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Exhibit 99.1
SUN BANCORP, INC. 401(K) PLAN
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TABLE OF CONTENTS
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ARTICLE I - DEFINITIONS .................................................. 1.1
1.01 "Plan" ......................................................... 1.1
1.02 "Employer" ..................................................... 1.1
1.03 "Trustee" ...................................................... 1.1
1.04 "Plan Administrator" . ......................................... 1.1
1.05 "Administrative Committee" ..................................... 1.1
1.06 "Employee" ..................................................... 1.1
1.07 "Highly Compensated Employee" .................................. 1.1
1.08 "Participant" .................................................. 1.2
1.09 "Beneficiary" .................................................. 1.2
1.10 "Compensation" ................................................. 1.2
1.11 "Account" ...................................................... 1.4
1.12 "Accrued Benefit" .............................................. 1.4
1.13 "Nonforfeitable" ............................................... 1.4
1.14 "Plan Year" .................................................... 1.4
1.15 "Effective Date" ............................................... 1.4
1.16 "Plan Entry Date" .............................................. 1.4
1.17 "Accounting Date" .............................................. 1.4
1.18 "Trust" ........................................................ 1.4
1.19 "Trust Fund" ................................................... 1.4
1.20 "Nontransferable Annuity" ...................................... 1.5
1.21 "ERISA" ........................................................ 1.5
1.22 "Code" ......................................................... 1.5
1.23 "Service" ...................................................... 1.5
1.24 "Hour of Service" .............................................. 1.5
1.25 "Disability" ................................................... 1.6
1.26 Service for Predecessor Employer ............................... 1.6
1.27 Related Employers .............................................. 1.6
1.28 Leased Employees ............................................... 1.7
1.29 Determination of Top Heavy Status .............................. 1.7
ARTICLE II - EMPLOYEE PARTICIPANTS ....................................... 2.1
2.01 Eligibility .................................................... 2.1
2.02 Year of Service - Participation ................................ 2.1
2.03 Break in Service - Participation ............................... 2.1
2.04 Participation upon Re-employment ............................... 2.1
2.05 Election not to Participate .................................... 2.2
ARTICLE III - EMPLOYER CONTRIBUTIONS AND FORFEITURES ..................... 3.1
3.01 Amount ......................................................... 3.1
3.02 Determination of Contribution .................................. 3.2
3.03 Time of Payment of Contribution ................................ 3.2
3.04 Contribution Allocation ........................................ 3.2
3.05 Forfeiture Allocation .......................................... 3.4
3.06 Accrual of Benefit ............................................. 3.4
3.07 Limitations on Allocations to Participants' Accounts ........... 3.5
3.08 Definitions - Article III ...................................... 3.6
ARTICLE IV - PARTICIPANT CONTRIBUTIONS ................................... 4.1
4.01 Participant Voluntary Contributions ............................ 4.1
4.02 Participant Voluntary Contributions - Special
Discrimination Test ............................................ 4.1
4.03 Participant Rollover Contributions ............................. 4.1
4.04 Participant Contribution - Forfeitability ...................... 4.1
4.05 Participant Contribution - Withdrawal/Distribution ............. 4.2
4.06 Participant Contribution - Accrued Benefit ..................... 4.2
ARTICLE V - TERMINATION OF SERVICE - PARTICIPANT VESTING ................. 5.1
5.01 Normal Retirement Age .......................................... 5.1
5.02 Participant Disability or Death ................................ 5.1
5.03 Vesting Schedule ............................................... 5.1
5.04 Cash-Out Distributions to Partially-Vested Participants/
Restoration of Forfeited Accrued Benefit ....................... 5.1
5.05 Segregated Account for Repaid Amount ........................... 5.3
5.06 Year of Service - Vesting ...................................... 5.3
5.07 Break In Service - Vesting ..................................... 5.3
5.08 Included Years of Service - Vesting ............................ 5.3
5.09 Forfeiture Occurs .............................................. 5.3
ARTICLE VI - TIME AND METHOD OF PAYMENT OF BENEFITS....................... 6.1
6.01 Time of Payment of Accrued Benefit ............................. 6.1
6.02 Method of Payment of Accrued Benefit ........................... 6.3
6.03 Benefit Payment Elections ...................................... 6.4
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6.04 Annuity Distributions to Participants and Surviving Spouses..... 6.6
6.05 Waiver Election - Qualified Joint and Survivor Annuity ......... 6.7
6.06 Waiver Election - Preretirement Survivor Annuity ............... 6.8
6.07 Distributions under Domestic Relations Orders .................. 6.9
ARTICLE VII - EMPLOYER ADMINISTRATIVE PROVISIONS ......................... 7.1
7.01 Information to Administrative Committee ........................ 7.1
7.02 No Liability ................................................... 7.1
7.03 Indemnity of Certain Fiduciaries ............................... 7.1
7.04 Employer Direction of Investment ............................... 7.1
7.05 Amendment to Vesting Schedule .................................. 7.1
ARTICLE VIII - PARTICIPANT ADMINISTRATIVE PROVISIONS ..................... 8.1
8.01 Beneficiary Designation ........................................ 8.1
8.02 No Beneficiary Designation/Death of Beneficiary ................ 8.1
8.03 Personal Data to Administrative Committee ...................... 8.2
8.04 Address for Notification ....................................... 8.2
8.05 Assignment or Alienation ....................................... 8.2
8.06 Notice of Change in Terms ...................................... 8.2
8.07 Litigation against the Trust ................................... 8.2
8.08 Information Available .......................................... 8.2
8.09 Appeal Procedure for Denial of Benefits ........................ 8.2
8.10 Participant Direction of Investment ............................ 8.3
ARTICLE IX - ADMINISTRATIVE COMMITTEE - DUTIES WITH RESPECT TO
PARTICIPANTS' ACCOUNTS.............................................. 9.1
9.01 Members' Compensation, Expenses................................. 9.1
9.02 Term............................................................ 9.1
9.03 Powers.......................................................... 9.1
9.04 General......................................................... 9.1
9.05 Funding Policy.................................................. 9.2
9.06 Manner of Action................................................ 9.2
9.07 Authorized Representative....................................... 9.2
9.08 Interested Member............................................... 9.2
9.09 Individual Accounts............................................. 9.2
9.10 Value of Participant's Accrued Benefit.......................... 9.2
9.11 Allocation and Distribution of Net Income Gain or Loss.......... 9.3
9.12 Individual Statement............................................ 9.4
9.13 Account Charged. ............................................... 9.4
9.14 Unclaimed Account Procedure..................................... 9.4
ARTICLE X - CUSTODIAN/TRUSTEE, POWERS AND DUTIES.......................... 10.1
10.01 Acceptance...................................................... 10.1
10.02 Receipt of Contributions........................................ 10.1
10.03 Investment Powers............................................... 10.1
10.04 Records and Statements.......................................... 10.3
10.05 Fees and Expenses from Fund..................................... 10.3
10.06 Parties to Litigation........................................... 10.3
10.07 Professional Agents............................................. 10.3
10.08 Distribution of Cash or Property................................ 10.3
10.09 Distribution Directions......................................... 10.3
10.10 Third Party/Multiple Trustees................................... 10.4
10.11 Resignation..................................................... 10.4
10.12 Removal......................................................... 10.4
10.13 Interim Duties and Successor Trustee............................ 10.4
10.14 Valuation of Trust.............................................. 10.4
10.15 Limitation on Liability - If Investment Manager, Ancillary
Trustee or Independent Fiduciary Appointed...................... 10.4
10.16 Investment in Group Trust Fund.................................. 10.5
10.17 Appointment of Ancillary Trustee or Independent Fiduciary....... 10.5
ARTICLE XI - PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY....... 11.1
11.01 Insurance Benefit............................................... 11.1
ARTICLE XII - MISCELLANEOUS............................................... 12.1
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12.01 Evidence........................................................ 12.1
12.02 No Responsibility for Employer Action........................... 12.1
12.03 Fiduciaries not Insurers........................................ 12.1
12.04 Waiver of Notice................................................ 12.1
12.05 Successors...................................................... 12.1
12.06 Word Usage...................................................... 12.1
12.07 State Law....................................................... 12.1
12.08 Employment Not Guaranteed....................................... 12.1
ARTICLE XIII - EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION.................. 13.1
13.01 Exclusive Benefit............................................... 13.1
13.02 Amendment by Employer........................................... 13.1
13.03 Discontinuance.................................................. 13.1
13.04 Full Vesting on Termination..................................... 13.2
13.05 Merger/Direct Transfer.......................................... 13.2
13.06 Termination..................................................... 13.3
ARTICLE XIV - PROVISIONS RELATING TO CODE SECTION 401(K) AND TO CODE
SECTION 401(M).................................................. 14.1
14.01 Section 401(k) Arrangement...................................... 14.1
14.02 Definitions..................................................... 14.1
14.03 Annual Elective Deferral Limitation............................. 14.3
14.04 Actual Deferral Percentage ("ADP") Test......................... 14.4
14.05 Nondiscrimination Rules for Employer Matching
Contributions/Participant Nondeductible Contributions........... 14.6
14.06 Multiple Use Limitation......................................... 14.8
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SUN BANCORP, INC. 401(K) PLAN
SUN BANCORP, INC., a corporation organized under the laws of the State of
Pennsylvania, makes this Agreement with Snyder County Trust Company, as Trustee.
