As filed with the Securities and Exchange Commission on November 13,
1995 Registration No. 33-_______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
__________________
FIRST MID-ILLINOIS BANCSHARES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 37-1103704
(State or other jurisdiction of (I.R.S.
Employer
incorporation or organization)
Identification No.)
__________________
1515 CHARLESTON AVENUE
MATTOON, ILLINOIS 61938
(Address of principal executive offices)
__________________
FIRST RETIREMENT & SAVINGS PLAN
(Full title of the plan)
__________________
WILLIAM S. ROWLAND
CHIEF FINANCIAL OFFICER
FIRST MID-ILLINOIS BANCSHARES, INC.
1515 CHARLESTON AVENUE
MATTOON, ILLINOIS 61938
(Name and address of agent for service)
(217) 234-7454
(Telephone number, including area code, of agent for
service)
WITH COPIES TO:
JOHN E. FREECHACK, ESQ.
DOUGLAS J. TUCKER, ESQ.
BARACK, FERRAZZANO, KIRSCHBAUM & PERLMAN
333 WEST WACKER DRIVE, SUITE 2700
CHICAGO, ILLINOIS 60606
(312) 984-3100
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Amount of
to be Registered Registered(1)(2) per Share(3) Offering Price(2)(3) Registration Fee(3)
<S> <C> <C> <C> <C>
Common Stock, $4.00 Par Value 80,000 $34.03 $2,722,400.00 $939.00
</TABLE>
(1)Pursuant to Rule 416(c) under the Securities Act of 1933, as amended (the
"Securities Act"), this Registration Statement also covers an indeterminate
amount of interests to be offered or sold pursuant to the First Mid-Illinois
Bancshares, Inc. First Retirement & Savings Plan (the "Plan").
(2)Pursuant to Rule 416(a) under the Securities Act, this Registration
Statement also registers such indeterminate number of additional shares as
may be issuable under the Plan in connection with share splits, share
dividends or similar transactions.
(3)Estimated pursuant to Rule 457 under the Securities Act solely for the
purpose of calculating the registration fee.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-
8 will be sent or given to participants in the First Mid-Illinois Bancshares,
Inc. First Retirement & Savings Plan (the "Plan") as specified by Rule
428(b)(1) promulgated by the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act").
Such document(s) are not being filed with the Commission, but constitute
(along with the documents incorporated by reference into the Registration
Statement pursuant to Item 3 of Part II hereof) a prospectus that meets the
requirements of Section 10(a) of the Securities Act.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents previously or concurrently filed by First Mid-
Illinois Bancshares, Inc. (the "Company") with the Commission are hereby
incorporated by reference into this Registration Statement:
(a) The Company's Annual Report on Form 10-K (the "Annual Report")
filed by the Company (SEC File No. 0-13368) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") with the
Commission on March 30, 1995.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the
Annual Report referred to in (a) above.
(c) The description of the Company's common stock, par value $4.00
per share, contained in the Company's Registration Statement on
Form 8-A (File No. 0-13368), filed with the Commission on April
10, 1985, and all amendments or reports filed for the purpose of
updating such description.
All documents subsequently filed by the Company or the Plan with the
Commission pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed incorporated by reference into this
Registration Statement and to be a part thereof from the date of the filing of
such documents. Any statement contained in the documents incorporated, or
deemed to be incorporated, by reference herein or therein shall be deemed to be
modified or superseded for purposes of this Registration Statement and the
prospectus which is a part hereof (the "Prospectus") to the extent that a
statement contained herein or therein or in any other subsequently filed
document which also is, or is deemed to be, incorporated by reference herein or
therein modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement and the Prospectus.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
In accordance with the General Corporation Law of the State of Delaware
found at Chapter 1 of Title 8 of the Delaware Code (the "DGCL"), Article 8 of
the Company's Restated Certificate of Incorporation, as amended, (the
"Certificate") provides as follows: "The Corporation shall, to the fullest
extent permitted by Section 145 of the General Corporation Law of Delaware, as
amended from time to time, indemnify all persons whom it may indemnify pursuant
thereto." Under such provisions, any director or officer, who in his or her
capacity as such, is made or threatened to be made, a party to any suit or
proceeding, must be indemnified if such director or officer acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the Company. The DGCL further provides that such
indemnification is not exclusive of any other rights to which such individuals
may be entitled under a company's certificate of incorporation or any
agreement, insurance policy, vote of stockholders or disinterested directors or
otherwise.
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
See the Exhibit Index following the signature page in this Registration
Statement, which Exhibit Index is incorporated herein by reference.
The Company has received a determination letter from the Internal
Revenue Service ("IRS") stating that the Plan is qualified pursuant to Section
401 of the Internal Revenue Code of 1986, as amended (the "Code"). The Company
will submit any amendments to the Plan to the IRS which are required to be
submitted under the Code, for a determination letter that the Plan, as amended,
remains qualified pursuant to Section 401 of the Code, and will make all
changes required by the IRS in order to qualify the Plan, as amended, under the
Code.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to the Registration Statement to
include: (i) any prospectus required by Section 10(a)(3) of the
Securities Act; (ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; and (iii) 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 provisions (i) and (ii) of this undertaking are
inapplicable if the information to be filed thereunder is contained in
periodic reports filed by the Company pursuant to Sections 13 or 15(d)
of the Exchange Act and incorporated by reference into the Registration
Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provision, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
of expenses incurred or paid by a director, officer or controlling person in
the
<PAGE>
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 Securities Act and will be governed
by the final adjudication of such issue.
<PAGE>
SIGNATURES
THE REGISTRANT.Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Mattoon, State of Illinois, on October 17,
1995.
FIRST MID-ILLINOIS BANCSHARES, INC.
By: /S/DANIEL E. MARVIN, JR.
Daniel E. Marvin, Jr.
President and Chief Executive Officer
By: /S/WILLIAM S. ROWLAND
William S. Rowland
Chief Financial Officer
POWER OF ATTORNEY
Know all men by these presents, that each person whose signature
appears below constitutes and appoints Daniel E. Marvin, Jr. and William S.
Rowland, and each of them, his true and lawful attorney-in-fact and agent, each
with full power of substitution and re-substitution, for him and in his name,
place and stead, in any and all capacities to sign any or all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or any of them, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by each of the following persons in the
capacities indicated on the dates indicated below.
SIGNATURE TITLE DATE
/S/ DANIEL E. MARVIN, JR. President, Chief Executive October 17, 1995
Daniel E. Marvin, Jr. Officer and Chairman of the
Board
/S/ WILLIAM S. ROWLAND Chief Financial and October 17, 1995
William S. Rowland Accounting Officer and
Director
<PAGE>
/S/ CHARLES A. ADAMS Director October 17, 1995
Charles A. Adams
/S/ KENNETH R. DIEPHOLZ Director October 17, 1995
Kenneth R. Diepholz
/S/ RICHARD A. LUMPKIN Director October 17, 1995
Richard A. Lumpkin
/S/ GARY W. MELVIN Director October 17, 1995
Gary W. Melvin
/S/ WILLIAM G. ROLEY Director October 17, 1995
William G. Roley
/S/ RAY A. SPARKS Director October 17, 1995
Ray A. Sparks
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administrator the employee benefit plan) have
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Mattoon, State of
Illinois, on Ocotber 17, 1995.
FIRST MID-ILLINOIS BANCSHARES, INC.
FIRST RETIREMENT & SAVINGS PLAN
By: FIRST MID-ILLINOIS BANCSHARES,
INC.
Plan Administrator
By: /S/ DANIEL E. MARVIN, JR.
Its: President and
Chief Executive Officer
<PAGE>
FIRST MID-ILLINOIS BANCSHARES, INC.
EXHIBIT INDEX
TO
FORM S-8 REGISTRATION STATEMENT
<TABLE>
<CAPTION>
Incorporated
Exhibit No. Description Herein by Filed Sequential
Reference To Herewith Page No.
<S> <C> <C> <C> <C>
4.1 Article IV of the First Exhibit 3(a) to First Mid-
Mid-Illinois Bancshares, Illinois Bancshares, Inc.'s
Inc. Restated Certificate Annual Report on Form 10-K for
of Incorporation and the year ended December 31, 1987
Amendment to Restated (File No. 0-13368) (incorporated
Certificate of by reference)
Incorporation
4.2 Articles II, VI and VIII of Exhibit 3(b) to First Mid-
the First Mid-Illinois Illinois Bancshares, Inc.'s
Bancshares, Inc. Restated Annual Report on Form 10-K for
Bylaws the year ended December 31, 1987
(File No.0-13368) (incorporated
by reference)
5.1 Opinion of Barack, X 11
Ferrazzano, Kirschbaum &
Perlman
23.1 Consent of KPMG Peat X 13
Marwick LLP
23.2 Consent of Barack, Included in Exhibit
Ferrazzano, Kirschbaum & 5.1
Perlman
24.1 Power of Attorney Included on
Signature Page to
this Registration
Statement
99.1 First Mid-Illinois X 14
Bancshares, Inc. First
Retirement & Savings Plan
</TABLE>
BARACK, FERRAZZANO, KIRSCHBAUM & PERLMAN
333 WEST WACKER DRIVE, SUITE 2700
CHICAGO, ILLINOIS 60606
TELEPHONE: (312) 984-3100
FAX: (312) 984-3150
November 9, 1995
First Mid-Illinois Bancshares, Inc.
1515 Charleston Avenue
Mattoon, Illinois 60507
Ladies and Gentlemen:
We have acted as special counsel to First Mid-Illinois Bancshares, Inc., a
Delaware corporation (the "Company"), in connection with the proposed offering
of 80,000 shares of its common stock, $4.00 par value ("Common Shares"),
pursuant to the Company's First Retirement & Savings Plan (the "Offering") as
described in the Form S-8 Registration Statement to be filed with the
Securities and Exchange Commission (the "SEC") on November 10, 1995 (the
"Registration Statement"). Capitalized terms used, but not defined, herein
shall have the meanings given such terms in the Registration Statement. You
have requested our opinion concerning certain matters in connection with the
Offering.
We have made such legal and factual investigation as we deemed necessary
for purposes of this opinion. In our investigation, we have assumed the
genuineness of all signatures, the proper execution of all documents submitted
to us as originals, the conformity to the original documents of all documents
submitted to us as copies and the authenticity of the originals of such copies.
In arriving at the opinions expressed below, we have reviewed and examined
the following documents:
a. the Restated Certificate of Incorporation of the Company filed with
the Secretary of State of the State of Delaware on May 21, 1986, as
amended, and the Company's Restated Bylaws;
b. the Registration Statement, including the prospectus constituting a
part thereof (the "Prospectus");
c. Resolutions of the board of directors of the Company (the "Board")
relating to the Offering; and
d. a form of share certificate representing the Common Shares approved
by the Board.
<PAGE>
BARACK, FERRAZZANO, KIRSCHBAUM & PERLMAN
First Mid-Illinois Bancshares, Inc.
November 9, 1995
Page 2
We call your attention to the fact that our firm only requires lawyers to
be qualified to practice law in the State of Illinois and, in rendering the
foregoing opinions, we express no opinion with respect to any laws relevant to
this opinion other than the Securities Act of 1933, as amended, and the rules
and regulations thereunder, the laws and regulations of the State of Illinois,
the General Corporation Law of the State of Delaware and United States federal
law.
Based upon the foregoing, but assuming no responsibility for the accuracy
or the completeness of the data supplied by the Company and subject to the
qualifications, assumptions and limitations set forth herein, it is our opinion
that:
1. The Company has been duly organized and is validly existing in good
standing under the laws of the State of Delaware and has due corporate
authority to carry on its business as it is presently conducted.
2. The Company is authorized to issue up to 2,000,000 Common Shares, of
which 892,991 Common Shares were issued and are presently outstanding prior to
the Offering.
3. When the Registration Statement shall have been declared effective
by order of the SEC and the Common Shares to be sold thereunder shall have been
issued and sold upon the terms and conditions set forth in the Registration
Statement, then such Common Shares will be legally issued, fully paid and non-
assessable.
We express no opinion with respect to any specific legal issues other than
those explicitly addressed herein. We assume no obligation to advise you of
any change in the foregoing subsequent to the date of this letter (even though
the change may affect the legal conclusions stated in this letter).
We hereby consent (i) to be named in the Registration Statement, and in
the Prospectus, as attorneys who will pass upon the legality of the Common
Shares to be sold thereunder and (ii) to the filing of this opinion as an
Exhibit to the Registration Statement.
Sincerely,
BARACK, FERRAZZANO, KIRSCHBAUM & PERLMAN
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to incorporation by reference in this Registration Statement on
Form S-8 of First Mid-Illinois Bancshares, Inc. of our report, dated
January 20, 1995, relating to the consolidated balance sheets of First Mid-
Illinois Bancshares, Inc. and subsidiaries as of December 31, 1994 and
1993, and the related consolidated statements of income, changes in
stockholders' equity, and cash flows for each of the years in the three-
year period ended December 31, 1994, which report is incorporated by
reference in the December 31, 1994 annual report on Form 10-K of First Mid-
Illinois Bancshares, Inc.
/s/ KPMG Peat Marwick LLP
Chicago, Illinois
November 6, 1995
QUALIFIED RETIREMENT PLAN AND TRUST
DEFINED CONTRIBUTION BASIC PLAN DOCUMENT 01
SECTION ONE DEFINITIONS
The following words and phrases when used in the Plan with initial capital
letters shall, for the purpose of this Plan, have the meanings set forth below
unless the context indicates that other meanings are intended:
1.01 Adoption Agreement
Means the document executed by the Employer through which it adopts the Plan
and Trust and thereby agrees to be bound by all terms and conditions of the
Plan and Trust.
1.02 Basic Plan Document
Means this prototype Plan and Trust document.
1.03 Break in Eligibility Service
Means a 12 consecutive month period which coincides with an Eligibility
Computation Period during which an Employee fails to complete more than 500
Hours of Service (or such lesser number of Hours of Service specified in the
Adoption Agreement for this purpose).
1.04 Break in Vesting Service
Means a Plan Year during which an Employee fails to complete more than 500
Hours of Service (or such lesser number of Hours of Service specified in the
Adoption Agreement for this purpose).
1.05 Code
Means the Internal Revenue Code of 1986 as amended from time-to-time.
1.06 Compensation
For Plan Years beginning on or after January 1, 1989, the following definition
of Compensation shall apply:
Unless another definition of Compensation is selected in the Adoption
Agreement, Compensation will mean all of each Participant's W-2 earnings. For
any Self-Employed Individual covered under the Plan, Compensation will mean
Earned Income. Compensation shall include only that Compensation which is
actually paid to the Participant during the applicable period. Except as
provided elsewhere in this Plan, the applicable period shall be the Plan Year
unless the Employer has selected another period in the Adoption Agreement.
Unless otherwise indicated in the Adoption Agreement, Compensation shall
include any amount which is contributed by the Employer pursuant to a salary
reduction agreement and which is not includible in the gross income of the
Employee under Sections 125, 402(a)(8), 402(h) or 403(b) of the Code.
The annual Compensation of each Participant taken into account under the Plan
for any year shall not exceed $200,000, as adjusted by the Secretary at the
same time and in the same manner as under Section 415(d) of the Code. In
determining the Compensation of a Participant for purposes of this limitation,
the rules of Section 414(q)(6) of the Code shall apply, except in applying such
rules, the term "family" shall include only the spouse of the Participant and
any lineal descendants of the Participant who have not attained age 19 before
the close of the year.
If, as a result of the application of such rules the adjusted $200,000
limitation is exceeded, then (except for purposes of determining the portion of
Compensation up to the integration level if this Plan provides for permitted
disparity), the limitation shall be prorated among the affected individuals in
proportion to each such individual's Compensation as determined under this
Section prior to the application of this limitation.
Unless otherwise indicated in the Adoption Agreement, where an Employee enters
the Plan (and thus becomes a Participant) on an Entry Date other than the first
Entry Date in a Plan Year, his Compensation will include any such earnings paid
to him during the whole of such Plan Year.
Where this Plan is being adopted as an amendment and restatement to bring a
Prior Plan into compliance with the Tax Reform Act of 1986, such Prior Plan's
definition of Compensation shall apply for Plan Years beginning before January
1, 1989.
<PAGE>
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
Compensation limit. The OBRA '93 annual Compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding
12 months, over which Compensation is determined (determination period)
beginning in such calendar year. If a determination period consists of fewer
than 12 months, the OBRA '93 annual Compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the determination
period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in this
Plan to the limitation under Section 401(a)(17) of the Code shall mean the OBRA
'93 annual Compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into account in
determining an Employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA '93
annual Compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
Compensation limit is $150,000.
1.07 Custodian
Means an entity specified in the Adoption Agreement as Custodian or any duly
appointed successor as provided in Section 5.09.
1.08 Disability
Means the inability to engage in any substantial, gainful activity by reason of
any medically determinable physical or mental impairment that can be expected
to result in 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 such
impairment shall be supported by medical evidence.
1.09 Earned Income
Means the net earnings from self-employment in the trade or business with
respect to which the Plan is established, for which personal services of the
individual are a material income-producing factor. Net earnings will be
determined without regard to items not included in gross income and the
deductions allocable to such items. Net earnings are reduced by contributions
by the Employer to a qualified plan to the extent deductible under Section 404
of the Code.
Net earnings shall be determined with regard to the deduction allowed to the
Employer by Section 164(f) of the Code for taxable years beginning after
December 31, 1989.
1.10 Effective Date
Means the date the Plan becomes effective as indicated in the Adoption
Agreement. However, where a separate date is stated in the Plan as of which a
particular Plan provision becomes effective, such date will control with
respect to that provision.
1.11 Eligibility Computation Period
An Employee's initial Eligibility Computation Period shall be the 12
consecutive month period commencing with the date such Employee first performs
an Hour of Service (employment commencement date). His subsequent Eligibility
Computation Periods shall be the 12 consecutive month periods commencing on the
anniversaries of his employment commencement date; provided, however, if
pursuant to the Adoption Agreement, an Employee is required to complete one or
less Years of Eligibility Service to become a Participant, then his subsequent
Eligibility Computation Periods shall be the Plan Years commencing with the
Plan Year beginning during his initial Eligibility Computation Period.
1.12 Employee
Means any person employed by the Employer maintaining the Plan or of any other
employer required to be aggregated with such Employer under Sections 414(b),
(c), (m) or (o) of the Code.
The term Employee shall also include any Leased Employee deemed to be an
Employee of any Employer described in the previous paragraph as provided in
Sections 414(n) or (o) of the Code.
1.13 Employer
<PAGE>
Means any corporation, partnership, sole-proprietorship or other entity named
in the Adoption Agreement and any successor who by merger, consolidation,
purchase or otherwise assumes the obligations of the Plan. A partnership is
considered to be the Employer of each of the partners and a sole-proprietorship
is considered to be the Employer of a sole proprietor.
1.14 Employer Contribution
Means the amount contributed by the Employer each year as determined under this
Plan.
1.15 Entry Dates
Means the first day of the Plan Year and the first day of the seventh month of
the Plan Year, unless the Employer has specified more frequent dates in the
Adoption Agreement.
1.16 ERISA
Means the Employee Retirement Income Security Act of 1974 as amended from
time-to-time.
1.17 Forfeiture
Means that portion of a Participant's Individual Account as derived from
Employer Contributions which he or she is not entitled to receive (i.e., the
nonvested portion).
1.18 Fund
Means the Plan assets held by the Trustee or Custodian for the Participants'
exclusive benefit.
1.19 Highly Compensated Employee
The term Highly Compensated Employee includes highly compensated active
employees and highly compensated former employees.
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: (a) received Compensation from the Employer in excess of $75,000 (as
adjusted pursuant to Section 415(d) of the Code); (b) received Compensation
from the Employer in excess of $50,000 (as adjusted pursuant to Section 415(d)
of the Code) and was a member of the top-paid group for such year; or (c) was
an officer of the Employer and received Compensation during such year that is
greater than 50% of the dollar limitation in effect under Section 415(b)(1)(A)
of the Code. The term Highly Compensated Employee also includes: (a)
Employees who are both described in the preceding sentence 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 (b) Employees who are 5% owners
at any time during the look-back year or determination year.
If no officer has satisfied the Compensation requirement of (c) above during
either a determination year or look-back year, the highest paid officer for
such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The look-back
year shall be the 12 month period immediately preceding the determination year.
A highly compensated former employee includes any Employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for the Employer during the determination year, and was a
highly compensated active employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a family
member of either a 5% owner who is an active or former Employee or a Highly
Compensated Employee who is one of the 10 most Highly Compensated Employees
ranked on the basis of Compensation paid by the Employer during such year, then
the family member and the 5% owner or top 10 Highly Compensated Employee shall
be aggregated. In such case, the family member and 5% owner or top 10 Highly
Compensated Employee shall be treated as a single Employee receiving
Compensation and Plan contributions or benefits equal to the sum of such
Compensation and contributions or benefits of the family member and 5% owner or
top 10 Highly Compensated Employee. For purposes of this Section, family
member includes the spouse, lineal ascendants and descendants of the Employee
or former Employee and the spouses of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including the
determinations 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 considered, will be made in accordance with Section 414(q)
of the Code and the regulations
<PAGE>
thereunder.
1.20 Hours of Service - Means
A.Each hour for which an Employee is paid, or entitled to payment, for the
performance of duties for the Employer. These hours will be credited to the
Employee for the computation period in which the duties are performed; and
B.Each hour for which an Employee is paid, or entitled to payment, 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. No more than 501 Hours of Service
will be credited under this paragraph for any single continuous period (whether
or not such period occurs in a single computation period). Hours under this
paragraph shall be calculated and credited pursuant to Section 2530.200b-2 of
the Department of Labor Regulations which is incorporated herein by this
reference; and
C.Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Employer. The same Hours of Service will
not be credited both under paragraph (A) or paragraph (B), as the case may be,
and under this paragraph (C). These hours will be credited to the Employee for
the computation period or periods to which the award or agreement pertains
rather than the computation period in which the award, agreement, or payment is
made.
D.Solely for purposes of determining whether a Break in Eligibility Service or
a Break in Vesting Service has occurred in a computation period (the
computation period for purposes of determining whether a Break in Vesting
Service has occurred is the Plan Year), an individual who is absent from work
for maternity or paternity reasons shall receive credit for the Hours of
Service which would otherwise have been credited to such individual but for
such absence, or in any case in which such hours cannot be determined, 8 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 (1) by reason of
the pregnancy of the individual, (2) by reason of a birth of a child of the
individual, (3) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or (4) 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 (1) in the Eligibility Computation Period or Plan Year in
which the absence begins if the crediting is necessary to prevent a Break in
Eligibility Service or a Break in Vesting Service in the applicable period, or
(2) in all other cases, in the following Eligibility Computation Period or Plan
Year.
E.Hours of Service will be credited for employment with other members of 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) of which the
adopting Employer is a member, and any other entity required to be aggregated
with the Employer pursuant to Section 414(o) of the Code and the regulations
thereunder.
Hours of Service will also be credited for any individual considered an
Employee for purposes of this Plan under Code Sections 414(n) or 414(o) and the
regulations thereunder.
F.Where the Employer maintains the plan of a predecessor employer, service for
such predecessor employer shall be treated as service for the Employer.
G.The above method for determining Hours of Service may be altered as specified
in the Adoption Agreement.
1.21 Individual Account
Means the account established and maintained under this Plan for each
Participant in accordance with Section 4.01.
1.22 Investment Fund
Means a subdivision of the Fund established pursuant to Section 5.05.
1.23 Key Employee
Means any person who is determined to be a Key Employee under Section 10.08.
1.24 Leased Employee
<PAGE>
Means any person (other than an Employee of the recipient) who pursuant to an
agreement between the recipient and any other person ("leasing organization")
has performed services for the recipient (or for the recipient and related
persons determined in accordance with 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 a Leased
Employee by the leasing organization which are attributable to services
performed for the recipient Employer shall be treated as provided by the
recipient Employer.
A Leased Employee shall not be considered an Employee of the recipient if: (1)
such employee is covered by a money purchase pension plan providing: (a) a
nonintegrated employer contribution rate of at least 10% of compensation, as
defined in Section 415(c)(3) of the Code, but including amounts contributed
pursuant to a salary reduction agreement which are excludible from the
employee's gross income under Section 125, Section 402(a)(8), Section 402(h) or
Section 403(b) of the Code, (b) immediate participation, and (c) full and
immediate vesting; and (2) Leased Employees do not constitute more than 20% of
the recipient's nonhighly compensated workforce.
