Registration No. 333-47735
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FORD MOTOR COMPANY
(Exact name of registrant as specified in its charter)
Delaware 38-0549190
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
The American Road
Dearborn, Michigan 48121-1899
(Address of principal executive offices) (Zip Code)
FORD MICROELECTRONICS, INC. SALARIED RETIREMENT SAVINGS PLAN
(Full title of the Plan)
J. M. RINTAMAKI, Esq.
Ford Motor Company
P. O. Box 1899
The American Road
Dearborn, Michigan 48121-1899
(313) 323-2260
(Name, address and telephone number, including area code, of agent for service)
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FORD MICROELECTRONICS, INC. SALARIED RETIREMENT SAVINGS PLAN
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INCORPORATION OF CONTENTS OF PRIOR REGISTRATION STATEMENT
The contents of Registration Statements Nos. 333-02407, 33-58785 and
33-56785 are incorporated herein by reference.
Item 3. Incorporation of Documents by Reference.
The following documents filed or to be filed with the Securities and
Exchange Commission are incorporated by reference in this Registration
Statement:
(a) The latest annual report of Ford Motor Company ("Ford") filed
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934 (the "1934 Act") which contains, either directly or indirectly by
incorporation by reference, certified financial statements for Ford's
latest fiscal year for which such statements have been filed.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of
the 1934 Act since the end of the fiscal year covered by the annual
report referred to in paragraph (a) above.
(c) The description of Ford's Common Stock contained in
registration statement no. 33-43085 filed by Ford under the Securities
Act of 1933 (the "1933 Act").
All documents subsequently filed by Ford pursuant to Sections
13(a), 13(c), 14 and 15(d) of the 1934 Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing such documents.
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INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 8. Exhibits.
Exhibit 4.A - Ford Microelectronics, Inc. Salaried Retirement Savings
Plan. Filed with this Registration Statement.
Exhibit 4.B* - Copy of Stock Trust Agreement dated as of December 30, 1996
between Ford Microelectronics, Inc. and UMB Bank, N.A., as
Trustee.
Exhibit 5.A* - Opinion of Peter Sherry, Jr., an Assistant
Secretary and Counsel of Ford Motor Company, with
respect to the legality of the securities being
registered hereunder.
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Exhibit 5.B* - Opinion of J. Gordon Christy, an Attorney
of Ford Motor Company, with respect to compliance
requirements of the Employee Retirement Income
Security Act of 1974.
Exhibit 15 - Letter from Independent Certified Public Accountants
regarding unaudited interim financial information. Filed
with this Registration Statement.
Exhibit 23 - Consent of Independent Certified Public Accountants.
Filed with this Registration Statement.
Exhibit 24.A - Powers of Attorney authorizing signature. Filed as
Exhibit 24.A to Registration Statement No. 333-49545 and
incorporated herein by reference.
Exhibit 24.B - Certified resolutions of Board of Directors authorizing
signature pursuant to a power of attorney. Filed as Exhibit
24.B to Registration Statement No. 333-49545 and
incorporated herein by reference.
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*Previously filed as an Exhibit with this Registration Statement on March 6,
1998.
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The Plan. Pursuant to the requirements of the Securities Act of 1933, the
Plan has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Colorado Springs,
State of Colorado, on this 12th day of May, 1998.
FORD MICROELECTRONICS, INC. SALARIED
RETIREMENT SAVINGS PLAN
By:/s/John A. Sullivan
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John A. Sullivan, Chairman
Ford Microelectronics, Inc. Salaried
Retirement Savings Plan Administrative Committee
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The Registrant. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dearborn, State of Michigan, on this 12th day of
May, 1998.
FORD MOTOR COMPANY
By: Alex Trotman*
----------------------------
(Alex Trotman)
Chairman of the Board of Directors
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Director and Chairman of the
Board of Directors, President
and Chief Executive Officer
Alex Trotman* (principal executive officer) May 12, 1998
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(Alex Trotman)
Michael D. Dingman* Director May 12, 1998
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(Michael D. Dingman)
Director and
Edsel B. Ford II* Vice President May 12, 1998
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(Edsel B. Ford II)
William Clay Ford* Director May 12, 1998
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(William Clay Ford)
Director and Chairman
William Clay Ford, Jr.* of the Finance Committee May 12, 1998
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(William Clay Ford, Jr.)
</TABLE>
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<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Irvine O. Hockaday, Jr.* Director May 12, 1998
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(Irvine O. Hockaday, Jr.)
Marie-Josee Kravis* Director May 12, 1998
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(Marie-Josee Kravis)
Ellen R. Marram* Director May 12, 1998
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(Ellen R. Marram)
Homer A. Neal* Director May 12, 1998
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(Homer A. Neal)
Carl E. Reichardt* Director May 12, 1998
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(Carl E. Reichardt)
John L. Thornton* Director May 12, 1998
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(John L. Thornton)
Executive Vice President
and Chief Financial Officer
John M. Devine* (principal financial officer) May 12, 1998
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(John M. Devine)
Corporate Controller
William J. Cosgrove* (principal accounting officer) May 12, 1998
- -----------------------------
(William J. Cosgrove)
*By:/s/K. S. Lamping
--------------------------
(K. S. Lamping,
Attorney-in-Fact)
</TABLE>
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EXHIBIT INDEX
Sequential Page
at Which Found
(or Incorporated
by Reference)
----------------
Exhibit 4.A - Ford Microelectronics, Inc. Salaried
Retirement Savings Plan. Filed with
this Registration Statement.
Exhibit 4.B* - Copy of Stock Trust Agreement dated as of
December 30, 1996 between Ford
Microelectronics, Inc. and UMB Bank,
N.A., as Trustee.
Exhibit 5.A* - Opinion of Peter Sherry, Jr., an Assistant
Secretary and Counsel of Ford Motor Company,
with respect to the legality of the
securities being registered hereunder.
Exhibit 5.B* - Opinion of J. Gordon Christy, an Attorney
of Ford Motor Company, with respect to
compliance requirements of the Employee
Retirement Income Security Act of 1974.
Exhibit 15 - Letter from Independent Certified Public
Accountants regarding unaudited interim
financial information. Filed with this
Registration Statement.
Exhibit 23 - Consent of Independent Certified Public
Accountants. Filed with this
Registration Statement.
Exhibit 24.A - Powers of Attorney authorizing signature.
Filed as Exhibit 24.A to Registration
Statement No. 333-49545 and incorporated
herein by reference.
Exhibit 24.B - Certified resolutions of Board of
Directors authorizing signature
pursuant to a power of attorney. Filed
as Exhibit 24.B to Registration Statement
No. 333-49545 and incorporated herein by
reference.
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*Previously filed as an Exhibit with this Registration Statement on March 6,
1998.
Exhibit 4.A
FMI SALARIED RETIREMENT SAVINGS PLAN
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER 16
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY 17
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR 18
2.4 RECORDS AND REPORTS 19
2.5 APPOINTMENT OF ADVISERS 19
2.6 PAYMENT OF EXPENSES 19
2.7 CLAIMS PROCEDURE 20
2.8 CLAIMS REVIEW PROCEDURE 20
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY 20
3.2 EFFECTIVE DATE OF PARTICIPATION 21
3.3 DETERMINATION OF ELIGIBILITY 21
3.4 TERMINATION OF ELIGIBILITY 21
3.5 OMISSION OF ELIGIBLE EMPLOYEE 21
3.6 INCLUSION OF INELIGIBLE EMPLOYEE 21
3.7 ELECTIONS NOT TO PARTICIPATE 22
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION 22
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION 22
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION 26
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS 26
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS 29
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS 31
4.7 ACTUAL CONTRIBUTIONS PERCENTAGE TESTS 33
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS 36
4.9 MAXIMUM ANNUAL ADDITIONS 38
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS 42
4.11 TRANSFERS FROM QUALIFIED PLANS 43
4.12 VOLUNTARY CONTRIBUTIONS 44
4.13 DIRECTED INVESTMENT ACCOUNT 45
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ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND 47
5.2 METHOD OF VALUATION 47
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT 48
6.2 DETERMINATION OF BENEFITS UPON DEATH 48
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY 49
6.4 DETERMINATION OF BENEFITS UPON TERMINATION 49
6.5 DISTRIBUTION OF BENEFITS 52
6.6 DISTRIBUTION OF BENEFITS UPON DEATH 54
6.7 TIME OF SEGREGATION OR DISTRIBUTION 55
6.8 DISTRIBUTION FOR MINOR BENEFICIARY 55
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN 55
6.10 PRE-RETIREMENT DISTRIBUTION 56
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP 56
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION 58
6.13 DIRECT ROLLOVER 58
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT 59
7.2 TERMINATION 59
7.3 MERGER OR CONSOLIDATION 60
7.4 LOANS TO PARTICIPANTS 60
ARTICLE VIII
TOP HEAVY
8.1 TOP HEAVY PLAN REQUIREMENTS 61
6.2 DETERMINATION OF TOP HEAVY STATUS 62
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANTS RIGHTS 65
9.2 ALIENATION 65
9.3 CONSTRUCTION OF PLAN 66
9.4 GENDER AND NUMBER 66
9.5 LEGAL ACTION 66
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS 66
9.7 BONDING 67
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE 67
9.9 INSURER'S PROTECTIVE CLAUSE 67
9.10 RECEIPT AND RELEASE FOR PAYMENTS 68
9.11 ACTION BY THE EMPLOYER 68
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY 68
9.13 HEADINGS 69
9.14 APPROVAL BY INTERNAL REVENUE SERVICE 69
9.15 UNIFORMITY 69
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FMI SALARIED RETIREMENT SAVINGS PLAN
THIS PLAN, hereby adopted this 1st day of September, 1994, by Ford
Microelectronics, Inc. (herein referred to as the "Employer".).
W I T N E S S E T H:
WHEREAS, the Employer heretofore established a Profit Sharing Plan
effective September 1, 1994 (hereinafter called the "Effective Date"), known as
FMI Salaried Retirement Savings Plan (herein referred to as the "Plan") in
recognition of the contribution made to its successful operation by its
employees and for the exclusive benefit of its eligible employees; and
WHEREAS, under the terms of the Plan, the Employer has the ability to
amend the Plan, provided the Trustee joins in such amendment if the provisions
of the Plan affecting the Trustee are amended;
NOW, THEREFORE, effective January 1, 1997, except as otherwise
provided, the Employer in accordance with the provisions of the Plan pertaining
to amendments thereof, hereby amends the Plan in its entirety and restates the
Plan to provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.2 "Administrator" means the Employer unless another person or entity
has been designated by the Employer pursuant to Section 2.2 to administer the
Plan on behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each Participant, the
value of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions, subject to the provisions of
Section 8.2.
1.5 "Anniversary Date" means December 31 and each other date specified by
the Employer.
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1.6 "Beneficiary" means the person to whom the share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
6.2 and 6.6.
1.7 "Code" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.8 "Compensation" with respect to any Participant means such Participant's
wages for the Plan Year within the meaning of Code Section 3401(a) (for the
purposes of income tax withholding at the source) but determined without regard
to any rules that limit the remuneration included in wages based on the nature
or location of the employment or the services performed (such as the exception
for agricultural labor in Code Section 3401 (a)(2)).
For purposes of this Section, the determination of Compensation shall be
made by:
(a) excluding overtime.
(b) excluding bonuses.
(c) excluding shift premium, cost of fringe benefits (including
pre-tax payment of medical/dental contributions), long-term
disability benefits, worker's compensation and other such benefits.
(d) including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402
(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee contributions
described in Code Section 414(h)(2) that are treated as Employer
contributions.
For a Participant's initial year of participation, Compensation shall be
recognized as of such Employee's effective date of participation pursuant to
Section 3.2.
Compensation in excess of $150,000 shall be disregarded. Such amount shall
be adjusted for increases in the cost of living in accordance with Code Section
401(a)(17), except that the dollar increase in effect on January 1 of any
calendar year shall be effective for the Plan Year beginning with or within such
calendar year. For any short Plan Year the Compensation limit shall be an amount
equal to the Compensation limit for the calendar year in which the Plan Year
begins multiplied by the ratio obtained by dividing the number of full months in
the short Plan Year by twelve (12). In applying this limitation, the family
group of a Highly Compensated Participant who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Participant is either a
"five percent owner" of the Employer or one of the ten (10) Highly Compensated
Employees paid the greatest "415 Compensation" during the year, shall be treated
as a single Participant, except that for this purpose Family Members shall
include only the affected Participant's spouse and any lineal descendants who
have not attained age nineteen (19) before the close of the year. If, as a
result of the application of such rules the adjusted limitation is exceeded,
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then the limitation shall be prorated among the affected Family Members in
proportion to each such Family Member's Compensation prior to the application of
this limitation, or the limitation shall be adjusted in accordance with any
other method permitted by Regulation.
If, as a result of such rules, the maximum "annual addition" limit of
Section 4.9(a) would be exceeded for one or more of the affected Family Members,
the prorated Compensation of all affected Family Members shall be adjusted to
avoid or reduce any excess. The prorated Compensation of any affected Family
Member whose allocation would exceed the limit shall be adjusted downward to the
level needed to provide an allocation equal to such limit. The prorated
Compensation of affected Family Members not affected by such limit shall then be
adjusted upward on a pro rata basis not to exceed each such affected Family
Member's Compensation as determined prior to application of the Family Member
rule. The resulting allocation shall not exceed such individual's maximum
"annual addition" limit. If, after these adjustments, an "excess amount" still
results, such "excess amount" shall be disposed of in the manner described in
Section 4.10(a) pro rata among all affected Family Members.
If, in connection with the adoption of this amendment and restatement, the
definition of Compensation has been modified, then, for Plan Years prior to the
Plan Year which includes the adoption date of this amendment and restatement,
Compensation means compensation determined pursuant to the Plan then in effect.
1.9 "Contract" or "Policy" means any life insurance policy, retirement
income or annuity policy, or annuity contract (group or individual) issued
pursuant to the terms of the Plan.
1.10 "Deferred Compensation" with respect to any Participant means the
amount of the Participant's total Compensation which has been contributed to the
Plan in accordance with the Participant's deferral election pursuant to Section
4.2 excluding any such amounts distributed as excess "annual additions" pursuant
to Section 4.10(a).
1.11 "Designated Investment Alternative" means a specific investment
identified by name by a Fiduciary as an available investment under the Plan
which may be acquired or disposed of by the Trustee pursuant to the investment
direction by a Participant.
1.12 "Directed Investment Option" means one or more of the following:
(a) a Designated Investment Alternative.
(b) any other investment permitted by the Plan and
the Participant Direction Procedures and acquired or disposed of by
the Trustee pursuant to the investment direction of a Participant.
1.13 "Early Retirement Date" means any Anniversary Date (prior to the
Normal Retirement Date) coinciding with or following the date on which a
Participant or Former Participant attains age 55, and has completed at least 5
Years of Service with the Employer (Early Retirement Age). A Participant shall
become fully Vested upon satisfying this requirement if still employed at his
Early Retirement Age.
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A Former Participant who terminates employment after satisfying the service
requirement for Early Retirement and who thereafter reaches the age requirement
contained herein shall be entitled to receive his benefits under this Plan.
1.14 "Elective Contribution" means the Employer contributions to the Plan
of Deferred Compensation excluding any such amounts distributed as excess
"annual additions" pursuant to Section 4.10(a). In addition, any Employer
Qualified Non-Elective Contribution made pursuant to Section 4.6(b) which is
used to satisfy the "Actual Deferral Percentage" tests shall be considered an
Elective Contribution for purposes of the Plan. Any contributions deemed to be
Elective Contributions (whether or not used to satisfy the "Actual Deferral
Percentages" tests) shall be subject to the requirements of Sections 4.2(b) and
4.2(c) and shall further be required to satisfy the nondiscrimination
requirements of Regulation 1.401(k)-1(b)(5), the provisions of which are
specifically incorporated herein by reference.
1.15 "Eligible Employees" means any Employee who is not excluded from
participation as provided for in this Section.
Employees who are Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2), and Employees employed on an hourly or temporary basis
shall not be eligible to participate in this Plan.
Employees of Affiliated Employers shall not be eligible to participate in
this Plan unless such Affiliated Employers have specifically adopted this Plan
in writing.
1.16 "Employee" means any person who is employed by the Employer or
Affiliated Employer, but excludes any person who is an independent contractor.
Employee shall include Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and such Leased Employees do not constitute
more than 20% of the recipient's non-highly compensated work force.
1.17 "Employer" means Ford Microelectronics, Inc. and any successor which
shall maintain this Plan; and any predecessor which has maintained this Plan.
The Employer is a corporation, with principal offices in the State of Colorado.
1.18 "Excess Aggregate Contributions" means, with respect to any Pan Year,
the excess of the aggregate amount of the Employer matching contributions made
pursuant to Section 4.1(b), voluntary Employee contributions made pursuant to
Section 4.12, Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 4.6(a) and any qualified non-elective
contributions or elective deferrals taken into account pursuant to Section
4.7(c) on behalf of Highly Compensated Participants for such Plan Year, over the
maximum amount of such contributions permitted under the limitations of Section
4.7(a).
