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Exhibit 4.1
AMEND. NO. 1 PAGE DTD. 01-01-99
F.N.B. CORPORATION
SALARY SAVINGS PLAN
Defined Contribution Plan 7.7
Restated January 1, 1998
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AMEND. NO. 1 PAGE DTD. 01-01-99
INTRODUCTION
Southwest Banks, Inc. previously established a 401 (k) plan on May 1,
1989.
Indian Rocks State Bank previously established a profit sharing/401 (k)
plan on April 6, 1986.
Effective January 1, 1998, Southwest Banks, Inc. is of the opinion that
these two plans should be merged. Effective January 1, 1998, the plans are
merged and set forth in this document which is substituted in lieu of the prior
documents.
The restated plan continues to be for the exclusive benefit of
employees of the Employer. All persons covered under one of the plans on
December 31, 1997, shall continue to be covered under the restated plan with no
loss of benefits.
It is intended that the plan, as restated, shall qualify as a profit
sharing plan under the Internal Revenue Code of 1986, including any later
amendments to the Code.
INTRODUCTION 5 (87056)
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AMEND. NO. 1 PAGE DTD. 01-01-99
PRIMARY EMPLOYER means F.N.B. CORPORATION.
QUALIFIED JOINT AND SURVIVOR FORM means, for a Participant who has a spouse, an
immediate survivorship life annuity with installment refund, where the
survivorship percentage is 50% and the Contingent Annuitant is the Participant's
spouse. A former spouse, will be treated as the spouse to the extent provided
under a qualified domestic relations order as described in Code Section 414(p).
If a Participant does not have a spouse, the Qualified Joint and Survivor Form
means the Normal Form.
The amount of benefit payable under the Qualified Joint and Survivor Form shall
be the amount of benefit which may be provided by the Participant's Vested
Account.
QUALIFIED NON ELECTIVE CONTRIBUTIONS means contributions (other than Employer
Contributions made to the Plan on behalf of a Participant on account of Elective
Deferral Contributions or on account of contributions made by the Participant)
made by the Employer to fund this Plan which an Employee may not elect to have
paid to him in cash instead of being contributed to the Plan and which are
subject to the distribution and nonforfeitability requirements under Code
Section 401(k). See the EMPLOYER CONTRIBUTIONS SECTION of Article III.
QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means a single life annuity with
installment refund payable to the surviving spouse of a Participant who dies
before his Annuity Starting Date. A former spouse will be treated as the
surviving spouse to the extent provided under a qualified domestic relations
order as described in Code Section 414(p).
QUALIFYING EMPLOYER SECURITIES means common stock issued by the Employer and
meeting the requirements of Section 4975(e)(8) of the Code, or by a corporation
which is a member of the same controlled group of corporations, having a
combination of voting power and dividend rates equal to or in excess of:
(a) That class of common stock of the Employer (or a corporation which is a
member of the same controlled group of corporations) having the
greatest voting power, and
(b) That class of common stock of the Employer (or a corporation which is a
member of the same controlled group of corporations) having the
greatest dividend rights.
Noncallable preferred stock shall be treated as Qualifying Employer Securities
if such stock is convertible at any time into stock that meets the requirements
of (a) and (b) above, and if such conversion is at a conversion price which (as
of the date of the acquisition by the Plan) is reasonable. For purposes of the
preceding sentence, the preferred stock shall be treated as noncallable if,
after the call, there is a reasonable opportunity for conversion which meets the
requirements of the preceding sentence.
QUALIFYING EMPLOYER SECURITIES ACCOUNT means for a Participant, his share of
Qualifying Employer Securities.
REEMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an
Hour-of-Service following an Eligibility Break in Service.
REENTRY DATE means the date a former Active Participant reenters the Plan. See
the ACTIVE PARTICIPANT SECTION of Article 11.
ARTICLE I 17 (87056)
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Your plan is an important legal document. This sample plan has be. n prepared
based on our understanding of the desired provisions. It may not fit your
situation. You should consult with your lawyer on the plan's legal and tax
implications. Neither Principal Mutual Life Insurance Company nor its agents can
be responsible for the legal or tax aspects of the plan nor its appropriateness
for your situation. If you wish to change the provisions of this sample plan,
you may ask us to prepare new sample wording for you and your lawyer to review.
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SOUTHWEST BANKS, INC.
SALARY SAVINGS PLAN
Defined Contribution Plan 7.7
Restated January 1, 1998-1
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TABLE OF CONTENTS
INTRODUCTION
ARTICLE I FORMAT AND DEFINITIONS
Section 1.01 ----- Format
Section 1.02 ----- Definitions
ARTICLE II PARTICIPATION
Section 2.01 ----- Active Participant
Section 2.02 ----- Inactive Participant
Section 2.03 ----- Cessation of Participation
Section 2.04 ----- Adopting Employers - Single Plan
ARTICLE III CONTRIBUTIONS
Section 3.01 ----- Employer Contributions
Section 3.01 A ----- Rollover Contributions
Section 3.02 ----- Forfeitures
Section 3.03 ----- Allocation
Section 3.04 ----- Contribution Limitation
Section 3.05 ----- Excess Amounts
ARTICLE IV INVESTMENT OF CONTRIBUTIONS
Section 4.01 ----- Investment of Contributions
Section 4.01A ----- Investment in Qualifying Employer Securities
Section 4.01 B ----- Voting and Tender Rights
ARTICLE V BENEFITS
Section 5.01 ----- Retirement Benefits
Section 5.02 ---- Death Benefits
Section 5.03 ----- Vested Benefits
Section 5.04 ---- When Benefits Start
Section 5.05 ----- Withdrawal Privileges
Section 5.06 ----- Loans to Participants
TABLE OF CONTENTS 3 (87056)
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ARTICLE VI DISTRIBUTION OF BENEFITS
Section 6.01 ----- Automatic Forms of Distribution
Section 6.02 ----- Optional Forms of Distribution and Distribution Requirements
Section 6.02A ----- Distributions in Qualifying Employer Securities
Section 6.03 ----- Election Procedures
Section 6.04 ----- Notice Requirements
Section 6.05 ----- Distributions under Qualified Domestic Relations Orders
ARTICLE VII TERMINATION OF PLAN
ARTICLE VIII ADMINISTRATION OF PLAN
Section 8.01 ----- Administration
Section 8.02 ----- Records
Section 8.03 ----- Information Available
Section 8.04 ----- Claim and Appeal Procedures
Section 8.05 ----- Unclaimed Vested Account Procedure
Section 8.06 ----- Delegation of Authority
ARTICLE IX GENERAL PROVISIONS
Section 9.01 ----- Amendments
Section 9.02 ----- Direct Rollovers
Section 9.03 ----- Mergers and Direct Transfers
Section 9.04 ----- Provisions Relating to the Insurer and Other Parties
Section 9.05 ----- Employment Status
Section 9.06 ----- Rights to Plan Assets
Section 9.07 ----- Beneficiary
Section 9.08 ----- Nonalienation of Benefits
Section 9.09 ----- Construction
Section 9.10 ----- Legal Actions
Section 9.11 ----- Small Amounts
Section 9.12 ----- Word Usage
Section 9.13 ----- Transfers Between Plans
ARTICLE X TOP-HEAVY PLAN REQUIREMENTS
Section 10.01 ----- Application
Section 10.02 ----- Definitions
Section 10.03 ----- Modification of Vesting Requirements
Section 10.04 ----- Modification of Contributions
Section 10.05 ----- Modification of Contribution Limitation
PLAN EXECUTION
TABLE OF CONTENTS 4 (87056)
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INTRODUCTION
Southwest Banks, Inc. previously established a 401 (k) plan on
May 1, 1989.
Indian Rocks State Bank previously established a profit sharing/401 (k)
plan on April 6, 1986.
Effective January 1, 1998, Southwest Banks, Inc. has changed its name
to F.N.B. Corporation. F.N.B. Corporation is now the Primary Employer and is of
the opinion that these two plans should be merged under the name F.N.B.
Corporation and Affiliates Salary Savings 401(k). Effective January 1, 1998, the
plans are merged and set forth in this document which is substituted in lieu of
the prior documents.
The restated plan continues to be for the exclusive benefit of
employees of the Employer. All persons covered under one of the plans on
December 31, 1997, shall continue to be covered under the restated plan with no
loss of benefits.
It is intended that the plan, as restated, shall qualify as a profit sharing
plan under the Internal Revenue Code of 1986, including any later amendments to
the Code.
INTRODUCTION 5 (87056)
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ARTICLE I
FORMAT AND DEFINITIONS
SECTION 1.01--FORMAT.
Words and phrases defined in the DEFINITIONS SECTION of Article I
shall have that defined meaning when used in this Plan, unless the context
clearly indicates otherwise.
These words and phrases have an initial capital letter to aid in
identifying them as defined terms.
SECTION 1.02--DEFINITIONS.
ACCOUNT means, for a Participant, his share of the Investment Fund. Separate
accounting records are kept for those parts of his Account that result from:
(a) Elective Deferral Contributions
(b) Matching Contributions
(c) Other Employer Contributions
If the Employer elects to include any of these Contributions in computing the
percentages in the EXCESS AMOUNTS SECTION of Article III, a separate accounting
record shall be kept for any part of his Account resulting from such Employer
Contributions.
(d) Rollover Contributions
If the Participant's Vesting Percentage is less than 100% as to any of the
Employer Contributions, a separate accounting record will be kept for any part
of his Account resulting from such Employer Contributions and, if there has been
a prior Forfeiture Date, from such Contributions made before a prior Forfeiture
Date.
A Participant's Account shall be reduced by any distribution of his Vested
Account and by any Forfeitures. A Participant's Account will participate in the
earnings credited, expenses charged and any appreciation or depreciation of the
Investment Fund. His Account is subject to any minimum guarantees applicable
under the Group Contract or other investment arrangement.
ACCRUAL COMPUTATION PERIOD means a 12-consecutive month period ending on the
last day of each Plan Year, including corresponding 12-consecutive month periods
before January 1, 1998.
ACTIVE PARTICIPANT means an Eligible Employee who is actively participating in
the Plan according
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to the provisions in the ACTIVE PARTICIPANT SECTION of Article II.
ADDITIONAL CONTRIBUTIONS means additional contributions made by the Employer to
fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article III.
ADOPTING EMPLOYER means an employer controlled by or affiliated with the
Employer and listed in the ADOPTING EMPLOYERS - SINGLE PLAN SECTION of Article
II.
AFFILIATED SERVICE GROUP means any group of corporations, partnerships or other
organizations of which the Employer is a part and which is affiliated within the
meaning of Code Section 414(m) and regulations thereunder. Such a group includes
at least two organizations one of which is either a service organization (that
is, an organization the principal business of which is performing services), or
an organization the principal business of which is performing management
functions on a regular and continuing basis. Such service is of a type
historically performed by employees. In the case of a management organization,
the Affiliated Service Group shall include organizations related, within the
meaning of Code Section 144(a)(3), to either the management organization or the
organization for which it performs management functions. The term Controlled
Group, as it is used in this Plan, shall include the term Affiliated Service
Group.
ALTERNATE PAYEE means any spouse, former spouse, child or other dependent of a
Participant who is recognized by a qualified domestic relations order as having
a right to receive all, or a portion of the benefits payable under the Plan with
respect to such Participant.
ANNUAL COMPENSATION means, on any given date, the Employee's Compensation for
the latest Compensation Year ending on or before the given date.
ANNUITY STARTING DATE means, for a Participant, the first day of the first
period for which an amount is payable as an annuity or any other form.
BENEFICIARY means the person or persons named by a Participant to receive any
benefits under this Plan upon the Participant's death. See the BENEFICIARY
SECTION of Article IX.
CLAIMANT means any person who has made a claim for benefits under this Plan. See
the CLAIM AND APPEAL PROCEDURES SECTION of Article VIII.
CODE means the Internal Revenue Code of 1986, as amended.
COMPENSATION means, except as modified in this definition, the total earnings
paid or made available to an Employee by the Employer during any specified
period.
"Earnings" in this definition means Compensation as defined in the CONTRIBUTION
LIMITATION SECTION of Article III.
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Compensation shall exclude the following:
car allowances
Compensation shall also include elective contributions. Elective contributions
are amounts excludable from the Employee's gross income under Code Sections 125,
402(e)(3), 402(h) or 403(b), and contributed by the Employer, at the Employee's
election, to a Code Section 401 (k) arrangement, a simplified employee pension,
cafeteria plan or tax-sheltered annuity. Elective contributions also include
Compensation deferred under a Code Section 457 plan maintained by the Employer
and Employee contributions "picked up" by a governmental entity and, pursuant to
Code Section 414(h)(2), treated as Employer contributions.
For purposes of the EXCESS AMOUNTS SECTION of Article Ill, the Employer may
elect to use an alternative nondiscriminatory definition of Compensation in
accordance with the regulations under Code Section 414(s).
For purposes of determining the allocation or amount of
Additional Contributions
Qualified Nonelective Contributions
Discretionary Contributions
Compensation shall exclude earnings paid before the Employee's Entry Date.
For Plan Years beginning after December 31, 1988, and before January 1, 1994,
the annual Compensation of each Participant taken into account for determining
all benefits provided under the Plan for any year shall not exceed $200,000. For
Plan Years beginning on or after January 1, 1994, the annual Compensation of
each Participant taken into account for determining all benefits provided under
the Plan for any year shall not exceed $150,000.
The $200,000 limit shall be adjusted by the Secretary at the same time and in
the same manner as under Code Section 415(d). The $150,000 limit shall be
adjusted by the Commissioner for increases in the cost of living in accordance
with Code Section 401(a)(17)(B). The cost of living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which pay is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the annual compensation
limit will be multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which is 12.
In determining the Compensation of a Participant for purposes of the annual
compensation limit, the rules of Code Section 414(q)(6) shall apply, except that
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 limit 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
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the affected individuals in proportion to each such individual's Compensation as
determined under this definition prior to the application of this limitation.
If Compensation for any prior determination period is taken into account in
determining a Participant's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the annual
compensation limit in effect for that prior determination period. For this
purpose, for determination periods beginning before the first day of the first
Plan Year beginning on or after January 1, 1989, which are used to determine
benefits in Plan Years beginning after December 31, 1988 and before January 1,
1994, the annual compensation limit is $200,000. For this purpose, for
determination periods beginning before the first day of the first Plan Year
beginning on or after January 1, 1994, which are used to determine benefits in
Plan Years beginning on or after January 1, 1994, the annual compensation limit
is $150,000.
Compensation means, for an Employee who is a Leased Employee, the Employee's
Compensation for the services he performs for the Employer, determined in the
same manner as the Compensation of Employees who are not Leased Employees,
regardless of whether such Compensation would be received directly from the
Employer or from the leasing organization.
COMPENSATION YEAR means each one-year period ending on the last day of the Plan
Year, including corresponding periods before January 1, 1998.
CONTINGENT ANNUITANT means an individual named by the Participant to receive a
lifetime benefit after the Participant's death in accordance with a survivorship
life annuity.
CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Qualified Nonelective Contributions
Additional Contributions
Discretionary Contributions
Rollover Contributions
as set out in Article III, unless the context clearly indicates otherwise.
CONTROLLED GROUP means any group of corporations, trades or businesses of which
the Employer is a part that are under common control. A Controlled Group
includes any group of corporations, trades or businesses, whether or not
incorporated, which is either a parent-subsidiary group, a brother-sister group,
or a combined group within the meaning of Code Section 414(b), Code
Section 414(c) and regulations thereunder and, for purposes of determining
contribution limitations under the CONTRIBUTION LIMITATION SECTION of
Article III, as modified by Code Section 415(h) and, for the purpose of
identifying Leased Employees, as modified by Code Section 144(a)(3). The term
Controlled Group, as it is used in this Plan, shall include the term Affiliated
Service Group and any other employer
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required to be aggregated with the Employer under Code Section 414(o) and the
regulations thereunder.
DIRECT ROLLOVER means a payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.
DISCRETIONARY CONTRIBUTIONS means discretionary contributions made by the
Employer to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article
III.
DISTRIBUTEE means 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 Code Section 414(p), are Distributees with regard
to the interest of the spouse or former spouse.
EARLY RETIREMENT DATE means the day of any month before a Participant's Normal
Retirement Date which the Participant selects for the start of his retirement
benefit. This day shall be on or after the date on which he ceases to be an
Employee and the date he meets the following requirement(s):
(a) He has attained age 55.
(b) He has completed five years of Vesting Service.
ELECTIVE DEFERRAL CONTRIBUTIONS means Contributions made by the Employer to fund
this Plan in accordance with a qualified cash or deferred arrangement as
described in Code Section 401(k). See the EMPLOYER CONTRIBUTIONS SECTION of
Article III.
ELIGIBILITY BREAK IN SERVICE means an Eligibility Computation Period in which an
Employee is credited with 500 or fewer Hours-of-Service. An Employee incurs an
Eligibility Break in Service on the last day of an Eligibility Computation
Period in which he has an Eligibility Break in Service.
ELIGIBILITY COMPUTATION PERIOD means a 12-consecutive month period. The first
Eligibility Computation Period begins on an Employee's Employment Commencement
Date. Later Eligibility Computation Periods begin on anniversaries of his
Employment Commencement Date.
To determine an Eligibility Computation Period after an Eligibility Break in
Service, the Plan shall use the 12-consecutive month period beginning on an
Employee's Reemployment Commencement Date as if his Reemployment Commencement
Date were his Employment Commencement Date.
ELIGIBILITY SERVICE means one year of service for each Eligibility Computation
Period in which an Employee is credited with at least 1,000 Hours-of-Service.
The year of service will be credited as of the date the Hour-of-Service
requirement is met.
However, Eligibility Service is modified as follows:
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Predecessor Employer service included:
An Employee's service with a Predecessor Employer shall be included as
service with the Employer. This service includes service performed
while a proprietor or partner.
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited. For purposes
of crediting Hours-of-Service during the Period of Military Duty, an
Hour-of-Service shall be credited (without regard to the 501
Hour-of-Service limitation) for each hour an Employee would normally
have been scheduled to work for the Employer during such period.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while both that
firm and the Employer were members of the Controlled Group shall be included as
service with the Employer.
ELIGIBLE EMPLOYEE means any Employee of the Employer.
ELIGIBLE RETIREMENT PLAN means an individual retirement account described in
Code Section 408(a), an individual retirement annuity described in Code Section
408(b), an annuity plan described in Code Section 403(a) or a qualified trust
described in Code Section 401(a), that accepts the Distributee's Eligible
Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
ELIGIBLE ROLLOVER DISTRIBUTION means any distribution of all or any portion of
the balance to the credit of the Distributee, except -hat an Eligible Rollover
Distribution does not include:
(a) 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.
(b) Any distribution to the extent such distribution is required under'
Code Section 401(a)(9).
(c) 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).
EMPLOYEE means an individual who is employed by the Employer or any other
employer required to be aggregated with the Employer under Code Sections 414(b),
(c), (m) or (o). A Controlled Group member is required to be aggregated with the
Employer.
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The term Employee shall also include any Leased Employee deemed to be an
employee of any employer described in the preceding paragraph as provided in
Code Sections 414(n) or 414(o).
EMPLOYER means the Primary Employer. This will also include any successor
corporation or firm of the Employer which shall, by written agreement, assume
the obligations of this Plan or any predecessor corporation or firm of the
Employer (absorbed by the Employer, or of which the Employer was once a part)
which became a predecessor because of a change of name, merger, purchase of
stock or purchase of assets and which maintained this Plan.
EMPLOYER CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Qualified Nonelective Contributions
Additional Contributions
Discretionary Contributions
as set out in Article III, unless the context clearly indicates otherwise.
EMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an
Hour-of-Service.
ENTRY DATE means the date an Employee first enters the Plan as an active
Participant. See the ACTIVE PARTICIPANT SECTION of Article II.
FISCAL YEAR means the Primary Employer's taxable year. The last day of the
Fiscal Year is December 31.
FORFEITURE means the part, if any, of a Participant's Account that is forfeited.
See the FORFEITURES SECTION of Article III.
FORFEITURE DATE means, as to a Participant, the date the Participant incurs five
consecutive Vesting Breaks in Service. A Participant incurs a Vesting Break in
Service on the last day of the period used to determine the Vesting Break in
Service.
This is the date on which the Participant's Nonvested Account will be forfeited
unless an earlier forfeiture occurs as provided in the FORFEITURES SECTION of
Article III.
GROUP CONTRACT means the group annuity contract or contracts into which the
Trustee enters with the Insurer for the investment of Contributions and the
payment of benefits under this Plan. The term Group Contract as it is used in
this Plan is deemed to include the plural unless the context clearly indicates
otherwise.
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HIGHLY COMPENSATED EMPLOYEE means a highly compensated active Employee or a
highly compensated former Employee.
A highly compensated active Employee means any Employee who performs service for
the Employer during the determination year and who, during the look-back year
is:
(a) An Employee who is a 5% owner, as defined in Section 4160)(1)(B)(i), at
any time during the determination year or the look-back year.
(b) An Employee who receives compensation in excess of $75,000 (indexed in
accordance with Section 415(d) during the look-back year.
(c) An Employee who receives compensation in excess of $50,000 (indexed in
accordance with Section 415(d) during the look-back year and is a
member of the top-paid group for the look-back year.
(d) An Employee who is an officer, within the meaning of Section 4160),
during the look-back year and who receives compensation in the
look-back year greater than 50% of the dollar limitation in effect
under Section 415(b)(1)(A) for the calendar year in which the look-back
year begins. The number of officers is limited to 50 (or, if lesser,
the greater of 3 employees or 10% of employees) excluding those
employees who may be excluded in determining the top-paid group.
(e) An Employee who is both described in paragraph b, c or d above when
these paragraphs are modified to substitute the determination year for
the look-back year and one of the 100 Employees who receive the most
compensation from the Employer during the determination year.
If no officer has satisfied the compensation requirement of (c) 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 means any Employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for the Employer during the determination year, and was a
highly compensated active Employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a family
member of either a 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
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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 definition, family member includes the spouse, lineal ascendants and
descendants of the Employee or former Employee and the spouses of such lineal
ascendants and descendants.
