AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 1, 1994
REGISTRATION NO.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
Form S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
INTERNATIONAL FLAVORS & FRAGRANCES INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-1432060
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
521 WEST 57TH STREET, NEW YORK, N.Y. 10019
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
-------------------
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
(EXACT NAME OF PLAN)
-------------------
STEPHEN A. BLOCK, ESQ., VICE-PRESIDENT, LAW & SECRETARY
INTERNATIONAL FLAVORS & FRAGRANCES INC.
521 WEST 57TH STREET
NEW YORK, N.Y. 10019
(212) 765-5500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPY TO:
GEORGE ROWE, JR., ESQ.
FULTON, DUNCOMBE & ROWE
30 ROCKEFELLER PLAZA
NEW YORK, N.Y. 10112
-------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PRICE PER UNIT OFFERING PRICE FEE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.12 1/2 par value (1).. 500,000 Shs.(2) $38.5625(3) $19,281,250(3) $6,649
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
(2) Estimated number of shares that could be purchased under the Plan.
(3) Pursuant to Rule 457(c) and (h), the proposed maximum offering price is
estimated, solely for the purpose of determining the registration fee, on
the basis of the average high and low prices of Registrant's Common Stock
reported in the consolidated reporting system on June 27, 1994.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) Registrant's annual report on Form 10-K, dated March 25, 1994, for
the year ended December 31, 1993.
(b) All other filings by the Registrant pursuant to Sections 13(a) or
15(d) of the Securities Exchange Act of 1934, since the end of the year
covered by the annual report referred to in (a) above.
(c) The description of the Registrant's Common Stock contained in its
registration statement filed under Section 12 of the Securities Exchange
Act of 1934, including any amendment or reports filed for the purpose of
updating such description, and which is more recently described in the
Registrant's Certificate of Incorporation filed as an exhibit to the
Registrant's Annual Report on Form 10-K for the year ended December 31,
1993.
All documents filed by Registrant pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934 subsequent to the
filing hereof and prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the
date of filing such documents.
Item 4. Description of Securities
Not Applicable
Item 5. Interests of Named Experts and Counsel
Not Applicable
Item 6. Indemnification of Directors and Officers
On July 24, 1986, New York substantially revised the provisions of the New
York Business Corporation Law ("BCL") to permit New York corporations to extend
broader protection to their directors and officers by way of indemnity and
advancement of expenses than that previously afforded by New York law. On
October 31, 1986, the Board of Directors of the Registrant amended the
Registrant's by-laws to extend such indemnification and advancement of expenses
to its directors and officers. Article II, Section 14 of the Registrant's
by-laws, as amended, provides among other things that a corporation may
indemnify a person against judgments, fines, amounts paid in settlement and
reasonable expenses arising out of litigation, to which such person shall have
been made a party by reason of the fact he is or was a director or officer of
the corporation, unless a judgment or other final adjudication adverse to such
person establishes that his acts were committed in bad faith or were the result
of active and deliberate dishonesty and were material to the action so
adjudicated, or that he personally gained in fact a personal profit or other
advantage to which he was not entitled. The by-laws also permit the Registrant
to advance litigation expenses of such director or officer upon receipt of an
undertaking to repay such advances if the director or officer is ultimately
determined not to be entitled to indemnification.
In July 1987, New York added Section 402(b) to the BCL which permits New
York corporations, with shareholder approval, to amend their certificates of
incorporation in order to eliminate or limit the personal liability of directors
to a corporation and its shareholders for damages arising from breaches of the
directors' duty. On May 13, 1988, the Registrant amended its Certificate of
Incorporation by adding a new Article XI which had been approved by the
shareholders on May 12, 1988. Article XI provides that no director of the
Registrant shall be personally liable to the Registrant or its shareholders for
damages for any breach of duty as a director. Article XI does not permit
elimination or limitation of the liability of any director if a judgment or
other final adjudication adverse to him establishes that (i) his acts or
omissions were in bad faith or involved intentional misconduct or a knowing
violation of law or that he personally derived a financial profit or other
advantage to which he was not legally entitled, or (ii) that
II-1
<PAGE>
his action involved (a) an improper declaration of any dividend or other
distribution, (b) an improper redemption by the Registrant of its own
shares, (c) the distribution of assets to shareholders after dissolution,
without paying or adequately providing for, with certain exceptions, known
liabilities of the Registrant or (d)the making of an improper loan to a
director. Article XI also does not authorize any limitation on the ability of
the Registrant or its shareholders to obtain injunctive relief, specific
performance or other equitable remedies, and would not apply to acts or
omissions which occurred prior to the filing of the amendment to the
Registrant's Certificate of Incorporation containing the limitation on
directors' liability.
On December 9, 1975, the Registrant's Board of Directors adopted a
resolution pursuant to which the Registrant is obligated to indemnify, to the
extent permitted by law, any director, officer or employee of the Registrant
against any liability arising out of claims under the Employee Retirement Income
Security Act of 1974.
Item 7. Exemption from Registration Claimed
Not Applicable
Item 8. Exhibits
4(a) --Restated Certificate of Incorporation (incorporated by reference to
Exhibit 3 to Registrant's Report on Form 10-K for the year ended
December 31, 1993)
4(b) --By-laws (incorporated by reference to Exhibit 3(b) to Registrant's
Report on Form 10-K for the year ended December 31, 1993).
4(c) --Shareholder Protection Rights Agreement dated as of February 20,
1990 between Registrant and the Bank, of New York, as Rights Agent,
incorporated by reference to Exhibit 4 to Registrant's Report on
Form 8-K dated February 13, 1990.
4(d) --Amendment No. 1 dated as of April 6, 1990 to Shareholder Protection
Rights Agreement, incorporated by reference to Exhibit 4 to
Registrant's Report on Form 10-Q dated May 14, 1990.
4(e) --Amendment No. 2 dated as of March 8, 1994 to Shareholder Protection
Rights Agreement, incorporated by reference to Exhibit 4(c) to
Registrant's Report on Form 10-K for year ended December 31, 1993.
4(f) --Specimen certificates of Registrant's Common Stock bearing legend
notifying of Shareholder Protection Rights Agreement, incorporated
by reference to Exhibit 4(b) to Registrant's Report on Form 10-K for
year ended December 31, 1989.
4(g) --Registrant's Retirement Investment Fund Plan.
23 --Consent of Price Waterhouse.
24 --Powers of Attorney authorizing George Rowe, Jr. and Stephen A.
Block to sign this Registration Statement and amendments thereto on behalf of
certain directors and officers of Registrant.
Item 9. Undertakings
The undersigned Registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement (i) to include any prospectus required by section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any
facts or events arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
the Registration Statement; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement, provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are
II-2
<PAGE>
incorporated by reference in the Registration Statement; (2) that, for the
purpose of determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
INTERNATIONAL FLAVORS & FRAGRANCES INC., CERTIFIES THAT IT HAS REASONABLE
GROUNDS TO BELIEVE THAT IT MEETS ALL THE REQUIREMENTS FOR FILING ON FORM S-8
AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY
THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, AND STATE
OF NEW YORK, ON THE 30TH DAY OF JUNE, 1994.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By /S/ EUGENE P. GRISANTI
---------------------------------------
EUGENE P. GRISANTI, PRESIDENT
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED:
PRINCIPAL EXECUTIVE OFFICER:
EUGENE P. GRISANTI
PRESIDENT
PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:
THOMAS H. HOPPEL
VICE PRESIDENT AND TREASURER
DIRECTORS:
MARGARET HAYES ADAME By /S/ STEPHEN A. BLOCK
ROBIN CHANDLER DUKE --------------------------------
RICHARD M. FURLAUD STEPHEN A. BLOCK
EUGENE P. GRISANTI ATTORNEY-IN-FACT
THOMAS H. HOPPEL
GEORGE ROWE, JR.
STANLEY M. RUMBOUGH, JR. June 30, 1994
HENRY P. VAN AMERINGEN
HENDRIK C. VAN BAAREN
WILLIAM D. VAN DYKE, III
ORIGINAL POWERS OF ATTORNEY AUTHORIZING GEORGE ROWE, JR. AND STEPHEN A.
BLOCK, AND EACH OF THEM, TO SIGN THIS REGISTRATION STATEMENT AND ANY AMENDMENTS
HERETO ON BEHALF OF CERTAIN DIRECTORS AND OFFICERS OF THE REGISTRANT HAVE BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
II-4
<PAGE>
THE PLAN. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
TRUSTEES (OR OTHER PERSONS WHO ADMINISTER THE PLAN) HAVE DULY CAUSED THIS
REGISTRATION TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED IN THE CITY OF NEW YORK, STATE OF NEW YORK, ON JUNE 30, 1994.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
RETIREMENT INVESTMENT FUND PLAN
By
--------------------------------------------------------
STEPHEN A. BLOCK, MEMBER OF THE ADMINISTRATIVE COMMITTEE
II-5
<PAGE>
EXHIBIT INDEX
Exhibit
- -------
4(g) Registrant's Retirement Investment Fund Plan ............
23 Consent of Price Waterhouse .............................
24 Powers of Attorney authorizing George Rowe, Jr.
and Stephen A. Block to sign this Registration
Statement and amendments thereto on behalf of
certain directors and officers of Registrant ............
Exhibit 4(g)
Non-Standardized Safe Harbor Adoption Agreement (Short Version)
ADOPTION AGREEMENT FOR THE
VANGUARD PROTOTYPE 401(k) SAVINGS PLAN
Please complete the following:
EMPLOYER INTERNATIONAL FLAVORS & FRAGRANCES INC.
BUSINESS ADDRESSS 521 WEST 57TH STREET
NEW YORK, NY 10019
TELEPHONE NUMBER (212) 765-5500
EMPLOYER TAX I.D. NUMBER 13-1432060
EMPLOYER FISCAL YEAR JANUARY 1 TO DECEMBER 31
NAME OF PLAN: The name of the Plan as adopted by the Employer is RETIREMENT
INVESTMENT FUND PLAN
EFFECTIVE DATE
(_) New Plan: If the Employer is adopting the Plan as a new plan for
its eligible Employees, the Effective Date of the Plan is
(_) Amended Plan: If the Employer is adopting the Plan as the amended
and restated version of an existing plan for its eligible
Employees, the Effective Date of the Amendment is May 1, 1994,
---------------
except that provisions mandated by TRA*
-----------------------------------
are effective as of January 1, 1989.
PLAN YEAR
The Plan Year shall be the 12-consecutive month period ending on the
last day of the calendar month of DECEMBER . (If no designation
--------------
is made, the Plan Year shall be the Employer's fiscal year.)
- --------------------------------------------------------------------------------
* The Tax Reform of 1986, the Omnibus Budget Reconciliation Act of 1986, the
Omnibus Budget Reconciliation Act of 1987 and the Revenue Reconciliation Act
of 1990.
<PAGE>
PLAN ADMINISTRATOR
The following individual(s) or committee has been appointed by the Employer
to serve as Plan Administrator for the Plan (if no designation is made, the
Employer shall be considered the Plan Administrator):
RETIREMENT INVESTMENT FUND PLAN
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ADMINISTRATIVE COMMITTEE
--------------------------------------------------------------------
(a) Specimen Signatures
Please provide the name(s), title(s) and specimen signature(s) of the
individual(s) authorized to act as, or on behalf of, the Plan Administrator:
(i) SEE ATTACHED
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Name Title
--------------------------------------------------------------------
Signature
(ii)
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Name Title
--------------------------------------------------------------------
Signature
(Use additional sheets, if necessary)
PLAN TRUSTEE
The following individual(s) or corporate fiduciary has been appointed by
the Employer to serve as Trustee for the Plan in accordance with the terms and
conditions of the Trust Agreement:
THE VANGUARD FIDUCIARY TRUST COMPANY
(i) --------------------------------------------------------------------
Name
VANGUARD FINANCIAL CENTER, VALLEY FORGE, PA 19482
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Address
(ii)--------------------------------------------------------------------
Name
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Address
(Use additional sheets, if necessary)
2
<PAGE>
SECTION I
PARTICIPATION REQUIREMENTS
(a) Eligible Employees
All Employees shall be eligible to participate in the Plan except the
following:
(_) No exclusions.
(_) Union Employees: Employees included in a unit of employees covered by
a collective bargaining agreement between the Employer and employee
representatives under which retirement benefits were the subject of
good faith bargaining. (For purposes of this exclusion, the term
"employee representatives" does not include any organization more than
half of whose members are owners, officers, or executives of the
Employer.)
(_) Nonresident aliens: Employees who are nonresident aliens and who
receive no earned income from the Employer which constitutes income
from sources within the United States.
(X) Employees described below: all Employees of a Domestic Affiliate that
has not adopted the Plan; and all Employees of any Foreign Affiliate,
except of a Foreign Affiliate on whose behalf IFF has entered into a
3121 Agreement concerning social security coverage under Section 3121
(1) of the Internal Revenue Code if such person is a citizen or
permanent resident of the United States and not a participant in a
pension plan of such affiliate except where required under foreign
law.
IMPORTANT: You may designate any categories of Employees to be excluded from
participation in the Plan (such as hourly-pay or salary-pay Employees,
Employees of a separate unit or division, Employees covered by a separate plan,
etc.). However, for tax qualification purposes, the Plan must satisfy the
-------------------------
minimum participation and coverage requirements of Sections 401(a)(26) and
- ---------------------------------------------------------------------------
4lO(b) of the Code.
- -------------------
(b) Minimum Age and Service Conditions
An Employee who is eligible to participate in the Plan shall be required to
satisfy the following minimum age and service conditions prior to the
commencement of participation in the Plan:
(X) No minimum age or service conditions.
(_) Minimum age condition: Employees shall be required to have attained
age __ (may not exceed age 21).
(_) Minimum service condition: Employees shall be required to have
completed one Year of Service.
3
<PAGE>
(c) Commencement of Participation
Employees who satisfy the participation requirements designated in (a) and
(b) above as of the Effective Date of the Plan shall commence participation (or
continue participation) in the Plan on the Effective Date. Employees who
satisty the participation requirements designated above after the Effective Date
shall commence participation in the Plan on their Entry Dates. For these
purposes, an Employee's Entry Date shall be:
(_) Prospective Payroll Entry Dates: The first day of the Employer's
regular payroll period following the date the Employee satisfies the
participation requirements designated above.
(_) Prospective Monthly Entry Dates: The first day of the calendar month
following the date the Employee satisfies the participation
requirements designated above.
(_) Prospective Quarterly Entry Dates: The first day of the calendar
quarter following the date the Employee satisfies the participation
requirements designated above.
(X) Prospective Semi-Annual Entry Dates: The earlier of (i) the first day
of the Plan Year or (ii) the first day of the seventh calendar month
of the Plan Year which coincides with or next follows the date the
Employee satisfies the participation requirements designated above.
(_) Annual Entry Date: The first day of the Plan Year nearest to the date
that the Employee satisfies the participation requirements designated
above.
(d) Service With Predecessor Employers
If Employees shall be credited with Years of Service for both eligibility
and vesting purposes for service with any predecessor employer, identify each
such predecessor employer below:
===============================================================================
SECTION 2
DEFINITION OF COMPENSATION
For purposes of the Plan, a Participant's Compensation shall be defined as
follows:
(_) Wages for federal tax withholding purposes: Compensation shall mean
all wages within the meaning of Section 3401(a) of the Code for
purposes of applying federal income tax withholding at the source,
determined without regard to rules which limit the remuneration
included in wages based on the nature or location of employment or the
services performed.
4
<PAGE>
(_) Wages for W-2 purposes: Compensation shall mean all wages within the
meaning of Section 3401(a) of the Code and all other payments of
compensation in the course of the Employer's trade or business for
which the Employer is required to furnish a written statement
(Form W-2) under Sections 6041(d) and 6051(a)(3) of the Code.
(_) Section 415 safe harbor compensation: Compensation shall mean
Compensation as defined in Article 11.l(b) of the Plan for purposes
of the limitations of Section 415 of the Code.
NOTE: Any one of the three "safe harbor" definitions of Compensation
set forth above will automatically satisfy the nondiscrimination
requirement of Section 414(s) of the Code. See IRS Reg. [sec.]
1.414(s)-1(c). You may designate an alternative definition of
Compensation below, provided that the definition is reasonable, does
not by design favor Highly Compensated Employees, and satisfies
the nondiscrimination test set forth in IRS Reg. [sec.]
1.414(s)-1(d).
(X) Exclusion of certain items: Compensation shall mean all wages within
the meaning of Section 3401(a) of the Code for purposes of applying
federal income tax withholding at the source, determined without
regard to rules which limit the remuneration included in wages based
on the nature or location of employment or the services performed, but
excluding the following items:
(X)~ Commissions
(X)~ Bonuses
(X)~ Overtime
(X)~ Other(specify):
shift differentials, and all other forms of fringe compensation or
benefits and any amount contributed for him by the Employer to any
public or private employee benefit plan or any employer non-elective
contributions made to his Plan.
(_) Other definition of Compensation (specify):
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--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
IMPORTANT: For purposes of determining the amounts of contributions
by or on behalf of Participants to the Plan, a Participant's
Compensation (under the definition selected above) is: (1)increased
by the Participant's Employee Pre-Tax Contributions to the Plan; and
(2) limited as required by law to an indexed $150,000 amount. See
Article 2.5 of the Plan.
5
<PAGE>
SECTION 3
EMPLOYEE PRE-TAX CONTRIBUTIONS
(a) Employee Pre-Tax Basic Contributions
(X)~ If this option is selected, a Participant may elect to make Employee
Pre-Tax Basic Contributions to the Plan in an amount up to 20%
(fill in the percentage or amount) of the Compensation otherwise
payable to the Participant.
(b) Employee Pre-Tax Supplemental Contributions
(_)~ If this option is selected, a Participant who has elected to make
Employee Pre-Tax Basic Contributions in the maximum amount permitted
under (a) above may also elect to make Employee Pre-Tax Supplemental
Contributions to the Plan in an amount up to (fill in the
percentage or amount) of the Compensation otherwise payable to the
Participant.
NOTE: This distinction between "Basic" and "Supplemental" Contributions is
appropriate for Employers who wish to make Employer Matching Contributions
under Section 5 below based on Employee Pre-Tax Basic Contributions, while
also permitting Participants to make "non-matched" Employee Pre-Tax
Supplemental Contributions.
(c) Employee Pre-Tax Bonus Contributions
(_) If this option is selected, a Participant may elect to make Employee
Pre-Tax Bonus Contributions to the Plan in an amount up to (fill
in the percentage or amount) of any bonus otherwise payable to the
Participant for the Plan Year.
NOTE: This option for Employee Pre-Tax Bonus Contributions is appropriate
for Employers who wish to permit Participants to defer different
percentages or amounts of their bonuses than their regular pay or who wish
to permit Participants to defer their bonuses on a different matching basis
than regular pay. Otherwise, bonuses will be eligible for reduction as
Employee Pre-Tax Basic and Supplemental Contributions (unless you exclude
bonuses from the definition of Compensation under Section 2 above). See
Article 4.2(h) of the Plan.
(d) Aggregate Limit on Employee Pre-Tax Contributions
(_) If this option is selected, the maximum amount of Employee Pre-Tax
Contributions (including Employee Pre-Tax Basic, Supplemental and
Bonus Contributions) which a Participant may elect to make for any
Plan Year shall not exceed (fill in the percentage or amount) of
the Participant's Compensation for the Plan Year.
6
<PAGE>
SECTION 4
EtMPLOYEE AFTER-TAX CONTRIBUTIONS
(_) If this option is selected, a Participant may elect to make Employee
After-Tax Contributions to the Plan for a Plan Year in an amount up to
(fill in the percentage or amount) of the Participant's Compensation
for the Plan Year.
(_) Coordination with Employee Pre-Tax Contributions: If this option is
selected, the maximum amount of Employee Pre-Tax Contributions and
Employee After-Tax Contributions which a Participant may elect to make
to the Plan for any Plan Year shall not exceed (fill in the percentage
or amount) of the Participant's Compensation for the Plan Year.
SECTION 5
EMPLOYER MATCHING CONTRIBUTIONS
(_) Fixed Formulas: If this option is selected, the Employer shall make
Employer Matching Contributions on behalf of each Participant for a
Plan Year equal to:
(1) (fill in the percentage or amount) of the amount of Employee Pre-Tax
Basic Contributions on behalf of the Participant for the Plan Year up
to (fill in the percentage or amount, if applicable) of the
Participant's Compensation for the Plan Year;
(2) (fill in the percentage or amount) of the amount of Employee Pre-Tax
Bonus Contributions on behalf of the Participant for the Plan Year up
to (fill in the percentage or amount; if applicable) of the
Participant's Compensation for the Plan Year; and
(3) (fill in the percentage or amount) of the amount of Employee After-Tax
Contributions by the Participant for the Plan Year up to (fill in the
percentage or amount, if applicable) of the Participant's Compensation
for the Plan Year.
(_) Discretionary Formula: If this option is selected, the Employer shall
make Employer Matching Contributions for each Plan Year in an amount
determined by the Employer in its sole discretion by resolution duly
adopted on or before the last day for filing its federal income tax
return, including extensions, for the taxable year with or within
which such Plan Year ends. Employer Matching Contributions shall be
allocated to the Employer Matching Contribution Accounts of
Participants in the proportion that each Participant's Employee
Pre-Tax Basic Contributions for the Plan Year bear to the total
Employee Pre-Tax Contributions of all Participants for the Plan Year.
(_) Other Formula: If this option is selected, the Employer shall make
Employer Matching Contributions for each Plan Year in an amount
determined as follows (describe the method for making Employer
Matching Contributions and allocating them to Participants' Employer
Matching Contribution Accounts below):
(_) Aggregate Limit on Employer Matching Contributions: If this option is
selected, the aggregate amount of Employer Matching Contributions on
behalf of a Participant for any Plan Year shall not exceed (fill in
the percentage or amount) of the Participant's Compensation for the
Plan Year.
7
<PAGE>
SECTION 6
EMPLOYER NONELECTIVE CONTRIBUTIONS
(a) Fixed Formula Based On Compensation
(_) Standard Formula. If this option is selected, the Employer shall make
Employer Nonelective Contributions on behalf of each Participant for
a Plan Year in an amount equal to % (fill in the percentage) of
the Participant's Compensation for the Plan Year.
(b) Discretionary Formula
(X) If this option is selected, the Employer shall make Employer
Nonelective Contributions for each Plan Year in an amount determined
by the Employer in its sole discretion by resolution duly adopted on
or before the last day for filing its federal income tax return,
including extensions, for the taxable year with or within which such
Plan Year ends. Employer Nonelective Contributions shall be allocated
to the Employer Nonelective Contribution Accounts of Participants who
participated in the Plan at any time during the Plan Year and who were
in the employ of the Employer on the last day of such Plan Year in the
proportion that each such Participant's Compensation for the Plan Year
bears to the total Compensation of all such Participants for the Plan
Year.
SECTION 7
DIRECTED INVESTMENTS BY PARTICIPANTS
(X) Total Investment Direction: If this option is selected, each
Participant shall be permitted to direct the investment of all
amounts allocated to the Participant's separate accounts under the
Plan.
(_) Limited Investment Direction: If this option is selected, a
Participant shall be permitted to direct the investment of amounts
allocated to the following of the Participant's separate
8
<PAGE>
accounts under the Plan (please complete the following if you wish to limit
investment direction by Participants to certain accounts):
(_) Employee Pre-Tax Contribution Account
(_) Employee After-Tax Contribution Account
(_) Employer Matching Contribution Account
(_) Employer Nonelective Contribution Account
(_) Rollover Contribution Account
Named Fiduciary Direction: To the extent that Participants do not direct
investments, the Plan Administrator or the person or entity designated by
the Employer below shall be responsible as the named fiduciary for
directing and managing Plan investments (see Article 6.5 of the Plan):
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SECTION 8
DISTRIBUTION UPON RETIREMENT
A Participant (or the Participant's designated Beneficiary, in the event of
the Participant's death) shall be entitled to receive the entire amounts
credited to the Participant's separate accounts under the Plan upon the
Participant's retirement on or after Normal Retirement Age, Disability or death.
For purposes of the Plan, the Normal Retirement Age shall be:
(X) The date a Participant attains age 65 (not to exceed age 65).
(_) The later of the date a Participant attains age (not to exceed age
65) or the 5th anniversary of the first day of the first Plan Year in
which the Participant commenced participation in the Plan.
SECTION 9
VESTING SCHEDULE
A Participant who terminates employment prior to Normal Retirement Age for
reasons other than death or Disability shall be entitled to receive the vested
amounts credited to the Participant's Employer Matching Contribution Account and
Employer Nonelective Contribution Account. These amounts shall be determined by
the vesting schedules selected below:
(a) Vesting Schedule for Employer Matching Contribution Account
(_) 100% Immediate Vesting: A Participant shall be fully (100%) vested
upon commencement of participation in the Plan.
9
<PAGE>
(_) Five-Year Cliff Vesting: A Participant shall be fully (100%) vested
upon completion of five Years of Service.
(_) Seven-Year Graded Vesting: A Participant shall become vested according
to the following vesting schedule:
Years of Service Vested Percentage
---------------- -----------------
3 20%
4 40
5 60
6 80
7 or more 100
(_) Other (complete the following if a different vesting schedule is
desired, with vested percentages for each Year of Service that satisfy
Section 41l(a)(2) of the Code):
Years of Service Vested Percentage
---------------- -----------------
1 -----------------
2 -----------------
3 -----------------
4 -----------------
5 -----------------
6 -----------------
7 -----------------
IMPORTANT: If a vesting schedule other than 100% immediate vesting is
selected, the Employer Matching Contributions will not qualify as
"Qualified Matching Contributions" (as defined in Article 5.1(1) of the
Plan) for purposes of the Plan's nondiscrimination requirements (see
Articles 5.4 and 5.6 of the Plan).
(b) Vesting Schedule for Employer Nonelective Contribution Account
(X) 100% Immediate Vesting: A Participant shall be fully (100%) vested
upon commencement of participation in the Plan.
(_) Five-Year Cliff Vesting: A Participant shall be fully (100%) vested
upon completion of five Years of Service.
(_) Seven-Year Graded Vesting: A Participant shall become vested according
to the following vesting schedule:
lO
<PAGE>
Years of Service Vested Percentage
---------------- -----------------
3 20%
4 40
5 60
6 80
7 or more 100
(_) Other (complete the following if a different vesting schedule is
desired, with vested percentages for each Year of Service that
satisfy Section 41l(a)(2) of the Code):
Years of Service Vested Percentage
---------------- -----------------
1 -----------------
2 -----------------
3 -----------------
4 -----------------
5 -----------------
6 -----------------
7 -----------------
IMPORTANT: If a vesting schedule other than 100% immediate vesting is
selected, the Employer Nonelective Contributions on behalf of Participants
will not qualify as "Qualified Nonelective Contributions" (as defined in
Article 5.1(m) of the Plan) for purposes of the Plan's nondiscrimination
requirements (see Articles 5.4 and 5.8 of the Plan).
SECTION 10
INSTALLMENT PAYMENT OPTION
(X) If this option is selected, a Participant who terminates employment
with a total vested amount in excess of $3,500 shall be permitted to
receive such amount in monthly, quarterly or annual installment
payments (as an alternative to a single-sum payment) under Article
8.3(b) of the Plan. If applicable, this option shall apply to:
(X) All such Participants who separate from service with the
Employer.
(_) Only such Participants who separate from service with the
Employer on or after Normal Retirement Age or upon Disability.
11
<PAGE>
SECTION 11 WITHDRAWALS
(a) Withdrawals On Or After Age 59 1/2
(X) If this option is selected, a Participant shall be permitted to make
in-service withdrawals under Article 9.2 of the Plan upon attaining
age 59 1/2.
(b) Hardship Withdrawals
(X) If this option is selected, a Participant shall be permitted to make
in-service withdrawals under Article 9.3 of the Plan upon establishing
financial hardship.
SECTION 12 LOANS
(X) If this option is selected, the Plan Administrator shall be permitted
to direct the Trustee to make loans to Participants from their
separate accounts under the Plan in accordance with the provisions of
Article 10 of the Plan.
NOTE: The Plan may not permit loans to Owner-Employees if the Employer
is a partnership or sole proprietorship or to shareholder-employees
if the Employer is an S corporation.
SECTION 13
LIMITATIONS ON ALLOCATIONS
NOTE: You must complete this Section 13 only if the Employer maintains
or has ever maintained another qualified plan in which any Participant
in this Plan is or was a participant or could possibly become a
participant.
(a) Employers Who Also Maintain a Qualified Defined Contribution Plan Other Than
a Master Or Prototype Plan (See Article 11.4 of the Plan)
If a Participant in this Plan is covered under another qualified defined
contribution plan maintained by the Employer which is not a Master or Prototype
Plan, the provisions of Article 11.3 of the Plan will automatically apply as if
the other plan was a Master or Prototype Plan unless the Employer hereby
designates another method of limiting Annual Additions to the Maximum
Permissible Amount (in a manner that precludes Employer discretion) by
describing such method below:
l2
<PAGE>
(b) Employers Who Also Maintain a Qualified Defined Benefit Plan (See Article
11.5 of the Plan)
If a Participant in this Plan is or has been covered under a qualified
defined benefit plan maintained by the Employer, the sum of the Defined Benefit
Plan and Defined Contribution Plan Fractions (as defined in Article 11.1 of the
Plan) may not exceed 1.0. The method under which the Employer will satisfy this
1.0 limitation is described below:
The International Flavors & Fragrances Inc. Pension Plan, a defined benefit
plan maintained by the Employer, will respond by adjusting the maximum benefit
payable to a Participant thereunder so that the combined plan fractions do not
exceed 1.0. Section 4.06(b)-(d) of the IFF Pension Plan (copy attached) contains
the applicable adjustment of benefit provisions.