WITNESSETH:
SUN BANCORP, INC. continues, within this Trust Agreement, a Plan for the
administration and distribution of contributions made by the Employer for the
purpose of providing retirement benefits for eligible Employees. This Plan is an
amended plan, in restated form, the original plan being established on January
1, 1990. The provisions of this Plan, as amended, apply solely to an Employee
whose employment with the Employer terminates on or after the restated Effective
Date of the Employer's Plan. If an Employee's employment with the Employer
terminates prior to the restated Effective Date, that Employee is entitled to
benefits under the Plan as the Plan existed on the date of the Employee's
termination of employment.
Now, therefore, in consideration of their mutual covenants, the Employer
and the Trustee agree as follows:
ARTICLE I - DEFINITIONS
1.01 "PLAN" means the retirement plan established and continued by the
Employer in the form of this Agreement, designated as the SUN BANCORP, INC.
401(K) PLAN.
1.02 "EMPLOYER" means SUN BANCORP, INC..
1.03 "TRUSTEE" means Snyder County Trust Company, or any successor in
office who in writing accepts the position of Trustee.
1.04 "PLAN ADMINISTRATOR" is Administrative Committee unless the Employer
designates another person to hold the position of Plan Administrator. In
addition to his other duties, the Plan Administrator has full responsibility for
compliance with the reporting and disclosure rules under ERISA as respects this
Agreement.
1.05 "ADMINISTRATIVE COMMITTEE" means the Employer's Administrative
Committee as from time to time constituted.
1.06 "EMPLOYEE" means any employee of the Employer.
1.07 "HIGHLY COMPENSATED EMPLOYEE" means an Employee who, during the Plan
Year or during the preceding 12-month period:
(a) is a more than 5% owner of the Employer (applying the constructive
ownership rules of Code Section 318, and applying the principles of Code
Section 318, for an unincorporated entity);
(b) has Compensation in excess of $75,000 (as adjusted by the Commissioner
of Internal Revenue for the relevant year);
(c) has Compensation in excess of $50,000 (as adjusted by the Commissioner
of Internal Revenue for the relevant year) and is part of the top-paid 20%
group of employees (based on Compensation for the relevant year); or
(d) has Compensation in excess of 50% of the dollar amount prescribed in
Code Section 415(b)(1)(A) (relating to defined benefit plans) and is an
officer of the Employer.
1.1
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If the Employee satisfies the definition in clause (b), (c) or (d) in the
Plan Year but does not satisfy clause (b), (c) or (d) during the preceding
12-month period and does not satisfy clause (a) in either period, the Employee
is a Highly Compensated Employee only if he is one of the 100 most highly
compensated Employees for the Plan Year. The number of officers taken into
account under clause (d) will not exceed the greater of 3 or 10% of the total
number (after application of the Code Section 414(q) exclusions) of Employees,
but no more than 50 officers. If no Employee satisfies the Compensation
requirement in clause (d) for the relevant year, the Administrative Committee
will treat the highest paid officer as satisfying clause (d) for that year.
For purposes of this Section 1.07, "Compensation" means Compensation as
defined in Section 1.10, except no exclusions from Compensation apply other than
the exclusions described in paragraphs (a), (b), (c) and (d) of Section 1.10,
and Compensation must include "elective contributions" (as defined in Section
1.10). The Administrative Committee must make the determination of who is a
Highly Compensated Employee, including the determinations of the number and
identity of the top paid 20% group, the top 100 paid Employees, the number of
officers includible in clause (d) and the relevant Compensation, consistent with
Code Section 14(q) and regulations issued under that Code section. The Employer
may make a calendar year election to determine the Highly Compensated Employees
for the Plan Year, as prescribed by Treasury regulations. A calendar year
election must apply to all plans and arrangements of the Employer. For purposes
of applying any nondiscrimination test required under the Plan or under the
Code, in a manner consistent with applicable Treasury regulations, the
Administrative Committee will treat a Highly Compensated Employee and all family
members (a spouse, a lineal ascendant or descendant, or a spouse of a lineal
ascendant or descendant) as a single Highly Compensated Employee, but only if
the Highly Compensated Employee is a more than 5% owner or is one of the 10
Highly Compensated Employees with the greatest Compensation for the Plan Year.
This aggregation rule applies to a family member even if that family member is a
Highly Compensated Employee without family aggregation.
The term "Highly Compensated Employee" also includes any former Employee
who separated from Service (or has a deemed Separation from Service, as
determined under Treasury regulations) prior to the Plan Year, performs no
Service for the Employer during the Plan Year, and was a Highly Compensated
Employee either for the separation year or any Plan Year ending on or after his
55th birthday. If the former Employee's Separation from Service occurred prior
to January 1, 1987, he is a Highly Compensated Employee only if he satisfied
clause (a) of this Section 1.07 or received Compensation in excess of $50,000
during: (1) the year of his Separation from Service (or the prior year); or (2)
any year ending after his 54th birthday.
1.08 "PARTICIPANT" is an Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01.
1.09 "BENEFICIARY" is a person designated by a Participant who is or may
become entitled to a benefit under the Plan. A Beneficiary who becomes entitled
to a benefit under the Plan remains a Beneficiary under the Plan until the
Trustee has fully distributed his benefit to him. A Beneficiary's right to (and
the Plan Administrator's, the Administrative Committee's or a Trustee's duty to
provide to the Beneficiary) information or data concerning the Plan does not
arise until he first becomes entitled to receive a benefit under the Plan.
1.10 "COMPENSATION" means the Participant's wages, salaries, fees for
professional service and other amounts received for personal services actually
rendered in the course of employment with the Employer maintaining the plan
except Compensation does not include the following items:
reimbursements or other expense allowances, fringe benefits (cash and
noncash), moving expenses, and welfare benefits..
1.2
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Compensation also includes elective contributions made by the Employer on the
Employee's behalf. "Elective contributions" are amounts excludible from the
Employee's gross income under Code Sections 125, 402(a)(8), 402(h) or 403(b),
and contributed by the Employer, at the Employee's election, to a Code Section
401(k) arrangement, a Simplified Employee Pension, cafeteria plan or
tax-sheltered annuity. A Compensation payment includes Compensation by the
Employer through another person under the common paymaster provisions in Code
Sections 3121(s) and 3306(p). The term "Compensation" does not include:
(a) Employer contributions (other than elective contributions) to a plan
of deferred compensation to the extent the contributions are not included
in the gross income of the Employee for the taxable year in which
contributed, on behalf of an Employee to a Simplified Employee Pension
Plan to the extent such contributions are excludible from the Employee's
gross income, and any distributions from a plan of deferred compensation,
regardless of whether such amounts are includible in the gross income of
the Employee when distributed.
(b) Amounts realized from the exercise of a non-qualified stock option, or
when restricted stock (or property) held by an Employee either becomes
freely transferable or is no longer subject to a substantial risk of
forfeiture.
(c) Amounts realized from the sale, exchange or other disposition of stock
acquired under a stock option described in Part II, Subchapter D, Chapter
1 of the Code.
(d) Other amounts which receive special tax benefits, such as premiums for
group term life insurance (but only to the extent that the premiums are
not includible in the gross income of the Employee), or contributions made
by an Employer (whether or not under a salary reduction agreement) towards
the purchase of an annuity contract described in Code Section 403(b)
(whether or not the contributions are excludible from the gross income of
the Employee), other than "elective contributions."
Any reference in this Plan to Compensation is a reference to the
definition in this Section 1.10, unless the Plan reference specifies a
modification to this definition. The Administrative Committee will take into
account only Compensation actually paid for the relevant period.