Compensation is compensation within the meaning of Code Section 415(c)(3),
including elective or salary reduction contributions to a cafeteria plan, cash
or deferred arrangement or tax-sheltered annuity. The top-paid group consists of
the top 20% of employees ranked on the basis of compensation received during the
year.
Employers aggregated under Section 414(b), (c), (m) or (o) are treated as a
single Employer.
HOUR-OF-SERVICE means the following:
(a) Each hour for which an Employee is paid, or entitled to payment, for
performing duties for the Employer during the applicable computation
period.
(b) Each hour for which an Employee is paid, or entitled to payment, by the
Employer because of a period of time in which no duties are performed
(irrespective of whether the employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty or leave of absence. Notwithstanding
the preceding provisions of this subparagraph (b), no credit will be
given to the Employee
(1) for more than 501 Hours-of-Service under this subparagraph (b)
because of any single continuous period in which the Employee
performs no duties (whether or not such period occurs in a
single computation period); or
(2) for an Hour-of-Service for which the Employee is directly or
indirectly paid, or entitled to payment, because of a period
in which no duties are performed if such payment is made or
due under a plan maintained solely for the purpose of
complying with applicable worker's or workmen's compensation,
or unemployment compensation or disability insurance laws; or
(3) for an Hour-of-Service for a payment which solely reimburses
the Employee for medical or medically related expenses
incurred by him.
For purposes of this subparagraph (b), a payment shall be deemed to be
made by, or due from the Employer, regardless of whether such payment is
made by, or due from the Employer, directly or indirectly through, among
others, a trust fund or insurer, to which the Employer contributes or
pays premiums and regardless of whether contributions made or due to the
trust fund, insurer or other
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entity are for the benefit of particular employees or are on behalf of
a group of employees in the aggregate.
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The
same Hours-of-Service shall not be credited both under
subparagraph (a) or subparagraph (b) above (as the case may
be) and under this subparagraph (c). Crediting of
Hours-of-Service for back pay awarded or agreed to with
respect to periods described in subparagraph (b) above will be
subject to the limitations set forth in that subparagraph.
The crediting of Hours-of-Service above shall be applied under the rules of
paragraphs (b) and (c) of the Department of Labor Regulation 2530.200b-2
(including any interpretations or opinions implementing said rules); which
rules, by this reference, are specifically incorporated in full within this
Plan. The reference to paragraph (b) applies to the special rule for determining
hours of service for reasons other than the performance of duties such as
payments calculated (or not calculated) on the basis of units of time and the
rule against double credit. The reference to paragraph (c) applies to the
crediting of hours of service to computation periods.
Hours-of-Service shall be credited for employment with any other employer
required to be aggregated with the Employer under Code Sections 414(b), (c), (m)
or (o) and the regulations thereunder for purposes of eligibility and vesting.
Hours-of-Service shall also be credited for any individual who is considered an
employee for purposes of this Plan pursuant to Code Section 414(n) or Code
Section 414(o) and the regulations thereunder.
Solely for purposes of determining whether a one-year break in service has
occurred for eligibility or vesting purposes, during a Parental Absence an
Employee shall be credited with the Hours-of-Service which otherwise would
normally have been credited to the Employee but for such absence, or in any case
in which such hours cannot be determined, eight Hours-of-Service per day of such
absence. The Hours-of-Service credited under this paragraph shall be credited in
the computation period in which the absence begins if the crediting is necessary
to prevent a break in service in that period; or in all other cases, in the
following computation period.
INACTIVE PARTICIPANT means a former Active Participant who has an Account. See
the INACTIVE PARTICIPANT SECTION of Article II.
INSURER means Principal Mutual Life Insurance Company and any other insurance
company or companies named by the Trustee or Primary Employer.
INVESTMENT FUND means the total assets held for the purpose of providing
benefits for Participants. These funds result from Contributions made under the
Plan.
INVESTMENT MANAGER means any fiduciary (other than a trustee or Named Fiduciary)
15
<PAGE> 19
(a) who has the power to manage, acquire, or dispose of any assets of the
Plan; and
(b) who (1) is registered as an investment adviser under the Investment
Advisers Act of 1940, or (2)is a bank, as defined in the Investment
Advisers Act of 1940, or (3) is an insurance company qualified to
perform services described in subparagraph (a) above under the laws of
more than one state; and
(c) who has acknowledged in writing being a fiduciary with respect to the
Plan.
LATE RETIREMENT DATE means the day of any month which is after a Participant's
Normal Retirement Date and on which retirement benefits begin. If a Participant
continues to work for the Employer after his
Normal Retirement Date, his Late Retirement Date shall be the earliest day of
the month on or after he ceases to be an Employee. An earlier or a later
Retirement Date may apply if the Participant so elects. An earlier Retirement
Date may apply if the Participant is age 70 1 /2. See the WHEN BENEFITS START
SECTION of Article V.
LEASED EMPLOYEE means any person (other than an employee of the recipient) who
pursuant to an agreement between the recipient and any other person ("leasing
organization") has performed services for the recipient (or for the recipient
and related persons determined in accordance with Code Section 414(n)(6)) on a
substantially full time basis for a period of at least one year, and such
services are of a type historically performed by employees in the business field
of the recipient employer. Contributions or benefits provided a Leased Employee
by the leasing organization which are attributable to service performed for the
recipient employer shall be treated as provided by the recipient employer.
A Leased Employee shall not be considered an employee of the recipient if:
(a) 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 Code Section 415(c)(3), but including
amounts contributed pursuant to a salary reduction agreement which are
excludable from the employee's gross income under Code Sections 125,
402(e)(3), 402(h) or 403(b), (2) immediate participation, and (3) full
and immediate vesting and
(b) Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce.
LOAN ADMINISTRATOR means the person or positions authorized to administer the
Participant loan program.
The Loan Administrator is Penny Calloway.
MATCHING CONTRIBUTIONS means matching contributions made by the Employer to fund
this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article III.
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<PAGE> 20
MONTHLY DATE means each Yearly Date and the same day of each following month
during the Plan Year beginning on such Yearly Date.
NAMED FIDUCIARY means the person or persons who have authority to control and
manage the operation and administration of the Plan.
The Named Fiduciary is the Employer.
NONHIGHLY COMPENSATED EMPLOYEE means an Employee of the Employer who is neither
a Highly Compensated Employee nor a family member.
NONVESTED ACCOUNT means the part, if any, of a Participant's Account that is in
excess of his Vested Account.
NORMAL FORM means a single life annuity with installment refund.
NORMAL RETIREMENT AGE means the age at which the Participant's normal retirement
benefit becomes nonforfeitable. A Participant's Normal Retirement Age is 65.
NORMAL RETIREMENT DATE means the date the Participant reaches his, Normal
Retirement Age. Unless otherwise provided in this Plan, a Participant's
retirement benefits shall begin on a Participant's Normal Retirement Date if he
has ceased to be an Employee on such date and has a Vested Account. Even if the
Participant is an Employee on his Normal Retirement Date, he may choose to have
his retirement benefit begin on such date. See the WHEN BENEFITS START SECTION
of Article V.
PARENTAL ABSENCE means an Employee's absence from work which begins on or after
the first Yearly Date after December 31, 1984,
(a) by reason of pregnancy of the Employee,
(b) by reason of birth of a child of the Employee,
(c) by reason of the placement of a child with the Employee in connection
with adoption of such child by such Employee, or
(d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
PARTICIPANT means either an Active Participant or an Inactive Participant.
PERIOD OF MILITARY DUTY means, for an Employee
(a) who served as a member of the armed forces of the United States, and
17
<PAGE> 21
(b) who was reemployed by the Employer at a time when the Employee had a
right to reemployment in accordance with seniority rights as protected
under Section 2021 through 2026 of Title 38 of the U. S. Code,
the period of time from the date the Employee was first absent from active work
for the Employer because of such military duty to the date the Employee was
reemployed.
PLAN means the 401 (k) savings plan of the Employer set forth in this document,
including any later amendments to it.
PLAN ADMINISTRATOR means the person or persons who administer the Plan.
The Plan Administrator is the Employer.
PLAN YEAR means a period beginning on a Yearly Date and ending on the day before
the next Yearly Date.
PREDECESSOR EMPLOYER means Mercantile Bank. If the Employer maintains the plan
of a predecessor employer, the Plan treats the service of the Employee with the
predecessor employer as service with the Employer.
PRIMARY EMPLOYER means SOUTHWEST BANKS, INC.
QUALIFIED JOINT AND SURVIVOR FORM means, for a Participant who has a spouse, an
immediate survivorship life annuity with installment refund, where the.
survivorship percentage is 50% and the Contingent Annuitant is the Participant's
spouse. A former spouse will be treated as the spouse to the extent provided
under a qualified domestic relations order as described in Code Section 414(pl.
If a Participant does not have a spouse, the Qualified Joint and Survivor Form
means the Normal Form.
The amount of benefit payable under the Qualified Joint and Survivor Form shall
be the amount of benefit which may be provided by the Participant's Vested
Account.
QUALIFIED NONELECTIVE CONTRIBUTIONS means contributions (other than Employer
Contributions made to the Plan on behalf of a Participant on account of Elective
Deferral Contributions or on account of contributions made by the Participant)
made by the Employer to fund this Plan which an Employee may not elect to have
paid to him in cash instead of being contributed to the Plan and which are
subject to the distribution and nonforfeitability requirements under Code
Section 401(k). See the EMPLOYER CONTRIBUTIONS SECTION of Article III.
QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means a single life annuity with
installment refund payable to the surviving spouse of a Participant who dies
before his Annuity Starting Date. A former spouse will be treated as the
surviving spouse to the extent provided under a qualified domestic relations
order as described in Code Section 414(p).
18
<PAGE> 22
QUALIFYING EMPLOYER SECURITIES means common stock issued by the Employer and
meeting the requirements of Section 4975(e)(8) of the Code, or by a corporation
which is a member of the same controlled group of corporations, having a
combination of voting power and dividend rates equal to or in excess of:
(a) That class of common stock of the Employer (or a corporation which is a
member of the same controlled group of corporations) having the
greatest voting power, and
(b) That class of common stock of the Employer (or a corporation which is a
member of the same controlled group of corporations) having the
greatest dividend rights.
Noncallable preferred stock shall be treated as Qualifying Employer Securities
if such stock is convertible at any time into stock that meets the requirements
of (a) and (b) above, and if such conversion is at a conversion price which (as
of the date of the acquisition by the Plan) is reasonable. For purposes of the
preceding sentence, the preferred stock shall be treated as noncafable if, after
the call, there is a reasonable opportunity for conversion which meets the
requirements of the preceding sentence.
QUALIFYING EMPLOYER SECURITIES ACCOUNT means for a Participant, his share of
Qualifying Employer Securities.
REEMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an
Hour-of-Service following an Eligibility Break in Service.
REENTRY DATE means the date a former Active Participant reenters the Plan. See
the ACTIVE PARTICIPANT SECTION of Article II.
RETIREMENT DATE means the date a retirement benefit will begin and is a
Participant's Early, Normal or Late Retirement Date, as the case may be.
ROLLOVER CONTRIBUTIONS means the Rollover Contributions which,are made by or for
a Participant according to the provisions of the ROLLOVER CONTRIBUTIONS SECTION
of Article III.
SEMI-YEARLY DATE means each Yearly Date and the sixth Monthly Date after each
Yearly Date which is within the same Plan Year.
TEFRA means the Tax Equity and Fiscal Responsibility Act of 1982.
TEFRA COMPLIANCE DATE means the date a plan is to Comply with the provisions of
TEFRA. The TEFRA Compliance Date as used in this Plan is,
(a) for purposes of contribution limitations, Code Section 415,
(1) if the plan was in effect on July 1, 1982, the first day of
the first limitation year which
19
<PAGE> 23
begins after December 31, 1982, or
(2) if the plan was not in effect on July 1, 1982, the first day
of the first limitation year which ends after July 1, 1982.
(b) for all other purposes, the first Yearly Date after December 31, 1983.
TOTALLY AND PERMANENTLY DISABLED means the Participant, because of a physical or
mental disability, will be unable to perform the duties of his customary
position of employment (or is unable to engage in any substantial gainful
activity) for an indefinite period which the Plan Administrator considers will
be of long continued duration. A Participant also is disabled if he incurs the
permanent loss or loss of use of a member or function of the body, or is
permanently disfigured, and incurs a separation from service. The Plan considers
a Participant disabled on the date the Plan Administrator determines the
Participant satisfies the definition of disability. The Plan Administrator may
require a Participant to submit to a physical examination in order to confirm
disability. The Plan Administrator will apply these provisions in a
nondiscriminatory, consistent and uniform manner.
TRUST means an agreement of trust between the Primary Employer and Trustee
established for the purpose of holding and distributing the Trust Fund under the
provisions of the Plan. The Trust may provide for the investment of all or any
portion of the Trust Fund in the Group Contract.
TRUST FUND means the total funds held under the Trust for the purpose of
providing benefits for Participants. These funds result from Contributions made
under the Plan which are forwarded to the Trustee to be deposited in the Trust
Fund.
TRUSTEE means the trustee or trustees under the Trust. The term Trustee as it is
used in this Plan is deemed to include the plural unless the context clearly
indicates otherwise.
VALUATION DATE means the date on which the value of the assets of the Trust is
determined. The value of each Account which is maintained under this Plan shall
be determined on the Valuation Date. In each Plan Year, the Valuation Date shall
be the close of each business day.
VESTED ACCOUNT means the vested part of a Participant's Account. The
Participant's Vested Account is determined as follows.
If the Participant's Vesting Percentage is 100%, his Vested Account equals his
Account.
If the Participant's Vesting Percentage is less than 100%, his Vested Account
equals the sum of (a) and (b) below:
(a) The part of the Participant's Account that results from Employer
Contributions made before a prior Forfeiture Date and all other
Contributions which were 100% vested when made.
20
<PAGE> 24
(b) The balance of the Participant's Account in excess of the amount in (a)
above multiplied by his Vesting Percentage.
If the Participant has wjthdrawn any part of his Account resulting from Employer
Contributions, other than the vested Employer Contributions included in (a)
above, the amount determined under this subparagraph (b) shall be equal to P(AB
+ D) - D as defined below:
P The Participant's Vesting Percentage.
AB The balance of the Participant's Account in excess of the amount in (a)
above.
D The amount of withdrawal resulting from Employer Contributions, other
than the vested Employer Contributions included in (a) above.
The Participant's Vested Account is nonforfeitable.
VESTING BREAK IN SERVICE means a Vesting Computation Period in which an Employee
is credited with 500 or fewer Hours-of-Service. An Employee incurs a Vesting
Break in Service on the last day of a Vesting Computation Period in which he has
a Vesting Break in Service.
VESTING COMPUTATION PERIOD means a 12-consecutive month period ending on the
last day of each Plan Year, including corresponding 12-consecutive month periods
before January 1, 1998.
VESTING PERCENTAGE means the percentage used to determine the nonforfeitable
portion of a Participant's Account attributable to Employer Contributions which
were not 10096 vested when made.
A Participant's Vesting Percentage is shown in the following schedule opposite
the number of whole years of his Vesting Service.
VESTING SERVICE VESTING
(whole years) PERCENTAGE
--------------- ----------
Less than 1 0
1 20
2 40
-- 3 60
4 80
5 or more 100
However, the Vesting Percentage for a Participant who is an Employee on or after
the earliest of (i) the date he reaches his Normal Retirement Age, (ii) the date
of his death, (iii) the date he meets the requirement(s) for an Early Retirement
Date, or (iv) the date he becomes Totally and Permanently Disabled, shall be
100% on such date.
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<PAGE> 25
If the schedule used to determine a Participant's Vesting Percentage is changed,
the new schedule shall not apply to a Participant unless he is credited with an
Hour-of-Service on or after the date of the change and the Participant's
nonforfeitable percentage on the day before the date of the change is not
reduced under this Plan. The amendment provisions of the AMENDMENT SECTION of
Article IX regarding changes in the computation of the Vesting Percentage shall
apply.
VESTING SERVICE means one year of service for each Vesting Computation Period in
which an Employee is credited with at least 1,000 Hours-of-Service.
However, Vesting Service is modified as follows:
Predecessor Employer service included:
An Employee's service with a Predecessor Employer shall be included as
service with the Employer. This service includes service performed
while a proprietor or partner.
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited. For purposes
of crediting Hours-of-Service during the Period of Military Duty, an
Hour-of-Service shall be credited (without regard to the 501
Hour-of-Service limitation) for each hour an Employee would normally
have been scheduled to work for the Employer during such period.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
YEARLY DATE means May 1, 1989, and each following January 1.
YEARS OF SERVICE means an Employee's Vesting Service disregarding any
modifications which exclude service.
ARTICLE II
PARTICIPATION
SECTION 2.01--ACTIVE PARTICIPANT.
(a) An Employee shall first become an Active Participant (begin
active participation in the
22
<PAGE> 26
Plan) on the earliest Semi-yearly Date on or after January 1,
1998, on which he is an Eligible Employee and has met both of
the eligibility requirements set forth below. This date is his
Entry Date.
(1) He has completed one year of Eligibility Service
before his Entry Date.
(2) He is age 21 or older.
Each Employee who was an Active Participant under the Plan or
the Indian Rocks State Bank Profit Sharing/401 (k) Plan on
December 31, 1997, shall continue to be an Active Participant
if he is still an Eligible Employee on January 1, 1998, and
his Entry Date shall not change.
If a person has been an Eligible Employee who has met all the
eligibility requirements above, but is not an Eligible
Employee on the date which would have been his Entry Date, he
shall become an Active Participant on the date he again
becomes an Eligible Employee. This date is his Entry Date.
(b) An Inactive Participant shall again become an Active
Participant (resume active participation in the Plan) on the
date he again performs an Hour-of-Service as an Eligible
Employee. This date is his Reentry Date.
Upon again becoming an Active Participant, he shall cease to be an
Inactive Participant.
(c) A former Participant shall again become an Active Participant
(resume active participation in the Plan) on the date he again
performs an Hour-of-Service as an Eligible Employee. This date
is his Reentry Date.
There shall be no duplication of benefits for a Participant under this
Plan because of more than one period as an Active Participant.
SECTION 2.02--INACTIVE PARTICIPANT.
An Active Participant shall become an Inactive Participant (stop
accruing benefits under the Plan) on the earlier of the following:
(a) The date on which he ceases to be an Eligible Employee (on his
Retirement Date if the date he ceases to be an Eligible
Employee occurs within one month of his Retirement Date).
(b) The effective date of complete termination of the Plan.
An Employee or former Employee who was an Inactive
23
<PAGE> 27
Participant under the Plan or the Indian Rocks State Bank Profit Sharing/401(k)
Plan on December 31, 1997, shall continue to be an Inactive Participant on
January 1, 1998. Eligibility for any benefits payable to him or on his behalf
and the amount of the benefits shall be determined according to the provisions
of the prior document, unless otherwise stated in this document.
SECTION 2.03--CESSATION OF PARTICIPATION.
A Participant shall cease to be a Participant on the date he is no
longer an Eligible Employee and his Account is zero.
SECTION 2.04--ADOPTING EMPLOYERS - SINGLE PLAN.
Each of the employers controlled by or affiliated with the Employer and
listed below is an Adopting Employer. Each Adopting Employer listed below
participates with the Employer in this Plan. An Adopting Employer's agreement to
participate in this Plan shall be in writing.
If the Adopting Employer did not maintain its plan before its date of
adoption specified below, its date of adoption shall be the Entry Date for any
of its employees who have met the requirements in the ACTIVE PARTICIPANT SECTION
of Article II as of that date. Service with and earnings from an Adopting
Employer shall be included as service with and earnings from the Employer.
Transfer of employment, without interruption, between an Adopting Employer and
another Adopting Employer or the Employer shall not be considered an
interruption of service.
Contributions made by an Adopting Employer shall be treated as
Contributions made by the Employer. Forfeitures arising from those Contributions
shall be used for the benefit of all Participants.
An employer shall not be an Adopting Employer if it ceases to be
controlled by or affiliated with the Employer. Such an employer may continue a
retirement plan for its employees in the form of a separate document. This Plan
shall be amended to delete a former Adopting Employer from the list below.
If an employer ceases to be an Adopting Employer and does not continue
a retirement plan for the benefit of its employees, partial termination may
result and the provisions of Article VII apply.
<TABLE>
<CAPTION>
ADOPTING EMPLOYERS
NAME FISCAL YEAR END DATE OF ADOPTION
<S> <C> <C>
FIRST NATIONAL BANK OF NAPLES December 31 MAY 1, 1989
CAPE CORAL NATIONAL BANK December 31 December 7, 1994
Indian Rocks State Bank December 31 January 1, 1998
First National Bank of Fort Myers December 31 May 24, 1997
Customer Service Company of F.N.B. December 31 February 12, 1997
</TABLE>
24
<PAGE> 28
ARTICLE III
CONTRIBUTIONS
SECTION 3.01--EMPLOYER CONTRIBUTIONS.
Employer Contributions for Plan Years which end on or after January 1,
1998, may be made without regard to current or accumulated net income, earnings,
or profits of the Employer. Notwithstanding the foregoing, the Plan shall
continue to be designed to qualify as a profit sharing plan for purposes of Code
Sections 401(a), 402, 412, and 417. Such Contributions will be equal to the
Employer Contributions as described below:
(a) The amount of each Elective Deferral Contribution for a
Participant shall be equal to any percentage(not less than 1 %
nor more than 15%) of his Compensation as elected in his
elective deferral agreement. An Employee who is eligible to
participate in the Plan may file an elective deferral
agreement with the Employer. The elective deferral agreement
to start Elective Deferral Contributions may be effective on a
Participant's Entry Date (Reentry Date, if applicable) or any
following first day of the payroll period. The Participant
shall make any change or terminate the elective deferral
agreement by filing a new elective deferral agreement. A
Participant's elective deferral agreement making a change may
be effective on any date an elective deferral agreement to
start Elective Deferral Contributions could be effective. A
Participant's elective deferral agreement to stop Elective
Deferral Contributions may be effective the first day of the
payroll period. The elective deferral agreement must be in
writing and effective before the beginning of the pay period
in which Elective Deferral Contributions are to start, change
or stop.
Elective Deferral Contributions are fully (100%) vested and
nonforfeitable.
