<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 23, 1997
REGISTRATION NO. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
GATX CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<C> <C>
NEW YORK 36-1124040
(State of incorporation) (IRS Employer Identification No.)
500 W. MONROE STREET, CHICAGO, ILLINOIS 60661
(Address of principal executive offices) (Zip Code)
</TABLE>
CENTRON DPL COMPANY, INC.
PROFIT SHARING PLAN
(Full Title of the Plan)
DAVID B. ANDERSON, ESQ.
GATX CORPORATION
500 W. MONROE STREET, CHICAGO, ILLINOIS 60661
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (312) 621-8472
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED* REGISTERED* PER SHARE** OFFERING PRICE** FEE
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Common Stock, $.625 Par Value... 25,000 shs. $69.00 $1,725,000 $508.88
==================================================================================================================
</TABLE>
* Pursuant to Rule 416(c) under the Securities Act of 1933, this registration
statement also covers an indeterminate amount of interests to be offered and
sold pursuant to the Plan.
** Estimated solely for purpose of computing the registration fee pursuant to
Rule 457 based on the average of the high and low prices reported on the New
York Stock Exchange composite tape on December 19, 1997.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
This Registration Statement covers 25,000 shares of common stock of GATX
Corporation (the "Company") to be purchased from time to time under the Centron
DPL Company Inc., Profit Sharing Plan (the "Plan") with salary deferrals,
matching employer contributions and profit sharing contributions by participants
who may elect to invest in the GATX Common Stock fund.
ITEM 3--INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission (the "Commission") are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997, June 30, 1997 and September 30, 1997.
(c) The Company's Current Reports on Form 8-K, filed January 24, 1997,
June 10, 1997, August 28, 1997, September 8, 1997, and December 8, 1997.
(c) The description of the common stock, par value $.625 per share, of
the Company (the "Common Stock") contained in the first paragraph of
"Description of Capital Stock -- Common Stock" from the Company's
Prospectus dated August 3, 1989, included as part of the Company's
Registration Statement on Form S-3 filed with the Commission on August 3,
1989 (No. 33-30165).
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") prior to the filing of a post-effective amendment which
indicates all securities then remaining unsold, shall be deemed to be
incorporated herein by reference and shall be deemed a part hereof from the date
of the filing of such documents.
ITEM 4--DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5--INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6--INDEMNIFICATION OF DIRECTORS AND OFFICERS
Certain provisions of the New York Business Corporation Law and Article II,
Section 11 of the Company's by-laws provide for indemnification of directors and
officers under certain conditions, including the possibility of indemnification
against liabilities under the Securities Act. In addition, the Company has a
directors and officers liability insurance policy.
ITEM 7--EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8--EXHIBITS
See Exhibit Index included herewith.
The Company has submitted or will submit the Plan and any amendment thereto
to the Internal Revenue Service ("IRS") in a timely manner, and has made or will
make all changes required by the IRS in order to qualify the Plan under Section
401 of the Internal Revenue Code.
II-1
<PAGE> 3
ITEM 9--UNDERTAKINGS
The Company hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in the volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the Company pursuant to Section
13 or Section 15 of the Exchange act that are incorporated by reference to
the registration statement.
2. That, for purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The Company hereby further undertakes that, for purpose of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where
applicable, each filing of any employee benefit plan's annual report pursuant to
section 15(d) of the Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions referred to in Item 6 or otherwise, the
Company has been advised that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act, and
is therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
II-2
<PAGE> 4
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe 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 Chicago, and the State of Illinois, on this 23rd day
of December, 1997.
GATX Corporation
By /s/ DAVID B. ANDERSON
-----------------------------------
David B. Anderson
Vice President General Counsel and
Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
* Chairman of the Board and Chief Executive
- ----------------------------------------------------- Officer (Principal Executive Officer)
Ronald H. Zech
/s/ DAVID M. EDWARDS Vice President and Chief Financial Officer
- ----------------------------------------------------- (Principal Financial Officer)
David M. Edwards
/s/ RALPH L. O'HARA Controller (Principal Accounting Officer)
- -----------------------------------------------------
Ralph L. O'Hara
* Director
- -----------------------------------------------------
James M. Denny
* Director
- -----------------------------------------------------
Richard Fairbanks
* Director
- -----------------------------------------------------
William C. Foote
* Director
- -----------------------------------------------------
Deborah M. Fretz
* Director
- -----------------------------------------------------
Richard A. Giesen
* Director
- -----------------------------------------------------
Miles L. Marsh
* Director
- -----------------------------------------------------
Charles Marshall
* Director
- -----------------------------------------------------
Michael E. Murphy
*By: /s/ RONALD J. CIANCIO
------------------------------------------------
Ronald J. Ciancio
Attorney in Fact
Dated: December 23, 1997
</TABLE>
II-3
<PAGE> 5
THE PLAN. Pursuant to the requirements of the Securities Act of 1933, the
plan has caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Chicago and the State of
Illinois on this 23rd day of December, 1997.
Centron DPL Company, Inc.,
Profit Sharing Plan
by Centron DPL Company, Inc.
(Plan Administrator)
By /s/ FREDERICK E. JOHNSON
------------------------------------
Frederick E. Johnson
II-4
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION OF EXHIBIT PAGE NUMBER
- ------- ---------------------- -----------
<C> <S> <C>
4.1 Restated Certificate of Incorporation of GATX Corporation,
as amended, filed as Exhibit 3(a) to the Company's Annual
Report on Form 10-K for the year ended December 31, 1991,
and incorporated herein by reference
4.2 By-Laws of GATX Corporation, as amended and restated as of
July 29, 1994, filed as Exhibit 3(b) to the Company's Annual
Report on Form 10-K for the year ended December 31, 1994,
and incorporated herein by reference
4.3 Centron DPL Company, Inc. Profit Sharing Plan
23 Consent of Ernst & Young LLP................................
24 Powers of Attorney..........................................
</TABLE>
II-5
<PAGE> 1
===============================================================================
DEFINED CONTRIBUTION
PLAN AND TRUST
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE I, DEFINITIONS
<S> <C>
1.01 Employer .......................................................... 1
1.02 Trustee ........................................................... 1
1.03 Plan .............................................................. 1
1.04 Adoption Agreement ................................................ 1
1.05 Plan Administrator ................................................ 1
1.06 Advisory Committee ................................................ 1
1.07 Employee .......................................................... 2
1.08 Self-Employed Individual/Owner-Employee ........................... 2
1.09 Highly Compensated Employee ....................................... 2
1.10 Participant ....................................................... 3
1.11 Beneficiary ....................................................... 3
1.12 Compensation ...................................................... 3
1.13 Earned Income ..................................................... 4
1.14 Account ........................................................... 4
1.15 Accrued Benefit ................................................... 5
1.16 Nonforfeitable .................................................... 5
1.17 Plan Year/Limitation Year ......................................... 5
1.18 Effective Date .................................................... 5
1.19 Plan Entry Date ................................................... 5
1.20 Accounting Date ................................................... 5
1.21 Trust ............................................................. 5
1.22 Trust Fund ........................................................ 5
1.23 Nontransferable Annuity ........................................... 5
1.24 ERISA ............................................................. 5
1.25 Code .............................................................. 5
1.26 Service............................................................ 5
1.27 Hour of Service ................................................... 5
1.28 Disability ........................................................ 6
1.29 Service for Predecessor Employer .................................. 6
1.30 Related Employers ................................................. 6
1.31 Leased Employees .................................................. 7
1.32 Special Rules for Owner-Employees ................................. 7
1.33 Determination of Top Heavy Status ................................. 8
1.34 Paired Plans ...................................................... 9
ARTICLE II, EMPLOYEE PARTICIPANTS
2.01 Eligibility ....................................................... 1
2.02 Year of Service - Participation ................................... 1
2.03 Break in Service - Participation .................................. 1
2.04 Participation upon Re-employment .................................. 2
2.05 Change in Employee Status ......................................... 2
2.06 Election Not to Participate ....................................... 2
ARTICLE III, EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 Amount ............................................................ 1
3.02 Determination of Contribution ..................................... 1
3.03 Time of Payment of Contribution ................................... 1
3.04 Contribution Allocation ........................................... 1
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
3.05 Forfeiture Allocation .............................................. 3
3.06 Accrual of Benefit ................................................. 3
3.07 3.16 Limitations on Allocations .................................... 5
3.08 3.16 Limitations on Allocations..................................... 5
3.09 3.16 Limitations on Allocations..................................... 5
3.10 3.16 Limitations on Allocations..................................... 5
3.11 3.16 Limitations on Allocations..................................... 6
3.12 3.16 Limitations on Allocations..................................... 6
3.13 3.16 Limitations on Allocations..................................... 6
3.14 3.16 Limitations on Allocations..................................... 6
3.15 3.16 Limitations on Allocations..................................... 6
3.16 3.16 Limitations on Allocations..................................... 6
3.17 Special Allocation Limitation ...................................... 7
3.18 Defined Benefit Plan Limitation .................................... 7
3.19 Definitions - Article III .......................................... 7
ARTICLE IV, PARTICIPANT CONTRIBUTIONS
4.01 Participant Nondeductible Contributions ............................ 1
4.02 Participant Deductible Contributions ............................... 1
4.03 Participant Rollover Contributions ................................. 1
4.04 Participant Contribution - Forfeitability .......................... 2
4.05 Participant Contribution - Withdrawal/Distribution ................. 2
4.06 Participant Contribution- Accrued Benefit .......................... 2
ARTICLE V, TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 Normal Retirement Age .............................................. 1
5.02 Participant Disability or Death .................................... 1
5.03 Vesting Schedule ................................................... 1
5.04 Cash-out Distributions to Partially-Vested
Participants/Restoration of Forfeited Accrued Benefit .............. 1
5.05 Segregated Account for Repaid Amount ............................... 2
5.06 Year of Service - Vesting .......................................... 3
5.07 Break in Service - Vesting ......................................... 3
5.08 Included Years of Service - Vesting ................................ 3
5.09 Forfeiture Occurs .................................................. 3
ARTICLE VI, TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 Time of Payment of Accrued Benefit ................................. 1
6.02 Method of Payment of Accrued Benefit ............................... 2
6.03 Benefit Payment Elections .......................................... 4
6.04 Annuity Distributions to Participants and Surviving Spouses ........ 5
6.05 Waiver Election - Qualified Joint and Survivor Annuity ............. 7
6.06 Waiver Election - Preretirement Survivor Annuity ................... 7
6.07 Distributions Under Domestic Relations Orders ...................... 8
ARTICLE VII, EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 Information to Committee ........................................... 1
7.02 No Liability ....................................................... 1
7.03 Indemnity of Certain Fiduciaries ................................... 1
7.04 Employer Direction of Investment ................................... 1
7.05 Amendment to Vesting Schedule ...................................... 1
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE VIII, PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 Beneficiary Designation ........................................... 1
8.02 No Beneficiary Designation/Death of Beneficiary ................... l
8.03 Personal Data to Committee ........................................ 1
8.04 Address for Notification .......................................... 2
8.05 Assignment or Alienation .......................................... 2
8.06 Notice of Change in Terms ......................................... 2
8.07 Litigation Against the Trust ...................................... 2
8.08 Information Available ............................................. 2
8.09 Appeal Procedure for Denial of Benefits ........................... 2
8.10 Participant Direction of Investment ............................... 3
ARTICLE IX, ADVISORY COMMITTEE - DUTIES WITH RESPECT TO
PARTICIPANTS' ACCOUNTS
9.01 Members' Compensation, Expenses ................................... 1
9.02 Term .............................................................. 1
9.03 Powers ............................................................ 1
9.04 General ........................................................... 1
9.05 Funding Policy..................................................... 2
9.06 Manner of Action................................................... 2
9.07 Authorized Representative ......................................... 2
9.08 Interested Member ................................................. 2
9.09 Individual Accounts ............................................... 2
9.10 Value of Participant's Accrued Benefit ............................ 2
9.11 Allocation and Distribution of Net Income Gain or Loss ............ 3
9.12 Individual Statement .............................................. 3
9.13 Account Charged ................................................... 3
9.14 Unclaimed Account Procedure ....................................... 3
ARTICLE X, TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
10.01 Acceptance ........................................................ 1
10.02 Receipt of Contributions .......................................... 1
10.03 Investment Powers ................................................. 1
10.04 Records and Statements ............................................ 5
10.05 Fees and Expenses from Fund ....................................... 5
10.06 Parties to Litigation ............................................. 5
10.07 Professional Agents ............................................... 5
10.08 Distribution of Cash or Property .................................. 5
10.09 Distribution Directions ........................................... 6
10.10 Third Party/Multiple Trustees ..................................... 6
10.11 Resignation ....................................................... 6
10.12 Removal ........................................................... 6
10.13 Interim Duties and Successor Trustee .............................. 6
10.14 Valuation of Trust ................................................ 6
10.15 Limitation on Liability - If Investment Manager, Ancillary
Trustee or Independent Fiduciary Appointed ........................ 6
10.16 Investment in Group Trust Fund .................................... 7
10.17 Appointment of Ancillary Trustee or Independent Fiduciary ......... 7
ARTICLE XI, PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
11.01 Insurance Benefit ................................................. 1
11.02 Limitation on Life Insurance Protection ........................... 1
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
11.03 Definitions ....................................................... 2
11.04 Dividend Plan ..................................................... 2
11.05 Insurance Company Not a Party to Agreement ........................ 2
11.06 Insurance Company Not Responsible for Trustee's Actions............ 2
11.07 Insurance Company Reliance on Trustee's Signature ................. 3
11.08 Acquittance ....................................................... 3
11.09 Duties of Insurance Company ....................................... 3
ARTICLE XII, MISCELLANEOUS
12.01 Evidence .......................................................... 1
12.02 No Responsibility for Employer Action.............................. 1
12.03 Fiduciaries Not Insurers........................................... 1
12.04 Waiver of Notice................................................... 1
12.05 Successors......................................................... 1
12.06 Word Usage......................................................... 1
12.07 State Law.......................................................... 1
12.08 Employer's Right to Participate.................................... 1
12.09 Employment Not Guaranteed ......................................... 2
ARTICLE XIII, EXCLUSIVE BENEFIT, AMENDMENT,TERMINATION
13.01 Exclusive Benefit ................................................. 1
13.02 Amendment by Employer ............................................. 1
13.03 Amendment by Regional Prototype Plan Sponsor ...................... 1
13.04 Discontinuance .................................................... 2
13.05 Full Vesting on Termination ....................................... 2
13.06 Merger/Direct Transfer ............................................ 2
13.07 Termination ....................................................... 3
ARTICLE XIV, CODE SECTION 401(k) AND CODE SECTION 401(m) ARRANGEMENTS
14.01 Application ....................................................... 1
14.02 Code Section 401 (k) Arrangement .................................. 1
14.03 Definitions ....................................................... 1
14.04 Matching Contributions/Employee Contributions ..................... 3
14.05 Time of Payment of Contributions .................................. 3
14.06 Special Allocation Provisions - Deferral Contributions,
Matching Contributions and Qualified Nonelective Contributions .... 3
14.07 Annual Elective Deferral Limitation ............................... 5
14.08 Actual Deferral Percentage ("ADP") Test ........................... 5
14.09 Nondiscrimination Rules for Employer Matching
Contributions/Participant Nondeductible Contributions ............. 7
14.10 Multiple Use Limitation ........................................... 9
14.11 Distribution Restrictions ......................................... 10
14.12 Special Allocation Rules .......................................... 10
</TABLE>
<PAGE> 6
\
ALPHABETICAL LISTING OF DEFINITIONS
<TABLE>
<CAPTION>
SECTION REFERENCE
PLAN DEFINITION (PAGE NUMBER)
<S> <C>
100% Limitation .................................................. 3.19(1) (10)
Account .............................................................. 1.14 (5)
Accounting Date ...................................................... 1.20 (5)
Accrued Benefit ...................................................... 1.15 (5)
Actual Deferral Percentage ("ADP") Test ............................. 14.08 (6)
Adoption Agreement ................................................... 1.04 (1)
Advisory Committee ................................................... 1.06 (2)
Annual Addition ................................................... 3.19(a) (7)
Average Contribution Percentage Test ................................ 14.09 (8)
Beneficiary .......................................................... 1.11 (3)
Break in Service for Eligibility Purposes ............................ 2.03 (1)
Break in Service for Vesting Purposes ................................ 5.07 (3)
Cash-out Distribution ................................................ 5.04 (1)
Code ................................................................. 1.25 (6)
Code Section 411(d)(6) Protected Benefits ........................... 13.02 (1)
Compensation ......................................................... 1.12 (3)
Compensation for Code Section 401 (k) Purpose .................... 14.03(f) (2)
Compensation for Code Section 415 Purposes ........................ 3.19(b) (8)
Compensation for Top Heavy Purposes ............................ 1.33(B)(3) (9)
Contract(s) ...................................................... 11.03(c) (2)
Custodian Designation ............................................ 10.03[B] (3)
Deemed Cash-out Rule .............................................. 5.04(C) (2)
Deferral Contributions ........................................... 14.03(g) (2)
Deferral Contributions Account ................................... 14.06(A) (4)
Defined Benefit Plan .............................................. 3.19(i) (9)
Defined Benefit Plan Fraction ..................................... 3.19(j) (9)
Defined Contribution Plan ......................................... 3.19(h) (8)
Defined Contribution Plan Fraction ................................ 3.19(k) (9)
Determination Date ............................................ 1.33(B)(7) (10)
Disability ........................................................... 1.28 (7)
Distribution Date ................................................... 6.01 (1)
Distribution Restrictions ........................................ 14.03(m) (3)
Earned Income ........................................................ 1.13 (5)
Effective Date ........................................................ 1.18(5)
Elective Deferrals ............................................... 14.03(h) (2)
Elective Transfer ................................................ 13.06(A) (3)
Eligible Employee ................................................ 14.03(c) (2)
Employee ............................................................. 1.07 (2)
Employee Contributions ........................................... 14.03(n) (3)
Employer .............................................................. 1.01(1)
Employer Contribution Account ....................................... 14.06 (4)
Employer for Code Section 415 Purposes ............................ 3.19(c) (8)
Employer for Top Heavy Purposes ............................... 1.33(B)(6) (10)
Employment Commencement Date ......................................... 2.02 (1)
ERISA ................................................................ 1.24 (6)
Excess Aggregate Contributions ................................... 14.09(D) (9)
Excess Amount ..................................................... 3.19(d) (8)
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
SECTION REFERENCE
PLAN DEFINITION (PAGE NUMBER)
<S> <C>
Excess Contributions ................................................ 14.08 (7)
Exempt Participant ................................................... 8.01 (1)
Forfeiture Break in Service .......................................... 5.08 (3)
Group Trust Fund .................................................... 10.16 (7)
Hardship ....................................................... 6.01(A)(4) (1)
Hardship for Code Section 401 (k) Purposes ..................... 14.11 (A) (11)
Highly Compensated Employee .......................................... 1.09 (2)
Highly Compensated Group ......................................... 14.03(d) (2)
Hour of Service ...................................................... 1.27 (6)
Incidental Insurance Benefits .................................... 11.01(A) (1)
Insurable Participant ............................................ 11.03(d) (2)
Investment Manager ................................................ 9.04(i) (1)
Issuing Insurance Company ........................................ 11.03(b) (2)
Joint and Survivor Annuity ........................................ 6.04(A) (6)
Key Employee ................................................... 1.33(B)(1) (9)
Leased Employees ..................................................... 1.31 (8)
Limitation Year .................................... 1.17 and 3.19(e) (5 and 8)
Loan Policy ....................................................... 9.04(A) (2)
Mandatory Contributions .......................................... 14.04(A) (3)
Mandatory Contributions Account .................................. 14.04(A) (3)
Master or Prototype Plan .......................................... 3.19(f) (8)
Matching Contributions ........................................... 14.03(i) (2)
Maximum Permissible Amount ........................................ 3.19(g) (8)
Minimum Distribution Incidental Benefit ........................... 6.02(A) (3)
Multiple Use Limitation ............................................ 14.10 (10)
Named Fiduciary .................................................. 10.03[D] (5)
Nonelective Contributions ........................................ 14.03(j) (2)
Nonforfeitable ........................................................ 1.16(5)
Nonhighly Compensated Employee ................................... 14.03(b) (2)
Nonhighly Compensated Group ...................................... 14.03(e) (2)
Non-Key Employee ............................................... 1.33(B)(2) (9)
Nontransferable Annuity .............................................. 1.23 (5)
Normal Retirement Age ................................................. 5.01(1)
Owner-Employee ....................................................... 1.08 (2)
Paired Plans ........................................................ 1.34 (10)
Participant .......................................................... 1.10 (3)
Participant Deductible Contributions ................................. 4.02 (1)
Participant Forfeiture ............................................... 3.05 (3)
Participant Loans ................................................ 10.03[E] (4)
Participant Nondeductible Contributions .............................. 4.01 (1)
Permissive Aggregation Group .................................. 1.33(B)(5) (10)
Plan ................................................................. 1.03 (1)
Plan Administrator ................................................... 1.05 (1)
Plan Entry Date ...................................................... 1.19 (5)
Plan Year ............................................................ 1.17 (5)
Policy ........................................................... 11.03(a) (2)
Predecessor Employer ................................................. 1.29 (7)
Preretirement Survivor Annuity .................................... 6.04(B) (6)
Qualified Domestic Relations Order ................................... 6.07 (8)
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
SECTION REFERENCE
PLAN DEFINITION (PAGE NUMBER)
<S> <C>
Qualified Matching Contributions ................................. 14.03(k) (2)
Qualified Nonelective Contributions .............................. 14.03(1) (3)
Qualifying Employer Real Property ................................ 10.03[F] (5)
Qualifying Employer Securities ................................... 10.03[F] (5)
Related Employers .................................................... 1.30 (7)
Required Aggregation Group ..................................... 1.33(B)(4) (9)
Required Beginning Date ........................................... 6.01(B) (2)
Rollover Contributions ............................................... 4.03 (1)
Self-Employed Individual ............................................. 1.08 (2)
Service .............................................................. 1.26 (6)
Term Life Insurance Contract ........................................ 11.03 (2)
Top Heavy Minimum Allocation ...................................... 3.04(B) (1)
Top Heavy Ratio ...................................................... 1.33 (9)
Trust ................................................................ 1.21 (5)
Trustee .............................................................. 1.02 (1)
Trustee Designation .............................................. 10.03[A] (1)
Trust Fund ........................................................... 1.22 (5)
Weighted Average Allocation Method ................................. 14.12 (11)
Year of Service for Eligibility Purposes ............................. 2.02 (1)
Year of Service for Vesting Purposes ................................. 5.06 (3)
</TABLE>
<PAGE> 9
DEFINED CONTRIBUTION PROTOTYPE PLAN AND TRUST AGREEMENT
BASIC PLAN DOCUMENT # 005
Milliman & Robertson, Inc., in its capacity as Prototype Plan Sponsor,
establishes this Prototype Plan intended to conform to and qualify under
Section 401 and Section 501 of the Internal Revenue Code of 1986, as amended.
An Employer establishes a Plan and Trust under this Prototype Plan by executing
an Adoption Agreement. If the Employer adopts this Plan as a restated Plan in
substitution for, and in amendment of, an existing plan, the provisions of this
Plan, as a restated Plan, apply solely to an Employee whose employment with the
Employer terminates on or after the restated Effective Date of the Employer's
Plan. If an Employee's employment with the Employer terminates prior to the
restated Effective Date, that Employee is entitled to benefits under the Plan
as the Plan existed on the date of the Employee's termination of employment.
ARTICLE I
DEFINITIONS
1.01 "Employer" means each Employer who adopts this Plan by executing an
Adoption Agreement.
1.02 "Trustee" means the person or persons who as Trustee execute the
Employer's Adoption Agreement, or any successor in office who in writing
accepts the position of Trustee. The Employer must designate in its Adoption
Agreement whether the Trustee will administer the Trust as a discretionary
Trustee or as a nondiscretionary Trustee. If a person acts as a discretionary
Trustee, the Employer also may appoint a Custodian. See Article X.
1.03 "Plan" means the retirement plan established or continued by the
Employer in the form of this Agreement, including the Adoption Agreement under
which the Employer has elected to participate in this Prototype Plan. The
Employer must designate the name of the Plan in its Adoption Agreement. An
Employer may execute more than one Adoption Agreement offered under this
Prototype Plan, each of which will constitute a separate Plan and Trust
established or continued by that Employer. The Plan and the Trust created by
each adopting Employer is a separate Plan and a separate Trust, independent from
the plan and the trust of any other employer adopting this Prototype Plan. All
section references within the Plan are Plan section references unless the
context clearly indicates otherwise.
1.04 "Adoption Agreement" means the document executed by each Employer
adopting this Prototype Plan. The terms of this Prototype Plan as modified by
the terms of an adopting Employer's Adoption Agreement constitute a separate
Plan and Trust to be construed as a single Agreement. Each elective provision of
the Adoption Agreement corresponds by section reference to the section of the
Plan which grants the election. Each Adoption Agreement offered under this
Prototype Plan is either a Nonstandardized Plan or a Standardized Plan, as
identified in the preamble to that Adoption Agreement. The provisions of this
Prototype Plan apply equally to Nonstandardized Plans and to Standardized Plans
unless otherwise specified.
1.05 "Plan Administrator" is the Employer unless the Employer designates
another person to hold the position of Plan Administrator. In addition to
his other duties, the Plan Administrator has full responsibility for compliance
with the reporting and disclosure rules under ERISA as respects this Agreement.
1.06 "Advisory Committee" means the Employer's Advisory Committee as from
time to time constituted.
1.07 "Employee" means any employee (including a Self-Employed Individual)
of the Employer. The Employer must specify in its Adoption Agreement any
Employee, or class of Employees, not eligible to participate in the Plan. If the
Employer elects to exclude collective bargaining employees, the exclusion
applies to any employee of the Employer included in a unit of employees covered
by an agreement which the Secretary of Labor finds to be a collective bargaining
agreement between employee representatives and one or more
1
<PAGE> 10
employers unless the collective bargaining agreement requires the employee
to be included within the Plan. The term "employee representatives" does not
include any organization more than half the members of which are owners,
officers, or executives of the Employer.
1.08 "Self-Employed Individual/Owner-Employee." "Self-Employed Individual"
means an individual who has Earned Income (or who would have had Earned
Income but for the fact that the trade or business did not have net earnings)
for the taxable year from the trade or business for which the Plan is
established. "Owner-Employee" means a Self-Employed Individual who is the sole
proprietor in the case of a sole proprietorship. If the Employer is a
partnership, "Owner-Employee" means a Self-Employed Individual who is a partner
and owns more than 10% of either the capital or profits interest of the
partnership.
1.09 "Highly Compensated Employee" means an Employee who, during the Plan
Year or during the preceding 12-month period:
(a) is a more than 5% owner of the Employer (applying the constructive
ownership rules of Code Section 318, and applying the principles of Code
Section 318, for an unincorporated entity);
(b) has Compensation in excess of $75,000 (as adjusted by the Commissioner
of Internal Revenue for the relevant year);
(c) has Compensation in excess of $50,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year) and is part of
the top-paid 20% group of employees (based on Compensation for the
relevant year); or
(d) has Compensation in excess of 50% of the dollar amount prescribed in
Code Section 415(b)(1)(A) (relating to defined benefit plans) and is an
officer of the Employer.
If the Employee satisfies the definition in clause (b), (c) or (d) in the
Plan Year but does not satisfy clause (b), (c) or (d) during the preceding
12-month period and does not satisfy clause (a) in either period, the Employee
is a Highly Compensated Employee only if he is one of the 100 most highly
compensated Employees for the Plan Year. The number of officers taken into
account under clause (d) will not exceed the greater of 3 or 10% of the total
number (after application of the Code Section 414(q) exclusions) of Employees,
but no more than 50 officers. If no Employee satisfies the Compensation
requirement in clause (d) for the relevant year, the Advisory Committee will
treat the highest paid officer as satisfying clause (d) for that year.
For purposes of this Section 1.09, "Compensation" means Compensation as
defined in Section 1.12, except any exclusions from Compensation elected in
the Employer's Adoption Agreement Section 1.12 do not apply, and Compensation
must include "elective contributions" (as defined in Section 1.12). The Advisory
Committee must make the determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of the top paid 20%
group, the top 100 paid Employees, the number of officers includible in clause
(d) and the relevant Compensation, consistent with Code Section 414(q) and
regulations issued under that Code section. The Employer may make a calendar
year election to determine the Highly Compensated Employees for the Plan Year,
as prescribed by Treasury regulations. A calendar year election must apply to
all plans and arrangements of the Employer. For purposes of applying any
nondiscrimination test required under the Plan or under the Code, in a manner
consistent with applicable Treasury regulations, the Advisory Committee will
treat a Highly Compensated Employee and all family members (a spouse, a lineal
ascendant or descendant, or a spouse of a lineal ascendant or descendant) as a
single Highly Compensated Employee, but only if the Highly Compensated Employee
is a more than 5% owner or is one of the 10 Highly Compensated Employees with
the greatest Compensation for the Plan Year. This aggregation rule applies to a
family member even if that family member is a Highly Compensated Employee
without family aggregation.
The term "Highly Compensated Employee" also includes any former Employee
who separated from Service (or has a deemed Separation from Service, as
determined under Treasury regulations) prior to the Plan Year, performs no
Service for the Employer during the Plan Year, and was a Highly Compensated
Employee
2
<PAGE> 11
either for the separation year or any Plan Year ending on or after his 55th
birthday. If the former Employee's Separation from Service occurred prior to
January 1, 1987, he is a Highly Compensated Employee only if he satisfied clause
(a) of this Section 1.09 or received Compensation in excess of $50,000 during:
(1) the year of his Separation from Service (or the prior year); or (2) any year
ending after his 54th birthday.
1.10 "Participant" is an Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01.
1.11 "Beneficiary" is a person designated by a Participant who is or may
become entitled to a benefit under the Plan. A Beneficiary who becomes entitled
to a benefit under the Plan remains a Beneficiary under the Plan until the
Trustee has fully distributed his benefit to him. A Beneficiary's right to (and
the Plan Administrator's, the Advisory Committee's or a Trustee's duty to
provide to the Beneficiary) information or data concerning the Plan does not
arise until he first becomes entitled to receive a benefit under the Plan.
1.12 "Compensation" means, except as provided in the Employer's Adoption
Agreement, the Participant's Earned Income, wages, salaries, fees for
professional service and other amounts received for personal services actually
rendered in the course of employment with the Employer maintaining the plan
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses). The Employer must elect in its Adoption
Agreement whether to include elective contributions in the definition of
Compensation. "Elective contributions" are amounts excludible from the
Employee's gross income under Code Sections 25, 402(a)(8), 402(h) or
403(b), and contributed by the Employer, at the Employee's election, to a Code
Section 401(k) arrangement, a Simplified Employee Pension, cafeteria plan or
tax-sheltered annuity. The term "Compensation" does not include:
(a) Employer contributions (other than "elective contributions," if
includible in the definition of Compensation under Section 1.12 of the
Employer's Adoption Agreement) to a plan of deferred compensation to the
extent the contributions are not included in the gross income of the
Employee for the taxable year in which contributed, on behalf of an
Employee to a Simplified Employee Pension Plan to the extent such
contributions are excludible from the Employee's gross income, and any
distributions from a plan of deferred compensation, regardless of whether
such amounts are includible in the gross income of the Employee when
distributed.
(b) Amounts realized from the exercise of a non-qualified stock option,
or when restricted stock (or property) held by an Employee either
becomes freely transferable or is no longer subject to a substantial risk
of forfeiture.
(c) Amounts realized from the sale, exchange or other disposition of
stock acquired under a stock option described in Part II, Subchapter
D, Chapter 1 of the Code.
(d) Other amounts which receive special tax benefits, such as premiums
for group term life insurance (but only to the extent that the premiums
are not includible in the gross income of the Employee), or contributions
made by an Employer (whether or not under a salary reduction
agreement) towards the purchase of an annuity contract described in Code
Section 403(b) (whether or not the contributions are excludible from the
gross income of the Employee), other than "elective contributions," if
elected in the Employer's Adoption Agreement.
Any reference in this Plan to Compensation is a reference to the
definition in this Section 1.12, unless the Plan reference specifies a
modification to this definition. The Advisory Committee will take into account
only Compensation actually paid for the relevant period. A Compensation payment
includes Compensation by the Employer through another person under the common
paymaster provisions in Code Section 3121 and 3306.
3
<PAGE> 12
(A) LIMITATIONS ON COMPENSATION.
(1) Compensation dollar limitation. For any Plan Year beginning after
December 31, 1988, the Advisory Committee must take into account only the
first S200,000 (or beginning January 1, 1990, such larger amount as the
Commissioner of Internal Revenue may prescribe) of any Participant's
Compensation. For any Plan Year beginning prior to January 1, 1989, this
$200,000 limitation (but not the family aggregation requirement described in the
next paragraph) applies only if the Plan is top heavy for such Plan Year or
operates as a deemed top heavy plan for such Plan Year.