SPECIAL DEFINITION FOR SALARY REDUCTION CONTRIBUTIONS. For purposes of
determining the Employee's salary reduction contributions under a salary
reduction agreement, "Compensation" means Compensation as defined in this
Section 1.10, determined prior to the reduction authorized by that salary
reduction agreement.
(A) LIMITATIONS ON COMPENSATION.
(1) COMPENSATION DOLLAR LIMITATION. For any Plan Year beginning after
December 31, 1988, the Administrative Committee must take into account only the
first $200,000 (or beginning January 1, 1990, such larger amount as the
Commissioner of Internal Revenue may prescribe) of any Participant's
Compensation. For any Plan Year beginning prior to January 1, 1989, this
$200,000 limitation (but not the family aggregation requirement) applies only if
the Plan is top heavy for such Plan Year.
(2) APPLICATION OF COMPENSATION LIMITATION TO CERTAIN FAMILY MEMBERS. The
$200,000 Compensation limitation applies to the combined Compensation of
the Employee and of any family member aggregated with the Employee under Section
1.07 who is either (i) the Employee's spouse; or (ii) the Employee's lineal
descendant under the age of 19. If, for a Plan Year, the combined Compensation
of the Employee and such family members who are Participants entitled to an
allocation for that Plan Year exceeds the $200,000 (or adjusted) limitation,
"Compensation" for each such Participant, for purposes of the contribution and
allocation provisions of Article III, means his
1.3
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Adjusted Compensation. Adjusted Compensation is the amount which bears the same
ratio to the $200,000 (or adjusted) limitation as the affected Participant's
Compensation (without regard to the $200,000 Compensation limitation) bears to
the combined Compensation of all the affected Participants in the family unit.
If the Plan uses permitted disparity, the Administrative Committee must
determine the integration level of each affected family member Participant prior
to the proration of the $200,000 Compensation limitation, but the combined
integration level of the affected Participants may not exceed $200,000 (or the
adjusted limitation). The combined Excess Compensation of the affected
Participants in the family unit may not exceed $200,000 (or the adjusted
limitation) minus the affected Participants' combined integration level (as
determined under the preceding sentence). If the combined Excess Compensation
exceeds this limitation, the Administrative Committee will prorate the Excess
Compensation limitation among the affected Participants in the family unit in
proportion to each such individual's Adjusted Compensation minus his integration
level.
(B) NONDISCRIMINATION. For purposes of determining whether the Plan
discriminates in favor of Highly Compensated Employees, Compensation means
Compensation as defined in this Section 1.10 except any exclusions from
Compensation, other than the exclusions described in paragraphs (a), (b), (c)
and (d), do not apply. The Employer may also elect to use an alternate
nondiscriminatory definition, in accordance with the requirements of Code
Section 414(s) and the regulations issued under that Code section. In
determining Compensation under this Section 1.10(B), the Employer may elect to
include all elective contributions made by the Employer on behalf of the
Employees. The Employer's election to include elective contributions must be
consistent and uniform with respect to Employees. The Employer may make this
election to include elective contributions for nondiscrimination testing
purposes, irrespective of whether this Section 1.10 includes elective
contributions in the general Compensation definition applicable to this Plan.
1.11 "ACCOUNT" means the separate account(s) which the Administrative
Committee or the Trustee maintains for a Participant under the Plan.
1.12 "ACCRUED BENEFIT" means the amount standing in a Participant's
Account(s) as of any date derived from both Employer contributions and Employee
contributions, if any.
1.13 "NONFORFEITABLE" means a Participant's or Beneficiary's unconditional
claim, legally enforceable against the Plan, to the Participant's Accrued
Benefit.
1.14 "PLAN YEAR" means the fiscal year of the Plan, a 12 consecutive month
period ending every December 31.
1.15 "EFFECTIVE DATE" of this Plan, as restated, is January 1, 1990.
1.16 "PLAN ENTRY DATE" means the date(s) prescribed by Section 2.01.
1.17 "ACCOUNTING DATE" is the last day of the Plan Year. Unless otherwise
specified in the Plan, the Administrative Committee will make all Plan
allocations for a particular Plan Year as of the Accounting Date of that Plan
Year.
1.18 "TRUST" means the separate Trust created under the Plan.
1.19 "TRUST FUND" means all property of every kind held or acquired by the
Employer's Plan, other than incidental benefit insurance contracts.
1.4
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1.20 "NONTRANSFERABLE ANNUITY" means an annuity which by its terms
provides that it may not be sold, assigned, discounted, pledged as collateral
for a loan or security for the performance of an obligation or for any purpose
to any person other than the insurance company. If the Plan distributes an
annuity contract, the contract must be a Nontransferable Annuity.
1.21 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.22 "CODE" means the Internal Revenue Code of 1986, as amended.
1.23 "SERVICE" means any period of time the Employee is in the employ of
the Employer, including any period the Employee is on an unpaid leave of absence
authorized by the Employer under a uniform, nondiscriminatory policy applicable
to all Employees. "Separation from Service" means the Employee no longer has an
employment relationship with the Employer maintaining this Plan.
1.24 "HOUR OF SERVICE" means:
(a) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment, for the performance of duties. The Administrative Committee
credits Hours of Service under this paragraph (a) to the Employee for the
computation period in which the Employee performs the duties, irrespective
of when paid;
(b) Each Hour of Service for back pay, irrespective of mitigation of
damages, to which the Employer has agreed or for which the Employee has
received an award. The Administrative Committee credits Hours of Service
under this paragraph (b) to the Employee for the computation period(s) to
which the award or the agreement pertains rather than for the computation
period in which the award, agreement or payment is made; and
(c) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment (irrespective of whether the employment relationship is
terminated), for reasons other than for the performance of duties during a
computation period, such as leave of absence, vacation, holiday, sick
leave, illness, incapacity (including disability), layoff, jury duty or
military duty. The Administrative Committee will credit no more than 501
Hours of Service under this paragraph (c) to an Employee on account of any
single continuous period during which the Employee does not perform any
duties (whether or not such period occurs during a single computation
period). The Administrative Committee credits Hours of Service under this
paragraph (c) in accordance with the rules of paragraphs (b) and (c) of
Labor Reg. Section 2530.200b-2, which the Plan, by this reference,
specifically incorporates in full within this paragraph (c).
The Administrative Committee will not credit an Hour of Service under more
than one of the above paragraphs. A computation period for purposes of this
Section 1.24 is the Plan Year, Year of Service period, Break in Service period
or other period, as determined under the Plan provision for which the
Administrative Committee is measuring an Employee's Hours of Service. The
Administrative Committee will resolve any ambiguity with respect to the
crediting of an Hour of Service in favor of the Employee.
(A) METHOD OF CREDITING HOURS OF SERVICE. The Employer will credit every
Employee with Hours of Service on the basis of the "actual" method. For purposes
of the Plan, "actual" method means the determination of Hours of Service from
records of hours worked and hours for which the Employer makes payment or for
which payment is due from the Employer.
(B) MATERNITY/PATERNITY LEAVE. Solely for purposes of determining whether the
Employee incurs
1.5
<PAGE> 10
a Break in Service under any provision of this Plan, the Administrative
Committee must credit Hours of Service during an Employee's unpaid absence
period due to maternity or paternity leave. The Administrative Committee
considers an Employee on maternity or paternity leave if the Employee's absence
is due to the Employee's pregnancy, the birth of the Employee's child, the
placement with the Employee of an adopted child, or the care of the Employee's
child immediately following the child's birth or placement. The Administrative
Committee credits Hours of Service under this paragraph on the basis of the
number of Hours of Service the Employee would receive if he were paid during the
absence period or, if the Administrative Committee cannot determine the number
of Hours of Service the Employee would receive, on the basis of 8 hours per day
during the absence period. The Administrative Committee will credit only the
number (not exceeding 501) of Hours of Service necessary to prevent an
Employee's Break in Service. The Administrative Committee credits all Hours of
Service described in this paragraph to the computation period in which the
absence period begins or, if the Employee does not need these Hours of Service
to prevent a Break in Service in the computation period in which his absence
period begins, the Administrative Committee credits these Hours of Service to
the immediately following computation period.