(b) The amount of each Matching Contribution for a Participant
shall be equal to a percentage as determined by the Employer
of the Elective Deferral Contributions made for him,
disregarding any Elective Deferral Contributions in excess of
a percentage as determined by the Employer of his
Compensation.
Matching Contributions are subject to the Vesting Percentage.
(c) The amount of each Qualified Nonelective Contribution shall be
determined by the Employer. A Qualified Nonelective
Contribution shall be made for a Participant only if he is a
Nonhighly Compensated Employee.
The Employer may, at its discretion, make all or any portion
(up to 100%) of this Qualified Nonelective Contribution to the
Trustee in the form of Qualifying Employer Securities.
Qualified Nonelective Contributions are fully (100%) vested
and nonforfeitable.
(d) The amount of each Additional Contribution for a Participant
eligible for an allocation for the Plan Year shall be equal to
5% of his Compensation for the Plan Year.
25
<PAGE> 29
The Employer may, at its discretion, make all or any portion
(up to 100%) of this Additional Contribution) to the Trustee
in the form of Qualifying Employer Securities.
Additional Contributions are subject to the Vesting
Percentage.
(e) The amount of each Discretionary Contribution shall be
determined by the Employer.
The Employer may, at its discretion, make all or any portion
(up to 100%) of this Discretionary Contribution in the form of
Qualifying Employer Securities.
Discretionary Contributions are subject to the Vesting
Percentage.
No Participant shall be permitted to have Elective Deferral
Contributions, as defined in the EXCESS AMOUNTS SECTION of Article III, 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.
The Employer shall pay to the Trustee its Contributions used to
determine the Actual Deferral Percentage, as defined in the EXCESS AMOUNTS
SECTION of Article III, to the Plan for each Plan Year not later than the end of
the twelve-month period immediately following the Plan Year for which they are
deemed to be paid. Any such Contributions accumulated through payroll deductions
shall be paid within 90 days of the date withheld or the date it is first
reasonably practical for the Employer to do so, if earlier.
A portion of the Plan assets resulting from Employer Contributions (but
not more than the original amount of those Contributions and reduced
proportionately for losses, if applicable) may be returned if the Employer
Contributions are made because of a mistake of fact or are more than the amount
deductible under Code Section 404 (excluding any amount which is not deductible
because the Plan is disqualified). The amount involved must be returned to the
Employer within one year after the date the Employer Contributions are made by
mistake of fact or the date the deduction is disallowed, whichever applies.
Except as provided under this paragraph and Article VII, the assets of the Plan
shall never be used for the benefit of the Employer and are held for the
exclusive purpose of providing benefits to Participants and their Beneficiaries
and for defraying reasonable expenses of administering the Plan.
SECTION 3.01 A--ROLLOVER CONTRIBUTIONS.
A Rollover Contribution may be made by or for a Participant if the following
conditions are met:
(a) The Contribution is a rollover contribution which the Code
permits to be transferred to a plan that meets the
requirements of Code Section 401(a).
(b) If the Contribution is made by the Participant, it is made
within sixty days after he receives the distribution.
(c) The Participant furnishes evidence satisfactory to the Plan
Administrator that the proposed transfer is in fact a rollover
contribution that meets conditions (a) and (b) above.
26
<PAGE> 30
The Rollover Contribution may be made by the Participant or the
Participant may direct the trustee or named fiduciary of another plan to
transfer the funds which would otherwise be a Rollover Contribution directly to
this Plan. Such transferred funds shall be called a Rollover Contribution. The
Contribution shall be made according to procedures set up by the Plan
Administrator.
Rollover Contributions made by or for a Participant shall be credited
to his Account. The part of the Participant's Account resulting from Rollover
Contributions is fully (100%) vested and nonforfeitable at all times. A separate
accounting record shall be maintained for that part of his Rollover Contribution
which consists of voluntary contributions that were deducted from the
Participant's gross income for Federal income tax purposes.
SECTION 3.02--FORFEITURES.
The Nonvested Account of a Participant shall be forfeited as of the
earlier of the following: the date of the Participant's death, if prior to such
date he had ceased to be an Employee; or his Forfeiture Date. All or a part of a
Participant's Nonvested Account will be forfeited if, after he ceases to be an
Employee, he receives a distribution of his entire Vested Account or a
distribution of his Vested Account derived from Employer Contributions which
were not 100% vested when made according to the provisions of the VESTED
BENEFITS SECTION of Article V or the SMALL AMOUNTS SECTION of Article IX. If a
Participant's Vested Account is zero on the date he ceases to be an Employee, he
shall be deemed to have received a distribution of his entire Vested Account on
such date. The forfeiture will occur as of the date he receives the distribution
or on the date such provision became effective, if later. If he receives a
distribution of his entire Vested Account, his entire Nonvested Account will be
forfeited. If he receives a distribution of his Vested Account from Employer
Contributions which were not 100% vested when made, but less than his entire
Vested Account, the amount to be forfeited will be determined by multiplying his
Nonvested Account by a fraction. The numerator of the fraction is the amount of
the distribution derived from Employer Contributions which were not
100(Degree),% vested when made and the denominator of the fraction is his entire
Vested Account derived from such Employer Contributions on the date of
distribution.
A Forfeiture shall also occur as described in the EXCESS AMOUNTS
SECTION of Article III.
Forfeitures may first be applied to pay administrative expenses under
the Plan which would otherwise be paid by the Employer.
Forfeitures not used to pay administrative expenses shall be allocated
as described in the ALLOCATION SECTION of Article III as of the last day of the
Plan Year in which they arise. Upon such allocation, Forfeitures shall be deemed
to be Discretionary Contributions.
Forfeitures of Matching Contributions which relate to excess amounts
shall be applied as provided in the EXCESS AMOUNTS SECTION of Article III.
If a Participant again becomes an Eligible Employee after receiving a
distribution which caused his Nonvested Account to be forfeited, he shall have
the right to repay to the Plan the entire amount of the distribution he received
(excluding any amount of such distribution resulting from Contributions which
were 100% vested when made). The repayment must be made before the earlier of
the date five years after the date he again becomes an Eligible Employee or the
end of the first period of five consecutive Vesting Breaks in Service which
begin after
27
<PAGE> 31
the date of the distribution.
If the Participant makes the repayment provided above, the Plan
Administrator shall restore to his Account an amount equal to his Nonvested
Account which was forfeited on the date of distribution, unadjusted for any
investment gains or losses. If the amount of the repayment is zero dollars
because the Participant was deemed to have received a distribution or the plan
did not have repayment provisions in effect on the date the distribution was
made and he again performs an Hour-of-Service as an Eligible Employee within the
repayment period, the Plan Administrator shall restore the Participant's Account
as if he had made a required repayment on the date he performed such
Hour-of-Service. Restoration of the Participant's Account shall include
restoration of all Code Section 41 1(d)(6) protected benefits with respect to
that restored Account, according to applicable Treasury regulations. Provided,
however, the Plan Administrator shall not restore the Nonvested Account if a
Forfeiture Date has occurred after the date of the distribution and on or before
the date of repayment and that Forfeiture Date would result in a complete
forfeiture of the amount the Plan Administrator would otherwise restore.
The Plan-Administrator shall restore the Participant's Account by the
close of the Plan Year following the Plan Year in which repayment is made.
Permissible sources for restoration are Forfeitures or Employer Contributions.
The Employer shall contribute, without regard to any requirement or condition of
the EMPLOYER CONTRIBUTIONS SECTION of Article III, such additional amount needed
to make the required restoration. The repaid and restored amounts are not
included in the Participant's Annual Addition, as defined in the CONTRIBUTION
LIMITATION SECTION of Article Ill.
SECTION 3.03--ALLOCATION.
The following Contributions for the Plan Year, plus any Forfeitures
released for allocation for the Plan Year, shall be allocated among all eligible
persons:
Qualified Nonelective Contributions
Additional Contributions
Discretionary Contributions
For purposes of the Discretionary Contribution (plus any Forfeitures)
and the Additional Contribution allocation, the eligible persons are all
Participants who had 1,000 or more Hours-of-Service in the Accrual Computation
Period that ends in the Plan Year and who are Active Participants on the last
day of the Plan Year. For purposes of the Qualified Nonelective Contribution
allocation, the eligible persons are all Participants who are Active
Participants on the last day of the Plan Year. The amount allocated to such a
person shall be determined below and under Article X.
An Employee's service with a Predecessor Employer shall be included as
service with the Employer for the purpose of determining his Hours-of-Service to
be eligible for an allocation. This service includes service performed while a
proprietor or partner.
The following Contributions for each Plan Year shall be allocated to
each Participant for whom such Contributions were made under the EMPLOYER
CONTRIBUTIONS SECTION of Article III:
Elective Deferral Contributions
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<PAGE> 32
Matching Contributions
These Contributions shall be allocated when made and credited to the
Participant's Account.
The following Contributions are allocated as of the last day of the
Plan Year to each eligible person for whom they are made and credited to his
Account:
Additional Contributions
Qualified Nonelective Contributions are allocated as of the last day of
each Plan Year. For purposes of this allocation, only Nonhighly Compensated
Employees shall be eligible persons. The amount allocated to each eligible
person for the Plan Year shall be equal to Qualified Nonelective Contributions
for the Plan Year, multiplied by the ratio of (a) his Annual Compensation as of
the last day of the Plan Year to (b) the total of such compensation for all
eligible persons. This amount is credited to his Account.
Discretionary Contributions plus any Forfeitures are allocated as of
the last day of each Plan Year. The amount allocated to each eligible person for
the Plan Year shall be equal to the Discretionary Contributions plus any
Forfeitures for the Plan Year, multiplied by the ratio of (a) his Annual
Compensation as of the last day of the Plan Year to (b) the total of such
compensation for all eligible persons. This amount is credited to his Account.
In determining the amount of Employer Contributions to be allocated to
a Participant who is a Leased Employee, contributions and benefits provided by
the leasing organization which are attributable to services such Leased Employee
performs for the Employer shall be treated as provided by the Employer and there
shall be no duplication of those contributions or benefits under this Plan.
The Plan suspends the accrual requirements outlined above for any Plan
Year the Plan fails to satisfy tests as described in the Excess Amounts Section
of Article III. The Plan Administrator will suspend the accrual requirements for
the Employees who are Participants, beginning first with the Employees, employed
with the Employer on the last day of the Plan Year, then the Employees who have
the latest separation from service during the Plan Year, and continuing to
suspend in descending order the accrual requirements for each Employee who
incurred an earlier separation from service, from the latest to the earliest
separation from service date, until the Plan satisfies the tests as described in
the Excess Amounts Section of Article III for the Plan Year. If two or more
Employees have a separation from service on the same day, the Plan Administrator
will suspend the accrual requirements for all such Employees, irrespective of
whether the plan can satisfy the tests by accruing benefits for fewer than all
such Employees. If the Plan suspends the accrual requirements for an Employee,
that Employee will share in the allocation of Employer Contributions and
Forfeitures, if any, without regard to the number of Hours of Service he has
earned for the Plan Year and without regard to whether he is employed by the
Employer on the last day of the Plan Year.
SECTION 3.04--CONTRIBUTION LIMITATION.
(a) For the purpose of determining the contribution limitation set forth in
this section, the following terms are defined:
Aggregate Annual Addition means, for a Participant with respect to any
Limitation Year, the sum
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<PAGE> 33
of his Annual Additions under all defined contribution plans of the
Employer, as defined in this section, for such Limitation Year. The
nondeductible participant contributions which the Participant makes to
a defined benefit plan shall be treated as Annual Additions to a
defined contribution plan. The Contributions the Employer, as defined
in this section, made for the Participant for a Plan Year beginning on
or after March 31, 1984, to an individual medical benefit account, as
defined in Code Section 415(1)(2), under a pension or annuity plan of
the Employer, as defined in this section, shall be treated as Annual
Additions to a defined contribution plan. Also, amounts derived from
contributions paid or accrued after December 31, 1985, in Fiscal 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 Code Section 419A(d)(3), under a welfare benefit fund, as
defined h- Code Section 419(e), maintained by the Employer, as defined
in this section, are treated as Annual Additions to a defined
contribution plan. The 25% of Compensation limit under Maximum
Permissible Amount does not apply to Annual Additions resulting from
contributions made to an individual medical account, as defined in Code
Section 415(1)(2), or to Annual Additions resulting from contributions
for medical benefits, within the meaning of Code Section 419A, after
separation from service.
Annual Addition means the amount added to a Participant's account for
any Limitation Year which may not exceed the Maximum Permissible
Amount. The Annual Addition under any plan for a Participant with
respect to any Limitation Year, shall be equal to the sum of (1) and
(2) below:
(1) Employer contributions and forfeitures credited to his account
for the Limitation Year.
(2) Participant contributions made by him for the Limitation Year.
Before the first Limitation Year beginning after December 31, 1986, the amount
under (2) above is the lesser of (i) 1 /2 of his nondeductible participant
contributions made for the Limitation Year, or (II) the amount, if any, of his
nondeductible participant contributions made for the Limitation Year which is in
excess of six percent of his Compensation, as defined in this section, for such
Limitation Year.
Compensation means all wages for Federal income tax withholding purposes, as
defined under Code Section 3401 (a) (for purposes of income tax withholding at
the source), disregarding any rules limiting the remuneration included as wages
based on the nature or location of the employment or the services performed.
Compensation also includes all other payments to an Employee in the course of
the Employer's trade or business, for which the Employer must furnish the
Employee a written statement under Code Sections 6041(d) and 6051(a)(3). The
"Wages, Tips and Other Compensation" box on Form W-2 satisfies this definition.
For any self-employed individual Compensation will mean earned income.
For purposes of applying the limitations of this section, Compensation for a
Limitation Year is the Compensation actually paid or made available during such
Limitation Year.
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<PAGE> 34
Defined Benefit Plan Fraction means, with respect to a Limitation Year for a
Participant who is or has been a participant in a defined benefit plan ever
maintained by the Employer, as defined in this section, the quotient, expressed
as a decimal, of
(1) the Participant's Projected Annual Benefit under all such
plans as of the close of such Limitation Year, divided by
(2) on and after the TEFRA Compliance Date, the lesser of (i) or (ii)
below:
(i) 1.25 multiplied by the maximum dollar limitation which
applies to defined benefit plans determined for the
Limitation Year under Code Sections 415(b) or (d) or
(ii) 1.4 multiplied by the Participant's highest average
compensation as defined in the defined benefit plan(s),
including any adjustments under Code Section 415(b).
Before the TEFRA Compliance Date, this denominator is the Participant's
Projected Annual Benefit as of the close of the Limitation Year if the
plan(s) provided the maximum benefit allowable.
The Defined Benefit Plan Fraction shall be modified as follows:
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, as defined in this section, which were in existence
on May 6, 1986, the denominator of this fraction will not be less than 125
percent 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 Code Section 415
for all Limitation Years beginning before January 1, 1987.
Defined Contribution Plan Fraction means, for a Participant with respect to a
Limitation Year, the quotient, expressed as a decimal, of
(1) the Participant's Aggregate Annual Additions for such Limitation
Year and all prior Limitation Years, under all defined
contribution plans (including the Aggregate Annual Additions
attributable to nondeductible accounts under defined benefit
plans and attributable to all welfare benefit funds, as defined
in Code Section 419(e) and attributable to individual medical
accounts, as defined in Code Section 415(1)(2)) ever maintained
by the Employer, as defined in this section, divided by
(2) on and after the TEFRA Compliance Date, the sum of the amount
determined for the Limitation Year under (i) or (ii) below,
whichever is less, and the amounts determined in the same manner
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<PAGE> 35
for all prior Limitation Years during which he has been an
Employee or an employee of a predecessor employer:
(i) 1.25 multiplied by the maximum permissible dollar amount
for each such Limitation Year, or
(ii) 1.4 multiplied by the maximum permissible percentage of
the Participant's Compensation, as defined in this
section, for each such Limitation Year.
Before the TEFRA Compliance Date, this denominator is the sum of
the maximum allowable amount of Annual Addition to his account(s)
under all the plans) of the Employer, as defined in this section,
for each such Limitation Year.
The Defined Contribution Plan Fraction shall be modified as follows:
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 contribution
plans maintained by the Employer, as defined in this section, which were in
existence on May 6, 1986, the numerator of this fraction shall be adjusted if
the sum of the Defined Contribution Plan Fraction and Defined Benefit Plan
Fraction would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, the dollar amount determined below shall be permanently subtracted
from the numerator of this fraction. The dollar amount is equal to the excess of
the sum of the two fractions, before adjustment, over 1.0 multiplied by the
denominator of his Defined Contribution Plan Fraction. The adjustment is
calculated using his Defined Contribution Plan Fraction and Defined Benefit Plan
Fraction 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 Code Section 415
limitations applicable to the first Limitation Year beginning on or after
January 1, 1987.
The Annual Addition for any Limitation Year beginning before January 1, 1987,
shall not be recomputed to treat all employee contributions as Annual Additions.
For a plan that was in existence on July 1, 1982, for purposes of determining
the Defined Contribution Plan Fraction for any Limitation Year ending after
December 31, 1982, the Plan Administrator may elect, in accordance with the
provisions of Code Section 415, that the denominator for each Participant for
all Limitation Years ending before January 1, 1983, will be equal to
(1) the Defined Contribution Plan Fraction denominator which would
apply for the last Limitation Year ending in 1982 if an
election under this paragraph were not made, multiplied by.
(2) a fraction, equal to (i) over (ii) below:
(i) the lesser of (A) $51,875, or (B) 1.4, multiplied by
25% of the Participant's Compensation, as defined in
this section, for the Limitation Year ending in 1981;
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<PAGE> 36
(ii) the lesser of (A) $41,500, or (B) 25% of the
Participant's Compensation, as defined in this section,
for the Limitation Year ending in 1981.
The election described above is applicable only if the plan administrators under
all defined contribution plans of the Employer, as defined in this section, also
elect to use the modified fraction.
Employer means any employer that adopts this Plan and all Controlled Group
members and any other entity required to be aggregated with the employer
pursuant to regulations under Code Section 414(o).
Limitation Year means the 12-consecutive month period within which it is
determined whether or not the limitations of Code Section 415 are exceeded.
Limitation Year means each 12-consecutive month period ending on the last day of
each Plan Year, including corresponding 12-consecutive month periods before
January 1, 1998. If the Limitation Year is other than the calendar year,
execution of this Plan (or any amendment to this Plan changing the Limitation
Year) constitutes the Employer's adoption of a written resolution electing the
Limitation Year. If the Limitation Year is changed, the new Limitation Year
shall begin within the current Limitation Year, creating a short Limitation
Year.
Maximum Permissible Amount means, for a Participant with respect to any
Limitation Year, the lesser of (1) or (2) below:
(1) The greater of $30,000 or one-fourth of the maximum dollar
limitation which applies to Defined benefit plans set forth in
Code Section 415(b)(1)(A) as in effect for the Limitation Year.
(Before the TEFRA Compliance Date, $25,000 multiplied by the cost
of living adjustment factor permitted by Federal regulations.)
(2) 25% of his Compensation, as defined in this section, for such
Limitation Year.
The compensation limitation referred to in (2) shall not apply to any
contribution for medical benefits (within the meaning of Code Section 401
(h) or Code Section 419A(f)(2)) which is otherwise treated as an annual
addition under Code Section 415(1)(1) or Code Section 419A(d)(2).
If there is a short Limitation Year because of a change in Limitation
Year, the Maximum Permissible Amount will not exceed the maximum dollar
limitation which would otherwise apply multiplied by the following
fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
Projected Annual Benefit means a Participant's expected annual benefit
under all defined benefit plan(s) ever maintained by the Employer, as
defined in this section. The P -ojected Annual Benefit shall be determined
assuming that the Participant will continue employment until the later of
current age or normal retirement age under such plan(s), and that the
Participant's compensation for the current Limitation Year and all other
relevant factors used to determine benefits under such plan(s) will remain
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<PAGE> 37
constant for all future Limitation Years. Such expected annual benefit
shall be adjusted to the actuarial equivalent of a straight life annuity
if expressed in a form other than a straight life or qualified joint and
survivor annuity.
(b) The Annual Addition under this Plan for a Participant during a Limitation
Year shall not be more than the Maximum Permissible Amount.
(c) Contributions and Forfeitures which would otherwise be credited to the
Participant's Account shall be limited or reallocated to the extent
necessary to meet the restrictions of subparagraph (b) above for any
Limitation Year in the following order. Forfeitures shall be reallocated
in the same manner as described in the ALLOCATION SECTION of Article III
to the remaining Participants to whom the limitations do not apply for the
Limitation Year. Discretionary Contributions shall be reallocated in the
same manner as described in the ALLOCATION SECTION of Article III to the
remaining Participants to whom the limitations do not apply for the
Limitation Year. The Discretionary Contributions shall be limited if there
are no such remaining Participants. Additional Contributions shall be
limited. Qualified Nonelective Contributions shall be reallocated in the
same manner as described in the ALLOCATION SECTION of Article III to the
remaining Participants to whom the limitations do not apply for the
Limitation Year. The Qualified Nonelective Contributions shall be limited
if there are no such remaining Participants. Elective Deferral
Contributions that are not the basis for Matching Contributions shall be
limited. Matching Contributions shall be limited to the extent necessary
to limit the Participant's Annual Addition under this Plan to his maximum
amount. If Matching Contributions are limited because of this limit,
Elective Deferral Contributions that are the basis for Matching
Contributions shall be reduced in proportion. If, due to (i) an error in
estimating a Participant's Compensation as defined in this section, (ii)
because Forfeitures cannot be reallocated to remaining Participants due to
the limits of this section, (iii) as a result of a reasonable error in
determining the amount of elective deferrals (within the meaning of Code
Section 402(gl(3)) that may be made with respect to any individual under
the limits of Code Section 415, or (iv) other limited facts and
circumstances, a Participant's Annual Addition is greater than the amount
permitted in (b) above, such excess amount shall be applied as-follows.