(2) Application of compensation limitation to certain family members. The
$200,000 Compensation limitation applies to the combined Compensation of the
Employee and of any family member aggregated with the Employee under Section
1.09 who is either (i) the Employee's spouse; or (ii) the Employee's lineal
descendant under the age of 19. If, for a Plan Year, the combined Compensation
of the Employee and such family members who are Participants entitled to an
allocation for that Plan Year exceeds the $200,000 (or adjusted) limitation,
"Compensation" for each such Participant, for purposes of the contribution and
allocation provisions of Article III, means his Adjusted Compensation. Adjusted
Compensation is the amount which bears the same ratio to the $200,000 (or
adjusted) limitation as the affected Participant's Compensation (without regard
to the $200,000 Compensation limitation) bears to the combined Compensation of
all the affected Participants in the family unit. If the Plan uses permitted
disparity, the Advisory Committee must determine the integration level of each
affected family member Participant prior to the proration of the $200,000
Compensation limitation, but the combined integration level of the affected
Participants may not exceed $200,000 (or the adjusted limitation). The combined
Excess Compensation of the affected Participants in the family unit may not
exceed $200,000 (or the adjusted limitation) minus the affected Participants'
combined integration level (as determined under the preceding sentence). If the
combined Excess Compensation exceeds this limitation, the Advisory Committee
will prorate the Excess Compensation limitation among the affected Participants
in the family unit in proportion to each such individual's Adjusted Compensation
minus his integration level. If the Employer's Plan is a Nonstandardized Plan,
the Employer may elect to use a different method in determining the Adjusted
Compensation of the affected Participants by specifying that method in an
addendum to the Adoption Agreement, numbered Section 1.12.
(B) NONDISCRIMINATION. For purposes of determining whether the Plan
discriminates in favor of Highly Compensated Employees, Compensation means
Compensation as defined in this Section 1.12, except: (1) the Employer may
elect to include or to exclude elective contributions, irrespective of the
Employer's election in its Adoption Agreement regarding elective contributions;
and (2) the Employer will not give effect to any elections made in the
"modifications to Compensation definition" section of Adoption Agreement
Section 1.12. The Employer's election described in clause (1) must be
consistent and uniform with respect to all Employees and all plans of the
Employer for any particular Plan Year. If the Employer's Plan is a
Nonstandardized Plan, the Employer, irrespective of clause (2), may elect to
exclude from this nondiscrimination definition of Compensation any items of
Compensation excludible under Code section 414(s) and the applicable Treasury
regulations, provided such adjusted definition conforms to the
nondiscrimination requirements of those regulations.
1.13 "Earned Income" means net earnings from self-employment in the
trade or business with respect to which the Employer has established the Plan,
provided personal services of the individual are a material income producing
factor. The Advisory Committee will determine net earnings without regard to
items excluded from gross income and the deductions allocable to those items.
The Advisory Committee will determine net earnings after the deduction allowed
to the Self-Employed Individual for all contributions made by the Employer to a
qualified plan and, for Plan Years beginning after December 31, 1989, the
deduction allowed to the Self-Employed under Code Section 164(f) for
self-employment taxes.
1.14 "Accounts" means the separate account(s) which the Advisory
Committee or the Trustee maintains for a Participant under the Employer's Plan.
4
<PAGE> 13
1.15 "Accrued Benefit" means the amount standing in a Participant's
Account(s) as of any date derived from both Employer contributions and
Employee contributions, if any.
1.16 "Nonforfeitable" means a Participant's or Beneficiary's unconditional
claim, legally enforceable against the Plan, to the Participant's Accrued
Benefit.
1.17 "Plan Year" means the fiscal year of the Plan, the consecutive month
period specified in the Employer's Adoption Agreement. The Employer's
Adoption Agreement also must specify the "Limitation Year" applicable to the
limitations on allocations described in Article III If the Employer maintains
Paired Plans, each Plan must have the same Plan Year.
1.18 "Effective Date" of this Plan is the date specified in the Employer's
Adoption Agreement.
1.19 "Plan Entry Date" means the date(s) specified in Section 2.01 of
the Employer's Adoption Agreement.
1.20 "Accounting Date" is the last day of an Employer's Plan Year. Unless
otherwise specified in the Plan, the Advisory Committee will make all Plan
allocations for a particular Plan Year as of the Accounting Date of that Plan
Year.
1.21 "Trust" means the separate Trust created under the Employer's Plan.
1.22 "Trust Fund" means all property of every kind held or acquired by
the Employer's Plan, other than incidental benefit insurance contracts.
1.23 "Nontransferable Annuity" means an annuity which by its terms
provides that it may not be sold, assigned, discounted, pledged as collateral
for a loan or security for the performance of an obligation or for any purpose
to any person other than the insurance company. If the Plan distributes an
annuity contract, the contract must be a Nontransferable Annuity.
1.24 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.25 "Code" means the Internal Revenue Code of 1986, as amended.
1.26 "Service" means any period of time the Employee is in the employ of
the Employer, including any period the Employee is on an unpaid leave of
absence authorized by the Employer under a uniform, nondiscriminatory policy
applicable to all Employees. "Separation from Service" means the Employee no
longer has an employment relationship with the employer maintaining this plan.
1.27 "Hour of Service" means:
(a) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment, for the performance of duties. The Advisory Committee credits
Hours of Service under this paragraph (a) to the Employee for the
computation period in which the Employee performs the duties, irrespective
of when paid;
(b) Each Hour of Service for back pay, irrespective of mitigation of
damages, to which the Employer has agreed or for which the Employee has
received an award. The Advisory Committee credits Hours of Service under
this paragraph (b) to the Employee for the computation period(s) to which
the award or the agreement pertains rather than for the computation period
in which the award, agreement or payment is made; and
(c) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment (irrespective of whether the employment relationship is
terminated), for reasons other than for the performance of duties during a
computation period, such as leave of absence, vacation, holiday, sick
leave, illness, incapacity (including disability), layoff, jury duty or
military duty. The Advisory Committee will credit no more than 501 Hours of
Service under this
5
<PAGE> 14
\
paragraph (c) to an Employee on account of any single continuous period
during which the Employee does not perform any duties (whether or not such
period occurs during a single computation period). The Advisory Committee
credits Hours of Service under this paragraph (c) in accordance with the rules
of paragraphs (b) and (c) of Labor Reg. Section 2530.200b-2, which the
Plan, by this reference, specifically incorporates in full within this
paragraph (c).
The Advisory Committee will not credit an Hour of Service under more than
one of the above paragraphs. A computation period for purposes of this Section
1.27 is the Plan Year, Year of Service period, Break in Service period or
other period, as determined under the Plan provision for which the Advisory
Committee is measuring an Employee's Hours of Service. The Advisory Committee
will resolve any ambiguity with respect to the crediting of an Hour of Service
in favor of the Employee.
(A) METHOD OF CREDITING HOURS OF SERVICE. The Employer must elect in its
Adoption Agreement the method the Advisory Committee will use in crediting an
Employee with Hours of Service. For purposes of the Plan, actual method
means the determination of Hours of Service from records of hours worked and
hours for which the Employer makes payment or for which payment is due from
the Employer. If the Employer elects to apply an equivalency method, for
each equivalency period for which the Advisory Committee would credit the
Employee with at least one Hour of Service, the Advisory Committee will credit
the Employee with: (i) 10 Hours of Service for a daily equivalency; (ii) 45
Hours of Service for a weekly equivalency; (iii) 95 Hours of Service for a
semimonthly payroll period equivalency; and (iv) 190 Hours of Service for a
monthly equivalency.
(B) MATERNITY/PATERNITY LEAVE. Solely for purposes of determining whether the
Employee incurs a Break in Service under any provision of this Plan, the
Advisory Committee must credit Hours of Service during an Employee's unpaid
absence period due to maternity or paternity leave. The Advisory Committee
considers an Employee on maternity or paternity leave if the Employee's
absence is due to the Employee's pregnancy, the birth of the Employee's child,
the placement with the Employee of an adopted child, or the care of the
Employee's child immediately following the child's birth or placement. The
Advisory Committee credits Hours of Service under this paragraph on the basis
of the number of Hours of Service the Employee would receive if he were paid
during the absence period or, if the Advisory Committee cannot determine the
number of Hours of Service the Employee would receive, on the basis of 8 hours
per day during the absence period. The Advisory Committee will credit only the
number (not exceeding 501) of Hours of Service necessary to prevent an
Employee's Break in Service. The Advisory Committee credits all Hours of
Service described in this paragraph to the computation period in which the
absence period begins or, if the Employee does not need these Hours of Service
to prevent a Break in Service in the computation period in which his absence
period begins, the Advisory Committee credits these Hours of Service to the
immediately following computation period.
1.28 "Disability" means the Participant, because of a physical or mental
disability, will be unable to perform the duties of his customary position of
employment (or is unable to engage in any substantial gainful activity) for an
indefinite period which the Advisory Committee considers will be of long
continued duration. A Participant also is disabled if he incurs the permanent
loss or loss of use of a member or function of the body, or is permanently
disfigured, and incurs a Separation from Service. The Plan considers a
Participant disabled on the date the Advisory Committee determines the
Participant satisfies the definition of disability. The Advisory Committee
may require a Participant to submit to a physical examination in order to
confirm disability. The Advisory Committee will apply the provisions of this
Section 1.28 in a nondiscriminatory, consistent and uniform manner. If the
Employer's Plan is a Nonstandardized Plan, the Employer may provide an
alternate definition of disability in an addendum to its Adoption Agreement,
numbered Section 1.28.
1.29 SERVICE FOR PREDECESSOR EMPLOYER. If the Employer maintains the plan
of a predecessor employer, the Plan treats service of the Employee with the
predecessor employer as service with the Employers. If the Employer does not
maintain the plan of a predecessor employer, the Plan does not credit service
with the predecessor employer, unless the Employer identifies the predecessor
in its Adoption Agreement and specifies the purposes for which the Plan will
credit service with that predecessor employer.
1.30 RELATED EMPLOYERS. A related group is a controlled group of
corporations (as defined in Code Section 414(b)), trades or businesses
(whether or not incorporated) which are under common control (as defined
6
<PAGE> 15
in Code Section 414(c)) or an affiliated service group (as defined in Code
Section 414(m) or in Code Section 414(o)). If the Employer is a member of a
related group, the term "Employer" includes the related group members for
purposes of crediting Hours of Service, determining Years of Service and Breaks
in Service under Articles II and V, applying the Participation Test and the
Coverage Test under Section 3.06(E), applying the limitations on allocations in
Part 2 of Article III, applying the top heavy rules and the minimum allocation
requirements of Article III, the definitions of Employee, Highly Compensated
Employee, Compensation and Leased Employee, and for any other purpose required
by the applicable Code section or by a Plan provision. However, an Employer
may contribute to the Plan only by being a signatory to the Execution Page of
the Adoption Agreement or to a Participation Agreement to the Employer's
Adoption Agreement. If one or more of the Employer's related group members
become Participating Employers by executing a Participation Agreement to the
Employer's Adoption Agreement, the term "Employer" includes the participating
related group members for all purposes of the Plan, and "Plan Administrator"
means the Employer that is the signatory to the Execution Page of the
Adoption Agreement.
If the Employer's Plan is a Standardized Plan, all Employees of the
Employer or of any member of the Employer's related group, are eligible to
participate in the Plan, irrespective of whether the related group member
directly employing the Employee is a Participating Employer. If the Employer's
Plan is a Nonstandardized Plan, the Employer must specify in Section 1.07 of its
Adoption Agreement, whether the Employees of related group members that are not
Participating Employers are eligible to participate in the Plan. Under a
Nonstandardized Plan, the Employer may elect to exclude from the definition of
"Compensation" for allocation purposes any Compensation received from a related
employer that has not executed A Participation Agreement and whose Employees are
not eligible to participate in the Plan.
1.31 LEASED EMPLOYEES. The Plan treats a Leased Employee as an Employee of the
Employer. A Leased Employee is an individual (who otherwise is not an Employee
of the Employer) who, pursuant to a leasing agreement between the Employer and
any other person, has performed services for the Employer (or for the Employer
and any persons related to the Employer within the meaning of Code Section
144(a)(3)) on a substantially full time basis for at least one year and who
performs services historically performed by employees in the Employer's
business field. If a Leased Employee is treated as an Employee by reason of
this Section 1.31 of the Plan, "Compensation" includes Compensation from
leasing organization which is attributable to services performed for the
Employer.
(A) SAFE HARBOR PLAN EXCEPTION. The Plan does not treat a Leased Employee as
an Employee if the leasing organization covers the employee in a safe harbor
plan and, prior to application of this safe harbor plan exception, 20% or less
of the Employer's Employees (other than Highly Compensated Employees) are
Leased Employees. A safe harbor plan is a money purchase pension plan providing
immediate participation, full and immediate vesting, and a nonintegrated
contribution formula equal to at least 10% of the employee's compensation
without regard to employment by the leasing organization on a specified date.
The safe harbor plan must determine the 10% contribution on the basis of
compensation as defined in Code Section 415(c)(3) plus elective contributions
(as defined in Section 1.12).
(B) OTHER REQUIREMENTS. The Advisory Committee must apply this Section 1.31 in
a manner consistent with Code Sections 414(n) and 414(o) and the regulations
issued under those Code sections. The Employer must specify in the Adoption
Agreement the manner in which the Plan will determine the allocation of
Employer contributions and Participant forfeitures on behalf of a Participant
if the Participant is a Leased Employee covered by a plan maintained by the
leasing organization.
1.32 SPECIAL RULES FOR OWNER-EMPLOYEES. The following special provisions
and restrictions apply to Owner-Employees:
(a) If the Plan provides contributions or benefits for an Owner-Employee or
for a group of Owner-Employees who controls the trade or business with respect
to which this Plan is established and the Owner-Employee or Owner-Employees
also control as Owner-Employees one or more other trades or businesses, plans
must exist or be established with respect to all the controlled trades or
businesses so that when the plans are combined they form a single plan which
satisfies the requirements of Code Section 401(a) and Code Section 401(d)
with respect to the employees of the controlled trades or businesses.
7
<PAGE> 16
(b) The Plan excludes an Owner-Employee or group of Owner-Employees if
the Owner-Employees or group of Owner-Employees controls any other
trade or business, unless the employees of the other controlled trade or
business participate in a plan which satisfies the requirements of Code
Section 401(a) and Code Section 401(d). The other qualified plan must
provide contributions and benefits which are not less favorable than
the contributions and benefits provided for the Owner-Employee or group of
Owner-Employees under this Plan, or if an Owner-Employee is covered under
another qualified plan as an Owner-Employee, then the plan established
with respect to the trade or business he does control must provide
contributions or benefits as favorable as those provided under the most
favorable plan of the trade or business he does not control. If the
exclusion of this paragraph (b) applies and the Employer's Plan is a
Standardized Plan, the Employer may not participate or continue to
participate in this Prototype Plan and the Employer's Plan becomes an
individually-designed plan for purposes of qualification reliance.
(c) For purposes of paragraphs (a) and (b) of this Section 1.32, an
Owner-Employee or group of Owner-Employees controls a trade or
business if the Owner-Employee or Owner-Employees together (1) own the
entire interest in an unincorporated trade or business, or (2) in the case
of a partnership, own more than 50% of either the capital interest or
the profits interest in the partnership.
1.33 DETERMINATION OF TOP HEAVY STATUS. If this Plan is the only qualified
plan maintained by the Employer, The Plan is top heavy for a Plan Year if the
top heavy ratio as of the Determination Date exceeds 60%. The top heavy ratio
is a fraction, the numerator of which is the sum of the present value of
Accrued Benefits of all Key Employees as of the Determination Date and the
denominator of which is a similar sum determined for all Employees. The
Advisory Committee must include in the top heavy ratio, as part of the present
value of Accrued Benefits, any contribution not made as of the Determination
Date but includible under Code Section 416 and the applicable Treasury
regulations, and distributions made within the Determination Period. The
Advisory Committee must calculate the top heavy ratio by disregarding the
Accrued Benefit (and distributions, if any, of the Accrued Benefit) of any
Non-Key Employee who was formerly a Key Employee, and by disregarding the
Accrued Benefit (including distributions, if any, of the Accrued Benefit) of an
individual who has not received credit for at least one Hour of Service with
the Employer during the Determination Period. The Advisory Committee must
calculate the top heavy ratio, including the extent to which it must take into
account distributions, rollovers and transfers, in accordance with Code Section
416 and the regulations under that Code section.
If the Employer maintains other qualified plans (including a simplified
employee pension plan), or maintained another such plan which now is
terminated, this Plan is top heavy only if it is part of the Required
Aggregation Group, and the top heavy ratio for the Required Aggregation Group
and for the Permissive Aggregation Group, if any, each exceeds 60%. The
Advisory Committee will calculate the top heavy ratio in the same manner as
required by the first paragraph of this Section 1.33, taking into account all
plans within the Aggregation Group. To the extent the Advisory Committee must
take into account distributions to a Participant, the Advisory Committee must
include distributions from a terminated plan which would have been part of the
Required Aggregation Group if it were in existence on the Determination Date.
The Advisory Committee will calculate the present value of accrued benefits
under defined benefit plans or simplified employee pension plans included
within the group in accordance with the terms of those plans, Code Section 416
and the regulations under that Code section. If a Participant in a defined
benefit plan is a Non-Key Employee, the Advisory Committee will determine his
accrued benefit under the accrual method, if any, which is applicable uniformly
to all defined benefit plans maintained by the Employer or, if there is no
uniform method, in accordance with the slowest accrual rate permitted under the
fractional rule accrual method described in Code Section 411(b)(1)(C). If the
Employer maintains a defined benefit plan, the Employer must specify in
Adoption Agreement Section 3.18 the actuarial assumptions (interest and
mortality only) the Advisory Committee will use to calculate the present value
of benefits from a defined benefit plan. If an aggregated plan does not have a
valuation date coinciding with the Determination Date, the Advisory Committee
must value the Accrued Benefits in the aggregated plan as of the most recent
valuation date falling within the twelve-month period ending on the
Determination Date, except as Code Section 416 and applicable Treasury
regulations require for the first and second plan year of a defined
benefit plan. The Advisory Committee will calculate the top heavy ratio with
reference to the Determination Dates that fall within the same calendar year.
8
<PAGE> 17
(A) STANDARDIZED PLAN. If the Employer's Plan is a Standardized Plan, the Plan
operates as a deemed top heavy plan in all Plan Years, except, if the
Standardized Plan includes a Code Section 401(k) arrangement, the Employer
may elect to apply the top heavy requirements only in Plan Years for which the
Plan actually is top heavy. Under a deemed top heavy plan, the Advisory
Committee need not determine whether the Plan actually is top heavy. However,
if the Employer, in Adoption Agreement Section 3.18, elects to override the
100% limitation, the Advisory Committee will need to determine whether a deemed
top heavy Plan's top heavy ratio for a Plan Year exceeds 90%.
(B) DEFINITIONS. For purposes of applying the provisions of this Section 1.33:
(1) "Key Employee" means, as of any Determination Date, any Employee or
former Employee (or Beneficiary of such Employee) who, for any Plan Year
in the Determination Period: (i) has Compensation in excess of 50% of
the dollar amount prescribed in Code Section 415(b)(1)(A) (relating to
defined benefit plans) and is an officer of the Employer; (ii) has
Compensation in excess of the dollar amount prescribed in Code Section
415(c)(l)(A) (relating to defined contribution plans) and is one of the
Employees owning the ten largest interests in the Employer; (iii) is a
more than 5% owner of the Employer; or (iv) is a more than 1% owner of the
Employer and has Compensation of more than $150,000. The constructive
ownership rules of Code Section 318 (or the principles of that section, in
the case of an unincorporated Employer,) will apply to determine
ownership in the Employer. The number of officers taken into account
under clause (i) will not exceed the greater of 3 or 10% of the total
number (after application of the Code Section 414(q) exclusions) of
Employees, but no more than 50 officers. The Advisory Committee will make
the determination of who is a Key Employee in accordance with Code Section
416(i)(1) and the regulations under that Code section.
(2) "Non-Key Employee" is an employee who does not meet the definition
of Key Employee.
(3) "Compensation" means Compensation as determined under Section 1.09
for purposes of identifying Highly Compensated Employees.
(4) "Required Aggregation Group" means: (i) each qualified plan of the
Employer in which at least one Key Employee participates at any
time during the Determination Period; and (ii) any other qualified plan of
the Employer which enables a plan described in clause (i) to meet the
requirements of Code Section 401(a)(4) or of Code Section 410.
(5) "Permissive Aggregation Group" is the Required Aggregation Group plus
any other qualified plans maintained by the Employer, but only if
such group would satisfy in the aggregate the requirements of Code
Section 401(a)(4) and of Code Section 410. The Advisory Committee will
determine the Permissive Aggregation Group.
(6) "Employer" means the Employer that adopts this Plan and any related
employers described in Section 1.30.
(7) "Determination Date" for any Plan Year is the Accounting Date of the
preceding Plan Year or, in the case of the first Plan Year of the Plan,
the Accounting Date of that Plan Year. The "Determination Period" is
the 5 year period ending on the Determination Date.
1.34 "Paired Plans" means the Employer has adopted two Standardized Plan
Adoption Agreements offered with this Prototype Plan, one Adoption Agreement
being a Paired Profit Sharing Plan and one Adoption Agreement being a Paired
Pension Plan. A Paired Profit Sharing Plan may include a Code Section 401(k)
arrangement. A Paired Pension Plan must be a money purchase pension plan or a
target benefit pension plan. Paired Plans must be the subject of a favorable
opinion letter issued by the National Office of the Internal Revenue Service.
This Prototype Plan does not pair any of its Standardized Plan Adoption
Agreements with Standardized Plan Adoption Agreements under a defined benefit
prototype plan.
* * * * * * * * * * *
9
<PAGE> 18
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY. Each Employee becomes a Participant in the Plan in
accordance with the participation option selected by the Employer in its
Adoption Agreement. If this Plan is a restated Plan, each Employee who was a
Participant in the Plan on the day before the Effective Date continues as a
Participant in the Plan, irrespective of whether he satisfies the participation
conditions in the restated Plan, unless otherwise provided in the Employer's
Adoption Agreement.
2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an Employee's
participation in the Plan under Adoption Agreement Section 2.01, the Plan
takes into account all of his Years of Service with the Employer, except as
provided in Section 2.03. "Year of Service" means an eligibility computation
period during which the Employee completes not less than the number of Hours of
Service specified in the Employer's Adoption Agreement. The initial eligibility
computation period is the first 12 consecutive month period measured from the
Employment Commencement Date. The Plan measures succeeding eligibility
computation periods in accordance with the option selected by the Employer in
its Adoption Agreement. If the Employer elects to measure subsequent periods on
a Plan Year basis, an Employee who receives credit for the required number of
Hours of Service during the initial eligibility computation period and during
the first applicable Plan Year will receive credit for two Years of Service
under Article II. "Employment Commencement Date" means the date on which the
Employee first performs an Hour of Service for the Employer. If the Employer
elects a service condition under Adoption Agreement Section 2.01 based on
months, the Plan does not apply any Hour of Service requirement after the
completion of the first Hour of Service.
2.03 BREAK IN SERVICE - PARTICIPATION. An Employee incurs a "Break in
Service" if during any 12 consecutive month period he does not complete more
than 500 Hours of Service with the Employer. The "12 consecutive month period"
under this Section 2.03 is the same 12 consecutive month period for which the
Plan measures "Years of Service" under Section 2.02.
(A) 2-year Eligibility. If the Employer elects a 2 years of service
condition for eligibility purposes under Adoption Agreement Section 2.01, the
Plan treats an Employee who incurs a one year Break in Service and who has
never become a Participant as a new Employee on the date he first performs an
Hour of Service for the Employer after the Break in Service.
(B) SUSPENSION OF YEARS OF SERVICE. The Employer must elect in its
Adoption Agreement whether a Participant will incur a suspension of Years of
Service after incurring a one year Break in Service. If this rule applies
under the Employer's Plan, the Plan disregards a Participant's Years of Service
(as defined in Section 2.02) earned prior to a Break in Service until the
Participant completes another Year of Service and the Plan suspends the
Participant's participation in the Plan. If the Participant completes a Year of
Service following his Break in Service, the Plan restores that Participant's
pre-Break Years of Service (and the Participant resumes active participation in
the Plan) retroactively to the first day of the computation period in which the
Participant earns the first post-Break Year of Service. The initial computation
period under this Section 2.03(B) is the 12 consecutive month period measured
from the date the Participant first receives credit for an Hour of Service
following the one year Break in Service period. The Plan measures any
subsequent periods, if necessary, in a manner consistent with the computation
period selection in Adoption Agreement Section 2.02. This Section 2.03(B) does
not affect a Participant's vesting credit under Article V and, during a
suspension period, the Participant's Account continues to share fully in Trust
Fund allocations under Section 9.11. Furthermore, this Section 2.03(B) will not
result in the restoration of any Year of Service disregarded under the Break in
Service rule of Section 2.03(A).
1
<PAGE> 19
2.04 PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose employment
with the Employer terminates will re-enter the Plan as a Participant on the
date of his re-employment, subject to the Break in Service rule, if
applicable, under Section 2.03(B). An Employee who satisfies the Plan's
eligibility conditions but who terminates employment with the Employer prior to
becoming a Participant will become a Participant on the later of the Plan Entry
Date on which he would have entered the Plan had he not terminated employment
or the date of his re-employment, subject to the Break in Service rule, if
applicable, under Section 2.03(B). Any Employee who terminates employment prior
to satisfying the Plan's eligibility conditions becomes a Participant in
accordance with Adoption Agreement Section 2.01.
2.05 CHANGE IN EMPLOYEE STATUS. If a Participant has not incurred a
Separation from Service but ceases to be eligible to participate in the
Plan, by reason of employment within an employment classification excluded by
the Employer under Adoption Agreement Section 1.07, the Advisory Committee must
treat the Participant as an Excluded Employee during the period such a
Participant is subject to the Adoption Agreement exclusion. The Advisory
Committee determines a Participant's sharing in the allocation of Employer
contributions and Participant forfeitures, if applicable, by disregarding his
Compensation paid by the Employer for services rendered in his capacity as an
Excluded Employee. However, during such period of exclusion, the Participant,
without regard to employment classification, continues to receive credit for
vesting under Article V for each included Year of Service and the Participant's
Account continues to share fully in Trust Fund allocations under Section
9.11.
If an Excluded Employee who is not a Participant becomes eligible to
participate in the Plan by reason of a change in employment classification, he
will participate in the Plan immediately if he has satisfied the eligibility
conditions of Section 2.01 and would have been a Participant had he not been an
Excluded Employee during his period of Service. Furthermore, the Plan takes
into account all of the Participant's included Years of Service with the
Employer as an Excluded Employee for purposes of vesting credit under Article
V.
2.06 ELECTION NOT TO PARTICIPATE. If the Employer's Plan is a Standardized
Plan, the Plan does not permit an otherwise eligible Employee nor any
Participant to elect not to participate in the Plan. If the Employer's Plan is
a Nonstandardized Plan, the Employer must specify in its Adoption Agreement
whether an Employee eligible to participate, or any present Participant, may
elect not to participate in the Plan. For an election to be effective for a
particular Plan Year, the Employee or Participant must file the election in
writing with the Plan Administrator not later than the time specified in the
Employer's Adoption Agreement. The Employer may not make a contribution under
the Plan for the Employee or for the Participant for the Plan Year for which
the election is effective, nor for any succeeding Plan Year, unless the
Employee or Participant re-elects to participate in the Plan. After an
Employee's or Participant's election not to participate has been effective for
at least the minimum period prescribed by the Employer's Adoption Agreement,
the Employee or Participant may re-elect to participate in the Plan for any
Plan Year and subsequent Plan Years. An Employee or Participant may re-elect
to participate in the Plan by filing his election in writing with the Plan
Administrator not later than the time specified in the Employer's Adoption
Agreement. An Employee or Participant who re-elects to participate may again
elect not to participate only as permitted in the Employer's Adoption
Agreement. If an Employee is a Self-Employed Individual, the Employee's
election (except as permitted by Treasury regulations without creating a Code
Section 401(k) arrangement with respect to that Self-Employed Individual) must
be effective no later than the date the Employee first would become a
Participant in the Plan and the election is irrevocable. The Plan Administrator
must furnish an Employee or a Participant any form required for purposes of an
election under this Section 2.06. An election timely filed is effective for the
entire Plan Year.
A Participant who elects not to participate may not receive a distribution
of his Accrued Benefit attributable either to Employer or to Participant
contributions except as provided under Anicle IV or under Article VI. However,
for each Plan Year for which a Participant's election not to participate is
effective, the Panicipant's Account, if any, continues to share in Trust Fund
allocations under Anicle IX. Furthermore, the Employee or the Participant
receives vesting credit under Article V for each included Year of Service during
the period the election not to participate is effective.
* * * * * * * * * * *
2
<PAGE> 20
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
Part 1. Amount of Employer Contributions and Plan Allocations: Sections 3.01
through 3.06
3.01 AMOUNT. For each Plan Year, the Employer contributes to the Trust
the amount determined by application of the contribution option selected by the
Employer in its Adoption Agreement. The Employer may not make a contribution to
the Trust for any Plan Year to the extent the contribution would exceed the
Participants' Maximum Permissible Amounts.
The Employer contributes to this Plan on the condition its contribution
is not due to a mistake of fact and the Revenue Service will not disallow
the deduction for its contribution. The Trustee, upon written request from the
Employer, must return to the Employer the amount of the Employer's
contribution made by the Employer by mistake of fact or the amount of the
Employer's contribution disallowed as a deduction under Code Section 404.
The Trustee will not return any portion of the Employer's contribution under
the provisions of this paragraph more than one year after:
(a) The Employer made the contribution by mistake of fact; or
(b) The disallowance of the contribution as a deduction, and then, only
to the extent of the disallowance.
The Trustee will not increase the amount of the Employer contribution
returnable under this Section 3.01 for any earnings attributable to the
contribution, but the Trustee will decrease the Employer contribution
returnable for any losses attributable to it. The Trustee may require the
Employer to furnish it whatever evidence the Trustee deems necessary to enable
the Trustee to confirm the amount the Employer has requested be returned is
properly returnable under ERISA.
3.02 DETERMINATION OF CONTRIBUTION. The Employer, from its records,
determines the amount of any contributions to be made by it to the Trust under
the terms of the Plan.
3.03 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its
contribution for each Plan Year in one or more installments without
interest. The Employer must make its contribution to the Plan within the time
prescribed by the Code or applicable Treasury regulations. Subject to the
consent of the Trustee, the Employer may make its contribution in property
rather than in cash, provided the contribution of property is not a prohibited
transaction under the Code or under ERISA.
3.04 CONTRIBUTION ALLOCATION.
(A) METHOD OF ALLOCATION. The Employer must specify in its Adoption Agreement
the manner of allocating each annual Employer contribution to this Trust.
(B) TOP HEAVY MINIMUM ALLOCATION. The Plan must comply with the provisions
of this Section 3.04(B), subject to the elections in the Employer's Adoption
Agreement.
(1) Top Heavy Minimum Allocation Under Standardized Plan. Subject to the
Employer's election under Section 3.04(B)(3), the top heavy minimum
allocation requirement applies to a Standardized Plan for each Plan Year,
irrespective of whether the Plan is top heavy.
(a) Each Participant employed by the Employer on the last day of the
Plan Year will receive a top heavy minimum allocation for that Plan
Year. The Employer may elect in Section 3.04 of its Adoption Agreement to
apply this paragraph (a) only to a Participant who is a Non-Key Employee.
(b) Subject to any overriding elections in Section 3.18 of the Employer's
Adoption Agreement, the top heavy minimum allocation is the lesser of 3%
of the Participant's Compensation for the Plan Year or the highest
contribution rate for the Plan Year made on behalf of any Participant for
the Plan Year.
1
<PAGE> 21
However, if the Employee participates in Paired Plans, the top heavy
minimum allocation is 3% of his Compensation. If, under Adoption
Agreement Section 3.04, the Employer elects to apply paragraph (a) only
to a Participant who is a Non-Key Employee, the Advisory Committee will
determine the "highest contribution rate" described in the first
sentence of this paragraph (b) by reference only to the contribution
rates of Participants who are Key Employees for the Plan Year.