1.25 Normal Retirement Age
Means the age specified in the Adoption Agreement. However, if the Employer
enforces a mandatory retirement age which is less than the Normal Retirement
Age, such mandatory age is deemed to be the Normal Retirement Age. If no age
is specified in the Adoption Agreement, the Normal Retirement Age shall be age
59 1/2.
1.26 Owner-Employee
Means an individual who is a sole proprietor, or who is a partner owning more
than 10% of either the capital or profits interest of the partnership.
1.27 Participant
Means any Employee or former Employee of the Employer who has met the Plan's
eligibility requirements, has entered the Plan and who is or may become
eligible to receive a benefit of any type from this Plan or whose Beneficiary
may be eligible to receive any such benefit.
1.28 Plan
Means the prototype defined contribution plan adopted by the Employer. The Plan
consists of this Basic Plan Document plus the corresponding Adoption Agreement
as completed and signed by the Employer.
1.29 Plan Administrator
Means the person or persons determined to be the Plan Administrator in
accordance with Section 8.01.
1.30 Plan Year
Means the 12 consecutive month period which coincides with the Employer's tax
year or such other 12 consecutive month period as is designated in the Adoption
Agreement.
1.31 Prior Plan
Means a plan which was amended or replaced by adoption of this Plan document,
as indicated in the Adoption Agreement.
1.32 Prototype Sponsor
Means the entity specified in the Adoption Agreement. Such entity must meet
the definition of a sponsoring organization set forth in Section 3.07 of
Revenue Procedure 89-9.
1.33 Self-Employed Individual
Means an individual who has Earned Income for the taxable year from the trade
or business for which the Plan is established; also, an individual who would
have had Earned Income but for the fact that the trade or business had no net
profits for the taxable year.
1.34 Separate Fund
Means a subdivision of the Fund held in the name of a particular Participant
representing certain assets held for that Participant. The assets which
comprise a Participant's Separate Fund are those assets earmarked for him and
those assets subject to the Participant's individual direction pursuant to
Section 5.14.
1.35 Taxable Wage Base
Means, with respect to any taxable year, the maximum amount of earnings which
may be considered wages for such year
<PAGE>
under Section 3121(a)(1) of the Code.
1.36 Termination of Employment
A Termination of Employment of an Employee of an Employer shall occur whenever
his status as an Employee of such Employer ceases for any reason other than his
death. An Employee who does not return to work for the Employer on or before
the expiration of an authorized leave of absence from such Employer shall be
deemed to have incurred a Termination of Employment when such leave ends.
1.37 Top-Heavy Plan
This Plan is a Top-Heavy Plan for any Plan Year if it is determined to be such
pursuant to Section 10.08. If this Plan is a standardized Plan as indicated in
the Adoption Agreement, it shall always be deemed to be a Top-Heavy Plan.
1.38 Trustee
Means an individual, individuals or corporation specified in the Adoption
Agreement as Trustee or any duly appointed successor as provided in Section
5.09. Trustee shall mean Custodian in the event the financial organization
named as Trustee does not have full trust powers.
1.39 Valuation Date
Means the last day of the Plan Year and each other date designated by the Plan
Administrator which is selected in a uniform and nondiscriminatory manner when
the assets of the Fund are valued at their then fair market value.
1.40 Vested
Means nonforfeitable, that is, a claim which is unconditional and legally
enforceable against the Plan obtained by a Participant or his Beneficiary to
that part of an immediate or deferred benefit under the Plan which arises from
a Participant's Years of Vesting Service.
1.41 Year of Eligibility Service
Means a 12-consecutive month period which coincides with an Eligibility
Computation period during which an Employee completes at least 1,000 Hours of
Service (or such lesser number of Hours of Service specified in the Adoption
Agreement for this purpose).
1.42 Year of Vesting Service
Means a Plan Year during which an Employee completes at least 1,000 Hours of
Service (or such lesser number of Hours of Service specified in the Adoption
Agreement for this purpose).
In the case of a Participant who has 5 or more consecutive Breaks in Vesting
Service, all Years of Vesting Service after such Breaks in Vesting Service will
be disregarded for the purpose of determining the Vested portion of his
Individual Account derived from Employer Contributions that accrued before such
breaks. Such Participant's prebreak service will count in vesting the
postbreak Individual Account derived from Employer Contributions only if
either:
(A)such Participant had any Vested right to any portion of his Individual
Account derived from Employer Contributions at the time of his Termination of
Employment; or
(B)upon returning to service, the number of consecutive Breaks in Vesting
Service is less than his number of Years of Vesting Service before such breaks.
Separate subaccounts will be maintained for the Participant's prebreak and
postbreak portions of his Individual Account derived from Employer
Contributions. Both subaccounts will share in the gains and losses of the
Fund.
Years of Vesting Service shall not include any period of time excluded from
Years of Vesting Service in the Adoption Agreement.
In the event the Plan Year is changed to a new 12-month period, Employees shall
receive credit for Years of Vesting Service, in accordance with the preceding
provisions of this definition, for each of the Plan Years (the old and new Plan
Years) which overlap as a result of such change.
SECTION TWO ELIGIBILITY AND PARTICIPATION
2.01 Eligibility to Participate
<PAGE>
Each Employee of the Employer, except those Employees who belong to a class of
Employees which is excluded from participation as indicated in the Adoption
Agreement, shall be eligible to participate in this Plan upon the satisfaction
of the age and Years of Eligibility Service requirements specified in the
Adoption Agreement.
2.02 Plan Entry
A.If this Plan is a replacement of a Prior Plan by amendment or
restatement, each Employee of the Employer who was a Participant in said Prior
Plan before the Effective Date shall continue to be a Participant in this Plan.
B.An Employee will become a Participant in the Plan as of the Effective Date if
he has met the eligibility requirements of Section 2.01 as of such date. After
the Effective Date, each Employee shall become a Participant on the first Entry
Date following the date the Employee satisfies the eligibility requirements of
Section 2.01.
C.The Plan Administrator shall notify each Employee who becomes eligible to be
a Participant under this Plan and shall furnish him with the application form,
enrollment forms or other documents which are required of Participants. The
eligible Employee shall execute such forms or documents and make available such
information as may be required in the administration of the Plan.
2.03 Transfer to or From Ineligible Class
If an Employee who had been a Participant becomes ineligible to participate
because he is no longer a member of an eligible class of Employees, but has not
incurred a Break in Eligibility Service, such Employee shall participate
immediately upon his return to an eligible class of Employees. If such
Employee incurs a Break in Eligibility Service, his eligibility to participate
shall be determined by Section 2.04.
An Employee who is not a member of the eligible class of Employees will become
a Participant immediately upon becoming a member of the eligible class provided
such Employee has satisfied the age and Years of Eligibility Service
requirements. If such Employee has not satisfied the age and Years of
Eligibility Service requirements as of the date he becomes a member of the
eligible class, he shall become a Participant on the first Entry Date following
the date he satisfies said requirements.
2.04 Return as a Participant After Break in Eligibility Service
A.Employee Not Participant Before Break - If an Employee incurs a Break in
Eligibility Service before satisfying the Plan's eligibility requirements, such
Employee's Years of Eligibility Service before such Break in Eligibility
Service will not be taken into account.
B.Nonvested Participants - In the case of a Participant who does not have a
Vested interest in his Individual Account derived from Employer Contributions,
Years of Eligibility Service before a period of consecutive Breaks in
Eligibility Service will not be taken into account for eligibility purposes if
the number of consecutive Breaks in Eligibility Service in such period equals
or exceeds the greater of 5 or the aggregate number of Years of Eligibility
Service before such break. Such aggregate number of Years of Eligibility
Service will not include any Years of Eligibility Service disregarded under the
preceding sentence by reason of prior breaks.
If a Participant's Years of Eligibility Service are disregarded pursuant to the
preceding paragraph, such Participant will be treated as a new Employee for
eligibility purposes. If a Participant's Years of Eligibility Service may not
be disregarded pursuant to the preceding paragraph, such Participant shall
continue to participate in the Plan, or, if terminated, shall participate
immediately upon reemployment.
C.Vested Participants - A Participant who has sustained a Break in Eligibility
Service and who had a Vested interest in all or a portion of his Individual
Account derived from Employer Contributions shall continue to participate in
the Plan, or, if terminated, shall participate immediately upon reemployment.
2.05 Determinations Under This Section
The Plan Administrator shall determine the eligibility of each Employee to be a
Participant. This determination shall be conclusive and binding upon all
persons except as otherwise provided herein or by law.
2.06 Terms of Employment
Neither the fact of the establishment of the Plan nor the fact that a common
law Employee has become a Participant shall give to that common law Employee
any right to continued employment; nor shall either fact limit the right of
the Employer to discharge or to deal otherwise with a common law Employee
without regard to the effect such treatment
<PAGE>
may have upon the Employee's rights under the Plan.
SECTION THREE CONTRIBUTIONS
3.01 Employer Contributions
A.Obligation to Contribute - The Employer shall make contributions to the Plan
in accordance with the contribution formula specified in the Adoption
Agreement. If this Plan is a profit sharing plan, the Employer shall, in its
sole discretion, make contributions without regard to current or accumulated
earnings or profits.
B. Allocation Formula and the Right to Share in the Employer
Contribution -
1.General - The Employer Contribution for a Plan Year will be allocated or
contributed to the Individual Accounts of qualifying Participants in accordance
with the allocation or contribution formula specified in the Adoption
Agreement. The Employer Contribution for any Plan Year will be allocated to
each Participant's Individual Account as of the last day of that Plan Year.
2.Qualifying Participants - A Participant is a qualifying Participant and is
entitled to share in the Employer Contribution for any Plan Year if (1) he was
a Participant on at least one day during the Plan Year, (2) if this Plan is a
nonstandardized plan, he completes a Year of Vesting Service during the Plan
Year and (3) where the Employer has selected the "last day requirement" in the
Adoption Agreement, he is an Employee of the Employer on the last day of the
Plan Year (except that this last requirement (3) shall not apply if the
Participant has died during the Plan Year or incurred a Termination of
Employment during the Plan year after having reached his Normal Retirement Age
or having incurred a Disability). Notwithstanding anything in this paragraph
to the contrary, a Participant will not be a qualifying Participant for a Plan
Year if he incurs a Termination of Employment during such Plan Year with not
more than 500 Hours of Service if he is not an Employee on the last day of the
Plan Year. The determination of whether a Participant is entitled to share in
the Employer Contribution shall be made as of the last day of each Plan Year.
3.Special Rules for Integrated Plans - If the Employer has selected the
integrated contribution or allocation formula in the Adoption Agreement, then
the maximum disparity rate shall be determined in accordance with the following
table.
MAXIMUM DISPARITY RATE
<TABLE>
<CAPTION>
NONSTANDARDIZED AND
STANDARDIZED AND TOP-HEAVY AND NONTOP-HEAVY
INTEGRATION LEVEL MONEY PURCHASE NONSTANDARDIZED PROFIT SHARING PROFIT SHARING
<S> <C> <C> <C>
Taxable Wage Base (TWB) 5.7% 2.7% 5.7%
More than $0 but not more than X* 5.7% 2.7% 5.7%
More than X* of TWB but not more
than 80% of TWB 4.3% 1.3% 4.3%
More than 80% of TWB but not
more than TWB 5.4% 2.4% 5.4%
</TABLE>
* X means the greater of $10,000 or 20% of TWB.
C.Allocation of Forfeitures - Forfeitures for a Plan Year which arise as a
result of the application of Section 6.01(D) shall be allocated as follows:
1.Profit Sharing Plan - If this is a profit sharing plan, Forfeitures shall be
allocated in the manner provided in Section 3.01(B) (for Employer
Contributions) to the Individual Accounts of Participants
<PAGE>
who are entitled to share in the Employer Contribution for such Plan Year.
2.Money Purchase Pension and Target Benefit Plan - If this Plan is a money
purchase pension plan or a target benefit plan, Forfeitures shall be applied
towards the reduction of Employer Contributions to the Plan. However, if the
Employer has indicated in the Adoption Agreement that Forfeitures shall be
allocated to the Individual Accounts of Participants, then Forfeitures shall be
allocated in the manner provided in Section 3.01(B) (for Employer
Contributions) to the Individual Accounts of Participants who are entitled to
share in the Employer Contributions for such Plan Year.
D.Timing of Employer Contribution - The Employer Contribution for each Plan
Year shall be delivered to the Trustee (or Custodian, if applicable) not later
than the due date for filing the Employer's income tax return for its fiscal
year in which the Plan Year ends, including extensions thereof.
E.Minimum Allocation for Top-Heavy Plans - The contribution and allocation
provisions of this Section 3.01(E) shall apply for any Plan Year with respect
to which this Plan is a Top-Heavy Plan and shall always apply if this Plan is a
standardized Plan.
1.Except as otherwise provided in (3) and (4) below, the Employer Contributions
and Forfeitures allocated on behalf of any Participant who is not a Key
Employee shall not be less than the lesser of 3% 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 the
first $200,000 (increased by any cost of living adjustment made by the
Secretary of Treasury or his delegate) of the Key Employee's Compensation,
allocated on behalf of any Key Employee for that year. The minimum allocation
is determined without regard to any Social Security contribution. This minimum
allocation 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 of (a) the Participant's
failure to complete 1,000 Hours of Service (or any equivalent provided in the
Plan), or (b) the Participant's failure to make mandatory Employee
Contributions to the Plan, or (c) Compensation less than a stated amount.
2.For purposes of computing the minimum allocation, Compensation shall mean
Compensation as defined in Section 1.06 of the Plan.
3.The provision in (1) above shall not apply to any Participant who was not
employed by the Employer on the last day of the Plan Year.
4.The provision in (1) above shall not apply to any Participant to the extent
the Participant is covered under any other plan or plans of the Employer and
the Employer has provided in the Adoption Agreement that the minimum allocation
or benefit requirement applicable to Top-Heavy Plans will be met in the other
plan or plans.
5.The minimum allocation required under this Section 3.01(E) and Section
3.01(F)(1) (to the extent required to be nonforfeitable under Code Section
416(b)) may not be forfeited under Code Section 411(a)(3)(B) or 411(a)(3)(D).
F.Special Requirements for Paired Plans - The Employer maintains paired plans
if the Employer has adopted both a standardized profit sharing plan and a
standardized money purchase pension plan using this Basic Plan Document.
1.Minimum Allocation - The mandatory minimum allocation provision of Section
3.01(E) shall not apply to any Participant if the Employer maintains paired
plans. Rather, for each Plan Year, the Employer will provide a minimum
contribution equal to 3% of Compensation for each non-Key Employee who is
entitled to a minimum contribution. Such minimum contribution will only be
made to one of the Plans. If an Employee is a Participant in only one of the
Plans, the minimum contribution shall be made to that Plan. If the Employee is
a Participant in both Plans, the minimum contribution shall be made to the
money purchase plan.
2.Only One Plan can be Integrated - If the Employer maintains paired plans,
only one of the Plans may provide for the disparity in contributions which is
permitted under Section 401(l) of the Code. In the
<PAGE>
event that both Adoption Agreements provide for such integration, only the
money purchase pension plan shall be deemed to be integrated.
G.Return of the Employer Contribution to the Employer Under Special
Circumstances - Any contribution made by the Employer because of a mistake of
fact must be returned to the Employer within one year of the contribution.
In the event that the Commissioner of Internal Revenue determines that the Plan
is not initially qualified under the Code, any contributions made incident to
that initial qualification by the Employer must 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.
In the event that a contribution made by the Employer under this Plan is
conditioned on deductibility and is not deductible under Code Section 404, the
contribution, to the extent of the amount disallowed, must be returned to the
Employer within one year after the deduction is disallowed.
H. Omission of Participant
1.If the Plan is a money purchase plan or a target benefit plan and, if in any
Plan Year, any Employee who should be included as a Participant is erroneously
omitted and discovery of such omission is not made until after a contribution
by the Employer for the year has been made and allocated, the Employer shall
make a subsequent contribution with respect to the omitted Employee in the
amount which the Employer would have contributed with respect to that Employee
had he not been omitted.
2.If the Plan is a profit sharing plan, and if in any Plan Year, any Employee
who should be included as a Participant is erroneously omitted and discovery of
such omission is not made until after the Employer Contribution has been made
and allocated, then the Plan Administrator must re-do the allocation (if a
correction can be made) and inform the Employee. Alternatively, the Employer
may choose to contribute for the omitted Employee the amount which the Employer
would have contributed for him.
3.02 Employee Contributions
This Plan will not accept nondeductible employee contributions and matching
contributions for Plan Years beginning after the Plan Year in which this Plan
is adopted by the Employer. Employee contributions for Plan Years beginning
after December 31, 1986, together with any matching contributions as defined in
Section 401(m) of the Code, will be limited so as to meet the nondiscrimination
test of Section 401(m) of the Code.
A separate account will be maintained by the Plan Administrator for the
nondeductible employee contributions of each Participant.
A Participant may, upon a written request submitted to the Plan Administrator,
withdraw the lesser of the portion of his Individual Account attributable to
his nondeductible employee contributions or the amount he contributed as
nondeductible employee contributions.
Employee contributions and earnings thereon will be nonforfeitable at all
times. No Forfeiture will occur solely as a result of an Employee's withdrawal
of employee contributions.
The Plan Administrator will not accept deductible employee contributions which
are made for a taxable year beginning after December 31, 1986. Contributions
made prior to that date will be maintained in a separate account which will be
nonforfeitable at all times. The account will share in the gains and losses of
the Fund in the same manner as described in Section 4.03 of the Plan. No part
of the deductible employee contribution account will be used to purchase life
insurance. Subject to Section 6.05, joint and survivor annuity requirements
(if applicable), the Participant may withdraw any part of the deductible
employee contribution account by making a written application to the Plan
Administrator.
3.03 Rollover Contributions
If the Plan Administrator so permits in a uniform and nondiscriminatory manner,
a Participant may contribute a rollover contribution to the Plan; provided
that such Employee submits a written certification, satisfactory to the Trustee
(or Custodian), that the contribution qualifies as a rollover contribution.
<PAGE>
A separate account shall be maintained by the Plan Administrator for each
Participant's rollover contributions which will be nonforfeitable at all times.
Such account will share in the income and gains and losses of the Fund in the
manner described in Section 4.03 and shall be subject to the Plan's provisions
governing distributions.
For purposes of this Section 3.03, "rollover contribution" means a contribution
described in Sections 402(a)(5), 403(a)(4) or 408(d)(3) of the Code or in any
other provision which may be added to the Code which may authorize rollovers to
the Plan.
3.04 Transfer Contributions
If the Plan Administrator so permits in a uniform and nondiscriminatory manner,
the Trustee (or Custodian, if applicable) may receive any amounts transferred
to it from the trustee or custodian of another plan qualified under Code
Section 401(a).
A separate account shall be maintained by the Plan Administrator for each
Participant's transfer contributions which will be nonforfeitable at all times.
Such account will share in the income and gains and losses of the Fund in the
manner described in Section 4.03 and shall be subject to the Plan's provisions
governing distributions.
3.05 Limitation on Allocations
A.If the 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
Section 3.05(E)(1), the following rules shall apply:
1.The amount of annual additions which may be credited to the Participant's
Individual Account for any limitation year will not exceed the lesser of the
maximum permissible amount or any other limitation contained in this Plan. If
the Employer Contribution that would otherwise be contributed or allocated to
the Participant's Individual Account would cause the annual additions for the
limitation year to exceed the maximum permissible amount, the amount
contributed or allocated will be reduced so that the annual additions for the
limitation year will equal the maximum permissible amount.
2.Prior to determining the Participant's actual compensation for the limitation
year, the Employer may determine the maximum permissible amount for a
Participant on the basis of a reasonable estimation of the Participant's
Compensation for the limitation year, uniformly determined for all participants
similarly situated.
3.As soon as is administratively feasible after the end of the limitation year,
the maximum permissible amount for the limitation year will be determined on
the basis of the Participant's actual compensation for the limitation year.
4.If pursuant to Section 3.05(A)(3) or as a result of the allocation of
Forfeitures there is an excess amount, the excess will be disposed of as
follows:
a.Any nondeductible voluntary employee contributions, to the extent they would
reduce the excess amount, will be returned to the Participant;
b.If after the application of paragraph (a) an excess amount still exists, and
the Participant is covered by the Plan at the end of the limitation year, the
excess amount in the Participant's Individual Account will be used to reduce
Employer Contributions (including any allocation of Forfeitures) for such
Participant in the next limitation year, and each succeeding limitation year if
necessary;
c.If after the application of paragraph (a) an excess amount still exists, and
the Participant is not covered by the Plan at the end of a limitation year, the
excess amount will be held unallocated in a suspense account. The suspense
account will be applied to reduce future Employer Contributions (including
allocation of any Forfeitures) for all remaining Participants in the next
limitation year, and each succeeding limitation year if necessary;
d.If a suspense account is in existence at any time during a limitation year
pursuant to this Section, it will not participate in the allocation of the
Fund's investment gains and losses. If a
<PAGE>
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' Individual Accounts before any Employer Contributions or any
Employee contributions may be made to the Plan for that limitation year.
Excess amounts may not be distributed to Participants or former Participants.
B.If, in addition to this Plan, the 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 as defined in Section 3.05(E)(1), during any limitation year,
the following rules apply:
1.The annual additions which may be credited to a Participant's Individual
Account under this Plan for any such limitation year will not exceed the
maximum permissible amount reduced by the annual additions credited to a
Participant's Individual Account under the other plans and welfare benefit
funds for the same limitation year. If the annual additions with respect to
the Participant under other defined contribution plans and welfare benefit
funds maintained by the employer are less than the maximum permissible amount
and the Employer Contribution that would otherwise be contributed or allocated
to the Participant's Individual Account under this Plan would cause the annual
additions for the limitation year to exceed this limitation, the amount
contributed or allocated will be reduced so that the annual additions under all
such plans and funds for the limitation year will 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, no amount will be
contributed or allocated to the Participant's Individual Account under this
Plan for the limitation year.
2.Prior to determining the Participant's actual compensation for the limitation
year, the Employer may determine the maximum permissible amount for a
Participant in the manner described in Section 3.05(A)(2).
3.As soon as is administratively feasible after the end of the limitation year,
the maximum permissible amount for the limitation year will be determined on
the basis of the Participant's actual compensation for the limitation year.
4.If, pursuant to Section 3.05(B)(3) or as a result of the allocation of
Forfeitures, a Participant's annual additions under this Plan and such other
plans would result in an excess amount for a limitation year, the excess amount
will be deemed to consist of the annual additions last allocated, except that
annual additions attributable to a welfare benefit fund or individual medical
account will be deemed to have been allocated first regardless of the actual
allocation date.
5.If an excess amount was allocated to a Participant on an allocation date of
this Plan which coincides with an allocation date of another plan, the excess
amount attributed to this Plan will be the product of,
a. the total excess amount allocated as of such date,
times
b.the ratio of (i) the annual additions allocated to the Participant for the
limitation year as of such date under this Plan to (ii) the total annual
additions allocated to the Participant for the limitation year as of such date
under this and all the other qualified master or prototype defined contribution
plans.
6.Any excess amount attributed to this Plan will be disposed in the manner
described in Section 3.05(A)(4).
C.If the Participant is covered under another qualified defined contribution
plan maintained by the Employer which is not a master or prototype plan, annual
additions which may be credited to the Participant's Individual Account under
this Plan for any limitation year will be limited in accordance with Sections
3.05(B)(1) through 3.05(B)(6) as though the other plan were a master or
prototype plan unless the Employer provides other limitations in the Section of
the Adoption Agreement titled "Limitation on Allocation - More Than One Plan."
<PAGE>
D.If the Employer maintains, or at any time maintained, a qualified defined
benefit plan covering any Participant in this Plan, the sum of the
Participant's defined benefit plan fraction and defined contribution plan
fraction will not exceed 1.0 in any limitation year. The annual additions
which may be credited to the Participant's Individual Account under this Plan
for any limitation year will be limited in accordance with the Section of the
Adoption Agreement titled "Limitation on Allocation - More Than One Plan."
E.The following terms shall have the following meanings when used in this
Section 3.05:
1.Annual additions: The sum of the following amounts credited to a
Participant's Individual Account for the limitation year:
a. Employer Contributions,
b. Employee contributions,
c. Forfeitures, and
d.amounts allocated, after March 31, 1984, to an individual medical account, as
defined in Section 415(l)(2) of the Code, which is part of a pension or annuity
plan maintained by the Employer are treated as annual additions to a defined
contribution plan. Also 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 are treated as annual additions to a defined contribution plan.
For this purpose, any excess amount applied under Section 3.05(A)(4) or
3.05(B)(6) in the limitation year to reduce Employer Contributions will be
considered annual additions for such limitation year.