Elective Deferral Contributions which are not the basis for Matching
Contributions will be returned to the Participant. If an excess still
exists, Elective Deferral Contributions that are the basis for Matching
Contributions will be returned to the Participant. Matching Contributions
based on Elective Deferral Contributions which are returned shall be
forfeited. If after the return of lective Deferral Contributions, an
excess amount still exists, and the Participant is an Active =articipant
as of the end of the Limitation Year, the excess amount shall be used to
offset Employer :ontributions for him in the next Limitation Year. If
after the return of Elective Deferral Contributions, an excess amount
still exists, and the Participant is not an Active Participant as of the
end of the Limitation Year, the excess amount will be held in a suspense
account which will be used to offset Employer Contributions for all
Participants in the next Limitation Year. No Employer Contributions that
would be included in the next Limitation Year's Annual Addition may be
made before the total suspense account has been used.
(d) A Participant's Aggregate Annual Addition for a Limitation Year shall not
exceed the Maximum Permissible Amount.
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<PAGE> 38
If, for the Limitation Year, the Participant has an Annual Addition under
more than one defined contribution plan or a welfare benefit fund, as
defined in Code Section 419(e), or an individual medical account, as
defined in Code Section 415(1)(2), maintained by the Employer, as defined
in this section, and such plans and welfare benefit funds and individual
medical accounts do not otherwise limit the Aggregate Annual Addition to
the Maximum Permissible Amount, any reduction necessary shall be made
first to the profit sharing plans, then to all other such plans and
welfare benefit funds and individual medical accounts and, if necessary,
by reducing first those that were most recently allocated. Welfare benefit
funds and individual medical accounts shall be deemed to be allocated
first. However, elective deferral contributions shall be the last
contributions reduced before the welfare benefit fund or individual
medical account is reduced.
If some of the Employer's defined contribution plans were not in existence
on July 1, 1982, and some were in existence on that date, the Maximum
Permissible Amount which is based on a dollar amount may differ for a
Limitation Year. The Aggregate Annual Addition for the Limitation Year in
which the dollar limit differs shall not exceed the lesser of (1) 25% of
Compensation as defined in this section, (2) $45,475, or (3) the greater
of $30,000 or the sum of the Annual Additions for such Limitation Year
under all the plan(s) to which the $45,475 amount applies.
(e) If a Participant is or has been a participant in both defined benefit and
defined contribution plans (including a welfare benefit fund or individual
medical account) ever maintained by the Employer, as defined in this
section, the sum of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction for any Limitation Year shall not exceed 1.0
(1.4 before the TEFRA Compliance Date).
After all other limitations set out in the plans and funds have been
applied, the following limitations shall apply so that the sum of the
Participant's Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction shall not exceed 1.0 (1.4 before the TEFRA Compliance Date). The
Projected Annual Benefit shall be limited first. If the Participant's
annual benefit(s) equal his Projected Annual Benefit, as limited, then
Annual Additions to the defined contribution plan(s) shall be limited to
the extent needed to reduce the sum to 1.0 (1.4). First, the voluntary
contributions the Participant may make for the Limitation Year shall be
limited. Next, in the case of a profit sharing plan, any forfeitures
allocated to the Participant shall be reallocated to remaining
participants to the extent necessary to reduce the decimal to 1.0 (1.4).
Last, to the extent necessary, employer contributions for the Limitation
Year shall be reallocated or limited, and any required and optional
employee contributions to which such employer contributi; is were geared
shall be reduced in proportion.
If, for the Limitation Year, the Participant has an Annual Addition under
more than one defined contribution plan or welfare benefit fund or
individual medical account maintained by the Employer, as defined in this
section, any reduction above shall be made first to the profit sharing
plans, then to all other such plans and welfare benefit plans and
individual medical accounts and, if necessary, by reducing first those
that were most recently allocated. However, elective deferral
contributions shall be the last contributions reduced before the welfare
benefit fund or individual medical account is reduced. The annual addition
to the welfare benefit fund and individual medical account shall be
limited last.
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<PAGE> 39
SECTION 3.05--EXCESS AMOUNTS.
(a) For the purposes of this section, the following terms are defined:
Actual Deferral Percentage means the ratio (expressed as a percentage) of
Elective Deferral Contributions under this Plan on behalf of the Eligible
Participant for the Plan Year to the Eligible Participant's Compensation
for the Plan Year. In modification of the foregoing, Compensation shall be
limited to the Compensation received while an Active Participant. The
Elective Deferral Contributions used to determine the Actual Deferral
Percentage shall include Excess Elective Deferrals (other than Excess
Elective Deferrals of Nonhighly Compensated Employees that arise solely
from Elective Deferral Contributions made under this Plan or any other
plans of the Employer or a Controlled Group member), but shall exclude
Elective Deferral Contributions that are used in computing the
Contribution Percentage (provided the Average Actual Deferral Percentage
test is satisfied both with and without exclusion of these Elective
Deferral Contributions). Under such rules as the Secretary of the Treasury
shall prescribe in Code Section 401(k)(3)(D), the Employer may elect to
include Qualified Nonelective Contributions and Qualified Matching
Contributions under this Plan in computing the Actual Deferral Percentage.
For an Eligible Participant for whom such Contributions on his behalf for
the Plan Year are zero, the percentage is zero.
Aggregate Limit means the greater of (1) or (2) below:
(1) The sum of
(i) 125 percent of the greater of the Average Actual Deferral
Percentage of the Nonhighly Compensated Employees for the
Plan Year or the Average Contribution Percentage of
Nonhighly 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 the lesser of 200% or two plus the lesser of such
Average Actual Deferral Percentage or Average
Contribution Percentage.
(2) The sum of
(i) 125 percent of the lesser of the Average Actual Deferral
Percentage of the Nonhighly Compensated Employees for the
Plan Year or the Average Contribution Percentage of
Nonhighly 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 greater of such
Average Actual Deferral Percentage or Average
Contribution Percentage.
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<PAGE> 40
Average Actual Deferral Percentage means the average (expressed as a
percentage) of the Actual Deferral Percentages of the Eligible
Participants in a group.
Average Contribution Percentage means the average (expressed as a
percentage) of the Contribution Percentages of the Eligible Participants
in a group.
Contribution Percentage means the ratio (expressed as a percentage) of the
Eligible Participant's Contribution Percentage Amounts to the Eligible
Participant's Compensation for the Plan Year. In modification of the
foregoing, Compensation shall be limited to the Compensation received
while an Active Participant. For an Eligible Participant for whom such
Contribution Percentage Amounts for the Plan Year are zero, the percentage
is zero.
Contribution Percentage Amounts means the sum of the Participant
Contributions and Matching Contributions (that are not Qualified Matching
Contributions) under this Plan on behalf of the Eligible 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 Elective Deferrals, Excess Contributions or Excess Aggregate
Contributions. Under such rules as the Secretary of the Treasury shall
prescribe in Code Section 401(k)(3)(D), the Employer may elect to include
Qualified Nonelective Contributions and Qualified Matching Contributions
under this Plan which were not used in computing the Actual Deferral
Percentage in computing the Contribution Percentage. The Employer may also
elect to use Elective Deferral Contributions in computing the Contribution
Percentage so long as the Average Actual Deferral Percentage test is met
before the Elective Deferral Contributions are used in the Average
Contribution Percentage test and continues to be met following the
exclusion of those Elective Deferral Contributions that are used to meet
the Average Contribution Percentage test.
Elective Deferral Contributions means employer contributions made on
behalf of a participant pursuant to an election to defer under any
qualified cash or deferred arrangement as described in Code Section
401(k), 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
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. Elective Deferral Contributions shall not
include any deferrals properly distributed as excess Annual Additions.
Eligible Participant means, for purposes of the Actual Deferral
Percentage, any Employee who is eligible to make an Elective Deferral
Contribution, and shall include the following: any Employee who would be a
plan participant if he chose to make req fired contributions; any Employee
who can make Elective Deferral Contributions but who has changed the
amount of his Elective Deferral Contribution to 0%, or whose eligibility
to make an Elective Deferral Contribution is suspended because of a loan,
distribution or hardship withdrawal; and, any Employee who is not able to
make an Elective Deferral Contribution because of Code Section 415(c)(1) -
Annual Additions limits. The Actual Deferral Percentage for any such
included Employee is zero.
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<PAGE> 41
Eligible Participant means, for purposes of the Average Contribution
Percentage, any Employee who is eligible to make a Participant
Contribution or to receive a Matching Contribution, and shall include the
following: any Employee who would be a plan participant if he chose to
make required contributions; any Employee who can make a Participant
Contribution or receive a matching contribution but who has made an
election not to participate in the Plan; and any Employee who is not able
to make a Participant Contribution or receive a matching contribution
because of Code Section 4151c)(1) or 415(e) limits. The Average
Contribution Percentage for any such included Employee is zero.
Excess Aggregate Contributions means, with respect to any Plan Year, the
excess of:
(1) The aggregate Contributions taken into account in computing the
numerator of the Contribution Percentage actually made on behalf
of Highly Compensated Employees for such Plan Year, over
(2) The maximum amount of such Contributions permitted by the Average
Contribution Percentage test (determined by reducing
Contributions made on behalf of Highly Compensated Employees in
order of their Contribution Percentages beginning with the
highest of such percentages).
Such determination shall be made after first determining Excess Elective
Deferrals and then determining Excess Contributions.
Excess Contributions means, with respect to any Plan Year, the excess of:
(1) The aggregate amount of Contributions actually taken into account
in computing the Actual Deferral Percentage of Highly Compensated
Employees for such Plan Year, over
(2) The maximum amount of such Contributions permitted by the Actual
Deferral Percentage test (determined by reducing Contributions
made on behalf of Highly Compensated Employees in order of the
Actual Deferral Percentages, beginning with the highest of such
percentages).
A Participant's Excess Contributions for a Plan Year will be reduced by
the amount of Excess Elective Deferrals, if any, previously distributed to
the Participant for the taxable year ending in that Plan Year.
Excess Elective Deferrals means those Elective Deferral Contributions that
are includible in a Participant's gross income under Code Section 402(g)
to the extent such Participant's Elective Deferral Contributions for a
taxable year exceed the dollar limitation under such Code section.
Excess Elective Deferrals shall be treated as Annual Additions, as defined
in the CONTRIBUTION LIMITATION SECTION of Article III, under the Plan,
unless such amounts are distributed no later than the first April 15
following the close of the Participant's taxable year.
Family Member means an Employee, or former employee; the spouse of the
Employee or former
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<PAGE> 42
employee, and the lineal ascendants or descendants and the spouses of such
lineal ascendants or descendants of any such Employee or former employee.
In determining if an individual is a family member as to an Employee or
former employee, legal adoptions are taken into account.
Matching Contributions means employer contributions made to this or any
other defined contribution plan, or to a contract described in Code
Section 403(b), on behalf of a participant on account of a Participant
Contribution made by such participant, or on account of a participant's
Elective Deferral Contributions, under a plan maintained by the employer.
Participant Contributions means contributions made to any plan by or on
behalf of a participant that are included in the participant's gross
income in the year in which made and that are maintained under a separate
account to which earnings and losses are allocated.
Qualified Matching Contributions means Matching Contributions which are
subject to the distribution and nonforfeitability requirements under Code
Section 401(k) when made.
Qualified Nonelective Contributions means any employer contributions
(other than Matching Contributions) which an employee may not elect to
have paid to him in cash instead of being contributed to the plan and
which are subject to the distribution and nonforfeitability requirements
under Code Section 401(k) when made.
(b) A Participant may assign to this Plan any Excess Elective Deferrals made
during a taxable year by notifying the Plan Administrator in writing on or
before the first following March 1 of the amount of the Excess Elective
Deferrals to be assigned to the Plan. A Participant is deemed to notify
the Plan Administrator of any Excess Elective Deferrals that arise by
taking into account only those Elective Deferral Contributions made to
this Plan and any other plans of the Employer or a Controlled Group member
and reducing such Excess Elective Deferrals by the amount of Excess
Contributions, if any, previously distributed for the Plan Year beginning
in that taxable year. The Participant's claim for Excess Elective
Deferrals shall be accompanied by the Participant's written statement that
if such amounts are not distributed, such Excess Elective Deferrals, when
added to amounts deferred under other plans or arrangements described in
Code Sections 401(k), 408(k) or 403(b), will exceed the limit imposed on
the Participant by Code Section 402(g) for the year in which the deferral
occurred. The Excess Elective Deferrals assigned to this Plan can not
exceed the Elective Deferral Contributions allocated under this Plan for
such taxable year.
Notwithstanding any other provisions of the Plan, Elective Deferral
Contributions in an amount equal to the Excess Elective Deferrals assigned
to this Plan, plus any income and minus any loss allocable thereto, shall
be distributed no later than April 15 to any Participant to whose Account
Excess Elective Deferrals were assigned for the preceding year and who
claims Excess Elective Deferrals for such taxable year.
The income or loss allocable to such Excess Elective Deferrals shall be
equal to the income or loss allocable to the Participant's Elective
Deferral Contributions for the taxable year in which the excess
39
<PAGE> 43
occurred multiplied by a fraction. The numerator of the fraction is the
Excess Elective Deferrals. The denominator of the fraction is the closing
balance without regard to any income or loss occurring during such taxable
year (as of the end of such taxable year) of the Participant's Account
resulting from Elective Deferral Contributions.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Elective Deferrals, plus any
income and minus any loss allocable thereto, shall be forfeited. These
Forfeitures shall be used to offset the earliest Employer Contribution due
after the Forfeiture arises.
(c) As of the end of each Plan Year after Excess Elective Deferrals have been
determined, one of the following tests must be met:
(1) The Average Actual Deferral Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year is not
more than the Average Actual Deferral Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 1.25.
(2) The Average Actual Deferral Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year is not
more than the Average Actual Deferral Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 2 and the difference between the Average
Actual Deferral Percentages is not more than 2.
The Actual Deferral Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to have
Elective Deferral Contributions (and Qualified Nonelective Contributions
or Qualified Matching Contributions, or both, if used in computing the
Actual Deferral Percentage) allocated to his account under two or more
plans or arrangements described in Code Section 401 (k) that are
maintained by the Employer or a Controlled Group member shall be
determined as if all such Elective Deferral Contributions (and, if
applicable, such Qualified Nonelective 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 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 mandatorily disaggregated under the
regulations under Code Section 401 (k) or permissibly disaggregated as
provided.
In the event that this Plan satisfies the requirements of Code Sections
401(k), 401(a)(4), or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such Code
sections only if aggregated with this Plan, then this section shall be
applied by determining the Actual Deferral Percentage of employees as if
all such plans were a single plan. Plans may be aggregated in order to
satisfy Code Section 401 (k) only if they have the same Plan Year.
For purposes of determining the Actual Deferral Percentage of an Eligible
Participant who is a five-percent
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<PAGE> 44
owner or one of the ten most highly-paid Highly Compensated Employees, the
Elective Deferral Contributions (and Qualified Nonelective Contributions
or Qualified Matching Contributions, or both, if used in computing the
Actual Deferral Percentage) and Compensation of such Eligible Participant
include the Elective Deferral Contributions (and, if applicable, Qualified
Nonelective Contributions or Qualified Matching Contributions, or both)
and Compensation for the Plan Year of Family Members. Family Members, with
respect to such Highly Compensated Employees, shall be disregarded as
separate employees in determining the Actual Deferral Percentage both for
Participants who are Nonhighly Compensated Employees and for Participants
who are Highly Compensated Employees.
For purposes of determining the Actual Deferral Percentage, Elective
Deferral Contributions, Qualified Nonelective Contributions and Qualified
Matching Contributions must be made before the last day of the 12-month
period immediately following the Plan Year to which contributions relate.
The Employer shall maintain records sufficient to demonstrate satisfaction
of the Average Actual Deferral Percentage test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or both,
used in such test.
The determination and treatment of the Contributions used in computing the
Actual Deferral Percentage shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
If the Plan Administrator should determine during the Plan Year that
neither of the above tests is being met, the Plan Administrator may adjust
the amount of future Elective Deferral Contributions of the Highly
Compensated Employees.
Notwithstanding any other provisions of this 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 such Excess Contributions were allocated for the preceding Plan
Year. If such excess amounts are distributed more than 2 1 J2 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 made
beginning with the Highly Compensated Employee(s) who has the greatest
Actual Deferral Percentage, reducing his Actual Deferral Percentage to the
next highest Actual Deferral Percentage level. Then, if necessary,
reducing the Actual Deferral Percentage of the Highly Compensated
Employees at the next highest level, and continuing in this manner until
the average Actual Deferral Percentage of the Highly Compensated Group
satisfies the Actual Deferral Percentage test. Excess Contributions of
Participants who are subject to the family member aggregation rules shall
be allocated among the Family Members in proportion to the Elective
Deferral Contributions (and amounts treated as Elective Deferral
Contributions) of each Family Member that is combined to determine the
combined Actual Deferral Percentage.
Excess Contributions shall be treated as Annual Additions, as defined in
the CONTRIBUTION LIMITATION SECTION of Article III, under the Plan.
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<PAGE> 45
The Excess Contributions shall be adjusted for income or loss. The income
or loss allocable to such Excess Contributions shall be equal to the
income or loss allocable to the Participant's Elective Deferral
Contributions (and, if applicable, Qualified Nonelective Contributions or
Qualified Matching Contributions, or both) for the Plan Year in which the
excess occurred multiplied by a fraction. The numerator of the fraction is
the Excess Contributions. The denominator of the fraction is the closing
balance without regard to any income or loss occurring during such Plan
Year (as of the end of such Plan Year) of the Participant's Account
resulting from Elective Deferral Contributions (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if used in
computing the Actual Deferral Percentage).
Excess Contributions shall be distributed from the Participant's Account
resulting first from Elective Deferral Contributions not the basis for
Matching Contributions, then if necessary, from Elective Deferral
Contributions which are the basis for Matching Contributions. If such
Excess Contributions exceed the balance in the Participant's Account
resulting from Elective Deferral Contributions, the balance shall be
distributed from the Participant's Account resulting from Qualified
Matching Contributions (if applicable) and Qualified Nonelective
Contributions, respectively.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Contributions, plus any
income and minus any loss allocable thereto, shall be forfeited. These
Forfeitures shall be used to offset the earliest Employer Contribution due
after the Forfeiture arises.
(d) As of the end of each Plan Year, one of the following tests must be met:
(1) The Average Contribution Percentage for Eligible Participants who
are Highly Compensated Employees for the Plan Year is not more
than the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 1 .25.
(2) The Average Contribution Percentage for Eligible Participants who
are Highly Compensated Employees for the Plan Year is not more
than the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 2 and the difference between the Average
Contribution Percentages is not more than 2.
If one or more Highly Compensated Employees participate in both a cash or
deferred arrangement and a plan subject to the Average Contribution
Percentage test maintained by the Employer or a Controlled Group member
and the sum of the Average Actual Deferral Percentage and Average
Contribution Percentage of those Highly Compensated Employees subject to
either or both tests exceeds the Aggregate Limit, then the Contribution
Percentage of those Highly Compensated Employees who also participate in a
cash or deferred arrangement will be reduced (beginning with such Highly
Compensated Employees whose Contribution Percentage is the highest) so
that the limit is not exceeded. The amount by which each Highly
Compensated Employee's Contribution Percentage is reduced shall be treated
as an Excess Aggregate Contribution. The Average Actual Deferral
Percentage and Average Contribution Percentage of the Highly Compensated
Employees are determined after any
42
<PAGE> 46
corrections required to meet the Average Actual Deferral Percentage and
Average Contribution Percentage tests. Multiple use does not occur if
either the Average Actual Deferral Percentage or Average Contribution
Percentage of the Highly Compensated Employees does not exceed 1.25
multiplied by the Average Actual Deferral Percentage and Average
Contribution Percentage of the Nonhighly Compensated Employees.
The Contribution Percentage for any Eligible Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have
Contribution Percentage Amounts allocated to his account under two or more
plans described in Code Section 401 (a) or arrangements described in Code
Section 401 (IC) that are maintained by the Employer or a Controlled Group
member 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 mandatorily disaggregated under the regulations under Code Section 401
(m) or permissibly disaggregated as provided.
In the event that this Plan satisfies the requirements of Code Sections
401(m), 401 (a)(4), or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of Code
sections only if aggregated with this Plan, then this section shall be
applied by determining the Contribution Percentages of Eligible
Participants as if all such plans were a single plan. Plans may be
aggregated in order to satisfy Code Section 401 (m) only if they have the
same Plan Year.
For purposes of determining the Contribution Percentage of an Eligible
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 Participant shall include Contribution Percentage
Amounts and Compensation for the Plan Year of Family Members. Family
Members, with respect to Highly Compensated Employees, shall be
disregarded as separate employees in determining the Contribution
Percentage both for employees who are Nonhighly Compensated Employees and
for employees who are Highly Compensated Employees.
For purposes of determining the Contribution Percentage, Participant
Contributions are considered to have been made in the Plan Year in which
contributed to the Plan. Matching Contributions and Qualified Nonelective
Contributions will be considered made for a Plan Year if made no later
than the end of the 12-month period beginning on the day after the close
of the Plan Year.
The Employer shall maintain records sufficient to demonstrate satisfaction
of the Average Contribution Percentage test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or both,
used in such test.
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.
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<PAGE> 47
Notwithstanding any other provisions of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto, shall
be forfeited, if not vested, or distributed, if vested, no later than the
last day of each Plan Year to Participants to whose Accounts such Excess
Aggregate Contributions were allocated for the preceding Plan Year. 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 will be distributed beginning with the Highly Compensated
Employee(s) who has the greatest Contribution Percentage, reducing his
contribution percentage to the next highest level. Then, if necessary,
reducing the Contribution Percentage of the Highly Compensated Employee at
the next highest level, and continuing in this manner until the Actual
Contribution Percentage of the Highly Compensated Group satisfies the
Actual Contribution Percentage Test. 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 Employee and
Matching Contributions (or amounts treated as Matching Contributions) of
each Family Member that is combined to determine the combined Contribution
Percentage. Excess Aggregate Contributions shall be treated as Annual
Additions, as defined in the CONTRIBUTION LIMITATION SECTION of Article
III, under the Plan.
The Excess Aggregate Contributions shall be adjusted for income or loss.
The income or loss allocable to such Excess Aggregate Contributions shall
be equal to the income or loss allocable to the Participant's Contribution
Percentage Amounts for the Plan Year in which the excess occurred
multiplied by a fraction. The numerator of the fraction is the Excess
Aggregate Contributions. The denominator of the fraction is the closing
balance without regard to any income or loss occurring during such Plan
Year (as of the end of such Plan Year) of the Participant's Account
resulting from Contribution Percentage Amounts.
