned Income.
For Limitation Years beginning after December 31, 1991,
for purposes of applying the limitations of Section 6.6,
Compensation for a Limitation Year is the compensation
actually paid or made available during such Limitation
Year.
Notwithstanding the preceding sentence, Compensation for
a Participant in a defined contribution Plan who is
permanently and totally disabled (as defined in Section
22(e)(3) of the Code) 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
permanently and totally disabled; such imputed
compensation for the disabled Participant may be taken
into account only if the Participant is not a Highly
Compensated Employee, (as defined in Section 414(q) of
the Code), and contributions made on behalf of such
Participant are nonforfeitable when made.
(3) DEFINED BENEFIT FRACTION: A fraction, the numerator of
which is the sum of the Participant's Projected Annual
Benefits under all the defined benefit plans (whether
or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of
the dollar limitation determined for the Limitation
Year under Sections 415(b) and (d) of the Code or 140
percent of the Participant's Highest Average
Compensation, including any adjustments under
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Section 415(b) of the Code.
Notwithstanding the above if the Participant was a
participant as of the first day of the first Limitation
Year beginning after December 31, 1986, in one or more
defined benefit plans maintained by the Employer which
were in existence on May 6, 1986, the denominator of
this fraction will not be less than 125 per cent of the
sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last
Limitation Year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of
the Plan after May 5, 1986. The preceding sentence
applies only if the defined benefit plans individually
and in the aggregate satisfied the requirements of
Section 415 for all Limitation Years beginning before
January 1, 1987.
(4) DEFINED CONTRIBUTION DOLLAR LIMITATION: For purposes of
calculating the Maximum Permissible Amount: $30,000 or,
if greater, one-fourth of the defined benefit dollar
limitation set forth in Section 415(b)(1) of the Code
as in effect for the Limitation Year.
(5) DEFINED CONTRIBUTION FRACTION: A fraction, the
numerator of which is the sum of the Annual Additions
to the Participant's accounts under all the defined
contribution plans (whether or not terminated)
maintained by the Employer for the current and all
prior Limitation Years, (including the Annual Additions
attributable to the Participant's nondeductible 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 Section 419(e) of the Code,
individual medical accounts, as defined in Section
415(l)(2) of the Code, and simplified employee pension,
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 125 percent of the dollar limitation
determined under Sections 415(b) and (d) of the Code in
effect under Section 415(c)(1)(A) of the Code or 35
percent of the Participant's Compensation for such year.
If the Employee was a participant as of the end of the
first day of the first Limitation Year beginning after
December 31, 1986, in one or more defined contribution
plans maintained by the Employer which were in existence
on May 6, 1986, the numerator of this fraction will be
adjusted if the sum of this fraction and the Defined
Benefit Fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount
equal to the product of (1) the excess of the sum of the
fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the
numerator of this fraction. The adjustment is
calculated using the fractions as they would be computed
as of the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in
the terms and conditions of the Plan made after May 5,
1986, but using the Section 415 limitation applicable to
the first Limitation
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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.
(6) EMPLOYER: For purposes of this Section 6.6: the
Employer that adopts this Plan, and all members of a
controlled group of corporations (as defined in section
414(b) of the Code as modified by Section 415(h), all
commonly controlled trades or businesses (as defined in
Section 414(c) as modified by Section 415(h)) or
affiliated service groups (as defined in Section 414(m))
of which the adopting Employer is a part, and any other
entity required to be aggregated with the Employer
pursuant to regulations under Section 414(o) of the
Code.
(7) EXCESS AMOUNT: The excess of the Participant's Annual
Additions for the Limitation Year over the Maximum
Permissible Amount.
(8) HIGHEST AVERAGE COMPENSATION: For purposes of
calculating the Defined Benefit Fraction, 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-consecutive month period defined in Item B(4)(j)
of the Adoption Agreement.
(9) LIMITATION YEAR: A calendar year or any other 12
consecutive month period elected in Item B(4)(d) of the
Adoption Agreement. All qualified plans maintained by
the Employer must use the same Limitation Year. If the
Limitation Year is amended to a different 12-
consecutive month period, the new Limitation Year must
begin on a date within the Limitation Year in which the
amendment is made.
(10) MASTER OR PROTOTYPE PLAN: A Plan the form of which is
the subject of a favorable opinion letter from the
Internal Revenue Service.
(11) MAXIMUM PERMISSIBLE AMOUNT: The maximum Annual Addition
that may be contributed or allocated to a Participant's
account under the Plan for any Limitation Year shall
not exceed the lesser of:
(a) the Defined Contribution Dollar Limitation, or
(b) 25 percent of the Participant's Compensation
for the Limitation Year.
The Compensation limitation referred to in (b)
shall not apply to any contribution for medical
benefits (within the meaning of Section 401(h)
or Section 419A(f)(2) of the Code) which is
otherwise treated as an Annual Addition under
Section 415(l)(1) or 419A(d)(2) of the Code.
If a short Limitation Year is created because of
an amendment changing the Limitation Year to a
different 12-consecutive month period, the
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Maximum Permissible Amount will not exceed the
Defined Contribution Dollar Limitation
multiplied by the following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
(12) PROJECTED ANNUAL BENEFIT: For purposes of calculating
the Defined Benefit Fraction: the annual retirement
benefit (adjusted to an actuarially equivalent straight
life annuity if such benefit is expressed in a form other
than a straight life annuity or qualified joint and
survivor annuity) to which the Participant would be
entitled under the terms of the Plan, assuming: (1) the
Participant will continue employment until Normal
Retirement Date 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.
(B) ANNUAL ADDITION LIMITATIONS:
(1) If the Participant does not participate in, and has
never participated in another qualified Plan or welfare
benefit fund, as defined in Section 419(e) of the Code
maintained by the Employer, or an individual medical
account, as defined in Section 415(l)(2) of the Code,
maintained by the Employer, or a simplified employee
pension, as defined in Section 408(K) of the Code,
maintained by the Employer which provides an Annual
Addition as defined in Section 6.6(E), the amount of
Annual Additions which may be credited to the
Participant's account for any Limitation Year will not
exceed the lesser of the Maximum Permissible Amount or
any other limitation contained in this Plan. If the
Employer Contribution that would otherwise be
contributed or allocated to the Participant's account
would cause the Annual Additions for the Limitation Year
to exceed the Maximum Permissible Amount, the amount
contributed or allocated will be reduced so that the
Annual Additions for the Limitation Year will equal the
Maximum Permissible Amount.
(2) Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a
Participant on the basis of a reasonable estimation of
the Participant's Compensation for the Limitation Year,
uniformly determined for all Participants similarly
situated.
(3) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible Amount
for the Limitation Year will be determined on the basis
of the Participant's actual Compensation for the
Limitation Year.
(4) If pursuant to Section 6.6(B)(3) or as result of the
allocation of forfeitures, there is an Excess Amount,
the excess will be disposed of as follows:
(a) Any nondeductible voluntary employee
contributions, to the extent they
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would reduce the Excess Amount, will be
returned to the Participant.
(b) If after the application of paragraph (a) an
Excess Amount still exists and the Participant
is covered by the Plan at the end of the
Limitation Year, the Excess Amount in the
Participant's account will be used to reduce
Employer Contributions (including any
allocation of forfeitures) for such
Participant in the next Limitation year, and
each succeeding Limitation Year, if necessary.
(c) If after the application of paragraph (a) an
Excess Amount still exists, and the Participant
is not covered by the Plan at the end of a
Limitation Year, the Excess Amount will be held
unallocated in a suspense account. The suspense
account will be applied to reduce future
Employer Contributions (including allocation of
any forfeitures) for all remaining Participants
in the next Limitation Year and each succeeding
Limitation Year, if necessary.
(d) If a suspense account is in existence at any
time during a Limitation Year pursuant to this
Section 6.6(A), it will not participate in the
allocation of the trust's investment gains and
losses. If a suspense account is in existence
at any time during a particular Limitation Year,
all amounts in the suspense account must be
allocated and reallocated to Participants'
accounts before any Employer Contributions or
any Employee contributions may be made to the
Plan for that Limitation Year. Excess Amounts
may not be distributed to Participants or former
Participants.
(C) MULTIPLE PLAN LIMITATION.
(1) This Section 6.6(C) applies if, in addition to this
Plan, the Participant is covered under another qualified
Master or Prototype defined contribution Plan maintained
by the Employer, a welfare benefit fund, as defined in
Section 419(e) of the Code maintained by the Employer,
or an individual medical account, as defined in Section
415(l)(2) of the Code, maintained by the Employer, or a
simplified employee pension maintained by the employer
which provides an Annual Addition as defined in Section
6.6(A) during any Limitation Year. The Annual Additions
which may be credited to a Participant's accounts 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 accounts under the
other qualified master and prototype defined
contribution plans, welfare benefit funds, individual
medical accounts, and simplified employee pensions for
the same Limitation Year. If the Annual Additions with
respect to the Participant under other qualified master
and prototype defined contribution plans and welfare
benefit funds, individual medical accounts, and
simplified employee pension, maintained by the Employer
are less than the Maximum Permissible Amount and the
contributions that would otherwise be contributed or
allocated to the Participant's Employer Contribution
Account under this Plan would cause the Annual Additions
for the Limitation Year to exceed this limitation, the
amount contributed or allocated will be reduced so that
the Annual Additions under all
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such plans and funds for the Limitation Year will equal
the Maximum Permissible Amount. If the Annual Additions
with respect to the Participant under such other
qualified master and prototype defined contribution
plans, welfare benefit funds individual medical
accounts, and simplified employee pension, in the
aggregate are equal to or greater than the Maximum
Permissible Amount, no amount will be contributed or
allocated to the Participant's Employer Contribution
Account under this Plan for the Limitation Year.
(2) Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a
Participant in the manner described in Section
6.6(B)(2).
(3) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible Amount
for the Limitation Year will be determined on the basis
of the Participant's actual Compensation for the
Limitation Year.
(4) If, pursuant to Section 6.6(C)(3) or as a result of the
allocation of forfeitures, a Participant's Annual
Additions under this Plan and all other plans result in
an Excess Amount for a Limitation Year, the Excess
Amount shall be deemed to consist of the amounts last
allocated, except that Annual Additions attributable to
a simplified employee pension will be deemed to have
been allocated first, followed by annual additions to
a welfare benefit fund or individual medical account
regardless of the actual allocation date.
(5) If an Excess Amount was allocated to a Participant on
an allocation date of this Plan which coincides with
an allocation date of another Plan, the Excess Amount
attributed to this Plan will be the product of:
(a) the total Excess Amount allocated as of such
date, times
(b) 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 Master or
Prototype defined contribution plans.
(6) Any Excess Amount attributed to this Plan should be
disposed of as provided in Section 6.6(C)(4).
(C) If the Participant is covered under another qualified defined
contribution Plan maintained by the Employer which is not a
Master or Prototype Plan, Annual Additions which may be credited
to the Participant's accounts under this Plan for any Limitation
Year will be limited in accordance with Section 6.6(C) (1-6) as
though the Plan were a Master or Prototype Plan unless the
Employer provides other limitations in Item B(12) of the
Adoption Agreement.
(D) If the Employer maintains, or at any time maintained, a qualified
defined benefit Plan covering any Participant in this Plan, the
sum of the Participant's Defined Benefit Plan
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Fraction and Defined Contribution Plan Fraction will not exceed
1.0 in any Limitation Year. The Annual Additions which may be
credited to the Participant's accounts under this Plan for any
Limitation Year will be limited in accordance with Item B(12)
of the Adoption Agreement.
6.7 REPORTS TO PARTICIPANTS. The Committee shall cause reports to be made at
least annually to each Participant and to the Beneficiary of each
deceased Participant as to the value of each such Participant's
accounts, as of an appropriate preceding Valuation Date.
ARTICLE VII
PAYMENT OF ACCOUNT BALANCES
7.1 TERMINATION OF EMPLOYMENT UPON DISABILITY OR DEATH. A Participant shall
become fully vested in his or her Employer Contribution Accounts if the
Participant becomes Disabled under Sections 5.1(A), (B), (C) or (D) or
dies while still employed. The accounts of a Participant who retires
becomes Disabled or dies will become distributable to the Participant or
to his or her Spouse or Beneficiary. If distributed immediately, subject
to Section 7.4, the distributable balance, after adjustments, will be
determined as soon as practicable following the receipt by the Trustee
of written notice of the Participant's termination from the Committee.
7.2 TIMING FOR DETERMINING ACCOUNT BALANCE UPON TERMINATION OF EMPLOYMENT
PRIOR TO RETIREMENT, DISABILITY OR DEATH. If a Participant terminates
employment with the Employer before retirement under Sections 5.1(F)
the vested portion of the Participant's Employer Contribution Account
and/or Matching Account shall be determined and such Participant's
accounts will be distributable to the Participant. If distributed
immediately, subject to Section 7.4, the distributable balance, after
adjustments, will be determined as soon as practicable following receipt
by the Trustee of written notice of the Participant's termination from
the Committee. The account balance shall be distributable at such time
as elected in the Adoption Agreement, but in no event shall an account
balance not be distributable later than the Participant's Normal
Retirement Date.
7.3 VESTING ON DISTRIBUTION BEFORE BREAK-IN-SERVICE; CASH-OUTS.
(A) 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 $3,500, the Employee
will receive a distribution of the value of the entire vested
portion of such account balances, and Rollover Account balance,
if any. The nonvested portion will be treated as a forfeiture.
For purposes of this Section 7.3, 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 Section 72(o)(5)(B) of the Code for Plan Years beginning
prior to January 1, 1989.
(B) If an Employee terminates service, and elects, in accordance
with the requirements of Section 7.4, to receive the value of
the Employee's vested account balance, the nonvested portion
will be treated as a forfeiture. If the Employee elects to have
distributed less than the entire vested portion of the balance
in the Employer
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Contribution Account, the part of the nonvested portion that
will be treated as a forfeiture is the total nonvested 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
balance in the Employer Contribution Account.
(C) If an Employee receives a distribution pursuant to this Section
7.3 and the Employee resumes employment covered under this Plan,
the Employee's Employer Contribution Account and/or Matching
Account balance will be restored to the amount on the date of
distribution if the Employee repays to the Plan the full amount
of the distribution attributable to Employer contributions
before the earlier of 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 (1) year
Breaks in Service following the date of the distribution. If an
Employee is deemed to receive a distribution pursuant to this
Section 7.3, and the Employee resumes employment covered under
this Plan before the date the Participant incurs five (5)
consecutive one (1) year Breaks in Service, upon the
reemployment of such Employee, the Employer Contribution Account
balance and/or Matching Account balance of the Employee will be
restored to the amount on the date of such deemed distribution.
7.4 RESTRICTIONS ON IMMEDIATE DISTRIBUTIONS.
(A) 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) $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
90-day period ending on the annuity staring 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 Committee
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 Section 417(a)(3),
and shall be provided no less than 30 days and no more than 90
days prior to the annuity starting date. However, distribution
may commence less than 30 days after the notice described in
the preceding sentence is given, provided the distribution is
one to which sections 401(a)(11) and 417 of the Internal
Revenue Code do not apply, the plan administrator clearly
informs the participant that the participant has a right to
a period of at least 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 the participant, after receiving the notice,
affirmatively elects a distribution.