1.19 "Excess Contributions" means, with respect to a Plan Year, the excess
of Elective Contributions used to satisfy the "Actual Deferral Percentage" tests
made on behalf of Highly Compensated Participants for the Plan Year over the
maximum amount of such contributions permitted under Section 4.5(a). Excess
Contributions, including amounts recharacterized
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pursuant to Section 4.6(a)(2), shall be treated as an "annual addition" pursuant
to Section 4.9(b).
1.20 "Excess Deferred Compensation" means, with respect to any taxable year
of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 4.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(9), which is incorporated
herein by reference. Excess Deferred Compensation shall be treated as an "annual
addition" pursuant to Section 4.9(b) when contributed to the Plan unless
distributed to the affected Participant not later than the first April 15th
following the close of the Participant's taxable year. Additionally, for
purposes of Sections 8.2 and 4.4(i), Excess Deferred Compensation shall continue
to be treated as Employer contributions even if distributed pursuant to Section
4.2(f). However, Excess Deferred Compensation of Non-Highly Compensated
Participants is not taken into account for purposes of Section 4.5(a) to the
extent such Excess Deferred Compensation occurs pursuant to Section 4.2(d).
1.21 "Family Member" means, with respect to an affected Participant, such
Participant's spouse and such Participant's lineal descendants and ascendants
and their spouses, all as described in Code Section 414(q)(6)(B).
1.22 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Employer and its representative body, and the
Administrator.
1.23 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on January 1st of each year and ending the following December 31st.
1.24 "Forfeiture" means that portion of a Participant's Account that is not
Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Terminated Participant's Account, or
(b) the last day of the Plan Year in which the Participant incurs
five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of a
Terminated Participant whose Vested benefit is zero, such Terminated Participant
shall be deemed to have received a distribution of his Vested benefit upon his
termination of employment. Restoration of such amounts shall occur pursuant to
Section 6.4(9)(2). In addition, the term Forfeiture shall also include amounts
deemed to be Forfeitures pursuant to any other provision of this Plan.
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1.25 "Former Participant" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.26 "415 Compensations" with respect to any Participant means such
Participant's wages for the Plan Year within the meaning of Code Section 3401(a)
(for the purposes of income tax withholding at the source) but determined
without regard to any rules that limit the remuneration included in wages based
on the nature or location of the employment or the services performed (such as
the exception for agricultural labor in Code Section 3401(a)(2)).
If, in connection with the adoption of this amendment and restatement, the
definition of "415 Compensation" has been modified, then, for Plan Years prior
to the Plan Year which includes the adoption date of this amendment and
restatement, "415 Compensation" means compensation determined pursuant to the
Plan then in effect.
1.27 "414(s) Compensation" with respect to any Participant means such
Participant's Elective Contributions attributable to Deferred Compensation
recharacterized as voluntary Employee contributions pursuant to Section 4.6(a)
plus "415 Compensation" paid during a Plan Year. The amount of "414(s)
Compensation" with respect to any Participant shall include "414(s)
Compensation" for the entire twelve (12) month period ending on the last day of
such Plan Year, except that "414(s) Compensation" shall only be recognized for
that portion of the Plan Year during which an Employee was a Participant in the
Plan.
For purposes of this Section, the determination of "414(s) Compensation"
shall be made by including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not includible in the
gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
"414(s) Compensation" in excess of $150,000 shall be disregarded. Such
amount shall be adjusted for increases in the cost of living in accordance with
Code Section 401(a)(17), except that the dollar increase in effect on January 1
of any calendar year shall be effective for the Plan Year beginning with or
within such calendar year. For any short Plan Year the "414(s) Compensation"
limit-shall be an amount equal to the .414(s) Compensation. lima for the
calendar year in which the Plan Year begins multiplied by the ratio obtained by
dividing the number of full months in the short Plan Year by twelve (12). In
applying this limitation, the family group of a Highly Compensated Participant
who is subject to the Family Member aggregation rules of Code Section 414(q)(6)
because such Participant is either a "five percent owner" of the Employer or one
of the ten (10) Highly Compensated Employees paid the greatest "415
Compensation" during the year, shall be treated as a single Participant, except
that for this purpose Family Members shall include only the affected
Participant's spouse and any lineal descendants who have not attained age
nineteen (19) before the close of the year.
If, in connection with the adoption of this amendment and restatement, the
definition of "414(s) Compensation" has been modified, then, for Plan Years
prior to the Plan Year which includes the adoption date of this amendment and
restatement, "414(s) Compensation" means compensation determined pursuant to the
Plan then in effect.
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1.28 "Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder, and generally means an Employee
who performed services for the Employer during the "determination year" and is
in one or more of the following groups:
(a) Employees who at any time during the "determination year" or
"look-back year" were "five percent owners" as defined in Section
1.34(c).
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $50,000 and were in
the Top Paid Group of Employees for the Plan Year.
(d) Employees who during the "look-back year" were officers
of the Employer (as that term is defined within the meaning of the
Regulations under Code Section 416) and received "415 Compensation"
during the "look-back year" from the Employer greater than 50 percent
of the limit in effect under Code Section 415(b)(1)(A) for any such
Plan Year. The number of officers shall be limited to the lesser of
(i) 50 employees; or (ii) the greater of 3 employees or 10 percent of
all employees. For the purpose of determining the number of officers,
Employees described in Section 1.59(a), (b), (c) and (d) shall be
excluded, but such Employees shall still be considered for the purpose
of identifying the particular Employees who are officers. If the
Employer does not have at least one officer whose annual
"415 Compensation" is in excess of 50 percent of the Code Section
415(b)(1)(A) limit, then the highest paid officer of the Employer will
be treated as a Highly Compensated Employee.
(e) Employees who are in the group consisting of the 100
Employees paid the greatest "415 Compensation" during the
"determination year" and are also described in (b), (c) or (d) above
when these paragraphs are modified to substitute "determination year"
for "look-back year".
The "determination year" shall be the Plan Year for which testing is being
performed, and the "look-back year" shall be the immediately preceding
twelve-month period. However, if the Plan Year is a calendar year, or if another
plan of the Employer so provides, and it the Administrator so elects, then the
"look-back year" shall be the calendar year ending with or within the Plan Year
for which testing is being performed, and the "determination year" (if
applicable) shall be the period of time, if any, which extends beyond the
"look-back year" and ends on the last day of the Plan Year for which testing is
being performed (the 'Lag period'). With respect to any such election, it shall
be applied on a uniform and consistent basis to all plans, entices, and
arrangements of the Employer.
If an Employee is, during a "determination year" or "look-back year", a
Family Member of either a "five percent owner" (whether active or former) or a
Highly Compensated Employee who is one of the 10 most Highly Compensated
Employees ranked on the basis of "415 Compensation" paid by the Employer during
such year, then the Family Member and the "five percent owner" or top-ten
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Highly Compensated Employee shall be aggregated. In such case, the Family Member
and "five percent owner" or top-ten Highly Compensated Employee shall be treated
as a single Employee receiving "415 Compensation" and Plan contributions or
benefits equal to the sum of such "415 Compensation" and contributions or
benefits of the Family Member and "five percent owner" or top-ten Highly
Compensated Employee.
For purposes of this Section, the determination of "415 Compensation" shall
be made by including amounts which are contributed by the Employer pursuant to a
salary reduction agreement and which are not includible in the gross income of
the Participant under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or
457(b), and Employee contributions described in Code Section 414(h)(2) that are
treated as Employer contributions. Additionally, the dollar threshold amounts
specified in (b) and (c) above shall be adjusted at such time and in such manner
as is provided in Regulations. In the case of such an adjustment, the dollar
limits which shall be applied are those for the calendar year in which the
"determination year" or "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees who are
non-resident aliens and who received no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Affiliated Employers shall be taken into account as
a single employer and Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are not
covered in any qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Employer's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard to
whether they performed services during the "determination year".
1.29 "Highly Compensated Former Employee" means a former Employee who had a
separation year prior to the "determination year" and was a Highly Compensated
Employee in the year of separation from service or in any "determination year"
after attaining age 55. Notwithstanding the foregoing, an Employee who separated
from service prior to 1987 will be treated as a Highly Compensated Former
Employee only if during the separation year (or year preceding the separation
year) or any year after the Employee attains age 55 (or the last year ending
before the Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner". For purposes
of this Section, "determination year", "415 Compensation" and "five percent
owner" shall be determined in accordance with Section 1.28. Highly Compensated
Former Employees shall be treated as Highly Compensated Employees. The method
set forth in this Section for determining who is a "Highly Compensated Former
Employee" shall be applied on a uniform and consistent basis for all purposes
for which the Code Section 414(q) definition is applicable.
1.30 "Highly Compensated Participant" means any Highly Compensated Employee
who is eligible to participate in the Plan.
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1.31 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties (these hours will be credited to the Employee for
the computation period in which the duties are performed); (2) each hour for
which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period (these hours will
be calculated and credited pursuant to Department of Labor regulation
2530.200b-2 which is incorporated herein by reference); (3) each hour for which
back pay is awarded or agreed to by the Employer without regard to mitigation of
damages (these hours will be credited to the Employee for the computation period
or periods to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made). The same Hours of
Service shall not be credited both under (1) or (2), as the case may be, and
under (3).
Notwithstanding the above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be made by or
due from the Employer regardless of whether such payment is made by or due from
the Employer directly, or indirectly through, among others, a trust fund, or
insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
For purposes of this Section, Hours of Service will be credited for
employment with other Affiliated Employers. The provisions of Department of
Labor regulations 2530.200b 2(b) and (c) are incorporated herein by reference.
1.32 "Income" means the income or losses allocable to "excess amounts"
which shall equal the allocable gain or loss for the "applicable computation
periods". The income allocable to "excess amounts" for the "applicable
computation period" is determined by multiplying the income for the "applicable
computation period" by a fraction. The numerator of the fraction is the "excess
amount" for the "applicable computation period". The denominator of the fraction
is the total "account balance" attributable to "Employer contributions" as of
the end of the "applicable computation period", reduced by the gain allocable to
such total amount for the "applicable computation period" and increased by the
loss allocable to such total amount for the "applicable computation period".
This computation is herein referred to as the "fractional method". The
provisions of this Section shall be applied:
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(a) For purposes of Section 4.2(f), by substituting:
(1) "Excess Deferred Compensation" for "excess amounts";
(2) "taxable year of the Participant" for "applicable
computation period.;
(3) "Deferred Compensation" for "Employer contributions";
and
(4) "Participant's Elective Account" for "account balance"
(b) For purposes of Section 4.6(a), by substituting:
(1) "Excess Contributions" for "excess amounts";
(2) "Plan Year" for "applicable computation period";
(3) "Elective Contributions" for "Employer contributions";
and
(4) "Participant's Elective Account" for "account
balance."
(c) For purposes of Section 4.8, by substituting:
(1) "Excess Aggregate Contributions" for "excess amounts";
(2) "Plan Year" for "applicable computation period";
(3) "Employer matching contributions made pursuant to
Section 4.1(b), voluntary Employee contributions made
pursuant to Section 4.12 and any qualified
non-elective contributions or elective deferrals
taken into account pursuant to Section 4.7(c)" for
"Employer contributions"; and
(4) "Participant's Account and Voluntary Contribution
Account" for "account balance".
Income allocable to any distribution of Excess Deferred Compensation on or
before the last day of the taxable year of the Participant shall be calculated
from the first day of the taxable year of the Participant to the date on which
the distribution is made pursuant to either the "fractional method" or the "safe
harbor method". Under such "safe harbor method," allocable income for such
period shall be deemed to equal ten percent (10%) of the income allocable to
such Excess Deferred Compensation multiplied by the number of calendar months in
such period. For purposes of determining the number of calendar months in such
period, a distribution occurring on or before the fifteenth day of the month
shall be treated as having been made on the last day of the preceding month and
a distribution occurring after such fifteenth day shall be treated as having
been made on the first day of the next subsequent month.
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The income allocable to Excess Aggregate Contributions resulting from the
recharacterization of Elective Contributions shall be determined and distributed
as if such recharacterized Elective Contributions had been distributed as Excess
Contributions.
1.33 "Investment Manager" means an entity that (a) has the power to manage,
acquire, or dispose of Plan assets and (b) acknowledges fiduciary responsibility
to the Plan in writing. Such entity must be a person, firm, or corporation
registered as an investment adviser under the Investment Advisers Act of 1940, a
bank, or an insurance company.
1.34 "Key Employee" means an Employee as defined in Code Section 416(i) and
the Regulations thereunder. Generally, any Employee or former Employee (as well
as each of his Beneficiaries) is considered a Key Employee if he, at any time
during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is
defined within the meaning of the Regulations under Code
Section 416) having annual "415 Compensation" greater than 50
percent of the amount in effect under Code Section
415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415
Compensation" from the Employer for a Plan Year greater than
the dollar limitation in effect under Code Section
415(c)(1)(A) for the calendar year in which such Plan Year
ends and owning (or considered as owning within the meaning of
Code Section 318) both more than one-half percent interest and
the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five
percent owner" means any person who owns (or is considered as
owning within the meaning of Code Section 318) more than five
percent (5%) of the outstanding stock of the Employer or stock
possessing more than five percent (5%) of the total combined
voting power of all stock of the Employer or, in the case of
an unincorporated business, any person who owns more than five
percent (5%) of the capital or profits interest in the
Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate
employers.
(d) a "one percent owner" of the Employer having an
annual "415 Compensation" from the Employer of more than
$150,000. "One percent owner" means any person who owns (or is
considered as owning within the meaning of Code Section 318) more
than one percent (1%) of the outstanding stock of the Employer or
stock possessing more than one percent (1%) of the total combined
voting power of all stock of the Employer or, in the case of an
unincorporated business, any person who owns more than one percent
(1%) of the capital or profits interest in the Employer. In
determining percentage ownership hereunder, employers that
would otherwise be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be treated as separate employers. However,
in determining whether an individual has "415 Compensation" of
more than $150,000, "415 Compensation" each employer required to be
aggregated under Code Sections 414(b), (c), (m) and (o) shall be taken
into account.
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For purposes of this Section, the determination of "415 Compensation" shall
be made by including amounts which are contributed by the Employer pursuant to a
salary reduction agreement and which are not includible in the gross income of
the Participant under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or
457(b), and Employee contributions described in Code Section 414(h)(2) that are
treated as Employer contribution.
1.35 " Late Retirement Date" means the Anniversary Date coinciding with or
next following a Participant's actual Retirement Date after having reached his
Normal Retirement Date.
1.36 "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 services
performed for the recipient employer shall be treated as provided by the
recipient employer. A Leased Employee shall not be considered an Employee of the
recipient:
(a) if such employee is covered by a money purchase
pension plan providing:
(1) a non-integrated employer contribution rate of at
least 10% of compensation, as defined in Code Section
415(c)(3), but including amounts which are contributed by
the Employer pursuant to a salary reduction agreement and
which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3), 402(h)(1)
(B), 403(b) or 457(b), and Employee contributions described
in Code Section 414(h)(2) that are treated as Employer
contributions.
(2) Immediate participation; and
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than
20% of the recipient's non-highly compensated work force.
1.37 "Non-Elective Contribution" means the Employer contributions to the
Plan excluding, however, contributions made pursuant to the Participant's
deferral election provided for in Section 4.2 and any Qualified Non-Elective
Contribution used in the "Actual Deferral Percentage" tests.
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1.38 "Non-Highly Compensated Participant" means any Participant who is
neither a Highly Compensated Employee nor a Family Member.
1.39 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.40 "Normal Retirement Age" means the Participant's 65th birthday. A
Participant shall become fully Vested in his Participant's Account upon
attaining his Normal Retirement Age.
1.41 "Normal Retirement Date" means the Anniversary Date coinciding with or
next following the Participant's Normal Retirement Age.
1.42 "1-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a 1-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and paternity
leaves of absence." Years of Service and 1-Year Breaks in Service shall be
measured on the same computation period.
"Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" means, for Plan Years beginning
after December 31, 1984, an absence from work for any period by reason of the
Employee's pregnancy, birth of the Employees child, placement of a child with
the Employee in connection with the adoption of such child, or any absence for
the purpose of caring for such child for a period immediately following such
birth or placement. For this purpose, Hours of Service shall be credited for the
computation period in which the absence from work begins, only if credit
therefore is necessary to prevent the Employee from incurring a 1-Year Break in
Service, or, in any other case, in the immediately following computation period.
The Hours of Service credited for a "maternity or paternity leave of absence"
shall be those which would normally have been credited but for such absence, or,
in any case in which the Administrator is unable to determine such hours
normally credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity leave of absence"
shall not exceed 501.
1.43 "Participant" means any Eligible Employee who participates in the Plan
and has not for any reason become ineligible to participate further in the Plan.
1.44 "Participant Direction Procedures" means such instructions, guidelines
or policies, the terms of which are incorporated herein, as shall be established
pursuant to Section 4.13 and observed by the Administrator and applied and
provided to Participants who have Participant Directed Accounts.
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1.45 "Participants Account" means the account established and maintained by
the Administrator for each Participant with respect to his total interest in the
Plan and Trust resulting from the Employer Non-Elective Contributions.
A separate accounting shall be maintained with respect to that portion of
the Participant's Account attributable to Employer matching contributions made
pursuant to Section 4.1 (b), Employer discretionary contributions made pursuant
to Section 4.1(c) and any Employer Qualified Non-Elective Contributions.