2.Compensation: A Participant's earned income, wages, salaries, and fees for
professional services and other amounts received for personal services actually
rendered in the course of employment with the Employer maintaining the Plan
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses), and excluding the following:
a.Employer contributions to a plan of deferred compensation which are not
includible in the Employee's gross income 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 Employee, or any
distributions from a plan of deferred compensation;
b.Amounts realized from the exercise of a nonqualified stock option, or when
restricted stock (or property) held by the Employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture;
c.Amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and
d.Other amounts which received special tax benefits, or contributions made by
the Employer (whether or not under a salary reduction agreement) towards the
purchase of an annuity described in Section 403(b) of the Code (whether or not
the amounts are actually excludible from the gross income of the Employee).
For purposes of applying the limitations of this Section 3.05, compensation for
a limitation year is the compensation actually paid or includible in 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 Code)
<PAGE>
is 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; 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 are
nonforfeitable when made.
3.Defined benefit fraction: A fraction, the numerator of which is the sum of
the Participant's projected annual benefits under all the defined benefit plans
(whether or not terminated) maintained by the Employer, and the denominator of
which is the lesser of 125% of the dollar limitation determined for the
limitation year under Section 415(b) and (d) of the Code or 140% of the 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 first limitation year beginning after December 31, 1986, in one or
more defined benefit plans maintained by the employer which were in existence
on May 6, 1986, the denominator of this fraction will not be less than 125% of
the sum of the annual benefits under such plans which the participant had
accrued as of the close of the last limitation year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the plan after
May 5, 1986. The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Section 415 of
the Code for all limitation years beginning before January 1, 1987.
4.Defined contribution dollar limitation: $30,000 or if greater, 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.
5.Defined contribution fraction: A fraction, the numerator of which is the sum
of the annual additions to the Participant's account under all the defined
contribution plans (whether or not terminated) maintained by the Employer for
the current and all prior limitation years (including the annual additions
attributable to the Participant's nondeductible employee contributions to all
defined benefit plans, whether or not terminated, maintained by the Employer,
and the annual additions attributable to all welfare benefit funds, as defined
in Section 419(e) of the Code, and 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 in any limitation year is the lesser of 125% of the dollar
limitation determined under Section 415(b) and (d) of the Code in effect under
Section 415(c)(1)(A) of the Code or 35% of the Participant's compensation for
such year.
If the Employee was a participant as of the end of the first day of the first
limitation year beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which were in existence on May 6,
1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of
(1) the excess of the sum of the fractions over 1.0 times (2) the denominator
of this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last limitation year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the Plan made
after May 5, 1986, but using the Section 415 limitation applicable to the first
limitation year beginning on or after January 1, 1987. The annual addition for
any limitation year beginning before January 1, 1987, shall not be recomputed
to treat all employee contributions as annual additions.
6.Employer: For purposes of this Section 3.05, 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)), all commonly controlled trades or businesses (as defined in Section
414(c) as modified by Section 415(h)) or affiliated service groups (as defined
in Section 414(m)) of which the adopting Employer is a part, and any other
entity required to be aggregated with the Employer pursuant to regulations
under Section 414(o) of the Code.
7.Excess amount: The excess of the Participant's annual additions for the
limitation year over the
<PAGE>
maximum permissible amount.
8.Highest average compensation: The average compensation for the three
consecutive years of service with the Employer that produces the highest
average.
9.Limitation year: A calendar year, or the 12-consecutive month period elected
by the Employer in the Section of the Adoption Agreement titled "Limitation on
Allocation - More Than One Plan." All qualified plans maintained by the
Employer must use the same limitation year. If the limitation year is amended
to a different 12-consecutive month period, the new limitation year must begin
on a date within the limitation year in which the amendment is made.
10.Master or prototype plan: A plan the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
11.Maximum permissible amount: The maximum annual addition that
may be contributed or allocated to a Participant's Individual Account under the
Plan for any limitation year shall not exceed the lesser of:
a. the defined contribution dollar limitation, or
b. 25% of the Participant's compensation for the
limitation year.
The compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits (within the meaning of Section 401(h) or
Section 419A(f)(2) of the Code) which is otherwise treated as an annual
addition under Section 415(l)(1) 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, the maximum
permissible amount will not exceed the defined contribution dollar limitation
multiplied by the following fraction:
NUMBER OF MONTHS IN THE SHORT LIMITATION YEAR
12
12.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 the Participant would be entitled under the terms of
the Plan assuming:
a.the Participant will continue employment until normal retirement age under
the Plan (or current age, if later), and
b.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.
SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
4.01 Individual Accounts
A.The Plan Administrator shall establish and maintain an Individual Account in
the name of each Participant to reflect the total value of his interest in the
Fund. Each Individual Account established hereunder shall consist of such
subaccounts as may be needed for each Participant including:
1.a subaccount to reflect Employer Contributions and Forfeitures allocated on
behalf of a Participant;
2. a subaccount to reflect a Participant's rollover
contributions;
3. a subaccount to reflect a Participant's transfer
contributions;
4. a subaccount to reflect a Participant's nondeductible
employee contributions; and
5. a subaccount to reflect a Participant's deductible employee
contributions.
<PAGE>
Such subaccounts are primarily for accounting purposes, and do not necessarily
require a segregation of the Fund.
B.The Plan Administrator may establish additional accounts as it may deem
necessary for the proper administration of the Plan, including, but not limited
to, a suspense account for Forfeitures as required pursuant to Section 6.01(D).
4.02 Valuation of Fund
The Fund will be valued each Valuation Date at fair market value.
4.03 Valuation of Individual Accounts
A.Where all or a portion of the assets of a Participant's Individual Account
are invested in a Separate Fund for the Participant, then the value of that
portion of such Participant's Individual Account at any relevant time equals
the sum of the fair market values of the assets in such Separate Fund, less any
applicable charges or penalties.
B.The fair market value of the remainder of each Individual Account is
determined in the following manner:
1.First, the portion of the Individual Account invested in each Investment Fund
as of the previous Valuation Date is determined. Each such portion is reduced
by any withdrawal made from the applicable Investment Fund to or for the
benefit of a Participant or his Beneficiary, further reduced by any amounts
forfeited by the Participant pursuant to Section 6.01(D) and further reduced by
any transfer to another Investment Fund since the previous Valuation Date and
is increased by any amount transferred from another Investment Fund since the
previous Valuation Date. The resulting amounts are the net Individual Account
portions invested in the Investment Funds.
2.Secondly, the net Individual Account portions invested in each Investment
Fund are adjusted upwards or downwards, pro rata (i.e., ratio of each net
Individual Account portion to the sum of all net Individual Account portions)
so that the sum of all the net Individual Account portions invested in an
Investment Fund will equal the then fair market value of the Investment Fund.
Notwithstanding the previous sentence, for the first Plan Year only, the net
Individual Account portions shall be the sum of all contributions made to each
Participant's Individual Account during the first Plan Year.
3.Thirdly, any contributions to the Plan and Forfeitures are allocated in
accordance with the appropriate allocation provisions of Section 3. For
purposes of Section 4, contributions made by the Employer for any Plan Year but
after that Plan Year will be considered to have been made on the last day of
that Plan Year regardless of when paid to the Trustee (or Custodian, if
applicable).
Amounts contributed between Valuation Dates will not be credited with
investment gains or losses until the next following Valuation Date.
4.Finally, the portions of the Individual Account invested in each Investment
Fund (determined in accordance with (1), (2) and (3) above) are added together.
4.04 Segregation of Assets
If a Participant elects a mode of distribution other than a lump sum, the Plan
Administrator may place that Participant's account balance into a segregated
Investment Fund for the purpose of maintaining the necessary liquidity to
provide benefit installments on a periodic basis.
4.05 Statement of Individual Accounts
No later than 270 days after the close of each Plan Year, the Plan
Administrator shall furnish a statement to each Participant indicating the
Individual Account balances of such Participant as of the last Valuation Date
in such Plan Year.
4.06 Modification of Method for Valuing Individual Accounts
If necessary or appropriate, the Plan Administrator may establish different or
additional procedures (which shall be uniform and nondiscriminatory) for
determining the fair market value of the Individual Accounts.
SECTION FIVE TRUSTEE OR CUSTODIAN
<PAGE>
5.01 Creation of Fund
By adopting this Plan, the Employer establishes the Fund which shall consist of
the assets of the Plan held by the Trustee (or Custodian, if applicable)
pursuant to this Section 5. Assets within the Fund may be pooled on behalf of
all Participants, earmarked on behalf of each Participant or be a combination
of pooled and earmarked. To the extent that assets are earmarked for a
particular Participant, they will be held in a Separate Fund for that
Participant.
No part of the corpus or income of the Fund may be used for, or diverted to,
purposes other than for the exclusive benefit of Participants or their
Beneficiaries.
5.02 Investment Authority
Except as provided in Section 5.14 (relating to individual direction of
investments by Participants), the Employer, not the Trustee (or Custodian, if
applicable), shall have exclusive management and control over the investment of
the Fund into any permitted investment. Notwithstanding the preceding
sentence, a Trustee with full trust powers (under applicable law) may make an
agreement with the Employer whereby the Trustee will manage the investment of
all or a portion of the Fund. Any such agreement shall be in writing and set
forth such matters as the Trustee deems necessary or desirable.
5.03 Financial organization Custodian or Trustee Without Full Trust Powers
This Section 5.03 applies where a financial organization has indicated in the
Adoption Agreement that it will serve, with respect to this Plan, as Custodian
or as Trustee without full trust powers (under applicable law). Hereinafter, a
financial organization Trustee without full trust powers (under applicable law)
shall be referred to as a Custodian.
A.Permissible Investments - The assets of the Plan shall be invested only in
those investments which are available through the Custodian in the ordinary
course of business which the Custodian may legally hold in a qualified plan and
which the Custodian chooses to make available to Employers for qualified plan
investments.
B.Responsibilities of the Custodian - The responsibilities of the Custodian
shall be limited to the following:
1.To receive Plan contributions and to hold, invest and reinvest the Fund
without distinction between principal and interest; provided, however, that
nothing in this Plan shall require the Custodian to maintain physical custody
of stock certificates (or other indicia of ownership of any type of asset)
representing assets within the Fund;
2.To maintain accurate records of contributions, earnings, withdrawals and
other information the Custodian deems relevant with respect to the Plan;
3.To make disbursements from the Fund to Participants or Beneficiaries upon the
proper authorization of the Plan Administrator; and
4.To furnish to the Plan Administrator a statement which reflects the value of
the investments in the hands of the Custodian as of the end of each Plan Year.
C.Powers of the Custodian - Except as otherwise provided in this Plan, the
Custodian shall have the power to take any action with respect to the Fund
which it deems necessary or advisable to discharge its responsibilities under
this Plan including, but not limited to, the following powers:
1.To invest all or a portion of the Fund (including idle cash balances) in time
deposits, savings accounts, money market accounts or similar investments
bearing a reasonable rate of interest in the Custodian's own savings department
or the savings department of another financial organization;
2.To vote upon any stocks, bonds, or other securities; to give general or
special proxies or powers of attorney with or without power of substitution; to
exercise any conversion privileges or subscription rights and to make any
payments incidental thereto; to oppose, or to consent to, or otherwise
participate in, corporate reorganizations or other changes affecting corporate
securities, and to pay any assessments or charges in connection therewith; and
generally to exercise any of the powers of an owner with respect to stocks,
bonds, securities or other property;
3.To hold securities or other property of the Fund in its own name, in the name
of its nominee or in bearer form; and
<PAGE>
4.To make, execute, acknowledge, and deliver any and all documents of transfer
and conveyance and any and all other instruments that may be necessary or
appropriate to carry out the powers herein granted.
5.04 Financial Organization Trustee With Full Trust Powers and Individual
Trustee
This Section 5.04 applies where a financial organization has indicated in the
Adoption Agreement that it will serve as Trustee with full trust powers. This
Section also applies where one or more individuals are named in the Adoption
Agreement to serve as Trustee(s).
A.Permissible Investments - The Trustee may invest the assets of the Plan in
property of any character, real or personal, including, but not limited to the
following: stocks, including shares of open-end investment companies (mutual
funds); bonds; notes; debentures; options; limited partnership interests;
mortgages; real estate or any interests therein; unit investment trusts;
Treasury Bills, and other U.S. Government obligations; common trust funds,
combined investment trusts, collective trust funds or commingled funds
maintained by a bank or similar financial organization (whether or not the
Trustee hereunder); savings accounts, time deposits or money market accounts of
a bank or similar financial organization (whether or not the Trustee
hereunder); annuity contracts; life insurance policies; or in such other
investments as is deemed proper without regard to investments authorized by
statute or rule of law governing the investment of trust funds but with regard
to ERISA and this Plan.
Notwithstanding the preceding sentence, the Prototype Sponsor may, as a
condition of making the Plan available to the Employer for adoption, limit the
types of property in which the Trustee (other than a financial organization
Trustee with full trust powers), is permitted to invest.
B.Responsibilities of the Trustee - The responsibilities of the Trustee shall
be limited to the following:
1.To receive Plan contributions and to hold, invest and reinvest the Fund
without distinction between principal and interest; provided, however, that
nothing in this Plan shall require the Trustee to maintain physical custody of
stock certificates (or other indicia of ownership) representing assets within
the Fund;
2.To maintain accurate records of contributions, earnings, withdrawals and
other information the Trustee deems relevant with respect to the Plan;
3.To make disbursements from the Fund to Participants or Beneficiaries upon the
proper authorization of the Plan Administrator; and
4.To furnish to the Plan Administrator a statement which reflects the value of
the investments in the hands of the Trustee as of the end of each Plan Year.
C.Powers of the Trustee - Except as otherwise provided in this Plan, the
Trustee shall have the power to take any action with respect to the Fund which
it deems necessary or advisable to discharge its responsibilities under this
Plan including, but not limited to, the following powers:
1.To hold any securities or other property of the Fund in its own name, in the
name of its nominee or in bearer form;
2.To purchase or subscribe for securities issued, or real property owned, by
the Employer or any trade or business under common control with the Employer
but only if the prudent investment and diversification requirements of ERISA
are satisfied;
3.To sell, exchange, convey, transfer or otherwise dispose of any securities or
other property held by the Trustee, by private contract or at public auction.
No person dealing with the Trustee shall be bound to see to the application of
the purchase money or to inquire into the validity, expediency, or propriety of
any such sale or other disposition, with or without advertisement;
4.To vote upon any stocks, bonds, or other securities; to give general or
special proxies or powers of attorney with or without power of substitution;
to exercise any conversion privileges or subscription rights and to make any
payments incidental thereto; to oppose, or to consent to, or otherwise
<PAGE>
participate in, corporate reorganizations or other changes affecting corporate
securities, and to delegate discretionary powers, and to pay any assessments or
charges in connection therewith; and generally to exercise any of the powers
of an owner with respect to stocks, bonds, securities or other property;
5.To invest any part or all of the Fund (including idle cash balances) in
certificates of deposit, demand or time deposits, savings accounts, money
market accounts or similar investments of the Trustee (if the Trustee is a bank
or similar financial organization), the Prototype Sponsor or any affiliate of
such Trustee or Prototype Sponsor, which bear a reasonable rate of interest;
6.To provide sweep services without the receipt by the Trustee of additional
compensation or other consideration (other than reimbursement of direct
expenses properly and actually incurred in the performance of such services);
7.To hold in the form of cash for distribution or investment such portion of
the Fund as, at any time and from time-to-time, the Trustee shall deem prudent
and deposit such cash in interest bearing or noninterest bearing accounts;
8.To make, execute, acknowledge, and deliver any and all documents of transfer
and conveyance and any and all other instruments that may be necessary or
appropriate to carry out the powers herein granted;
9.To settle, compromise, or submit to arbitration any claims, debts, or damages
due or owing to or from the Plan, to commence or defend suits or legal or
administrative proceedings, and to represent the Plan in all suits and legal
and administrative proceedings;
10.To employ suitable agents and counsel, to contract with agents to perform
administrative and recordkeeping duties and to pay their reasonable expenses,
fees and compensation, and such agent or counsel may or may not be agent or
counsel for the Employer;
11.To cause any part or all of the Fund, without limitation as to
amount, to be commingled with the funds of other trusts (including trusts for
qualified employee benefit plans) by causing such money to be invested as a
part of any pooled, common, collective or commingled trust fund heretofore or
hereafter created by any trustee (if the Trustee is a bank), by the Prototype
Sponsor, by any affiliate bank of such a Trustee or the Prototype Sponsor, or
by such a Trustee, the Prototype Sponsor or such an affiliate in participation
with others; the instrument or instruments establishing such trust fund or
funds, as amended, being made part of this Plan and trust so long as any
portion of the Fund shall be invested through the medium thereof.
12.Generally to do all such acts, execute all such instruments,
initiate all such proceedings, and exercise all such rights and privileges with
relation to property constituting the Fund as if the Trustee were the absolute
owner thereof.
5.05 Division of Fund into Investment Funds
The Employer may direct the Trustee (or Custodian, if applicable) from
time-to-time to divide and redivide the Fund into one or more Investment Funds.
Such Investment Funds may include, but not be limited to, Investment Funds
representing the assets under the control of an investment manager pursuant to
Section 5.12 and Investment Funds representing investment options available for
individual direction by Participants pursuant to Section 5.14. Upon each
division or redivision, the Employer may specify the part of the Fund to be
allocated to each such Investment Fund and the terms and conditions, if any,
under which the assets in such Investment Fund shall be invested.
5.06 Compensation and Expenses
The Trustee (or Custodian, if applicable) shall receive such reasonable
compensation as may be agreed upon by the Trustee (or Custodian) and the
Employer. The Trustee (or Custodian) shall be entitled to reimbursement by the
Employer for all proper expenses incurred in carrying out his duties under this
Plan, including reasonable legal, accounting and actuarial expenses. If not
paid by the Employer, such compensation and expenses may be charged against the
Fund.
All taxes of any kind that may be levied or assessed under existing or future
laws upon, or in respect of, the Fund or the income thereof shall be paid from
the Fund.
5.07 Not Obligated to Question Data
<PAGE>
The Employer shall furnish the Trustee (or Custodian, if applicable) and Plan
Administrator the information which each party deems necessary for the
administration of the Plan including, but not limited to, changes in a
Participant's status, eligibility, mailing addresses and other such data as may
be required. The Trustee (or Custodian) and Plan Administrator shall be
entitled to act on such information as is supplied them and shall have no duty
or responsibility to further verify or question such information.
5.08 Liability for Withholding on Distributions
The Plan Administrator shall be responsible for withholding federal income
taxes from distributions from the Plan, unless the Participant (or Beneficiary,
where applicable) elects not to have such taxes withheld. However, the Trustee
(or Custodian, if applicable) shall act as agent for the Plan Administrator to
withhold such taxes and to make the appropriate distribution reports, subject
to the Plan Administrator's obligation to furnish all the necessary information
to so withhold to the Trustee (or Custodian).
5.09 Resignation or Removal of Trustee (or Custodian)
The Trustee (or Custodian, if applicable) may resign at any time by giving 30
days advance written notice to the Employer. The resignation shall become
effective 30 days after receipt of such notice unless a shorter period is
agreed upon.
The Employer may remove any Trustee (or Custodian) at any time by giving
written notice to such Trustee (or Custodian) and such removal shall be
effective 30 days after receipt of such notice unless a shorter period is
agreed upon. The Employer shall have the power to appoint a successor Trustee
(or Custodian).
Upon such resignation or removal, if the resigning or removed Trustee (or
Custodian) is the sole Trustee (or Custodian), he shall transfer all of the
assets of the Fund then held by him as expeditiously as possible to the
successor Trustee (or Custodian) after paying or reserving such reasonable
amount as he shall deem necessary to provide for the expense in the settlement
of the accounts and the amount of any compensation due him and any sums
chargeable against the Fund for which he may be liable. If the Funds as
reserved are not sufficient for such purpose, then he shall be entitled to
reimbursement from the successor Trustee (or Custodian) out of the assets in
the successor Trustee's (or Custodian's) hands under this Plan. If the amount
reserved shall be in excess of the amount actually needed, the former Trustee
(or Custodian) shall return such excess to the successor Trustee (or
Custodian).
Upon receipt of such assets, the successor Trustee (or Custodian) shall
thereupon succeed to all of the powers and responsibilities given to the
Trustee (or Custodian) by this Plan.
The resigning or removed Trustee (or Custodian) shall render an accounting to
the Employer and unless objected to by the Employer within 30 days of its
receipt, the accounting shall be deemed to have been approved and the resigning
or removed Trustee (or Custodian) shall be released and discharged as to all
matters set forth in the accounting. Where a financial organization is serving
as Trustee (or Custodian) and it is merged with or bought by another
organization (or comes under the control of any federal or state agency), that
organization shall serve as the successor Trustee (or Custodian) of this Plan,
but only if it is the type of organization that can so serve under applicable
law.
Where the Trustee or Custodian is serving as a nonbank trustee or custodian
pursuant to Section 1.401-12(n) of the Income Tax Regulations, the Employer
will appoint a successor Trustee (or Custodian) upon notification by the
Commissioner of Internal Revenue that such substitution is required because the
Trustee (or Custodian) has failed to comply with the requirements of Section
1.401-12(n) or is not keeping such records or making such returns or rendering
such statements as are required by forms or regulations.
5.10 Degree of Care
Limitations of Liability - The Trustee (or Custodian, if applicable) shall not
be liable for any losses incurred by the Fund by any lawful direction to invest
communicated by the Employer, Plan Administrator or any Participant or
Beneficiary. The Trustee (or Custodian) shall be under no liability for
distributions made or other action taken or not taken at the written direction
of the Plan Administrator. It is specifically understood that the Trustee (or
Custodian) shall have no duty or responsibility with respect to the
determination of matters pertaining to the eligibility of any Employee to
become a Participant or remain a Participant hereunder, the amount of benefit
to which a Participant or Beneficiary shall be entitled to receive hereunder,
whether a distribution to Participant or Beneficiary is appropriate under the
terms of the Plan or the size and type of any policy to be purchased from any
insurer for any Participant hereunder or similar matters; it being understood
that all such responsibilities under the Plan are vested in the Plan
Administrator.
5.11 Indemnification of Prototype Sponsor and Trustee (or Custodian)
<PAGE>
Notwithstanding any other provision herein, and except as may be otherwise
provided by ERISA, the Employer shall indemnify and hold harmless the Trustee
(or Custodian, if applicable) and the Prototype Sponsor, their officers,
directors, employees, agents, their heirs, executors, successors and assigns,
from and against any and all liabilities, damages, judgments, settlements,
losses, costs, charges, or expenses (including legal expenses) at any time
arising out of or incurred in connection with any action taken by such parties
in the performance of their duties with respect to this Plan, unless there has
been a final adjudication of gross negligence or willful misconduct in the
performance of such duties.
Further, except as may be otherwise provided by ERISA, the Employer will
indemnify the Trustee (or Custodian) and Prototype Sponsor from any liability,
claim or expense (including legal expense) which the Trustee (or Custodian) and
Prototype Sponsor shall incur by reason of or which results, in whole or in
part, from the Trustee's (or Custodian's) or Prototype Sponsor's reliance on
the facts and other directions and elections the Employer communicates or fails
to communicate.
5.12 Investment Managers
A.Definition of Investment Manager - The Employer may appoint one or more
investment managers to make investment decisions with respect to all or a
portion of the Fund. The investment manager shall be any firm or individual
registered as an investment adviser under the Investment Advisers Act of 1940,
a bank as defined in said Act or an insurance company qualified under the laws
of more than one state to perform services consisting of the management,
acquisition or disposition of any assets of the Plan.
B.Investment Manager's Authority - A separate Investment Fund shall be
established representing the assets of the Fund invested at the direction of
the investment manager. The investment manager so appointed shall direct the
Trustee (or Custodian, if applicable) with respect to the investment of such
Investment Fund. The investments which may be acquired at the direction of the
investment manager are limited to those described in Section 5.03(A) (for
Custodians) or Section 5.04(A) (for Trustees).
C.Written Agreement - The appointment of any investment manager shall be by
written agreement between the Employer and the investment manager and a copy of
such agreement (and any modification or termination thereof) must be given to
the Trustee (or Custodian).
The agreement shall set forth, among other matters, the effective date of the
investment manager's appointment and an acknowledgment by the investment
manager that it is a fiduciary of the Plan under ERISA.