(c) Limitation Year
For purposes of Article 11 of the Plan, the Limitation Year shall be the
Plan Year unless another 12-consecutive month period is designated as the
Limitation Year below:
DECEMBER 1 TO NOVEMBER 30
SECTION 14
TOP-HEAVY PLAN PROVISIONS
(a) Minimum Vesting Schedules
For any Plan Year in which the Plan is a Top-Heavy Plan (as defined in
Article 12.2(b) of the Plan), a Participant's vested percentage in his or her
Employer Matching Contribution Account and Employer Nonelective Contribution
Account shall be determined by the vesting schedules selected below (rather than
the vesting schedules selected in Section 9 of this Adoption Agreement):
(i) Employer Matching Contribution Account
(_) Three-Year Cliff Vesting: A Participant shall be fully (100%)
vested upon completion of (may not exceed 3) Years of
Service.
(_) Six-Year Graded Vesting
Years of Service Vested Percentage
---------------- -----------------
2 %(not less than 20%)
3 %(not less than 40%)
4 %(not less than 60%)
5 %(not less than 80%)
6 or more 100%
13
<PAGE>
(ii) Employer Nonelective Contribution Account
(_) (Three-Year Cliff Vesting: A Participant shall be fully (100%)
vested upon completion of (may not exceed 3) Years of
Service.)
(_) Six-Year Graded Vesting
Years of Service Vested Percentage
---------------- -----------------
2 _%(not less than 20%)
3 _%(not less than 40%)
4 _%(not less than 60%)
5 _%(not less than 80%)
6 or more 100%
NOTE: If the Plan's vesting schedules shift in or out of the schedules
selected above because of changes to or from Top-Heavy Plan status,
such shifts shall constitute amendments to the Plan's vesting
schedules and the elections provided for in Article 14.l(c)(ii) of
the Plan shall be applicable.
(b) Minimum Benefits
For any Plan Year in which the Plan is a Top-Heavy Plan, the minimum
benefit requirements of Section 416(c) of the Code shall be satisfied as follows
(please select one of the following):
(_) Minimum contributions under this Plan: Employer contributions under
this Plan shall be made on behalf of every Participant who is not a
Key Employee in accordance with Article 12.3(a) of the Plan. To the
extent this requirement is not already satisfied by the Employer
contributions provided under this Adoption Agreement (other than
Employee Pre-Tax Contributions and Employer Matching Contributions),
the Employer shall (select one, if applicable):
(_) make additional Employer contributions on behalf of Participants
who are not Key Employees for the Plan Year in the minimum amount
necessary; or
(_) make additional Employer contributions on behalf of all
Participant for the Plan Year in an amount equal to a uniform
percentage of each Participant's Compensation, which percentage
shall be determined by the Employer by resolution duly adopted
on or before the last day for filing its federal income tax
return, including extensions, for the taxable year with or within
which such Plan Year ends.
(X) Minimum benefits under other qualified plan(s): The minimum benefit
requirements of Section 416(c) of the Code shall be satisfied through
one or more other qualified plans maintained by the Employer that are
identified below:
IFF PENSION PLAN
Name of plan(s)
14
<PAGE>
(c) Present Value Determination
This subsection (c) applies only if the Employer maintains or has
maintained a defined benefit plan which has covered or could cover a Participant
in this Plan. If this subsection (c) applies, the following interest rate,
mortality table and valuation date shall apply for purposes of determining the
present value of accrued benefits under the defined benefit plan (see Article
12.2(c), (g) and (h) of the Plan):
Interest Rate: 7% Mortality Table: George B. Buck Mortality Table
Valuation Date: December 1 of each year
SECTION 15
EXECUTION OF PLAN AND TRUST AGREEMENT
IMPORTANT:
(1) Failure to properly complete this Adoption Agreement may result in
disqualification of the Plan.
(2) The Sponsor will inform the Employer of any amendments made to the Plan
or the discontinuance or abandonment of the Plan.
(3) The name, address and telephone number of the Sponsor are as follows:
Vanguard Fiduciary Trust Company
P.O. Box 2600
Vanguard Financial Center
Valley Forge, PA 19482
1-800-523-1036
(4) If the Employer has ever maintained or later adopts any plan (including
a welfare benefit fund, as defined in Section 419A(e) of the Code, which
provides post-retirement medical benefits allocated to separate accounts
for key employees, as defined in Section 419A(d)(3) of the Code, or an
individual medical account, as defined in Section 415(1)(2) of the Code)
in addition to this Plan, the Employer may not rely on an opinion letter
issued by the National Office of the Internal Revenue Service to the
Sponsor as evidence that the Plan as adopted by the Employer is qualified
under Section 401 of the Internal Revenue Code. If the Employer who adopts
or maintains multiple plans wishes to obtain reliance with respect to the
qualification of this Plan, the Employer should apply to the appropriate
Key District Office of the Internal Revenue Service for a determination
letter.
(5) This Adoption Agreement may be used only in conjunction with the
Vanguard Prototype 401(k) Savings Plan.
(6) For the purposes of applying Section 10.5 of the Trust Agreement, the
"principal place of business" is the State of New York.
15
<PAGE>
(a) EXECUTION BY EMPLOYER
IN WITNESS WHEREOF, and intending to be legally bound, the Employer named
above hereby adopts the Vanguard Prototype 401(k) Savings Plan by causing
this Adoption Agreement to be executed as of the date set forth below.
EMPLOYER: International Flavors & Fragrances Inc.
By: STEPHEN A. BLOCK Vice Presdent & Secretary
---------------- -------------------------
Name Title
Signature:
------------------------------------
Date: May 1, 1994
(b) EXECUTION BY TRUSTEE(S)
IN WITNESS WHEREOF, and intending to be legally bound, the Trustee(s) named
above hereby accepts its appointment as Trustee for the Plan. and hereby agrees
to the terms and conditions of the Trust Agreement for the Plan.
TRUSTEE:
By:
---------------------------------
Name Title
Signature:
------------------------------------
Date:
-------------
TRUSTEE:
By:
--------------------------------
Name Title
Signature:
-----------------------------------
Date:
-------------
16
<PAGE>
(e) If a Participant who had retired pursuant to Section 4.04(a) dies before
his Normal Retirement Date, no benefits shall be payable.
4.05 Deferred Vested Retirement
--------------------------
(a) Effective December 1, 1989, a Participant shall be 100% vested in, and have
a nonforfeitable right to, his Accrued Benefit upon completion of five
years of Service. Prior to December 1, 1989, a Participant shall be 100%
vested in, and have a nonforfeitable right to, his Accrued Benefit upon
completion of ten years of Service. If the Participant's employment with
the Employer is subsequently terminated for reasons other than normal or
early Retirement or death, he shall be eligible for a deferred vested
Pension commencing on his Normal Retirement Date, if the Participant is
then living.
(b) The deferred vested Pension shall begin on the Member's Normal Retirement
Date and, subject to the provisions of Section 5.01, shall be equal to his
Accrued Benefit at termination of employment. Notwithstanding the
foregoing, a Participant who has completed at least ten years of Service
may request that the Committee authorize commencement of his Pension as
of the beginning of any calendar month within the 10-year period preceding
his Normal Retirement Date, in which case his Pension shall commence as of
the date so requested, but the amount thereof shall be reduced as provided
in Section 4.03(b).
4.06 Maximum Benefit Limitation
--------------------------
(a) The maximum annual Pension payable as a life annuity to a Participant under
the Plan, when added to any pension attributable to contributions of the
Employer or any Associated Company provided to the Participant under any
other qualified defined benefit plan, shall
17
<PAGE>
be equal to the lesser of (1) $90,000 or (2) the Participant's average annual
remuneration during the three consecutive calendar years of his membership in
the Plan affording the highest such average, or during all of the years in which
he was a Participant in the Plan if less than three years, subject to the
following adjustments:
(i) If the Participant has not been a Participant in the Plan for at least 10
years, the maximum annual Pension in clause (1) above shall be multiplied
by the ratio (not less than 1/10) which the number of years of his
participation in the Plan bears to 10.
(ii) If the Participant has not completed 10 years of Service, the maximum
annual Pension in clause (2) above shall be multiplied by the ratio (not
less than 1/10) which the number of years of his Service bears to 10.
(iii)If the Pension begins before the Participant's Social Security Retirement
Age but on or after his 62nd birthday, the maximum Pension in (1) above
shall be reduced by 5/9 of 1% for each of the first 36 months, plus 5/12 of
1% for each additional month, by which the Participant is younger than the
Social Security Retirement Age at the date his Pension begins. If the
Pension begins before the Participant's 62nd birthday, the maximum Pension
in clause (1) above shall be the Actuarial Equivalent of the maximum
benefit payable to age 62 as determined in accordance with the preceding
sentence.
(iv) If the Pension begins after the Participant's Social Security Retirement
Age, the maximum Pension in clause (1) above shall be the Actuarial
Equivalent, based on an interest rate of 5% per year in lieu of the
interest rate otherwise used in the determination of the Actuarial
Equivalent, of that maximum benefit payable at the Social Security
Retirement Age.
18
<PAGE>
(v) If the Participant's Pension is payable as a Qualified Joint and Survivor
Pension with his spouse as the Beneficiary, the modification of the
Pension for that form of payment shall be made before the application of
the maximum limitation, and, as so modified, shall be subject to the
limitation.
(vi) As of January 1 of each calendar year beginning on or after January 1,
1988, the dollar limitation as determined by the Commissioner of Internal
Revenue for that calendar year shall become effective as the maximum
permissible dollar amount of Pension payable under the Plan during the
Limitation Year ending within that calendar year, including Pensions
payable to Participants who retired prior to that Limitation Year, in lieu
of the dollar amount in clause (1) above.
(b) In the case of a Participant who is also a member of a defined contribution
plan of the Employer or any Associated Company, his maximum benefit
limitation shall not exceed an adjusted limitation computed as follows:
(i) Determine the defined contribution fraction.
(ii) Subtract the result of (i) from one (1.0).
(iii) Multiply the dollar amount in clause (1) of paragraph (a) (as
adjusted by subparagraph (a)(i) thereof) above by 1.25.
(iv) Multiply the amount described in clause (2) of paragraph (a) (as
adjusted by subparagraph (a)(ii) thereof) above by 1.4.
(v) Multiply the lesser of the result of (iii) or the result of (iv) by
the result of (ii) to determine the adjusted maximum benefit
limitation applicable to the Participant.
(c) For purposes of this Section:
19
<PAGE>
(i) the defined contribution fraction for a Participant who is a member of one
or more defined contribution plans of the Employer or any Associated
Company shall be a fraction, the numerator of which is the sum of the
following:
(A) the Employer's and any Associated Company's contributions credited to
the Participant's accounts under the defined contribution plan or
plans,
(B) with respect to Limitation Years beginning before 1987, the lesser of
the part of the Participant's contributions in excess of 6 per cent of
his compensation or one-half of his total contributions to such plan
or plans, and with respect to Limitation Years beginning after 1986,
all of the Participant's contributions to such plan or plans, and
(C) any forfeitures allocated to his accounts under such plan or plans,
but reduced by any amount permitted by regulations promulgated by the
Commissioner of Internal Revenue; and the denominator of which is the
lesser of the following amounts determined for each year of the
Participant's Service:
(D) 1.25 multiplied by the maximum dollar amount allowed by law for that
year; or
(E) 1.4 multiplied by 25% of the Participant's annual remuneration for
that year. At the direction of the Committee, the portion of the
denominator of that fraction with respect to Limitation Years ending
before 1983 shall be computed as the denominator for the Limitation
Year ending in 1982, as determined under the law as then in effect,
multiplied by a fraction the numerator of which is the lesser of:
(F) $51,875, or
20
<PAGE>
(G) 1.4 multiplied by 25% of the Participant's annual remuneration for the
Limitation Year ending in 1981, and the denominator of which is the
lesser of:
(H) $41,500, or
(I) 25% of the Participant's remuneration for that Limitation Year;
(ii) a defined contribution plan means a qualified plan which provides for an
individual account for each participant and for benefits based solely upon
the amount contributed to the participant's account, and any income,
expenses, gains and losses, and any forfeitures of accounts of other
participants which may be allocated to that participant's accounts, subject
to (iii) below;
(iii)a defined benefit plan means any qualified pension plan which is not a
defined contribution plan; however, in the case of a defined benefit plan
which provides a benefit which is based partly on the balance of the
separate account of a participant, that plan shall be treated as a defined
contribution plan to the extent benefits are based on the separate account
of a participant and as a defined benefit plan with respect to the
remaining portion of the benefits under the plan; and
(iv) the term "remuneration" with respect to any Participant shall mean the
wages, salaries and other amounts paid in respect of such Participant by
the Employer or an Associated Company for personal services actually
rendered, determined after any pre-tax contributions under a "qualified
cash or deferred arrangement" (as defined under Section 401(k) of the Code
and its applicable regulations) or under a "cafeteria plan" (as defined
under Section 125 of the Code and its applicable regulations), and shall
include, but not by way of limitation, bonuses, overtime
21
<PAGE>
payments and commissions; and shall exclude deferred compensation, stock
options and other distributions which receive special tax benefits under
the Code.
(d) Notwithstanding the preceding paragraphs of this Section, a Participant's
annual Pension payable under this Plan, prior to any reduction required by
operation of paragraph (b) above, shall in no event be less than (i) the
benefit which the Participant had accrued under the Plan as of November
30, 1983, with no changes in the terms and conditions of the Plan on or
after July 1, 1982 taken into account in determining that benefit, or
(ii) the benefit that the Participant had accrued under the Plan as of
November 30, 1987, with no changes in the terms and conditions of the Plan
after May 5, 1986 taken into account in determining that benefit.
22
<PAGE>
3/94
VANGUARD PROTOTYPE 401(k) SAVINGS PLAN
THE VANGUARD GROUP, INC.
VANGUARD FINANCIAL CENTER
VALLEY FORGE, PA
<PAGE>
VANGUARD PROTOTYPE 401(k) SAVINGS PLAN
TABLE OF CONTENTS
INTRODUCTION
1.1 Introduction................................................ 1-1
DEFINITIONS
2.1 Definitions................................................. 2-1
PARTICIPATION IN THE PLAN
3.1 Eligibility to Participate.................................. 3-1
3.2 Commencement of Participation............................... 3-1
3.3 Cessation of Participation.................................. 3-1
3.4 Year of Service for Eligibility Purposes.................... 3-1
3.5 Eligibility Computation Periods............................. 3-2
3.6 Participation and Service upon Reemployment................. 3-2
3.7 Transfers To or From Covered Status......................... 3-3
CONTRIBUTIONS
4.1 Employee Pre-Tax Basic and Supplemental Contributions....... 4-1
4.2 Salary Reduction Agreement.................................. 4-1
4.3 Employee Pre-Tax Contributions.............................. 4-3
4.4 Maximum Amount of Employee Pre-Tax Contributions............ 4-4
4.5 Employee After-Tax Contributions............................ 4-5
4.6 Employer Matching Contributions............................. 4-5
4.7 Employer Nonelective Contributions.......................... 4-6
4.8 Rollover Contributions...................................... 4-6
4.9 Manner of Making Contributions.............................. 4-7
4.10 Transfer of Assets.......................................... 4-7
NONDISCRIMINATION REQUIREMENTS
5.1 Definitions................................................. 5-1
5.2 Average Actual Deferral Percentage Tests.................... 5-5
5.3 Special Rules............................................... 5-6
5.4 Treatment of Qualified Matching Contributions and Qualified
Nonelective Contributions as Employee Pre-Tax Contributions. 5-7
5.5 Correction of Excess Contributions.......................... 5-7
TC-1
<PAGE>
5.6 Average Contribution Percentage Tests....................... 5-10
5.7 Special Rules............................................... 5-10
5.8 Treatment of Employee Pre-Tax Contributions and Nonelective
Contributions as Employer Matching Contributions............ 5-12
5.9 Correction of Excess Aggregate Contributions................ 5-12
5.10 Multiple Use of Alternative Limitation...................... 5-15
5.11 Recordkeeping Requirements.................................. 5-17
ALLOCATIONS AND INVESTMENTS
6.1 Receipt of Contributions by Trustee......................... 6-1
6.2 Establishment of Separate Accounts by Recordkeeper.......... 6-1
6.3 Allocation of Employer Nonelective Contributions
under Intergrated Plan ..................................... 6-2
6.4 Allocation of Forfeitures................................... 6-3
6.5 Investment of Plan Assets .................................. 6-4
6.6 Allocation of Earnings and Losses........................... 6-4
6.7 Insurance Contracts ........................................ 6-5
VESTING
7.1 Full Vesting in Employee Contributions and
Rollover Contributions...................................... 7-1
7.2 Vesting in Employer Contributions........................... 7-1
7.3 Year of Services for Vesting Purposes....................... 7-2
7.4 Years of Service Upon Reemployment.......................... 7-2
DISTRIBUTION OF BENEFITS
8.1 Distribution Upon Separation from Service .................. 8-1
8.2 Distribution Upon Death..................................... 8-1
8.3 Optional Forms of Distribution; Participant Consent......... 8-1
8.4 Distribution Upon Written Instructions;
Valuation of Distributions ................................. 8-3
8.5 Forfeitures Upon Separation from Service ................... 8-3
8.6 Minimum Distribution Requirements........................... 8-4
8.7 Joint and Survivor Annuity Requirement...................... 8-9
8.8 Preretirement Survivor Annuity Requirement.................. 8-10
8.9 Notice and Explanation to Participants ..................... 8-10
8.10 Waiver of Qualified Joint or Survivor Annuity or
Qualified Preretirement Survivor Annuity.................... 8-11
8.11 Exception To Joint and Survivor Annuity and
Preretirement Survivor Annuity Requirements................. 8-13
8.12 Cash-Outs................................................... 8-14
8.13 Former Spouse Under Qualified Domestic Relations Order...... 8-14
TC-2
<PAGE>
8.14 Purchase of Annuities; Nontransferability Provisions........ 8-14
8.15 Commencement of Benefits.................................... 8-14
8.16 Designation of Beneficiary.................................. 8-15
8.17 Distribution Pursuant to Qualified Domestic Relations Orders 8-15
8.18 Direct Rollovers............................................ 8-16
WITHDRAWALS
9.1 Withdrawal of Employee After-Tax Contributions.............. 9-1
9.2 Withdrawals of Rollover Contributions ...................... 9-1
9.3 Withdrawals on or After Age 59 1/2.......................... 9-1
9.4 Hardship Withdrawals........................................ 9-1
9.5 Manner of Making Withdrawals................................ 9-4
LOANS
10.1 Amount of Loan.............................................. 10-1
10.2 Security for Loan........................................... 10-1
10.3 Interest Rate Charged....................................... 10-1
10.4 Repayment of Loans.......................................... 10-2
10.5 Default on Loan............................................. 10-2
10.6 Setoff of Loan Upon Distributions........................... 10-2
10.7 Manner of Making Loans...................................... 10-3
10.8 Spousal Consent Required ................................... 10-3
10.9 Accounting for Loans........................................ 10-3
LIMITATION ON CONTRIBUTIONS AND BENEFITS
11.1 Definitions................................................. 11-1
11.2 Employers Who Maintain No Other Qualified Plans............. 11-6
11.3 Employers Who Maintain Other Qualified Master or
Prototype Defined Contribution Plans........................ 11-7
11.4 Employers Who Maintain a Qualified Defined Contribution Plan
Other Than a Master or Prototype Plan....................... 11-9
11.5 Employers Who Maintain a Qualified Defined Benefit Plan..... 11-9
TOP-HEAVY PROVISIONS
12.1 Application................................................. 12-1
12.2 Definitions................................................. 12-1
12.3 Minimum Allocation.......................................... 12-4
12.4 Minimum Vesting Schedules................................... 12-5
TC-3
<PAGE>
ADMINISTRATION
13.1 Duties and Responsibilities of Fiduciaries; Allocation of
Fiduciary Responsibility.................................... 13-1
13.2 Powers and Responsibilities of the Plan Administrator....... 13-1
13.3 Allocation of Duties and Responsibilities................... 13-3
13.4 Expenses.................................................... 13-3
13.5 Liabilities................................................. 13-3
13.6 Claims Procedure............................................ 13-4
AMENDMENT, TERMINATION AND MERGER
14.1 Amendment of Plan........................................... 14-1
14.2 Termination of Plan; Suspension of Contributions............ 14-3
14.3 Successor Employer.......................................... 14-3
14.4 Merger, Consolidation or Transfer........................... 14-3
14.5 Distribution Upon Termination of Plan or Disposition of
Assets or Subsidiary........................................ 14-4
MISCELLANEOUS
15.1 Exclusive Benefit of Participants and Beneficiaries......... 15-1
15.2 Leased Employees............................................ 15-1
15.3 Crediting Service With Predecessor Employer................. 15-2
15.4 Special Requirements For Controlled Business By Owner
Employees .................................................. 15-2
15.5 Nonguarantee of Employment.................................. 15-3
15.6 Right to Trust Assets....................................... 15-3
15.7 Nonalienation of Benefits................................... 15-3
15.8 Failure of Qualification.................................... 15-4
15.9 Applicable Law.............................................. 15-4
TC-4
<PAGE>
VANGUARD PROTOTYPE 401(k) SAVINGS PLAN
ARTICLE 1
INTRODUCTION
1.1 Introduction. This 401(k) Savings Plan has been adopted by the Employer for
the exclusive benefit of eligible Employees and their Beneficiaries. The Plan is
to be maintained and administered according to the terms and conditions of this
instrument. The assets of the Plan are held and managed by the Trustee in
accordance with the terms and conditions of the Trust Agreement, which is
considered to be an integral part of the Plan.
1-1
<PAGE>
ARTICLE 2
DEFINITIONS
2.1 "Adoption Agreement" means the Adoption Agreement for the Vanguard Prototype
401(k) Savings Plan as executed by the Employer for purposes of adopting or
amending the Plan. The provisions of the Adoption Agreement shall be considered
an integral part of the Plan as if set forth fully herein.
2.2 "Beneficiary" means a person or persons (natural or otherwise) designated by
a Participant in accordance with Article 8.16 to receive any undistributed
amounts credited to the Participant's separate accounts under the Plan at the
time of the Participant's death.
2.3 "Break in Service" means:
(a) for purposes of determining an Employee's eligibility to
participate in the Plan, an eligibility computation period (as
determined under Article 3.5) during which the Employee does not
complete more than 500 Hours of Service; and
(b) for all other purposes under the Plan, including the determination
of the Employee's vested percentage under Article 7.4, a Plan Year
during which an Employee does not complete more than 500 Hours of
Service.
An Employee shall not be deemed to have incurred a Break in Service during any
leave of absence granted in writing by the Employer.
2.4 "Code" means the Internal Revenue Code of 1986, including any amendments
thereto.
2.5 "Compensation" means, for purposes of determining the amounts of
contributions to the Plan by or on behalf of any Participant for a Plan Year,
the total amount of Compensation (as that term is defined in Section 2 of the
Adoption Agreement) which is paid by the Employer to the Participant while
participating in the Plan during the Plan Year, adjusted as follows:
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(a) the Compensation of each Participant for a Plan Year shall include
all Employee Pre-Tax Contributions made to the Plan on behalf of the
Participant for the Plan Year and all pre-tax elective contributions
made to any other plan by the Employer for the Plan Year pursuant to a
salary reduction agreement with the Participant which are not
includible in the Participant's gross income under Section 125,
402(e)(3), 402(h) or 403(b) of the Code, provided that the Employer
has elected to treat all such pre-tax elective contributions as
compensation with respect to all employees under all plans of the
Employer; and
(b) in no event shall the amount of Compensation of any Participant
taken into account for any Plan Year exceed the Annual Compensation
Limit. For these purposes, the Annual Compensation Limit is $150,000,
as adjusted by the Commissioner of Internal Revenue for increases in
the cost of living in accordance with Section 401(a)(17) of the Code.
The cost-of-living adjustment in effect for any calendar year shall
apply to any Plan Year beginning in such calendar year. If any Plan
Year consists of fewer than 12 months, the Annual Compensation Limit
for such Plan Year shall be multiplied by a fraction, the numerator of
which is the number of months in such Plan Year and the denominator of
which is 12.
For purposes of the Annual Compensation Limit, the family aggregation rules of
Section 414(q)(6) of the Code shall apply, with the exception that in applying
such rules the term "family" shall include only the spouse of the Participant
and any lineal descendants of the Participant who have not attained age 19
before the close of the Plan Year. If, as a result of the application of such
family aggregation rules, the Annual Compensation Limit is exceeded, then the
Annual Compensation Limit shall be prorated among the affected individuals in
proportion to each such individual's Compensation as otherwise determined under
this Article 2.2 prior to the application of the Annual Compensation Limit (with
the exception that such proration shall not apply for purposes of determining
the portion of Compensation up to the Integration Level designated by the
Employer in the Adoption Agreement if the Plan is an Integrated Plan). In the
case of a Self-Employed Individual who is treated as employed by the Employer
under Section 401(c) of the Code, Compensation shall include the individual's
Earned Income as defined in Article 2.7.
2.6 "Disability" means an inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in
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death or which has lasted or can be expected to last for a continuous period of
not less than 12 months. The permanence and degree of impairment shall be
supported by medical evidence.
2.7 "Earned Income" means the net earnings derived by an Employee from
self-employment in the trade or business with respect to which the Plan is
established and for which the personal services of the Employee are a material
income-producing factor, determined without regard to any items not included in
the Employee's gross income and the deductions allocable to such items. Net
earnings shall be reduced by contributions by the Employer to a qualified plan
to the extent deductions are allowed to the Employee for such contributions
under Section 404 of the Code. Net Earnings shall be determined by taking into
account any deduction allowed to the Employer under Section 164(f) of the Code.
2.8 "Effective Date" means the date designated by the Employer in the Adoption
Agreement as the date on which the provisions of the Plan, as originally adopted
or as amended and restated by the Employer (whichever is applicable) shall
apply.
2.9 "Employee" means any individual who is employed (or treated as employed
under Section 401(c)(1) of the Code) by the Employer or by any other employer
required to be aggregated with the Employer under Section 414(b), (c), (m) or
(o) of the Code, and shall include any leased employee as described in Article
15.2 who is deemed to be an employee of the Employer or of any employer required
to be aggregated with the Employer as provided under Section 414(n) or (o) of
the Code.
2.10 "Employee After-Tax Contribution" means an after-tax contribution to the
Plan by a Participant in accordance with Article 4.5 which is includible in the
Participant's gross income for federal income tax purposes in the year of
contribution.
2.11 "Employee After-Tax Contribution Account" means the separate account
established in the name of a Participant pursuant to Article 6.2(a)(ii) to
record the Employee After-Tax Contributions by the Participant and the earnings,
losses and expenses allocated thereto.
2.12 "Employee Pre-Tax Basic Contribution" means an Employee Pre-Tax
Contribution to the Plan on behalf of a Participant in accordance with Article
4.1(a).
2.13 "Employee Pre-Tax Bonus Contribution" means an Employee Pre-Tax
Contribution to the Plan on behalf of a Participant in accordance with Article
4.3.
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2.14 "Employee Pre-Tax Contribution" means a pre-tax contribution to the Plan by
the Employer on behalf of a Participant in accordance with the Participant's
election under Article 4.1 or 4.3 to have the amount contributed to the Plan
rather than paid to the Participant as current-year Compensation.
2.15 "Employee Pre-Tax Contribution Account" means the separate account
established in the name of a Participant pursuant to Article 6.2(a)(i) to record
the Employee Pre-Tax Contributions on behalf of the Participant and the
earnings, losses and expenses allocated thereto.
2.16 "Employee Pre-Tax Supplemental Contribution" means an Employee Pre-Tax
Contribution to the Plan on behalf of a Participant in accordance with Article
4.1(b).
2.17 "Employer" means the corporation, partnership or other employer which has
adopted the Plan by executing the Adoption Agreement.
2.18 "Employer Matching Contribution" means a contribution to the Plan by the
Employer on behalf of a Participant in accordance with Article 4.6 on account of
the Employee Pre-Tax Contributions or Employee After-Tax Contributions by the
Participant to the Plan.
2.19 "Employer Matching Contribution Account" means the separate account
established in the name of a Participant pursuant to Article 6.2(a)(iii) to
record the Employer Matching Contributions on behalf of the Participant and the
earnings, losses, and expenses allocated thereto.
2.20 "Employer Nonelective Contribution" means a contribution to the Plan by the
Employer on behalf of a Participant for a Plan Year in accordance with Article
4.7.
2.21 "Employer Nonelective Contribution Account" means the separate account
established in the name of a Participant pursuant to Article 6.2(a)(iv) to
record the Employer Nonelective Contributions on behalf of the Participant and
the earnings, losses, and expenses allocated thereto.
2.22 "Entry Date" means the date designated by the Employer in the Adoption
Agreement on which an Employee who has otherwise satisfied the participation
requirements selected by the
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Employer in the Adoption Agreement shall be eligible to commence participation
in the Plan. If no event shall the initial Entry Date for any Employee be later
than the earlier of:
(a) the first day of the Plan Year coinciding with or next following
the date the Employee otherwise satisfies the participation
requirements selected by the Employer in the Adoption Agreement; or
(b) the date that is six months after the date the Employee satisfies
such participation requirements.
