<PAGE>
AMERCO EMPLOYEE SAVINGS,
-----------------------
PROFIT SHARING AND
------------------
EMPLOYEE STOCK OWNERSHIP PLAN
-----------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
PREAMBLE AND INTRODUCTION................................................-1-
ARTICLE ONE - EFFECTIVE DATE.............................................-2-
1.1. EFFECTIVE DATE...........................................-2-
ARTICLE TWO - DEFINITIONS AND CONSTRUCTION...............................-2-
2.1. DEFINITIONS..............................................-2-
2.2. TOP HEAVY PLAN PROVISIONS...............................-13-
2.3. HIGHLY COMPENSATED EMPLOYEE.............................-15-
2.4. CONSTRUCTION............................................-16-
ARTICLE THREE - ELIGIBILITY AND PARTICIPATION...........................-17-
3.1. ELIGIBILITY.............................................-17-
3.2. PARTICIPATION...........................................-17-
3.3. CREDITING OF SERVICE....................................-19-
3.4. EFFECT OF REHIRING......................................-20-
3.5. AFFILIATED EMPLOYERS....................................-20-
3.6. TRANSFERS TO AND FROM AN ELIGIBLE CLASS OF EMPLOYEES....-20-
3.7. LEASED EMPLOYEES........................................-21-
ARTICLE FOUR - EMPLOYEE CONTRIBUTIONS...................................-21-
4.1. PRE-TAX CONTRIBUTIONS...................................-21-
4.2. PRE-TAX CONTRIBUTIONS--DOLLAR LIMITATION................-22-
4.3. LIMITATION ON CONTRIBUTIONS OF HIGHLY
COMPENSATED EMPLOYEES...................................-22-
4.4. DESIGNATION AND CHANGE OF DESIGNATION OF
PRE-TAX CONTRIBUTIONS...................................-25-
4.5. SUSPENSION OF PRE-TAX CONTRIBUTIONS.....................-26-
4.6. AFTER-TAX CONTRIBUTIONS.................................-26-
4.7. ROLLOVER CONTRIBUTIONS..................................-26-
ARTICLE FIVE - EMPLOYER CONTRIBUTIONS...................................-27-
5.1. PROFIT SHARING CONTRIBUTIONS............................-27-
5.2. ESOP CONTRIBUTIONS......................................-28-
5.3. ATOP HEAVY@ CONTRIBUTIONS...............................-28-
5.4. EMPLOYER MATCHING CONTRIBUTIONS.........................-28-
5.5. PAYMENT OF EMPLOYER MATCHING CONTRIBUTIONS,
PROFIT SHARING CONTRIBUTIONS AND ESOP CONTRIBUTIONS.....-31-
<PAGE>
5.6. CONDITIONAL NATURE OF CONTRIBUTIONS.....................-31-
ARTICLE SIX - INVESTMENT OF CONTRIBUTIONS...............................-32-
6.1. PARTICIPANT DIRECTED INDIVIDUAL ACCOUNT PLAN............-32-
6.2. DIRECTION BY PARTICIPANT................................-33-
6.3. CHANGE IN INVESTMENT DIRECTIONS.........................-36-
6.4. TRANSFERS BETWEEN INVESTMENT FUNDS......................-36-
6.5. LOANS TO PLAN PARTICIPANTS..............................-37-
6.6. LIFE INSURANCE..........................................-39-
ARTICLE SEVEN - THE ESOP FUND...........................................-41-
7.1. ESOP FUND...............................................-41-
7.2. LOANS TO ACQUIRE EMPLOYER SECURITIES....................-41-
7.3. TERMS OF LOANS TO ACQUIRE EMPLOYER SECURITIES...........-42-
7.4. THE LOAN SUSPENSE ACCOUNT...............................-43-
7.5. PUT OPTION..............................................-43-
7.6. RIGHT OF FIRST REFUSAL..................................-45-
7.7. NONTERMINABLE PROTECTIONS AND RIGHTS....................-46-
ARTICLE EIGHT - ACCOUNTING..............................................-47-
8.1. INDIVIDUAL ACCOUNTS.....................................-47-
8.2. ALLOCATION OF CONTRIBUTIONS.............................-47-
8.3. VALUATION AND ADJUSTMENT................................-50-
8.4. STATEMENTS TO PARTICIPANTS..............................-51-
8.5. LIMITATION ON ANNUAL ADDITIONS..........................-51-
8.6. VALUATION OF EMPLOYER SECURITIES........................-54-
ARTICLE NINE - WITHDRAWALS PRIOR TO TERMINATION OF EMPLOYMENT...........-54-
9.1. WITHDRAWALS FROM THE AFTER-TAX CONTRIBUTION
ACCOUNT.................................................-54-
9.2. IN-SERVICE WITHDRAWALS FROM THE EMPLOYER
MATCHING CONTRIBUTION ACCOUNT AND THE PROFIT
SHARING ACCOUNT.........................................-55-
9.3. WITHDRAWALS FROM THE PRE-TAX CONTRIBUTIONS
AND ROLLOVER CONTRIBUTIONS ACCOUNTS.....................-56-
9.4. WITHDRAWALS OF AMOUNTS CREDITED TO THE ESOP
FUND, PROFIT SHARING ACCOUNTS AND EMPLOYER
MATCHING CONTRIBUTIONS ACCOUNTS.........................-58-
9.5. LIMITATIONS ON WITHDRAWALS..............................-58-
9.6. SPOUSAL CONSENT.........................................-58-
<PAGE>
ARTICLE TEN - VESTING...................................................-59-
10.1. VESTING IN THE AFTER-TAX CONTRIBUTION ACCOUNT,
PRE-TAX CONTRIBUTION ACCOUNT, EMPLOYER
MATCHING CONTRIBUTION ACCOUNT, AND ROLLOVER
CONTRIBUTION ACCOUNT....................................-59-
10.2. VESTING IN THE ESOP ACCOUNT AND PROFIT SHARING
ACCOUNT.................................................-59-
10.3. DETERMINATION OF VESTED INTEREST IN ESOP ACCOUNT
AND PROFIT SHARING ACCOUNT IN THE EVENT OF
TERMINATION OF EMPLOYMENT...............................-59-
10.4. RESTORATION OF FORFEITURES..............................-61-
10.5. AMENDMENTS TO VESTING SCHEDULE..........................-61-
ARTICLE ELEVEN - DISTRIBUTION OF BENEFITS...............................-62-
11.1. NORMAL AND LATE RETIREMENT..............................-62-
11.2. DISABILITY RETIREMENT...................................-62-
11.3. DEATH...................................................-62-
11.4. OTHER SEPARATIONS FROM EMPLOYMENT.......................-63-
11.5. TIME OF DISTRIBUTION OF BENEFITS........................-63-
11.6. METHOD OF DISTRIBUTION..................................-66-
11.7. PAYMENTS TO DISABLED....................................-67-
11.8. MISSING PAYEES..........................................-68-
11.9. WITHHOLDING.............................................-68-
11.10. UNDERPAYMENT OR OVERPAYMENT OF BENEFITS.................-68-
11.11. TRANSFERS FROM THE PLAN.................................-68-
11.12. ELIGIBLE ROLLOVER DISTRIBUTIONS.........................-69-
ARTICLE TWELVE - PLAN ADMINISTRATION....................................-70-
12.1. THE ADVISORY COMMITTEE..................................-70-
12.2. POWERS OF THE ADVISORY COMMITTEE........................-71-
12.3. CLAIMS..................................................-72-
12.4. THE TRUSTEES............................................-73-
12.5. SCOPE OF RESPONSIBILITY.................................-73-
12.6. EXPENSES................................................-74-
12.7. TRUST AGREEMENTS........................................-74-
12.8. VOTING OF EMPLOYER SECURITIES...........................-75-
12.9. SECURITIES REGISTRATION.................................-77-
12.10. SECURITIES RESTRICTIONS.................................-77-
ARTICLE THIRTEEN - AMENDMENT, MERGER AND TERMINATION....................-78-
13.1. AMENDMENT OF PLAN AND TRUST AGREEMENTS..................-78-
13.2. MERGER OR CONSOLIDATION.................................-78-
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13.3. DISCONTINUANCE AND TERMINATION OF PLAN..................-78-
13.4. SUCCESSORS..............................................-79-
ARTICLE FOURTEEN - INALIENABILITY OF BENEFITS...........................-80-
14.1. NO ASSIGNMENT PERMITTED.................................-80-
14.2. QUALIFIED DOMESTIC RELATIONS ORDERS.....................-80-
14.3. EARLY COMMENCEMENT OF PAYMENTS TO ALTERNATE
PAYEES..................................................-81-
14.4. PROCESSING OF QUALIFIED DOMESTIC RELATIONS ORDERS.......-81-
14.5. RESPONSIBILITY OF ALTERNATE PAYEES......................-82-
ARTICLE FIFTEEN - GENERAL PROVISIONS....................................-82-
15.1. SOURCE OF PAYMENT.......................................-82-
15.2. BONDING.................................................-83-
15.3. EXCLUSIVE BENEFIT.......................................-83-
15.4. UNIFORM ADMINISTRATION; EXERCISE OF DISCRETION..........-83-
15.5. NO RIGHT TO EMPLOYMENT..................................-83-
15.6. HEIRS AND SUCCESSORS....................................-83-
15.7. ASSUMPTION OF QUALIFICATION.............................-83-
15.8. EFFECT OF AMENDMENT.....................................-83-
15.9. COMPLIANCE WITH SECTION 414(U) OF THE CODE..............-84-
<PAGE>
AMERCO EMPLOYEE SAVINGS,
PROFIT SHARING AND
EMPLOYEE STOCK OWNERSHIP PLAN
PREAMBLE AND INTRODUCTION
-------------------------
On March 16, 1973, AMERCO, a Nevada corporation (the
"Corporation") established the AMERCO Profit Sharing Retirement Trust
(the "Profit Sharing Plan") for certain of its employees. The Profit
Sharing Plan was subsequently amended from time to time. Effective
April 1, 1984, the Corporation established the AMERCO Employee Savings
and Protection Plan (the "Savings Plan") to permit employee
contributions to be made on a favorable tax basis through utilization
of the provisions of Section 401(k) of the Internal Revenue Code (the
"Code"). The Savings Plan was subsequently amended from time to
time. Effective January 1, 1988, the Profit Sharing Plan and the
Savings Plan were merged into a single plan called the "AMERCO
Retirement Savings and Profit Sharing Plan" (the "Plan").
The Plan was amended and restated in its entirety, effective
as of July 24, 1988, to establish an "employee stock ownership plan"
(as defined in Section 407(d)(6) of the Employee Retirement Income
Security Act of 1974 (the "Act") and Section 4975(e)(7) of the Code)
designed to invest primarily in "qualifying employer securities" (as
defined in Section 407(d)(5) of the Act and Section 4975(e)(8) of the
Code) of the Corporation. The July 24, 1988, restatement changed the
name of the Plan to the "AMERCO Employee Savings, Profit Sharing And
Employee Stock Ownership Plan."
The Plan was subsequently amended and restated in its entirety effective
January 1, 1989 to comply with the Tax Reform Act of 1986 ("TRA 86") and to
make certain other modifications. The Plan was then amended on four occasions.
By the adoption of this document, the Plan is amended and restated in its
entirety to comply with the Small Business Job Protection Act of 1996 ("SBJPA"),
the Uniformed Services Employment and Reemployment Rights Act of 1994
("USERRA"), the Taxpayer Relief Act of 1997 ("TRA 97") and to make certain other
modifications. It is the intention of the Corporation that the Plan shall
continue to be qualified under the provisions of Section 401(a) of the Code
and that the Trust Fund maintained pursuant to the Plan shall continue to be
exempt from taxation pursuant to Section 501(a) of the Code. The Plan as so
amended shall be qualified as a profit sharing plan containing a "cash or
deferred" feature under Section 401(k) of the Code, with a constituent employee
stock ownership plan feature.
The provisions of this Plan shall apply only to a Participant whose termination
of employment occurs on or after the Effective Date of said provisions.
<PAGE>
ARTICLE ONE
-----------
EFFECTIVE DATE
--------------
1.1. EFFECTIVE DATE.
--------------
Except as specifically provided with respect to a particular provision of
the Plan or as required by SBJPA, USERRA or TRA 97, the provisions of this
amended and restated Plan shall be effective as of January 1, 1997.
ARTICLE TWO
-----------
DEFINITIONS AND CONSTRUCTION
----------------------------
2.1. DEFINITIONS.
-----------
When a word or phrase shall appear in this Plan with the initial letter
capitalized, and the word or phrase does not commence a sentence, the word or
phrase shall generally be a term defined in this Section 2.1 or in the
Preamble. The following words and phrases utilized in the Plan with the
initial letter capitalized shall have the meanings set forth in this Section
2.1, unless a clearly different meaning is required by the context in which
the word or phrase is used:
(a) "ACCOUNTING DATE" - The Accounting Date for Profit Sharing Accounts,
---------------
After-Tax Contribution Accounts, Pre-Tax Contribution Accounts, Rollover
Contribution Accounts, and the Employer Matching Contribution Accounts shall be
the last day of each calendar month. The Accounting Date for the ESOP Account
shall be the last day of the Plan Year. The Accounting Date shall also be any
other date so designated by the Advisory Committee.
(b) "ACCOUNTS" - The Pre-Tax Contribution Account, After-Tax Contribution
--------
Account, Employer Matching Contribution Account, Profit Sharing Account, ESOP
Account and, effective November 1, 1997, the Rollover Contribution Account of a
Participant.
(c) "ADMINISTRATIVE TRUSTEE" - The trustee or trustees which are charged
----------------------
under the Trust Agreement with certain administrative duties as well as the
investment of assets of the Trust Fund generally.
(d) "ADVISORY COMMITTEE" - The committee appointed by the Board pursuant
------------------
to Section 12.1 to serve as the Advisory Committee.
(e) "AFFILIATE" - Any member of a "controlled group of corporations"
---------
(within the meaning of Section 414(b) of the Code as modified by Section 415(h)
of the Code) that includes the Employer as a member of the group; any member of
<PAGE>
an "affiliated service group" (within the meaning of Section 414(m)(2) of the
Code) that includes the Employer as a member of the group; any member of a group
of trades or businesses under common control (within the meaning of Section
414(c) of the Code as modified by Section 415(h) of the Code) that includes the
Employer as a member of the group; and any other entity required to be
aggregated with the Employer pursuant to regulations issued by the United States
Treasury Department pursuant to Section 414(o) of the Code.
(f) "AFTER-TAX CONTRIBUTION ACCOUNT" - The account established pursuant
------------------------------
to Section 8.1 to which a Participant's After-Tax Contributions and the earnings
thereon are credited.
(g) "AFTER-TAX CONTRIBUTIONS" - The contributions made by a Participant
-----------------------
on an "after-tax" basis prior to March 31, 1987.
(h) "ANNIVERSARY DATE" - January 1 of each calendar year.
----------------
(i) "ANNUAL ADDITION" - The sum of the following amounts allocable for
---------------
a Plan Year to a Participant under this Plan or under any defined contribution
plan or defined benefit plan maintained by the Employer or any Affiliate:
(1) The Employer contributions allocable for a Plan Year to the
Accounts of the Participant under this Plan or any other defined
contribution plan, including any amount allocable from a suspense account
maintained pursuant to such plan on account of a prior Plan Year (computed
as though no part of the ESOP Contribution is allocable to the Loan
Suspense Account); amounts deemed to be Employer contributions pursuant to
a cash-or-deferred arrangement qualified under Section 401(k) of the Code
(including the Pre-Tax Contributions allocable to a Participant pursuant to
this Plan); and amounts allocated to a medical account which must be
treated as annual additions pursuant to Section 415(l)(1) or Section
419A(d)(2) of the Code;
(2) All nondeductible Employee contributions allocable during a
Plan Year to the Accounts of the Participant; and
(3) Forfeitures allocable for a Plan Year to the Accounts of the
Participant.
Any rollover contributions or transfers from other qualified plans,
restorations of forfeitures, or other items similarly enumerated in Treasury
Regulation Section 1.415-6(b)(3) shall not be considered in calculating a
Participant's Annual Additions for any Plan Year.
(j) "AUTHORIZED OR APPROVED LEAVE OF ABSENCE" - A leave of absence from
---------------------------------------
the performance of active service for an Employer that is approved by the
Employer in accordance with the Employer's rules regarding leave of absence. An
Authorized Leave of Absence shall include an approved leave of absence for
<PAGE>
sickness or Disability. An absence from employment as a result of an
Employee's service as a member of the armed forces of the United States shall
also be treated as an Authorized Leave of Absence upon the Employee's return
to employment with the Employer, provided that the Employee left employment
with his Employer directly to enter the armed forces and returns directly to
the employment of an Employer within the period during which his employment
rights are protected by the Selective Service Act (or any similar law) as now
in effect or as hereafter amended. Absence shall be deemed to be approved by
an Employer for any period of an Employee's Disability prior to his separation
from employment.
(k) "AUTOMATIC ENROLLMENT EFFECTIVE DATE" shall mean the first day of
-----------------------------------
the first calendar month following or coinciding with the sixtieth (60th) day
after the date on which the United States Treasury Department issues a
determination that the automatic enrollment provisions of the Plan do not cause
the Plan to fail to satisfy the requirements under Section 401(a).
(l) "BALANCED FUND" - A diversified fund that is designed to invest its
-------------
holdings in bonds and stocks to achieve a high amount of current income while
preserving capital.
(m) "BENEFICIARY" - The person or persons designated by a Participant
-----------
to receive benefits under the Plan in the event of the death of the Participant.
(n) "BENEFIT COMMENCEMENT DATE" - The first day on which all events
-------------------------
(including the passing of the day on which benefit payments are scheduled to
commence) have occurred which entitle the Participant to receive his first
benefit payment from the Plan.
(o) "BOARD" - The Board of Directors of the Corporation.
-----
(p) "BOND FUND" - A fund that is primarily designed to invest its
---------
holdings in corporate and government bonds and mortgages and is designed to
achieve a high amount of current income with moderate risk. This fund was
previously known as the "Profit Sharing Fund."
(q) "BREAK IN CONTINUOUS SERVICE" - A twelve (12) continuous month
---------------------------
period, commencing with an Employee's Termination Date, in which the Employee
is not credited with at least one (1) Hour of Service.
(r) "COMPENSATION" - Effective for Plan Years beginning on or after
------------
January 1, 1993, the term "Compensation" shall mean all of the Participant's
wages within the meaning of Section 3401(a) of the Code and all payments of
compensation to the Employee by the Employer (in the course of the Employer's
trade or business) for which the Employer is required to furnish the Employee
a written statement under Sections 6041(d), 6051(a)(3) and 6502 of the Code,
determined without regard to any rules under Section 3401(a) that limit the
remuneration included in wages based on the nature or location of the
<PAGE>
employment or the services performed. For purposes of this paragraph,
Compensation for a Plan Year is the Compensation actually paid or includible
in gross income during such year. Notwithstanding the foregoing, Compensation
in excess of One Hundred Fifty Thousand Dollars ($150,000) shall be disregarded
for all purposes for each Plan Year. The limitations specified in the
preceding sentence shall be adjusted to take into account any cost-of-living
increase adjustment for that Plan Year allowable pursuant to the applicable
regulations or rulings of the United States Treasury Department under Section
401(a)(17) of the Code. If an Employee receives any payments from an Affiliate
which would be treated as Compensation if paid by the Employer, such amounts
shall be included in calculating the Employee's Compensation for purposes of
Section 415 of the Code and the corresponding provisions of this Plan. Any
amounts paid to an Employee by an Affiliate shall be disregarded for all other
purposes under this Plan unless the Affiliate making the payment has elected
to provide benefits to its employees pursuant to this Plan. Except for
purposes of making allocations under Top Heavy Plans pursuant to Section 8.2
and for purposes of identifying Highly Compensated Employees pursuant to
Section 2.3 and, for Plan Years beginning before January 1, 1998, testing
compliance with the provisions of Section 415 of the Code pursuant to Section
8.5, the term "Compensation" shall also include amounts (such as Pre-Tax
Contributions to this Plan) which are not currently includible in the
Participant's gross taxable income by reason of the application of Sections
125, 402(a)(8) or 402(h)(1)(B) of the Code, if such amounts are attributable
to the performance of services for the Employer or any Affiliate.
(s) "CONTINUOUS SERVICE" - The aggregated service of the Employee
------------------
measured in years and completed calendar months, based on the Employee's
period of elapsed time of employment determined in accordance with Section 3.3
and the applicable regulations of the United States Treasury Department.
(t) "DISABILITY" - A continuous period of absence resulting from illness
----------
or injury that, in the judgment of the Advisory Committee, supported by the
written opinion of a licensed physician (who may be designated by the Advisory
Committee), prevents a Participant from performing the duties of his own
occupation or other appropriate work made available by his Employer. The
Advisory Committee shall be the sole determinant of Disability for purposes of
this Plan.
(u) "DIVERSIFIED EQUITY FUND" - A fund designed to invest its holdings
-----------------------
in a broadly diversified group of common stocks to seek both dividend income
and capital appreciation over the long term.
(v) "EARNINGS" - The term "Earnings" shall mean all of the Participant's
--------
wages within the meaning of Section 3401(a) of the Code and all payments of
compensation to the Employee by the Employer (in the course of the Employer's
trade or business) for which the Employer is required to furnish the Employee
a written statement under Sections 6041(d), 6051(a)(3) and 6502 of the Code,
determined without regard to any rules under Section 3401(a) that limit the
<PAGE>
remuneration included in wages based on the nature or location of the
employment or the services performed. "Earnings" shall also include the amount
of Pre-Tax Contributions that would have been paid to the Participant as current
Earnings reportable on Internal Revenue Service Form W-2 but for the
Participant's election to direct Pre-Tax Contributions. Only Earnings paid
during periods of actual Plan participation shall be includable as Earnings
hereunder. Notwithstanding the foregoing, Earnings in excess of One Hundred
Fifty Thousand Dollars ($150,000) shall be disregarded for all purposes (other
than for the purpose of determining the amount of Pre-Tax Contributions that
a Participant may contribute to the Plan pursuant to Section 4.1(c)). The
limitations specified in the preceding sentence shall be adjusted to take into
account any cost-of-living increase adjustment for that Plan Year allowable
pursuant to the applicable regulations or rulings of the United States Treasury
Department under Section 401(a)(17) of the Code.
(w) "EFFECTIVE DATE" - Except as otherwise expressly provided in Section
--------------
1.1 or elsewhere in this Plan document, the Effective Date of this amendment
and restatement of the Plan shall be January 1, 1997.
(x) "EMPLOYEE" - Each person who is classified by the Employer as a
--------
common law employee (or who would be considered a common law employee if such
person were not on an Authorized Leave of Absence). Regardless of any
subsequent determination by a court or a governmental agency that an individual
should be treated as a common law employee, an individual will be considered
an Employee under the Plan only if such individual has been so classified by
the Employer for purposes of this Plan and is not a private contractor. If the
Employer modifies its classification or treatment of an individual, the
modification shall be applied prospectively only unless the Employer indicates
otherwise, in which case the modification will be effective as of the date
specified by the Employer. If an individual is characterized as a common law
employee of the Employer by a governmental agency or court but not by the
Employer, such individual shall be treated as an employee who has not been
designated for participation in this Plan.
(y) "EMPLOYEE SELECTED INVESTMENT FUNDS" - The investment funds, if any,
----------------------------------
established pursuant to Section 6.1.
(z) "EMPLOYER" - The Corporation and any company which is designated by
--------
the Board as an Employer under the Plan and whose designation as such has
become effective and has continued in effect. The designation shall become
effective only when it has been accepted by the board of directors of the
designated Employer. Any Employer may revoke its acceptance of such
designation at any time, but until such acceptance is revoked all the
provisions of the Plan and the Trust Agreement and any amendments thereto shall
apply to the Employees of the Employer. In the event that the designation of
an Employer as such is revoked by the board of directors of the Employer, the
Plan shall be deemed terminated only as to such Employer.
<PAGE>
(aa) "EMPLOYER MATCHING CONTRIBUTION ACCOUNT" - The account established
--------------------------------------
pursuant to Section 8.1 to which Employer Matching Contributions are credited.
(bb) "EMPLOYER MATCHING CONTRIBUTIONS" - The contributions of the
-------------------------------
Employers as described in Section 5.4 of the Plan.
(cc) "EMPLOYER SECURITIES" - shall mean:
-------------------
(1) common stock of the Corporation (or any other corporation that is a
member of a controlled group of corporations along with the Employer, as
defined in Section 414(b) of the Code (a "related corporation") which is
readily tradeable on an established securities market;
(2) if at any time there is no common stock which meets the requirements
of subparagraph (1), the term Employer Securities means common stock of the
Corporation or any related corporation having a combination of voting power
and dividend rights equal to or in excess of (i) that class of common stock of
the Corporation or any related corporation having the greatest voting power and
(ii) that class of common stock of the Corporation or any related corporation
having the greatest dividend rights; or
(3) Non-callable preferred stock shall be treated as Employer Securities
if such stock is convertible at any time to stock which meets the requirements
of subparagraphs (1) or (2) (whichever is applicable) and if such conversion is
at a conversion price which (as of the date of the acquisition by the ESOP)
is reasonable. Preferred stock shall be treated as noncallable if after the
call there will be a reasonable opportunity for a conversion which meets the
requirements of this paragraph.
(dd) "ESOP ACCOUNT" - The account established pursuant to Section 8.1
------------
for each Participant to which ESOP Contributions made on behalf of that
Participant, are credited.
(ee) "ESOP CONTRIBUTION" - The regular, special and per capita ESOP
-----------------
contributions made by the Employers pursuant to Section 5.2(a), (b) or (c).
(ff) "ESOP FUND" - The amounts of the Trust Fund (attributable to ESOP
---------
Contributions, and Employer Matching Contributions and Pre-Tax Contributions
invested in the ESOP Fund pursuant to Section 6.2(e)) invested by the ESOP
Trustee as an "employee stock ownership plan" (as defined in Section 407(d)(6)
of the Act and Section 4975(e)(7) of the Code and the applicable regulations
thereunder) established pursuant to ARTICLE SEVEN for the purpose of acquiring
Employer Securities.
<PAGE>
(gg) "ESOP TRUST AGREEMENT" - The instrument entered into between the
--------------------
Corporation and the ESOP Trustee to provide for the investment and
administration of the ESOP Fund. The ESOP Trust Agreement shall constitute a
part of the Plan.
(hh) "ESOP TRUSTEE" - The trustee or trustees appointed by the
------------
Corporation pursuant to the ESOP Trust Agreement to administer, invest and
distribute the ESOP Fund. If the Employer appoints two or more individuals
or entities to act jointly as the ESOP Trustee, the term "ESOP Trustee" shall
refer collectively to all of said individuals or entities.
(ii) "FUNDS" - The various investment alternatives under the Plan, which
-----
presently include the Balanced Fund, the Income Fund, the Bond Fund, the
Diversified Equity Fund and the ESOP Fund.
(jj) "HIGHLY COMPENSATED EMPLOYEE" - Each individual who is treated as
---------------------------
a "Highly Compensated Employee" pursuant to Section 2.3 of this Plan.
(kk) "HOUR OF SERVICE" -
---------------
(1) An hour for which an Employee is directly or indirectly compensated,
or is entitled to Compensation, by an Employer or an Affiliate for the
performance of duties. Such Hours of Service shall be credited in the
respective eligibility and vesting service computation periods in which the
duties were performed.
(2) An hour for which an Employee is directly or indirectly compensated,
or is entitled to Compensation, by an Employer or an Affiliate on account of
a period of time during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including Disability), layoff, jury duty, military duty
or leave of absence. No more than five hundred one (501) Hours of Service
shall be credited under this paragraph for any single continuous period
(whether or not such period occurs in a single computation period). Hours
of Service under this paragraph shall be calculated and credited pursuant to
Section 2530.200b-2 of the Department of Labor Regulations governing the
computation of Hours of Service, which are incorporated herein by this
reference.
(3) An hour for which back pay (irrespective of mitigation of damages)
is either awarded or agreed to by an Employer or an Affiliate. The same
Hours of Service shall not be credited both under paragraphs (1) or (2)
above, as the case may be, and under this paragraph (3). Hours of Service
attributable to back pay credits will be credited to the respective
computation period or periods to which the back pay pertains, rather than
to the period in which the award, agreement or payment is made.
<PAGE>
(4) In lieu of determining Hours of Service under the foregoing
paragraphs, the Advisory Committee may credit an Employee with ten (10) Hours
of Service for each day for which any service must be credited, or forty-five
(45) Hours of Service for each week for which any service must be credited,
or one hundred ninety (190) Hours of Service for each month for which any
service must be credited. Such crediting of hours shall be performed on a
nondiscriminatory basis.
(5) Employees also shall be credited with any additional Hours of
Service required to be credited pursuant to Federal law other than the Act
or the Code.
(6) Solely for purposes of determining whether an Employee has incurred
a Break in Service, an Employee shall be credited with Hours of Service in
accordance with the provisions of this paragraph (6) for periods of absence
(with or without pay) by reason of the pregnancy of the Employee, the birth
of a child of the Employee, the placement of a child with the Employee in
connection with the adoption of such child by the Employee, or for purposes
of caring for a child of the Employee for a period beginning immediately
following the child's birth or placement. An Employee who is on an
Authorized Leave of Absence for any of the foregoing reasons shall receive
credit for the Hours of Service which the Employee would normally have been
credited with but for such absence. If the Advisory Committee and the
Employer are unable to determine the Hours which would have otherwise been
credited to the Employee, the Employee shall receive credit for eight (8)
Hours of Service for each day of such absence. The maximum number of Hours
of Service credited to an Employee pursuant to this paragraph for any one
absence or any series of related absences shall not exceed five hundred
one (501). The hours credited pursuant to this paragraph will be treated
as Hours of Service for the service computation period during which the
absence begins if the Employee would be prevented from incurring a Break
in Service during such twelve (12) consecutive month period solely because
of the Hours of Service credited pursuant to this paragraph. In all other
cases, the Hours of Service shall be credited to the Employee for the service
computation period which begins immediately following the day on which the
absence commences. This paragraph (6)shall not be construed as entitling
any Employee to an Authorized Leave of Absence for any of the reasons
enumerated above. An Employee's entitlement to an Authorized Leave of
Absence will be determined in accordance with the standard policies of the
Employer. No credit will be given pursuant to this paragraph (6) unless
the Employee furnishes to the Advisory Committee such timely information
as the Advisory Committee may reasonably require to establish the number of
days for which there was such an absence and that the absence was for one
of the reasons enumerated above.