(2) TOP HEAVY MINIMUM ALLOCATION UNDER NONSTANDARDIZED PLAN. The top
heavy minimum allocation requirement applies to a Nonstandardized Plan only
in Plan Years for which the Plan is top heavy. Except as provided in the
Employer's Adoption Agreement, if the Plan is top heavy in any Plan Year:
(a) Each Non-Key Employee who is a Participant and is employed by the
Employer on the last day of the Plan Year will receive a top heavy
minimum allocation for that Plan Year, irrespective of whether he
satisfies the Hours of Service condition under Section 3.06 of the
Employer's Adoption Agreement; and
(b) The top heavy minimum allocation is the lesser of 3% of the
Non-Key Employee's Compensation for the Plan Year or the highest
contribution rate for the Plan Year made on behalf of any Key
Employee. However, if a defined benefit plan maintained by the
Employer which benefits a Key Employee depends on this Plan to
satisfy the antidiscrimination rules of Code Section 401(a)(4) or the
coverage rules of Code Section 410 (or another plan benefiting the
Key Employee so depends on such defined benefit plan), the top heavy
minimum allocation is 3% of the Non-Key Employee's Compensation
regardless of the contribution rate for the Key Employees.
(3) SPECIAL ELECTION FOR STANDARDIZED CODE SECTION 401(k) PLAN. If the
Employer's Plan is a Standardized Code Section 401(k) Plan, the Employer may
elect in Adoption Agreement Section 3.04 to apply the top heavy minimum
allocation requirements of Section 3.04(B)(1) only for Plan Years in which the
Plan actually is a top heavy plan.
(4) SPECIAL DEFINITIONS. For purposes of this Section 3.04(B), the term
"Participant" includes any Employee otherwise eligible to participate in the
Plan but who is not a Participant because of his Compensation level or because
of his failure to make elective deferrals under a Code Section 401(k)
arrangement or because of his failure to make mandatory contributions. For
purposes of subparagraph (1)(b) or (2)(b), "Compensation" means Compensation
as defined in Section 1.12, except Compensation does not include elective
contributions, irrespective of whether the Employer has elected to include
these amounts in Section 1.12 of its Adoption Agreement, any exclusion
selected in Section 1.12 of the Adoption Agreement (other than the exclusion
of elective contributions) does not apply, and any modification to the
definition of Compensation in Section 3.06 does not apply.
(5) DETERMINING CONTRIBUTION RATES. For purposes of this Section
3.04(B), a Participant's contribution rate is the sum of all Employer
contributions (not including Employer contributions to Social Security) and
forfeitures allocated to the Participant's Account for the Plan Year divided
by his Compensation for the entire Plan Year. However, for purposes of
satisfying a Participant's top heavy minimum allocation in Plan Years
beginning after December 31, 1988, the Participant's contribution rate does
not include any elective contributions under a Code Section 401(k)
arrangement nor any Employer matching contributions allocated on the basis of
those elective contributions or on the basis of employee contributions, except
a Nonstandardized Plan may include in the contribution rate any matching
contributions not necessary to satisfy the nondiscrimination requirements
of Code Section 401(k) or of Code Section 401(m).
If the Employee is a Participant in Paired Plans, the Advisory Committee
will consider the Paired Plans as a single Plan to determine a Participant's
contribution rate and to determine whether the Plans satisfy this top heavy
minimum allocation requirement. To determine a Participant's contribution
rate under a Nonstandardized Plan, the Advisory Committee must treat all
qualified top heavy defined contribution plans maintained by the Employer (or
by any related Employers described in Section 1.30) as a single plan.
2
<PAGE> 22
(6) NO ALLOCATIONS. If, for a Plan Year, there are allocations of
Employer contributions or forfeitures for any Participant (for purposes of
Section 3.04 (B)(l)(b)) or for any Key Employee (for purposes of Section
3.04(B)(2)(b)), the Plan does not require any top heavy minimum allocation for
the Plan Year, unless a top heavy minimum allocation applies because of the
maintenance by the Employer of more than one plan.
(7) ELECTION OR METHOD. The Employer must specify in its Adoption
Agreement the manner in which the Plan will satisfy the top heavy minimum
allocation requirement.
(a) If the Employer elects to make any necessary additional contribution
to this Plan, the Advisory Committee first will allocate the Employer
contributions (and Participant forfeitures, if any) for the Plan Year in
accordance with the provisions of Adoption Agreement Section 3.04. The
Employer then will contribute an additional amount for the Account of any
Participant entitled under this Section 3.04(B) to a top heavy minimum
allocation and whose contribution rate for the Plan Year, under this Plan
and any other plan aggregated under paragraph (5), is less than the top
heavy minimum allocation. The additional amount is the amount necessary to
increase the Participant's contribution rate to the top heavy minimum
allocation. The Advisory Committee will allocate the additional
contribution to the Account of the participant on whose behalf the
Employer makes the contribution.
(b) If the Employer elects to guarantee the top heavy minimum allocation
under another plan, this plan does not provide the top heavy minimum
allocation and the Advisory Committee will allocate the annual Employer
contributions (and Participant forfeitures) under the Plan solely in
accordance with the allocation method selected under Adoption Agreement
Section 3.04.
3.05 FORFEITURE ALLOCATION. The amount of a Participant's Accrued Benefit
forfeited under the Plan is a Participant forfeiture. The Advisory
Committee will allocate Participant forfeitures in the manner specified by the
Employer in its Adoption Agreement. The Advisory Committee will continue to
hold the undistributed, non-vested portion of a terminated Participant's
Accrued Benefit in his Account solely for his benefit until a forfeiture occurs
at the time specified in Section 5.09 or if applicable, until the time
specified in Section 9.14. Except as provided under Section 5.04, a Participant
will not share in the allocation of a forfeiture of any portion of his Accrued
Benefit.
3.06 ACCRUAL OF BENEFIT. The Advisory Committee will determine the
accrual of benefit (Employer contributions and Participant forfeitures) on the
basis of the Plan Year in accordance with the Employer's elections in its
Adoption Agreement.
(A) COMPENSATION TAKEN INTO ACCOUNT. The Employer must specify in its
Adoption Agreement the Compensation the Advisory Committee is to take into
account in allocating an Employer contribution to a Participant's Account for
the Plan Year in which the Employee first becomes a Participant. For all other
Plan Years, the Advisory Committee will take into account only the
Compensation determined for the portion of the Plan Year in which the Employee
actually is a Participant. The Advisory Committee must take into account the
Employee's entire Compensation for the Plan Year to determine whether the Plan
satisfies the top heavy minimum allocation requirement of Section 3.04(B). The
Employer, in an addendum to its Adoption Agreement numbered 3.06(A), may elect
to measure Compensation for the Plan Year for allocation purposes on the basis
of a specified period other than the Plan Year.
(B) HOURS OF SERVICE REQUIREMENT. Subject to the applicable minimum allocation
requirement of Section 3.04, the Advisory Committee will not allocate any
portion of an Employer contribution for a Plan Year to any Participant's
Account if the Participant does not complete the applicable minimum Hours of
Service requirement specified in the Employer's Adoption Agreement.
(C) EMPLOYMENT REQUIREMENT. If the Employer's Plan is a Standardized Plan,
a Participant who, during a particular Plan Year, completes the accrual
requirements of Adoption Agreement Section 3.06 will share in the allocation of
Employer contributions for that Plan Year without regard to whether he is
employed by the Employer on the Accounting Date of that Plan Year. If the
Employer's Plan is a Nonstandardized Plan, the Employer must specify in its
Adoption Agreement whether the Participant will accrue a benefit if he is not
3
<PAGE> 23
employed by the Employer on the Accounting Date of the Plan Year. If the
Employer's Plan is a money purchase plan or a large benefit plan, whether
Nonstandardized or Standardized, the Plan conditions benefit accrual on
employment with the Employer on the last day of the Plan Year for the Plan Year
in which the Employer terminates the Plan.
(D) Other Requirements. If the Employer's Adoption Agreement includes options
for other requirements affecting the Participant's accrual of benefits under
the Plan, the Advisory Committee will apply this Section 3.06 in accordance
with the Employer's Adoption Agreement selections.
(E) SUSPENSION OF ACCRUAL REQUIREMENTS UNDER NONSTANDARDIZED PLAN. If the
Employer's Plan is a Nonstandardized Plan, the Employer may elect in its
Adoption Agreement to suspend the accrual requirements elected under Adoption
Agreement Section 3.06 if, for any Plan Year beginning after December 31, 1989,
the Plan fails to satisfy the Participation Test or the Coverage Test. A Plan
satisfies the Participation Test if, on each day of the Plan Year, the number
of Employees who benefit under the Plan is at least equal to the lesser of 50
or 40% of the total number of Includible Employees as of such day. A Plan
satisfies the Coverage Test if, on the last day of each quarter of the Plan
Year, the number of Nonhighly Compensated Employees who benefit under the Plan
is at least equal to 70% of the total number of Includible Nonhighly
Compensated Employees as of such day. "Includible" Employees are all Employees
other than: (l) those Employees excluded from participating in the Plan for
the entire Plan Year by reason of the collective bargaining unit exclusion or
the nonresident alien exclusion under Adoption Agreement Section 1.07 or by
reason of the participation requirements of Sections 2.01 and 2.03; and (2)
any Employee who incurs a Separation from Service during the Plan Year and
fails to complete at least 501 Hours of Service for the Plan Year. A
"Nonhighly Compensated Employee" is an Employee who is not a Highly
Compensated Employee and who is not a family member aggregated with a Highly
Compensated Employee pursuant to Section 1.09 of the Plan.
For purposes of the Participation Test and the Coverage Test, an Employee
is benefiting under the Plan on a particular date if, under Adoption Agreement
Section 3.04, he is entitled to an allocation for the Plan Year. Under the
Participation Test, when determining whether an Employee is entitled to an
allocation under Adoption Agreement Section 3.04, the Advisory Committee will
disregard any allocation required solely by reason of the top heavy minimum
allocation, unless the top heavy minimum allocation is the only allocation
made under the Plan for the Plan Year.
If this Section 3.06(E) applies for a Plan Year, the Advisory Committee
will suspend the accrual requirements for the Includible Employees who are
Participants, beginning first with the Includible Employee(s) employed with
the Employer on the last day of the Plan Year, then the Includible
Employee(s) who have the latest Separation from Service during the Plan Year,
and continuing to suspend in descending order the accrual requirements for
each Includible Employee who incurred an earlier Separation from Service, from
the latest to the earliest Separation from Service date, until the Plan
satisfies both the Participation Test and the Coverage Test for the Plan Year.
If two or more Includible Employees have a Separation from Service on the same
day, the Advisory Committee will suspend the accrual requirements for all such
Includible Employees, irrespective of whether the Plan can satisfy the
Participation Test and the Coverage Test by accruing benefits for fewer than
all such Includible Employees. If the Plan suspends the accrual requirements
for an Includible Employee, that Employee will share in the allocation of
Employer contributions and Participant forfeitures, if any, without regard to
the number of Hours of Service he has earned for the Plan Year and without
regard to whether he is employed by the Employer on the last day of the Plan
Year. If the Employer's Plan includes Employer matching contributions subject
to Code Section 401(m), this suspension of accrual requirements applies
separately to the Code Section 401(m) portion of the Plan, and the Advisory
Committee will treat an Employee as benefiting under that portion of the Plan
if he is an Eligible Employee for purposes of the Code Section 401(m)
nondiscrimination test. The Employer may modify the operation of this
Section 3.06(E) by electing appropriate modifications in Section 3.06 of its
Adoption Agreement.
4
<PAGE> 24
PART 2. LIMITATIONS ON ALLOCATIONS: Sections 3.07 THROUGH 3.19
[Note: Sections 3.07 through 3.10 apply only to Participants in this
Plan who do not participate, and who have never participated, in another
qualified plan or in a welfare benefit fund (as defined in Code Section 419(e))
maintained by the Employer.]
3.07 The amount of Annual Additions which the Advisory Committee may
allocate under this Plan on a Participant's behalf for a Limitation Year may
not exceed the Maximum Permissible Amount. If the amount the Employer otherwise
would contribute to the Participant's Account would cause the Annual Additions
for the Limitation Year to exceed the Maximum Permissible Amount, the Employer
will reduce the amount of its contribution so the Annual Additions for the
Limitation Year will equal the Maximum Permissible Amount. If an allocation of
Employer contributions, pursuant to Section 3.04, would result in an Excess
Amount (other than an Excess Amount resulting from the circumstances described
in Section 3.10) to the Participant's Account, the Advisory Committee will
reallocate the Excess Amount to the remaining Participants who are eligible for
an allocation of Employer contributions for the Plan Year in which the
Limitation Year ends. The Advisory Committee will make this reallocation on the
basis of the allocation method under the Plan as if the Participant whose
Account otherwise would receive the Excess Amount is not eligible for an
allocation of Employer contributions.
3.08 Prior to the determination of the Participant's actual Compensation
for a Limitation Year, the Advisory Committee may determine the Maximum
Permissible Amount on the basis of the Participant's estimated annual
Compensation for such Limitation Year. The Advisory Committee must make this
determination on a reasonable and uniform basis for all Participants similarly
situated. The Advisory Committee must reduce any Employer contributions
(including any allocation of forfeitures) based on estimated annual
Compensation by any Excess Amounts carried over from prior years.
3.09 As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the Maximum
Permissible Amount for such Limitation Year on the basis of the Participant's
actual Compensation for such Limitation Year.
3.10 If, pursuant to Section 3.09, or because of the allocation
of forfeitures, there is an Excess Amount with respect to a Participant for
a Limitation Year, the Advisory Committee will dispose of such Excess Amount
as follows:
(a) The Advisory Committee will return any nondeductible voluntary
Employee contributions to the Participant to the extent the return would
reduce the Excess Amount.
(b) If, after the application of paragraph (a), an Excess Amount
still exists, and the Plan covers the Participant at the end of the
Limitation Year, then the Advisory Committee will use the Excess Amount(s)
to reduce future Employer contributions (including any allocation of
forfeitures) under the Plan for the next Limitation Year and for each
succeeding Limitation Year, as is necessary, for the Participant. If the
Employer's Plan is a profit sharing plan, the Participant may elect to
limit his Compensation for allocation purposes to the extent necessary to
reduce his allocation for the Limitation Year to the Maximum Permissible
Amount and eliminate the Excess Amount.
(c) If, after the application of paragraph (a), an Excess Amount still
exists, and the Plan does not cover the Participant at the end of the
Limitation Year, then the Advisory Committee will hold the Excess Amount
unallocated in a suspense account. The Advisory Committee will apply the
suspense account to reduce Employer Contributions (including allocation of
forfeitures) for all remaining Participants in the next Limitation Year,
and in each succeeding Limitation Year if necessary. Neither the Employer
nor any Employee may contribute to the Plan for any Limitation Year in
which the Plan is unable to allocate fully a suspense account maintained
pursuant to this paragraph (c).
5
<PAGE> 25
(d) The Advisory Committee will not distribute any Excess Amount(s) to
Participants or to former Participants.
[Note: Sections 3.11 through 3.16 apply only to Participants who, in
addition to this Plan, participate in one or more plans (including Paired
Plans), all of which are qualified Master or Prototype defined contribution
plans or welfare benefit funds (as defined in Code Section 419(e)) maintained
by the Employer during the Limitation Year.]
3.11 The amount of Annual Additions which the Advisory Committee may
allocate under this Plan on a Participant's behalf for a Limitation Year
may not exceed the Maximum Permissible Amount, reduced by the sum of any
Annual Additions allocated to the Participant's Accounts for the same
Limitation Year under this Plan and such other defined contribution plan. If
the amount the Employer otherwise would contribute to the Participant's Account
under this Plan would cause the Annual Additions for the Limitation Year to
exceed this limitation, the Employer will reduce the amount of its contribution
so the Annual Additions under all such plans for the Limitation Year will equal
the Maximum Permissible Amount. If an allocation of Employer contributions,
pursuant to Section 3.04, would result in an Excess Amount (other than an
Excess Amount resulting from the circumstances described in Section 3.10) to
the Participant's Account, the Advisory Committee will reallocate the Excess
Amount to the remaining Participants who are eligible for an allocation of
Employer contributions for the Plan Year in which the Limitation Year ends. The
Advisory Committee will make this reallocation on the basis of the allocation
method under the Plan as if the Participant whose Account otherwise would
receive the Excess Amount is not eligible for an allocation of Employer
contributions.
3.12 Prior to the determination of the Participant's actual Compensation
for the Limitation Year, the Advisory Committee may determine the amounts
referred to in 3.11 above on the basis of the Participant's estimated annual
Compensation for such Limitation Year. The Advisory Committee will make this
determination on a reasonable and uniform basis for all Participants similarly
situated. The Advisory Committee must reduce any Employer contribution
(including allocation of forfeitures) based on estimated annual Compensation by
any Excess Amounts carried over from prior years.
3.13 As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the amounts referred
to in 3.11 on the basis of the Participant's actual Compensation for such
Limitation Year.
3.14 If pursuant to Section 3.13, or because of the allocation of
forfeitures, a Participant's Annual Additions under this Plan and all such
other plans result in an Excess Amount, such Excess Amount will consist of the
Amounts last allocated. The Advisory Committee will determine the Amounts last
allocated by treating the Annual Additions attributable to a welfare benefit
fund as allocated first, irrespective of the actual allocation date under the
welfare benefit fund.
3.15 The Employer must specify in its Adoption Agreement the Excess
Amount attributed to this Plan, if the Advisory Committee allocates an Excess
Amount to a Participant on an allocation date of this Plan which coincides with
an allocation date of another plan.
3.16 The Advisory Committee will dispose of any Excess Amounts attributed
to this Plan as provided in Section 3.10.
[Note: Section 3.17 applies only to Participants who, in addition to this
Plan, participate in one or more qualified plans which are qualified
defined contribution plans other than a Master or Prototype plan maintained by
the Employer during the Limitation Year.]
6
<PAGE> 26
3.17 SPECIAL ALLOCATION LIMITATION. The amount of Annual Additions which
the Advisory Committee may allocate under this Plan on behalf of any
Participant are limited in accordance with the provisions of Section 3.11
through 3.16, as though the other plan were a Master or Prototype plan, unless
the Employer provides other limitations in an addendum to the Adoption
Agreement, numbered Section 3.17.
3.18 DEFINED BENEFIT PLAN LIMITATION. If the Employer maintains a defined
benefit plan, or has ever maintained a defined benefit plan which the Employer
has terminated, then the sum of the defined benefit plan fraction and the
defined contribution plan fraction for any Participant for any Limitation Year
must not exceed 1.0. The Employer must provide in Adoption Agreement Section
3.18 the manner in which the Plan will satisfy this limitation. The Employer
also must provide in its Adoption Agreement Section 3.18 the manner in which
the Plan will satisfy the top heavy requirements of Code Section 416 after
taking into account the existence (or prior maintenance) of the defined
benefit plan.
3.19 DEFINITIONS - ARTICLE III. For purposes of Article III, the
following terms mean:
(a) "Annual Addition" - The sum of the following amounts allocated
on behalf of a Participant for a Limitation Year, of (i) all
Employer contributions; (ii) all forfeitures; and (iii) all Employee
contributions. Except to the extent provided in Treasury regulations,
Annual Additions include excess contributions described in Code Section
401(k), excess aggregate contributions described in Code Section 401(m) and
excess deferrals described in Code Section 402(g), irrespective of whether
the plan distributes or forfeits such excess amounts. Annual Additions
also include Excess Amounts reapplied to reduce Employer contributions
under Section 3.10. Amounts allocated after March 31, 1984, to an
individual medical account (as defined in Code Section 415(1)(2)) included
as part of a defined benefit plan maintained by the Employer are Annual
Additions. Furthermore, Annual Additions include contributions paid or
accrued after December 31, 1985, for taxable years ending after December
31, 1985, attributable to post-retirement medical benefits allocated to
the separate account of a key employee (as defined in Code Section
419A(d)(3)) under a welfare benefit fund (as defined in Code Section
419(e)) maintained by the Employer.
(b) "Compensation" - For purposes of applying the limitations of
Part 2 of this Article III, "Compensation" means Compensation as defined
in Section 1.12, except Compensation does not include elective
contributions, irrespective of whether the Employer has elected to include
these amounts as Compensation under Section 1.12 of its Adoption
Agreement, and any exclusion selected in Section 1.12 of the Adoption
Agreement (other than the exclusion of elective contributions) does not
apply.
(c) "Employer" - The Employer that adopts this Plan and any related
employers described in Section 1.30. Solely for purposes of applying the
limitations of Part 2 of this Article III, the Advisory Committee will
determine related employers described in Section 1.30 by modifying Code
Sections 414(b) and (c) in accordance with Code Section 415(h).
(d) "Excess Amount" - The excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
(e) "Limitation Year" - The period selected by the Employer under
Adoption Agreement Section 1.17. All qualified plans of the Employer
must use the same Limitation Year. If the Employer amends the
Limitation Year to a different 12 consecutive month period, the new
Limitation Year must begin on a date within the Limitation Year for which
the Employer makes the amendment, creating a short Limitation Year.
(f) "Master or Prototype Plan" - A plan the form of which is the subject
of a favorable notification letter or a favorable opinion letter from the
Internal Revenue Service.
7
<PAGE> 27
(g) "Maximum Permissible Amount" - The lesser of (i) $30,000 (or, if
greater, one-fourth of the defined benefit dollar limitation under
Code 415(b)(1)(A)), or (ii) 25% of the Participant's Compensation for
the Limitation Year. If there is a short Limitation Year because of a
change in Limitation Year, the Advisory Committee will multiply the
$30,000 (or adjusted) limitation by the following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
(h) "Defined contribution plan" - A retirement plan which provides for
an individual account for each participant and for benefits based solely
on the amount contributed to the participant's account, and any income,
expenses, gains and losses, and any forfeitures of accounts of other
participants which the plan may allocate to such participant's account.
The Advisory Committee must treat all defined contribution plans (whether
or not terminated) maintained by the Employer as a single plan. Solely for
purposes of the limitations of Part 2 of this Article III, the Advisory
Committee will treat employee contributions made to a defined benefit plan
maintained by the Employer as a separate defined contribution plan. The
Advisory Committee also will treat as a defined contribution plan an
individual medical account (as defined in Code Section 415(1)(2)) included
as part of a defined benefit plan maintained by the Employer and, for
taxable years ending after December 31, 1985, a welfare benefit fund under
Code Section 419(e) maintained by the Employer to the extent there are
post-retirement medical benefits allocated to the separate account of a
key employee (as defined in Code Section 419A(d)(3)).
(i) "Defined benefit plan" - A retirement plan which does not provide
for individual accounts for Employer contributions. The Advisory
Committee must treat all defined benefit plans (whether or not
terminated) maintained by the Employer as a single plan.
[Note: The definitions in paragraphs (j), (k) and (1) apply only if the
limitation described in Section 3.18 applies to the Employer's Plan.]
(j) "Defined benefit plan fraction" -
Projected annual benefit of the Participant under the defined benefit plan(s)
-----------------------------------------------------------------------------
The lesser of (i) 125% (subject to the "100% limitation" in paragraph (1))
of the dollar limitation in effect under Code Section 415(b)(1)(A) for
the Limitation Year, or (ii) 140% of the Participant's average
Compensation for his high three (3) consecutive
Years of Service
To determine the denominator of this fraction, the Advisory Committee
will make any adjustment required under Code Section 415(b) and will determine
a Year of Service, unless otherwise provided in an addendum to Adoption
Agreement Section 3.18, as a Plan Year in which the Employee completed at least
1,000 Hours of Service. The "projected annual benefit" is the annual retirement
benefit (adjusted to an actuarially equivalent straight life annuity if the
plan expresses such benefit in a form other than a straight life annuity or
qualified joint and survivor annuity) of the Participant under the terms of the
defined benefit plan on the assumptions he continues employment until his
normal retirement age (or current age, if later) as stated in the defined
benefit plan, his compensation continues at the same rate as in effect in the
Limitation Year under consideration until the date of his normal retirement age
and all other relevant factors used to determine benefits under the defined
benefit plan remain constant as of the current Limitation Year for all future
Limitation Years.
CURRENT ACCRUED BENEFIT. If the Participant accrued benefits in one or
more defined benefit plans maintained by the Employer which were in
existence on May 6, 1986, the dollar limitation used in the denominator of this
fraction will not be less than the Participant's Current Accrued Benefit. A
Participant's Current Accrued Benefit is the sum of the annual benefits under
such defined benefit plans which the Participant had accrued as of the end of
the 1986 Limitation Year (the last Limitation Year beginning before January 1,
1987), determined without regard to any change in the terms or conditions of
the Plan
8
<PAGE> 28
ARTICLE IV
PARTICIPANT CONTRTBU1IONS
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. This Plan does not permit
Participant nondeductible contributions unless the Employer maintains its
Plan under a Code Section 401(k) Adoption Agreement. If the Employer does not
maintain its Plan under a Code Section 401(k) Adoption Agreement and,
prior to the adoption of this Prototype Plan, the Plan accepted Participant
nondeductible contributions for a Plan Year beginning after December 31, 1986,
those contributions must satisfy the requirements of Code Section 401(m). This
Section 4.01 does not prohibit the Plan's acceptance of Participant
nondeductible contributions prior to the first Plan Year commencing after the
Plan Year in which the Employer adopts this Prototype Plan.
4.02 PARTICIPANT DEDUCTIBLE CONTRIBUTIONS. A qualified Plan may not
accept Participant deductible contributions after April 15, 1987. If the
Employer's Plan includes Participant deductible contributions ("DECs") made
prior to April 16, 1987, the Advisory Committee must maintain a separate
accounting for the Participant's Accrued Benefit attributable to DECs,
including DECs which are part of a rollover contribution described in Section
4.03. The Advisory Committee will treat the accumulated DECs as part of the
Participant's Accrued Benefit for all purposes of the Plan, except for purposes
of determining the top heavy ratio under Section 1.33. The Advisory Committee
may not use DECs to purchase life insurance on the Participant's behalf.
4.03 PARTICIPANT ROLLOVER CONTRIBUTIONS. Any Participant, with the
Employer's written consent and after filing with the Trustee the form
prescribed by the Advisory Committee, may contribute cash or other property
to the Trust other than as a voluntary contribution if the contribution is a
"rollover contribution" which the Code permits an employee to transfer either
directly or indirectly from one qualified plan to another qualified plan.
Before accepting a rollover contribution, the Trustee may require an Employee
to furnish satisfactory evidence that the proposed transfer is in fact a
"rollover contribution" which the Code permits an employee to make to a
qualified plan. A rollover contribution is not an Annual Addition under Part 2
of Article III.
The Trustee will invest the rollover contribution in a segregated
investment Account for the Participant's sole benefit unless the Trustee
(or the Named Fiduciary, in the case of a nondiscretionary Trustee
designation), in its sole discretion, agrees to invest the rollover
contribution as part of the Trust Fund. The Trustee will not have any
investment responsibility with respect to a Participant's segregated rollover
Account. The Participant, however, from time to time, may direct the Trustee in
writing as to the investment of his segregated rollover Account in property, or
property interests, of any kind, real, personal or mixed; provided however, the
Participant may not direct the Trustee to make loans to his Employer. A
Participant's segregated rollover Account alone will bear any extraordinary
expenses resulting from investments made at the direction of the Participant.
As of the Accounting Date (or other valuation date) for each Plan Year, the
Advisory Committee will allocate and credit the net income (or net loss) from a
Participant's segregated rollover Account and the increase or decrease in the
fair market value of the assets of a segregated rollover Account solely to that
Account. The Trustee is not liable nor responsible for any loss resulting to
any Beneficiary, nor to any Participant, by reason of any sale or investment
made or other action taken pursuant to and in accordance with the direction of
the Participant. In all other respects, the Trustee Will hold, administer and
distribute a rollover contribution in the same manner as any Employer
contribution made to the Trust.
An eligible Employee, prior to satisfying the Plan's eligibility
conditions, may make a rollover contribution to the Trust to the same extent
and in the same manner as a Participant. If an Employee makes a rollover
contribution to the Trust prior to satisfying the Plan's eligibility
conditions, the Advisory Committee and Trustee must treat the Employee as a
Participant for all purposes of the Plan except the Employee is not a
Participant for purposes of sharing in Employer contributions or Participant
forfeitures under the Plan until he actually becomes a Participant in the Plan.
If the Employee has a Separation from Service prior to becoming a Participant,
the Trustee will distribute his rollover contribution Account to him as if it
were an Employer contribution Account.
1
<PAGE> 29
4.04 PARTICIPANT CONTRIBUTION - FORFEITABILITY. A Participant's Accrued
Benefit is, at all times, 100% Nonforfeitable to the extent the value of his
Accrued Benefit is derived from his Participant contributions described in this
Article IV.
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. A Participant,
by giving prior written notice to the Trustee, may withdraw all or any
part of the value of his Accrued Benefit derived from his Participant
contributions described in this Article IV. A distribution of Participant
contributions must comply with the joint and survivor requirements described in
Article VI, if those requirements apply to the Participant. A Participant may
not exercise his right to withdraw the value of his Accrued Benefit derived
from his Participant contributions more than once during any Plan Year. The
Trustee, in accordance with the direction of the Advisory Committee, will
distribute a Participant's unwithdrawn Accrued Benefit attributable to his
Participant contributions in accordance with the provisions of Article VI
applicable to the distribution of the Participant's Nonforfeitable Accrued
Benefit.
4.06 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT. The Advisory Committee
must maintain a separate Account(s) in the name of each Participant to reflect
the Participant's Accrued Benefit under the Plan derived from his Participant
contributions. A Participant's Accrued Benefit derived from his Participant
contributions as of any applicable date is the balance of his separate
Participant contribution Account(s).
* * * * * * * * * * * * * * *
2
<PAGE> 30
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT AGE. The Employer must define Normal Retirement
Age in its Adoption Agreement. A Participant's Accrued Benefit derived from
Employer contributions is 100% Nonforfeitable upon and after his attaining
Normal Retirement Age (if employed by the Employer on or after that date).
5.02 PARTICIPANT DISABILITY OR DEATH. The Employer may elect in its
Adoption Agreement to provide a Participant's Accrued Benefit derived from
Employer contributions will be 100% Nonforfeitable if the Participant's
Separation from Service is a result of his death or his disability.
5.03 VESTING SCHEDULE. Except as provided in Sections 5.01 and 5.02, for
each Year of Service, a Participant's Nonforfeitable percentage of his
Accrued Benefit derived from Employer contributions equals the percentage in
the vesting schedule completed by the Employer in its Adoption Agreement.
(A) ELECTION OF SPECIAL VESTING FORMULA. If the Trustee makes a distribution
(other than a cash-out distribution described in Section 5.04) to a
partially-vested Participant, and the Participant has not incurred a Forfeiture
Break in Service at the relevant time, the Advisory Committee will establish a
separate Account for the Participant's Accrued Benefit. At any relevant time
following the distribution, the Advisory Committee will determine the
Participant's Nonforfeitable Accrued Benefit derived from Employer
contributions in accordance with the following formula: P(AB + (R x D)) -
(R x D).
To apply this formula, "P" is the Participant's current vesting
percentage at the relevant time, "AB" is the Participant's Employer-derived
Accrued Benefit at the relevant time, "R" is the ratio of "AB" to the
Participant's Employer-derived Accrued Benefit immediately following the
earlier distribution and "D" is the amount of the earlier distribution. If,
under a restated Plan, the Plan has made distribution to a partially-vested
Participant prior to its restated Effective Date and is unable to apply the
cash-out provisions of Section 5.04 to that prior distribution, this special
vesting formula also applies to that Participant's remaining Account. The
Employer, in an addendum to its Adoption Agreement, numbered Section 5.03, may
elect to modify this formula to read as follows: P(AB + D) - D.
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/
RESTORATION OF FORFEITED ACCRUED BENEFIT. If, pursuant to Article VI, a
partially-vested Participant receives a cash-out distribution before he incurs a
Forfeiture Break in Service (as defined in Section 5.08), the cash-out
distribution will result in an immediate forfeiture of the nonvested portion of
the Participant's Accrued Benefit derived from Employer contributions. See
Section 5.09. A partially-vested Participant is a Participant whose
Nonforfeitable Percentage determined under Section 5.03 is less than 100%. A
cash-out distribution is a distribution of the entire present value of the
Participant's Nonforfeitable Accrued Benefit.