2.23 "Excess Elective Deferral" means the amount of a Participant's pre-tax
elective deferrals (as defined in Article 4.4(a)) for a taxable year which are
includible in the Participant's gross income for the taxable year for the reason
they exceed the dollar limitation in effect under Section 402(g) of the Code.
2.24 "Forfeiture" means the portion of a Participant's Employer Matching
Contribution Account or Employer Nonelective Contribution Account which is
forfeited, in accordance with the provisions of Article 8.5, on account of the
Participant's termination of employment prior to full vesting under Article 7.2.
Forfeitures shall also include any Employer Matching Contributions on behalf of
Highly Compensated Employees (as defined in Article 5.1(j)) which are forfeited
in accordance with the provisions of Article 4.6 and any Excess Aggregate
Contributions on behalf of Highly Compensated Employees which are forfeited in
accordance with the provisions of Article 5.9(c).
2.25 "Hour of Service" means:
(a) Each hour for which the individual is paid or entitled to be paid
for the performance of duties for the Employer. Hours of Service under
this paragraph shall be credited to the individual for the computation
period in which the duties are performed.
(b) Each hour for which the individual is paid or entitled to be paid
by the Employer on account of a period of time during which no duties
are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence;
provided, however, that no more than 501 Hours of Service shall be
credited under this
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paragraph for any single continuous period (whether or not such period
occurs in a single computation period) during which the individual
performed no duties. Hours of Service under this paragraph shall be
calculated and credited pursuant to Section 2530.200b-2 of the
Department of Labor Regulations which are incorporated herein by
reference.
(c) Each hour for which back pay, irrespective of mitigation or
damages, is either awarded or agreed to by the Employer; provided,
however, that Hours of Service credited under paragraphs (a) or (b)
above shall not be re-credited by operation of this paragraph. Hours
of Service under this paragraph shall be credited to the individual
for the computation period or periods to which the award or agreement
pertains rather than the computation period in which the award,
agreement or payment is made.
Hours of Service shall be credited to an Employee in a manner consistent with
the rules of (a), (b) and (c) above for employment with any other employer
required to be aggregated with the Employer in an affiliated service group under
Section 414(m) of the Code, a controlled group of corporations under Section
414(b) of the Code, or a group of trades or businesses under common control
under Section 414(c) of the Code, or with any other employer required to be
aggregated with the Employer pursuant to Section 414(o) of the Code and the
regulations thereunder. Hours of Service shall also be credited to any leased
employee as described in Article 15.2 who is deemed to be an Employee for
purposes of the Plan as required under Section 414(n) or (o) of the Code and the
regulations thereunder.
Solely for purposes of determining whether a Break in Service has occurred for
participation and vesting purposes, an individual who is absent from work for
maternity or paternity reasons shall receive credit for the Hours of Service
which would otherwise normally have been credited to such individual but for
such absence, or in any case in which such Hours of Service cannot be
determined, eight Hours of Service per day of such absence. For purposes of this
paragraph, an absence from work for maternity or paternity reasons means an
absence: (i) by reason of the pregnancy of the individual; (ii) by reason of the
birth of a child of the individual; (iii) by reason of the placement of a child
with the individual in connection with the adoption of such child by such
individual; or (iv) for purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of Service credited
under this paragraph shall be credited: (i) in the eligibility computation
period or Plan Year in which the absence begins if the crediting is necessary to
prevent a Break in Service in that period; or (ii) in all other cases, in the
following eligibility computation period or Plan Year.
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In lieu of determining Hours of Service on the basis of the actual hours for
which an individual is paid or entitled to be paid under subsections (a) through
(c) above, the Plan Administrator may, with the approval of the Employer, credit
Hours of Service in accordance with any equivalency method prescribed by
regulations issued by the Department of Labor.
2.26 "Integrated Plan" means the Plan if the Employer has selected under Section
6 of the Adoption Agreement either: (1) the Permitted Disparity (Integration
with Social Security) Contribution Formula for Employer Nonelective
Contributions; or (2) the Permitted Disparity (Integration with Social Security)
Allocation Formula for Employer Nonelective Contributions. The Employer may not
adopt this Plan as an Integrated Plan if the Employer maintains any other
integrated plan providing for permitted disparity which covers any of the same
Participants under this Plan.
2.27 "Normal Retirement Age" means the date a Participant attains age 65, unless
the Employer designates a different Normal Retirement Age in the Adoption
Agreement. If the Employer enforces a mandatory retirement age, the Normal
Retirement Age shall not exceed such mandatory retirement age.
2.28 "Owner-Employee" means: (1) if the Employer is a sole proprietorship, the
proprietor of the sole proprietorship; or (2) if the Employer is a partnership,
a partner who owns more than 10 percent of either the capital interest or the
profits interest of the partnership.
2.29 "Participant" means an Employee who is participating in the Plan in
accordance with the provisions of Article 3.
2.30 "Plan" means the Vanguard Prototype 401(k) Savings Plan as set forth herein
and as adopted by the Employer under the Adoption Agreement, as each such
document may be amended from time to time.
2.31 "Plan Administrator" means the individual(s) or committee designated by the
Employer in the Adoption Agreement or subsequent written resolution furnished to
the Trustee to be solely responsible for the administration of the Plan, as more
fully described in Article 13.2. If no such designation is made, the Employer
shall be deemed to be the Plan Administrator.
2.32 "Plan Year" means the 12-consecutive month period designated by the
Employer in the Adoption Agreement.
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2.33 "Recordkeeper" means the individual(s) or firm selected by the Employer to
provide record-keeping and participant accounting services for the Plan,
including the maintenance of separate accounts for Participants in accordance
with the provisions of Article 6.
2.34 "Rollover Contribution Account" means the separate account established in
the name of a Participant pursuant to Article 6.2(a)(v) to record any rollover
contributions to the Plan by or on behalf of the Participant under Article 4.8
and the earnings, losses and expenses allocated thereto.
2.35 "Self-Employed Individual" means an individual who has Earned Income for
the taxable year from the trade or business with respect to which the Plan is
established or who would have had such Earned Income but for the fact that the
trade or business had no net profits for the taxable year.
2.36 "Sponsor" means Vanguard Fiduciary Trust Company, a trust company
incorporated under Pennsylvania banking laws. Vanguard Fiduciary Trust Company
is a wholly-owned subsidiary of The Vanguard Group, Inc., Vanguard Financial
Center, Valley Forge, Pennsylvania 19482.
2.37 "Trust" means the trust maintained by the Trustee to hold the assets of the
Plan in accordance with the terms and conditions of the Trust Agreement.
2.38 "Trust Agreement" means the agreement between the Employer and Trustee
which governs the management and administration of the Trust. The provisions of
the Trust Agreement shall be considered an integral part of this Plan as if set
forth fully herein.
2.39 "Trustee" means the individual(s) or qualified corporate fiduciary
designated by the Employer in the Adoption Agreement to serve as Trustee for the
Plan and any successor thereto.
2.40 "Valuation Date" means any business day that the New York Stock Exchange is
open for trading.
2.41 "Vanguard Fund(s)" means one or more of the regulated investment companies,
collective investment funds or other investments offered by The Vanguard Group,
Inc. as funding vehicles for employee benefit plans. The Employer shall have the
authority to designate
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the Vanguard Funds available for investment under the Plan in accordance with
the provisions of the Trust Agreement.
2.42 "Year of Service" means a 12-consecutive month period during which an
Employee completes at least 1,000 Hours of Service as determined under Article
3.4 for purposes of determining the Employee's eligibility to participate in the
Plan and Article 7.3 for purposes of determining the Employee's vested
percentage under the Plan.
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ARTICLE 3
PARTICIPATION IN THE PLAN
3.1 Eligibility to Participate. An Employee shall be eligible to participate in
the Plan when the Employee satisfies the participation requirements designated
by the Employer in Section 1 of the Adoption Agreement.
3.2 Commencement of Participation.
(a) An Employee who satisfies the participation requirements
designated by the Employer in Section 1 of the Adoption Agreement as
of the Effective Date of the Plan shall become a Participant on the
Effective Date.
(b) An Employee who satisfies the participation requirements
designated by the Employer in Section 1 of the Adoption Agreement
after the Effective Date of the Plan shall become a Participant on the
next Entry Date.
3.3 Cessation of Participation. An Employee shall cease to participate in the
Plan on the date on which the Employee's employment with the Employer terminates
for any reason or the Employee no longer satisfies the participation
requirements designated by the Employer in Section 1 of the Adoption Agreement.
3.4 Year of Service for Eligibility Purposes.
(a) General Rule. For purposes of determining the eligibility of an
Employee to participate in the Plan, the Employee shall be credited
with one Year of Service for each eligibility computation period (as
determined under Article 3.5) during which the Employee completes
1,000 or more Hours of Service. All Years of Service by an Employee
(including Years of Service completed prior to the Effective Date of
the Plan) shall be counted for purposes of determining the Employee's
eligibility to participate in the Plan, except as specifically
provided otherwise in Article 3.6(b).
(b) Service With Predecessor Employer. If so designated by the
Employer in the Adoption Agreement, an Employee's Years of Service for
eligibility purposes shall
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include all years of service (determined in a manner consistent with
subsection (a) above) with any predecessor employer of the Employer;
provided, however, that if the Employer is maintaining the Plan as the
plan of a predecessor employer, an Employee's Years of Service shall
automatically include years of service with such predecessor employer
without regard to any designation in the Adoption Agreement.
3.5 Eligibility Computation Periods. For purposes of determining the eligibility
of an Employee to participate in the Plan, the Employee's initial eligibility
computation period which shall be used to measure the Employee's Years of
Service and Breaks in Service shall be the 12-consecutive month period beginning
on the date the Employee first performs an Hour of Service for the Employer (the
Employee's "employment commencement date"). The Employee's subsequent
eligibility computation periods shall be the 12-consecutive month periods
beginning on each anniversary of the Employee's employment commencement date.
3.6 Participation and Service upon Reemployment.
(a) Participation. A Participant who terminates employment with the
Employer shall be eligible to resume participation in the Plan
immediately upon reemployment by the Employer (provided that, upon
reemployment, the former Participant satisfies the participation
requirements designated by the Employer in Section 1 of the Adoption
Agreement).
(b) Years of Service. An Employee who terminates employment with the
Employer prior to becoming a Participant in the Plan shall have all
Years of Service which the Employee completed for eligibility purposes
automatically reinstated upon reemployment by the Employer, unless the
Employee incurs a Break in Service, in which case the Employee's prior
Years of Service shall be reinstated only if the number of the
Employee's consecutive one-year Breaks in Service is less than the
greater of five or the aggregate number of the Employee's Years of
Service prior to the Break in Service. For these purposes, the
Employee's aggregate number of Years of Service prior to the period of
consecutive one-year Breaks in Service shall exclude any Years of
Service which were not reinstated under this Article 3.6(b) by reason
of any prior period of consecutive one-year Breaks in Service. If an
Employee's Years of Service are disregarded pursuant to this Article
3.6(b), the Employee shall be treated as a new Employee for
eligibility purposes upon reemployment by the Employer.
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3.7 Transfers To or From Covered Status.
(a) In the event a Participant ceases participation in the Plan
because he or she is no longer a member of the category of Employees
who are eligible to participate in the Plan as designated by the
Employer in Section 1 of the Adoption Agreement, the former
Participant shall be eligible to resume participation in the Plan
immediately upon his or her return to such category of eligible
Employees.
(b) Any Employee who is not a member of the category of Employees who
are eligible to participate in the Plan (as designated by the Employer
in Section 1 of the Adoption Agreement) shall be eligible to
immediately commence participation in the Plan if the Employee becomes
such a member and has otherwise satisfied the participation
requirements designated by the Employer in the Adoption Agreement.
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ARTICLE 4
CONTRIBUTIONS
4.1 Employee Pre-Tax Basic and Supplemental Contributions.
(a) Employee Pre-Tax Basic Contributions. A Participant may elect
under a salary reduction agreement as described in Article 4.2 to have
the Employer make Employee Pre-Tax Basic Contributions to the Plan on
the Participant's behalf in an amount not to exceed the maximum amount
permitted under the Adoption Agreement, subject to the limitations of
Article 4.4 and Article 11.
(b) Employee Pre-Tax Supplemental Contributions. If so designated by
the Employer in the Adoption Agreement, a Participant who has elected
to have the Employer make Employee Pre-Tax Basic Contributions to the
Plan in the maximum amount permitted under the Adoption Agreement may
also elect under the Participant's salary reduction agreement to have
the Employer make Employee Pre-Tax Supplemental Contributions to the
Plan on the Participant's behalf, subject to the limitations of
Article 4.4 and Article 11.
4.2 Salary Reduction Agreement.
(a) Nature of Agreement. The salary reduction agreement referred to in
Article 4.1 shall be on a form prescribed by the Plan Administrator
whereby the Participant agrees to reduce his or her Compensation by
specified amounts for purposes of having the Employer contribute the
reduced Compensation amount to the Plan as Employee Pre-Tax
Contributions on behalf of the Participant under Article 4.1.
(b) Commencement of Agreement. Every Employee who is eligible to
participate in the Plan under Article 3.1 shall be afforded a
reasonable opportunity by the Plan Administrator to enter into a
salary reduction agreement and to elect to have Employee Pre-Tax
Contributions made to the Plan on his or her behalf under Article 4.1.
A Participant's salary reduction agreement shall be effective as soon
as practicable following the date the agreement is received in
executed form by the Plan Administrator, provided such effective date
shall be no earlier than the date the Participant would otherwise
commence participation in the Plan under Article 3.2. Under no
circumstances shall a Participant's salary reduction agreement be
adopted
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retroactively. A Participant's salary reduction agreement shall remain
in effect until amended or terminated by the Participant in accordance
with (f) or (g) below.
(c) Timing of Reduction and Contribution. The reduction in a
Participant's Compensation which is used for purposes of funding the
Participant's Employee Pre-Tax Contributions under Article 4.1 shall
be done on a monthly, semimonthly, biweekly, weekly or other periodic
basis in accordance with the Participant's regular payroll period and,
if applicable under (h) below, at the time any bonus is payable to the
Participant. The Employee Pre-Tax Contributions on behalf of a
Participant for a payroll period shall be contributed to the Trust as
of the earliest date on which such amounts can reasonably be
segregated from the Employer's general assets, and in no event later
than 90 days following the date on which such amounts would otherwise
have been payable to the Participant as Compensation.
(d) Cut-Back in Employee Pre-Tax Contributions. If the Plan
Administrator reasonably determines that all or any part of the
Participant's reduced Compensation amount for any Plan Year may not be
contributed to the Plan as Employee Pre-Tax Contributions under
Article 4.1 without causing the Plan to fail the nondiscrimination
requirements of Article 5 or the contribution limitations of Article
11, the Employer shall not be required to make such contributions to
the Plan and shall instead pay such reduced Compensation amount
directly to the Participant.
(e) Amendment of Agreement. A Participant shall be permitted to amend
his or her salary reduction agreement at any time with respect to
Compensation not yet received to provide a new amount which will be
used to determine the Employee Pre-Tax Contributions to the Plan on
the Participant's behalf under Article 4.1. A Participant's amended
salary reduction agreement shall be effective as soon as practicable
following the date the amended agreement is received in executed form
by the Plan Administrator. The Plan Administrator may prescribe
uniform and nondiscriminatory rules limiting the number of times a
Participant may amend his or her salary reduction agreement during a
Plan Year, provided that Participants are afforded a reasonable
opportunity at least once each Plan Year to amend their salary
reduction agreements.
(f) Termination of Agreement. A Participant may terminate his or her
salary reduction agreement at any time with respect to Compensation
not yet received by delivering written notice of termination to the
Plan Administrator. Any Participant who
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terminates his or her salary reduction agreement may be permitted, in
accordance with uniform and nondiscriminatory rules prescribed by the
Plan Administrator, to execute a new salary reduction agreement and
resume having Employee Pre-Tax Contributions made to the Plan on his
or her behalf under Article 4.1.
(g) Transfer to or from Non-Covered Employment. A Participant's salary
reduction agreement shall automatically terminate if the Participant
is no longer a member of the category of Employees who are eligible to
participate in the Plan as designated by the Employer in Section 1 of
the Adoption Agreement. If such a Participant subsequently returns to
the category of eligible Employees, the Participant shall be permitted
to execute a new salary reduction agreement and resume having Employee
Pre-Tax Contributions made to the Plan on his or her behalf under
Article 4.1.
(h) Coordination with Employee Pre-Tax Bonus Contributions. If the
Employer has elected under the Adoption Agreement to allow
Participants to make Employee Pre-Tax Bonus Contributions, any
designated bonus payable to a Participant shall be eligible for
reduction as Employee Pre-Tax Bonus Contributions under Article 4.3
(and not as Employee Pre-Tax Basic or Supplemental Contributions under
Article 4.1).
4.3 Employee Pre-Tax Bonus Contributions.
(a) Bonus Reduction Agreement. If so designated by the Employer in the
Adoption Agreement, a Participant may elect to have the Employer make
Employee Pre-Tax Bonus Contributions to the Plan on the Participant's
behalf by executing a bonus reduction agreement. Such agreement shall
be on a form prescribed by the Plan Administrator whereby the
Participant agrees to reduce the amount of any designated bonus
payable to the Participant by the Employer by an amount specified by
the Participant (not to exceed the maximum amount permitted under the
Adoption Agreement) for purposes of having the Employer contribute the
bonus reduction amount to the Plan as an Employee Pre-Tax Bonus
Contribution on behalf of the Participant, subject to the limitations
of Article 4.4 and Article 11.
(b) Timing of Contribution. Any Employee Pre-Tax Bonus Contribution on
behalf of a Participant shall be contributed to the Trust by the
Employer as of the earliest date on which such amount can reasonably
be segregated from the Employer's general
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assets, and in no event later than 90 days following the date on which
such amount would otherwise have been payable to the Participant as
Compensation.
4.4 Maximum Amount of Employee Pre-Tax Contributions.
(a) Limitation on Employee Pre-Tax Contributions. No Participant shall
be permitted to have aggregate elective deferrals made to this Plan or
any other qualified plans maintained by the Employer during any
taxable year in excess of the dollar limitation of Section 402(g) of
the Code in effect at the beginning of such taxable year. For these
purposes, a Participant's "elective deferrals" include: (i) the
Participant's Employee Pre-Tax Contributions to this Plan (excluding
any Employee Pre-Tax Contributions returned to the Participant as an
Excess Amount under Article 11); (ii) Employer contributions made on
behalf of the Participant pursuant to an election to defer under any
other plan with a qualified cash or deferred arrangement under Section
401(k) of the Code, any simplified employee pension as described in
Section 402(h)(1)(B) of the Code, any eligible deferred compensation
plan as described in Section 457 of the Code, or any plan as described
in Section 501(c)(18) of the Code; and (iii) Employer contributions
made on behalf of the Participant pursuant to a salary reduction
agreement to purchase an annuity contract under Section 403(b) of the
Code.
(b) Allocation of Excess Elective Deferrals. If a Participant has made
Excess Elective Deferrals for any taxable year, the Participant may
assign to this Plan any portion of such Excess Elective Deferrals by
notifying the Plan Administrator in writing no later than the first
March 1st following the close of the taxable year. Such written
notification shall certify that the Participant has made Excess
Elective Deferrals for the taxable year, and shall specify the amount
of such Excess Elective Deferrals to be allocated to this Plan for the
taxable year. A Participant shall be deemed to have notified the Plan
Administrator of the existence of any Excess Elective Deferrals which
arise by taking into account only those elective deferrals on behalf
of the Participant to this Plan and any other plans maintained by the
Employer, and to have assigned those Excess Elective Deferrals to such
plans maintained by the Employer.
(c) Distribution of Excess Elective Deferrals. Notwithstanding any
provision of the Plan to the contrary, if a Participant has assigned
Excess Elective Deferrals to this Plan for a taxable year, the amount
of such Excess Elective Deferrals, plus any income or minus any loss
allocable thereto, shall be distributed to the Participant from the
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Participant's Employee Pre-Tax Contribution Account no later than the
first April 15th following the close of the taxable year.
(d) Income or Loss Allocable to Excess Elective Deferrals. The income
or loss allocable to the amount of Excess Elective Deferrals referred
to in subsection (c) above shall include all allocable income or loss
for the taxable year of the Excess Elective Deferral and shall be
calculated using any reasonable method for computing income or loss,
provided such method is used consistently for all Participants and for
all corrective distributions under the Plan for the relevant year, and
is used by the Plan for allocating income or loss to Participants'
Employee Pre-Tax Contribution Accounts.
(e) Alternative Method for Calculating Income or Loss Allocable to
Excess Elective Deferrals. Notwithstanding (d) above, the Plan may
elect to calculate the income or loss allocable to the amount of
Excess Elective Deferrals referred to in subsection (c) above by
multiplying the total investment income or loss (including dividends,
interest, realized gains or losses, and unrealized appreciation or
depreciation) allocated to the Participant's Employee Pre-Tax
Contribution Account for the taxable year of the Excess Elective
Deferrals by a fraction, the numerator of which is the Excess Elective
Deferral amount to be distributed to the Participant by the Plan for
the taxable year, and the denominator of which is the total account
balance attributable to the Participant's Employee Pre-Tax
Contributions as of the end of the taxable year, reduced by the
investment gain or increased by the investment loss allocated to such
total amount for the taxable year.
4.5 Employee After-Tax Contributions. If so designated by the Employer in the
Adoption Agreement, a Participant shall be permitted to make Employee After-Tax
Contributions to the Plan in an amount not to exceed the maximum amount
permitted under the Adoption Agreement, subject to the limitations of Article
11. All Employee After-Tax Contributions for a Plan Year shall be made to the
Trust no later than the last day of the Plan Year.
4.6 Employer Matching Contributions. If so designated by the Employer in the
Adoption Agreement, the Employer shall make Employer Matching Contributions to
the Plan for each Plan Year in an amount determined under the provisions of the
Adoption Agreement, subject to the limitations of Article 11. All Employer
Matching Contributions for any Plan Year shall be made to the Trust no later
than the end of the 12-month period immediately following the close of the Plan
Year. Notwithstanding the preceding, if any Employer Matching Contribution
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on behalf of any Highly Compensated Employee (as defined in Article 5.1(j))
relates to an Excess Elective Deferral, Excess Contribution (as defined in
Article 5.1(g)) or an Excess Aggregate Contribution (as defined in Article
5.1(h)) which is distributed to the Highly Compensated Employee, such Employer
Matching Contribution shall be forfeited no later than the end of the 12-month
period immediately following the close of the Plan Year.
4.7 Employer Nonelective Contributions.
(a) If so designated by the Employer in the Adoption Agreement, the
Employer shall make Employer Nonelective Contributions to the Plan for
each Plan Year in an amount determined under the provisions of the
Adoption Agreement, subject to the limitations of Article 11. All
Employer Nonelective Contributions for any Plan Year shall be made to
the Trust no later than the end of the 12-month period immediately
following the close of the Plan Year.
(b) For any Plan Year in which the Plan does not satisfy one of the
Average Actual Deferral Percentage tests of Article 5.2 or one of the
Average Contribution Percentage tests of Article 5.6, the Employer
shall be permitted, in its sole discretion by resolution duly adopted
on or before the last day of the following Plan Year, to make Employer
Nonelective Contributions which qualify as Qualified Nonelective
Contributions (as defined is Article 5.1(m)) to the Plan on behalf of
Eligible Employees who are Non-Highly Compensated Employees (as
defined in Article 5.1(k)) for the Plan Year in an amount sufficient
to enable the Plan to satisfy one of the Average Actual Deferral
Percentage tests or one of the Average Contribution Percentage Tests
for the Plan Year. Any such Qualified Nonelective Contributions for a
Plan Year shall be allocated to the Employer Nonelective Contribution
Accounts of Non-Highly Compensated Employees in the proportion that
each such Employee's Compensation for the Plan Year bears to the total
Compensation of all such Employees for the Plan Year. All Qualified
Nonelective Contributions for a Plan Year shall be made to the Trust
no later than the end of the 12-month period immediately following the
close of the Plan Year.
4.8 Rollover Contributions.
(a) An Employee who has participated in any other qualified plan
described in Section 401(a) of the Code or in a qualified annuity plan
described in Section 403(a) of the
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Code shall be permitted, subject to the approval of the Plan
Administrator, to make a rollover contribution to the Plan of an
amount received by the Employee which is attributable to participation
in such other plan (reduced by any employee after-tax contributions
made to the plan), provided that the rollover contribution complies
with all applicable requirements of the Code and the regulations and
rulings thereunder.
(b) Any Employee who is permitted to make a rollover contribution to
the Plan, but who has not otherwise commenced participation in the
Plan under Article 3.2, shall be considered a Participant for all
purposes under the Plan except Articles 4.1, 4.3, 4.5, 4.6 and 4.7.
(c) The Sponsor, Trustee and Recordkeeper shall not be liable for any
adverse consequences which may result to any Employee, the Employer,
the Plan or the Trust should any rollover contribution pursuant to
this Article 4.8 which is duly authorized by the Plan Administrator be
determined not to constitute a proper rollover contribution under the
Code, and the Employer specifically agrees to hold the Sponsor,
Trustee and Recordkeeper harmless from any and all such liability.
4.9 Manner of Making Contributions. All contributions to the Trust shall be paid
directly to the Trustee. Contributions may be made by check, bank wire or money
order. The Plan Administrator shall furnish the Recordkeeper with allocation
instructions with respect to each contribution which: (i) identify each
Participant on whose behalf the contribution is being made and the amount
thereof; (ii) identify whether the amount contributed on behalf of the
Participant represents an Employee Pre-Tax Contribution, Employee After-Tax
Contribution, Employer Matching Contribution, Employer Nonelective Contribution,
or rollover contribution; and (iii) direct the investment of the amount
contributed on behalf of the Participant in accordance with the provisions of
Article 6.5.
4.10 Transfer of Assets.
(a) If so authorized by the Plan Administrator, the Trustee may accept
a transfer of assets from the trustee of any other qualified plan
described in Section 401(a) of the Code or from a qualified annuity
plan described in Section 403(a) of the Code on behalf of any one or
more Employees to the extent permitted by the Code and the regulations
and rulings thereunder.
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(b) In the event assets are transferred to this Plan on behalf of any
Employee in accordance with (a) above, the transferred assets shall be
accounted for separately under Article 6.2, and any optional forms of
benefit available to the Employee under the transferor plan shall be
preserved with respect to the transferred assets of the Employee under
this Plan to the extent required by the Code and the regulations and
rulings thereunder.
(c) The Sponsor, Trustee and Recordkeeper shall not be liable for any
adverse consequences which may result to any Employee, the Employer,
the Plan or the Trust should any transfer of assets that is duly
authorized by the Plan Administrator pursuant to this Article 4.10 be
determined not to constitute a proper transfer under the Code, and the
Employer specifically agrees to hold the Sponsor, Trustee and
Recordkeeper harmless from any and all such liability.
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ARTICLE 5
NONDISCRIMINATION REQUIREMENTS
5.1 Definitions. For purposes of this Article 5, the following terms shall be
defined as follows:
(a) "Actual Deferral Percentage" means the ratio, expressed as a
percentage calculated to the nearest one-hundredth of one percent, of
the amount of Employee Pre-Tax Contributions on behalf of an Eligible
Employee for a Plan Year to the Employee's Compensation for the Plan
Year, whether or not the Employee was a Participant in the Plan for
the entire Plan Year. For these purposes, an Eligible Employee's
Employee Pre-Tax Contributions shall include any Qualified Nonelective
Contributions and Qualified Matching Contributions on behalf of the
Eligible Employee for the Plan Year which the Employer elects to treat
as Employee Pre-Tax Contributions under Article 5.4, but shall not
include any Employee Pre-Tax Contributions on behalf of the Eligible
Employee for the Plan Year which the Employer elects to treat as
Employer Matching Contributions under Article 5.8. A Highly
Compensated Employee's Employee Pre-Tax Contributions shall include
any Excess Elective Deferrals on behalf of the Highly Compensated
Employee for the Plan Year. Any Eligible Employee who does not elect
to make Employee Pre-Tax Contributions and who does not receive any
allocation of Qualified Nonelective Contributions or Qualified
Matching Contributions which are treated as Employee Pre-Tax
Contributions for a Plan Year shall have a zero Actual Deferral
Percentage for the Plan Year. An Eligible Employee's Actual Deferral
Percentage for a Plan Year shall be calculated by disregarding any
Employee Pre-Tax Contributions on behalf of the Eligible Employee for
the Plan Year which are properly returned to the Eligible Employee as
an Excess Amount under Article 11.
(b) "Average Actual Deferral Percentage" means, for the group of
Eligible Employees who are Highly Compensated Employees for a Plan
Year or the group of Eligible Employees who are Non-Highly Compensated
Employees for the Plan Year, the average of the Actual Deferral
Percentages of all Eligible Employees in such group for the Plan Year.
(c) "Average Contribution Percentage" means, for the group of Eligible
Employees who are Highly Compensated Employees for a Plan Year or the
group of Eligible Employees who are Non-Highly Compensated Employees
for the Plan Year, the
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average of the Contribution Percentages of all Eligible Employees in
such group for the Plan Year.