<PAGE>
(ll) "INACTIVE PARTICIPANT" - A Participant for whom Accounts are
--------------------
maintained under the Plan, but who is not eligible to make Pre-Tax Contributions
or to receive allocations of Employer matching Contributions, ESOP Contributions
or Profit Sharing Contributions. An Inactive Participant shall continue to
share in the earnings or losses on Trust investments.
(mm) "INCOME FUND" - A fund invested in high quality short and
-----------
intermediate term bonds, insurance contracts, and money market securities, with
the objective of earning interest income without exposing the fund to
significant fluctuations in value.
(nn) "KEY EMPLOYEE" - An Employee or former Employee who, at any time
------------
during the Plan Year in which the "determination date" (as defined in Section
2.2) falls or any of the four (4) preceding Plan Years, is or was:
(1) An officer of the Employer or an Affiliate whose Compensation from
the Employer and the Affiliate exceeds fifty percent (50%) of the applicable
dollar limitation of Section 415(b)(1)(A) of the Code (as such sum shall be
adjusted to take into account any cost-of-living increase adjustment for
that Plan Year pursuant to the applicable lawful regulations or rulings of
the United States Treasury Department under Section 415 of the Code). No
more than the lesser of fifty (50) Employees or ten percent (10%) of the
aggregate number of employees of the Employer and its Affiliates shall be
considered as officers for purposes of this paragraph. The number of
officers considered to be Key Employees shall be further limited in
accordance with Section 416 of the Code. In addition, whether a particular
Employee is an "officer" for purposes of this paragraph (1) shall be
determined in accordance with Section 416 of the Code and regulations issued
thereunder.
(2) An Employee (i) whose ownership interest in the Employer or any
Affiliate is more than .5% (.005), and (ii) whose ownership interest in the
Employer or any Affiliate is or was among the ten (10) largest ownership
interests of persons who are employed by the Employer or an Affiliate,
and (iii) whose Compensation from the Employer and any Affiliates exceeds
the applicable dollar limitation of Section 415(c)(1)(A) of the Code for the
calendar year in which the Plan Year ends (as such sum shall be adjusted to
take into account any cost-of-living increase adjustment for that Plan Year
pursuant to the applicable lawful regulations or rulings of the United States
Treasury Department under Section 415 and Section 416(i)(1) of the Code).
For purposes of this paragraph (2), if two (2) Employees have equal ownership
interests, the Employee receiving the highest Compensation shall be treated
as owning the larger interest.
<PAGE>
(3) An Employee owning more than five percent (5%) of the issued and
outstanding shares of stock of the Employer or stock possessing more than
five percent (5%) of the total combined voting power of all stock of the
Employer.
(4) An Employee owning more than one percent (1%) of the issued and
outstanding shares of stock of the Employer or stock possessing more than
one percent (1%) of the total combined voting power of all stock of the
Employer and whose Compensation from the Employer and any Affiliate is more
than One Hundred Fifty Thousand Dollars ($150,000.00).
Ownership shall be determined under Section 318 of the Code, as modified by
Sections 416(i)(1)(B)(iii) and 416(i)(1)(C) of the Code. In addition, for any
Plan Year the term Key Employee shall include the spouse or Beneficiary of any
deceased individual who would have been considered a Key Employee if he had
terminated his employment on the date of his death.
(oo) "LOAN SUSPENSE ACCOUNT" - The suspense account created in accordance
---------------------
with Section 7.4 to provide for the holding of Employer Securities subject to a
loan, in accordance with ARTICLE SEVEN and Section 4975(d)(3) of the Code and
applicable regulations thereunder.
(pp) "NON-CONTRIBUTING PARTICIPANT" - A Participant who is not eligible
----------------------------
to direct his Employer to make Pre-Tax Contributions, has not elected to direct
(or as of the Automatic Enrollment Effective Date has elected not to direct)
his Employer to make Pre-Tax Contributions, or has stopped directing or making
Pre-Tax Contributions. This Plan refers to Non-Contributing Participants to
distinguish between an Employee who does not elect to direct (or as of the
Automatic Enrollment Effective Date elects not to direct) Pre-Tax Contributions
under this Plan, but who nonetheless is eligible to receive an allocation of
ESOP Contributions and Profit Sharing Contributions under the Plan, and an
Employee who directs Pre-Tax Contributions under this Plan. An Employee who
is eligible to participate in the Plan, but who does not elect to direct (or
as of the Automatic Enrollment Effective Date elects not to direct) Pre-Tax
Contributions, shall automatically be a Non-Contributing Participant for the
period during which he does not elect to direct (or as of the Automatic
Enrollment Effective Date elects not to direct) Pre-Tax Contributions.
(qq) "NORMAL RETIREMENT AGE" or "NORMAL RETIREMENT
--------------------- -----------------
DATE" -
----
(1) Normal Retirement Age - The date on which a Participant attains the
---------------------
age of sixty-five (65) years.
(2) Normal Retirement Date - The last day of the month in which the
----------------------
Participant attains his Normal Retirement Age.
<PAGE>
(rr) "PARTICIPANT" - An Employee who has satisfied the eligibility
-----------
requirements specified in Section 3.1, who has elected to participate pursuant
to Section 3.2 and whose participation in the Plan has not been terminated. An
Employee who is otherwise eligible to participate who does not elect to make
any Pre-Tax Contributions (who is occasionally referred to as a
"Non-Contributing Participant") will be treated as a Participant for purposes
of the application of the actual deferral percentage tests of Section 4.3, for
purposes of the actual contribution percentage tests of Section 5.4 and for
purposes of the allocation of ESOP Contributions and Profit Sharing
Contributions. If so indicated by the context, the term Participant shall also
include former Participants whose active participation in the Plan has
terminated but who have not received all amounts to which they are entitled
pursuant to the terms and provisions of this Plan. Whether former Participants
are allowed to exercise an option or election extended to "Participants" will be
determined by the Advisory Committee in the exercise of its discretion, but in
making such determinations the Advisory Committee shall act in a uniform,
nondiscriminatory manner. In order to distinguish between individuals who are
actively participating in all phases of the Plan and former active Participants
and individuals who are not making Pre-Tax Contributions, the Plan occasionally
refers to Inactive Participants or Non-Contributing Participants. Whether the
term Participant includes Inactive Participants and/or Non-Contributing
Participants will be determined by the Advisory committee based on the context
in which the term is used.
(ss) "PLAN ENTRY DATE" - The last day of each calendar quarter --
---------------
March 31, June 30, September 30 and December 31.
(tt) "PLAN YEAR" - A twelve (12) month period commencing on each
---------
January 1 and ending on each following December 31.
(uu) "PRE-TAX CONTRIBUTION ACCOUNT" - The separate bookkeeping account
----------------------------
established pursuant to Section 8.1 to record and credit the Pre-Tax
Contributions directed by a Participant and the net gains and losses thereon.
(vv) "PRE-TAX CONTRIBUTIONS" - The contributions directed by a
---------------------
Participant pursuant to Section 4.1 of the Plan.
(ww) "PROFIT SHARING ACCOUNT" - The account established pursuant to
----------------------
Section 8.1 to which Profit Sharing Contributions are credited.
(xx) "PROFIT SHARING CONTRIBUTION - The regular, special, or per capita
---------------------------
Profit Sharing Contributions made by the Employers pursuant to Section 5.1(a),
(b) or (c).
(yy) "QUALIFIED DOMESTIC RELATIONS ORDER" - A domestic relations order
----------------------------------
meeting the requirements specified in Section 14.2.
<PAGE>
(zz) "REQUIRED BEGINNING DATE"
-----------------------
(1) 5 Percent Owners - For a Participant who is a "5-Percent
----------------
Owner" as defined in Code Section 416(i)(1)(B)(i), Required Beginning Date means
April 1 of the calendar year following the calendar year in which the
Participant attains age 70+, regardless of whether the Participant has
terminated employment with the Employer.
(2) Non 5-Percent Owners - For a Participant who is not a
--------------------
"5-Percent Owner" as defined in Code Section 416(i)(1)(B)(i), Required Beginning
Date shall mean April 1 of the calendar year following the later of (i) the
calendar year in which the Participant attains age 70+, or (ii) the calendar
year in which the Participant terminates employment with the Employer.
Notwithstanding the above, for any Participant who attains age 70+ prior to the
Plan Year beginning January 1, 1999, Required Beginning Date shall mean, at the
Participant's election, April 1 of the calendar year following (i) the calendar
year in which the Participant attains age 70+, or (ii) the calendar year in
which the Participant terminates employment with the Employer.
(aaa) "ROLLOVER CONTRIBUTION" - The amounts transferred to the Trust Fund
---------------------
by Employees in accordance with Section 4.7.
(bbb) "ROLLOVER CONTRIBUTION ACCOUNT" - A separate account established
-----------------------------
pursuant to Section 8.1 to which are credited the Rollover Contributions of an
Employee.
(ccc) "SUPER TOP HEAVY PLAN" - A Super Top Heavy Plan, as defined in
--------------------
Section 2.2.
(ddd) "TERMINATION DATE" - The earliest of (1) the date on which an
----------------
Employee quits, retires, is discharged or dies, or (2) the second anniversary
of the first day of the period during which the Employee was absent from
service with the Employer by reason of a maternity or paternity leave (within
the meaning of Section 3.3), or (3) the first anniversary of the first day of
the period during which the Employee was absent from service with the Employer
for any reason other than a maternity or paternity leave or a separation from
service due to quit, discharge, retirement or death.
(eee) "TOP HEAVY PLAN" - A "Top Heavy Plan," as defined in Section 2.2.
--------------
(fff) "TRUST AGREEMENT" - The instrument or instruments executed in
---------------
connection with the Plan by the Corporation and the Trustees to provide for
the investment and administration of all of the Trust Fund other than the ESOP
Fund. The Trust Agreement shall constitute a part of the Plan.
(ggg) "TRUST FUND" - The fund established by the Corporation to provide
----------
for the holding, investment, administration and distribution of all amounts
contributed under the Plan, and the net gains and losses thereon. The Trust
<PAGE>
Fund will be held, administered and distributed for the exclusive benefit of
Participants and their Beneficiaries. The Trust Fund shall be administered
and invested by the Administrative Trustee pursuant to the Trust Agreement
except that the ESOP Fund shall be administered and invested by the ESOP
Trustee pursuant to the ESOP Trust Agreement.
(hhh) "TRUSTEE" or "TRUSTEES" - The Administrative Trustee and the ESOP
------- --------
Trustee acting as such under the applicable Trust Agreement. Any reference to
the "Trustee" or the "Trustees" shall be deemed to refer to the Administrative
Trustee unless the action to be taken relates to the ESOP Fund, in which case
the reference shall be deemed to refer to the ESOP Trustee.
(iii) "YEAR OF ELIGIBILITY SERVICE" - A twelve (12) month period (the
---------------------------
"Computation Period") in which an Employee is credited with at least one
thousand (1,000) Hours of Service, regardless of whether the Employee is
employed on the last day of said period. The initial Computation Period shall
commence with the first Hour of Service of the Employee. Following this initial
Computation Period, a Year of Eligibility Service shall be determined on the
Computation Period commencing on the first day of the Plan Year which includes
the first anniversary of the date on which the Employee first performed an Hour
of Service. Thereafter, the Advisory Committee shall measure any subsequent
Computation Period necessary for a determination of a Year of Eligibility
Service by reference to succeeding Plan Years. If an individual terminates
employment with the Employers prior to completing one thousand (1,000) Hours
of Service in any of such Computation Periods and returns to an Employer or
any Affiliate after the close of the Computation Period during which his
employment was terminated, in the future the relevant Computation Periods shall
commence on the date the individual first performs an Hour of Service for an
Employer or any Affiliate following his reemployment and the anniversaries
thereof. Once a Participant enters the Plan pursuant to Section 3.1, the
Participant need not complete any particular number of Hours of Service in
order to make Pre-Tax Contributions pursuant to Section 4.1. The Participant
may, however, be required to complete one thousand (1,000) Hours of Service
during the Plan Year in order to receive an allocation of Employer contributions
pursuant to Section 8.2(e). Effective November 1, 1997, for purposes of
determining an Employee's Years of Eligibility Service under this Plan, service
with North American Insurance Company and Safemate Life Insurance Company shall
be taken into account.
2.2. TOP HEAVY PLAN PROVISIONS.
-------------------------
The provisions of this Section 2.2 shall be observed in determining the
Plan's status as a Top Heavy Plan or a Super Top Heavy Plan:
(a) GENERAL RULES. The Plan will be a Top Heavy Plan for a Plan Year if,
-------------
on the last day of the prior Plan Year (hereinafter referred to as the
"determination date"), more than sixty percent (60%) of the cumulative balances
credited to all accounts of all Participants are credited to or allocable to the
<PAGE>
accounts of Key Employees. The Plan will be a Super Top Heavy Plan if, on the
determination date, more than ninety percent (90%) of the cumulative balances
credited to the accounts of all Participants are credited or allocable to the
accounts of Key Employees. For purposes of making these determinations, the
following rules will apply:
(1) The balance credited to or allocable to a Participant's accounts for
purposes of this Section 2.2 shall include contributions made on or before
the applicable determination date, together with withdrawals and
distributions made during the five (5) year period ending on the
determination date.
(2) The accounts of any Participant who was formerly (but no longer is)
a Key Employee shall be disregarded. In addition, the accounts of any
Participant who has not performed any services for the Employer or an
Affiliate during the five (5) year period ending on the determination
date shall be disregarded.
(3) Rollover contributions that are both initiated by the Employee and
are not derived from a plan maintained by the Employer or any Affiliate,
shall be disregarded unless otherwise provided in lawful regulations issued
by the United States Treasury Department. Other amounts rolled over to or
from this Plan to or from another qualified plan will be considered in
calculating the Plan's status as a Top Heavy Plan or Super Top Heavy Plan if
and to the extent required by said regulations.
(b) AGGREGATION OF PLANS. Notwithstanding anything in this Section 2.2
--------------------
to the contrary, in the event that the Plan shall be determined by the Advisory
Committee (in its sole and absolute discretion, but pursuant to the provisions
of Section 416 of the Code) to be a constituent in an "aggregation group", this
Plan shall be considered a Top Heavy Plan or a Super Top Heavy Plan only if the
"aggregation group" is a "top heavy group" or a "super top heavy group". For
purposes of this Section 2.2, an "aggregation group" shall include the
following:
(1) Each plan intended to qualify under Section 401(a) of the Code
sponsored by the Employer or an Affiliate in which one (1) or more Key
Employees participate;
(2) Each other plan of the Employer or an Affiliate that is considered in
conjunction with a plan referred to in clause (1) in determining whether or
not the nondiscrimination and coverage requirements of Section 401(a)(4) or
Section 410 of the Code are met; and
(3) If the Advisory Committee, in the exercise of its discretion, so
chooses, any other such plan of the Employer or an Affiliate which, if
considered as a unit with the plans referred to in clauses (1) and (2),
satisfies the requirements of Code Section 401(a) and Code Section 410.
<PAGE>
A "top heavy group" for purposes of this Section 2.2 is an "aggregation group"
in which the sum of the present value of the cumulative accrued benefits for Key
Employees under all "defined benefit plans" (as defined in Section 414(j) of the
Code) included in such group plus the aggregate of the account balances of Key
Employees on the last Valuation Date in the twelve (12) month period ending on
the respective determination date under all "defined contribution plans" (as
defined in Section 414(i) of the Code) included in such group exceeds sixty
percent (60%) of the total of such similar sum determined for all employees and
beneficiaries covered by all such plans (where such present values and account
balances are those present values applicable to those determination dates of
each plan which fall in the same calendar year). A "super top heavy" group is
an "aggregation group" for which the sum so determined for Key Employees exceeds
ninety percent (90%) of the sum so determined for all employees and
beneficiaries. The Advisory Committee will calculate the present value of the
cumulative annual benefits under a defined benefit plan in accordance with the
rules set forth in the defined benefit plan. All determinations will be made
in accordance with applicable regulations under Section 416 of the Code.
2.3. HIGHLY COMPENSATED EMPLOYEE.
---------------------------
(a) GENERAL. The term "Highly Compensated Employee" shall include all
-------
"highly compensated active employees" and all "highly compensated former
employees."
(b) HIGHLY COMPENSATED ACTIVE EMPLOYEES. For purposes of this Section
-----------------------------------
2.3, a "highly compensated active employee" is an Employee who performs services
for the Employer or its Affiliates during the current Plan Year (the
"determination year") and who:
(1) During the determination year, or during the preceding Plan Year, is
or was a "five percent owner" as described in Section 416(i)(l) of the Code
and applicable regulations thereunder; or
(2) For the preceding year received Compensation from the Employer or
its Affiliates in excess of Eighty Thousand Dollars ($80,000) and, if so
elected by the Corporation, is ranked within the highest-paid twenty
percent (20%) of Employees of the Employer and Affiliates, ranked in
terms of Compensation (the "top paid group").
(c) HIGHLY COMPENSATED FORMER EMPLOYEES. For purposes of
-----------------------------------
this Section 2.3, the term "highly compensated former employee" shall
mean any individual formerly employed by the Employer or its
Affiliates who satisfied the definition of "highly compensated active
employee" set forth in paragraph (b) above, (i) at the time he
separated from employment or (ii) at any time after he attained
fifty-five (55) years of age. No highly compensated former employee
shall be considered a member of the top-paid group (as defined in
paragraph (b)(2) above). If, at any time prior to the termination of
employment and prior to attaining fifty-five (55) years of age, a
highly compensated active employee receives Compensation which is less
than fifty percent (50%) of the Employee's annual average compensation
for the three (3) consecutive years preceding the determination year,
and if, under all the facts and circumstances, such Employee's future
services for and Compensation from the Employer will not rise above
that amount, then such Employee shall not be deemed to be a highly
compensated former employee upon his actual separation from employment
with the Employer.
(d) EXCLUDED INDIVIDUALS. Anything in the foregoing to
--------------------
the contrary notwithstanding, for purposes of determining which
Employees shall be included in the top-paid group, the following shall
be excluded from the definition of Employee:
(1) Employees who have not completed six (6) months
of service during the current and prior calendar years;
(2) Employees who work for the Employer less than
seventeen and one-half (17-1/2) hours per week during fifty
percent (50%) or more of the weeks worked by such Employees;
(3) Employees who normally work for the Employer
during not more than six (6) months in any year;
(4) Employees who have not attained twenty-one (21)
years of age;
(5) Employees who are nonresident aliens and who have
not earned U.S. source income from the Employer; and
(6) Employees covered under the terms of a
"collective bargaining agreement" (within the meaning of
Code Section 7701(a)(46) and the regulations hereunder) if
(i) ninety percent (90%) of the Employees of the Employer
are covered by one or more such agreements, and (ii) the
Plan covers only Employees who are not so covered.
(e) COST-OF-LIVING ADJUSTMENTS. The dollar limitations of
--------------------------
sub-paragraphs (b)(2) above shall be adjusted at the same time and in
a similar manner pursuant to the applicable rulings or regulations of
the United States Treasury Department under Code Section 415(d).
2.4. CONSTRUCTION.
------------
The masculine gender, where appearing in the Plan, shall
include the feminine gender, and the singular shall include the
plural, unless the context clearly indicates to the contrary. The
term "delivered to the Advisory Committee," as used in the Plan,
shall include delivery to a person or persons designated by the
Advisory Committee for the disbursement and receipt of administrative
forms. Delivery shall be deemed to have occurred only when the form
<PAGE>
or other communication is actually received, and, with respect to the
receipt of forms effective as of a payroll period, delivery effective
for the payroll period must be made within the time indicated by the
Advisory Committee for receipt of such form or other communication to
be effective as of the next-occurring payroll period. Any such rule
with respect to delivery shall be uniformly applicable to all
Employees and Participants. Headings and subheadings are for the
purpose of reference only and are not to be considered in the
construction of this Plan. If any provision of this Plan is
determined to be for any reason invalid or unenforceable, the
remaining provisions shall continue in full force and effect. All of
the provisions of this Plan shall be construed and enforced according
to the laws of the State of Arizona and shall be administered
according to the laws of such state, except as otherwise required by
the Act, the Code or other Federal law. It is the intention of the
Corporation that the Plan as adopted by the Employers shall constitute
a qualified plan under the provisions of Section 401(a) of the Code,
and that the Trust Fund maintained pursuant to the Trust Agreement
shall be exempt from taxation pursuant to Section 501(a) of the Code.
This Plan shall be construed in a manner consistent with the
Corporation's intention.
ARTICLE THREE
-------------
ELIGIBILITY AND PARTICIPATION
-----------------------------
3.1. ELIGIBILITY.
-----------
(a) CURRENT PARTICIPANTS. Each Employee who was a
--------------------
Participant in the Plan on the day immediately preceding the Effective
Date shall be a Participant in the Plan on the Effective Date.
(b) NEW PARTICIPANTS. Each other Employee shall become
----------------
eligible to participate in the Plan as of the dates specified below:
(1) PRE-TAX CONTRIBUTIONS - A Participant shall be
---------------------
eligible to commence making Pre-Tax Contributions as of the
first day of the first payroll period following the
Participant's completion of one (1) Year of Eligibility
Service.
(2) PROFIT SHARING CONTRIBUTIONS AND ESOP
-------------------------------------
CONTRIBUTIONS - A Participant will become eligible to
-------------
participate in the allocation of Profit Sharing
Contributions and ESOP Contributions as of the Plan Entry
Date coinciding with or following the Participant's
completion of one (1) Year of Eligibility Service.
(c) COLLECTIVE BARGAINING UNIT EMPLOYEES AND LEASED
-----------------------------------------------
EMPLOYEES. Employees who are covered by a collective bargaining
---------
<PAGE>
agreement with a union with which an Employer or Affiliate has
bargained in good faith over retirement benefits shall not be eligible
to participate in this Plan unless their collective bargaining
agreement specifically provides for their participation in this Plan.
Employees who are "leased employees" for purposes of Section 414(n)
of the Code shall not be eligible to participate hereunder.
3.2. PARTICIPATION.
-------------
(a) GENERAL. There shall be two (2) levels of
-------
contribution participation in the Plan. An Employee who has satisfied
the eligibility requirements specified in Section 3.1 but who does not
elect to participate (or as of the Automatic Enrollment Effective Date
elects not to participate) in all contribution features of the Plan
shall be a Non-Contributing Participant. Participation in the
contribution features of this Plan, other than the allocation of
discretionary ESOP Contributions and Profit Sharing Contributions,
shall be entirely voluntary.
(b) PRE-TAX CONTRIBUTIONS BEFORE THE AUTOMATIC ENROLLMENT
-----------------------------------------------------
EFFECTIVE DATE. Each Employee who, before the Automatic Enrollment
--------------
Effective Date, is eligible pursuant to Section 3.1 to make Pre-Tax
Contributions may direct such contributions by signing an enrollment
form provided by the Advisory Committee and delivering the form to the
Advisory Committee. The enrollment form shall authorize Earnings
reductions in an amount equal to the amount of Pre-Tax Contributions
directed by the Participant. The Employee shall designate on the form
the amount of his Pre-Tax Contributions and shall authorize the
reduction of his Earnings in an amount equal to his directed Pre-Tax
Contributions. On the form, the Employee also shall designate the
Fund or Funds to which amounts credited to his Pre-Tax Contribution
Account shall be allocated, to the extent permitted under this Plan.
(c) PRE-TAX CONTRIBUTIONS ON AND AFTER THE AUTOMATIC
------------------------------------------------
ENROLLMENT EFFECTIVE DATE. Each Employee who, on or after the
-------------------------
Automatic Enrollment Effective Date, is eligible pursuant to Section
3.1 to make Pre-Tax Contributions will automatically make Pre-Tax
Contributions to the Plan in an amount equal to two percent (2%) of
his Earnings, without the necessity of signing or delivering to the
Advisory Committee an enrollment form. If the Employee does not want
to make Pre-Tax Contributions, he may elect not to make Pre-Tax
Contributions by signing a form provided by the Advisory Committee and
delivering the form to the Advisory Committee. If an eligible
Employee becomes a Participant due to automatic enrollment, his
failure to elect not to make Pre-Tax Contributions will be deemed to
authorize the reduction of his Earnings in an amount equal to two
percent (2%). Subject to the limitations in Section 4.1(c), an
Employee who is eligible pursuant to Section 3.1 to make Pre-Tax
Contributions may elect to make Pre-Tax Contributions in an amount
other than two percent (2%) of his Earnings, by signing an enrollment
form provided by the Advisory Committee and delivering the form to the
Advisory Committee. The enrollment form shall authorize Earnings
reductions in an amount equal to the amount of Pre-Tax Contributions
directed by the Participant. The Employee shall designate on the form
the amount of his Pre-Tax Contributions and shall authorize the
reduction of his Earnings in an amount equal to his directed Pre-Tax
Contributions. On the form, the Employee also shall designate the
<PAGE>
Fund or Funds to which amounts credited to his Pre-Tax Contribution
Account shall be allocated, to the extent permitted under this Plan.
If an eligible Employee becomes a Participant due to this Section
3.2(c), all of his Pre-Tax Contributions made after the Automatic
Enrollment Effective Date shall be allocated to the Income Fund unless
and until he designates the Fund or Funds to which such amounts should
instead be allocated.
(d) TRANSITION TO THE AUTOMATIC ENROLLMENT SYSTEM. As of
---------------------------------------------
the Automatic Enrollment Effective Date, the enrollment forms of all
Participants who are, as of such date, making Pre-Tax Contributions to
the Plan, will be honored and the amount of such contributions shall
not be affected. However, each eligible Employee who as of the
Automatic Enrollment Effective Date is not making Pre-Tax
Contributions to the Plan will automatically begin making Pre-Tax
Contributions in accordance with Section 3.2(c) as of such date unless
the eligible Employee elects not to make Pre-Tax Contributions in
accordance with the provisions of Section 3.2(c).
(e) DELIVERY OF FORMS. All forms to be delivered to the
-----------------
Advisory Committee pursuant to this Section 3.2 must be received by
the Advisory Committee at least ten (10) days prior to the earliest
date on which the directions under such forms could take effect or
within such shorter period as may be specified by the Advisory
Committee in rules of uniform application. Before the Automatic
Enrollment Effective Date, completion of a valid enrollment form shall
be a mandatory requirement for participation in the Plan other than as
a Non-Contributing Participant.
<PAGE>
3.3. CREDITING OF SERVICE.
--------------------
(a) GENERAL RULE. All periods of Continuous Service shall
------------
be taken into account under this Plan. An Employee's Continuous
Service shall be determined by aggregating the calendar days of
service included in each "period of service" performed by the
Employee, and expressing the total in completed years and months,
disregarding any fractional months. If two (2) or more "periods of
service" are aggregated, a complete year shall consist of three
hundred sixty-five (365) days and a complete month shall consist of
thirty (30) days. A "period of service" commences on the day on
which the Employee performs his first Hour of Service for the Employer
or an Affiliate or, when an Employee incurs a Break in Continuous
Service, on the day on which the Employee performs his first Hour of
Service following the Break in Continuous Service. The "period of
service" ends on the Employee's Termination Date, unless the Employee
again resumes employment with the Employer or an Affiliate prior to
the occurrence of a Break in Continuous Service, in which case the
"period of service" will continue and the Employee also will receive
credit for the period of time between the Termination Date and the
date of reemployment.
(b) SPECIAL RULES FOR MATERNITY AND PATERNITY LEAVES. The
------------------------------------------------
Continuous Service of an Employee who is absent from work by reason of
a maternity or paternity leave shall not include the period of time
following the first anniversary of the first day of such leave even
though the Employee's Termination Date shall not be deemed to occur
until the second anniversary of such leave. For purposes of this
Plan, a "maternity or paternity leave" is an Authorized Leave of
Absence granted for any of the following reasons: the pregnancy of
the Employee; the birth of a child of the Employee; the placement of a
child with the Employee in connection with the adoption of such child
by the Employee; or the caring for a child of the Employee for a
period beginning immediately following the child's birth or placement
with the Employee. This paragraph shall not be construed as entitling
any Employee to an Authorized Leave of Absence for any of the reasons
noted above. An Employee's entitlement to an Authorized Leave of
Absence will be determined in accordance with the Employer's standard
policies.
(c) SPECIAL RULE FOR OTHER ABSENCES. If an Employee's
-------------------------------
employment has been terminated on account of resignation, discharge or
retirement and the Employee is rehired, the period between the
Employee's Termination Date and his date of rehire shall be taken into
account and treated as a period of Continuous Service if the Employee
is rehired within twelve (12) months of his Termination Date. If the
Employee is absent from employment for reasons other than resignation,
discharge or retirement and, during such absence, the Employee
resigns, is discharged or retires, if the Employee is thereafter
rehired, the period between the Employee's date of resignation,
discharge or retirement and his date of rehire shall be taken into
account and treated as a period of Continuous Service if the Employee
is rehired by the Employer prior to the first anniversary of the date
on which the Employee's initial period of absence from employment
commenced.