(A) RESTORATION AND CONDITIONS UPON RESTORATION. A partially-vested
Participant who is re-employed by the Employer after receiving a cash-out
distribution of the Nonforfeitable percentage of his Accrued Benefit may repay
the trustee the amount of the cash-out distribution attributable to Employer
contributions, unless the Participant no longer has a right to restoration by
reason of the conditions of this Section 5.04(A). If a partially-vested
Participant males the cash-out distribution repayment, the Advisory Committee,
subject to the conditions of this Section 5.04(A), must restore his Accrued
Benefit attributable to Employer contributions to the same dollar amount as the
dollar amount of his Accrued Benefit on the Accounting Date, or other valuation
date, immediately preceding the date of the cash-out distribution, unadjusted
for any gains or losses occurring subsequent to that Accounting Date, or other
valuation date. Restoration of the Participant's Accrued Benefit includes
restoration of all Code Section 411 (d)(6) protected benefits with respect to
that restored Accrued Benefit, in accordance with applicable Treasury
regulations. The Advisory Committee will not restore a re-employed
Participant's Accrued Benefit under this paragraph if:
(1) 5 years have elapsed since the Participant's first re-employment
date with the Employer following the cash-out distribution; or
1
<PAGE> 31
(2) The Participant incurred a Forfeiture Break in Service (as defined in
Section 5.08). This condition also applies if the Participant makes
repayment within the Plan Year in which he incurs the Forfeiture Break in
Service and that Forfeiture Break in Service would result in a complete
forfeiture of the amount the Advisory Committee otherwise would restore.
(B) TIME AND METHOD OF RESTORATION. If neither of the two conditions preventing
restoration of the Participant's Accrued Benefit applies, the Advisory
Committee will restore the Participant's Accrued Benefit as of the Plan Year
Accounting Date coincident with or immediately following the repayment. To
restore the Participant's Accrued Benefit, the Advisory Committee, to the
extent necessary, will allocate to the Participant's Account:
(1) First, the amount, if any, of Participant forfeitures the Advisory
Committee would otherwise allocate under Section 3.05;
(2) Second, the amount, if any, of the Trust Fund net income or gain for
the Plan Year; and
(3) Third, the Employer contribution for the Plan Year to the extent made
under a discretionary formula.
In an addendum to its Adoption Agreement numbered 5.04(B), the Employer
may eliminate as a means of restoration any of the amounts described in clauses
(1), (2) and (3) or may change the order of priority of these amounts. To the
extent the amounts described in clauses (1), (2) and (3) are insufficient to
enable the Advisory Committee to make the required restoration, the Employer
must contribute, without regard to any requirement or condition of Section
3.01, the additional amount necessary to enable the Advisory Committee to make
the required restoration. If, for a particular Plan Year, the Advisory
Committee must restore the Accrued Benefit of more than one re-employed
Participant, then the Advisory Committee will make the restoration allocations
to each such Participant's Account in the same proportion that a Participant's
restored amount for the Plan Year bears to the restored amount for the Plan
Year of all re-employed Participants. The Advisory Committee will not take into
account any allocation under this Section 5.04 in applying the limitation on
allocations under Part 2 of Article III.
(C) 0% VESTED PARTICIPANT. The Employer must specify in its Adoption Agreement
whether the deemed cash-out rule applies to a 0% vested Participant. A 0%
vested Participant is a Participant whose Accrued Benefit derived from Employer
contributions is entirely forfeitable at the time of his Separation from
Service. If the Participant's Account is not entitled to an allocation of
Employer contributions for the Plan Year in which he has a Separation from
Service, the Advisory Committee will apply the deemed cash-out rule as if the
0% vested Participant received a cash-out distribution on the date of the
Participant's Separation from Service. If the Participant's Account is entitled
to an allocation of Employer contributions or Participant forfeitures for the
Plan Year in which he has a Separation from Service, the Advisory Committee
will apply the deemed cash-out rule as if the 0% vested Participant received a
cash-out distribution on the first day of the first Plan Year beginning after
his Separation from Service. For purposes of applying the restoration
provisions of this Section 5.04, the Advisory Committee will treat the 0%
vested Participant as repaying his cash-out "distribution" on the first date of
his re-employment with the Employer. If the deemed cash-out rule does not apply
to the Employer's Plan, a 0% vested Participant will not incur a forfeiture
until he incurs a Forfeiture Break in Service.
5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT. Until the Advisory Committee
restores the Participant's Accrued Benefit, as described in Section 5.04, the
Trustee will invest the cash-out amount the Participant has repaid in a
segregated Account maintained solely for that Participant. The Trustee must
invest the amount in the Participant's segregated Account in Federally insured
interest bearing savings account(s) or time deposit(s) (or a combination of
both), or in other fixed income investments. Until commingled with the balance
of the Trust Fund on the date the Advisory Committee restores the Participant's
Accrued Benefit, the Participant's segregated Account remains a part of the
Trust, but it alone shares in any income it earns and it alone bears any
expense or loss it incurs. Unless the repayment qualifies as a rollover
contribution, the Advisory Committee will direct the Trustee to repay to the
Participant as soon as is administratively practicable the full amount of the
Participant's segregated Account if the Advisory Committee determines either of
the conditions of Section 5.04(A) prevents restoration as of the applicable
Accounting Date, notwithstanding the Participant's repayment.
2
<PAGE> 32
5.06 YEAR OF SERVICE - VESTING. For purposes of vesting under
Section 5.03, Year of Service means any 12-consecutive month period
designated in the Employer's Adoption Agreement during which an Employee
completes not less than the number of Hours of Service (not exceeding 1,000)
specified in the Employer's Adoption Agreement. A Year of Service includes any
Year of Service earned prior to the Effective Date of the Plan, except as
provided in Section 5.08.
5.07 BREAK IN SERVICE - VESTING. For purposes of this Article V, a
Participant incurs a "Break in Service" if during any vesting computation
period he does not complete more than 500 Hours of Service. If, pursuant to
Section 5.06, the Plan does not require more than 500 Hours of Service to
receive credit for a Year of Service, a Participant incurs a Break in Service
in a vesting computation period in which he fails to complete a Year of
Service.
5.08 INCLUDED YEARS OF SERVICE - VESTING. For purposes of determining
"Years of Service" under Section 5.06, the Plan takes into account all Years
of Service an Employee completes with the Employer except:
(a) For the sole purpose of determining a Participant's Nonforfeitable
percentage of his Accrued Benefit derived from Employer contributions
which accrued for his benefit prior to a Forfeiture Break in Service,
the Plan disregards any Year of Service after the Participant first incurs
a Forfeiture Break in Service. The Participant incurs a Forfeiture Break
in Service when he incurs 5 consecutive Breaks in Service.
(b) The Plan disregards any Year of Service excluded under the Employer's
Adoption Agreement.
The Plan does not apply the Break in Service rule under Code Section
411(a)(6)(B). Therefore, an Employee need not complete a Year of Service after a
Break in Service before the Plan takes into account the Employee's otherwise
includible Years of Service under this Article V.
5.09 FORFEITURE OCCURS. A Participant's forfeiture, if any, of his
Accrued Benefit derived from Employer contributions occurs under the Plan on
the earlier of:
(a) The last day of the vesting computation period in which the
Participant first incurs a Forfeiture Break in Service; or
(b) The date the Participant receives a cash-out distribution.
The Advisory Committee determines the percentage of a Participant's
Accrued Benefit forfeiture, if any, under this Section 5.09 solely by
reference to the vesting schedule of Section 5.03. A Participant does not
forfeit any portion of his Accrued Benefit for any other reason or cause except
as expressly provided by this Section 5.09 or as provided under Section 9.14.
* * * * * * * * * * * * * * *
3
<PAGE> 33
ARTICLE VI
TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Unless, pursuant to Section 6.03,
the Participant or the Beneficiary elects in writing to a different time or
method of payment, the Advisory Committee will direct the Trustee to commence
distribution of a Participant's Nonforfeitable Accrued Benefit in accordance
with this Section 6.01. A Participant must consent, in writing, to any
distribution required under this Section 6.01 if the present value of the
Participant's Nonforfeitable Accrued Benefit, at the time of the distribution
to the Participant, exceeds $3,500 and the Participant has not attained the
later of Normal Retirement Age or age 62. Furthermore, the Participant's spouse
also must consent, in writing, to any distribution, for which Section 6.04
requires the spouse's consent. For all purposes of this Article VI, the term
"annuity starting date" means the first day of the first period for which the
Plan pays an amount as an annuity or in any other form. A distribution date
under this Article VI, unless otherwise specified within the Plan, is the date
or dates the Employer specifies in the Adoption Agreement, or as soon as
administratively practicable following that distribution date. For purposes of
the consent requirements under this Article VI, if the present value of the
Participant's Nonforfeitable Accrued Benefit, at the time of any distribution,
exceeds $3,500, the Advisory Committee must treat that present value as
exceeding $3,500 for purposes of all subsequent Plan distributions to the
Participant.
(A) SEPARATION FROM SERVICE FOR A REASON OTHER THAN DEATH.
(1) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT NOT EXCEEDING $3,500.
If the Participant's Separation from Service is for any reason other than
death, the Advisory Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in a lump sum, on the distribution
date the Employer specifies in the Adoption Agreement, but in no event later
than the 60th day following the close of the Plan Year in which the Participant
attains Normal Retirement Age. If the Participant has attained Normal
Retirement Age at the time of his Separation from Service, the distribution
under this paragraph will occur no later than the 60th day following the close
of the Plan Year in which the Participant's Separation from Service occurs.
(2) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $3,500. If the
Participant's Separation from Service is for any reason other than
death, the Advisory Committee will direct the Trustee to commence distribution
of the Participant's Nonforfeitable Accrued Benefit in a form and at the time
elected by the Participant, pursuant to Section 6.03. In the absence of an
election by the Participant, the Advisory Committee will direct the Trustee to
distribute the Participant's Nonforfeitable Accrued Benefit in a lump sum (or,
if applicable, the normal annuity form of distribution required under Section
6.04), on the 60th day following the close of the Plan Year in which the latest
of the following events occurs: (a) the Participant attains Normal Retirement
Age; (b) the Participant attains age 62; or (c) the Participant's Separation
from Service.
(3) Disability. If the Participant's Separation from Service is because
of his disability, the Advisory Committee will direct the Trustee to pay
the Participant's Nonforfeitable Accrued Benefit in lump sum, on the
distribution date the Employer specifies in the Adoption Agreement, subject to
the notice and consent requirements of this Article VI and subject to the
applicable mandatory commencement dates described in Paragraphs (1) and (2).
(4) HARDSHIP. Prior to the time at which the Participant may receive
distribution under Paragraphs (1), (2) or (3), the Participant may request
a distribution from his Nonforfeitable Accrued Benefit in an amount necessary
to satisfy a hardship, if the Employer elects in the Adoption Agreement to
permit hardship distributions. Unless the Employer elects otherwise in the
Adoption Agreement, a hardship distribution must be on account of any of the
following: (a) medical expenses; (b) the purchase (excluding mortgage payments)
of the Participant's principal residence; (c) post-secondary education tuition,
for the next semester or quarter, for the Participant or for the Participant's
spouse, children or dependents; (d) to prevent the eviction of the Participant
from his principal residence or the foreclosure on the mortgage of the
Participant's principal residence; (e) funeral expenses of the Participant's
family member; or (f) the Participant's disability. A partially-vested
Participant may not receive a hardship distribution described in this Paragraph
(A)(4) prior to incurring a Forfeiture Break in Service, unless the hardship
distribution is a cash-out distribution (as defined in Article V). The Advisory
Committee will direct the Trustee to make the hardship distribution as soon as
administratively practicable after the Participant makes a valid request for
the hardship distribution.
1
<PAGE> 34
(B) REQUIRED BEGINNING DATE. If any distribution commencement date described
under Paragraph (A) of this Section 6.01, either by Plan provision or by
Participant election (or nonelection), is later than the Participant's Required
Beginning Date the Advisory Committee instead must direct the Trustee to make
distribution on the Participant's Required Beginning Date, subject to the
transitional election, if applicable, under Section 6.03(D). A Participant's
Required Beginning Date is the April 1 following the close of the calendar year
in which the Participant attains age 70 1/2. However, if the Participant, prior
to incurring a Separation from Service, attained age 70 1/2 by January 1, 1988,
and, for the five Plan Year period ending in the calendar year in which he
attained age 70 1/2 and for all subsequent years, the Participant was not a more
than 5% owner, the Required Beginning Date is the April 1 following the close
of the calendar year in which the Participant separates from Service or, if
earlier, the April 1 following the close of the calendar year in which the
Participant becomes a more than 5% owner. Furthermore, if a Participant who
was not a more than 5% owner attained age 70 1/2 during 1988 and did not incur a
Separation from Service prior to January 1, 1989, his Required Beginning Date
is April 1, 1990. A mandatory distribution at the Participant's Required
Beginning Date will be in lump sum (or, if applicable, the normal annuity form
of distribution required under Section 6.04) unless the Participant, pursuant
to the provisions of this Article VI, makes a valid election to receive an
alternative form of payment.
(C) DEATH OF THE PARTICIPANT. The Advisory Committee will direct the Trustee,
in accordance with this Section 6.01(C), to distribute to the Participant's
Beneficiary the Participant's Nonforfeitable Accrued Benefit remaining in the
Trust at the time of the Participant's death. Subject to the requirements of
Section 6.04, the Advisory Committee will determine the death benefit by
reducing the Participant's Nonforfeitable Accrued Benefit by any security
interest the Plan has against that Nonforfeitable Accrued Benefit by reason of
an outstanding Participant loan.
(1) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT DOES NOT EXCEED
$3,500. The Advisory Committee, subject to the requirements of Section 6.04,
must direct the Trustee to distribute the deceased Participant's Nonforfeitable
Accrued Benefit in a single sum, as soon as administratively practicable
following the Participant's death or, if later, the date on which the Advisory
Committee receives notification of or otherwise confirms the Participant's
death.
(2) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $3,500.
The Advisory Committee will direct the Trustee to distribute the deceased
Participant's Nonforfeitable Accrued Benefit at the time and in the form
elected by the Participant or, if applicable by the Beneficiary, as permitted
under this Article VI. In the absence of an election, subject to the
requirements of Section 6.04, the Advisory Committee will direct the Trustee to
distribute the Participant's undistributed Nonforfeitable Accrued Benefit in a
lump sum on the first distribution date following the close of the Plan Year in
which the Participant's death occurs or, if later, the first distribution date
following the date the Advisory Committee receives notification of or otherwise
confirms the Participant's death.
If the death benefit is payable in full to the Participant's surviving
spouse, the surviving spouse, in addition to the distribution options
provided in this Section 6.01(C), may elect distribution at any time or in any
form (other than a joint and survivor annuity) this Article VI would permit for
a Participant.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to the annuity
distribution requirements, if any, prescribed by Section 6.04, and any
restrictions prescribed by Section 6.03, a Participant or Beneficiary may elect
distribution under one, or any combination, of the following methods: (a) by
payment in a lump sum; or (b) by payment in monthly, quarterly or annual
installments over a fixed reasonable period of time, not exceeding the life
expectancy of the Participant, or the joint life and last survivor expectancy
of the Participant and his Beneficiary. The Employer may elect in its Adoption
Agreement to modify the methods of payment available under this Section 6.02.
The distribution options permitted under this Section 6.02 are available
only if the present value of the Participant Nonforfeitable Accrued Benefit,
at the time of the distribution to the Participant, exceeds $3,500. To
facilitate installment payments under this Article VI, the Advisory Committee
may direct the Trustee to segregate all or any part of the Participant's
Accrued Benefit in a separate Account. The Trustee will invest the
Participant's segregated Account in Federally insured interest bearing savings
account(s) or time deposit(s) (or
2
<PAGE> 35
a combination of both), or in other fixed income investments. A segregated
Account remains a part of the Trust, but it alone shares in any income it
earns, and it alone bears any expense or loss it incurs. A Participant or
Beneficiary may elect to receive an installment distribution in the form of a
Nontransferable Annuity Contract. Under an installment distribution, the
Participant or Beneficiary, at any time, may elect to accelerate the payment of
all, or any portion, of the Participant's unpaid Nonforfeitable Accrued
Benefit, subject to the requirements of Section 6.04.
(A) MINIMUM DISTRIBUTION REQUIREMENTS FOR PARTICIPANTS. The Advisory Committee
may not direct the Trustee to distribute the Participant's Nonforfeitable
Accrued Benefit, nor may the Participant elect to have the Trustee distribute
his Nonforfeitable Accrued Benefit, under a method of payment which, as of the
Required Beginning Date, does not satisfy the minimum distribution
requirements under Code Section 401(a)(9) and the applicable Treasury
regulations. The minimum distribution for a calendar year equals the
Participant's Nonforfeitable Accrued Benefit as of the latest valuation date
preceding the beginning of the calendar year divided by the Participant's life
expectancy or, if applicable, the joint and last survivor expectancy of the
Participant and his designated Beneficiary (as determined under Article VIII,
subject to the requirements of the Code Section 401(a)(9) regulations). The
Advisory Committee will increase the Participant's Nonforfeitable Accrued
Benefit, as determined on the relevant valuation date, for contributions or
forfeitures allocated after the valuation date and by December 31 of the
valuation calendar year, and will decrease the valuation by distributions made
after the valuation date and by December 31 of the valuation calendar year. For
purposes of this valuation, the Advisory Committee will treat any portion of
the minimum distribution for the first distribution calendar year made after
the close of that year as a distribution occurring in that first distribution
calendar year. In computing a minimum distribution, the Advisory Committee must
use the unisex life expectancy multiples under Treas. Reg. Section 1.72-9. The
Advisory Committee, only upon the Participant's written request, will compute
the minimum distribution for a calendar year subsequent to the first calendar
year for which the Plan requires a minimum distribution by redetermining the
applicable life expectancy. However, the Advisory Committee may not redetermine
the joint life and last survivor expectancy of the Participant and a nonspouse
designated Beneficiary in a maimer which takes into account any adjustment to a
life expectancy other than the Participant's life expectancy.
If the Participant's spouse is not his designated Beneficiary, a method
of payment to the Participant (whether by Participant election or by Advisory
Committee direction) may not provide more than incidental benefits to the
Beneficiary. For Plan Years beginning after December 31, 1988, the Plan must
satisfy the minimum distribution incidental benefit ("MDIB") requirement in
the Treasury regulations issued under Code Section 401(a)(9) for distributions
made on or after the Participant's Required Beginning Date and before the
Participant's death. To satisfy the MDIB requirement, the Advisory Committee
will compute the minimum distribution required by this Section 6.02(A) by
substituting the applicable MDIB divisor for the applicable life expectancy
factor, if the MDIB divisor is a lesser number. Following the Participant's
death, the Advisory Committee will compute the minimum distribution required
by this Section 6.02(A) solely on the basis of the applicable life expectancy
factor and will disregard the MDIB favor. For Plan Years beginning prior to
January 1, 1989, the Plan satisfies the incidental benefits requirement if the
distributions to the Participant satisfied the MDIB requirement or if the
present value of the retirement benefits payable solely to the Participant is
greater than 50% of the present value of the total benefits payable to the
Participant and his Beneficiaries. The Advisory Committee must determine
whether benefits to the Beneficiary are incidental as of the date the Trustee
is to commence payment of the retirement benefits to the Participant, or as of
any date the Trustee redetermines the payment period to the Participant.
The minimum distribution for the first distribution calendar year is due
by the Participant's Required Beginning Date. The minimum distribution for
each subsequent distribution calendar year, including the calendar year in
which the Participant's Required Beginning Date occurs, is due by December 31
of that year. If the Participant receives distribution in the form of a
Nontransferable Annuity Contract, the distribution satisfies this Section
6.02(A) if the contract complies with the requirements of Code Section
401(a)(9) and the applicable Treasury regulations.
3
<PAGE> 36
(B) MINIMUM DISTRIBUTION REQUIREMENTS FOR BENEFICIARIES. The method of
distribution to the Participant's Beneficiary must satisfy Code Section
401(a)(9) and the applicable Treasury regulations. If the Participant's death
occurs after his Required Beginning Date or, if earlier, the date the
Participant commences an irrevocable annuity pursuant to Section 6.04, the
method of payment to the Beneficiary must provide for completion of payment
over a period which does not exceed the payment period which had commenced for
the Participant. If the Participant's death occurs prior to his Required
Beginning Date, and the Participant had not commenced an irrevocable annuity
pursuant to Section 6.04, the method of payment to the Beneficiary, subject to
Section 6.04, must provide for completion of payment to the Beneficiary over a
period not exceeding: (i) 5 years after the date of the Participant's death; or
(ii) if the Beneficiary is a designated Beneficiary, the designated
Beneficiary's life expectancy. The Advisory Committee may not direct payment of
the Participant's Nonforfeitable Accrued Benefit over a period described in
clause (ii) unless the Trustee will commence payment to the designated
Beneficiary no later than the December 31 following the close of the calendar
year in which the Participant's death occurred or, if later, and the designated
Beneficiary is the Participant's surviving spouse, December 31 of the calendar
year in which the Participant would have attained age 70 1/2. If the Trustee
will make distribution in accordance with clause (ii), the minimum distribution
for a calendar year equals the Participant's Nonforfeitable Accrued Benefit as
of the latest valuation date preceding the beginning of the calendar year
divided by the designated Beneficiary's life expectancy. The Advisory Committee
must use the unisex life expectancy multiples under Treas. Reg. Section 1.72-9
for purposes of applying this paragraph. The Advisory Committee, only upon the
written request of the Participant or of the Participant's surviving spouse,
will recalculate the life expectancy of the Participant's surviving spouse not
more frequently than annually, but may not recalculate the life expectancy of a
nonspouse designated Beneficiary after the Trustee commences payment to the
designated Beneficiary. The Advisory Committee will apply this paragraph by
treating any amount paid to the Participant's child, which becomes payable to
the Participant's surviving spouse upon the child's attaining the age of
majority, as paid to the Participant's surviving spouse. Upon the Beneficiary's
written request, the Advisory Committee must direct the Trustee to accelerate
payment of all, or any portion, of the Participant's unpaid Accrued Benefit, as
soon as administratively practicable following the effective date of that
request.
6.03 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days, but not later
than 30 days, before the Participant's annuity starting date, the Advisory
Committee must provide a benefit notice to a Participant who is eligible to
make an election undo this Section 6.03. The benefit notice must explain the
optional forms of benefit in the Plan, including the material features and
relative values of those options, and the Participant's right to defer
distribution until he attains the later of Normal Retirement Age or age 62.
If a Participant or Beneficiary makes an election prescribed by this
Section 6.03, the Advisory Committee will direct the Trustee to
distribute the Participant's Nonforfeitable Accrued Benefit in accordance with
that Section. Any election under this Section 6.03 is subject to the
requirements of Section 6.02 and of Section 6.04. The Participant or
Beneficiary must make an election under this Section 6.03 by filing his
election with the Advisory Committee at any time before the Trustee otherwise
would commence to pay a Participant's Accrued Benefit in accordance with the
requirements of Article VI.
(A) PARTICIPANT ELECTIONS AFTER SEPARATION FROM SERVICE. If the present value
of a Participant's Nonforfeitable Accrued Benefit exceeds $3,500, he may elect
to have the Trustee commence distribution as of any distribution date permitted
under the Employer's Adoption Agreement Section 6.03. The Participant may
reconsider an election at any time prior to the annuity starting date and elect
to commence distribution as of any other distribution date permitted under the
Employer's Adoption Agreement Section 6.03. If the Participant is
partially-vested in his Accrued Benefit, an election under this Paragraph (A)
to distribute prior to the Participant's incurring a Forfeiture Break in
Service (as defined in Section 5.08), must be in the form of a cash-out
distribution (as defined in Article V). A Participant may not receive a
cash-out distribution if, prior to the time the Trustee actually makes the
cash-out distribution, the Participant returns to employment with the Employer.
Following his attainment of Normal Retirement Age, a Participant who has
separated from Service may elect distribution as of any distribution date,
irrespective of the elections under Adoption Agreement Section 6.03.
4
<PAGE> 37
(B) PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE. The Employer must
specify in its Adoption Agreement the distribution election rights, if any, a
Participant has prior to his Separation from Service. A Participant must make
an election under this Section 6.03(B) on a form prescribed by the Advisory
Committee at any time during the Plan Year for which his election is to be
effective. In his written election, the Participant must specify the percentage
or dollar amount he wishes the Trustee to distribute to him. The Participant's
election relates solely to the percentage or dollar amount specified in his
election form and his right to elect to receive an amount, if any, for a
particular Plan Year greater than the dollar amount or percentage specified in
his election form terminates on the Accounting Date. The Trustee must make a
distribution to a Participant in accordance with his election under this
Section 6.03(B) within the 90 day period (or as soon as administratively
practicable) after the Participant files his written election with the Trustee.
The Trustee will distribute the balance of the Participant's Accrued Benefit
not distributed pursuant to his election(s) in accordance with the other
distribution provisions of this Plan.
(C) DEATH BENEFIT ELECTIONS. If the present value of the deceased
Participant's Nonforfeitable Accrued Benefit exceeds $3,500, the
Participant's Beneficiary may elect to have the Trustee distribute the
Participant's Nonforfeitable Accrued Benefit in a form and within a period
permitted under Section 6.02. The Beneficiary's Section is subject to any
restrictions designated in writing by the Participant and not revoked as of his
date of death.
(D) TRANSITIONAL ELECTIONS. Notwithstanding the provisions of Sections 6.01
and 6.02, if the Participant (or Beneficiary) signed a written distribution
designation prior to January 1, 1984, the Advisory Committee must distribute
the Participant's Nonforfeitable Accrued Benefit in accordance with that
designation, subject however, to the survivor requirements, if applicable, of
Sections 6.04, 6.05 and 6.06. This Section 6.03(D) does not apply to a pre-1984
distribution designation, and the Advisory Committee will not comply with that
designation, if any of the following applies: (1) the method of distribution
would have disqualified the Plan under Code Section 401(a)(9) as in effect on
December 31, 1983; (2) the Participant did not have an Accrued Benefit as of
December 31, 1983; (3) the distribution designation does not specify the timing
and form of the distribution and the death Beneficiaries (in order of
priority); (4) the substitution of a Beneficiary modifies the payment period
of the distribution; or, (5) the Participant (or Beneficiary) modifies or
revokes the distribution designation. In the event of a revocation, the Plan
must distribute, no later than December 31 of the calendar year following the
year of revocation, the amount which the Participant would have received under
Section 6.02(A) if the distribution designation had not been in effect or, if
the Beneficiary revokes the distribution designation, the amount which the
Beneficiary would have received under Section 6.02(B) if the distribution
designation had not been in effect. The Advisory Committee will apply this
Section 6.03(D) to rollovers and transfers in accordance with Part J of the
Code Section 401(a)(9) Treasury regulations.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES.
(A) JOINT AND SURVIVOR ANNUITY. THE Advisory Committee must direct the
Trustee to distribute a married or unmarried Participant's Nonforfeitable
Accrued Benefit in the form of a qualified joint and survivor annuity, unless
the Participant makes a valid waiver election (described in Section 6.05)
within the 90 day period ending on the annuity starting date. If, as of the
annuity starting date, the Participant is married, a qualified joint and
survivor annuity is an immediate annuity which is purchasable with the
Participant's Nonforfeitable Accrued Benefit and which provides a life annuity
for the Participant and a survivor annuity payable for the remaining life of
the Participant's surviving spouse equal to 50% of the amount of the annuity
payable during the life of the Participant. If, as of the annuity starting
date, the Participant is not married, a qualified joint and survivor annuity is
an immediate life annuity for the Participant which is purchasable with the
Participant's Nonforfeitable Accrued Benefit. On or before the annuity starting
date, the Advisory Committee, without Participant or spousal consent, must
direct the Trustee to pay the Participant's Nonforfeitable Accrued Benefit in a
lump sum, in lieu of a qualified joint and survivor annuity, in accordance with
Section 6.01, if the Participant's Nonforfeitable Accrued Benefit is not
greater than $3,500. This Section 6.04(A) applies only to a Participant who has
completed at least one Hour of Service with the Employer after August 22, 1984.
5
<PAGE> 38
(B) PRERETIREMENT SURVIVOR ANNUITY. If a married Participant dies prior
to his annuity starting date, the Advisory Committee will direct the Trustee to
distribute a portion of the Participant's Nonforfeitable Accrued Benefit to the
Participant's surviving spouse in the form of a preretirement survivor annuity,
unless the Participant has a valid waiver election (as described in Section
6.06) in effect, or unless the Participant and his spouse were not married
throughout the one year period ending on the date of his death. A preretirement
survivor annuity is an annuity which is purchasable with 50% of the
Participant's Nonforfeitable Accrued Benefit (determined as of the date of the
Participant's death) and which is payable for the life of the Participant's
surviving spouse. The value of the preretirement survivor annuity is
attributable to Employer contributions and to Employee contributions in the
same proportion as the Participant's Nonforfeitable Accrued Benefit is
attributable to those contributions. The portion of the Participant's
Nonforfeitable Accrued Benefit not payable under this paragraph is payable to
the Participant's Beneficiary, in accordance with the other provisions of this
Article VI. If the present value of the preretirement survivor annuity does not
exceed $3,500, the Advisory Committee, on or before the annuity starting date,
must direct the Trustee to make a lump sum distribution to the Participant's
surviving spouse, in lieu of a preretirement survivor annuity. This Section
6.04(B) applies only to a Participant who dies after August 22, 1984, and
either (i) completes at least one Hour of Service with the Employer after
August 22, 1984, or (ii) separated from Service with at least 10 Years of
Service (as defined in Section 5.06) and completed at least one Hour of Service
with the Employer in a Plan Year beginning after December 31, 1975.
(C) SURVIVING SPOUSE ELECTIONS. If the present value of the preretirement
survivor annuity exceeds $3,500, the Participant's surviving spouse may
elect to have the Trustee commence payment of the preretirement survivor
annuity at any time following the date of the Participant's death, but not
later than the mandatory distribution periods described in Section 6.02, and
may elect any of the forms of payment described in Section 6.02, in lieu of the
preretirement survivor annuity. In the absence of an election by the surviving
spouse, the Advisory Committee must direct the Trustee to distribute the
preretirement survivor annuity on the first distribution date following the
close of the Plan Year in which the latest of the following events occurs: (i)
the Participant's death; (ii) the date the Advisory Committee receives
notification of or otherwise confirms the Participant's death; (iii) the date
the Participant would have attained Normal Retirement Age; or (iv) the date the
Participant would have attained age 62.
(D) SPECIAL RULES. If the Participant has in effect a valid waiver election
regarding the qualified joint and survivor annuity or the preretirement
survivor annuity, the Advisory Committee must direct the Trustee to distribute
the Participant's Nonforfeitable Accrued Benefit in accordance with Sections
6.01, 6.02 and 6.03. The Advisory Committee will reduce the Participant's
Nonforfeitable Accrued Benefit by any security interest (pursuant to any offset
rights authorized by Section 10.03[E]) held by the Plan by reason of a
Participant loan to determine the value of the Participant's Nonforfeitable
Accrued Benefit distributable in the form of a qualified joint and survivor
annuity or preretirement survivor annuity, provided any post-August 18, 1985,
loan satisfied the spousal consent requirement described in Section 10.03[E] of
the Plan. For purposes of applying this Article VI, the Advisory Committee
treats a former spouse as the Participant's spouse or surviving spouse to the
extent provided under a qualified domestic relations order described in Section
6.07. The provisions of this Section 6.04, and of Sections 6.05 and 6.06, apply
separately to the portion of the Participant's Nonforfeitable Accrued Benefit
subject to the qualified domestic relations order and to the portion of the
Participant's Nonforfeitable Accrued Benefit not subject to that order.
(E) PROFIT SHARING PLAN ELECTION. If this Plan is a profit sharing plan, the
Employer must elect the extent to which the preceding provisions of Section
6.04 apply. If the Employer elects to apply this Section 6.04 only to a
Participant described in this Section 6.04(E), the preceding provisions of this
Section 6.04 apply only to the following Participants: (1) a Participant as
respects whom the Plan is a direct or indirect transferee from a plan subject
to the Code Section 417 requirements and the Plan received the transfer after
December 31, 1984, unless the transfer is an elective transfer described
in Section 13.06; (2) a Participant who elects a life annuity distribution (if
Section 6.02 or Section 13.02 of the Plan requires the Plan to provide a life
annuity distribution option); and (3) a Participant whose benefits under a
defined benefit plan maintained by the Employer are offset by benefits provided
under this Plan. If the Employer elects to apply this Section 6.04 to all
Participants, the preceding provisions of this Section 6.04 apply to all
Participants described in the first two paragraphs of this Section 6.04,
without regard to the limitations of this Section 6.04(E). Sections 6.05 and
6.06 only apply to Participants to whom the preceding provisions of this
Section 6.04 apply.
6
<PAGE> 39
6.05 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY. Not
earlier than 90 days, but not later than 30 days, before the Participant's
annuity starting date, the Advisory Committee must provide the Participant
a written explanation of the terms and conditions of the qualified joint
and survivor annuity, the Participant's right to make, and the effect of,
an election to waive the joint and survivor form of benefit, the rights of
the Participant's spouse regarding the waiver election and the
Participant's right to make, and the effect of, a revocation of a waiver
election. The Plan does not limit the number of times the Participant may
revoke a waiver of the qualified joint and survivor annuity or make a new
waiver during the election period.