(d) "Contribution Percentage" means the ratio, expressed as a
percentage calculated to the nearest one-hundredth of one percent, of
the sum of Employer Matching Contributions (other than Qualified
Matching Contributions treated as Employee Pre-Tax Contributions under
Article 5.4), Employee After-Tax Contributions, and any Employee
Pre-Tax Contributions and Qualified Nonelective Contributions treated
as Employer Matching Contributions under Article 5.8, on behalf of an
Eligible Employee for a Plan Year to the Employee's Compensation for
the Plan Year, whether or not the Employee was a Participant in the
Plan for the entire Plan Year. For these purposes, an Eligible
Employee's Contribution Percentage for any Plan Year shall be
calculated by excluding any Employer Matching Contributions which are
forfeited either to correct Excess Aggregate Contributions or because
the contributions to which they relate are Excess Elective Deferrals,
Excess Contributions, or Excess Aggregate Contributions. An Eligible
Employee's Contribution Percentage for a Plan Year shall be calculated
by disregarding any Employee After-Tax Contributions or Employee
Pre-Tax Contributions on behalf of the Eligible Employee for the Plan
Year which are properly returned to the Eligible Employee as an Excess
Amount under Article 11.
(e) "Compensation" means the total amount of compensation (within the
meaning of Section 415(c)(3) of the Code) received by an Employee from
the Employer while an Eligible Employee under the Plan during the Plan
Year. An Eligible Employee's Compensation for a Plan Year shall
include all Employee Pre-Tax Contributions made to the Plan on behalf
of the Employee for the Plan Year, and all elective contributions made
by the Employer for the Plan Year to any other plan on behalf of the
Employee which are not currently includible in the gross income of the
Employee under Section 125, 402(a)(8), 402(h) or 403(b) of the Code,
provided that the Employer has elected to treat all such elective
contributions as compensation with respect to all employees under all
plans of the Employer.
(f) "Eligible Employee" means, with respect to any Plan Year, any
Employee who is eligible to commence participation in the Plan under
Article 3.2 and to have Employee Pre-Tax Contributions made to the
Plan under Article 4.1 for the Plan Year, regardless of whether any
contributions are made to the Plan on behalf of the Employee for the
Plan Year.
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(g) "Excess Contributions" means, with respect to any Plan Year, the
excess of the aggregate amount of Employee Pre-Tax Contributions,
including any Qualified Nonelective Contributions and Qualified
Matching Contributions treated as Employee Pre-Tax Contributions under
Article 5.4, actually made to the Plan on behalf of Highly Compensated
Employees for the Plan Year over the maximum amount of such
contributions permitted under Article 5.2.
(h) "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of the aggregate amount of Employer Matching
Contributions, Employee After-Tax Contributions, and any Employee
Pre-Tax Contributions and Qualified Nonelective Contributions treated
as Employer Matching Contributions under Article 5.8, actually made to
the Plan on behalf of Highly Compensated Employees for the Plan Year
over the maximum amount of such contributions permitted under Article
5.6.
(i) "Family Member" means, with respect to any Eligible Employee, an
individual described in Section 414(q)(6)(B) of the Code.
(j) "Highly Compensated Employee" includes, for any Plan Year, all
Highly Compensated Active Employees and all Highly Compensated Former
Employees:
(1) A Highly Compensated Active Employee includes any
Employee who performs service for the Employer during the
Determination Year and who during the Look-Back Year:
(i) received Compensation from the Employer in
excess of the $75,000 indexed amount of Section
414(q)(1)(B) of the Code in effect for the
Look-Back Year;
(ii) received Compensation from the Employer in
excess of the $50,000 indexed amount of Section
414(q)(1)(C) of the Code in effect for the
Look-Back Year and was a member of the top-paid
group within the meaning of Section 414(q)(4) of
the Code for such year; or
(iii) was an officer of the Employer as described
in Section 414(q)(1)(D) of the Code for such
year.
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(2) A Highly Compensated Active Employee also includes:
(i) any Employee who is described in (1) above if
the term "Determination Year" is substituted for
the term "Look-Back Year" and the Employee is one
of the 100 Employees who received the most
Compensation from the Employer during the
Determination Year; and
(ii) any Employee who is a five percent owner of
the Employer at any time during the Look-Back
Year or Determination Year.
(3) A Highly Compensated Former Employee includes any
Employee who separated from service with the Employer (or
was deemed to have separated from service) prior to the
Determination Year, performs no service for the Employer
during the Determination Year, and was a Highly Compensated
Active Employee for either the year of separation from
service or any Determination Year ending on or after the
employee's 55th birthday.
(4) For purposes of this Article 5.1(j), the term
"Determination Year" shall mean the Plan Year, and the term
"Look-Back Year" shall mean the twelve-month period
immediately preceding the Determination Year (unless the
Employer elects, in accordance with the regulations under
Section 414(q) of the Code, to make the Look-Back Year the
calendar year ending with or within the applicable
Determination Year).
(5) If during a Determination Year or Look-Back Year an
Employee is a family member of either (i) a five percent
owner who is an active or former Employee, or (ii) a Highly
Compensated Employee who is one of the 10 most highly
compensated Employees ranked on the basis of Compensation
paid by the Employer during such year, then the family
member and the five percent owner or top-ten Highly
Compensated Employee shall be treated as a single Employee
receiving aggregate Compensation and Plan contributions
equal to the sum of the Compensation and Plan contributions
on behalf of the family member and five percent owner or
top-ten Highly Compensated Employee. For these purposes,
family members shall include the spouse, lineal ascendant
and descendants of the Employee and the spouses of such
lineal ascendant and descendants.
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(6) The determination of Highly Compensated Employees,
including the determination of the number and identity of
Employees in the top-paid group, the top-100 Employees, the
number of Employees treated as officers and the Compensation
that is taken into account with respect to each Employee
shall be made in accordance with Section 414(q) of the Code
and the regulations thereunder.
(k) "Non-Highly Compensated Employee" means, for any Plan Year, an
Employee who is not a Highly Compensated Employee.
(l) "Qualified Matching Contributions" means any Employer Matching
Contributions to this Plan on behalf of Eligible Employees, and any
matching contributions (as defined in Section 401(m)(4)(A) of the
Code) by the Employer to any other plan or plans on behalf of Eligible
Employees, which are nonforfeitable (fully vested) when made and which
are subject to the distribution restrictions of Section 401(k)(2)(B)
of the Code, provided that amounts attributable to such contributions
are not distributable solely on account of the Employee's hardship. A
Qualified Matching Contribution is not treated as forfeitable merely
because under the Plan it is forfeited when the contribution to which
it relates is treated as an Excess Elective Deferral, Excess
Contribution or Excess Aggregate Contribution.
(m) "Qualified Nonelective Contributions" means any Employer
Nonelective Contributions to this Plan on behalf of Eligible
Employees, and any qualified nonelective contributions (as defined in
Section 401(m)(4)(C) of the Code) by the Employer to any other plan or
plans on behalf of Eligible Employees that Eligible Employees may not
elect to receive in cash until distributed from the plan, which are
nonforfeitable (fully-vested) when made, and which are subject to the
distribution restrictions of Section 401(k)(2)(B) of the Code,
provided that amounts attributable to such contributions are not
distributable merely on account of the Employee's hardship.
5.2 Average Actual Deferral Percentage Tests. For each Plan Year, the Plan shall
satisfy one of the following Average Actual Deferral Percentage tests with
respect to the Employee Pre-Tax Contributions, and any Qualified Nonelective
Contributions and Qualified Matching Contributions treated as Employee Pre-Tax
Contributions under Article 5.4, made to the Plan for the Plan Year:
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(a) the Average Actual Deferral Percentage for the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year shall
not exceed the Average Actual Deferral Percentage for the group of
Eligible Employees who are Non-Highly Compensated Employees for the
Plan Year multiplied by 1.25; or
(b) the Average Actual Deferral Percentage for the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year shall
not exceed the Average Actual Deferral Percentage for the group of
Eligible Employees who are Non-Highly Compensated Employees for the
Plan Year multiplied by two, provided that the Average Actual Deferral
Percentage for the group of Eligible Employees who are Highly
Compensated Employees for the Plan Year does not exceed the Average
Actual Deferral Percentage for the group of Eligible Employees who are
Non-Highly Compensated Employees by more than two percentage points.
5.3 Special Rules.
(a) Aggregation of Family Members. For purposes of determining the
Actual Deferral Percentage of any Eligible Employee who is a Highly
Compensated Employee and who is subject to the family aggregation rule
of Section 414(q)(6) of the Code because the Employee is either a
five-percent owner or one of the ten most highly-paid Highly
Compensated Employees, the Employee Pre-Tax Contributions (and any
Qualified Matching Contributions and Qualified Nonelective
Contributions treated as Employee Pre-Tax Contributions under Article
5.4) made on behalf of any Family Member of the Highly Compensated
Employee for the Plan Year shall, to the extent required by
regulations of the Secretary of Treasury, be treated as made on behalf
of the Highly Compensated Employee, and any Compensation of such
Family Member for the Plan Year shall, to the extent required by
regulations of the Secretary of Treasury, be treated as Compensation
of the Highly Compensated Employee. In such a case, the Family Member
of the Highly Compensated Employee shall not be considered a separate
employee for purposes of calculating Average Actual Deferral
Percentages for the Plan Year.
(b) Highly Compensated Employees Under Multiple Cash or Deferred
Arrangements. In the case of any Eligible Employee who is a Highly
Compensated Employee for a Plan Year and who is eligible to
participate in more than one cash or deferred arrangement described in
Section 401(k) of the Code maintained by the Employer during the Plan
Year, the Actual Deferral Percentage of the Employee for the Plan
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Year shall be calculated by treating all such cash or deferred
arrangements in which the Employee is eligible to participate as one
arrangement. If the Highly Compensated Employee participates in two or
more such cash or deferred arrangements that have different plan
years, all cash or deferred arrangements ending with or within the
same calendar year shall be treated as a single arrangement.
(c) Aggregation of Plans. In the event that this Plan satisfies the
requirements of Section 401(a)(4), 401(k) or 410(b) of the Code only
if aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of such sections of the Code only if
aggregated with this Plan, then this Article 5 shall be applied by
determining the Actual Deferral Percentages of Employees as if all
such plans were a single plan. For plan years beginning after December
31, 1989, plans may be aggregated in order to satisfy Section 401(k)
of the Code only if they have the same plan year.
5.4 Treatment of Qualified Matching Contributions and Qualified Nonelective
Contributions as Employee Pre-Tax Contributions. If any Qualified Matching
Contributions or Qualified Nonelective Contributions are made on behalf of
Eligible Employees for a Plan Year, the Employer may elect, in accordance with
the regulations of the Secretary of Treasury under Section 401(k) of the Code,
to treat all or a portion of such Qualified Matching Contributions or Qualified
Nonelective Contributions as Employee Pre-Tax Contributions for purposes of
calculating the Actual Deferral Percentages of Eligible Employees for the Plan
Year. Any such Qualified Nonelective Contributions or Qualified Matching
Contributions for a Plan Year must be made no later than the end of the 12-month
period immediately following the close of the Plan Year.
5.5 Correction of Excess Contributions
(a) General rule. If the Plan does not satisfy one of the Average
Actual Deferral Percentage tests of Article 5.2 as of the end of a
Plan Year, the Excess Contributions for the Plan Year shall be
corrected if the Employer makes Qualified Nonelective Contributions to
the Plan on behalf of Non-Highly Compensated Employees in accordance
with Article 4.7(b) in an amount sufficient to enable the Plan to
satisfy one of the Average Actual Deferral Percentage tests of Article
5.2 for the Plan Year, or if the Excess Contributions for the Plan
Year are timely distributed to Highly Compensated Employees in
accordance with subsection (c) below.
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(b) Allocation of Excess Contributions. In the event Excess
Contributions are made to the Plan for a Plan Year, the Actual
Deferral Percentage for the Highly Compensated Employee with the
highest Actual Deferral Percentage for the Plan Year shall be reduced
to the minimum extent necessary either:
(i) to enable the Plan to satisfy one of the Average Actual
Deferral Percentage tests of Article 5.2 for the Plan
Year; or
(ii) to cause the Employee's Actual Deferral Percentage to
equal the next highest Actual Deferral Percentage of any
Highly Compensated Employee for the Plan Year.
This process shall be repeated until the Average Actual Deferral
Percentage for the group of Eligible Employees who are Highly
Compensated Employees is sufficiently reduced to enable the Plan to
satisfy one of the Average Actual Deferral Percentage tests of Article
5.2 for the Plan Year. The amount of Excess Contributions to be
allocated to each Highly Compensated Employee for the Plan Year shall
equal the total Employee Pre-Tax Contributions, including Qualified
Matching Contributions and Qualified Nonelective Contributions treated
as Employee Pre-Tax Contributions under Article 5.4, on behalf of the
Highly Compensated Employee for the Plan Year minus the amount
determined by multiplying the Highly Compensated Employee's reduced
Actual Deferral Percentage (as determined above) by the Employee's
Compensation for the Plan Year. Excess Contributions shall be
allocated to Employees who are subject to the family aggregation rule
of Section 414(q)(6) of the Code in the manner prescribed by
regulations of the Secretary of Treasury.
(c) Distribution of Excess Contributions. If any Excess Contributions
allocated to Highly Compensated Employees for a Plan Year are not
corrected by Qualified Nonelective Contributions under Article 4.7(b),
such Excess Contributions, plus any income and minus any loss
allocable thereto, shall be distributed to Highly Compensated
Employees no later than 12 months following the close of the Plan
Year. Such distributions shall be made to Highly Compensated Employees
on the basis of the respective portions of the Excess Contributions
attributable to each such Highly Compensated Employee. Excess
Contributions of Highly Compensated Employees who are subject to the
family member aggregation rules of Article 5.3(a) shall be allocated
among the Family Members of the Highly Compensated Employee in
proportion to the Employee Pre-Tax Contributions (and amounts treated
as Employee Pre-Tax
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Contributions) of each Family Member which are combined to determine
the Highly Compensated Employee's Actual Deferral Percentage.
(d) Income or Loss Allocable to Excess Contributions. The income or
loss allocable to the Excess Contributions referred to in subsection
(c) above shall include the allocable income or loss for the Plan Year
of the Excess Contributions and shall be calculated using any
reasonable method for computing income or loss, provided such method
is used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by the
Plan for allocating income or loss to Participants' separate accounts
under the Plan.
(e) Alternative Method for Calculating Income or Loss Allocable to
Excess Contributions. Notwithstanding (d) above, the Plan may elect to
calculate the income or loss allocable to the amount of Excess
Contributions referred to in subsection (c) above by multiplying the
total investment income or loss (including dividends, interest,
realized gains or losses, and unrealized appreciation or depreciation)
allocable to the Participant's Employee Pre-Tax Contributions and
amounts treated as Employee Pre-Tax Contributions under Article 5.4
for the Plan Year by a fraction, the numerator of which is the Excess
Contributions allocated to the Participant for the Plan Year, and the
denominator of which is the total account balance attributable to the
Participant's Employee Pre-Tax Contributions and amounts treated as
Employee Pre-Tax Contributions under Article 5.4 as of the end of the
Plan Year, reduced by the investment gain (or increased by the
investment loss) allocated to such total amount for the Plan Year.
(f) Coordination with Excess Elective Deferrals. The amount of any
Excess Contributions to be distributed under subsection (c) above with
respect to any Highly Compensated Employee for a Plan Year shall be
reduced by any Excess Elective Deferrals previously distributed to the
Highly Compensated Employee under Article 4.4(c) for the Employee's
taxable year ending with or within the Plan Year.
(g) Accounting for Excess Contributions. The amount of Excess
Contributions allocated to a Highly Compensated Employee for a Plan
Year which is distributed under subsection (c) above shall be
attributed first to the Participant's Employee Pre-Tax Contributions
for the Plan Year and then, to the extent such Excess Contributions
exceed the Participant's Employee Pre-Tax Contributions for the Plan
Year, attributed
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to amounts treated as Employee Pre-Tax Contributions under Article 5.4
in proportion to the amounts of such contributions on behalf of the
Participant for the Plan Year.
(h) Excise Tax. If any Excess Contributions for a Plan Year are not
distributed to Highly Compensated Employees in accordance with
subsection (c) above within 2 1/2 months after the close of the Plan
Year, the Employer shall be subject to the 10 percent excise tax of
Section 4979 of the Code, unless Qualified Nonelective Contributions
are made to the Plan on behalf of Non-Highly Compensated Employees in
accordance with Article 4.7(b) prior to the end of the 12-month period
immediately following the close of the Plan Year in an amount
sufficient to enable the Plan to satisfy one of the Average Actual
Deferral Percentage tests of Article 5.2 for the Plan Year.
5.6 Average Contribution Percentage Tests. For each Plan Year for which any
Employer Matching Contributions are made to the Plan (other than Qualified
Matching Contributions treated as Employee Pre-Tax Contributions for the Plan
Year under Article 5.4) or any Employee After-Tax Contributions are made to the
Plan, the Plan shall satisfy one of the following Average Contribution
Percentage tests for the Plan Year:
(a) the Average Contribution Percentage for the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year shall
not exceed the Average Contribution Percentage for the group of
Eligible Employees who are Non-Highly Compensated Employees for the
Plan Year multiplied by 1.25; or
(b) the Average Contribution Percentage for the group of Eligible
Employees who are Highly Compensated Employees for the Plan Year shall
not exceed the Average Contribution Percentage for the group of
Eligible Employees who are Non-Highly Compensated Employees for the
Plan Year multiplied by two, provided that the Average Contribution
Percentage for the group of Eligible Employees who are Highly
Compensated Employees for the Plan Year does not exceed the Average
Contribution Percentage for the group of Eligible Employees who are
Non-Highly Compensated Employees by more than two percentage points.
5.7 Special Rules.
(a) Aggregation of Family Members. For purposes of determining the
Contribution Percentage of any Eligible Employee who is a Highly
Compensated Employee and who is subject to the family aggregation rule
of Section 414(q)(6) of the Code because the
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Employee is either a five-percent owner or one of the ten most highly
paid Highly Compensated Employees, the Employee After-Tax
Contributions and Employer Matching Contributions (and any Employee
Pre-Tax Contributions and Qualified Nonelective Contributions treated
as Employer Matching Contributions under Article 5.8) made on behalf
of any Family Member of the Highly Compensated Employee for the Plan
Year shall, to the extent required by regulations of the Secretary of
Treasury, be treated as made on behalf of the Highly Compensated
Employee, and any Compensation of such Family Member for the Plan Year
shall, to the extent required by regulations of the Secretary of
Treasury, be treated as Compensation of the Highly Compensated
Employee. In such a case, the Family Member of the Highly Compensated
Employee shall not be considered a separate employee for purposes of
calculating Average Contribution Percentages for the Plan Year.
(b) Highly Compensated Employees Under Multiple Plans. In the case of
any Eligible Employee who is a Highly Compensated Employee for a Plan
Year and who is eligible to participate in more than one plan
maintained by the Employer during the Plan Year, all matching
contributions (as defined in Section 401(m)(4)(A) of the Code), all
employee contributions, and any elective deferrals and qualified
nonelective contributions taken into account under Section 401(m)(3)
of the Code with respect to the Employee for the Plan Year, shall be
aggregated for purposes of determining the Employee's Contribution
Percentage for the Plan Year. If the Highly Compensated Employee
participates in two or more cash or deferred arrangements described in
Section 401(k) of the Code maintained by the Employer that have
different plan years, all such cash or deferred arrangements ending
with or within the same calendar year shall be treated as a single
arrangement.
(c) Aggregation of Plans. In the event that this Plan satisfies the
requirements of Section 401(a)(4), 401(m) or 410(b) of the Code only
if aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of such sections of the Code only if
aggregated with this Plan, then this Article 5 shall be applied by
determining the Contribution Percentages of Employees as if all such
plans were a single plan. For plan years beginning after December 31,
1989, plans may be aggregated to satisfy Section 401(m) of the Code
only if they have the same plan year.
(d) Collectively Bargained Plans. If this Plan (or any portion of the
Plan) is a collectively bargained plan which automatically satisfies
Section 410(b) of the Code, the requirements of Article 5.6 shall be
treated as satisfied with respect to the
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Employee After-Tax Contributions and Employer Matching Contributions
to the Plan (or portion of the Plan).
5.8 Treatment of Employee Pre-Tax Contributions and Qualified Nonelective
Contributions as Employer Matching Contributions. The Employer may elect, in
accordance with the regulations of the Secretary of Treasury under Section
401(m) of the Code, to treat all or a portion of the Employee Pre-Tax
Contributions and any Qualified Nonelective Contributions on behalf of Eligible
Employees for a Plan Year as Employer Matching Contributions for purposes of
calculating the Contribution Percentages of Eligible Employees for the Plan
Year. Any such Employee Pre-Tax Contributions or Qualified Nonelective
Contributions for a Plan Year must be made no later than the end of the 12-month
period immediately following the close of the Plan Year. Notwithstanding the
preceding, the Employer may elect to treat Employee Pre-Tax Contributions as
Employer Matching Contributions for purposes of calculating Contribution
Percentages only if one of the Average Actual Deferral Percentage Tests of
Article 5.2 is satisfied before the Employee Pre-Tax Contributions are treated
as Employer Matching Contribution for the Plan Year, and one of the Average
Actual Deferral Percentage Tests of Article 5.2 continues to be satisfied for
the Plan Year excluding the Employee Pre-Tax Contributions treated as Employer
Matching Contributions for the Plan Year.
5.9 Correction of Excess Aggregate Contributions
(a) General Rule. If the Plan does not satisfy one of the Average
Contribution Percentages tests of Article 5.6 as of the end of a Plan
Year, the Excess Aggregate Contributions for the Plan Year shall be
corrected if the Employer makes Qualified Nonelective Contributions to
the Plan on behalf of Non-Highly Compensated Employees in accordance
with Article 4.7(b) in an amount sufficient to enable the Plan to
satisfy one of the Average Contribution Percentage tests of Article
5.6 for the Plan Year, or if the Excess Aggregate Contributions for
the Plan Year are forfeited or timely distributed to Highly
Compensated Employees in accordance with subsection (c) below.
(b) Allocation of Excess Contributions. In the event Excess Aggregate
Contributions are made to the Plan for a Plan Year, the Contribution
Percentage for the Highly Compensated Employee with the highest
Contribution Percentage for the Plan Year shall be reduced to the
minimum extent necessary either:
(i) to enable the Plan to satisfy one of the Average
Contribution Percentage tests of Article 5.6 for the Plan
Year, or;
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(ii) to cause the Highly Compensated Employee's Contribution
Percentage to equal the next highest Contribution Percentage
of any Highly Compensated Employee for the Plan Year.
This process shall be repeated until the Average Contribution
Percentage for the group of Eligible Employees who are Highly
Compensated Employees for the Plan Year is sufficiently reduced to
enable the Plan to satisfy one of the Average Contribution Percentage
tests of Article 5.6 for the Plan Year. The amount of Excess Aggregate
Contributions to be allocated to each Highly Compensated Employee for
the Plan Year shall equal the total Employee After-Tax Contributions
and Employer Matching Contributions, including Employee Pre-Tax
Contributions and Qualified Nonelective Contributions treated as
Employer Matching Contributions under Article 5.8, on behalf of the
Highly Compensated Employee for the Plan Year minus the amount
determined by multiplying the Highly Compensated Employee's reduced
Contribution Percentage (as determined above) by the Employee's
Compensation for the Plan Year. Excess Aggregate Contributions shall
be allocated to Employees who are subject to the family aggregation
rules of Section 414(q)(6) of the Code in the manner prescribed by
regulations of the Secretary of Treasury.
(c) Forfeiture or Distribution of Excess Aggregate Contributions. If
any Excess Aggregate Contributions allocated to Highly Compensated
Employees for a Plan Year are not corrected by Qualified Nonelective
Contributions under Article 4.7(b), such Excess Aggregate
Contributions, plus any income or minus any loss allocable thereto,
must be forfeited to the extent attributable under subsection (g)
below to Employer Matching Contributions that are not vested under
Article 7.2, and otherwise distributed to Highly Compensated Employees
no later than 12 months following the close of the Plan Year. Such
distributions shall be made to Highly Compensated Employees on the
basis of the respective portions of the Excess Aggregate Contributions
attributable to each such Highly Compensated Employee. Excess
Aggregate Contributions of Highly Compensated Employees who are
subject to the family member aggregation rules of Article 5.7(a) shall
be allocated among the Family Members of the Highly Compensated
Employee in proportion to the Employee After-Tax Contributions and
Employer Matching Contributions of each Family Member which are
combined to determine the Highly Compensated Employee's Average
Contribution Percentage.
(d) Income or Loss Allocable to Excess Aggregate Contributions. The
income or loss allocable to the Excess Aggregate Contributions
referred to in subsection (c) above
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shall include the allocable income or loss for the Plan Year of the
Excess Aggregate Contributions and shall be calculated using any
reasonable method for computing income or loss, provided such method
is used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by the
Plan for allocating income or loss to Participants' separate accounts
under the Plan.
(e) Alternative Method for Calculating Income or Loss Allocable to
Excess Aggregate Contributions. Notwithstanding (d) above, the Plan
may elect to calculate the income or loss allocable to the amount of
Excess Aggregate Contributions referred to in subsection (c) above by
multiplying the total investment income or loss (including dividends,
interest, realized gains or losses, and unrealized appreciation or
depreciation) allocable to the Participant's Employee After-Tax
Contributions, Employer Matching Contributions, and amounts treated as
Employer Matching Contributions under Article 5.8 for the Plan Year by
a fraction, the numerator of which is the Excess Aggregate
Contributions allocated to the Participant for the Plan Year, and the
denominator of which is the total account balance attributable to the
Participant's Employee After-Tax Contributions, Employer Matching
Contributions and amounts treated as Employer Matching Contributions
under Article 5.8 as of the end of the Plan Year, reduced by the
investment gain (or increased by the investment loss) allocated to
such total amount for the Plan Year.
(f) Coordination with Excess Contributions. The determination of the
amount of Excess Aggregate Contributions for a Plan Year shall be made
after the determination of the amount of any Excess Contributions for
the Plan Year.
(g) Accounting for Excess Aggregate Contributions.
(i) Non-Matched Employee After-Tax Contributions. If the
Plan provides for Employee After-Tax Contributions which are
not matched by Employer Matching Contributions under Article
4.6, the amount of Excess Aggregate Contributions allocated
to a Highly Compensated Employee for a Plan Year shall be
attributed first to the Employee After-Tax Contributions by
the Participant for the Plan Year. To the extent such Excess
Aggregate Contributions exceed the Participant's Employee
After-Tax Contributions for the Plan Year, such Excess
Aggregate Contributions shall be attributed to the Employer
Matching Contributions and any amounts treated as Employer
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Matching Contributions under Article 5.8 in proportion to
the amounts of such contributions on behalf of the
Participant for the Plan Year.
(ii) Other Situations. If subsection (a) above does not
apply, the amount of Excess Aggregate Contributions
allocated to a Highly Compensated Employee for a Plan Year
shall be attributed to the Employee After-Tax Contributions,
Employer Matching Contributions and any amounts treated as
Employer Matching Contributions under Article 4.6 in
proportion to the amounts of such contributions on behalf of
the Participant for the Plan Year.
(h) Excise Tax. If any Excess Aggregate Contributions for a Plan Year
are not forfeited or distributed to Highly Compensated Employees in
accordance with subsection (c) above within 2 1/2 months after the
close of the Plan Year, the Employer shall be subject to the 10
percent excise tax of Section 4979 of the Code, unless Qualified
Nonelective Contributions are made to the Plan on behalf of Non-Highly
Compensated Employees in accordance with Article 4.7(b) prior to the
end of the 12-month period immediately following the close of the Plan
Year in an amount sufficient to enable the Plan to satisfy one of the
Average Contribution Percentage Tests of Article 5.6 for the Plan
Year.
5.10 Multiple Use of Alternative Limitation.
(a) In General. This Article 5.10 shall apply for any Plan Year if:
(i) any Eligible Employee who is a Highly Compensated
Employee is eligible to participate in a plan maintained by
the Employer (including this Plan) which is subject to the
requirements of Section 401(m) of the Code because such plan
accepts matching contributions or employee contributions for
the plan's plan year beginning with or within the Plan Year;
(ii) this Plan does not pass the 1.25 Average Actual
Deferral Percentage Test of Article 5.2(a) for the Plan
Year, and the Employer's plan which is subject to the
requirements of Section 401(m) of the Code does not pass the
1.25 contribution percentage test of Section 401(m)(2)(A)(i)
of the Code for the plan's plan year beginning with or
within the Plan Year; and
(iii) the sum of the Average Actual Deferral Percentage for
all Eligible Employees who are Highly Compensated Employees
for the Plan Year, and
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the average contribution percentage (as defined in Section
401(m)(3) of the Code) for all Highly Compensated Employees
who are eligible to participate in the Employer's plan which
is subject to Section 401(m) of the Code for the plan's plan
year beginning with or within the Plan Year, exceeds the
aggregate limit of subsection (b) below.
For purposes of this Article 5.10, the Average Actual Deferral
Percentage of Highly Compensated Employees for the Plan Year shall be
determined after any corrective measures as described in Article 5.5
are undertaken for the Plan Year. The average contribution percentage
for all Highly Compensated Employees under the Employer's plan that is
subject to Section 401(m) of the Code shall be determined after any
corrective measures (including those described in Article 5.9) are
undertaken to satisfy the average contribution percentage tests of
Section 401(m)(2) of the Code for the plan's plan year beginning with
or within the Plan Year.