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 7.10 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 Section 401(a)(9) or Section 415 of the Code. In
addition, upon termination of this Plan if the Plan does not
offer an annuity option (purchased from a commercial provider),
and if the Employer or any entity within the same controlled
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group as the Employer does not maintain another defined
contribution Plan (other than an employee stock ownership Plan
as defined in Section 4975(e)(7) of the Code), the Participant's
account balance will, without the Participant's consent, be
distributed to the Participant. However, if any entity within
the same controlled group as the Employer maintains another
defined contribution Plan (other than an employee stock
ownership Plan as defined in Section 4975(e)(7) of the Code)
then the Participant's account balance will be transferred,
without the Participant's consent, to the other Plan if the
Participant does not consent to an immediate distribution.
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 the Normal Retirement
Date or age 62.
(B) 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 balance shall not include amounts
attributable to accumulated deductible employee contributions
within the meaning of Section 72(o)(5)(B) of the Code.
7.5 COMMENCEMENT OF BENEFITS. Unless the Participant elects otherwise,
payments will be made or commence to a Participant by the Trustee, as
directed by the Committee, no later than the sixtieth (6Oth) day after
the latest of the close of the Plan Year in which (1) the Participant
attains age sixty-five (65) (or Normal Retirement Date; if earlier); (2)
occurs the tenth (10th) anniversary of the year in which the Participant
commenced participation in the Plan; or (3) the Participant terminates
his or her service with the Employer.
Notwithstanding the foregoing, the failure of a Participant and Spouse
to consent to a distribution while a benefit is immediately
distributable, within the meaning of Section 7.4 of the Plan, shall be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this section.
7.6 TIMING AND MODES OF DISTRIBUTION.
(A) GENERAL RULES.
(1) Subject to Section 7.10, Joint and Survivor Annuity
Requirements, the requirements of this Section 7.6 shall
apply to any distribution of a Participant's interest
and will take precedence over any inconsistent
provisions of this Plan. Unless otherwise specified,
the provisions of this Section 7.6 apply to calendar
years beginning after December 31, 1984.
(2) All distributions required under this Section 7.6 shall
be determined and made in accordance with the Income Tax
Regulations under Section 401(a)(9), including the
minimum distribution incidental benefit requirement of
Section 1.401(a)(9)-2 of the regulations.
(3) The normal form of payment for a profit-sharing Plan
satisfying the requirements
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of Section 7.10(F) hereof shall be a single sum with no
option for annuity payments; provided, however, that
distributions may be made:
(a) In installment payments, if the Employer has
elected installment payments in Item B(1O)(a) of
the Adoption Agreement;
(b) Through such other form of benefit as may be
identified in Item B(10)(a) of the Adoption
Agreement, which shall be available to
Participants as an optional form of benefit
payment, and shall preclude Employer discretion;
(c) Through such other form of benefits as may be
protected as Section 411(d)(6) protected
benefits, identified in an addendum to the
Adoption Agreement attached pursuant to Item
B(13), including any annuity purchased with the
Participant's account balance from an insurance
carrier selected by the Employer. Such optional
form of benefit shall be restricted to those
Participants, or that portion of a Participant's
account balances to which the optional form of
benefit must be applicable, as provided for in
Code Section 411(d)(6) and the Treasury
regulations issued thereunder, as identified in
the addendum to the Adoption Agreement described
above. Notwithstanding the preceding sentence,
to the extent that the Employer does not
indicate in the addendum described above the
extent to which such Section 411(d)(6)
protected benefits are restricted, such optional
forms of benefits described in the addendum
shall be available to all Participants, and with
respect to their entire account balances.
(B) REQUIRED BEGINNING DATE. The entire interest of a Participant
must be distributed or begin to be distributed no later than the
Participant's required beginning date.
(C) LIMITS ON DISTRIBUTION PERIODS. As of the first distribution
calendar year, distributions, if not made in a single-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) DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR. If the
Participant's interest is to be distributed in other than a
single sum, the following minimum distribution rules shall apply
on or after the required beginning date:
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(1) INDIVIDUAL ACCOUNT.
(a) If a Participant's benefit 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 benefit 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
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 benefit by the lesser of (1) the
applicable life expectancy or (2) if the
Participant's Spouse is not the designated
Beneficiary, the applicable divisor determined
from the table set forth in Q&A-4 of Section
1.401(a)(9)-2 of the Income Tax Regulations.
Distributions after the death of the Participant
shall be distributed using the applicable life
expectancy in Section (1)(a) above as the
relevant divisor without regard to Regulations
Section 1.401(a)(9)-2
(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 31 of that
distribution calendar year.
(2) OTHER FORMS. If the Participant's benefit is distributed
in the form of an annuity purchased from an insurance
company, distributions thereunder shall be made in
accordance with the requirements of Section 401(a)(9) of
the Code and the regulations thereunder.
(E) DEATH DISTRIBUTION PROVISIONS
(1) DISTRIBUTION BEGINNING BEFORE DEATH. If the Participant
dies after distribution of his or her interest has
begun, the remaining portion of such interest will
continue
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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 his or her interest begins, distribution
of the Participant's entire interest shall be completed by
December 31 of the calendar year containing the fifth
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 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 31 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 date distributions are required
to begin in accordance with (a) above shall not be
earlier than the later of (1) December 31 of the
calendar year immediately following the calendar year
in which the Participant died and (2) December 31 of
the calendar year in which the Participant would have
attained age 70-1/2.
If the Participant has not made an election pursuant to
this Section 7.6(E)(2) by the time of his or her
death, the Participant's designated Beneficiary must
elect the method of distribution no later than the
earlier of (1) December 31 of the calendar year in which
distributions would be required to begin under this
section, or (2) December 31 of the calendar year in
which contains the fifth anniversary of the date of
death of the Participant. 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 interest must
be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's
death.
(3) SURVIVING SPOUSE'S DEATH. For purposes of Section (E)(2) above,
if the surviving Spouse dies after the Participant, but before
payments to such Spouse begin, the provisions of Section (E)(2)
with the exception of paragraph (b) therein, shall be applied
as if the surviving Spouse were the Participant.
(4) MINOR BENEFICIARY. For purposes of this Section (E), 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.
(5) DISTRIBUTION CONSIDERED TO BEGIN ON REQUIRED BEGINNING DATE.
For the purposes of this Section (E), distribution of a
Participant's interest is considered to begin on the
Participant's required beginning date (or, if Section (E)(3)
above
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is applicable, the date distribution is required to
begin to the surviving Spouse pursuant to Section (E)(2)
above). If distribution in the form of an annuity
irrevocably commences to the Participant before the
required beginning date, the date distribution is
considered to begin is the date distribution actually
commences.
(F) 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 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.
(2) DESIGNATED BENEFICIARY: The individual who is designated
as the Beneficiary under the Plan in accordance with
Section 401(a)(9) and the proposed 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 (E) 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 Spouse,
in the case of distributions described in Section
(E)(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 Spouse) and shall apply to all
subsequent years. The life expectancy of a non-spouse
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
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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.
(6) 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 70-1/2.
(b) TRANSITIONAL RULES. The required beginning date of a
Participant who attains age 70-1/2 before January 1,
1988, shall be determined in accordance with (1) or
(2) below:
(1) Non-5-percent owners. The required beginning
date of a Participant who is not a 5-percent
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 70-1/2
occurs.
(2) 5-percent owners. The required beginning date
of a Participant who is a 5-percent 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 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
5-percent owner, or the calendar year
in which the Participant retires.
The required beginning date of a Participant who is not
a 5-percent owner who attains age 70-1/2 during 1988 and
who has not retired as of January 1, 1989, is April 1,
1990.
(c) 5-PERCENT OWNER. A Participant is treated as a
5-percent owner for purposes of this Section if such
Participant is a 5-percent owner as defined in Section
416(i) of the Code (determined in accordance with
Section 416 but without regard to whether the Plan is
top-heavy) at any time during the Plan Year ending with
or within the calendar year in which such owner attains
age 66-1/2 or any subsequent Plan Year.
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(d) Once distributions have begun to a 5-percent
owner under this Section, they must continue to
be distributed, even if the Participant ceases
to be a 5-percent owner in a subsequent year.
(G) TRANSITIONAL RULE.
(1) DISTRIBUTIONS TO 5-PERCENT OWNERS. Notwithstanding the
other requirements of this Section 7.6 and subject to
the requirements of Section 7.10, Joint and Survivor
Annuity Requirements, distributions on behalf of any
Employee, including a 5-percent owner, may be made in
accordance with all of the following requirements
(regardless of when such distribution commences):
(a) The distribution by the plan is one which
would not have disqualified such plan under
Section 401(a)(9) of the Internal Revenue Code
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 plan 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 the 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 Employee's
death, the Beneficiaries of the Employee
listed in order of priority.
(2) DISTRIBUTION ON DEATH. A distribution upon death will
not be covered by this transitional rule unless the
information in the designation contains the required
information described above with respect to the
distributions to be made upon the death of the Employee.
(3) DESIGNATION OF DISTRIBUTION METHOD. For any
distribution which commences before January 1, 1984,
but continues after December 31, 1983, the Employee,
or the Beneficiary, to whom such distribution is being
made, will be presumed to have designated the method
of distribution under which the distribution is being
made if the method of distribution was specified in
writing and the distribution satisfies the requirements
in subsections (G)(1)(a) and (e).
(4) REVOCATION OF DESIGNATIONS. If a designation is
revoked any subsequent distribution must satisfy the
requirements of Section 401(a)(9) of the Code and
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the regulations thereunder. If a designation is revoked
subsequent to the date distributions are required to
begin, the plan 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 Section 401(a)(9) of the Code 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.
7.7 DESIGNATION OF BENEFICIARY.
(A) DEFAULT BENEFICIARY. In the case of a Participant who is
married, the Participant's Beneficiary shall be the
Participant's Spouse, but if the Participant's Spouse consents
as provided in this Section 7.7, or if the Participant is not
married, then the Participant shall have the right to designate
that after such Participant's death such Participant's accounts
shall be distributed to a designated Beneficiary or
Beneficiaries.
(B) SPOUSAL CONSENT. Any consent of a Spouse given pursuant to this
Section must be in writing and given prior to the death of the
Participant. Such consent must acknowledge the effect of the
Participant's Beneficiary designation, the identity of any
non-Spouse Beneficiary, including any class of Beneficiaries and
contingent Beneficiaries, and the consent must be witnessed by a
Plan representative or a Notary Public. The Participant may not
subsequently change the designation of his or her Beneficiary
unless his Spouse consents to the new designation in accordance
with the requirements set forth in the preceding sentence. The
consent of a Participant's Spouse shall not be required if the
Participant establishes to the satisfaction of the Committee
that consent may not be obtained because there is no Spouse, the
Spouse cannot be located or because of such other circumstances
as the Secretary of the Treasury may prescribe by regulations. A
Spouse's consent shall be irrevocable. Any consent by a Spouse,
or establishment that the consent of the Spouse may not be
obtained, shall be effective only with respect to that Spouse.
(C) CHANGING BENEFICIARIES. Subject to Subparagraphs (A) and (B)
above, the Participant's designation of Beneficiary may be made,
changed or revoked by the Participant at any time by a written
instrument, in form satisfactory to the Committee, and shall
become effective only when executed by such Participant (and, if
applicable, consented to by the Participant's Spouse as Set
forth in Section 7.7(B)) and filed with the Committee prior to
such Participant's death. If all of the Beneficiaries named in
such designation shall have
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predeceased such Participant, or die prior to complete
distribution of the Participant's accounts, or if such
Participant fails to execute and file a designation and is not
survived by a Spouse the payment of such Participant's accounts
shall be made pursuant to the Plan and to such Beneficiaries as
required by state law. Neither the Employer, the Committee, nor
the Trustee, shall have any duty to see that such Participant,
any Spouse or any Beneficiary executes and files any such
designation with the Committee.
7.8 OPTIONAL FORMS OF BENEFIT. The optional forms of benefit provided by
this Plan are not subject to Employer discretion and are made available
to all Participants on a nondiscriminatory basis. The optional forms of
benefit are described in Articles III and VII, as may be selected in the
Adoption Agreement. If selected in Item B(13) of the Adoption Agreement,
the Employer may attach to the Plan a list of the Section "411(d)(6)
protected benefits" that must be preserved from a individually designed
Plan or other prototype Plan which this Plan amends.
7.9 DISTRIBUTION UPON DISABILITY. In the event of the Disability of the
Participant, the Trustee, following receipt of notification of such
Disability from the Committee, shall make distributions from the
Account.
7.10 JOINT AND SURVIVOR ANNUITY REQUIREMENTS.
(A) APPLICATION. The provisions of this Section 7.10 shall apply to
any Participant who is credited with at least one Hour of
Service with the Employer on or after August 23, 1984, and such
other Participants as provided in Section 7.10(G).
(B) QUALIFIED JOINT AND SURVIVOR ANNUITY. Unless an optional form of
benefit is selected pursuant to a Qualified Election within the
ninety-day period ending on the 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.
(C) QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY. Unless an optional
form of benefit has been selected within the election period
pursuant to a Qualified Election, if a Participant dies before
the Annuity Starting Date then the Participant's Vested Account
Balance shall be applied toward the purchase of an annuity for
the life of the surviving Spouse. The surviving Spouse may
elect to have such annuity distributed within a reasonable
period after the Participant's death.
(D) DEFINITIONS.
(1) ELECTION PERIOD: The period which begins on the first
day of the Plan Year in which the Participant attains
age 35 and ends on the date of the Participant's death.
If a Participant separates from service prior to the
first day of the Plan Year in which age 35 is attained,
with respect to the account balance as of the date of
separation, the election period shall begin on the date
of separation.
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Pre-age 35 waiver: A Participant who will not yet attain
age 35 as of the end of any current Plan Year may make a
special Qualified Election to waive the Qualified
Preretirement Survivor Annuity for the period beginning
on the date of such election and ending on the first day
of the Plan Year in which the Participant will attain
age 35. Such election shall not be valid unless the
Participant receives a written explanation of the
Qualified Preretirement Survivor Annuity in such terms
as are comparable to the explanation required under
Section 7.10(E). Qualified Preretirement Survivor
Annuity coverage will be automatically reinstated as of
the first day of the Plan Year in which the Participant
attains age 35. Any new waiver on or after such date
shall be subject to the full requirements of this
Section 7.10.
(2) EARLIEST RETIREMENT AGE: The earliest date on which,
under the Plan, the Participant could elect to receive
retirement benefits.
(3) QUALIFIED ELECTION: A waiver of a Qualified Joint and
Survivor Annuity or a Qualified Preretirement Survivor
Annuity. Any waiver of a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity
shall not be effective unless: (a) the Participant's
Spouse consents in writing to the election; (b) the
election designates a specific Beneficiary including any
class of Beneficiaries or any contingent Beneficiaries,
which may not be changed without spousal consent (or the
Spouse expressly permits designations by the Participant
without any further spousal consent); (c) the Spouse's
consent acknowledges the effect of the election; and (d)
the Spouse's consent is witnessed by a Plan
representative or Notary Public. Additionally, a
Participant's waiver of the Qualified Joint and Survivor
Annuity shall not be effective unless the election
designates a form of benefit payment which may not be
changed without spousal consent (or the spouse expressly
permits designations by the Participant without any
further spousal consent). If it is established to the
satisfaction of a Plan representative that there is no
Spouse or that the Spouse cannot be located, a waiver
will be deemed a Qualified Election.