A married Participant's waiver election is not valid unless (a) the
Participant's spouse (to whom the survivor annuity is payable under the
qualified joint and survivor annuity), after the Participant has received
the written explanation described in this Section 6.05, has consented in
writing to the waiver election, the spouse's consent acknowledges the
effect of the election, and a notary public or the Plan Administrator (or
his representative) witnesses the spouse's consent, (b) the spouse consents
to the alternate form of payment designated by the Participant or to any
change in that designated form of payment, and (c) unless the spouse is the
Participant's sole primary Beneficiary, the spouse consents to the
Participant's Beneficiary designation or to any change in the Participant's
Beneficiary designation. The spouse's consent to a waiver of the qualified
joint and survivor annuity is irrevocable, unless the Participant revokes
the waiver election. The spouse may execute a blanket consent to any form of
payment designation or to any Beneficiary designation made by the
Participant, if the spouse acknowledges the right to limit that consent to
a specific designation but, in writing, waives that right. The consent
requirements of this Section 6.05 apply to a former spouse of the
Participant, to the extent required under a qualified domestic relations
order described in Section 6.07.
The Advisory Committee will accept as valid a waiver election which
does not satisfy the spousal consent requirements if the Advisory Committee
establishes the Participant does not have a spouse, the Advisory Committee is
not able to locate the Participant's spouse, the Participant is legally
separated or has been abandoned (within the meaning of State law) and the
Participant has a court order to that effect, or other circumstances exist
under which the Secretary of the Treasury will excuse the consent requirement.
If the Participant's spouse is legally incompetent to give consent, the
spouse's legal guardian (even if the guardian is the Participant) may give
consent.
6.06 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. The Advisory
Committee must provide a written explanation of the preretirement survivor
annuity to each married Participant, within the following period which ends
last: (1) the period beginning on the first day of the Plan Year in which the
Participant attains age 32 and ending on the last day of the Plan Year in which
the Participant attains age 34; a) a reasonable period after an Employee
becomes a Participant; (3) a reasonable period after the joint and survivor
rules become applicable to the Participant; or (4) a reasonable period after a
fully subsidized preretirement survivor annuity no longer satisfies the
requirements for a fully subsidized benefit. A reasonable period described in
clauses (2), (3) and (4) is the period beginning one year before and ending one
year after the applicable event. If the Participant separates from Service
before attaining age 35, clauses (1), (2), (3) and (4) do not apply and the
Advisory Committee must provide the written explanation within the period
beginning one year before and ending one year after the Separation from
Service. The written explanation must describe, in a manner consistent with
Treasury regulations, the terms and conditions of the preretirement survivor
annuity comparable to the explanation of the qualified joint and survivor
annuity required under Section 6.05. The Plan does not limit the number of
times the Participant may revoke a waiver of the preretirement survivor
annuity or make a new waiver during the election period.
A Participant's waiver election of the preretirement survivor annuity
is not valid unless (a) the Participant makes the waiver election no earlier
than the first day of the Plan Year in which he attains age 35 and (b) the
Participant's spouse (to whom the preretirement survivor annuity is payable)
satisfies the consent requirements described in Section 6.05, except the spouse
need not consent to the form of benefit payable to the designated Beneficiary.
The spouse's consent to the waiver of the preretirement survivor annuity is
irrevocable, unless the Participant revokes the waiver election. Irrespective
of the time of election requirement described in clause (a), if the Participant
separates from Service prior to the first day of the Plan Year in which he
attains age 35, the Advisory Committee will accept a waiver election as
respects the Participant's Accrued Benefit attributable to his Service prior to
his Separation from Service. Furthermore, if a Participant who has not
separated from
7
<PAGE> 40
Service makes a valid waiver election, except for the timing requirement of
clause (a), the Advisory Committee will accept that election as valid, but only
until the first day of the Plan Year in which the Participant attains age 35. A
waiver election described in this paragraph is not valid unless made after the
Participant has received the written explanation described in this Section
6.06.
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing contained in
this Plan prevents the Trustee, in accordance with the direction of the
Advisory Committee, from complying with the provisions of a qualified domestic
relations order (as defined in Code Section 414(p)). This Plan specifically
permits distribution to an alternate payee under a qualified domestic relations
order at any time, irrespective of whether the Participant has attained his
earliest retirement age (as defined under Code Section 414(p)) under the Plan.
A distribution to an alternate payee prior to the Participant's attainment of
earliest retirement age is available only if: (1) the order specifies
distribution at that time or permits an agreement between the Plan and the
alternate payee to authorize an earlier distribution; and (2) if the present
value of the alternate payee's benefits under the Plan exceeds $3,500, and the
order requires, the alternate payee consents to any distribution occurring
prior to the Participant's attainment of earliest retirement age. The Employer,
in an addendum to its Adoption Agreement numbered 6.07, may elect to limit
distribution to an alternate payee only when the Participant has attained his
earliest retirement age under the Plan. Nothing in this Section 6.07 gives a
Participant a right to receive distribution at a time otherwise not permitted
under the Plan nor does it permit the alternate payee to receive a form of
payment not otherwise permitted under the Plan.
The Advisory Committee must establish reasonable procedures to determine
the qualified status of a domestic relations order. Upon receiving a
domestic relations order, the Advisory Committee promptly will notify the
Participant and any alternate payee named in the order, in writing, of the
receipt of the order and the Plan's procedures for determining the qualified
status of the order. Within a reasonable period of time after receiving the
domestic relations order, the Advisory Committee must determine the qualified
status of the order and must notify the Participant and each alternate payee,
in writing, of its determination. The Advisory Committee must provide notice
under this paragraph by mailing to the individual's address specified in the
domestic relations order, or in a manner consistent with Department of Labor
regulations.
If any portion of the Participant's Nonforfeitable Accrued Benefit is payable
during the period the Advisory Committee is making its determination of the
qualified status of the domestic relations order, the Advisory Committee must
make a separate accounting of the amounts payable. If the Advisory Committee
determines the order is a qualified domestic relations order within 18 months
of the date amounts first are payable following receipt of the order, the
Advisory Committee will direct the Trustee to distribute the payable amounts in
accordance with the order. If the Advisory Committee does not make its
determination of the qualified status of the order within the 18-month
determination period, the Advisory Committee will direct the Trustee to
distribute the payable amounts in the manner the Plan would distribute if the
order did not exist and will apply the order prospectively if the Advisory
Committee later determines the order is a qualified domestic relations order.
To the extent it is not inconsistent with the provisions of the
qualified domestic relations order, the Advisory Committee may direct
the Trustee to invest any partitioned amount in a segregated subaccount or
separate account and to invest the account in Federally insured,
interest-bearing savings account(s) or time deposit(s) (or a combination of
both), or in other fixed income investments. A segregated subaccount remains a
part of the Trust, but it alone shares in any income it earns, and it alone
bears any expense or loss it incurs. The Trustee will make any payments or
distributions required under this Section 6.07 by separate benefit checks or
other separate distribution to the alternate payee(s).
* * * * * * * * * * * * * * *
8
<PAGE> 41
ARTICLE VII
EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 INFORMATION TO COMMITTEE. The Employer must supply current
information to the Advisory Committee as to the name, date of birth, date of
employment, annual compensation, leaves of absence, Years of Service and date
of termination of employment of each Employee who is, or who will be eligible
to become, a Participant under the Plan, together with any other information
which the Advisory Committee considers necessary. The Employer's records as to
the current information the Employer furnishes to the Advisory Committee are
conclusive as to all persons.
7.02 NO LIABILITY. The Employer assumes no obligation or responsibility to any
of its Employees, Participants or Beneficiaries for any act of, or failure
to act, on the part of its Advisory Committee (unless the Employer is the
Advisory Committee), the Trustee, the Custodian, if any, or the Plan
Administrator (unless the Employer is the Plan Administrator).
7.03 INDEMNITY OF CERTAIN FIDUCIARIES. The Employer indemnifies and saves
harmless the Plan Administrator and the members of the Advisory Committee, and
each of them, from and against any and all loss resulting from liability to
which the Plan Administrator and the Advisory Committee, or the members of the
Advisory Committee, may be subjected by reason of any act or conduct (except
willful misconduct or gross negligence) in their official capacities in the
administration of this Trust or Plan or both, including all expenses
reasonably incurred in their defense, in case the Employer fails to provide
such defense. The indemnification provisions of this Section 7.03 do not
relieve the Plan Administrator or any Advisory Committee member from any
liability he may have under ERISA for breach of a fiduciary duty. Furthermore,
the Plan Administrator and the Advisory Committee members and the Employer may
execute a letter agreement further delineating the indemnification agreement
of this Section 7.03, provided the letter agreement must be consistent with
and does not violate ERISA. The indemnification provisions of this Section
7.03 extend to the Trustee (or to a Custodian, if any) solely to the extent
provided by a letter agreement executed by the Trustee (or Custodian) and the
Employer.
7.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer has the right to
direct the Trustee with respect to the investment and reinvestment of assets
comprising the Trust Fund only if the Trustee consents in writing to permit
such direction. If the Trustee consents to Employer direction of investment,
the Trustee and the Employer must execute a letter agreement as a part of this
Plan containing such conditions, limitations and other provisions they deem
appropriate before the Trustee will follow any Employer direction as respects
the investment or re-investment of any part of the Trust Fund.
7.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves the
right to amend the vesting schedule at any time, the Advisory Committee will
not apply the amended vesting schedule to reduce the Nonforfeitable percentage
of any Participant's Accrued Benefit derived from Employer contributions
(determined as of the later of the date the Employer adopts the amendment, or
the date the amendment becomes effective) to a percentage less than the
Nonforfeitable percentage computed under the Plan without regard to the
amendment. An amended vesting schedule will apply to a Participant only if the
Participant receives credit for at least one Hour of Service after the new
schedule becomes effective.
If the Employer makes a permissible amendment to the vesting schedule,
each Participant having at least 3 Years of Service with the Employer may
elect to have the percentage of his Nonforfeitable Accrued Benefit computed
under the Plan without regard to the amendment. For Plan Years beginning prior
to January l, 1989, the election described in the preceding sentence applies
only to Participants having at least 5 Years of Service with the Employer. The
Participant must file his election with the Advisory Committee within 60 days
of the latest of (a) the Employer's adoption of the amendment; (b) the
effective date of the amendment; or (c) his receipt of a copy of the
amendment. The Advisory Committee, as soon as practicable, must forward a
true copy of any amendment to the vesting schedule to each affected
Participant, together with an explanation of the effect of the amendment, the
appropriate form upon which the Participant may make an election to remain
under the
1
<PAGE> 42
vesting schedule provided under the Plan prior to the amendment and notice of
the time within which the Participant must make an election to under the prior
vesting schedule. The election described in this Section 7.05 does not apply to
a Participant if the amended vesting schedule provides for vesting at least as
rapid at all times as the vesting schedule in effect prior to the amendment.
For purposes of this Section 7.05, an amendment to the vesting schedule
includes any Plan amendment which directly or indirectly affects the
computation of the Nonforfeitable percentage of an Employee's rights to his
Employer derived Accrued Benefit. Furthermore, the Advisory Committee must
treat any shift in the vesting schedule, due to a change in the Plan's top
heavy status, as an amendment to the vesting schedule for purposes of this
Section 7.05.
* * * * * * * * * * * * *
2
<PAGE> 43
ARTICLE VIII
PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 BENEFICIARY DESIGNATION. Any Participant may from time to time
designate, in writing, any person or persons, contingently or successively,
to whom the Trustee will pay his Nonforfeitable Accrued Benefit (including any
life insurance proceeds payable to the Participant's Account) in the event of
his death and the Participant may designate the form and method of payment. The
Advisory Committee will prescribe the form for the written designation of
Beneficiary and, upon the Participant's filing the form with the Advisory
Committee, the form effectively revokes all designations filed prior to that
date by the same Participant.
(A) COORDINATION WITH SURVIVOR REQUIREMENTS. If the joint and survivor
requirements of Article VI apply to the Participant, this Section 8.01 does not
impose any special spousal consent requirements on the Participant's Beneficiary
designation. However, in the absence of spousal consent (as required by Article
VI) to the Participant's Beneficiary designation: (1) any waiver of the joint
and survivor annuity or of the preretirement survivor annuity is not valid; and
(2) if the Participant dies prior to his annuity starting date, the
Participant's Beneficiary designation will apply only to the portion of the
death benefit which is not payable as a preretirement survivor annuity.
Regarding clause (2), if the Participant's surviving spouse is a primary
Beneficiary under the Participant's Beneficiary designation, the Trustee will
satisfy the spouse's interest in the Participant's death benefit first from the
portion which is payable as a preretirement survivor annuity.
(B) PROFIT SHARING PLAN EXCEPTION. If the Plan is a profit sharing plan, the
Beneficiary designation of a married Exempt Participant is not valid unless the
Participant's spouse consents (in a manner described in Section 6.05) to the
Beneficiary designation. An "Exempt Participant" is a Participant who is
not subject to the joint and survivor requirements of Article VI. The spousal
consent requirement in this paragraph does not apply if the Exempt Participant
and his spouse are not married throughout the one year period ending on the
date of the Participant's death, or if the Participant's spouse is the
Participant's sole primary Beneficiary.
8.02 NO BENEFICIARY DESIGNATION/DEATH OF BENEFICIARY. If a Participant
fails to name a Beneficiary in accordance with Section 8.01, or if the
Beneficiary named by a Participant predeceases him, then the Trustee will pay
the Participant's Nonforfeitable Accrued Benefit in accordance with Section
6.02 in the following order of priority, unless the Employer specifies a
different order of priority in an addendum to its Adoption Agreement, to:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted children,
in equal shares;
(c) The Participant's surviving parents, in equal shares; or
(d) The Participant's estate.
If the Beneficiary does not predecease the Participant, but dies prior
to distribution of the Participant's entire Nonforfeitable Accrued Benefit,
the Trustee will pay the remaining Nonforfeitable Accrued Benefit to the
Beneficiary's estate unless the Participant's Beneficiary designation provides
otherwise or unless the Employer provides otherwise in its Adoption Agreement.
If the Plan is a profit sharing plan, and the Plan includes Exempt
Participants, the Employer may not specify a different order of priority in the
Adoption Agreement unless the Participant's surviving spouse will be first in
the different order of priority. The Advisory Committee will direct the Trustee
as to the method and to whom the Trustee will make payment under this Section
8.02.
8.03 PERSONAL DATA TO COMMITTEE. Each Participant and each Beneficiary
of a deceased Participant must furnish to the Advisory Committee such
evidence, data or information as the Advisory Committee considers necessary or
desirable for the purpose of administering the Plan. The provisions of this
Plan are effective for the benefit of each Participant upon the condition
precedent that each Participant will furnish promptly full, true and complete
evidence, data and information when requested by the Advisory
1
<PAGE> 44
Committee, provided the Advisory Committee advises each Participant of the
effect of his failure to comply with its request.
8.04 ADDRESS FOR NOTIFICATION. Each Participant and each Beneficiary of
a deceased Participant must file with the Advisory Committee from time to time,
in writing, his post office address and any change of post office address. Any
communication, statement or notice addressed to a Participant, or Beneficiary,
at his last post office address filed with the Advisory Committee, or as shown
on the records of the Employer, binds the Participant, or Beneficiary, for all
purposes of this Plan.
8.05 ASSIGNMENT OR ALIENATION. Subject to Code Section 414(p) relating
to qualified domestic relations orders, neither a Participant nor a Beneficiary
may anticipate, assign or alienate (either at law or in equity) any benefit
provided under the Plan, and the Trustee will not recognize any such
anticipation, assignment or alienation. Furthermore, a benefit under the Plan is
not subject to attachment, garnishment, levy, execution or other legal or
equitable process.
8.06 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within the time
prescribed by ERISA and the applicable regulations, must furnish all
Participants and Beneficiaries a summary description of any material amendment
to the Plan or notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.
8.07 LITIGATION AGAINST THE TRUST. A court of competent jurisdiction
may authorize any appropriate equitable relief to redress violations of ERISA
or to enforce any provisions of ERISA or the terms of the Plan. A fiduciary may
receive reimbursement of expenses properly and actually incurred in the
performance of his duties with the Plan.
8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any
Beneficiary may examine copies of the Plan description, latest annual report,
any bargaining agreement, this Plan and Trust, contract or any other instrument
under which the Plan was established or is operated. The Plan Administrator
will maintain all of the items listed in this Section 8.08 in his office, or in
such other place or places as he may designate from time to time in order to
comply with the regulations issued under ERISA, for examination during
reasonable business hours. Upon the written request of a Participant or
Beneficiary the Plan Administrator must furnish him with a copy of any item
listed in this Section 8.08. The Plan Administrator may make a reasonable
charge to the requesting person for the copy so furnished.
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. A Participant or a
Beneficiary ("Claimant") may file with the Advisory Committee a written claim
for benefits, if the Participant or Beneficiary determines the distribution
procedures of the Plan have not provided him his proper Nonforfeitable Accrued
Benefit. The Advisory Committee must render a decision on the claim within 60
days of the Claimant's written claim for benefits. The Plan Administrator must
provide adequate notice in writing to the Claimant whose claim for benefits
under the Plan the Advisory Committee teas denied. The Plan Administrator's
notice to the Claimant must set forth:
(a) The specific reason for the denial;
(b) Specific references to pertinent Plan provisions on which the
Advisory Committee based its denial;
(c) A description of any additional material and information needed for
the Claimant to perfect his claim and an explanation of why the material or
information is needed; and
(d) That any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Advisory Committee within 75 days after
receipt of the Plan Administrator's notice of denial of benefits. The Plan
Administrator's notice must further advise the Claimant that his failure to
appeal the action to the Advisory Committee in writing within the 75-day period
will render the Advisory Committee's determination final, binding and
conclusive.
2
<PAGE> 45
If the Claimant should appeal to the Advisory Committee, he, or his
duly authorized representative, may submit, in writing, whatever issues and
comments he, or his duly authorized representative, feels are pertinent. The
Claimant, or his duly authorized representative, may review pertinent Plan
documents. The Advisory Committee will re-examine all facts related to the
appeal and make a final determination as to whether the denial of benefits is
justified under the circumstances. The Advisory Committee must advise the
Claimant of its decision within 60 days of the Claimant's written request for
review, unless special circumstances (such as a hearing) would make the
rendering of a decision within the 60-day limit unfeasible, but in no event may
the Advisory Committee render a decision respecting a denial for a claim for
benefits later than 120 days after its receipt of a request for review.
The Plan Administrator's notice of denial of benefits must identify the
name of each member of the Advisory Committee and the name and address of the
Advisory Committee member to whom the Claimant may forward his appeal.
8.10 PARTICIPANT DIRECTION OF INVESTMENT. A Participant has the right
to direct the Trustee with respect to the investment or re-investment of the
assets comprising the Participant's individual Account only if the Trustee
consents in writing to permit such direction. If the Trustee consents to
Participant direction of investment, the Trustee will accept direction from
each Participant on a written election form (or other written agreement), as a
part of this Plan, containing such conditions, limitations and other provisions
the parties deem appropriate. The Trustee or, with the Trustee's consent, the
Advisory Committee, may establish written procedures, incorporated specifically
as part of this Plan, relating to Participant direction of investment under
this Section 8.10. The Trustee will maintain a segregated investment Account to
the extent a Participant's Account is subject to Participant self-direction.
The Trustee is not liable for any loss, nor is the Trustee liable for any
breach, resulting from a Participant's direction of the investment of any part
of his directed Account.
The Advisory Committee, to the extent provided in a written loan policy
adopted under Section 9.04, will treat a loan made to a Participant as a
Participant direction of investment under this Section 8.10. To the extent of
the loan outstanding at any time, the borrowing Participant's Account alone
shares in any interest paid on the loan, and it alone bears any expense or loss
it incurs in connection with the loan. The Trustee may retain any principal or
interest paid on the borrowing Participant's loan in an interest bearing
segregated Account on behalf of the borrowing Participant until the Trustee (or
the Named Fiduciary, in the case of a nondiscretionary Trustee) deems it
appropriate to add the amount paid to the Participant's separate Account under
the Plan.
If the Trustee consents to Participant direction of investment of his
Account, the Plan treats any post-December 31, 1981, investment by a
Participant's directed Account in collectibles (as defined by Code Section
408(m)) as a deemed distribution to the Participant for Federal income tax
purposes.
* * * * * * * * * * * * * * *
3
<PAGE> 46
ARTICLE IX
ADVISORY COMMITTEE - DUTLES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.01 MEMBERS' COMPENSATION, EXPENSES. The Employer must appoint an
Advisory Committee to administer the Plan, the members of which may or may not
be Participants in the Plan, or which may be the Plan Administrator acting
alone. In the absence of an Advisory Committee appointment, the Plan
Administrator assumes the powers, duties and responsibilities of the Advisory
Committee. The members of the Advisory Committee will serve without
compensation for services as such, but the Employer will pay all expenses of
the Advisory Committee, except to the extent the Trust properly pays for such
expenses, pursuant to Article X.
9.02 TERM. Each member of the Advisory Committee serves until the
appointment of his successor.
9.03 POWERS. In case of a vacancy in the membership of the Advisory
Committee, the remaining members of the Advisory Committee may exercise any and
all of the powers, authority, duties and discretion conferred upon the Advisory
Committee pending the filling of the vacancy
9.04 GENERAL. The Advisory Committee has the following powers and
duties:
(a) To select a Secretary, who need not be a member of the Advisory
Committee;
(b) To determine the rights of eligibility of an Employee to
participate in the Plan, the value of a Participant's Accrued Benefit
and the Nonforfeitable percentage of each Participant's Accrued
Benefit;
(c) To adopt rules of procedure and regulations necessary for the
proper and efficient administration of the Plan provided the rules are
not inconsistent with the terms of this Agreement;
(d) To construe and enforce the terms of the Plan and the rules and
regulations it adopts, including interpretation of the Plan documents
and documents related to the Plan's operation;
(e) To direct the Trustee as respects the crediting and distribution of
the Trust;
(f) To review and render decisions respecting a claim for (or denial of
a claim for) a benefit under the Plan;
(g) To furnish the Employer with information which the Employer may
require for tax or other purposes;
(h) To engage the service of agents whom it may deem advisable to
assist it with the performance of its duties;
(i) To engage the services of an Investment Manager or Managers
(as defined in ERISA Section 3(38)), each of whom will have full
power and authority to manage, acquire or dispose (or direct the
Trustee with respect to acquisition or disposition) of any Plan asset
under its control;
(j) To establish, in its sole discretion, a nondiscriminatory policy
(see Section 9.04(A)) which the Trustee must observe in making loans,
if any, to Participants and Beneficiaries; and
(k) To establish and maintain a funding standard account and to make
credits and charges to the account to the extent required by and in
accordance with the provisions of the Code.
The Advisory Committee must exercise all of its powers, duties and
discretion under the Plan in a uniform and nondiscriminatory manner.
1
<PAGE> 47
(A) LOAN POLICY. If the Advisory Committee adopts a loan policy, pursuant to
paragraph (j), the loan policy must be a written document and must include: (1)
the identity of the person or positions authorized to administer the
participant loan program; (2) a procedure for applying for the loan; (3) the
criteria for approving or denying a loan; (4) the limitations, if any, on the
types and amounts of loans available; (5) the procedure for determining a
reasonable rate of interest; (6) the types of collateral which may secure the
loan; and (7) the events constituting default and the steps the Plan will take
to preserve plan assets in the event of default. This Section 9.04 specifically
incorporates a written loan policy as part of the Employer's Plan.
9.05 FUNDING POLICY. The Advisory Committee will review, not less often
than annually, all pertinent Employee information and Plan data in order to
establish the funding policy of the Plan and to determine the appropriate
methods of carrying out the Plan's objectives. The Advisory Committee must
communicate periodically, as it deems appropriate, to the Trustee and to any
Plan Investment Manager the Plan's short-term and long-term financial needs so
investment policy can be coordinated with Plan financial requirements.
9.06 MANNER OF ACTION. The decision of a majority of the members
appointed and qualified controls.
9.07 AUTHORIZED REPRESENTATIVE. The Advisory Committee may authorize
any one of its members, or its Secretary, to sign on its behalf any notices,
directions, applications, certificates, consents, approvals, waivers, letters
or other documents. The Advisory Committee must evidence this authority by an
instrument signed by all members and filed with the Trustee.
9.08 INTERESTED MEMBER. No member of the Advisory Committee may decide
or determine any matter concerning the distribution, nature or method of
settlement of his own benefits under the Plan, except in exercising an election
available to that member in his capacity as a Participant, unless the Plan
Administrator is acting alone in the capacity of the Advisory Committee.
9.09 INDIVIDUAL ACCOUNTS. The Advisory Committee will maintain, or
direct the Trustee to maintain, a separate Account, or multiple Accounts, in
the name of each Participant to reflect the Participant's Accrued Benefit under
the Plan. If a Participant re-enters the Plan subsequent to his having a
Forfeiture Break in Service, the Advisory Committee, or the Trustee, must
maintain a separate Account for the Participant's pre-Forfeiture Break in
Service Accrued Benefit and a separate Account for his post-Forfeiture Break in
Service Accrued Benefit, unless the Participant's entire Accrued Benefit under
the Plan is 100% Nonforfeitable.
The Advisory Committee will make its allocations, or request the
Trustee to make its allocations, to the Accounts of the Participants in
accordance with the provisions of Section 9.11. The Advisory Committee may
direct the Trustee to maintain a temporary segregated investment Account in the
name of a Participant to prevent a distortion of income, gain or loss
allocations under Section 9.11. The Advisory Committee must maintain records of
its activities.
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. The value of each
Panicipant's Accrued Benefit consists of that proportion of the net worth (at
fair market value) of the Employer's Trust Fund which the net credit balance in
his Account (exclusive of the cash value of incidental benefit insurance
contracts) bears to the total net credit balance in the Accounts (exclusive of
the cash value of the incidental benefit insurance contracts) of all
Participants plus the cash surrender value of any incidental benefit insurance
contracts held by the Trustee on the Participant's life.
For purposes of a distribution under the Plan, the value of a
Participant's Accrued Benefit is its value as of the valuation date immediately
preceding the date of the distribution. Any distribution (other than a
distribution from a segregated Account) made to a Participant (or to his
Beneficiary) more than 90 days after the most recent valuation date may include
interest on the amount of the distribution as an expense of the Trust Fund. The
interest, if any, accrues from such valuation date to the date of the
distribution at the rate established in the Employer's Adoption Agreement.
2
<PAGE> 48
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. A
"evaluation date" under this Plan is each Accounting Date and each interim
valuation date determined under Section 10.14. As of each valuation date the
Advisory Committee must adjust Accounts to reflect net income, gain or loss
since the last valuation date. The valuation period is the period beginning the
day after the last valuation date and ending on the current valuation date.
(A) TRUST FUND ACCOUNTS. The allocation provisions of this paragraph apply to
all Participant Accounts other than segregated investment Accounts. The
Advisory Committee first will adjust the Participant Accounts, as those
Accounts stood at the beginning of the current valuation period, by reducing
the Accounts for any forfeitures arising under Section 5.09 or under Section
9.14, for amounts charged during the valuation period to the Accounts in
accordance with Section 9.13 (relating to distributions) and Section 11.01
(relating to insurance premiums), and for the cash value of incidental benefit
insurance contracts. The Advisory Committee then, subject to the restoration
allocation requirements of Section 5.04 or of Section 9.14, will allocate the
net income, gain or loss pro rata to the adjusted Participant Accounts. The
allocable net income, gain or loss is the net income (or net loss), including
the increase or decrease in the fair market value of assets, since the last
valuation date.
(B) SEGREGATED INVESTMENT ACCOUNTS. A segregated investment Account receives
all income it earns and bears all expense or loss it incurs. The Advisory
Committee will adopt uniform and nondiscriminatory procedures for determining
income or loss of a segregated investment Account in a manner which reasonably
reflects investment directions relating to pooled investments and investment
directions occurring during a valuation period. As of the valuation date, the
Advisory Committee must reduce a segregated Account for any forfeiture arising
under Section 5.09 after the Advisory Committee has made all other allocations,
changes or adjustments to the Account for the Plan Year.
(C) ADDITIONAL RULES. An Excess Amount or suspense account described in Part 2
of Article III does not share in the allocation of net income, gain or loss
described in this Section 9.11. If the Employer maintains its Plan under a
Code Section 401 (k) Adoption Agreement, the Employer may specify in its
Adoption Agreement alternate valuation provisions authorized by that Adoption
Agreement. This Section 9.11 applies solely to the allocation of net income,
gain or loss of the Trust. The Advisory Committee will allocate the Employer
contributions and Participant forfeitures, if any, in accordance with Article
III.
9.12 INDIVIDUAL STATEMENT. As soon as practicable after the Accounting
Date of each Plan Year, but within the time prescribed by ERISA and the
regulations under ERISA, the Plan Administrator will deliver to each
Participant (and to each Beneficiary) a statement reflecting the condition of
his Accrued Benefit in the Trust as of that date and such other information
ERISA requires be furnished the Participant or Beneficiary. No Participant,
except a member of the Advisory Committee, has the right to inspect the records
reflecting the Account of any other Participant.
9.13 ACCOUNT CHARGED. The Advisory Committee will charge a
Participant's Account for all distributions made from that Account to the
Participant, to his Beneficiary or to an alternate payee. The Advisory
Committee also will charge a Participant's Account for any administrative
expenses incurred by the Plan directly related to that Account.
9.14 UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require either the
Trustee or the Advisory Committee to search for, or to ascertain the
whereabouts of, any Participant or Beneficiary. At the time the Participant's
or Beneficiary's benefit becomes distributable under Article Vl, the Advisory
Committee, by certified or registered mail addressed to his last known address
of record with the Advisory Committee or the Employer, must notify any
Participant, or Beneficiary, that he is entitled to a distribution under this
Plan. The notice must quote the provisions of this Section 9.14 and otherwise
must comply with the notice requirements of Article VI. If the Participant, or
Beneficiary, fails to claim his distributive share or make his whereabouts
known in writing to the Advisory Committee within 6 months from the date of
mailing of the notice, the Advisory Committee will treat the Participant's or
Beneficiary's unclaimed payable Accrued Benefit as forfeited and will
reallocate the unclaimed payable Accrued Benefit in accordance with Section
3.05. A forfeiture under this paragraph will occur at the end of the notice
period or, if later, the earliest date applicable
3
<PAGE> 49
Treasury regulations would permit the forfeiture. Pending forfeiture, the
Advisory Committee, following the expiration of the notice period, may direct
the Trustee to segregate the Nonforfeitable Accrued Benefit in a segregated
Account and to invest that segregated Account in Federally insured interest
bearing savings accounts or time deposits (or in a combination of both), or in
other fixed income investments.
If a Participant or Beneficiary who has incurred a forfeiture of his
Accrued Benefit under the provisions of the first paragraph of this Section
9.14 makes a claim, at any time, for his forfeited Accrued Benefit, the
Advisory committee must restore the Participant's or Beneficiary's forfeited
Accrued Benefit to the same dollar amount as the dollar amount of the Accrued
Benefit forfeited, unadjusted for any gains or losses occurring subsequent to
the date of the forfeiture. The Advisory Committee will make the restoration
during the Plan Year in which the Participant or Beneficiary makes the claim,
first from the amount, if any, of Participant forfeitures the Advisory
Cormmittee otherwise would allocate for the Plan Year, then from the amount, if
any, of the Trust Fund net income or gain for the Plan Year and then from the
amount, or additional amount, the Employer contributes to enable the Advisory
Committee to make the required restoration. The Advisory Committee must direct
the Trustee to distribute the Participant's or Beneficiary's restored Accrued
Benefit to him not later than 60 days after the close of the Plan Year in which
the Advisory Committee restores the forfeited Accrued Benefit. The forfeiture
provisions of this Section 9.14 apply solely to the Participant's or to the
Beneficiary's Accrued Benefit derived from Employer contributions.
* * * * * * * * * * * * *
4
<PAGE> 50
ARTICLE X
TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
10.01 ACCEPTANCE. The Trustee accepts the Trust created under the Plan
and agrees to perform the obligations imposed. The Trustee must provide bond
for the faithful performance of its duties under the Trust to the extent
required by ERISA.
10.02 RECEIPT OF CONTRIBUTIONS. The Trustee is accountable to the
Employer for the funds contributed to it by the Employer, but does not have any
duty to see that the contributions received comply with the provisions of the
Plan. The Trustee is not obliged to collect any contributions from the
Employer, nor is obliged to see that funds deposited with it are deposited
according to the provisions of the Plan.