(b) Aggregate Limit. For purposes of this Article 5.10, the term
"aggregate limit" shall means the sum of:
(i) 125 percent of the greater of: (1) the Average Actual
Deferral Percentage for Eligible Employees who are
Non-Highly Compensated Employees for the Plan Year or (2)
the average contribution percentage (as defined in Section
401(m)(3) of the Code) for Non-Highly Compensated Employees
who are eligible to participate in the Employer's plan that
is subject to Section 401(m) of the Code for the plan's plan
year beginning with or within the Plan Year; plus
(ii) two plus the lesser of (1) or (2) above, provided that
in no event shall this amount exceed 200 percent of the
lesser of (1) or (2) above.
(c) Required Correction. In the event that the aggregate limit of
subsection (b) is exceeded as of the end of any Plan Year, the
Employer shall reduce the Average Actual Deferral Percentage of those
Highly Compensated Employees who also participate in the Employer's
plan which is subject to Section 401(m) of the Code (beginning with
such Highly Compensated Employees whose Actual Deferral Percentage is
the highest) so that the aggregate limit is not exceeded. The amount
by which each such Highly Compensated Employee's Average Actual
Deferral Percentage is reduced shall be
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determined in accordance with the procedures of Article 5.5, by
treating the excess amount as Excess Contributions.
5.11 Recordkeeping Requirements.
(a) Average Actual Deferral Percentage Tests. The Employer shall
maintain records sufficient to demonstrate satisfaction of the Average
Actual Deferral Percentage tests of Article 5.2 for each Plan Year and
the extent to which any Qualified Nonelective Contributions and
Qualified Matching Contributions are treated as Employee Pre-Tax
Contributions under Article 5.4 for purposes of such tests. The
determination of Eligible Employees' Actual Deferral Percentages, and
the disposition of all Employee Pre-Tax Contributions (and any
Qualified Nonelective Contributions and Qualified Matching
Contributions treated as Employee Pre-Tax Contributions under Article
5.4) on behalf of Participants, shall satisfy such other requirements
as may be prescribed by the Secretary of Treasury.
(b) Average Contribution Percentage Tests. The Employer shall maintain
records sufficient to demonstrate satisfaction of the Average
Contribution Percentage tests of Article 5.6 for each Plan Year and
the extent to which any Employee Pre-Tax Contributions and Qualified
Nonelective Contributions are treated as Employer Matching
Contributions under Article 5.8 for purposes of such tests. The
determination of Eligible Employees' Average Contribution Percentages,
and the disposition of all Employer Matching Contributions and
Employee After-Tax Contributions (and any Employee Pre-Tax
Contributions and Qualified Nonelective Contributions treated as
Employer Matching Contributions under Article 5.8) on behalf of
Participants, shall satisfy such other requirements as may be
prescribed by the Secretary of Treasury.
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ARTICLE 6
ALLOCATIONS AND INVESTMENTS
6.1 Receipt of Contributions by Trustee. All contributions to the Plan which are
paid to the Trustee under Article 4.9 shall be held in trust and managed by the
Trustee in accordance with the terms and conditions of the Trust Agreement.
6.2 Establishment of Separate Accounts by Recordkeeper.
(a) In accordance with the directions of the Plan Administrator, the
Recordkeeper shall establish and maintain the following separate
accounts in the name of each Participant:
(i) an Employee Pre-Tax Contribution Account to record the
Employee Pre-Tax Contributions to the Plan on behalf of the
Participant under Articles 4.1 and 4.3, and the earnings,
losses and expenses allocated thereto;
(ii) an Employee After-Tax Contribution Account to record
any Employee After-Tax Contributions to the Plan by the
Participant under Articles 4.5 and the earnings, losses and
expenses allocated thereto;
(iii) an Employer Matching Contribution Account to record
any Employer Matching Contributions to the Plan under
Article 4.6 on behalf of the Participant and the earnings,
losses and expenses allocated thereto;
(iv) an Employer Nonelective Contribution Account to record
any Employer Nonelective Contributions to the Plan on behalf
of the Participant under Article 4.7 and the earnings,
losses and expenses allocated thereto;
(v) a Rollover Contribution Account to record any rollover
contributions to the Plan on behalf of the Participant under
Article 4.8 and the earnings, losses and expenses allocated
thereto; and
(vi) such other accounts as the Plan Administrator shall
direct in accordance with the provisions of the Plan or the
requirements of the Code.
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If the Employer makes both Employer Nonelective Contributions under
Article 4.7(a) which do not qualify as Qualified Nonelective
Contributions and Qualified Nonelective Contributions under Article
4.7(b), separate sub-accounts shall be established within the
Participant's Employer Nonelective Contribution Account to record
separately such contributions and the earnings, losses and expenses
allocated thereto.
(b) The Plan Administrator shall certify to the Recordkeeper the name,
address and social security number of each Participant for whom a
separate account is to be established under the Plan. The Plan
Administrator shall furnish the Recordkeeper with instructions in
accordance with Article 4.9 allocating all contributions to the Plan
to Participants' separate accounts. In crediting amounts to
Participants' separate accounts, the Recordkeeper shall be fully
entitled to rely on the instructions furnished by the Plan
Administrator, and shall be under no duty to make any inquiry or
investigation with respect thereto.
(c) The maintenance of separate accounts under subsection (a) above
shall be for accounting purposes only. Any amount distributed to a
Participant or Beneficiary under Article 8, or any amount withdrawn by
a Participant under Article 9, shall be charged to the appropriate
separate accounts of the Participant as of the applicable Valuation
Date for such distribution or withdrawal under Article 8.4 or 9.5.
6.3 Allocation of Employer Nonelective Contributions under Integrated Plan. If
the Employer has adopted an Integrated Plan by selecting the Permitted Disparity
(Integration with Social Security) Allocation Formula under Section 6 of the
Adoption Agreement, the Employer Nonelective Contributions to the Plan for any
Plan Year plus any Forfeitures (if applicable under Article 6.3) shall be
allocated to Participants' Employer Nonelective Contribution Accounts in the
following manner:
(a) First, the Employer Nonelective Contributions and Forfeitures, if
applicable, shall be allocated to the Employer Nonelective
Contribution Accounts of all Participants in the proportion that each
such Participant's total Compensation for the Plan Year bears to the
total Compensation of all Participants for the Plan Year; provided,
however, that the amount allocated to any Participant's Employer
Nonelective Contribution Account for the Plan Year under this
paragraph shall not exceed three percent of the Participant's
Compensation for the Plan Year.
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(b) Second, any remaining Employer Nonelective Contributions and
Forfeitures, if applicable, shall be allocated to the Employer
Nonelective Contribution Accounts of all Participants eligible to
share in Employer Nonelective Contributions for the Plan Year in the
proportion that each such Participant's Compensation in excess of the
Integration Level designated in the Adoption Agreement for the Plan
Year bears to the total Compensation in excess of said Integration
Level of all such Participants; provided, however, that the amount
allocated to any Participant's Employer Nonelective Contribution
Account for the Plan Year under this paragraph shall not exceed three
percent of the Participant's Compensation in excess of the Integration
Level designated in the Adoption Agreement.
(c) Third, any remaining Employer Nonelective Contributions and
Forfeitures, if applicable, shall be allocated to the Employer
Nonelective Contribution Accounts of all Participants eligible to
share in Employer Nonelective Contributions for the Plan Year in the
proportion that the sum of each such Participant's total Compensation
plus Compensation in excess of the Integration Level designated in the
Adoption Agreement bears to the sum of the total Compensation plus
Compensation in excess of said Integration Level for all such
Participants for the Plan Year; provided however, that the amount
allocated to any Participant's Employer Nonelective Contribution
Accounts for the Plan Year under this paragraph shall not exceed the
Maximum Disparity Rate designated in the Adoption Agreement multiplied
by the sum of the Participant's total Compensation plus Compensation
in excess of the Integration Level designated in the Adoption
Agreement.
(d) Fourth, any remaining Employer Nonelective Contributions and
Forfeitures, if applicable, shall be allocated to the Employer
Nonelective Contribution Accounts of all Participants eligible to
share in Employer Nonelective Contributions for the Plan Year in the
proportion that each such Participant's total Compensation for the
Plan Year bears to the total Compensation of all eligible Participants
for the Plan Year.
6.4 Allocation of Forfeitures. Any Forfeitures which have become available for
allocation under Article 4.6, Article 5.9(c) or Article 8.5 during a Plan Year
shall be used to reduce the amount of contributions thereafter required to be
made to the Plan by the Employer.
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<PAGE>
6.5 Investment of Plan Assets.
(a) Unless otherwise designated by the Employer in the Adoption
Agreement, all amounts which are allocated to the separate accounts of
a Participant under the Plan shall be invested and reinvested in the
Vanguard Funds or other investments authorized under the Trust
Agreement in accordance with the Participant's investment directions.
All such investment directions by a Participant shall be made in
accordance with rules and procedures prescribed by the Plan
Administrator. To the extent that any Participant fails to provide
investment directions in accordance with such rules and procedures,
the Plan Administrator or other named fiduciary for the Plan which the
Employer identifies in the Adoption Agreement shall be responsible for
directing the investment of amounts allocated to the Participant's
separate accounts under the Plan. A Participant shall be permitted to
change investment directions both as to existing amounts credited to
his or her separate accounts under the Plan and future contributions
by or on behalf of the Participant under the Plan. Any such change in
investment directions shall be made in accordance with rules and
procedures prescribed by the Plan Administrator.
(b) To the extent that the Employer provides in the Adoption Agreement
that the investment of the assets of the Plan shall not be subject to
participant direction, such Plan assets shall be invested and
reinvested in the Vanguard Funds or other investments authorized under
the Trust Agreement as directed by the Plan Administrator or other
named fiduciary for the Plan which the Employer identifies in the
Adoption Agreement to be responsible for Plan investments. All such
investment directions by the Plan Administrator or other named
fiduciary for the Plan shall uniformly and ratably apply to all
Participants similarly situated.
6.6 Allocation of Earnings and Losses.
(a) The dividends, capital gains distributions, and other earnings
received on any shares or units of the Vanguard Funds or on any other
Plan investments which are specifically credited or earmarked to a
Participant's separate account under the Plan shall be allocated to
such separate account and immediately reinvested, to the extent
practicable, in additional shares or units of such Vanguard Funds or
other earmarked Plan investments.
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(b) Any Plan earnings or losses attributable to the investment of a
Participant's separate account under the Plan in a loan to the
Participant under Article 10 shall be allocated to the Participant's
separate account in accordance with the provisions of Article 10.9.
(c) To the extent not otherwise provided in subsection (a) or (b)
above, the assets of the Plan shall be valued at their current fair
market value on periodic Valuation Dates as determined by the
Recordkeeper, which shall occur no less frequently than once each
calendar quarter. On each such periodic Valuation Date, the earnings
or losses of the Plan since the immediately preceding periodic
Valuation Date shall be allocated to the separate accounts of all
Participants and former Participants under the Plan in the ratio that
the fair market value of each such account as of that immediately
preceding Valuation Date, reduced by any distributions or withdrawals
therefrom since such preceding Valuation Date, bears to the total fair
market value of all separate accounts as of the immediately preceding
Valuation Date, reduced by any distributions or withdrawals therefrom
since such preceding Valuation Date.
6.7 Insurance Contracts. Any insurance contract purchased on behalf of a
Participant under the Plan shall provide that all proceeds payable upon the
death of the Participant shall be paid to the Plan. The Plan shall be required
to distribute all such proceeds in accordance with the Plan's distribution
provisions (including the provisions of Article 8.8(a) requiring in certain
cases a qualified preretirement survivor annuity to be distributed to the
Participant's surviving spouse). Under no circumstances shall the Plan retain
any part of the proceeds. In the event of any conflict between the terms of the
Plan and the terms of any insurance contract purchased hereunder, the provisions
of the Plan shall control.
6.8 No Rights Created by Allocation. Any allocation of contributions or earnings
to the separate account of a Participant under this Article 6 shall not cause
the Participant to have any right, title or interest in any assets of the Plan
except at the time and under the terms and conditions expressly provided for in
the Plan.
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ARTICLE 7
VESTING
7.1 Full Vesting in Employee Contributions and Rollover Contributions. A
Participant shall be fully vested at all times in all amounts allocated to the
Participant's Employee Pre-Tax Contribution Account, Employee After-Tax
Contribution Account and Rollover Contribution Account.
7.2 Vesting in Employer Contributions.
(a) General Rule. Except as otherwise provided below, the vested
amounts in a Participant's Employer Matching Contribution Account and
Employer Nonelective Contribution Account shall be determined by the
number of Years of Service completed by the Participant for vesting
purposes (as determined under Article 7.3) and the vesting schedules
designated by the Employer in the Adoption Agreement.
(b) Full Vesting Upon Normal Retirement Age, Disability or Death.
Notwithstanding the vesting schedules designated by the Employer in
the Adoption Agreement, all amounts allocated to a Participant's
Employer Matching Contribution Account and Employer Nonelective
Contribution Account shall automatically become fully vested if the
Participant attains Normal Retirement Age, incurs a Disability or dies
while employed by the Employer.
(c) Vesting After In-Service Withdrawals. If a Participant makes an
in-service withdrawal under Article 9.2 or 9.3 from the Participant's
Employer Matching Contribution Account or Employer Nonelective
Contribution Account at a time when the Participant is not
fully-vested, the Participant's vested amount in such account on any
date thereafter shall be an amount ("X") determined by the following
formula: X = P(AB + D) - D. For purposes of this formula, "P" is the
Participant's vested percentage under the Plan's vesting schedule on
the relevant date, "AB" is the account balance on the relevant date,
and "D" is the amount of the Participant's in-service withdrawal.
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7.3 Year of Service for Vesting Purposes.
(a) General Rule. For vesting purposes, a Participant shall be
credited with one Year of Service for each Plan Year during which the
Participant completes 1,000 or more Hours of Service. All Years of
Service completed by the Participant, including Years of Service
completed prior to the Effective Date of the Plan or prior to the
Participant's commencement of participation in the Plan, shall be
counted for vesting purposes except as otherwise provided in Article
7.4.
(b) Service With Predecessor Employer. If so designated in the
Adoption Agreement, a Participant's Years of Service shall include
years of service (determined in a manner consistent with (a) above)
with any predecessor employer of the Employer; provided, however, that
if the Employer is maintaining the Plan as the plan of a predecessor
employer, an Employee's Years of Service shall automatically include
years of service with such predecessor employer without regard to any
designation in the Adoption Agreement.
7.4 Years of Service Upon Reemployment. If a Participant incurs five or more
consecutive one-year Breaks in Service, any Years of Service completed by the
Participant after the Breaks in Service shall be disregarded for purposes of
determining the Participant's vested amounts in his or her Employer Matching
Contribution Account and Employer Nonelective Contribution Account prior to the
date the Participant incurred the Breaks in Service (although both pre-Break and
post-Break Years of Service shall count for purposes of determining the
Participant's vested percentage in his or her Employer Matching Contribution
Account and Employer Nonelective Contribution Account after the date the
Participant incurred the Breaks in Service). To the extent necessary, separate
sub-accounts shall be established by the Recordkeeper within the Participant's
Employer Matching Contribution Account and Employer Nonelective Contribution
Account to reflect the Participant's pre-Break and post-Break amounts derived
from Employer Matching Contributions and Employer Nonelective Contributions,
which sub-accounts shall share in the allocation of earnings and losses under
Article 6.6.
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ARTICLE 8
DISTRIBUTION OF BENEFITS
8.1 Distribution Upon Separation from Service. A Participant shall be entitled
to receive the vested amounts (as determined under Articles 7.1 and 7.2)
credited to the Participant's separate accounts under the Plan when the
Participant separates from service with the Employer.
8.2 Distribution Upon Death. In the event of a Participant's death, the
Participant's Beneficiary under Article 8.16 shall be entitled to receive the
vested amounts (as determined under Article 7.1 and 7.2) credited to the
Participant's separate accounts under the Plan, which amounts shall be
determined after the payment of any preretirement survivor annuity required
under Article 8.8.
8.3 Optional Forms of Distribution; Participant Consent.
(a) Amounts Not Greater Than $3,500. If the total vested amount which
a Participant is entitled to receive under Article 8.1 does not exceed
(or at the time of any prior distribution did not exceed) $3,500, such
amount shall be distributed to the Participant in a lump-sum payment
as soon as practicable following the date of the Participant's
separation from service. For purposes of this Article 8.3(a), a
Participant's vested account balance shall not include any accumulated
deductible employee contributions within the meaning of Section
72(o)(5)(B) of the Code for Plan Years beginning prior to January 1,
1989.
(b) Amounts Greater than $3,500. If the total vested amount which a
Participant is entitled to receive under Article 8.1 exceeds (or at
the time of any prior distribution exceeded) $3,500, such amount shall
not be distributed to the Participant prior to his or her required
beginning date under Article 8.6(b) unless the Participant consents to
such distribution within 90 days before the date of distribution. If
the vested amount which the Participant is entitled to receive is not
required to be distributed in the form of a qualified joint and
survivor annuity under Article 8.7, the Participant shall be permitted
to elect to have such amount distributed:
(i) in a single-sum payment; or
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(ii) if so designated by the Employer in the Adoption
Agreement, in monthly, quarterly or annual installment
payments over a period not to exceed the life expectancy of
the Participant or the joint life and last survivor
expectancy of the Participant and the Participant's
designated Beneficiary.
The method (if applicable) and timing of distribution shall be
selected by the Participant on a form prescribed for these purposes by
the Plan Administrator. If no such selection is made by the
Participant and the Participant's distribution is not required to be
made in the form of a qualified joint and survivor annuity under
Article 8.7, the Participant's distribution shall be automatically
made in a lump-sum payment no later than the Participant's required
beginning date under Article 8.6(b).
(c) Explanation to Participants. No more than 90 days and no less than
30 days prior to the date of any distribution to a Participant under
(b) above, the Plan Administrator shall furnish the Participant with a
general explanation of the material features and relative values of
the optional forms of distribution available under the Plan and the
Participant's right to defer such distribution to the Participant's
required beginning date. If after having received the explanation the
Participant affirmatively elects to receive a distribution from the
Plan or to make a direct rollover under Article 8.18, such
distribution or direct rollover shall be made as soon as practicable
following the Participant's affirmative election notwithstanding the
30-day requirement of the preceding sentence. If the Participant
elects to defer the distribution of all or any portion of the amount
which the Participant is entitled to receive, such deferred amount
shall remain in the Plan and continue to receive allocations of
earnings and losses pursuant to Article 6.6 until the Participant
elects or is otherwise required to receive such deferred amount.
(d) Payments to Death Beneficiaries. Any amount which a Participant's
Beneficiary is entitled to receive under Article 8.2 upon the death of
the Participant shall be distributed in a lump-sum payment or in
monthly, quarterly or annual installment payments over a specified
period as selected by the Beneficiary in accordance with the minimum
distribution requirements of Article 8.6(d). The method and timing of
distribution shall be selected by the Beneficiary on a form prescribed
for these purposes by the Plan Administrator. If the Beneficiary does
not select a method of distribution, the entire amount which the
Beneficiary is entitled to receive under Article 8.2 shall be
distributed to the Beneficiary in a lump-sum payment no later than the
December 31st of the calendar year containing the fifth anniversary of
the Participant's death. If the
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Beneficiary dies before receiving a complete distribution of any
amount which the Beneficiary is entitled to receive under Article 8.2,
such remaining amount shall be distributed as soon as practicable in a
lump-sum payment to the Beneficiary's estate.
8.4 Distribution Upon Written Instructions; Valuation of Distributions. All
distributions from the Plan shall be made by the Trustee as soon as practicable
following receipt of proper instructions furnished by the Plan Administrator
setting forth the name and address of the recipient and the amount and form of
distribution. In the case of a single-sum payment, the amount of the
distribution shall be determined by the value of the amounts credited to the
Participant's separate accounts under the Plan as of the Valuation Date on which
the Trustee receives instructions in good order from the Plan Administrator to
make the distribution. In the case of installment payments, the amount of each
distribution shall be determined by the value of the amounts credited to the
Participant's separate accounts under the Plan as of the Valuation Date on which
the installment payment is to be made in accordance with the Plan
Administrator's instructions. In making any distribution from the Plan, the
Trustee shall be fully entitled to rely on instructions furnished to it by the
Plan Administrator, and shall be under no duty to make any inquiry or
investigation with respect thereto.
8.5 Forfeitures Upon Separation from Service.
(a) If a Participant separates from service with the Employer prior to
becoming fully vested in the Participant's Employer Matching
Contribution Account or Employer Nonelective Contribution Account (the
"Employer Contribution Accounts") under Article 7.2 and the
Participant elects or is otherwise required to receive a distribution
of the entire vested amounts credited to the Participant's Employer
Contribution Accounts, the total non-vested amount of the
Participant's Employer Contribution Accounts shall be treated as a
Forfeiture. For these purposes, a Participant who separates from
service at a time when the vested amount credited to the Participant's
Employer Contribution Accounts is zero shall be deemed to have
received a distribution of the vested amount credited to the
Participant's Employer Contribution Accounts and the entire non-vested
amount of the Participant's Employer Contribution Accounts shall be
treated as a Forfeiture. All Forfeitures by Participants under this
Article 8.5 shall be available for allocation in accordance with the
provisions of Article 6.4.
(b) If a Participant who separates from service with the Employer
prior to becoming fully vested in the Participant's Employer
Contribution Accounts under Article 7.2 elects at any time under
Article 8.4 to receive less than the entire vested amount
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credited to the Participant's Employer Contribution Accounts, the
non-vested amount of the Participant's Employer Contribution Accounts
which shall be treated as a Forfeiture upon such distribution shall
equal the total non-vested amount credited to the Participant's
Employer Contribution Accounts prior to the distribution multiplied by
a fraction, the numerator of which is the amount of the Participant's
distribution from the Employer Contribution Accounts, and the
denominator of which is the total vested amount credited to the
Employer Contribution Accounts immediately prior to the distribution.
(c) Any amount forfeited by a Participant under (a) or (b) above
(unadjusted for gains or losses) shall be restored to the
Participant's Employer Contribution Accounts if the Participant
returns to the service of the Employer and repays the amount of any
distribution the Participant received from the Participant's Employer
Contribution Accounts upon the Participant's prior separation from
service before the earlier of:
(i) five years after the first date the Participant is
subsequently reemployed by the Employer; or
(ii) the date the Participant incurs five consecutive
one-year Breaks in Service for vesting purposes
following the date of the Participant's distribution.
The amount of any such Forfeiture shall be restored to the
Participant's Employer Contribution Accounts from other Forfeiture
amounts by Participants and the Plan earnings attributable thereto, or
by additional Employer contributions to the Plan on behalf of the
Participant. If a Participant is deemed to have received a
distribution under (a) above because the Participant separated from
service at a time when the vested amount credited to the Participant's
Employer Contribution Accounts was zero and the Participant resumes
employment covered under the Plan before the date the Participant
incurs five consecutive one-year Breaks in Service, the amount
forfeited by the Participant under (a) above shall be restored to the
Participant's Employer Contribution Accounts upon the Participant's
reemployment by the Employer.
8.6 Minimum Distribution Requirements.
(a) Application. All minimum distributions required to be made to
Participants and Beneficiaries under this Article 8.6 shall be
determined in accordance with the U.S. Department of Treasury
regulations under Section 401(a)(9) of the Code, including the
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minimum distribution incidental benefit requirement of Treasury
Regulation Section 1.401(a)(9)-2. Unless otherwise specified, the
provisions of this Article 8.6 shall apply to calendar years beginning
after December 31, 1984, and shall take precedence over any
inconsistent provisions of the Plan.
(b) Required Beginning Date. All amounts which a Participant is
entitled to receive under Article 8.1 shall be distributed or begin to
be distributed to the Participant no later than the Participant's
required beginning date. For purposes of this requirement, a
Participant's required beginning date shall be the first day of April
of the calendar year following the calendar year in which the
Participant attains age 70 1/2; provided, however, that in the case of
any Participant who attained age 70 1/2 before January 1, 1988, the
following rules shall apply:
(i) if the Participant is not a five-percent owner of the
Employer within the meaning of Section 416(i) of the Code,
the Participant's required beginning date shall be the first
day of April following the later of the calendar year in
which the Participant attains age 70 1/2 or the calendar
year in which the Participant retires;
(ii) if the Participant is a five-percent owner of the
Employer within the meaning of Section 416(i) of the Code
during any year beginning after December 31, 1979, the
Participant's required beginning date shall be the first day
of April following the later of: (1) the calendar year in
which the Participant attains age 70 1/2, or (2) the earlier
of the calendar year with or within which ends the Plan Year
in which the Participant becomes a five-percent owner or the
calendar year in which the Participant retires. Once minimum
distributions have commenced to a five-percent owner under
this Article 8.6, they must continue to be made even if the
Participant ceases to be a five-percent owner in a
subsequent year.
(c) Minimum Distribution Amounts. The method of distribution selected
by a Participant under Article 8.3 shall satisfy the minimum
distribution requirements of this Article 8.6 for each calendar year
beginning with the calendar year immediately preceding the calendar
year which contains the Participant's required beginning date (the
"first distribution calendar year"). The minimum distribution amount
for the first distribution calendar year shall be made on or before
the Participant's required beginning date. The minimum distribution
amount for each distribution calendar year
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thereafter, including the calendar year in which the Participant's
required beginning date occurs, shall be made on or before December
31st of that calendar year.
(i) For calendar years beginning after December 31, 1988,
the minimum distribution amount for each distribution
calendar year shall be determined by dividing the
Participant's account balance under the Plan for the
distribution calendar year by the lesser of: (1) the life
expectancy of the Participant or joint life and last
survivor expectancy of the Participant and his or her
designated Beneficiary for the calendar year; or (2) if the
Participant's designated Beneficiary under the Plan is not
the Participant's spouse, the applicable divisor for the
distribution calendar year determined from the table set
forth in Treasury Regulation Section 1.401(a)(9)-2, Q&A-4.
(ii) For calendar years beginning before January 1, 1989,
the minimum distribution amount for each distribution
calendar year shall be determined by dividing the
Participant's vested account balance under the Plan for the
distribution calendar year by the life expectancy of the
Participant or joint and last survivor expectancy of the
Participant and his or her designated Beneficiary for the
distribution calendar year; provided however, that if the
Participant's designated Beneficiary under the Plan is not
the Participant's spouse, the method of distribution
selected by the Participant under Article 8.3 must provide
for at least 50 percent of the amount available for
distribution under the Plan at the time of selection to be
paid within the life expectancy of the Participant.
For purposes of these minimum distribution requirements, a
Participant's account balance under the Plan for any distribution
calendar year shall mean the total vested amount credited to the
Participant's separate accounts under the Plan as of the last
Valuation Date of the preceding calendar year (the "valuation calendar
year"), increased by the amount of any contributions or Forfeitures
allocated to the Participant's accounts in the valuation calendar year
after such Valuation Date, and decreased by any distributions made
from the Participant's accounts in the valuation calendar year after
such Valuation Date. If any minimum distribution for the Participant's
first distribution calendar year is made in the following calendar
year but on or before the Participant's required beginning date, the
amount of such minimum distribution shall be treated as if it had been
made in the Participant's first distribution calendar year.
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(d) Death Distribution Provisions. Any amount which a Participant's
designated Beneficiary shall be entitled to receive under Article 8.2
upon the death of the Participant shall be distributed in accordance
with the following rules:
(i) Where Distribution Had Already Commenced. If the
Participant died after minimum distributions had already
commenced, all amounts payable to the Participant's
designated Beneficiary shall be distributed at least as
rapidly as under the method of distribution in effect prior
to the Participant's death. For these purposes, a
Participant's minimum distributions shall be considered to
have commenced no earlier than the Participant's required
beginning date. If distribution in the form of an annuity as
described in Article 8.6(f) has irrevocably commenced prior
to the Participant's required beginning date, the
Participant's minimum distributions shall be considered to
have commenced on the date distributions actually commenced
under the annuity contract.
(ii) Five-Year Rule. If the Participant died before minimum
distributions had already commenced in accordance with (a)
above, all amounts payable to the Participant's designated
Beneficiary shall be distributed by December 31st of the
calendar year which contains the fifth anniversary of the
date of the Participant's death.
(iii) Exception to Five-Year Rule. Notwithstanding
subsection (ii) above, all amounts payable to the
Participant's designated Beneficiary may (if subsection (a)
does not apply) be distributed in installment payments over
a period not extending beyond the Beneficiary's life
expectancy, provided such distribution commences by December
31st of the calendar year following the calendar year of the
Participant's death. If the designated Beneficiary is the
surviving spouse of the Participant, the date that
distributions are required to commence in accordance with
the preceding sentence shall be the later of: (1) December
31st of the calendar year following the calendar year of the
Participant's death, or (2) December 31st of the calendar
year in which the Participant would have attained age
70 1/2.
(iv) Calculation of Minimum Installment Payments. In the
case of installment payments over the Beneficiary's life
expectancy under (iii) above, the minimum distribution
amount for each calendar year shall be determined by
dividing the Beneficiary's account balance under the Plan
for the calendar
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year by the Beneficiary's life expectancy for the calendar
year. For these purposes, a Beneficiary's account balance
under the Plan for any calendar year shall mean the total
vested amount credited to the deceased Participant's
separate accounts under the Plan which the Beneficiary is
entitled to receive under Article 8.2 as of the last
Valuation Date of the preceding calendar year (the
"valuation calendar year"), increased by the amount of any
contributions or Forfeitures allocated to the deceased
Participant's accounts in the valuation calendar year after
such Valuation Date, and decreased by any distributions made
from the deceased Participant's accounts in the valuation
calendar year after such Valuation Date.