D.Concerning the Trustee (or Custodian) - Written notice of each appointment of
an investment manager shall be given to the Trustee (or Custodian) in advance
of the effective date of such appointment. Such notice shall specify which
portion of the Fund will constitute the Investment Fund subject to the
investment manager's direction. The Trustee (or Custodian) shall comply with
the investment direction given to it by the investment manager and will not be
liable for any loss which may result by reason of any action (or inaction) it
takes at the direction of the investment manager.
5.13 Matters Relating to Insurance
A.If a life insurance policy is to be purchased for a Participant, the
aggregate premium for certain life insurance for each Participant must be less
than a certain percentage of the aggregate Employer Contributions and
Forfeitures allocated to a Participant's Individual Account at any particular
time as follows:
1.Ordinary Life Insurance - For purposes of these incidental insurance
provisions, ordinary life insurance contracts are contracts with both
nondecreasing death benefits and nonincreasing premiums. If such contracts are
purchased, less than 50% of the aggregate Employer Contributions and
Forfeitures allocated to any Participant's Individual Account will be used to
pay the premiums attributable to them.
2.Term and Universal Life Insurance - No more than 25% of the aggregate
Employer Contributions and Forfeitures allocated to any Participant's
Individual Account will be used to pay the premiums on term life insurance
contracts, universal life insurance contracts, and all other life insurance
contracts which are not ordinary life.
3.Combination - The sum of 50% of the ordinary life insurance premiums and all
other life insurance premiums will not exceed 25% of the aggregate Employer
Contributions and Forfeitures allocated to any Participant's Individual
Account.
<PAGE>
B.Any dividends or credits earned on insurance contracts for a Participant
shall be allocated to such Participant's Individual Account.
C.Subject to Section 6.05, the contracts on a Participant's life will be
converted to cash or an annuity or distributed to the Participant upon
commencement of benefits.
D.The Trustee (or Custodian, if applicable) shall apply for and will be the
owner of any insurance contract(s) purchased under the terms of this Plan. The
insurance contract(s) must provide that proceeds will be payable to the Trustee
(or Custodian), however, the Trustee (or Custodian) shall be required to pay
over all proceeds of the contract(s) to the Participant's designated
Beneficiary in accordance with the distribution provisions of this Plan. A
Participant's spouse will be the designated Beneficiary of the proceeds in all
circumstances unless a qualified election has been made in accordance with
Section 6.05, Joint and Survivor Annuity Requirements, if applicable. Under no
circumstances shall the Fund retain any part of the proceeds. In the event of
any conflict between the terms of this Plan and the terms of any insurance
contract purchased hereunder, the Plan provisions shall control.
E.The Employer may direct the Trustee (or Custodian) to sell and
distribute insurance or annuity contracts to a Participant (or other party as
may be permitted) in accordance with applicable law or regulations.
5.14 Direction of Investments by Participant
If so indicated in the Adoption Agreement, each Participant may individually
direct the Trustee (or Custodian, if applicable) regarding the investment of
part or all of his Individual Account. To the extent so directed, the
Employer, Plan Administrator, Trustee (or Custodian) and all other fiduciaries
are relieved of their fiduciary responsibility under Section 404 of ERISA.
The Plan Administrator shall direct that a Separate Fund be established in the
name of each Participant who directs the investment of part or all of his
Individual Account. Each Separate Fund shall be charged or credited (as
appropriate) with the earnings, gains, losses or expenses attributable to such
Separate Fund. No fiduciary shall be liable for any loss which results from a
Participant's individual direction. The assets subject to individual direction
shall not be invested in collectibles as that term is defined in Section 408(m)
of the Code.
The Plan Administrator shall establish such uniform and nondiscriminatory rules
relating to individual direction as it deems necessary or advisable including,
but not limited to, rules describing (1) which portions of Participant's
Individual Account can be individually directed; (2) the frequency of
investment changes; (3) the forms and procedures for making investment changes;
and (4) the effect of a Participant's failure to make a valid direction.
Subject to the approval of the Prototype Sponsor, the Plan Administrator may,
in a uniform and nondiscriminatory manner, limit the available investments for
Participants' individual direction to certain specified investment options
(including, but not limited to, certain mutual funds, investment contracts,
deposit accounts and group trusts). The Plan Administrator may permit, in a
uniform and nondiscriminatory manner, a Beneficiary of a deceased Participant
to individually direct in accordance with this Section.
SECTION SIX VESTING AND DISTRIBUTION
6.01 Distribution to Participant
A. When Distributable
1.Entitlement to Distribution - The Vested portion of a Participant's
Individual Account shall be distributable to the Participant upon the
occurrence of any of the following events:
a. the Participant's Termination of Employment;
b. the Participant's attainment of Normal Retirement Age;
c. the Participant's Disability; or
d. the termination of the Plan.
2.Written Request: When Distributed - A Participant entitled to distribution
who wishes to receive a
<PAGE>
distribution must submit a written request to the Plan Administrator. Such
request shall be made upon a form provided by the Plan Administrator. Upon a
valid request, the Plan Administrator shall direct the Trustee (or Custodian, if
applicable) to commence distribution no later than 90 days following the later
of:
a.the close of the Plan Year within which the event occurs which entitles the
Participant to distribution; or
b. the close of the Plan Year in which the request is
received.
3.Special Rules For Withdrawals During Service - If this is a profit sharing
plan and the Adoption Agreement so provides, a Participant who is not otherwise
entitled to a distribution under Section 6.01(A)(1) may elect to receive a
distribution of all or a part of the Vested portion of his Individual Account,
subject to the requirements of Section 6.05 and further subject to the
following limits:
a.Participant for 5 or more years. An Employee who has been a Participant in
the Plan for 5 or more years may withdraw up to his entire Vested portion of
his Individual Account.
b.Participant for less than 5 years. An Employee who has been a Participant in
the Plan for less than 5 years may withdraw only the amount which has been in
his Vested Individual Account attributable to Employer Contributions for at
least 2 full Plan Years.
However, if the distribution is on account of hardship, the Participant may
withdraw up to his entire Vested portion of his Individual Account. For
purposes of the preceding sentence, hardship is defined as an immediate and
heavy financial need of the Participant where such Participant lacks other
available resources. The following are the only financial needs considered
immediate and heavy: expenses incurred or necessary for medical care,
described in Section 213(d) of the Code, of the Employee, the Employee's spouse
or dependents; the purchase (excluding mortgage payments) of a principal
residence for the Employee; payment of tuition and related educational fees for
the next 12 months of post-secondary education for the Employee, the Employee's
spouse, children or dependents; or the need to prevent the eviction of the
Employee from, or a foreclosure on the mortgage of, the Employee's principal
residence.
A distribution will be considered as necessary to satisfy an immediate and
heavy financial need of the Employee only if:
1)The employee has obtained all distributions, other than hardship
distributions, and all nontaxable loans under all plans maintained by the
Employer;
2)The distribution is not in excess of the amount of an 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).
4.Commencement of Benefits - Notwithstanding any other provision, unless the
Participant elects otherwise, distribution of benefits will begin no later than
the 60th day after the latest of the close of the Plan Year in which:
a. the Participant attains Normal Retirement Age;
b.occurs the 10th anniversary of the year in which the Participant commenced
participation in the Plan; or
c. the Participant incurs a Termination of Employment.
Notwithstanding the foregoing, the failure of a Participant and spouse to
consent to a distribution while a benefit is immediately distributable, within
the meaning of Section 6.02(B), shall be deemed to be an election to defer
commencement of payment of any benefit sufficient to satisfy this Section
6.01(A)(4).
B.Determining the Vested Portion - In determining the Vested portion of a
Participant's Individual Account, the
<PAGE>
following rules apply:
1.Employer Contributions and Forfeitures - The Vested portion of a
Participant's Individual Account derived from Employer Contributions and
Forfeitures is determined by applying the vesting schedule selected in the
Adoption Agreement (or the vesting schedule described in Section 6.01(C) if the
Plan is a Top-Heavy Plan).
2.Rollover and Transfer Contributions - A Participant is fully Vested in his
rollover contributions and transfer contributions.
3.Fully Vested Under Certain Circumstances - A Participant is fully Vested in
his Individual Account if any of the following occurs:
a. the Participant reaches Normal Retirement Age;
b. the Participant incurs a Disability;
c. the Participant dies;
d. the Plan is terminated or partially terminated; or
e.there exists a complete discontinuance of contributions under the Plan (if
this Plan is a profit sharing plan).
4.Participants in a Prior Plan - If a Participant was a participant in a Prior
Plan on the Effective Date, his Vested percentage shall not be less than it
would have been under such Prior Plan as computed on the Effective Date.
C.Minimum Vesting Schedule for Top-Heavy Plans - The following vesting
provisions apply for any Plan Year in which this Plan is a Top-Heavy Plan.
Notwithstanding the other provisions of this Section 6.01 or the vesting
schedule selected in the Adoption Agreement (unless those provisions or that
schedule provide for more rapid vesting), a Participant's Vested portion of his
Individual Account attributable to Employer Contributions and Forfeitures shall
be determined in accordance with the following minimum vesting schedule:
Years of Vesting ServiceVested Percentage
1 0
2 20
3 40
4 60
5 80
6 100
This minimum vesting schedule applies to all benefits within the meaning of
Section 411(a)(7) of the Code, except those attributable to employee
contributions including benefits accrued before the effective date of Section
416 of the Code and benefits accrued before the Plan became a Top-Heavy Plan.
Further, no decrease in a Participant's Vested percentage may occur in the
event the Plan's status as a Top-Heavy Plan changes for any Plan Year. However,
this Section 6.01(C) does not apply to the Individual Account 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 Individual Account attributable to Employer
Contributions and Forfeitures will be determined without regard to this
Section.
If this Plan ceases to be a Top-Heavy Plan, then in accordance with the above
restrictions, the vesting schedule as selected in the Adoption Agreement will
govern. If the vesting schedule under the Plan shifts in or out of top-heavy
status, such shift is an amendment to the vesting schedule and the election in
Section 9.04 applies.
D.Break in Vesting Service and Forfeitures - If a Participant incurs a
Termination of Employment, any portion of
<PAGE>
his Individual Account which is not Vested shall be held in a suspense account.
Such suspense account shall share in any increase or decrease in the fair
market value of the assets of the Fund in accordance with Section 4 of the Plan.
The disposition of such suspense account shall be as follows:
1.No Breaks in Vesting Service - If a Participant neither receives nor is
deemed to receive a distribution pursuant to Section 6.01(D)(2) or (3) and the
Participant returns to the service of the Employer before incurring 5
consecutive Breaks in Vesting Service, there shall be no Forfeiture and the
amount in such suspense account shall be recredited to such Participant's
Individual Account.
2.Cash-out of Certain Participants - If the value of the Vested portion of such
Participant's Individual Account derived from Employee and Employer
Contributions does not exceed $3,500, the Participant shall receive a
distribution of the entire Vested portion of such Individual Account and the
portion which is not Vested shall be treated as a Forfeiture. For purposes of
this Section, if the value of the Vested portion of a Participant's Individual
Account is zero, the Participant shall be deemed to have received a
distribution of such Vested Individual Account. A Participant's Vested
Individual Account balance shall not include 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.
3.Participants Who Elect to Receive Distributions - If such Participant elects
to receive a distribution, in accordance with Section 6.02(B), of the value of
the Vested portion of his Individual Account derived from Employee and Employer
Contributions, the portion which is not Vested shall be treated as a
Forfeiture.
4.Re-employed Participants - If a Participant receives or is deemed to receive
a distribution pursuant to Section 6.01(D)(2) or (3) above and the Participant
resumes employment covered under this Plan, the Participant's Employer-derived
Individual Account balance will be restored to the amount on the date of
distribution if the Participant repays to the Plan the full amount of the
distribution attributable to Employer Contributions before the earlier of 5
years after the first date on which the Participant is subsequently re-employed
by the Employer, or the date the Participant incurs 5 consecutive Breaks in
Vesting Service following the date of the distribution.
Amounts forfeited under Section 6.01(D) shall be allocated in accordance with
Section 3.01(C) as of the last day of the Plan Year during which the Forfeiture
arises. Any restoration of a Participant's Individual Account pursuant to
Section 6.01(D)(4) shall be made from other Forfeitures, income or gain to the
Fund or contributions made by the Employer.
E.Distribution Prior to Full Vesting - If a distribution is made to a
Participant who was not then fully Vested in his Individual Account derived
from Employer Contributions and the Participant may increase his Vested
percentage in his Individual Account, then the following rules shall apply:
1.a separate account will be established for the Participant's interest in the
Plan as of the time of the distribution, and
2.at any relevant time the Participant's Vested portion of the separate account
will be equal to an amount ("X") determined by the formula: X=P (AB + (R x D))
- - (R x D) where "P" is the Vested percentage at the relevant time, "AB" is the
separate account balance at the relevant time; "D" is the amount of the
distribution; and "R" is the ratio of the separate account balance at the
relevant time to the separate account balance after distribution.
6.02 Form of Distribution to a Participant
A.Value of Individual Account Does Not Exceed $3,500 - If the value of the
Vested portion of a Participant's Individual Account derived from Employee and
Employer Contributions does not exceed $3,500, distribution from the Plan shall
be made to the Participant in a single lump sum in lieu of all other forms of
distribution from the Plan.
B. Value of Individual Account Exceeds $3,500
1.If the value of the Vested portion of a Participant's Individual Account
derived from Employee and Employer Contributions exceeds (or at the time of any
prior distribution exceeded) $3,500, and the
<PAGE>
Individual Account is immediately distributable, the Participant and the
Participant's spouse (or where either the Participant or the spouse died, the
survivor) must consent to any distribution of such Individual Account. The
consent of the Participant and the Participant's spouse shall be obtained in
writing within the 90-day period ending on the annuity starting date. The
annuity starting date is the first day of the first period for which an amount
is paid as an annuity or any other form. The Plan Administrator shall notify
the Participant and the Participant's spouse of the right to defer any
distribution until the Participant's Individual Account is no longer immediately
distributable. Such notification shall include a general description of the
material features, and an explanation of the relative values of, the optional
forms of benefit available under the Plan in a manner that would satisfy the
notice requirements of Section 417(a)(3) of the Code, and shall be provided no
less than 30 days and no more than 90 days prior to the annuity starting date.
Notwithstanding the foregoing, only the Participant need consent to the
commencement of a distribution in the form of a qualified joint and survivor
annuity while the Individual Account is immediately distributable. Neither the
consent of the Participant nor the Participant's spouse shall be required to
the extent that a distribution is required to satisfy Section 401(a)(9) or
Section 415 of the Code. In addition, upon termination of this Plan if the
Plan does not offer an annuity option (purchased from a commercial provider),
the Participant's Individual Account may, without the Participant's consent, be
distributed to the Participant or transferred to another defined contribution
plan (other than an employee stock ownership plan as defined in Section
4975(e)(7) of the Code) within the same controlled group.
An Individual Account is immediately distributable if any part of the
Individual Account could be distributed to the Participant (or surviving
spouse) before the Participant attains or would have attained (if not deceased)
the later of Normal Retirement Age or age 62.
2.For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first Plan year
beginning after December 31, 1988, the Vested portion of a Participant's
Individual Account shall not include amounts attributable to accumulated
deductible employee contributions within the meaning of Section 72(o)(5)(B) of
the Code.
C.Other Forms of Distribution to Participant - If the value of the Vested
portion of a Participant's Individual Account exceeds $3,500 and the
Participant has properly waived the joint and survivor annuity, as described in
Section 6.05, the Participant may request in writing that the Vested portion of
his Individual Account be paid to him in one or more of the following forms of
payment: (1) in a lump sum; (2) in installment payments over a period not to
exceed the life expectancy of the Participant or the joint and last survivor
life expectancy of the Participant and his designated Beneficiary; or (3)
applied to the purchase of an annuity contract.
6.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT
A.Designation of Beneficiary - Spousal Consent - Each Participant may
designate, upon a form provided by and delivered to the Plan Administrator, one
or more primary and contingent Beneficiaries to receive all or a specified
portion of his Individual Account in the event of his death. A Participant may
change or revoke such Beneficiary designation from time to time by completing
and delivering the proper form to the Plan Administrator.
In the event that a Participant wishes to designate a primary Beneficiary who
is not his spouse, his spouse must consent in writing to such designation, and
the spouse's consent must acknowledge the effect of such designation and be
witnessed by a notary public. Notwithstanding this consent requirement, if the
Participant establishes to the satisfaction of the Plan Administrator that such
written consent may not be obtained because there is no spouse or the spouse
cannot be located, no consent shall be required. Any change of Beneficiary
will require a new spousal consent.
B.Payment to Beneficiary - If a Participant dies before his entire Individual
Account has been paid to him, such deceased Participant's Individual Account
shall be payable to any surviving Beneficiary designated by the Participant,
or, if no Beneficiary survives the Participant, to the Participant's estate.
C.Written Request: When Distributed - A Beneficiary of a deceased Participant
entitled to a distribution who wishes to receive a distribution must submit a
written request to the Plan Administrator. Such request shall be made upon a
form provided by the Plan Administrator. Upon a valid request, the Plan
Administrator shall direct the Trustee (or Custodian) to commence distribution
no later than 90 days following the later of:
<PAGE>
1. the close of the Plan Year within which the Participant dies;
or
2. the close of the Plan Year in which the request is received.
D.Location of Participant or Beneficiary Unknown - In the event that all, or
any portion, of the distribution payable to a Participant or his Beneficiary
hereunder shall, at the expiration of 5 years after it becomes payable, remain
unpaid solely by reason of the inability of the Plan Administrator, after
sending a registered letter, return receipt requested, to the last known
address, and after further diligent effort, to ascertain the whereabouts of
such Participant or his Beneficiary, the amount so distributable shall be
forfeited and allocated in accordance with the terms of the Plan. In the event
a Participant or Beneficiary is located subsequent to his benefit being
forfeited, such benefit shall be restored; provided, however, if all or a
portion of such amount has been lost by reason of escheat under state law, the
Participant or Beneficiary shall cease to be entitled to the portion so lost.
6.04 Form of Distribution to Beneficiary
A.Value of Individual Account Does Not Exceed $3,500 - If the value of the
Participant's Individual Account derived from Employee and Employer
Contributions does not exceed $3,500, the Plan Administrator shall direct the
Trustee (or Custodian, if applicable) to make a distribution to the Beneficiary
in a single lump sum in lieu of all other forms of distribution from the Plan.
B.Value of Individual Account Exceeds $3,500 - If the value of a Participant's
Individual Account derived from Employee and Employer Contributions exceeds
$3,500 the preretirement survivor annuity requirements of Section 6.05 shall
apply unless waived in accordance with that Section.
C.Other Forms of Distribution to Beneficiary - If the value of a Participant's
Individual Account exceeds $3,500 and the Participant has properly waived the
preretirement survivor annuity, as described in Section 6.05, the Beneficiary
may, subject to the requirements of Section 6.06, request in writing that the
Participant's Individual Account be paid to him as follows: (1) in a lump sum;
or (2) in installment payments over a period not to exceed the life expectancy
of such Beneficiary.
6.05 Joint and Survivor Annuity Requirements
A.The provisions of this Section shall apply to any Participant who is credited
with at least one Hour of Eligibility Service with the Employer on or after
August 23, 1984, and such other participants as provided in Section 6.05(F).
B.Qualified Joint and Survivor Annuity - Unless an optional form of benefit is
selected pursuant to a qualified election within the 90-day period ending on
the annuity starting date, a married Participant's Vested account balance will
be paid in the form of a qualified joint and survivor annuity and an unmarried
Participant's Vested account balance will be paid in the form of a life
annuity. The Participant may elect to have such annuity distributed upon
attainment of the earliest retirement age under the Plan.
C.Qualified Preretirement Survivor Annuity - Unless an optional form of benefit
has been selected within the election period pursuant to a qualified election,
if a Participant dies before the annuity starting date then the Participant's
Vested account balance shall be applied toward the purchase of an annuity for
the life of the surviving spouse. The surviving spouse may elect to have such
annuity distributed within a reasonable period after the Participant's death.
D. Definitions
1.Election Period - 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 age 35 is attained, with respect to the
account balance as of the date of separation, the election period shall begin
on the date of separation.
Pre-age 35 waiver - A Participant who will not yet attain age 35 as of the end
of any current Plan Year may make a special qualified election to waive the
qualified preretirement survivor annuity for the period beginning on the date
of such election and ending on the first day of the Plan Year in which the
Participant will attain age 35. Such election shall not be valid unless the
Participant receives a written explanation of the qualified preretirement
survivor annuity in such terms as are comparable to the
<PAGE>
explanation required under Section 6.05(E)(1). Qualified preretirement survivor
annuity coverage will be automatically reinstated as of the first day of the
Plan Year in which the Participant attains age 35. Any new waiver on or after
such date shall be subject to the full requirements of this Section 6.05.
2.Earliest Retirement Age - The earliest date on which, under the Plan, the
Participant could elect to receive retirement benefits.
3.Qualified Election - A waiver of a qualified joint and survivor annuity or a
qualified preretirement survivor annuity. Any waiver of a qualified joint and
survivor annuity or a qualified preretirement survivor annuity shall not be
effective unless: (a) the Participant's spouse consents in writing to the
election, (b) the election designates a specific Beneficiary, including any
class of beneficiaries or any contingent beneficiaries, which may not be
changed without spousal consent (or the spouse expressly permits designations
by the Participant without any further spousal consent); (c) the spouse's
consent acknowledges the effect of the election; and (d) the spouse's consent
is witnessed by a plan representative or notary public. Additionally, a
Participant's waiver of the qualified joint and survivor annuity shall not be
effective unless the election designates a form of benefit payment which may
not be changed without spousal consent (or the spouse expressly permits
designations by the Participant without any further spousal consent). If it is
established to the satisfaction of a plan representative that there is no
spouse or that the spouse cannot be located, a waiver will be deemed a
qualified election.
Any consent by a spouse obtained under this provision (or establishment that
the consent of a spouse may not be obtained) shall be effective only with
respect to such spouse. A consent that permits designations by the Participant
without any requirement of further consent by such spouse must acknowledge that
the spouse has the right to limit consent to a specific Beneficiary, and a
specific form of benefit where applicable, and that the spouse voluntarily
elects to relinquish either or both of such rights. A revocation of a prior
waiver may be made by a Participant without the consent of the spouse at any
time before the commencement of benefits. The number of revocations shall not
be limited. No consent obtained under this provision shall be valid unless the
Participant has received notice as provided in Section 6.05(E) below.
4.Qualified Joint and Survivor Annuity - An immediate annuity for the life of
the Participant with a survivor annuity for the life of the spouse which is not
less than 50% and not more than 100% of the amount of the annuity which is
payable during the joint lives of the Participant and the spouse and which is
the amount of benefit which can be purchased with the Participant's vested
account balance. The percentage of the survivor annuity under the Plan shall
be 50% (unless a different percentage is elected by the Employer in the
Adoption Agreement).
5.Spouse (surviving spouse) - The spouse or surviving spouse of the
Participant, provided that a former spouse will be treated as the spouse or
surviving spouse and a current spouse will not be treated as the spouse or
surviving spouse to the extent provided under a qualified domestic relations
order as described in Section 414(p) of the Code.
6.Annuity Starting Date - The first day of the first period for which an amount
is paid as an annuity or any other form.
7.Vested Account Balance - The aggregate value of the Participant's Vested
account balances derived from Employer and Employee contributions (including
rollovers), whether Vested before or upon death, including the proceeds of
insurance contracts, if any, on the Participant's life. The provisions of this
Section 6.05 shall apply to a Participant who is Vested in amounts attributable
to Employer Contributions, Employee contributions (or both) at the time of
death or distribution.
E. Notice Requirements
1.In the case of a qualified joint and survivor annuity, the Plan Administrator
shall no less than 30 days and not more than 90 days prior to the annuity
starting date provide each Participant a written explanation of: (a) the terms
and conditions of a qualified joint and survivor annuity; (b) the Participant's
right to make and the effect of an election to waive the qualified joint and
survivor annuity form of benefit; (c) the rights of a Participant's spouse; and
(d) the right to make, and the effect of, a revocation of a previous election
to waive the qualified joint and survivor annuity.
<PAGE>
2.In the case of a qualified preretirement survivor annuity as described in
Section 6.05(C), the Plan Administrator shall provide each Participant within
the applicable period for such Participant a written explanation of the
qualified preretirement survivor annuity in such terms and in such manner as
would be comparable to the explanation provided for meeting the requirements of
Section 6.05(E)(1) applicable to a qualified joint and survivor annuity.