10.03 INVESTMENT POWERS.
[A] DISCRETIONARY TRUSTEE DESIGNATION. If the Employer, in Adoption Agreement
Section 1.02, designates the Trustee to administer the Trust as a discretionary
Trustee, then the Trustee has full discretion and authority with regard to the
investment of the Trust Fund, except with respect to a Plan asset under the
control or direction of a properly appointed Investment Manager or with respect
to a Plan asset properly subject to Employer, Participant or Advisory Committee
direction of investment. The Trustee must coordinate its investment policy with
Plan financial needs as communicated to it by the Advisory Committee. The
Trustee is authorized and empowered, but not by way of limitation, with the
following powers, rights and duties:
(a) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds, put and call
options traded on a national exchange, United States retirement plan
bonds, corporate bonds, debentures, convertible debentures, commercial
paper, U.S. Treasury bills, U.S. Treasury notes and other direct or
indirect obligations of the United States Government or its agencies,
improved or unimproved real estate situated in the United States,
limited partnerships, insurance contracts of any type, mortgages, notes
or other property of any kind, real or personal, to buy or sell options
on common stock on a nationally recognized exchange with or without
holding the underlying common stock, to buy and sell commodities,
commodity options and contracts for the future delivery of commodities,
and to make any other investments the Trustee deems appropriate, as a
prudent man would do under like circumstances with due regard for the
purposes of this Plan. Any investment made or retained by the Trustee
in good faith is proper but must be of a kind constituting a
diversification considered by law suitable for trust investments.
(b) To retain in cash so much of the Trust Fund as it may deem
advisable to satisfy liquidity needs of the Plan and to deposit any
cash held in the Trust Fund in a bank account at reasonable interest.
(c) To invest, if the Trustee is a bank or similar financial
institution supervised by the United States or by a State, in any
type of deposit of the Trustee (or of a bank related to the Trustee
within the meaning of Code Section 414(b)) at a reasonable rate of
interest or in a common trust fund, the provisions of which
govern the investment of such assets and which the Plan incorporates by
this reference, which the Trustee (or its affiliate, as defined
in Code Section 1504) maintains exclusively for the collective
investment of money contributed by the bank (or the affiliate) in its
capacity as trustee and which conforms to the rules of the Comptroller
of the Currency.
(d) To manage, sell, contract to sell, grant options to purchase,
convey, exchange, transfer, abandon, improve, repair, insure, lease for
any term even though commencing in the future or extending beyond the
term of the Trust, and otherwise deal with all property, real or
personal, in such manner, for such considerations and on such terms and
conditions as the Trustee decides.
(e) To credit and distribute the Trust as directed by the Advisory
Committee. The Trustee is not obliged to inquire as to whether any
payee or distributee is entitled to any payment or whether the
distribution is proper or within the terms of the Plan, or as to the
manner of making any payment or distribution. The
1
<PAGE> 51
Trustee is accountable only to the Advisory Committee for any payment
or distribution made by it in good faith on the order or direction of
the Advisory Committee.
(f) To borrow money, to assume indebtedness, extend mortgages and
encumber by mortgage or pledge.
(g) To compromise, contest, arbitrate or abandon claims and demands,
in its discretion.
(h) To have with respect to the Trust all of the rights of an
individual owner, including the power to give proxies, to participate
in any voting trusts, mergers, consolidations or liquidations, and to
exercise or sell stock: subscriptions or conversion rights.
(i) To lease for oil, gas and other mineral purposes and to create
mineral severances by grant or reservation; to pool or unitize
interests in oil, gas and other minerals; and to enter into operating
agreements and to execute division and transfer orders.
(j) To hold any securities or other property in the name of the Trustee
or its nominee, with depositories or agent depositories or in another
form as it may deem best, with or without disclosing the trust
relationship.
(k) To perform any and all other acts in its judgment necessary or
appropriate for the proper and advantageous management, investment and
distribution of the Trust.
(l) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make payment
or delivery of the funds or property until final adjudication is made
by a court of competent jurisdiction.
(m) To file all tax returns required of the Trustee.
(n) To furnish to the Employer, the Plan Administrator and the Advisory
Committee an annual statement of account showing the condition of the
Trust Fund and all investments, receipts, disbursements and other
transactions effected by the Trustee during the Plan Year covered by
the statement and also stating the assets of the Trust held at the end
of the Plan Year, which accounts are conclusive on all persons,
including the Employer, the Plan Administrator and the Advisory
Committee, except as to any act or transaction concerning which the
Employer, the Plan Administrator or the Advisory Committee files with
the Trustee written exceptions or objections within 90 days after the
receipt of the accounts or for which ERISA authorizes a longer period
within which to object.
(o) To begin, maintain or defend any litigation necessary in connection
with the administration of the Plan, except that the Trustee is not
obliged or required to do so unless indemnified to its satisfaction.
[B] Nondiscretionary Trustee Designationl/Appointment of Custodian. If the
Employer, in its Adoption Agreement Section 1.02, designates the Trustee to
administer the Trust as a nondiscretionary Trustee, then the Trustee will not
have any discretion or authority with regard to the investment of the Trust
Fund, but must act solely as a directed trustee of the funds contributed to it.
A nondiscretionary Trustee, as directed trustee of the funds held by it under
the Employer's Plan, is authorized and empowered, by way of limitation, with
the following powers, rights and duties, each of which the nondiscretionary
Trustee exercises solely as directed trustee in accordance with the written
direction of the Named Fiduciary (except to the extent a Plan asset is subject
to the control and management of a properly appointed Investment Manager or
subject to Advisory Committee or Participant direction of investment):
(a) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds, put and call
options traded on a national exchange, United States retirement plan
bonds, corporate bonds, debentures, convertible debentures, commercial
paper, U.S. Treasury bills, U.S. Treasury notes and other direct or
indirect obligations of the United States Government or its agencies,
improved or unimproved real estate situated in the United States,
limited partnerships, insurance contracts
2
<PAGE> 52
of any type, mortgages, notes or other property of any kind, real or
personal, to buy or sell options on common stock on a nationally
recognized options exchange with or without holding the underlying
common stock, to buy and sell commodities, commodity options and
contracts for the future delivery of commodities, and to make any other
investments the Named Fiduciary deems appropriate.
(b) To retain in cash so much of the Trust Fund as the Named Fiduciary
may direct in writing to satisfy liquidity needs of the Plan and to
deposit any cash held in the Trust Fund in a bank account at reasonable
interest, including, specific authority to invest in any type of
deposit of the Trustee (or of a bank related to the Trustee within the
meaning of Code Section 414(b)) at a reasonable rate of interest.
(c) To sell, contract to sell, grant options to purchase, convey,
exchange, transfer, abandon, improve, repair, insure, lease for any
term even though commencing in the future or extending beyond the term
of the Trust, and otherwise deal with all property, real or personal,
in such manner, for such considerations and on such terms and
conditions as the Named Fiduciary directs in writing.
(d) To credit and distribute the Trust as directed by the Advisory
Committee. The Trustee is not obliged to inquire as to whether any
payee or distributee is entitled to any payment or whether the
distribution is proper or within the terms of the Plan, or as to the
manner of making any payment or distribution. The Trustee is
accountable only to the Advisory Committee for any payment or
distribution made by it in good faith on the order or direction of the
Advisory Committee.
(e) To borrow money, to assume indebtedness, extend mortgages and
encumber by mortgage or pledge.
(f) To have with respect to the Trust all of the rights of an
individual owner, including the power to give proxies, to participate
in any voting trusts, mergers, consolidations or liquidations, and to
exercise or sell stock subscriptions or conversion rights, provided the
exercise of any such powers is in accordance with and at the written
direction of the Named Fiduciary.
(g) To lease for oil, gas and other mineral purposes and to create
mineral severances by grant or reservation; to pool or unitize
interests in oil, gas and other minerals; and to enter into operating
agreements and to execute division and transfer orders, provided the
exercise of any such powers is in accordance with and at the written
direction of the Named Fiduciary.
(h) To hold any securities or other property in the name of the
nondiscretionary Trustee or its nominee, with depositories or agent
depositories or in another form as the Named Fiduciary may deem best,
with or without disclosing the custodial relationship.
(i) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make payment
or delivery of the funds or property until a court of competent
jurisdiction makes final adjudication.
(j) To file all tax returns required of the Trustee.
(k) To furnish to the named fiduciary, the Employer, the Plan
Administrator and the Advisory Committee an annual statement of account
showing the condition of the Trust Fund and all investments, receipts,
disbursements and other transactions effected by the nondiscretionary
Trustee during the Plan Year covered by the statement and also stating
the assets of the Trust held at the end of the Plan Year, which
accounts are conclusive on all persons, including the Named Fiduciary,
the Employer, the Plan Administrator and the Advisory Committee, except
as to any act or transaction concerning which the Named Fiduciary, the
Employer, the Plan Administrator or the Advisory Committee files with
the nondiscretionary Trustee written exceptions or objections within 90
days after the receipt of the accounts or for which ERISA authorizes a
longer period within which to object.
3
<PAGE> 53
(l) To begin, maintain or defend any litigation necessary in
connection with the administration of the Plan, except that the
Trustee is not obliged or required to do so unless indemnified to its
satisfaction.
APPOINTMENT OF CUSTODIAN. The Employer may appoint a Custodian under
the Plan, the acceptance by the Custodian indicated on the execution page of the
Employer's Adoption Agreement. If the Employer appoints a Custodian, the
Employer's Plan must have a discretionary Trustee, as described in Section
10.03[A]. A Custodian has the same powers, rights and duties as a
nondiscretionary Trustee, as described in this Section 10.03[B]. The Custodian
accepts the terms of the Plan and Trust by executing the Employer's Adoption
Agreement. Any reference in the Plan to a Trustee also is a reference to a
Custodian where the context of the Plan dictates. A limitation of the Trustee's
liability by Plan provision also acts as a limitation of the Custodian's
liability. Any action taken by the Custodian at the discretionary Trustee's
direction satisfies any provision in the Plan referring to the Trustee's taking
that action.
MODIFICATION OF POWERS/LIMITED RESPONSIBILITY. The Employer and the
Custodian or nondiscretionary Trustee, by letter agreement, may limit the
powers of the Custodian or nondiscretionary Trustee to any combination of
powers listed within this Section 10.03[B]. If there is a Custodian or a
nondiscretionary Trustee under the Employer's Plan, then the Employer, in
adopting this Plan acknowledges the Custodian or nondiscretionary Trustee has
no discretion with respect to the investment or re-investment of the Trust Fund
and that the Custodian or nondiscretionary Trustee is acting solely as
custodian or as directed trustee with respect to the assets comprising the
Trust Fund.
[C] LIMITATION OF POWERS OF CERTAIN CUSTODIANS. If a Custodian is a bank which,
under its governing state law, does not possess trust powers, then paragraphs
(a), (c), (e), (f), (g) of Section 10.03[B], Section 10.16 and Article XI do
not apply to that bank and that bank only has the power and authority to
exercise the remaining powers, rights and duties under Section 10.03[B].
[D] NAMED FIDUCIARY/LIMITATION OF LIABILITY OF NONDISCRETIONARY TRUSTEE or
Custodian. Under a nondiscretionary Trustee designation, the Named Fiduciary
under the Employer's Plan has the sole responsibility for the management and
control of the Employer's Trust Fund, except with respect to a Plan asset under
the control or direction of a properly appointed Investment Manager or with
respect to a Plan asset properly subject to Participant or Advisory Committee
direction of investment. If the Employer appoints a Custodian, the Named
Fiduciary is the discretionary Trustee. Under a nondiscretionary Trustee
designation, unless the Employer designates in writing another person or
persons to serve as Named Fiduciary, the Named Fiduciary under the Plan is the
president of a corporate Employer, the managing partner of a partnership
Employer or the sole proprietor, as appropriate. The Named Fiduciary will
exercise its management and control of the Trust Fund through its written
direction to the nondiscretionary Trustee or to the Custodian, whichever
applies to the Employer's Plan.
The nondiscretionary Trustee or Custodian has no duty to review or to
make recommendations regarding investments made at the written direction of the
Named Fiduciary. The nondiscretionary Trustee or Custodian must retain any
investment obtained at the written direction of the Named Fiduciary until
further directed in writing by the Named Fiduciary to dispose of such
investment. The nondiscretionary Trustee or Custodian is not liable in any
manner or for any reason for making, retaining or disposing of any investment
pursuant to any written direction described in this paragraph. Furthermore, the
Employer agrees to indemnify and to hold the nondiscretionary Trustee or
Custodian harmless from any damages, costs or expenses, including reasonable
counsel fees, which the nondiscretionary Trustee or Custodian may incur as a
result of any claim asserted against the nondiscretionary Trustee, the
Custodian or the Trust arising out of the nondiscretionary Trustee's or
Custodian's compliance with any written direction described in this paragraph.
[E] PARTICIPANT LOANS. This Section 10.03[E] specifically authorizes the
Trustee to make loans on a nondiscriminatory basis to a Participant or to a
Beneficiary in accordance with the loan policy established by the Advisory
Committee, provided: (1) the loan policy satisfies the requirements of Section
9.04; (2) loans are available to all Participants and Beneficiaries on a
reasonably equivalent basis and are not available in a greater amount for
Highly Compensated Employees than for other Employees; (3) any loan is
adequately secured and bears a reasonable rate of interest; (4) the loan
provides for repayment within a specified time; (5) the default provisions of
the note prohibit offset of the Participant's Nonforfeitable Accrued Benefit
prior to the time the
4
<PAGE> 54
Trustee otherwise would distribute the Participant's Nonforfeitable Accrued
Benefit; (6) the amount of the loan does not exceed (at the time the Plan
extends the loan) the present value of the Participant's Nonforfeitable Accrued
Benefit; and (7) the loan otherwise conforms to the exemption provided by Code
Section 4975(d)(1). If the joint and survivor requirements of Article VI apply
to the Participant, the Participant may not pledge any portion of his Accrued
Benefit as security for a loan made after August 18, 1985, unless, within the
90 day period ending on the date the pledge becomes effective, the
Participant's spouse, if any, consents (in a manner described in Section 6.05
other than the requirement relating to the consent of a subsequent spouse) to
the security or, by separate consent, to an increase in the amount of security.
If the Employer is an unincorporated trade or business, a Participant who is an
Owner-Employee may not receive a loan from the Plan, unless he has obtained a
prohibited transaction exemption from the Department of Labor. If the Employer
is an "IS Corporation," a Participant who is a shareholder-employee (an
employee or an officer) who, at any time during the Employer's taxable year,
owns more than 5%, either directly or by attribution under Code Section
318(a)(1), of the Employer's outstanding stock may not receive a loan from the
Plan, unless he has obtained a prohibited transaction exemption from the
Department of Labor. If the Employer is not an unincorporated trade or business
nor an "S Corporation," this Section 10.03[E] does not impose any restrictions
on the class of Participants eligible for a loan from the Plan.
[F] INVESTMENT IN QUALIFYING EMPLOYER SECURITIES AND QUALIFYING EMPLOYER REAL
PROPERTY. The investment options in this Section 10.03[F] include the ability
to invest in qualifying Employer securities or qualifying Employer real
property, as defined in and as limited by ERISA. If the Employer's Plan is a
Nonstandardized profit sharing plan, it may elect in its Adoption Agreement to
permit the aggregate investments in qualifying Employer securities and in
qualifying Employer real property to exceed 10% of the value of Plan assets.
10.04 RECORDS AND STATEMENTS. The records of the Trustee pertaining to
the Plan must be open to the inspection of the Plan Administrator, the Advisory
Committee and the Employer at all reasonable times and may be audited from time
to time by any person or persons as the Employer, Plan Administrator or
Advisory Committee may specify in writing. The Trustee must furnish the Plan
Administrator or Advisory Committee with whatever information relating to the
Trust Fund the Plan Administrator or Advisory Committee considers necessary.
10.05 FEES AND EXPENSES FROM FUND. A Trustee or Custodian will receive
reasonable annual compensation as may be agreed upon from time to time between
the Employer and the Trustee or Custodian. No person who is receiving full pay
from the Employer may receive compensation for services as Trustee or as
Custodian. The Trustee will pay from the Trust Fund all fees and expenses
reasonably incurred by the Plan, to the extent such fees and expenses are for
the ordinary and necessary administration and operation of the Plan, unless the
Employer pays such fees and expenses. Any fee or expense paid, directly or
indirectly, by the Employer is not an Employer contribution to the Plan,
provided the fee or expense relates to the ordinary and necessary
administration of the Fund.
10.06 PARTIES TO LITIGATION. Except as otherwise provided by ERISA, no
Participant or Beneficiary is a necessary party or is required to receive
notice of process in any court proceeding involving the Plan, the Trust Fund or
any fiduciary of the Plan. Any final judgment entered in any proceeding will be
conclusive upon the Employer, the Plan Administrator, the Advisory Committee,
the Trustee, Custodian, Participants and Beneficiaries.
10.07 PROFESSIONAL AGENTS. The Trustee may employ and pay from the
Trust Fund reasonable compensation to agents, attorneys, accountants and other
persons to advise the Trustee as in its opinion may be necessary. The Trustee
may delegate to any agent, attorney, accountant or other person selected by it
any non-Trustee power or duty vested in it by the Plan, and the Trustee may act
or refrain from acting on the advice or opinion of any agent, attorney,
accountant or other person so selected.
10.08 DISTRIBUTION OF CASH OR PROPERTY. The Trustee may make
distribution under the Plan in cash or property, or partly in each, at its fair
market value as determined by the Trustee. For purposes of a distribution to a
Participant or to a Participant's designated Beneficiary or surviving spouse,
"property" includes a Nontransferable Annuity Contract, provided the contract
satisfies the requirements of this Plan.
5
<PAGE> 55
10.09 DISTRIBUTION DIRECTIONS. If no one claims a payment or
distribution made from the Trust, the Trustee must promptly notify the Advisory
Committee and then dispose of the payment in accordance with the subsequent
direction of the Advisory Committee.
10.10 THIRD PARTY/MULTIPLE TRUSTEES. No person dealing with the Trustee
is obligated to see to the proper application of any money paid or property
delivered to the Trustee, or to inquire whether the Trustee has acted pursuant
to any of the terms of the Plan. Each person dealing with the Trustee may act
upon any notice, request or representation in writing by the Trustee, or by the
Trustee's duly authorized agent, and is not liable to any person in so acting.
The certificate of the Trustee that it is acting in accordance with the Plan
will be conclusive in favor of any person relying on the certificate. If more
than two persons act as Trustee, a decision of the majority of such persons
controls with respect to any decision regarding the administration or investment
of the Trust Fund or of any portion of the Trust Fund with respect to which
such persons act as Trustee. However, the signature of only one Trustee is
necessary to effect any transaction on behalf of the Trust.
10.11 RESIGNATION. The Trustee or Custodian may resign its position at
any time by giving 30 days' written notice in advance to the Employer and to
the Advisory Committee. If the Employer fails to appoint a successor Trustee
within 60 days of its receipt of the Trustee's written notice of resignation,
the Trustee will treat the Employer as having appointed itself as Trustee and
as having filed its acceptance of appointment with the former Trustee. The
Employer, in its sole discretion, may replace a Custodian. If the Employer does
not replace a Custodian, the discretionary Trustee will assume possession of
Plan assets held by the former Custodian.
10.12 REMOVAL. The Employer, by giving 30 days' written notice in
advance to the Trustee, may remove any Trustee or Custodian. In the event of
the resignation or removal of a Trustee, the Employer must appoint a successor
Trustee if it intends to continue the Plan. If two or more persons hold the
position of Trustee, in the event of the removal of one such person, during any
period the selection of a replacement is pending, or during any period such
person is unable to serve for any reason, the remaining person or persons will
act as the Trustee.
10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE. Each successor Trustee
succeeds to the title to the Trust vested in his predecessor by accepting in
writing his appointment as successor Trustee and by filing the acceptance with
the former Trustee and the Advisory Committee without the signing or filing of
any further statement. The resigning or removed Trustee, upon receipt of
acceptance in writing of the Trust by the successor Trustee, must execute all
documents and do all acts necessary to vest the title of record in any
successor Trustee. Each successor Trustee has and enjoys all of the powers,
both discretionary and ministerial, conferred under this Agreement upon his
predecessor. A successor Trustee is not personally liable for any act or
failure to act of any predecessor Trustee, except as required under ERISA. With
the approval of the Employer and the Advisory Committee, a successor Trustee,
with respect to the Plan, may accept the account rendered and the property
delivered to it by a predecessor Trustee without incurring any liability or
responsibility for so doing.
10.14 VALUATION OF TRUST. The Trustee must value the Trust Fund as of
each Accounting Date to determine the fair market value of each Participant's
Accrued Benefit in the Trust. The Trustee also must value the Trust Fund on
such other valuation dates as directed in writing by the Advisory Committee or
as required by the Employer's Adoption Agreement.
10.15 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER, ANCILLARY TRUSTEE
OR INDEPENDENT FIDUCIARY APPOINTED. The Trustee is not liable for the acts or
omissions of any Investment Manager the Advisory Committee may appoint, nor is
the Trustee under any obligation to invest or otherwise manage any asset of the
Plan which is subject to the management of a properly appointed Investment
Manager. The Advisory Committee, the Trustee and any properly appointed
Investment Manager may execute a letter agreement as a part of this Plan
delineating the duties, responsibilities and liabilities of the Investment
Manager with respect to any part of the Trust Fund under the control of the
Investment Manager.
6
<PAGE> 56
The limitation on liability described in this Section 10.15 also
applies to the acts or omissions of any ancillary trustee or independent
fiduciary properly appointed under Section 10.17 of the Plan. However, if a
discretionary Trustee, pursuant to the delegation described in Section 10.17 of
the Plan, appoints an ancillary trustee, the discretionary Trustee is
responsible for the periodic review of the ancillary trustee's actions and must
exercise its delegated authority in accordance with the terms of the Plan and
in a manner consistent with ERISA. The Employer, the discretionary Trustee and
an ancillary trustee may execute a letter agreement as a part of this Plan
delineating any indemnification agreement between the parties.
10.16 INVESTMENT IN GROUP TRUST FUND. The Employer, by adopting this
Plan, specifically authorizes the Trustee to invest all or any portion of the
assets comprising the Trust Fund in any group trust fund which at the time of
the investment provides for the pooling of the assets of plans qualified under
Code Section 401(a). This authorization applies solely to a group trust fund
exempt from taxation under Code Section 501(a) and the trust agreement of
which satisfies the requirements of Revenue Ruling 81-100. The provisions
of the group trust fund agreement, as amended from time to time, are by this
reference incorporated within this Plan and Trust. The provisions of the group
trust fund will govern any investment of Plan assets in that fund. The Employer
must specify in an attachment to its adoption agreement the group trust fund(s)
to which this authorization applies. If the Trustee is acting as a
nondiscretionary Trustee, the investment in the group trust fund is available
only in accordance with a proper direction, by the Named Fiduciary, in
accordance with Section 10.03[B]. Pursuant to paragraph (c) of Section 10.03[A]
of the Plan, a Trustee has the authority to invest in certain common trust
funds and collective investment funds without the need for the authorizing
addendum described in this Section 10.16.
Furthermore, at the Employer's direction, the Trustee, for collective
investment purposes, may combine into one trust fund the Trust created under
this Plan with the Trust created under any other qualified retirement plan the
Employer maintains. However, the Trustee must maintain separate records of
account for the assets of each Trust in order to reflect properly each
Participant's Accrued Benefit under the plan(s) in which he is a Participant.
10.17 APPOINTMENT OF ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY. The Employer,
in writing, may appoint any person in any State to act as ancillary trustee
with respect to a designated portion of the Trust Fund. An ancillary trustee
must acknowledge in writing its acceptance of the terms and conditions of its
appointment as ancillary trustee and its fiduciary status under ERISA. The
ancillary trustee has the rights, powers, duties and discretion as the Employer
may delegate, subject to any limitations or directions specified in the
instrument evidencing appointment of the ancillary trustee and to the terms of
the Plan or of ERISA. The investment powers delegated to the ancillary trustee
may include any investment powers available under Section 10.03 of the Plan
including the right to invest any portion of the assets of the Trust Fund in a
common trust fund, as described in Code Section 584, or in any collective
investment fund, the provisions of which govern the investment of such assets
and which the Plan incorporates by this reference, but only if the ancillary
trustee is a bank: or similar financial institution supervised by the United
States or by a State and the ancillary trustee (or its affiliate, as defined in
Code Section 1504) maintains the common trust fund or collective investment
fund exclusively for the collective investment of money contributed by the
ancillary trustee (or its affiliate) in a trustee capacity and which conforms
to the rules of the Comptroller of the Currency. The Employer also may appoint
as an ancillary trustee, the trustee of any group trust fund designated for
investment pursuant to the provisions of Section 10.16 of the Plan.
The ancillary trustee may resign its position at any time by providing
at least 30 days' advance written notice to the Employer, unless the Employer
waives this notice requirement. The Employer, in writing, may remove an
ancillary trustee at any time. In the event of resignation or removal, the
Employer may appoint another ancillary trustee, return the assets to the
control and management of the Trustee or receive such assets in the capacity of
ancillary trustee. The Employer may delegate its responsibilities under this
Section 10.17 to a discretionary Trustee under the Plan, but not to a
nondiscretionary Trustee or to a Custodian, subject to the acceptance by the
discretionary Trustee of that delegation.
If the U.S. Department of Labor "the Department" requires engagement
of an independent fiduciary to have control or management of all or a portion
of the Trust Fund, the Employer will appoint such independent fiduciary, as
directed by the Department. The independent fiduciary will have the duties,
responsibilities and powers prescribed by the Department and will exercise
those duties, responsibilities and powers in accordance
7
<PAGE> 57
with the terms, restrictions and conditions established by the Department and,
to the extent not inconsistent with ERISA, the terms of the Plan. The
independent fiduciary must accept its appointment in writing and must
acknowledge its status as a fiduciary of the Plan.
* * * * * * * * * * * * * * *
8
<PAGE> 58
ARTICLE XI
PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
11.01 INSURANCE BENEFIT. The Employer may elect to provide incidental
life insurance benefits for insurable Participants who consent to life
insurance benefits by signing the appropriate insurance company application
form. The Trustee will not purchase any incidental life insurance benefit for
any Participant prior to an allocation to the Participant's Account. At an
insured Participant's written direction, the Trustee will use all or any
portion of the Participant's nondeductible voluntary contributions, if any, to
pay insurance premiums covering the Participant's life. This Section 11.01 also
authorizes the purchase of life insurance, for the benefit of the Participant,
on the life of a family member of the Participant or on any person in whom the
Participant has an insurable interest. However, if the policy is on the joint
lives of the Participant and another person, the Trustee may not maintain that
policy if that other person predeceases the Participant.
The Employer will direct the Trustee as to the insurance company and
insurance agent through which the Trustee is to purchase the insurance
contracts, the amount of the coverage and the applicable dividend plan. Each
application for a policy, and the policies themselves, must designate the
Trustee as sole owner, with the right reserved to the Trustee to exercise any
right or option contained in the policies, subject to the terms and provisions
of this Agreement. The Trustee must be the named beneficiary for the Account of
the insured Participant. Proceeds of insurance contracts paid to the
Participant's Account under this Article XI are subject to the distribution
requirements of Article V and of Article VI. The Trustee will not retain any
such proceeds for the benefit of the Trust.
The Trustee will charge the premiums on any incidental benefit
insurance contract covering the life of a Participant against the Account of
that Participant. The Trustee will hold all incidental benefit insurance
contracts issued under the Plan as assets of the Trust created under the Plan.
(A) INCIDENTAL INSURANCE BENEFITS. The aggregate of life insurance premiums
paid for the benefit of a Participant, at all times, may not exceed the
following percentages of the aggregate of the Employer's contributions
allocated to any Participant's Account: (i) 49% in the case of the purchase of
ordinary life insurance contracts; or (ii) 25% in the case of the purchase of
term life insurance or universal life insurance contracts. If the Trustee
purchases a combination of ordinary life insurance contract(s) and term life
insurance or universal life insurance contract(s), then the sum of one-half of
the premiums paid for the ordinary life insurance contract(s) and the premiums
paid for the term life insurance or universal life insurance contract(s) may not
exceed 25% of the Employer contributions allocated to any Participant's
Account.
(B) EXCEPTION FOR CERTAIN PROFIT SHARING PLANS. If the Employer's Plan is a
profit sharing plan, the incidental insurance benefits requirement does not
apply to the Plan if the Plan purchases life insurance benefits only from
Employer contributions accumulated in the Participant's Account for at least
two years (measured from the allocation date).
11.02 LIMITATION ON LIFE INSURANCE PROTECTION. The Trustee will
not continue any life insurance protection for any Participant beyond his
annuity starting date (as defined in Article VI). If the Trustee holds any
incidental benefit insurance contract(s) for the benefit of a Participant when
he terminates his employment (other than by reason of death), the Trustee must
proceed as follows:
(a) If the entire cash value of the contract(s) is vested in the
terminating Participant, or if the contract(s) will have no cash
value at the end of the policy year in which termination of employment
occurs, the Trustee will transfer the contract(s) to the Participant
endorsed so as to vest in the transferee all right, title and interest
to the contract(s), free and clear of the Trust; subject however, to
restrictions as to surrender or payment of benefits as the issuing
insurance company may permit and as the Advisory Committee directs;
1
<PAGE> 59
(b) If only part of the cash value of the contract(s) is vested in the
terminating Participant, the Trustee, to the extent the Participant's
interest in the cash value of the contract(s) is not vested, may adjust
the Participant's interest in the value of his Account attributable to
Trust assets other than incidental benefit insurance contracts and
proceed as in (a), or the Trustee must effect a loan from the issuing
insurance company on the sole security of the contract(s) for an amount
equal to the difference between the cash value of the contract(s) at
the end of the policy year in which termination of employment occurs
and the amount of the cash value that is vested in the terminating
Participant, and the Trustee must transfer the contract(s) endorsed so
as to vest in the transferee all right, title and interest to the
contract(s), free and clear of the Trust; subject however, to the
restrictions as to surrender or payment of benefits as the issuing
insurance company may permit and the Advisory Committee directs;
(c) If no part of the cash value of the contract(s) is vested in the
terminating Participant, the Trustee must surrender the contract(s) for
cash proceeds as may be available.
In accordance with the written direction of the Advisory Committee, the
Trustee will make any transfer of contract(s) under this Section 11.02 on the
Participant's annuity starting date (or as soon as administratively practicable
after that date). The Trustee may not transfer any contract under this Section
11.02 which contains a method of payment not specifically authorized by Article
VI or which fails to comply with the joint and survivor annuity requirements,
if applicable, of Article VI. In this regard, the Trustee either must convert
such a contract to cash and distribute the cash instead of the contract, or
before making the transfer, require the issuing company to delete the
unauthorized method of payment option from the contract.
11.03 DEFINITIONS. For purposes of this Article XI:
(a) "Policy" means an ordinary life insurance contract or a term life
insurance contract issued by an insurer on the life of a Participant.
(b) "Issuing insurance company" is any life insurance company which
has issued a policy upon application by the Trustee under the terms of
this Agreement.
(c) "Contract" or "Contracts" means a policy of insurance. In the event
of any conflict between the provisions of this Plan and the terms of
any contract or policy of insurance issued in accordance with this
Article XI, the provisions of the Plan control.
(d) "Insurable Participant" means a Participant to whom an insurance
company, upon an application being submitted in accordance with the
Plan, will issue insurance coverage, either as a standard risk or as a
risk in an extra mortality classification.
11.04 DIVIDEND PLAN. The dividend plan is premium reduction unless the
Advisory Committee directs the Trustee to the contrary. The Trustee must use
all dividends for a contract to purchase insurance benefits or additional
insurance benefits for the Participant on whose life the insurance company has
issued the contract. Furthermore, the Trustee must arrange, where possible, for
all policies issued on the lives of Participants under the Plan to have the
same premium due date and all ordinary life insurance contracts to contain
guaranteed cash values with as uniform basic options as are possible to obtain.
The term "dividends" includes policy dividends, refunds of premiums and other
credits.
11.05 INSURANCE COMPANY NOT A PARTY TO AGREEMENT. No insurance company,
solely in its capacity as an issuing insurance company, is a party to this
Agreement nor is the company responsible for its validity.
11.06 INSURANCE COMPANY NOT RESPONSIBLE FOR TRUSTEE'S ACTIONS. No
insurance company, solely in its capacity as an issuing insurance company,
need examine the terms of this Agreement nor is responsible for any action
taken by the Trustee.
2
<PAGE> 60
11.07 INSURANCE COMPANY RELIANCE ON TRUSTEE'S SIGNATURE. For the
purpose of making application to an insurance company and in the exercise of
any right or option contained in any policy, the insurance company may rely
upon the signature of the Trustee and is saved harmless and completely
discharged in acting at the direction and authorization of the Trustee.
11.08 ACQUITTANCE. An insurance company is discharged from all
liability for any amount paid to the Trustee or paid in accordance with the
direction of the Trustee, and is not obliged to see to the distribution or
further application of any moneys it so pays.