(e) Applicable Life Expectancy. For purposes of this Article 8.6, the
life expectancy of the Participant or his or her designated
Beneficiary, or the joint life and last survivor expectancy of the
Participant and his or her designated Beneficiary, shall be determined
by the following rules:
(i) Life expectancy or joint life and last survivor
expectancy shall be computed by using the expected return
multiples contained in Tables V and VI of Treasury
Regulation Section 1.72-9. The life expectancies of the
Participant and his or her spouse (if the spouse is
designated Beneficiary) shall be recalculated annually
unless otherwise elected by the Participant or by the spouse
in the case of distributions referred to in (d)(iii) above
on or before the date minimum distributions are required to
begin. Any such election by the Participant or spouse shall
be irrevocable and shall apply to all subsequent years. The
life expectancy of a non-spouse Beneficiary shall not be
recalculated.
(ii) For purposes of determining the minimum distribution
amounts to be paid to the Participant for each distribution
calendar year under (c)(i) or (ii) above, the life
expectancy of the Participant, or the joint life and last
survivor expectancy of the Participant and his or her
designated Beneficiary, shall be calculated based on the
attained age of the Participant or Beneficiary as of the
Participant's or Beneficiary's birthday in the first
distribution calendar year. If life expectancy is being
recalculated, the life expectancy of the Participant, or the
joint life and last survivor expectancy of the Participant
and his or her spouse (if the spouse is the designated
Beneficiary), shall be calculated based
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on the attained age of the Participant and spouse as of the
Participant's and spouse's birthday in each succeeding
distribution calendar year.
(iii) For purposes of determining the minimum distribution
amounts to be paid to the Beneficiary for each calendar year
under (d)(iv) above, the life expectancy of the designated
Beneficiary shall be calculated based on the attained age of
the Beneficiary as of the Beneficiary's birthday in the
calendar year in which distributions are required to
commence under (d)(iii). If life expectancy is being
recalculated, the life expectancy of the Participant's
surviving spouse (if the spouse is designated Beneficiary)
shall be calculated based on the attained age of the spouse
as of the spouse's birthday in each succeeding calendar
year.
(iv) For purposes of determining the joint life and last
survivor expectancy of the Participant and his or her
designated Beneficiary under (c)(i) or (ii) above, or the
life expectancy of the Participant's designated Beneficiary
under (d)(iii) above, the Participant's designated
Beneficiary shall mean the appropriate individual (if any)
designated as Beneficiary under Article 8.16 as determined
in accordance with the Department of Treasury regulations
under Section 401(a)(9) of the Code.
(f) Annuity Distributions. If distributions to any Participant or
Beneficiary from the Plan are to be made in the form of an annuity
contract purchased from an insurance company, such contract shall
provide for distributions to be made in accordance with Section
401(a)(9) of the Code and the Treasury Regulations thereunder.
8.7 Joint and Survivor Annuity Requirement.
(a) General Rule. Notwithstanding any provision of the Plan to the
contrary, any amount which a Participant is entitled to receive from
the Plan (including any withdrawal under Article 9) shall be
distributed in the form of a qualified joint and survivor annuity in
the absence of a qualified waiver under Article 8.10, or except as
otherwise provided in Article 8.11 or 8.12. The requirement for a
qualified joint and survivor annuity shall apply to all vested amounts
payable to the Participant under the Plan (whether derived from
Employer or Employee contributions) as of the earliest date upon which
the Participant is entitled to receive a distribution under the Plan.
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(b) Definition of Qualified Joint and Survivor Annuity. For purposes
of this Article 8, the term "qualified joint and survivor annuity"
means, in the case of a married participant, an immediate annuity
payable for the life of the Participant with a survivor annuity
payable for the life of the Participant's surviving spouse which is
not less than 50 percent nor more than 100 percent of the annuity
payable for the life of the Participant, as designated by the
Participant during his or her lifetime; provided that if no such
designation is made by the Participant, the percentage shall be 50
percent. In the case of an unmarried participant, the term "qualified
joint and survivor annuity" means an annuity payable for the life of
the Participant. The qualified joint and survivor annuity shall be
purchased with the total amount available for distribution from the
Participant's separate accounts under the Plan at the time of
distribution.
8.8 Preretirement Survivor Annuity Requirement.
(a) General Rule. Notwithstanding any provision of the Plan to the
contrary, in the case of any vested Participant who dies before his or
her annuity starting date, a qualified preretirement survivor annuity
shall be payable to the surviving spouse of the Participant in the
absence of a qualified waiver under Article 8.10, or except as
otherwise provided in Article 8.11 or 8.12. For these purposes, the
Participant's "annuity starting date" means the first day of the first
period for which an amount is paid to the Participant under the Plan
as an annuity or any other form of benefit. The surviving spouse may
elect to have the preretirement survivor annuity distributed within a
reasonable time after the Participant's death.
(b) Definition of Qualified Preretirement Survivor Annuity. For
purposes of this Article 8, the term "qualified preretirement survivor
annuity" means an annuity payable for the life of the Participant's
surviving spouse which is purchased with 50 percent of the
Participant's vested account balance under the Plan at the time of the
Participant's death. For these purposes, the Participant's "vested
account balance" shall mean the aggregate vested amount (as determined
under Article 7) credited to the Participant's separate accounts under
the Plan derived from all Employer and Employee contributions
(including rollover contributions) at the time of death.
8.9 Notice and Explanation to Participants.
(a) Explanation of Joint and Survivor Annuity. The Plan Administrator
shall provide each Participant with a written explanation at least 30
days, but no more than
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90 days, prior to the Participant's annuity starting date (as defined
in Article 8.8(a)) setting forth: (i) the terms and conditions of the
qualified joint and survivor annuity under Article 8.7; (ii) the
Participant's right to make, and the effect of, an election to waive
the qualified joint and survivor annuity form of distribution in
accordance with Article 8.10; (iii) the rights of the Participant's
spouse; and (iv) the right to make, and the effect of, a revocation of
a previous election to waive the qualified joint and survivor annuity
method of distribution.
(b) Explanation of Preretirement Survivor Annuity. The Plan
Administrator shall provide each Participant within the period
beginning with the first day of the Plan Year in which the Participant
attains age 32 and ending with the close of the Plan Year in which the
Participant attains age 35 a written explanation of the qualified
preretirement survivor annuity of Article 8.8 in such terms and in
such a manner as would be comparable to the explanation required under
subsection (a) above with respect to the qualified joint and survivor
annuity. If a Participant commences participation in the Plan after
the first day of the Plan Year in which the Participant attains age
32, the Plan Administrator shall provide the written explanation
required by the preceding sentence no later than the end of the
one-year period beginning on the date the Participant commences
participation in the Plan. If a Participant terminates employment with
the Employer before attaining age 35, the Plan Administrator shall
provide the required written explanation during the period beginning
one year before the Participant's termination of employment and ending
one year after such termination of employment; provided that if the
Participant thereafter resumes employment with the Employer, the Plan
Administrator shall provide the required written explanation during
the period otherwise required above.
8.10 Waiver of Qualified Joint or Survivor Annuity or Qualified Preretirement
Survivor Annuity.
(a) General Rule. A Participant may elect at any time during the
applicable election period to waive the qualified joint and survivor
annuity form of distribution or the qualified preretirement survivor
annuity (or both), and may revoke any such election at any time during
the applicable election period.
(b) Spousal Consent Required. Any election by a Participant to waive
the qualified joint and survivor annuity form of distribution or the
qualified preretirement survivor annuity under (a) above shall not be
effective unless:
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(i) the Participant's spouse consents in writing to the
Participant's election;
(ii) the Participant's election designates the specific
non-spouse Beneficiary (including any class of
Beneficiaries or contingent Beneficiaries) to receive the
Participant's benefits under the Plan upon the Participant's
death, which Beneficiary designation shall not be thereafter
changed by the Participant without further spousal consent
(unless the spouse expressly permits subsequent Beneficiary
designations by the Participant without further spousal
consent);
(iii) the spouse's consent acknowledges the effect of the
Participant's election; and
(iv) the spouse's consent is witnessed by a Plan
representative or a notary public.
In addition, in the case of a waiver of the qualified joint and
survivor annuity, the Participant's election shall specify the
optional form of distribution elected by the Participant under Article
8.3 which may not be thereafter changed without further spousal
consent (unless the spouse expressly permits subsequent changes by the
Participant without further spousal consent). Notwithstanding the
preceding, if the Participant establishes to the satisfaction of the
Plan Administrator that there is no spouse or the spouse cannot be
located, the Participant's election to waive the qualified joint and
survivor annuity form of distribution or the qualified preretirement
survivor annuity shall be deemed a qualified election for which no
spousal consent is required.
Any consent by a spouse, or establishment that the consent
of a spouse may not be obtained, shall not be effective with respect
to any other spouse. Any spousal consent which permits subsequent
changes by the Participant to the Beneficiary designation or optional
form of distribution without the requirement of further spousal
consent shall acknowledge that the spouse has the right to limit such
consent to a specific Beneficiary or optional form of distribution,
and that the spouse voluntarily elects to relinquish such right. A
Participant may revoke any prior waiver of the qualified joint and
survivor annuity or qualified preretirement survivor annuity at any
time prior to the commencement of benefits without the consent of his
or her spouse, and the number of such revocations shall not be
limited. Any new waiver of the qualified joint and survivor annuity or
qualified preretirement survivor annuity, or any
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change to an existing Beneficiary designation by a Participant under
Article 8.16 which was in effect at the time of a waiver of the
qualified joint and survivor annuity or qualified preretirement
survivor annuity, shall require a new spousal consent in accordance
with this Article 8.10(b). No consent obtained under this Article
8.10(b) shall be valid unless the Participant has received the
appropriate notice and written explanation as provided in Article 8.9.
(c) Applicable Election Period Defined. For purposes of this Article
8.10, the term "applicable election period" means: (i) in the case of
an election to waive the qualified joint and survivor annuity form of
distribution, the 90-day period ending on the Participant's annuity
starting date (as defined in Article 8.8(a)); or (ii) in the case of
an election to waive the qualified preretirement survivor annuity, the
period which begins on the first day of the Plan Year in which the
Participant attains age 35 and ends on the date of the Participant's
death. If a Participant separates from service prior to the first day
of the Plan Year in which he attains age 35, the applicable election
period for purposes of (ii) shall begin on the date of the
Participant's separation from service with respect to the separate
accounts of the Participant under the Plan as of the date of
separation.
8.11 Exception To Joint and Survivor Annuity and Preretirement Survivor Annuity
Requirements. The qualified joint and survivor annuity requirement of Article
8.7 and the qualified preretirement survivor annuity requirement of Article 8.8
shall not apply with respect to any Participant: (1) who does not or cannot
elect to receive payments under the Plan in the form of a life annuity; and (2)
whose spouse is the sole Beneficiary entitled to receive the Participant's
vested account balance under the Plan at the time of the Participant's death,
unless the Participant has no surviving spouse or the Participant's spouse has
consented, in a manner conforming to the requirements of Article 8.10(b), to the
designation by the Participant of another Beneficiary who shall receive all
amounts credited to the Participant's separate accounts under the Plan at the
time of the Participant's death. This Article 8.11 shall not be operative with
respect to any Participant if it is determined that this Plan constitutes a
direct or indirect transferee of the Participant's interest in a defined benefit
plan, money purchase pension plan (including a target benefit plan), or stock
bonus or profit-sharing plan which is subject to the survivor annuity
requirements of Sections 401(a)(11) and 417 of the Code. In addition, this
Article 8.11 shall not be operative with respect to any Participant unless the
Participant's spouse is the beneficiary of any insurance on the Participant's
life which may be purchased by Employer Contributions or Forfeitures which are
allocated to the Participant's separate accounts
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under the Plan. For purposes of this Article 8.11, the Participant's "vested
account balance" shall have the same meaning as provided in Article 8.8(b).
8.12 Cash-Outs.
(a) Distributions Not In Excess Of $3,500. If the total amount
otherwise required to be distributed in the form of a qualified joint
and survivor annuity or a qualified preretirement survivor annuity to
a Participant or his or her surviving spouse under Article 8.7 or 8.8
does not exceed $3,500, such distribution shall automatically be made
in the form of a lump-sum payment. No distribution shall be made under
the preceding sentence after the first day of the first period for
which an amount is received as an annuity unless the Participant and
his or her spouse (or the Participant's surviving spouse if the
Participant has died) consents in writing to such distribution.
(b) Distributions In Excess of $3,500 Only With Consent. If the total
amount otherwise required to be distributed in the form of a qualified
joint and survivor annuity or a qualified preretirement survivor
annuity to a Participant or his or her surviving spouse under Article
8.7 or 8.8 exceeds $3,500, such distribution shall be made in the form
of a lump-sum payment if the Participant and his or her spouse (or the
Participant's surviving spouse if the Participant has died) consent in
writing to such distribution.
8.13 Former Spouse Under Qualified Domestic Relations Order. For purposes of the
qualified joint and survivor annuity requirement and the qualified preretirement
survivor annuity requirement of this Article 8, a former spouse of a Participant
shall be treated as the spouse or surviving spouse of the Participant, and any
current spouse of a Participant shall not be treated as the spouse or surviving
spouse of the Participant, to the extent provided for in any qualified domestic
relations order as described in Section 414(p) of the Code.
8.14 Purchase of Annuities; Nontransferability Provisions. The Plan
Administrator shall be responsible for arranging the purchase of any annuity
contract required to be distributed by the Plan under this Article 8 and
directing the Trustee to transfer Plan funds for purposes of making any such
purchase. Any annuity contract distributed by the Plan to a Participant or his
or her surviving spouse shall be nontransferable and comply with all
requirements of this Plan.
8.15 Commencement of Benefits. Unless a Participant elects otherwise,
distribution of the Participant's benefits under the Plan shall commence no
later than 60 days after the close of the
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Plan Year in which the latest of the following events occurs: (i) the
Participant attains age 65 (or Normal Retirement Age, if earlier); (ii) the 10th
anniversary of the Plan Year in which the Participant commenced participation in
the Plan; or (iii) the Participant's termination of employment with the
Employer. Notwithstanding the foregoing, the failure of any Participant to
consent to a distribution of benefits under Article 8.3(b) shall be deemed to be
an election by the Participant to defer the distribution of his benefits for
purposes of this Article 8.15.
8.16 Designation of Beneficiary. A Participant may designate from time to time
any person or persons, who may be designated contingently or successively and
who may be an entity other than a natural person, as the Participant's
Beneficiary who shall be entitled to receive, except as otherwise required under
Article 8.7 or 8.8, any undistributed vested amounts credited to the
Participant's separate accounts under the Plan at the time of the Participant's
death. Notwithstanding the preceding, to the extent that the Employer elects to
satisfy the exception of Article 8.11 to the survivor annuity requirements with
respect to all Participants in the Plan, the Employer may require that the sole
Beneficiary of every Participant be the Participant's spouse, unless the
Participant has no spouse or the Participant's spouse has consented, in a manner
conforming to the requirements of Article 8.10(b), to the designation by the
Participant of another Beneficiary who shall be entitled to receive any
undistributed vested amounts credited to the Participant's separate accounts
under the Plan at the time of the Participant's death. Any Beneficiary
designation by a Participant shall be made on a form prescribed by the Plan
Administrator and shall be effective only when filed with the Plan Administrator
during the Participant's lifetime. A Participant may change or revoke his or her
Beneficiary designation at any time by filing a new instrument with the Plan
Administrator (except where the Participant's spouse is required to be the
Beneficiary). If the designated Beneficiary predeceases the Participant, the
Participant's Beneficiary designation shall be ineffective. If no Beneficiary
designation is in effect at the time of the Participant's death, the
Participant's Beneficiary shall be the Participant's estate.
8.17 Distributions Pursuant to Qualified Domestic Relations Orders.
(a) In General. Notwithstanding any provision of the Plan to the
contrary, the Plan Administrator may direct the Trustee to distribute
all or any portion of a Participant's benefits under the Plan to an
alternate payee in accordance with the terms and conditions of a
qualified domestic relations order as defined in Section 414(p) of the
Code (a "QDRO"). The Plan hereby specifically permits and authorizes
distribution of a Participant's benefits under the Plan to an
alternate payee in accordance with a QDRO prior to the date the
Participant separates from service with the Employer or
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attains the Participant's earliest retirement age as defined in
Section 414(p)(4)(B) of the Code.
(b) Plan Procedures. The Plan Administrator shall be responsible for
establishing reasonable procedures for determining whether any
domestic relations order received with respect to the Plan qualifies
as a QDRO and for administering distributions in accordance with the
terms and conditions of a QDRO. If any domestic relations order is
received with respect to the Plan, the Plan Administrator shall
promptly notify the Participant and each alternate payee identified in
the order. The Plan Administrator shall determine within a reasonable
period after receipt of the domestic relations order whether the order
qualifies as a QDRO, and notify the Participant and each alternate
payee of such determination. In making any distribution to an
alternate payee pursuant to the Plan Administrator's directions under
this Article 8.17, the Trustee shall be fully entitled to rely on such
directions furnished by the Plan Administrator and shall be under no
duty to make any inquiry or investigation with respect thereto.
8.18 Direct Rollovers. This Article 8.18 applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan to the contrary
which would otherwise limit a distributee's election under this Article 8.18, a
distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have all or any portion of an eligible rollover distribution
paid directly in the form of a direct rollover to any eligible retirement plan
specified by the distributee. For purposes of this Article 8.18, the following
definitions shall apply:
(a) Eligible Rollover Distribution. An eligible rollover distribution
includes any distribution of all or any portion of the balance to the
credit of the distributee, except than an eligible rollover
distribution does not include:
(1) any distribution which is one of a series of
substantially equal periodic payments made (not less
frequently than annually) for (i) the life or life
expectancy of the distributee, (ii) the joint lives or joint
life expectancies of the distributee and the distributee's
designated beneficiary, or (iii) a specified period of ten
years or more;
(2) any distribution to the extent that such distribution is
required under Section 401(a)(9) of the Code; and
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(3) the portion of any distribution which is not includible
in the distributee's gross income (determined without regard
to the exclusion for net unrealized appreciation with
respect to employer securities).
(b) Eligible Retirement Plan. An eligible retirement plan includes an
individual retirement account described in Section 408(a) of the Code,
an individual retirement annuity described in Section 408(b) of the
Code, an annuity plan described in Section 403(b) of the Code, or a
qualified trust described in Section 401(a) of the Code which accepts
the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to an Employee's surviving
spouse, an eligible retirement plan is limited to an individual
retirement account or individual retirement annuity.
(c) Distributee. A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order,
as defined in Section 414(p) of the Code, are distributees with regard
to the interest of the spouse or former spouse.
(d) Direct Rollover. A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the distributee.
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ARTICLE 9
WITHDRAWALS
9.1 Withdrawals of Employee After-Tax Contributions. A Participant shall be
permitted to withdraw at any time all or any portion of the total amount
credited to the Participant's Employee After-Tax Contribution Account. The Plan
Administrator may prescribe uniform and nondiscriminatory rules and procedures
limiting the number of times that any Participant may make withdrawals under
this Article 9.1 during any Plan Year and the minimum amount that a Participant
may withdraw on any single occasion. No forfeitures or penalties shall apply
under the Plan solely as a result of a Participant's withdrawal of Employee
After-Tax Contributions.
9.2 Withdrawals of Rollover Contributions. A Participant shall be permitted to
withdraw at any time all or any portion of the total amount credited to the
Participant's Rollover Contribution Account. The Plan Administrator may
prescribe uniform and nondiscriminatory rules and procedures limiting the number
of times that any Participant may make withdrawals under this Article 9.2 during
any Plan Year and the minimum amount that a Participant may withdraw on any
single occasion.
9.3 Withdrawals on or After Age 59 1/2. If so designated by the Employer in the
Adoption Agreement, a Participant who has attained age 59 1/2 shall be entitled
to withdraw all or any portion of the total vested amount (as determined under
Article 7) credited to the Participant's separate accounts under the Plan. The
Plan Administrator may prescribe uniform and nondiscriminatory rules and
procedures limiting the number of times that a Participant may make withdrawals
under this Article 9.3 during any Plan Year and the minimum amount that a
Participant may withdraw on any single occasion.
9.4 Hardship Withdrawals.
(a) Immediate and Heavy Financial Need. If so designated by the
Employer in the Adoption Agreement, a Participant shall be permitted
to make a hardship withdrawal from the Plan if the Participant
certifies that he or she has incurred an immediate and heavy financial
need for funds. For these purposes, an immediate and heavy financial
need shall include a need:
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(1) to pay expenses incurred or necessary for medical care,
described in Section 213(d) of the Code, of the Participant
or the Participant's spouse, children or dependents;
(2) to purchase the principal residence of the Participant
(excluding mortgage payments);
(3) to pay tuition and related educational fees for the next
12 months of post-secondary education for the Participant or
the Participant's spouse, children, or dependents;
(4) to prevent the eviction of the Participant from his or
her principal residence or foreclosure on the mortgage of
the Participant's principal residence; or
(5) to meet any other demonstrable emergency of the
Participant as determined by the Plan Administrator on a
uniform and nondiscriminatory basis in accordance with
regulations of the Secretary of Treasury under 401(k) of the
Code.
(b) Necessary to Satisfy Financial Need. The amount of any hardship
withdrawal by a Participant under subsection (a) above shall not
exceed the amount which is necessary to satisfy the Participant's
immediate and heavy financial need and which is not reasonably
available from other resources of the Participant. For these purposes,
a hardship withdrawal will be treated as necessary to satisfy an
immediate and heavy financial need under subsection (a) above if:
(1) the Participant has obtained all distributions, other
than hardship distributions, and all nontaxable loans from
the Plan and any other plans maintained by the Employer;
(2) all plans maintained by the Employer provide that, if
the hardship withdrawal is made from the Participant's
Employee Pre-Tax Contribution Account under subsection (c)
below, the Participant's elective deferrals (as defined in
Article 4.4) and employee after-tax contributions will be
suspended for twelve months after the receipt of the
hardship distribution;
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(3) the distribution is not in excess of the amount of the
Participant's immediate and heavy financial need (including
amounts necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result from the
distribution); and
(4) all plans maintained by the Employer provide that, if
the hardship withdrawal is made from the Participant's
Employee Pre-Tax Contribution Account under subsection (c)
below, the Participant may not make elective deferrals for
the Participant's taxable year immediately following the
taxable year of the hardship distribution in excess of the
applicable limit under Section 402(g) of the Code for such
taxable year less the amount of the Participant's elective
deferrals for the taxable year of the hardship distribution.
(c) Limitations on Hardship Withdrawals. Any hardship withdrawal by
a Participant under subsection (a) above shall be made from:
(1) the Participant's Employee Pre-Tax Contributions to the
Plan, including any earnings attributable thereto which were
allocated to the Participant's Employee Pre-Tax Contribution
Account as of the end of the last Plan Year ending before
July 1, 1989 (but not the earnings allocated thereafter);
(2) the Participant's Employer Matching Contribution
Account, unless the Employer Matching Contributions
allocated thereto qualify as Qualified Matching
Contributions under Article 5.1(l) in which case only the
amount allocated to the Participant's Employer Matching
Contribution Account as of the end of the last Plan Year
ending before July 1, 1989, shall be eligible for hardship
withdrawal by the Participant; and
(3) the Participant's Employer Nonelective Contribution
Account, unless the Employer Nonelective Contributions
allocated thereto qualify as Qualified Nonelective
Contributions under Article 5.1(m) in which case only the
amount allocated to the Participant's Employer Nonelective
Contribution Account as of the end of the last Plan Year
ending before July 1, 1989, shall be eligible for hardship
withdrawal by the Participant.
(d) Prior Withdrawal of Employee After-Tax and Rollover Contributions
Required. A Participant shall not be permitted to make a hardship
withdrawal under
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subsection (a) above unless the Participant has already withdrawn, in
accordance with Articles 9.1 and 9.2, all available amounts credited
to the Participant's Employee After-Tax Contribution Account and
Rollover Contribution Account.
9.5 Manner of Making Withdrawals. Any withdrawal by a Participant under the Plan
shall be made only after the Participant files a written request with the Plan
Administrator specifying the nature of the withdrawal (and the reasons therefor,
if a hardship withdrawal), the amount of funds requested to be withdrawn, and
the separate accounts from which the withdrawal should be made. Upon approving
any withdrawal, the Plan Administrator shall furnish the Trustee with
instructions directing the Trustee to make the withdrawal from the Participant's
separate accounts under the Plan in a lump-sum payment to the Participant,
unless such withdrawal is required to be paid in the form of a qualified joint
and survivor annuity under Article 8.7. The amount of any withdrawal shall be
determined by the value of the amounts credited to the Participant's separate
accounts under the Plan as of the Valuation Date on which the Trustee receives
instructions in good order from the Plan Administrator to make the withdrawal
payment. In making any such withdrawal payment, the Trustee shall be fully
entitled to rely on the instructions furnished by the Plan Administrator, and
shall be under no duty to make any inquiry or investigation with respect
thereto.
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ARTICLE 10
LOANS
10.1 Amount of Loan. If so designated by the Employer in the Adoption Agreement,
the Plan Administrator may direct the Trustee to make a loan to a Participant
from the vested amounts (as determined under Article 7) credited to the
Participant's separate accounts under the Plan. The total amount of any such
loan, when added to the outstanding balance of all other loans to the
Participant from the Plan and any other qualified plans of the Employer, shall
not exceed the lesser of:
(a) 50 percent of the total vested accrued benefits of the Participant
under such plans as of the date of the loan; or
(b) $50,000 reduced by the excess (if any) of the highest outstanding
balance of all loans to the Participant from such plans during the
one-year period ending on the day before the loan was made over the
outstanding balance of all loans to the Participant from such plans on
the date on which the loan was made.
In no event shall any loan be made from the Plan to any Participant who is an
Owner-Employee or a shareholder-employee. For these purposes, a
"shareholder-employee" means any employee or officer of an electing small
business (Subchapter S) corporation who owns (or is considered as owning within
the meaning of Section 318(a)(1) of the Code) on any day during the taxable year
of such corporation more than 5 percent of the outstanding stock of the
corporation.
10.2 Security for Loan. Any loan to a Participant under the Plan shall be
adequately secured within the meaning of Section 4975(d) of the Code. Such
security shall include the pledge of all the Participant's right, title and
interest in the Plan, which pledge shall be evidenced by the execution of a
legally binding promissory note by the Participant. The Participant shall
further authorize the Employer to deduct specified amounts from the wages or
salary thereafter payable to the Participant by the Employer and to transmit
such amounts to the Trustee as the periodic repayments of the Participant's
loan.
10.3 Interest Rate Charged. Any loan to a Participant under the Plan shall bear
a reasonable rate of interest which is commensurate with the prevailing interest
rate charged by professional lenders for similarly secured personal loans, as
determined by the Plan Administrator. The Plan Administrator shall not
discriminate among Participants in the matter of interest rates, but loans
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granted at different times may bear different interest rates if, in the opinion
of the Plan Administrator, the difference in rates reflects prevailing interest
rates.
10.4 Repayment of Loans.
(a) Any loan to a Participant under the Plan shall by its terms be
required to be repaid within five years of the date on which the loan
is made, with the exception that a loan which is used within a
reasonable period of time to acquire a principal residence of the
Participant may be repaid over a longer, reasonable period of time as
determined by the Plan Administrator. Repayments on any loan shall be
made in regular periodic installments on a schedule prescribed by the
Plan Administrator with payments not less frequently than quarterly,
and shall be applied on a substantially level amortization basis to
reduce the principal as well as the accrued interest of the loan.
(b) The Plan Administrator shall have the sole responsibility for
assuring that a Participant timely makes all loan repayments and
notifying the Trustee in the event of any default by a Participant on
a loan repayment. Loan repayments shall be paid to the Trustee and
shall be accompanied by instructions from the Plan Administrator which
identify each Participant on whose behalf a loan repayment is being
made and the amount thereof.
10.5 Default on Loan. In the event of a default by a Participant on any loan
repayment, all remaining payments on the loan shall be immediately due and
payable. The Plan Administrator shall take any and all actions necessary and
appropriate to enforce collection of the unpaid loan, although foreclosure on
the Participant's promissory note and attachment of the Plan's security shall
not occur until a distributable event occurs under the Plan.
10.6 Setoff of Loan Upon Distributions. Prior to making any distribution of
benefits from a Participant's separate accounts under Article 8 upon the
Participant's separation from service or death, the Plan Administrator shall
direct the Trustee to deduct the total amount of any outstanding Plan loans to
the Participant, plus any unpaid interest due thereon, from the Participant's
separate accounts under the Plan in order to satisfy the amounts due on the
Participant's loans. If, upon a Participant's death, a preretirement survivor
annuity is payable under Article 8.8 from 50 percent of the total vested amount
credited to the Participant's separate accounts under the Plan, such 50 percent
amount shall be determined after reducing the total vested amount credited to
the Participant's separate accounts at the time of the Participant's
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death by the amount of any outstanding Plan loans to the Participant, plus any
unpaid interest due thereon.
10.7 Manner of Making Loans. A request by a Participant for a loan shall be made
in writing to the Plan Administrator and shall specify the amount of the loan
and the separate accounts of the Participant from which the loan should be made.
The terms and conditions on which the Plan Administrator shall approve loans
under the Plan shall be applied on a uniform and reasonably equivalent basis
with respect to all Participants and Beneficiaries who are "parties in interest"
as defined in Section 3(14) of ERISA. Loans shall not be made available to
Participants who are highly compensated employees (within the meaning of Section
414(q) of the Code) in an amount greater than the amount made available to other
employees. If a Participant's request for a loan is approved by the Plan
Administrator, the Plan Administrator shall furnish the Trustee with written
instructions directing the Trustee to make the loan in a lump sum payment to the
Participant. In making any loan under this Article 10.7, the Trustee shall be
fully entitled to rely on the instructions furnished by the Plan Administrator,
and shall be under no duty to make any inquiry or investigation with respect
thereto.