Excess Aggregate Contributions shall be distributed from the Participant's
Account resulting from Participant Contributions that are not required as
a condition of employment or partic nation or for obtaining additional
benefits from Employer Contributions. If such Excess Aggregate
Contributions exceed the balance in the Participant's Account resulting
from such Participant Contributions, the balance shall be forfeited, if
not vested, or distributed, if vested, on a pro-rata basis from the
Participant's Account resulting from Contribution Percentage Amounts.
These Forfeitures shall be used to offset the earliest Employer
Contribution due after the Forfeiture arises.
ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
SECTION 4.01--INVESTMENT OF CONTRIBUTIONS.
All Contributions are forwarded by the Employer to the Trustee to be
deposited in the Trust Fund.
Investment of Contributions is governed by the provisions of the Trust,
the Group Contract and any
44
<PAGE> 48
other funding arrangement in which the Trust Fund is or may be invested. To the
extent permitted by the Trust, Group Contract or other funding arrangement, the
parties named below shall direct the Contributions to any of the accounts
availbble under the Trust or Group Contract and may request the transfer of
assets resulting from those Contributions oetween such accounts. A Participant
may not direct the Trustee to invest the Participant's Account in collectibles.
Collectibles means any work of art, rug or antique, metal or gem, stamp or coin,
alcoholic beverage or other tangible personal property specified by the
Secretary of Treasury. To the extent that a Participant does not direct the
investment of his Account, such Account shall be invested ratably in the
accounts available under the Trust or Group Contract in the same manner as the
undirected Accounts of all other Participants. The Vested Accounts of all
Inactive Participants may be segregated and invested separately from the
Accounts of all other Participants.
The Trust Fund shall be valued at current fair market value as of the last
day of the last calendar month ending in the Plan Year and, at the discretion of
the Trustee, may be valued more frequently. The valuation shall take into
consideration investment earnings credited, expenses charged, payments made and
changes in the value of the assets held in the Trust Fund. The Account of a
Participant shall be credited with its share of the gains and losses of the
Trust Fund. That part of a Participant's Account invested in a funding
arrangement which establishes an account or accounts for such Participant
thereunder shall be credited with the gain or loss from such account or
accounts. That part of a Participant's Account which is invested in other
funding arrangements shall be credited with a proportionate share of the gain or
loss of such investments. The share shall be determined by multiplying the gain
or loss of the investment by the ratio of the part of the Participant's Account
invested in such funding arrangement to the total of the Trust Fund invested in
such funding arrangement.
At least annually, the Named Fiduciary shall review all pertinent Employee
information and Plan data in order to establish the funding policy of the Plan
and to determine appropriate methods of carrying out the Plan's objectives. The
Named Fiduciary shall inform the Trustee and any Investment Manager of the
Plan's short-term and long-term financial needs so the investment policy can be
coordinated with the Plan's financial requirements.
(a) Employer Contributions other than Matching Contributions and
Elective Deferral Contributions: The Trustee shall direct the
investment of such Employer Contributions and transfer of assets
resulting from those Contributions.
(b) Elective Deferral Contributions: The Participant shall direct the
investment of Elective Deferral Contributions and transfer of assets
resulting from those Contributions.
(c) Matching Contributions: The Participant shall direct the investment
of Matching Contributions and transfer of assets resulting from
those Contributions.
(d) Rollover Contributions: The Participant shall direct the investment
of Rollover Contributions and transfer of assets resulting from
those Contributions.
Notwithstanding the foregoing, the Participant shall direct the investment
of contributions that are held
45
<PAGE> 49
under the Plan as a result of a merger or direct transfer as described in the
MERGER AND DIRECT TRANSFERS SECTION of ARTICLE IX.
However, the Named Fiduciary may delegate to the Investment Manager
investment discretion for Contributions and Plan assets which are not subject to
Participant direction.
SECTION 4.01A--INVESTMENT IN QUALIFYING EMPLOYER SECURITIES.
All or any portion (up to 100%) of the Discretionary Contributions,
Qualified Nonelective Contributions, and Additional Contributions may be made in
the form of Qualifying Employer Securities as long as the Plan Administrator so
directs. The Trustee shall invest all or any portion (up to 100%) of the
Discretionary Contributions, Qualified Nonelective Contributions and Additional
Contributions in Qualifying Employer Securities as long as the Plan
Administrator so directs.
Any dividends payable on the Qualifying Employer Securities shall, unless
otherwise directed by the Plan Administrator, be made in the form of additional
shares of Qualifying Employer Securities hereunder. The Plan Administrator will
allocate any dividends the Employer pays with respect to Qualifying Employer
Securities to the Accounts of Participants in the same ratio, determined on the
dividend declaration date, that Qualifying Employer Securities allocated to the
Participant's Qualifying Employer Securities Account bears to the Qualifying
Employer Securities allocated to all Qualifying Employer Securities Accounts.
If the securities of the Employer are not publicly traded and if no market
or an extremely thin market exists for the Qualifying Employer Securities, so
that a reasonable valuation may not be obtained from the market place, then such
Qualifying Employer Securities must be valued at least annually by an
independent appraiser who is not associated with the Employer, the Plan
Administrator, the Trustee, or any person related to any fiduciary under the
Plan. The independent appraiser may be associated with a person who is merely a
contract administrator with respect to the Plan, but who exercises no
discretionary authority and is not a Plan fiduciary.
If there is a public market for Qualifying Employer Securities of the type
held by the Plan, then the Plan Administrator may use as the value of the shares
the price at which such shares traded in such market, or an average of the bid
and asked prices for such shares in such market, provided that such value is
representative of the fair market value of such shares in the opinion of the
Plan Administrator. If the Qualifying Employer Securities do not trade on the
annual valuation date or if the market is very thin on such date, then the Plan
Administrator may use the average of trade prices for a period of time ending on
such date, provided that such value is representative of the fair market value
of such shares in the opinion of the Plan Administrator. The value of a
Participant's Qualifying Employer Securities Account may a expressed in units.
For purposes of determining the annual valuation of the Plan and for
reporting to Participants and regulatory authorities, the assets of the Plan
shall be valued at least annually on the Valuation Date which corresponds to the
last day of the Plan Year. The fair market value of Qualifying Employer
46
<PAGE> 50
Securities shall be determined on such a Valuation Date. The average of the bid
and asked prices of Qualifying Employer Securities as of the date of the
transaction shall apply for purposes of valuing distributions and other
transactions of the Plan to the extent such value is representative of the fair
market value of such shares in the opinion of the Plan Administrator.
All purchases of Qualifying Employer Securities shall be made at a price,
or prices, which, in the judgment of the Plan Administrator, do not exceed the
fair market value of such Qualifying Employer Securities.
In the event that the Trustee acquires shares of Qualifying Employer
Securities by purchase from a "disqualified person" as defined in Code Section
4975(el(2), in exchange for cash or other assets of the Trust, the terms of such
purchase shall contain the provision that in the event that there is a final
determination by the Internal-Revenue Service or court of competent jurisdiction
that a fair market value of such shares of Qualifying Employer Securities, as of
the date of purchase was less than the purchase price paid by the Trustee, then
the seller shall pay or transfer, as the case may be, to the Trustee, an amount
of cash, shares of Qualifying Employer Securities, or any combination thereof
equal in value to the difference between the purchase price and said fair market
value for all such shares. In the event that cash and/or shares of Qualifying
Employer Securities are paid and/or transferred to the Trustee under this
provision, shares of Qualifying Employer Securities shall be valued at their
fair market value as of the date of said purchase, and interest at a reasonable
rate from the date of purchase to the date of payment shall be paid by the
seller on the amount of cash paid.
The Plan Administrator may direct the Trustee to sell, resell or otherwise
dispose of Qualifying Employer Securities to any person, including the Employer,
provided that any such sales to any disqualified person, including the Employer,
will be made at not less than the fair market value and no commission is
charged. Any such sale shall be made in conformance with Section 408(e) of
ERISA.
The Trustee may suspend purchases of Qualifying Employer Securities in
circumstances in which such suspension is necessary to comply with rules and
regulations of the Securities and Exchange Commission, in which event such
purchases will be made or resumed as or when the Trustee reasonably determines
that such purchases are permitted under such rules and regulations.
In the event the Plan Administrator directs the Trustee to dispose of any
Qualifying Employer Securities held as Trust Assets under circumstances which
require registration and/or qualification of the securities under applicable
Federal or state securities laws, then the Employer, at its own expense, will
take or cause to be taken any and all such action as may be necessary or
appropriate to effect such registration and/or qualification.
If SEC filing is required, the Qualifying Employer Securities provisions
set forth in this Plan restatement will not be made available to Participants
until the later of the effective date of the Plan restatement or the date the
Plan and any other necessary documentation has been filed for registration with
the SEC by the Employer.
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<PAGE> 51
SECTION 4.01 B--VOTING AND TENDER RIGHTS.
VOTING RIGHTS.
(A) VOTING OF ALLOCATED SHARES. All shares of Qualifying Employer
Securities allocated to a Participant's Qualifying Employer Securities Account
shall be voted by the Trustee as the Participant, to whom such shares are
allocated, directs in writing from time to time.
(B) VOTING OF SHARES AS TO WHICH PARTICIPANTS FAIL TO GIVE VOTING
INSTRUCTIONS. The Trustee does not have the right to vote any Qualifying
Employer Securities as to which a Participant (or Beneficiary) fails to give
voting instructions.
(C) OBLIGATIONS OF THE EMPLOYER. The Employer shall, in an appropriate
time and manner, furnish the Trustees and Participants with proxy materials,
notices and information statements on which a Participant may give his
confidential voting instructions. The materials furnished to Participants should
generally be the same as those provided to non-Participant shareholders.
(D) FAIL SAFE RULES. With respect to the voting of Qualifying Employer
Securities which are not part of a registration-type class of securities (as
defined in Code Section 409(e)(4), a Participant (or Beneficiary) has the right
to direct _the Trustee regarding the voting of such Qualifying Employer
Securities allocated to his Qualifying Employer Securities Account with respect
to any corporate matter which involves the approval or disapproval of any
corporate merger or consolidation, recapitalization, reclassification,
liquidation, dissolution, sale of substantially all assets of a trade or
business, or such similar transaction as the Treasury may prescribe in
regulations. The voting rights provided in this section extend to all corporate
matters requiring a vote of stockholders with respect to Qualifying Employer
Securities allocated to the Participant's Qualifying Employer Securities
Account.
TENDER OFFER FOR QUALIFYING EMPLOYER SECURITIES.
(A) OBLIGATIONS OF THE EMPLOYER. In the event of a tender offer for
Qualifying Employer Securities, the Trustee shall, as promptly as possible after
such tender offer is made, send to all Participants such materials and forms for
responding to the tender as are appropriate in order to determine the tender
instructions of each such Participant. Such materials or forms sent to the
Participant shall appropriately note that a failure by a Participant to return
such tender form within a specified reasonable period of time shall be deemed a
direction to the Trustee not to tender the shares of Qualifying Employer
Securities as to which the Participant has the right to tender (or not tender)
as provided below. In carrying out the steps necessary to determine the tender
instructions of Participants unaer this section, the Trustee shall adopt such
means as it deems appropriate to provide the Participants with the opportunity
to indicate their directions in a confidential manner,.i.e., without the
disclosure of any Participant's individual decision to the public or to the
Employer.
(B) TENDER RULES. After the Participants have received appropriate tender
materials and forms, the Trustee shall, at the expiration of the period during
which the Participants may direct the Trustee to tender, tender (or refrain from
tendering) the shares of Qualifying Employer Securities allocated to a
Participant's Employer Securities Account to carry out the tender of such
shares. Notwithstanding the foregoing
48
<PAGE> 52
provision of this section, the Trustee shall have the right to change or modify
its actions with respect to tendering (or failing to tender) Qualifying Employer
Securities held in the Plan if necessary to comply with the terms of any valid
order of a court of competent jurisdiction directing the Trustee to take certain
actions inconsistent with the rules of this section.
(C) FRACTIONAL SHARES. After the expiration of the period during which
Participants may direct the Trustee to tender their shares, the Trustee shall
determine the total number of whole shares it was directed to tender, and the
total number of whole shares it was directed not to tender (either expressly or
by a Participant's failure timely to respond). If the majority of the whole
shares of Qualifying Employer Securities were directed to be tendered, then the
Trustee also shall tender, as promptly as practical, any allocated or
unallocated fractional shares that are held in the Plan. However, if the
majority of the whole shares of Qualifying Employer Securities were directed not
to be tendered (either expressly or by a Participant's failure timely to
respond), the Trustee shall not tender such shares.
ARTICLE V
BENEFITS
SECTION 5.01--RETIREMENT BENEFITS.
On a Participant's Retirement Date, his Vested Account shall be
distributed to him according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article IX.
SECTION 5.02--DEATH BENEFITS.
If a Participant dies before his Annuity Starting Date, his Vested Account
shall be distributed according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article IX.
SECTION 5.03--VESTED BENEFITS.
A Participant may receive a distribution of his Vested Account at any time
after he ceases to be an Employee, provided he has not again become an Employee.
However, if the Participant is entitled to an allocation of Employer
Contributions or Forfeitures in the Plan Year in which separation of service
occurs, the distribution may not commence earlier than the first day of the Plan
Year beginning after that separation from service. If such amount is not payable
under the provisions of the SMALL AMOUNTS SECTION of Article IX, it will be
distributed only if the Participant so elects. The Participant's election shall
be subject to the requirements in the ELECTION PROCEDURES SECTION of Article VI
for a qualified election of a retirement benefit.
If a Participant does not receive an earlier distribution according to the
provisions of this section or the SMALL AMOUNTS SECTION of Article IX, upon his
Retirement Date or death, his Vested Account
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<PAGE> 53
shall be applied according to the provisions of the RETIREMENT BENEFITS SECTION
or the DEATH BENEFITS SECTION of Article V.
The Nonvested Account of a Participant who has ceased to be an Employee
shall remain a part of his Account until it becomes a Forfeiture; provided,
however, if the Participant again becomes an Employee so that his Vesting
Percentage can increase, the Nonvested Account may become a part of his Vested
Account.
SECTION 5.04--WHEN BENEFITS START.
Benefits under the Plan begin when a Participant retires, dies or ceases
to be an Employee, whichever applies, as provided in the preceding sections of
this article. Benefits which begin before Normal Retirement Date for a
Participant who became Totally and Permanently Disabled when he was an Employee
shall be deemed to begin because he is Totally and Permanently Disabled. The
start of benefits is subject to the qualified election procedures of Article VI.
Unless otherwise elected, benefits shall begin before the sixtieth day
following the close of the Plan Year in which the latest date below occurs:
(a) The date the Participant attains age 65 (Normal Retirement Age, if
earlier).
(b) The tenth anniversary of the Participant's Entry Date.
(c) The date the Participant ceases to be an Employee.
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 the ELECTION PROCEDURES SECTION of Article VI, shall be deemed to
be an election to defer commencement of payment of any benefit sufficient to
satisfy this section.
The Participant may elect to have his benefits begin after the latest date
for beginning benefits described above, subject to the provisions of this
section. The Participant shall make the election in writing and deliver the
signed statement of election to the Plan Administrator before Normal Retirement
Date or the date he ceases to be an Employee, if later. The election must
describe the form of distribution and the -,ate the benefits will begin. The
Participant shall not elect a date for beginning benefits or a form of
distribution that would result in a benefit payable when he dies which would be
more than incidental within the meaning of governmental regulations.
Benefits shall begin by the Participant's Required Beginning Date, as
defined in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS
SECTION of Article VI.
Contributions which are used to compute the Actual Deferral Percentage, as
defined in the EXCESS AMOUNTS SECTION of Article III, may be distributed upon
disposition by the Employer of substantially
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all of the assets (within the meaning of Code Section 409(d)(2)) used by the
Employer in a trade or business or disposition by the Employer of the Employer's
interest in a subsidiary (within the meaning of Code Section 409(d)(3)) if the
transferee corporation is not a Controlled Group member, the Employee continues
employment with the transferee corporation and the transferor corporation
continues to maintain the Plan. Such distributions made after March 31, 1988,
must be made in a single sum.
SECTION 5.05--WITHDRAWAL PRIVILEGES.
A Participant may withdraw all or any portion of his Vested Account which
results from the following Contributions
Elective Deferral Contributions in the event of hardship due to an
immediate and heavy financial need. Withdrawals from the Participant's Account
resulting from Elective Deferral Contributions shall be limited to the amount of
the Participant's Elective Deferral Contributions. Immediate and heavy financial
need shall be limited to: (i) expenses incurred or necessary for medical care,
described in Code Section 213(d), of the Participant, the Participant's spouse,
or any dependents of the Participant (as defined in Code Section 152); (ii)
purchase (excluding mortgage payments) of a principal residence for the
Participant; (iii) payment of tuition and related educational fees and the
payment of room and board expenses for the next 12 months of post-secondary
education for the Participant, his spouse, children or dependents; (iv) the need
to prevent the eviction of the Participant from his principal residence or
foreclosure on the mortgage of the Participant's principal residence; or (v) any
other distribution which is deemed by the Commissioner of Internal Revenue to be
made on account of immediate and heavy financial need as provided in Treasury
regulations. The Participant's request for a withdrawal shall include his
written statement that an immediate and heavy financial need exists and explain
its nature.
No withdrawal shall be allowed which is not necessary to satisfy such
immediate and heavy financial need. Such withdrawal shall be deemed necessary
only if all of the following requirements are met: (i) the distribution is not
in excess of the amount of the immediate and heavy financial need of the
Participant (including amounts necessary to pay any Federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution); (ii) the Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available under all
plans maintained by the Employer; (iii) the Plan, and all other plans maintained
by the Employer, provide that the Participant's elective contributions and
employee contributions will be suspended for at least 12 months after receipt of
the hardship distribution; and (iv) the Plan, and all other plans maintained by
the Employer, provide that the Participant may not make elective contributions
for the Participant's taxable year immediately following the taxable year of the
hardship distribution in excess of the applicable limit under Code Section
402(g) for such next taxable year less the amount of such Participant's elective
contributions for the taxable year of the hardship distribution. The Plan will
suspend elective contributions and employee contributions for 12 months and
limit elective deferrals as provided in the preceding sentence. A Participant
shall not cease to be an Eligible Participant, as defined in the EXCESS AMOUNTS
SECTION of Article III, merely because his elective contributions or employee
contributions are suspended.
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A request for withdrawal shall be in writing on a form furnished for that
purpose and delivered to the Plan Administrator before the withdrawal is to
occur. The Participant's request shall be subject to the requirements in the
ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit payable in a form other than a Qualified Joint and Survivor
Form.
A forfeiture shall not occur solely as a result of a withdrawal.
SECTION 5.06--LOANS TO PARTICIPANTS.
Loans shall be made available to all Participants on a reasonably
equivalent basis from the Participant's Account resulting from their- Elective
Deferral Contributions and Matching Contributions. For purposes of this section,
Participant means any Participant or Beneficiary who is a party-in-interest,
within the meaning of Section 3(14) of the Employee Retirement Income Security
Act of 1974 (ERISA). Loans shall not be made to highly compensated employees, as
defined in Code Section 414(q), in an amount greater than the amount made
available to other Participants.
No loans will be made to any shareholder-employee or owner-employee. For
purposes of this requirement, a shareholder-employee means an employee or
officer of an electing small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of Code Section 318(a)(1)), on any day
during the taxable year of such corporation, more than 5% of the outstanding
stock of the corporation.
A loan to a Participant shall be a Participant-directed investment of his
Account. No Account other than the borrowing Participant's Account shall share
in the interest paid on the loan or bear any expense or loss incurred because of
the loan.
The number of outstanding loans shall be limited to two. No more than two
loans will be approved for any Participant in any 12-month period. The minimum
amount of any loan shall be $400.
Loans must be adequately secured and bear a reasonable rate of interest.
The amount of the loan shall not exceed the maximum amount that may be
treated as a loan under Code Section 72(p) (rather than a distribution) to the
Participant and shall be equal to the lesser of (a) or (b) below:
(a) $50,000 reduced by the highest outstanding loan balance of loans
during the one-year period ending on the day before the new loan
is made.
(b) The greater of (1) or (2), reduced by (3) below:
(1) One-half of the Participant's Vested Account.
(2) $10,000.
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(3) Any outstanding loan balance on the date the new loan is
made.
For purposes of this maximum, a Participant's Vested Account does not include
any accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and all qualified employer plans, as defined in Code Section
72(p)(4), of the Employer and any Controlled Group member shall be treated as
one plan.
The foregoing notwithstanding, the amount of such loan shall not exceed
50% of the amount of the Participant's Vested Account resulting from Elective
Deferral Contributions and Matching Contributions. For purposes of this maximum,
a Participant's Vested Account does not include any accumulated deductible
employee contributions, as defined in Code Section 72(o)(5)(B). No collateral
other than a portion of the Participant's Vested Account (as limited above)
shall be accepted. The Loan Administrator shall determine if the collateral is
adequate for the amount of the loan requested.
A Participant must obtain the consent of the Participant's spouse, if any,
to the use of the Vested Account as security for the loan. Spousal consent shall
be obtained no earlier than the beginning of the 90-day period that ends on the
date on which the loan to be so secured is made. The consent must be in writing,
must acknowledge the effect of the loan, and must be witnessed by a plan
representative or a notary public. Such consent shall thereafter be binding with
respect to the consenting spouse or any subsequent spouse with respect to that
loan. A new consent shall be required if the Vested Account is used for
collateral upon renegotiation, extension, renewal, or other revision of the
loan.
If a valid spousal consent has been obtained in accordance with the above,
then, notwithstanding any other provision of this Plan, the portion of the
Participant's Vested Account used as a security interest held by the Plan by
reason of a loan outstanding to the Participant shall be taken into account for
purp9ses of determining the amount of the Vested Account payable at the time of
death or distribution, but only if the reduction is used as repayment of the
loan. If less than 100(Degree)k of the Participant's Vested Account (determined
without regard to the preceding sentence) is payable to the surviving spouse,
then the Vested Account shall be adjusted by first reducing the Vested Account
by the amount of the security used as repayment of the loan, and then
determining the benefit payable to the surviving spouse.