Any consent by a Spouse obtained under this provision
(or 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
Paragraph (E) below.
(4) QUALIFIED JOINT AND SURVIVOR ANNUITY: An immediate
annuity for the life of the Participant with a survivor
annuity for the life of the Spouse which is not less
than 50 percent and not more than 100 percent of the
amount of the annuity
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which is payable during the joint lives of the
Participant and the Spouse and which is the amount of
benefit which can be purchased with the Participant's
vested account balance. The percentage of the survivor
annuity under the Plan shall be 50%.
(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
the 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
Section 414(p) of the Code.
(6) ANNUITY STARTING DATE: The first day of the first period
for which an amount is payable 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. The
provisions of this Section 7.10 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) QUALIFIED JOINT AND SURVIVOR ANNUITY. In the case of a
Qualified Joint and Survivor Annuity as described in Section
7.10(B), the Committee shall no less than 30 days and no more
than 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) QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY. In the case of a
Qualified Pre-Retirement Survivor Annuity as described in
Section 7.10(C), the Committee shall provide each Participant
within the applicable period for such Participant 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
7.10(E) applicable to a Qualified Joint and Survivor 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 preceding the Plan Year in which the
Participant attains age thirty-two (32) and ending with the
close of 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 Section 7.10(E)(3) ceases to apply to the
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Participant; and (iv) a reasonable period ending after
Section 7.10 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 year prior to the date the
applicable event occurs, and ending one year after that
date. In the case of a Participant who separates from
service before the Plan Year in which age 35 is
attained, notice shall be provided within the two-year
period beginning one-year prior to separation and ending
one year after separation. If such a Participant
thereafter returns to employment with the Employer, the
applicable period for such participant shall be
redetermined.
(3) SUBSIDIZED ANNUITY DISTRIBUTIONS. Notwithstanding the
other requirements of this Section 7.10(E), the
respective notices prescribed by this Section 7.10(E)
need not be given to a Participant if (1) the Plan
"fully subsidizes" the cost of a Qualified Joint and
Survivor Annuity or Qualified Pre-Retirement Survivor
Annuity, and (2) the Plan does not allow the Participant
to waive the Qualified Joint and Survivor Annuity or
Qualified Preretirement Survivor Annuity and does not
allow a married Participant to designate a non-Spouse
Beneficiary. For purposes of this Section 7.10(E), a
Plan fully subsidizes the cost of a benefit if no
increase in cost, or decrease in benefits to the
Participant may result from the Participant's failure to
elect another benefit.
(F) SAFE HARBOR RULES.
(1) APPLICATION. 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 Section
72(o)(5)(B) of the Code, 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 the 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 already 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 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 7.10(F) 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 Plan, a target benefit Plan,
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stock bonus, or profit-sharing Plan which is subject to
the survivor annuity requirements of Section 401(a)(11)
and Section 417 of the Code. If this Section 7.10(F) is
operative, then the provisions of this Section 7.10,
other than in Section 7.10(G), shall be inoperative.
(2) WAIVER. 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 of Section 7.10(D)(3) (other
than the notification requirement referred to therein)
that would apply to the Participant's waiver of the
Qualified Preretirement Survivor Annuity.
(3) VESTED ACCOUNT BALANCE. For purposes of this Section
7.10(F), vested account balance shall mean, if 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 Section 72(o)(5) (B)
of the Code. In the case of a profit-sharing Plan,
vested account balance shall have the same meaning as
provided in Section 7.10(D)(7).
(G) TRANSITIONAL RULES.
(1) Any living Participant not receiving benefits on August
23, 1984, who would otherwise not receive the benefits
prescribed by the previous sections of this Section 7.10
must be given the opportunity to elect to have the prior
sections of this Section 7.10 apply if such Participant
is credited with at least one Hour of Service under this
Plan or a predecessor Plan in a Plan Year beginning on
or after January 1, 1976, and such Participant had at
least ten (10) years of vesting service when he or she
separated from service.
(2) Any living Participant not receiving benefits on August
23, 1984 who was credited with at least one Hour of
Service under this Plan or predecessor Plan on or after
September 2, 1974, and who is not otherwise credited
with any service in a Plan Year beginning on or after
January 1, 1976 must be given the opportunity to have
his or her benefits paid in accordance with Section
7.10(G)(4).
(3) The respective opportunities to elect (as described in
Section 7.10(G)(1) and (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 these Participants.
(4) Any Participant who has elected pursuant to Section
7.10(G)(2) and any Participant who does not elect under
Section 7.10(G)(1) or who meets the requirements of
Section 7.10(G)(1) except that such Participant does
not have at least ten (10) years of vesting service when
he or she separates from service, shall have his or her
benefits distributed in accordance with all of the
following requirements of 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
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annuity become payable to a married participant
who:
(1) begins to receive payments under the
Plan on or after Normal Retirement Date: or
(2) dies on or after Normal Retirement Date
while still working for the Employer; or
(3) begins to receive payments on or after
the Qualified Early Retirement Age; or
(4) separates from service on or after
attaining Normal Retirement Date (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 6 months
before the Participant attains Qualified Early
Retirement Age and end not more than 90 days
before the commencement of benefits. Any
election hereunder will be in writing and may be
changed by the Participant at any time.
b) Election of early survivor annuity. A
Participant who is employed after attaining the
Qualified Early Retirement Age will be given the
opportunity to elect, during the election
period, to have a survivor annuity payable on
death. If the Participant elects the survivor
annuity, payments under such annuity must not be
less than the payments which would have been
made to the Spouse under the Qualified Joint and
Survivor Annuity if the Participant had retired
on the day before his or her death. Any election
under this provision will be in writing and may
be changed by the Participant at any time. The
election period begins on the later of (1) the
9Oth 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 7.10(G)(4):
(1) Qualified Early Retirement Age is the
latest of: (i) the earliest date, under the
Plan, on which the Participant may elect to
receive retirement benefits, (ii) the first
day of the 120th month beginning before the
Participant reaches Normal Retirement Date,
or (iii) the date the Participant begins
participation.
(2) 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 7.10(D)(4).
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(H) Nontransferability. Any annuity distributed from the Plan must
be nontransferable.
(I) Incorporation of Terms. 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.
7.11 DISTRIBUTIONS TO QUALIFIED PLANS. In the event a former Employee whose
accounts have not been fully distributed becomes an active participant
in a Plan qualified under Section 401(a) of the Code, the Committee may
direct the Trustee to transfer the amount in such Participant's
account(s) to any such Plan provided the Plan to receive such transfers
authorizes accepting the transfer, provides that assets transferred
shall be held in a separate account and requires that the assets
transferred shall not be subject to any forfeiture provisions.
7.12 PROFIT SHARING PLANS AND 401(k) PROFIT SHARING PLANS ONLY-WITHDRAWAL OF
EMPLOYER CONTRIBUTIONS. Subject to the provisions of the Plan, in
accordance with rules for giving notice as determined by the Committee,
and as elected in the Adoption Agreement, a Participant may withdraw as
of the first Accounting Date subsequent to receipt by the Committee of
such notice:
(A) An amount equal to not more than 100% of the Participant's
Employer Contribution Account determined as of such Accounting
Date. No Participant who has made any withdrawal of Employer
Contributions in the twelve (12) months preceding the giving of
such notice may make a withdrawal under this Section.
(B) Notwithstanding anything to the contrary in this Section 7.12,
any withdrawal made pursuant to Section 7.12(A) shall be for a
minimum whole dollar amount not less than Five Hundred Dollars
($500.00); except that if the amount available for withdrawal is
less than Five Hundred Dollars ($500.00) then the minimum amount
of the withdrawal shall be the amount available.
(C) No forfeitures will occur solely as a result of an Employee's
withdrawal of Employer Contributions.
(D) Notwithstanding anything to the contrary in this Section 7.12, a
Participant may not make a withdrawal, pursuant to this Section
of any portion of the Participant's vested interest which has
been assigned to secure repayment of a loan in accordance with
Section 10.10, below, until such time as the Committee shall
have released said portion so assigned.
7.13. PROHIBITION AGAINST ALIENATION.
(A) Except as provided in Sections 401(a)(13) and 414(p) of the
Code, no benefit or interest available under this Plan will be
subject to assignment or alienation, either voluntarily or
involuntarily.
(B) The preceding sentence shall also apply to the creation,
assignment, or recognition of a right to any benefit payable
with respect to a Participant pursuant to a domestic relations
order, unless the Committee determines that such order is a
qualified domestic relations
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order, as defined in Section 414(p) of the Code, or any domestic
relations order entered before January 1, 1985.
(C) All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded
to any "alternate payee" under a "qualified domestic relations
order." Furthermore, an immediate distribution to an "alternate
payee" shall be permitted if such distribution is authorized by
a "qualified domestic relations order," even if the affected
Participant has not reached the "earliest retirement age" under
the Plan, provided that in no event will any such distribution
accelerate the repayment of any loan made to the affected
Participant under the Plan, unless such Participant consents
thereto in writing. For purposes of this Section 7.13,
"alternate payee," "qualified domestic relations order" and
"earliest retirement age" shall have the meaning set forth under
Code Section 414(p), unless a Qualified Distribution Date has
been selected in the Adoption Agreement, in which case the
earliest retirement age shall be the date on which the domestic
relations order is determined to be qualified.
7.14 MISSING PARTICIPANT OR BENEFICIARY. Each Participant and/or each
Beneficiary must file with the Committee from time to time in writing
his or her post office address and each change of post office address.
Any communication, statement or notice addressed to a Participant and/or
Beneficiary at such last post office address filed with the Committee or
if no address is filed with the Committee then at the last post office
address as shown on the Employer's records, will be binding on the
Participant and/or Beneficiary for all purposes of the Plan. Neither
the Committee nor the Trustee shall be required to search for or locate
a Participant or Beneficiary.
Any other provision of the Plan to the contrary notwithstanding, if any
application for a benefit has not been filed by a Participant otherwise
eligible therefor within ninety (90) days after the Plan Year in which
occurred his or her termination date, the Committee shall mail to such
Participant and/or Beneficiary at his or her last known address an
application for benefit and a reminder that he or she is eligible for
such benefit. If such application is not filed with the Committee in
accordance with the provisions of the Plan within ninety (90) days after
it is so mailed to such Participant or his or her termination date,
whichever is later, the benefit shall be forfeited and shall be used to
reduce future Employer Contributions as though the Participant were not
vested in his or her accounts as of the end of said ninety (90) day
period. Upon the subsequent filing of an application therefor by the
Participant and/or his Beneficiary, such accounts shall be immediately
reinstated pursuant to this provision as though the Participant were
100% vested in his or her accounts in an amount equal to the cash value
of the accounts on the date forfeited. To the extent forfeited amounts
are not available, the Employer shall contribute the amount required to
reinstate the Participant's account balance.
7.15 LIMITATION ON CERTAIN DISTRIBUTIONS. Notwithstanding anything contained
herein to the contrary, the Trustee may, in its discretion, delay
satisfying requests for distributions for up to one year where
distributions require amounts to be withdrawn from the Guaranteed
Investment Contract Fund; provided, however, that in no event shall the
Trustee delay distributions to a Participant beyond the legally required
time for distribution as set forth in Section 7.5.
7.16 FORM OF DISTRIBUTIONS AND WITHDRAWALS. The Trustee shall make all
distributions and withdrawals under the Plan, including Hardship
withdrawals, other withdrawals while the
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Participant is still employed, and distributions upon retirement,
disability, death and separation from service, pro rata, from all
accounts and Investment Funds, as follows:
(A) In a Plan with no Employer Stock Fund, all withdrawals and
distributions under the Plan shall be made in cash.
(B) In a Plan with an Employer Stock Fund:
(i) Withdrawals and distributions under the Plan from the
other Investment Fund(s) shall be made in cash.
(2) Withdrawals and distributions under the Plan from the
Employer Stock Fund may be made in cash or in full
shares of Employer Stock, with any fractional share paid
in cash, as elected by the Participant. For the cash
portion of any distribution or withdrawal, the
Participant will receive the cash proceeds from the sale
of shares of Employer Stock as of the sale date.
ARTICLE VIII
DIRECT ROLLOVERS
8.1 GENERAL. This Article 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
Article, a distributee may elect, at the time and in the manner
prescribed by the Plan administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement Plan
specified by the distributee in a direct rollover.
8.2 DEFINITIONS.
(A) ELIGIBLE ROLLOVER DISTRIBUTION: An eligible rollover
distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually ) made for
the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's designated Beneficiary, or for a specified period
of ten years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the Code;
and the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(B) ELIGIBLE RETIREMENT PLAN: An eligible retirement Plan is an
individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section
408(b) of the Code, an annuity Plan described in section 403(a)
of the Code, or a qualified trust described in section 401(a) of
the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement
Plan is an individual retirement account or individual
retirement annuity.
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(C) DISTRIBUTEE: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving Spouse and the Employee's or former Employee's Spouse
or former Spouse who is the alternate payee under a qualified
domestic relations order, as defined in section 414(p) of the
Code, are distributees with regard to the interest of the Spouse
or former Spouse.
(D) DIRECT ROLLOVER: A direct rollover is a payment by the Plan to
the eligible retirement Plan specified by the distributee.
(E) WAIVER OF NOTICE. If a distribution is one to which Sections
401(a)(11) and 417 of the Internal Revenue Code do not apply,
such distribution may commence less than 30 days after the
notice required under Section 1.411(a)-(11)(c) of the Income
Tax Regulations is given, provided that: (1) the plan
administrator clearly informs the Participant that the
Participant has a right to a period of at least 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 (2) the Participant, after receiving
the notice, affirmatively elects a distribution.
ARTICLE IX
TOP-HEAVY PROVISIONS
9.1 USE OF TOP-HEAVY PROVISIONS. If the Plan becomes a Top-Heavy Plan in any
Plan Year after December 31, 1983, the provisions of this Article IX
will supersede any conflicting provision in the Plan or the Adoption
Agreement. The Committee has sole responsibility to make the
determination as to the top-heavy status of the Plan.
9.2 TOP-HEAVY DEFINITIONS.
(A) KEY EMPLOYEE: Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the
determination period was an officer of the Employer if such
individual's annual Compensation exceeds 50% of the dollar
limitation under Section 415(b)(1)(A) of the Code, an owner (or
considered an owner under Section 318 of the Code) of one of the
ten largest interests in the Employer if such individual's
Compensation exceeds 100% of the dollar limitation under Section
415(c)(1)(A) of the Code, a 5 per cent owner of the Employer, or
a 1 per cent owner of the Employer who has an annual
Compensation of more than $150,000. Annual compensation means
compensation as defined in Item B(4)(a) of the Adoption
Agreement, but including amounts contributed by the Employer
pursuant to a salary reduction agreement which are excludable
from the Employee's gross income under Section 125, Section
402(e)(3), Section 402(h)(1)(B) or Section 403(b) of the Code.