The applicable period for a Participant is whichever of the following periods
ends last: (a) the period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the close of the Plan Year
preceding the Plan Year in which the Participant attains age 35; (b) a
reasonable period ending after the individual becomes a Participant; (c) a
reasonable period ending after Section 6.05(E)(3) ceases to apply to the
Participant; (d) a reasonable period ending after this Section 6.05 first
applies to the Participant. Notwithstanding the foregoing, notice must be
provided within a reasonable period ending after separation from service in the
case of a Participant who separates from service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable period ending
after the enumerated events described in (b), (c) and (d) is the end of the
two-year period beginning one year prior to the date the applicable event
occurs, and ending one year after that date. In the case of a Participant who
separates from service before the Plan Year in which age 35 is attained, notice
shall be provided within the two-year period beginning one year prior to
separation and ending one year after separation. If such a Participant
thereafter returns to employment with the Employer, the applicable period for
such Participant shall be redetermined.
3.Notwithstanding the other requirements of this Section 6.05(E), the
respective notices prescribed by this Section 6.05(E), need not be given to a
Participant if (a) the Plan "fully subsidizes" the costs of a qualified joint
and survivor annuity or qualified preretirement survivor annuity, and (b) the
Plan does not allow the Participant to waive the qualified joint and survivor
annuity or qualified preretirement survivor annuity and does not allow a
married Participant to designate a nonspouse beneficiary. For purposes of this
Section 6.05(E)(3), a plan fully subsidizes the costs of a benefit if no
increase in cost, or decrease in benefits to the Participant may result from
the Participant's failure to elect another benefit.
F. Transitional Rules
1.Any living Participant not receiving benefits on August 23, 1984, who would
otherwise not receive the benefits prescribed by the previous subsections of
this Section 6.05 must be given the opportunity to elect to have the prior
subsections of this Section apply if such Participant is credited with at least
one Hour of Service under this Plan or a predecessor plan in a Plan Year
beginning on or after January 1, 1976, and such Participant had at least 10
Years of Vesting Service when he or she separated from service.
2.Any living Participant not receiving benefits on August 23, 1984, who was
credited with at least one Hour of Service under this Plan or a predecessor
plan on or after September 2, 1974, and who is not otherwise credited with any
service in a Plan Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance with Section
6.05(F)(4).
3.The respective opportunities to elect (as described in Section 6.05(F)(1) and
(2) above) must be afforded to the appropriate Participants during the period
commencing on August 23, 1984, and ending on the date benefits would otherwise
commence to said Participants.
4.Any Participant who has elected pursuant to Section 6.05(F)(2) and any
Participant who does not elect under Section 6.05(F)(1) or who meets the
requirements of Section 6.05(F)(1) except that such Participant does not have
at least 10 Years of Vesting Service when he or she separates from service,
shall have his or her benefits distributed in accordance with all of the
following requirements if benefits would have been payable in the form of a
life annuity:
a.Automatic Joint and Survivor Annuity - If benefits in the form of a life
annuity become payable to a married Participant who:
<PAGE>
1)begins to receive payments under the Plan on or after Normal Retirement Age;
or
2)dies on or after Normal Retirement Age while still working for the Employer;
or
3)begins to receive payments on or after the qualified early retirement age;
or
4)separates from service on or after attaining Normal Retirement Age (or the
qualified early retirement age) and after satisfying the eligibility
requirements for the payment of benefits under the Plan and thereafter dies
before beginning to receive such benefits;
then such benefits will be received under this Plan in the form of a qualified
joint and survivor annuity, unless the Participant has elected otherwise during
the election period. The election period must begin at least 6 months before
the Participant attains qualified early retirement age and ends not more than
90 days before the commencement of benefits. Any election hereunder will be in
writing and may be changed by the Participant at any time.
b.Election of Early Survivor Annuity - A Participant who is employed after
attaining the qualified early retirement age will be given the opportunity to
elect, during the election period, to have a survivor annuity payable on death.
If the Participant elects the survivor annuity, payments under such annuity
must not be less than the payments which would have been made to the spouse
under the qualified joint and survivor annuity if the Participant had retired
on the day before his or her death. Any election under this provision will be
in writing and may be changed by the Participant at any time. The election
period begins on the later of (1) the 90th day before the Participant attains
the qualified early retirement age, or (2) the date on which participation
begins, and ends on the date the Participant terminates employment.
c. For purposes of Section 6.05(F)(4):
1) Qualified early retirement age is the latest of:
a)the earliest date, under the Plan, on which the
Participant may elect to receive retirement benefits,
b)the first day of the 120th month beginning
before the Participant reaches Normal Retirement Age, or
c) the date the Participant begins
participation.
2)Qualified joint and survivor annuity is an annuity for the life of the
Participant with a survivor annuity for the life of the spouse as described in
Section 6.05 (D)(4) of this Plan.
6.06 Distribution Requirements
A. General Rules
1.Subject to Section 6.05, Joint and Survivor Annuity Requirements, the
requirements of this Section shall apply to any distribution of a Participant's
interest and will take precedence over any inconsistent provisions of this
Plan. Unless otherwise specified, the provisions of this Section 6.06 apply to
calendar years beginning after December 31, 1984.
2.All distributions required under this Section 6.06 shall be determined and
made in accordance with the Income Tax Regulations under Section 401(a)(9),
including the minimum distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the regulations.
B.Required Beginning Date - The entire interest of a Participant must be
distributed or begin to be distributed no later than the Participant's required
beginning date.
C.Limits on Distribution Periods - As of the first distribution calendar year,
distributions, if not made in a single
<PAGE>
sum, may only be made over one of the following periods (or a combination
thereof):
1. the life of the Participant,
2. the life of the Participant and a designated Beneficiary,
3. a period certain not extending beyond the life expectancy of
the Participant, or
4.a period certain not extending beyond the joint and last survivor expectancy
of the Participant and a designated Beneficiary.
D.Determination of Amount to be Distributed Each Year - If the Participant's
interest is to be distributed in other than a single sum, the following minimum
distribution rules shall apply on or after the required beginning date:
1. Individual Account
a.If a Participant's benefit is to be distributed over (1) a period not
extending beyond the life expectancy of the Participant or the joint life and
last survivor expectancy of the Participant and the Participant's designated
Beneficiary or (2) a period not extending beyond the life expectancy of the
designated Beneficiary, the amount required to be distributed for each calendar
year, beginning with distributions for the first distribution calendar year,
must at least equal the quotient obtained by dividing the Participant's benefit
by the applicable life expectancy.
b.For calendar years beginning before January 1, 1989, if the Participant's
spouse is not the designated Beneficiary, the method of distribution selected
must assure that at least 50% of the present value of the amount available for
distribution is paid within the life expectancy of the Participant.
c.For calendar years beginning after December 31, 1988, the amount to be
distributed each year, beginning with distributions for the first distribution
calendar year shall not be less than the quotient obtained by dividing the
Participant's benefit by the lesser of (1) the applicable life expectancy or
(2) if the Participant's spouse is not the designated Beneficiary, the
applicable divisor determined from the table set forth in Q&A-4 of Section
1.401(a)(9)-2 of the Income Tax Regulations. Distributions after the death of
the Participant shall be distributed using the applicable life expectancy in
Section 6.06(D)(1)(a) above as the relevant divisor without regard to
regulations 1.401(a)(9)-2.
d.The minimum distribution required for the Participant's first distribution
calendar year must be made on or before the Participant's required beginning
date. The minimum distribution for other calendar years, including the minimum
distribution for the distribution calendar year in which the Employee's
required beginning date occurs, must be made on or before December 31 of that
distribution calendar year.
2.Other Forms - If the Participant's benefit is distributed in the form of an
annuity purchased from an insurance company, distributions thereunder shall be
made in accordance with the requirements of Section 401(a)(9) of the Code and
the regulations thereunder.
E. Death Distribution Provisions
1.Distribution Beginning Before Death - If the Participant dies after
distribution of his or her interest has begun, the remaining portion of such
interest will continue to be distributed at least as rapidly as under the
method of distribution being used prior to the Participant's death.
2.Distribution Beginning After Death - If the Participant dies before
distribution of his or her interest begins, distribution of the Participant's
entire interest shall be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death except to the
extent that an election is made to receive distributions in accordance with (a)
or (b) below:
a.if any portion of the Participant's interest is payable to a designated
Beneficiary, distributions
<PAGE>
may be made over the life or over a period certain not greater than the life
expectancy of the designated Beneficiary commencing on or before December 31 of
the calendar year immediately following the calendar year in which the
Participant died;
b.if the designated Beneficiary is the Participant's surviving spouse, the date
distributions are required to begin in accordance with (a) above shall not be
earlier than the later of (1) December 31 of the calendar year immediately
following the calendar year in which the Participant dies or (2) December 31 of
the calendar year in which the Participant would have attained age 70 1/2.
If the Participant has not made an election pursuant to this Section 6.06(E)(2)
by the time of his or her death, the Participant's designated Beneficiary must
elect the method of distribution no later than the earlier of (1) December 31
of the calendar year in which distributions would be required to begin under
this Section 6.06(E)(2), or (2) December 31 of the calendar year which contains
the fifth anniversary of the date of death of the Participant. If the
Participant has no designated Beneficiary, or if the designated Beneficiary
does not elect a method of distribution, distribution of the Participant's
entire interest must be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death.
3.For purposes of Section 6.06(E)(2) above, if the surviving spouse dies after
the Participant, but before payments to such spouse begin, the provisions of
Section 6.06(E)(2), with the exception of paragraph (b) therein, shall be
applied as if the surviving spouse were the Participant.
4.For purposes of this Section 6.06(E), any amount paid to a child of the
Participant will be treated as if it had been paid to the surviving spouse if
the amount becomes payable to the surviving spouse when the child reaches the
age of majority.
5.For purposes of this Section 6.06(E), distribution of a Participant's
interest is considered to begin on the Participant's required beginning date
(or, if Section 6.06(E)(3) above is applicable, the date distribution is
required to begin to the surviving spouse pursuant to Section 6.06(E)(2)
above). If distribution in the form of an annuity irrevocably commences to the
Participant before the required beginning date, the date distribution is
considered to begin is the date distribution actually commences.
F. Definitions
1.Applicable Life Expectancy - The life expectancy (or joint and last survivor
expectancy) calculated using the attained age of the Participant (or designated
Beneficiary) as of the Participant's (or designated Beneficiary's) birthday in
the applicable calendar year reduced by one for each calendar year which has
elapsed since the date life expectancy was first calculated. If life
expectancy is being recalculated, the applicable life expectancy shall be the
life expectancy as so recalculated. The applicable calendar year shall be the
first distribution calendar year, and if life expectancy is being recalculated
such succeeding calendar year.
2.Designated Beneficiary - The individual who is designated as the Beneficiary
under the Plan in accordance with Section 401(a)(9) of the Code and the
regulations thereunder.
3.Distribution Calendar Year - A calendar year for which a minimum distribution
is required. For distributions beginning before the Participant's death, the
first distribution calendar year is the calendar year immediately preceding the
calendar year which contains the Participant's required beginning date. For
distributions beginning after the Participant's death, the first distribution
calendar year is the calendar year in which distributions are required to begin
pursuant to Section 6.06(E) above.
4.Life Expectancy - Life expectancy and joint and last survivor expectancy are
computed by use of the expected return multiples in Tables V and VI of Section
1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the case of
distributions described in Section 6.06(E)(2)(b) above) by the time
distributions are required to begin, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to the Participant (or spouse)
and shall apply to all subsequent years. The life expectancy of a nonspouse
Beneficiary may not be recalculated.
<PAGE>
5. Participant's Benefit
a.The account balance as of the last valuation date in the valuation calendar
year (the calendar year immediately preceding the distribution calendar year)
increased by the amount of any Contributions or Forfeitures allocated to the
account balance as of dates in the valuation calendar year after the valuation
date and decreased by distributions made in the valuation calendar year after
the valuation date.
b.Exception for second distribution calendar year. For purposes of paragraph
(a) above, if any portion of the minimum distribution for the first
distribution calendar year is made in the second distribution calendar year on
or before the required beginning date, the amount of the minimum distribution
made in the second distribution calendar year shall be treated as if it had
been made in the immediately preceding distribution calendar year.
6. Required Beginning Date
a.General Rule - The required beginning date of a Participant is the first day
of April of the calendar year following the calendar year in which the
Participant attains age 70 1/2.
b.Transitional Rules - The required beginning date of a Participant who attains
age 70 1/2 before January 1, 1988, shall be determined in accordance with (1)
or (2) below:
1)Non 5% Owners - The required beginning date of a Participant who is not a 5%
owner is the first day of April of the calendar year following the calendar
year in which the later of retirement or attainment of age 70 1/2 occurs.
2)5% Owners - The required beginning date of a Participant who is a 5% owner
during any year beginning after December 31, 1979, is the first day of April
following the later of:
a) the calendar year in which the Participant
attains age 70 1/2, or
b)the earlier of the calendar year with or within which ends the Plan Year in
which the Participant becomes a 5% owner, or the calendar year in which the
Participant retires.
The required beginning date of a Participant who is not a 5% owner who attains
age 70 1/2 during 1988 and who has not retired as of January 1, 1989, is April
1, 1990.
c.5% Owner - A Participant is treated as a 5% owner for purposes of this
Section 6.06(F)(6) if such Participant is a 5% owner as defined in Section
416(i) of the Code (determined in accordance with Section 416 but without
regard to whether the Plan is top-heavy) at any time during the Plan Year
ending with or within the calendar year in which such owner attains age 66 1/2
or any subsequent Plan Year.
d.Once distributions have begun to a 5% owner under this Section 6.06(F)(6)
they must continue to be distributed, even if the Participant ceases to be a 5%
owner in a subsequent year.
G. Transitional Rule
1.Notwithstanding the other requirements of this Section 6.06 and subject to
the requirements of Section 6.05, Joint and Survivor Annuity Requirements,
distribution on behalf of any Employee, including a 5% owner, may be made in
accordance with all of the following requirements (regardless of when such
distribution commences):
a.The distribution by the Fund is one which would not have disqualified such
Fund under Section 401(a)(9) of the Code as in effect prior to amendment by the
Deficit Reduction Act of 1984.
<PAGE>
b.The distribution is in accordance with a method of distribution designated by
the Employee whose interest in the Fund is being distributed or, if the
Employee is deceased, by a Beneficiary of such Employee.
c.Such designation was in writing, was signed by the Employee or the
Beneficiary, and was made before January 1, 1984.
d.The Employee had accrued a benefit under the Plan as of December 31, 1983.
e.The method of distribution designated by the Employee or the Beneficiary
specifies the time at which distribution will commence, the period over which
distributions will be made, and in the case of any distribution upon the
Employee's death, the Beneficiaries of the Employee listed in order of
priority.
2.A distribution upon death will not be covered by this transitional rule
unless the information in the designation contains the required information
described above with respect to the distributions to be made upon the death of
the Employee.
3.For any distribution which commences before January 1, 1984, but continues
after December 31, 1983, the Employee, or the Beneficiary, to whom such
distribution is being made, will be presumed to have designated the method of
distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfies the
requirements in Sections 6.06(G)(1)(a) and (e).
4.If a designation is revoked, any subsequent distribution must satisfy the
requirements of Section 401(a)(9) of the Code and the regulations thereunder.
If a designation is revoked subsequent to the date distributions are required
to begin, the Plan must distribute by the end of the calendar year following
the calendar year in which the revocation occurs the total amount not yet
distributed which would have been required to have been distributed to satisfy
Section 401(a)(9) of the Code and the regulations thereunder, but for the
Section 242(b)(2) election. For calendar years beginning after December 31,
1988, such distributions must meet the minimum distribution incidental benefit
requirements in Section 1.401(a)(9)-2 of the Income Tax Regulations. Any
changes in the designation will be considered to be a revocation of the
designation. However, the mere substitution or addition of another Beneficiary
(one not named in the designation) under the designation will not be considered
to be a revocation of the designation, so long as such substitution or addition
does not alter the period over which distributions are to be made under the
designation, directly or indirectly (for example, by altering the relevant
measuring life). In the case in which an amount is transferred or rolled over
from one plan to another plan, the rules in Q&A J-2 and Q&A J-3 shall apply.
6.07 Annuity Contracts
Any annuity contract distributed under the Plan (if permitted or required by
this Section 6) must be nontransferable. The terms of any annuity contract
purchased and distributed by the Plan to a Participant or spouse shall comply
with the requirements of the Plan.
6.08 Loans to Participants
If the Adoption Agreement so indicates, a Participant may receive a loan from
the Fund, subject to the following rules:
A. Loans shall be made available to all Participants on a reasonably
equivalent basis.
B.Loans shall not be made available to Highly Compensated Employees (as defined
in Section 414(q) of the Code) in an amount greater than the amount made
available to other Employees.
C. Loans must be adequately secured and bear a reasonable interest
rate.
D.No Participant loan shall exceed the present value of the Vested portion of a
Participant's Individual Account.
E.A Participant must obtain the consent of his or her spouse, if any, to the
use of the Individual Account as security for the loan. Spousal consent shall
be obtained no earlier than the beginning of the 90 day period that ends on the
date on which the loan is to be so secured. The consent must be in writing,
must acknowledge the
<PAGE>
effect of the loan, and must be witnessed by a plan representative or notary
public. Such consent shall thereafter be binding with respect to the consenting
spouse or any subsequent spouse with respect to that loan. A new consent shall
be required if the account balance is used for renegotiation, extension,
renewal, or other revision of the loan.
F.In the event of default, foreclosure on the note and attachment of security
will not occur until a distributable event occurs in the Plan.
G.No loans will be made to any shareholder-employee or Owner- Employee. For
purposes of this requirement, a shareholder-employee means an employee or
officer of an electing small business (Subchapter S) corporation who owns (or
is considered as owning within the meaning of Section 318(a)(1) of the Code),
on any day during the taxable year of such corporation, more than 5% of the
outstanding stock of the corporation.
If a valid spousal consent has been obtained in accordance with 6.08(E), then,
notwithstanding any other provisions of this Plan, the portion of the
Participant's Vested Individual Account used as a security interest held by the
Plan by reason of a loan outstanding to the Participant shall be taken into
account for purposes of determining the amount of the account balance payable
at the time of death or distribution, but only if the reduction is used as
repayment of the loan. If less than 100% of the Participant's Vested
Individual Account (determined without regard to the preceding sentence) is
payable to the surviving spouse, then the account balance shall be adjusted by
first reducing the Vested Individual Account by the amount of the security used
as repayment of the loan, and then determining the benefit payable to the
surviving spouse.
No loan to any Participant can be made to the extent that such loan when added
to the outstanding balance of all other loans to the Participant would exceed
the lesser of (a) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans during the one year period ending on the day
before the loan is made, over the outstanding balance of loans from the Plan on
the date the loan is made, or (b) 50% of the present value of the
nonforfeitable Individual Account of the Participant or, if greater, the total
Individual Account up to $10,000. For the purpose of the above limitation, all
loans from all plans of the Employer and other members of a group of employers
described in Sections 414(b), 414(c), and 414(m) of the Code are aggregated.
Furthermore, any loan shall by its terms require that repayment (principal and
interest) be amortized in level payments, not less frequently than quarterly,
over a period not extending beyond 5 years from the date of the loan, unless
such loan is used to acquire a dwelling unit which within a reasonable time
(determined at the time the loan is made) will be used as the principal
residence of the Participant. An assignment or pledge of any portion of the
Participant's interest in the Plan and a loan, pledge, or assignment with
respect to any insurance contract purchased under the Plan, will be treated as
a loan under this paragraph.
The Plan Administrator shall administer the loan program in accordance with a
written document. Such written document shall include, at a minimum, the
following: (i) the identity of the person or positions authorized to administer
the Participant loan program; (ii) the procedure for applying for loans; (iii)
the basis on which loans will be approved or denied; (iv) limitations (if any)
on the types and amounts of loans offered; (v) the procedure under the program
for determining a reasonable rate of interest; (vi) the types of collateral
which may secure a Participant loan; and (vii) the events constituting default
and the steps that will be taken to preserve Plan assets in the event of such
default.
6.09 Distribution in Kind
The Plan Administrator may cause any distribution under this Plan to be made
either in a form actually held in the Fund, or in cash by converting assets
other than cash into cash, or in any combination of the two foregoing ways.
6.10 DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS
A.Direct Rollover Option - This Section applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the manner prescribed by
the Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
B. Definitions
1.Eligible rollover distribution - An eligible rollover distribution is any
distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not
<PAGE>
include:
a.any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more;
b.any distribution to the extent such distribution is required under Section
401(a)(9) of the Code; and
c.the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized appreciation
with respect to employer securities).
2.Eligible retirement plan - An eligible retirement plan is 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(a) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
3.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.
4.Direct rollover - A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.
SECTION SEVEN CLAIMS PROCEDURE
7.01 Filing a Claim for Plan Distributions
A Participant or Beneficiary who desires to make a claim for the Vested Portion
of the Participant's Individual Account shall file a written request with the
Plan Administrator on a form to be furnished to him by the Plan Administrator
for such purpose. The request shall set forth the basis of the claim. The
Plan Administrator is authorized to conduct such examinations as may be
necessary to facilitate the payment of any benefits to which the Participant or
Beneficiary may be entitled under the terms of the Plan.
7.02 Denial of Claim
Whenever a claim for a Plan distribution by any Participant or Beneficiary has
been wholly or partially denied, the Plan Administrator must furnish such
Participant or Beneficiary written notice of the denial within 60 days of the
date the original claim was filed. This notice shall set forth the specific
reasons for the denial, specific reference to pertinent Plan provisions on
which the denial is based, a description of any additional information or
material needed to perfect the claim, an explanation of why such additional
information or material is necessary and an explanation of the procedures for
appeal.
7.03 Remedies Available
The Participant or Beneficiary shall have 60 days from receipt of the denial
notice in which to make written application for review by the Plan
Administrator. The Participant or Beneficiary may request that the review be
in the nature of a hearing. The Participant or Beneficiary shall have the
right to representation, to review pertinent documents and to submit comments
in writing. The Plan Administrator shall issue a decision on such review
within 60 days after receipt of an application for review as provided for in
Section 7.02. Upon a decision unfavorable to the Participant or Beneficiary,
such Participant or Beneficiary shall be entitled to bring such actions in law
or equity as may be necessary or appropriate to protect or clarify his right to
benefits under this Plan.
SECTION EIGHT PLAN ADMINISTRATOR
8.01 Employer is Plan Administrator
A.The Employer shall be the Plan Administrator unless the managing body of the
Employer designates a person or persons other than the Employer as the Plan
Administrator and so notifies the Prototype Sponsor and the Trustee (or
Custodian, if applicable). The Employer shall also be the Plan Administrator if
the person or persons so designated cease to be the Plan Administrator.
<PAGE>
B.If the managing body of the Employer designates a person or persons other
than the Employer as Plan Administrator, such person or persons shall serve at
the pleasure of the Employer and shall serve pursuant to such procedures as
such managing body may provide. Each such person shall be bonded as may be
required by law.
8.02 Powers and Duties of the Plan Administrator
A.The Plan Administrator may, by appointment, allocate the duties of the Plan
Administrator among several individuals or entities. Such appointments shall
not be effective until the party designated accepts such appointment in
writing.
B.The Plan Administrator shall have the authority to control and manage the
operation and administration of the Plan. The Plan Administrator shall
administer the Plan for the exclusive benefit of the Participants and their
Beneficiaries in accordance with the specific terms of the Plan.
C.The Plan Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
1.To determine all questions of interpretation or policy in a manner consistent
with the Plan's documents and the Plan Administrator's construction or
determination in good faith shall be conclusive and binding on all persons
except as otherwise provided herein or by law. Any interpretation or
construction shall be done in a nondiscriminatory manner and shall be
consistent with the intent that the Plan shall continue to be deemed a
qualified plan under the terms of Section 401(a) of the Code, as amended from
time-to-time, and shall comply with the terms of ERISA, as amended from
time-to-time;
2.To determine all questions relating to the eligibility of Employees to become
or remain Participants hereunder;
3. To compute the amounts necessary or desirable to be
contributed to the Plan;
4.To compute the amount and kind of benefits to which a Participant or
Beneficiary shall be entitled under the Plan and to direct the Trustee (or
Custodian, if applicable) with respect to all disbursements under the Plan,
and, when requested by the Trustee (or Custodian), to furnish the Trustee (or
Custodian) with instructions, in writing, on matters pertaining to the Plan and
the Trustee (or Custodian) may rely and act thereon;
5.To maintain all records necessary for the administration of the Plan;
6.To be responsible for preparing and filing such disclosure and tax forms as
may be required from time-to-time by the Secretary of Labor or the Secretary of
the Treasury; and
7.To furnish each Employee, Participant or Beneficiary such notices,
information and reports under such circumstances as may be required by law.