1.46 "Participant's Combined Account" means the total aggregate amount of
each Participants Elective Account and Participant's Account.
1.47 "Participant's Directed Account" means that portion of a Participant's
Interest in the Plan with respect to which the Participant has directed the
investment in accordance with the Participant Direction Procedure.
1.48 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer Elective
Contributions used to satisfy the "Actual Deferral Percentage" tests. A separate
accounting shall be maintained with respect to that portion of the Participant's
Elective Account attributable to such Elective Contributions pursuant to Section
4.2 and any Employer Qualified Non-Elective Contributions.
1.49 "Plan" means this instrument, including all amendments thereto.
1.50 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending the following December 31st.
1.51 "Qualified Non-Elective Contribution" means any Employer contributions
made pursuant to Section 4.6(b) and Section 4.8(h). Such contributions shall be
considered an Elective Contribution for the purposes of the Plan and used to
satisfy the "Actual Deferral Percentage" tests or the "Actual Contribution
Percentage" tests.
1.52 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to time.
1.53 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.54 "Retirement Date" means the date as of which a Participant retires for
reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date, Early or Late Retirement Date
(see Section 6.1).
1.55 "Super Top Heavy Plan" means a plan described in Section 8.2(b).
1.56 "Terminated Participant" means a person who has been a Participant,
but whose employment has been terminated other than by death, Total and
Permanent Disability or retirement.
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1.57 "Top Heavy Plan" means a plan described in Section 8.2(a).
1.58 "Top Heavy Plan Year" means a Plan Year during which the Plan is a Top
Heavy Plan.
1.59 "Top Paid Group" means the top 20 percent of Employees who performed
services for the Employer during the applicable year, ranked according to the
amount of "415 Compensation" (determined for the purpose in accordance with
Section 1.28) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased Employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such Leased Employees are covered by a plan described in Code
Section 414(n)(5) and are not covered in any qualified plan maintained by the
Employer. Employees who are non-resident aliens and who received no earned
income (within the meaning of Code Section 911(d)(2)) from the Employer
constituting United States source income within the meaning of Code Section
861(a)(3) shall not be treated as Employees. Additionally, for the purpose of
determining the number of active Employees in any year, the following additional
Employees shall also be excluded; however, such Employees shall still be
considered for the purpose of identifying the particular Employees in the Top
Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per
week;
(c) Employees who normally work less than six (6) months
during a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the Employer are
covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representative and the Employer, and the
Plan covers only Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the identification of particular
Employees in the Top Paid Group.
The forgoing exclusions set forth in this Section shall be applied on a
uniform and consistent basis for all purposed for which the Code Section 414(q)
definition is applicable.
1.60 "Total and Permanent Disability" means a physical or mental condition
of a Participant resulting from bodily injury, disease, or mental disorder which
renders him incapable of continuing his usual and customary employment with the
Employer. The disability of a Participant shall be determined by a licensed
physician chosen by the Administrator. The determination shall be applied
uniformly to all Participants.
1.61 "Trustee" means the person or entity named as trustee herein or in any
separate trust forming a part of this Plan, and any successors.
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1.62 "Trust Fund" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.63 "Valuation Date" means the Anniversary Date and such other date or
dates deemed necessary by the Administrator. The Valuation Date may include any
day during the Plan Year that the Trustee, any transfer agent appointed by the
Trustee or the Employer and any stock exchange used by such agent are open for
business.
1.64 "Vested" means the nonforfeitable portion of any account maintained on
behalf of a Participant.
1.65 "Voluntary Contribution Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan resulting from the Participant's nondeductible voluntary
contributions made pursuant to Section 4.12.
Amounts recharacterized as voluntary Employee contributions pursuant to
Section 4.6(a) shall remain subject to the limitations of Sections 4.2(b) and
4.2(c). Therefore, a separate accounting shall be maintained with respect to
that portion of the Voluntary Contribution Account attributable to voluntary
Employee contributions made pursuant to Section 4.12.
1.66 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at least 1000
Hours of Service.
For vesting purposes, the computation periods shall be the Plan Year,
including periods prior to the Effective Date of the Plan.
The computation period shall be the Plan Year if not otherwise set forth
herein.
Notwithstanding the foregoing, for any short Plan Year, the determination
of whether an Employee has completed a Year of Service shall be made in
accordance with Department of Labor regulation 2530.203-2(c).
Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) In addition to the general powers and responsibilities
otherwise provided for in this Plan, the Employer shall be empowered to
appoint and remove the Trustee and the Administrator from time to time
as it deems necessary for the proper administration of the Plan to
ensure that the Plan is being operated for the exclusive benefit of the
Participants and their Beneficiaries in accordance with the terms of
the Plan, the Code, and the Act. The Employer may appoint counsel,
specialists, advisers, agents (including any nonfiduciary agent) and
other persons as the Employer deems necessary or desirable in
connection with
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the exercise of its fiduciary duties under this Plan. The Employer may
compensate such agents or advisers from the assets of the Plan as fiduciary
expenses (but not including any business (settlor) expenses of the
Employer), to the extent not paid by the Employer.
(b) The Employer may, by written agreement or designation,
appoint at its option an Investment Manager (qualified under the
Investment Company Act of 1940 as amended), investment adviser,
or other agent to provide direction to the Trustee with respect to any
or all of the Plan assets. Such appointment shall be given by the
Employer in writing in a form acceptable to the Trustee and shall
specifically identify the Plan assets with respect to which the
Investment Manager or other agent shall have authority to direct the
investment.
(c) The Employer shall establish a "funding policy and
method," i.e., it shall determine whether the Plan has a short run
need for liquidity (e.g., to pay benefits) or whether liquidity is a
long run goal and investment growth (and stability of same) is a more
current need, or shall appoint a qualified person to do so. The
Employer or its delegate shall communicate such needs and goals to the
Trustee, who shall coordinate such Plan needs with its investment
policy. The communication of such a "funding policy and method" shall
not, however, constitute a directive to the Trustee as to investment
of the Trust Funds. Such "funding policy and method" shall be
consistent with the objectives of this Plan and with the requirements
of Title 1 of the Act.
(d) The Employer shall periodically review the performance of
any Fiduciary of other person to whom duties have been delegated or
allocated by it under the provisions of the Plan or pursuant to
procedures established hereunder. This requirement may be satisfied by
formal periodic review by the Employer, through day-to-day conduct and
evaluation, or through other appropriate ways.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall be the Administrator. The Employer may, in writing,
appoint any person, including, but not limited to, the Employees of the
Employer, to perform the duties of the Administrator. Any person so appointed
shall signify his acceptance by filing written acceptance with the Employer.
Upon the resignation or removal of any individual performing the duties of the
Administrator, the Employer may designate a successor.
In the event that the Employer functions as the Administrator, pursuant to
Section 2.4, the Employer or the Trustee may appoint an "Advisory Committee",
which may perform such duties as the Administrator, as may be delegated to it.
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2.3 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the Plan
for the exclusive benefit of the Participants and their Beneficiaries, subject
to the specific terms of the Plan. The Administrator shall administer the Plan
in accordance with its terms and shall have the power and discretion to construe
the terms of the Plan and to determine all questions arising in connection with
the administration, interpretation, and application of the Plan. Any such
determination by the Administrator shall be conclusive and binding upon all
persons. The Administrator may establish procedures, correct any defect, supply
any information, or reconcile any inconsistency in such manner and to such
extent as shall be deemed necessary or advisable to carry out the purpose of the
Plan; provided, however, that any procedure, discretionary act, interpretation
or construction shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the intent that the
Plan shall continue to be deemed a qualified plan under the terms of Code
Section 401(a), and shall comply with the terms of the Act and all regulations
issued pursuant thereto. The Administrator shall have all powers necessary or
appropriate to accomplish his duties under this Plan.
Except to the extent which duties have been delegated to others, the
Administrator shall be charged with the duties of the general administration of
the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions
relating to the eligibility of Employees to participate or
remain a Participant hereunder and to receive benefits under
the Plan;
(b) to compute, certify, and direct the Trustee with respect
to the amount and the kind of benefits to which any Participant shall
be entitled hereunder;
(c) to authorize and direct the Trustee with respect
to all nondiscretionary or otherwise directed disbursements
from the Trust;
(d) to maintain all necessary records for the administration of
the Plan;
(e) to interpret the provisions of the Plan and to
make and publish such rules for regulation of the Plan as are
consistent with the terms hereof;
(f) to determine the size and type of any Contract to
be purchased from any insurer, and to designate the insurer
from which such Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary of
desirable to be contributed to the Plan;
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(h) to consult with the Employer and the Trustee
regarding the short and long-term liquidity needs of the Plan
in order that the Trustee can exercise any investment
discretion in a manner designed to accomplish specific
objectives;
(i) to prepare and implement a procedure to notify Eligible
Employees that they may elect to have a portion of their Compensation
deferred or paid to them in cash;
(j) to act as the named Fiduciary responsible for
communications with Participants as needed to maintain Plan
compliance with ERISA Section 404(c), including but not
limited to the receipt and transmitting of Participant's
directions as to the investment of their account(s) under the Plan
and the formulation of policies, rules, and procedures pursuant to
which Participants may give investment instructions with respect to
the investment of their accounts;
(k) to assist any Participant regarding his rights,
benefits, or elections available under the Plan.
2.4 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall keep
all other books of account, records, policies, and other data that may be
necessary for proper administration of the Plan and shall be responsible for
supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by law.
2.5 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the Administrator,
may appoint counsel, specialists, advisers (including an "Advisory Committee"),
and other persons as the Administrator or the Trustee deems necessary or
desirable in connection with the administration of this Plan.
2.6 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund unless
paid by the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, or any person or persons retained or appointed
by any Named Fiduciary incident to the exercise of their duties under the Plan,
including, but not limited to, fees of accountants, counsel, Investment
Managers, agents (including nonfiduciary agents) appointed for the purpose of
assisting the Administrator or the Trustee in carrying out the instructions of
Participants as to the directed investment of their accounts and other
specialists and their agents, and other costs of administering the Plan. Until
paid, the expenses shall constitute a liability of the Trust Fund.
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2.7 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within 90 days after the application is filed. In the event the
claim is denied, the reasons for the denial shall be specifically set forth in
the notice in language calculated to be understood by the claimant, pertinent
provisions of the Plan shall be cited, and, where appropriate, an explanation as
to how the claimant can perfect the claim will be provided. In addition, the
claimant shall be furnished with an explanation of the Plan's claims review
procedure.
2.8 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section 2.7
shall be entitled to request the Administrator to give further consideration to
his claim by filing with the Administrator (on a form which may be obtained from
the Administrator) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim should be
allowed, shall be filed with the Administrator no later than 60 days after
receipt of the written notification provided for in Section 2.7. The
Administrator shall then conduct a hearing within the next 60 days, at which the
claimant may be represented by an attorney or any other representative of his
choosing and at which the claimant shall have an opportunity to submit written
and oral evidence and arguments in support of his claim. At the hearing (or
prior thereto upon 5 business days written notice to the Administrator) the
claimant or his representative shall have an opportunity to review all documents
in the possession of the Administrator which are pertinent to the claim at issue
and its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participant hereunder on the
date of his employment with the Employer. However, any Employee who was a
Participant in the Plan prior to the effective date of this amendment and
restatement shall continue to participate in the Plan.
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3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as of the first
day on which such Employee met the eligibility requirements of Section 3.1
(i.e., date of employment with the Employer).
In the event an Employee who is not a member of an eligible class of
Employees becomes a member of an eligible class, such Employee will participate
immediately if such Employee would have otherwise previously become a
Participant.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer. Such
determination shall be conclusive and binding upon all persons, as long as the
same is made pursuant to the Plan and the Act. Such determination shall be
subject to review per Section 2.8.
3.4 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a classification
of an Eligible Employee to an ineligible Employee, such Former
Participant shall continue to vest in his interest in the Plan for
each Year of Service completed while a noneligible Employee, until
such time as his Participant's Account shall be forfeited or
distributed pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings of the
Trust Fund.
(b) In the event a Participant is longer a member of an eligible
class of Employees and becomes ineligible to participant, such
Employee will participate immediately upon returning to an eligible
class of Employees.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a Participant
in the Plan is erroneously omitted and discovery of such omission is not made
until after a contribution by his Employer for the year has been made, the
Employer shall make a subsequent contribution with respect to the omitted
Employee in the amount which the said Employer would have contributed with
respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not its deductible in whole or in part in any taxable
year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made, the
Employer shall not be entitled to recover the contribution made with respect to
the ineligible person regardless or whether or not a deduction
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is allowable with respect to such contribution. In such event, the amount
contributed with respect to the ineligible person shall constitute a Forfeiture
(except for Deferred Compensation which shall be distributed to the ineligible
person) for the Plan Year in which the discovery is made.
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to participate must
be communicated to the Employer, in writing, at least thirty (30) days before
the beginning of a Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of all
Participants made pursuant to Section 4.2(a), which amount shall be
deemed an Employer Elective Contribution.
(b) On behalf of each Participant who is eligible to share in
matching contributions for the Plan Year, a matching contribution
equal to 100% of such Participant's Deferred Compensation representing
the first 3% deferred pursuant to Section 4.2(a), plus 60% of such
Participant's Deferred Compensation representing the next 7% deferred
pursuant to Section 4.2(a), which amount shall be deemed an Employer's
Non-Elective Contribution.
(c) A discretionary amount, which amount, if any, shall be
deemed an Employer Non-Elective Contribution.
(d) Additionally, to the extent necessary, the Employer shall
contribute to the Plan the amount necessary to provide the top heavy
minimum contribution. All contributions by the Employer shall be made
in cash.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer from 1% to
15% (in whole percentages) of his Compensation which would
have been received in the Plan Year, but for the deferral
election. A deferral election (or modification of an earlier
election) may not be made with respect to Compensation which
is currently available on or before the date the Participant
executed such election.
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The amount by which Compensation is reduced shall be that Participant's
Deferred Compensation and be treated as an Employer Elective Contribution and
allocated to that Participant's Elective Account.
(b) The balance in each Participant's Elective Account shall be
fully Vested at all times and shall not be subject to Forfeiture for
any reason.
(c) Notwithstanding anything in the Plan to the contrary,
amounts held in the Participant's Elective Account may not be
distributable (including any offset of loans) earlier than:
(1) a participant's separation from service, Total and Permanent
Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the establishment or
existence of a "successor plan," as that term is described in
Regulation 1.401(k)-1(d)(3);
(4) the date of disposition by the Employer to an entity that
is not an Affiliated Employer of substantially all of the assets
(within the meaning of Code Section (d)(2)) used in a trade or
business of such corporation if such corporation continues to
maintain this Plan after the disposition with respect to a
Participant who continues employment with the corporation
acquiring such assets;
(5) the date of disposition by the Employer or an
Affiliated Employer who maintains the Plan of its interest in
a subsidiary (within the meaning of Code Section 409(d)(3)) to
an entity which is not an Affiliated Employer but only with
respect to a Participant who continues employment with such
subsidiary; or
(6) the proven financial hardship of a Participant, subject to
the limitations of Section 6.11.
(d) For each Plan Year, a Participant's Deferred Compensation
made under this Plan and all other plans, contracts or arrangements
of the Employer maintaining this Plan shall not exceed, during any
taxable year of the Participant, the limitation imposed by Code
Section 402(g), as in effect at the beginning of such taxable year.
If such dollar limitation is exceeded, a participant will be deemed
to have notified the Administrator of such excess amount which shall
be distributed in a manner consistent with Section 4.2(f). The
dollar limitation shall be adjusted annually pursuant to the method
provided in Code Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship
distribution from his Participant's Elective Account pursuant to
Section 6.11(b) or pursuant to Regulation 1.401(k)-1(d)(2)(iv)(B)
from any other plan maintained by the Employer, than such Participant
shall not be permitted to elect to have Deferred Compensation
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contributed to the Plan on his behalf for a period of twelve
(12) months following the receipt of the distribution. Furthermore,
the dollar limitation under Code Section 402(g) shall be reduced,
with respect to the Participant's taxable year following the taxable
year in which the hardship distribution was made, by the amount of
such Participant's Deferred Compensation, if any, pursuant to this
Plan (and any other plan maintained by the Employer) for the taxable
year of the hardship distribution.
(f) If a Participant's Deferred Compensation under this Plan
together with any elective deferrals (as defined in Regulation
1.402(g)-1(b)) under another qualified cash or deferred arrangement
(as defined in Code Section 401(k)), a simplified employee pension
(as defined in Code Section 408(k)), a salary reduction arrangement
(within the meaning of Code Section 3121(a)(5)(D)), a deferred
compensation plan under Code Section 457(b), or a trust described in
Code Section 501(c)(18) cumulatively exceed the limitation imposed by
Code Section 402(g) (as adjusted annually in accordance with the
method provided in Code Section 415(d) pursuant to Regulations) for
such Participant's taxable year, the Participant may, not later than
March 1 following the close of the Participant's taxable year, notify
the Administrator in writing of such excess and request that his
Deferred Compensation under this Plan be reduced by an amount
specified by the Participant. In such event, the Administrator may
direct the Trustee to distribute such excess amount (and any income
allocable to such excess amount) to the Participant not later than the
first April 15th following the close of the Participant's taxable
year. Any distribution of less than the entire amount of Excess
Deferred Compensation and Income shall be treated as a pro rata
distribution of Excess Deferred Compensation and Income. The amount
distributed shall not exceed the Participant's Deferred Compensation
under the Plan for the taxable year (and any income allocable to such
excess amount). Any distribution on or before the last day of the
Participant's taxable year must satisfy each of the following
conditions:
(1) the distribution must be made after the date on which the
Plan received the Excess Deferred Compensation;
(2) the Participant shall designate the distribution as Excess
Deferred Compensation; and
(3) the Plan must designate the distribution as a distribution
of Excess Deferred Compensation.