1.25 "DISABILITY" means the Participant, because of a physical or mental
disability, will be unable to perform the duties of his customary position of
employment (or is unable to engage in any substantial gainful activity) for an
indefinite period which the Administrative Committee considers will be of long
continued duration. A Participant also is disabled if he incurs the permanent
loss or loss of use of a member or function of the body, or is permanently
disfigured, and incurs a Separation from Service. The Plan considers a
Participant disabled on the date the Administrative Committee determines the
Participant satisfies the definition of disability. The Administrative Committee
may require a Participant to submit to a physical examination in order to
confirm disability. The Administrative Committee will apply the provisions of
this Section 1.25 in a nondiscriminatory, consistent and uniform manner.
1.26 SERVICE FOR PREDECESSOR EMPLOYER. If the Employer maintains the plan
of a predecessor employer, the Plan treats service of the Employee with the
predecessor employer as service with the Employer. Furthermore, the Employer is
the successor to Watsontown National Bank and Snyder County Trust. In this
respect, the Plan takes into account all service of all Employees with that
predecessor employer for purposes of participation under Article II and for
purposes of vesting under Article V.
1.27 RELATED EMPLOYERS. A related group is a controlled group of
corporations (as defined in Code Section 414(b)), trades or businesses (whether
or not incorporated) which are under common control (as defined in Code Section
414(c)) or an affiliated service group (as defined in Code Section 414(m) or in
Code Section 414(o)). If the Employer is a member of a related group, the term
"Employer" includes the related group members for purposes of crediting Hours of
Service, determining Years of Service and Breaks in Service under Articles II
and V, applying the Participation Test and the Coverage Test under Section
3.06(D), applying the limitations on allocations in Part 2 of Article III,
applying the top heavy rules and the minimum allocation requirements of Article
III, the definitions of Employee, Highly Compensated Employee, Compensation and
Leased Employee, and for any other purpose required by the applicable Code
section or by a Plan provision. However, only an Employer described in Section
1.02 may contribute to the Plan and only an Employee employed by an Employer
described in Section 1.02 is eligible to participate in this Plan. For Plan
allocation purposes, "Compensation" does not include Compensation received from
a related employer that is not participating in this Plan.
1.6
<PAGE> 11
1.28 LEASED EMPLOYEES. The Plan treats a Leased Employee as an Employee of
the Employer. A Leased Employee is an individual (who otherwise is not an
Employee of the Employer) who, pursuant to a leasing agreement between the
Employer and any other person, has performed services for the Employer (or for
the Employer and any persons related to the Employer within the meaning of Code
Section 144(a)(3)) on a substantially full time basis for at least one year and
who performs services historically performed by employees in the Employer's
business field. If a Leased Employee is treated as an Employee by reason of this
Section 1.28 of the Plan, "Compensation" includes Compensation from the leasing
organization which is attributable to services performed for the Employer.
(A) SAFE HARBOR PLAN EXCEPTION. The Plan does not treat a Leased Employee as an
Employee if the leasing organization covers the employee in a safe harbor plan
and, prior to application of this safe harbor plan exception, 20% or less of the
Employer's Employees (other than Highly Compensated Employees) are Leased
Employees. A safe harbor plan is a money purchase pension plan providing
immediate participation, full and immediate vesting, and a nonintegrated
contribution formula equal to at least 10% of the employee's compensation
without regard to employment by the leasing organization on a specified date.
The safe harbor plan must determine the 10% contribution on the basis of
compensation as defined in Code Section 415(c)(3) plus elective contributions
(as defined in Section 1.10).
(B) OTHER REQUIREMENTS. The Administrative Committee must apply this Section
1.28 in a manner consistent with Code Sections 414(n) and 414(o) and the
regulations issued under those Code sections.
1.29 DETERMINATION OF TOP HEAVY STATUS. If this Plan is the only qualified
plan maintained by the Employer, the Plan is top heavy for a Plan Year if the
top heavy ratio as of the Determination Date exceeds 60%. The Top Heavy Ratio is
a fraction, the numerator of which is the sum of the present value of Accrued
Benefits of all Key Employees as of the Determination Date and the denominator
of which is a similar sum determined for all Employees. The Administrative
Committee must include in the top heavy ratio, as part of the present value of
Accrued Benefits, any contribution not made as of the Determination Date but
includible under Code Section 416 and the applicable Treasury regulations, and
distributions made within the Determination Period. The Administrative Committee
must calculate the top heavy ratio by disregarding the Accrued Benefit (and
distributions, if any, of the Accrued Benefit) of any Non-Key Employee who was
formerly a Key Employee, and by disregarding the Accrued Benefit (including
distributions, if any, of the Accrued Benefit) of an individual who has not
received credit for at least one Hour of Service with the Employer during the
Determination Period. The Administrative Committee must calculate the top heavy
ratio, including the extent to which it must take into account distributions,
rollovers and transfers, in accordance with Code Section 416 and the regulations
under that Code section.
If the Employer maintains other qualified plans (including a simplified
employee pension plan), or maintained another such plan which now is terminated,
this Plan is top heavy only if it is part of the Required Aggregation Group, and
the top heavy ratio for the Required Aggregation Group and for the Permissive
Aggregation Group, if any, each exceeds 60%. The Administrative Committee will
calculate the top heavy ratio in the same manner as required by the first
paragraph of this Section 1.29, taking into account all plans within the
Aggregation Group. To the extent the Administrative Committee must take into
account distributions to a Participant, the Administrative Committee must
include distributions from a terminated plan which would have been part of the
Required Aggregation Group if it were in existence on the Determination Date.
The Administrative Committee will calculate the present value of accrued
benefits under defined benefit plans or simplified employee pension plans
included within the group in accordance with the terms of those plans, Code
Section 416 and the regulations under that Code section. If a Participant in a
defined benefit plan is a Non-Key Employee, the Administrative Committee will
determine his accrued benefit under the accrual method, if any, which is
applicable uniformly to all defined benefit plans maintained by the Employer or,
if there is no uniform method, in accordance with the slowest accrual rate
permitted
1.7
<PAGE> 12
under the fractional rule accrual method described in Code Section 411(b)(1)(C).
To calculate the present value of benefits from a defined benefit plan, the
Administrative Committee will use the actuarial assumptions (interest and
mortality only) prescribed by the defined benefit plan(s) to value benefits for
top heavy purposes. If an aggregated plan does not have a valuation date
coinciding with the Determination Date, the Administrative Committee must value
the Accrued Benefits in the aggregated plan as of the most recent valuation date
falling within the twelve-month period ending on the Determination Date, except
as Code Section 416 and applicable Treasury regulations require for the first
and second plan year of a defined benefit plan. The Administrative Committee
will calculate the top heavy ratio with reference to the Determination Dates
that fall within the same calendar year.
Definitions. For purposes of applying the provisions of this Section 1.29:
(a) "Key Employee" means, as of any Determination Date, any Employee or
former Employee (or Beneficiary of such Employee) who, for any Plan Year
in the Determination Period: (i) has Compensation in excess of 50% of the
dollar amount prescribed in Code Section 415(b)(1)(A) (relating to defined
benefit plans) and is an officer of the Employer; (ii) has Compensation in
excess of the dollar amount prescribed in Code Section 415(c)(1)(A)
(relating to defined contribution plans) and is one of the Employees
owning the ten largest interests in the Employer; (iii) is a more than 5%
owner of the Employer; or (iv) is a more than 1% owner of the Employer and
has Compensation of more than $150,000. The constructive ownership rules
of Code Section 318 (or the principles of that section, in the case of an
unincorporated Employer,) will apply to determine ownership in the
Employer. The number of officers taken into account under clause (i) will
not exceed the greater of 3 or 10% of the total number (after application
of the Code Section 414(q) exclusions) of Employees, but no more than 50
officers. The Administrative Committee will make the determination of who
is a Key Employee in accordance with Code Section 416(i)(1) and the
regulations under that Code section.
(b) "Non-Key Employee" is an employee who does not meet the definition of
Key Employee.
(c) "Compensation" means Compensation as determined under Section 1.07 for
purposes of identifying Highly Compensated Employees.
(d) "Required Aggregation Group" means: (1) each qualified plan of the
Employer in which at least one Key Employee participates at any time
during the Determination Period; and (2) any other qualified plan of the
Employer which enables a plan described in clause (1) to meet the
requirements of Code Section 401(a)(4) or of Code Section 410.
(e) "Permissive Aggregation Group" is the Required Aggregation Group plus
any other qualified plans maintained by the Employer, but only if such
group would satisfy in the aggregate the requirements of Code Section
401(a)(4) and of Code Section 410. The Administrative Committee will
determine the Permissive Aggregation Group.
(f) "Employer" means the Employer that adopts this Plan and any related
employers described in Section 1.27.