D.The Plan Administrator shall have all of the powers necessary or appropriate
to accomplish his duties under the Plan, including, but not limited to, the
following:
1.To appoint and retain such persons as may be necessary to carry out the
functions of the Plan Administrator;
2.To appoint and retain counsel, specialists or other persons as the Plan
Administrator deems necessary or advisable in the administration of the Plan;
3. To resolve all questions of administration of the Plan;
4.To establish such uniform and nondiscriminatory rules which it deems
necessary to carry out the terms of the Plan;
5.To make any adjustments in a uniform and nondiscriminatory manner which it
deems necessary to correct any arithmetical or accounting errors which may have
been made for any Plan Year; and
<PAGE>
6.To correct any defect, supply any omission or reconcile any inconsistency in
such manner and to such extent as shall be deemed necessary or advisable to
carry out the purpose of the Plan.
8.03 Expenses and Compensation
All reasonable expenses of administration including, but not limited to, those
involved in retaining necessary professional assistance may be paid from the
assets of the Fund. Alternatively, the Employer may, in its discretion, pay
such expenses. The Employer shall furnish the Plan Administrator with such
clerical and other assistance as the Plan Administrator may need in the
performance of his duties.
8.04 Information From Employer
To enable the Plan Administrator to perform his duties, the Employer shall
supply full and timely information to the Plan Administrator (or his designated
agents) on all matters relating to the Compensation of all Participants, their
regular employment, retirement, death, Disability or Termination of Employment,
and such other pertinent facts as the Plan Administrator (or his agents) may
require. The Plan Administrator shall advise the Trustee (or Custodian, if
applicable) of such of the foregoing facts as may be pertinent to the Trustee's
(or Custodian's) duties under the Plan. The Plan Administrator (or his agents)
is entitled to rely on such information as is supplied by the Employer and
shall have no duty or responsibility to verify such information.
SECTION NINE AMENDMENT AND TERMINATION
9.01 Right of Prototype Sponsor to Amend the Plan
A.The Employer, by adopting the Plan, expressly delegates to the Prototype
Sponsor the power, but not the duty, to amend the Plan without any further
action or consent of the Employer as the Prototype Sponsor deems necessary for
the purpose of adjusting the Plan to comply with all laws and regulations
governing pension or profit sharing plans. Specifically, it is understood that
the amendments may be made unilaterally by the Prototype Sponsor. However, it
shall also be understood that the Prototype Sponsor shall be under no
obligation to amend the Plan documents and the Employer expressly waives any
rights or claims against the Prototype Sponsor for not exercising this power to
amend. For purposes of Prototype Sponsor amendments, the mass submitter shall
be recognized as the agent of the Prototype Sponsor. If the Prototype Sponsor
does not adopt the amendments made by the mass submitter, it will no longer be
identical to or a minor modifier of the mass submitter plan.
B.An amendment by the Prototype Sponsor shall be accomplished by giving written
notice to the Employer of the amendment to be made. The notice shall set forth
the text of such amendment and the date such amendment is to be effective.
Such amendment shall take effect unless within the 30 day period after such
notice is provided, or within such shorter period as the notice may specify,
the Employer gives the Prototype Sponsor written notice of refusal to consent
to the amendment. Such written notice of refusal shall have the effect of
withdrawing the Plan as a prototype plan and shall cause the Plan to be
considered an individually designed plan. The right of the Prototype Sponsor
to cause the Plan to be amended shall terminate should the Plan cease to
conform as a prototype plan as provided in this or any other section.
9.02 Right of Employer to Amend the Plan
The Employer may (1) change the choice of options in the Adoption Agreement,
(2) add overriding language in the Adoption Agreement when such language is
necessary to satisfy Section 415 or Section 416 of the Code because of the
required aggregation of multiple plans, and (3) add certain model amendments
published by the Internal Revenue Service which specifically provide that their
adoption will not cause the Plan to be treated as individually designed. An
Employer that amends the Plan for any other reason, including a waiver of the
minimum funding requirement under Section 412(d) of the Code, will no longer
participate in this prototype plan and will be considered to have an
individually designed plan.
An Employer who wishes to amend the Plan to change the options it has chosen in
the Adoption Agreement must complete and deliver a new Adoption Agreement to
the Prototype Sponsor and Trustee (or Custodian, if applicable). Such
amendment shall become effective upon execution by the Employer and Trustee (or
Custodian).
The Employer further reserves the right to replace the Plan in its entirety by
adopting another retirement plan which the Employer designates as a replacement
plan.
9.03 Limitation on Power to Amend
No amendment to the Plan shall be effective to the extent that it has the
effect of decreasing a Participant's accrued
<PAGE>
benefit. Notwithstanding the preceding sentence, a Participant's Individual
Account may be reduced to the extent permitted under Section 412(c)(8) of the
Code. For purposes of this paragraph, a plan amendment which has the effect of
decreasing a Participant's Individual Account or eliminating an optional form of
benefit with respect to benefits attributable to service before the amendment
shall be treated as reducing an accrued benefit. Furthermore, if the vesting
schedule of a 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's
Individual Account derived from Employer Contributions will not be less than the
percentage computed under the Plan without regard to such amendment.
9.04 Amendment of Vesting Schedule
If the Plan's vesting schedule is amended, or the Plan is amended in any way
that directly or indirectly affects the computation of the Participant's Vested
percentage, or if the Plan is deemed amended by an automatic change to or from
a top-heavy vesting schedule, each Participant with at least 3 Years of Vesting
Service with the Employer may elect, within the time set forth below, to have
the Vested percentage computed under the Plan without regard to such amendment.
For Participants who do not have at least 1 Hour of Service in any Plan Year
beginning after December 31, 1988, the preceding sentence shall be applied by
substituting "5 Years of Vesting Service" for "3 Years of Vesting Service"
where such language appears.
The Period during which the election may be made shall commence with the date
the amendment is adopted or deemed to be made and shall end the later of:
A. 60 days after the amendment is adopted;
B. 60 days after the amendment becomes effective; or
C.60 days after the Participant is issued written notice of the amendment by
the Employer or Plan Administrator.
9.05 Permanency
The Employer expects to continue this Plan and make the necessary contributions
thereto indefinitely, but such continuance and payment is not assumed as a
contractual obligation. Neither the Adoption Agreement nor the Plan nor any
amendment or modification thereof nor the making of contributions hereunder
shall be construed as giving any Participant or any person whomsoever any legal
or equitable right against the Employer, the Trustee (or Custodian, if
applicable), the Plan Administrator or the Prototype Sponsor except as
specifically provided herein, or as provided by law.
9.06 Method and Procedure for Termination
The Plan may be terminated by the Employer at any time by appropriate action of
its managing body. Such termination shall be effective on the date specified by
the Employer. The Plan shall terminate if the Employer shall be dissolved,
terminated, or declared bankrupt. Written notice of the termination and
effective date thereof shall be given to the Trustee (or Custodian, if
applicable), Plan Administrator, Prototype Sponsor, Participants and
Beneficiaries of deceased Participants, and the required filings (such as the
Form 5500 series and others) must be made with the Internal Revenue Service and
any other regulatory body as required by current laws and regulations. Until
all of the assets have been distributed from the Fund, the Employer must keep
the Plan in compliance with current laws and regulations by (a) making
appropriate amendments to the Plan and (b) taking such other measures as may be
required.
9.07 Continuance of Plan by Successor Employer
Notwithstanding the preceding Section 9.06, a successor of the Employer may
continue the Plan and be substituted in the place of the present Employer. The
successor and the present Employer (or, if deceased, the executor of the estate
of a deceased Self-Employed Individual who was the Employer) must execute a
written instrument authorizing such substitution and the successor must
complete and sign a new Adoption Agreement.
9.08 Failure of Plan Qualification
If the Plan fails to attain or retain its qualified status, the Plan will no
longer be considered to be part of a prototype plan, and such Employer can no
longer participate under this prototype. In such event, the Plan will be
considered an individually designed plan.
SECTION TEN MISCELLANEOUS
<PAGE>
10.01 State Community Property Laws
The terms and conditions of this Plan shall be applicable without regard to the
community property laws of any state.
10.02 Headings
The headings of the Plan have been inserted for convenience of reference only
and are to be ignored in any construction of the provisions hereof.
10.03 Gender and Number
Whenever any words are used herein in the masculine gender they shall be
construed as though they were also used in the feminine gender in all cases
where they would so apply, and whenever any words are used herein in the
singular form they shall be construed as though they were also used in the
plural form in all cases where they would so apply.
10.04 Plan Merger or Consolidation
In the case of any merger or consolidation of the Plan with, or transfer of
assets or liabilities of such Plan to, any other plan, each Participant shall
be entitled to receive benefits immediately after the merger, consolidation, or
transfer (if the Plan had then terminated) which are equal to or greater than
the benefits he would have been entitled to receive immediately before the
merger, consolidation, or transfer (if the Plan had then terminated). The
Trustee (or Custodian, if applicable) has the authority to enter into merger
agreements or agreements to directly transfer the assets of this Plan but only
if such agreements are made with trustees or custodians of other retirement
plans described in Section 401(a) of the Code.
10.05 Standard of Fiduciary Conduct
The Employer, Plan Administrator, Trustee and any other fiduciary under this
Plan shall discharge their duties with respect to this Plan solely in the
interests of Participants and their Beneficiaries and with the care, skill,
prudence and diligence under the circumstances then prevailing that a prudent
man acting in like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims. No fiduciary
shall cause the Plan to engage in any transaction known as a "prohibited
transaction" under ERISA.
10.06 General Undertaking of All Parties
All parties to this Plan and all persons claiming any interest whatsoever
hereunder agree to perform any and all acts and execute any and all documents
and papers which may be necessary or desirable for the carrying out of this
Plan and any of its provisions.
10.07 Agreement Binds Heirs, etc.
This Plan shall be binding upon the heirs, executors, administrators,
successors and assigns, as those terms shall apply to any and all parties
hereto, present and future.
10.08 Determination of Top-Heavy Status
A.For any Plan Year beginning after December 31, 1983, this Plan is a Top-Heavy
Plan if any of the following conditions exist:
1.If the top-heavy ratio for this Plan exceeds 60% and this Plan is not part of
any required aggregation group or permissive aggregation group of plans;
2.If this Plan is part of a required aggregation group of plans but not part of
a permissive aggregation group and the top-heavy ratio for the group of plans
exceeds 60%;
3.If this Plan is a part of a required aggregation group and part of a
permissive aggregation group of plans and the top-heavy ratio for the
permissive aggregation group exceeds 60%.
For purposes of this Section 10.08, the following terms shall have the meanings
indicated below:
B.Key Employee - Any Employee or former Employee (and the beneficiaries of such
Employee) who at any time during the determination period was an officer of the
Employer if such individual's annual compensation exceeds 50% 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 10 largest interests in the
Employer if such individual's compensation exceeds 100% of the dollar
limitation under Section 415(c)(1)(A) of the Code, a 5% owner of the Employer,
or a 1% owner of the Employer who has an annual compensation of more than
$150,000. Annual compensation means compensation as defined in Section
415(c)(3) of the Code, but including amounts contributed by the
<PAGE>
Employer pursuant to a salary reduction agreement which are excludible from the
Employee's gross income under Section 125, Section 402(a)(8), Section 402(h) or
Section 403(b) of the Code. The determination period is the Plan Year
containing the determination date and the 4 preceding Plan Years.
The determination of who is a Key Employee will be made in accordance with
Section 416(i)(1) of the Code and the regulations thereunder.
C. Top-heavy ratio
1.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(s) has or has had accrued benefits, the top-heavy ratio for this Plan
alone or for the required or permissive aggregation group as appropriate is a
fraction, the numerator of which is the sum of the account balances of all Key
Employees as of the determination date(s) (including any part of any account
balance distributed in the 5-year period ending on the determination date(s)),
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(s)), both computed in accordance with Section 416 of the
Code and the regulations thereunder. Both the numerator and the denominator of
the top-heavy ratio are increased to reflect any contribution not actually made
as of the determination date, but which is required to be taken into account on
that date under Section 416 of the Code and the regulations thereunder.
2.If the Employer maintains one or more defined contribution plans (including
any simplified employee pension plan) and the Employer maintains or has
maintained one or more defined benefit plans which during the 5-year period
ending on the determination date(s) has or has had any accrued benefits, the
top-heavy ratio for any required or permissive aggregation group as appropriate
is a fraction, the numerator of which is the sum of account balances under the
aggregated defined contribution plan or plans for all Key Employees, determined
in accordance with (1) above, and the present value of accrued benefits under
the aggregated defined benefit plan or plans for all Key Employees as of the
determination date(s), and the denominator of which is the sum of the account
balances under the aggregated defined contribution plan or plans for all
Participants, determined in accordance with (1) above, and the present value of
accrued benefits under the defined benefit plan or plans for all Participants
as of the determination date(s), all determined in accordance with Section 416
of the Code and the regulations thereunder. The accrued benefits under a
defined benefit plan in both the numerator and denominator of the top-heavy
ratio are increased for any distribution of an accrued benefit made in the
5-year period ending on the determination date.
3.For purposes of (1) and (2) 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 (a) who is
not a Key Employee but who was a Key Employee in a Prior Year, or (b) who has
not been credited with at least one Hour of Service with any employer
maintaining the plan at any time during the 5-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 will be made in accordance with Section 416 of the Code and
the regulations thereunder. Deductible employee contributions will not be taken
into account for purposes of computing the top-heavy ratio. When aggregating
plans the value of account balances and accrued benefits will be calculated
with reference to the determination dates that fall within the same calendar
year.
The accrued benefit of a Participant other than a Key Employee shall be
determined under (a) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the Employer, or (b) 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.
4.Permissive aggregation group: The required aggregation group of plans plus
any other plan or plans of the 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.
<PAGE>
5.Required aggregation group: (a) Each qualified plan of the Employer in which
at least one Key Employee participates or participated at any time during the
determination period (regardless of whether the Plan has terminated), and (b)
any other qualified plan of the Employer which enables a plan described in (a)
to meet the requirements of Sections 401(a)(4) or 410 of the Code.
6.Determination date: For any Plan Year 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 year.
7.Valuation date: For purposes of calculating the top-heavy ratio, the
valuation date shall be the last day of each Plan Year.
8.Present value: For purposes of establishing the "present value" of benefits
under a defined benefit plan to compute the top-heavy ratio, any benefit shall
be discounted only for mortality and interest based on the interest rate and
mortality table specified for this purpose in the defined benefit plan.
10.09 Special Limitations for Owner-Employees
If this Plan provides contributions or benefits for one or more Owner-Employees
who control both the business for which this Plan is established and one or
more other trades or businesses, this Plan and the plan established for other
trades or businesses must, when looked at as a single plan, satisfy Sections
401(a) and (d) of the Code for the employees of those trades or businesses.
If the Plan provides contributions or benefits for one or more Owner-Employees
who control one or more other trades or businesses, the employees of the other
trades or businesses must be included in a plan which satisfies Sections 401(a)
and (d) of the Code and which provides contributions and benefits not less
favorable than provided for Owner-Employees under this Plan.
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 trade or business which is controlled must be as favorable as
those provided for him under the most favorable plan of the trade or business
which is not controlled.
For purposes of the preceding paragraphs, an Owner-Employee, or two or more
Owner-Employees, will be considered to control a trade or business if the
Owner-Employee, or two or more Owner-Employees, together:
A. own the entire interest in a unincorporated trade or business, or
B.in the case of a partnership, own more than 50% of either the capital
interest or the profit interest in the 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.
10.10 Inalienability of Benefits
No benefit or interest available hereunder will be subject to assignment or
alienation, either voluntarily or involuntarily. The preceding sentence shall
also apply to the creation, assignment, or recognition of a right to any
benefit payable with respect to a Participant pursuant to a domestic relations
order, unless such order is determined to be a qualified domestic relations
order, as defined in Section 414(p) of the Code.
Generally, a domestic relations order cannot be a qualified domestic relations
order until January 1, 1985. However, in the case of a domestic relations
order entered before such date, the Plan Administrator:
(1)shall treat such order as a qualified domestic relations order if such Plan
Administrator is paying benefits pursuant to such order on such date, and
(2)may treat any other such order entered before such date as a qualified
domestic relations order even if such order does not meet the requirements of
Section 414(p) of the Code.
<PAGE>
SECTION ELEVEN 401(K) PROVISIONS
In addition to Sections 1 through 10, the provisions of this Section 11 shall
apply if the Employer has established a 401(k) cash or deferred arrangement
(CODA) by completing and signing the appropriate Adoption Agreement.
11.100 Definitions
The following words and phrases when used in the Plan with initial capital
letters shall, for the purposes of this Plan, have the meanings set forth below
unless the context indicates that other meanings are intended.
11.101 Actual Deferral Percentage (ADP)
Means, for a specified group of Participants for a Plan Year, the average of
the ratios (calculated separately for each Participant in such group) of (1)
the amount of Employer Contributions actually paid over to the Fund on behalf
of such Participant for the Plan Year to (2) the Participant's Compensation for
such Plan Year (taking into account only that Compensation paid to the Employee
during the portion of the Plan Year he was an eligible Participant). For
purposes of calculating the ADP, Employer Contributions on behalf of any
Participant shall include: (1) any Elective Deferrals made pursuant to the
Participant's deferral election, including Excess Elective Deferrals but
excluding Elective Deferrals that are taken into account in the Average
Contribution Percentage test (provided the ADP test is satisfied both with and
without exclusion of these Elective Deferrals); (2) any Qualified Nonelective
Contributions but excluding Qualified Nonelective Contributions that are taken
into account in the Average Contribution Percentage test; and (3) at the
election of the Employer, Qualified Matching Contributions. For purposes of
computing Actual Deferral Percentages, an Employee who would be a Participant
but for the failure to make Elective Deferrals shall be treated as a
Participant on whose behalf no Elective Deferrals are made.
11.102 Aggregate Limit
Means the sum of (1) 125% of the greater of the ADP of the Participants who are
not Highly Compensated Employees for the Plan Year or the ACP of the
Participants who are not Highly Compensated Employees under the Plan subject to
the Code Section 401(m) for the Plan Year beginning with or within the Plan
Year of the CODA and (2) the lesser of 200% or two plus the lesser of such ADP
or ACP.
11.103 Average Contribution Percentage (ACP)
Means the average of the Contribution Percentages of the Eligible Participants
in a group.
11.104 Contributing Participant
Means a Participant who has enrolled as a Contributing Participant pursuant to
Section 11.201 and on whose behalf the Employer is contributing Elective
Deferrals to the Plan.
11.105 Contribution Percentage
Means the ratio (expressed as a percentage) of the Participant's Contribution
Percentage Amounts to the Participant's Compensation for the Plan Year (whether
or not the Employee was a Participant for the entire Plan Year).
11.106 Contribution Percentage Amounts
Means the sum of the Employee Contributions, Matching Contributions, and
Qualified Matching Contributions (to the extent not taken into account for
purposes of the ADP test) made under the Plan on behalf of the Participant for
the Plan Year. Such Contribution Percentage Amounts shall not include Matching
Contributions that are forfeited either to correct Excess Aggregate
Contributions or because the contributions to which they relate are Excess
Deferrals, Excess Contributions, or Excess Aggregate Contributions. If so
elected in the Adoption Agreement, the Employer may include Qualified
Nonelective Contributions in the Contribution Percentage Amounts. The Employer
also may elect to use Elective Deferrals in the Contribution Percentage Amounts
so long as the ADP test is met before the Elective Deferrals are used in the
ACP test and continues to be met following the exclusion of those Elective
Deferrals that are used to meet the ACP test.
11.107 Elective Deferrals
Means any Employer Contributions made to the Plan at the election of the
Participant, in lieu of cash compensation, and shall include contributions made
pursuant to a salary reduction agreement or other deferral mechanism. With
respect to any taxable year, a Participant's Elective Deferral is the sum of
all Employer contributions made on behalf of such Participant pursuant to an
election to defer under any qualified CODA as described in Section 401(k) of
the Code, any simplified employee pension cash or deferred arrangement as
described in Section 402(h)(1)(B), any eligible deferred compensation plan
under Section 457, any plan as described under Section 501(c)(18), and any
Employer contributions made on the behalf of a Participant for the purchase of
an annuity contract under Section 403(b) pursuant to a salary
<PAGE>
reduction agreement. Elective Deferrals shall not include any deferrals
properly distributed as excess annual additions.
No Participant shall be permitted to have Elective Deferrals made under this
Plan, or any other qualified plan maintained by the Employer, during any
taxable year, in excess of the dollar limitation contained in Section 402(g) of
the Code in effect at the beginning of such taxable year.
Elective Deferrals may not be taken into account for purposes of satisfying the
minimum allocation requirement applicable to Top-Heavy Plans described in
Section 3.01(E).
11.108 Eligible Participant
Means any Employee who is eligible to make an Employee Contribution, or an
Elective Deferral (if the Employer takes such contributions into account in the
calculation of the Contribution Percentage), or to receive a Matching
Contribution (including Forfeitures thereof) or a Qualified Matching
Contribution. If an Employee Contribution is required as a condition of
participation in the Plan, any Employee who would be a Participant in the Plan
if such Employee made such a contribution shall be treated as an Eligible
Participant on behalf of whom no Employee Contributions are made.
11.109 Employee Contribution
Means any contribution made to the Plan by or on behalf of a Participant that
is included in the Participant's gross income in the year in which made and
that is maintained under a separate account to which earnings and losses are
allocated.
11.110 Excess Aggregate Contributions
Means, with respect to any Plan Year, the excess of:
A.The aggregate Contribution Percentage Amounts taken into account in computing
the numerator of the Contribution Percentage actually made on behalf of Highly
Compensated Employees for such Plan Year, over
B.The maximum Contribution Percentage Amounts permitted by the ACP test
(determined by reducing contributions made on behalf of Highly Compensated
Employees in order of their Contribution Percentages beginning with the highest
of such percentages).
Such determination shall be made after first determining Excess Elective
Deferrals pursuant to Section 11.112 and then determining Excess Contributions
pursuant to Section 11.111.
11.111 Excess Contributions
Means, with respect to any Plan Year, the excess of:
A.The aggregate amount of Employer Contributions actually taken into account in
computing the ADP of Highly Compensated Employees for such Plan Year, over
B.The maximum amount of such contributions permitted by the ADP test
(determined by reducing contributions made on behalf of Highly Compensated
Employees in order of the ADPs, beginning with the highest of such
percentages).
11.112 Excess Elective Deferrals
Means those Elective Deferrals that are includible in a Participant's gross
income under Section 402(g) of the Code to the extent such Participant's
Elective Deferrals for a taxable year exceed the dollar limitation under such
Code section. Excess Elective Deferrals shall be treated as annual additions
under the Plan, unless such amounts are distributed no later than the first
April 15 following the close of the Participant's taxable year.
11.113 Matching Contribution
Means an Employer contribution made to this or any other defined contribution
plan on behalf of a Participant on account of an Employee Contribution made by
such Participant, or on account of a Participant's Elective Deferrals, under a
plan maintained by the Employer.
Matching Contributions may not be taken into account for purposes of satisfying
the minimum allocation requirement applicable to Top-Heavy Plans described in
Section 3.01(E).
11.114 Qualified Nonelective Contributions
<PAGE>
Means contributions (other than Matching Contributions or Qualified Matching
Contributions) made by the Employer and allocated to Participants' Individual
Accounts that the Participants may not elect to receive in cash until
distributed from the Plan; that are nonforfeitable when made; and that are
distributable only in accordance with the distribution provisions that are
applicable to Elective Deferrals and Qualified Matching Contributions.
11.115 Qualified Matching Contributions
Means Matching Contributions which are subject to the distribution and
nonforfeitability requirements under Section 401(k) of the Code when made.
11.200 CONTRIBUTING PARTICIPANT
11.201 Requirements to Enroll as a Contributing Participant
A.Each Employee who becomes a Participant may enroll as a Contributing
Participant. A Participant shall be eligible to enroll as a Contributing
Participant on the Entry Date as of which he enters the Plan. If a Participant
does not enroll at that time, he may enroll on the first day of any subsequent
Plan Year, or, if the Plan Administrator shall permit in a uniform and
nondiscriminatory manner, on any subsequent Entry Date. A Participant who
wishes to enroll as a Contributing Participant must complete, sign and file a
salary reduction agreement with the Plan Administrator.
B.Notwithstanding the times set forth in Section 11.201(A) as of which a
Participant may enroll as a Contributing Participant, the Plan Administrator
shall have the authority to designate, in a nondiscriminatory manner,
additional enrollment times during the 12 month period beginning on the
Effective Date in order that an orderly first enrollment might be completed.