Any distribution made pursuant to this Section 4.2(f) shall be made first
from unmatched Deferred Compensation and, thereafter, from Deferred Compensation
which is matched. Matching contributions which relate to such Deferred
Compensation shall be forfeited.
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(g) Notwithstanding Section 4.2(f) above, a
Participant's Excess Deferred Compensation shall be reduced,
but not below zero, by any distribution and/or recharacterization of
Excess Contributions pursuant to Section 4.6(a) for the Plan Year
beginning with or within the taxable year of the Participant.
(h) At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair market
value of the Participant's Elective Account shall be used to provide
additional benefits to the Participant or his Beneficiary
(i) Employer Elective Contributions made pursuant to this
Section may be segregated into a separate account for each Participant
in a federally insured savings account, certificate of deposit in a
bank or savings and loan association, money market mutual fund, or
other short- term debt security acceptable to the Trustee until such
time as the allocations pursuant to Section 4.4 have been made.
(j) The Employer and the Administrator shall implement the
salary reduction elections provided for herein in accordance with the
following:
(1) A Participant may commence making elective
deferrals to the Plan only after first satisfying the
eligibility and participation requirements specified
in Article III. However, the Participant must make
his salary deferral election within a reasonable time
after entering the Plan pursuant to Section 3.3. If
the Participant fails to make an initial salary
deferral election, then such Participant may
thereafter made an election in accordance with the
rules governing modifications. The Participant shall
make such an election by entering into a written
salary reduction agreement with the Employer and
filing such agreement with the Administrator. Such
election shall initially be effective beginning with
the pay period following the acceptance of the salary
reduction agreement by the Administrator, shall not
have retroactive effect and shall remain in force
until revoked.
(2) A Participant may modify a prior election at any
time during the Plan Year and concurrently make a new
election by filing a written notice with the Administrator
within a reasonable time before the pay period for which such
modification is to be effective. Any modification shall not have
retroactive effect and shall remain in force until revoked.
(3) A Participant may elect to prospectively revoke
his salary reduction agreement in its entirety at any
time during the Plan Year by providing the Administrator with
thirty (30) days written notice of such revocation (or upon such
shorter notice period as may be acceptable to the
Administrator). Such revocation shall become effective as of
the beginning of the first pay period coincident with or next
following the expiration of the notice period. Furthermore, the
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termination of the Participant's employment, or the cessation of
participation for any reason, shall be deemed to revoke any
salary reduction agreement then in effect, effective immediately
following the close of the pay period within which such
termination or cessation occurs.
In lieu of the above requirements of written salary reduction agreements
and written modifications and revocations thereto, the Administrator may
authorize use of an "automated response unit" which generates written
acknowledgments of transactions, under procedures established by the
Administrator.
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution to the
Plan for each Plan Year within the time prescribed by law, including extensions
of time, for the filing of the Employer federal income tax return for the Fiscal
Year.
However, Employer Elective Contributions accumulated through payroll
deductions shall be paid to the Trustee as of the earliest date on which such
contributions can reasonably be segregated from the Employer's general assets,
but in any event within the time prescribed by regulations. The provisions of
Department of Labor regulations 2510.3-102 are incorporated herein by reference.
Furthermore, any additional Employer contribution which are allocable to the
Participant's Elective Account for a Plan Year shall be paid to the Plan no
later than the twelve-month period immediately following the close of such Plan
Year.
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account in
the name of each Participant to which the Administrator shall credit
as of each Anniversary Date all amounts allocated to each such
Participant as set forth herein:
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation
of the Employer contributions for each Plan year. Within a reasonable
period of time after the date of receipt by the Administrator of such
information, the Administrator shall allocate such contribution as
follows:
(1) With respect to the Employer Elective Contribution made
pursuant to Section 4.1(a), to each Participant's Elective
Account in an amount equal to each such Participant's Deferred
Compensation for the year.
(2) With respect to the Employer Non-Elective Contribution made
pursuant to Section 4.1(b), to each Participant's Account in
accordance with section 4.1(b).
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Any Participant actively employed during the Plan Year shall be
eligible to share in the matching contribution for the Plan Year.
(3) With respect to the Employer Non-Elective Contribution made
pursuant to Section 4.1(c), to each Participant's Account in the
Same proportion that each such Participant's Compensation for the
year bears to the total Compensation of all Participants for
such year.
Any Participant actively employed during the Plan Year shall be
eligible to share in the discretionary contribution for the year.
(c) As of each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date shall first be made
available to reinstate previously forfeited account balances of Former
Participants, if any, in accordance with Section 6.4(g)(2), and next
to offset administrative expenses of the Plan. The remaining
Forfeitures, if any, shall be used to reduce the contribution of the
Employer hereunder for the Plan Year in which such Forfeitures occur
in the following manner:
(1) Forfeitures attributable to Employer matching contributions
made pursuant to Section 4.1(b) shall be used to reduce the
Employer contribution for the Plan Year in which such Forfeiture
occur.
(2) Forfeitures attributable to Employer discretionary
contributions made pursuant to Section 4.1(c) shall be used to
reduce the Employer contribution for the plan Year in which such
Forfeitures occur.
(d) For any Top Heavy Plan Year, Employees not otherwise
eligible to share in the allocation of contributions as provided
above, shall receive the minimum allocation provided for in Section
4.4(i) if eligible pursuant to the provisions of Section 4.4(k).
(e) As of each Valuation Date, before the current valuation
period allocation of Employer contributions, any earnings or losses
(net appreciation or net depreciation) of the Trust Fund shall be
allocated in the same proportion that each Participant's and Former
Participant's nonsegregated accounts bear to the total of all
Participants' and Former Participant's nonsegregated accounts as of
such date. Earnings of losses with respect to a Participant's
Directed Account shall be allocated in accordance with Section 4.13.
Participants' transfers from other qualified plans and voluntary
contributions deposited in the general Trust Fund shall share in any earnings
and losses (net appreciation or net depreciation) of the Trust Fund in the same
manner provided above.
(f) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum
of the Employer contributions allocated to the Participant's Combined
Account of each Employee shall be equal to at least three percent (3%)
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of such Employee's "415 Compensation" (reduced by contributions
and forfeitures, if any, allocated to each Employee in any defined
contribution plan included with this plan in a Required Aggregation
Group). However, if (1) the sum of the Employer contribution allocated
to the Participant's Combined Account of each key Employee for such
Top Heavy Plan Year is less than three percent (3%) of each Key
Employee's "415 Compensation, and (2) this Plan is not required to be
included in an Aggregation Group to enable a defined benefit plan
to meet the requirements of Code Section 401(a)(4) or 410, the sum of
the Employer contributions allocated to the Participants Combined
Account of each Employee shall be equal to the largest percentage
allocated to the Participant's Combined Account of any Key Employee.
However, in determining whether a Non-Key Employee has received the
required minimum allocation, such Non-Key Employee's Deferred
Compensation and matching contributions needed to satisfy the "Actual
Contribution Percentage" tests pursuant to Section 4.7(a) shall not
be taken into account.
However, no such minimum allocation shall be required in this Plan for any
Employee who participates in another defined contribution plan subject to Code
Section 412 included with this Plan in a Required Aggregation Group.
(g) For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant' Combined Account of any Key
Employee shall be equal to the ratio of the sum of the Employer
contributions allocated on behalf of such Key Employee divided by the
"415 Compensation" for such Key Employee.
(h) For any Top Heavy Plan Year, the minimum allocations set
forth above shall be allocated to the Participant's Combined Account
of all Employees who are Participants and who are employed by the
Employer on the last day of the Plan Year, including Employees who
have (1) failed to complete a Year of Service; and (2) declined to
make mandatory contributions (if required) or, in the case of a cash
or deferred arrangement, elective contributions to the Plan.
(i) For the purposes of this Section, "415 Compensation" shall
be limited to $150,000. Such amount shall be adjusted for increases
in the cost of living in accordance with Code Section 401(a)(17),
except that the dollar increase in effect on January 1 of any calendar
year shall be effective for the Plan Year beginning with or within
such calendar year. For any short Plan Year the "415" Compensation"
limit shall be an amount equal to the "415 Compensation" limit for
the calendar year in which the Plan Year begins multiplied by the
ratio obtained by dividing the number of full months in the short
Plan Year by twelve (12).
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(j) Notwithstanding anything herein to the contrary,
Participants who terminated employment for any reason during the Plan
Year shall share in the salary reduction contributions made by the
Employer for the year of termination without regard to the Hours of
Service credited.
(k) If a Former Participant is reemployed after five (5)
consecutive 1-Year Breaks in Service, then separate accounts shall be
maintained as follows:
(1) one account for nonforfeitable benefits attributable to
pre-break service, and;
(2) one account representing his status in the Plan
attributable to post-break service.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year, the annual
allocation derived from Employer Elective Contributions to a
Participant's Elective Account shall satisfy one of the following
tests:
(1) The "Actual Deferral Percentage" for the Highly Compensated
Participant group shall not be more than the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant group
multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the
Highly Compensated Participant group over the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
shall not be more than two percentage points. Additionally, the
"Actual Deferral Percentage" for the Highly Compensated
Participant group shall not exceed the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
multiplied by 2. The provisions of Code Section 401(k)(3) and
Regulation 1.401(k)-1(b) are incorporated herein by reference.
However, in order to prevent the multiple use of the alternative method
described in (2) above and in Code Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals pursuant to Section 4.2 and to
make Employee contributions or to receive matching contributions under this Plan
or under any other plan maintained by the Employer or an Affiliated Employer
shall have a combination of his actual deferral ratio and his actual
contribution ratio reduced pursuant to Regulation 1.401(m)-2, the provisions of
which are incorporated herein by reference.
(b) For the purpose of this Section "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant group and
Non-Highly Compensated Participant group for a Plan year, the
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average of the ratios, calculated separately for each Participant in
such group, of the amount of Employer Elective Contributions allocated
to each Participant's Elective Account for such Plan Year, to such
Participant's "414(s) Compensation" for such Plan Year. The actual
deferral ratio for each Participant and the "Actual Deferral
Percentage" for each group shall be calculated to the nearest
one-hundredth of one percent. Employer Elective Contributions
allocated to each Non-Highly Compensated Participant's Elective
Account shall be reduced by Excess Deferred Compensation to the extent
such excess amounts are made under this Plan or any other plan
maintained by the Employer.
(c) For the purpose of determining the actual deferral ratio of
a Highly Compensated Employee who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Participant
is either a "five percent owner" of the Employer or one of the ten
(10) Highly Compensated Employees paid the greatest "415 Compensation"
during the year, the following shall apply:
(1) The combined actual deferral ratio for the family group
(which shall be treated as one Highly Compensated Participant)
shall be determined by aggregating Employer Elective
Contributions and "414(s) Compensation" of all eligible Family
Members (including Highly Compensated Participants). However, in
applying the $150,000 limit to "414(s) Compensation," Family
Members shall include only the affected Employee's spouse and any
lineal descendants who have not attained age 19 before the close
of the Plan Year.
(2) The Employer Elective Contributions and "414(s)
Compensation" of all Family Members shall be disregarded for
purposes of determining the "Actual Deferral Percentage" of the
Non-Highly Compensated Participant group except to the extent
taken into account in paragraph (1) above.
(3) If a Participant is required to be aggregated as a member of
more than one family group in a plan, all Participants who are
members of those family groups that include the Participant are
aggregated as one family group in accordance with paragraphs (1)
and (2) above.
(d) For the purposes of Sections 4.5(a) and 4.6, a Highly
Compensated Participant and a Non-Highly Compensated Participant
shall include any Employee eligible to made a deferral election
pursuant to Section 4.2, whether or not such deferral election was
made or suspended pursuant to Section 4.2.
(e) For the purposes of this Section and Code Sections 401(a)
(4), 410(b)and 401(k), if two or more plans which include cash or
deferred arrangements are considered one plan for the purposes of
Code Section 401(a)(4) or 410(b) (other than Code Section
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410(b)(2)(A)(ii), the cash or deferred arrangements included in such
plans shall be treated as one arrangement. In addition, two or more
cash or deferred arrangements may be considered as a single
arrangements may be considered as a single arrangement for purposes of
determining whether or not such arrangements satisfy Code Sections
401(a)(4), 410(b) and 401(k). In such a case, the cash or deferred
arrangements included in such plans and the plans including such
arrangements shall be treated as one arrangement and as one plan for
purposes of this Section and Code Sections 401(a)(4), 410(b) and
401(k). Plans may be aggregated under this paragraph (e) only if they
have the same plan year.
Notwithstanding the above, an employee stock ownership plan described in
Code Section 4975(e)(7) or 409 may not be combined with this Plan for purposes
of determining whether the employee stock ownership plan or this Plan satisfies
this Section and Code Sections 401(a)(4), 410(b) and 401(k).
(f) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two or more cash or deferred
arrangements (other than a cash or deferred arrangement which is part
of an employee stock ownership plan as defined in Code Section 4975(e)
(7) or 409) of the Employer or an Affiliated Employer, all such cash
or deferred arrangements shall be treated as one cash or deferred
arrangement for the purpose of determining the actual deferral ratio
with respect to such Highly Compensated Participant. However, if the
cash or deferred arrangements have different plan years, this
paragraph shall be applied by treating all cash or deferred
arrangements ending with or within the same calendar year as a single
arrangement.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer Elective
Contributions made pursuant to Section 4.4 do not satisfy one of the tests set
forth in Section 4.5(a), the Administrator shall adjust Excess Contributions
pursuant to the options set forth below:
(a) On or before the fifteenth day of the third month following
the end of each Plan Year, the Highly Compensated Participant having
the highest actual deferral ratio shall have his portion of Excess
Contributions distributed to him and/or at his election
recharacterized as a voluntary Employee contribution pursuant to
Section 4.12 until one of the tests set forth in Section 4.5(a) is
satisfied, or until his actual deferral ratio equals the actual
deferral ratio of the Highly Compensated Participant having the second
highest actual deferral ratio. This process shall continue until one
of the tests set forth in Section 4.5(a) is satisfied. For each Highly
Compensated Participant, the amount of Excess Contributions is equal
to the Elective Contribution used to satisfy the "Actual Deferral
Percentage" tests on behalf of such Highly Compensated Participant
(determined prior to the application of this paragraph) minus the
amount determined by multiplying the Highly Compensated Participant's
actual deferral ratio (determined after application of this paragraph)
by his "414(s) Compensation". However, in determining the amount of
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Excess Contributions to be distributed and/or recharacterized with
respect to an affected Highly Compensated participant as
determined herein, such amount shall be reduced pursuant to Section
4.2(f) by any Excess Deferred Compensation previously distribute to
such affected Highly Compensated Participant for his taxable year
ending with or within such Plan Year.
(1) With respect to the distribution of Excess Contributions
pursuant to (a) above, such distribution:
(i) may be postponed but not later than the close of the
Plan Year following the Plan Year to which they are
allocable;
(ii) shall be adjusted for income; and
(iii) shall be designated by the Employer as a distribution
of Excess Contributions (and Income).
(2) With respect to the recharacterization of Excess
Contributions pursuant to (a) above, such recharacterized
amounts:
(i) shall be deemed to have occurred on the date on which
the last of those Highly Compensated Participants with
Excess Contributions to be recharacterized is notified of
the recharacterization and the tax consequences of such
recharacterization.
(ii) shall not exceed the amount of Deferred Compensation
on behalf of any Highly Compensated Participant for any
Plan Year;
(iii) shall be treated as voluntary Employee contributions
for purposes of Code Section 401(a)(4) and Regulation
1.401(k)-1(b). However, for purposes of Sections 8.2 and
4.4(j), recharacterized Excess Contributions continue to be
treated as Employer contributions that are Deferred
Compensation. Excess Contributions recharacterized as
voluntary Employee contributions shall continue to be
nonforfeitable and subject to the same distribution rules
provided for in Section 4.2(c);
(iv) are not permitted if the amount recharacterized plus
voluntary Employee contributions actually made by such
Highly Compensated Participant, exceed the maximum amount of
voluntary Employee contributions (determined prior to
application of Section 4.7(a)) that such Highly Compensated
Participant is permitted to make under the Plan in the
absence of recharacterization; and
(v) shall be adjusted for income.
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(3) Any distribution and/or recharacterization of less than
the entire amount of Excess Contributions shall be treated as a
pro rata distribution and/or recharacterization of Excess
Contributions and Income.
(4) The determination and correction of Excess contributions
of a Highly Compensated Participant whose actual deferral ratio
is determined under the family aggregation rules shall be
accomplished by reducing the actual deferral ratio as required
herein, and the Excess Contributions for the family unit shall
then be allocated among the Family Members in proportion to the
Elective Contributions of each Family Member that were combined
to determine the group actual deferral ratio.