10.8 Spousal Consent Required. No loan shall be made to a Participant from the
Plan unless within the 90-day period before the making of the loan the
Participant's spouse consents in writing to the pledge of the participant's
interest in the Plan as security for the loan under Article 10.2. Any such
consent by the Participant's spouse shall be in writing, shall acknowledge the
effect of the loan, and shall be witnessed by a Plan representative or notary
public. The spouse's consent shall be thereafter binding on the consenting
spouse or any subsequent spouse with respect to the Participant's loan. A new
spousal consent shall be required for any renegotiation, extension, renewal or
other revision of the Participant's loan. Notwithstanding the preceding, spousal
consent shall not be required under this Article 10.8 if the qualified joint and
survivor annuity requirement of Article 8.8 and the qualified preretirement
survivor annuity requirement of Article 8.9 do not apply with respect to the
Participant by reason of Article 8.11.
10.9 Accounting for Loans. A loan to a Participant from the Plan shall be
considered an investment of the separate accounts of the Participant from which
the loan is made, and all loan repayments by the Participant shall be credited
to such separate accounts and reinvested in the Vanguard Funds and other
investments authorized under the Trust Agreement in accordance with the
investment provisions of Article 6.5.
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ARTICLE 11
LIMITATIONS ON CONTRIBUTIONS AND BENEFITS
11.1 Definitions. For purposes of this Article 11 only, the following terms
shall be defined as follows:
(a) Annual Additions. The sum of the following amounts that are
allocated to a Participant's separate accounts under the Plan for
any Limitation Year:
(i) Employer contributions including Employee Pre-Tax
Contributions, Employer Matching Contributions and Employer
Nonelective Contributions (regardless of whether any amounts
attributable to such contributions are distributed to the
Participant, recharacterized or forfeited as Excess Elective
Deferrals, Excess Contributions or Excess Aggregate
Contributions);
(ii) Employee After-Tax Contributions;
(iii) Forfeitures; and
(iv) any amounts allocated after March 31, 1984, to an
individual medical account (as defined in Section 415(1)(2)
of the Code) which is part of a pension or annuity plan
maintained by the Employer shall be treated as Annual
Additions; in addition, amounts derived from contributions
paid or accrued after December 31, 1985, in taxable years
ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Section 419A(d)(3)
of the Code) under a welfare benefit fund (as defined in
Section 419(e) of the Code) maintained by the Employer,
shall be treated as Annual Additions.
For purposes of this definition, any Excess Amount, plus any
investment gains or other income or less any investment losses
attributable thereto, that is applied under Article 11.2(c) or 11.3(e)
to reduce the Employer contributions on behalf of a Participant for a
Limitation Year shall be considered Annual Additions for such
Limitation Year.
(b) Compensation. A Participant's earned income, wages, salaries, fees
for professional services and other amounts received for personal
services actually rendered
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in the course of employment with the Employer maintaining the plan
(including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips and bonuses), excluding the
following:
(i) Employer contributions to a plan of deferred
compensation which are not includible in the gross income of
the Participant for the taxable year in which contributed,
or Employer contributions under a simplified employee
pension plan to the extent such contributions are deductible
by the Participant, or any distributions from a plan of
deferred compensation;
(ii) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by
the Participant either becomes freely transferable or is no
longer subject to a substantial risk of forfeiture;
(iii) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(iv) other amounts which receive special tax benefits, such
as contributions made by the Employer (whether or not under
a salary reduction agreement) towards the purchase of an
annuity contract under Section 403(b) of the Code (whether
or not the contributions are excludable from the gross
income of the Participant).
For purposes of applying the limitations of this Article 11,
Compensation for a Limitation Year shall be the Compensation annually
paid to a Participant or includible in his gross income during such
Limitation Year. Notwithstanding the preceding sentence, Compensation
for a Participant in a defined contribution plan who is permanently
and totally disabled (as defined in Section 22(e)(3) of the Internal
Revenue Code) shall be the Compensation such Participant would have
received for the Limitation Year if the Participant had been paid at
the rate of compensation paid immediately before becoming permanently
and totally disabled; provided that such imputed Compensation for the
disabled Participant may be taken into account only if the Participant
is not a highly compensated employee (as defined in section 414(q) of
the Code) and contributions made on behalf of such Participant to the
defined contribution plan are nonforfeitable when made.
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(c) Defined Benefit Plan Fraction. A fraction, the numerator of which
is the sum of a Participant's Projected Annual Benefits under all
defined benefit plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser of 125 percent of
the dollar limitation determined for the Limitation Year under
Sections 415(b) and (d) of the Code or 140 percent of the
Participant's Highest Average Compensation, including any adjustments
under Section 415(b) of the Code.
Notwithstanding the above, if the Participant was a
participant as of the first day of the Limitation Year beginning after
December 31, 1986, in one or more defined benefit plans maintained by
the Employer which were in existence on May 6, 1986, the denominator
of the Defined Benefit Plan Fraction shall not be less than 125
percent of the sum of the annual benefits under all such plans which
the Participant had accrued as of the close of the last Limitation
Year beginning before January 1, 1987, disregarding any changes in the
terms and conditions of the plan after May 5, 1986. The preceding
sentence shall apply only if the Employer's defined benefit plans
individually and in the aggregate satisfied the requirements of
Section 415 of the Code for all Limitation Years beginning before
January 1, 1987.
(d) Defined Contribution Dollar Limitation. The greater of $30,000 or
one-fourth of the defined benefit dollar limitation set forth in
Section 415(b)(1) of the Code as in effect for the Limitation Year.
(e) Defined Contribution Plan Fraction. A fraction, the numerator of
which is the sum of the Annual Additions credited to a Participant's
accounts under all defined contribution plans (whether or not
terminated) maintained by the Employer for the current and all prior
Limitation Years (including any Annual Additions attributable to
nondeductible employee contributions to any defined benefit plans,
whether or not terminated, maintained by the Employer and any Annual
Additions attributable to any welfare benefit funds, as defined in
Section 419(e) of the Code, or individual medical accounts, as defined
in Section 415(l)(2) of the Code, maintained by the Employer) and the
denominator of which is the sum of the maximum aggregate amounts for
the current and all prior Limitation Years of service with the
Employer (regardless of whether a defined contribution plan was
maintained by the Employer). The maximum aggregate amount for any
Limitation Year is the lesser of 125 percent of the dollar limitation
determined under Sections 415(b) and (d) of the Code in effect under
Section 415(c)(1)(A) of the Code or 35 percent of the Participant's
Compensation for such year.
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Notwithstanding the above, if the Participant was a
participant as of the end of the first day of the first Limitation
Year beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which were in existence
on May 6, 1986, the numerator of the Defined Contribution Plan
Fraction shall be adjusted if the sum of such fraction and the Defined
Benefit Plan Fraction would otherwise exceed 1.0 under the terms of
this Plan. Under this adjustment, an amount equal to the product of
(i) the excess of the sum of the Defined Benefit and Defined
Contribution Plan Fractions over 1.0 times (ii) the denominator of the
Defined Contribution Plan Fraction shall be permanently subtracted
from the numerator of the Defined Contribution Plan Fraction. This
adjustment shall be calculated using the Defined Benefit and Defined
Contribution Plan Fractions as they would have been calculated as of
the end of the last Limitation Year beginning before January 1, 1987,
and disregarding any changes in the terms and conditions of the plan
made after May 5, 1986, but using the Section 415 limitation
applicable to the first Limitation Year beginning on or after January
1, 1987.
The Annual Additions for any Limitation Year beginning
before January 1, 1987, shall not be recomputed to treat all employee
contributions as Annual Additions.
(f) Employer. For purposes of this Article 11, the Employer shall mean
the Employer that adopts this Plan and all members of a controlled
group of corporations (as defined in Section 414(b) of the Code, as
modified by Section 415(h) of the Code), all commonly controlled
trades or businesses (as defined in Section 414(c) of the Code, as
modified by Section 415(h) of the Code) or affiliated service groups
(as defined in Section 414(m) of the Code) of which the adopting
Employer is a member, and any other entity required to be aggregated
with the Employer pursuant to regulations under Section 414(o) of the
Code.
(g) Excess Amount. The excess of a Participant's Annual Additions for
a Limitation Year over the Maximum Permissible Amount for the
Limitation Year.
(h) Highest Average Compensation. A Participant's average annual
Compensation for the three consecutive Limitation Years that produces
the highest average annual compensation.
(i) Limitation Year. The Plan Year or other 12-consecutive month
period designated by the Employer in the Adoption Agreement. All
qualified plans maintained by the
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Employer must use the same Limitation Year. If the Limitation Year is
amended to a different 12-consecutive month period, the new Limitation
Year shall begin on a date within the Limitation Year in which the
amendment is made.
(j) Master or Prototype Plan. A qualified plan the form of which is
the subject of a favorable opinion letter from the Internal Revenue
Service.
(k) Maximum Permissible Amount. The maximum amount of Annual Additions
that may be contributed or allocated to any Participant's accounts
under the Plan for any Limitation Year shall not exceed the lesser of:
(a) the Defined Contribution Dollar Limitation, or
(b 25 percent of the Participant's Compensation for the
Limitation Year.
The Compensation limitation referred to in (b) above shall not apply
to any contribution for medical benefits (within the meaning of
Section 401(h) or 419A(f)(2) of the Code) which is otherwise treated
as Annual Additions under Section 415(l)(2) or 419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment changing
the Limitation Year to a different 12-consecutive month period, then
the Maximum Permissible Amount shall not exceed the Defined
Contribution Dollar Limitation multiplied by the following fraction:
Number of months in the short Limitation Year
12
(l) Projected Annual Benefit. The annual retirement benefit (adjusted
to an actuarially equivalent straight life annuity if such benefit is
expressed in a form other than a straight life annuity or qualified
joint and survivor annuity) to which a Participant would be entitled
under the terms of the plan assuming:
(i) the Participant will continue employment until normal
retirement age under the plan (or current age, if later),
and
(ii) the Participant's Compensation for the current
Limitation Year and all other relevant factors used to
determine benefits under the plan will remain constant
for all future Limitation Years.
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11.2 Employers Who Maintain No Other Qualified Plans
(a) If a Participant does not participate in, and has never
participated in, another qualified plan maintained by the Employer, or
a welfare benefit fund, as defined in Section 419(e) of the Code,
maintained by the Employer, or an individual medical account, as
defined in Section 415(l)(2) of the Code, maintained by the Employer
which provides an Annual Addition, as defined in Article 11.1(a), the
amount of Annual Additions which may be credited to the Participant's
separate accounts under the Plan for any Limitation Year shall not
exceed the lesser of the Maximum Permissible Amount or any other
limitation contained in the Plan. If the Employer Contributions that
would otherwise be contributed or allocated to the Participant's
separate accounts under the Plan would cause the Annual Additions for
the Limitation Year to exceed the Maximum Permissible Amount, then the
amount contributed or allocated shall be reduced so that the Annual
Additions for the Limitation Year shall equal the Maximum Permissible
Amount.
(b) Prior to determining a Participant's actual Compensation for any
Limitation Year, the Plan Administrator may determine the
Participant's Maximum Permissible Amount for the Limitation Year on
the basis of a reasonable estimation of the Participant's Compensation
for the Limitation Year, uniformly determined for all Participants
similarly situated. As soon as is administratively feasible after the
end of the Limitation Year, the Maximum Permissible Amount for such
Limitation Year shall be determined on the basis of the Participant's
actual Compensation for the Limitation Year.
(c) If, pursuant to (b) above or as a result of the allocation of
Forfeitures or a reasonable error in determining the amount of
Employee Pre-Tax Contributions which may be made by a Participant,
there exists an Excess Amount with respect to the Participant as of
the end of a Limitation Year, such Excess Amount shall be disposed of
as follows:
(i) Any Employee After-Tax Contributions or Employee Pre-Tax
Contributions by the Participant, to the extent they would
reduce the Excess Amount, shall be returned to the
Participant.
(ii) If, after the application of subparagraph (i) above, an
Excess Amount still exists and the Participant is covered by
the Plan at the end of the Limitation
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Year, then such Excess Amount, plus any investment gains or
other income or less any investment losses attributable
thereto, shall be used to reduce the Employer contributions
on behalf of the Participant for the next Limitation Year
and each succeeding Limitation Year, if necessary.
(iii) If, after the application of subparagraph (i) above,
an Excess Amount still exists and the Participant is not
covered by the Plan at the end of a Limitation Year, then
such Excess Amount shall be held unallocated in a suspense
account and applied to reduce future Employer contributions
to the Plan for all remaining Participants in the next
Limitation Year and each succeeding Limitation Year, if
necessary.
(iv) If a suspense account is in existence at any time
during a Limitation Year pursuant to this Article 11.2, such
account shall participate in the allocation of the Trust's
investment gains and losses. If a suspense account is in
existence at any time during a particular Limitation Year,
all amounts in the suspense account must be allocated and
reallocated to Participants' accounts before any Employer
contributions may be made to the Plan for that Limitation
Year. Except as otherwise provided in (i) above, Excess
Amounts may not be distributed to Participants or former
Participants.
11.3 Employers Who Maintain Other Qualified Master or Prototype Defined
Contribution Plans.
(a) This Article 11.3 applies if, in addition to this Plan, a
Participant is covered under another qualified Master or Prototype
defined contribution plan maintained by the Employer, a welfare
benefit fund, as defined in Section 419(e) of the Code, maintained by
the Employer, or an individual medical account, as defined in Section
415(l)(2) of the Code, maintained by the Employer, which provides an
Annual Addition during any Limitation Year. The Annual Additions which
may be credited to the Participant's separate accounts under this Plan
for any such Limitation Year shall not exceed the Maximum Permissible
Amount reduced by the total Annual Additions credited to the
Participant's accounts under all such other defined contribution plans
or welfare benefit funds for the Limitation Year. If the Annual
Additions with respect to the Participant under all other defined
contribution plans and welfare benefit funds maintained by the
Employer are less than the Maximum Permissible Amount and the Employer
Contributions that would otherwise be contributed or allocated to the
Participant's
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<PAGE>
separate accounts under this Plan would cause the Annual Additions for
the Limitation Year to exceed the Maximum Permissible Amount, then the
amount contributed or allocated under this Plan shall be reduced so
that the Annual Additions under all such plans and funds for the
Limitation Year shall equal the Maximum Permissible Amount. If the
Annual Additions with respect to the Participant under such other
defined contribution plans and welfare benefit funds in the aggregate
are equal to or greater than the Maximum Permissible Amount, then no
amount shall be contributed or allocated to the Participant's separate
accounts under this Plan for the Limitation Year.
(b) Prior to determining a Participant's actual Compensation for any
Limitation Year, the Plan Administrator may determine the Maximum
Permissible Amount for the Participant in the manner described in
Article 11.2(b). As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible Amount for the
Limitation Year shall be determined on the basis of the Participant's
actual Compensation for the Limitation Year.
(c) If, pursuant to Article 11.3(b), a Participant's Annual Additions
under this Plan and such other defined contribution plans maintained
by the Employer that are Master or Prototype Plans would result in an
Excess Amount for a Limitation Year, then the Excess Amount shall be
deemed to consist of the Annual Additions last allocated. Any Annual
Additions attributable to a welfare benefit fund or individual medical
account shall be deemed to have been allocated first regardless of the
actual allocation date.
(d) If an Excess Amount was allocated to a Participant's account under
this Plan on an allocation date which coincides with an allocation
date of another plan, the Excess Amount attributed to this Plan shall
be the product of:
(i) the total Excess Amount allocated as of such date, times
(ii) the ratio of (1) the Annual Additions allocated to the
Participant's separate accounts under this Plan for the
Limitation Year as of such date to (2) the total Annual
Additions allocated to the Participant's accounts for the
Limitation Year as of such date under this Plan and all
other qualified defined contribution Master or Prototype
Plans maintained by the Employer.
(e) Any Excess Amount attributable to this Plan shall be disposed of
in the manner described in Article 11.2(c).
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11.4 Employers Who Maintain A Qualified Defined Contribution Plan Other Than A
Master Or Prototype Plan. If a Participant is covered under another qualified
defined contribution plan maintained by the Employer which is not a Master or
Prototype Plan, the Annual Additions which may be credited to the Participant's
separate accounts under this Plan for any Limitation Year shall be limited in
accordance with Article 11.3 as though the other plan were a Master or Prototype
Plan unless the Employer designates other limitations in the section on
"Limitations on Allocations" in the Adoption Agreement.
11.5 Employers Who Maintain A Qualified Defined Benefit Plan. If the Employer
maintains, or has at any time maintained, a qualified defined benefit plan
covering any Participant in this Plan, then the sum of the Participant's Defined
Benefit Plan Fraction and Defined Contribution Plan Fraction shall not exceed
1.0 for any Limitation Year. The Annual Additions which may be credited to the
Participant's separate accounts under this Plan for any Limitation Year shall be
limited in accordance with the limitations designated by the Employer in the
section on "Limitations on Allocations" in the Adoption Agreement.
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ARTICLE 12
TOP-HEAVY PROVISIONS
12.1 Application. If the Plan is or becomes a Top-Heavy Plan in any Plan Year,
the provisions of this Article 12 shall supersede any conflicting provision in
the Plan or Adoption Agreement.
12.2 Definitions. For purposes of this Article 12, the following terms shall be
defined as follows:
(a) Key Employee. Any Employee or former Employee (and the Beneficiary
of any such Employee) who at any time during the determination period
was an officer of the Employer whose annual compensation exceeds 50
percent of the dollar limitation under Section 415(b)(1)(A) of the
Code, an owner (or considered an owner under Section 318 of the Code)
of one of the ten largest interests in the Employer if such
individual's annual compensation exceeds 100 percent of the dollar
limitation under Section 415(c)(1)(A) of the Code, a 5-percent owner
of the Employer, or a 1-percent owner of the Employer who has annual
compensation of more than $150,000. For the purposes of this
definition, the term "annual compensation" means compensation as
defined in Section 415(c)(3) of the Code, but including amounts
contributed by the Employer pursuant to a salary reduction agreement
which are excludable from the Employee's gross income under Section
125, Section 402(a)(8), Section 402(h), or Section 403(b) of the Code.
The term "determination period" is the Plan Year containing the
Determination Date and the four preceding Plan Years. The
determination of who is a Key Employee shall be made in accordance
with Section 416(i)(1) of the Code and the regulations thereunder.
(b) Top-Heavy Plan. For any Plan Year beginning after December 31,
1983, the Plan is a Top-Heavy Plan if any of the following conditions
exists:
(i) the Top-Heavy Ratio for the Plan exceeds 60 percent and
the Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group;
(ii) the Plan is a part of a Required Aggregation Group but
not part of a Permissive Aggregation Group and the Top-Heavy
Ratio for the Required Aggregation Group exceeds 60 percent;
or
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(iii) the Plan is a part of a Required Aggregation Group and
a Permissive Aggregation Group and the Top-Heavy Ratio for
both Groups exceeds 60 percent.
(c) Top-Heavy Ratio.
(i) If the Employer maintains one or more defined
contribution plans (including any Simplified Employee
Pension Plan), and the Employer has not maintained any
defined benefit plan which during the 5-year period ending
on the Determination Date has accrued any benefits for any
Participant in the Plan, the Top-Heavy Ratio for this Plan
alone, or for any Required Aggregation Group or Permissive
Aggregation Group, is a fraction, the numerator of which is
the sum of the account balances of all Key Employees under
the plan(s) as of the Determination Date (including any part
of any account balance distributed in the 5-year period
ending on the Determination Date), and the denominator of
which is the sum of all account balances (including any part
of any account balance distributed in the 5-year period
ending on the Determination Date) of all Participants under
the plan(s) as of the Determination Date, both computed in
accordance with Section 416 of the Code and the regulations
thereunder. Both the numerator and denominator of the
Top-Heavy Ratio shall be increased to reflect any
contribution which is due but unpaid as of the Determination
Date, but which is required to be taken into account on that
date under Section 416 of the Code and the regulations
thereunder.
(ii) If the Employer maintains one or more defined
contribution plans (including any Simplified Employee
Pension Plan) and the Employer maintains one or more defined
benefit plans which, during the 5-year period ending on the
Determination Date, has accrued any benefits for any
Participant in this Plan, the Top-Heavy Ratio for any
Required Aggregation Group or Permissive Aggregation Group
is a fraction, the numerator of which is the sum of the
account balances under the defined contribution plans for
all Key Employees, determined in accordance with (i) above,
and the Present Value of accrued benefits under the defined
benefit plans for all Key Employees, and the denominator of
which is the sum of the account balances under the defined
contribution plans for all participants and the Present
Value of accrued benefits under the defined benefit plans
for all participants. Both the numerator and
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<PAGE>
denominator of the Top-Heavy Ratio shall be increased for
any distribution of an account balance or an accrued benefit
made in the five-year period ending on the Determination
Date and any contribution due but unpaid as of the
Determination Date.
(iii) For purposes of (i) and (ii) above, the value of
account balances and the Present Value of accrued benefits
will be determined as of the most recent Valuation Date that
falls within or ends with the 12-month period ending on the
Determination Date, except as provided in Section 416 of the
Code and the regulations thereunder for the first and second
plan years of a defined benefit plan. The account balances
and accrued benefits of a participant (1) who is not a Key
Employee but who was a Key Employee in a prior year, or (2)
who has not been credited with at least one hour of service
with the Employer at any time during the five-year period
ending on the Determination Date, will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers, and transfers are taken into
account, shall be made in accordance with Section 416 of the
Code and the regulations thereunder. Deductible employee
contributions shall not be taken into account for purposes
of computing the Top-Heavy Ratio. When aggregating plans,
the value of account balances and accrued benefits shall be
calculated with reference to the Determination Dates that
fall within the same calendar year. The accrued benefit of a
Participant other than a Key Employee shall be determined
under (1) the method, if any, that uniformly applies for
accrual purposes under all defined benefit plans maintained
by the Employer, or (2) if there is no such method, as if
such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional rule of Section
411(b)(1)(C) of the Code.
(d) Permissive Aggregation Group. The Required Aggregation Group plus
any other qualified plans of the Employer or an Affiliated Employer
which, when considered as a group with the Required Aggregation Group,
would continue to satisfy the requirements of Sections 401(a)(4) and
410 of the Code.
(e) Required Aggregation Group.
(i) Each qualified plan of the Employer or an Affiliated
Employer in which at least one Key Employee participates or
has participated at any time during the determination period
(regardless of whether the plan has terminated), and
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<PAGE>
(ii) any other qualified plan of the Employer or an
Affiliated Employer which enables a plan described in (i)
above to meet the requirements of Sections 401(a)(4) or 410
of the Code.
(f) Determination Date. For any Plan Year of the Plan subsequent to
the first Plan Year, the last day of the preceding Plan Year. For the
first Plan Year of the Plan, the last day of that Plan Year.
(g) Valuation Date. The Determination Date, unless the Employer
designates a different Valuation Date in the Adoption Agreement as the
date as of which account balances or accrued benefits shall be valued
for purposes of calculating the Top-Heavy Ratio.
(h) Present Value. Present value shall be based on the interest rate
and mortality table specified in the Adoption Agreement.
12.3 Minimum Allocation.
(a) Except as otherwise provided in (c) and (d) below, the Employer
contributions on behalf of any Participant who is not a Key Employee
shall not be less than the lesser of three percent of such
Participant's Compensation or, in the case where the Employer has no
defined benefit plan which designates this Plan to satisfy Section 401
of the Code, the largest percentage of Employer contributions and
forfeitures, as a percentage of a Key Employee's Compensation,
allocated on behalf of any Key Employee for that year. The minimum
allocation under this Article 12.3 shall be determined without regard
to any Social Security contribution, and shall be made even though,
under other Plan provisions, the Participant would not otherwise be
entitled to receive an allocation, or would have received a lesser
allocation for the year, because: (1) the Participant failed to
complete 1,000 Hours of Service; (2) the Participant failed to make
mandatory employee contributions to the Plan; or (3) the Participant's
Compensation was less than a stated amount. Employee Pre-Tax
Contributions and Employer Matching Contributions to the Plan shall
not be taken into account for purposes of satisfying the minimum
allocation required under this Article 12.3.
(b) For purposes of computing the minimum allocation required under
(a) above, Compensation shall mean Compensation as defined in Article
2.5 except, however, that
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<PAGE>
any exclusions designated by the Employer in the Adoption Agreement
shall not be taken into account.
(c) The provisions of (a) above shall not apply to any Participant who
was not employed by the Employer on the last day of the Plan Year.
(d) The provisions of (a) above shall not apply to any Participant to
the extent the Participant is covered under any other qualified plan
or plans of the Employer and the Employer has provided in the Adoption
Agreement that the minimum benefits requirement applicable to
Top-Heavy Plans under Section 4l6(c) of the Code shall be satisfied
through the other plan or plans maintained by the Employer.
(e) The minimum allocation required under (a) above (to the extent
required to be nonforfeitable under Section 416(b) of the Code) may
not be forfeited under Section 411(a)(3)(B) or 411(a)(3)(D) of the
Code.
12.4 Minimum Vesting Schedules.
(a) For any Plan year in which this Plan is a Top-Heavy Plan, one of
the minimum vesting schedules designated by the Employer in the
Adoption Agreement shall automatically apply to the Plan. This minimum
vesting schedule shall apply to all benefits within the meaning of
Section 411(a)(7) of the Code except those attributable to employee
contributions, benefits that accrued before the effective date of
Section 416 of the Code, and benefits that accrued before the Plan
became a Top-Heavy Plan. No reduction in a Participant's vested
benefits may occur in the event the Plan's status as a Top-Heavy Plan
changes for any Plan Year.
(b) This Article 12.4 does not apply to the account balances of any
Employee who does not have an Hour of Service after the Plan has
initially become a Top-Heavy Plan, and such Employee's account balance
attributable to Employer Contributions and Forfeitures shall be
determined without regard to this Article.
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<PAGE>
ARTICLE 13
ADMINISTRATION
13.1 Duties and Responsibilities of Fiduciaries; Allocation of Fiduciary
Responsibility. A fiduciary for the Plan shall have only those specific powers,
duties, responsibilities and obligations which are explicitly assigned to the
fiduciary under the Plan and Trust Agreement. In general, the Employer shall
have the responsibility for determining the provisions of the Plan by completing
the Adoption Agreement; appointing the Plan Administrator and Trustee; making
the contributions to the Plan required under Article 4; and determining the
procedures for the investment of Trust assets in accordance with Article 6. The
Plan Administrator shall have the responsibility for the administration of the
Plan, as more fully described in Article 13.2. The Trustee shall have the
responsibility for the administration of the Trust and the management of the
assets held thereunder, as specifically provided in the Trust Agreement. It is
intended that each fiduciary shall be responsible only for the proper exercise
of his or her own powers, duties, responsibilities and obligations under the
Plan and Trust Agreement, and shall not be responsible for any act or failure to
act of another fiduciary. A fiduciary may serve in more than one fiduciary
capacity with respect to the Plan.
13.2 Powers and Responsibilities of the Plan Administrator.
(a) Administration of the Plan. The Plan Administrator shall have all
powers necessary to administer the Plan, including the power to
construe and interpret the Plan documents; to decide all questions
relating to an individual's eligibility to participate in the Plan; to
determine the amount, form and timing of any distribution of benefits
or withdrawal under the Plan; to approve and enforce the repayment of
any loan to a Participant under the Plan; to resolve any claim for
benefits in accordance with Article 13.6; and to appoint or employ
advisors, including legal counsel, to render advice with respect to
any of the Plan Administrator's responsibilities under the Plan. Any
construction, interpretation or application of the Plan by the Plan
Administrator shall be final, conclusive and binding. All actions by
the Plan Administrator shall be taken pursuant to uniform standards
consistently applied to all persons similarly situated. The Plan
Administrator shall have no power to add to, subtract from, or modify
any of the terms of the Plan, or to change or add to any benefits
provided by the Plan, or to waive or fail to apply any requirements of
eligibility for a benefit under the Plan.
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(b) Records and Reports. The Plan Administrator shall be responsible
for maintaining sufficient records to reflect the Years of Service
completed by each Employee for purposes of determining the Employee's
eligibility to participate in the Plan and vested percentage under
Article 7, and the Compensation of each Participant for purposes of
determining the amount of contributions which may be made by or on
behalf of the Participant under the Plan. The Plan Administrator shall
be responsible for submitting all required reports and notifications
relating to the Plan to Participants or their beneficiaries, the
Internal Revenue Service and the Department of Labor.
(c) Furnishing Recordkeeper with Information. The Plan Administrator
shall be responsible for furnishing the Recordkeeper with sufficient
information to enable the Recordkeeper to establish and maintain
separate accounts on behalf of Participants in accordance with Article
6, including information with respect to the allocation of Plan
contributions to Participants, disposition of Plan Forfeitures,
payment of Plan distributions and withdrawals, and accounting for Plan
loans and loan repayments. In addition, the Plan Administrator shall
be responsible for furnishing the Recordkeeper with any further
information respecting the Plan which the Recordkeeper may reasonably
request for the performance of its duties or for the purpose of making
any returns to the Internal Revenue Service or Department of Labor as
may be required of the Recordkeeper.