Each loan shall bear a reasonable fixed rate of interest to be determined
by the Loan Administrator. In determining the interest rate, the Loan
Administrator shall take into consideration fixed interest rates currently being
charged by commercial lenders for loans of comparable risk on similar terms and
for similar durations, so that the interest will provide for a return
commensurate with rates currently charged by commercial lenders for loans made
under similar circumstances. The Loan Administrator shall not discriminate among
Participants in the matter of interest rates; but loans granted at different
times may bear different interest rates in accordance with the current
appropriate standards.
The 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. The
period of repayment for any loan shall be arrived at by mutual agreement between
the Loan Administrator and the Participant.
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The Participant shall make a written application for a loan from the Plan
on forms provided by the Loan Administrator. The application must specify the
amount and duration requested. No loan will be approved unless the Participant
is creditworthy. The Participant must grant authority to the Loan Administrator
to investigate the Participant's creditworthiness so that the loan application
may be properly considered.
Information contained in the application for the loan concerning the
income, liabilities, and assets of the Participant will be evaluated to
determine whether there is a reasonable expectation that the Participant will be
able to satisfy payments on the loan as due. Additionally, the Loan
Administrator will pursue any appropriate further investigations concerning the
creditworthiness and/or credit history of the Participant to determine whether a
loan should be approved.
Each loan shall be fully documented in the form of a promissory note
signed by the Participant for the face amount of the loan, together with
interest determined as specified above.
There will be an assignment of collateral to the Plan executed at the time
the loan is made.
In those cases where repayment through payroll deduction by the Employer
is available, installments are so payable, and a payroll deduction agreement
will be executed by the Participant at the time of making the loan.
Where payroll deduction is not available, payments are to be timely made.
Any payment that is not by payroll deduction shall be made payable to the
Employer or Trustee, as specified in the promissory note, and delivered to the
Loan Administrator, including prepayments, service fees and penalties, if any,
and other amounts due under the note.
The promissory note may provide for reasonable late payment penalties
and/or service fees. Any penalties or service fees shall be applied to all
Participants in a nondiscriminatory manner. If the promissory note so provides,
such amounts may be assessed and collected from the Account of the Participant
as part of the loan balance.
Each loan may be paid prior to maturity, in part or in full, without
penalty or service fee, except as may be set out in the promissory note.
If any amount remains unpaid for more than 31 days after due, a default is
deemed to occur.
Upon default, the Plan has the right to pursue any remedy available by law
to satisfy the amount due, along with accrued interest, including the right to
enforce its claim against the security pledged and execute upon the collateral
as allowed by law.
If any payment of principal or interest or any other amount due under the
promissory note, or any portion thereof, is not made for a period of 90 days
after due, the entire principal balance whether or not
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otherwise then due, shall become immediately due and payable without demand or
notice, and subject to collection or satisfaction by any lawful means, including
specifically but not limited to the right to enforce the claim against the
security pledged and to execute upon the collateral as allowed by law.
In the event of default, foreclosure on the note and attachment of
security or use of amounts pledged to satisfy the amount then due, will not
occur until a distributable event occurs in accordance with the Plan, and will
not occur to an extent greater than the amount then available upon any
distributable event which has occurred under the Plan.
All reasonable costs and expenses, including but not limited to attorney's
fees, incurred by the Plan in connection with any default or in any proceeding
to enforce any provision of a promissory note or instrument by which a
promissory note for a Participant loan is secured, shall be assessed and
collected from the Account of the Participant as part of the loan balance.
If payroll deduction is being utilized, in the event that a Participant's
available payroll deduction amounts in any given month are insufficient to
satisfy the total amount due, there will be an increase in the amount taken
subsequently, sufficient to make up the amount that is then due. If the
subsequent deduction is also insufficient to satisfy the amount due within 31
days, a default is deemed to occur as above. If any amount remains past due more
than 90 days, the entire principal amount, whether or not otherwise then due,
along with interest then accrued and any other amount then due under the
promissory note, shall become due and payable, as above.
If the Participant ceases to be a party-in-interest (as defined in this
section) the balance of the outstanding loan becomes due and payable, and the
Participant's Vested Account will be used as available for distribution(s) to
pay the outstanding loan. The Participant's Vested Account will not be used to
pay any amount due under the outstanding loan before the date which is 31 days
after the date he ceased to be an Employee, and the Participant may elect to
repay the outstanding loan with interest on the day of repayment. If no
distributable event has occurred under the Plan at the time that the
Participant's Vested Account would otherwise be used under this provision to pay
any amount due under the outstanding loan, this will not occur until the time,
or in excess of the extent to which, a distributable event occurs under the
Plan.
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ARTICLE VI
DISTRIBUTION OF BENEFITS
SECTION 6.01--AUTOMATIC FORMS OF DISTRIBUTION.
Unless a qualified election of an optional form of benefit has been made
within the election period (see the ELECTION PROCEDURES SECTION of Article VI),
the automatic form of benefit payable to or on behalf of a Participant is
determined as follows:
(a) The automatic form of retirement benefit for a Participant who
does not die before his Annuity Starting Date shall be the
Qualified Joint and Survivor Form.
(b) The automatic form of death benefit for a Participant who dies
before his Annuity Starting Date shall be:
(1) A Qualified Preretirement Survivor Annuity for a
Participant who has a spouse to whom he has been
continuously married throughout the one-year period
ending on the date of his death. The spouse may elect to
start receiving the death benefit on any first day of the
month on or after the Participant dies and before the
date the Participant would have been age 70 1 /2. If the
spouse dies before benefits start, the Participant's
Vested Account, determined as of the date of the spouse's
death, shall be paid to the spouse's Beneficiary.
(2) A single-sum payment to the Participant's Beneficiary for
a Participant who does not have a spouse who is entitled
to a Qualified Preretirement Survivor Annuity.
Before a death benefit will be paid on account of the death of a
Participant who does not have a spouse who is entitled to a
Qualified Preretirement Survivor Annuity, it must be established
to the satisfaction of a plan representative that the Participant
does not have such a spouse.
SECTION 6.02--OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS.
(a) For purposes of this section, the following terms are defined:
Applicable Life Expectancy means 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 so
recalculated. The applicable calendar year shall be the first
Distribution Calendar Year, and if Life Expectancy is being
recalculated such succeeding calendar year.
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Designated Beneficiary means the individual who is designated as
the beneficiary under the Plan in accordance with Code Section
401(a)(9) and the regulations thereunder.
Distribution Calendar Year means 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 (e) below.
Joint and Last Survivor Expectancy means joint and last survivor
expectancy computed by use of the expected return multiples in
Table 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 (e)(2)(ii) below) 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 nonspouse Beneficiary may not be
recalculated.
Life Expectancy means life expectancy computed by use of the
expected return multiples in Table V 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 (e) (2)(ii) below) 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 nonspouse Beneficiary may not be
recalculated.
Participant's Benefit means
(1) 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 the dates in the valuation
calendar year after the valuation date and decreased by
distributions made in the valuation calendar year after
the valuation date.
(2) For purposes of (1) 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.
Required Beginning Date means, for a Participant, the first day of April
of the calendar year following
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the calendar year in which the Participant attains age 70 1 /2, unless
otherwise provided in (1), (2) or (3) below:
(1) The Required Beginning Date for a Participant who attains age 70
1 /2 before January 1, 1988, and 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) The Required Beginning Date for a Participant who attains age
70 1 /2 before January 1, 1988, and who is a 5-percent owner
is the first day of April of the calendar year 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.
(3) The Required Beginning Date of a Participant who is not
a 5-percent owner and who attains age 70 1 /2 during
1988 and who has not retired as of January 1, 1989, is
April 1, 1990.
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 Code Section 416(i) (determined in accordance with Code
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.
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.
(b) The optional forms of retirement benefit shall be the
following: a straight life annuity; single life annuities with
certain periods of five, ten or fifteen years; a single life
annuity with installment refund; survivorship life annuities
with installment refund and survivorship percentages of 50, 66
2/3 or 100; fixed period annuities for any period of whole
months which is not less than 60 and does not exceed the Life
Expectancy of the Participant and the named Beneficiary as
provided in (d) below where the Life Expectancy is not
recalculated; and a series of installments chosen by the
Participant with a minimum payment each year beginning with
the year the Participant turns age 70 1 /2. The payment for
the first year in which a minimum payment is required will be
made by April 1 of the following calendar year. The payment
for the second year and each successive year will be made by
December 31 of that year. The minimum payment will be based on
a period equal to the Joint and Last Survivor Expectancy of
the Participant and the Participant's spouse, if any, as
provided in (d) below where the Joint and Last Survivor
Expectancy is recalculated. The balance of the Participant's
Vested Account,
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if any, will be payable on the Participant's death to his
Beneficiary in a single sum. The Participant may also elect to
receive his Vested Account in a single-sum payment.
Election of an optional form is subject to the qualified election
provisions of Article VI.
Any annuity contract distributed shall be nontransferable. 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.
(c) The optional forms of death benefit are a single-sum payment and
any annuity that is an optional form of retirement benefit.
However, a series of installments shall not be available if the
Beneficiary is not the spouse of the deceased Participant.
(d) Subject to the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article
VI, joint and survivor annuity requirements, the requirements of
this section 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 apply to calendar years beginning
after December 31, 1984.
All distributions required under this section shall be determined
and made in accordance with the proposed regulations under Code
Section 401(a)(9), including the minimum distribution incidental
benefit requirement of section 1.401(a)(9)-2 of the proposed
regulations.
The entire interest of a Participant must be distributed or begin
to be distributed no later than the Participant's Required
Beginning Date.
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 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.
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:
(5) Individual account:
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(i) If a Participant's Benefit is to be distributed
over
(a) 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
(b) a period not extending beyond the Life
Expectancy of the Designated
Beneficiary,
the amount required to be distributed for each
calendar year beginning with the distributions
for the first Distribution Calendar Year, must
be at least equal to the quotient obtained by
dividing the Participant's Benefit by the
Applicable Life Expectancy.
(ii) 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
5096 of the present value of the amount
available for distribution is paid within the
Life Expectancy of the Participant.
(iii) 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
(a) the Applicable Life Expectancy or
(b) if the Participant's spouse is not the
Designated Beneficiary, the applicable
divisor determined from the table set
forth in Q&A-4 of section 1.401 (a)
(9)-2 of the proposed regulations.
Distributions after the death of the Participant
shall be distributed using the Applicable Life
Expectancy in (5)(i) above as the relevant
divisor without regard to Proposed Regulations
section 1.401(a)(9)-2.
(iv) 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 the Distribution Calendar Year
for other calendar years, including the minimum
distribution for the Distribution Calendar Year
in which the Participant's Required Beginning
Date occurs, must be made on or before December
31 of that Distribution Calendar Year.
(6) Other forms:
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(i) 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 Code Section 401 (a) (9) and the
proposed regulations thereunder.
(e) Death distribution provisions:
(1) Distribution beginning before death. If the Participant
dies after distribution of his interest has begun, the
remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
(2) Distribution beginning after death. If the Participant
dies before distribution of his 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 (i) or (ii)
below:
(i) 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;
(ii) if the Designated Beneficiary is the
Participant's surviving spouse, the date
distributions are required to begin in
accordance with (i) above shall not be earlier
than the later of
(a) December 31 of the calendar year
immediately following the calendar
year in which the Participant died and
(b) 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 (e)(2) by the time of his death, the Participant's
Designated Beneficiary must elect the method of
distribution no later than the earlier of
(iii) December 31 of the calendar year in which
distributions would be required to begin under
this subparagraph, or
(iv) December 31 of the calendar year which contains
the fifth anniversary of the date of death of
the Participant.
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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) For purposes of (e)(2) above, if the surviving spouse
dies after the Participant, but before payments to such
spouse begin, the provisions of (e)(2) above, with the
exception of (e)(2)(ii) therein, shall be applied as if
the surviving spouse were the Participant.
(4) For purposes of this (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) For purposes of this (e), distribution of a Participant's
interest is considered to begin on the Participant's
Required Beginning Date (or if (e)(3) above is
applicable, the date distribution is required to begin to
the surviving spouse pursuant to (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.
SECTION 6.02A--DISTRIBUTIONS IN QUALIFYING EMPLOYER SECURITIES.
Except as otherwise provided in this section, the Trustee shall distribute
a Participant's accrued benefit in whole shares of Qualifying Employer
Securities, cash, or a combination of both, as determined by the Employer;
provided, however, that a Participant has the right to demand distribution of
his Qualifying Employer Securities Account balance entirely in whole shares of
Qualifying Employer Securities. The Trustee will pay in cash any fractional
security share to which a Participant or his Beneficiary is entitled.
Notwithstanding the foregoing provisions of this section, if the
Employer's charter or bylaws restrict ownership of substantially all shares of
Qualifying Employer Securities to Employees and the Trust, as described in Code
Section 409(h)(2), the Trustee will make the distribution of a Participant's
accrued benefit entirely in cash.
Notwithstanding the preceding provisions of this section, the Trustee, if
directed in writing by the Plan Administrator, will pay, in cash, any cash
dividends on Qualifying Employer Securities allocated, or allocable to
Participants' Qualifying Employer Securities Accounts, irrespective of whether a
Participant is fully vested in his Qualifying Employer Securities Account. The
Plan Administrator's direction must state whether the Trustee is to pay the cash
dividend distributions currently, or within the 90 day period following the
close of the Plan Year in which the Employer pays the dividends to the Trust.
The Plan Administrator may request the Employer to pay dividends on Qualifying
Employer Securities directly to Participants.
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Election of such distribution is subject to the qualified election
provisions of Article VI.
SECTION 6.03--ELECTION PROCEDURES.
The Participant, Beneficiary, or spouse shall make any election under this
section in writing. The Plan Administrator may require such individual to
complete and sign any necessary documents as to the p visions to be made. Any
election permitted under (a) and (b) below shall be subject to the qualified
election pr.)visions of (c) below.
(a) Retirement Benefits. A Participant may elect his Beneficiary or
Contingent Annuitant and may elect to have retirement benefits
distributed under any of the optional forms of retirement benefit
described in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI.
(b) Death Benefits. A Participant may elect his Beneficiary and may
elect to have death benefits distributed under any of the
optional forms of death benefit described in the OPTIONAL FORMS
OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of Article
VI.
If the Participant has not elected an optional form of
distribution for the death benefit payable to his Beneficiary,
the Beneficiary may, for his own benefit, elect the form of
distribution, in like manner as a Participant.
The Participant may waive the Qualified Preretirement Survivor
Annuity by naming someone other than his spouse as Beneficiary.
In lieu of the Qualified Preretirement Survivor Annuity described
in the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI, the
spouse may, for his own benefit, waive the Qualified
Preretirement Survivor Annuity by electing to have the benefit
distributed under any of the optional forms of death benefit
described in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI.
(c) Qualified Election. The Participant, Beneficiary or spouse may
make an election at any time during the election period. The
Participant, Beneficiary, or spouse may revoke the election made
(or make a new election) at any time and any number of times
during the election period. An election is effective only if it
meets the consent requirements below.
The election period as to retirement benefits is the 90-day
period ending on the Annuity Starting Date. An election to waive
the Qualified Joint and Survivor Form may not be made before the
date he is provided with the notice of the ability to waive the
Qualified Joint and Survivor Form. If the Participant elects the
series of installments, he may elect on any later date to have
the balance of his Vested Account paid under any of the optional
forms of retirement benefit available under the Plan. His
election period for this election is the 90-day period ending on
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the Annuity Starting Date for the optional form of retirement
benefit elected.
A Participant may make an election as to death benefits at any
time before he dies. The spouse's election period begins on the
date the Participant dies and ends on the date benefits begin.
The Beneficiary's election period begins on the date the
Participant dies and ends on the date benefits begin. An election
to waive the Qualified Preretirement Survivor Annuity may not be
made by the Participant before the date he is provided with the
notice of the ability to waive the Qualified Preretirement
Survivor Annuity. A Participant's election to waive the Qualified
Preretirement Survivor Annuity which is made before the first day
of the Plan Year in which he reaches age 35 shall become invalid
on such date. An election made by a Participant after he ceases
to be an Employee will not become invalid on the first day of the
Plan Year in which he reaches age 35 with respect to death
benefits from that part of his Account resulting from
Contributions made before he ceased to be an Employee.
If the Participant's Vested Account has at any time exceeded
$3,500, any benefit which is (1) immediately distributable or (2)
payable in a form other than a Qualified Joint and Survivor Form
or a Qualified Preretirement Survivor Annuity requires the
consent of the Participant and the Participant's spouse (or where
either the Participant or the spouse has died, the survivor). The
consent of the Participant or spouse to a benefit which is
immediately distributable must not be made before the date the
Participant or spouse is provided with the notice of the ability
to defer the distribution. Such consent shall be made in writing.
The consent shall not be made more than 90 days before the
Annuity Starting Date. Spousal consent is not required for a
benefit which is immediately distributable in a Qualified Joint
and Survivor Form. Furthermore, if spousal consent is not
required because the Participant is electing an optional form of
retirement benefit that is not a life annuity pursuant to (d)
below, only the Participant need consent to the distribution of a
benefit payable in a form that is not a life annuity and which 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 Code Section 401 (a) (9) or
Code Section 415. In addition, upon termination of this Plan if
the Plan does not offer an annuity option (purchased from a
commercial provider), the Participant's Account balance may,
without the Participant's consent, be distributed to the
Participant or transferred to another defined contribution plan
(other than an employee stock ownership plan as defined in Code
Section 4975(e)(7)) within the same Controlled Group. A benefit
is immediately distributable if any part of the benefit could be
distributed to the Participant (or surviving spouse) before the
Participant attains (or would have attained if not deceased) the
older of Normal Retirement Age or age 62. If the Qualified Joint
and Survivor Form is waived, the spouse has the right to limit
consent only to a specific Beneficiary or a specific form of
benefit. The spouse can relinquish one or both such rights. Such
consent shall be made in writing. The consent shall not be made
more than 90 days before the Annuity Starting Date. If the
Qualified Preretirement Survivor Annuity is waived, the spouse
has the right to limit consent only to a specific Beneficiary.
Such consent shall be in writing. The spouse's consent shall be
witnessed by a plan representative or notary public. The spouse's
consent must acknowledge the effect of the election, including
that the spouse had the right to limit consent only to a specific
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Beneficiary or a specific form of benefit, if applicable, and
that the relinquishment of one or both such rights was voluntary.
Unless the consent of the spouse expressly permits designations
by the Participant without a requirement of further consent by
the spouse, the spoue's consent must be limited to the form of
benefit, if applicable, and the Beneficiary (includinc any
Contingent Annuitant), class of Beneficiaries, or contingent
Beneficiary named in the election. Spousal consent is not
required, however, if the Participant establishes to the
satisfaction of the plan representative that the consent of the
spouse cannot be obtained because there is no spouse or the
spouse cannot be located. A spouse's consent under this paragraph
shall not be valid with respect to any other spouse. A
Participant may revoke a prior election without the consent of
the spouse. Any, new election will require a new spousal consent,
unless the consent of the spouse expressly permits such election
by the Participant without further consent by the spouse. A
spouse's consent may be revoked at any time within the
Participant's election period.
(d) Special Rule for Profit Sharing Plan. As provided in the
preceding provisions of the Plan, if a Participant has a spouse
to whom he has been continuously married throughout the one-year
period ending on the date of his death, the Participant's Vested
Account shall be paid to such spouse. However, if there is no
such spouse or if the surviving spouse has already consented in a
manner conforming to the qualified election requirements in (c)
above, the Vested Account shall be payable to the Participant's
Beneficiary in the event of the Participant's death.
The Participant may waive the spousal death benefit described
above at any time provided that no such waiver shall be effective
unless it satisfies the conditions of (c) above (other than the
notification requirement referred to therein) that would apply to
the Participant's waiver of the Qualified Preretirement Survivor
Annuity.
Because this is a profit sharing plan which pays death benefits
as described above, this subsection (d) applies if the following
condition is met: with respect to the Participant, this Plan is
not a direct or indirect transferee after December 31, 1984, of a
defined benefit plan, money purchase plan (including a target
plan), stock bonus plan or profit sharing plan which is subject
to the survivor annuity requirements of Code Section 401 (a) (1
1) and Code Section 417. If the above condition is met, spousal
consent is not required for electing a benefit payable in a form
that is not a life annuity. If the above condition is not met,
the consent requirements of this article shall be operative.
SECTION 6.04--NOTICE REQUIREMENTS.
(a) Optional forms of retirement benefit. The Plan Administrator
shall furnish to the Participant and the Participant's spouse a
written explanation of the optional forms of retirement benefit
in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTIONof Article VI, including the material
features and relative values of these options, in a manner that
would satisfy the notice requirements of Code Section 417(a)(3)
and the right of the Participant and the Participant's spouse to
defer distribution until the benefit is no longer immediately
distributable.
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The Plan Administrator shall furnish the written explanation by a
method reasonably calculated to reach the attention of the
Participant and the Participant's spouse no less than 30 days and
no more than 90 days before the Annuity Starting Date.
(b) Qualified Joint and Survivor Form. The Plan Administrator shall
furnish to the Participant a written explanation of the
following: the terms and conditions of the Qualified Joint and
Survivor Form; the Participant's right to make, and the effect
of, an election to waive the Qualified Joint and Survivor Form;
the rights of the Participant's spouse; and the right to revoke
an election and the effect of such a revocation. The Plan
Administrator shall furnish the written explanation by a method
reasonably calculated to reach the attention of the Participant
no less than 30 days and no more than 90 days before the Annuity
Starting Date.
After the written explanation is given, a Participant or spouse
may make written request for additional information. The written
explanation must be personally delivered or mailed (first class
mail, postage prepaid) to the Participant or spouse within 30
days from the date of the written request. The Plan Administrator
does not need to comply with more than one such request by a
Participant or spouse.
The Plan Administrator's explanation shall be written in
nontechnical language and will explain the terms and conditions
of the Qualified Joint and Survivor Form and the financial effect
upon the Participant's benefit (in terms of dollars per benefit
payment) of electing not to have benefits distributed in
accordance with the Qualified Joint and Survivor Form.