In addition, if the Employer has indicated in the Adoption Agreement that
Elective Deferrals may be based on cash bonuses, then Participants shall be
afforded a reasonable period of time prior to the issuance of such cash bonuses
to elect to defer them into the Plan.
11.202 Modification of Salary Reduction Agreement By a Contributing Participant
A Contributing Participant may modify his salary reduction agreement to
increase or decrease (within the limits placed on Elective Deferrals in the
Adoption Agreement) the amount of his Compensation deferred into the Plan.
Such modification may only be made as of the first day of a Plan Year, or as of
any other more frequent date(s) if the Plan Administrator permits in a uniform
and nondiscriminatory manner. A Contributing Participant who desires to make
such a modification shall complete, sign and file a new salary reduction
agreement with the Plan Administrator at least thirty days before the
modification is to become effective.
11.203 Withdrawal as a Contributing Participant
A Participant may withdraw as a Contributing Participant as of the last day
preceding any Entry Date (or as of any other date if the Plan Administrator so
permits in a uniform and nondiscriminatory manner) by revoking his
authorization to the Employer to make Elective Deferrals on his behalf. A
Participant who desires to withdraw as a Contributing Participant shall give
written notice of withdrawal to the Plan Administrator at least thirty days (or
such lesser period of days as the Plan Administrator shall permit in a uniform
and nondiscriminatory manner) before the effective date of withdrawal. A
Participant shall cease to be a Contributing Participant upon his Termination
of Employment, or on account of termination of the Plan.
11.204 Return as a Contributing Participant after Withdrawal
A Participant who has withdrawn as a Contributing Participant under Section
11.203 may not again become a Contributing Participant until the first day of
the first Plan Year following the effective date of his withdrawal as a
Contributing Participant.
11.300 CONTRIBUTIONS
11.301 Contributions By Employer
The Employer shall make contributions to the Plan in accordance with the
contribution formulas specified in the Adoption Agreement.
11.302 Qualified Nonelective Contributions
The Employer may elect to make Qualified Nonelective Contributions under the
Plan on behalf of Participants as provided in the Adoption Agreement.
In addition, in lieu of distributing Excess Contributions as provided in
Section 11.505 of the Plan, or Excess Aggregate
<PAGE>
Contributions as provided in Section 11.506 of the Plan, and to the extent
elected by the Employer in the Adoption Agreement, the Employer may make
Qualified Nonelective Contributions on behalf of Participants who are not
Highly Compensated Employees that are sufficient to satisfy either the Actual
Deferral Percentage test or the Average Contribution Percentage test, or both,
pursuant to regulations under the Code.
11.303 Qualified Matching Contributions
The Employer may elect to make Qualified Matching Contributions under the Plan
on behalf of Participants as provided in the Adoption Agreement.
11.304 Employee Contributions
Notwithstanding Section 3.02, if the Employer so allows in the Adoption
Agreement, a Participant may contribute an Employee Contribution to the Plan.
A separate account will be maintained by the Plan Administrator for the
Employee Contributions for each Participant.
A Participant may, upon a written request submitted to the Plan Administrator,
withdraw the lesser of the portion of his Individual Account attributable to
his Employee Contributions or the amount he contributed as Employee
Contributions.
Employee Contributions and earnings thereon will be nonforfeitable at all
times. No Forfeiture will occur solely as a result of an Employee's withdrawal
of Employee Contributions.
11.400 NONDISCRIMINATION TESTING
11.401 Actual Deferral Percentage (ADP) Test
A.Limits on Highly Compensated Employees - The Actual Deferral Percentage
(hereinafter "ADP") for Participants who are Highly Compensated Employees for
each Plan Year and the ADP for Participants who are not Highly Compensated
Employees for the same Plan Year must satisfy one of the following tests:
1.The ADP for Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the ADP for Participants who are not Highly Compensated
Employees for the same Plan Year multiplied by 1.25; or
2.The ADP for Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the ADP for Participants who are not Highly Compensated
Employees for the same Plan Year multiplied by 2.0 provided that the ADP for
Participants who are Highly Compensated Employees does not exceed the ADP for
Participants who are not Highly Compensated Employees by more than 2 percentage
points.
B. Special Rules
1.The ADP for any Participant who is a Highly Compensated Employee for the Plan
Year and who is eligible to have Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if treated as
Elective Deferrals for purposes of the ADP test) allocated to his or her
Individual Accounts under two or more arrangements described in Section 401(k)
of the Code, that are maintained by the Employer, shall be determined as if
such Elective Deferrals (and, if applicable, such Qualified Nonelective
Contributions or Qualified Matching Contributions, or both) were made under a
single arrangement. If a Highly Compensated Employee participates in two or
more cash or deferred arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar year shall be
treated as a single arrangement.
2.In the event that this Plan satisfies the requirements of Sections 401(k),
401(a)(4), 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 Section 11.401 shall
be applied by determining the ADP 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.
3.For purposes of determining the ADP of a Participant who is a 5% owner or one
of the 10 most highly paid Highly Compensated Employees, the Elective Deferrals
(and Qualified Nonelective Contributions
<PAGE>
or Qualified Matching Contributions, or both, if treated as Elective Deferrals
for purposes of the ADP test) and compensation of such Participant shall
include the Elective Deferrals (and, if applicable, Qualified Nonelective
Contributions and Qualified Matching Contributions, or both) and Compensation
for the Plan Year of family members (as defined in Section 414(q)(6) of the
Code). Family members, with respect to such Highly Compensated Employees,
shall be disregarded as separate Employees in determining the ADP both for
Participants who are not Highly Compensated Employees and for Participants who
are Highly Compensated Employees.
4.For purposes of determining the ADP test, Elective Deferrals, Qualified
Nonelective Contributions and Qualified Matching Contributions must be made
before the last day of the 12 month period immediately following the Plan Year
to which contributions relate.
5.The Employer shall maintain records sufficient to demonstrate satisfaction of
the ADP test and the amount of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.
6.The determination and treatment of the ADP amounts of any Participant shall
satisfy such other requirements as may be prescribed by the Secretary of the
Treasury.
7.If the Employer has elected in the Adoption Agreement to take Qualified
Matching Contributions into account as Elective Deferrals for purposes of the
ADP test, then (subject to such other requirements as may be prescribed by the
Secretary of the Treasury) only the amount of such Qualified Matching
Contributions that are needed to meet the ADP test shall be taken into account.
8.In the event that the Plan Administrator determines that it is not likely
that the ADP test will be satisfied for a particular Plan Year unless certain
steps are taken prior to the end of such Plan Year, the Plan Administrator may
require Contributing Participants who are Highly Compensated Employees to
reduce their Elective Deferrals for such Plan Year in order to satisfy that
requirement. Said reduction shall also be required by the Plan Administrator in
the event that the Plan Administrator anticipates that the Employer will not be
able to deduct all Employer Contributions from its income for Federal income
tax purposes.
11.402 Limits on Employee Contributions and Matching Contributions
A.Limits on Highly Compensated Employees - The Average Contribution Percentage
(hereinafter "ACP") for Participants who are Highly Compensated Employees for
each Plan Year and the ACP for Participants who are not Highly Compensated
Employees for the same Plan Year must satisfy one of the following tests:
1.The ACP for Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the ACP for Participants who are not Highly Compensated
Employees for the same Plan Year multiplied by 1.25; or
2.The ACP for Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the ACP for Participants who are not Highly Compensated
Employees for the same Plan Year multiplied by 2, provided that the ACP for the
Participants who are Highly Compensated Employees does not exceed the ACP for
Participants who are not Highly Compensated Employees by more than 2 percentage
points.
B. Special Rules
1.Multiple Use - If one or more Highly Compensated Employees participate in
both a CODA and a plan subject to the ACP test maintained by the Employer and
the sum of the ADP and ACP of those Highly Compensated Employees subject to
either or both tests exceeds the Aggregate Limit, then the ACP of those Highly
Compensated Employees who also participate in a CODA will be reduced (beginning
with such Highly Compensated Employee whose ACP is the highest) so that the
limit is not exceeded. The amount by which each Highly Compensated Employee's
Contribution Percentage Amounts is reduced shall be treated as an Excess
Aggregate Contribution. The ADP and ACP of the Highly Compensated Employees
are determined after any corrections required to meet the ADP and ACP tests.
Multiple use does not occur if the ADP and ACP of the Highly Compensated
Employees does not exceed 1.25
<PAGE>
multiplied by the ADP and ACP of the Participants who are not Highly
Compensated Employees.
2.For purposes of this Section 11.402, the Contribution Percentage for any
Participant who is a Highly Compensated Employee and who is eligible to have
Contribution Percentage Amounts allocated to his or her Individual Account
under two or more plans described in Section 401(a) of the Code, or
arrangements described in Section 401(k) of the Code that are maintained by the
Employer, shall be determined as if the total of such Contribution Percentage
Amounts was made under each plan. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that have different
plan years, all cash or deferred arrangements ending with or within the same
calendar year shall be treated as a single arrangement.
3.In the event that this Plan satisfies the requirements of Sections 401(m),
401(a)(4) 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 Section shall be
applied by determining the Contribution Percentage 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(m) of the Code only if
they have the same Plan Year.
4.For purposes of determining the Contribution Percentage of a Participant who
is a 5% owner or one of the 10 most highly paid Highly Compensated Employees,
the Contribution Percentage Amounts and Compensation of such Participant shall
include the Contribution Percentage Amounts and Compensation for the Plan Year
of family members, (as defined in Section 414(q)(6) of the Code). Family
members, with respect to Highly Compensated Employees, shall be disregarded as
separate Employees in determining the Contribution Percentage both for
Participants who are not Highly Compensated Employees and for Participants who
are Highly Compensated Employees.
5.For purposes of determining the Contribution Percentage test, Employee
Contributions are considered to have been made in the Plan Year in which
contributed to the Fund. Matching Contributions and Qualified Nonelective
Contributions will be considered made for a Plan Year if made no later than the
end of the 12 month period beginning on the day after the close of the Plan
Year.
6.The Employer shall maintain records sufficient to demonstrate satisfaction of
the ACP test and the amount of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.
7.The determination and treatment of the Contribution Percentage of any
Participant shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
8.If the Employer has elected in the Adoption Agreement to take Qualified
Nonelective Contributions into account as Contribution Percentage Amounts for
purposes of the ACP test, then (subject to such other requirements as may be
prescribed by the Secretary of the Treasury) only the amount of such Qualified
Nonelective Contributions that are needed to meet the ACP test shall be taken
into account.
9.If the Employer has elected in the Adoption Agreement to take Elective
Deferrals into account as Contribution Percentage Amounts for purposes of the
ACP test, then (subject to such other requirements as may be prescribed by the
Secretary of the Treasury) only the amount of such Elective Deferrals that are
needed to meet the ACP test shall be taken into account.
11.500 DISTRIBUTION PROVISIONS
11.501 General Rule
Distributions from the Plan are subject to the provisions of Section 6 and the
provisions of this Section 11. In the event of a conflict between the
provisions of Section 6 and Section 11, the provisions of Section 11 shall
control.
11.502 Distribution Requirements
Elective Deferrals, Qualified Nonelective Contributions, and Qualified Matching
Contributions, and income allocable to each are not distributable to a
Participant or his or her Beneficiary or Beneficiaries, in accordance with such
Participant's or Beneficiary or Beneficiaries' election, earlier than upon
separation from service, death, or disability.
<PAGE>
Such amounts may also be distributed upon:
A. Termination of the Plan without the establishment of another
defined contribution plan.
B.The disposition by a corporation to an unrelated corporation of substantially
all of the assets (within the meaning of Section 409(d)(2) of the Code) used in
a trade or business of such corporation if such corporation continues to
maintain this Plan after the disposition, but only with respect to Employees
who continue employment with the corporation acquiring such assets.
C.The disposition by a corporation to an unrelated entity of such corporation's
interest in a subsidiary (within the meaning of Section 409(d)(3) of the Code)
if such corporation continues to maintain this Plan, but only with respect to
Employees who continue employment with such subsidiary.
D. The attainment of age 59 1/2 in the case of a profit sharing plan.
E.If the Employer has so elected in the Adoption Agreement, the hardship of the
Participant as described in Section 11.503.
All distributions that may be made pursuant to one or more of the foregoing
distributable events are subject to the spousal and Participant consent
requirements (if applicable) contained in Sections 401(a)(11) and 417 of the
Code.
11.503 Hardship Distribution
A.General - If the Employer has so elected in the Adoption Agreement,
distribution of Elective Deferrals (and any earnings credited to a
Participant*s account as of the end of the last Plan Year ending before July 1,
1989) may be made to a Participant in the event of hardship. For the purposes
of this Section, hardship is defined as an immediate and heavy financial need
of the Employee where such Employee lacks other available resources. Hardship
distributions are subject to the spousal consent requirements contained in
Sections 401(a)(11) and 417 of the Code.
B. Special Rules
1.The following are the only financial needs considered immediate and heavy:
expenses incurred or necessary for medical care, described in Section 213(d) of
the Code, of the Employee, the Employee's spouse or dependents; the purchase
(excluding mortgage payments) of a principal residence for the Employee;
payment of tuition and related educational fees for the next 12 months of
post-secondary education for the Employee, the Employee's spouse, children or
dependents; or the need to prevent the eviction of the Employee from, or a
foreclosure on the mortgage of, the Employee's principal residence.
2.A distribution will be considered as necessary to satisfy an immediate and
heavy financial need of the Employee only if:
a.The Employee has obtained all distributions, other than hardship
distributions, and all nontaxable loans under all plans maintained by the
Employer;
b.All plans maintained by the Employer provide that the Employee's Elective
Deferrals (and Employee Contributions) will be suspended for 12 months after
the receipt of the hardship distribution;
c.The distribution is not in excess of the amount of an 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
d.All plans maintained by the Employer provide that the Employee may not make
Elective Deferrals for the Employee'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 such
Employee's Elective Deferrals for the taxable year of the hardship
distribution.
11.504 Distribution of Excess Elective Deferrals
<PAGE>
A.General Rule - A Participant may assign to this Plan any Excess Elective
Deferrals made during a taxable year of the Participant by notifying the Plan
Administrator on or before the date specified in the Adoption Agreement of the
amount of the Excess Elective Deferrals to be assigned to the Plan. A
Participant is deemed to notify the Plan Administrator of any Excess Elective
Deferrals that arise by taking into account only those Elective Deferrals made
to this Plan and any other plans of the Employer.
Notwithstanding any other provision of the Plan, Excess Elective Deferrals,
plus any income and minus any loss allocable thereto, shall be distributed no
later than April 15 to any Participant to whose Individual Account Excess
Elective Deferrals were assigned for the preceding year and who claims Excess
Elective Deferrals for such taxable year.
B.Determination of Income or Loss - Excess Elective Deferrals shall be adjusted
for any income or loss up to the date of distribution. The income or loss
allocable to Excess Elective Deferrals is the sum of: (1) income or loss
allocable to the Participant's Elective Deferral account for the taxable year
multiplied by a fraction, the numerator of which is such Participant's Excess
Elective Deferrals for the year and the denominator is the Participant's
Individual Account balance attributable to Elective Deferrals without regard to
any income or loss occurring during such taxable year; and (2) 10% of the
amount determined under (1) multiplied by the number of whole calendar months
between the end of the Participant's taxable year and the date of distribution,
counting the month of distribution if distribution occurs after the 15th of
such month. Notwithstanding the preceding sentence, the Plan Administrator may
compute the income or loss allocable to Excess Elective Deferrals in the manner
described in Section 4 (i.e., the usual manner used by the Plan for allocating
income or loss to Participants' Individual Accounts), provided such method is
used consistently for all Participants and for all corrective distributions
under the Plan for the Plan Year.
11.505 Distribution of Excess Contributions
A.General Rule - Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto, shall be
distributed no later than the last day of each Plan Year to Participants to
whose Individual Accounts such Excess Contributions were allocated for the
preceding Plan Year. If such excess amounts are distributed more than 2 1/2
months after the last day of the Plan Year in which such excess amounts arose,
a 10% excise tax will be imposed on the Employer maintaining the Plan with
respect to such amounts. Such distributions shall be made to Highly
Compensated Employees on the basis of the respective portions of the Excess
Contributions attributable to each of such Employees. Excess Contributions of
Participants who are subject to the family member aggregation rules shall be
allocated among the family members in proportion to the Elective Deferrals (and
amounts treated as Elective Deferrals) of each family member that is combined
to determine the combined ADP.
Excess Contributions (including the amounts recharacterized) shall be treated
as annual additions under the Plan.
B.Determination of Income or Loss - Excess Contributions shall be adjusted for
any income or loss up to the date of distribution. The income or loss
allocable to Excess Contributions is the sum of: (1) income or loss allocable
to Participant's Elective Deferral account (and, if applicable, the Qualified
Nonelective Contribution account or the Qualified Matching Contributions
account or both) for the Plan Year multiplied by a fraction, the numerator of
which is such Participant's Excess Contributions for the year and the
denominator is the Participant's Individual Account balance attributable to
Elective Deferrals (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if any of such contributions are included in
the ADP test) without regard to any income or loss occurring during such Plan
Year; and (2) 10% of the amount determined under (1) multiplied by the number
of whole calendar months between the end of the Plan Year and the date of
distribution, counting the month of distribution if distribution occurs after
the 15th of such month. Notwithstanding the preceding sentence, the Plan
Administrator may compute the income or loss allocable to Excess Contributions
in the manner described in Section 4 (i.e., the usual manner used by the Plan
for allocating income or loss to Participants' Individual Accounts), provided
such method is used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year.
C.Accounting for Excess Contributions - Excess Contributions shall be
distributed from the Participant's Elective Deferral account and Qualified
Matching Contribution account (if applicable) in proportion to the
Participant's Elective Deferrals and Qualified Matching Contributions (to the
extent used in the ADP test) for the Plan Year. Excess Contributions shall be
distributed from the Participant's Qualified Nonelective Contribution account
only to the extent that such Excess Contributions exceed the balance in the
Participant's Elective Deferral account and Qualified Matching Contribution
account.
<PAGE>
11.506 Distribution of Excess Aggregate Contributions
A.General Rule - Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if forfeitable, or if not forfeitable, distributed no later
than the last day of each Plan Year to Participants to whose accounts such
Excess Aggregate Contributions were allocated for the preceding Plan Year.
Excess Aggregate Contributions of Participants who are subject to the family
member aggregation rules shall be allocated among the family members in
proportion to the Employee and Matching Contributions (or amounts treated as
Matching Contributions) of each family member that is combined to determine the
combined ACP. If such Excess Aggregate Contributions are distributed more than
2 1/2 months after the last day of the Plan Year in which such excess amounts
arose, a 10% excise tax will be imposed on the Employer maintaining the Plan
with respect to those amounts.
Excess Aggregate Contributions shall be treated as annual additions under the
Plan.
B.Determination of Income or Loss - Excess Aggregate Contributions shall be
adjusted for any income or loss up to the date of distribution. The income or
loss allocable to Excess Aggregate Contributions is the sum of: (1) income or
loss allocable to the Participant's Employee Contribution account, Matching
Contribution account (if any, and if all amounts therein are not used in the
ADP test) and, if applicable, Qualified Nonelective Contribution account and
Elective Deferral account for the Plan Year multiplied by a fraction, the
numerator of which is such Participant's Excess Aggregate Contributions for the
year and the denominator is the Participant's Individual Account balance(s)
attributable to Contribution Percentage Amounts without regard to any income or
loss occurring during such Plan Year; and (2) 10% of the amount determined
under (1) multiplied by the number of whole calendar months between the end of
the Plan Year and the date of distribution, counting the month of distribution
if distribution occurs after the 15th of such month. Notwithstanding the
preceding sentence, the Plan Administrator may compute the income or loss
allocable to Excess Aggregate Contributions in the manner described in Section
4 (i.e., the usual manner used by the Plan for allocating income or loss to
Participants' Individual Accounts), provided such method is used consistently
for all Participants and for all corrective distributions under the Plan for
the Plan Year.
C.Forfeitures of Excess Aggregate Contributions - Forfeitures of Excess
Aggregate Contributions may either be reallocated to the accounts of
Contributing Participants who are not Highly Compensated Employees or applied
to reduce Employer Contributions, as elected by the Employer in Section 5 of
the Adoption Agreement.
D.Accounting for Excess Aggregate Contributions - Excess Aggregate
Contributions shall be forfeited, if forfeitable or distributed on a pro rata
basis from the Participant's Employee Contribution account, Matching
Contribution account, and Qualified Matching Contribution account (and, if
applicable, the Participant's Qualified Nonelective Contribution account or
Elective Deferral account, or both).
11.507 Recharacterization
A Participant may treat his or her Excess Contributions as an amount
distributed to the Participant and then contributed by the Participant to the
Plan. Recharacterized amounts will remain nonforfeitable and subject to the
same distribution requirements as Elective Deferrals. Amounts may not be
recharacterized by a Highly Compensated Employee to the extent that such amount
in combination with other Employee Contributions made by that Employee would
exceed any stated limit under the Plan on Employee Contributions.
Recharacterization must occur no later than 2 1/2 months after the last day of
the Plan Year in which such Excess Contributions arose and is deemed to occur
no earlier than the date the last Highly Compensated Employee is informed in
writing of the amount recharacterized and the consequences thereof.
Recharacterized amounts will be taxable to the Participant for the
Participant*s tax year in which the Participant would have received them in
cash.
11.508 DISTRIBUTION OF ELECTIVE DEFERRALS IF EXCESS ANNUAL ADDITIONS
Notwithstanding any other provision of the Plan, a Participant's Elective
Deferrals shall be distributed to him to the extent that the distribution will
reduce an excess annual addition (as that term is described in Section 3.05 of
the Plan).
11.600 VESTING
11.601 100% Vesting on Certain Contributions
The Participant*s accrued benefit derived from Elective Deferrals, Qualified
Nonelective Contributions, Employee Contributions, and Qualified Matching
Contributions is nonforfeitable. Separate accounts for Elective Deferrals,
Qualified Nonelective Contributions, Employee Contributions, Matching
Contributions, and Qualified Matching
<PAGE>
Contributions will be maintained for each Participant. Each account will be
credited with the applicable contributions and earnings thereon.
11.602 Forfeitures and Vesting of Matching Contributions
Matching Contributions shall be Vested in accordance with the vesting schedule
selected for Matching Contributions in the Adoption Agreement. In any event,
Matching Contributions shall be fully Vested at Normal Retirement Age, upon the
complete or partial termination of the profit sharing plan, or upon the
complete discontinuance of Employer Contributions. Notwithstanding any other
provision of the Plan, Matching Contributions or Qualified Matching
Contributions may be forfeited if the contributions to which they relate are
Excess Elective Deferrals, Excess Contributions or Excess Aggregate
Contributions.
Any forfeitures of Matching Contributions which (as indicated in the Adoption
Agreement) are allocated to Participants' Accounts shall be made in accordance
with Section 6.01(D).
<PAGE>
401(K) PROFIT SHARING PLAN - NONSTANDARDIZED (WITH INTEGRATION)
ADOPTION AGREEMENT
_______________________________________________________________________________
SECTION 1. EMPLOYER INFORMATION
Name of Employer FIRST MID-ILLINOIS BANCSHARES, INC.
Address 1515 CHARESTON AVE.
City MATTOON State IL Zip 61938
Telephone (217) 254-7454 Federal Tax Identification Number 37-1156677
Income Tax Year End 12 31
Plan Year End 12 31
Type of Business (CHECK ONLY ONE)
[ ] Sole Proprietorship [ ] Partnership [ X ] Corporation
[ ] Other (SPECIFY)
Nature of Business (DESCRIBE) BANKING
Plan Sequence No. 002 (ENTER 001 IF THIS IS THE FIRST QUALIFIED PLAN THE
EMPLOYER HAS EVER MAINTAINED, ENTER 002 IF IT IS THE SECOND, ETC.)
SECTION 2. EFFECTIVE DATES
PART A. Initial Adoption or Amendment of Plan: CHECK AND COMPLETE OPTION
1 OR 2
OPTION 1:[ ]This is the initial adoption of a profit sharing plan
by the Employer.
The Effective Date of this Plan is _________________,
19___.
NOTE: THE EFFECTIVE DATE IS USUALLY THE FIRST DAY OF
THE PLAN YEAR IN WHICH THIS ADOPTION AGREEMENT IS
SIGNED.
OPTION 2:[ X ]This is an amendment and restatement of an existing
profit sharing plan (a Prior Plan).