(d) Furnishing Trustee with Instructions. The Plan Administrator shall
be responsible for furnishing the Trustee with instructions with
respect to the investment of all Plan contributions to the Trust in
accordance with Article 6, all distributions to Participants
(including any purchases of annuity contracts) in accordance with
Article 8, all withdrawals by Participants in accordance with Article
9 and all loans to Participants in accordance with Article 10. In
addition, the Plan Administrator shall be responsible for furnishing
the Trustee with any further information respecting the Plan which the
Trustee may reasonably request for the performance of its duties or
for the purpose of making any returns to the Internal Revenue Service
or Department of Labor as may be required of the Trustee.
(e) Rules and Decisions. The Plan Administrator may adopt such rules
as the Plan Administrator deems necessary, desirable, or appropriate
in the administration of the Plan. All rules and decisions of the Plan
Administrator shall be applied uniformly and consistently to all
Participants in similar circumstances. When making a determination or
calculation, the Plan Administrator shall be entitled to rely upon
information
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<PAGE>
furnished by a Participant or Beneficiary, the Employer, legal
counsel of the Employer, the Recordkeeper, or the Trustee.
(f) Application and Forms for Benefits. The Plan Administrator may
require a Participant, former Participant or Beneficiary to complete
and file with it an application for a benefit, and to furnish all
pertinent information requested by the Plan Administrator. The Plan
Administrator may rely upon all such information so furnished,
including the Participant's, former Participant's or Beneficiary's
current mailing address.
(g) Facility of Payment. Whenever, in the Plan Administrator's
opinion, a person entitled to received any payment of a benefit or
installment thereof is under a legal disability or is incapacitated in
any way so as to be unable to manage his or her financial affairs, the
Plan Administrator may direct the Trustee to apply the payment for the
benefit of such person in such manner as the Plan Administrator
considers advisable.
13.3 Allocation of Duties and Responsibilities. The Plan Administrator may by
written instrument designate other persons to carry out any of the Plan
Administrator's duties and responsibilities under the Plan. Any such duties or
responsibilities thus allocated must be described in the written instrument. If
a person other than an Employee of the Employer is so designated, such person
must acknowledge in writing his or her acceptance of the allocated duties and
responsibilities. All such instruments shall be attached to, and made a part of,
the Plan.
13.4 Expenses. The Employer shall pay all expenses authorized and incurred in
the administration of the Plan except to the extent such expenses are paid from
the Trust.
13.5 Liabilities. The Plan Administrator and each person to whom duties and
responsibilities have been allocated pursuant to Article 13.3 may be indemnified
and held harmless by the Employer to an extent determined by the Board of
Directors with respect to any alleged breach of responsibilities performed or to
be performed hereunder. The Employer shall indemnify and hold harmless the
Sponsor against all claims, liabilities, fines and penalties, and all expenses
reasonably incurred by or imposed upon the Sponsor (including, but not limited
to, reasonable attorney's fees) which arise as a result of actions or failure to
act by another party, including the Employer, Plan Administrator, Recordkeeper
or Trustee, in connection with the operation and administration of the Plan.
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<PAGE>
13.6 Claims Procedure.
(a) Filing of Claim. Any Participant or Beneficiary under the Plan may
file a written claim for a Plan benefit with the Plan Administrator or
with a person named by the Plan Administrator to receive claims under
the Plan.
(b) Notice of Denial of Claim. In the event of a denial or limitation
of any benefit or payment due to or requested by any Participant or
Beneficiary under the Plan ("claimant"), claimant shall be given a
written notification containing specific reasons for the denial or
limitation. The written notification shall contain specific reference
to the pertinent Plan provisions on which the denial or limitation of
the claimant's benefit is based. In addition, it shall contain a
description of any other material or information necessary for the
claimant to perfect a claim, and an explanation of why such material
or information is necessary. The notification shall further provide
appropriate information as to the steps to be taken if the claimant
wishes to submit his or her claim for review. This written
notification shall be given to a claimant within 90 days after receipt
of the claim by the Plan Administrator unless special circumstances
require an extension of time for process of the claim. If such an
extension of time for processing is required, written notice of the
extension shall be furnished to the claimant prior to the termination
of said 90-day period, and such notice shall indicate the special
circumstances which make the postponement appropriate.
(c) Right of Review. In the event of a denial or limitation of the
claimant's benefit, the claimant (or his or her duly authorized
representative) shall be permitted to review pertinent documents and
to submit to the Plan Administrator issues and comments in writing.
In addition, the claimant may make a written request for a full and
fair review of the claimant's claim and its denial by the Plan
Administrator; provided, however, that such written request must be
received by the Plan Administrator within 60 days after receipt by
the claimant of written notification of the denial or limitation of
the claim. The 60-day requirement may be waived by the Plan
Administrator in appropriate cases.
(d) Decision on Review. A decision shall be rendered by the Plan
Administrator within 60 days after the receipt of the request for
review, provided that where special circumstances require an extension
of time for processing the decision, it may be postponed on written
notice to the claimant (prior to the expiration of the initial 60-day
period) for an additional 60 days, but in no event shall the decision
by rendered more
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than 120 days after the receipt of such request for review. Any
decision by the Plan Administrator shall be furnished to the
claimant in writing and shall set forth the specific reasons for the
decision and the specific plan provisions on which the decision is
based.
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ARTICLE 14
AMENDMENT, TERMINATION AND MERGER
14.1 Amendment of Plan.
(a) Amendment by Sponsor. The Employer, by executing the Adoption
Agreement, has thereby delegated to the Sponsor the power to amend
the Plan at any time, including any retroactive amendment necessary
to assure that the Plan will qualify or continue to be qualified
under the applicable provisions of the Code. The Sponsor shall
promptly furnish written notice of any such amendment to the
Employer.
(b) Amendment by Employer. The Employer may at any time: (i) amend
any elective or optional provision of the Adoption Agreement; (ii)
amend the Plan by adding certain model amendments published by the
Internal Revenue Service which specifically provide that their
adoption will not cause the Plan to be treated as an
individually-designed plan; (iii) amend the Plan by adding
overriding Plan language to the Adoption Agreement where such
language is necessary to satisfy Section 415 or 416 of the Code
because of the required aggregation of multiple plans. Any Employer
that amends the Plan for any other reason shall cause the Plan as
adopted by the Employer to no longer represent a prototype plan
covered by an opinion letter issued by the Internal Revenue Service
to the Sponsor, but rather to represent an individually-designed
plan. The Employer shall furnish an executed copy of any amendment
to the Adoption Agreement or Plan to the Sponsor, which amendment
shall become effective no earlier than the date of receipt by the
Sponsor, unless the Sponsor specifically consents to an earlier
effective date.
(c) Limitations on Amendment.
(i) Neither the Sponsor nor the Employer shall amend the
Plan so as to cause or permit any part of the assets of
the Plan to be used for, or diverted to, purposes other
than for the exclusive benefit of Participants or their
Beneficiaries, or so as to cause or permit any part of the
assets of the Plan to revert to or become the property of
the Employer.
(ii) No amendment to the Plan shall be effective to the
extent that it has the effect of decreasing a
Participant's accrued benefit. For purposes of this
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Article 14.1(c)(ii), a Plan amendment which has the effect
of decreasing a Participant's account balance or
eliminating an optional form of benefit, with respect to
benefits attributable to service before the amendment,
shall be treated as reducing an accrued benefit.
Furthermore, if the vesting schedule of the Plan is
amended, in the case of an Employee who is a Participant
as of the later of the date such amendment is adopted or
the date it becomes effective, the vested percentage
(determined as of such date) of such Employee in his or
her Employer Matching Contribution Account and Employer
Nonelective Contribution Account will not be less than the
percentage computed under the Plan without regard to such
amendment.
(iii) Any amendment to the Plan or Adoption Agreement
which alters the Plan's vesting schedule (including any
automatic amendment to the Plan vesting schedule resulting
from a change to or from Top-Heavy Plan status) or any
amendment which directly or indirectly affects the
computation of a Participant's vested percentage in his or
her Employer Contribution Account and Employer Nonelective
Contribution Account under Article 7.2 shall be deemed to
include the following terms:
(1) Each Participant having not less than three Years
of Service for vesting purposes at the later of the
date such amendment is adopted or the date such
amendment becomes effective shall be permitted to
elect to have his or her vested percentages computed
under the Plan without regard to such amendment. Such
election must be made within 60 days from the latest
of: (i) the date the amendment is adopted, (ii) the
date the amendment becomes effective, or (iii) the
date the Participant is issued written notice of such
amendment by the Plan Administrator or the Employer.
Notwithstanding the preceding sentence, no election
need be provided for any Participant whose vested
percentage in his or her Employer Matching
Contribution Account and Employer Nonelective
Contribution Account under the Plan, as amended, at
any time cannot be less than such percentage
determined without regard to such amendment.
(2) No decrease in a Participant's vested percentage
in his or her Employer Contribution Account and
Employer Nonelective
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Contribution Account may occur in the event that the
Plan's status as Top-Heavy changes for any Plan Year.
14.2 Termination of Plan; Suspension of Contributions.
(a) Plan Termination. The Employer, by duly adopted resolution, may
terminate the Plan at any time. In the event of the dissolution,
merger, consolidation or reorganization of the Employer, the Plan
shall automatically terminate unless it is continued by a successor
employer in accordance with Article 14.3. Upon the termination or
partial termination of the Plan, the separate accounts of all
Participants affected thereby shall immediately become fully vested
and nonforfeitable.
(b) Suspension of Contributions. The Employer, by duly adopted
resolution, may discontinue all further contributions to the Plan.
Upon the complete suspension of contributions to the Plan by the
Employer, the separate accounts of all Participants affected thereby
shall immediately become fully vested and nonforfeitable. The
Employer and Trustee shall continue to maintain the Plan and Trust
in accordance with the requirements of Sections 401(a) and 501(a) of
the Code, and the Plan Administrator shall direct the Trustee to
distribute the separate accounts of Participants only at such times
and in such manner as specifically provided in Article 8.
14.3 Successor Employer. In the event of the dissolution, merger,
consolidation or reorganization of the Employer, provision may be made by
which the Plan and Trust shall be continued by the successor employer, in
which case such successor employer shall be substituted for the Employer under
the Plan. The substitution of the successor employer shall constitute an
assumption of Plan liabilities by the successor employer, and the successor
employer shall have all powers, duties and responsibilities of the Employer
under the Plan.
14.4 Merger, Consolidation or Transfer. There shall be no merger or
consolidation of the Plan with, or transfer of assets or liabilities of the
Plan to, any other plan maintained or to be established for the benefit of all
or some of the Participants in the Plan, unless each Participant would (if
either this Plan or such other plan then terminated) receive a benefit
immediately after the merger, consolidation or transfer which is equal to or
greater than the benefit the Participant would have been entitled to receive
immediately before the merger, consolidation or transfer (if this Plan had
then terminated).
14-3
<PAGE>
14.5 Distribution Upon Termination of Plan or Disposition of Assets or
Subsidiary. If so directed by the Plan Administrator, the Trustee shall
distribute to each Participant the amounts credited to the Participant's
separate accounts under the Plan in a lump-sum payment (unless such amount is
required to be paid in the form of a qualified joint and survivor annuity
under Article 8) if:
(a) the Plan is terminated under Article 14.2 without the
establishment or maintenance by the Employer of another defined
contribution plan;
(b) the Employer is a corporation and the Employer disposes of
substantially all the assets (within the meaning of Section
409(d)(2) of the Code) used in its trade or business to an unrelated
corporation, provided that the Participant continues employment with
the corporation acquiring such assets and the Employer continues to
maintain the Plan after the disposition; or
(c) the Employer is a corporation and the Employer disposes of its
interest in a subsidiary (within the meaning of Section 409(d)(3) of
the Code), provided that the Participant continues employment with
such subsidiary and the Employer continues to maintain the Plan
after the disposition.
14-4
<PAGE>
ARTICLE 15
MISCELLANEOUS
15.1 Exclusive Benefit of Participants and Beneficiaries.
(a) The corpus or income of the Trust shall not be used for, or
diverted to, purposes other than for the exclusive benefit of
Participants, former Participants and their Beneficiaries. The
assets of the Trust shall not revert to the benefit of the Employer,
except as otherwise specifically provided in subsection (b) below.
(b) Employer Contributions to the Plan may be returned to the
Employer under the following conditions:
(i) If the Employer Contribution was made by mistake of
fact, such contribution may be returned to the Employer
within one year of the payment of such contribution.
(ii) Employer Contributions to the Plan are specifically
conditioned upon their deductibility under the Code. To
the extent a deduction is disallowed for any such
contribution, it may be returned to the Employer within
one year after the disallowance of the deduction.
(iii) Employer contributions to the Plan are specifically
conditioned on the initial qualification of the Plan under
the Code. If the Plan is determined by the Internal
Revenue Service to not be initially qualified, any
Employer contributions made incident to that initial
qualification may be returned to the Employer within one
year after the date the initial qualification is denied,
but only if the application for qualification is made by
the time prescribed by law for filing the Employer's
return for the taxable year in which the Plan is adopted,
or such later date as the Secretary of the Treasury may
prescribe.
15.2 Leased Employees. For purposes of this Plan, any leased employee of the
Employer shall be treated as an Employee of the Employer and shall be
otherwise eligible for coverage and benefits under the Plan, unless:
15-1
<PAGE>
(1) the leased employee is covered by a money purchase pension plan
providing (i) a non-integrated employer contribution of at least 10
percent of compensation (as defined in Section 415(c)(3) of the
Code, but including amounts contributed pursuant to a salary
reduction agreement which are excludable from the employee's gross
income under Section 125, 402(a)(8), 402(h) or 403(b) of the Code),
(ii) immediate participation, and (iii) full and immediate vesting;
and
(2) leased employees do not constitute more than 20 percent of the
Employer's non-highly compensated workforce.
For purposes of this Article 15.2, the term "leased employee" means any person
(other than an employee of the recipient) who, pursuant to an agreement
between the recipient and any other person ("leasing organization"), has
performed services for the recipient (or for the recipient and any related
persons determined in accordance with Section 414(n)(6) of the Code) on a
substantially full time basis for a period of at least one year and such
services are of a type historically performed by employees in the business
field of the recipient employer. Contributions or benefits provided to the
leased employee by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by the
recipient employer.
15.3 Crediting Service With Predecessor Employer. If the Employer maintains
this Plan as the plan of a predecessor employer, service with the predecessor
employer shall be treated as service with the Employer under this Plan in
accordance with Articles 3.4(b) and 7.3(b).
15.4 Special Requirements For Controlled Business By Owner-Employees
(a) If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the trade or business with respect
to which this Plan is established and one or more other trades or
businesses, this Plan and any plan established with respect to such
other trades or businesses must, when looked at as a single plan,
satisfy Section 401(a) and (d) of the Code with respect to the
employees of this and all such other trades or businesses.
(b) If this Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades of businesses,
the employees of each such other trade or business must be included
in a plan which satisfies Sections 401(a) and (d) of
15-2
<PAGE>
the Code and which provides contributions and benefits not less
favorable than provided for Owner-Employees under this Plan.
(c) If an individual is covered as an Owner-Employee under the plans
of two or more trades or businesses which are not controlled and the
individual controls a trade or business, then the contributions or
benefits of the employees under the plan of the trades or businesses
which are controlled must be as favorable as those provided for the
Owner-Employee under the most favorable plan of the trade or
business which is not controlled.
(d) For purposes of the preceding paragraphs, an Owner-Employee, or
two or more Owner-Employees, shall be considered to control a trade
or business if such Owner-Employee, or such two or more
Owner-Employees together:
(1) own the entire interest in a unincorporated trade or
business; or
(2) in the case of a partnership, own more than 50 percent
of either the capital interest or the profits interest in
such partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or
more Owner-Employees, shall be treated as owning any interest in a
partnership which is owned, directly or indirectly, by a partnership
which such Owner-Employee, or such two or more Owner-Employees, are
considered to control within the meaning of the preceding sentence.
15.5 Nonguarantee of Employment. Nothing contained in this Plan shall be
construed as a contract of employment between the Employer and any Employee,
or as a right of any Employee to be continued in the employment of the
Employer, or as a limitation of the right of the Employer to discharge any of
its Employees, with or without cause.
15.6 Right to Trust Assets. No Employee, Participant, former Participant or
Beneficiary shall have any right to, or interest in, any assets of the Trust
upon termination of employment or otherwise, except as specifically provided
under the Plan. All payments of benefits under the Plan shall be made solely
out of the assets of the Trust.
15.7 Nonalienation of Benefits. Except as provided under Article 10 with
respect to Plan loans, benefits payable under the Plan shall not be subject in
any manner to anticipation,
15-3
<PAGE>
alienation, sale, transfer, assignment, pledge, encumbrance, charge,
garnishment, execution, or levy of any kind, whether voluntary or involuntary;
provided, however, that the Trustee shall not be hereby precluded from
complying with any qualified domestic relations order as defined in Section
414(p) of the Code or any domestic relations order entered before January 1,
1985. Any attempt by a Participant, former Participant or Beneficiary to
anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or
otherwise dispose of any right to benefits payable hereunder shall be void.
The Trustee shall not in any manner be liable for, or subject to, the debts,
contracts, liabilities, engagements or torts of any person entitled to
benefits hereunder.
15.8 Failure of Qualification. If the Employer fails to attain or retain this
Plan as a plan which qualifies under Section 401 of the Code, then the Plan as
adopted by the Employer will no longer represent a prototype plan covered by
an opinion letter issued by the Internal Revenue Service to the Sponsor as to
the acceptability of the form of the Plan and Trust Agreement under Sections
401 and 501(a) of the Code, but rather will be considered an
individually-designed plan.
15.9 Applicable Law. The Plan shall be construed and enforced in accordance
with and by the laws of the state in which the Employer's principal place of
business is located, as specified in the Adoption Agreement, to the extent
permitted by ERISA.
15-4
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 2, 1994 appearing on page 23
of International Flavors & Fragrances Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1993.
Price Waterhouse
1177 Avenue of the Americas
New York, New York 10036
July 1, 1994
EXHIBIT 24
POWER OF ATTORNEY
The undersigned director and/or officer of International Flavors &
Fragrances Inc., a New York corporation, which is about to file with the
Securities and Exchange Commission, under the provisions of the Securities Act
of 1933, as amended, a new Registration Statement on Form S-8 or on other
appropriate form for the registration of shares of the Corporation's Common
Stock issued and to be issued and interests to be offered or sold pursuant to
the Corporation's Retirement Investment Fund Plan, hereby constitutes and
appoints George Rowe, Jr. and Stephen A. Block his (her) lawful
attorneys-in-fact and agents, and each of them his (her) attorney with power to
act without the other, with full power of substitution and resubstitution, for
him (her) and in his(her) name, place and stead to sign in any and all
capacities such new Registration Statement, any and all amendments thereto
(including any post-effective amendment), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission and any other regulatory authority, granting unto such
attorneys-in-fact and agents and each of them, full power and authority to do so
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he (she) might or
could do in person, hereby ratifying and confirming the acts of such attorneys
and each of them, and confirming all that such said attorneys-in-fact and
agents, or their substitutes may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his (her) hand and
seal this 28th day of June 1994.
/s/ William D. Van Dyke III
---------------------------
William D. Van Dyke III
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned director and/or officer of International Flavors &
Fragrances Inc., a New York corporation, which is about to file with the
Securities and Exchange Commission, under the provisions of the Securities Act
of 1933, as amended, a new Registration Statement on Form S-8 or on other
appropriate form for the registration of shares of the Corporation's Common
Stock issued and to be issued and interests to be offered or sold pursuant to
the Corporation's Retirement Investment Fund Plan, hereby constitutes and
appoints George Rowe, Jr. and Stephen A. Block his (her) lawful
attorneys-in-fact and agents, and each of them his (her) attorney with power to
act without the other, with full power of substitution and resubstitution, for
him (her) and in his(her) name, place and stead to sign in any and all
capacities such new Registration Statement, any and all amendments thereto
(including any post-effective amendment), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission and any other regulatory authority, granting unto such
attorneys-in-fact and agents and each of them, full power and authority to do so
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he (she) might or
could do in person, hereby ratifying and confirming the acts of such attorneys
and each of them, and confirming all that such said attorneys-in-fact and
agents, or their substitutes may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his (her) hand and
seal this 27th day of June 1994.
/s/ Hendrik C. van Baaren
-------------------------
Hendrik C. van Baaren
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned director and/or officer of International Flavors &
Fragrances Inc., a New York corporation, which is about to file with the
Securities and Exchange Commission, under the provisions of the Securities Act
of 1933, as amended, a new Registration Statement on Form S-8 or on other
appropriate form for the registration of shares of the Corporation's Common
Stock issued and to be issued and interests to be offered or sold pursuant to
the Corporation's Retirement Investment Fund Plan, hereby constitutes and
appoints George Rowe, Jr. and Stephen A. Block his (her) lawful
attorneys-in-fact and agents, and each of them his (her) attorney with power to
act without the other, with full power of substitution and resubstitution, for
him (her) and in his(her) name, place and stead to sign in any and all
capacities such new Registration Statement, any and all amendments thereto
(including any post-effective amendment), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission and any other regulatory authority, granting unto such
attorneys-in-fact and agents and each of them, full power and authority to do so
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he (she) might or
could do in person, hereby ratifying and confirming the acts of such attorneys
and each of them, and confirming all that such said attorneys-in-fact and
agents, or their substitutes may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his (her) hand and
seal this 23rd day of June 1994.
/s/ Henry P. van Ameringen
--------------------------
Henry P. van Ameringen
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned director and/or officer of International Flavors &
Fragrances Inc., a New York corporation, which is about to file with the
Securities and Exchange Commission, under the provisions of the Securities Act
of 1933, as amended, a new Registration Statement on Form S-8 or on other
appropriate form for the registration of shares of the Corporation's Common
Stock issued and to be issued and interests to be offered or sold pursuant to
the Corporation's Retirement Investment Fund Plan, hereby constitutes and
appoints George Rowe, Jr. and Stephen A. Block his (her) lawful
attorneys-in-fact and agents, and each of them his (her) attorney with power to
act without the other, with full power of substitution and resubstitution, for
him (her) and in his(her) name, place and stead to sign in any and all
capacities such new Registration Statement, any and all amendments thereto
(including any post-effective amendment), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission and any other regulatory authority, granting unto such
attorneys-in-fact and agents and each of them, full power and authority to do so
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he (she) might or
could do in person, hereby ratifying and confirming the acts of such attorneys
and each of them, and confirming all that such said attorneys-in-fact and
agents, or their substitutes may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his (her) hand and
seal this 23rd day of June 1994.
/s/ George Rowe, Jr.
--------------------
George Rowe, Jr.
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned director and/or officer of International Flavors &
Fragrances Inc., a New York corporation, which is about to file with the
Securities and Exchange Commission, under the provisions of the Securities Act
of 1933, as amended, a new Registration Statement on Form S-8 or on other
appropriate form for the registration of shares of the Corporation's Common
Stock issued and to be issued and interests to be offered or sold pursuant to
the Corporation's Retirement Investment Fund Plan, hereby constitutes and
appoints George Rowe, Jr. and Stephen A. Block his (her) lawful
attorneys-in-fact and agents, and each of them his (her) attorney with power to
act without the other, with full power of substitution and resubstitution, for
him (her) and in his(her) name, place and stead to sign in any and all
capacities such new Registration Statement, any and all amendments thereto
(including any post-effective amendment), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission and any other regulatory authority, granting unto such
attorneys-in-fact and agents and each of them, full power and authority to do so
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he (she) might or
could do in person, hereby ratifying and confirming the acts of such attorneys
and each of them, and confirming all that such said attorneys-in-fact and
agents, or their substitutes may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his (her) hand and
seal this 26th day of June 1994.
/s/ Richard M. Furlaud
----------------------
Richard M. Furlaud
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned director and/or officer of International Flavors &
Fragrances Inc., a New York corporation, which is about to file with the
Securities and Exchange Commission, under the provisions of the Securities Act
of 1933, as amended, a new Registration Statement on Form S-8 or on other
appropriate form for the registration of shares of the Corporation's Common
Stock issued and to be issued and interests to be offered or sold pursuant to
the Corporation's Retirement Investment Fund Plan, hereby constitutes and
appoints George Rowe, Jr. and Stephen A. Block his (her) lawful
attorneys-in-fact and agents, and each of them his (her) attorney with power to
act without the other, with full power of substitution and resubstitution, for
him (her) and in his(her) name, place and stead to sign in any and all
capacities such new Registration Statement, any and all amendments thereto
(including any post-effective amendment), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission and any other regulatory authority, granting unto such
attorneys-in-fact and agents and each of them, full power and authority to do so
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he (she) might or
could do in person, hereby ratifying and confirming the acts of such attorneys
and each of them, and confirming all that such said attorneys-in-fact and
agents, or their substitutes may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his (her) hand and
seal this 23rd day of June 1994.
/s/ Robin Chandler Duke
-----------------------
Robin Chandler Duke
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned director and/or officer of International Flavors &
Fragrances Inc., a New York corporation, which is about to file with the
Securities and Exchange Commission, under the provisions of the Securities Act
of 1933, as amended, a new Registration Statement on Form S-8 or on other
appropriate form for the registration of shares of the Corporation's Common
Stock issued and to be issued and interests to be offered or sold pursuant to
the Corporation's Retirement Investment Fund Plan, hereby constitutes and
appoints George Rowe, Jr. and Stephen A. Block his (her) lawful
attorneys-in-fact and agents, and each of them his (her) attorney with power to
act without the other, with full power of substitution and resubstitution, for
him (her) and in his(her) name, place and stead to sign in any and all
capacities such new Registration Statement, any and all amendments thereto
(including any post-effective amendment), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission and any other regulatory authority, granting unto such
attorneys-in-fact and agents and each of them, full power and authority to do so
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he (she) might or
could do in person, hereby ratifying and confirming the acts of such attorneys
and each of them, and confirming all that such said attorneys-in-fact and
agents, or their substitutes may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his (her) hand and
seal this 27th day of June 1994.
/s/ Margaret Hayes Adame
------------------------
Margaret Hayes Adame
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned director and/or officer of International Flavors &
Fragrances Inc., a New York corporation, which is about to file with the
Securities and Exchange Commission, under the provisions of the Securities Act
of 1933, as amended, a new Registration Statement on Form S-8 or on other
appropriate form for the registration of shares of the Corporation's Common
Stock issued and to be issued and interests to be offered or sold pursuant to
the Corporation's Retirement Investment Fund Plan, hereby constitutes and
appoints George Rowe, Jr. and Stephen A. Block his (her) lawful
attorneys-in-fact and agents, and each of them his (her) attorney with power to
act without the other, with full power of substitution and resubstitution, for
him (her) and in his(her) name, place and stead to sign in any and all
capacities such new Registration Statement, any and all amendments thereto
(including any post-effective amendment), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission and any other regulatory authority, granting unto such
attorneys-in-fact and agents and each of them, full power and authority to do so
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he (she) might or
could do in person, hereby ratifying and confirming the acts of such attorneys
and each of them, and confirming all that such said attorneys-in-fact and
agents, or their substitutes may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his (her) hand and
seal this 22nd day of June 1994.
/s/ Thomas H. Hoppel
--------------------
Thomas H. Hoppel
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned director and/or officer of International Flavors &
Fragrances Inc., a New York corporation, which is about to file with the
Securities and Exchange Commission, under the provisions of the Securities Act
of 1933, as amended, a new Registration Statement on Form S-8 or on other
appropriate form for the registration of shares of the Corporation's Common
Stock issued and to be issued and interests to be offered or sold pursuant to
the Corporation's Retirement Investment Fund Plan, hereby constitutes and
appoints George Rowe, Jr. and Stephen A. Block his (her) lawful
attorneys-in-fact and agents, and each of them his (her) attorney with power to
act without the other, with full power of substitution and resubstitution, for
him (her) and in his(her) name, place and stead to sign in any and all
capacities such new Registration Statement, any and all amendments thereto
(including any post-effective amendment), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission and any other regulatory authority, granting unto such
attorneys-in-fact and agents and each of them, full power and authority to do so
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he (she) might or
could do in person, hereby ratifying and confirming the acts of such attorneys
and each of them, and confirming all that such said attorneys-in-fact and
agents, or their substitutes may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his (her) hand and
seal this 27th day of June 1994.
/s/ Stanley M. Rumbough, Jr.
----------------------------
Stanley M. Rumbough, Jr.
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned director and/or officer of International Flavors &
Fragrances Inc., a New York corporation, which is about to file with the
Securities and Exchange Commission, under the provisions of the Securities Act
of 1933, as amended, a new Registration Statement on Form S-8 or on other
appropriate form for the registration of shares of the Corporation's Common
Stock issued and to be issued and interests to be offered or sold pursuant to
the Corporation's Retirement Investment Fund Plan, hereby constitutes and
appoints George Rowe, Jr. and Stephen A. Block his (her) lawful
attorneys-in-fact and agents, and each of them his (her) attorney with power to
act without the other, with full power of substitution and resubstitution, for
him (her) and in his(her) name, place and stead to sign in any and all
capacities such new Registration Statement, any and all amendments thereto
(including any post-effective amendment), and to file the same with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission and any other regulatory authority, granting unto such
attorneys-in-fact and agents and each of them, full power and authority to do so
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he (she) might or
could do in person, hereby ratifying and confirming the acts of such attorneys
and each of them, and confirming all that such said attorneys-in-fact and
agents, or their substitutes may lawfully do or cause to be done by virtue
thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his (her) hand and
seal this 29th day of June 1994.
/s/ Eugene P. Grisanti
-------------------------
Eugene P. Grisanti