The determination period is the Plan Year containing the
Determination Date and the 4 preceding Plan Years.
The determination of who is Key Employee will made by the
Committee in accordance with Section 416(i)(1) of the Code and
the regulations thereunder.
(B) TOP-HEAVY PLAN: This Plan, for any Plan Year beginning after
December 31, 1983, if any of the following conditions exists:
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(1) If the Top-Heavy Ratio for this Plan exceeds 60 percent
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
60 percent.
(3) If this Plan is a part of a Required Aggregation Group
and part of a Permissive Aggregation Group of plans and
the Top-Heavy Ratio for the Permissive Aggregation Group
exceeds 60 percent.
(C) TOP-HEAVY RATIO: For purposes of determining if the Plan is a
Top-Heavy Plan:
(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 5-year period
ending on the Determination Date(s) has or has had
accrued benefits, the Top-Heavy Ratio for this Plan
alone or for the Required or Permissive Aggregation
Group as appropriate is a fraction, the numerator of
which is the sum of the account balances of all Key
Employees as of the Determination Date(s) (including any
part of any account balance distributed in the 5-year
period ending on the Determination Date(s)), and the
denominator of which is the sum of all account balances
(including any part of any account balance distributed
in the 5-year period ending on the Determination
Date(s), both computed in accordance with Section 416 of
the Code and the regulations thereunder. Both the
numerator and denominator of the Top-Heavy Ratio are
increased to reflect any contribution not actually made
as of the Determination Date, but which is required to
be taken into account on that date under Section 416 of
the Code and the regulations thereunder.
(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 5-year period ending on the Determination
Date(s) has or has had any accrued benefits, the
Top-Heavy Ratio for any Required or Permissive
Aggregation Group as appropriate is a fraction, the
numerator of which is the sum of account balances under
the aggregated defined contribution plan or plans for
all Key Employees determined in accordance with (1)
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 (1)
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 Section 416 of the Code and 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
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ending on the Determination Date.
(3) For purposes of (1) and (2) 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 12-month period ending on
the Determination Date, except as provided in Section
416 of the Code and the regulations thereunder for the
first and second Plan years of a defined benefit Plan.
The account balances and accrued benefits of a
Participant (a) who is not a Key Employee but who was a
Key Employee in a prior year, or (b) who has not been
credited with at least one Hour of Service with any
Employer maintaining the Plan at any time during the
five-year period ending on the Determination Date will
be disregarded. The calculation of the Top-Heavy Ratio,
and the extent to which distributions, rollovers, and
transfers are taken into account will be made in
accordance with Section 416 of the Code and the
regulations thereunder. Voluntary 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 Section
411(b)(1)(C) of the Code.
(D) PERMISSIVE AGGREGATION GROUP: The Required Aggregation Group of
plans plus any other Plan or plans of the Employer which, when
considered as a group with the Required Aggregation Group,
would continue to satisfy the requirements of Section 401(a)(4)
and Section 410 of the Code.
(E) REQUIRED AGGREGATION GROUP: (1) Each qualified Plan of the
Employer in which at least one Key Employee participates or
participated at any time during the determination period
(regardless of whether the Plan has terminated), and (2) any
other qualified Plan of Employer which enables a Plan described
in (1) to meet the requirements of Section 401(a)(4) or Section
410 of the Code.
(F) DETERMINATION DATE: For purposes of determining if there is a
Key Employee and for calculating the Top-Heavy Ratio: 1) for any
Plan Year subsequent to the first Plan Year, the last day of the
preceding Plan Year, and 2) for the first Plan Year of the Plan,
the last day of that year.
(G) VALUATION DATE: The date specified in Item B(14)(c) 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 only on the interest
and mortality rates
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specified in the Adoption Agreement.
9.3 MINIMUM ALLOCATION.
(A) Except as otherwise provided in Section 9.3(C) and (D) below,
the Employer Contributions and forfeitures allocated on behalf
of any Participant who is not a Key Employee shall not be less
than the lesser of three per cent (3%) of such Participant's
Compensation or in the case where the Employer has no defined
benefit Plan which designates this Plan to satisfy Section 401
of the Code, the largest percentage of Employer contributions
and forfeitures, as a percentage of the Key Employee's
Compensation, as limited by Section 401(a)(17) of the Code,
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 of (i)
such Participants failure to complete 1,000 Hours of Service
(or any other equivalent provided in the Plan) or (ii) the
Employee's failure to make mandatory contributions or (iii)
Compensation less than a stated amount.
(B) For purposes of computing the minimum allocation, Compensation
shall mean Compensation as defined in Section 6.6(A) as limited
by Section 401(a)(17) of the Code.
(C) Section 9.3(A) shall not apply to any Participant who was not
employed by the Employer on the last day of the Plan Year.
(D) Section 9.3(A) shall not apply to any Participant to the extent
the Participant is covered under any other plan or plans of the
Employer and the Employer has provided in Item B(14) of the
Adoption Agreement that the minimum allocation or benefit
requirement applicable to Top-Heavy Plans will be met in the
other plan or plans.
(E) The minimum allocation required (to the extent required to be
nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Section 411(a)(3)(B) or Section 411(a)(3)(D) of
the Code.
(F) For each Plan Year in which the Paired Plans are Top-Heavy, the
Top-Heavy requirements set forth in Article VIII of the Plan and
Item B(14) of the Adoption Agreement shall apply.
(G) Neither Before Tax Contributions nor Matching Contributions may
be taken into account for the purpose of satisfying the minimum
Top-Heavy contribution requirements.
9.4 MINIMUM VESTING SCHEDULES. For any Plan Year in which this Plan is a
Top-Heavy Plan, the vesting schedule elected by the Employer in Item
B(14) and/or C(4)(d) of the Adoption Agreement will automatically apply
to the Plan. The minimum vesting schedule applies to all benefits within
the meaning of Section 411(a)(7) of the Code except those attributable
to Employee contributions, including benefits accrued before the
effective date of Section 416 and benefits accrued before the Plan
became a Top-Heavy Plan. Further, no decrease in a
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Participant's nonforfeitable percentage may occur in the event the
Plan's Status as a Top-Heavy Plan changes for any Plan Year. However,
this Section 9.4 does not apply to the account balance of any Employee
who does not have an Hour of Service after the Plan has initially become
a Top-Heavy Plan and such Employee's account balance attributable to
employer contributions and forfeitures will be determined without regard
to this Section 9.4.
ARTICLE X
TRUSTEE
10.1 TRUSTEE. The Trustee shall receive, hold, invest, administer and
distribute the Trust Fund in accordance with the provisions of the Plan
as herein set forth.
10.2 RECORDS AND ACCOUNTS OF TRUSTEE. The Trustee shall maintain accurate and
detailed records and accounts of all its transactions of the Trust Fund,
which shall be available at all reasonable times for inspection or audit
by any person designated by the Employer and by any other person or
entity to the extent required by law.
10.3 REPORTS TO EMPLOYER. As soon as practicable following the close of each
accounting period and following the effective date of the termination of
the Plan, the Trustee shall file a written report with the Employer. The
report shall set forth all transactions with respect to the Trust Fund
during the period listing the Trust Fund assets with their market
value as of the close of the period covered by the report.
10.4 POWERS OF TRUSTEE. The Trustee shall administer the Trust Fund as a
nondiscretionary Trustee, and the Trustee shall not have any discretion
or authority with regard to the investment of the Trust Fund and shall
act solely as a directed Trustee of the fund contributed to it. The
Trustee, as a nondiscretionary Trustee, as may be directed by the
Employer (or the Participants to the extent provided herein) is
authorized and empowered, by way of limitation, with the following
powers, rights and duties, each of which the Trustee shall exercise in a
nondiscretionary manner as directed in accordance with the direction of
the Employer (or the Participants) as a Named Fiduciary (except to the
extent that Plan assets are subject to the control and management of a
properly appointed Investment Manager):
(A) At the direction of the Named Fiduciary, to sell, write options
on, convey or transfer, invest and reinvest any part thereof in
each and every kind of property, whether real, personal or
mixed, tangible or intangible, whether income or non-income
producing and wherever situated, including, but not limited to,
time deposits (including time deposits in the Trustee or its
affiliates, or any successor thereto, if the deposits bear a
reasonable rate of interest), fee simple, leasehold or lesser
estates in real estate, shares of common and preferred stock,
mortgages, bonds, leases, notes, debentures, equipment or
collateral trust certificates, rights, warrants, convertible or
exchangeable, and other corporate, individual or government
securities or obligations, annuity, retirement or other
insurance contracts, mutual funds (including funds for which the
Trustee or its affiliates serve as investment advisor), units of
group or collective trusts established to permit the pooling of
funds of separate pension and profit sharing trusts, provided
the Internal Revenue Service has ruled such group trust to be
qualified under Code Section 401(a) and exempt under Code
Section 501(a) (or the applicable corresponding provision of any
other
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Revenue Act) or in units of any other common, collective or
commingled trust fund heretofore or hereafter established and
maintained by the Trustee or its affiliates; as long as the
Trustee holds any units hereunder, the instrument establishing
such common trust fund (including all amendments thereto) shall
be deemed to have been adopted and made a part of this Plan, and
such other investments as the Named Fiduciary shall direct the
Trustee to invest Plan assets or hold as an Investment Fund for
the investment of Plan assets pursuant to Participant direction.
(B) At the direction of the Named Fiduciary, to sell, convert,
redeem, exchange, grant options for the purchase or exchange of,
or otherwise dispose of any property held hereunder, at public
or private sale, for cash or upon credit with or without
security, without obligation on the part of any person dealing
with the Trustee to see to the application of the proceeds of or
to inquire into the validity, expediency, or propriety of any
such disposal;
(C) At the direction of the Named Fiduciary, to manage, operate,
repair, partition and improve and mortgage or lease (with or
without an option to purchase) for any length of time any
property held in the Trust Fund; to renew or extend any mortgage
or lease, upon such terms as the Trustee may deem expedient; to
agree to reduction of the rate of interest on any mortgage; to
agree to any modification in the terms of any lease or mortgage,
or of any guarantee pertaining to either of them; to exercise
and enforce any right of foreclosure; to bid in property on
foreclosure; to take a deed in lieu of foreclosure with or
without paying consideration therefor and in connection
therewith to release the obligation on the bond secured by the
mortgage; and to exercise and enforce in any action, suit or
proceeding at law or in equity any rights, covenants,
conditions, or remedies with respect to any lease or mortgage or
to any guarantee pertaining to either of them or to waive any
default in the performance thereof;
(D) In accordance with the direction of a Named Fiduciary, to vote,
personally or by general or limited proxy, any shares of stock
or other securities held in the Trust Fund, provided that all
voting rights pertaining to shares of any financial institution
in the state where the Trustee is located shall be exercised by
the trustee only if and as directed in writing by the Committee;
provided further, that the Trustee and the Employer may agree in
writing that such voting rights be passed through to the
Participant's in proportion to their interest in the Investment
Funds to delegate discretionary voting power to the trustees of
a voting trust for any period of time; and to exercise or sell,
personally or by power of attorney, any conversion or
subscription or other rights appurtenant to any securities or
other property held in the Trust Fund;
(E) As may be directed by the Named Fiduciary, to join in or oppose
any reorganization, recapitalization, consolidation, merger or
liquidation, or any Plan therefor, or any lease (with or without
an option to purchase), mortgage or sale of the property of any
organization the securities of which are held in the Trust Fund;
to pay from the Trust Fund any assessments, charges, or
compensation specified in any Plan of reorganization,
recapitalization, consolidation, merger or liquidation; to
deposit any property with any committee or depository; and to
retain any property allotted to the Trust Fund in any
reorganization, recapitalization, consolidation, merger or
liquidation;
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(F) In accordance with the written instructions of a Named
Fiduciary, to settle, compromise or commit to arbitration any
claim, debt or obligation of or against the Trust Fund; to
enforce or abstain from enforcing any right, claim, debt, or
obligation; and to abandon any property determined by it to be
worthless;
(G) As may be directed by the Named Fiduciary, to continue to hold
any property of the Trust Fund, whether or not productive of
income; to reserve from investment and keep unproductive of
income, without liability for interest, such cash as it deems
advisable and, consistent with its obligations as Trustee
hereunder, to hold such cash in a demand deposit in the Trustee
bank, its affiliates, or any successor thereto;
(H) To hold property of the Trust Fund in its own name, or in the
name of nominee, without disclosure of this trust, or in
bearer form so that it may pass by delivery, and to deposit
property with any depository, but no such holding or depositing
shall relieve the Trustee of its responsibility for the safe
custody and disposition of the Trust Fund in accordance with the
provisions of this agreement as may be directed by the Named
Fiduciary, and the Trustee's records shall at all times show
that such property is part of the Trust Fund;
(I) As directed by the Named Fiduciary, to make, execute and
deliver, as Trustee, any deeds, conveyances, leases (with or
without option to purchase), mortgages, options, contracts,
waivers, or other instruments that the Trustee shall deem
necessary or desirable in the exercise of its powers under this
agreement;
(J) To employ, at the expense of the Employer or the Trust Fund,
agents and delegate to them such duties as the Trustee sees fit;
the Trustee shall not be responsible for any loss occasioned by
any such agents selected by it with reasonable care; the Trustee
may consult with legal counsel (who may be counsel for the
Employer) concerning any questions which may arise with
reference to its power or duties under this Plan, and the
written opinion of such counsel shall be full and complete
protection with respect to any action taken or not taken by the
Trustee in good faith and in accordance with the written opinion
of such counsel;
(K) To pay out of the Trust Fund any taxes imposed or levied with
respect to the Trust Fund and may contest the validity or amount
of any tax, assessment, penalty, claim or demand respecting the
Trust Fund; however, unless the Trustee shall have first been
indemnified to its satisfaction, it shall not be required to
contest the validity of any tax, or to institute, maintain or
defend against any other action or proceeding either at law or
in equity;
(L) To make loans to Participants in accordance with policies
established by the Committee and in accordance with the terms
of the Plan and the and to segregate or otherwise identify
property of the Trust Fund as directed by the Committee for such
purpose including providing collateral for loans made pursuant
to the Plan.
10.5 TRUSTEE'S FEES AND EXPENSES. The Trustee shall be entitled to receive
reasonable fees for its services hereunder in accordance with its
schedule of fees then in effect and shall be entitled to receive
reimbursement for all reasonable expenses incurred by it in the
administration of this
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Plan. Except to the extent that the Employer shall pay such fees and
expenses, they shall be charged to and collected by the Trustee from
each Participant's accounts. The Trustee's fees and expenses for
extraordinary services in connection with any Participant's accounts may
be charged to and collected by the Trustee from such accounts.
10.6 TRUSTEE MAY RESIGN OR BE REMOVED. The Trustee may resign by written
notice to the Employer which shall be effective sixty (60) days after
delivery unless the Trustee and the Employer agree to an earlier
effective date. The Trustee may be removed by the Employer by written
notice to the Trustee which shall be effective sixty (60) days after
delivery unless the Trustee and the Employer agree to an earlier
effective date. Prior to the effective date of such resignation or
removal, the Employer shall amend its Plan to eliminate any reference to
the PRISM(R) PROTOTYPE RETIREMENT PLAN AND TRUST, and appoint a new
trustee. The Trustee shall deliver the Trust Fund to its successor on
the effective date of resignation or removal, or as soon after such
effective date as practicable. However, the Trustee may first subtract
any amounts owed it from the Trust Fund for compensation, expenses and
taxes due.