(g) "Determination Date" for any Plan Year is the Accounting Date of the
preceding Plan Year or, in the case of the first Plan Year of the Plan,
the Accounting Date of that Plan Year. The "Determination Period" is the 5
year period ending on the Determination Date.
* * * * * * * * * * * * * * *
1.8
<PAGE> 13
ARTICLE II - EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY. Each Employee becomes a Participant in the Plan on the
Plan Entry Date (if employed on that date) immediately following the later of
the date on which he completes one Year of Service or attains age 21. "Plan
Entry Date" means the Effective Date and January 1st and July 1st of each year;
however, the "Plan Entry Date" for the special eligibility rule for Code Section
401(k) shall be each January 1st. Each Employee who was a Participant in the
Plan on the day before the Effective Date of this restated Plan will not
continue as a Participant unless he has completed the conditions of this Section
2.01.
SPECIAL ELIGIBILITY RULE FOR CODE SECTION 401(k) ARRANGEMENT. In lieu of
the eligibility requirements in the preceding paragraph, each Employee becomes a
participant in the Code Section 401(k) arrangement on the Plan Entry Date
described above (if employed on that date) immediately following the later of
his Employment Commencement Date or the date he attains age 18. This special
eligibility rule will also apply to an Employee's participation in matching
contributions.
2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an Employee's
participation in the Plan under Section 2.01, the Plan takes into account all of
his Years of Service with the Employer, except as provided in Section 2.03.
"Year of Service" means an eligibility computation period during which the
Employee completes not less than 1000 Hours of Service. The initial eligibility
computation period is the first 12 consecutive month period measured from the
Employment Commencement Date. The Plan measures subsequent periods by reference
to the Plan Year, beginning with the Plan Year which includes the first
anniversary of the Employee's Employment Commencement Date. "Employment
Commencement Date" means the date on which the Employee first performs an Hour
of Service for the Employer.
2.03 BREAK IN SERVICE - PARTICIPATION. For purposes of participation in
the Plan, the Plan does not apply any Break in Service rule.
2.04 PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose employment with
the Employer terminates will re-enter the Plan as a Participant on the date of
his re-employment. An Employee who satisfies the Plan's eligibility conditions
but who terminates employment with the Employer prior to becoming a Participant
will become a Participant on the later of the Plan Entry Date on which he would
have entered the Plan had he not terminated employment or the date of his
re-employment. Any Employee who terminates employment prior to satisfying the
Plan's eligibility conditions becomes a Participant in accordance with the
provisions of Section 2.01.
2.1
<PAGE> 14
2.05 ELECTION NOT TO PARTICIPATE. An Employee eligible to participate, or
any present Participant, may elect not to participate in the Plan. For an
election to be effective for a particular Plan Year, the Employee or Participant
must file the election in writing with the Plan Administrator not later than the
end of the plan year in which the election is effective.. The Employer may not
make a contribution under the Plan for the Employee or for the Participant for
the Plan Year for which the election is effective, nor for any succeeding Plan
Year, unless the Employee or Participant re-elects to participate in the Plan.
After an Employee's or Participant's election not to participate has been
effective for at least one Plan Years, the Employee or Participant may re-elect
to participate in the Plan for any Plan Year and subsequent Plan Years. An
Employee or Participant may re-elect to participate in the Plan by filing his
election in writing with the Plan Administrator not later than the end of the
plan year in which the election is effective.. An Employee or Participant who
re-elects to participate may again elect not to participate after the first day
of the Plan Year following the Plan Year in which the re-election is first
effective. If an Employee is a Self-Employed Individual, the Employee's election
(except as permitted by Treasury regulations without creating a Code Section
401(k) arrangement with respect to that Self-Employed Individual) must be
effective no later than the date the Employee first would become a Participant
in the Plan and the election is irrevocable. The Plan Administrator must furnish
an Employee or a Participant any form required for purposes of an election under
this Section 2.05. An election timely filed is effective for the entire Plan
Year. A Participant's or Employee's election not to participate includes his
right to enter into a salary reduction agreement, unless the Participant or
Employee limits the effect of the election to the non-401(k) portions of the
Plan.
A Participant who elects not to participate may not receive a distribution
of his Accrued Benefit attributable either to Employer or to Participant
contributions except as provided under Article IV or under Article VI. However,
for each Plan Year for which a Participant's election not to participate is
effective, the Participant's Account, if any, continues to share in Trust Fund
allocations under Article IX. Furthermore, the Employee or the Participant
receives vesting credit under Article V for each included Year of Service during
the period the election not to participate is effective.
* * * * * * * * * * * * * * *
2.2
<PAGE> 15
ARTICLE III - EMPLOYER CONTRIBUTIONS AND FORFEITURES
PART 1. AMOUNT OF EMPLOYER CONTRIBUTIONS AND PLAN ALLOCATIONS: SECTIONS 3.01
THROUGH 3.06
3.01 AMOUNT.
(A) CONTRIBUTION FORMULA. For each Plan Year, the Employer will contribute to
the Trust the following amounts:
DEFERRAL CONTRIBUTIONS. The amount by which the Participants have elected
to reduce their Compensation for the Plan Year under their salary reduction
agreements on file with the Administrative Committee.
MATCHING CONTRIBUTIONS. An amount equal to a percentage the Employer may
from time to time deem advisable of the Participant's eligible contributions.
The Employer will determine the amount of its matching contributions by
disregarding Participants not entitled to an allocation of matching
contributions.
QUALIFIED NONELECTIVE CONTRIBUTIONS. The amount the Employer, in its sole
discretion, designates as qualified nonelective contributions.
NONELECTIVE CONTRIBUTIONS. For each Plan Year, the Employer will
contribute to the Trust the additional amount which the Employer may from time
to time deem advisable. Although the Employer may contribute to this Plan
irrespective of whether it has net profits, the Employer intends the Plan to be
a profit sharing plan for all purposes of the Code.
ELIGIBLE CONTRIBUTIONS. Under the matching contribution formula, a
Participant's "eligible contributions" are the deferral contributions allocated
to the Participant for the Plan Year not in excess of 4% of the Participant's
Compensation for the Plan Year. Eligible contributions do not include deferral
contributions that are excess deferrals under Section 14.03. For this purpose:
(a) excess deferrals relate first to deferral contributions for the Plan Year
not otherwise eligible for a matching contribution; and (2) if the Plan Year is
not a calendar year, the excess deferrals for a Plan Year are the last deferrals
made for a calendar year.
(B) RETURN OF CONTRIBUTIONS.The Employer contributes to this Plan on the
condition its contribution is not due to a mistake of fact and the Revenue
Service will not disallow the deduction for its contribution. The Trustee, upon
written request from the Employer, must return to the Employer the amount of the
Employer's contribution made by the Employer by mistake of fact or the amount of
the Employer's contribution disallowed as a deduction under Code Section 404.
The Trustee will not return any portion of the Employer's contribution under the
provisions of this paragraph more than one year after:
(a) The Employer made the contribution by mistake of fact; or
(b) The disallowance of the contribution as a deduction, and then, only
to the extent of the disallowance.
The Trustee will not increase the amount of the Employer contribution
returnable under this Section 3.01 for any earnings attributable to the
contribution, but the Trustee will decrease the Employer contribution returnable
for any losses attributable to it. The Trustee may require the Employer to
furnish it whatever evidence the Trustee deems necessary to enable the Trustee
to confirm the amount the Employer has requested be returned is properly
returnable under ERISA.
3.1
<PAGE> 16
3.02 DETERMINATION OF CONTRIBUTION. The Employer, from its records,
determines the amount of any contributions to be made by it to the Trust under
the terms of the Plan.
3.03 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its
contribution for each Plan Year in one or more installments without interest.
The Employer must make its contribution to the Plan within the time prescribed
by the Code or applicable Treasury regulations. Subject to the consent of the
Trustee, the Employer may make its contribution in property rather than in cash,
provided the contribution of property is not a prohibited transaction under the
Code or under ERISA.
3.04 CONTRIBUTION ALLOCATION.
(A) METHOD OF ALLOCATION. To make allocations under the Plan, the Administrative
Committee must establish the following accounts for each Participant: Deferral
Contributions Account, Regular Matching Contributions Account, Qualified
Nonelective Contributions Account, Employer Contributions
Account.
DEFERRAL CONTRIBUTIONS. The Administrative Committee will allocate to each
Participant's Deferral Contributions Account the deferral contributions the
Employer makes to the Trust on behalf of the Participant. The Administrative
Committee will make this allocation as of the last day of each Plan Year.