<PAGE>
3.4. EFFECT OF REHIRING.
------------------
In the event that an Employee separates from employment with
the Employer and is later rehired, as a general rule he shall remain
credited with all of his Years of Eligibility Service and all periods
of Continuous Service credited to him during his prior period of
employment. If such an Employee was a Participant or had satisfied
the eligibility requirements of Section 3.1 during his prior period of
employment and following his return he is otherwise eligible to
participate in the Plan, the Employee shall commence participation in
the Plan upon the later of his date of rehire or the date on which he
would have commenced participation if his employment had not
terminated.
3.5. AFFILIATED EMPLOYERS.
--------------------
For the purpose of computing an Employee's Years of
Eligibility Service and period of Continuous Service, employees of
Affiliates of the Employer shall be given credit for their Hours of
Service and periods of Continuous Service with such Affiliates in the
event that they become Employees of an Employer as though during such
periods they were Employees of an Employer. Persons employed by a
business organization that is acquired by the Employer or by an
Affiliate of the Employer shall be credited with service for their
Hours of Service and periods of Continuous Service with such
predecessor employer hereunder in the event that they become Employees
of an Employer only to the extent required under lawful regulations of
the United States Treasury Department under Section 414(a)(2) of the
Code or to the extent determined by the Board on a uniform basis with
respect to employees of each "predecessor company," which term for
this purpose means and includes any organization which is acquired by
an Employer or any Affiliate.
3.6. TRANSFERS TO AND FROM AN ELIGIBLE CLASS OF EMPLOYEES.
----------------------------------------------------
(a) TRANSFERS OUT OF PLAN. A Participant will
---------------------
automatically become ineligible to participate in the Plan as of the
effective date of a change in his employment classification if as a
result of the change he is no longer eligible to participate in the
Plan. All sums credited to the Inactive Participant's accounts will
continue to be held pursuant to the terms of this Plan and will be
distributed to the Inactive Participant only upon his subsequent
termination of employment or the occurrence of some event permitting a
distribution pursuant to the provisions of this Plan.
(b) TRANSFERS TO PLAN. If an Employee of the Employer is
-----------------
not eligible to participate in the Plan due to his employment
classification, he shall participate immediately upon becoming a
member of an eligible class of Employees if he has satisfied the other
requirements set forth in Section 3.1 and would have become a
Participant previously had he been in an eligible class.
<PAGE>
(c) SERVICE CREDIT. In any event, an Employee's service
--------------
in an ineligible employment classification shall be considered in
calculating the Employee's Years of Eligibility Service and years of
Continuous Service.
(d) TRANSFERS TO AFFILIATES. If a Participant ceases to
-----------------------
participate in the Plan solely as a result of his transfer to an
Affiliate that has not adopted this Plan, amounts credited to his
accounts as of the date of his transfer shall not be forfeited or
distributed. Rather, such amounts shall be payable in accordance with
the terms of this Plan upon his subsequent termination of employment
with all Affiliates and the Employer or the occurrence of some other
event permitting a distribution pursuant to the provisions of this
Plan.
3.7. LEASED EMPLOYEES.
----------------
A "leased employee" (within the meaning of Section
414(n)(2) of the Code) shall be treated as an Employee of the Employer
for purposes of the pension requirements of Section 414(n)(3) of the
Code, unless leased employees constitute less than twenty percent
(20%) of the Employer's non-highly compensated work force (within the
meaning of Section 414(n)(5)(C)(ii) of the Code) and the leased
employee is covered by a "safe harbor plan" that satisfies the
requirements of Section 414(n)(5)(B) of the Code. In any event, a
leased employee who is deemed to be an Employee of the Employer
pursuant to the preceding sentence shall be treated as if he is
employed in an employment classification that has not been designated
for participation in the Plan.
ARTICLE FOUR
------------
EMPLOYEE CONTRIBUTIONS
----------------------
4.1. PRE-TAX CONTRIBUTIONS.
---------------------
(a) ELECTION. Subject to Section 3.2, each Participant
--------
may direct the Employer to make Pre-Tax Contributions to the Trust
Fund on the Participant's behalf during each Plan Year while he is a
Participant. The amount payable to the Participant as his current
salary or wages shall then be reduced by an amount equal to the
Pre-Tax Contributions directed by the Participant.
(b) TRANSFER TO TRUSTEE. Pre-Tax Contributions shall be
-------------------
forwarded to the Trustee as soon as practicable following the end of
the calendar month for which the Pre-Tax Contributions are made, and,
in any event, such contributions shall be transferred to the Trustee
no later than the fifteenth (15th) business day of the month following
the month in which such amounts would otherwise have been payable to
the Participant in cash.
(c) LIMITATIONS. The Employer and the Advisory Committee
-----------
shall implement such procedures as may be necessary to assure that the
sum of the Pre-Tax Contributions and the Employer Contributions does
<PAGE>
not exceed the maximum amount that may be deducted by the Employer
pursuant to Section 404 of the Code. The Pre-Tax Contributions shall
be in an amount of not less than two percent (2%) and not more than
eighteen percent (18%) of a Participant's Earnings. Pre-Tax
Contributions also shall be subject to such other nondiscriminatory
restrictions as the Employer and Advisory Committee shall determine
and announce to Plan Participants.
<PAGE>
4.2. PRE-TAX CONTRIBUTIONS--DOLLAR LIMITATION.
----------------------------------------
A Participant's Pre-Tax Contributions for any calendar year
may not exceed Ten Thousand Dollars ($10,000.00) adjusted in order to
reflect increases in the cost-of-living as announced from time to time
by the United States Treasury Department. This limitation applies in
the aggregate to the Participant's "elective contributions" under all
plans. For this purpose, the term "elective contributions" includes
the Participant's Pre-Tax Contributions to this Plan, the
Participant's pre-tax contributions to any other qualified cash or
deferred arrangement (as defined in Section 401(k) of the Code), any
elective employer contributions to a simplified employee pension plan
that are not included in the Participant's gross income due to Section
402(h)(1)(B) of the Code and any employer contribution used to
purchase an annuity contract under Section 403(b) of the Code pursuant
to a salary reduction arrangement (within the meaning of Section
3121(a)(5)(D) of the Code). In the event that the Participant's
elective contributions to all such programs during any calendar year
exceed the limitation for that calendar year, the Participant may, by
March 1 of the calendar year following the calendar year for which the
excess contributions were made, so advise the Advisory Committee and
request the return of all or a portion of the excess contributions to
this Plan. The excess contributions, along with any income thereon
(as determined by the Advisory Committee in accordance with rules of
uniform and nondiscriminatory application) may then be returned to the
Participant by the next following April 15. The Advisory Committee is
not under any obligation, however, to honor a request for a return.
4.3. LIMITATION ON CONTRIBUTIONS OF HIGHLY COMPENSATED
-------------------------------------------------
(a) ACTUAL DEFERRAL PERCENTAGE LIMITATIONS. The
--------------------------------------
contributions made by Participants who are Highly Compensated
Employees shall be limited to the extent necessary to satisfy one of
the following two paragraphs:
(1) The "actual deferral percentage" for
Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the "actual deferral
percentage" for Participants who are not Highly Compensated
Employees for the previous Plan Year multiplied by one and
one-quarter (1.25); or
(2) The actual deferral percentage for Participants
who are Highly Compensated Employees for the Plan Year shall
not exceed the actual deferral percentage for Participants
who are not Highly Compensated Employees for the previous
Plan Year multiplied by two (2), provided that the actual
deferral percentage for Participants who are Highly
Compensated Employees does not exceed the actual deferral
percentage for Participants who are not Highly Compensated
Employees by more than two percentage points (2%) or such
lesser amount as the Secretary of the Treasury shall
<PAGE>
prescribe to prevent the multiple use of this alternative
limitation with respect to any Highly Compensated Employee.
(b) SPECIAL DEFINITIONS. For purposes of this Section
-------------------
alone, the following definitions shall apply:
(1) "Actual deferral percentage" - The average
(expressed as a percentage) of the deferral percentages of
the Participants in a group. The actual deferral percentage
for a group shall be determined by adding the deferral
percentage of all Participants in the group and dividing
that sum by the number of Participants in the group.
(2) "Deferral percentage" - The ratio (expressed as
a percentage) of the Pre-Tax Contributions under the Plan on
behalf of the Participant for the Plan Year to the
Participant's Compensation for the Plan.
(3) "Compensation" - Compensation shall be defined
in accordance with the definition of Compensation in Section
2.1(r) of the Plan.
(c) SPECIAL RULES. For purposes of this Section, the
-------------
following rules shall apply:
(1) If any Highly Compensated Employee is a
participant under two (2) or more cash or deferred
arrangements of the Employer, all such cash or deferred
arrangement shall be treated as one (1) cash or deferred
arrangement for purposes of determining such Highly
Compensated Employee's individual deferral percentage.
(2) At the election of the Employer, but in
accordance with such rules as may be prescribed in
applicable regulations, any matching contributions (within
the meaning of Section 401(m)(4)(A) of the Code) or
qualified nonelective contributions (within the meaning of
Section 401(m)(4)(C) of the Code) allocated to a Participant
under this or any other plan described in Section 401(a) of
the Code maintained by the Employer or an Affiliate shall be
aggregated with the Participant's Pre-Tax Contributions
under this Plan for purposes of determining the
Participant's deferral percentage. If the Employer makes
such an election, such matching and qualified nonelective
contributions (i) must satisfy the conditions set forth in
Treasury Regulation Section 1.401(k)-1(b)(5) and (ii) must
be subject to the same distribution requirements as are Pre-
Tax Contributions. Additionally, in accordance with Treasury
Regulations Section 1.401(k)-1(g)(13), such matching and
qualified nonelective contributions must satisfy the above
requirements without regard to whether they are actually
treated as Pre-Tax Contributions.
<PAGE>
(3) If this Plan satisfies the requirements of
Section 401(a)(4) or Section 410 of the Code only if
aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of Section 410(b) of
the Code only if aggregated with this Plan, then the
limitations of this Section shall be applied by determining
the deferral percentages of Participants as if all such
plans were a single plan.
(4) The Pre-Tax Contributions, compensation, and
other amounts treated as elective contributions of all
family members are disregarded in determining the actual
deferral percentage for the groups of Highly Compensated
Employees and those who are not Highly Compensated
Employees.
(5) The determination and treatment of the
contribution percentage of any Participant shall satisfy
such other requirements as may be prescribed by the
Secretary of the Treasury.
(6) For purposes of determining the actual deferral
percentage under Section 4.3(a), Participants who are
directly or indirectly eligible to make an election to make
a Pre-Tax Contribution under the Plan for all or a portion
of the Plan Year shall be taken into account, including a
Participant who cannot make Pre-Tax Contributions because of
the limitations of Sections 415(c)(1) or 415(e).
(7) Pre-Tax Contributions made by a Participant will
be taken into account under the actual deferral percentage
test for a Plan Year only if the contributions relate to
Compensation that either would have been received by the
Participant in the Plan Year (but for the deferral election)
or are attributable to services performed by the Participant
in the Plan Year and would have been received by the
Participant within two and one-half (2 1/2) months after the
close of the Plan Year (but for the deferral election).
(8) For Plan Years beginning on or after January 1,
1999, if the Corporation has elected to apply Code Section
410(b)(4)(B) in determining whether the cash or deferred
arrangement meets the requirements of Code Section
401(k)(3)(A)(i), the Corporation may, in determining
whether the Plan meets the requirements of Section 4.3(a),
exclude from consideration all eligible Employees (other
than Highly Compensated Employees) who have not met the
minimum age and service requirements of Code Section
410(a)(1)(A).
(d) DISTRIBUTION OF EXCESS CONTRIBUTIONS. No later than
------------------------------------
the last day of each Plan Year, any "excess Pre-Tax Contributions"
and the income allocable thereto will be distributed to Participants
who made the excess Pre-Tax Contributions during the preceding Plan
Year. For purposes of this paragraph, the term "excess Pre-Tax
Contributions" means, with respect to any Plan Year, the aggregate
<PAGE>
amount of Pre-Tax Contributions paid to the Plan by the Highly
Compensated Employees for the Plan Year over the maximum amount of
Pre-Tax Contributions permitted pursuant to Section 4.3(a) and Section
401(k)(3)(A)(ii) of the Code. In order to determine the excess
Pre-Tax Contributions attributable to a particular Participant, the
Advisory Committee shall reduce the Pre-Tax Contributions made on
behalf of Highly Compensated Employees beginning with the Highly
Compensated Employees who have the highest dollar amount of Pre-Tax
Contributions until the Pre-Tax Contributions of the Highly
Compensated Employees do not exceed the limitations mentioned in the
preceding sentence. The distribution of excess Pre-Tax Contributions
for any Plan Year shall be made to Highly Compensated Employees on the
basis of the respective portions of the excess Pre-Tax Contributions
attributable to each such Highly Compensated Employee. The income
allocable to excess Pre-Tax Contributions shall be determined by
multiplying the income allocable for the Plan Year to the
Participant's Pre-Tax Contributions Account from which the excess
contributions are to be distributed by a fraction, the numerator of
which is the excess Pre-Tax Contribution on behalf of the Participant
for the preceding Plan Year and the denominator of which is the sum of
the Participant's Pre-Tax Contributions Account balance on the last
business day of the preceding Plan Year plus the Pre-Tax Contributions
(other than excess Pre-Tax Contributions) allocated to that account
during the Plan Year. If there is a loss, the total excess Pre-Tax
Contributions shall nonetheless be distributed to the Participant, but
the amount distributed shall not exceed the balance of the Pre-Tax
Contributions Account from which the distribution is made. The amount
of any excess contributions to be distributed shall be reduced by
excess deferrals previously distributed for the taxable year ending in
the same Plan Year in accordance with Section 402(g)(2) of the Code
and excess deferrals to be distributed for a taxable year shall be
reduced by excess contributions previously distributed for the Plan
beginning in such taxable year.
(e) REDUCTION OF FUTURE CONTRIBUTIONS. If prior to the
---------------------------------
end of a Plan Year the Advisory Committee concludes that the average
rate of Pre-Tax contributions made on behalf of Highly Compensated
Employees would violate the rules set forth in paragraph (a) and
Section 401(k) of the Code, the Advisory Committee may prospectively
reduce the Pre-Tax Contributions directed by the Highly Compensated
Employees. The reduction shall be implemented by reducing first the
highest rates of Pre-Tax Voluntary Contributions within such group and
then the highest rates of Pre-Tax Required Contributions within the
group, with such rates to be reduced in one percent (1%) increments or
fractions thereof, as determined by the Advisory Committee. Any
reduction pursuant to this Section shall be limited to the extent
necessary to assure compliance with the requirements set forth in
paragraph (a) and Section 401(k) of the Code.
4.4. DESIGNATION AND CHANGE OF DESIGNATION OF PRE-TAX
------------------------------------------------
CONTRIBUTIONS.
-------------
(a) USE OF FORMS. All designations or changes of
------------
designation of the amount of Pre-Tax Contributions directed by a
Participant shall be made on forms supplied by the Advisory Committee,
signed by the Participant and delivered to the Advisory Committee.
<PAGE>
Notwithstanding the foregoing, as of the Automatic Enrollment
Effective Date, any designation made as a result of an automatic
enrollment, need not be made on a form.
(b) FREQUENCY OF CHANGES. A Participant may change his
--------------------
rate of Pre-Tax Contributions as of the first day of the first payroll
period in each calendar quarter, except as otherwise determined by the
Advisory Committee in a uniform manner with respect to all
Participants. All such designations or changes shall be made
effective as of the first day of the calendar quarter following
receipt by the Advisory Committee of the appropriate forms, as long as
the forms are received by the Advisory Committee at least ten (10)
days prior to the first day of such calendar quarter or within such
shorter period as the Advisory Committee may prescribe pursuant to
rules of uniform application.
(c) GENERAL. A payroll deduction designation form, or a
-------
payroll deduction made as a result of an automatic enrollment, shall
be effective until it is succeeded by a later valid payroll deduction
designation form, or until the Participant separates from employment
or becomes a Non-Contributing Participant or Inactive Participant.
All designations or changes of designation shall be subject to the
right of the Advisory Committee to refuse to accept such designation
or change of designation directed by a Participant if the Advisory
Committee concludes that such designation or change of designation
would cause the Plan to fail to satisfy Section 4.2 or Section 4.3.
4.5. SUSPENSION OF PRE-TAX CONTRIBUTIONS.
-----------------------------------
A Participant may instruct the Advisory Committee to suspend
his Pre-Tax Contributions at any time. The suspension will be
effective as soon as possible following receipt of the instruction
from the Participant. A suspension may last indefinitely. A
Participant may recommence directing contributions at any time in
accordance with the procedures set forth in Section 4.4 for changing
the rate of Pre-Tax Contributions. Suspension of Pre-Tax
Contributions shall be made pursuant to a form supplied by the
Advisory Committee, signed by the Participant and delivered to the
Advisory Committee. While a Participant is on an Approved Leave of
Absence, he shall be a Non-Contributing Participant. A Participant
shall not be entitled to "make up" suspended Pre-Tax Contributions,
except to the extent required by Section 15.9 of the Plan.
4.6. AFTER-TAX CONTRIBUTIONS.
-----------------------
No current "after-tax" contributions shall be permitted
under the Plan. After-Tax Contributions made to the Plan by a
Participant previously shall continue to be held in the Trust Fund and
shall be credited to the Participant's After-Tax Contribution Account.
Until withdrawn or distributed, the After-Tax Contributions Account
shall continue to share in the earnings or losses of the Trust Fund.
<PAGE>
4.7. ROLLOVER CONTRIBUTIONS.
----------------------
(a) CONTRIBUTION. Any Employee (whether or not a
------------
Participant) who has received a distribution from a profit sharing
plan, stock bonus plan or pension plan intended to "qualify" under
Section 401 of the Code may transfer such distribution to the Trust
Fund if such contribution to the Trust Fund would constitute, in the
sole and absolute discretion of the Advisory Committee, a "rollover
contribution" within the meaning of the applicable provisions of the
Code. Additionally, an Employee may request, with the approval of the
Advisory Committee that the Trustee accept a transfer from the trustee
of another qualified plan. Upon such approval, the Trustee shall
accept such transfer. The Advisory Committee may, in its sole
discretion, decline to accept such transfer. For purposes of this
Plan, both a "rollover contribution" within the meaning of the
applicable provisions of the Code and a transfer initiated by the
Employee from another plan shall be referred to as a "Rollover
Contribution." If the Advisory Committee decides to grant an
Employee's request to make a Rollover Contribution, the Employee may
contribute to the Trust Fund cash or other property acceptable to the
Trustee to the extent of such distribution.
(b) ACCOUNTING AND DISTRIBUTIONS. The Advisory Committee
----------------------------
shall credit the Rollover Contribution to a separate account (the
"Rollover Contribution Account") for the Employee's sole benefit.
The separate Rollover Contribution Account shall be adjusted, valued
and credited pursuant to Section 8.3. Any such Rollover Contribution
Account shall be nonforfeitable and shall be paid to the Employee or
his Beneficiary in the same manner as benefits would be paid to the
Participant or Beneficiary under ARTICLE ELEVEN.
(c) NO GUARANTY. The Advisory Committee, the Employer and
-----------
the Trustee do not guarantee the Rollover Contribution Accounts of
Participants in any way from loss or depreciation. The Employer, the
Advisory Committee and the Trustee do not guarantee the payment of any
money which may be or become due to any person from a Rollover
Contribution Account, and the liability of the Employer, the Advisory
Committee or the Trustee to make any payment therefrom shall at any
and all times be limited to the then value of the Rollover
Contribution Account.
(d) PROHIBITION OF ROLLOVERS FROM CERTAIN PLANS. The
-------------------------------------------
Advisory Committee shall not permit a Participant to make a direct
transfer to this Plan (as distinguished from a "rollover
contribution" or "eligible rollover distribution" within the meaning
of the Code) if the plan from which the transfer is to be made is or
was subject to the joint and survivor annuity and preretirement
survivor annuity requirements of Section 417 of the Code by reason of
Section 401(a)(11) of the Code.
(e) EFFECTIVE DATE. The provisions of this Section 4.7
--------------
shall be effective as of November 1, 1997.
<PAGE>
ARTICLE FIVE
------------
EMPLOYER CONTRIBUTIONS
----------------------
5.1. PROFIT SHARING CONTRIBUTION.
---------------------------
(a) REGULAR PROFIT SHARING CONTRIBUTION. Subject to the
-----------------------------------
Board's right to terminate or amend this Plan, the Employer shall
contribute to the Trust Fund for each Plan Year as a Profit Sharing
Contribution such amount, if any, as the Board shall determine, in its
sole and absolute discretion.
(b) SPECIAL PROFIT SHARING CONTRIBUTIONS. Notwithstanding
------------------------------------
whether any Profit Sharing Contribution is made for the Plan Year
pursuant to Section 5.1(a) or any other provision contained herein,
the Employer may make a special Profit Sharing Contribution to the
Trust Fund each Plan Year in such amount and on behalf of such
Participants and Non-Contributing Participants, as the Board shall
determine, in its sole and absolute discretion, provided that in no
event shall a special Profit Sharing Contribution be made on behalf of
any Participant or any Non-Contributing Participant who is a Highly
Compensated Employee.
(c) SPECIAL "PER CAPITA" PROFIT SHARING CONTRIBUTIONS.
-------------------------------------------------
In addition to the foregoing, the Employer may make a special "per
capita" Profit Sharing Contribution to the Trust Fund on behalf of
each Participant and Non-Contributing Participant in such amount, if
any, as the Board shall determine, in its sole and absolute
discretion, provided that each Participant and Non-Contributing
Participant receives an equal allocation of such special "per capita"
Profit Sharing Contribution.
(d) AGGREGATE PROFIT SHARING CONTRIBUTIONS. In no event
--------------------------------------
shall the aggregate Profit Sharing Contributions for any Plan Year be
more than the amount allowable as a deduction for federal income tax
purposes for such Plan Year.
5.2. ESOP CONTRIBUTIONS.
------------------
(a) REGULAR ESOP CONTRIBUTION. Subject to the Board's
-------------------------
right to terminate or amend this Plan, the Employer shall contribute
to the Trust Fund for each Plan Year as an ESOP Contribution such
amount, if any, as the Board shall determine, in its sole and absolute
discretion.
(b) SPECIAL ESOP CONTRIBUTIONS. Notwithstanding whether
--------------------------
any ESOP Contribution is made for the Plan Year pursuant to Section
5.2(a) or any other provision contained herein, the Employer may make
a special ESOP Contribution each Plan Year in such amount and on
behalf of such Participants and Non-Contributing Participants, as the
Board shall determine, in its sole and absolute discretion, provided
that in no event shall a special ESOP Contribution be made on behalf
of any Participant or any Non-Contributing Participant who is a Highly
Compensated Employee.
<PAGE>
(c) SPECIAL "PER CAPITA" ESOP CONTRIBUTIONS. In addition
---------------------------------------
to the foregoing, the Employer may make a special "per capita" ESOP
Contribution on behalf of each Participant and Non-Contributing
Participant in such amount, if any, as the Board shall determine, in
its sole and absolute discretion, provided that each Participant and
Non-Contributing Participant receives an equal allocation of such
special "per capita" ESOP Contribution.
(d) AGGREGATE ESOP CONTRIBUTIONS. In no event shall the
----------------------------
aggregate ESOP Contributions for any Plan Year be more than the amount
allowable as a deduction for federal income tax purposes for such Plan
Year.
5.3. "TOP HEAVY" CONTRIBUTIONS.
-------------------------
The Employer may, in its sole and absolute discretion, make
additional ESOP Contributions for any Plan Year in which the Plan is
Top Heavy in such amounts as may be necessary to fund the Employer
contribution allocation required by Section 8.2.
5.4. EMPLOYER MATCHING CONTRIBUTION.
------------------------------
(a) DISCRETIONARY MATCHING CONTRIBUTIONS. Subject to the
------------------------------------
Board's right to terminate or amend this Plan, the Employer shall
contribute to the Trust Fund for each Plan Year as an Employer
Matching Contribution such amount, if any, as the Board shall
determine in its sole and absolute discretion.
(b) LIMITATION ON CONTRIBUTIONS OF HIGHLY COMPENSATED
-------------------------------------------------
EMPLOYEES. The Employer Matching Contributions made on behalf of
---------
Participants who were Highly Compensated Employees were limited to the
extent necessary to satisfy one of the following two paragraphs:
(1) The "average contribution percentage" for
Participants who were Highly Compensated Employees for the
Plan Year could not exceed the "average contribution
percentage" for Participants who were not Highly
Compensated Employees for the previous Plan Year multiplied
by one and one-quarter (1.25); or
(2) The average contribution percentage for
Participants who were Highly Compensated Employees for the
Plan Year could not exceed the average contribution
percentage for Participants who were not Highly Compensated
Employees for the previous Plan Year multiplied by two (2),
provided that the average contribution percentage for
Participants who were Highly Compensated Employees did not
exceed the average contribution percentage for Participants
who were not Highly Compensated Employees by more than two
<PAGE>
percentage points (2%) or such lesser amount as the
Secretary of the Treasury prescribed to prevent the multiple
use of this alternative limitation with respect to any
Highly Compensated Employee.
(c) DEFINITIONS. For purposes of this Section alone, the
-----------
following definitions shall apply:
(1) "Average contribution percentage" - The average
(expressed as a percentage) of the contribution percentages
of the Participants in a group.
(2) "Contribution percentage" - The ratio
(expressed as a percentage) of the Matching Contributions
under the Plan on behalf of the Participant for the Plan
Year to the Participant's compensation for the Plan Year.
(3) "Compensation" - Compensation shall be defined
in accordance with the definition of Compensation in Section
2.1(r) of the Plan.
(d) SPECIAL RULES. For purposes of this Section, the
-------------
following rules shall apply:
(1) The contribution percentage for any Participant
who was a Highly Compensated Employee for the Plan Year and
who was eligible to make Pre-Tax Contributions (or to have
employee contributions within the meaning of Section
401(m)(3)(A) of the Code, qualified nonelective
contributions within the meaning of Section 401(m)(4)(C) of
the Code or elective deferrals within the meaning of Section
402(g)(3)(A) of the Code allocated to his account under this
Plan and one or more other plans described in Section 401(a)
or arrangements described in Section 401(k) of the Code that
are maintained by the Employer or an Affiliate) were
determined as if all such contributions (and all such
matching contributions, qualified nonelective contributions
or elective deferrals) were made under a single plan.
(2) In the event that this Plan satisfied the
requirements of Section 410(b) of the Code only if
aggregated with one or more other plans, or if one or more
other plans satisfied the requirements of Section 410(b) of
the Code only if aggregated with this Plan, then the
limitations of this Section were applied by determining the
contribution percentages of Participants as if all such
plans were a single plan.
(3) The Matching Contributions, compensation, and
other amounts treated as matching contributions of all
family members were disregarded in determining the actual
contribution percentage for the groups of Highly Compensated
Employees and those who were not Highly Compensated
Employees.
<PAGE>
(4) The determination and treatment of the con-
tribution percentage of any Participant may have satisfied
such other requirements as may be prescribed by the
Secretary of the Treasury.
(5) For purposes of determining whether the Plan
satisfies the actual contribution percentage test of Section
5.4(b) of the Plan and Section 401(m) of the Code, all Pre-
Tax Contributions and Matching Contributions that are made
under two or more plans that are aggregated for purposes of
Section 401(a)(4) and 410(b) of the Code (other than Section
410(b)(2)(A)(ii)) shall be treated as made under a single
plan.
(6) For purposes of the actual contribution
percentage test of Section 5.4(b) and Section 401(m) of the
Code, the actual contribution ratios of all "eligible
Employees" shall be taken into account. For purposes of
this paragraph, an "eligible Employee" is any Employee who
is directly eligible to receive an allocation of Matching
Contributions or to make Pre-Tax Contributions and includes:
(i) an Employee who would be a Plan Participant but for the
failure to make required contributions; (ii) an Employee
whose right to make Pre-Tax Contributions or receive
Matching Contributions has been suspended because of an
election (other than certain one-time elections) not to
participate; and (iii) an Employee who cannot make Pre-Tax
Contributions or receive a Matching Contribution because
Section 415(c)(1) or Section 415(e) of the Code prevents the
Employee from receiving additional Annual Additions. In the
case of an eligible Employee who makes no Pre-Tax
Contributions and who receives no Matching Contributions,
the contribution ratio that is to be included in determining
the actual contribution percentage is zero (0).
(7) For Plan Years beginning on or after January 1,
1999, if the Corporation has elected to apply Code Section
410(b)(4)(B) in determining whether the Plan meets the
requirements of Code Section 410(b), the Corporation may, in
determining whether the arrangement meets the requirements
of Section 5.4(c), exclude from consideration all eligible
Employees (other than Highly Compensated Employees) who have
not met the minimum age and service requirements of Code
Section 410(a)(1)(A).
(e) DISTRIBUTION OF EXCESS CONTRIBUTIONS. No later than
------------------------------------
the last day of each Plan Year, any "excess aggregate contributions"
and the income allocable thereto will be distributed to Participants
who made excess aggregate contributions during the preceding Plan
Year. For purposes of this paragraph, an "excess aggregate
contribution" is the amount described in Section 401(m)(6)(B) of the
Code. In order to determine the excess aggregate contributions
attributable to a particular Participant, the Advisory Committee shall
reduce the Matching Contributions made on behalf of Highly Compensated
Employees, beginning with the Highly Compensated Employees who have
the highest dollar amount of Matching Contributions, until the
<PAGE>
Matching Contributions of the Highly Compensated Employees do not
exceed the limitations mentioned in the preceding sentence. For each
Highly Compensated Employee, the amount of excess aggregate
contributions for a Plan Year is equal to the total of employee,
matching and other contributions taken into account in performing the
actual contribution percentage test minus the Employee's actual
contribution ratio multiplied by the Employee's Compensation. The
income allocable to excess aggregate contributions was to be
determined by multiplying the income allocable to the Participant's
Matching Contributions Account for the Plan Year by a fraction, the
numerator of which is the excess aggregate contributions on behalf of
the Participant for the preceding Plan Year and the denominator of
which is the Participant's Matching Contributions Account balance on
the last business day of the preceding Plan Year. The excess
aggregate contributions to be distributed to the Participant shall be
adjusted for income and losses. In the case of a loss, the total
excess aggregate contributions would nonetheless be distributed to the
Participant, but the amount distributed could not exceed the
Participant's Matching Contributions Account balance.