If the Employer fails to so amend the Plan and appoint a successor
trustee within the sixty (60) days, or longer period as the Trustee
permits in writing, the Trustee shall apply to a court of competent
jurisdiction for appointment of a successor trustee.
10.7 SEPARATE INVESTMENT FUNDS.
(A) The assets of the Trust Fund shall be held in such number of
Investment Funds as the Employer and the Trustee may agree, plus
an Employer Stock Fund if selected by the Employer in the
Adoption Agreement, as the Employer shall designate in writing
on the Investment Fund Designation form affixed to the Adoption
Agreement. Such Investment Funds shall be selected by the
Employer from among the funds offered by the Trustee for use as
Investment Funds in the PRISM(R) PROTOTYPE RETIREMENT PLAN &
TRUST. The Trustee reserves the right to change the funds
available for use as Investment Funds in the PRISM(R) PROTOTYPE
RETIREMENT PLAN & TRUST, from time to time, and the Employer
agrees to execute an amended Investment Fund Designation form to
reflect any such changes as may impact the Investment Funds
available to the Employer's Plan. The Employer hereby
acknowledges that, available as Investment Funds are interests
in registered investment companies (i.e. mutual funds) for
which the sponsoring organization, its parent, affiliates or
successors may serve as investment advisor and receive
compensation from the registered investment company for its
services as investment advisor. The Employer acknowledges that
it, as Named Fiduciary, has the sole responsibility for
selection of the Investment Funds offered under the Plan, and it
has done so on the basis of the Employer's determination, after
due inquiry, of the appropriateness of the selected Investment
Funds as vehicles for the investment of Plan assets pursuant to
the terms of the Plan, considering all relevant facts and
circumstances, including but not limited to (i) the investment
policy and philosophy of the Employer developed pursuant to
ERISA section 402(b)(1); (ii) the Participants, including
average level of investment experience and sophistication;
(iii) the ability of Participants, using an appropriate mix of
Investment Funds, to diversify the investment of Plan assets
held for their benefit; (iv) the ability of Participants to,
utilizing an appropriate mix of Investment Funds, to structure
an investment portfolio within their account in the Plan with
risk and
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return characteristics within the normal range of risk and
return characteristics for individuals with similar investment
backgrounds, experience and expectations; and, (v) in making the
selection of Investment Funds, the Employer did not rely on any
representations or recommendations from the Trustee or any of
its employees, except as may have been provided through written
materials, including marketing materials provided by the various
sponsors or distributors of the Investment Funds, and that the
Investment Fund selection has not be influenced, approved, or
encouraged through the actions of the Trustee or its employees.
For purposes of the Plan, "Employer Stock" shall mean common
stock listed on a recognized securities exchange issued by an
Employer of Employees covered by the Plan or by an affiliate of
such Employer and which shall be a "qualifying employer
security" as defined in ERISA. The Employer Stock Fund shall be
invested and reinvested in shares of Employer Stock, which stock
shall be purchased by the Trustee to the extent not contributed
to the Plan by the Employer, except for amounts which may
reasonably be expected to be necessary to satisfy distributions
to be made in cash. No Employer Stock shall be acquired or held
in any Investment Fund other than the Employer Stock Fund. Up to
100% of the assets of the Trust Fund may be invested in Employer
Stock.
All contributions shall be allocated by the Trustee to the
Plan's Investment Funds specified by the Employer. Dividends,
interest and other distributions shall be reinvested in the same
Investment Fund from which received.
Employers sponsoring 401(k) profit sharing plans may elect to
determine the Investment Funds, including an Employer Stock
Fund, if applicable, into which Matching Contributions and/or
Employer Contributions will be invested and/or into which
Participants may not direct contributions. By making these
designations, the Employer shall be deemed to have advised the
Trustee in writing regarding the retention of investment powers.
Notwithstanding the foregoing provisions of this Section
10.7(A), the Trustee may, in its discretion, accept certain
investments which have been, and are, held as part of the Trust
Fund prior to the date the Employer adopted this Plan. Such
investments shall be considered investments directed by the
Employer or an Investment Committee for the Plan ("Investment
Committee"), if one is acting. The Trustee shall hold,
administer and dispose of such investments in accordance with
directions to the Trustee contained in a written notice from the
Employer or Investment Committee. Any such notice shall advise
the Trustee regarding the retention of investment powers by the
Employer or the Investment Committee and shall be of a
continuing nature or otherwise, and may be revoked in writing by
the Employer or Investment Committee.
The Trustee shall not be liable but shall be fully protected by
reason of its taking or refraining from taking any action at the
direction of the Employer or Investment Committee, nor shall the
Trustee be liable but shall be fully protected by reason of its
refraining from taking any action because of the failure of the
Employer or the Investment Committee to give a direction or
order. The Trustee shall be under no duty to question or make
inquiry as to any direction, notification or order or failure to
give a direction, notification or order by the Employer or the
Investment Committee. The
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Trustee shall be under no duty to make any review of investments
directed by the Employer or Investment Committee acquired for
the Trust Fund and under no duty at any time to make any
recommendation with respect to disposing of or continuing to
retain any such investments. While the Employer may direct the
Trustee with respect to Plan investments, the Employer may not
(1) borrow from the Fund or pledge any assets of the Fund as
security for a loan; (2) buy property or assets from or sell
property or assets to the Fund; (3) charge any fee for
services rendered to the Fund; or (4) receive any services from
the Fund on a preferential basis.
The Employer hereby indemnifies and holds the Trustee or its
nominee harmless from any and all actions, claims, demands,
liabilities, losses, damages or reasonable expenses of
whatsoever kind and nature in connection with or arising out of
(1) any action taken or omitted in good faith or any investment
or disbursement of any part of the Trust Fund made by the
Trustee in accordance with the directions of the Employer or the
Investment Committee or any inaction with respect to any
Employer or Investment Committee directed investment or with
respect to any investment previously made at the direction of
the Employer or Investment Committee in the absence of
directions from the Employer or Investment Committee therefor,
or (2) any failure by the Trustee to pay for any property
purchased by the Employer or the Investment Committee for the
Trust Fund by reason of the insufficiency of funds in the Trust
Fund.
Anything hereinabove to the contrary notwithstanding, the
Employer shall have no responsibility to the Trustee under the
foregoing indemnification if the Trustee knowingly participated
in or knowingly concealed any act or omission of the Employer or
Investment Committee knowing that such act or omission
constituted a breach of fiduciary responsibility, or if the
Trustee fails to perform any of the duties undertaken by it
under the provisions of this Plan, or if the Trustee fails to
act in conformity with the directions of an authorized
representative of the Employer or the Investment Committee.
(B) Each Participant shall by such mechanism as may be agreed upon
between the Trustee and Employer, direct that the contributions
made to his or her accounts for which the Participant may direct
investments, as selected by the Employer in the Adoption
Agreement, be invested in one or more of the Investment Funds,
including the Employer Stock Fund, if applicable. At the time an
Employee becomes eligible for the Plan, he or she shall specify
the percentage of his or her accounts (expressed in percentage
increments as may be agreed to between the Employer and the
Trustee) to be invested pro-rata in each such Investment Fund.
(C) Upon prior written notice to the Trustee, or other form of
notice acceptable to the Trustee, a Participant may change an
investment direction with respect to future contributions.
Through acceptable notice to the Trustee, the Participant may
elect to transfer all or a portion of such Participant's
interest in each Investment Fund (based on the value of such
interest on the Valuation Date immediately preceding such
election), including an Employer Stock Fund, if applicable, to
any other of the Investment Funds selected by the Employer so
that the Participant's interest in the said Investment Funds
immediately after the transfer is allocated in percentage
increments as may be agreed to by the Employer and the Trustee.
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Notwithstanding any Participant's election to change Investment
Funds, the Trustee may, in its discretion, delay satisfaction of
requests to change from a guaranteed investment contract fund
for up to one year, or delay satisfaction of changes in
Investment Funds pending settlement of prior changes in
Investment Funds.
(D) The Employer will be responsible when transmitting Employer and
Employee contributions to show the dollar amount to be credited
to each Investment Fund for each Employee.
(E) Except as otherwise provided in the Plan, neither the Trustee,
nor the Employer, nor any fiduciary of the Plan shall be liable
to the Participant or any of his or her beneficiaries for any
loss resulting from action taken at the direction of the
Participant.
(F) In a 401(k) profit sharing Plan where the Employer has elected
to invest a portion or all of the Matching Contributions and/or
Employer Contributions in the Employer Stock Fund, then the
following shall apply:
If selected by the Employer in the Adoption Agreement, a
Participant who is fifty-five (55) years of age or older and who
is 100% vested in his Matching Contribution account and/or
Employer Contribution account may elect to have the Employer
Stock (and any earnings thereon) attributable to such Matching
Contributions and/or Employer Contributions diversified in the
other Investment Funds under the Plan in accordance with the
following rules and limitations. The amount of Employer Stock
which may be diversified each Plan Year shall be determined in
accordance with the following schedule:
<TABLE>
<CAPTION>
THEN THE PERCENT OF THE NUMBER
OF WHOLE SHARES (ROUNDED TO
THE NEAREST WHOLE NUMBER)
CREDITED TO THE PARTICIPANTS'
IF THE AGE ATTAINED BY MATCHING ACCOUNT AND/OR
THE PARTICIPANT EMPLOYER CONTRIBUTION
DURING THE PLAN YEAR IS: ACCOUNT ON THE LAST DAY OF THE
PRECEDING PLAN YEAR WHICH
MAY BE DIVERSIFIED PURSUANT TO
THE RULES BELOW MAY NOT EXCEED
- --------------------------------------------------------------------------
<S> <C>
55 25%
- --------------------------------------------------------------------------
56 25%
- --------------------------------------------------------------------------
57 30%
- --------------------------------------------------------------------------
58 40%
- --------------------------------------------------------------------------
59 50%
- --------------------------------------------------------------------------
60 60%
- --------------------------------------------------------------------------
61 70%
- --------------------------------------------------------------------------
62 80%
- --------------------------------------------------------------------------
63 90%
- --------------------------------------------------------------------------
64 100%
- --------------------------------------------------------------------------
</TABLE>
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<PAGE> 116
The election to diversify may only be made once each Plan Year.
The election may be made in any month by providing notice to the
Committee in accordance with the frequency selected by the
Employer for other Investment Fund changes under the Plan. Each
election to make a transfer pursuant to this Section shall
specify the Investment Fund(s) into which the shares subject to
diversification will be reinvested so that the Participant's
interest in the said Investment Fund(s), immediately after the
transfer, is allocated in increments as may be allowed by the
Trustee. Thereafter, the Participant's interest in said
Investment Fund(s) shall be subject to transfer in accordance
with this Section.
(G) Forfeitures arising under the Plan will be invested in an
Investment Fund as may be selected in the discretion of the
Employer.
(H) In the event the Trust holds life insurance, the following
restrictions shall apply:
(1) Limitations on Premium Payments
(a) If ordinary or whole life insurance contracts
are purchased on the life of a Participant, less
than one-half of the insured Participant's
current allocation of contributions will be used
to pay premiums attributable to such insurance.
Ordinary or whole life insurance contracts are
those with both nondecreasing benefits and
nonincreasing premiums.
(b) If term or universal life insurance contracts
are purchased, no more than one-quarter of the
insured Participant's current allocation of
contributions will be used to pay premiums
attributable to such insurance.
(2) The Plan Administrator will direct the Trustee to
convert the entire value of any life insurance contract
at or before the Participant's actual retirement or
distribution on termination of employment, but not later
than the Participant's Required Beginning Date to
provide cash values or retirement annuity income, or,
subject to the Joint and Survivor Annuity waiver
requirements of Section 7.10, the Plan Administrator may
direct the Trustee to distribute the insurance contract
directly to the Participant.
(3) The Trustee, at the direction of the Employer shall be
entitled to exercise all rights and options with respect
to any such life insurance contracts held by the Plan.
10.8 REGISTRATION, DISTRIBUTION AND VOTING OF EMPLOYER STOCK AND PROCEDURES
REGARDING TENDER OFFERS.
(A) All voting rights on shares of Employer Stock held in the
Employer Stock Fund shall be exercised by the Trustee only as
directed by the Participants acting in their capacity as "Named
Fiduciaries" (as defined in Section 402 of the Act) in
accordance with the following provisions of this Section
10.8(A):
(1) As soon as practicable before each annual or special
shareholders' meeting of the Employer, the Trustee
shall furnish to each Participant sufficient copies of
the proxy solicitation material sent generally to
shareholders, together with a form
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requesting confidential instructions on how the shares
of Employer Stock allocated to such Participant's
account, and, separately, such shares of Employer Stock
as may be unallocated ("Unallocated Shares") or
allocated to Participant accounts but for which the
Trustee does not receive timely voting instruction from
the Participant (Non-Directed Shares"), (including
fractional shares to 1/1000 of a share) are to be
voted. The direction with respect to Non-Directed
Shares and Unallocated Shares shall apply to such
number of votes equal to the total number of votes
attributable to Non-Directed Shares and Unallocated
Shares multiplied by a fraction, the numerator of which
is the number of shares of Employer Stock credited to
the Participant's account and the denominator of which
is the total number of shares credited to the accounts
of all such Participants who have timely provided
directions to the Trustee with respect to Non-Directed
Shares and Unallocated Shares under this Section
10.8(A)(1). The Employer and the Committee will
cooperate with the Trustee to ensure that Participants
receive the requisite information in a timely manner.
The materials furnished to the Participants shall
include a notice from the Trustee that the Trustee will
vote any shares for which timely instructions are not
received by the Trustee as may be directed by those
voting Participant, acting in their capacity as Named
Fiduciaries of the Plan as provided above . Upon
timely receipt of such instructions, the Trustee shall
vote the shares as instructed. The instructions
received by the Trustee from Participants or
Beneficiaries shall be held by the Trustee in strict
confidence and shall not be divulged or released to any
person including directors, officers or employees of
the Employer, or of any other company, except as
otherwise required by law.
(2) With respect to all corporate matters submitted to
shareholders, all shares of Employer Stock
shall be voted only in accordance with the directions
of such Participants as Named Fiduciaries as given to
the Trustee as provided in Section 10.8(A)(1). With
respect to shares of Employer Stock allocated to the
account of a deceased Participant, such Participant's
Beneficiary, as Named Fiduciary, shall be entitled to
direct the voting of shares of Employer Sock as if such
Beneficiary were the Participant.