(5) Matching contributions which relate to Excess
Contributions shall be forfeited unless the related matching
contribution is distributed as an Excess Aggregate Contribution
pursuant to Section 4.8.
(b) Within twelve (12) months after the end of the Plan Year,
the Employer may make a special Qualified Non-Elective Contribution
on behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy one of the tests set forth in Section 4.5(a).
Such contribution shall be allocated to the Participant's Elective
Account of each Non-Highly Compensated Participant in the same
proportion that each Non- Highly Compensation Participant's
Compensation for the year bears to the total Compensation of all
Non-Highly Compensated Participants.
(c) If during a Plan year the projected aggregate amount of
Elective Contributions to be allocated to all Highly Compensated
Participants under this Plan would, by virtue of the tests set forth
in Section 4.5(a), cause the Plan to fail such tests, then the
Administrator may automatically reduce proportionately or in the order
provided in Section 4.6(a) each affected Highly Compensated
Participant's deferral election made pursuant to Section 4.2 by an
amount necessary to satisfy one of the tests set forth in Section
4.5(a).
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for the Highly
Compensated Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly compensated
Participant group; or
(2) the lesser of 200 percent of such percentage for the
Non-Highly Compensated Participant group, or such percentage for
the Non-Highly Compensated Participant group plus 2 percentage
points. However, to prevent the multiple use of the alternative
method described in this paragraph and Code Section 401(m)(9)(A),
any Highly Compensated participant eligible to make elective
deferrals pursuant to Section 4.2 or any other cash or deferred
arrangement maintained by the Employer or an Affiliated Employer
and to make Employee contributions or to receive matching
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contributions under this Plan or under any plan maintained by the
Employer or an Affiliated Employer shall have a combination of
his actual deferral ratio and his actual contribution ratio
reduced pursuant to Regulation 1.40(m)-(2). The provisions of
Code Section 401(m) and Regulations 1.40(m)-1(b) and 1.401(m)-2
are incorporated herein by reference.
(b) For the purposes of this Section and Section 4.8, "Actual
Contribution Percentage" for a Plan Year means, with respect to the
Highly Compensated Participant group and Non-Highly Compensated
Participant group, the average of the ratios (calculated separately
for each Participant in each group) of:
(1) the sum of Employer matching contributions made pursuant to
Section 4.1(b), voluntary Employee contributions made pursuant to
Section 4.12 and Excess Contributions recharacterized as
voluntary Employee contributions pursuant to Section 4.6(a) on
behalf of each such Participant for such Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan Year.
(c) For purposes of determining the "Actual Contribution
Percentage" and the amount of Excess Aggregate Contributions pursuant
to Section 4.8(d), only Employer matching contributions contributed to
the Plan prior to the end of the succeeding Plan Year shall be
considered. In addition, the Administrator may elect to take into
account, with respect to Employees eligible to have Employer matching
contributions pursuant to Section 4.1(b) or voluntary Employee
contributions pursuant to Section 4.12 allocated to their accounts,
elective deferrals (as defined in Regulation 1.402(g)-1(b)) and
qualified non-elective contributions (as defined in Code Section
401(m)(4)(C)) contributed to any plan maintained by the Employer. Such
elective deferrals and qualified non-elective contributions shall be
treated as Employer matching contributions subject to Regulation
1.40(m)-1(b)(5) which is incorporated herein by reference. However,
the Plan Year must be the same as the plan year of the plan to which
the elective deferrals and the qualified non-elective contributions
are made.
(d) For the purpose of determining the actual contribution ratio
of a Highly Compensated Employee who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Employee is
either a "five percent owner" of the Employer or one of the ten (10)
Highly Compensated Employees paid the greatest "415 Compensation"
during the year, the following shall apply:
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(1) The combined actual contribution ratio for the family group
(which shall be treated as one Highly Compensated Participant)
shall be determined by aggregating Employer matching
contributions made pursuant to Section 4.1(b), voluntary Employee
contributions made pursuant to Section 4.12, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 4.6(a) and "414(s) Compensation" of all eligible Family
Members (including Highly Compensated Participants). However, in
applying the $150,000 limit "414(s) Compensation", Family Members
shall include only the affected Employee's spouse and any lineal
descendants who have not attained age 19 before the close of the
Plan Year.
(2) The Employer matching contributions made pursuant to
Section 4.1(b), voluntary Employee contributions made pursuant to
Section 4.12, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 4.6(a) and "414(s)
Compensation" of all Family Members shall be disregarded for
purposes of determining the "Actual Contribution Percentage" of
the Non-Highly Compensated Participant group except to the extent
taken into account in paragraph (1) above.
(3) If a Participant is required to be aggregated as a member of
more than one family group in a plan, all Participants who are
members of those family groups that included the Participant are
aggregated as one family group in accordance with paragraphs (1)
and (2) above.
(e) For purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(m), if two or more plans of the Employer to which
matching contributions, Employee contributions, or both, are made are
treated as one plan for purposes of Code Sections 401(a)(4) or 410(b)
(other than the average benefits test under Code Section
410(b)(2)(A)(ii), such plans shall be treated as one plan. In
addition, two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made may be
considered as a single plan for purposes of determining whether or not
such plans satisfy Code Sections 401(a)(4), 410(b) and 401(m). In such
a case, the aggregated plans must satisfy this Section and Code
Sections 401(a)(4), 410(b) and 401(m) as through such aggregated plans
were a single plan. Plans may be aggregated under this paragraph (e)
only if they have the same plan year.
Notwithstanding the above, an employee stock ownership plan
described in Code Section 4975(e)(7) or 409 may not be aggregated with
this Plan for purposes of determining whether the employee stock
ownership plan or this Plan satisfies this Section and Code Sections
401(a)(4), 410(b) and 401(m).
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<PAGE>
(f) If a Highly Compensated Participant is a Participant under
two or more plans (other than an employee stock ownership plan as
defined in Code Section 4975(e)(7) or 409) which are maintained by the
Employer or an Affiliated Employer to which matching contributions,
Employee contributions, or both, are made, all such contributions on
behalf of such Highly Compensated Participant shall be aggregated for
purposes of determining such Highly Compensated Participant's actual
contribution ratio. However, if the plans have different plan years,
this paragraph shall be applied by treated in all plans ending with or
within the same calendar year as a single plan.
(g) For purposes of Sections 4.7(a) and 4.8, a Highly Compensated
Participant and Non-Highly Compensated Participant shall include any
Employee eligible to have Employer matching contributions pursuant to
Section 4.1(b) (whether or not a deferral election was made or
suspended pursuant to Section 4.2(e)) or voluntary Employee
contributions pursuant to Section 4.12 (whether or not voluntary
Employee contributions are made) allocated to his account for the Plan
Year.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that the "Actual Contribution Percentage" for
the Highly Compensated Participant group exceeds the "Actual
Contribution Percentage" for the Non-Highly Compensated Participant
group pursuant to Section 4.7(a), the Administrator (on or before the
fifteenth day of the third month following the end of the Plan Year,
but in no event later than the close of the following Plan Year) shall
direct the Trustee to distribute to the Highly Compensated Participant
having the highest actual contribution ratio, his Vested portion of
Excess Aggregate Contributions (and income allocable to such
contributions) and, if forfeitable, forfeit such non-Vested Excess
Aggregate Contributions attributable to Employer matching contribution
(and income allocable to such forfeitures) until either one of the
tests set fort in Section 4.7(a) is satisfied, or until his actual
contribution ratio equals the actual contribution ratio of the Highly
Compensated Participant having the second highest actual contribution
ratio. This process shall continue until one of the tests set forth in
Section 4.7(a) is satisfied. The distribution and/or forfeiture of
Excess Aggregate Contributions shall be made in the following order:
(1) Voluntary Employee contributions including Excess
Contributions recharacterized as voluntary Employee contributions
pursuant to Section 4.6(a)(2);
(2) Employer matching contributions.
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<PAGE>
If the correction of Excess Aggregate Contributions attributable
to Employer matching contributions is not in proportion to the Vested
and non-Vested portion of such contributions, then the Vested portion
of the Participant's Account attributable to Employer matching
contributions after the correction shall be subject to Section 6.5(f).
(b) Any distribution and/or forfeiture of less than the entire
amount of Excess Aggregate Contribution (and income) shall be treated
as a pro rata distribution and/or forfeiture of Excess Aggregate
Contribution and Income. Distribution of Excess Aggregate
Contributions shall be designated by the Employer as a distribution of
Excess Aggregate Contributions (and income. Forfeitures of Excess
Aggregate Contributions shall be treated in accordance with Section
4.4.
(c) Excess Aggregate Contributions attributable to amounts other
than voluntary Employee contributions, including forfeited matching
contributions, shall be treated as Employer contributions for purposes
of Code Sections 404 and 415 even if distributed from the Plan.
Forfeited matching contributions that are reallocated to
Participants' Accounts for the Plan Year in which the forfeiture
occurs shall be treated as an "annual addition" pursuant to Section
4.9(b) for the Participants to whose Accounts they are reallocated and
for the Participants from whose Accounts they are forfeited.
(d) For each Highly Compensated Participant, the amount of Excess
Aggregate Contributions is equal to the Employer matching
contributions made pursuant to Section 4.1(b), voluntary Employee
contributions made pursuant to Section 4.12, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 4.6(a) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.7(c) on
behalf of the Highly Compensated Participant (determined prior to the
application to this paragraph) minus the amount determined by
multiplying the Highly Compensated Participant's actual contribution
ratio (determined after application of this paragraph) by his "414(s)
Compensation." The actual contribution ratio must be rounded to the
nearest one-hundredth of one percent. In no case shall the amount of
Excess Aggregate Contribution with respect to any Highly Compensated
Participant exceed the amount of Employer matching contributions made
pursuant to Section 4.1(b), voluntary Employee contributions made
pursuant to Section 4.12, Excess Contributions recharacterized as
voluntary Employee contributions pursuant to Section 4.6(a) and any
qualified non-elective contributions or elective deferrals taken into
account pursuant to Section 4.7(c) on behalf of such Highly
Compensated Participant for such Plan year.
(e) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to be treated as
voluntary Employee contributions due to recharacterization for the
plan year of any other qualified cash or deferral arrangement (as
37
<PAGE>
defined in Code Section 401(k)) maintained by the Employer that
ends with or within the Plan Year or which are treated as voluntary
Employee contributions due to recharacterization pursuant to Section
4.6(a).
(f) If the determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual
contribution ratio is determined under the family aggregation rules,
then the actual contribution ratio shall reduced and the Excess
Aggregate Contributions for the family unit shall be allocated among
the Family Members in proportion to the sum of Employer matching
contributions made pursuant to Section 4.1(b), voluntary Employee
contributions made pursuant to Section 4.12, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 4.6(a) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.7(c) of
each Family Member that were combined to determine the group actual
contribution ratio.
(g) If during a Plan Year the protected aggregate amount of
Employer matching contributions, voluntary Employee contributions and
Excess Contributions recharacterized as voluntary Employee
contributions to be allocated to all Highly Compensated Participants
under this Plan would, by virtue of the tests set forth in Section
4.7(a), cause the Plan to fail such tests, then the Administrator may
automatically reduce proportionately or in the order provided in
Section 4.8(a) each affected Highly Compensated Participant's
projected share of such contributions by an amount necessary to
satisfy one of the tests set forth in Section 4.7(a).
(h) Notwithstanding the above, within twelve (12) months after
the end of the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy one of the test set
forth in Section 4.7(a). Such contribution shall be allocated to the
Participant's Account of each Non-Highly Compensated Participant in
the same proportion that each Non-Highly Compensated Participant's
Compensation for the year bears to the total Compensation of all
Non-Highly Compensated Participants. A separate accounting of any
special Qualified Non-Elective Contribution shall be maintained in the
Participant's Account.
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual additions"
credited to a Participant's accounts for any "limitation year" shall
equal the lesser of : (1) $30,000 adjusted annually as provided in
Code Section 415(d) pursuant to the Regulations, or (2) twenty-five
percent (25%) of the Participant's "415 Compensation" for such
"limitation year." For any short "limitation year," the dollar
limitation in (1) above shall be reduced by a fraction, the numerator
of which is the number of full month in the short "limitation year"
and the denominator of which is twelve (12).
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<PAGE>
(b) For purposes of applying the limitations of Code Section 415,
"annual additions" means the sum credited to a Participant's accounts
for any "limitation year" or (1) Employer contributions, (2) Employee
contributions, (3) forfeitures, (4) amounts allocated, after March 31,
1984, to an individual medical account, as defined in Code Section
415(i)(2) which is part of a pension or annuity plan maintained by the
Employer and (5) amounts derived from contribution paid or accrued
after December 31, 1985, in taxable years ending after such date,
which are attributable to post-retirement medical benefits allocated
to the separate account of a key employee (as defined in Code Section
419(d)(3))under a welfare benefit plan (as defined in Code Section
419(e)) maintained by the Employer. Except, however, the "415
Compensation" percentage limitation referred to in paragraph (a)(2)
above shall not apply to : (1) any contribution for medical benefits
(within the meaning of Code Section 419A(f)(2)) after separation from
service which is otherwise treated as an "annual addition," or (2) any
amount otherwise treated as an "annual addition" under Code Section
415(l)(1).
(c) Ford purposes of applying the limitations of Code Section
415, the transfer of funds from one qualified plan to another is not
an "annual addition." In addition, the following are not Employee
contributions for the purposes of Section 4.9(b)(2): (1) rollover
contributions (as defined in Code Sections 402(e)(6), 403(a)(4),
403(b)(8) and 408(d)(3)); (2) repayments of loans made to a
participant from the Plan; (3) repayments of distributions received by
an Employee pursuant to Code Section 411(a)(7)(B) (cash-outs); (4)
repayments of distributions received by an Employee pursuant to Code
Section 411(a)(3)(D) (mandatory contributions); and (5) Employee
contributions to a simplified employee pension excludable from gross
income under Code Section 408(k)(6).
(d) Ford purposes of applying the limitations of Code Section
415, the "limitation year" shall be the Plan Year.
(e) For the purpose of this Section, all qualified defined
benefit plans (whether terminated or not) ever maintained by the
Employer shall be treated as one defined benefit plan, and all
qualified defined contribution plans (whether terminated or not) ever
maintained by the Employer shall be treated as one defined
contribution plan.
(f) For the purpose of this Section, if the Employer is a member
of a controlled group of corporations, trades or businesses under
common control (as defined by Code Section 1563(a) or Code Section
414(b) and (c) as modified by Code Section 415(h)), is a member of an
affiliated service group (as defined by Code Section 414(m)), or is a
member of a group of entities required to be aggregated pursuant to
Regulations under Code Section 414(o), all Employees of such Employers
shall be considered to be employed by a single Employer.
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<PAGE>
(g) For the purpose of this Section, if this Plan is a Code
Section 413(c) plan, each Employer who maintains this Plan will be
considered to be a separate Employer.
(h)(1) If a Participant participates in more than one defined
contribution plan maintained by the Employer which have different
Anniversary Dates, the maximum "annual additions" under this Plan
shall equal the maximum "annual additions" for the "limitation year"
minus any "annual additions" previously credited to such Participant's
accounts during the "limitation year."
(2) If a Participant participates in both a defined contribution
plan subject to Code Section 412 and a defined contribution plan
not subject to Code Section 412 maintained by the Employer which
have the same Anniversary Date, "annual additions" will be
credited to the Participant's accounts under the defined
contribution plan subject to Code Section 412 prior to crediting
"annual additions" to the Participant's accounts under the
defined contribution plan not subject to Code Section 412.
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412 maintained by
the Employer which have the same Anniversary Date, the maximum
"annual additions" under this Plan shall equal the product of (A)
the maximum "annual additions" for the "limitation year" minus
any "annual additions" previously credited under subparagraphs
(1) or (2) above, multiplied by (B) a fraction (i) the numerator
of which is the "annual additions" which would be credited to
such Participant's accounts under this Plan without regard to
the limitations of Code Section 415 and (ii) the denominator of
which is such "annual additions" for all plans described in this
subparagraph.
(i) If an Employee is (or has been) a Participant in one or more
defined benefit plans and one or more defined contribution plans
maintained by the Employer, the sum of the defined benefit plan
fraction and the defined contribution plan fraction for any
"limitation year" may not exceed 1.0.
(j) The defined benefit plan fraction for any "limitation year"
is a fraction, the numerator of which is the sum of the Participant's
projected annual benefits under all the defined benefit plans (whether
or not terminated) maintained by the Employer, and the denominator of
which is the lesser of 125 percent of the dollar limitation determined
for the "limitation year" under Code Sections 415(b) and (d) or 140
percent of the highest average compensation, including any adjustments
under Code Section 415(b).
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<PAGE>
Notwithstanding the above, if the Participant was a Participant
as of the first day of the first "limitation year" beginning after
December 31, 1986, in one or more defined benefit plans maintained by
the Employer which were in existence on May 6, 1986, the denominator
of this fraction will not be less than 125 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 plan individually and in the aggregate satisfied the
requirements of Code Section 415 for all "limitation years" beginning
before January 1, 1987.