(f) MULTIPLE USE OF THE ALTERNATIVE LIMITATION. For
------------------------------------------
purposes of determining whether the limitations in Sections 4.3 and
5.4 are met, the Plan shall satisfy the test for multiple use of the
"alternative limitation" (as described in Sections
401(k)(3)(A)(ii)(II) and 401(m)(2)(A)(ii) of the Code) set forth in
Treasury Regulation Section 1.401(m)-2. If multiple use of the
alternative limitation occurs with respect to two or more plans or
arrangements maintained by the Employer it must be corrected by
reducing the actual deferral percentage or actual contribution
percentage of Highly Compensated Employees in the manner described in
Treasury Regulation Section 1.401(m)-2(c)(3); provided that the
Employer may instead eliminate the multiple use of the alternative
limitation by making qualified nonelective contributions.
5.5. PAYMENT OF EMPLOYER MATCHING CONTRIBUTIONS, PROFIT SHARING
----------------------------------------------------------
CONTRIBUTIONS AND ESOP CONTRIBUTIONS.
------------------------------------
Profit Sharing Contributions pursuant to Section 5.1, ESOP
Contributions pursuant to Section 5.2 and Employer Matching
Contributions pursuant to Section 5.4, may be paid within the Plan
Year for which such contribution is made or within the period
thereafter ending on the date by which the Corporation's Federal
income tax return for the corresponding year of deduction must be
filed, including any extensions of such date. Employer Matching
Contributions and ESOP Contributions may be paid in cash or in
Employer Securities, in the discretion of the Corporation. Profit
Sharing Contributions may be paid in cash or other property acceptable
to the Trustee.
<PAGE>
5.6. CONDITIONAL NATURE OF CONTRIBUTIONS.
-----------------------------------
(a) MISTAKE OF FACT. Any contribution made to this Plan
---------------
by the Employer because of a mistake of fact shall be returned to the
Employer upon its request within one (1) year of the date of the
contribution.
(b) DEDUCTIBILITY. Every contribution made by the
-------------
Employer is conditional on its deductibility. If the Internal Revenue
Service determines that all or part of a contribution is not
deductible, the contribution (to the extent that it is not deductible)
shall be refunded to the Employer upon its request within one (1) year
after the date of the disallowance.
(c) LIMITATIONS ON AMOUNTS RETURNED. Notwithstanding
-------------------------------
anything to the contrary, the maximum amount that may be returned to
the Employer pursuant to subparagraphs (a) and (b), above, is limited
to the portion of such contribution attributable to the mistake of
fact or the portion of such contribution deemed non-deductible (the
"excess contribution"). Earnings attributable to the excess
contribution will not be returned to the Employer, but losses
attributable thereto will reduce the amount so returned. In no case
shall withdrawal of any excess contribution pursuant to subparagraphs
(a) and (b), above, reduce the balance of the Participant's account to
less than the balance would have been had the excess contribution not
been made.
ARTICLE SIX
-----------
INVESTMENT OF CONTRIBUTIONS
---------------------------
6.1. PARTICIPANT DIRECTED INDIVIDUAL ACCOUNT PLAN.
--------------------------------------------
(a) GENERAL. This Plan is intended to constitute a
-------
participant directed individual account plan under Section 404(c) of
the Act with respect to those amounts held in the Pre-Tax Contribution
Account, the Employer Matching Contribution Account, the Profit
Sharing Account, the After-Tax Contribution Account, the ESOP Account
(to the extent qualified Participants may diversify such ESOP Account
pursuant to Section 6.4(b)) and, effective November 1, 1997, the
Rollover Contribution Account. As such, Participants shall be
provided the opportunity to exercise control over some or all of the
assets in their accounts under the Plan. The Board, pursuant to
uniform and non-discriminatory rules, shall establish three or more
Funds which provide each Participant with a broad range of investment
alternatives in accordance with Department of Labor Regulation Section
2550.404c-1(b)(3). The Funds available under the Plan, and any
restrictions on such Funds, may be modified or supplemented from time
to time by action of the Board, without the necessity of a Plan
amendment. In its discretion, the Board may delegate to the Advisory
Committee the responsibility and authority to modify or supplement the
Funds available under the Plan and to impose any restrictions on such
Funds. If the Board delegates such authority to the Advisory
Committee, the Advisory Committee may add or delete Funds by action as
described in Section 12.1(c) of the Plan, without the necessity of a
Plan amendment.
(b) REQUIRED INFORMATION. The Advisory Committee shall
--------------------
provide each Participant with the opportunity to obtain sufficient
information to make informed decisions with regard to investment
alternatives available under the Plan, and incidents of ownership
appurtenant to such investments. The Advisory Committee shall
promulgate and distribute to Participants an explanation that the Plan
is intended to comply with section 404(c) of the Act and any relief
from fiduciary liability resulting therefrom, a description of
investment alternatives available under the Plan, an explanation of
the circumstances under which Participants may give investment
instructions and any limitations thereon, along with all other
information and explanations required under Department of Labor
Regulation Section 2550.404c-1(b)(2)(B)(1). In addition, the Advisory
Committee shall provide information to Participants upon request as
required by Department of Labor Regulation Section
2550.404c-1(b)(2)(B)(2). Neither the Employer, Advisory Committee,
Trustee, or any other individual associated with the Plan or the
Employer shall give investment advice to Participants with respect to
Plan investments. The providing of information pursuant to this
Section 6.1 shall not in any way be deemed to be the providing of
investment advice, and shall in no way obligate the Employer, Advisory
Committee, Trustee or any other individual associated with the Plan or
the Employer to provide any investment advice.
(c) IMPERMISSIBLE INVESTMENT INSTRUCTION. The Advisory
------------------------------------
Committee shall decline to implement any Participant instructions if:
(1) the instruction is inconsistent with any provisions of the Plan
or Trust Agreement; (2) the instruction is inconsistent with any
investment direction policies adopted by the Advisory Committee from
time to time; (3) implementing the instruction would not afford a Plan
fiduciary protection under section 404(c) of the Act; (4) implementing
the instruction would result in a prohibited transaction under Section
406 of the Act or Section 4975 of the Code; (5) implementing the
instruction would result in taxable income to the Plan; (6)
implementing the instruction would jeopardize the Plan's tax qualified
status; or (7) implementing the instruction could result in a loss in
excess of a Participant's account balance. The Advisory Committee,
pursuant to uniform and nondiscriminatory rules, may promulgate
additional limitations on investment instruction consistent with
Section 404(c) of the Act from time to time.
(d) INDEPENDENT EXERCISE. A Participant shall be given
--------------------
the opportunity to make independent investment directions. No Plan
fiduciary shall subject any Participant to improper influence with
respect to any investment decisions, and nor shall any Plan fiduciary
conceal any non-public facts regarding a Participant's Plan investment
unless disclosure is prohibited by law. Plan fiduciaries shall remain
completely neutral in all regards with respect to Participant
investment direction. A Plan fiduciary may not accept investment
instructions from a Participant known to be legally incompetent, and
any transactions with a fiduciary, otherwise permitted under this
Section 6.1 and the uniform and nondiscriminatory rules regarding
investment direction promulgated by the Advisory Committee, shall be
fair and reasonable to the Participant in accordance with Department
of Labor Regulation Section 404c-1(c)(3).
<PAGE>
(e) LIMITATION OF LIABILITY AND RESPONSIBILITY. The
------------------------------------------
Trustee, the Advisory Committee and the Employer shall not be liable
for acting in accordance with the directions of a Participant pursuant
to this Section 6.1 or for failing to act in the absence of any such
direction. The Trustee, the Advisory Committee and the Employer shall
not be responsible for any loss resulting from any direction made by a
Participant and shall have no duty to review any direction made by a
Participant. The Trustee shall have no obligation to consult with any
Participant regarding the propriety or advisability of any selection
made by the Participant.
6.2. DIRECTION BY PARTICIPANT.
------------------------
As permitted by Section 6.1, the following specific rules
shall govern a Participant's ability to direct the investment of
amounts held in his various Accounts:
(a) INVESTMENT OF PRE-TAX CONTRIBUTIONS. Subject to the
-----------------------------------
provisions of this Section 6.2, each Participant shall designate, on a
form supplied by the Advisory Committee, signed by the Participant and
delivered to the Advisory Committee, the amounts credited to his
Pre-Tax Contribution Account that is to be invested in one or more of
the Funds (other than the ESOP Fund), individual life insurance
policies pursuant to Section 6.6 or in loans pursuant to Section 6.5.
Each Participant may, except as otherwise provided in this Plan,
direct the investment of all of the amounts credited to his Pre-Tax
Contribution Account in a single Fund, or the Participant may direct
five percent (5%) increments (or multiples of five percent (5%)
increments) of amounts allocable to his Pre-Tax Contribution Account
to be invested in such Funds as he shall desire. As set forth in
Section 3.2(c), if an eligible Employee becomes a Participant due to
the automatic enrollment provisions under Section 3.2(c), his Pre-Tax
Contributions made after the Automatic Enrollment Effective Date shall
be allocated to the Income Fund unless he designates the Fund or
Funds to which such amounts should instead be allocated.
(b) INVESTMENT OF MATCHING CONTRIBUTIONS ACCOUNTS.
---------------------------------------------
Subject to the provisions of this Section 6.2, each Participant shall
designate, on a form supplied by the Advisory Committee, signed by the
Participant and delivered to the Advisory Committee, the amounts
credited to his Employer Matching Contribution Account that are to be
invested in one or more of the Funds (other than the ESOP Fund). Each
Participant may, except as otherwise provided in this Plan, direct the
investment of all of the amounts credited to his Matching Contribution
Account in a single Fund, or the Participant may direct five percent
(5%) increments (or multiples of five percent (5%) increments) of
amounts allocable to his Matching Contribution Account to be invested
in such Funds as he shall desire.
(c) INVESTMENT OF ESOP CONTRIBUTIONS. Except as otherwise
--------------------------------
provided in Section 6.4(b), Participants shall not be allowed to
direct the investment of their ESOP Accounts. Rather, all ESOP
Contributions allocable to each Participant's ESOP Account will
automatically be allocated to and invested as part of the ESOP Fund.
The investment of the ESOP Fund shall be in the discretion of the ESOP
Trustee, subject to the provisions of this Plan. To the extent
permitted by Section 6.4(b) and subject to the provisions of this
Section 6.2, each qualified Participant may elect to direct the
investment of a portion of his ESOP Account in one or more of the
Funds (other than the ESOP Fund). The direction shall be made on a
form supplied by the Advisory Committee, signed by the qualified
Participant and delivered to the Advisory Committee. The portion of
the qualified Participant's ESOP Account that may be invested at the
qualified Participant's direction, as determined pursuant to Section
6.4(b), may be invested in a single Fund, or the qualified Participant
may direct five percent (5%) increments (or multiples of five percent
(5%) increments) of amounts allocable to his ESOP Account to be
invested in such Funds as he shall desire.
(d) INVESTMENT OF PROFIT SHARING AND AFTER-TAX
------------------------------------------
CONTRIBUTIONS ACCOUNTS. Subject to the provisions of this Section
----------------------
6.2, each Participant shall designate, on a form supplied by the
Advisory Committee, signed by the Participant and delivered to the
Advisory Committee, the amounts credited to his Profit Sharing Account
or his After-Tax Contributions Account that are to be invested in one
or more of the Funds (other than the ESOP Fund). Each Participant
may, except as otherwise provided in this Plan, direct the investment
of all the amounts credited to his Profit Sharing Account and his
After-Tax Contributions Account in a single Fund, or the Participant
may direct five percent (5%) increments (or multiples of five percent
(5%) increments) of amounts allocable to his Profit Sharing Account
and/or his After-Tax Contributions Accounts to be invested in such
Funds as he shall desire.
(e) LIMITATION ON INVESTMENTS IN ESOP FUND. If there is
--------------------------------------
then in effect with respect to the ESOP Fund a registration statement
or offering circular pursuant to the Securities Act of 1933, a
Participant may direct investment of any sums attributable to his
Pre-Tax Contribution Account to the ESOP Fund. The Advisory Committee
shall determine, in its sole and exclusive discretion (but in reliance
upon legal counsel, if it desires), when sums allocable to the Pre-Tax
Contribution Accounts of Participants may be invested in the ESOP
Fund. If permitted pursuant to uniform, nondiscriminatory rules
adopted by the Advisory Committee, to the extent provided in this
Section 6.2, it shall be permissible, if so directed by Participants,
for all sums allocable to the Employer Matching Contribution Accounts
to be invested in the ESOP Fund. The ESOP Trustee is specifically
authorized and empowered, pursuant to this Plan and in accordance with
the terms and provisions of the ESOP Trust Agreement, to hold any
amount of "qualifying employer securities" (as defined in Section
407(d)(5) of the Act) without regard to the diversification
requirements of Section 404(a)(1)(C) and Section 407(a) of the Act, as
permitted pursuant to Section 404(a)(2) and Section 407(b)(1) of the
Act.
(f) NO DISTINCTION BETWEEN INCOME AND PRINCIPAL. The
-------------------------------------------
income of and gains of each Fund shall be added to the Fund and each
Fund shall be invested without distinction between principal and
income.
<PAGE>
(g) EFFECT OF WRITTEN INSTRUCTION. The written investment
-----------------------------
directive of a Participant shall be effective until another written
directive is received by the Advisory Committee. Subject to the last
sentence of Section 3.2(c), the Trustee, in its discretion, will
invest the portion of the Participant's Accounts for which the
Participant has the right to issue, but has not issued, investment
directions in accordance with this Plan and the Trust Agreement.
(h) FORMER PARTICIPANTS AND BENEFICIARIES. For purposes
-------------------------------------
of this ARTICLE SIX, the term "Participant" shall be deemed to
include former Participants and Beneficiaries of any deceased
Participant.
(i) VOTING, TENDER OFFERS, OR SIMILAR RIGHTS. Unless
----------------------------------------
passed through to the Participants, the Trustee, in its discretion,
shall vote all proxies relating to the exercise of voting, tender or
similar rights that are incidental to the ownership of any asset which
is held in any Fund, other than the ESOP Fund.
(j) INVESTMENT OF ROLLOVER CONTRIBUTION ACCOUNTS.
--------------------------------------------
Effective November 1, 1997, subject to the provisions of this Section
6.2, each Employee shall designate, on a form supplied by the Advisory
Committee, signed by the Participant and delivered to the Advisory
Committee, the amounts credited to his Rollover Contribution Account
that are to be invested one or more of the Funds (other than the ESOP
Fund). Each Participant may, except as otherwise provided in this
Plan, direct the investment of all of the amounts credited to his
Rollover Contribution Account in a single Fund, or the Participant may
direct five percent (5%) increments (or multiples of five percent (5%)
increments) of amounts allocable to his Rollover Contribution Account
to be invested in such Funds as he shall desire.
6.3. CHANGE IN INVESTMENT DIRECTIONS.
-------------------------------
(a) RULES. Participants may elect to change their
-----
investment directions with respect to future contributions during the
months of March, June, September and December, with the changes to be
effective as of the first day of the first payroll period beginning in
the next succeeding calendar quarter, if the notice of change is
received by the Advisory Committee at least ten (10) days prior to the
beginning of such calendar quarter or within such shorter period as
the Advisory Committee may prescribe pursuant to rules of uniform
application.
(b) GENERAL. All changes shall be permitted subject to
-------
the provisions of Section 6.2 regarding the available investments for
various types of contributions. Any change shall be made pursuant to
a form provided by the Advisory Committee, signed by the Participant
and delivered to the Advisory Committee.
<PAGE>
6.4. TRANSFERS BETWEEN INVESTMENT FUNDS.
----------------------------------
(a) GENERAL. Except as provided in this Section 6.4, a
-------
Participant may transfer all or a portion of his Accounts invested in
a Fund to another Fund or Funds as of the Accounting Date for which
such notice is given in accordance with uniformly applied
nondiscriminatory rules of the Advisory Committee. All transfers
shall be subject to the requirements and limitations of Section 6.2.
Each such transfer shall be made pursuant to a form provided by the
Advisory Committee, signed by the Participant and delivered to the
Advisory Committee at least five (5) working days prior to the
Accounting Date for which such notice is given or within such shorter
period as the Advisory Committee may prescribe for the receipt of such
forms pursuant to rules of uniform application. Transfers may be made
four (4) times each Plan Year, effective as of an Accounting Date.
(b) ESOP DIVERSIFICATION ELECTION. ESOP Contributions
-----------------------------
allocable to a Participant's ESOP Account and amounts transferred to
the ESOP Fund from amounts credited to a Participant's other Accounts
may not be transferred from the ESOP Fund to another Fund or Funds,
except as provided in this Section 6.4(b). A Participant shall become
a "qualified Participant" and may elect to diversify his ESOP Account
after attaining age fifty-five (55) and being credited with ten (10)
or more years of participation in the Plan since the later of (1) the
date he commenced participation in the Plan or (2) January 1, 1988
(which is the date as of which the ESOP feature was added to this
Plan). (In other words, no Participant will be allowed to diversify
his ESOP Account prior to January 1, 1998.) A qualified Participant
may elect to diversify twenty-five percent (25%) of his or her ESOP
Account during the "qualified election period." The "qualified
election period" is the six (6) year period commencing with the Plan
Year in which the Participant becomes a qualified Participant. In
addition, in the final year of the six (6) year qualified election
period, a Participant may diversify fifty percent (50%) of his or her
ESOP Account balance. A qualified Participant may elect to diversify
his ESOP Account by directing the investment of up to the available
percentage of such account (twenty-five percent (25%) or fifty percent
(50%) as the case may be) to one or more of the Funds (other than the
ESOP Fund) in accordance with the provisions of Sections 6.3 and 6.4,
commencing as of the first day of the first Plan Year falling within
the qualified election period. Beginning with the first day of the
first Plan Year falling within the qualified election period, the
restrictions on the transfer of the portion of any Account other than
the ESOP Account from the ESOP Fund to any other Fund, as set forth in
the first sentence of this paragraph, shall no longer be applicable to
such qualified Participant and such transfers may be accomplished
pursuant to the rules of Section 6.4(a).
6.5. LOANS TO PLAN PARTICIPANTS.
--------------------------
(a) GENERAL. The Advisory Committee is authorized to
-------
direct the Administrative Trustee to make a loan or loans to a
Participant in an earmarked investment of the Participant's Accounts.
Such loan shall be available to all Participants on a
non-discriminatory basis, except that the Advisory Committee may
refuse to make a loan or may limit a loan on the basis of credit
worthiness. The Advisory Committee shall not direct the
<PAGE>
Administrative Trustee to make loans to Highly Compensated Employees
in amounts which, when expressed as a percentage of the Participant's
vested interest in his Accounts, are greater than those available to
other Participants; provided, however, that the Advisory Committee may
adopt a rule precluding loans of less than One Thousand Dollars
($1,000). As a general rule, a Participant may not have more than one
(1) loan outstanding at any particular time and a Participant may not
receive a loan for a period of one (1) year following the repayment of
an earlier loan. The limitations referred to in the preceding
sentence shall not apply if the Advisory Committee determines that the
Participant has a "hardship" within the meaning of Section 9.3.
(b) AMOUNT. The total outstanding loans from the Trust
------
Fund to any Participant at any time shall not exceed the lesser of (a)
fifty percent (50%) of the Participant's vested interest in his
Accounts, or (b) ninety percent (90%) of the portion of the
Participant's Accounts that is invested in the Income Fund, both
determined as of the most recent Accounting Date for the Plan. Any
loan which is made pursuant to this Section shall be treated as a
taxable distribution to the extent that it causes the outstanding
balance at any time of all loans from all "employee pension benefit
plans" (as defined in the Act) of the Employer and its Affiliates that
are intended to "qualify" under Section 401(a) of the Act to exceed
fifty percent (50%) of the present value of the Participant's
nonforfeitable accrued benefit under all such plans; provided that
such maximum shall not be less than Ten Thousand Dollars ($10,000.00)
nor more than Fifty Thousand Dollars ($50,000.00) with such Fifty
Thousand Dollar ($50,000.00) limitation to be reduced by the highest
outstanding loan balance during the twelve (12) month period preceding
the date on which a loan is made. The Advisory Committee may, in the
exercise of its discretion, prohibit the making of any loan that would
be treated as a taxable distribution. The Advisory Committee may also
impose such other limitations and restrictions with respect to the
amount of loans as it deems necessary or advisable, provided that such
limitations or restrictions shall be consistent with the applicable
provisions of the Act and the Code.
(c) SECURITY. The loan shall be evidenced by the
--------
Participant's promissory note and shall be secured by an assignment of
the Participant's vested interest in his Employer Contributions
Account and such additional collateral as the Advisory Committee shall
deem necessary, provided that in no event shall the loan be secured by
an assignment of more than fifty percent (50%) of the Participant's
vested nonforfeitable interest in his Accounts. In determining
whether a pledge of additional collateral is necessary, the
Administrative Trustee shall consider the Participant's credit
worthiness and the impact on the Plan in the event of a default under
the loan prior to the Participant's Benefit Commencement Date.
(d) INTEREST RATE. All loans shall bear interest at a
-------------
rate determined by the Advisory Committee which shall be commensurate
with the interest rates charged by persons in the business of lending
money for similar loans. Subject to the foregoing, the terms of any
loan shall be arrived at by mutual agreement between the
Administrative Trustee and the Participant pursuant to a uniform,
nondiscriminatory policy.
<PAGE>
(e) REPAYMENT. All loans shall be repayable in monthly,
---------
quarterly or more frequent installments over a period not exceeding
five (5) years. All loans shall be repayable by payroll withholdings
or in the case of a former Employee or an Employee on a leave of
absence by any other means acceptable to the Advisory Committee.
Repayments will be credited to the respective Accounts from which the
funds have been borrowed and shall be invested in the Income Fund.
(f) COSTS. Any costs incurred or charged by the
-----
Administrative Trustee to establish, process or collect the loan shall
be charged directly and solely to the Participant. Any loan set-up
fees or expenses will be subtracted from the loan proceeds unless
other mutually agreeable arrangements are made by the Administrative
Trustee and the Participant. Any other fees charged to process or
collect a loan (including, but not limited to, quarterly maintenance
fees) shall be paid by the Participant to the Administrative Trustee
by payroll deduction (in the case of an active Employee) or by such
other means as may be agreeable to the Administrative Trustee (in the
case of a former Employee or an Employee on leave of absence).
(g) TREATMENT OF EARNINGS OR LOSSES. The portion of any
-------------------------------
Participant's Account that is loaned to the Participant shall be
disregarded for purposes of allocating earnings or losses pursuant to
Section 8.3. The loan shall be treated as a segregated or earmarked
investment of the appropriate Account and all principal and interest
payments made on the loan, and all losses suffered on the loan, shall
be allocated to the appropriate Account.
(h) DEFAULT. In the event that the Participant does not
-------
repay such loan or loans and the interest thereon in a timely fashion,
the Administrative Trustee may exercise every creditors right at law
or equity available to the Administrative Trustee. The Administrative
Trustee may not, however, deduct or offset the payments in default or
the unpaid outstanding balance of the loan from or against the
Participant's Accounts until such time as the Account becomes payable
pursuant to the provisions of this Plan. When payments become due
hereunder, the Administrative Trustee may deduct the total amount of
the loan then outstanding, together with any interest then due and
owing, from any payment or distribution (including any payment due to
the Participant's surviving spouse pursuant to Section 11.3) to which
such Participant or his Beneficiary or Beneficiaries may become
entitled. Loan instruments may provide for acceleration of payment of
any unpaid balance in the event of a default following the
Participant's termination of employment.
(i) DISTRIBUTION. A Participant who has (i) attained the
------------
age of fifty-nine and one-half (59-1/2) and has been a Participant in
the Plan for five (5) or more years or (ii) terminated employment with
the Employer shall be entitled to request to receive a distribution of
one or more of the notes representing a loan or loans made to such
Participant from the Plan pursuant to Section 6.5(a). The Advisory
Committee shall honor such requests as soon as possible following the
receipt of all necessary forms. Such request shall be subject to the
spousal consent requirements of Section 9.6.
<PAGE>
(j) SPOUSAL CONSENT. No loan will be made to any married
---------------
Participant unless the Participant's spouse consents to the loan. The
spouse's consent must be in writing, acknowledge the effect of the
loan on the benefits ultimately payable from the Plan and the effect
of the spouse's consent to the loan and be witnessed by a notary
public or a designated representative of the Advisory Committee. The
consent must be filed with the Advisory Committee within the ninety
(90) day period ending on the date on which the loan is made. A
spouse may not consent to Participant loans generally but rather must
consent to loans of specific amounts to be made at specified times and
on specified terms and conditions. If the amount of the loan or the
terms and conditions under which the loan will be made are later
changed, a new consent will be required. A new consent will be
required each time a Participant borrows money from the Plan. No
spousal consent shall be required if the Advisory Committee
determines, in its sole and absolute discretion, that the spouse
cannot be located or other circumstances exist that preclude the
Participant from obtaining such consent (as permitted under the
applicable regulations issued by the United States Treasury
Department). For purposes of this Section 6.5, the renewal of a loan
shall be treated as a new loan and spousal consent again shall be
required.
(k) SUSPENSION OF LOAN PAYMENTS UNDER CODE SECTION 414(U).
-----------------------------------------------------
Loan repayments will be suspended under the Plan as permitted under
Section 414(u) of the Code.
6.6. LIFE INSURANCE.
--------------
(a) AVAILABILITY. Each Participant who was a Participant
------------
in the Plan and had a policy in force on or before October 30, 1985,
shall have the right to direct that a portion of his Employer Matching
Contribution Account (not credited to the ESOP Fund) and Pre-Tax
Contribution Account shall be invested in a policy or policies of
insurance upon his life. All such investments shall be earmarked as
an investment of the Participant's Accounts. Subject to the
provisions of this Section 6.6, a Participant may direct investment in
term life, universal life, and/or whole life policies and may specify
the percentages of his Accounts to be so invested. All such
directives shall be made in writing to the Advisory Committee. The
Participant shall also execute such application forms, statements and
claim forms as the Advisory Committee, Administrative Trustee or
insurer may reasonably request in connection with policies acquired
pursuant to the Participant's direction. Notwithstanding anything in
this Section 6.6 to the contrary, Participants may not increase their
life insurance coverage beyond the levels in effect as of October 30,
1985.
(b) LIMITATION ON AMOUNT OF PREMIUMS. In all cases, the
--------------------------------
percentage of Pre-Tax Contributions and Employer Matching
Contributions, exclusive of income and appreciation thereon, used to
purchase whole life insurance policies must be less than fifty percent
(50%) of such contributions, and the percentage of contributions,
exclusive of income and appreciation thereon, used to purchase term
life or universal life insurance policies must be less than
twenty-five percent (25%) of such contributions. In the event that
either a term or universal life insurance contract may be purchased
for a Participant in addition to a whole life insurance contract, the
sum of one-half (1/2) of the premiums on ordinary life insurance
contracts and all premiums on term life or universal life insurance
contracts shall not exceed twenty-five percent (25%) of such
contributions, exclusive of income and accruals thereon, allocable to
the Participant's respective Accounts.
(c) PREMIUMS AND DIVIDENDS. The Advisory Committee shall
----------------------
take reasonable action to assure that premiums shall be paid when due.
Dividends, refunds and other credits on policies shall be applied to
reduce premiums on such policies, to acquire additional paid-up
insurance benefits or may be taken in cash allocable to the
Participant's Accounts, as the Advisory Committee shall direct. The
Advisory Committee may direct the Administrative Trustee to borrow
against policies to pay premiums thereon. In the event that amounts
to be allocated toward the purchase of insurance policies are
insufficient to meet the required premium payments, the Advisory
Committee shall direct the Administrative Trustee to reduce policy
coverage amounts, to exchange or convert policies or to allow policies
to lapse.
(d) MODES OF SETTLEMENT. The modes of settlement under
-------------------
any policy acquired pursuant to this Section 6.6 shall be limited to
the forms of distribution described in this Section 6.6. All policies
shall by their express terms be nontransferable by the Participant or
shall be rendered so prior to distribution to the Participant.
(e) DISTRIBUTIONS. When benefits become payable to a
-------------
Participant pursuant to this Section 6.6, and a policy is held for the
benefit of such Participant pursuant to this Section 6.6, the Advisory
Committee shall direct the Administrative Trustee either to (1)
surrender such policy in cash settlement (with such settlement being
allocable to the appropriate Accounts of the Participant), (2) convert
such policy to a nontransferable contract or contracts providing
payments in any form described in ARTICLE ELEVEN, without life
insurance coverage, and deliver such contract or contracts so
converted to the Participant, or (3) deliver such policy to the
Participant without conversion, after rendering such policy
nontransferable.
(f) RIGHTS OF PARTICIPANT. The fact that any contract is
---------------------
issued or based on the life of a Participant shall not vest any right,
title or interest in such contract in the Participant except at the
time and upon the terms and conditions set forth in this Plan.