11.09 DUTIES OF INSURANCE COMPANY. Each insurance company must keep
such records, make such identification of contracts, funds and accounts within
funds, and supply such information as may be necessary for the proper
administration of the Plan under which it is carrying insurance benefits.
Note: The provisions of this Article XI are not applicable, and the
Plan may not invest in insurance contracts, if a Custodian signatory to the
Adoption Agreement is a bank which has not acquired trust powers from its
governing state banking authority.
* * * * * * * * * * * * * * *
3
<PAGE> 61
ARTICLE XII
MISCELLANEOUS
12.01 EVIDENCE. Anyone required to give evidence under the terms of the
Plan may do so by certificate, affidavit, document or other information which
the person to act in reliance may consider pertinent, reliable and genuine, and
to have been signed, made or presented by the proper party or parties. The
Advisory Committee and the Trustee are fully protected in acting and relying
upon any evidence described under the immediately preceding sentence.
12.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee nor
the Advisory Committee has any obligation or responsibility with respect to any
action required by the Plan to be taken by the Employer, any Participant or
eligible Employee, or for the failure of any of the above persons to act or
make any payment or contribution, or to otherwise provide any benefit
contemplated under this Plan. Furthermore, the Plan does not require the
Trustee or the Advisory Committee to collect any contribution required under
the Plan, or to determine the correctness of the amount of any Employer
contribution. Neither the Trustee nor the Advisory Committee need inquire into
or be responsible for any action or failure to act on the part of the others,
or on the part of any other person who has any responsibility regarding the
management, administration or operation of the Plan, whether by the express
terms of the Plan or by a separate agreement authorized by the Plan or by the
applicable provisions of ERISA. Any action required of a corporate Employer
must be by its Board of Directors or its designate.
12.03 FIDUCIARIES NOT INSURERS. The Trustee, the Advisory Committee,
the Plan Administrator and the Employer in no way guarantee the Trust Fund from
loss or depreciation. The Employer does not guarantee the payment of any money
which may be or becomes due to any person from the Trust Fund. The liability of
the Advisory Committee and the Trustee to make any payment from the Trust Fund
at any time and all times is limited to the then available assets of the Trust.
12.04 WAIVER OF NOTICE. Any person entitled to notice under the Plan
may waive the notice, unless the Code or Treasury regulations prescribe the
notice or ERISA specifically or impliedly prohibits such a waiver.
12.05 SUCCESSORS. The Plan is binding upon all persons entitled to
benefits under the Plan, their respective heirs and legal representatives, upon
the Employer, its successors and assigns, and upon the Trustee, the Advisory
Committee, the Plan Administrator and their successors.
12.06 WORD USAGE. Words used in the masculine also apply to the
feminine where applicable, and wherever the context of the Employer's Plan
dictates, the plural includes the singular and the singular includes the
plural.
12.07 STATE LAW. The law of the state of the Employer's principal place
of business (unless otherwise designated in an addendum to the Employer's
Adoption Agreement) will determine all questions arising with respect to the
provisions of this Agreement except to the extent superseded by Federal law.
12.08 EMPLOYER'S RIGHT TO PARTICIPATE. If the Employer's Plan fails to
qualify or to maintain qualification or if the Employer makes any amendment or
modification to a provision of this Plan (other than a proper completion of an
elective provision under the Adoption Agreement or the attachment of an
addendum authorized by the Plan or by the Adoption Agreement), the Employer may
no longer participate under this Prototype Plan. Furthermore, if the Employer
no longer is a client of the Regional Prototype Sponsor, pursuant to Section
13.03 of the Plan, will result in the discontinuance of the Employer's
participation in this Prototype Plan unless it resumes its client relationship
with the Regional Prototype Sponsor. If the Employer is not entitled to
participate under this Prototype Plan, the Employer's Plan is an
individually-designed plan and the reliance procedures specified in the
applicable Adoption Agreement no longer will apply.
1
<PAGE> 62
12.09 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or
with respect to the establishment of the Trust, or any modification or
amendment to the Plan or Trust, or in the creation of any Account, or the
payment of any benefit, gives any Employee, Employee-Participant or any
Beneficiary any right to continue employment, any legal or equitable right
against the Employer, or Employee of the Employer, or against the Trustee, or
its agents or employees, or against the Plan Administrator, except as expressly
provided by the Plan, the Trust, ERISA or by a separate agreement.
* * * * * * * * * * * * * *
2
<PAGE> 63
ARTICLE XIII
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the
Employer has no beneficial interest in any asset of the Trust and no part of
any asset in the Trust may ever revert to or be repaid to an Employer, either
directly or indirectly; nor, prior to the satisfaction of all liabilities with
respect to the Participants and their Beneficiaries under the Plan, may any part
of the corpus or income of the Trust Fund, or any asset of the Trust, be (at
any time) used for, or diverted to, purposes other than the exclusive benefit
of the Participants or their Beneficiaries. However, if the Commissioner of
Internal Revenue, upon the Employer's request for initial approval of this
Plan, determines the Trust created under the Plan is not a qualified trust
exempt from Federal income tax, then (and only then) the Trustee, upon written
notice from the Employer, will return the Employer's contributions (and
increment attributable to the contributions) to the Employer. The Trustee must
make the return of the Employer contribution under this Section 13.01 within
one year of a final disposition of the Employer's request for initial approval
of the Plan. The Employer's Plan and Trust will terminate upon the Trustee's
return of the Employer's contributions.
13.02 AMENDMENT BY EMPLOYER. The Employer has the right at any time and
from time to time:
(a) To amend the elective provisions of the Adoption Agreement in any
manner it deems necessary or advisable in order to qualify (or maintain
qualification of) this Plan and the Trust created under it under the
provisions of Code Section 401(a);
(b) To amend the Plan to allow the Plan to operate under a waiver of
the minimum funding requirement; and
(c) To amend this Agreement in any other manner.
No amendment may authorize or permit any of the Trust Fund (other than
the part which is required to pay taxes and administration expenses) to be used
for or diverted to purposes other than for the exclusive benefit of the
Participants or their Beneficiaries or estates. No amendment may cause or
permit any portion of the Trust Fund to revert to or become a property of the
Employer. The Employer also may not make any amendment which affects the
rights, duties or responsibilities of the Trustee, the Plan Administrator or
the Advisory Committee without the written consent of the affected Trustee, the
Plan Administrator or the affected member of the Advisory Committee. The
Employer must make all amendments in writing. Each amendment must state the
date to which it is either retroactively or prospectively effective. See
Section 12.08 for the effect of certain amendments adopted by the Employer.
(A) CODE SECTION 411(d)(6) PROTECTED BENEFITS. An amendment (including the
adoption of this Plan as a restatement of an existing plan) may not decrease a
Participant's Accrued Benefit, except to the extent permitted under Code
Section 412(c)(8), and may not reduce or eliminate Code Section 411(d)(6)
protected benefits determined immediately prior to the adoption date (or, if
later, the effective date) of the amendment. An amendment reduces or eliminates
Code Section 411(d)(6) protected benefits if the amendment has the effect of
either (1) eliminating or reducing an early retirement benefit or a retirement-
type subsidy (as defined in Treasury regulations), or (2) except as provided by
Treasury regulations, eliminating an optional form of benefit. The Advisory
Committee must disregard an amendment to the extent application of the
amendment would fail to satisfy this paragraph. If the Advisory Committee must
disregard an amendment because the amendment would violate clause (1) or
clause (2), the Advisory Committee must maintain a schedule of the early
retirement option or other optional forms of benefit the plan must continue
for the affected Participants.
13.03 AMENDMENT BY REGIONAL PROTOTYPE PLAN SPONSOR. The Regional
Prototype Plan Sponsor, without the Employer's consent, may amend the Plan and
Trust, from time to time, in order to conform the Plan and Trust to any
requirement for qualification of the Plan and Trust under the Internal
1
<PAGE> 64
Revenue Code. The Regional Prototype Plan Sponsor may not amend the Plan in any
manner which would modify any election made by the Employer under the Plan
without the Employer's written consent. Furthermore, the Regional Prototype
Plan Sponsor may not amend the Plan in any manner which would violate the
proscription of Section 13.02. A Trustee does not have the power to amend the
Plan or Trust.
13.04 DISCONTINUANCE. The Employer has the right, at any time, to
suspend or discontinue its contributions under the Plan, and to terminate, at
any time, this Plan and the Trust created under this Agreement. The Plan will
terminate upon the first to occur of the following:
(a) The date terminated by action of the Employer;
(b) The dissolution or merger of the Employer, unless the successor
makes provision to continue the Plan, in which event the successor must
substitute itself as the Employer under this Plan. Any termination of
the Plan resulting from this paragraph (b) is not effective until
compliance with any applicable notice requirements under ERISA.
13.05 FULL VESTING ON TERMINATION. Upon either full or partial
termination of the Plan, or, if applicable, upon complete discontinuance of
profit sharing plan contributions to the Plan, an affected Participant's right
to his Accrued Benefit is 100% Nonforfeitable, irrespective of the
Nonforfeitable percentage which otherwise would apply under Article V.
13.06 MERGER/DIRECT TRANSFER. The Trustee may not consent to, or be a
party to, any merger or consolidation with another plan, or to a transfer of
assets or liabilities to another plan, unless immediately after the merger,
consolidation or transfer, the surviving Plan provides each Participant a
benefit equal to or greater than the benefit each Participant would have
received had the Plan terminated immediately before the merger or consolidation
or transfer. The Trustee possesses the specific authority to enter into merger
agreements or direct transfer of assets agreements with the trustees of other
retirement plans described in Code Section 401(a), including an elective
transfer, and to accept the direct transfer of plan assets, or to transfer plan
assets, as a party to any such agreement.
The Trustee may accept a direct transfer of plan assets on behalf of an
Employee prior to the date the Employee satisfies the Plan's eligibility
conditions. If the Trustee accepts such a direct transfer of plan assets, the
Advisory Committee and Trustee must treat the Employee as a Participant for all
purposes of the Plan except the Employee is not a Participant for purposes of
sharing in Employer contributions or Participant forfeitures under the Plan
until he actually becomes a Participant in the Plan.
(A) ELECTIVE TRANSFERS. The Trustee, after August 9, 1988, may not consent to,
or be a party to a merger, consolidation or transfer of assets with a defined
benefit plan, except with respect to an elective transfer, or unless the
transferred benefits are in the form of paid-up individual annuity contracts
guaranteeing the payment of the transferred benefits in accordance with the
terms of the transferor plan and in a manner consistent with the Code and with
ERISA. The Trustee will hold, administer and distribute the transferred assets
as a part of the Trust Fund and the Trustee must maintain a separate Employer
contribution Account for the benefit of the Employee on whose behalf the
Trustee accepted the transfer in order to reflect the value of the transferred
assets. Unless a transfer of assets to this Plan is an elective transfer, the
Plan will preserve all Code Section 411(d) (6) protected benefits with respect
to those transferred assets, in the manner described in Section 13.02. A
transfer is an elective transfer if: (1) the transfer satisfies the first
paragraph of this Section 13.06; (2) the transfer is voluntary, under a fully
informed election by the Participant; (3) the Participant has an alternative
that retains his Code Section 411 (d)(6) protected benefits (including an
option to leave his benefit in the transferor plan, if that plan is not
terminating); (4) the transfer satisfies the applicable spousal consent
requirements of the Code; (5) the transferor plan satisfies the joint and
survivor notice requirements of the Code, if the Participant's transferred
benefit is subject to those requirements; (6) the Participant has a right to
immediate distribution from the transferor plan, in lieu of the elective
transfer; (7) the transferred benefit is at least the greater of the single sum
distribution provided by the transferor plan for which the Participant is
eligible or the present value of the Participant's accrued benefit under the
transferor plan payable at that plan's normal retirement age; (8) the
Participant has a 100% Nonforfeitable interest in the transferred benefit; and
(9) the transfer otherwise satisfies
2
<PAGE> 65
applicable Treasury regulations. An elective transfer may occur between
qualified plans of any type. Any direct transfer of assets from a defined
benefit plan after August 9, 1988, which does not satisfy the requirements of
this paragraph will render the Employer's Plan individually-designed. See
Section 12.08.
(B) DISTRIBUTION RESTRICTIONS UNDER CODE SECTION 401(k). If the Plan receives a
direct transfer (by merger or otherwise) of elective contributions (or amounts
treated as elective contributions) under a Plan with a Code Section 401(k)
arrangement, the distribution restrictions of Code Sections 401(k)(2) and (10)
continue to apply to those transferred elective contributions.
13.07 TERMINATION.
(A) PROCEDURE. Upon termination of the Plan, the distribution provisions of
Article VI remain operative, with the following exceptions:
(1) if the present value of the Participant's Nonforfeitable Accrued
Benefit does not exceed $3,500, the Advisory Committee will direct the
Trustee to distribute the Participant's Nonforfeitable Accrued Benefit
to him in lump sum as soon as administratively practicable after the
Plan terminates; and
(2) if the present value of the Participant's Nonforfeitable Accrued
Benefit exceeds $3,500, the Participant or the Beneficiary, in addition
to the distribution events permitted under Article VI, may elect to
have the Trustee commence distribution of his Nonforfeitable Accrued
Benefit as soon as administratively practicable after the Plan
terminates.
To liquidate the Trust, the Advisory Committee will purchase a deferred
annuity contract for each Participant which protects the Participant's
distribution rights under the Plan, if the Participant's Nonforfeitable Accrued
Benefit exceeds $3,500 and the Participant does not elect an immediate
distribution pursuant to Paragraph (2).
If the Employer's Plan is a profit sharing plan, in lieu of the
preceding provisions of this Section 13.07 and the distribution provisions of
Article VI, the Advisory Committee will direct the Trustee to distribute each
Participant's Nonforfeitable Accrued Benefit, in lump sum, as soon as
administratively practicable after the termination of the Plan, irrespective of
the present value of the Participant's Nonforfeitable Accrued Benefit and
whether the Participant consents to that distribution. This paragraph does not
apply if: (1) the Plan provides an annuity option; or (2) as of the period
between the Plan termination date and the final distribution of assets, the
Employer maintains any other defined contribution plan (other than an ESOP).
The Employer, in an addendum to its Adoption Agreement numbered 13.07, may
elect not to have this paragraph apply.
The Trust will continue until the Trustee in accordance with the
direction of the Advisory Committee has distributed all of the benefits under
the Plan. On each valuation date, the Advisory Committee will credit any part
of a Participant's Accrued Benefit retained in the Trust with its proportionate
share of the Trust's income, expenses, gains and losses, both realized and
unrealized. Upon termination of the Plan, the amount, if any, in a suspense
account under Article III will revert to the Employer, subject to the
conditions of the Treasury regulations permitting such a reversion. A
resolution or amendment to freeze all future benefit accrual but otherwise to
continue maintenance of this Plan, is not a termination for purposes of this
Section 13.07.
(B) DISTRIBUTION RESTRICTIONS UNDER CODE SECTION 401(k). If the Employer's
Plan includes a Code Section 401(k) arrangement or if transferred assets
described in Section 13.06 are subject to the distribution restrictions of Code
Sections 401(k) (2) and (10), the special distribution provisions of this
Section 13.07 are subject to the restrictions of this paragraph. The portion
of the Participant's Nonforfeitable Accrued Benefit attributable to elective
contributions (or to amounts treated under the Code Section 401(k) arrangement
as elective contributions) is not distributable on account of Plan termination,
as described in this Section 13.07, unless: (a) the Participant otherwise is
entitled under the Plan to a distribution of that portion of his Nonforfeitable
Accrued Benefit; or (b) the Plan termination occurs without the establishment
of a successor plan. A successor plan under clause (b) is a defined
contribution plan (other than an ESOP) maintained by the Employer (or by a
related employer)
3
<PAGE> 66
at the time of the termination of the Plan or within the period ending twelve
months after the final distribution of assets. A distribution made after March
31, 1988, pursuant to clause (b), must be part of a lump sum distribution to
the Participant of his Nonforfeitable Accrued Benefit.
* * * * * * * * * * * * * * *
4
<PAGE> 67
ARTICLE XIV
CODE SECTION 401(k) AND CODE SECTION 401(m) ARRANGEMENTS
14.01 APPLICATION. This Article XIV applies to an Employer's Plan only
if the Employer is maintaining its Plan under a Code Section 401(k) Adoption
Agreement.
14.02 CODE SECTION 401(k) ARRANGEMENT. The Employer will elect in
Section 3.01 of its Adoption Agreement the terms of the Code Section 401(k)
arrangement, if any, under the Plan. If the Employer's Plan is a Standardized
Plan, the Code Section 401(k) arrangement must be a salary reduction
arrangement. If the Employer's Plan is a Nonstandardized Plan, the Code Section
401(k) arrangement may be a salary reduction arrangement or a cash or deferred
arrangement.
(A) SALARY REDUCTION ARRANGEMENT. If the Employer elects a salary reduction
arrangement, any Employee eligible to participate in the Plan may file a salary
reduction agreement with the Advisory Committee. The salary reduction agreement
may not be effective earlier than the following date which occurs last: (i) the
Employee's Plan Entry Date (or, in the case of a reemployed Employee, his
reparticipation date under Article II); (ii) the execution date of the
Employee's salary reduction agreement; (iii) the date the Employer adopts the
Code Section 401(k) arrangement by executing the Adoption Agreement; or (iv) the
effective date of the Code Section 401(k) arrangement, as specified in the
Employer's Adoption Agreement. Regarding clause (i), an Employee subject
to the Break in Service rule of Section 2.03(B) of the Plan may not enter into
a salary reduction agreement until the Employee has completed a sufficient
number of Hours of Service to receive credit for a Year of Service (as defined
in Section 2.02) following his reemployment commencement date. A salary
reduction agreement must specify the amount of Compensation (as defined in
Section 1.12) or percentage of Compensation the Employee wishes to defer. The
salary reduction agreement will apply only to Compensation which becomes
currently available to the Employee after the effective date of the salary
reduction agreement. The Employer will apply a reduction election to all
Compensation (and to increases in such Compensation) unless the Employee
specifies in his salary reduction agreement to limit the election to certain
Compensation. The Employer will specify in Adoption Agreement Section 3.01 the
rules and restrictions applicable to the Employees salary reduction agreements.
(B) CASH OR DEFERRED ARRANGEMENT. If the Employer elects a cash or deferred
arrangement, a Participant may elect to make a cash election against his
proportionate share of the Employer's Cash or Deferred Contribution, in
accordance with the Employer's elections in Adoption Agreement Section 3.01. A
Participant's proportionate share of the Employer's Cash or Deferred
Contribution is the percentage of the total Cash or Deferred Contribution which
bears the same ratio that the Participant's Compensation for the Plan Year
bears to the total Compensation of all Participants for the Plan Year. For
purposes of determining each Participant's proportionate share of the Cash or
Deferred Contribution, a Participant's Compensation is his Compensation as
determined under Section 1.12 of the Plan (as modified by Section 3.06 for
allocation purposes), excluding any effect the proportionate share may have on
the Participant's Compensation for the Plan Year. The Advisory Committee will
determine the proportionate share prior to the Employer's actual contribution
to the Trust, to provide the Participants the opportunity to file cash
elections. The Employer will pay directly to the Participant the portion of his
proportionate share the Participant has elected to receive in cash.
(C) ELECTION NOT TO PARTICIPATE. A Participant's or Employee's election not to
participate, pursuant to Section 2.06, includes his right to enter into a
salary reduction agreement or to share in the allocation of a Cash or Deferred
Contribution, unless the Participant or Employee limits the effect of the
election to the non-401(k) portions of the Plan.
14.03 DEFINITIONS. For purposes of this Article XIV:
(a) "Highly Compensated Employee" means an Eligible Employee who
satisfies the definition in Section 1.09 of the Plan. Family members
aggregated as a single Employee under Section 1.09 constitute a single
Highly Compensated Employee, whether a particular family member is a
<PAGE> 68
Highly Compensated Employee or a Nonhighly Compensated Employee without
the application of family aggregation.
(b) "Nonhighly Compensated Employee" means an Eligible Employee who is
not a Highly Compensated Employee and who is not a family member
treated as a Highly Compensated Employee.
(c) "Eligible Employee" means for purposes of the ADP test described in
Section 14.08 an Employee who is eligible to enter into a salary
reduction agreement for the Plan Year, irrespective of whether he
actually enters into such an agreement, and a Participant who is
eligible for an allocation of the Employer's Cash or Deferred
Contribution for the Plan Year. For purposes of the ACP test described
in Section 14.09, an "Eligible Employee" means a Participant who is
eligible to receive an allocation of matching contributions (or would
be eligible if he made the type of contributions necessary to receive
an allocation of matching contributions) and a Participant who is
eligible to make nondeductible contributions, irrespective of whether he
actually makes nondeductible contributions. An Employee continues to be
an Eligible Employee during a period the Plan suspends the Employee's
right to make elective deferrals or nondeductible contributions
following a hardship distribution.
(d) "Highly Compensated Group" means the group of Eligible Employees
who are Highly Compensated Employees for the Plan Year.
(e) "Nonhighly Compensated Group" means the group of Eligible Employees
who are Nonhighly Compensated Employees for the Plan Year.
(f) "Compensation" means, except as specifically provided in this
Article XIV, Compensation as defined for nondiscrimination purposes in
Section 1.12(B) of the Plan. To compute an Employee's ADP or ACP, the
Advisory Committee may limit Compensation taken into account to
Compensation received only for the portion of the Plan Year in which
the Employee was an Eligible Employee and only for the portion of the
Plan Year in which the Plan or the Code Section 401(k) arrangement was
in effect.
(g) "Deferral contributions" are Salary Reduction Contributions and
Cash or Deferred Contributions the Employer contributes to the Trust on
behalf of an Eligible Employee, irrespective of whether, in the case of
Cash or Deferred Contributions, the contribution is at the Election of
the Employee. For Salary Reduction Contributions, the terms "deferral
contributions" and "elective deferrals" have the same meaning.
(h) "Elective deferrals" are all Salary Reduction Contributions and
that portion of any Cash or Deferred Contribution which the Employer
contributes to the Trust at the election of an Eligible Employee. Any
portion of a Cash or Deferred Contribution contributed to the Trust
because of the Employee's failure to make a cash election is an elective
deferral. However, any portion of a Cash or Deferred Contribution over
which the Employee does not have a cash election is not an elective
deferral. Elective deferrals do not include amounts which have become
currently available to the Employee prior to the election nor amounts
designated as nondeductible contributions at the time of deferral or
contribution.
(i) "Matching contributions" are contributions made by the Employer on
account of elective deferrals under a Code Section 401(k) arrangement
or on account of employee contributions. Matching contributions also
include Participant forfeitures allocated on account of such elective
deferrals or employee contributions.
(j) "Nonelective Contributions" are contributions made by the
Employer which are not subject to a deferral election by an Employee
and which are not matching contributions.
(k) "Qualified matching contributions" are matching contributions which
are 100% Nonforfeitable at all times and which are subject to the
distribution restrictions described in paragraph (m). Matching
contributions are not 100% Nonforfeitable at all times if the Employee
has a 100% Nonforfeitable interest because of his Years of Service
taken into account under a vesting schedule. Any matching contributions
allocated to a Participant's
<PAGE> 69
Qualified Matching Contributions Account under the Plan automatically
satisfy the definition of qualified matching contributions.
(l) "Qualified nonelective contributions" are nonelective contributions
which are 100% Nonforfeitable at all times and which are subject to the
distribution restrictions described in paragraph (m). Nonelective
contributions are not 100% Nonforfeitable at all times if the Employee
has a 100% Nonforfeitable interest because of his Years of Service
taken into account under a vesting schedule. Any nonelective
contributions allocated to a Participant's Qualified Nonelective
Contributions Account under the Plan automatically satisfy the
definition of qualified nonelective contributions.
(m) "Distribution restrictions" means the Employee may not receive a
distribution of the specified contributions (nor earnings on those
contributions) except in the event of (1) the Participant's death,
disability, termination of employment or attainment of age 59-1/2, (2)
financial hardship satisfying the requirements of Code Section 401(k)
and the applicable Treasury regulations, (3) a plan termination,
without establishment of a successor defined contribution plan (other
than an ESOP), (4) a sale of substantially all of the assets (within
the meaning of Code Section 409(d)(2)) used in a trade or business, but
only to an employee who continues employment with the corporation
acquiring those assets, or (5) a sale by a corporation of its interest
in a subsidiary (within the meaning of Code Section 409(d)(3)), but
only to an employee who continues employment with the subsidiary. For
Plan Years beginning after December 31, 1988, a distribution on account
of financial hardship, as described in clause (2), may not include
earnings on elective deferrals credited as of a date later than
December 31, 1988, and may not include qualified matching contributions
and qualified nonelective contributions, nor any earnings on such
contributions, credited after December 31, 1988. A plan does not
violate the distribution restrictions if, instead of the December 31,
1988, date in the preceding sentence the plan specifies a date not
later than the end of the last Plan Year ending before July 1, 1989. A
distribution described in clauses (3), (4) or (5), if made after March
31, 1988, must be a lump sum distribution, as required under Code
Section 401(k)(10).
(n) "Employee contributions" are contributions made by a Participant
on an after-tax basis, whether voluntary or mandatory, and designated,
at the time of contribution, as an employee (or nondeductible)
contribution. Elective deferrals and deferral contributions are not
employee contributions. Participant nondeductible contributions, made
pursuant to Section 4.01 of the Plan, are employee contributions.
14.04 MATCHING CONTRIBUTIONS/EMPLOYEE CONTRIBUTIONS. The Employer may
elect in Adoption Agreement Section 3.01 to provide matching contributions. The
Employer also may elect in Adoption Agreement Section 4.01 to permit or to
require a Participant to make nondeductible contributions.
(A) MANDATORY CONTRIBUTIONS. Any participant nondeductible contributions
eligible for matching contributions are mandatory contributions. The Advisory
Committee will maintain a separate accounting, pursuant to Section 4.06 of the
Plan, to reflect the Participant's Accrued Benefit derived from his mandatory
contributions. The Employer, under Adoption Agreement Section 4.05, may
prescribe special distribution restrictions which will apply to the Mandatory
Contributions Account prior to the Participant's Separation from Service.
Following his Separation from Service, the general distribution provisions of
Article VI apply to the distribution of the Participant's Mandatory
Contributions Account.
14.05 TIME OF PAYMENT OF CONTRIBUTIONS. The Employer must make Salary
Reduction Contributions to the Trust within an administratively reasonable
period of time after withholding the corresponding Compensation from the
Participant. Furthermore, the Employer must make Salary Reduction
Contributions, Cash or Deferred Contributions, Employer matching contributions
(including qualified Employer matching contributions) and qualified Employer
nonelective contributions no later than the time prescribed by the Code or by
applicable Treasury regulations. Salary Reduction Contributions and Cash or
Deferred Contributions are Employer contributions for all purposes under this
Plan, except to the extent the Code or Treasury
<PAGE> 70
regulations prohibit the use of these contributions to satisfy the
qualification requirements of the Code.
14.06 SPECIAL ALLOCATION PROVISIONS - DEFERRAL CONTRIBUTIONS,
MATCHING CONTRIBUTIONS AND QUALIFIED NONELECTIVE CONTRIBUTIONS. To make
allocations under the Plan, the Advisory Committee must establish a Deferral
Contributions Account, a Qualified Matching Contributions Account, a Regular
Matching Contributions Account, a Qualified Nonelective Contributions Account
and an Employer Contributions Account for each Participant.
(A) DEFERRAL CONTRIBUTIONS. The Advisory Committee will allocate to each
Participant's Deferral Contributions Account the amount of Deferral
Contributions the Employer makes to the Trust on behalf of the Participant. The
Advisory Committee will make this allocation as of the last day of each Plan
Year unless, in Adoption Agreement Section 3.04, the Employer elects more
frequent allocation dates for salary reduction contributions.
(B) MATCHING CONTRIBUTIONS. The Employer must specify in its Adoption Agreement
whether the Advisory Committee will allocate matching contributions to the
Qualified Matching Contributions Account or to the Regular Matching
Contributions Account of each Participant. The Advisory Committee will make this
allocation as of the last day of each Plan Year unless, in Adoption Agreement
Section 3.04, the Employer elects more frequent allocation dates for matching
contributions.
(1) To the extent the Employer makes matching contributions under a
fixed matching contribution formula, the Advisory Committee will
allocate the matching contribution to the Account of the Participant on
whose behalf the Employer makes that contribution. A fixed matching
contribution formula is a formula under which the Employer contributes
a certain percentage or dollar amount on behalf of a Participant based
on that Participant's deferral contributions or nondeductible
contributions eligible for a match, as specified in Section 3.01 of the
Employer's Adoption Agreement. The Employer may contribute on a
Participant's behalf under a specific matching contribution formula only
if the Participant satisfies the accrual requirements for matching
contributions specified in Section 3.06 of the Employer's Adoption
Agreement and only to the extent the matching contribution does not
exceed the Participant's annual additions limitation in Part 2 of
Article III.
(2) To the extent the Employer makes matching contributions under a
discretionary formula, the Advisory Committee will allocate the
discretionary matching contributions to the Account of each Participant
who satisfies the accrual requirements for matching contributions
specified in Section 3.06 of the Employer's Adoption Agreement. The
allocation of discretionary matching contributions to a Participant's
Account is in the same proportion that each Participant's eligible
contributions bear to the total eligible contributions of all
Participants. If the discretionary formula is a tiered formula, the
Advisory Committee will make this allocation separately with respect to
each tier of eligible contributions, allocating in such manner the
amount of the matching contributions made with respect to that tier.
"Eligible contributions" are the Participant's deferral contributions or
nondeductible contributions eligible for an allocation of matching
contributions, as specified in Section 3.01 of the Employer's Adoption
Agreement.
If the matching contribution formula applies both to deferral
contributions and to Participant nondeductible contributions, the matching
contributions apply first to deferral contributions. Furthermore, the matching
contribution formula does not apply to deferral contributions that are excess
deferrals under Section 14.07. For this purpose: (a) excess deferrals relate
first to deferral contributions for the Plan Year not otherwise eligible for a
matching contribution; and (2) if the Plan Year is not a calendar year, the
excess deferrals for a Plan Year are the last elective deferrals made for a
calendar year. Under a Standardized Plan, an Employee forfeits any matching
contribution attributable to an excess contribution or to an excess aggregate
contribution, unless distributed pursuant to Sections 14.08 or 14.09. Under a
Nonstandardized Plan, this forfeiture rule applies only if specified in
Adoption Agreement Section 3.06. The provisions of Section 3.05 govern
<PAGE> 71
the treatment of any forfeiture described in this paragraph, and the Advisory
Committee will compute a Participant's ACP under 14.09 by disregarding the
forfeiture.
(C) QUALIFIED NONELECTIVE CONTRIBUTIONS. If the Employer, at the time of
contribution, designates a contribution to be a qualified nonelective
contribution for the Plan Year, the Advisory Committee will allocate that
qualified nonelective contribution to the Qualified Nonelective Contributions
Account of each Participant eligible for an allocation of that designated
contribution, as specified in Section 3.04 of the Employer's Adoption
Agreement. The Advisory Committee will make the allocation to each eligible
Participant's Account in the same ratio that the Participant's Compensation for
the Plan Year bears to the total Compensation of all eligible Participants for
the Plan Year. The Advisory Committee will determine a Participant's
Compensation in accordance with the general definition of Compensation under
Section 1.12 of the Plan, as modified by the Employer in Sections 1.12 and 3.06
of its Adoption Agreement.
(D) NONELECTIVE CONTRIBUTIONS. To the extent the Employer makes nonelective
contributions for the Plan Year which, at the time of contribution, it does not
designate as qualified nonelective contributions, the Advisory Committee will
allocate those contributions in accordance with the elections under Section
3.04 of the Employer's Adoption Agreement. For purposes of the special
nondiscrimination tests described in Sections 14.08 and 14.09, the Advisory
Committee may treat nonelective contributions allocated under this paragraph as
qualified nonelective contributions, if the contributions otherwise satisfy the
definition of qualified nonelective contributions.
14.07 ANNUAL ELECTIVE DEFERRAL LIMITATION.
(A) ANNUAL ELECTIVE DEFERRAL LIMITATION. An Employee's elective deferrals for a
calendar year beginning after December 31, 1986, may not exceed the 402(g)
limitation. The 402(g) limitation is the greater of $7,000 or the adjusted
amount determined by the Secretary of the Treasury. If, pursuant to a salary
reduction agreement or pursuant to a cash or deferral election, the Employer
determines the Employee's elective deferrals to the Plan for a calendar year
would exceed the 402(g) limitation, the Employer will suspend the Employee's
salary reduction agreement, if any, until the following January 1 and pay in
cash the portion of a cash or deferral election which would result in the
Employee's elective deferrals for the calendar year exceeding the 402(g)
limitation. If the Advisory Committee determines an Employee's elective
deferrals already contributed to the Plan for a calendar year exceed the 402(g)
limitation, the Advisory Committee will distribute the amount in excess of the
402(g) limitation (the "excess deferral"), as adjusted for allocable income, no
later than April 15 of the following calendar year. If the Advisory Committee
distributes the excess deferral by the appropriate April 15, it may make the
distribution irrespective of any other provision under this Plan or under the
Code. The Advisory Committee will reduce the amount of excess deferrals for a
calendar year distributable to the Employee by the amount of excess
contributions (as determined in Section 14.08), If any, previously distributed
to the Employee for the Plan Year beginning in that calendar year.