(k) The defined contribution plan fraction for any "limitation
year" is a fraction, the numerator of which is the sum of the annual
additions to the Participant's Account under all the defined
contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior "limitation years" (including
the annual additions attributable to the Participant's nondeductible
Employee contribution to all defined benefit plans, whether or not
terminated, maintained by the Employer, and the annual additions
attributable to all welfare benefit funds, as defined in Code Section
419(e), and individual medical accounts, as defined in Code Section
415(i)(2), maintained by the Employer), and the denominator of which
is the sum of the maximum aggregate amounts for the current and all
prior "limitation years" of service with the Employer (regardless of
whether a defined contribution plan was maintained by the Employer).
The maximum aggregate amount in any "limitation year" is the lesser of
125 percent of the dollar limitation determined under Code Section
s415(b) and (d) in effect under Code Section 415(c)(1)(A) or 35
percent of the Participant's Compensation for such year.
If the Employee was a Participant as of the end of the first day
of the first "limitation year" beginning after December 31, 1986, in
one or more defined contribution plans maintained by the Employer
which were in existence on May 6, 1986, the numerator of this fraction
will be adjusted if the sum of this fraction and the defined benefit
fraction would otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, an amount equal to the product of (1) the excess
of the sum of the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they
would be computed as of the end of the last "limitation year'
beginning before January 1, 1987, and disregarding any changes in the
terms and conditions of the Plan made after May 5, 1986, but using the
Code Section 415 limitation applicable to the first "limitation year"
beginning on or after January 1, 1987. The annual addition for any
"limitation year" beginning before January 1, 1987 shall not be
recomputed to treat all Employee contributions as annual additions.
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(i) Notwithstanding anything contained in this Section to the
contrary, the limitations, adjustments and other requirements
prescribed in this Section shall at all times comply with the
provisions of Code Section 415 and the Regulations thereunder, the
terms of which are specifically incorporated herein by reference.
410 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of a reasonable error in estimating a
Participant's Compensation, the allocation of Forfeitures, a
reasonable error in determining the amount of elective deferrals
(within the meaning of Code Section 402(g)(3)) that may be made with
respect to any Participant under the limits of Section 4.9 or other
facts and circumstances to which Regulation 1.415-6(b)(6) shall be
applicable, the "annual additions" under this Plan would cause the
maximum "annual additions" to be exceeded for any Participant, the
Administrator shall (1) distribute any elective deferrals (within the
meaning of Code Section 402(g)(3)) and gains attributable to those
elective deferrals or return any voluntary Employee contributions and
gains attributable to those voluntary Employee contributions credited
for the "limitation year" to the extent that the return of elective
deferrals and/or voluntary Employee contributions would reduce the
"excess amount" in the Participant's accounts; (2) hold any "excess
amount" remaining after the return of any elective deferrals or
voluntary Employee contributions in a "Section 415 suspense account";
(3) use the "Section 415 suspense account" in the next "limitation
year" (and succeeding "limitation years" if necessary) to reduce
Employer contributions for that Participant if that Participant is
covered by the Plan as of the end of the "limitation year," or if the
Participant is not so covered, allocate and reallocate the "Section
415 suspense account" in the next "limitation year" (and succeeding
"limitation years" if necessary) to all Participants in the Plan
before any Employer or Employee contributions which would constitute
"annual additions" are made to the Plan for such "limitation year";
and (4) reduce Employer contributions to the Plan for such "limitation
year" by the amount of the "Section 415 suspense account" allocated
and reallocated during such "limitation year."
(b) For purposes of this Article, "excess amount" for any
Participant for a "limitation year" shall mean the excess, if any, or
(1) the "annual additions" which would be credited to his account
under the terms of the Plan without regard to the limitation of Code
Section 415 over (2) the maximum "annual additions" determined
pursuant to Section 4.9.
(c) For purposes of this Section, "Section 415 suspense account"
shall mean an unallocated account equal to the sum of "excess amounts"
for all Participants in the Plan during the "limitation year." The
"Section 415 suspense account" shall not share in any earnings or
losses of the Trust Fund.
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4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be
transferred from other qualified plans by Eligible Employees, provided
that the trust from which such funds are transferred permits the
transfer to be made and the transfer will not jeopardize the tax
exempt status of the Plan or Trust or create adverse tax consequences
for the Employer. The amounts transferred shall be set up in a
separate account herein referred to as a "Participant's Rollover
Account." Such account shall be fully Vested at all times and shall
not be subject to Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be held by
the Trustee pursuant to the provisions of this Plan and may not be
withdrawn by, or distributed to the Participant, in whole or in part,
except as provided in paragraphs (c) and (d) of this Section and
Sections 6.10.
(c) Except as permitted by Regulations (including Regulation
1.411(d)-4), amounts attributable to elective contributions (as
defined in Regulation 1.401(k)-1(g)(3)), including amounts treated as
elective contributions, which are transferred from another qualified
plan in a plan-to-plan transfer shall be subject to the distribution
limitations provided for in Regulation 1.401(k)-1(d).
(d) The Administrator, at the election of the Participant, shall
direct the Trustee to distribute all or a portion of the amount
credited to the Participant's Rollover Account. Any distributions of
amounts held in a Participant's Rollover Account shall be made in a
manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations
thereunder. Furthermore, such amounts shall be considered as part of a
Participant's benefit in determining whether an involuntary cash-out
of benefits without Participant consent may be made.
(e) The Administrator may direct that employee transfers made
after a valuation date be segregated into a separate account for each
Participant in a federally insured savings account, certificate of
deposit in a bank or savings and loan association, money market mutual
fund, or other short term debt security acceptable to the Trustee
until such time as the allocation pursuant to this Plan have been
made, at which time they may remain segregated or be invested as part
of the general Trust Fund, to be determined by the Administrator.
(f) For purposes of this Section, the term "qualified plan" shall
mean any tax qualified plan under Code Section 401(a). The term
"amounts transferred from other qualified plans" shall mean: (i)
amounts transferred to this Plan directly from another qualified plan;
(ii) distributions from another qualified plan which are eligible
rollover distributions and which are either transferred by the
Employee to this Plan within sixty (60) days following his receipt
thereof or are transferred pursuant to a direct rollover; (iii)
amounts transferred to this Plan from a conduit individual retirement
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account provided that the conduit individual retirement account
has no assets other than assets which (A) were previously distributed
to the Employee by another qualified plan as a lump-sum distribution;
(B) were eligible for tax-free rollover to a qualified plan; and (C)
were deposited in such conduit individual retirement account within
sixty (60) days of receipt thereof and other than earnings on said
assets; and (iv) amounts distributed to the Employee from a conduit
individual retirement account meeting the requirements of clause (iii)
above, and transferred by the Employee to this Plan within sixty (60)
days of his receipt thereof from such conduit individual retirement
account.
(g) Prior to accepting any transfers to which this Section
applies, the Administrator may require the Employee to establish that
the amounts to be transferred to this Plan meet the requirements of
this Section and may also require the Employee to provide an opinion
of counsel satisfactory to the Employer that the amounts to be
transferred meet the requirements of this Section.
(h) This Plan shall not accept any direct or indirect transfers
(as that term is defined and interpreted under Code Section 401(a)(11)
and the Regulations thereunder) from a defined benefit plan, money
purchase plan (including a target benefit plan), stock bonus or profit
sharing plan which would otherwise have provided for a life annuity
form of payment to the Participant.
(i) Notwithstanding anything herein to the contrary, a transfer
directly to this Plan from another qualified plan (or a transaction
having the effect of such a transfer) shall only be permitted if it
will not result in the elimination or reduction of any "Section
411(d)(6) protected benefit" as described in Section 7.1.
4.12 VOLUNTARY CONTRIBUTIONS
(a) In order to allow Participants the opportunity to increase
their retirement income, each Participant may, at the discretion of
the Administrator, elect to voluntarily contribute from 1% to 10% (in
whole percentages) of his compensation earned while a Participant
under this Plan. Such contributions shall be paid to the Trustee
within a reasonable period of time after the receipt of the
contribution, but in any event within the time prescribed by
regulations. The balance in each Participant's Voluntary Contribution
Account shall be fully Vested at all times and shall not be subject to
Forfeiture for any reason.
(b) A Participant may elect to withdraw his voluntary
contributions from his Voluntary Contribution Account and the actual
earnings thereon in a manner which is consistent with and satisfies
the provisions of Section 6.5 and Section 6.10, including, but not
limited to, all notice and consent requirements of Code Section
411(a)(11) and the Regulations thereunder.
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If the Administrator maintains sub-accounts with respect to
voluntary contributions (and earnings thereon) which were made on or
before a specified date, a Participant shall be permitted to designate
which sub-account shall be the source for his withdrawal.
In the event such a withdrawal is made, or in the event a
Participant has received a hardship distribution from his
Participant's Elective Account pursuant to Section 6.11(b) or pursuant
to Regulation 1.401(k)-1(d)(2)(iv)(B) from any other plan maintained
by the Employer, then such Participant shall be barred from making any
voluntary contributions to the Trust Fund for a period of twelve (12)
months after receipt of the withdrawal or distribution.
(c) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits,
the fair market value of the Voluntary Contribution Account shall be
used to provide additional benefits to the Participant or his
Beneficiary.
(d) The Administrator may direct that voluntary contributions
made after a valuation date be segregated into a separate account for
each Participant in a federally insured savings account, certificate
of deposit in a bank or savings and loan association, money market
mutual fund, or other short term debt security acceptable to the
Trustee until such time as the allocations pursuant to this Plan have
been made, at which time they may remain segregated or be invested as
part of the general Trust Fund, to be determined by the Administrator.
4.13 DIRECTED INVESTMENT ACCOUNT
(a) Participants may, subject to a procedure established by the
Administrator (the Participant Direction Procedures) and applied in a
uniform nondiscriminatory manner, direct the Trustee to invest in
specific assets, specific funds or other investments permitted under
the Plan and the Participant Direction Procedures. That portion of the
interest of any Participant so directing will thereupon be considered
a Participant's Directed Account. As part of the Directed Investment
Account, the Administrator may determine that all Participants be
permitted to direct the Trustee to acquire, hold and dispose of
"qualifying Employer securities" and "qualifying Employer real
property", as those terms are defined in the Act, in amounts that
exceed the percentage limitation on "qualifying Employer securities"
in Section 407 of the Act.
(b) As of each Valuation Date, all Participant Directed Accounts
shall be charged or credited with the net earnings, gains, losses and
expenses as well as any appreciation or depreciation in the market
value using publicly listed fair market values when available or
appropriate.
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(1) To the extent that the assets in a Participant's Directed
Account are accounted for as pooled assets or investments, the
allocation of earnings, gains and losses of each Participant's
Directed Account shall be based upon the total amount of funds so
invested, in a manner proportionate to the Participant's share
of such pooled investment.
(2) To the extent that the assets in the Participant's Directed
Account are accounted for as segregated assets, the allocation of
earnings, gains and losses from such assets shall be made on a
separate and distinct basis.
(c) The Participant's Direction Procedures shall provide an
explanation of the circumstances under which Participants and their
Beneficiaries may give investment instructions, including, but need
not be limited to, the following:
(1) the conveyance of instructions by the Participants and their
Beneficiaries to invest Participant Directed Accounts in Directed
Investments;
(2) the name, address and phone number of the Fiduciary (and, if
applicable, the person or persons designated by the Fiduciary to
act on its behalf) responsible for providing information to the
Participant or a Beneficiary upon request relating to the
investments in Directed Investments;
(3) applicable restrictions on transfers to and from any
Designated Investment Alternative;
(4) any restrictions on the exercise of voting, tender and
similar rights related to a Directed Investment by the
Participants or their Beneficiaries;
(5) a description of any transaction fees and expenses which
affect the balances in Participant Directed Accounts in
connection with the purchase or sale of Directed Investments; and
(6) general procedures for the dissemination of investment and
other information relating to he Designated Investment
Alternatives as deemed necessary or appropriate, including but
not limited to a description of the following:
(i) the investment vehicles available under the Plan,
including specific information regarding any Designated
Investment Alternative;
(ii) any designated Investment Managers; and
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(iii) a description of the additional information which
may be obtained upon request for the Fiduciary designated to
provide such information.
(d) Any information regarding investments available under the
Plan, to the extent not required to be described in the Participant
Direction Procedures, may be provided to the Participant in one or
more written documents which are separate from the Participant
Direction Procedures and are not thereby incorporated by reference
into this Plan.
(e) The Administrator may, at its discretion, include in or
exclude by amendment or other action from the Participant Direction
Procedures such instructions, guidelines or policies as it deems
necessary or appropriate to ensure proper administration of the Plan,
and may interpret the same accordingly.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Valuation
Date, to determine the net worth of the assets comprising the Trust Fund
as it exists on the Valuation Date. In determining such net worth, the
Trustee shall value the assets comprising the Trust Fund at their fair market
value as of the Valuation Date and shall deduct all expenses for which the
Trustee has not yet obtained reimbursement from the Employer or the Trust Fund.
The Trustee may update the value of any shares held in the Participant Directed
Account by reference to the number of shares held by the Participant, priced at
the market value as of the Valuation Date.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the Trust
Fund which are listed on a registered stock exchange, the Administrator
shall direct the Trustee to value the same at the prices they were last traded
on such exchange proceeding the close of business on the "valuation date." If
such securities were not traded on the "valuation date," of if the exchange on
which they are traded was not open for business on the "valuation date," then
the securities shall be valued at the prices at which they were last traded
prior to the "valuation date." Any unlisted security held in the Trust Fund for
which trading or bid prices can not be obtained, shall be valued at least
annually. In determining the fair market value of such assets, the Trustee,
itself, may appraise any unlisted security held in the Trust Fund, or in its
discretion, employ one or more appraisers for that purpose and rely on the
values established by such appraiser or appraisers. Such appraisal shall be
performed at least annually.
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ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer
and retire for the purposes hereof on his Normal Retirement Date or
Early Retirement Date. However, a Participant may postpone the termination of
his employment with the Employer to a later date, in which event the participant
of such Participant in the Plan, including the right to receive allocation
pursuant to Section 4.4, shall continue until his Late Retirement Date. Upon a
Participant's Retirement Date or attainment of his Normal Retirement Date
without termination of employment with the Employer, or as soon thereafter as is
practicable, the Trustee shall distribute, at the election of the Participant,
all amounts credited to such Participant's Combined Account in accordance with
Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement Date or
other termination of his employment, all amounts credited to such
Participant's Combined Account shall become fully Vested. The
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute the value of the
deceased Participant's accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the Administrator
shall direct the Trustee, in accordance with the provisions of Section
6.6 and 6.7, to distribute any remaining Vested amounts credited to
the accounts of a deceased Former Participant to such Former
Participant's Beneficiary.
(c) Any security interest held by the Plan by reason of an
outstanding loan to the Participant or Former Participant shall be
taken into account in determining the amount of the death benefit.
(d) The Administrator may require such proper proof of death and
such evidence of the right of any person to receive payment of the
value of the account of a deceased Participant or Former Participant
as the Administrator may deem desirable. The Administrator's
determination of death and of the right of any person to receive
payment shall be conclusive.
(e) The Beneficiary of the death benefit payable pursuant to this
Section shall be the Participant's spouse. Except, however, the
Participant may designate a Beneficiary other than his spouse if:
(1) the spouse has waived the right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has been abandoned
(within the meaning of local law) and the Participant has a court
order to such effect (and there is
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no "qualified domestic relations order" as defined in Code
Section 414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be made on
a form satisfactory to the Administrator. A Participant may at any
time revoke his designation of a Beneficiary or change his Beneficiary
by filing written notice of such revocation or change with the
Administrator. However, the Participant's spouse must again consent in
writing to any change in Beneficiary unless the original consent
acknowledged that the spouse had the right to limit consent only to a
specific Beneficiary and that the spouse voluntarily elected to
relinquish such right. In the event no valid designation of
Beneficiary exists at the time of the Participant's death, the death
benefit shall be payable to his estate.
(f) Any consent by the Participant's spouse to waive any rights
to the death benefit must be in writing, must acknowledge the effect
of such waiver, and be witnessed by a Plan representative or a notary
public. Further, the spouse's consent must be irrevocable and must
acknowledge the specific nonspouse Beneficiary.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability prior to
his Retirement Date or other termination of his employment, all amounts credited
to such Participant's Combined Account shall become fully Vested. In the event
of a Participant's Total and Permanent Disability, the Trustee, in accordance
with the provisions of Sections 6.5 and 6.7, shall distribute to such
Participant all amounts credited to such Participant's Combined Account as
though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) If a Participant's employment with the Employer is terminated
for any reason other than death, Total and Permanent Disability or
retirement, such Participant shall be entitled to such benefits as are
provided hereinafter pursuant to this Section 6.4.
Distribution of the funds due to a Terminated Participant shall
be made on the occurrence of an event which would result in the
distribution had the Terminated Participant remained in the employ of
the Employer (upon the Participant's death, Total and Permanent
Disability, Early or Normal Retirement). However, at the election of
the Participant, the Administrator shall direct the Trustee to cause
the entire Vested portion of the Terminated Participant's Combined
Account to be payable to such Terminated Participant. Any distribution
under this paragraph shall be made in a manner which is consistent
with and satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code Section
411(a)(11) and the Regulations thereunder.
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If the value of a Terminated Participant's Vested benefit derived
from Employer and Employees contributions does not exceed $3,500 and
has never exceeded $3,500 at the time of any prior distribution, the
Administrator shall direct the Trustee to cause the entire Vested
benefit to be paid to such Participant in a single lump sum.