The Prior Plan was initially effective on
JANUARY 1, 1985.
The Effective Date of this amendment and restatement
is JANUARY 1, 1995.
NOTE: THE EFFECTIVE DATE IS USUALLY THE FIRST DAY OF
THE PLAN YEAR IN WHICH THIS ADOPTION AGREEMENT IS
SIGNED.
PART B. Commencement of Elective Deferrals
Elective Deferrals may commence on_________________________________.
NOTE: Complete this part only if Option 1 above was selected.
This date may be no earlier than the date this Adoption Agreement
is signed because Elective Deferrals cannot be made retroactively.
SECTION 3. ELIGIBILITY REQUIREMENTS COMPLETE PARTS A, B, C, D AND E
PART A. Years of Eligibility Service Requirement:
An Employee will be eligible to become a Participant in the Plan
after completing 1000 hours of Eligibility Service.
NOTE: IF LEFT BLANK, THE YEARS OF ELIGIBILITY SERVICE REQUIRED
WILL BE DEEMED TO BE 0.
PART B. Age Requirement:
An Employee will be eligible to become a Participant in the Plan
after attaining age 21 (no more than 21).
NOTE: IF LEFT BLANK, IT WILL BE DEEMED THERE IS NO AGE REQUIREMENT
FOR ELIGIBILITY.
<PAGE>
PART C. All Employees employed as of the Effective Date of this Plan who
have not otherwise met the requirements of Part A or Part B above
[ ] will [ X ] will not be considered to have considered to have
met those requirements as of the Effective Date.
PART D. Class of Employees Eligible to Participate:
All Employees shall be eligible to become a Participant in the
Plan, except those checked below:
[ X ]Those Employees included in a unit of Employees covered by the
terms of a collective bargaining agreement between Employee
representatives (the term "Employee representatives" does not
include any organization more than half of whose members are
Employees who are owners, officers or executives of the
Employer) and the Employer under which retirement benefits were
the subject of good faith bargaining unless the agreement
provides that such Employees are to be included in the Plan.
[ X ]Those Employees who are non-resident aliens pursuant to
Section 410(b)(3)(C) of the Code and who received no earned
income from the Employer which constitutes income from sources
within the United States.
[ ]Other (DEFINE)_______________________________________________
PART E. Entry Dates
The Entry Dates for participation shall be (CHOOSE ONLY ONE
OPTION):
OPTION 1:[ X ]The first day of the Plan Year and the first day of
the seventh month of the Plan Year.
OPTION 2:[ ]Other (SPECIFY)_____________________________________
NOTE: IF OPTION 2 IS SELECTED, THE ENTRY DATES SPECIFIED MUST BE
MORE FREQUENT THAN THOSE DESCRIBED IN OPTION 1.
SECTION 4. ELECTIVE DEFERRALS
PART A. Will Elective Deferrals be permitted under this Plan (CHOOSE ONE)?
OPTION 1:[ X ]Yes
OPTION 2:[ ]No
NOTE: IF NO OPTION IS SELECTED, OPTION 2 WILL AUTOMATICALLY APPLY.
COMPLETE THE REMAINDER OF SECTION 4 ONLY IF OPTION 1 IS SELECTED.
PART B. If Elective Deferrals are permitted under the Plan, a Contributing
Participant may elect under a salary reduction agreement to have
his Compensation reduced by an amount each pay period as described
below (Choose one):
OPTION 1:[ X ]An amount equal to a percentage of the Contributing
Participant's Compensation from 0 % to 15 % in
increments of 1%.
OPTION 2:[ ]An amount of the Contributing Participant's
Compensation not less than $__________ and not more
than $___________.
The amount of such reduction shall be contributed to the Plan by
the Employer on behalf of the Contributing Participant. For any
taxable year, a Contributing Participant's Elective Deferrals shall
not exceed the limit contained in Section 402(g) of the Code in
effect at the beginning of such taxable year.
<PAGE>
PART C. Participants who claim Excess Elective Deferrals for the preceding
calendar year must submit their claims in writing to the Plan
Administrator by MARCH 1
NOTE: THIS DATE SHOULD BE A DATE PRIOR TO THE PARTICIPANT'S TAX
RETURN DUE DATE. IF NO DATE IS SELECTED, MARCH 1 WILL BE DEEMED TO
BE SELECTED.
SECTION 5. MATCHING CONTRIBUTIONS
PART A. Will the Employer make Matching Contributions to the Plan on behalf
of Contributing Participants (CHOOSE ONE)?
OPTION 1: [ X ] Yes
OPTION 2:[ ] No
NOTE: IF NO OPTION IS SELECTED, OPTION 2 WILL AUTOMATICALLY APPLY.
COMPLETE THE REMAINDER OF SECTION 5 ONLY IF OPTION 1 IS SELECTED.
PART B. Matching Contribution Formula. If the Employer will make Matching
Contributions, then the amount of such Matching Contributions made
on behalf of a Contributing Participant each Plan Year shall be
(CHOOSE ONE):
OPTION 1:[ ]An amount equal to ________% of such Contributing
Participant's Elective Deferral.
OPTION 2:[ ]An amount equal to the sum of ______% of the portion
of such Contributing Participant's Elective Deferral
which does not exceed ________% of the Contributing
Participant's Compensation plus ______% of the portion
of such Contributing Participant's Elective Deferral
which exceeds ______% of the Contributing
Participant's Compensation.
OPTION 3:[ X ]Other Formula. (SPECIFY) AN AMOUNT EQUAL TO 0% TO
100% OF EACH CONTRIBUTING PARTICIPANTS ELECTIVE
DEFERRAL AS DEEMED EACH YEAR.
NOTE: IF OPTION 3 IS SELECTED, THE FORMULA SPECIFIED CAN ONLY ALLOW
MATCHING CONTRIBUTIONS TO BE MADE WITH RESPECT TO CONTRIBUTING
PARTICIPANT'S ELECTIVE DEFERRALS.
PART C. Limit On Matching Contributions. Notwithstanding the matching
contribution formula specified above, the Employer will not match a
Contributing Participant's Elective Deferrals in excess of
$_____________ or ______% of such Contributing Participant's
Compensation.
PART D. Forfeitures of Excess Aggregate Contributions. Complete Part D only
if Matching Contributions are not 100% Vested.
Forfeitures of Excess Aggregate Contributions shall be (CHOOSE
ONE):
Option 1:[ X ]Allocated, after all other Forfeitures under the
Plan, to each Contributing Participant's Matching
Contribution account in the ratio which each
Contributing Participant's Compensation for the Plan
Year bears to the total Compensation of all
Contributing Participants for such Plan Year. Such
Forfeitures will not be allocated to the account of
any Highly Compensated Employee.
Option 2:[ ]Applied to reduce Employer Contributions.
NOTE: IF NO OPTION IS SELECTED, OPTION 2 WILL BE DEEMED TO BE
SELECTED.
SECTION 6. QUALIFIED NONELECTIVE CONTRIBUTIONS
<PAGE>
PART A. Will the Employer make Qualified Nonelective Contributions to the
Plan (CHOOSE ONE)?
OPTION 1:[ X ]Yes
OPTION 2:[ ]No
If the Employer will make Qualified Nonelective Contributions, then
the amount of such contribution to the Plan for each Plan Year
shall be an amount determined by the Employer.
NOTE: IF NO OPTION IS SELECTED, OPTION 2 WILL AUTOMATICALLY APPLY.
COMPLETE THE REMAINDER OF SECTION 6 ONLY IF OPTION 1 IS SELECTED.
PART B. Participants Entitled to Qualified Nonelective Contributions.
Allocation of Qualified Nonelective Contributions shall be made to
the Individual Accounts of (CHOOSE ONE):
OPTION 1:[ X ]All Participants.
OPTION 2:[ ]Only Participants who are not Highly Compensated
Employees.
PART C. Allocation of Qualified Nonelective Contributions. Allocation of
Qualified Nonelective Contributions to Participants entitled
thereto shall be made (CHOOSE ONE):
OPTION 1:[ X ]In the ratio which each Participant's Compensation
for the Plan Year bears to the total Compensation of
all Participants for such Plan Year.
OPTION 2:[ ]In the ratio which each Participant's Compensation
not in excess of $__________________ for the Plan Year
bears to the total Compensation of all Participants
not in excess of $__________________ for such Plan
Year.
PART D. Contributions Taken into Account for the Average Contribution
Percentage Test. In computing the Average Contribution Percentage,
the Employer shall take into account, and include as Contribution
Percentage Amounts any of the following contributions, if checked,
under this Plan or any other plan of the Employer, as provided by
regulations (CHECK IF DESIRED):
[ ]Elective Deferrals
[ ]Qualified Nonelective Contributions
SECTION 7. QUALIFIED MATCHING CONTRIBUTIONS
PART A. Will the Employer make Qualified Matching Contributions to the Plan
(CHOOSE ONE)?
OPTION 1:[ X ]Yes
OPTION 2:[ ]No
NOTE: IF NO OPTION IS SELECTED, OPTION 2 WILL AUTOMATICALLY APPLY.
COMPLETE THE REMAINDER OF SECTION 7 ONLY IF OPTION 1 IS SELECTED.
PART B. Participants Entitled to Qualified Matching Contributions.
Qualified Matching Contribution, if made to the Plan, will be made
on behalf of (CHOOSE ONE):
Option 1:[ X ]All Contributing Participants who make Elective
Deferrals.
Option 2:[ ]Only Contributing Participants who make Elective
Deferrals who are not Highly Compensated Employees.
PART C. Qualified Matching Contribution Formula. If the Employer will make
Qualified Matching Contributions, then the amount of such Qualified
Matching Contributions made on behalf of a Contributing Participant
each Plan Year shall be (Choose one):
OPTION 1:[ ]An amount equal to ______% of such Contributing
Participant's Elective Deferral.
<PAGE>
OPTION 2:[ X ]An amount equal to the sum of 50 % of the portion
of such Contributing Participant's Elective Deferral
which does not exceed 2 % of the Contributing
Participant's Compensation plus 0 % of the portion
of such Contributing Participant's Elective Deferral
which exceeds 2 % of the Contributing Participant's
Compensation.
OPTION 3:[ ]Other Formula. (SPECIFY) ____________________________
PART D. Limit on Qualified Matching Contributions. Notwithstanding the
Qualified Matching Contribution formula specified above, the
Employer will not match a Contributing Participant's Elective
Deferrals in excess of $ _________ or 2 % of such Contributing
Participant's Compensation.
PART E. Actual Deferral Percentage Test and Qualified Matching
Contributions. Qualified Matching Contributions under this Plan
(or any other plan of the Employer, as provided by regulations)
[ X ] will [ ] will not be taken into account as Elective
Deferrals for purposes of calculating the Actual Deferral
Percentage.
NOTE: IF NO OPTION IS SELECTED, QUALIFIED MATCHING CONTRIBUTIONS
WILL NOT BE USED FOR CALCULATING THE ACTUAL DEFERRAL PERCENTAGE
TEST.
SECTION 8. EMPLOYER PROFIT SHARING CONTRIBUTION AND ALLOCATION FORMULA
PART A. Contribution Formula. For each Plan Year the Employer may, in its
sole discretion, contribute to the Plan an amount to be determined
from year to year.
PART B. Allocation Formula (CHECK OPTION 1 OR 2):
OPTION 1.[ X ]Pro Rata Formula. Employer Contributions made
pursuant to this Section and Forfeitures shall be
allocated to the Individual Accounts of qualifying
Participants in the ratio that each qualifying
Participant's Compensation for the Plan Year bears to
the total Compensation of all qualifying Participants
for the Plan Year.
OPTION 2.[ ]Integrated Formula. Employer Contributions made
pursuant to this Section and Forfeitures shall be
allocated as follows (Start with Step 3 if this plan
is not a Top-Heavy Plan):
Step 1.Employer Contributions and Forfeitures shall
first be allocated pro rata to qualifying
Participants in the manner described in Section
8, Part B, Option 1. The percent so allocated
shall not exceed 3% of each qualifying
Participant's Compensation.
Step 2.Any Employer Contributions and Forfeitures
remaining after the allocation in Step 1 shall
be allocated to each qualifying Participant's
Individual Account in the ratio that each
qualifying Participant's Compensation for the
Plan Year in excess of the integration level
bears to all qualifying Participants'
Compensation in excess of the integration level,
but not in excess of 3%.
Step 3.Any Employer Contributions and Forfeitures
remaining after the allocation in Step 2 shall
be allocated to each qualifying Participant's
Individual Account in the ratio that the sum of
each qualifying Participant's total Compensation
and Compensation in excess of the integration
level bears to the sum of all qualifying
Participants' total Compensation and
Compensation in excess of the integration level,
but not in excess of the profit sharing maximum
disparity rate as described in Section
3.01(B)(3) of the Plan.
<PAGE>
Step 4.Any Employer Contributions and Forfeitures
remaining after the allocation in Step 3 shall
be allocated pro rata to qualifying Participants
in the manner described in Section 8, Part B,
Option 1.
The integration level shall be (CHOOSE ONE):
OPTION 1.[ ]The Taxable Wage Base
OPTION 2.[ ] $____________ (a dollar amount less than
the Taxable Wage Base)
OPTION 3.[ ] _______% of the Taxable Wage Base
NOTE: IF NO BOX IS CHECKED, THE INTEGRATION LEVEL SHALL BE
THE TAXABLE WAGE BASE.
SECTION 9. COMPENSATION COMPLETE PARTS A, B, AND C IF APPLICABLE
PART A. Compensation will mean all of each Participant's (CHOOSE ONE):
OPTION 1:[ ]W-2 earnings
OPTION 2:[ X ]compensation (as that term is defined in Section
415(c)(3) of the Code) which is actually paid to the
Participant during (CHOOSE ONE):
OPTION 1:[ X ]the Plan Year
OPTION 2:[ ]the taxable year ending with or within
the Plan Year
OPTION 3:[ ]the limitation year ending with or
within the Plan Year
PART B. Compensation [ X ] shall include [ ] shall not include Employer
Contributions made pursuant to a salary reduction agreement which
are not includible in the gross income of the Employee under
Section 125, 402(a)(8), 402(h) and 403(b) of the Code.
PART C. Compensation shall not include the following (e.g., bonuses,
overtime, etc.). (COMPLETE IF APPLICABLE)
NOTE: NO AMOUNTS CAN BE EXCLUDED FROM COMPENSATION IF THE
INTEGRATED FORMULA OF SECTION 8, PART B, OPTION 2 HAS BEEN
SELECTED.
SECTION 10.VESTING COMPLETE PARTS A, B AND C
PART A. Vesting Schedules. A Participant shall become Vested in his or her
Individual Account derived from Employer Contributions made
pursuant to Section 8 of the Adoption Agreement (and Forfeitures
thereof) as follows (CHOOSE ONE):
YEARS OF VESTED PERCENTAGE
<TABLE>
<CAPTION>
VESTING SERVICE Option 1 [ ]Option 2 [ X ]Option 3 [ ]Option 4 [ ]Option 5 [ ] (COMPLETE IF CHOSEN.)
<S> <C> <C> <C> <C> <C> <C>
1 0% 0% 100% 0% _____%
2 0% 20% 100% 0% _____%
3 0% 40% 100% 20% _____% (not less than 20%)
4 0% 60% 100% 40% _____% (not less than 40%)
5 100% 80% 100% 60% _____% (not less than 60%)
6 100% 100% 100% 80% _____% (not less than 80%)
7 100% 100% 100% 100% _____% (not less than 100%)
</TABLE>
NOTE: IF NO SELECTION IS MADE, OPTION 3, 100% VESTING, WILL BE
DEEMED TO BE SELECTED.
<PAGE>
PART B. Vesting of Matching Contributions. A Participant shall become
Vested in his or her Individual Account derived from Matching
Contributions made pursuant to Section 5 of this Adoption Agreement
as follows (CHOOSE ONE IF MATCHING CONTRIBUTIONS WILL BE MADE):
YEARS OF VESTED PERCENTAGE
<TABLE>
<CAPTION>
VESTING SERVICE Option 1 [ ]Option 2 [ X ]Option 3 [ ]Option 4 [ ]Option 5 [ ] (COMPLETE IF CHOSEN.)
<S> <C> <C> <C> <C> <C> <C>
1 0% 0% 100% 0% _____%
2 0% 20% 100% 0% _____%
3 0% 40% 100% 20% _____% (not less than 20%)
4 0% 60% 100% 40% _____% (not less than 40%)
5 100% 80% 100% 60% _____% (not less than 60%)
6 100% 100% 100% 80% _____% (not less than 80%)
7 100% 100% 100% 100% _____% (not less than 100%)
</TABLE>
NOTE: IF NO SELECTION IS MADE, OPTION 3, 100% VESTING, WILL BE
DEEMED TO BE SELECTED.
PART C. All of an Employee's Years of Vesting Service with the Employer are
counted to determine the vesting percentage in the Participant
Individual Account except:
[ ]Years of Vesting Service before the Employee reaches age 18.
[ ]Years of Vesting Service before the Employer maintained this
Plan or a predecessor plan.
SECTION 11.NORMAL RETIREMENT AGE
The Normal Retirement Age under the Plan is age 65 (NOT TO
EXCEED 65).
NOTE: IF LEFT BLANK, THE NORMAL RETIREMENT AGE WILL BE DEEMED TO BE
AGE 59-1/2.
SECTION 12.HOURS REQUIRED Complete Parts A and B
PART A. 1000 Hours of Service (no more than 1,000) shall be required
to constitute a Year of Vesting Service or a Year of Eligibility
Service.
PART B. 500 Hours of Service (no more than 500) must be exceeded to
avoid a Break in Vesting Service or a Break in Eligibility Service.
NOTE: THE NUMBER OF HOURS IN PART A MUST BE GREATER THAN THE NUMBER
OF HOURS IN PART B.
SECTION 13. METHOD OF DETERMINING SERVICE
Service will be determined on the basis of the method selected
below. Only one method may be selected. The method selected will
be applied to all Employees covered under the Plan. (CHECK OPTION
A, B, C OR D):
Option A: [ X ]On the basis of actual hours for which an Employee
is paid or entitled to payment.
Option B: [ ]On the basis of days worked. An Employee will be
credited with 10 Hours of Service if under
Section 1.20 of the Plan such Employee would be
credited with at least 1 Hour of Service during the
day.
Option C: [ ]On the basis of weeks worked. An Employee will be
credited with 45 Hours of Service if under Section
1.20 of the Plan such Employee would be credited
with at least 1 Hour of Service during the week.
Option D: [ ]On the basis of months worked. An Employee will be
credited with 190 Hours of Service if under Section
1.20 of the Plan such Employee would be credited
with at least 1 Hour of Service during the month.
NOTE: IF LEFT BLANK, OPTION A WILL BE DEEMED SELECTED.
<PAGE>
SECTION 14.OTHER OPTIONS ANSWER "YES" OR "NO" TO EACH OF THE FOLLOWING
QUESTIONS BY CHECKING THE APPROPRIATE BOX. IF A BOX IS NOT CHECKED
FOR A QUESTION, THE ANSWER WILL BE DEEMED TO BE "NO."
A. Loans: Will loans to Participants pursuant to Section 6.08 of
the Plan be permitted? [ X ] Yes [ ] No
B. Participant Direction of Investments: Will Participants be
permitted to direct the investment of their Individual Accounts
pursuant to Section 5.14 of the Plan? [ X ] Yes [ ] No
C. In-Service Withdrawals: Will Participants be permitted to make
withdrawals during service pursuant to Section 6.01(A)(3) of the
Plan? [ ] Check here if such withdrawals will be permitted
only on account of hardship. [ ] Yes [ X ] No
NOTE: IF THE PLAN IS BEING ADOPTED TO AMEND AND REPLACE A PRIOR
PLAN WHICH PERMITTED IN-SERVICE WITHDRAWALS YOU MUST ANSWER
"YES."
D. Last Day Requirement: Must a Participant be an Employee of the
Employer on the last day of the Plan Year in order to qualify
for an Employer Contribution? [ ] Yes [ X ] No
E. Nondeductible Employee Contributions: Will Participants be
permitted to make Nondeductible Employee Contributions pursuant
to Section 11.304 of the Plan? [ ] Yes [ X ] No
F. Hardship Withdrawals: Will Participants be permitted to
withdraw Elective Deferrals on account of hardship pursuant
to Section 11.503 of the Plan? [ X ] Yes [ ] No
SECTION 15.JOINT AND SURVIVOR ANNUITY
The survivor annuity portion of the Joint and Survivor Annuity
shall be a percentage equal to _______% (at least 50% but no more
than 100%) of the amount paid to the Participant prior to his or
her death.
SECTION 16.RELIANCE
The Employer may not rely on an opinion letter issued by the
National Office of the Internal Revenue Service as evidence that
the Plan is qualified under Section 401 of the Internal Revenue
Code. In order to obtain reliance with respect to plan
qualification, the Employer must apply to the appropriate Key
District Office for a determination letter.
This Adoption Agreement may be used only in conjunction with Basic
Plan Document No. 01.
SECTION 17.EMPLOYER SIGNATURE IMPORTANT: PLEASE READ BEFORE
SIGNING
I am an authorized representative of the Employer named above and I
state the following:
1. I acknowledge that I have relied upon my own advisors regarding
the completion of this Adoption Agreement and the legal and tax
implications of adopting this Plan.
2. I understand that my failure to properly complete this Adoption
Agreement may result in disqualification of the Plan.
3. I understand that the Prototype Sponsor will inform me of any
amendments made to the Plan and will notify me should it
discontinue or abandon the Plan.
<PAGE>
4. I have received a copy of this Adoption Agreement and the
corresponding Basic Plan Document.
Signature for Employer /S/WILLIAM S. ROWLAND Date Signed 12-22-94
Type Name WILLIAM S. ROWLAND, PLAN ADMINISTRATOR
SECTION 18.TRUSTEE OR CUSTODIAN CHECK AND COMPLETE OPTION A OR B
OPTION A. Financial Organization as Trustee or Custodian
Check One: [ ] Custodian, [ ] Trustee without full trust
powers, or [ X ] Trustee with full trust powers
NOTE: CUSTODIAN WILL BE DEEMED SELECTED IF NO BOX IS CHECKED.
Financial Organization FIRST MID-ILLINOIS BANK & TRUST CO.
Signature /S/TAMARA M. VAUGHN
Type Name TAMARA M. VAUGHN, TRUST OFFICER
OPTION B.Individual Trustee(s)
Signature _________________________Signature________________________
Type Name _________________________Type Name________________________
SECTION 19.PROTOTYPE SPONSOR
Name of Prototype Sponsor FIRST MID-ILLINOIS BANK & TRUST CO.
Address 1515 CHARLESTON AVE. MATTOON, IL 61938
Telephone Number (217) 234-7454
SECTION 20.LIMITATION ON ALLOCATIONS - More Than One Plan
If you maintain or ever maintained another qualified plan in which
any Participant in this Plan is (or was) a Participant or could
become a Participant, you must complete this section. You must also
complete this section if you maintain a welfare benefit fund, as
defined in Section 419(e) of the Code, or an individual medical
account, as defined in Section 415(l)(2) of the Code, under
which amounts are treated as annual additions with respect to any
Participant in this Plan.
PART A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a master
or prototype plan:
N/A 1. [ ] The provisions of Section 3.05(B)(1) through 3.05(B)(6)
of the Plan will apply as if the other plan were a master
or prototype plan.
2. [ ] Other method. (Provide the method under which the plans
will limit total annual additions to the maximum
permissible amount, and will properly reduce any excess
amounts, in a manner that precludes Employer discretion.)
Part B. If the Participant is or has ever been a participant in a defined
benefit plan maintained by the Employer, the Employer will provide
below the language which will satisfy the 1.0 limitation of Section
415(e) of the Code. Such language must preclude Employer
discretion. (Complete)
________________________________________________________________________________
________________________________________________________________________________
Part C. The limitation year is the following 12-consecutive month period:
DECEMBER 31
<PAGE>
SECTION 21.ELECTIVE DEFERRALS BASED EXCLUSIVELY ON BONUSES
May a Contributing Participant base Elective Deferrals on cash
bonuses that, at the Contributing Participant's election, may be
contributed to the Plan or received by the Contributing Participant
in cash (CHOOSE ONE)?
OPTION 1. [ ]Yes
OPTION 2. [ X ] No
NOTE: ANSWER "YES" ONLY IF ELECTIVE DEFERRALS WILL BE BASED
EXCLUSIVELY ON CASH BONUSES RATHER THAN PAYROLL DEDUCTIONS. IF NO
OPTION IS SELECTED, OPTION 2 WILL AUTOMATICALLY APPLY.