(B) All tender or exchange decisions with respect to Employer Stock
held in the Employer Stock Fund shall be made only by the
Participants acting in their capacity as Named Fiduciaries with
respect to the Employer Stock allocated to their accounts in
accordance with the following provisions of this Section
10.8(B):
(1) In the event an offer shall be received by the Trustee
(including a tender offer for shares of Employer Stock
subject to Section 14(d)(1) of the Securities Exchange
Act of 1934 or subject to Rule 13e-4 promulgated under
that Act, as those provisions may from time to time be
amended) to purchase or exchange any shares of Employer
Stock held by the Trust, the Trustee will advise each
Participant who has shares of Employer Stock credited to
such Participant's account in writing of the terms of
the offer as soon as practicable after its commencement
and will furnish each Participant with a form by which
he may instruct the Trustee confidentially whether or
not to tender or exchange shares allocated to such
Participant's account, and separately, Unallocated
Shares and Non-Directed Shares (including fractional
shares to 1/1000th of a share). The directions with
respect to Non-Directed Shares and Unallocated Shares
shall apply to such number of Non-Directed Shares and
Unallocated Shares equal to the total number of
Non-Directed Shares and Unallocated Shares multiplied
by a fraction, the numerator of which is the number of
shares of Employer Stock credited to the Participant's
account and the denominator of which is the total
number of shares credited to the accounts of all such
Participants who have timely provided directions to the
Trustee with respect to Non-Directed Shares and
Unallocated Shares under this Section 10.8(B). The
materials furnished to the Participants shall include
(i) a notice from the Trustee that, except as provided
in this Section 10.8(B), the Trustee will not tender or
exchange any shares for which timely instructions are
not received by the Trustee and (ii) such related
documents as are prepared by any person and provided to
the shareholders of the Employer pursuant to the
Securities Exchange Act of 1934. The Committee and the
Trustee may also provide Participants with such other
material concerning the tender or exchange
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offer as the Trustee or the Committee in its discretion
determines to be appropriate; provided, however, that
prior to any distribution of materials by the Committee,
the Trustee shall be furnished with sufficient numbers
of complete copies of all such materials. The Employer
and the Committee will cooperate with the Trustee to
ensure that Participants receive the requisite
information in a timely manner.
(2) The Trustee shall tender or not tender shares or
exchange shares of Employer Stock (including
fractional shares to 1/1000th of a share) only as and
to the extent instructed by the Participants as Named
Fiduciaries as provided in Section 10.8(B)(1). With
respect to shares of Employer Stock allocated to the
account of a deceased Participant, such Participant's
Beneficiary, as a Named Fiduciary, shall be entitled to
direct the Trustee whether or not to tender or exchange
such shares as if such Beneficiary were the
Participant. If tender or exchange instructions for
shares of Employer Stock allocated to the account of
any Participant are not timely received by the Trustee,
the Trustee will treat the non-receipt as a direction
not to tender or exchange such shares. The instructions
received by the Trustee from Participants or
Beneficiaries shall be held by the Trustee in strict
confidence and shall not be divulged or released to any
person, including directors, officers or employees of
the Employer, or of any other company, except as
otherwise required by law.
(3) In the event, under the terms of a tender offer or
otherwise, any shares of Employer Stock tendered for
sale, exchange or transfer pursuant to such offer may be
withdrawn from such offer, the Trustee shall follow such
instructions respecting the withdrawal of such
securities from such offer in the same manner and the
same proportion as shall be timely received by the
Trustee from the Participants, as Named Fiduciaries,
entitled under this Section 10.8(B) to give instructions
as to the sale, exchange or transfer of securities
pursuant to such offer.
(4) In the event an offer shall be received by the Trustee
and instructions shall be solicited from Participants
pursuant to Section 10.8(B)(1-3) regarding such offer,
and prior to termination of such offer, another offer is
received by the Trustee for the securities subject to
the first offer, the Trustee shall use its best efforts
under the circumstances to solicit instructions from the
Participants to the Trustee (i) with respect to
securities tendered for sale, exchange or transfer
pursuant to the first offer, whether to withdraw such
tender, if possible, and, if withdrawn, whether to
tender any securities so withdrawn for sale, exchange or
transfer pursuant to the second offer and (ii) with
respect to securities not tendered for sale, exchange or
transfer pursuant to the first offer, whether to tender
or not to tender such securities for sale, exchange or
transfer pursuant to the second offer. The Trustee
shall follow all such instructions received in a timely
manner from Participants in the same manner and in the
same proportion as provided in Section 10.8(B)(1-3).
With respect to any further offer for any Employer Stock
received by the Trustee and subject to any earlier offer
(including successive offers from one or more existing
offers), the Trustee shall act in the same manner as
described above.
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<PAGE> 119
(5) A Participant's instructions to the Trustee to tender or
exchange shares of Employer Stock will not be deemed a
withdrawal or suspension from the Plan or a forfeiture
of any portion of the Participant's interest in the
Plan. Funds received in exchange for tendered shares
will be credited to the account of the Participant whose
shares were tendered and will be used by the Trustee to
purchase Employer Stock, as soon as practicable. In the
interim, the Trustee will invest such funds in
short-term investments permitted under the Plan, and in
the same manner in which forfeited amounts are invested.
(6) In the event the Employer initiates a tender or exchange
offer, the Trustee may, in its sole discretion, enter
into an agreement with the Employer not to tender or
exchange any shares of Employer Stock in such offer, in
which event, the foregoing provisions of this Section
10.8(B) shall have no effect with respect to such offer
and the Trustee shall not tender or exchange any shares
of Employer Stock in such offer.
(C) The Trustee acting with respect to the Employer Stock Fund may
with the consent of the Committee designate any Employee or
other Trustee as agent to solicit the instructions to vote
provided for in Subsection (A) of this Section, and shall be
held harmless in relying upon such agent's written advice as to
how shares are to be voted, and said Trustee may, with the
consent of the Committee, designate any Employee as agent to
solicit instructions from Participants regarding such a tender
offer, as required under Subsection (B) above, and shall be held
harmless in relying upon such agent's written advice as to
whether shares of Employer Stock are to be tendered.
(D) The Employer shall be responsible for complying with applicable
federal and state securities laws and regulations.
10.9 VALUATION OF INVESTMENT FUNDS AND ACCOUNTS.
(A) As of each Valuation Date, the Trustee shall determine the fair
market value of each Investment Fund, including an Employer
Stock Fund, if any, being administered by the Trustee. With
respect to each such Investment Fund, the Trustee shall
determine (a) the change in value between the current Valuation
Date and the then last preceding Valuation Date, (b) the net
gain or loss resulting from expenses paid (including fees and
expenses, if any, which are to be charged to such Fund) and (c)
realized and unrealized gains and losses.
The transfer of funds to or from an Investment Fund pursuant to
Section 10.7(C) and payments, distributions and withdrawals from
an Investment Fund to provide benefits under the Plan for
Participants or Beneficiaries shall not be deemed to be gains,
expenses or losses of an Investment Fund.
After each Valuation Date, the Trustee shall allocate the net
gain or loss of each Investment Fund as of such Valuation Date
to the accounts of Participants participating in such Investment
Fund on such Valuation Date. Contributions, forfeitures and
rollovers received and credited to Participants' accounts as of
such Valuation Date, or as
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<PAGE> 120
of any earlier date since the last preceding Valuation Date
shall not be considered in allocating gains or losses allocated
to Participants' accounts.
(B) The reasonable and equitable decision of the Trustee as to the
value of each Investment Fund, including an Employer Stock Fund,
if any, and of any account as of each Valuation Date shall be
conclusive and binding upon all persons having any interest,
direct or indirect, in the Investment Funds or in any account.
ARTICLE XI
ADMINISTRATION
11.1 COMMITTEE MEMBERSHIP. The Employer shall appoint a Committee which shall
consist of at least one member. The Committee members will be named in
the Adoption Agreement and may be, but are not required to be, Employees
of the Employer. All members of the Committee shall serve at the
pleasure of the Employer. In the event that the Committee has more than
one member, one member shall serve as Chairman and one as Secretary.
Any member of the Committee may resign by notice in writing to the
Employer. Any vacancy in the Committee shall be filled by the Employer
as soon as practicable after a vacancy. If the Employer does not
designate a Committee, the Employer shall assume all of the duties of
the Committee.
11.2 POWERS AND DUTIES OF COMMITTEE. The Committee shall have all powers and
duties and only the powers and duties as are specifically conferred upon
it by this Plan or as the Employer may delegate to or impose upon it
consistent with the provisions of this Plan, ERISA and the Code.
Without limiting the generality of the foregoing, the Committee shall
have the following powers and duties:
(A) to interpret and construe the terms and provisions of this Plan
and to decide any questions which may arise hereunder, including
but not limited to --
(1) the amount of a Participant's Compensation,
(2) a Participant's Years of Service,
(3) the age of any person who might be entitled to receive
benefits,
(4) the right of any person to receive benefits,
(5) the amount of any benefits to be paid to any persons;
(B) to cause to be maintained all necessary records and accounts
under this Plan and to keep in convenient form any data as may
be necessary for valuation of the assets and liabilities;
(C) to rely upon the records of the Employer or upon any
certificate, statement or other representation made to it by a
Participant, a Beneficiary, the authorized representative of the
Participant or Beneficiary, or the Trustee concerning any fact
required to be
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<PAGE> 121
determined under any of the provisions of this Plan, and the
Committee shall not be required to make inquiry into the
propriety of any action by the Employer or the Trustee;
(D) to give written notice to a Participant, a Beneficiary, or the
authorized representative of the Participant or Beneficiary, of
the amount of benefits payable under this Plan;
(E) to make and enforce any rules, not inconsistent with this Plan,
as it shall deem necessary or proper for the efficient
administration of this Plan;
(F) to have and exercise such other authority as it deems necessary
to carry out the purposes and provisions of this Plan, provided
that any act of discretion permitted shall be exercised in a
uniform non-discriminatory manner with respect to individuals in
like or similar circumstances;
(G) to adopt rules and guidelines for the administration of this
Plan, provided that they are not inconsistent with the terms of
this Plan and are uniformly applicable to all persons similarly
situated and to delegate in accordance with Section 11.8 such
functions and duties as the Committee deems advisable.
(H) to establish a funding policy and investment objectives
consistent with the purposes of the Plan and the requirements of
law;
(I) to employ such attorneys, accountants and agents as it shall
determine to assist it in carrying out its duties hereunder.
Except as otherwise provided in this Plan or determined by the Employer,
any action or determination taken or made by the Committee or any
interpretation or construction made by the Committee shall be final and
shall be binding upon all persons. The Committee shall at all times
exercise the power and authority given to it under this Plan in a fair,
reasonable and non-discriminatory manner.
11.3 ACTIONS OF THE COMMITTEE. Any act authorized or required to be taken by
the Committee shall be taken by a decision of the majority of the
members acting at the time. Any decision of the Committee may be
expressed by a vote at a Committee meeting or in writing, signed by all
members of the Committee, without a meeting. All allocation statements,
notices, directions, approvals, instructions and all other
communications required or authorized to be given by the Committee under
this Plan shall be in writing and signed by a majority of the members of
the Committee. The Committee may, however, by an instrument in writing
signed by all the members and filed with the Trustee, designate one or
more if its members as having the authority to sign all such
communications on behalf of the Committee. Until notified in writing to
the contrary, the Trustee shall be fully protected in acting in
accordance with all communications which it considers genuine and to
have been signed on behalf of the Committee by the members authorized to
sign communications. If at any time for any reason the Committee shall
be unable to act with respect to any matter, the Employer shall act with
respect to that matter and its action shall be final and it shall be
binding upon all persons.
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<PAGE> 122
11.4 RESIGNATION, REMOVAL AND DESIGNATION OF SUCCESSORS. Any member of the
Committee may resign at any time and any member may be removed by the
Employer with or without cause. In case of resignation, death, removal
or inability or failure for any cause of any member of the Committee to
serve or to continue to serve, a successor shall be appointed by the
Employer. The Committee shall promptly notify the Trustee of any change
in its membership.
11.5 COMMITTEE REVIEW. If any Participant, Spouse, Beneficiary, or other
authorized representative of a Participant, Spouse or Beneficiary shall
file an application with the Committee for benefits under the Plan and
the application is denied, in whole or in part, such applicant shall be
notified of the denial in writing within ninety (90) days of receipt of
the claim. The notice to the applicant shall state that the Committee
has denied the application pursuant to the exercise of its discretionary
powers. This notice shall set forth the specific reasons for the denial;
specific reference to pertinent Plan provisions upon which the denial is
based, a description of any additional information needed to perfect the
claim with an explanation of why it is necessary and an explanation of
procedure for appeal.
Any Participant, Spouse, Beneficiary, or other authorized representative
of the Participant, Spouse or Beneficiary whose application for benefits
has been denied may, within sixty (60) days after receiving the
notification, make a written application to the Committee to review the
denial. The applicant may request that the review be made by written
statements submitted by the applicant and the Committee, at a hearing,
or by both. Any hearing shall be held in the main offices of the
Employer on a date and time as the Employer shall designate with at
least seven (7) days notice to the applicant unless the applicant
accepts shorter notice. Within sixty (60) days after the review has been
completed, the Employer shall render a written decision and shall send a
copy to the applicant. This decision shall include specific reasons for
the decision, as well as specific references to the pertinent Plan
provisions upon which the decision is based.
If the Participant, Spouse, Beneficiary, or other authorized
representative of a Participant, Spouse or Beneficiary does not file
written notice with the Employer at the times set forth above, the
individual shall have waived all benefits under this Plan other than as
set forth in the notice from the Committee.
11.6 RECORDS. The Committee shall keep or cause to be kept records of all
meetings, proceedings and actions held, undertaken or performed by it
and shall furnish to the Employer reports as the Employer may request.
11.7 COMPENSATION. The members of the Committee shall serve without
compensation for services as such, but all reasonably incurred fees and
expenses shall be paid by the Employer.
11.8 DESIGNATION OF NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY AMONG
FIDUCIARIES. The Employer, the Committee and the Trustee shall be "Named
Fiduciaries" with respect to this Plan as that term is defined in ERISA.
The Named Fiduciaries shall have only those specific powers, duties,
responsibilities and obligations as are given to them under this Plan.
The Named Fiduciaries may designate any person or persons as a fiduciary
and may delegate to such person or persons any one or more of their
powers, functions, duties and responsibilities with respect to the Plan
as set forth in this Plan, authorizing or providing for such direction,
information or action. Any such designation shall be made in writing and
shall become effective upon written
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<PAGE> 123
acceptance. No such designation or delegation by the Employer or the
Committee of any of its powers, authority or responsibilities to the
Trustee shall become effective unless such designation or delegation
shall first be accepted by the Trustee in a writing signed by it and
delivered to the Employer or the Committee, as applicable. Furthermore,
each Named Fiduciary may rely upon any such direction, information or
action of another Named Fiduciary as being proper under this Plan and is
not required to inquire into the propriety of any such direction,
information or action. It is intended that under this Plan each Named
Fiduciary shall be responsible for the proper exercise of its own
powers, duties, responsibilities and obligations and shall not be
responsible for act or failure to act of another fiduciary.
11.9 NOTICE BY COMMITTEE OR EMPLOYER. Any communication or notice to any
person by the Committee or the Employer shall be in writing and may be
given by delivery to the person or by first class mail with postage
prepaid addressed to the person at the last address on file with the
Committee or the Employer. Any notice delivered as provided above shall
be deemed to have been given when delivered, and any notice mailed as
provided above shall be deemed to have been given when mailed.