For purposes of this Section 6.4, if the value of a Terminated
Participant's Vested benefit is zero, the Terminated Participant shall
be deemed to have received a distribution of such Vested benefit.
(b) The Vested portion of any Participant's Account shall be a
percentage of the total amount credited to his Participant's Account
determined on the basis of the Participant's number of Years of
Service according to the following schedule:
Vesting Schedule
Years of Service Percentage
---------------- ----------
Less than 5 0%
5 100%
(c) Notwithstanding the vesting attributable to Employer matching
and discretionary contributions provided for in paragraph 6.4(b)
above, for any Top Heavy Plan Year, the Vested portion of the
Participant's Account attributable to Employer matching and
discretionary contributions of any Participant who has an Hour of
Service after the Plan becomes top heavy shall be a percentage of the
amount credited to his Participant's Account attributable to Employer
matching and discretionary contributions determined on the basis of
the Participant's number of Years of Service according to the
following schedule:
Vesting Schedule
Years of Service Percentage
---------------- ----------
Less than 3 0%
3 100%
If in any subsequent Plan Year, the Plan ceases to be a Top Heavy
Plan, the Administrator shall revert to the vesting schedule in effect
before this Plan became a Top Heavy Plan. Any such reversion shall be
treated as a Plan amendment pursuant to the terms of the Plan.
(d) Notwithstanding the vesting schedule above, the Vested
percentage of a Participant's Account shall not be less than the
Vested percentage attained as of the later of the effective date or
adoption date of this amendment and restatement.
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(e) Notwithstanding the vesting schedule above, upon the complete
discontinuance of the Employer contributions to the Plan or upon any
full or partial termination of the Plan, all amounts credited to the
account of any affected Participant shall become 100% Vested and shall
not thereafter be subject to Forfeiture.
(f) The computation of a Participant's nonforfeitable percentage
of his interest in the Plan shall not be reduced as the result of any
direct or indirect amendment to this Plan. For this purpose, the Plan
shall be treated as having been amended if the Plan provides for an
automatic change in vesting due to a change in top heavy status. In
the event that the Plan is amended to change or modify any vesting
schedule, a Participant with at least three (3) Years of Service as of
the expiration date of the election period may elect to have his
nonforfeitable percentage computed under the Plan without regard to
such amendment. If a Participant fails to make such election, then
such Participant shall be subject to the new vesting schedule. The
Participant's election period shall commence on the adoption date of
the amendment and shall end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
(g)(1) If any Former Participant shall be reemployed by the
Employer before a 1-Year Break in Service occurs, he shall continue to
participate in the Plan in the same manner as if such termination had
not occurred.
(2) If any Former Participant shall be reemployed by the
Employer before five (5) consecutive 1-Year Breaks in Service,
and such Former Participant had received, or was deemed to have
received, a distribution of his entire Vested interest prior to
his reemployment, his forfeited account shall be reinstated only
if he repays the full amount distributed to him before the
earlier of five (5) years after the first date on which the
Participant is subsequently reemployed by the Employer of the
close of the first period of five (5) consecutive 1-Year Breaks
in Service commencing after the distribution, or in the event of
a deemed distribution, upon the reemployment of such Former
Participant. In the event the Former Participant does repay the
full amount distributed to him, or in the event of a deemed
distribution, the undistributed portion of the Participant'
Account must be restored in full, unadjusted by any
gains or losses occurring subsequent to the Valuation Date
coinciding with or preceding his termination. The source for such
reinstatement shall first be any Forfeitures occurring during
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the year. If such source is insufficient, then the Employer
shall contribute an amount which is sufficient to restore any
such forfeited Accounts provided, however, that if a
discretionary contribution is made for such year pursuant to
Section 4.1(c), such contribution shall first be applied
to restore any such Accounts and the remainder shall be allocated
in accordance with Section 4.4.
(3) If any Former Participant is reemployed after a 1-Year Break
in Service has occurred, Years of Service shall include Years of
Service prior to his 1-Year Break in Service subject to the
following rules:
(i) Any Former Participant who under the Plan does not have a
nonforfeitable right to any interest in the Plan resulting from
Employer contributions shall lose credit for his pre-break
service for computing Years of Service for eligibility and for
vesting purposes, if his consecutive 1-Year Breaks in Service
equal or exceed the greater of (A) five (5) or (B) the aggregate
number of his pre-break Years of Service, and he shall be
considered a new Employee for eligibility and for vesting
purposes;
(ii) After five (5) consecutive 1-Year Breaks in Service, a
Former Participant's Vested Account balance attributable to
pre-break service shall not be increased as a result of
post-break service.
6.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election of the
Participant, shall direct the Trustee to distribute to a Participant
or his Beneficiary any amount of which he is entitled under the Plan
in one lump-sum payment in one or a combination of the following
methods: (i) in cash, (ii) in-kind of Ford Motor Company stock, (iii)
in-kind via a direct rollover of assets invested in a "Charles Schwab
Personal Choice Retirement Account" into a Charles Schwab individual
retirement account.
(b) Any distribution to a Participant who has a benefit which
exceeds, or has ever exceeded, $3,500 at the time of any prior
distribution shall require such Participant's consent if such
distribution occurs prior to the later of his Normal Retirement Age or
age 62. With regard to this required consent:
(1) The Participant must be informed of his right to defer
receipt of the distribution. If a Participant fails to consent,
it shall be deemed an election to defer the distribution of any
benefit. However, any election to defer the receipt of benefits
shall not apply with respect to distributions which are required
under Section 6.5(c).
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(2) Notice of the rights specified under this paragraph shall
be provided no less than 30 days and no more than 90 days before
the date the distribution commences.
(3) Written consent of the Participant to the distribution
must no be made before the Participant receives the notice and
must not be made more than 90 days before the date the
distribution commences.
(4) No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not consent
to the distribution.
Any such distribution may commence less than 30 days after the
notice required under Regulation 1.411(a)-11(c) is given, provided
that: (1) the Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and (2) the Participant, after receiving the notice,
affirmatively elects a distribution.
(c) Notwithstanding any provision in the Plan to the contrary,
the distribution of a Participant's benefits shall be made in
accordance with the following requirements and shall otherwise comply
with Code Section 401(a)(9) and the Regulations thereunder (including
Regulation 1.401(a)(9)-2), the provisions of which are incorporated
herein by reference:
(1) A Participant's benefits shall be distributed or must
begin to be distributed to him not later than April 1st of the
calendar year following the later of (i) the calendar year in
which the Participant attains age 70 1/2 or (ii) the calendar
year in which the Participant retires, provided, however, that
this clause (ii) shall not apply in the case of a Participant who
is a "five (5) percent owner" at any time during the five (5)
Plan Year period ending in the calendar year in which he attains
age 70 1/2 or, in the case of a Participant who becomes a "five
(5) percent owner" during any subsequent Plan Year, clause (ii)
shall no loner apply and the required beginning date shall be
the April 1st of the calendar year following the calendar year in
which such subsequent Plan Year ends. Such distributions shall be
equal to or greater than any required distribution.
Notwithstanding the foregoing, clause (ii) above shall not apply
to any Participant unless the Participant had attained age 70
1/2 before January 1, 1988 and was not a "five (5) percent owner"
at any time during the Plan Year ending with or within the
calendar year in which the Participant attained age 66 1/2 or any
subsequent Plan Year.
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(2) Distributions to a Participant and his Beneficiaries shall
only be made in accordance with the incidental death benefit
requirements of Code Section 401(a)(9)(G) and the Regulations
thereunder.
(d) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse shall be redetermined annually
in accordance with Regulations. Life expectancy and joint and last
survivor expectancy shall be computed using the return multiples in
Tables V and VI of Regulation 1.72-9.
(e) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of any
annuity Contract purchased and distributed to a Participant or spouse
shall comply with all of the requirements of the Plan.
(f) If a distribution is made at a time when a Participant is not
fully Vested in his Participant's Account and the Participant may
increase the Vested percentage in such account:
(1) a separate account shall be established for the
Participant's interest in the Plan as of the time of the
distribution; and
(2) at any relevant time, the Participant's Vested portion of
the separate account shall be equal to an amount ("X") determined
by the formula:
X equals P(AB plus (R x D)) - (R x D)
For purposes of applying the formula: P is the Vested percentage
at the relevant time, AB is the account balance at the relevant time,
D is the amount of distribution, and R is the ratio for the account
balance at the relevant time to the account balance after
distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) The death benefit payable pursuant to Section 6.2 shall be
paid to the Participant's Beneficiary in one lump-sum payment in one
or a combination of the following methods, subject to the rules of
Section 6.6(b): (i) in cash, (ii) in-kind of Ford Motor Company stock,
or (iii) in-kind via a direct rollover of assets invested in a
"Charles Schwab Personal Choice Retirement Account" into a Charles
Schwab individual retirement account.
(b) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in
accordance with the following requirements and shall otherwise comply
with code Section 401(a)(9) and the Regulations thereunder. If it is
determined pursuant to Regulations that the distribution of a
Participant's interest has begun and the Participant dies before his
entire interest has been distributed to him, the remaining portion of
such interest shall be distributed at least as rapidly as under the
method of distribution selected pursuant to Section 6.5 as of his date
of death. If a Participant dies before he has begun to receive any
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distributions of his interest under the Plan or before
distributions are deemed to have begun pursuant to Regulation, then
his death benefit shall be distributed to his Beneficiaries by
December 31st of the calendar year in which the fifth anniversary of
his date of death occurs.
However, in the event that the Participant's spouse (determined
as of the date of the Participant's death) is his Beneficiary, then in
lieu of the preceding rules, distributions must be made over a period
not extending beyond the life expectancy of the spouse and must
commence on or before the later of: (1) December 31st of the calendar
year immediately following the calendar year in which the Participant
died; or (2) December 31st of the calendar year in which the
Participant would have attained ate 70 1/2. If the surviving spouse
dies before distributions to such spouse begin, then the 5-year
distribution requirement of this Section shall apply as if the spouse
was the Participant.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the Trustee is to
make a distribution the distribution may be made as soon as is practicable.
However, unless a Former Participant elects in writing to defer the receipt of
benefits (such election may not result in a death benefit that is more than
incidental), the payment of benefits shall occur not later than the 60th day
after the close of the Plan Year in which the latest of the following events
occurs: (a) the date on which the Participant attains the earlier of age 65 or
the Normal Retirement Age specified herein; (b) the 10th anniversary of the year
in which the Participant commenced participant in the Plan; or (c) the date the
Participant terminates his service with the Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable to a
Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable may be treated as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
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subsequent to his benefit being reallocated, such benefit shall be restored.
6.10 PRE-RETIREMENT DISTRIBUTION
The Administrator, at the election of the Participant, shall
direct the Trustee to distribute all or a portion of the amount then credited to
the accounts maintained on behalf of the Participant. However, no distribution
from the Participant's Account shall occur prior to 100% vesting. In the event
that the Administrator makes such distribution, the Participant shall continue
to be eligible to participate in the Plan on the same basis as any other
Employee. Any distribution made pursuant to this Section shall be made in a
manner consistent with Section 6.5, including, but not limited to, all notice
and consent requirements of Code Section 411(a)(11) and the Regulations
thereunder.
Notwithstanding the above, pre-retirement distributions from a
Participant's Elective Account shall not be permitted except as otherwise
permitted under the terms of the Plan.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant, shall
direct the Trustee to distribute to any Participant up to the lesser
of 100% of his Participant's Elective Account valued as of the last
Valuation Date or the amount necessary to satisfy the immediate and
heavy financial need of the Participant. Any distribution made
pursuant to this Section shall be deemed to be made as of the first
day of the Plan Year or, if later, the Valuation Date immediately
preceding the date of distribution, and the Participant's Elective
Account shall be reduced accordingly. A Participant shall not receive
more than one (1) hardship withdrawal pursuant to this Section in any
twelve (12) month period. Withdrawal under this Section shall be
authorized only if the distribution is on account of:
(1) Expenses for medical care described in Code Section
213(d) previously incurred by the Participant, his
spouse, or any of his dependents (as defined in Code
Section 152) or necessary for these persons to obtain
medical care;
(2) The costs directly related to the purchase of a
principal residence for the Participant (excluding mortgage
payments);
(3) Payment of tuition, room and board expenses and
related educational fees for the next twelve (12)
months of post-secondary education for the Participant,
his spouse, children, or dependents; or
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure
on the mortgage of the Participant's principal residence.
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(b) No distribution shall be made pursuant to this Section unless
the Administrator, based upon the Participant's representation and
such other facts as are known to the Administrator, determines that
all of the following conditions are satisfied:
(1) The distribution is not in excess of the amount of
the immediate and heavy financial need of the
Participant. The amount of the immediate and heavy
financial need may include any amounts necessary to
pay any federal, state, or local income taxes or
penalties reasonably anticipated to result from the
distribution;
(2) The Participant has obtained all distributions, other
than hardship distributions, and all nontaxable (at
the time of the loan) loans currently available under
all plans maintained by the Employer;
(3) The Plan, and all other plans maintained by the Employer,
provide that the Participant's elective deferrals and voluntary
Employee contributions will be suspended for at least twelve
(12) months after receipt of the hardship distribution or,
the Participant, pursuant to a legally enforceable agreement,
will suspend his elective deferrals and voluntary Employee
contributions to the Plan and all other plans maintained by the
Employer for at least twelve (12) months after receipt of the
hardship distribution; and
(4) The Plan, and all other plans maintained by the
Employer, provide that the Participant may not make
elective deferrals 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 deferrals
for the taxable year of the hardship distribution.
(c) Notwithstanding the above, distributions from the
Participant's Elective Account pursuant to this Section shall be
limited, as of the date of distribution, to the Participant's Elective
Account as of the end of the last Plan Year ending before July 1,
1989, plus the total Participant's Deferred Compensation after such
date, reduced by the amount of any previous distributions pursuant to
this Section and Section 6.10.
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(d) Any distribution made pursuant to this Section shall be made
in a manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations
thereunder.
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a Participant
in this Plan shall be subject to the rights afforded to any "alternate
payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached the "earliest
retirement age" under the Plan. For the purposes of this Section, "alternate
payee," "qualified domestic relations order" and "earliest retirement age" shall
have the meaning set forth under Code Section 414(p).
6.13 DIRECT ROLLOVER
(a) 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 Administrator, to have any portion of an eligible
rollover distribution that is equal to at least $500 paid directly to
an eligible retirement plan specified by the distributee in a direct
rollover.
(b) For purposes of this Section the following definitions shall
apply:
(1) An eligible rollover distribution is any distribution of all
or any portion of the balance to the credit of the distributee,
except that an eligible rollover distribution does not include:
any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period
of ten years or more; any distribution to the extent such
distribution is required under Code Section 401(a)(9); the
portion of any other distribution that is not includible in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities);
and any other distribution that is reasonably expected to total
less than $200 during a year.
(2) An eligible retirement plan is 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.
(3) A distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse
and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations
order, as defined in Code Section 414(p), are distributee's with
regard to the interest of the spouse or former spouse.
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(4) A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT
(a) The Employer shall have the right at any time to amend the
Plan, subject to the limitations of this Section. However, any
amendment which affects the rights, duties or responsibilities of the
Trustee and Administrator, other than an amendment to remove the
Trustee or Administrator, may only be made with the Trustee's and
Administrator's written consent. Any such amendment shall become
effective as provided therein upon its execution. The Trustee shall
not be required to execute any such amendment unless the Trust
provisions contained herein are apart of the Plan and the amendment
affects the duties of the Trustee hereunder.
(b) No amendment to the Plan shall be effective if it authorizes
or permits any part of the Trust Fund (other than such part as is
required to pay taxes and administration expenses) to be used for a
diverted to any purpose other than for the exclusive benefit of the
Participants or their Beneficiaries or estates; or causes any
reduction in the amount credited to the account of any Participant; or
causes or permits any portion of the Trust Fund to revert to or become
property of the Employer.
(c) Except as permitted by Regulations, no Plan amendment or
transaction having the effect of a Plan amendment (such as a merger,
plan transfer or similar transaction) shall be effective to the extent
it eliminates or reduces any "Section 411(d)(6) protected benefit" or
adds or modifies conditions relating to "Section 411(d)(6) protected
benefits" the result of which is a further restriction on such benefit
unless such protected benefits are preserved with respect to benefits
accrued as of the later of the adoption date or effective date of the
amendment. "Section 411(d)(6) protected benefits" are benefits
described in Code Section 411(d)(6)(A), early retirement benefits and
retirement-type subsidies, and optional forms of benefit.
7.2 TERMINATION
(a) The Employer shall have the right at any time to terminate
the Plan by delivering to the Trustee and Administrator written notice
of such termination. Upon any full or partial termination, all amounts
credited to the affected Participants' Combined Accounts shall become
100% Vested as provided in Section 6.4 and shall not thereafter be
subject to forfeiture, and all unallocated amounts shall be allocated
to the accounts of all Participants in accordance with the provisions
hereof.