MATCHING CONTRIBUTIONS. The Administrative Committee will allocate
matching contributions as of the last day of each Plan Year. The Administrative
Committee will allocate the matching contributions to the Regular Matching
Contributions Account of each Participant who satisfies the accrual requirements
for matching contributions specified in Section 3.06. The allocation of matching
contributions to a Participant's Account is in the same proportion that each
Participant's eligible contributions (as defined in Section 3.01) bears to the
total eligible contributions of all Participants.
QUALIFIED NONELECTIVE CONTRIBUTIONS. If the Employer, at the time of
contribution, designates a contribution to be a qualified nonelective
contribution for the Plan Year, the Administrative Committee will allocate that
qualified nonelective contribution to the Qualified Nonelective Contributions
Account of each Participant eligible for an allocation of qualified nonelective
contributions. The Administrative Committee will make the allocation to each
eligible Participant's Account in the same ratio that the Participant's
Compensation for the Plan Year bears to the total Compensation of all eligible
Participants for the Plan Year. For purposes of allocating qualified nonelective
contributions, the term "eligible Participant" means any Participant who is a
Nonhighly Compensated Employee and who satisfies the conditions of Section 3.06.
NONELECTIVE CONTRIBUTIONS. Subject to any restoration required under
Section 5.04, the Administrative Committee will allocate and credit each annual
Employer contribution (and Participant forfeitures, if any) to the Account of
each Participant who satisfies the conditions of Section 3.06.The Administrative
Committee will make this allocation in the same ratio that each Participant's
Compensation for the Plan Year bears to the total Compensation of all
Participants for the Plan Year.
(B) TOP HEAVY MINIMUM ALLOCATION.
(1) MINIMUM ALLOCATION. If the Plan is top heavy in any Plan Year:
(a) Each Non-Key Employee who is a Participant and is employed by
the Employer on the last day of the Plan Year will receive a top
heavy minimum allocation for that Plan Year, irrespective of whether
he satisfies the Hours of Service condition under
3.2
<PAGE> 17
Section 3.06; and
(b) The top heavy minimum allocation is the lesser of 3% of the
Non-Key Employee's Compensation for the Plan Year or the highest
contribution rate for the Plan Year made on behalf of any Key
Employee. However, if a defined benefit plan maintained by the
Employer which benefits a Key Employee depends on this Plan to
satisfy the antidiscrimination rules of Code Section 401(a)(4) or
the coverage rules of Code Section 410 (or another plan benefiting
the Key Employee so depends on such defined benefit plan), the top
heavy minimum allocation is 3% of the Non-Key Employee's
Compensation regardless of the contribution rate for the Key
Employees.
(2) SPECIAL DEFINITIONS. For purposes of this Section 3.04(B), the term
"Participant" includes any Employee otherwise eligible to participate in
the Plan but who is not a Participant because of his failure to make
elective deferrals under a Code Section 401(k) arrangement or because of
his failure to make mandatory employee contributions. For purposes of
clause (b), "Compensation" means Compensation as defined in Section 1.10,
except: (i) Compensation does not include elective contributions; (ii) any
exclusions from Compensation (other than the exclusion of elective
contributions and the exclusions described in paragraphs (a), (b), (c) and
(d) of Section 1.10) do not apply; and (iii) any modification to the
definition of Compensation in Section 3.06 does not apply.
(3) DETERMINING CONTRIBUTION RATES. For purposes of this Section 3.04(B),
a Participant's contribution rate is the sum of Employer contributions
(not including Employer contributions to Social Security) and forfeitures
allocated to the Participant's Account for the Plan Year divided by his
Compensation for the entire Plan Year. However, for purposes of satisfying
a Participant's top heavy minimum allocation in Plan Years beginning after
December 31, 1988, a Participant's contribution rate does not include any
elective contributions under a Code Section 401(k) arrangement nor any
Employer matching contributions necessary to satisfy nondiscrimination
requirements of Code Section 401(k) or of Code Section 401(m). To
determine a Participant's contribution rate, the Administrative Committee
must treat all qualified top heavy defined contribution plans maintained
by the Employer (or by any related Employers described in Section 1.27) as
a single plan.
(4) NO ALLOCATIONS. If, for a Plan Year, there are no allocations of
Employer contributions or forfeitures for any Key Employee, the Plan does
not require any top heavy minimum allocation for the Plan Year, unless a
top heavy minimum allocation applies because of the maintenance by the
Employer of more than one plan.
(5) METHOD OF COMPLIANCE. The Plan will satisfy the top heavy minimum
allocation in accordance with this Section 3.04(B)(5). The Administrative
Committee first will allocate the Employer contributions (and Participant
forfeitures, if any) for the Plan Year in accordance with the allocation
formula under Section 3.04(A). The Employer then will contribute an
additional amount for the Account of any Participant entitled under this
Section 3.04(B) to a top heavy minimum allocation and whose contribution
rate for the Plan Year, under this Plan and any other plan aggregated
under paragraph (3), is less than the top heavy minimum allocation. The
additional amount is the amount necessary to increase the Participant's
contribution rate to the top heavy minimum allocation. The Administrative
Committee will allocate the additional contribution to the Account of the
Participant on whose behalf the Employer makes the contribution.
3.3
<PAGE> 18
3.05 FORFEITURE ALLOCATION. The amount of a Participant's Accrued Benefit
forfeited under the Plan is a Participant Forfeiture. Subject to any restoration
allocation required under Sections 5.04 or 9.14 and the special forfeiture
allocation for certain excess aggregate contributions described in Section
14.05, the Administrative Committee will allocate a Participant forfeiture in
accordance with Section 3.04, as an Employer nonelective contribution for the
Plan Year in which the forfeiture occurs, as if the Participant forfeiture were
an additional Employer nonelective contribution for that Plan Year. The
Administrative Committee will continue to hold the undistributed, non-vested
portion of a terminated Participant's Accrued Benefit in his Account solely for
his benefit until a forfeiture occurs at the time specified in Section 5.09 or
if applicable, until the time specified in Section 9.14. Except as provided
under Section 5.04, a Participant will not share in the allocation of a
forfeiture of any portion of his Accrued Benefit.
3.06 ACCRUAL OF BENEFIT. The Administrative Committee will determine the
accrual of benefit (Employer contributions and Participant forfeitures) on the
basis of the Plan Year.
(A) COMPENSATION TAKEN INTO ACCOUNT. In allocating an Employer qualified
nonelective or nonelective contribution to a Participant's Account, the
Administrative Committee, except for purposes of determining the top heavy
minimum contribution under Section 3.04(B), will take into account only the
Compensation determined for the portion of the Plan Year in which the Employee
actually is a Participant.
(B) HOURS OF SERVICE REQUIREMENT. Subject to the top heavy minimum allocation
requirement of Section 3.04(B), the Administrative Committee will not allocate
any portion of an Employer contribution for a Plan Year to any Participant's
Account if the Participant does not complete a minimum of 1000 Hours of Service
during the Plan Year, unless the Participant terminates employment during the
Plan Year because of death or disability or because of the attainment of Normal
Retirement Age in the current Plan Year or in a prior Plan Year. This Hours of
Service requirement does not apply to an allocation of matching contributions or
deferral contributions.
(C) EMPLOYMENT REQUIREMENT. A Participant who, during a particular Plan Year,
completes the Hours of Service requirement under this Section 3.06(B) will not
share in the allocation of Employer contributions and Participant forfeitures,
if any, for that Plan Year unless he is employed by the Employer on the
Accounting Date of that Plan Year. This employment requirement does not apply if
the Participant terminates employment during the Plan Year because of death or
disability or because of the attainment of Normal Retirement Age in the current
Plan Year or in a prior Plan Year. This employment requirement does not apply to
an allocation of deferral contributions.