(g) TREATMENT OF INSURANCE POLICIES. The portion of any
-------------------------------
account or subaccount that is invested in an insurance policy on the
Participant's life shall be disregarded for purposes of allocating
earnings or losses pursuant to Section 8.3. The insurance policy
shall be treated as a segregated or earmarked investment of the
appropriate Account and all premiums payable on the policy and all
dividends, credits, cash values, proceeds or other amounts payable
pursuant to the policy shall be credited or charged, as the case may
be, solely to that Account.
<PAGE>
ARTICLE SEVEN
-------------
THE ESOP FUND
-------------
7.1. ESOP FUND.
---------
(a) GENERAL. The ESOP Fund is an "employee stock
-------
ownership plan" as defined in Section 407(d)(6) of the Act and Section
4975(e)(7) of the Code, which is designed to invest primarily in
Employer Securities.
(b) USE OF CONTRIBUTIONS AND DIVIDENDS. All ESOP
----------------------------------
Contributions shall be used by the ESOP Trustee to acquire Employer
Securities to be held by the ESOP Fund or to pay the principal and
interest on any loan entered into pursuant to the provisions of this
ARTICLE SEVEN. Dividends on shares of Employer Securities allocated
to the Loan Suspense Account and earnings on ESOP Contributions
allocated to the Loan Suspense Account may be used to repay any loan
entered into pursuant to this ARTICLE SEVEN.
(c) TRANSFERS TO FUND. Subject to ARTICLE SIX,
-----------------
Participants may transfer amounts allocable to their Employer Matching
Contribution Accounts to the ESOP Fund for the purpose of acquiring
Employer Securities; provided that amounts allocable to Participants'
Employer Matching Contribution Accounts may not be used to pay
principal and/or interest on any loan entered into pursuant to this
ARTICLE SEVEN, the proceeds of which were used by the ESOP Trustee to
acquire Employer Securities. Amounts allocable to Participants'
Pre-Tax Contribution Accounts and After-Tax Contribution Accounts may
be invested in or transferred to the ESOP Fund only in accordance with
ARTICLE SIX and may not be used to pay principal and/or interest on
any loan entered into pursuant to this ARTICLE SEVEN, the proceeds of
which were used by the ESOP Trustee to acquire Employer Securities.
7.2. LOANS TO ACQUIRE EMPLOYER SECURITIES.
------------------------------------
(a) BORROWING IN GENERAL. The Advisory Committee shall
--------------------
have the authority to direct the ESOP Trustee to borrow funds to
purchase Employer Securities. In the event that such funds are
borrowed from, or the loan is guaranteed by, a "disqualified person,"
as defined in Section 4975(e)(2) of the Code, or a "party in
interest," as defined in Section (3)(14) of the Act, such loan shall
be made only in accordance with all of the provisions of this ARTICLE
SEVEN. Any loan entered into by the ESOP Trustee in connection with
the purchase of Employer Securities shall be directed by the Advisory
Committee and shall be primarily for the benefit of Participants and
their Beneficiaries.
(b) USE OF LOAN PROCEEDS. The proceeds of any loan shall
--------------------
be used within a reasonable time after receipt only for all or any of
the following purposes:
(1) To acquire Employer Securities;
<PAGE>
(2) To repay the loan entered into in connection with
the purchase of Employer Securities as provided in (a)
above; or
(3) To repay a prior loan entered into in connection
with the purchase of other Employer Securities.
The provisions of this ARTICLE SEVEN are intended to be in accordance
with Section 4975(d)(3) of the Code and applicable regulations
thereunder and Section 408(b)(3) of the Act and applicable regulations
thereunder. This ARTICLE SEVEN is to be construed in a manner
consistent with such intention.
7.3. TERMS OF LOANS TO ACQUIRE EMPLOYER SECURITIES.
---------------------------------------------
(a) LOAN TERMS. Any loan transaction entered into by the
----------
ESOP Trustee at the direction of the Advisory Committee in order to
purchase Employer Securities must, as determined in good faith by the
Advisory Committee at the time the loan is made, be at least as
favorable to the Plan as the terms of a comparable loan resulting from
an arm's-length negotiation between independent parties. The interest
rate of any such loan must not be in excess of a reasonable rate of
interest considering the amount and duration of the loan, the security
and any guaranty involved, the credit standing of the Plan, the
guarantor, if any, and the interest rate prevailing for comparable
loans. Any loan entered into in connection with this ARTICLE SEVEN
shall be for a specific term and may not be payable at the demand of
any person, except in the case of default.
(b) RECOURSE OF LENDER. Any loan transaction entered into
------------------
by the ESOP Trustee in connection with this ARTICLE SEVEN shall
provide that the lender shall be without recourse against the ESOP
Fund, provided that the lender may have recourse against assets of the
Trust Fund that consist of (1) Employer Securities acquired with the
proceeds of the loan and provided as collateral for the loan, (2)
Employer Securities used as collateral on a prior loan repaid with the
proceeds of the current loan, (3) ESOP Contributions, other than ESOP
Contributions consisting of Employer Securities, that are made under
the Plan in order to enable the ESOP Trustee to meet its obligations
under the loan, (4) earnings attributable to the Employer Securities
given as collateral and (5) the earnings from investment of ESOP
Contributions credited to the Loan Suspense Account.
(c) LIMITATION ON PAYMENTS; ALLOCATION OF CONTRIBUTIONS.
---------------------------------------------------
Payments on a loan during a Plan Year shall not exceed an amount equal
to the sum of ESOP Contributions, other than ESOP Contributions
consisting of Employer Securities, made by the Employers in order to
enable the ESOP Trustee to meet its obligation under the loan,
together with earnings thereon and dividends on Employer Securities
allocated to the Loan Suspense Account, received during or prior to
the Plan Year, less payments on the loan in prior Plan Years. Any
such ESOP Contributions and the earnings thereon and dividends on
Employer Securities allocated to the Loan Suspense Account shall be
<PAGE>
accounted for separately in the books of account of the Plan by
crediting such contributions, the earnings thereon and such dividends
to the Loan Suspense Account, rather than to the ESOP Accounts of
Participants.
(d) REMEDIES. Any such loan shall also provide that in
--------
the event of default, the value of Plan assets transferred in
satisfaction of the loan must not exceed the amount of default. The
loan shall provide for a transfer of Plan assets upon default only
upon and to the extent of the failure of the Plan to meet the payment
schedule of the loan.
7.4. THE LOAN SUSPENSE ACCOUNT.
-------------------------
(a) ALLOCATIONS TO LOAN SUSPENSE ACCOUNT. Employer
------------------------------------
Securities purchased with the proceeds of a loan entered into pursuant
to this ARTICLE SEVEN shall not be credited to ESOP Accounts, but
shall be credited to the Loan Suspense Account. One (1) or more such
accounts may be established under this Section 7.4 with respect to one
(1) or more such loans. ESOP Contributions and income thereon that
are to be utilized by the ESOP Trustee for the purpose of paying the
principal and interest on a loan entered into pursuant to this ARTICLE
SEVEN and dividends payable on Employer Securities allocated to the
Loan Suspense Account shall also be credited to the Loan Suspense
Account.
(b) RELEASE OF SHARES FROM LOAN SUSPENSE ACCOUNT. As of
--------------------------------------------
each Accounting Date during the duration of the loan, the number of
shares of Employer Securities released from the Loan Suspense Account
for allocation pursuant to Section 8.2 shall equal the number of
Employer Securities allocated to the Loan Suspense Account immediately
before release as of the Accounting Date multiplied by a fraction.
The numerator of the fraction is the principal and interest paid for
the period ending on the Accounting Date, and the denominator of the
fraction is the sum of the numerator plus all principal and interest
to be paid for all future periods, determined without taking into
account extensions, renewals or refinancings. If the interest rate
under the loan is variable, the interest to be paid in future years
must be computed by using the interest rate applicable as of the
Accounting Date. The foregoing method of release shall be utilized by
the Advisory Committee, unless the loan documents specifically require
the release of Employer Securities from the Loan Suspense Account for
allocation to the ESOP Accounts of Participants pursuant to
Section 8.2 in accordance with a different method permitted by
Section 4975(d)(3) of the Code and the regulations thereunder. If the
Loan Suspense Account includes more than one (1) class of Employer
Securities, the number of Employer Securities of each class to be
released for a Plan Year must be determined by applying the same
fraction to each class. Such released Employer Securities shall be
subject to allocation pursuant to Section 8.2.
7.5. PUT OPTION.
----------
(a) GENERAL RULE. Employer Securities distributed
------------
pursuant to ARTICLE ELEVEN shall be subject to a put option as
provided in this Section 7.5 if the Employer Securities are not
<PAGE>
publicly traded when the Employer Securities are distributed, or if
the Employer Securities are subject to a "trading limitation" when
distributed. For purposes of this Section 7.5, a "trading
limitation" is a restriction under any Federal or state securities law
or any regulation thereunder affecting the security that would make
the Employer Securities not as freely tradeable as Employer Securities
not subject to the restriction.
(b) EXERCISE OF PUT OPTION. The put option granted
----------------------
pursuant to this Section 7.5 may be exercisable by the Participant, a
donee of the Participant, a Beneficiary receiving the Employer
Securities or by any other person (including the Participant's estate
or its distributees) to whom the Employer Securities pass by reason of
the Participant's death. In the event that Employer Securities are
subject to the put option granted by this Section 7.5, the holder of
the option may "put" the securities to the Corporation by notifying
the Corporation in writing that he is exercising the put option
granted by this Section 7.5.
(c) PRICE. The price at which the option is exercisable
-----
shall be the fair market value of the Employer Securities as of the
most recent Accounting Date under the Plan, with fair market value as
of such date being determined by an independent appraiser (as such
term is defined in Section 401(a)(28) of the Code) pursuant to
applicable regulations issued by the Internal Revenue Service;
provided, however, that if the holder of the put option is a
"disqualified person" as defined in Section 4975(e)(2) of the Code,
the fair market value shall be determined as of the date of exercise.
(d) PUT TO CORPORATION. The put option granted pursuant
------------------
to this Section 7.5 shall extend to the Corporation and shall not
extend to the Plan. However, the Advisory Committee shall have the
option to assume for the Plan the rights and obligations of the
Corporation at the time that the put option is exercised, if it so
desires. Any other Affiliate may also assume the put exercise before
the Corporation. If the Plan assumes the put, the put against the
Corporation and/or Affiliates shall be extinguished.
(e) PUT TO AFFILIATE. In the event that, at the time a
----------------
loan is entered into pursuant to this ARTICLE SEVEN, it is known that
Federal or state law will be violated by the Corporation or another
Affiliate honoring the put option, the Corporation shall arrange for
put options to be exercised before a party which is an Affiliate,
having substantial net worth at the time the loan is made, and whose
net worth is reasonably expected to remain substantial.
(f) PERIOD OF EXERCISE. The put option shall be
------------------
exercisable initially for a sixty (60) day period, beginning on the
date the security subject to the put option is distributed (the "first
put option period"), and for an additional sixty (60) day period in
the next following Plan Year (the "second put option period") if the
put is not exercised during the first put option period. Upon the
close of the Plan Year during which the security is distributed, the
independent appraiser retained pursuant to Section 401(a)(28) of the
Code shall determine the value of the Employer Securities and the
Advisory Committee shall then notify each former Participant who did
not exercise the put option during the initial put option period of
the new value. Unless regulations issued by the United States
Treasury Department provide otherwise, the second put option period
<PAGE>
shall then begin on the date such notice is given and shall end sixty
(60) days thereafter. The period during which a put option pursuant
to this Section 7.5 shall be exercisable shall not include any time in
which a distributee is unable to exercise the put option because the
Corporation or other party bound by the put option is prohibited from
honoring it by applicable state or Federal law.
(g) CHANGE IN TRADING OF SECURITIES. If a Participant
-------------------------------
receives Employer Securities which are publicly traded without
restriction when distributed from the Trust Fund but which cease to be
so traded before the expiration of that former Participant's second
put option period, the put option provisions of this Section 7.5 may
be exercised by that former Participant during the balance (if any) of
the first and/or second put option periods. The Corporation will
notify each such former Participant of the applicability of this
Section 7.5 in writing on or before the tenth (10th) day after the day
on which the Employer Securities previously distributed cease to be so
publicly traded. The number of days between such tenth (10th) day and
the date on which notice is actually given, if later than the tenth
(10th) day, shall be added to the duration of the put option, if (but
only if) the notice is given, or required to be given, during a put
option period. Any such notice shall inform distributees of the terms
of the put option that they are to hold.
(h) PAYMENT. Deferred payments under an exercised put
-------
option shall be permissible if adequate security and a reasonable
interest rate are provided. If a put option is exercised with respect
to Employer Securities received as a lump sum distribution from the
Plan, payments may be made in a lump sum or in equal installments not
less frequently than annually, beginning within thirty (30) days after
the date the put option is exercised, for a period of not more than
five (5) years. The determination of whether payment shall be made in
installments or in a lump sum shall be made by the party to whom the
Employer Securities may be put, in its sole discretion. If a put
option is exercised with respect to Employer Securities received as
part of an installment distribution under the Plan, full payment for
the Employer Securities shall be made within thirty (30) days after
the put option is exercised. Payment of the put option described in
this Section 7.5 shall not be restricted by the provisions of a loan
agreement or any other arrangement, including the terms of the
Corporation's or Affiliates' charters or articles of incorporation,
unless so required by applicable state law.
(i) OBLIGATION TO ACQUIRE SECURITIES. Except as provided
--------------------------------
above, the Plan may not otherwise obligate itself to acquire Employer
Securities from a particular Employer Security holder at an indefinite
time determined upon the happening of an event such as the death of
the holder.
<PAGE>
7.6. RIGHT OF FIRST REFUSAL.
----------------------
(a) GENERAL RULE. If any Participant or his Beneficiary
------------
to whom shares of Employer Securities are distributed from the Plan
shall, at any time, desire to sell some or all of such shares to a
third party, the Participant or Beneficiary shall, prior to such sale,
give written notice of such desire to the Employer and the Advisory
Committee, which notice shall set forth the number of shares offered
for sale, the proposed terms of the sale and the names and addresses
of both the Participant or Beneficiary and the third party. Employer
Securities that were not acquired with the proceeds of an exempt loan
shall be subject to such rights of first refusal or other restrictions
as may be specified from time to time in the Employer's Articles of
Incorporation or By-Laws, or in any applicable agreement. Employer
Securities that were acquired with the proceeds of an exempt loan
under this ARTICLE SEVEN shall be subject to the right of first
refusal described below Section 7.5. The right of first refusal
provided by this Section shall not be applicable to any transfer of
Employer Securities at a time when such securities are listed on a
National Securities Exchange registered under Section 6 of the
Securities Exchange Act of 1934, or quoted on a system sponsored by a
national securities association registered under Section 15A(b) of the
Securities Exchange Act of 1934.
(b) TIME PERIODS. Both the Advisory Committee, acting on
------------
behalf of the Plan, and the Employer shall each have a right of first
refusal for a period of fourteen (14) days from the date of such
written notice to acquire the shares of Employer Securities subject to
the sale. As between the Advisory Committee and the Employer, the
Advisory Committee shall have priority to acquire the shares pursuant
to the right of first refusal.
(c) PRICE AND TERMS. The selling price and other sale
---------------
terms under the right of first refusal shall be the same as offered by
the Participant and Beneficiary to the third party, unless the fair
market value of the Employer Securities as of the immediately
preceding Accounting Date, as determined by the independent appraiser
retained pursuant to Section 401(a)(28) of the Code, is higher, in
which case such higher price shall be paid.
(d) SALE TO THIRD PARTY. If the Advisory Committee and
-------------------
the Employer do not exercise their respective rights of first refusal
within the fourteen (14) day period provided above, the Participant or
his Beneficiary shall have the right, at any time following the
expiration of such fourteen (14) day period, to sell the Employer
Securities to the third party; provided, however, that (1) no sale
shall be made to the third party on terms more favorable to the third
party than the terms set forth in the written notice of sale delivered
to the Advisory Committee or Employer by the Participant or his
Beneficiary, and (2) if the sale is not made to the third party on the
terms offered to the Employer and the Advisory Committee, the Employer
Securities subject to such sale shall again be subject to the right of
first refusal set forth above.
(e) TRANSFER OF SHARES. Following the Employer's or
------------------
Advisory Committee's exercise of the right of first refusal, the sale
shall take place at such place agreed upon between the Advisory
Committee or Employer and the Participant or Beneficiary, no later
than ten (10) days after the Employer or the Advisory Committee shall
have notified the Participant or Beneficiary of its exercise of the
right of first refusal. The Participant or Beneficiary shall deliver
certificates representing the Employer Securities subject to such sale
duly endorsed in blank for transfer, or with stock powers attached
duly executed in blank with all required transfer tax stamps attached
<PAGE>
or provided for, and the Employer or the Advisory Committee shall
deliver the purchase price, or an appropriate portion thereof, to the
Participant or Beneficiary.
(f) OTHER RESTRICTIONS PROHIBITED. Except as provided in
-----------------------------
this Section or in Section 7.5, or as otherwise required by applicable
law, no Employer Securities acquired with the proceeds of an exempt
loan may be subject to put, call or option, or buy-sell or similar
arrangement, while held by and when distributed from this Plan,
whether or not the Plan is then an "employee stock ownership plan" as
defined in Section 4975(e)(7) of the Code.
7.7. NONTERMINABLE PROTECTIONS AND RIGHTS.
------------------------------------
The protections and rights accorded by Sections 7.5 and 7.6
to Participants and Beneficiaries or other persons (including the
Participant's estate or its distributees) to whom Employer Securities
pass by way of gift from the Participant or by reason of the
Participant's death shall never terminate, even if all loans described
in Section 7.2 have been repaid or the Plan ceases to be an "employee
stock ownership plan" as defined in Section 4975(e)(7) of the Code.
The fact that a put option is not exercisable pursuant to the
provisions of Section 7.5, however, shall not violate the requirements
of this Section 7.6.
ARTICLE EIGHT
-------------
ACCOUNTING
----------
8.1. INDIVIDUAL ACCOUNTS.
-------------------
A separate ESOP Account and Profit Sharing Account shall be
maintained for each Participant in the Plan. A separate Pre-Tax
Contribution Account and Employer Matching Contribution Account shall
be maintained for each Participant who elects to make Pre-Tax
Contribution and on whose behalf an employer makes Employer Matching
Contributions. In addition, a separate After-Tax Contribution Account
shall be maintained for each Participant who has made and not
withdrawn After-Tax Contributions. Finally, effective November 1,
1997, a separate Rollover Contribution Account shall be maintained for
each Employee who has made Rollover Contributions. The Accounts will
separately reflect balances derived from Profit Sharing Contributions,
Employer Matching Contributions, ESOP Contributions, Pre-Tax
Contributions, and After-Tax Contributions made by or on behalf of the
Participant and shall reflect the fair market value, as of the most
recent Accounting Date, of the Participant's interest in the Funds;
provided that the ESOP Fund shall be valued only as of each year-end
Accounting Date, except as otherwise required pursuant to this Plan.
Accounts shall not reflect amounts credited to the Loan Suspense
Account pursuant to ARTICLE SEVEN. The Accounts shall reflect any
withdrawals, loans to Participants, life insurance acquisitions and
distributions to the Participant. The establishment and maintenance
of separate Accounts for each Participant shall not be construed as
giving any person any interest in any specific assets of the Funds,
which shall be administered as separately identifiable commingled
<PAGE>
Funds, and as loan and life insurance investments, unless and until
otherwise directed by the Advisory Committee or expressly provided in
this Plan.
8.2. ALLOCATION OF CONTRIBUTIONS.
---------------------------
(a) EMPLOYER MATCHING CONTRIBUTIONS. Employer Matching
-------------------------------
Contributions made pursuant to Section 5.4 shall be allocated among
the Employer Matching Contribution Accounts of Participants who were
Employees of the Employers during the Plan Year by crediting each such
respective Participant's Employer Matching Contribution Account with
the Employer Matching Contribution made on his behalf.
(b) ESOP CONTRIBUTIONS AND EMPLOYER SECURITIES RELEASED
---------------------------------------------------
FROM THE LOAN SUSPENSE ACCOUNT. Regular ESOP Contributions made
------------------------------
pursuant to Section 5.2(a) that are not allocated to the Loan Suspense
Account pursuant to Section 7.4 shall be allocated to the ESOP Account
of each eligible Participant by crediting each such Participant's ESOP
Account in the ratio that each such Participant's Earnings for the
Plan Year bear to the Earnings of all such Participants for the Plan
Year. Employer Securities allocated to the Loan Suspense Account that
become subject to allocation to ESOP Accounts pursuant to Sections 7.4
which are attributable to ESOP Contributions used by the ESOP Trustee
to meet its obligations under a loan pursuant to Section 7.2 shall be
allocable as of the year-end Accounting Date on which such Employer
Securities are released from the Loan Suspense Account among the ESOP
Accounts of all eligible Participants in the ratio that each such
Participant's Earnings for such Plan Year bear to the Earnings for
such Plan Year of all such Participants. Special ESOP Contributions
made pursuant to Section 5.2(b) and special "per capita" ESOP
Contributions made pursuant to Section 5.2(c) shall be allocated to
the ESOP Account of each eligible Participant on whose behalf such a
contribution has been made in such amount and under terms and
conditions as the Board shall direct, in its sole and absolute
discretion. To the extent such special ESOP Contributions and special
"per capita" ESOP Contributions are used to meet the ESOP Trustee's
obligations under a loan pursuant to Section 7.2, Employer Securities
allocated to the Loan Suspense Account which become allocable to
Participants as a result of these special contributions, shall be
allocated in an equitable manner. Only Earnings earned while the
Participant is eligible to participate in the Plan will be considered
for purposes of this paragraph. Notwithstanding anything to the
contrary herein, encumbered Employer Securities released from the Loan
Suspense Account shall be allocated to Participant's ESOP Accounts in
shares of Employer Securities or other non-monetary units rather than
by dollar amounts.
(c) PROFIT SHARING CONTRIBUTIONS. Regular Profit Sharing
----------------------------
Contributions made pursuant to Section 5.1(a) shall be allocated to
the Profit Sharing Account of each eligible Participant by crediting
each such Participant's Profit Sharing Account in the same ratio that
each such Participant's Earnings for the Plan Year bear to the
Earnings of all such Participants for the Plan Year. Special Profit
<PAGE>
Sharing Contributions made pursuant to Section 5.1(b) and special "per
capita" Profit Sharing Contributions made pursuant to Section 5.1(c)
shall be allocated to the Profit Sharing Accounts of each eligible
Participant on whose behalf such a contribution has been made in such
amount and under such terms and conditions as the Board shall direct,
in its sole and absolute discretion.
(d) FORFEITURES. Forfeitures from a Profit Sharing
-----------
Account or an ESOP Account that become available for allocation
pursuant to Sections 10.3 and 11.8 that are not used to restore prior
forfeitures pursuant to Sections 10.4 and 11.8 shall be allocated to
the Profit Sharing Accounts or ESOP Accounts (as the case may be) of
each eligible Participant in the same ratio that each such eligible
Participant's Earnings for the Plan Year bear to the Earnings of all
such eligible Participants for the Plan Year.
(e) ELIGIBLE PARTICIPANTS. As a general rule, a
---------------------
Participant will be entitled to share in the allocation of Profit
Sharing Contributions, ESOP Contributions, Employer Securities
released from the Loan Suspense Account, or forfeitures for a Plan
Year only if the Participant is in the active employ of the Employer
on the last day of the Plan Year and has completed at least one
thousand (1,000) Hours of Service during the Plan Year. If a
Participant dies, retires on or after his Normal Retirement Date, or
terminates employment due to a Disability during a Plan Year, however,
the Participant shall be entitled to share in the allocations for that
Plan Year regardless of whether the Participant is employed on the
last day of the Plan Year or whether the Participant completes one
thousand (1,000) Hours of Service during the Plan Year. A
Non-Contributing Participant who satisfies the requirements noted
above shall be considered to be a "Participant" pursuant to this
Section.
(f) TOP HEAVY ALLOCATIONS. Notwithstanding anything to
---------------------
the contrary in this Section or any other provision of this Plan, in
any Plan Year in which the Plan is Top Heavy or Super Top Heavy, the
Employer shall make a special ESOP Contribution on behalf of each
Participant who is not a Key Employee for the Plan Year in such amount
as may be necessary to assure that the sum of the Employer Matching
Contributions, Profit Sharing Contributions, ESOP Contributions, and
forfeitures, if any, allocated to the Participant's accounts equals at
least the "minimum required contribution." The "minimum required
contribution" is the lesser of (a) three percent (3%) of the
Participant's Compensation for the Plan Year or (b) if the Employer
does not have a defined benefit plan which is enabled to satisfy
Section 401 of the Code by this Plan, the Participant's Compensation
for the Plan Year multiplied by the "Employer contribution
percentage" for such Plan Year for the Key Employee for whom the
"Employer contribution percentage" is the highest. For this purpose,
the "Employer contribution percentage" shall equal the sum of the
Employer Matching Contributions, Profit Sharing Contributions and ESOP
Contributions and forfeitures allocated to a Participant divided by
the Compensation of the Participant. The minimum required
contribution called for by this paragraph will be determined without
regard to Employer contributions to the Social Security System. The
special ESOP Contribution called for by this paragraph shall be
allocated on behalf of all Employees who are not Key Employees for the
Plan Year and who are employed by the Employer on the last day of the
Plan Year. This special ESOP Contribution shall be made regardless of
<PAGE>
any provision in this Plan requiring (as a condition of allocation of
the ESOP Contribution for the Plan Year) payment of Pre-Tax
Contributions. In determining whether the minimum required
contribution provisions of this Section have been satisfied, all
Employer contributions and forfeiture allocations for the Plan Year
under all "defined contribution plans," as defined in Section 414(i)
of the Code, maintained by the Employer or an Affiliate shall be
considered as allocable under this Plan. If a non-Key Employee who is
participating in this Plan is covered under a "defined benefit plan,"
as defined in Section 414(j) of the Code, sponsored by the Employer or
an Affiliate, no minimum required contribution allocation shall be
required pursuant to this paragraph if such Employee is provided with
a top heavy minimum defined benefit pursuant to the defined benefit
plan. All special ESOP Contributions made pursuant to this paragraph
on behalf of a Participant shall be allocated to that Participant's
ESOP Contributions Account. In determining the amount of the minimum
required contribution, the Pre-Tax Contributions made by Highly
Compensated Employees shall be treated as Employer Matching
Contributions, and such Pre-Tax Contributions shall be taken into
account in determining the employer contribution percentage of Highly
Compensated Employees. The Pre-Tax Contributions made by non-Highly
Compensated Employees shall be disregarded.
(g) ALLOCATION TO CERTAIN PERSONS PROHIBITED.
----------------------------------------
Notwithstanding the foregoing, no portion of the assets of the Plan
attributable (or allocable in lieu of) Employer Securities acquired by
the Plan in a sale to which Section 1042 of the Code applies may
accrue or be allocated directly or indirectly under any Plan of the
Employer meeting the requirements of Section 401(a) of the Code during
the "nonallocation period", as defined in Section 409(n)(3)(C) of the
Code, for the benefit of (1) any taxpayer who makes an election under
Section 1042(a) of the Code with respect to Employer Securities or (2)
any individual who is related to the taxpayer within the meaning of
Section 267(b) of the Code. Clause (2) of the preceding sentence
paragraph shall not apply to any individual if the individual is the
lineal descendant of the taxpayer and the aggregate amount allocated
to the benefit of all lineal descendants during the nonallocation
period does not exceed more than five percent (5%) of the Employer
Securities (or amounts allocated in lieu thereof) held by the Plan
which are attributable to a sale to the Plan by any person related to
such descendants (within the meaning of Section 267(c)(4) of the Code)
in a transaction to which Section 1042 of the Code applied.
(h) ROLLOVER CONTRIBUTIONS. Effective November 1, 1997,
----------------------
the Rollover Contributions of an Employee shall be credited to his
Rollover Contributions Account.
8.3. VALUATION AND ADJUSTMENT.
------------------------
The Advisory Committee shall determine the fair market value
of the Accounts as follows:
(a) First, as of each Accounting Date, the Advisory
Committee shall credit to the proper Accounts all Pre-Tax
Contributions, loan repayments and insurance premium payments.
(b) Second, as of each Accounting Date, the Advisory
Committee shall charge to the proper Accounts all withdrawals or
distributions made since the most recent Accounting Date that have not
previously been charged to Accounts.
(c) Third, as of each Accounting Date, the Advisory
Committee shall credit each Participant's Accounts with their pro
rata share of any increase, or charge each Participant's Accounts with
their pro rata share of any decrease, in the fair market value of the
Funds to which the Accounts are allocated as of the current Accounting
Date; provided that such adjustment to ESOP Accounts shall be made
only as of the year-end Accounting Date. Dividends on shares of
Employer Securities which have been allocated to the Participant's
ESOP Accounts shall be credited first to a cash fund maintained by the
Trustee. Dividends so credited to the cash fund shall be used to
purchase additional Employer Securities, which, pursuant to this
Section 8.3(c), shall be credited, on a pro rata basis, to each
Participant's ESOP Account; provided that such adjustment to ESOP
Accounts shall be made only as of the year-end Accounting Date.
Dividends on shares of Employer Securities which are held in the Loan
Suspense Account created pursuant to Section 7.4(a) shall be used
along with the Employer's ESOP Contributions to repay the loan as
provided in Section 7.1(b).
(d) Fourth, as of each Accounting Date, the Advisory
Committee shall charge and credit to the proper Accounts the amounts
transferred from one Fund to another, as provided in Section 6.4 of
the Plan.
(e) Fifth, if the Accounting Date is the final Accounting
Date of the Plan Year, the Advisory Committee shall credit to the
proper Accounts the annual Employer Matching Contributions and ESOP
Contributions to be allocated for that Plan Year, in accordance with
Section 8.2 of the Plan, to the extent not already allocated thereto,
subject to the provisions of ARTICLE SEVEN. Forfeitures becoming
allocable pursuant to Section 10.3 or 11.8 shall similarly be
allocated.