(c) Qualified Preretirement Survivor Annuity. As required by the Code
and Federal regulation, the Plan Administrator shall furnish to
the Participant a written explanation of the following: the terms
and conditions of the Qualified Preretirement Survivor Annuity;
the Participant's right to make, and the effect of, an election
to waive the Qualified Preretirement Survivor Annuity; the rights
of the Participant's spouse; and the right to revoke an election
and the effect of such a revocation. The Plan Administrator shall
furnish the written explanation by a method reasonably calculated
to reach the attention of the Participant within the applicable
period. The applicable period for a Participant is whichever of
the following periods ends last:
(1) the period beginning one year before the date the
individual becomes a Participant and ending one year
after such date; or
(2) the period beginning one year before the date the
Participant's spouse is first entitled to a Qualified
Preretirement Survivor Annuity and ending one year after
such date.
If such notice is given before the period beginning with the
first day of the Plan Year in which the Participant attains age
32 and ending with the close of the Plan Year preceding the Plan
Year in which the Participant attains age 35, an additional
notice shall be given within such period. If a Participant ceases
to be an Employee before attaining age 35, an additional notice
shall be given within the period beginning one year before the
date he ceases to be an Employee
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and ending one year after such date.
After the written explanation is given, a Participant or spouse
may make written request for additional information. The written
explanation must be personally delivered or mailed (first class
mail, postage prepaid) to the Participant or spouse within 30
days from the date of the written request. The Plan Administrator
does not need to comply with more than one such request by a
Participant or spouse.
The Plan Administrator's explanation shall be written in
nontechnical language and will explain the terms and conditions
of the Qualified Preretirement Survivor Annuity and the financial
effect upon the spouse's benefit (in terms of dollars per benefit
payment) of electing not to have benefits distributed in
accordance with the Qualified Preretirement Survivor Annuity.
SECTION 6.05--DISTRIBUTIONS UNDER QUALIFIED DOMESTIC RELATIONS ORDERS.
The Plan specifically permits distributions to an Alternate Payee under a
qualified domestic relations order as defined in Code Section 414(p), at any
time, irrespective of whether the Participant has attained his earliest
retirement age as defined in Code Section 414(p), under the Plan. A distribution
to an Alternate Payee before the Participant-s attainment of earliest retirement
age, as defined in Code Secti,)n 414(p), is available only if:
1) the order specifies distributions at that time or permits an
agreement between the Plan and the Alternate Payee to authorize
an earlier distribution; and
2) if the present value of the Alternate Payee's benefits under the
Plan exceeds $3,500, and the order requires, the Alternate Payee
consents to any distribution occurring before the Participant's
attainment of earliest retirement age, as defined in Code Section
414(p).
Nothing in this section shall permit a Participant a right to receive a
distribution at a time otherwise not permitted under the Plan nor shall it
permit the Alternate Payee to receive a form of payment not permitted under the
Plan.
The Plan Administrator shall establish reasonable procedures to determine
the qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Plan Administrator promptly shall notify the Participant
and an Alternate Payee named in the order, in writing, of the receipt of the
order and the Plan's procedures for determining the qualified status of the
order. Within a reasonable period of time after receiving the domestic relations
order, the Plan Administrator shall determine the qualified status of the order
and shall notify the Participant and each Alternate Payee, in writing, of its
determination. The Plan Administrator shall provide notice under this paragraph
by mailing to the individual's address specified in the domestic relations
order, or in a manner consistent with Department of Labor regulations. The Plan
Administrator may treat as qualified any domestic relations order entered before
January 1, 1985, irrespective of whether it satisfies all the requirements
described in Code Section 414(p).
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If any portion of the Participant's Vested Account is payable during the
period the Plan Administrator is making its determination of the qualified
status of the domestic relations order, a separate accounting shall be made of
the amount payable. If the Plan Administrator determines the order is a
qualified domestic relations order within 18 months of the date amounts are
first payable following receipt of the order, the payable amount shall be
distributed in accordance with the order. If the Plan Administrator does not
make its determination of the qualified status of the order within the 18 month
determination period, the payable amounts shall be distributed in the manner the
Plan would distribute if the order did not exist and the order shall apply
prospectively if the Plan Administrator later determines the order is a
qualified domestic relations order.
The Plan shall make payments or distributions required under this section
by separate benefit checks or other separate distribution to the Alternate
Payee(s).
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ARTICLE VII
TERMINATION OF PLAN
The Employer expects to continue the Plan indefinitely but reserves the
right to terminate the Plan in whole or in part at--any time upon giving written
notice to all parties concerned. Complete discontinuance of Contributions under
the Plan constitutes complete termination of Plan.
The Account of each Participant shall be fully (100%) vested and
nonforfeitable as of the effective date of complete termination of Plan. The
Account of each Participant who is included in the group of Participants deemed
to be affected by the partial termination of the Plan shall be fully (100%)
vested and nonforfeitable as of the effective date of the partial Plan
termination. The Participant's Account shall continue to participate in the
earnings credited, expenses charged and any appreciation or depreciation of the
Investment Fund until the Vested Account is distributed. A distribution under
this article will be a retirement benefit and shall be distributed to the
Participant according to the provisions of Article VI.
A Participant's Account which does not result from Contributions which are
used to compute the Actual Deferral Percentage, as defined in the EXCESS AMOUNTS
SECTION of Article III, may be distributed to the Participant after the
effective date of the complete or partial Plan termination. A Participant's
Account resulting from Contributions which are used to compute such percentage
may be distributed upon termination of the Plan without the establishment or
maintenance of another defined contribution plan, other than an employee stock
ownership plan (as defined in Code Section 4975(e) or Code Section 409) or a
simplified employee pension plan (as defined in Code Section 408(k)). Such a
distribution made after March 31, 1988, must be in a single sum.
Upon complete termination of Plan, no more Employees shall become
Participants and no more Contributions shall be made.
The assets of this Plan shall not be paid to the Employer at any time,
except that, after the satisfaction of all liabilities under the Plan, any
assets remaining may be paid to the Employer. The payment may not be made if it
would contravene any provision of law.
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ARTICLE VIII
ADMINISTRATION OF PLAN
SECTION 8.01--ADMINISTRATION.
Subject to the provisions of this article, the Plan Administrator has
complete control of the administration of the Plan. The Plan Administrator has
all the powers necessary for it to properly carry out its administrative duties.
Not in limitation, but in amplification of the foregoing, the Plan Administrator
has the power to construe the Plan, including ambiguous provisions, and to
determine all questions that may arise under the Plan, including all questions
relating to the eligibility of Employees to participate in the Plan and the
amount of benefit to which any Participant, Beneficiary, spouse or Contingent
Annuitant may become entitled. The Plan Administrator's decisions upon all
matters within the scope of its authority shall be final.
Unless otherwise set out in the Plan or Group Contract, the Plan
Administrator may delegate recordkeeping and other duties which are necessary
for the administration of the Plan to any person or firm which agrees to accept
such duties. The Plan Administrator shall be entitled to rely upon all tables,
valuations, certificates and reports furnished by the consultant or actuary
appointed by the Plan Administrator and upon all opinions given by any counsel
selected or approved by the Plan Administrator.
The Plan Administrator shall receive all claims for benefits by
Participants, former Participants, Beneficiaries, spouses, and Contingent
Annuitants. The Plan Administrator shall determine all facts necessary to
establish the right of any Claimant to benefits and the amount of those benefits
under the provisions of the Plan. The Plan Administrator may establish rules and
procedures to be followed by Claimants in filing claims for benefits, in
furnishing and verifying proofs necessary to determine age, and in any other
matters required to administer the Plan.
SECTION 8.02--RECORDS.
All acts and determinations of the Plan Administrator shall oe duly
recorded. All these records, together with other documents necessary for the
administration of the Plan, shall be preserved in the Plan Administrator's
custody.
Writing (handwriting, typing, printing), photostating, photographing,
microfilming, magnetic impulse, mechanical or electrical recording or other
forms of data compilation shall be acceptable means of keeping records.
SECTION 8.03--INFORMATION AVAILABLE.
Any Participant in the Plan or any Beneficiary may examine copies of the
Plan description, latest annual report, any bargaining agreement, this Plan, the
Group Contract or any other instrument under which the Plan was established or
is operated. The Plan Administrator shall maintain all of the items listed
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in this section in its office, or in such other place or places as it may
designate in order to comply with governmental regulations. These items may be
examined during reasonable business hours. Upon the written request of a
Participant or Beneficiary receiving benefits under the Plan, the Plan
Administrator will furnish him with a copy of any of these items. The Plan
Administrator may make a reasonable charge to the requesting person for the
copy.
SECTION 8.04--CLAIM AND APPEAL PROCEDURES.
A Claimant must submit any required forms and pertinent information when
making a claim for benefits under the Plan.
If a claim for benefits under the Plan is denied, the Plan Administrator
shall provide adequate written notice to the Claimant whose claim for benefits
under the Plan has been denied. The notice must be furnished within 90 days -)f
the date that the claim is received by the Plan Administrator. The Claimant
shall be notified in writing within V s initial 90-day period if special
circumstances require an extension of time needed to process the claim and the
.gate by which the Plan Administrator's decision is expected to be rendered. The
written notice shall be furnished no later than 180 days after the date the
claim was received by the Plan Administrator.
The Plan Administrator's notice to the Claimant shall specify the reason
for the denial; specify references to pertinent Plan provisions on which denial
is based; describe any additional material and information needed for the
Claimant to perfect his claim for benefits; explain why the material and
information is needed; inform the Claimant that any appeal he wishes to make
must be in writing to the Plan Administrator within 60 days after receipt of the
Plan Administrator's notice of denial of benefits and that failure to make the
written appeal within such 60-day period shall render the Plan Administrator's
determination of such denial final, binding and conclusive.
If the Claimant appeals to the Plan Administrator, the Claimant, or his
authorized representative, may submit in writing whatever issues and comments
the Claimant, or his representative, feels are pertinent. The Claimant, or his
authorized representative may review pertinent Plan documents. The Plan
Administrator shall reexamine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under the
circumstances. The Plan Administrator shall advise the Claimant of its decision
within 60 days of his written request for review, unless special circumstances
(such as a hearing) would make rendering a decision within the 60-day limit
unfeasible. The Claimant must be notified within the 60-day limit if an
extension is necessary. The Plan Administrator shall render a decision on a
claim for benefits no later than 120 days after the request for review is
received.
SECTION 8.05--UNCLAIMED VESTED ACCOUNT PROCEDURE.
At the time the Participant's Vested Account is distributable to the
Participant, spouse or Beneficiary without his consent according to the
provisions of Article VI or Article IX, the Plan Administrator, by certified or
registered mail addressed to his last known address and in accordance with the
notice requirements of Article VI, will notify him of his entitlement to a
benefit. If the Participant, spouse or
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Beneficiary fails to claim the Vested Account or make his whereabouts known in
writing within six months from the date of mailing the notice, the Plan
Administrator may treat such unclaimed Vested Account as a forfeiture and apply
it according to the forfeiture provisions of Article III. If Article III
contains no forfeiture provisions, such amount will be applied to reduce the
earliest Employer Contributions due after the forfeiture arises.
If a Participant's Vested Account is forfeited according to the provisions
of the above paragraph and the Participant, his spouse or his Beneficiary at any
time make a claim for benefits, the forfeited Vested Account shall be
reinstated, unadjusted for any gains or losses occurring after the date it was
forfeited. The reinstated Vested Account shall then be distributed to the
Participant, spouse or Beneficiary according to the preceding provisions of the
Plan.
SECTION 8.06--DELEGATION OF AUTHORITY.
All or any part of the administrative duties and responsibilities under
this article may be delegated by the Plan Administrator to a retirement
committee. The duties and responsibilities of the retirement committee shall be
set out in a separate written agreement.
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ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01--AMENDMENTS.
The Employer may amend this Plan at any time, including any remedial
retroactive changes (within the specified period of time as may be determined by
Internal Revenue Service regulations) to comply with the requirements of any law
or regulation issued by any governmental agency to which the Employer is
subject. An amendment may not diminish or adversely affect any accrued interest
or benefit of Participants or their Beneficiaries or eliminate an optional form
of distribution with respect to benefits attributable to service before the
amendment nor allow reversion or diversion of Plan assets to the Employer at any
time, except as may be necessary to comply with the requirements of any law or
regulation issued by any governmental agency to which the Employer is subject.
No amendment to this Plan shall be effective to the extent that it has the
effect of decreasing a Participant's accrued benefit. However, a Participant's
Account may be reduced to the extent permitted under Code Section 412(c)(8). For
purposes of this paragraph, a Plan amendment which has the effect of decreasing
a Participant's Account 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 the 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 his percentage computed
under the Plan without regard to such amendment.
An amendment shall not decrease a Participant's vested interest in the
Plan. If an amendment to the Plan, or a deemed amendment in the case of a change
in top-heavy status of the Plan as provided in the MODIFICATION OF VESTING
REQUIREMENTS SECTION of Article X, changes the computation of the percentage
used to determine that portion of a Participant's Account attributable to
Employer Contributions which is nonforfeitable (whether directly or indirectly),
each Participant or former Participant
(a) who has completed at least three Years of Service on the date the
election period described below ends (five Years of Service if
the Participant does not have at least one Hour-of-Service in a
Plan Year beginning after December 31, 1988) and
(b) whose nonforfeitable percentage will be determined on any
date after the date of the change
may elect, during the election period, to have the nonforfeitable percentage of
his Account that results from Employer Contributions determined without regard
to the amendment. This election may not be revoked. An election does not need to
be provided for any Participant or former Participant whose nonforfeitable
percentage, determined according to the Plan provisions as changed, cannot at
any time be less than the percentage determined without regard to such change.
The election period shall begin no later than the date the Plan amendment is
adopted, or deemed adopted in the case of a change in the top-heavy status of
the Plan, and end no earlier than the sixtieth day after the latest of the date
the amendment is adopted (deemed adopted) or becomes effective, or the date the
Participant is issued written notice of the amendment (deemed
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amendment) by the Employer or the Plan Administrator.
SECTION 9.02--DIRECT ROLLOVERS.
This section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a Distributee's election under this section, 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.
SECTION 9.03--MERGERS AND DIRECT TRANSFERS.
The Plan may not be merged or consolidated with, nor have its assets or
liabilities transferred to, any other retirement plan, unless each Participant
in the plan would (if the plan then terminated) receive a benefit immediately
after the merger, consolidation or transfer which is equal to or greater than
the benefit the Participant would have been entitled to receive immediately
before the merger, consolidation or transfer (if this Plan had then terminated).
The Employer may enter into merger agreements or direct transfer of assets
agreements with the employers under other retirement plans which are qualifiable
under Code Section 401(a), including an elective transfer, and may accept the
direct transfer of plan assets, or may transfer plan assets, as a party to any
such agreement. The Employer shall not consent to, or be a party to a merger,
consolidation or transfer of assets with a defined benefit plan if such action
would result in a defined benefit feature being maintained under this Plan.
The Plan may accept a direct transfer of plan assets on behalf of an
Eligible Employee. If the Eligible Employee is not an Active Participant when
the transfer is made, the Eligible Employee shall be deemed to be an Active
Participant only for the purpose of investment and distribution of the
transferred assets. Employer Contributions shall not be made for or allocated to
the Eligible Employee, until the time he meets all of the requirements to become
an Active Participant.
The Plan shall hold, administer and distribute the transferred assets as a
part of the Plan. The Plan shall maintain a separate account for the benefit of
the Employee on whose behalf the Plan accepted the transfer in order to reflect
the value of the transferred assets. Unless a transfer of assets to the Plan is
an elective transfer, the Plan shall apply the optional forms of benefit
protections described in the AMENDMENTS SECTION of Article IX to all transferred
assets. A transfer is elective if: (1) the transfer is voluntary, under a fully
informed election by the Participant; (2) the Participant has an alternative
that retains his Code Section 411(d)(6) protected benefits (including an option
to leave his benefit in the transferor plan, if that plan is not terminating);
(3) if the transferor plan is subject to Code Sections 401(a)(11) and 417, the
transfer satisfies the applicable spousal consent requirements of the Code; (4)
the notice requirements under Code Section 417, requiring a written explanation
with respect to an election not to receive benefits in the form of a qualified
joint and survivor annuity, are met with respect to the Participant and spousal
transfer election; (5) the Participant has a right to immediate distribution
from the transferor plan under provisions in the plan not inconsistent with Code
Section 401(a); (6) the transferred benefit is equal to the Participant's entire
nonforfeitable accrued benefit under the transferor plan, calculated to be at
least the greater of the
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single sum distribution provided by the transferor plan (if any) or the present
value of the Participant's accrued benefit under the transferor plan payable at
the plan's normal retirement age and calculated using an interest rate subject
to the restrictions of Code Section 417(e) and subject to the overall
limitations of Code Section 415; (7) the Participant has a 100% nonforfeitable
interest in the transferred benefit; and (8) the transfer otherwise satisfies
applicable Treasury regulations.
SECTION 9.04--PROVISIONS RELATING TO THE INSURER AND OTHER PARTIES.
The obligations of an Insurer shall be governed solely by the provisions
of the Group Contract. The Insurer shall not be required to perform any act not
provided in or contrary to the provisions of the Group Contract. See the
CONSTRUCTION SECTION of this article.
Any issuer or distributor of investment contracts or securities is
governed solely by the terms of its policies, written investment contract,
prospectuses, security instruments, and any other written agreements entered
into with the Trustee.
Such Insurer, issuer or distributor is not a party to the Plan, nor bound
in any way by the Plan provisions. Such parties shall not be required to look to
the terms of this Plan, nor to determine whether the Employer, the Plan
Administrator, the Trustee, or the Named Fiduciary have the authority to act in
any particular manner or to make any contract or agreement.
Until notice of any amendment or termination of this Plan or a change in
Trustee has been received by the Insurer at its home office or an issuer or
distributor at their principal address, they are and shall be fully protected in
assuming that the Plan has not been amended or terminated and in dealing with
any party acting as Trustee according to the latest information which they have
received at their home office or principal address.
SECTION 9.05--EMPLOYMENT STATUS.
Nothing contained in this Plan gives an Employee the right to be retained
in the Employer's employ or to interfere with the Employer's right to discharge
any Employee.
SECTION 9.06--RIGHTS TO PLAN ASSETS.
No Employee shall have any right to or interest in any assets of the Plan
upon termination of his employment or otherwise except as specifically provided
under this Plan, and then only to the extent of the benefits payable to such
Employee in accordance with Plan provisions.
Any final payment or distribution to a Participant or his legal
representative or to any Beneficiaries, spouse or Contingent Annuitant of such
Participant under the Plan provisions shall be in full satisfaction of all
claims against the Plan, the Named Fiduciary, the Plan Administrator, the
Trustee, the Insurer, and the Employer arising under or by virtue of the Plan.
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<PAGE> 79
SECTION 9.07--BENEFICIARY.
Each Participant may name a Beneficiary to receive any death benefit
(other than any income payable to a Contingent Annuitant) that may arise out of
his participation in the Plan. The Participant may change his Beneficiary from
time to time. Unless a qualified election has been made, for purposes of
distributing any death benefits before Retirement Date, the Beneficiary of a
Participant who has a spouse who is entitled to a Qualified Preretirement
Survivor Annuity shall be the Participant's spouse. The Participant's
Beneficiary designation and any change of Beneficiary shall be subject to the
provisions of the ELECTION PROCEDURES SECTION of Article VI. It is the
responsibility of the Participant to give written notice to the Insurer of the
name of the Beneficiary on a form furnished for that purpose.
With the Employer's consent, the Plan Administrator may maintain records
of Beneficiary designations for Participants before their Retirement Dates. In
that event, the written designations made by Participants shall be filed with
the Plan Administrator. If a Participant dies before his Retirement Date, the
Plan Administrator shall certify to the Insurer the Beneficiary designation on
its records for the Participant.
If, at the death of a Participant, there is no Beneficiary named or
surviving, any death benefit under the Group Contract shall be paid under the
applicable provisions of the Group Contract.
SECTION 9.08--NONALIENATION OF BENEFITS.
Benefits payable under the Plan are not subject to the claims of any
creditor of any Participant, Beneficiary, spouse or Contingent Annuitant. A
Participant, Beneficiary, spouse or Contingent Annuitant does not have any
richts to alienate, anticipate, commute, pledge, encumber or assign any of such
benefits, except in the case of a 'oan as provided in the LOANS TO PARTICIPANTS
SECTION of Article V. The preceding sentences shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Participant according to a domestic relations order, unless such order is
determined by the Plan Administrator to be a qualified domestic relations order,
as defined in Code Section 414(p), or any domestic relations order entered
before January 1, 1985.
SECTION 9.09--CONSTRUCTION.
The validity of the Plan or any of its provisions is determined under and
construed according to Federal law and, to the extent permissible, according to
the laws of the state in which the Employer has its principal office. In case
any provision of this Plan is held illegal or invalid for any reason, such
determination shall not affect the remaining provisions of this Plan, and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included.
In the event of any conflict between the provisions of the Plan and the
terms of any contract or policy issued hereunder, the provisions of the Plan
control the operation and administration of the Plan.
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<PAGE> 80
SECTION 9.10--LEGAL ACTIONS.
The Plan, the Plan Administrator, the Trustee and the Named Fiduciary are
the necessary parties to any action or proceeding involving the assets held with
respect to the Plan or administration of the Plan or Trust. No person employed
by the Employer, no Participant, former Participant or their Beneficiaries or
any other person having or claiming to have an interest in the Plan is entitled
to any notice of process. A final judgment entered in any such action or
proceeding shall be binding and conclusive on all persons having or claiming to
have an interest in the Plan.
SECTION 9.11--SMALL AMOUNTS.
If the Vested Account of a Participant has never exceeded $3,500, the
entire Vested Account shall be payable in a single sum as of the earliest of his
Retirement Date, the date he dies, or the date he ceases to be an Employee for
any other reason. This is a small amounts payment. If a small amount is payable
as of the date the Participant dies, the small amounts payment shall be made to
the Participant's Beneficiary (spouse if the death benefit is payable to the
spouse). If a small amount is payable while the Participant is living, the small
amounts payment shall be made to the Participant. The small amounts payment is
in full settlement of all benefits otherwise payable.
No other small amounts payments shall be made.
SECTION 9.12--WORD USAGE.