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(b) Upon the full termination of the Plan, the Employer shall
direct the distribution of the assets of the Trust Fund to
Participants in a manner which is consistent with and satisfies the
provisions of Section 6.5. Distributions to a Participant shall be
made in cash or in property or through the purchase of irrevocable
nontransferable deferred commitments from an insurer. Except as
permitted by Regulations, the termination of the Plan shall not result
in the reduction of "Section 411(d)(6) protected benefits" in
accordance with Section 7.1(c).
7.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets and/or
liabilities may be transferred to any other plan and trust only if the benefits
which would be received by a Participant of this Plan, in the event of a
termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 7.1(c).
7.4 LOAN TO PARTICIPANTS
(a) The Trustee may, in the Trustee's discretion, make loans to
Participants and Beneficiaries who are "parties-in-interest" as that
term is defined under the Act, under the following circumstances: (1)
loans shall be made available to all Participants and Beneficiaries
who are "parties-in-interest" on a reasonably equivalent basis; (2)
loans shall not be made available to Highly Compensated Employees in
an amount greater than the amount made available to other Participants
and Beneficiaries; (3) loans shall bear a reasonable rate of interest;
(4) loans shall be adequately secured; and (5) shall provide for
repayment over a reasonable period of time.
(b) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the
Participant) shall be limited to the lesser of:
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(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the Participant
during the one year period ending on the day before the date on
which such loan is made, over the outstanding balance of
loans from the Plan to the Participant on the date on which such
loan as made, or
(2) one-half (1/2) of the present value of the non-forfeitable
accrued benefit of the Participant under the Plan.
For purposes of this limit, all plans of the Employer shall be
considered one plan.
(c) Loans shall provide for level amortization with payments to
be made not less frequently than quarterly over a period not to exceed
five (5) years. However, loans used to acquire any dwelling unit
which, within a reasonable time, is to be used (determined at the time
the loan is made) as a principal residence of the Participant shall
provide for periodic repayment over a reasonable period of time not to
exceed ten (10) years.
(d) Any loans granted or renewed shall be made pursuant to a
Participant loan program. Such loan program shall be established in
writing and must include, but need not be limited to, the following:
(1) the identity of the person or positions authorized to
administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans
offered;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a Participant
loan; and
(7) the events constituting default and the steps that will be
taken to preserve the Plan assets.
Such Participant loan program shall be contained in a separate
written document which, when properly executed, is hereby incorporated
by reference and made a part of the Plan. Furthermore, such
Participant loan program may be modified or amended in writing from
time to time without the necessity of amending this Section.
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ARTICLE VIII
TOP HEAVY
8.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special
vesting requirements of Code Section 416(b) pursuant to Section 6.4 of the
Plan and the special minimum allocation requirements of Code Section 416(c)
pursuant to Section 4.4 of the Plan.
8.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year is
which, as of the Determination date, (1) the Present Value of Accrued
Benefits of Key Employees and (2) the sum of the Aggregate Accounts of
Key Employees under this Plan and all plans of an Aggregation Group,
exceeds sixty percent (60%) of the Present Value of Accrued Benefits
and the Aggregate Accounts of all Key and Non-Key Employees under this
Plan and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year, but
such Participant was a Key Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit and/or Aggregate
Account balance shall not be taken into account for purposes of
determining whether this Plan is a Top Heavy or Super Top Heavy Plan
(or whether any Aggregation Group which includes this Plan is a Top
Heavy Group). In addition, if a Participant or Former Participant has
not performed any services for any Employer maintaining the Plan at
any time during the five year period ending on the Determination Date,
any accrued benefit for such Participant or Former Participant shall
not be taken into account for the purposes of determining whether this
Plan is a Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan Year
in which, as of the Determination Date, (1) the Present Value of
Accrued Benefits of Key Employees and (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds ninety percent (90%) of the Present Value
of Accrued Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate Account as of
the Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the
most recent valuation occurring within a twelve (12)
month period ending on the Determination Date;
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(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the
amount of any contributions actually made after the
Valuation Date but due on or before the Determination
Date, except for the first Plan Year when such
adjustment shall also reflect the amount of any
contributions made after the Determination Date that
are allocated as of a date in that first Plan Year.
(3) any Plan distributions made within the Plan Year that
includes the Determination Date or within the four (4) preceding
Plan Years. However, in the case of distributions made after the
Valuation Date and prior to the Determination Date, such
distributions are not included as distributions for top
heavy purposes to the extent that such distributions are
already included in the Participant's Aggregate Account balance
as of the Valuation Date. Notwithstanding anything herein to
the contrary, all distributions, including distributions
under a terminated plan which if it had not been terminated would
have been required to be included in an Aggregation Group,
will be counted. Further, distributions from the Plan
(including the cash value of life insurance policies) of a
Participant's account balance because of death shall be treated
as distribution for the purposes of this paragraph.
(4) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax deductible
qualified voluntary employee contributions shall not be
considered to be a part of the Participant's Aggregate
Account balance.
(5) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and
made from a plan maintained by one employer to a plan
maintained by another employer), if this Plan provides the
rollovers or plan-to-plan transfers, it shall always
consider such rollovers or plan-to-plan transfers as a
distribution for the purposes of this Section. If
this Plan is the plan accepting such rollovers or plan-to-plan
transfers, it shall not consider such rollovers or plan-to-plan
transfers, it shall not consider such rollovers or plan-to-plan
transfers as part of the Participant's Aggregate Account balance.
(6) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or
made to a plan maintained by the same employer), if this
Plan provides the rollover or plan-to-plan transfer, it shall
not be counted as a distribution for purposes of this Section.
If this Plan is the plan accepting such rollover or plan-to-plan
transfer, it shall consider such rollover or plan-to-plan
transfer as part of the Participant's Aggregate Account balance,
irrespective of the date on which such rollover or plan-to-plan
transfer is accepted.
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(7) For the purposes of determining whether two employers are
to be treated as the same employer in (5) and (6) above, all
employers aggregated under Code Section 414(b), (c), (m) and
(o) are treated as the same employer.
(d) "Aggregation Group" means either a Required Aggregation Group
or a Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each plan of the Employer in which
a Key Employee is a participant in the Plan Year containing the
Determination Date or any of the four preceding Plan Years, and
each other plan of the Employer which enables any plan in which
a Key Employee participates to meet the requirements of Code
Sections 401(a)(4) or 410, will be required to be aggregated.
Such group shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan
in the group will be considered a Top Heavy Plan if
the Required Aggregation Group is a Top Heavy Group.
No plan in the Required Aggregation Group will be
considered a Top Heavy Plan if the Required
Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also
include any other plan not required to be included in
the Required Aggregation Group, provided the
resulting group, taken as a whole, would continue to
satisfy the provisions of Code Sections 401(a)(4) and
410. Such group shall be known as a Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group
will be considered a Top Heavy Plan if the Permissive
Aggregation Group is a Top Heavy Group. No plan in
the Permissive Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar
year shall be aggregated in order to determine whether such
plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated
plan of the Employer if it was maintained within the
last five (5) years ending on the Determination Date.
(e) "Determination Date" means (a) the last day of the preceding
Plan Year, or (b) in the case of the first Plan Year, the last day of
such Plan Year.
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(f) Present Value of Accrued Benefit: In the case of a defined
benefit plan, the Present Value of Accrued Benefit for a Participant
other than a Key Employee, shall be as determined using the single
accrual method used for all plans of the Employer and Affiliated
Employers, or if no such single method exists, using a method which
results in benefits accruing not more rapidly than the slowest accrual
rate permitted under Code Section 411(b)(1)(C). The determination of
the Present Value of Accrued Benefit shall 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.
(g) "Top Heavy Group" means an Aggregation Group in which, as of
the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key
Employees under all defined benefit plans included in
the group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum determined for
all Participants.
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between
the Employer and any Participant or to be a consideration or an inducement for
the employment of any Participant or Employee. Nothing contained in this Plan
shall be deemed to give any Participant or Employee the right to be retained in
the service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect which
such discharge shall have upon him as a Participant as of this Plan.
9.2 ALIENATION
(a) Subject to the exceptions provided below, no benefit which
shall be payable out of the Trust Fund to any person (including a
Participant or his Beneficiary) shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge the same shall be void;
and no such benefit shall in any manner be liable for, or subject to,
the debts, contracts, liabilities, engagements, or torts of any such
person, nor shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized by the
Trustee, except to such extent as may be required by law.
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(b) This provision shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, as a result of a loan from the
Plan. At the time a distribution is to be made to or for a
Participant's or Beneficiary's benefit, such proportion of the amount
distributed as shall equal such loan indebtedness shall be paid by the
Trustee to the Trustee or the Administrator, at the direction of the
Administrator, to apply against or discharge such loan indebtedness.
Prior to making a payment, however, the Participant or Beneficiary
must be given written notice by the Administrator that such loan
indebtedness is to be so paid in whole or part from his Participant's
Combined Account. If the Participant or Beneficiary does not agree
that the loan indebtedness is a valid claim against his Vested
Participant's Combined Account, he shall be entitled to a review of
the validity of the claim in accordance with procedures provided in
Section 2.7 and 2.8.
(c) This provision shall not apply to a "qualified domestic
relations order" defined in Code Section 414(p), and those other
domestic relations orders permitted to be so treated by the
Administrator under the provisions of the Retirement Equity Act of
1984. The Administrator shall establish a written procedure to
determine the qualified status of domestic relations orders and to
administer distributions under such qualified orders. Further, to the
extent provided under a "qualified domestic relations order," a former
spouse of a Participant shall be treated as the spouse or surviving
spouse for all purposes under the Plan.
9.3 CONSTRUCTION OF PLAN
This Plan shall be construed and enforced according to the Act
and the laws of the State of Colorado, other than its laws respecting choice of
law, to the extent not preempted by the Act.
9.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine
or neuter gender, they shall be construed as though they were also used in
another gender in all cases where they would so apply, and whenever any words
are used herein in the singular or plural form, they shall be construed as
though they were also used in the other form in all cases where they would so
apply.
9.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which the Trustee, the
Employer or the Administrator may be a party, and such claim, suit, or
proceeding is resolved in favor of the Trustee, the Employer or the
Administrator, any and all costs, attorney's fees, and other expenses pertaining
thereto incurred by them for which they shall have become liable shall be paid
by the Employer and, until paid, such expenses shall constitute a liability of
the Trust Fund.
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9.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically permitted
by law, it shall be impossible by operation of the Plan or of the
Trust, by termination of either, by power of revocation or amendment,
by the happening of any contingency, by collateral arrangement or by
any other means, for any part of the corpus or income of any trust
fund maintained pursuant to the Plan or any funds contributed thereto
to be used for, or diverted to, purposes other than the exclusive
benefit of Participants, Retired Participants, or their Beneficiaries.
(b) In the event the Employer shall make an excessive
contribution under a mistake of fact pursuant to Act Section
403(c)(2)(A), the Employer may demand repayment of such excessive
contribution at any time within one (1) year following the time of
payment and the Trustees shall return such amount to the Employer
within the one (1) year period. Earnings of the Plan attributable to
the excess contributions may not be returned to the Employer but any
losses attributable thereto must reduce the amount so returned.
9.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act and regulations thereunder, shall be bonded in an amount not
less than 10% of the amount of the funds such Fiduciary handles; provided,
however, that the minimum bond shall be $1,000 and the maximum bond, $500,000.
The amount of funds handled shall be determined at the beginning of each Plan
Year by the amount of funds handled by such person, group, or class to be
covered and their predecessors, if any, during the preceding Plan Year, or if
there is no preceding Plan Year, then by the amount of the funds to be handled
during the then current year. The bond shall provide protection to the Plan
against any loss by reason of acts of fraud or dishonesty by the Fiduciary alone
or in connivance with others. The surety shall be a corporate surety company (as
such term is used in Action Section 412(a)(2)), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an expense of and may, at the election
of the Administrator, be paid from the Trust Fund or by the Employer.
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer, the Administrator, nor the Trustee, nor
their successors shall be responsible for the validity of any Contract issued
hereunder or for the failure on the part of the insurer to make payments
provided by any such Contract, or for the action of any person which may delay
payment or render a Contract null and void or unenforceable in whole or in part.
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9.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not have
any responsibility for the validity of this Plan or for the tax or legal aspects
of this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the insurer.
9.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative, Beneficiary,
or to any guardian or committee appointed for such Participant or Beneficiary
in accordance with the provisions of the Plan, shall, to the extent thereof,
be in full satisfaction of all claims hereunder against the Trustee and
the Employer, either of whom may require such Participant, legal representative,
Beneficiary, guardian or committee, as a condition precedent to such payment, to
execute a receipt and release thereof in such form as shall be determined by the
Trustee or Employer.
9.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator and (3) the Trustee. The named Fiduciaries shall have only
those specific powers, duties, responsibilities, and obligations as are
specifically given them under the Plan or as accepted by or assigned to them
pursuant to any procedure provided under the Plan, including but not limited to
any agreement allocating or delegating their responsibilities, the terms of
which are incorporated herein by reference. In general, unless otherwise
indicated herein or pursuant to such agreements, the Employer shall have the
duties specified in Article II hereof, as the same may be allocated or delegated
thereunder, including but not limited to the responsibility for making the
contributions provided for under Section 4.1; and shall have the authority to
appoint and remove the Trustee and the Administrator; to formulate the Plan's
"funding policy and method"; and to amend or terminate, in whole or in part, the
Plan. The Administrator shall have the responsibility for the administration of
the Plan, including but not limited to the items specified in Article II of the
Plan, as the same may be allocated or delegated thereunder. The Administrator
shall act as the named Fiduciary responsible for communicating with the
Participant according to the Participant Direction Procedures. The Trustee shall
have the responsibility of management and control of the assets held under the
Trust, except to the extent directed pursuant to Article II or with respect to
those assets, the management of which has been assigned to an Investment
Manager, who shall be solely responsible for the management of the assets
assigned to it, all as specifically provided in the Plan and any agreement with
the Trustee. Each named Fiduciary warrants that any directions given,
information furnished, or action taken by it shall be in accordance with the
provisions of the Plan, authorizing or providing for such direction, information
or action. Furthermore, each named Fiduciary may rely upon any such direction,
information or action of another named Fiduciary as being proper under the Plan,
and is not required under the Plan to inquire into the propriety of any such
direction, information or action. It is intended under the Plan that each named
Fiduciary shall be responsible for the proper exercise of its own powers,
duties, responsibilities and obligations under the Plan as specified or
allocated herein. No named Fiduciary shall guarantee the Trust Fund in any
manner against investment loss or depreciation in asset value. Any person or
group may serve in more than one Fiduciary capacity. In the furtherance of their
responsibilities hereunder, the "named Fiduciaries" shall be empowered to
interpret the Plan and Trust and to resolve ambiguities, inconsistencies and
omissions, which findings shall be binding, final and conclusive.
68
<PAGE>
9.13 HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
9.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary,
contributions to this Plan are conditioned upon the initial
qualification of the Plan under Code Section 401. If the Plan receives
an adverse determination with respect to its initial qualification,
then the Plan may return such contributions to the Employer within one
year after such determination, provided the application for the
determination is made by the time prescribed by law for filing the
Employer's return for the taxable year in which the Plan was adopted,
or such later date as the Secretary of the Treasury may prescribe.
(b) Notwithstanding any provisions to the contrary, except
Sections 3.5, 3.6, and 4.1(d), any contribution by the Employer to the
Trust Fund is conditioned upon the deductibility of the contribution
by the Employer under the Code and, to the extent any such deduction
is disallowed, the Employer may, within one (1) year following the
disallowance of the deduction, demand repayment of such disallowed
contribution and the Trustee shall return such contribution within one
(1) year following the disallowance. Earnings of the Plan attributable
to the excess contribution may not be returned to the Employer, but
any losses attributable thereto must reduce the amount so returned.
9.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
IN WITNESS WHEREOF, this Plan has been executed the day and year first
above written.
FORD MICROELECTRONICS, INC.
By/s/John A. Sullivan
--------------------------
John A. Sullivan
Employer
Exhibit 15
Coopers & Lybrand L.L.P.
Ford Motor Company
The American Road
Dearborn, Michigan
Re: Ford Motor Company Registration Statement on Form S-8
We are aware that our report dated April 15, 1998 accompanying the unaudited
interim financial information of Ford Motor Company and Subsidiaries for the
periods ended March 31, 1998 and 1997 and included in the Ford Motor
Company Quarterly Reports on Form 10-Q for the quarter ended March 31, 1998
is incorporated by reference in this Registration Statement. Pursuant to Rule
436(c) under the Securities Act of 1933, these reports should not be considered
a part of the Registration Statement prepared or certified by us within the
meaning of Sections 7 and 11 of the Act.
/s/Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
400 Renaissance Center
Detroit, Michigan 48243
May 12, 1998
Exhibit 23
Coopers & Lybrand L.L.P.
Ford Motor Company
The American Road
Dearborn, Michigan
CONSENT OF COOPERS & LYBRAND L.L.P.
Re: Ford Motor Company Registration Statement on Form S-8
We consent to the incorporation by reference in this Registration Statement of
our report dated January 26, 1998 on our audits of the consolidated financial
statements of Ford Motor Company at December 31, 1997 and 1996 and for the
years ended December 31, 1997, 1996 and 1995, which report is included in the
Company's 1997 Annual Report on Form 10-K.
/s/Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
400 Renaissance Center
Detroit, Michigan 48243
May 12, 1998