If an Employee participates in another plan under which he makes
elective deferrals pursuant to a Code Section 401(k) arrangement, elective
deferrals under a Simplified Employee Pension, or salary reduction
contributions to a tax-sheltered annuity, irrespective of whether the Employer
maintains the other plan, he may provide the Advisory Committee a written claim
for excess deferrals made for a calendar year. The Employee must submit the
claim no later than the March 1 following the close of the particular calendar
year and the claim must specify the amount of the Employee's elective deferrals
under this Plan which are excess deferrals. If the Advisory Committee receives
a timely claim, it will distribute the excess deferral (as adjusted for
allocable income) the Employee has assigned to this Plan, in accordance with
the distribution procedure described in the immediately preceding paragraph.
(B) ALLOCABLE INCOME. For purposes of making a distribution of excess deferrals
pursuant to this Section 14.07, allocable income means net income or net loss
allocable to the excess deferrals for the calendar year in which the Employee
made the excess deferral, determined in a manner which is uniform,
nondiscriminatory and reasonably reflective of the manner used by the Plan to
allocate income to Participants' Accounts.
<PAGE> 72
14.08 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST. For each Plan Year, the
Advisory Committee must determine whether the Plan's Code Section 401(k)
arrangement satisfies either of the following ADP tests:
(i) The average ADP for the Highly Compensated Group does not exceed
1.25 times the average ADP of the Nonhighly Compensated Group; or
(ii) The average ADP for the Highly Compensated Group does
not exceed the average ADP for the Nonhighly Compensated Group by more
than two percentage points (or the lesser percentage permitted by the
multiple use limitation in Section 14.10) and the average ADP for the
Highly Compensated Group is not more than twice the average ADP for the
Nonhighly Compensated Group.
(A) CALCULATION OF ADP. The average ADP for a group is the average of the
separate ADPs calculated for each Eligible Employee who is a member of that
group. An Eligible Employee's ADP for a Plan Year is the ratio of the Eligible
Employee's deferral contributions for the Plan Year to the Employee's
Compensation for the Plan Year. For aggregated family members treated as a
single Highly Compensated Employee, the ADP of the family unit is the ADP
determined by combining the deferral contributions and Compensation of all
aggregated family members. A Nonhighly Compensated Employee's ADP does not
include elective deferrals made to this Plan or to any other Plan maintained by
the Employer, to the extent such elective deferrals exceed the 402(g) limitation
described in Section 14.07(A).
The Advisory Committee, in a manner consistent with Treasury
regulations, may determine the ADPs of the Eligible Employees by taking into
account qualified nonelective contributions or qualified matching
contributions, or both, made to this Plan or to any other qualified Plan
maintained by the Employer. The Advisory Committee may not include qualified
nonelective contributions in the ADP test unless the allocation of nonelective
contributions is nondiscriminatory when the Advisory Committee takes into
account all nonelective contributions (including the qualified nonelective
contributions) and also when the Advisory Committee takes into account only the
nonelective contributions not used in either the ADP test described in this
Section 14.08 or the ACP test described in Section 14.09. For Plan Years
beginning after December 31, 1989, the Advisory Committee may not include in
the ADP test any qualified nonelective contributions or qualified matching
contributions under another qualified plan unless that plan has the same plan
year as this Plan. The Advisory Committee must maintain records to demonstrate
compliance with the ADP test, including the extent to which the Plan used
qualified nonelective contributions or qualified matching contributions to
satisfy the test.
For Plan Years beginning prior to January 1, 1992, the Advisory
Committee may elect to apply a separate ADP test to each component group under
the Plan. Each component group separately must satisfy the commonality
requirement of the Code Section 401(k) regulations and the minimum coverage
requirements of Code Section 410(b). A component group consists of all the
allocations and other benefits, rights and features provided that group of
Employees. An Employee may not be part of more than one component group. The
correction rules described in this Section 14.08 apply separately to each
component group.
(B) SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES. To determine
the ADP of any Highly Compensated Employee, the deferral contributions taken
into account must include any elective deferrals made by the Highly Compensated
Employee under any other Code Section 401(k) arrangement maintained by the
Employer, unless the elective deferrals are to an ESOP. If the plans containing
the Code Section 401(k) arrangements have different plan years, the Advisory
Committee will determine the combined deferral contributions on the basis of
the plan years ending in the same calendar year.
(C) AGGREGATION OF CERTAIN CODE SECTION 401(k) ARRANGEMENTS. If the Employer
treats two plans as a unit for coverage or nondiscrimination purposes, the
Employer must combine the Code Section 401(k) arrangements under such plans to
determine whether either plan satisfies the ADP test. This
<PAGE> 73
aggregation rule applies to the ADP determination for all Eligible Employees,
irrespective of whether an Eligible Employee is a Highly Compensated Employee
or a Nonhighly Compensated Employee. For Plan Years beginning after December
31, 1989, an aggregation of Code Section 401(k) arrangements under this
paragraph does not apply to plans which have different plan years and, for Plan
Years beginning after December 31, 1988, the Advisory Committee may not
aggregate an ESOP (or the ESOP portion of a plan) with a non-ESOP plan (or
non-ESOP portion of a plan).
(D) CHARACTERIZATION OF EXCESS CONTRIBUTIONS. IF, pursuant to this Section
14.08, the Advisory Committee has elected to include qualified matching
contributions in the average ADP, the Advisory Committee will treat excess
contributions as attributable proportionately to deferral contributions and to
qualified matching contributions allocated on the basis of those deferral
contributions. If the total amount of a Highly Compensated Employee's excess
contributions for the Plan Year exceeds his deferral contributions or qualified
matching contributions for the Plan Year, the Advisory Committee will treat the
remaining portion of his excess contributions as attributable to qualified
nonelective contributions. The Advisory Committee will reduce the amount of
excess contributions for a Plan Year distributable to a Highly Compensated
Employee by the amount of excess deferrals (as determined in Section 14.07), if
any, previously distributed to that Employee for the Employee's taxable year
ending in that Plan Year.
(E) DISTRIBUTION OF EXCESS CONTRIBUTIONS. If the Advisory Committee determines
the Plan fails to satisfy the ADP test for a Plan Year, it must distribute the
excess contributions, as adjusted for allocable income, during the next Plan
Year. However, the Employer will incur an excise tax equal to 10% of the amount
of excess contributions for a Plan Year not distributed to the appropriate
Highly Compensated Employees during the first 1/2 months of that next Plan Year.
The excess contributions are the amount of deferral contributions made by the
Highly Compensated Employees which causes the Plan to fail to satisfy the ADP
test. The Advisory Committee will distribute to each Highly Compensated
Employee his respective share of the excess contributions. The Advisory
Committee will determine the respective shares of excess contributions by
starting with the Highly Compensated Employee(s) who has the greatest ADP,
reducing his ADP (but not below the next highest ADP), then, if necessary,
reducing the ADP of the Highly Compensated Employee(s) at the next highest ADP
level (including the ADP of the Highly Compensated Employee(s) whose ADP the
Advisory Committee already has reduced), and continuing in this manner until
the average ADP for the Highly Compensated Group satisfies the ADP test. If the
Highly Compensated Employee is part of an aggregated family group, the Advisory
Committee, in accordance with the applicable Treasury regulations, will
determine each aggregated family members allocable share of the excess
contributions assigned to the family unit.
(F) ALLOCABLE INCOME. To determine the amount of the corrective distribution
required under this Section 14.08, the Advisory Committee must calculate the
"allocable income" for the Plan Year in which the excess contributions arose.
"Allocable income" means net income or net loss. To calculate allocable income
for the Plan Year, the Advisory Committee will use a uniform and
nondiscriminatory method which reasonably reflects the manner used by the Plan
to allocate income to Participants' Accounts.
14.09 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING
CONTRIBUTIONS/PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. For Plan Years
beginning after December 31, 1986, the Advisory Committee must determine
whether the annual Employer matching contributions (other than qualified
matching contributions used in the ADP under Section 14.08), if any, and the
Employee contributions, if any, satisfy either of the following average
contribution percentage ("ACP") tests:
(i) The ACP for the Highly Compensated Group does not exceed 1.25 times
the ACP of the Nonhighly Compensated Group; or
(ii) The ACP for the Highly Compensated Group does not exceed the ACP
for the Nonhighly Compensated Group by more than two percentage points
(or the lesser percentage permitted by the multiple use limitation in
Section 14.10) and the ACP for the Highly Compensated Group is not more
than twice the ACP for the Nonhighly Compensated Group.
<PAGE> 74
(A) CALCULATION OF ACP. The average contribution percentage for a group is the
average of the separate contribution percentages calculated for each Eligible
Employee who is a member of that group. An Eligible Employee's contribution
percentage for a Plan Year is the ratio of the Eligible Employee's aggregate
contributions for the Plan Year to the Employee's Compensation for the Plan
Year. "Aggregate contributions" are Employer matching contributions (other than
qualified matching contributions used in the ADP test under Section 14.08) and
employee contributions (as defined in Section 14.03). For aggregated family
members treated as a single Highly Compensated Employee, the contribution
percentage of the family unit is the contribution percentage determined by
combining the aggregate contributions and Compensation of all aggregated family
members.
The Advisory Committee, in a manner consistent with Treasury
regulations, may determine the contribution percentages of the Eligible
Employees by taking into account qualified nonelective contributions (other
than qualified nonelective contributions used in the ADP test under Section
14.08) or elective deferrals, or both, made to this Plan or to any other
qualified Plan maintained by the Employer. The Advisory Committee may not
include qualified nonelective contributions in the ACP test unless the
allocation of nonelective contributions is nondiscriminatory when the Advisory
Committee takes into account all nonelective contributions (including the
qualified nonelective contributions) and also when the Advisory Committee takes
into account only the nonelective contributions not used in either the ADP test
described in Section 14.08 or the ACP test described in this Section 14.09. The
Advisory Committee may not include elective deferrals in the ACP test, unless
the Plan which includes the elective deferrals satisfies the ADP test both with
and without the elective deferrals included in this ACP test. For Plan Years
beginning after December 31, 1989, the Advisory Committee may not include in
the ACP test any qualified nonelective contributions or elective deferrals under
another qualified plan unless that plan has the same plan year as this Plan.
The Advisory Committee must maintain records to demonstrate compliance with the
ACP test, including the extent to which the Plan used qualified nonelective
contributions or elective deferrals to satisfy the test. For Plan Years
beginning prior to January 1, 1992, the component group testing rule permitted
under Section 14.08(A) also applies to the ACP test under this Section 14.09.
(B) SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES. To determine the
contribution percentage of any Highly Compensated Employee, the aggregate
contributions taken into account must include any matching contributions (other
than qualified matching contributions used in the ADP test) and any Employee
contributions made on his behalf to any other plan maintained by the Employer,
unless the other plan is an ESOP. If the plans have different plan years, the
Advisory Committee will determine the combined aggregate contributions on the
basis of the plan years ending in the same calendar year.
(C) AGGREGATION OF CERTAIN PLANS. If the Employer treats two plans as a unit
for coverage or nondiscrimination purposes, the Employer must combine the plans
to determine whether either plan satisfies the ACP test. This aggregation rule
applies to the contribution percentage determination for all Eligible
Employees, irrespective of whether an Eligible Employee is a Highly Compensated
Employee or a Nonhighly Compensated Employee. For Plan Years beginning after
December 31, 1989, an aggregation of plans under this paragraph does not apply
to plans which have different plan years and, for Plan Years beginning after
December 31, 1988, the Advisory Committee may not aggregate an ESOP (or the
ESOP portion of a plan) with a non-ESOP plan (or non-ESOP portion of a plan).
(D) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. The Advisory Committee
will determine excess aggregate contributions after determining excess
deferrals under Section 14.07 and excess contributions under Section 14.08. If
the Advisory Committee determines the Plan fails to satisfy the ACP test for a
Plan Year, it must distribute the excess aggregate contributions, as adjusted
for allocable income, during the next Plan Year. However, the Employer will
incur an excise tax equal to 10% of the amount of excess aggregate
contributions for a Plan Year not distributed to the appropriate Highly
Compensated Employees during the first 1/2 months of that next Plan Year. The
excess aggregate contributions are the amount of aggregate contributions
allocated on behalf of the Highly Compensated Employees which causes the Plan
to fail to satisfy the ACP test. The Advisory
<PAGE> 75
Committee will distribute to each Highly Compensated Employee his respective
share of the excess aggregate contributions. The Advisory Committee will
determine the respective shares of excess aggregate contributions by starting
with the Highly Compensated Employee(s) who has the greatest contribution
percentage, reducing his contribution percentage (but not below the next
highest contribution percentage), then, if necessary, reducing the contribution
percentage of the Highly Compensated Employee(s) at the next highest
contribution percentage level (including the contribution percentage of the
Highly Compensated Employee(s) whose contribution percentage the Advisory
Committee already has reduced), and continuing in this manner until the ACP for
the Highly Compensated Group satisfies the ACP test. If the Highly Compensated
Employee is part of an aggregated family group, the Advisory Committee, in
accordance with the applicable Treasury regulations, will determine each
aggregated family member's allocable share of the excess aggregate
contributions assigned to the family unit.
(E) ALLOCABLE INCOME. To determine the amount of the corrective distribution
required under this Section 14.09, the Advisory Committee must calculate the
allocable income for the Plan Year in which the excess aggregate contributions
arose. "Allocable income" means net income or net loss. The Advisory
Committee will determine allocable income in the same manner as described in
Section 14.08(F) for excess contribution.
(F) CHARACTERIZATION OF EXCESS AGGREGATE CONTRIBUTIONS. The Advisory Committee
will treat a Highly Compensated Employee's allocable share of excess aggregate
contributions in the following priority: (1) first as attributable to his
Employee contributions which are voluntary contributions, if any; (2) then as
matching contributions allocable with respect to excess contributions
determined under the ADP test described in Section 14.08; (3) then on a pro
rata basis to matching contributions and to the deferral contributions relating
to those matching contributions which the Advisory Committee has included in
the ACP test; (4) then on a pro rata basis to Employee contributions which are
mandatory contributions, if any, and to the matching contributions allocated on
the basis of those mandatory contributions; and (5) last to qualified
nonelective contributions used in the ACP test. To the extent the Highly
Compensated Employee's excess aggregate contributions are attributable to
matching contributions, and he is not 100% vested in his Accrued Benefit
attributable to matching contributions, the Advisory Committee will distribute
only the vested portion and forfeit the nonvested portion. The vested portion
of the Highly Compensated Employee's excess aggregate contributions
attributable to Employer matching contributions is the total amount of such
excess aggregate contributions (as adjusted for allocable income) multiplied by
his vested percentage (determined as of the last day of the Plan Year for which
the Employer made the matching contribution). The Employer will specify in
Adoption Agreement Section 3.05 the manner in which the Plan will allocate
forfeited excess aggregate contributions.
14.10 MULTIPLE USE LIMITATION. For Plan Years beginning after December
31, 1988, if at least one Highly Compensated Employee is includible in the ADP
test under Section 14.08 and in the ACP test under Section 14.09, the sum of
the Highly Compensated Group's ADP and ACP may not exceed the multiple use
limitation.
The multiple use limitation is the sum of (i) and (ii):
(i) 125% of the greater of: (a) the ADP of the Nonhighly Compensated
Group under the Code Section 401(k) arrangement; or (b) the ACP of the
Nonhighly Compensated Group for the Plan Year beginning with or within
the Plan Year of the Code Section 401(k) arrangement.
(ii) 2% plus the lesser of (i)(a) or (i)(b), but no more than twice the
lesser of (i)(a) or (i)(b).
The Advisory Committee, in lieu of determining the multiple use
limitation as the sum of (i) and (ii), may elect to determine the multiple use
limitation as the sum of (iii) and (iv):
(iii) 125% of the lesser of: (a) the ADP of the Nonhighly Compensated
Group under the Code Section 401(k) arrangement; or (b) the ACP of the
Nonhighly Compensated Group for the Plan Year beginning with or within
the Plan Year of the Code Section 401(k) arrangement.
<PAGE> 76
(iv) 2% plus the greater of (iii)(a) or (iii)(b), but no more than twice
the greater of (iii)(a) or (iii)(b).
The Advisory Committee will determine whether the Plan satisfies the
multiple use limitation after applying the ADP test under Section 14.08 and the
ACP test under Section 14.09 and after making any corrective distributions
required by those Sections. If, after applying this Section 14.10, the Advisory
Committee determines the Plan has failed to satisfy the multiple use
limitation, the Advisory Committee will correct the failure by treating the
excess amount as excess contributions under Section 14.08 or as excess
aggregate contributions under Section 14.09, as it determines in its sole
discretion. This Section 14.10 does not apply unless, prior to application of
the multiple use limitation, the ADP and the ACP of the Highly Compensated
Group each exceeds 125% of the respective percentages for the Nonhighly
Compensated Group.
14.11 DISTRIBUTION RESTRICTIONS. The Employer must elect in Section
6.03 the Adoption Agreement the distribution events permitted under the Plan.
The distribution events applicable to the Participant's Deferral Contributions
Account, Qualified Nonelective Contributions Account and Qualified Matching
Contributions Account must satisfy the distribution restrictions described in
paragraph (m) of Section 14.03.
(A) HARDSHIP DISTRIBUTIONS FROM DEFERRAL CONTRIBUTIONS ACCOUNT. The Employer
must elect in Adoption Agreement Section 6.03 whether a Participant may receive
hardship distributions from his Deferral Contributions Account prior to the
Participant's Separation from Service. Hardship distributions from the Deferral
Contributions Account must satisfy the requirements of this Section 14.11. A
hardship distribution option may not apply to the Participant's Qualified
Nonelective Contributions Account or Qualified Matching Contributions Account,
except as provided in paragraph (3).
(1) DEFINITION OF HARDSHIP. A hardship distribution under this Section
14.11 must be on account of one or more of the following immediate and heavy
financial needs: (1) medical care described in Code Section 213(d) incurred by
the Participant, by the Participant's spouse, or by any of the Participant's
dependents, or necessary to obtain such medical care; (2) the purchase
(excluding mortgage payments) of a principal residence for the Participant; (3)
the payment of post-secondary education tuition and related educational fees,
for the next 12-month period, for the Participant, for the Participant's
spouse, or for any of the Participant's dependents (as defined in Code Section
152); (4) to prevent the eviction of the Participant from his principal
residence or the foreclosure on the mortgage of the Participant's principal
residence; or (5) any need prescribed by the Revenue Service in a revenue
ruling, notice or other document of general applicability which satisfies the
safe harbor definition of hardship.
(2) RESTRICTIONS. The following restrictions apply to a Participant who
receives a hardship distribution: (a) the Participant may not make elective
deferrals or employee contributions to the Plan for the 12-month period
following the date of his hardship distribution; (b) the distribution is not in
excess of the amount of the immediate and heavy financial need (including any
amounts necessary to pay any federal state or local income taxes or penalties
reasonably anticipated to result from the distribution); (c) the Participant
must have obtained all distributions, other than hardship distributions, and
all nontaxable loans (determined at the time of the loan) currently available
under this Plan and all other qualified plans maintained by the Employer; and
(d) the Participant agrees to limit elective deferrals under this Plan and under
any other qualified Plan maintained by the Employer, for the Participant's
taxable year immediately following the taxable year of the hardship
distribution, to the 402(g) limitation (as described in Section 14.07), reduced
by the amount of the Participant's elective deferrals made in the taxable year
of the hardship distribution. The suspension of elective deferrals and employee
contributions described in clause (a) also must apply to all other qualified
plans and to all nonqualified plans of deferred compensation maintained by the
Employer, other than any mandatory employee contribution portion of a defined
benefit plan, including stock option, stock purchase and other similar plans,
but not including health or welfare benefit plans (other than the cash or
deferred arrangement portion of a cafeteria plan).
<PAGE> 77
(3) EARNINGS. For Plan Years beginning after December 31, 1988, a
hardship distribution under this Section 14.11 may not include earnings on an
Employee's elective deferrals credited after December 31, 1988. Qualified
matching contributions and qualified nonelective contributions, and any
earnings on such contributions, credited as of December 31, 1988, are subject
to the hardship withdrawal only if the Employer specifies in an addendum to
this Section 14.11. The addendum may modify the December 31, 1988, date for
purposes of determining credited amounts provided the date is not later than
the end of the last Plan Year ending before July 1, 1989.
(B) DISTRIBUTIONS AFTER SEPARATION FROM SERVICE. Following the Participant's
Separation from Service, the distribution events applicable to the Participant
apply equally to all of the Participant's Accounts, except as elected in
Section 6.03 of the Employer's Adoption Agreement.
(C) CORRECTION OF ANNUAL ADDITIONS LIMITATION. If, as a result of a reasonable
error in determining the amount of elective deferrals an Employee may make
without violating the limitations of Part 2 of Article III, an Excess Amount
results, the Advisory Committee will return the Excess Amount (as adjusted for
allocable income) attributable to the elective deferrals. The Advisory Committee
will make this distribution before taking any corrective steps pursuant to
Section 3.10 or to Section 3.16. The Advisory Committee will disregard any
elective deferrals returned under this Section 14.11(C) for purposes of
Sections 14.07, 14.08 and 14.09.
14.12 SPECIAL ALLOCATION RULES. If the Code Section 401(k) arrangement
provides for salary reduction contributions, if the Plan accepts Employee
contributions, pursuant to Adoption Agreement Section 4.01, or if the Plan
allocates matching contributions as of any date other than the last day of the
Plan Year, the Employer must elect in Adoption Agreement 9.11 whether any
special allocation provisions will apply under Section 9.11 of the Plan. For
purposes of the elections:
(a) A "segregated Account" direction means the Advisory Committee will
establish a segregated Account for the applicable contributions made on
the Participant's behalf during the Plan Year. The Trustee must invest
the segregated Account in Federally insured interest bearing savings
account(s) or time deposits, or a combination of both, or in any other
fixed income investments, unless otherwise specified in the Employer's
Adoption Agreement. As of the last day of each Plan Year (or, if
earlier, an allocation date coinciding with a valuation date described
in Section 9.11), the Advisory Committee will reallocate the segregated
Account to the Participant's appropriate Account, in accordance with
Section 3.04 or Section 4.06, whichever applies to the contributions.
(b) A "weighted average allocation" method will treat a weighted
portion of the applicable contributions as if included in the
Participant's Account as of the beginning of the valuation period. The
weighted portion is a fraction, the numerator of which is the number of
months in the valuation period, excluding each month in the valuation
period which begins prior to the contribution date of the applicable
contributions, and the denominator of which is the number of months in
the valuation period. The Employer may elect in its Adoption Agreement
to substitute a weighting period other than months for purposes of this
weighted average allocation.
* * * * * * * * * * * * * * *
<PAGE> 78
LOAN POLICY
CENTRON DPL COMPANY, INC. PROFIT SHARING PLAN
The Plan Administrator of the Centron DPL Company, Inc. Profit
Sharing Plan (the "Plan") adopts the following loan policy
pursuant to the terms of the Plan:
1. ADMINISTRATION OF POLICY. The Plan Administrator will be
responsible for administering this Loan Policy.
2. LOAN APPLICATION. Any Plan Participant may apply for a loan
from his or her accounts under the Plan. For purposes of
this loan policy. the term "Participant" means any active
participant who is a party in interest (within the meaning of
ERISA Section 3(14)) with respect to the Plan. A Participant
must apply for each loan in writing with an application which
specifies the amount of the loan desired, the requested
duration for the loan, and the source of security for the loan.
Applications may be obtained from the Human Resource Department
at the Home Office.
The Plan Administrator will not approve any loan to a
Participant who is not creditworthy. In order to be creditworthy,
the Participant must have established a reputation in his or her
community which would entitle him or her to a similar loan from a
commercial or business lenders. In applying for the loan from the
Plan, each Participant must give full authority to investigate
his or her creditworthiness.
All loans will be made in a uniform and nondiscriminatory manner,
not only in determining which Participants will be entitled to
borrow from the Plan but also in the terms of the loan and the
manner of repayment. This means that loans will be made available
to all Participants without regard to any individual's race,
color, religion, sex, age or national origin. It also means that
loans will not be made available to officers, shareholders or
highly compensated employees (within the meaning of Section
414(q) of the Internal Revenue Code) in an amount greater than
the amount made available to other Participants except in the
manner described in this Loan Policy.
3. LIMITATION ON LOAN AMOUNT. The Plan Administrator will not
approve any loan in an amount which exceeds 50% of the
Participant's vested account balance as reflected by the books
and records of the Plan. The maximum aggregate dollar amount of
loans outstanding to any Participant may not exceed $50,000 as
aggregated with all participant loans from other qualified plans
of the Employer and all Related Employers, reduced by the excess
of the Participant's highest outstanding participant loan balance
during the 12-month period ending on the date of the loan over
the Participant's loan balance on the date of the loan. A
participant may not request a loan for less than $1000.
4. EVIDENCE AND TERMS OF LOAN. The Plan Administrator will document
every loan in the form of a promissory note signed by the
Participant for the face amount of the loan, together with a
commercially reasonable rate of interest. The Plan Administrator
will determine the appropriate interest rate by obtaining at
least one quote from a financial
1
<PAGE> 79
institution that is in the business of lending money for
similar purposes. The interest rate quote(s) must take into
account the term of the loan, the security on that loan, the
creditworthiness of the Participant, whether the interest
rate is adjustable during the term of the loan, and the
intended use of the loan proceeds. if known, and must reflect
a commercially reasonable rate for the geographical region in
which the Participant lives.
If Participants in the Plan live in different geographical
regions, the Plan Administrator may establish a uniform
commercially reasonable interest rate applicable to all
regions based on information obtained from at least one
region in which Participants live. The Plan Administrator
will re-evaluate interest rates for loans made more than one
month since the last loan made by the Plan.
The loan will provide at least quarterly payments under a
level amortization schedule and, if the Participant is
currently employed by the Employer or any Related Employer,
for payroll withholding. The loan may permit a suspension of
payments for a period not exceeding one year which occurs
during an approved leave of absence. The Plan Administrator
will fix the term of repayment of the loan. In no instance,
however, may the term of repayment be greater than 5 years
unless the loan qualifies as a "home loan". A "home loan" is
a loan used to acquire a dwelling unit which, within a
reasonable time, the Participant will use as a principal
residence. The Plan Administrator may fix the term for the
repayment of a home loan for a reasonable period to exceed 5
years, but in no case to exceed 15 years.
Participants should note that federal income tax law treats
the amount of any loan (other than a home loan) that is not
repaid within 5 years after the date of the loan as a taxable
distribution on the last day of the 5- year period or, if
sooner, at the time the loan is in default. If a Participant
extends a non-home loan having a repayment term of 5 years or
less beyond the 5-year period, the balance of the loan at the
time of the extension is a taxable distribution to the
Participant. Participants should also note that interest on a
loan is deductible for federal income tax purposes only in
limited circumstances. Each Participant should seek the
advice of his or her own tax adviser.
5. SECURITY FOR LOAN. A Participant must secure each loan with an
irrevocable pledge and assignment of up to 50% of the
nonforfeitable amount of the borrowing Participant's account
balance under the Plan or other security the Plan Administrator
accepts and finds to be adequate or both. The Plan Administrator
may, in a uniform and nondiscriminatory manner, require the
borrowing Participant to secure each loan with additional
collateral acceptable to the Plan Administrator or to substitute
collateral given for the loan.
If the Participant secures the loan wholly or partly with a
portion of his or her vested account balance, the pledge and
assignment of that portion of his vested account balance will be
in the form attached to this Loan Policy. If any of the
Participant's vested account balance is to be used as security
for the loan, unless the total amount to be used as security for
all loans does not exceed $3,500, the Participant and the
Participant's spouse (if any) must consent to the making of the
loan and to the reduction of the account balance in case of
default or of the Participant's death. The consent must meet the
following requirements:
2
<PAGE> 80
* Be in writing;
* Acknowledge the effect of the consent;
* Be witnessed by a notary public or a duly appointed
representative of the Plan Administrator; and
* Be given not more than 90 days before the disbursement of
the loan proceeds.
Spousal consent will be binding with respect to the consenting spouse
or any later spouse with respect to that loan. A new consent will be
required if any of the vested account balance is used for
renegotiation, extension. renewal or other revision of the loan.
6. DEFAULT/RISK OF LOSS. The Plan Administrator will treat this loan in
default if:
* Any scheduled payment remains unpaid for more than 90 DAYS;
* The making or furnishing of any representation or statement to
the Plan by or on behalf of the Participant which proves to
have been false in any material respect when made or furnished;
* Loss, theft, damage, destruction, sale or encumbrance to or of
any of the collateral, or the making of any levy, seizure or
attachment thereof or thereon; or
* Death, insolvency, appointment of a receiver of any part of
the property of, assignment for the benefit of creditors by,
or the commencement of any proceeding under any bankruptcy or
insolvency laws of, by or against the Participant.
The Participant will have the opportunity to repay the loan, resume
current status of the loan by paying any missed payment plus interest
or, if distribution of the Participant's benefit is available under the
Plan, request distribution of the note in satisfaction of the benefit.
Default may be treated as a taxable distribution to the Participant
regardless of whether the loan is repaid.
HOWEVER, TREATMENT OF THE LOAN AS A TAXABLE DISTRIBUTION DOES NOT
RELIEVE THE PARTICIPANT OF THE OBLIGATION TO REPAY THE LOAN. If the
loan remains in default, the Plan Administrator may foreclose on any
other security it holds or, to the extent a distribution to the
Participant is permissible under the Plan, offset the Participant's
vested account balance by the outstanding balance of the loan. The Plan
Administrator will treat the note as repaid to the extent of any
permissible offset. Pending final disposition of the note, the
Participant remains obligated for any unpaid principal and accrued
interest.
The Plan intends that this loan program not place other participants at
risk with respect to their interests in the Plan. For this reason, the
Plan Administrator will administer any loan as a directed investment
by the Participant of that portion of the Participant's account balance
3
<PAGE> 81
equal to the outstanding principal balance of the loan. The Plan will credit
that portion of the Participant's account balance with the interest earned on
the note and with principal payments received by the Participant. The Plan
also will charge that portion of the Participant's account balance with
expenses directly related to the organization, maintenance and collection of
the note.
DATED: October 7 , 1994.
--------------------- --
/s/ DVJ
---------------------------
Centron DPL Company, Inc.
4
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the GATX Corporation, Centron DPL Company Inc., Profit
Sharing Plan, of our report dated January 28, 1997, with respect to the
consolidated financial statements of GATX Corporation and schedules included or
incorporated by reference in its Annual Report on Form 10-K for the year ended
December 31, 1996.
/s/ ERNST & YOUNG LLP
December 22, 1997
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
The undersigned officers and directors of GATX CORPORATION, a New York
corporation, do hereby constitute and appoint David B. Anderson and Ronald J.
Ciancio, or either of them, attorneys and agents of the undersigned, with full
power and authority to sign in the name and on behalf of the undersigned, and in
the capacities indicated, its registration statement on Form S-8 under the
Securities Act of 1933 of 25,000 shares of Common Stock to be purchased under
the Centron DPL Company, Inc. Profit Sharing Plan, together with any amendments
thereto, hereby ratifying and confirming all that said attorneys and agents and
each of them may do by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JAMES M. DENNY Director
- -----------------------------------------------------
James M. Denny December 19, 1997
/s/ RICHARD FAIRBANKS Director
- -----------------------------------------------------
Richard Fairbanks December 19, 1997
/s/ WILLIAM C. FOOTE Director
- -----------------------------------------------------
William C. Foote December 5, 1997
/s/ DEBORAH M. FRETZ Director
- -----------------------------------------------------
Deborah M. Fretz December 5, 1997
/s/ RICHARD A. GIESEN Director
- -----------------------------------------------------
Richard A. Giesen December 5, 1997
/s/ MILES L. MARSH Director
- -----------------------------------------------------
Miles L. Marsh December 5, 1997
/s/ CHARLES MARSHALL Director
- -----------------------------------------------------
Charles Marshall December 10, 1997
/s/ MICHAEL E. MURPHY Director
- -----------------------------------------------------
Michael E. Murphy December 5, 1997
/s/ RONALD H. ZECH Chairman of the Board
- ----------------------------------------------------- and Chief Executive
Ronald H. Zech Officer December 19, 1997
</TABLE>