(D) SUSPENSION OF ACCRUAL REQUIREMENTS. The Plan suspends the accrual
requirements under Sections 3.06(B) and (C) if, for any Plan Year beginning
after December 31, 1989, the Plan fails to satisfy the Participation Test or the
Coverage Test. A Plan satisfies the Participation Test if, on each day of the
Plan Year, the number of Employees who benefit under the Plan is at least equal
to the lesser of 50 or 40% of the total number of Includible Employees as of
such day. A Plan satisfies the Coverage Test if, on the last day of each quarter
of the Plan Year, the number of Nonhighly Compensated Employees who benefit
under the Plan is at least equal to 70% of the total number of Includible
Nonhighly Compensated Employees as of such day. "Includible" Employees are all
Employees other than: (1) those Employees excluded from participating in the
Plan for the entire Plan Year by reason of the collective bargaining unit
exclusion or the nonresident alien exclusion described in the Code or by reason
of the age and service requirements of Article II; and (2) any Employee who
incurs a Separation from Service during the Plan Year and fails to complete at
least 501 Hours of Service for the Plan Year. A "Nonhighly Compensated Employee"
is an Employee who is not a Highly Compensated Employee and who is not a family
member aggregated with a Highly Compensated Employee pursuant to Section 1.07 of
the Plan. For purposes of the Participation Test and the Coverage Test, an
Employee is benefiting under the Plan on a particular date if, under Section
3.04, he is entitled to an allocation for the Plan Year. For any portion of the
Plan subject to the discrimination test described in Section 14.05, an Employee
is benefiting if he is an Eligible Employee for purposes of Section 14.05 and
the Coverage Test applies separately to that portion of the Plan.
3.4
<PAGE> 19
If this Section 3.06((D)) applies for a Plan Year, the Administrative
Committee will suspend the accrual requirements for the Includible Employees who
are Participants, beginning first with the Includible Employee(s) employed with
the Employer on the last day of the Plan Year, then the Includible Employee(s)
who have the latest Separation from Service during the Plan Year, and continuing
to suspend in descending order the accrual requirements for each Includible
Employee who incurred an earlier Separation from Service, from the latest to the
earliest Separation from Service date, until the Plan satisfies both the
Participation Test and the Coverage Test for the Plan Year. If two or more
Includible Employees have a Separation from Service on the same day, the
Administrative Committee will suspend the accrual requirements for all such
Includible Employees, irrespective of whether the plan can satisfy the
Participation Test and the Coverage Test by accruing benefits for fewer than all
such Includible Employees. If the Plan suspends the accrual requirements for an
Includible Employee, that Employee will share in the allocation of Employer
contributions and Participant forfeitures, if any, without regard to the number
of Hours of Service he has earned for the Plan Year and without regard to
whether he is employed by the Employer on the last day of the Plan Year.
PART 2. LIMITATIONS ON ALLOCATIONS: SECTIONS 3.07 AND 3.08
3.07 LIMITATIONS ON ALLOCATIONS TO PARTICIPANTS' ACCOUNTS. The amount of
Annual Additions which the Administrative Committee may allocate under this Plan
on a Participant's behalf for a Limitation Year may not exceed the Maximum
Permissible Amount. If the amount the Employer otherwise would contribute to the
Participant's Account would cause the Annual Additions for the Limitation Year
to exceed the Maximum Permissible Amount, the Employer will reduce the amount of
its contribution so the Annual Additions for the Limitation Year will equal the
Maximum Permissible Amount. If an allocation of Employer contributions, pursuant
to Section 3.04, would result in an Excess Amount (other than an Excess Amount
resulting from the circumstances described in Section 3.07(B)) to the
Participant's Account, the Administrative Committee will reallocate the Excess
Amount to the remaining Participants who are eligible for an allocation of
Employer contributions for the Plan Year in which the Limitation Year ends. The
Administrative Committee will make this reallocation on the basis of the
allocation method under the Plan as if the Participant whose Account otherwise
would receive the Excess Amount is not eligible for an allocation of Employer
contributions.
(A) ESTIMATION OF COMPENSATION. Prior to the determination of the Participant's
actual Compensation for a Limitation Year, the Administrative Committee may
determine the Maximum Permissible Amount on the basis of the Participant's
estimated annual Compensation for such Limitation Year. The Administrative
Committee must make this determination on a reasonable and uniform basis for all
Participants similarly situated. The Administrative Committee must reduce any
Employer contributions (including any allocation of forfeitures) based on
estimated annual Compensation by any Excess Amounts carried over from prior
years. As soon as is administratively feasible after the end of the Limitation
Year, the Administrative Committee will determine the Maximum Permissible Amount
for such Limitation Year on the basis of the Participant's actual Compensation
for such Limitation Year.
(B) DISPOSITION OF EXCESS AMOUNT. If, pursuant to Section 3.07(A), or because of
the allocation of forfeitures, there is an Excess Amount with respect to a
Participant for a Limitation Year, the Administrative Committee will dispose of
such Excess Amount as follows:
(a) The Administrative Committee will return any nondeductible voluntary
Employee contributions to the Participant to the extent the return would
reduce the Excess Amount.
3.5
<PAGE> 20
(b) If, after the application of paragraph (a), an Excess Amount still
exists, and the Plan covers the Participant at the end of the Limitation
Year, then the Administrative Committee will use the Excess Amount(s) to
reduce future Employer contributions (including any allocation of
forfeitures) under the Plan for the next Limitation Year and for each
succeeding Limitation Year, as is necessary, for the Participant. The
Participant may elect to limit his Compensation for allocation purposes to
the extent necessary to reduce his allocation for the Limitation Year to
the Maximum Permissible Amount and eliminate the Excess Amount.
(c) If, after the application of paragraph (a), an Excess Amount still
exists, and the Plan does not cover the Participant at the end of the
Limitation Year, then the Administrative Committee will hold the Excess
Amount unallocated in a suspense account. The Administrative Committee
will apply the suspense account to reduce Employer Contributions
(including allocation of forfeitures) for all remaining Participants in
the next Limitation Year, and in each succeeding Limitation Year if
necessary. Neither the Employer nor any Employee may contribute to the
Plan for any Limitation Year in which the Plan is unable to allocate fully
a suspense account maintained pursuant to this paragraph (c).
(d) The Administrative Committee will not distribute any Excess Amount(s)
to Participants or to former Participants.
(C) DEFINED BENEFIT PLAN LIMITATION. If the Participant presently participates,
or has ever participated under a defined benefit plan maintained by the
Employer, then the sum of the defined benefit plan fraction and the defined
contribution plan fraction for the Participant for that Limitation Year must not
exceed 1.0. To the extent necessary to satisfy this limitation, the Employer
will reduce its contribution or allocation on behalf of the Participant to the
defined contribution plan under which the Participant participates and then, if
necessary, the Participant's projected annual benefit under the defined benefit
plan under which the Participant participates.
3.08 DEFINITIONS - ARTICLE III. For purposes of Article III, the following
terms mean:
(a) "Annual Addition" - The sum of the following amounts allocated on
behalf of a Participant for a Limitation Year, of (i) all Employer
contributions; (ii) all forfeitures; and (iii) all Employee contributions.
Except to the extent provided in Treasury regulations, Annual Additions
include excess contributions described in Code Section 401(k), excess
aggregate contributions described in Code Section 401(m) and excess
deferrals described in Code Section 402(g), irrespective of whether the
plan distributes or forfeits such excess amounts. Annual Additions also
include Excess Amounts reapplied to reduce Employer contributions under
Section 3.07. Amounts allocated after March 31, 1984, to an individual
medical account (as defined in Code Section 415(l)(2)) included as part of
a defined benefit plan maintained by the Employer are Annual Additions.
Furthermore, Annual Additions include contributions paid or accrued after
December 31, 1985, for taxable years ending after December 31, 1985,
attributable to post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Code Section 419A(d)(3)) under a
welfare benefit fund (as defined in Code Section 419(e)) maintained by the
Employer, but only for purposes of the dollar limitation applicable to the
Maximum Permissible Amount.
(b) "Compensation" - For purposes of applying the limitations of Part 2 of
this Article III, "Compensation" means Compensation as defined in Section
1.10, except Compensation does not include elective contributions and any
exclusion from Compensation (other than the exclusion of elective
contributions and the exclusions described in paragraphs (a), (b), (c) and
(d) of Section 1.10) does not apply.
(c) "Maximum Permissible Amount" - The lesser of (i) $30,000 (or, if
greater, one-fourth of the defined benefit dollar limitation under Code
Section 415(b)(1)(A)), or (ii) 25% of the
3.6
<PAGE> 21
Participant's Compensation for the Limitation Year. If there is a short
Limitation Year because of a change in Limitation Year, the Administrative
Committee will multiply the $30,000 (or adjusted) limitation by the
following fraction:
Number of months in the short Limitation Year
12
(d) "Employer" - The Employer that adopts this Plan and any related
employers described in Section 1.27. Solely for purposes of applying the
limitations of Part 2 of this Article III, the Administrative Committee
will determine related employers described in Section 1.27 by modifying
Code Section 414(b) and (c) in accordance with Code Section 415(h).