As noted in Section 2.1(a), the Accounting Dates vary, depending on
the type of Account (i.e., Pre-Tax Contribution Account, ESOP Account
or other account) involved. The adjustments called for by this
Section as of a particular date shall only be made to those Accounts
for which such date is an Accounting Date.
<PAGE>
8.4. STATEMENTS TO PARTICIPANTS.
--------------------------
At least annually, the Advisory Committee shall furnish to
each Participant a statement showing his Account balances in the
respective Funds as of such date.
8.5. LIMITATION ON ANNUAL ADDITIONS.
------------------------------
(a) GENERAL RULE. Notwithstanding anything in this Plan
------------
to the contrary, except as provided in this Section 8.5, the Annual
Additions to be allocated to the Accounts of a Participant for any
Plan Year shall not exceed an amount equal to the lesser of (1) Thirty
Thousand Dollars ($30,000) (or such greater amount as may be permitted
under Section 415(d)) (the "dollar limitation"), or (2) twenty-five
percent (25%) of the Compensation of the Participant for the Plan Year
(the "compensation limitation"). If no more than one-third (1/3) of
the ESOP Contribution for a Plan Year is allocable to the ESOP
Accounts of Highly Compensated Employees, the limitations imposed by
this Section 8.5(a) and Section 415 of the Code shall not apply to (1)
forfeitures of Employer Securities (within the meaning of Section 409
of the Code) if such Employer securities were acquired with the
proceeds of a loan described in Section 404(a)(9)(A) of the Code, or
(2) Employer Contributions to the Plan that are deductible under
Section 404(a)(9)(B) of the Code and charged against the Participant's
Account.
(b) EXCLUSION OF INTEREST PAYMENTS. For any "special
------------------------------
permissible allocation year," the limitations imposed by this
Section 8.5 shall not apply to, and the Participant's Annual Addition
shall be determined without regard to, any ESOP Contributions which
are applied to pay interest on an exempt loan. For purposes of this
Section 8.5, an "exempt loan" is a loan described in ARTICLE SEVEN,
incurred for the purpose of acquiring Employer Securities.
(c) MULTIPLE DEFINED CONTRIBUTION PLANS. The limitations
-----------------------------------
of this Section 8.5 with respect to any Participant who is at any time
participating in any other "defined contribution plan," as defined in
Section 414(i) of the Code, maintained by the Corporation or by an
Affiliate shall apply as if the total Annual Additions under all such
defined contribution plans in which the Participant is participating
were allocated under this Plan.
(d) ADJUSTING ANNUAL ADDITIONS. In the event it is
--------------------------
necessary to limit the Annual Additions to the Accounts of a
Participant under this Plan, the Advisory Committee shall limit the
allocation of Pre-Tax Contributions to the Participant's Pre-Tax
Contribution Account and/or return any such excess Pre-Tax
Contribution plus earnings allocable to any such excess Pre-Tax
Contributions to the Participant. The earnings allocable to any
excess Pre-Tax Contribution shall be determined in a manner consistent
with determining the earnings allocable to excess Pre-Tax
Contributions in Section 4.3(d). After such limitation and/or return,
if necessary, Employer Matching Contributions shall be reallocated.
Amounts that would be allocable to the Employer Matching Contribution
<PAGE>
Account of the Participant but for the provisions of this Section 8.5
shall be used to reduce Employer Matching Contributions to the Trust
Fund and shall be allocable as a part of the Employer Matching
Contributions allocable to the Employer Matching Contribution Accounts
of Participants with respect to whom allocations of Employer Matching
Contributions are not limited by this Section 8.5. If further
limitation is required by this Section 8.5, the Advisory Committee
shall allocate that portion of the Employer Matching Contribution that
would cause the limitations of this Section 8.5 to be exceeded to a
suspense account in which such sums shall be held to be allocated on a
first-in-first-out basis in reduction of Employer Matching
Contributions prior to the allocation of additional Employer Matching
Contributions, to the extent permitted under this Section 8.5. In the
event that, after the reallocation of the Employer Contribution
pursuant to this Section 8.5, the amount allocable as Annual Additions
remain in excess of the limitations of this Section 8.5, the Advisory
Committee shall return the Pre-Tax Contributions of the Participant to
the extent necessary to satisfy such limitations. No Employer
Matching Contribution shall be made or allocated as a result of such
Pre-Tax Contributions until allocated from the suspense account.
Further reductions or adjustments to the methods described above for
adjusting the Accounts of Participants may be made pursuant to the
directions of the Advisory Committee and may be made pursuant to
priorities established under related defined contribution plans.
(e) TREATMENT OF ESOP CONTRIBUTIONS ALLOCATED TO LOAN
-------------------------------------------------
SUSPENSE ACCOUNT. In computing the limitation on Annual Additions
----------------
pursuant to this Section 8.5, solely for the purposes of this
Section 8.5, the Advisory Committee shall compute the ESOP
Contribution allocable to ESOP Accounts as though no part of the ESOP
Contribution for the Plan Year is allocable to the Loan Suspense
Account, but rather as though the entire ESOP Contribution is subject
to allocation pursuant to Section 8.2.
(f) DEFINED BENEFIT PLAN PARTICIPANTS. For Plan Years
---------------------------------
beginning before January 1, 2000, in any case where a Participant
under this Plan is also a participant in one or more "defined benefit
plans," as defined in Section 414(j) of the Code, maintained by the
Employer or by an Affiliate of the Employer, the sum of the "defined
benefit plan fraction" under such plan or plans and the "defined
contribution plan fraction" under this Plan and all other defined
contribution plans shall not exceed one (1.0).
(g) DEFINED BENEFIT PLAN FRACTION. The "defined benefit
-----------------------------
plan fraction" for any Plan Year is a fraction, the numerator of which
is the projected annual benefit payable to the Participant as of the
close of the current Plan Year under all defined benefit plans
(whether or not terminated) maintained by the Employer and the
denominator of which is the lesser of one hundred twenty-five percent
(125%) of the defined benefit plan dollar limitation in effect for the
Plan Year under Section 415(b)(1)(A) of the Code, as adjusted pursuant
to Section 415(d) of the Code, or one hundred forty percent (140%) of
the Participant's average Compensation for the three (3) Plan Years
during which such Compensation is the highest. For any Plan Year for
which the Plan is Top Heavy, the denominator of the defined benefit
plan fraction will be the lesser of one hundred percent (100%) (rather
than one hundred twenty-five percent (125%)) of the defined benefit
plan dollar limitation referred to in the preceding sentence, as in
<PAGE>
effect for the Plan Year under Section 415(b)(1)(A) of the Code, or
one hundred forty percent (140%) of the Participant's average
Compensation for the three (3) Plan Years during which Compensation is
highest, unless both of the following conditions are satisfied, in
which case the defined benefit plan fraction shall be calculated as
set forth in the preceding sentence:
(1) The Plan is not a Super Top Heavy Plan; and
(2) The contributions or benefits on behalf of all Participants
other than Key Employees meet the requirements of Section 416(h) of
the Code.
Notwithstanding the above, if a Participant was a participant in one
or more defined benefit plans maintained by the Employer or an
Affiliate which were in existence on May 6, 1986, the denominator of
the defined benefit plan fraction will not be less than one hundred
twenty-five percent (125%) of the sum of the annual benefits under
such plans which the Participant had accrued as of the close of the
last Plan Year beginning on or before December 31, 1986, calculated as
if the Participant had terminated employment on the last day of said
Plan Year. In calculating a Participant's benefits, the Advisory
Committee shall disregard changes in the terms and conditions of such
plans occurring on or after May 6, 1986, and cost-of-living
adjustments occurring on or after May 6, 1986. The preceding two
sentences shall only apply if the defined benefit plans individually
and in the aggregate satisfy the requirements of Section 415 of the
Code as in effect at the end of the 1986 Plan Year.
(h) DEFINED CONTRIBUTION PLAN FRACTION. The "defined
----------------------------------
contribution plan fraction" for any Plan Year is a fraction, the
numerator of which is the sum of the Annual Additions to the
Participant's accounts under all the defined contribution plans
(whether or not terminated) maintained by the Employer for the current
and all prior Plan Years (including the Annual Additions attributable
to the Participant's nondeductible employee contributions to any
defined benefit plan, whether or not terminated, maintained by the
Employer) and the denominator of which is the sum of the "maximum
aggregate amounts" for the current and all prior Plan Years of service
with the Employer, regardless of whether a plan was maintained by the
Employer during such years. The "maximum aggregate amount" in any
Plan Year is the lesser of one hundred twenty-five percent (125%) of
the dollar limitation in effect under Section 415(c)(1)(A) of the Code
or thirty-five percent (35%) of the Participant's Compensation for
such year. For any Plan Year for which the Plan is a Top Heavy Plan,
the "maximum aggregate amount" is the lesser of one hundred percent
(100%) (rather than one hundred twenty-five percent (125%)) of the
dollar limitation in effect under Section 415(c)(1)(A) of the Code or
thirty-five percent (35%) of the Participant's Compensation for such
year, unless both of the following conditions are satisfied:
(1) The Plan is not a Super Top Heavy Plan; and
(2) The contributions or benefits on behalf of all
Participants other than Key Employees meet the requirements
of Section 416(h) of the Code.
<PAGE>
of a Participant was a participant in one or more defined contribution
plans and one or more defined benefit plans maintained by the Employer
which were in existence on May 6, 1986, and which satisfied all of the
requirements of Section 415 of the Code for all limitation years
beginning before January 1, 1987, the numerator of this fraction will
be adjusted if the sum of this fraction and the defined benefit plan
fraction would otherwise exceed one (1.0) under the terms of this
Plan. The adjustment shall be made by permanently subtracting from
the numerator of the defined contribution fraction an amount equal to
the product of (1) the excess of the sum of the fractions over one
(1.0) and (2) the denominator of the defined contribution fraction as
of the "determination date." For this purpose, the "determination
date" is the last day of the last Plan Year commencing on or before
December 31, 1986. Changes in the terms and conditions of any plan
after May 5, 1986, must be disregarded in adjusting the defined
contribution plan fraction. The adjustment will be made only after
eliminating any accruals under this or any other Plan which are in
excess of the accruals permitted pursuant to Section 415 of the Code.
(i) ADJUSTMENTS. In the event it is necessary to adjust
-----------
benefits and/or contributions to prevent the combined fraction from
being exceeded in a Plan Year, the Participant's benefits under the
defined benefit plan shall be reduced so as to eliminate any excess
over the combined fraction, and such reduction shall be made, if
necessary, prior to the allocation of contributions to Accounts. Any
further reductions necessary shall be made by reducing the Annual
Additions under this Plan as provided above, then by reducing Annual
Additions in the manner and priority set out above with respect to
other defined contribution plans, if any.
(j) TREATMENT OF AFFILIATES. For purposes of this
-----------------------
Section, the Employer and all of its Affiliates shall be treated as a
single entity and any plans maintained by an Affiliate shall be deemed
to be maintained by the Employer.
8.6. VALUATION OF EMPLOYER SECURITIES.
--------------------------------
In the event that Employer Securities credited to the ESOP
Fund are not readily tradeable on an established securities market,
the fair market value of such securities must be determined by an
independent appraiser meeting the requirements of Section
401(a)(28)(C) of the Code.
ARTICLE NINE
------------
WITHDRAWALS PRIOR TO TERMINATION OF EMPLOYMENT
----------------------------------------------
9.1. WITHDRAWALS FROM THE AFTER-TAX CONTRIBUTION ACCOUNT.
---------------------------------------------------
<PAGE>
Subject to the provisions of this ARTICLE NINE, a
Participant may withdraw all or part of the amount credited to his
After-Tax Contribution Account, determined as of the most recent
Participant Account status report available at the time his notice of
withdrawal is received by the Advisory Committee. Withdrawals
pursuant to this Section 9.1 shall be requested on a form supplied by
the Advisory Committee, signed by the Participant and delivered to the
Advisory Committee. All such withdrawals shall be subject to the
spousal consent requirements of Section 9.6. Amounts withdrawn from a
Participant's After-Tax Contributions Account shall be charged against
the subaccounts within that account in the following order:
(1) Withdrawals will first be charged against the
subaccount established to record the After-Tax Contributions
made by the Participant on or before December 31, 1986, and
the earnings or losses thereon (the "pre-1987 subaccount")
until an amount equal to the lesser of the After-Tax
Contributions made by the Participant on or before
December 31, 1986, or the value of such subaccount has been
charged against such subaccount.
(2) Withdrawals will then be charged against the
subaccount established to record the After-Tax Contributions
made by the Participant on or after January 1, 1987, and the
earnings or losses thereon (the "post-1986 subaccount")
unless and until such subaccount is depleted.
(3) Any remaining withdrawals will be charged against
the earnings remaining in the pre-1987 subaccount.
The minimum withdrawal shall be the lesser of One Thousand Dollars
($1,000) or the amount credited to the After-Tax Contribution Account.
9.2. IN-SERVICE WITHDRAWALS FROM THE EMPLOYER MATCHING CONTRIBUTION
--------------------------------------------------------------
ACCOUNT AND THE PROFIT SHARING ACCOUNT.
--------------------------------------
(a) ELIGIBILITY.
-----------
(1) ELIGIBILITY FOR WITHDRAWALS FROM THE EMPLOYER
---------------------------------------------
MATCHING CONTRIBUTION ACCOUNT. A Participant who has
-----------------------------
attained the age of fifty-nine and one-half (59-1/2) years
may withdraw all amounts credited to his Employer Matching
Contribution Account (other than amounts invested in the
ESOP Fund), provided that Employer Matching Contributions
credited to that Account within the two (2) Plan Years
preceding the Plan Year of withdrawal may not be withdrawn
unless such Participant has participated in the Plan for
five (5) or more years. No hardship withdrawals may be made
from the Participant's Employer Matching Account or ESOP Account.
<PAGE>
(2) ELIGIBILITY FOR WITHDRAWALS FROM THE PROFIT
-------------------------------------------
SHARING ACCOUNT. A Participant who has attained the age of
---------------
fifty-nine and one-half (59-1/2) years may withdraw all
amounts credited to his Profit Sharing Account (other than
amounts invested in the ESOP Fund). In the event of a
"hardship" as determined by the Advisory Committee
pursuant to Section 9.3(c), (d), and (e), a Participant who
has withdrawn all amounts permitted to be withdrawn under
Section 9.1, Section 9.2(a), and the preceding sentence may
withdraw fifty percent (50%) of the remaining amounts, if
any, credited to his Profit Sharing Account, other than
amounts that are credited to the ESOP Fund, determined as of
the most recent Participant Account status report available
at the time his notice of withdrawal is received by the
Advisory Committee. A Participant may not make a withdrawal
from his Profit Sharing Account unless the Participant has a
one hundred percent (100%) vested interest in that account.
(b) PROCEDURES AND LIMITATIONS. Withdrawals pursuant to
--------------------------
this Section 9.2 shall be subject to the spousal consent requirements
of Section 9.6 and shall be requested on a form supplied by the
Advisory Committee, signed by the Participant, and delivered to the
Advisory Committee. In addition, the following limitations shall
apply:
(1) LIMITATIONS ON AMOUNTS WITHDRAWN FROM THE
-----------------------------------------
EMPLOYER MATCHING CONTRIBUTIONS ACCOUNT. The minimum amount
---------------------------------------
subject to withdrawal pursuant to this Section from an
Employer Matching Contributions Account is the lesser of:
(i) One Thousand Dollars ($1,000.00); or (ii) the portion of
the Account that is invested in the Income Fund.
Withdrawals from the Employer Matching Contribution Account
may only be made from the Income Fund and such withdrawal
shall be charged against the Income Fund.
(2) LIMITATIONS ON AMOUNTS WITHDRAWN FROM THE PROFIT
------------------------------------------------
SHARING ACCOUNT. The minimum amount subject to withdrawal
---------------
pursuant to this Section from a Profit Sharing Account shall
be One Thousand Dollars ($1,000).
9.3. WITHDRAWALS FROM THE PRE-TAX CONTRIBUTIONS AND ROLLOVER
-------------------------------------------------------
CONTRIBUTIONS ACCOUNTS.
----------------------
(a) ELIGIBILITY. In accordance with rules established by
-----------
the Advisory Committee uniformly applicable to all Participants, all
or any part of amounts credited to the Pre-Tax Contribution Account
and, effective November 1, 1997, the Rollover Contributions Account of
a Participant as of the most recent available Account status report
may be distributed to the Participant in cash at any time after the
Participant has attained the age of fifty-nine and one-half (59-1/2)
<PAGE>
years or in the event of a "hardship" as defined in this Section.
Withdrawals only may be made from amounts allocated to the Income
Fund. The Advisory Committee may promulgate uniform rules regarding
the effective date of any distribution, minimum amounts to be
distributed and the frequency of distributions. All withdrawals
pursuant to this Section are subject to the spousal consent
requirements of Section 9.6.
(b) LIMITATION ON HARDSHIP DISTRIBUTIONS. In no event
------------------------------------
shall a hardship distribution exceed the balance of the Participant's
or former Participant's Pre-Tax Contributions Accounts, determined as
of the Valuation Date immediately preceding the date of the
distribution, less any amounts distributed from or charged to the
Pre-Tax Contributions Account since such Valuation Date. The
distribution may not exceed the lesser of the amount determined
pursuant to the preceding sentence or the total Pre-Tax Contributions
made by the Participant prior to the date of the withdrawal less any
Pre-Tax Contributions previously withdrawn.
(c) HARDSHIP DEFINED. A distribution may be made pursuant
----------------
to this Section due to a "hardship" only if the Participant satisfies
the Advisory Committee that the Participant has an immediate and heavy
financial need and that the distribution is necessary in order to
satisfy that need.
(d) IMMEDIATE AND HEAVY FINANCIAL NEED. The following are
----------------------------------
the only expenses or circumstances that will be deemed to give rise to
an immediate and heavy financial need for purposes of this Section:
(1) Medical expenses described in Section 213(d) of
the Code previously incurred by the Participant, the
Participant's spouse, or any of the Participant's dependents
(as defined in Section 152 of the Code) or necessary for
such persons to obtain medical care described in
Section 213(d);
(2) Costs directly related to the purchase (excluding
mortgage payments) of a principal residence for the
Participant; or
(3) Payment of tuition, room and board and related
education expenses for the next twelve (12) months of
post-secondary education for the Participant or the
Participant's spouse, children or dependents (as defined in
Section 152 of the Code); or
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on
the mortgage on the Participant's principal residence; or
(5) Any other circumstance or expense designated by
the Commissioner of Internal Revenue as a deemed immediate
and heavy financial need in any published revenue ruling,
<PAGE>
notice or other document of general applicability.
(e) NECESSITY. A distribution will be deemed to be
---------
necessary to satisfy an immediate and heavy financial need of a
Participant only if all of the following requirements are satisfied:
(1) The distribution is not in excess of the amount
of the immediate and heavy financial need of the Participant
(this amount may include any amounts necessary to pay any
federal, state or local income taxes or penalties reasonably
anticipated to result from the withdrawal);
(2) The Participant has obtained all distributions,
other than hardship distributions, and all nontaxable loans
currently available under all plans maintained by the
Employer;
(3) All plans sponsored by the Employer provide that
the Participant's contributions (whether made on a pre-tax
or after-tax basis) will be suspended for at least twelve
(12) months after receipt of the distribution; and
(4) All plans sponsored by the Employer provide that
the Participant may not make elective pre-tax contributions
for the calendar year immediately following the calendar
year in which the hardship distribution is made in excess of
the applicable limit in effect for such year under Section
402(g) of the Code less the amount of the Participant's
pre-tax elective contributions for the calendar year in
which the hardship distribution is made.
For purposes of subparagraphs (3) and (4), the phrase "all plans"
includes all qualified and nonqualified plans of deferred compensation
maintained by the compensation or any Employer, including stock
option, stock purchase or similar plans or a cash or deferred
arrangement that is part of a cafeteria plan within the meaning of
Section 125 of the Code.
9.4. WITHDRAWALS OF AMOUNTS CREDITED TO THE ESOP FUND, PROFIT
--------------------------------------------------------
SHARING ACCOUNTS AND EMPLOYER MATCHING CONTRIBUTIONS ACCOUNTS.
-------------------------------------------------------------
There shall be no withdrawals permitted under this ARTICLE
NINE from ESOP Accounts or for the portion of any other Account that
is invested in the ESOP Fund or, except as otherwise provided in
Section 9.2, from amounts credited to Profit Sharing Accounts and
Employer Matching Contribution Accounts.
<PAGE>
9.5. LIMITATIONS ON WITHDRAWALS.
--------------------------
The Advisory Committee may direct that a Participant shall
not be entitled to withdraw funds from his Accounts below an amount
equal to the unpaid principal and interest on any loan granted to him
in accordance with the Plan as then in effect or an amount required to
service insurance premium obligations. All withdrawals under this
ARTICLE NINE shall be paid in cash. Not more than one (1) withdrawal
pursuant to this ARTICLE NINE shall be permitted per Plan Year, unless
the Participant has attained the age of fifty-nine and one-half
(59-1/2) or terminated employment, in which case no more than one (1)
withdrawal may be made per calendar quarter.
9.6. SPOUSAL CONSENT.
---------------
No married Participant shall be allowed to make a withdrawal
unless the Participant's spouse consents to the withdrawal. Such
consent must be in writing, must consent to a single lump sum payment
of the amount to be withdrawn, must acknowledge the effect of the
withdrawal on the benefits ultimately payable from the Plan, must
acknowledge the effect of the spouse's consent to the withdrawal, and
must be witnessed by a notary public or a designated representative of
the Advisory Committee. No spousal consent shall be required if the
Advisory Committee determines, in its sole and absolute discretion,
that the spouse cannot be located or other circumstances exist that
preclude the Participant from obtaining such consent (as permitted
under applicable regulations issued by the United States Treasury
Department). Any spousal consent given or dispensed with pursuant to
this Section will be valid with respect to the spouse who signs the
consent or with respect to whom the consent requirement is waived by
the Advisory Committee and any subsequent spouse. If the
Participant's spouse fails to consent to the withdrawal of amounts
allocated to the Participant's Accounts, the amounts in the
Participant's Accounts will be held for distribution in accordance
with the other provisions of this Plan unless the spouse later
consents to a withdrawal pursuant to the provisions of this Section.
ARTICLE TEN
-----------
VESTING
-------
10.1. VESTING IN THE AFTER-TAX CONTRIBUTION ACCOUNT, PRE-TAX
------------------------------------------------------
CONTRIBUTION ACCOUNT, EMPLOYER MATCHING CONTRIBUTION ACCOUNT,
--------------------------------------------------------------
AND ROLLOVER CONTRIBUTION ACCOUNT.
---------------------------------
Each Participant shall at all times be fully vested in all
amounts credited to or allocable to his After-Tax Contribution
<PAGE>
Account, Pre-Tax Contribution Account, Employer Matching Contribution
Account and, effective November 1, 1997, his Rollover Contribution
Account and his rights and interest therein shall not be forfeitable
for any reason.
10.2. VESTING IN THE ESOP ACCOUNT AND PROFIT SHARING ACCOUNT.
------------------------------------------------------
Each Participant shall be fully vested in the amounts
credited to or allocable to his ESOP Account, and in the amounts
credited to or allocable to his Profit Sharing Account on or after
January 1, 1988, on and after the first to occur of the following
events:
(a) Attainment by the Participant prior to January 1,
1991, of the age of sixty-five (65) years, or, for Participants who
attain the age of sixty-five (65) on or after January 1, 1991, the
later of attainment by the Participant of age sixty-five (65) or the
fifth (5th) anniversary of the Participant's commencement of
participation in the Plan;
(b) The date of his separation from employment due to
Disability, as determined by the Advisory Committee;
(c) The date of death of the Participant;
(d) Termination of this Plan as provided in Section 13.3
of this Plan;
(e) Complete discontinuance of contributions by the
Employers as provided in Section 13.3 of this Plan; or
(f) The completion of seven (7) years of Continuous
Service by the Participant.
Notwithstanding anything contained herein to the contrary,
all Participants with five (5) or more years of Continuous Service as
of January 1, 1988 shall be 100% vested in their Profit Sharing
Accounts. All Profit Sharing Account balances relating to
contributions actually paid to the Profit Sharing Plan prior to
January 1, 1988 shall be 100% vested.
10.3. DETERMINATION OF VESTED INTEREST IN ESOP ACCOUNT AND PROFIT
------------------------------------------------------------
SHARING ACCOUNT IN THE EVENT OF TERMINATION OF EMPLOYMENT.
---------------------------------------------------------
(a) VESTING SCHEDULE. A Participant's vested percentage
shall be determined as of the day of his termination of employment.
The value of the Participant's vested interest in his ESOP Account and
Profit Sharing Account shall be determined in accordance with the
following schedule:
<PAGE>
Years of Vested
Continuous Service Percentage of Account
------------------- ---------------------
Less than three 0%
Three but less than four 20%
Four but less than five 40%
Five but less than six 60%
Six but less than seven 80%
Seven or more 100%
Effective for Participants receiving distributions on or after
January 1, 1996, if, after the application of the above vesting
schedule, the Participant is entitled to receive a distribution of a
fractional share of Employer Securities, such fractional share shall
be rounded up to the nearest whole number and the distribution shall
be made only in whole shares of Employer Securities.
(b) TIME OF DETERMINATION. A Participant's vested
---------------------
percentage shall be determined as of his Termination Date. The value
of the Participant's vested interest in his ESOP Account or Profit
Sharing Account shall be determined as of the earlier of (1) the
Accounting Date immediately preceding the first distribution to the
Participant from such Account following his termination of employment
or (2) the Accounting Date coinciding with or next following the date
on which the Participant incurs his fifth (5th) consecutive one-year
Break in Continuous Service. If a Participant has no vested interest
in any of his Accounts, the Participant shall be deemed to have
received a distribution of his zero (0) Account balance as of the date
of his termination of employment. Any amounts credited to the
Participant's Accounts in which the Participant is not fully vested
shall be forfeited as the later of such Accounting Date or the date on
which the Participant's employment terminated. The amount forfeited
shall then be available for allocation to the accounts of the
remaining Participants as of the year-end Accounting Date coinciding
with or next following the date of the forfeiture, to the extent such
forfeiture is not used to restore forfeitures previously charged to a
reemployed former Participant pursuant to Section 10.4. If interests
in more than one class of Employer Securities are allocable to the
Participant's ESOP Account, the Participant shall be treated as
forfeiting the same proportion of each class.
(c) TOP HEAVY VESTING. If this Plan is or becomes Top
-----------------
Heavy, the vested interest of any Participant other than a Participant
who is not credited with at least one (1) Hour of
Service while the Plan is Top Heavy shall be determined in accordance
with the following schedule instead of the schedules set forth above:
<PAGE>
Years of Vested
Continuous Service Percentage of Account
------------------- ---------------------
Less than two 0%
Two but less than three 20%
Three but less than four 40%
Four but less than five 60%
Five but less than six 80%
Six or more 100%
10.4. RESTORATION OF FORFEITURES.
--------------------------
(a) ELIGIBILITY. Subject to the provisions of this
-----------
Section, any forfeitures charged to the ESOP Account or Profit Sharing
Account of a former Participant will be restored if the former
Participant returns to employment with an Employer or any Affiliate
prior to incurring five (5) consecutive Breaks in Continuous Service.
Prior forfeitures will be restored only if the former Participant
repays, in a timely manner as provided below, the full amount,
unadjusted for any subsequent gains or losses, previously distributed
to him, which amount may include cash in lieu of Employer Securities.
If a former Participant who was deemed to have received a
distribution pursuant to Section 10.3(b) resumes employment with the
Employer prior to incurring five (5) consecutive one year Breaks in
Continuous Service, any forfeitures charged to the former
Participant's Account upon his prior termination of employment shall
be restored to such Account immediately.
(b) RETURN OF DISTRIBUTIONS. A former Participant may
-----------------------
repay the full amount previously distributed to him prior to the
earlier of (1) the fifth (5th) anniversary of the former Participant's
reemployment by the Employer or (2) the last day of the Plan Year in
which the former Participant incurs his fifth (5th) consecutive Break
in Continuous Service. The amount of any distribution repaid by the
former Participant shall be allocated between his Accounts in
proportion to the amount distributed from each Account. Any
forfeitures restored by the Employer pursuant to this Section will be
allocated to the Account or Accounts to which the forfeiture was
charged. A Participant may not, and need not, repay amounts
attributable to his Pre-Tax Contributions or After-Tax Contributions.
The Participant must repay the amount distributed from both his other
Accounts in order to qualify for the restoration of any prior
forfeitures. A Participant may not repay a prior distribution
pursuant to this paragraph if the Participant had a fully vested
interest in all of his Accounts when the prior distribution was made.
(c) RESTORATION CONTRIBUTIONS. Any forfeitures available
-------------------------
for allocation as of the last day of the Plan Year in which an
individual does everything necessary in order to have a prior
forfeiture restored will be applied first to restore the prior
forfeiture. If the available forfeitures are not sufficient to
restore the prior forfeiture, the Employer will make a special
contribution equal to the balance of the amount forfeited. Such
contributions or forfeitures will be allocated to the account from
which the distribution was made.
<PAGE>
10.5. AMENDMENTS TO VESTING SCHEDULE.
------------------------------
No amendments to the vesting schedule set forth in
Section 10.3 shall deprive an Employee who is a Participant on the
later of (a) the date the amendment is adopted, or (b) the date the
amendment is effective, of any non-forfeitable benefit to which he is
entitled under the Plan, determined as of such date without regard to
such amendment. If the vesting schedule designated in Section 10.3 is
amended, each Participant whose benefits would be determined under
such schedule and who is credited with three (3) or more years of
Continuous Service shall have the right to elect, during the period
computed pursuant to this Section, to have his non-forfeitable benefit
determined without regard to such amendment; provided, however, that
no election shall be provided to any Participant whose non-forfeitable
percentage under the Plan, as amended, cannot at any time be less than
the percentage computed without regard to such amendment. The
election period shall commence on the date the amendment is adopted
and end on the later of (a) sixty (60) days after adoption of the
amendment, (b) sixty (60) days after the effective date of the
amendment, or (c) sixty (60) days after the Participant is notified of
the amendment in writing by the Corporation or the Advisory Committee.