The masculine gender, where used in this Plan, shall include the feminine
gender and the singular words as used in this Plan may include the plural,
unless the context indicates otherwise.
SECTION 9.13--TRANSFERS BETWEEN PLANS.
If an Employee previously participated in another plan of the Employer
which credited service under the elapsed time method for any purpose which under
this Plan is determined using the hours method, then the Employee's service
shall be equal to the sum of (a), (b) and (c) below:
(a) The number of whole years of service credited to him under the
other plan as of the date he became an Eligible Employee under
this Plan.
(b) One year or a part of a year of service for the applicable
service period in which he became an Eligible Employee if he is
credited with the required number of Hours-of-Service. If the
Employer does not have sufficient records to determine the
Employee's actual Hours-of-Service in that part of the service
period before the date he became an Eligible Employee, the
Hours-of-Service shall be determined using an equivalency. For
any month in which he would be required to be credited with one
Hour-of-Service, the Employee shall be deemed for purposes of
this section to be credited with 190 Hours-of-Service.
(c) The Employee's service determined under this Plan using the hours
method after the end of the applicable service period in which he
became an Eligible Employee.
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<PAGE> 81
If an Employee previously participated in another plan of the Employer
which credited service under the hours method for any purpose which under this
Plan is determined using the elapsed time method, then the Employee's service
shall be equal to the sum of (d), (e) and (f) below:
(d) The number of whole years of service credited to him under the
other plan as of the beginning of the applicable service period
under that plan in which he became an Eligible Employee under
this Plan.
(e) The greater of (1) the service that would be credited to him for
that entire service period using the elapsed time method or (2)
the service credited to him under the other plan as of the date
he became an Eligible Employee under this Plan.
(f) The Employee's service determined under this Plan using the
elapsed time method after the end of the applicable service
period under the other plan in which he became an Eligible
Employee.
Any modification of service contained in this Plan shall be applicable to
the service determined pursuant to this section.
If the Employee previously participated in the plan of a Controlled Group
member which credited service under a different method than is used in this
Plan, for purposes of determining eligibility and vesting the provisions above
shall apply as though the plan of the Controlled Group member were a plan of the
Employer.
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<PAGE> 82
ARTICLE X
TOP-HEAVY PLAN REQUIREMENTS
SECTION 10.01--APPLICATION.
The provisions of this article shall supersede all other provisions in the
Plan to the contrary.
For the purpose of applying the Top-heavy Plan requirements of this
article, all members of the Controlled Group shall be treated as one Employer.
The term Employer as used in this article shall be deemed to include all members
of the Controlled Group unless the term as used clearly indicates only the Emple
ver is meant.
The accrued benefit or account of a participant which results from
deductible voluntary contributions shall not be included for any purpose under
this article.
The minimum vesting and contribution provisions of the MODIFICATION OF
VESTING REQUIREMENTS and MODIFICATION OF CONTRIBUTIONS SECTIONS of Article X
shall not apply to any Employee who is included in a group of Employees covered
by a collective bargaining agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or more
employers, including the Employer, if there is evidence that retirement benefits
were the subject of good faith bargaining between such representatives. For this
purpose, the term "employee representatives" does not include any organization
more than half of whose members are employees who are owners, officers, or
executives.
SECTION 10.02--DEFINITIONS.
The following terms are defined for purposes of this article.
Aggregation Group means
(a) each of the Employer's retirement plans in which a Key Employee
is a participant during the Year containing the Determination
Date or one of the four preceding Years,
(b) each of the Employer's other retirement plans which allows the
plan(s) described in (a) above to meet the nondiscrimination
requirement of Code Section 401(a)(4) or the minimum coverage
requirement of Code Section 410, and
(c) any of the Employer's other retirement plans not included in (a)
or (b) above which the Employer desires to include as part of the
Aggregation Group. Such a retirement plan shall be included only
if the Aggregation Group would continue to satisfy the
requirements of Code Section 401 (a) (4) and Code Section 410.
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<PAGE> 83
The plans in (a) and (b) above constitute the "required" Aggregation
Group. The plans in (a), (b) and (c) above constitute the "permissive"
Aggregation Group.
Compensation means, as to an Employee for any period, compensation as
defined in the CONTRIBUTION LIMITATION SECTION of Article Ill. For
purposes of determining who is a Key Employee, Compensation shall include,
in addition to compensation as defined in the CONTRIBUTION LIMITATION
SECTION of Article III, elective contributions. Elective contributions are
amounts excludable from the Employee's gross income under Code Sections
125, 402(e)(3), 402(h) or 403(b), and contributed by the Employer, at the
Employee's election, to a Code Section 401(k) arrangement, a simplified
employee pension, cafeteria plan or tax-sheltered annuity.
For purposes of Compensation as defined in this section, Compensation'
shall be limited to the maximum dollar amount, as adjusted, in the same
manner and in the same time as the Compensation defined in the DEFINITION
SECTION of Article I.
Determination Date means as to this Plan for any Year, the last day of the
preceding Year. However, if there is no preceding Year, the Determination
Date is the last day of such Year.
Key Employee means any Employee or former Employee (including
Beneficiaries of deceased Employees) who at any time during the
determination period was
(a) one of the Employer's officers (subject to the maximum below)
whose Compensation (as defined in this section) for the Year
exceeds 50 percent of the dollar limitation under Code Section
415 (b) (1)(A),
(b) one of the ten Employees who owns (or is considered to own, under
Code Section 318) more than a half percent ownership interest and
one of the largest interests in the Employer during any Year of
the determination period if such person's Compensation (as
defined in this section) for the Year exceeds the dollar
limitation under Code Section 415(c)(1)(A),
(c) a five-percent owner of the Employer, or
(d) a one-percent owner of the Employer whose Compensation (as
defined in this section) for the Year is more than $150,000.
Each member of the Controlled Group shall be treated as a separate
employer for purposes of determining ownership in the Employer.
The determination period is the Year containing the Determination Date and
the four preceding Years. If the Employer has fewer than 30 Employees, no
more than three Employees shall be treated as Key Employees because they
are officers. If the Employer has between 30 and 500 Employees, no more
than ten percent of the Employer's Employees (if not an integer, increased
to the next integer) shall be treated as Key Employees because they are
officers. In no event will more than 50 Employees be
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<PAGE> 84
treated as Key Employees because they are officers if the Employer has 500
or more Employees. The number of Employees for any Plan Year is the
greatest number of Employees during the determination period. Officers who
are employees described in Code Section 414(q)(8) shall be excluded. If
the Employer has more than the maximum number of officers to be treated as
Key Employees, the officers shall be ranked by amount of annual
Compensation (as defined in this section), and those with the greater
amount of annual Compensation during the determination period shall be
treated as Key Employees. To determine the ten Employees owning the
largest interests in the Employer, if more than one Employee has the same
ownership interest, the Employee(s) having the greater annual Compensation
shall be treated as owning the larger interest(s). The determination of
who is a Key Employee shall be made according to Code Section 4160)(1) and
the regulations thereunder.
Non-key Employee means a person who is a non-key employee within the
meaning of Code Section 416 and regulations thereunder.
Present Value means the present value of a participant's accrued benefit
under a defined benefit plan as of his normal retirement age (attained age
if later) or, if the plan provides non-proportional subsidies, the age at
which the benefit is most valuable. The accrued benefit of any Employee
(other than a Key Employee) shall be determined under the method which is
used for accrual purposes for all plans of the Employer or if there is no
one method which is used for accrual purposes for all plans of the
Employer, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under Code Section 411(b)(1)(C). For purposes of
establishing Present Value, any benefit shall be discounted only for 7.5%
interest and mortality according to the 1971 Group Annuity Table (Male)
without the 7% margin but with projection by Scale E from 1971 to the
later of (a) 1974, or (b) the year determined by adding the age to 1920,
and wherein for females the male age six years younger is used. If the
Present Value of accrued benefits is determined for a participant under
more than one defined benefit plan included in the Aggregation Group, all
such plans shall use the same actuarial assumptions to determine the
Present Value.
Top-heavy Plan means a plan which is a top-heavy plan for any plan year
beginning after December 31, 1983. This Plan shall be a Top-heavy Plan if
(a) the Top-heavy Ratio for this Plan alone exceeds 60 percent and
this Plan is not part of any required Aggregation Group or
permissive Aggregation Group.
(b) his Plan is a part of a required Aggregation Group, but not part
of a permissive Aggregation Group, and the Top-heavy Ratio for
the required Aggregation Group exceeds 60 percent.
(c) this Plan is a part of a required Aggregation Group and part of a
permissive Aggregation Group and the Top-heavy Ratio for the
permissive Aggregation Group exceeds 60 percent.
Top-heavy Ratio means the ratio calculated below for this Plan or for the
Aggregation Group.
(a) If the Employer maintains one or more defined contribution plans
(including any simplified
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<PAGE> 85
employee pension plan) and the Employer has not maintained any
defined benefit plan which during the five-year period ending on
the determination date has or has had accrued benefits, the
Top-heavy Ratio for this Plan alone or for the required or
permissive Aggregation Group as appropriate is a fraction, the
numerator of which is the sum of the account balances of all Key
Employees as of the determination date and the denominator of
which is the sum of all account balances of all employees as of
the determination date. Both the numerator and denominator of the
Top-heavy Ratio are adjusted for any distribution of an account
balance (including those made from terminated plan(s) of the
Employer which would have been part of the required Aggregation
Group had such plan(s) not been terminated) made in the five-year
period ending on the determination date. 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
Code Section 416 and the regulations thereunder.
(b) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer
maintains or has maintained one or more defined benefit plans
which during the five-year period ending on the determination
date has or has had accrued benefits, the Top-heavy Ratio for any
required or permissive Aggregation Group as appropriate is a
fraction, the numerator of which is the sum of the account
balances under the defined contribution plan(s) of all Key
Employees and the Present Value of accrued benefits under the
defined benefit plan(s) for all Key Employees, and the
denominator of which is the sum of the account balances under the
defined contribution plan(s) for all employees and the Present
Value of accrued benefits under the defined benefit plans for all
employees. Both the numerator and denominator of the Top-heavy
Ratio are adjusted for any distribution of an account balance or
an accrued benefit (including those made from terminated plans)
of the Employer which would have been part of the required
Aggregation Group had such plan(s) not been terminated) made in
the five-year period ending on the determination date.
(c) For purposes of (a) and (b) above, the value of account balances
and the Present Value of accrued benefits will be determined as
of the most recent valuation date that falls within or ends with
the 12-month period ending on the determination date, except as
provided in Code Section 416 and the regulations thereunder for
the first and second plan years of a defined benefit plan. The
account balances and accrued benefits of an employee who is not a
Key Employee but who was a Key Employee in a prior year will be
disregarded. The calculation of the Top-heavy Ratio and the
extent to which distributions, rollovers and transfers during the
five-year period ending on the determination date are to be taken
into account, shall be determined according to the provisions of
Code Section 416 and regulations thereunder. The account balances
and accrued benefits of an individual who has performed no
service for the Employer during the five-year period ending on
the determination date shall be excluded from the Top-heavy Ratio
until the time the individual again performs service for the
Employer. 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.
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Account, as used in this definition, mean: the value of an employee's
account under one of the Employer's retirement plans on the latest
valuation date. In the case of a money purchase plan or target benefit
plan, such value shall be adjusted to include any contributions made for
or by the employee after the valuation date and on or before such
determination date or due to be made as of such determination date but not
yet forwarded to the insurer or trustee. In the case of a profit sharing
plan, such value shall be adjusted to include any contributions made for
or by the employee after the valuation date and on or before such
determination date. During the first Year of any profit sharing plan such
adjustment in value shall include contributions made after such
determination date that are allocated as of a date in such Year. The
nondeductible employee contributions which an employee makes under a
defined benefit plan of the Employer shall be treated as if they were
contributions under a separate defined contribution plan.
Valuation Date means, as to this Plan, the last day of the last calendar
month ending in a Year.
Year means the Plan Year unless another year is specified by the Employer
in a separate written resolution in accordance with regulations issued by
the Secretary of the Treasury or his delegate.
SECTION 10.03--MODIFICATION OF VESTING REQUIREMENTS.
If a Participant's Vesting Percentage determined under Article I is not at
least as great as his Vesting Percentage would be if it were determined under a
schedule permitted in Code Section 416, the following shall apply. During any
Year in which the Plan is a Top-heavy Plan, the Participant's Vesting Percentage
shall be the greater of the Vesting Percentage determined under Article I or the
schedule below.
VESTING SERVICE VESTING SERVICE
(whole years) PERCENTAGE
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
The schedule above shall not apply to Participants who are not credited
with an Hour-of-Service after the Plan first becomes a Top-heavy Plan. The
Vesting Percentage determined above applies to all of the Participant's Account
resulting from Employer Contributions, including Contributions the Employer
makes before the TEFRA Compliance Date or when the Plan is not a Top-heavy Plan.
If, in a later Year, this Plan is not a Top-heavy Plan, a Participant's
Vesting Percentage shall be determined under Article I. A Participant's Vesting
Percentage determined under either Article I or the schedule above shall never
be reduced and the election procedures of the AMENDMENTS SECTION of
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Article IX shall apply when changing to or from the schedule as though the
automatic change were the result of an amendment.
The part of the Participant's Vested Account resulting from the minimum
contributions required pursuant to the MODIFICATION OF CONTRIBUTIONS SECTION of
Article X shall not be forfeited because of a period of reemployment after
benefit payments have begun.
SECTION 10.04--MODIFICATION OF CONTRIBUTIONS.
During any Year in which this Plan is a Top-heavy Plan, the Employer shall
make a minimum contribution or allocation on the last day of the Year for each
person who is a Non-key Employee on that day and who either was or could have
been an Active Participant during the Year. A Non-key Employee is not required
to have a minimum number of hours-of-service or minimum amount of Compensation,
or to have had any Elective Deferral Contributions made for him in order to be
entitled to this minimum. The minimum contribution or allocation for such person
shall be equal to the lesser of (a) or (b) below:
(a) Three percent of such person's Compensation (as defined in this
article).
(b) The "highest percentage" of Compensation (as defined in this
article) for such Year at which the Employer's contributions are
made for or allocated to any Key Employee. The highest percentage
shall be determined by dividing the Employer Contributions made
for or allocated to each Key Employee during such Year by the
amount of his Compensation (as defined in this article), which is
not more than the maximum set out above, and selecting the
greatest quotient (expressed as a percentage). To determine the
highest percentage, all of the Employer's defined contribution
plans within the Aggregation Group shall be treated as one plan.
The provisions of this paragraph shall not apply if this Plan and
a defined benefit plan of the Employer are required to be
included in the Aggregation Group and this Plan enables the
defined benefit plan to meet the requirements of Code Section 401
(a) (4) or Code Section 410.
If the Employer's contributions and allocations otherwise required under
the defined contribution plan(s) are at least equal to the minimum above, no
additional contribution or reallocation shall be required. If the Employer's
contributions and allocations are less than the minimum above and Employer
Contributions under this Plan are allocated to Participants, any Employer
Contributions (other than those which are allocated on the basis of the amount
made for such person) shall be reallocated to provide the minimum. The remaining
Contributions shall be allocated as provided in the preceding articles of this
Plan taking into account any amount which was reallocated to_provide the
minimum. If the Employer's total contributions and allocations are less than the
minimum above after any reallocation provided above, the Employer shall
contribute the difference for the Year.
The minimum contribution or allocation applies to all of the Employer's
defined contribution plans in the aggregate which are Top-heavy Plans. If an
additional contribution or allocation is required to meet the minimum above, it
shall be provided in this Plan.
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A minimum allocation under a profit sharing plan shall be made without
regard to whether or not the Employer has profits.
If a person who is otherwise entitled to a minimum contribution or
allocation above is also covered under a defined benefit plan of the Employer's
which is a Top-heavy Piz -i during that same Year, the minimum benefits for him
shall not be duplicated. The defined benefit plan shall privide an annual
benefit for him on, or adjusted to, a straight life basis of the lesser of (c)
two percent of his average pay multiplied. by his years of service or (d) twenty
percent of his average pay. Average pay and years of service shall have the
meaning set forth in such defined benefit plan for this purpose.
For purposes of this section, any employer contribution made according to
a salary reduction or similar arrangement shall not apply before the first
Yearly Date in 1985. On and after the first Yearly Date in 1989, any such
employer contributions and employer contributions which are matching
contributions, as defined in Code Section 401(m), shall not apply in determining
if the minimum contribution requirement has been met, but shall apply in
determining the minimum contribution required. Forfeitures credited to a
Participant's Account are treated as employer contributions.
The requirements of this section shall be met without regard to
contributions under Chapter 2 of the Code (relating to tax on self-employment),
Chapter 21 of the Code (relating to Federal Insurance Contributions Act), Title
II of the Social Security Act or any other Federal or state law.
SECTION 10.05--MODIFICATION OF CONTRIBUTION LIMITATION.
If the provisions of subsection (e) of the CONTRIBUTION LIMITATION SECTION
of Article III are applicable for any Limitation Year during which this Plan is
a Top-heavy Plan, the benefit limitations shall be modified. The definitions of
Defined Benefit Plan Fraction and Defined Contribution Plan Fraction in the
CONTRIBUTION LIMITATION SECTION of Article III shall be modified by substituting
"1.0" in lieu of "1.25." The optional denominator for determining the Defined
Contribution Plan Fraction shall be modified by substituting "$41,500" in lieu
of "$51,875." In addition, an adjustment shall be made to the numerator of the
Defined Contribution Plan Fraction. The adjustment is a reduction of that
numerator similar to the modification of the Defined Contribution Plan Fraction
described in the CONTRIBUTION LIMITATION SECTION of Article III, and shall be
made with respect to the last Plan Year beginning before January 1, 1984.
The modifications in the paragraph above shall not apply with respect to a
Participant so long as employer contributions, forfeitures or nondeductible
employee contributions are not credited to his account under this or any of the
Employer's other defined contribution plans and benefits do not accrue for such
Participant under the Employer's defined benefit plan(s), until the sum of his
Defined Contribution and Defined Benefit Plan Fractions is less than 1.0.
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By executing this Plan, the Primary Employer acknowledges having counseled
to the extent necessary with selected legal and tax advisors regarding the
Plan's legal and tax implications.
Executed this ________ day of ________________________, 19___.
SOUTHWEST BANKS, INC.
By:
--------------------------------
--------------------------------
Title
The adopting Employer must agree to participate in or adopt the Plan in
writing. If this has not already been done, it may be done by signing below.
FIRST NATIONAL BANK OF NAPLES
By:
--------------------------------
--------------------------------
Title
--------------------------------
Date
CAPE CORAL NATIONAL BANK
By:
--------------------------------
--------------------------------
Title
--------------------------------
Date
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INDIAN ROCKS STATE BANK
By:
--------------------------------
--------------------------------
Title
--------------------------------
Date
FIRST NATIONAL BANK OF FORT MYERS
By:
--------------------------------
--------------------------------
Title
--------------------------------
Date
CUSTOMER SERVICE COMPANY OF F.N.B.
By:
--------------------------------
--------------------------------
Title
--------------------------------
Date
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AMENDMENT NO. 1
SOUTHWEST BANKS, INC. SALARY SAVINGS PLAN
The Plan named above gives the Employer the right to amend it at any
time. According to that right, the Plan is amended as provided below:
Effective January 1, 1999,
by striking the following:
Title Page
Page 5
Page 17
and substituting the following:
Title Page
Page 5
Page 17
The provisions and conditions set forth on any page of this amendment
are a part of the Plan as fully as if recited over the signature(s) below.
By signing this amendment, the Employer acknowledges having counseled
to the extent necessary with selected legal and tax advisors regarding the
amendment's legal and tax implications.
Signed this _________ day of ___________________, 19___.
SOUTHWEST BANKS, INC. F.N.B. CORPORATION
By: By:
----------------------------- ----------------------------
----------------------------- ----------------------------
Title Title
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SECOND AMENDMENT TO
F.N.B. CORPORATION SALARY SAVINGS PLAN
The F.N.B. Corporation Salary Savings Plan (the "Plan") is hereby amended,
effective as of January 1, 2000, as follows:
The following definitions are amended as indicated below such that each
reference in the Plan to such word shall now have the meaning as stated
in this Amendment:
"EMPLOYER" shall mean F.N.B. Corporation and any other
affiliated employer, which, with the consent of the Board,
shall adopt this Plan.
"PLAN ADMINISTRATOR" shall mean the Pension Committee of
F.N.B. Corporation.
"PRIMARY EMPLOYER" shall mean F.N.B. Corporation.
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<PAGE> 93
THIRD AMENDMENT TO
F.N.B. CORPORATION SALARY SAVINGS PLAN
The F.N.B. Corporation Salary Savings Plan (the "Plan") is hereby amended,
effective as of January 1, 2000, as follows:
The following definitions are amended as indicated below such that each
reference in the Plan to such word shall now have the meaning as stated
in this Amendment:
"COMPENSATION" means except as modified in this definition,
the total earnings paid or made available to an Employee by
the Employer during any specified period.
"Earnings" in this definition means Compensation as defined in
the CONTRIBUTION LIMITATION SECTION of Article III.
Compensation shall exclude reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving
expenses, deferred compensation and welfare benefits.
Compensation shall also include elective contributions.
Elective contributions are amounts excludable from the
Employee's gross income under Code Sections 125, 402(e)(3),
402(h) or 403(b), and contributed by the Employer, at the
Employee's election, to a Code Section 401(k) arrangement, a
simplified employee pension, cafeteria plan or tax-sheltered
annuity. Elective contributions also include Compensation
deferred under a Code Section 457 plan maintained by the
Employer and Employee contributions "picked up" by a
governmental entity and, pursuant to Code Section 414(h)(2),
treated as Employer contributions.
For purposes of the EXCESS AMOUNTS SECTION of Article III, the
Employer may elect to use an alternative nondiscriminatory
definition of Compensation in accordance with the regulations
under Code Section 414(s).
The provisions and conditions set forth on any page of this Amendment are a part
of the Plan as fully as if recited.
Unless otherwise stated on any page of this Amendment, eligibility for any
benefits and the amount of such benefits payable to or on behalf of an
individual who is an Inactive Participant on the effective date(s) stated above,
shall be determined according to the provisions of the Plan as in effect on the
day before he became an Inactive Participant.
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