11.10 LOANS TO PARTICIPANTS.
(A) (1) In accordance with Section 11.8 above, the Committee is
hereby designated as the named fiduciary with sole
authority and responsibility to approve or deny loans
and, except as provided in subsections (G) and (H) of
this Section, collect unpaid loans, in accordance with
the provisions of this Section 11.10. This Section
11.10 shall apply if the Employer is eligible to and
elects Item B(16) of the Adoption Agreement.
(2) Subject to the consent of the Committee, loans may be
made upon approval of the written application of a
Participant or Beneficiary submitted to the Committee.
Such application shall be submitted during a specified
period established by the Committee prior to the date
the loan is to be made. The Committee shall notify the
Participant or Beneficiary whether the loan has been
approved or denied. Loans shall be made available to
all Participants and Beneficiaries on a reasonably
equivalent basis, except that no loans will be made to
any Stockholder-Employee or Owner-Employee and no loan
shall be made to any Participant which the Committee,
upon reviewing the Participant's written application
determines may be reasonably expected to be unable to
repay the loan. Loans shall not be made available to
Highly Compensated Employees (as defined in Section
414(q) of the Code) in an amount greater than the amount
made available to other Employees. Except for loans made
prior to the date this Plan is adopted, a Participant or
Beneficiary shall have no more than five loans
outstanding at any given time.
(3) All loans will be adequately secured and will bear a
reasonable rate of interest. Rates of interest will be
determined daily by the Trustee for Plan loans. The
Committee will determine the minimum loan amount for the
Plan.
(B) In reviewing and approving or denying loan applications
hereunder, the Committee shall
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<PAGE> 124
bear sole responsibility for ensuring compliance with all
applicable federal or state laws and regulations, including the
federal Truth In Lending Act (15 U.S.C. Section 1601 et seq.),
and Equal Credit Opportunity Act (15 U.S.C. Section 1691 et
seq.). The Committee shall upon request supply the Trustee with
evidence that it has complied with such federal or state law.
(C) Notwithstanding Section 7.13 above, each loan made hereunder
shall be secured by a written assignment, in favor of the Plan,
of that portion of the Participant's accounts which the
Committee determines to be necessary to adequately secure
repayment of the loan.
(D) A Participant must obtain the consent of his or her Spouse, if
any, to use the account balance 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 the loan is
to be so secured. The consent must be in writing 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 account balance is
used for renegotiation, extension, renewal, or other revision of
the loan.
Notwithstanding the preceding paragraph, no spousal consent is
required for the use of the account balance as security for a
Plan loan to the Participant under a safe-harbor profit sharing
Plan as described in Section 7.10(F).
(E) No loan shall be approved by the Committee to any Participant or
Beneficiary in any amount which exceeds the lesser of
(1) $50,000, reduced by the excess (if any) of -
(a) the highest outstanding balance of loans from
the Plan during the one-year period ending on
the day before the date on which such loan was
made, over,
(b) the outstanding balance of loans from the Plan
on the date on which such loan was made, or
(2) fifty percent (50%) of the present value of the
Participant's nonforfeitable accrued benefit.
For purposes of the above limitation, all loans from all plans
of the Employer and other members of a group of employers
described in Sections 414(b), (c), (m) and (o) of the Code are
aggregated.
The term of the loan shall be determined by the Committee.
Furthermore, any loan shall, by its terms require that repayment
(principal and interest) be amortized in level payments, not
less frequently than quarterly over a period not extending
beyond five years from the date of the loan, except that the
Committee, in its discretion, may permit a repayment period in
excess of five years for loans made to a Participant or
Beneficiary
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<PAGE> 125
used to acquire a dwelling unit which, within a reasonable time
(determined at the time the loan is made) will be used as a
principal residence of the borrower.
An assignment or pledge of any portion of the participant's
interest in the Plan will be treated as a loan under this
paragraph.
(F) Each loan hereunder shall be made pro rata from the borrowing
Participant's available accounts and Investment Funds. Loan
repayments shall generally be made via payroll deduction, except
that the repayment of outstanding principal at maturity, in the
event the loan is called, or in the event the Participant
chooses to prepay the loan shall be made in such manner as the
Committee shall determine. Loan repayments and interest thereon
shall be credited to the Investment Funds and accounts in
accordance with current elections. No loan shall be considered a
general investment of the Trust Fund. Each loan shall be
evidenced by a written agreement, evidencing the Participant's
obligation to repay the borrowed amount to the Plan, in such
form and with such provisions consistent with this Section 11.10
as is acceptable to the Trustee. All loan agreements shall be
deposited with the Trustee.
(G) In the event a Participant does not repay the principal of such
loan or interest thereon at such times as are required by the
terms of the loan or if the Participant ceases to be an Employee
while such Participant has a loan made hereunder which is
outstanding, the Committee, in its discretion, may direct the
Trustee to take such action as the Committee may reasonably
determine, including:
(1) demand repayment of the loan and, subject to Section
10.4(K), institute legal action against the Participant
to enforce collection of any balance due from the
Participant, or
(2) demand repayment of the loan, and charge the total
amount of the unpaid loan and unpaid interest against
the balance credited to the Participant's vested account
balance which was assigned as security for the loan and
reduce any payment or distribution from the Trust Fund
to which the Participant or the Participant's
Beneficiary may become entitled to the extent necessary
to discharge the obligation on the loan.
Notwithstanding the foregoing provisions of this Paragraph (G),
in the event of default, foreclosure on the note and attachment
of security will not occur until a distributable event occurs in
the Plan.
(H) In the event the Committee fails or refuses for any reason to
direct the Trustee as provided in Paragraph (G) above or if the
Trustee otherwise reasonably concludes that the collectibility
of a loan hereunder is in jeopardy, the Trustee is authorized to
take such action as it may reasonably determine to enforce
repayment and satisfaction of the loan. The Employer shall be
responsible for costs and expenses incurred in collecting any
loan balance.
(I) In the event that the amount of any payment or distribution from
the Trust Fund is insufficient to repay the balance due on any
loan, the Participant shall be liable for and
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continue to make repayments on such balance.
(J) If a valid spousal consent has been obtained in accordance with
Paragraph (D), then, notwithstanding any other provision of this
Plan, the portion of the Participant's vested account balance
used as a security interest held by the Plan by reason of a loan
outstanding to the Participant shall be taken into account for
purposes of determining the amount of the account balance
payable at the time of death or distribution, but only if the
reduction is used as repayment of the loan. If less than 100% of
the Participant's vested account balance (determined without
regard to the preceding sentence) is payable to the surviving
Spouse, then the account balance shall be adjusted by first
reducing the vested account balance by the amount of the
security used as repayment of the loan, and then determining the
benefit payable to the surviving Spouse.
ARTICLE XII
FAILURE TO ATTAIN OR RETAIN QUALIFIED STATUS
12.1 FAILURE TO QUALIFY AS A PROTOTYPE. This Plan is established with the
intent that it shall qualify under Section 401 of the Code and that it
shall comply with ERISA and all other applicable laws, regulations and
rulings. It may be modified and amended retroactively, if necessary, to
secure such qualification. Should the Internal Revenue Service determine
that this Plan does not qualify under the Code or any statute of similar
import, or fails or refuses to issue an opinion, and if the Plan is not
amended, as required to qualify, before the time allowed by law for the
Employer to file its corporate federal tax return for the taxable year
in which the Effective Date occurs, the Plan shall be considered to be
rescinded and of no force and effect. Any assets attributable to
contributions made by the Employer shall be returned to the Employer by
the Trustee as soon as administratively feasible. The Employer shall
refund to the Participant any contributions made by the Participant to
the Plan.
12.2 FAILURE OF EMPLOYER TO ATTAIN OR RETAIN QUALIFICATION. If the Employer's
Plan fails to attain or retain qualification, such Plan will no longer
participate in this prototype Plan and will be considered an
individually designed Plan.
ARTICLE XIII
MISCELLANEOUS
13.1 EMPLOYER ACTION. Except as may be specifically provided herein, any
action required or permitted to be taken by the Employer may be taken on
behalf of the Employer by any officer of the Employer.
13.2 NO GUARANTEE OF INTERESTS. Neither the Trustee, the Employer nor any
other named fiduciary in any way guarantees the Trust Fund from loss or
depreciation, nor do they guarantee any payment to any person. The
liability of the Trustee, the Employer and a named fiduciary to make any
payments hereunder is limited to the available assets of the Trust Fund.
13.3 EMPLOYMENT RIGHTS. The Plan is not a contract of employment.
Participation in the Plan will not give any Participant the right to be
retained in the Employer's employ, nor any right or claim to any benefit
under the Plan, unless the right or claim has specifically accrued under
the
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Plan.
13.4 INTERPRETATIONS AND ADJUSTMENTS. To the extent permitted by law, an
interpretation of the Plan and a decision on any matter within a named
fiduciary's discretion made in good faith is binding on all persons. A
misstatement or other mistake of fact shall be corrected when it becomes
known and the person responsible shall make such adjustment on account
thereof as he or she considers equitable and practicable.
13.5 UNIFORM RULES. In the administration of the Plan, uniform rules will be
applied to all Participants similarly situated.
13.6 EVIDENCE. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person
acting on it considers pertinent and reliable and signed, made or
presented by the proper party or parties.
13.7 WAIVER OF NOTICE. Any notice required under the Plan may be waived by
the person entitled to notice.
13.8 CONTROLLING LAW. The law of the state where the Trustee is located shall
be the controlling state law in all matters relating to the Plan and
shall apply to the extent that it is not preempted by the laws of the
United States of America.
13.9 TAX EXEMPTION OF TRUST. The trust herein created is designated as
constituting a part of a Plan intended to qualify under Sections 401(a)
of the Code and to be tax-exempt under Section 501(a) of the Code.
13.10 COUNTERPARTS. The Plan may be executed in two or more counterparts, any
one of which will be an original without reference to the others.
13.11 ANNUAL STATEMENT OF ACCOUNT. The assets of the Trust Fund will be valued
annually at fair market as of the last day of each Plan Year. On such
date the earning and losses of the Trust Fund will be allocated to each
Participant's accounts in the ratio that such account balance bears to
all account balances. The Trustee will deliver to the Employer a
statement of each Participant's account balances as of the last day of
Plan Year.
13.12 NO DUTY TO INQUIRE. No person shall have any duty to make any inquiry as
to the application or use of the Trust Fund, or any part thereof, or to
inquire into the validity, expediency or propriety of any matter or
thing done or proposed to be done by the Trustee.
13.13 INVALIDITY. In case any provisions of this Plan shall be invalid, this
fact shall not affect the validity of any other provision.
13.14 TITLES. Titles to Articles and Sections are for convenience only and
shall have no bearing upon the construction or interpretation of this
Plan.
13.15 NO DUTY OF TRUSTEE TO COLLECT CONTRIBUTIONS. The Trustee shall be
accountable for all contributions received but shall have no duty to
require any contributions to be delivered or to
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determine if the contributions received comply with the Plan or with any
Board of Directors resolution of the Employer providing for
contributions.
13.16 TRUSTEE DISTRIBUTES BY COMMITTEE DIRECTION. The Trustee shall make
distributions only through Committee direction. The Trustee shall have
no responsibility to see how distributions are applied or to ascertain
whether the Committee's directions comply with the Plan.
Notwithstanding anything in the Plan to the contrary, payments made in
accordance with these provisions will continue only so long as amounts
remain in the Participant's accounts.
ARTICLE XIV
AMENDMENT OR TERMINATION
14.1 AMENDMENT BY THE SPONSOR. Society National Bank, the sponsoring
organization, reserves the right without being required to obtain the
approval of the Employer to amend any part of the Plan from time to
time, subject to the provisions of Article XII, Section 14.2 and the
following:
(A) Except as provided in Section 14.1(B) and (C), no amendment
shall become effective until at least thirty (30) days' prior
written notice (unless the Employer agrees to shorter notice)
has been given to the Employer, nor shall any such amendment
reduce Participants' benefits to less than the benefits to which
they would have been entitled if they had resigned from the
employ of the Employer on the effective date of the amendment;
(B) An amendment of the Plan and Trust which the sponsor deems
necessary to enable the Plan and Trust to meet the requirements
of Section 401(a) of the Code may be made effective as of the
date the Plan and Trust was established by the sponsor or as of
any subsequent date;
(C) An amendment of the Plan and Trust to conform the Plan and Trust
to any change in the law, regulations or rulings of the United
States may take effect as of the date such amendment is required
to be effective. Any amendment executed pursuant to the
provisions of this Section 14.1 shall be executed by an
authorized officer of the sponsor, or its successor. For
purposes of this Section 14.1, the Employer shall be deemed to
have been furnished a copy of any amendment on the business day
next following the mailing by the sponsor or the Trustee.
14.2 AMENDMENT BY ADOPTING EMPLOYER. The Employer may (1) change the choice
of options in the Adoption Agreement, (2) add overriding language in the
Adoption Agreement when such language is necessary to satisfy Section
415 or Section 416 of the Code because of the required aggregation of
multiple plans, and (3) add certain model amendments published by the
Internal Revenue Service which specifically provide that their adoption
will not cause the Plan to be treated as individually designed. An
Employer that amends the Plan for any other reason, including a waiver
of the minimum funding requirement under Section 412(d) of the Code,
will no longer participate in this Master or Prototype Plan and will be
considered to have an individually designed Plan.
14.3 VESTING - PLAN TERMINATION. In the event of termination or partial
termination of the Plan, the
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account balance of each affected Participant will be nonforfeitable.
14.4 VESTING - COMPLETE DISCONTINUANCE OF CONTRIBUTIONS. In the event of a
complete discontinuance of contributions under the Plan, the account
balance of each affected Participant will be nonforfeitable.
14.5 PLAN MERGER - MAINTENANCE OF BENEFIT. In the event of a merger or
consolidation with, or transfer of assets to any other Plan, each
Participant will receive a benefit immediately after the merger,
consolidation or transfer (if the Plan then terminated) which is at
least equal to the benefit the Participant was entitled to immediately
before such merger, consolidation or transfer (if the Plan had then
terminated).
14.6 DIRECT TRANSFER. In its discretion, the Trustee may accept the direct
transfer of Plan assets from the trustee of other retirement plans
described in Code Section 401(a). If the Plan receives a direct transfer
of elective deferrals (or amounts treated as elective deferrals) under a
Plan with a Code Section 401(k) arrangement, the distribution
restrictions of Code Sections 401(k)(2) and (10) continue to apply to
those transferred elective deferrals.
14.7 TERMINATION OF PARTICIPATION BY EMPLOYER. The Employer expects to
continue its participation in this Plan indefinitely but reserves the
right to terminate this Plan as to its Employees at any time by written
instrument filed with the Trustee. In the event of such termination,
partial termination or complete discontinuance of contributions, or
termination as provided in Section 13.3, the account balance of each
affected Participant will be nonforfeitable. Distribution to
Participants who have theretofore become entitled to the payment of any
benefits hereunder or to Spouses or Beneficiaries of deceased
Participants shall be made in the same manner as if the Employer's
participation had not terminated or contributions had not been
discontinued.
The account(s) of each such Participant, in the event of payment in
other than a single sum, need not be converted into cash, but may
continue to remain in the trust, with a right and obligation thereafter
to participate in the net earnings, losses, taxes and expenses of the
trust.