Such election, if exercised, shall be irrevocable, and shall be
available only to an Employee who is a Participant when the election
is made and who has completed at least three (3) years of Continuous
Service when the election is made. Any change in the applicability of
the vesting schedule set forth in Section 10.3 as a result of the Plan
ceasing to be Top Heavy shall be treated as an amendment to such
vesting schedule for purposes of this Section.
ARTICLE ELEVEN
--------------
DISTRIBUTION OF BENEFITS
------------------------
11.1. NORMAL AND LATE RETIREMENT.
--------------------------
A Participant shall be entitled to full distribution of his
accounts, as provided in Sections 11.5 and 11.6, upon actual
retirement as of or after his Normal Retirement Date. A Participant
may remain in the employment of the Employer after his Normal
Retirement Date, if he desires, and shall retire at such later time as
he may desire, unless the Employer lawfully directs earlier
retirement.
11.2. DISABILITY RETIREMENT.
---------------------
A Participant whose active employment is discontinued due to
Disability shall be entitled to full distribution of his accounts, as
provided in Sections 11.5 and 11.6. Subject to the provisions of
Section 11.5, the payments may commence at any time on or after the
date of his discontinuance of active employment due to Disability.
11.3. DEATH.
-----
(a) BENEFIT. In the event that a Participant (which term
-------
for purposes of this Section includes former Participants) shall die
prior to his Benefit Commencement Date, the Participant's surviving
spouse (or his other designated Beneficiary, if the Participant is
<PAGE>
unmarried or his spouse has consented in writing to designation of
another Beneficiary) shall be entitled to full distribution of the
Participant's accounts at the time and in the manner provided in
Sections 11.5 and 11.6.
(b) SPOUSE AS BENEFICIARY. Notwithstanding any
---------------------
Beneficiary designation made by the Participant to the contrary,
except as otherwise noted below, a married Participant's spouse shall
be deemed to be his Beneficiary for purposes of this Plan unless the
Participant's spouse consents to the designation of a different
Beneficiary. Once given, the spouse's consent will be irrevocable.
The consent of the Participant's spouse to his election shall be in
writing, acknowledge the effect of such an election, be witnessed by a
notary public or a designated representative of the Advisory Committee
and be provided to the Advisory Committee. The spouse may not consent
to the designation of another Beneficiary generally, but rather must
consent to the designation of a particular Beneficiary. If the
Participant elects to change the Beneficiary, the spouse's prior
consent will be null and void and a new consent will be required,
unless the spouse's consent expressly permits a change of designation
without the further consent of the spouse. No spousal consent will be
required if the Advisory Committee determines, in its sole discretion,
that such consent cannot be obtained because the spouse cannot be
located or other circumstances exist that preclude the Participant
from obtaining such consent (to the degree permitted under applicable
regulations issued by the United States Treasury Department). Any
spousal consent given pursuant to this Section or dispensed with
pursuant to the preceding sentence will be valid only with respect to
the spouse who signs the consent or with respect to whom the consent
requirement is waived by the Advisory Committee.
(c) DEATH AFTER COMMENCEMENT OF BENEFITS. In the event
------------------------------------
that a former Participant shall die after his Benefit Commencement
Date but prior to the complete distribution of all amounts to which
such Participant is entitled under the provisions of this ARTICLE
ELEVEN, the Participant's spouse or other designated Beneficiary shall
be entitled to receive any remaining amounts to which the Participant
would have been entitled had the Participant survived. The Advisory
Committee may require and rely upon such proofs of death and the right
of any spouse or Beneficiary to receive benefits pursuant to this
Section as the Advisory Committee may reasonably determine, and its
determination of death and the right of such spouse or Beneficiary to
receive payment shall be binding and conclusive upon all persons
whomsoever.
11.4. OTHER SEPARATIONS FROM EMPLOYMENT.
---------------------------------
A Participant who separates from employment for any reason
other than retirement, death or Disability shall be entitled to
distribution of his vested interest in his accounts at the time and in
the manner provided in Sections 11.5 and 11.6.
<PAGE>
11.5. TIME OF DISTRIBUTION OF BENEFITS.
--------------------------------
(a) RETIREMENT. Subject to the provisions of
----------
paragraph (g) relating to distributions of a Participant's ESOP
Account, payment to a Participant who is entitled to benefits under
Section 11.1 normally shall commence within a reasonable time
following the Participant's Termination Date; except that, at the
election of the Participant, payment of benefits may be postponed
until after the next year-end Accounting Date, at which time losses or
earnings on the Trust Fund will be allocated to the Participant's
accounts.
(b) TERMINATION AND DISABILITY. Subject to the provisions
--------------------------
of paragraph (g) relating to distributions of a Participant's ESOP
Account, payment to a Participant who is entitled to benefits under
Section 11.2 or Section 11.4 normally shall commence not later than
the date on which the Participant shall attain his Normal Retirement
Date. As a general rule, the Advisory Committee will begin
distributions pursuant to Section 11.2 or Section 11.4 as soon as
possible after the year-end Accounting Date next following the
Participant's termination of employment or discontinuance of active
employment due to Disability. At the request of the Participant, all
of the Participant's Accounts, including his ESOP Account, may be
distributed as soon as possible following the Participant's
Termination Date or discontinuance of active employment due to
Disability. If the total amount distributable to the Participant from
all of his accounts at the time of any distribution under this ARTICLE
ELEVEN or any withdrawal under ARTICLE NINE, exceeds Three Thousand
Five Hundred Dollars ($3,500.00) (Five Thousand Dollars ($5,000.00)
for Plan Years beginning on or after January 1, 1998), however, no
distribution may be made prior to the Participant's Normal Retirement
Date unless the Participant requests said distribution in writing.
For purposes of this rule, if the total amount distributable to the
Participant from all his accounts at the time of any distribution or
withdrawal exceeds Three Thousand Five Hundred Dollars ($3,500.00)
(Five Thousand Dollars ($5,000.00) for Plan Years beginning on or
after January 1, 1998), then the amount in the Participant's account
at all times thereafter will be deemed to exceed Three Thousand Five
Hundred Dollars ($3,500.00) (Five Thousand Dollars ($5,000.00) for
Plan Years beginning on or after January 1, 1998). No distribution
may be made pursuant to the preceding sentence after the Benefit
Commencement Date unless the Participant consents in writing to said
distribution.
(c) DEATH AFTER COMMENCEMENT OF PAYMENTS. In the event of
------------------------------------
the death of a Participant after his Benefit Commencement Date but
prior to the complete distribution to such Participant of the benefits
payable to him under the Plan, any remaining benefits shall be
distributed over a period that does not exceed the period over which
distribution was to be made prior to the date of death of the
Participant. Subject to the provisions of paragraph (g) relating to
distributions of a Participant's ESOP Account, payments to the
Beneficiaries entitled to payments pursuant to Section 11.3 shall
commence as soon as possible following the death of the Participant.
(d) DEATH PRIOR TO COMMENCEMENT OF BENEFITS. In the event
---------------------------------------
of the death of the Participant prior to his Benefit Commencement
Date, subject to the provisions of paragraph (g) relating to
distributions of a Participant's ESOP Account, payments to the
<PAGE>
Participant's Beneficiaries must be paid in full by December 31 of the
calendar year which includes the fifth (5th) anniversary of the date
of the Participant's death, unless the surviving spouse or other
designated beneficiary irrevocably elects to apply one of the
following exceptions:
(1) PAYMENTS TO DESIGNATED BENEFICIARIES OTHER THAN
-----------------------------------------------
SPOUSES. If the death benefit is payable to a "designated
-------
Beneficiary," the designated Beneficiary may elect that the
death benefit be distributed in the form of an annuity over the
life of the designated beneficiary, or in substantially equal
quarterly or annual installments over a period not to exceed the
Beneficiary's life expectancy (determined in accordance with
Section 11.6(g)) as long as the distributions commence by
December 31 of the calendar year following the year of the
Participant's death or by such other date as may be specified in
regulations issued by the United States Treasury Department. For
purposes of this Section, a "designated Beneficiary" is any
individual who has the right to receive a death benefit from this
Plan regardless of whether the individual was specifically
designated by the Participant. The term "designated
Beneficiary" may also include the beneficiaries of any Trust
that satisfies the requirements of regulations issued by the
United States Treasury Department pursuant to Section 401(a)(9)
of the Code.
(2) PAYMENTS TO SPOUSES. If the Participant's surviving
-------------------
spouse is his sole Beneficiary, the surviving spouse may elect to
postpone distributions until any date not later than the latter
of December 31 of the calendar year following the calendar year
in which the Participant died or December 31 of the calendar year
in which the Participant would have attained age seventy and
one-half (70-1/2). Distributions to the surviving spouse shall
then be made in the form of an annuity over the life of the
surviving spouse, or in substantially equal quarterly or annual
installments over a period not to exceed the surviving spouse's
life expectancy (determined in accordance with Section 11.6(g)).
If the surviving spouse dies before the distributions begin,
this paragraph (d) shall be applied as if the surviving spouse
was the Participant.
An election to utilize one of the foregoing exceptions, if made, is
irrevocable and must be made no later than the earlier of (i)
December 31 of the calendar year in which distributions are required
to commence under (1) or (2) above (whichever is applicable) or (ii)
December 31 of the calendar year which contains the fifth (5th)
anniversary of the date of the Participant's death. If neither the
Participant nor a designated Beneficiary make such an election,
distributions will be made in accordance with the general rule set
forth in this Section 11.5(d). Any elections made by a designated
Beneficiary pursuant to this paragraph (d) and any distributions made
pursuant to this paragraph (d) shall comply with regulations issued by
the United States Treasury Department under Section 401(a)(9) of the
Code, as they may be amended from time to time. In case of conflict,
the provisions of the regulations shall control over the provisions of
this Plan.
(e) REQUIRED COMMENCEMENT OF PAYMENTS. In no event shall
----------------------------------
payment to a former Participant commence later than sixty (60) days
<PAGE>
after the last to occur of (1) the last day of the Plan Year in which
the Participant attains the age of sixty-five (65) years, (2) the last
day of the Plan Year in which the Participant separates from
employment with the Employer, or (3) the tenth (10th) anniversary of
the last day of the Plan Year in which the Participant commenced
participation in the Plan. In addition, payments must commence by the
Participant's Required Beginning Date.
(f) CONSENT TO EARLY DISTRIBUTIONS. Except as otherwise
------------------------------
provided in Section 11.6 concerning the payment of small amounts, no
benefit payments may commence pursuant to the preceding provisions of
this Section prior to the Participant's Normal Retirement Date unless
the Participant requests the earlier commencement of payments. The
Participant's request must be in writing in a form acceptable to the
Advisory Committee.
(g) DISTRIBUTIONS FROM ESOP ACCOUNTS. Subject to the
--------------------------------
provisions of paragraph (b) restricting distribution of more than
Three Thousand Five Hundred Dollars ($3,500.00) (Five Thousand Dollars
($5,000.00) for Plan Years beginning on or after January 1, 1998)
without the Participant's consent, the distribution of the
Participant's ESOP Account shall be made in accordance with Section
11.5(a), 11.5(b), 11.5(c) or 11.5(d) whichever is applicable.
11.6. METHOD OF DISTRIBUTION.
----------------------
(a) PARTICIPANT'S ELECTION. Except for amounts invested
----------------------
in the ESOP Fund, the Participant or Beneficiary shall select the
method of payment of his or her benefits hereunder in accordance with
the provisions of this Section. Distribution of amounts credited to
the ESOP Fund shall be made in Employer Securities in a single
distribution.
(b) OPTIONAL METHODS OF DISTRIBUTION. Distribution may be
--------------------------------
made in any one (1) or more of the following methods:
(1) By payment in a cash lump sum to the Participant or
his Beneficiary;
(2) By making payments of amounts credited to Accounts
(other than amounts invested in the ESOP Fund) in quarterly or annual
installments over any period not in excess of five (5) years, unless
elected otherwise by the Participant, but in no event in excess of the
joint life expectancy of the Participant and his spouse. Distribution
of amounts credited to the ESOP Fund shall be made in whole and
fractional shares (if necessary) of Employer Securities in a single
distribution. A former Participant who is receiving distributions in
installments may direct the investment of the undistributed portion of
his Accounts (other than his ESOP Account) pursuant to the provision
of Sections 6.2 and 6.4.
(c) EMPLOYER SECURITIES. If Employer Securities
-------------------
consisting of stock acquired with the proceeds of an exempt loan are
available for distribution and consist of more than one (1) class, a
distributee shall receive substantially the same proportion of each
class.
<PAGE>
(d) MINIMUM DISTRIBUTION AND INCIDENTAL BENEFIT
-------------------------------------------
REQUIREMENTS. The distribution of a Participant's interest must
------------
commence by the date determined pursuant to Section 11.5(e) (the
"required beginning date"). Unless the Participant's entire interest
is distributed to him by the required beginning date, the
distributions must be made over a period certain not extending beyond
the life expectancy of the Participant, or over a period certain not
extending beyond the joint life and last survivor life expectancy of
the Participant and the Participant's designated Beneficiary. In
addition, all benefit payment options shall be structured so as to
comply with the incidental benefit requirements of
Section 401(a)(9)(G) of the Code and any regulations issued pursuant
thereto, which require, generally, that certain minimum amounts be
distributed to a Participant during each calendar year, commencing
with the calendar year in which the Participant's required beginning
date falls, in order to assure that only "incidental" benefits are
provided to a Participant's beneficiaries. The provision of this
paragraph shall control over any conflicting provisions of this Plan.
In addition, all distributions made pursuant to the Plan shall comply
with any regulations issued by the United States Treasury Department
under Section 401(a)(9) of the Code, including any regulations issued
pursuant to Section 401(a)(9)(G), and such regulations shall override
and supersede any conflicting provisions of this Section or any other
Section of this Plan. Any distributions required by the paragraph to
a Participant who has not yet terminated employment shall be charged
to the Account selected by the Participant; provided, however, that
said distributions shall not be charged to the Participant's ESOP
Account until all of the other Accounts maintained for the Participant
have been exhausted. If the only account maintained for the
Participant is the ESOP Account, the Participant may elect to receive
the entire balance of said Account.
(e) DISTRIBUTION OF SMALL AMOUNTS. Notwithstanding any
-----------------------------
provision of this Plan to the contrary, the Advisory Committee, in its
sole discretion, may direct payment of benefits in a single lump sum
if the total amount distributable to the Participant from all of his
accounts at the time of any distribution under this ARTICLE ELEVEN or
any withdrawal under ARTICLE NINE, does not exceed Three Thousand Five
Hundred Dollars ($3,500.00) (Five Thousand Dollars ($5,000.00) for
Plan Years beginning on or after January 1, 1998). For purposes of
this rule, if the total amount distributable to the Participant from
all his accounts at the time of any distribution or withdrawal exceeds
Three Thousand Five Hundred Dollars ($3,500.00) (Five Thousand Dollars
($5,000.00) for Plan Years beginning on or after January 1, 1998),
then the amount in the Participant's account at all times thereafter
will be deemed to exceed Three Thousand Five Hundred Dollars
($3,500.00) (Five Thousand Dollars ($5,000.00) for Plan Years
beginning on or after January 1, 1998). No distribution may be made
pursuant to the preceding sentence after the Benefit Commencement Date
unless the Participant consents in writing to the distribution. All
distributions pursuant to this paragraph must be made not later than
the close of the second Plan Year following the Plan Year in which the
Participant's employment is terminated.
(f) AMOUNT OF DISTRIBUTION. For the purpose of
----------------------
determining the amount to be distributed to Participants and
Beneficiaries, the Participant's accounts will be valued as of the
<PAGE>
Accounting Date preceding the date upon which distribution is to
commence, and the accounts shall then be adjusted to reflect any
contributions made by or on behalf of the Participant after such
Accounting Date.
(g) LIFE EXPECTANCIES. For purposes of this Plan, life
-----------------
expectancies shall be calculated by use of the expected return
multiples specified in Tables V and VI of ?1.72-9 of the regulations
issued by the United States Treasury Department, and in accordance
with the rules and procedures specified in regulations issued under
Section 401(a)(9) of the Code, as such Tables and regulations may be
amended from time to time, or any Tables or regulations subsequently
issued in replacement of said Tables or regulations. The life
expectancy of a Participant and his spouse may be recalculated
annually. The life expectancy of any other individual shall be
calculated using the individual's attained age on his birthday in the
relevant calendar year (as determined in accordance with regulations
issued pursuant to Section 401(a)(9) of the Code) and such
individual's life expectancy during any later calendar year shall be
the life expectancy as originally determined less the number of
calendar years that have elapsed since the calendar year of the
initial determination.
11.7. PAYMENTS TO DISABLED.
--------------------
If any person to whom a payment is due under this Plan is
unable to care for his affairs because of physical or mental
disability, or is subject to a legal disability, the Advisory
Committee shall have the authority to cause the payments becoming due
to such person to be made to his duly-appointed legal guardian or
custodian, to his spouse or to any other person charged with the legal
obligation to support him, without any responsibility on the part of
the Advisory Committee or the Trustees to see to the application of
such payments. Payments made pursuant to such power shall operate as
a complete discharge of the Advisory Committee, the Trustees, the ESOP
Fund and the Trust Fund. The decision of the Advisory Committee in
each case shall be final and binding upon all persons whomsoever.
11.8. MISSING PAYEES.
--------------
Neither the Trustees nor the Advisory Committee nor any
Employer shall be obliged to search for or ascertain the whereabouts
of any Participant or Beneficiary. It shall be the responsibility of
each Participant to advise the Advisory Committee of the current
mailing address of such Participant and his Beneficiary, and any
notice or payment addressed to such last known address of record shall
be deemed to have been received by the Participant. Should the
Advisory Committee not be able locate a Participant who is entitled to
be paid a benefit under the Plan after making reasonable efforts to
contact said Participant, and a period of two (2) years has elapsed
from the Participant's Termination Date, a forfeiture of the
Participant's vested benefit shall occur and be redistributed in
accordance with Sections 8.2(d) and 10.4(c). Notwithstanding said
forfeiture, in the event the Participant should thereafter make a
claim for his benefits, as determined prior to the date of forfeiture,
the Advisory Committee shall restore (as of the next Accounting Date)
his account balance together with interest at the "Short Term Federal
<PAGE>
Rate," as defined in Internal Revenue Code Section 1274, from the date
of forfeiture. Such amounts shall be restored in a manner consistent
with the restoration of forfeitures as set forth in Section 10.4(c).
Should there be insufficient forfeitures occurring on said Accounting
Date, the Employer shall be obligated to restore said Account by means
of a special contribution to the Plan.
11.9. WITHHOLDING.
-----------
Payment of benefits under this Plan shall be subject to
applicable law governing the withholding of taxes from benefit
payments, and the Trustees and Advisory Committee shall be authorized
to withhold taxes from the payment of any benefits hereunder, in
accordance with applicable law.
11.10. UNDERPAYMENT OR OVERPAYMENT OF BENEFITS.
---------------------------------------
In the event that, through misstatement or computation
error, benefits are underpaid or overpaid, there shall be no liability
for any more than the correct benefit sums under the Plan.
Overpayments may be deducted from future payments under the Plan, and
underpayments may be added to future payments under the Plan. In lieu
of receiving reduced benefits under the Plan, a Participant or
beneficiary may elect to make a lump sum repayment of any overpayment.
11.11. TRANSFERS FROM THE PLAN.
-----------------------
Upon receipt by the Advisory Committee of a written request
from a Participant who has separated or is separating from the
Employer and has not yet received distribution of his benefits under
the Plan, the Advisory Committee shall direct the Trustee to transfer
such Participant's vested interest in his accounts to the trustee or
other administrative agent of another plan or trust or individual
retirement account certified by the Participant as meeting the
requirements for qualified plans or trusts or individual retirement
accounts under the Code. The Trustee shall make such transfer within
a reasonable time following receipt of such written direction by the
Advisory Committee. The Employer, the Advisory Committee and the
Trustee shall not be responsible for ascertaining whether the
transferee plan, trust, or individual retirement account is qualified
under the Code, and the written request of the Participant shall
constitute a certification on the part of such Participant that the
plan, trust, or individual retirement account is qualified and
provides for the acceptance of such transfer.
11.12. ELIGIBLE ROLLOVER DISTRIBUTIONS.
-------------------------------
(a) GENERAL. With respect to any "eligible rollover
-------
distribution", a "distributee" may elect to have such distribution
paid directly to an "eligible retirement plan" and may specify the
eligible retirement plan to which such distribution is to be paid (in
<PAGE>
such form and at such time as determined by the Advisory Committee).
If such election is made, the eligible rollover distribution shall be
made in the form of a direct trustee-to-trustee transfer to the
eligible retirement plan so specified. Any distribution not
qualifying as an eligible rollover distribution under Section 11.12(b)
may not be rolled over in the manner specified in this Section 11.12.
(b) DEFINITIONS.
-----------
(1) The term "eligible rollover distribution" shall
mean a distribution that would be includable in the
distributee's gross income if not transferred pursuant to
this Section 11.12 (as determined without regard to Code
Sections 402(c) and 403(a)(4)) and that is a distribution of
all or any portion of the balance to the credit of the
distributee in the Plan except that such term shall not
include:
(A) any distribution which is one of a series of
substantially equal periodic payments made (not less
frequently than annually);
(i) for the life (or life expectancy) of
the distributee or the joint lives (or life
expectancies) of the distributee and the
distributee's Beneficiary; or
(ii) for a specified period of ten (10)
years or more; and
(B) any distribution to the extent such
distribution is required under Code Section 401(a)(9).
(2) The term "eligible retirement plan" shall mean:
(A) an individual retirement account described
in Code Section 408(a);
(B) an individual retirement annuity described
in Code Section 408(b) (other than an endowment
contract);
(C) an employee's trust described in Code
Section 401(a) which is exempt from tax under Code
Section 501(a) provided that such employee's trust is
a defined contribution plan, the terms of which permit
the acceptance of rollover distributions; or
(D) an annuity plan described in Code Section
403(b).
Notwithstanding the above, if the distributee is
a surviving spouse, an eligible retirement plan shall
include only an individual retirement account or an
individual retirement annuity.
<PAGE>
(3) The term "distributee" shall include an
Employee and a former Employee. In addition, the Employee's
or former Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the
alternate payee under a Qualified Domestic Relations Order
are distributees with regard to the interest of a spouse or
former spouse.
ARTICLE TWELVE
--------------
PLAN ADMINISTRATION
-------------------
12.1. THE ADVISORY COMMITTEE.
----------------------
(a) APPOINTMENT AND REMOVAL. The Corporation is the plan
-----------------------
administrator, but it delegates its duties and responsibilities as
such to the Advisory Committee which shall consist of not less than
three (3) members (who may be directors, officers or other employees
of the Employers or Participants in this Plan). Such members shall be
appointed from time to time by the President of the Corporation and
shall serve at his pleasure. Each member may be dismissed by the
President or his designee at any time by notice to the members of the
Advisory Committee. A member of the Advisory Committee may resign at
any time by delivering his written resignation to the President or his
designee. The members of the Advisory Committee may be appointed to
succeed themselves.
(b) CHAIRMAN AND SECRETARY. The members of the Advisory
----------------------
Committee shall elect a chairman and shall also elect a secretary who
may, but need not, be one of the members of the Advisory Committee.
The secretary of the Advisory Committee or his designee shall record
all acts and determinations of the Advisory Committee and shall
preserve and retain custody of all such records, together with such
other documents as may be necessary for the administration of the Plan
or as may be required by law.
(c) MEETINGS AND MAJORITY ACTION. The Advisory Committee
----------------------------
shall hold meetings upon such notice, and at such place or places, and
at such intervals as it may from time to time determine. A majority
of the members of the Advisory Committee at any time in office shall
constitute a quorum for the transaction of business. All resolutions
or other actions taken by the Advisory Committee shall be by vote of a
majority of the Advisory Committee at a meeting of the Advisory
Committee or without a meeting by an instrument in writing signed by a
majority of the members of the Advisory Committee.
12.2. POWERS OF THE ADVISORY COMMITTEE.
--------------------------------
(a) GENERAL POWERS. The Advisory Committee shall have the
--------------
power and discretion to perform the administrative duties described in
this Plan or required for proper administration of the Plan and shall
have all powers necessary to enable it to properly carry out such
<PAGE>
duties. Without limiting the generality of the foregoing, the
Advisory Committee shall have the power and discretion to construe and
interpret this Plan, to hear and resolve claims relating to this Plan,
and to decide all questions and disputes arising under this Plan. The
Advisory Committee shall determine, in its discretion, the eligibility
of employees to participate in the Plan, to determine the service
credited to the Employees, the status and rights of a Participant, and
the identity of the Beneficiary or Beneficiaries entitled to receive
any benefits payable hereunder on account of the death of a
Participant.
(b) BENEFIT PAYMENTS. Except as is otherwise provided
----------------
hereunder, the Advisory Committee shall determine the manner and time
of payment of benefits under this Plan. All benefit disbursements by
the Trustee shall be made upon the instructions of the Advisory
Committee.
(c) DECISIONS FINAL. All matters to be decided by the
---------------
Advisory Committee shall be decided by the Advisory Committee in the
exercise of its discretion and shall be binding and conclusive upon
all persons.
(d) REPORTING AND DISCLOSURE. The Advisory Committee
------------------------
shall file all reports and forms lawfully required to be filed by the
Advisory Committee with any governmental agency or department, federal
or state, and shall distribute any forms, reports, statements or plan
descriptions lawfully required to be distributed to Participants and
others by any governmental agency or department, federal or state.
(e) INVESTMENT. The Advisory Committee shall keep itself
----------
advised with respect to the investment of the Trust Fund and shall
report to the Employer regarding the investment and reinvestment of
the Trust Fund not less frequently than annually. The Advisory
Committee shall have power to direct specific investments of the Trust
Fund only where such power is expressly conferred by this Plan and
only to the extent described in this Plan. All other investment
duties shall be the responsibility of the Trustee. Notwithstanding
anything set forth in the Plan or the Trust Agreements to which the
Administrative Trustees and/or the ESOP Trustees are parties, no
purchase of Employer Securities shall be made by the ESOP Trustees
without their first obtaining a recommendation from the Advisory
Committee stating: (1) that the Advisory Committee recommends that
the ESOP Trustees acquire shares of Employer Securities, and (2) upon
the terms and conditions which they recommend such shares be acquired.
Before making such recommendation, the Advisory Committee shall take
into account such items as they deem appropriate, including, but not
limited to, their reviewing appraisals and financial statements of the
Employer.
<PAGE>
12.3. CLAIMS.
------
(a) FILING OF CLAIM. A Participant or Beneficiary
---------------
entitled to benefits need not file a written claim to receive
benefits. If an Employee, Participant, Beneficiary or any other
person is dissatisfied with the determination of his benefits,
eligibility, participation or any other right or interest under this
Plan, such person may file a written statement setting forth the basis
of the claim with the Advisory Committee in a manner prescribed by the
Advisory Committee. In connection with the determination of a claim,
or in connection with review of a denied claim, the claimant may
examine this Plan and any other pertinent documents generally
available to Participants relating to the claim and may submit
comments in writing.
(b) NOTICE OF DECISION. A written notice of the
------------------
disposition of any such claim shall be furnished to the claimant
within thirty (30) days after the claim is filed with the Advisory
Committee, provided that the Advisory Committee may have an additional
period to decide the claim if it advises the claimant in writing of
the need for an extension and the date on which it expects to decide
the claim. The notice of disposition of a claim shall refer, if
appropriate, to pertinent provisions of this Plan, shall set forth in
writing the reasons for denial of the claim if the claim is denied
(including references to any pertinent provisions of this Plan), and
where appropriate shall explain how the claimant can perfect the
claim.
(c) REVIEW. If the claim is denied, in whole or in part,
------
the claimant shall also be notified in writing that a review procedure
is available. Thereafter, within ninety (90) days after receiving the
written notice of the Advisory Committee's disposition of the claim,
the claimant may request in writing, and shall be entitled to, a
review meeting with the Advisory Committee to present reasons why the
claim should be allowed. The claimant shall be entitled to be
represented by counsel at the review meeting. The claimant also may
submit a written statement of his claim and the reasons for granting
the claim. Such statement may be submitted in addition to, or in lieu
of, the review meeting with the Advisory Committee. The Advisory
Committee shall have the right to request of and receive from a
claimant such additional information, documents or other evidence as
the Advisory Committee may reasonably require. If the claimant does
not request a review meeting within ninety (90) days after receiving
written notice of the Advisory Committee's disposition of the claim,
the claimant shall be deemed to have accepted the Advisory Committee's
written disposition, unless the claimant shall have been physically or
mentally incapacitated so as to be unable to request review within the
ninety (90) day period.
(d) DECISION FOLLOWING REVIEW. A decision on review shall
-------------------------
be rendered in writing by the Advisory Committee ordinarily not later
than sixty (60) days after review, and a written copy of such decision
shall be delivered to the claimant. If special circumstances require
an extension of the ordinary period, the Advisory Committee shall so
notify the claimant. In any event, if a claim is not determined
within one hundred twenty (120) days after submission for review, it
shall be deemed to be denied.
<PAGE>
(e) DECISIONS FINAL; PROCEDURES MANDATORY. To the extent
-------------------------------------
permitted by law, a decision on review by the Advisory Committee shall
be binding and conclusive upon all persons whomsoever. To the extent
permitted by law, completion of the claims procedures described in
this Section shall be a mandatory precondition that must be complied
with prior to commencement of a legal or equitable action in
connection with the Plan by a person claiming rights under the Plan or
by another person claiming rights through such a person. The Advisory
Committee may, in its sole discretion, waive these procedures as a
mandatory precondition to such an action.
12.4. THE TRUSTEES.
------------
The Administrative Trustee shall be appointed under and
shall be governed by the provisions of the Trust Agreement and the
ESOP Trustees shall be appointed under and shall be governed by the
provisions of the ESOP Trust Agreement.
12.5. SCOPE OF RESPONSIBILITY.
-----------------------
(a) GENERAL. The Corporation and other Employers, the
-------
Advisory Committee and the Trustees shall perform the duties
respectively assigned to them under the Plan, the Trust Agreement, or
the ESOP Trust Agreement or pursuant to the written directions of the
Board, and shall not be responsible for performing duties assigned to
others under the terms and provisions of the Plan or the Trust
Agreement or the ESOP Trust Agreement or assigned to others pursuant
to the written directions of the Board. No inference of approval or
disapproval is to be made from the inaction of any party described
above or the employee or agent of any of them with regard to the
action of any other such party.
(b) CONFLICTS. No member of the Advisory Committee may
---------
act, vote or otherwise influence the Advisory Committee regarding his
own eligibility, participation, status or rights under the Plan.
(c) ADVISORS. The Corporation shall have the authority to
--------
employ advisors, legal counsel, accountants and investment managers in
connection with the administration of the Plan, and may delegate to
other Employers, the Advisory Committee and/or the Trustees' authority
to employ such persons. To the extent permitted by applicable law,
the Corporation, other Employers, the Advisory Committee and the
Trustees shall not be liable for complying with the directions of any
advisors, legal counsel, accountants and investment managers appointed
pursuant to this Section. The Corporation, other Employers, the
Advisory Committee and the Trustees shall not be responsible or liable
for any loss resulting from the investment directions of Participants
and do not guarantee the Trust Fund against investment loss or
depreciation in asset value.
(d) MULTIPLE CAPACITIES. Persons, organizations or
-------------------
corporations acting in a position of any fiduciary responsibility with
respect to the Plan and/or the Trust Fund may serve in more than one
(1) fiduciary capacity.
<PAGE>
(e) ALLOCATION OF RESPONSIBILITIES. The Corporation or
------------------------------
the Advisory Committee from time to time may allocate to one (1) or
more of the members of the Advisory Committee and may delegate to any
other persons or organizations any of the rights, powers, duties and
responsibilities of the Corporation or the Advisory Committee,
respectively, with respect to the operation and administration of the
Plan, and the Corporation may employ and authorize any person to whom
any of its fiduciary responsibility has been delegated to employ
persons to render advice with regard to any fiduciary responsibility
held hereunder. Any such allocation and delegation shall be reviewed
at least annually by the Corporation and shall be terminable upon such
notice as the Corporation, in its sole discretion, deems reasonable
and prudent under the circumstances.
(f) INDEMNIFICATION. To the extent permitted by law, the
---------------
Employers shall and do hereby jointly and severally indemnify and
agree to hold harmless their employees, agents and members of the
Advisory Committee, from all loss, damage or liability, joint or
several (including payment of expenses in connection with defense
against any such claim), for their acts, omissions and conduct, and
for the acts, omissions and conduct of their duly appointed agents,
which acts, omissions or conduct constitute or are alleged to
constitute a breach of such individual's fiduciary or other
responsibilities under the Act or any other law, except for those
acts, omissions or conduct resulting from his own willful misconduct,
willful failure to act, or gross negligence; provided, however, that
if any party would otherwise be entitled to indemnification hereunder
in respect of any liability and such party shall be insured against
loss as a result of such liability by any insurance contract or
contracts, such party shall be entitled to indemnification hereunder
only to the extent by which the amount of such liability shall exceed
the amount thereof payable under such insurance contract or contracts.
(g) INSURANCE. The Employers may obtain insurance
---------
covering themselves and others for breaches of fiduciary obligations
under this Plan to the extent permitted by law, and nothing in this
Plan shall restrict the right of any person to obtain such insurance
for himself in connection with the performance of his duties under
this Plan. The Corporation and the Advisory Committee shall be the
Named Fiduciaries under the Plan, and the Corporation shall be the
plan administrator.
12.6. EXPENSES.
--------
Any brokerage commissions, transfer taxes and other charges
and expenses in connection with the purchase and sale of securities or
other property for a Fund shall be charged to such Fund. Any income
taxes or other taxes payable with respect to a Fund shall likewise be
charged to that Fund. Any other expenses associated with the
administration of the Plan or the Trust Fund shall be paid from the
Trust Fund if not paid by the Corporation or an Affiliated Company.
<PAGE>
12.7. TRUST AGREEMENTS.
----------------
The Board shall maintain a Trust Agreement pursuant to which
the Administrative Trustee shall be appointed providing for the
general administration of the Trust Fund in such form as the Board may
deem appropriate. The Board shall also maintain an ESOP Trust
Agreement pursuant to which the ESOP Trustees shall be appointed
providing for the administration of the ESOP Fund in such form and
containing such provisions as the Board may deem appropriate. To the
extent that duties have been allocated to the ESOP Trustees under the
ESOP Trust Agreement, such duties shall not be the responsibility of
the Administrative Trustee, and to the extent that duties have been
allocated to the Administrative Trustee under the Trust Agreement such
duties shall not be the responsibility of the ESOP Trustees. The
Trust Agreement and the ESOP Trust Agreement shall contain such terms
as the Board may deem appropriate, including, but not limited to,
provisions with respect to the powers and authority of the
Administrative Trustee or the ESOP Trustee or the ESOP Trust
Agreement, and the authority of the Board to amend the Trust
Agreement, to terminate the trust and to settle the accounts of the
Administrative Trustee or the ESOP Trustee on behalf of all persons
having an interest in the Trust Fund or the ESOP Fund. The Trust
Agreement and the ESOP Trust Agreement shall form a part of the Plan
and any and all rights and benefits which may accrue to any persons
under the Plan shall be subject to all the terms and provisions of the
Trust Agreement and the ESOP Trust Agreement.
12.8. VOTING OF EMPLOYER SECURITIES.
-----------------------------
(a) GENERAL RULE. Except as otherwise provided herein,
------------
and unless such responsibilities or duties are properly delegated to a
named fiduciary or investment manager other than the ESOP Trustee, the
ESOP Trustee shall vote all voting Employer Securities held as assets
of the ESOP Fund in its discretion.
(b) VOTING PASS THROUGH. Notwithstanding anything to the
-------------------
contrary in paragraph (a) above, and subject to the limitations
contained in paragraph (f) herein, a Participant (or the Beneficiary
if the Participant has died) shall direct the ESOP Trustee, or an
agent designated by the ESOP Trustee for that purpose, with respect to
the voting of shares of the Employer Securities allocated to the
Participant's Accounts to the extent that, and with respect to matters
for which, Participants are granted pass through voting rights as
provided in paragraphs (c) or (d), whichever is applicable. The pass
through voting rights provided herein shall not apply to, and the ESOP
Trustee shall be responsible for voting in its discretion, shares of
Employer Securities which are not yet allocated to Participants'
Accounts. Similarly, the ESOP Trustee shall retain responsibility for
voting in its discretion, shares of Employer Securities which are
subject to the pass through voting rights provided herein to the
extent that Participants fail to give directions with respect to such
allocated shares. Notwithstanding the foregoing, nothing in this
Section 12.8 shall prohibit delegation of the ESOP Trustee's voting
responsibilities or duties to another named fiduciary or investment
manager to the extent permitted by, and in accordance with, the Act.
To the extent permitted by law, the ESOP Trustee shall not be liable
for following the proper directions of Participants, an investment
manager, or another named fiduciary in accordance with the rules
herein.
<PAGE>
(c) NO REGISTRATION-TYPE CLASS OF SECURITIES. If the
----------------------------------------
Corporation does not have a "registration-type class of securities,"
the voting pass through rights provided in paragraph (b) above shall
apply to all voting Employer Securities allocated to Participant
Accounts with respect to all matters involving approval or disapproval
of any corporate merger or consolidation, recapitalization,
reclassification, liquidation, dissolution, sale of substantially all
the assets of a trade or business, or any similar transaction (as
defined in the applicable regulations under Section 409(e)(3) of the
Code).
(d) REGISTRATION-TYPE CLASS OF SECURITIES. If the
-------------------------------------
Corporation has a "registration-type class of securities", the voting
pass through rights provided in paragraph (b) above shall apply to all
voting Employer Securities allocated to Participant Accounts with
respect to all matters submitted to shareholders for their vote.
(e) PROXY MATERIALS; VOTING DIRECTION. Prior to the
---------------------------------
holding of any annual or special meeting of the shareholders of the
Corporation at which such matters are to be voted upon, the ESOP
Trustee, or an agent designated by the ESOP Trustee for that purpose,
shall verify that the Corporation or its agent has sent to each
Participant (or Beneficiary if the Participant has died) entitled to
pass through voting rights as described herein, a proxy statement
and/or other neutral information which the ESOP Trustee deems
appropriate in order to provide Participants necessary and accurate
information regarding the voting decisions being passed through,
together with a form to be returned to the ESOP Trustee or its
designated agent instructing the ESOP Trustee to vote the shares of
Employer Securities allocated to the Participant's Accounts in
accordance with the Participant's wishes. Alternatively, or if the
Corporation fails to provide such information, the ESOP Trustee shall
send or cause to be sent such information to Participants who are
entitled to direct the voting of Employer Securities hereunder. Each
Participant shall have the right to direct the ESOP Trustee how to
vote the number of votes attributable to the full and fractional
shares of Employer Securities that are subject to pass through voting
herein by completing the voting direction form and returning it to the
ESOP Trustee or its designated agent. If the ESOP Trustee, or its
designated agent, does not receive instructions from a Participant at
least two (2) days prior to such meeting, the ESOP Trustee shall vote
all of the Employer Securities attributable to the Accounts of such a
Participant, in its discretion, subject to the directions of the
independent fiduciary, if one has been appointed. If the ESOP Trustee
has designated an agent for purposes of this Section 12.8, the ESOP
Trustee may remove such agent and appoint a new agent, or exercise its
powers without the use of an agent, as it shall determine in its sole
discretion.
(f) VOTING RIGHTS OVERRIDE. Notwithstanding anything in
----------------------
this Section 12.8 to the contrary, the ESOP Trustee shall disregard
any Participant directions made under authority of paragraph (b), and
vote any Employer Securities subject to such directions in the ESOP
Trustee's sole discretion, to the extent required by the Act or the
Code.
(g) REGISTRATION-TYPE CLASS OF SECURITIES DEFINED. For
---------------------------------------------
purposes of this Section 12.8, the phrase "registration-type class of
securities" means:
<PAGE>
(1) a class of securities required to be registered
under section 12 of the Security Exchange Act of 1934, and
(2) a class of securities which would be required to
be so registered except for the exemption from registration
provided in subsection (g)(2)(H) of such section 12.
12.9. SECURITIES REGISTRATION.
-----------------------
In the event that, in the opinion of counsel for the
Corporation or the Advisory Committee, any acquisition, sale or
distribution of Employer Securities shall be made in circumstances
requiring registration of the securities or Participants' interests in
the Trust Fund under the Securities Act of 1933 or qualification of
the securities under the "blue sky" laws of any state or states, or
requiring any other form of compliance with Federal or state
securities laws, then the Employers may, in their sole discretion and
at their own expense, take or cause to be taken any and all such
action as may be necessary or appropriate to effect such registration,
qualification or other form of compliance, but shall not be required
to take such action.
12.10. SECURITIES RESTRICTIONS.
-----------------------
The Advisory Committee may, in its sole discretion and
subject to ARTICLE SEVEN, condition delivery of Employer Securities
distributable pursuant to ARTICLE ELEVEN upon delivery by the
Participant to the Advisory Committee of a written statement, in such
form as the Advisory Committee may reasonably require, containing all
or any of the following:
(a) A certification that he is acquiring the Employer
Securities for his own account and not with a view to or for sale in
connection with any distribution of such shares;
(b) An acknowledgment that the Employer Securities are
being acquired in a transaction not involving any public offering and
without being registered under the Securities Act of 1933 and that the
shares may not be sold except in a transaction that complies with the
requirements of the Securities Act of 1933 and the rules and
regulations promulgated thereunder;
(c) An acknowledgment that his right to transfer such
Employer Securities and the right of any person to acquire such
Employer Securities may be restricted by the provisions of this
ARTICLE TWELVE and/or ARTICLE SEVEN of this Plan, and that the
certificates evidencing the Employer Securities may contain a legend
setting forth or referring to the various restrictions to which
transfer of such Employer Securities are or may be subject;
(d) An acknowledgment that the Employer Securities are
being acquired in a private transaction, that such shares have not
been registered under the Securities Act of 1933 and that the
Corporation, Administrative Trustee, ESOP Trustees and Advisory
Committee have neither the obligation or the intention to effect any
such registration and therefore such Employer Securities must be held
<PAGE>
by the distributee indefinitely and without any market therefor unless
the shares are subsequently registered under the Securities Act of
1933 or an exemption from the registration provisions of such Act is
available; and
(e) An acknowledgment, if appropriate, that he has been
advised that Rule 144 under the Securities Act of 1933 (which Rule
permits sales of securities in limited amounts in accordance with the
terms and conditions of such Rule) or any successor thereto may not be
applicable to resales of the Employer Securities, and that no
assurance has been given him as to whether or when there may be any
registration statement under such Act covering the Employer Securities
being distributed, or whether or when such Rule or any other exemption
from the requirements for registration under such Act might be
applicable.
ARTICLE THIRTEEN
----------------
AMENDMENT, MERGER AND TERMINATION
---------------------------------
13.1. AMENDMENT OF PLAN AND TRUST AGREEMENTS.
--------------------------------------
The Plan, the Trust Agreement and the ESOP Trust Agreement
may be amended at any time and from time to time by an instrument in
writing executed pursuant to authority granted by the Board. Upon
delivery to the Advisory Committee by the Corporation of such
instrument and of evidence of such authority, the Plan, the Trust
Agreement and the ESOP Trust Agreement shall be deemed to have been
amended in the manner and to the extent therein set forth. No
amendment shall substantially increase the duties and liabilities of
the members of the Advisory Committee then serving without their
written consent. Any such amendment may be in whole or in part and
may be prospective or retroactive; provided, however, that no
amendment shall be effective to the extent it shall have the effect of
reverting to the Corporation or any other Employer the whole or any
part of the principal or income of the Trust Fund or of diverting any
part of the principal or income of the Trust Fund to purposes other
than for the exclusive benefit of the Participants or their
Beneficiaries. No such amendment shall diminish the rights of any
Participant with respect to contributions made by him prior to the
date of such amendment.
13.2. MERGER OR CONSOLIDATION.
-----------------------
In the event of merger or consolidation of this Plan with
another stock bonus plan, employee stock ownership plan, profit
sharing plan, pension plan or other plan, or a transfer of assets or
liabilities of the Trust Fund to any other such fund, each Participant
shall have a right to a benefit immediately after such merger,
consolidation or transfer (if the Plan was then terminated) that is at
least equal to, and may be greater than, the benefit to which he had a
right immediately before such merger, consolidation or transfer (if
the Plan was then terminated).
<PAGE>
13.3. DISCONTINUANCE AND TERMINATION OF PLAN.
--------------------------------------
The Board shall have the right to terminate the Plan and to
direct distribution of the Trust Fund. In the event of termination of
the Plan, the Board shall have the power to terminate contributions by
appropriate resolution. A certified copy of such resolution or
resolutions shall be delivered to the Advisory Committee. In the
event of termination of the Plan or discontinuance of contributions
(and the Employer does not establish or maintain a successor defined
contribution plan, in accordance with the provisions set forth in
Treasury Regulations Section 1.401(k)-1(d)(3)), the Board may direct
the Advisory Committee to instruct the Administrative Trustee and the
ESOP Trustees to make distribution to the Participants as soon as
practicable in the same manner as if their employment with the
Employer had then terminated (provided that in any event distribution
of the Trust Fund may be delayed pending liquidation of any loan
obligation entered into pursuant to ARTICLE SEVEN), or the Board may
direct that the Plan shall be continued without any further
contributions. No distributions shall be made after termination of
contributions by the Employers until a reasonable time after the
Corporation has received from the United States Treasury Department a
determination under the provisions of the Code as to the effect of
such termination or discontinuance upon the qualification of the Plan.
In the event such determination is unfavorable, then prior to making
any distributions hereunder, the Administrative Trustee and the ESOP
Trustees shall pay any Federal or state income taxes due because of
the income of the Trust Fund and shall then distribute the balance in
the manner above provided. The Corporation may, by written notice
delivered to the Administrative Trustee, the ESOP Trustees and the
Advisory Committee, waive the Corporation's right hereunder to apply
for such a determination, and if no application for determination
shall have been made within sixty (60) days after the date specified
in the terminating resolution or after the date of discontinuance of
contributions, the Corporation shall be deemed to have waived such
right. A mere suspension of contributions by the Employers shall not
be construed by the Advisory Committee as a discontinuance thereof.
In the event of a complete or partial termination of the Plan, or
complete discontinuance of contributions under the Plan, the Account
balances of each affected Participant shall be non-forfeitable to the
extent funded.
13.4. SUCCESSORS.
----------
In case of the merger, consolidation, liquidation,
dissolution or reorganization of an Employer, or the sale by an
Employer of all or substantially all of its assets, provision may be
made by written agreement between the Corporation and any successor
corporation acquiring or receiving a substantial part of the
Employer's assets, whereby the Plan will be continued by the
successor. If the Plan is to be continued by the successor, then
effective as of the date of the applicable event the successor
corporation shall be substituted for the Employer under the Plan. The
substitution of a successor corporation for an Employer will not in
any way be considered a termination of the Plan.
<PAGE>
ARTICLE FOURTEEN
----------------
INALIENABILITY OF BENEFITS
--------------------------
14.1. NO ASSIGNMENT PERMITTED.
-----------------------
(a) GENERAL PROHIBITION. No Participant or Beneficiary,
-------------------
and no creditor of a Participant or Beneficiary, shall have any right
to assign, pledge, hypothecate, anticipate or in any way create a lien
upon the Trust Fund. All payments to be made to Participants or their
Beneficiaries shall be made only upon their personal receipt or
endorsement, except as provided in Section 11.7, and no interest in
the Trust Fund shall be subject to assignment or transfer or otherwise
be alienable, either by voluntary or involuntary act or by operation
of law or equity, or subject to attachment, execution, garnishment,
sequestration, levy or other seizure under any legal, equitable or
other process, or be liable in any way for the debts or defaults of
Participants and Beneficiaries.
(b) PERMITTED ARRANGEMENTS. This Section shall not
----------------------
preclude arrangements for the withholding of taxes from benefit
payments, arrangements for the recovery of benefit overpayments,
arrangements for the transfer of benefit rights to another plan, or
arrangements for direct deposit of benefit payments to an account in a
bank, savings and loan association or credit union (provided that such
arrangement is not part of an arrangement constituting an assignment
or alienation). A Participant may also grant the Administrative
Trustee a security interest in his Accounts as collateral for the
repayment of a loan to the Participant pursuant to and in accordance
with Section 6.5. Additionally, this Section shall not preclude: (1)
arrangements for the distribution of the benefits of a Participant or
Beneficiary pursuant to the terms and provisions of a Qualified
Domestic Relations Order in accordance with the following provisions
of this ARTICLE FOURTEEN; or (2) effective for Plan Years commencing
on or after August 5, 1997, the offsetting of benefits of a
Participant or Beneficiary as permitted by Code Section 401(a)(13)(C).
14.2. QUALIFIED DOMESTIC RELATIONS ORDERS.
-----------------------------------
(a) DEFINITIONS. A Qualified Domestic Relations Order is
-----------
any judgment, decree, or order (including an order approving a
property settlement agreement) which relates to the provision of child
support, alimony, or marital property rights to a spouse, child, or
other dependent of a Participant and which is entered or made pursuant
to the domestic relations or community property laws of any State and
which creates or recognizes the right of an "alternate payee" to
receive all or a portion of the benefits payable with respect to a
Participant under this Plan or assigns to an "alternate payee" the
right to receive all or a portion of said benefits. For purposes of
this ARTICLE FOURTEEN, an "alternate payee" is the spouse, former
<PAGE>
spouse, child or other dependent of a Participant who is recognized by
a Qualified Domestic Relations Order as having the right to receive
all or a portion of the benefits payable under the Plan with respect
to the Participant.
(b) REQUIREMENTS. In accordance with Section 414(p) of
------------
the Code, a judgment, decree or order (hereinafter collectively
referred to as an "order") shall not be treated as a Qualified
Domestic Relations Order unless it satisfies all of the following
conditions:
(1) The order clearly specifies the name and last
known mailing address (if any) of the Participant and the
name and last known mailing address of each alternate payee
covered by the order, the amount or percentage of the
Participant's benefits to be paid to each alternate payee or
the manner in which such amount or percentage is to be
determined, and the number of payments or period to which
such order applies.
(2) The order specifically indicates that it applies
to this Plan.
(3) The order does not require this Plan to provide
any type or form of benefit, or any option, not otherwise
provided under the Plan, and it does not require the Plan to
provide increased benefits (determined on the basis of
actuarial value).
(4) The order does not require the payment of
benefits to an alternate payee which are required to be paid
to another alternate payee under another order previously
determined to qualify as a Qualified Domestic Relations
Order.
14.3. EARLY COMMENCEMENT OF PAYMENTS TO ALTERNATE PAYEES.
--------------------------------------------------
(a) EARLY PAYMENTS. An order requiring payment to an
--------------
alternate payee before a Participant has separated from employment may
qualify as a Qualified Domestic Relations Order even if it requires
payment prior to the Participant's "earliest retirement age." For
purposes of this Section, "earliest retirement age" shall mean the
earlier of (i) the date on which the Participant attains age fifty
(50) or (ii) the earliest date on which the Participant could begin
receiving benefits under the Plan if the Participant separated from
service. If the Order requires payments to commence prior to a
Participant's actual retirement, the amounts of the payments must be
determined as if the Participant had retired on the date on which such
payments are to begin under such order, but taking into account only
the present account balances at that time.
(b) ALTERNATE PAYMENT FORMS. The order may call for the
-----------------------
payment of benefits to an alternate payee in any form in which
benefits may be paid under the Plan to the Participant, other than in
the form of a joint and survivor annuity with respect to the alternate
payee and his or her subsequent spouse.
<PAGE>
14.4. PROCESSING OF QUALIFIED DOMESTIC RELATIONS ORDERS.
-------------------------------------------------
(a) NOTICE. The Advisory Committee shall promptly notify
------
the Participant and any alternate payee who may be entitled to
benefits pursuant to a previously received Qualified Domestic
Relations Order of the receipt of any order which could qualify as a
Qualified Domestic Relations Order. At the same time, the Advisory
Committee shall advise the Participant and any alternate payees
(including the alternate payee designated in the order) of the
provisions of this Section relating to the determination of the
qualified status of such orders.
(b) QUALIFIED NATURE OF ORDER. Within a reasonable period
-------------------------
of time after receipt of a copy of the order, the Advisory Committee
shall determine whether the order is a Qualified Domestic Relations
Order and notify the Participant and each alternate payee of its
determination. The determination of the status of an order as a
Qualified Domestic Relations Order shall be made in accordance with
such uniform and nondiscriminatory rules and procedures as may be
adopted by the Advisory Committee from time to time. If benefits are
presently being paid with respect to a Participant named in an order
which may qualify as a Qualified Domestic Relations Order or if
benefits become payable after receipt of the order, the Advisory
Committee shall notify the Trustee to segregate and hold the amounts
which would be payable to the alternate payee or payees designated in
the order if the order is ultimately determined to be a Qualified
Domestic Relations Order. If the Advisory Committee determines that
the order is a Qualified Domestic Relations Order within eighteen (18)
months of receipt of the order, the Advisory Committee shall instruct
the Trustee to pay the segregated amounts (plus any earnings thereon)
to the alternate payee specified in the Qualified Domestic Relations
Order. If within the same eighteen (18) month period the Advisory
Committee determines that the order is not a Qualified Domestic
Relations Order or if the status of the order as a Qualified Domestic
Relations Order is not resolved, the Advisory Committee shall instruct
the Trustee to pay the segregated amounts (plus any earnings thereon)
to the person or persons who would have been entitled to such amounts
if the order had not been entered. If the Advisory Committee
determines that an order is a Qualified Domestic Relations Order after
the close of the eighteen (18) month period mentioned above, the
determination shall be applied prospectively only. The determination
of the Advisory Committee as to the status of an order as a Qualified
Domestic Relations Order shall be binding and conclusive on all
interested parties, present and future, subject to the claims review
provisions of Section 12.3.
14.5. RESPONSIBILITY OF ALTERNATE PAYEES.
----------------------------------
Any person claiming to be an alternate payee under a
Qualified Domestic Relations Order shall be responsible for supplying
the Advisory Committee with a certified or otherwise authenticated
copy of the order and any other information or evidence that the
Advisory Committee deems necessary in order to substantiate the
individual's claim or the status of the order as a Qualified Domestic
Relations Order.
<PAGE>
ARTICLE FIFTEEN
---------------
GENERAL PROVISIONS
------------------
15.1. SOURCE OF PAYMENT.
-----------------
Benefits under the Plan shall be payable only out of the
Trust Fund and the Corporation and other Employers shall have no legal
obligation, responsibility or liability to make any direct payment of
benefits under the Plan. Neither the Corporation, any other Employer,
the Advisory Committee, the Administrative Trustee nor the ESOP
Trustees guarantee the Trust Fund against any loss or depreciation or
guarantees the payment of any benefits hereunder. No persons shall
have any rights under the Plan with respect to the Trust Fund or
against the Administrative Trustee, the ESOP Trustees, the Advisory
Committee, the Corporation or any Employer, except as specifically
provided for herein.
15.2. BONDING.
-------
The Corporation shall procure bonds for every "bondable
fiduciary" in an amount not less than ten percent (10%) of the amount
of funds handled and in no event less than One Thousand Dollars
($1,000.00), except the Corporation shall not be required to procure
such bonds if the person is exempted from the bonding requirement by
law or regulation or if the Secretary of Labor exempts the Trust from
the bonding requirements. The bonds shall conform to the requirements
of the Act and regulations thereunder. For purposes of this Section,
the term "bondable fiduciary" shall mean any person who handles funds
or other property of the Trust Fund.
15.3. EXCLUSIVE BENEFIT.
-----------------
Except as otherwise provided herein or in the Trust
Agreement or the ESOP Trust Agreement, it shall be impossible for any
part of the Trust Fund to be used for or diverted to purposes other
than for the exclusive benefit of Participants and their
Beneficiaries, except that payment of taxes and administration
expenses may be made from the Trust Fund as provided in the Trust
Agreement.
15.4. UNIFORM ADMINISTRATION; EXERCISE OF DISCRETION.
----------------------------------------------
Whenever in the administration of the Plan any action is
required by the Advisory Committee, including, but not limited to,
action with respect to valuation, such action shall be uniform in
nature as applied to all persons similarly situated and no such action
shall be taken which will discriminate in favor of Highly Compensated
Employees. All actions to be taken by the Advisory Committee, the
Administrative Trustee or the ESOP Trustees shall be taken in the
exercise of their discretion and shall be binding and conclusive on
all persons.
<PAGE>
15.5. NO RIGHT TO EMPLOYMENT.
----------------------
Participation in the Plan or as a Beneficiary shall not give
any person the right to be retained in the employ of the Corporation
or any other Employer nor, upon dismissal, to have any right or
interest in the Trust Fund other than as provided in the Plan.
15.6. HEIRS AND SUCCESSORS.6. HEIRS AND SUCCESSORS.
--------------------------------------------
All of the provisions of this Plan shall be binding upon all
persons who shall be entitled to any benefits hereunder, and their
heirs and legal representatives.
15.7. ASSUMPTION OF QUALIFICATION.
---------------------------
Unless and until advised to the contrary, the Administrative
Trustee and the ESOP Trustees may assume that the Plan is a qualified
plan under the provisions of the Code relating to such plans, and that
the Trust Fund is entitled to exemption from income tax under such
provisions.
15.8. EFFECT OF AMENDMENT.
-------------------
This Plan is not a new plan succeeding the Plan as
constituted prior to the Effective Date, but is an amendment and
restatement of the Plan as so constituted. The amount, right to and
form of any benefits under this Plan, if any, of each person who is an
Employee after the Effective Date, or the persons who are claiming
through such an Employee, shall be determined under this Plan. The
amount, right to and form of benefits, if any, of each person who
separated from employment with the Employer prior to the Effective
Date, or of persons who are claiming benefits through such a former
Employee, shall be determined in accordance with the provisions of the
Plan in effect on the date of termination of his employment, except as
may be otherwise expressly provided under this Plan, unless he shall
again become an Employee after the Effective Date.
15.9. COMPLIANCE WITH SECTION 414(U) OF THE CODE. Notwithstanding any
------------------------------------------
provision of the Plan to the contrary, contributions, benefits and
service credit with respect to qualified military service will be
provided in accordance with Section 414(u) of the Code effective
December 12, 1994.
IN WITNESS WHEREOF, AMERCO has caused this Plan to be
executed and its corporate seal to be hereunto affixed by its duly
authorized officers, this 13th day of May, 1998.
AMERCO
By /S/ EDWARD J. SHOEN
---------------------------
Its President
---------------------------
ATTEST:
By /S/ GARY V. KLINEFELTER
---------------------------
Its Secretary
---------------------------