If any Participant shall die after the termination of the Employer's
participation and before all of said Participant's interest has been
paid, then, upon the written direction of Employer, the entire
undistributed portion shall be paid in a single sum to the Participant's
Beneficiary.
In the event of complete discontinuance of contributions, the Employer
shall terminate this Plan as to its Employees and each Participant's
interest shall be distributed to such Participant.
14.8 NOTICE OF AMENDMENT, TERMINATION OR PARTIAL TERMINATION. The Committee
will notify affected Participants of an amendment, termination or
partial termination of the Plan within a reasonable time.
14.9 SUBSTITUTION OF TRUSTEE. Any corporation or association into which the
Trustee may be converted, merged or with which it may be consolidated,
or any corporation or association resulting from any conversion, merger,
reorganization or consolidation to which the Trustee may be a party,
shall be the successor of the Trustee hereunder without the execution or
filing of any instrument or the performance of any further act.
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ARTICLE XV
DISCHARGE OF DUTIES BY FIDUCIARIES
15.1 DISCHARGE OF DUTIES. Subject to the provisions of Articles IX and X, the
Named Fiduciaries and any other fiduciary shall discharge their
respective duties set forth in the Plan solely in the interest of the
Participants and their Spouses and Beneficiaries and:
(A) for the exclusive purpose of:
(i) providing benefits to Participants and their Spouses and
Beneficiaries; and
(ii) defraying reasonable expenses of administering the Plan;
(B) 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 would use in the
conduct of an enterprise of a like character and with like aims;
and
(C) by diversifying the investments of the Plan so as to minimize
the risk of large losses, unless under the circumstances it is
clearly prudent not to do so.
ARTICLE XVI
AMENDMENT AND CONTINUATION OF ORIGINAL PLAN
16.1 AMENDMENT AND CONTINUATION. Notwithstanding any of the foregoing
provisions of the Plan to the contrary, an Employer which has previously
established a profit sharing Plan and trust or money purchase pension
Plan and trust, as applicable, (the "Original Plan") may, in accordance
with the provisions of the Original Plan, amend and continue that Plan
in the form of this Plan and Trust and become an Employer hereunder,
subject to the following:
(A) Subject to the conditions and limitations of the Plan, each
person who is a Participant or former Participant under the
Original Plan immediately prior to the Effective Date of the
amendment and continuation thereof in the form of this Plan will
continue as a Participant under this Plan;
(B) The words "Original Plan" shall be substituted for the word
"Plan" where the word appears in Section 2.2 of the Plan;
(C) No election may be made in the Adoption Agreement if such
election will reduce the benefits of a Participant under the
Original Plan to less than the benefits to which he would have
been entitled if he had resigned from the employ of the Employer
on the date of the amendment and continuation of the Original
Plan in the form of this Plan;
(D) The amounts, if any, credited to a Participant's or former
Participant's accounts, immediately prior to the Effective Date
of the amendment and continuation of the Original Plan in the
form of this Plan shall constitute the opening balances in his
or her accounts, as appropriate, under this Plan and Trust;
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(E) Amounts being paid to a former Participant or Beneficiary in
accordance with the provisions of the Original Plan shall
continue to be paid in accordance with such provisions; and
(F) Any Beneficiary designation in effect under the Original Plan
immediately before its amendment and continuation in the form of
this Plan shall be deemed to be a valid Beneficiary designation
filed with the Employer under Section 7.7 of this Plan, to the
extent consistent with the provisions of this Plan, unless and
until the Participant or former Participant revokes such
Beneficiary designation or makes a new Beneficiary designation
under this Plan.
IN WITNESS WHEREOF, KeyCorp has established this prototype Plan as of
the 24th day of March, 1995.
KeyCorp
By: /s/ Edward J. Tognetti
----------------------------
Title: Senior Vice President
-------------------------
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<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our reports dated April 11, 1996
and August 23, 1996, respectively, included in the Fabri-Centers of America,
Inc. Form 10-K for the fiscal year ended January 27, 1996 and Form 11-K for the
Plan year ended December 31, 1995 and to all references to our firm in this
Registration Statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Cleveland, Ohio
September 9, 1996
<PAGE> 1
Exhibit 24.1
FABRI-CENTERS OF AMERICA, INC.
POWER OF ATTORNEY
The undersigned, an officer or director, or both an officer and
director of Fabri-Centers of America, Inc. (the "Company"), an Ohio
corporation, which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-8, with respect to the
issuance of 450,000 Class A Common Shares, without par value, and 450,000 Class
B Common Shares, without par value, of the Company which will be issued and
sold pursuant to the Fabri-Centers of America, Inc. Employees' Savings and
Profit-Sharing Plan (the "Plan") (or under a new employee 401(k) plan which
may be adopted), hereby constitutes and appoints Alan Rosskamm and Robert R.
Gerber, and each of them, as attorney for the undersigned, with full power of
substitution and resubstitution, for and in the name, place, and stead of the
undersigned, to sign and file the proposed Registration Statement and any and
all amendments, post-effective amendments, and exhibits thereto, and any and
all applications and other documents to be filed with the Securities and
Exchange Commission pertaining to such securities or such registration with
full power and authority to do and perform any and all acts and things
whatsoever requisite and necessary to be done in the premises, hereby ratifying
and approving the acts of such attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand as of August 30, 1996.
/s/ Alan Rosskamm
-----------------------------------------------
Alan Rosskamm
<PAGE> 2
FABRI-CENTERS OF AMERICA, INC.
POWER OF ATTORNEY
The undersigned, an officer or director, or both an officer and
director of Fabri-Centers of America, Inc. (the "Company"), an Ohio
corporation, which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-8, with respect to the
issuance of 450,000 Class A Common Shares, without par value, and 450,000 Class
B Common Shares, without par value, of the Company which will be issued and
sold pursuant to the Fabri-Centers of America, Inc. Employees' Savings and
Profit-Sharing Plan (the "Plan") (or under a new employee 401(k) plan which
may be adopted), hereby constitutes and appoints Alan Rosskamm and Robert R.
Gerber, and each of them, as attorney for the undersigned, with full power of
substitution and resubstitution, for and in the name, place, and stead of the
undersigned, to sign and file the proposed Registration Statement and any and
all amendments, post-effective amendments, and exhibits thereto, and any and
all applications and other documents to be filed with the Securities and
Exchange Commission pertaining to such securities or such registration with
full power and authority to do and perform any and all acts and things
whatsoever requisite and necessary to be done in the premises, hereby ratifying
and approving the acts of such attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand as of August 30, 1996.
/s/ Robert R. Gerber
-----------------------------------------------
Robert R. Gerber
<PAGE> 3
FABRI-CENTERS OF AMERICA, INC.
POWER OF ATTORNEY
The undersigned, an officer or director, or both an officer and
director of Fabri-Centers of America, Inc. (the "Company"), an Ohio
corporation, which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-8, with respect to the
issuance of 450,000 Class A Common Shares, without par value, and 450,000 Class
B Common Shares, without par value, of the Company which will be issued and
sold pursuant to the Fabri-Centers of America, Inc. Employees' Savings and
Profit-Sharing Plan (the "Plan") (or under a new employee 401(k) plan which
may be adopted), hereby constitutes and appoints Alan Rosskamm and Robert R.
Gerber, and each of them, as attorney for the undersigned, with full power of
substitution and resubstitution, for and in the name, place, and stead of the
undersigned, to sign and file the proposed Registration Statement and any and
all amendments, post-effective amendments, and exhibits thereto, and any and
all applications and other documents to be filed with the Securities and
Exchange Commission pertaining to such securities or such registration with
full power and authority to do and perform any and all acts and things
whatsoever requisite and necessary to be done in the premises, hereby ratifying
and approving the acts of such attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand as of August 29, 1996.
/s/ Betty Rosskamm
-----------------------------------------------
Betty Rosskamm
<PAGE> 4
FABRI-CENTERS OF AMERICA, INC.
POWER OF ATTORNEY
The undersigned, an officer or director, or both an officer and
director of Fabri-Centers of America, Inc. (the "Company"), an Ohio
corporation, which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-8, with respect to the
issuance of 450,000 Class A Common Shares, without par value, and 450,000 Class
B Common Shares, without par value, of the Company which will be issued and
sold pursuant to the Fabri-Centers of America, Inc. Employees' Savings and
Profit-Sharing Plan (the "Plan") (or under a new employee 401(k) plan which
may be adopted), hereby constitutes and appoints Alan Rosskamm and Robert R.
Gerber, and each of them, as attorney for the undersigned, with full power of
substitution and resubstitution, for and in the name, place, and stead of the
undersigned, to sign and file the proposed Registration Statement and any and
all amendments, post-effective amendments, and exhibits thereto, and any and
all applications and other documents to be filed with the Securities and
Exchange Commission pertaining to such securities or such registration with
full power and authority to do and perform any and all acts and things
whatsoever requisite and necessary to be done in the premises, hereby ratifying
and approving the acts of such attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand as of August 29, 1996.
/s/ Alma Zimmerman
-----------------------------------------------
Alma Zimmerman
<PAGE> 5
FABRI-CENTERS OF AMERICA, INC.
POWER OF ATTORNEY
The undersigned, an officer or director, or both an officer and
director of Fabri-Centers of America, Inc. (the "Company"), an Ohio
corporation, which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-8, with respect to the
issuance of 450,000 Class A Common Shares, without par value, and 450,000 Class
B Common Shares, without par value, of the Company which will be issued and
sold pursuant to the Fabri-Centers of America, Inc. Employees' Savings and
Profit-Sharing Plan (the "Plan") (or under a new employee 401(k) plan which
may be adopted), hereby constitutes and appoints Alan Rosskamm and Robert R.
Gerber, and each of them, as attorney for the undersigned, with full power of
substitution and resubstitution, for and in the name, place, and stead of the
undersigned, to sign and file the proposed Registration Statement and any and
all amendments, post-effective amendments, and exhibits thereto, and any and
all applications and other documents to be filed with the Securities and
Exchange Commission pertaining to such securities or such registration with
full power and authority to do and perform any and all acts and things
whatsoever requisite and necessary to be done in the premises, hereby ratifying
and approving the acts of such attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand as of September 3, 1996.
/s/ Scott Cowen
-----------------------------------------------
Scott Cowen
<PAGE> 6
FABRI-CENTERS OF AMERICA, INC.
POWER OF ATTORNEY
The undersigned, an officer or director, or both an officer and
director of Fabri-Centers of America, Inc. (the "Company"), an Ohio
corporation, which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-8, with respect to the
issuance of 450,000 Class A Common Shares, without par value, and 450,000 Class
B Common Shares, without par value, of the Company which will be issued and
sold pursuant to the Fabri-Centers of America, Inc. Employees' Savings and
Profit-Sharing Plan (the "Plan") (or under a new employee 401(k) plan which
may be adopted), hereby constitutes and appoints Alan Rosskamm and Robert R.
Gerber, and each of them, as attorney for the undersigned, with full power of
substitution and resubstitution, for and in the name, place, and stead of the
undersigned, to sign and file the proposed Registration Statement and any and
all amendments, post-effective amendments, and exhibits thereto, and any and
all applications and other documents to be filed with the Securities and
Exchange Commission pertaining to such securities or such registration with
full power and authority to do and perform any and all acts and things
whatsoever requisite and necessary to be done in the premises, hereby ratifying
and approving the acts of such attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand as of August 30, 1996.
/s/ Ira Gumberg
-----------------------------------------------
Ira Gumberg
<PAGE> 7
FABRI-CENTERS OF AMERICA, INC.
POWER OF ATTORNEY
The undersigned, an officer or director, or both an officer and
director of Fabri-Centers of America, Inc. (the "Company"), an Ohio
corporation, which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-8, with respect to the
issuance of 450,000 Class A Common Shares, without par value, and 450,000 Class
B Common Shares, without par value, of the Company which will be issued and
sold pursuant to the Fabri-Centers of America, Inc. Employees' Savings and
Profit-Sharing Plan (the "Plan") (or under a new employee 401(k) plan which
may be adopted), hereby constitutes and appoints Alan Rosskamm and Robert R.
Gerber, and each of them, as attorney for the undersigned, with full power of
substitution and resubstitution, for and in the name, place, and stead of the
undersigned, to sign and file the proposed Registration Statement and any and
all amendments, post-effective amendments, and exhibits thereto, and any and
all applications and other documents to be filed with the Securities and
Exchange Commission pertaining to such securities or such registration with
full power and authority to do and perform any and all acts and things
whatsoever requisite and necessary to be done in the premises, hereby ratifying
and approving the acts of such attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand as of August 29, 1996.
/s/ Samuel Krasney
-----------------------------------------------
Samuel Krasney
<PAGE> 8
FABRI-CENTERS OF AMERICA, INC.
POWER OF ATTORNEY
The undersigned, an officer or director, or both an officer and
director of Fabri-Centers of America, Inc. (the "Company"), an Ohio
corporation, which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-8, with respect to the
issuance of 450,000 Class A Common Shares, without par value, and 450,000 Class
B Common Shares, without par value, of the Company which will be issued and
sold pursuant to the Fabri-Centers of America, Inc. Employees' Savings and
Profit-Sharing Plan (the "Plan") (or under a new employee 401(k) plan which
may be adopted), hereby constitutes and appoints Alan Rosskamm and Robert R.
Gerber, and each of them, as attorney for the undersigned, with full power of
substitution and resubstitution, for and in the name, place, and stead of the
undersigned, to sign and file the proposed Registration Statement and any and
all amendments, post-effective amendments, and exhibits thereto, and any and
all applications and other documents to be filed with the Securities and
Exchange Commission pertaining to such securities or such registration with
full power and authority to do and perform any and all acts and things
whatsoever requisite and necessary to be done in the premises, hereby ratifying
and approving the acts of such attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand as of August 30, 1996.
/s/ Frank Newman
-----------------------------------------------
Frank Newman
<PAGE> 9
FABRI-CENTERS OF AMERICA, INC.
POWER OF ATTORNEY
The undersigned, an officer or director, or both an officer and
director of Fabri-Centers of America, Inc. (the "Company"), an Ohio
corporation, which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-8, with respect to the
issuance of 450,000 Class A Common Shares, without par value, and 450,000 Class
B Common Shares, without par value, of the Company which will be issued and
sold pursuant to the Fabri-Centers of America, Inc. Employees' Savings and
Profit-Sharing Plan (the "Plan") (or under a new employee 401(k) plan which
may be adopted), hereby constitutes and appoints Alan Rosskamm and Robert R.
Gerber, and each of them, as attorney for the undersigned, with full power of
substitution and resubstitution, for and in the name, place, and stead of the
undersigned, to sign and file the proposed Registration Statement and any and
all amendments, post-effective amendments, and exhibits thereto, and any and
all applications and other documents to be filed with the Securities and
Exchange Commission pertaining to such securities or such registration with
full power and authority to do and perform any and all acts and things
whatsoever requisite and necessary to be done in the premises, hereby ratifying
and approving the acts of such attorney or any such substitute or substitutes.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand as of August 30, 1996.
/s/ Gregg Searle
-----------------------------------------------
Gregg Searle