(e) "Excess Amount" - The excess of the Participant's Annual Additions for
the Limitation Year over the Maximum Permissible Amount.
(f) "Limitation Year" - The Plan Year. If the Employer amends the
Limitation Year to a different 12 consecutive month period, the new
Limitation Year must begin on a date within the Limitation Year for which
the Employer makes the amendment, creating a short Limitation Year.
(g) "Defined contribution plan" - A retirement plan which provides for an
individual account for each participant and for benefits based solely on
the amount contributed to the participant's account, and any income,
expenses, gains and losses, and any forfeitures of accounts of other
participants which the plan may allocate to such participant's account.
The Administrative Committee must treat all defined contribution plans
(whether or not terminated) maintained by the Employer as a single plan.
Solely for purposes of the limitations of Part 2 of this Article III, the
Administrative Committee will treat employee contributions made to a
defined benefit plan maintained by the Employer as a separate defined
contribution plan. The Administrative Committee also will treat as a
defined contribution plan an individual medical account (as defined in
Code Section 415(l)(2)) included as part of a defined benefit plan
maintained by the Employer and, for taxable years ending after December
31, 1985, a welfare benefit fund under Code Section 419(e) maintained by
the Employer to the extent there are post-retirement medical benefits
allocated to the separate account of a key employee (as defined in Code
Section 419A(d)(3)).
(h) "Defined benefit plan" - A retirement plan which does not provide for
individual accounts for Employer contributions. The Administrative
Committee must treat all defined benefit plans (whether or not terminated)
maintained by the Employer as a single plan.
(i) "Defined benefit plan fraction" -
Projected annual benefit of the Participant under the defined benefit plan(s)
-----------------------------------------------------------------------------
The lesser of (i) 125% (subject to the "100% limitation" in paragraph (l))
of the dollar limitation in effect under Code Section 415(b)(1)(A) for the
Limitation Year, or (ii) 140% of the Participant's average
Compensation for his high three (3) consecutive Years of Service
3.7
<PAGE> 22
To determine the denominator of this fraction, the Administrative
Committee will make any adjustment required under Code Section 415(b) and
will determine a Year of Service as a Plan Year in which the Employee
completed at least 1,000 Hours of Service. The "projected annual benefit"
is the annual retirement benefit (adjusted to an actuarially equivalent
straight life annuity if the plan expresses such benefit in a form other
than a straight life annuity or qualified joint and survivor annuity) of
the Participant under the terms of the defined benefit plan on the
assumptions he continues employment until his normal retirement age (or
current age, if later) as stated in the defined benefit plan, his
compensation continues at the same rate as in effect in the Limitation
Year under consideration until the date of his normal retirement age and
all other relevant factors used to determine benefits under the defined
benefit plan remain constant as of the current Limitation Year for all
future Limitation Years.
CURRENT ACCRUED BENEFIT. If the Participant accrued benefits in one
or more defined benefit plans maintained by the Employer which were in
existence on May 6, 1986, the dollar limitation used in the denominator of
this fraction will not be less than the Participant's Current Accrued
Benefit. A Participant's Current Accrued Benefit is the sum of the annual
benefits under such defined benefit plans which the Participant had
accrued as of the end of the 1986 Limitation Year (the last Limitation
Year beginning before January 1, 1987), determined without regard to any
change in the terms or conditions of the Plan made after May 5, 1986, and
without regard to any cost of living adjustment occurring after May 5,
1986. This Current Accrued Benefit rule applies only if the defined
benefit plans individually and in the aggregate satisfied the requirements
of Code Section 415 as in effect at the end of the 1986 Limitation Year.
(j) "Defined contribution plan fraction" -
The sum, as of the close of the Limitation Year, of the Annual Additions
to the Participant's Account under the defined contribution plan(s)
------------------------------------------------------------------------
The sum of the lesser of the following amounts determined
for the Limitation Year and for each prior Year of Service with the Employer:
(i) 125% (subject to the "100% limitation" in paragraph (l)) of the dollar
limitation in effect under
Code Section 415(c)(1)(A) for the Limitation Year (determined without regard
to the special dollar limitations for employee stock ownership plans), or
(ii) 35% of the Participant's Compensation for the Limitation Year
For purposes of determining the defined contribution plan fraction,
the Administrative Committee will not recompute Annual Additions in
Limitation Years beginning prior to January 1, 1987, to treat all Employee
contributions as Annual Additions. If the Plan satisfied Code Section 415
for Limitation Years beginning prior to January 1, 1987, the
Administrative Committee will redetermine the defined contribution plan
fraction and the defined benefit plan fraction as of the end of the 1986
Limitation Year, in accordance with this Section 3.19. If the sum of the
redetermined fractions exceeds 1.0, the Administrative Committee will
subtract permanently from the numerator of the defined contribution plan
fraction an amount equal to the product of (1) the excess of the sum of
the fractions over 1.0, times (2) the denominator of the defined
contribution plan fraction. In making the adjustment, the Administrative
Committee must disregard any accrued benefit under the defined benefit
plan which is in excess of the Current Accrued Benefit. This Plan
continues any transitional rules applicable to the determination of the
defined contribution plan fraction under the Employer's Plan as of the end
of the 1986 Limitation Year.
(k) "100% limitation." If the 100% limitation applies, the Administrative
Committee must determine the denominator of the defined benefit plan
fraction and the denominator of the defined contribution plan fraction by
substituting 100% for 125%. The 100% limitation
3.8
<PAGE> 23
applies only if: (i) the Plan's top heavy ratio exceeds 90%; or (ii) the
Plan's top heavy ratio is greater than 60%, and the Employer does not
provide extra minimum benefits which satisfy Code Section 416(h)(2).
* * * * * * * * * * * * * * *
3.9
<PAGE> 24
ARTICLE IV - PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT VOLUNTARY CONTRIBUTIONS. The Plan does not permit nor
require Participant voluntary contributions.
4.02 PARTICIPANT VOLUNTARY CONTRIBUTIONS - SPECIAL DISCRIMINATION
TEST. [Reserved]
4.03 PARTICIPANT ROLLOVER CONTRIBUTIONS. Any Participant, with the
Employer's written consent and after filing with the Trustee the form prescribed
by the Administrative Committee, may contribute cash or other property to the
Trust other than as a voluntary contribution if the contribution is a "rollover
contribution" which the Code permits an employee to transfer either directly or
indirectly from one qualified plan to another qualified plan. Before accepting a
rollover contribution, the Trustee may require an Employee to furnish
satisfactory evidence that the proposed transfer is in fact a "rollover
contribution" which the Code permits an employee to make to a qualified plan. A
rollover contribution is not an Annual Addition under Part 2 of Article III.
The Trustee will invest the rollover contribution in a segregated
investment Account for the Participant's sole benefit unless the Trustee, in its
sole discretion, agrees to invest the rollover contribution as part of the Trust
Fund. The Trustee will not have any investment responsibility with respect to a
Participant's segregated rollover Account. The Participant, however, from time
to time, may direct the Trustee in writing as to the investment of his
segregated rollover Account in property, or property interests, of any kind,
real, personal or mixed; provided however, the Participant may not direct the
Trustee to make loans to his Employer. A Participant's segregated rollover
Account alone will bear any extraordinary expenses resulting from investments
made at the direction of the Participant. As of the Accounting Date (or other
valuation date) for each Plan Year, the Administrative Committee will allocate
and credit the net income (or net loss) from a Participant's segregated rollover
Account and the increase or decrease in the fair market value of the assets of a
segregated rollover Account solely to that Account. The Trustee is not liable
nor responsible for any loss resulting to any Beneficiary, nor to any
Participant, by reason of any sale or investment made or other action taken
pursuant to and in accordance with the direction of the Participant. In all
other respects, the Trustee will hold, administer and distribute a rollover
contribution in the same manner as any Employer contribution made to the Trust.
An eligible Employee, prior to satisfying the Plan's eligibility
conditions, may make a rollover contribution to the Trust to the same extent and
in the same manner as a Participant. If an Employee makes a rollover
contribution to the Trust prior to satisfying the Plan's eligibility conditions,
the Administrative Committee and Trustee must treat the Employee as a
Participant for all purposes of the Plan except the Employee is not a
Participant for purposes of sharing in Employer contributions or Participant
forfeitures under the Plan until he actually becomes a Participant in the Plan.
If the Employee has a Separation from Service prior to becoming a Participant,
the Trustee will distribute his rollover contribution Account to him as if it
were an Employer contribution Account.
4.04 PARTICIPANT CONTRIBUTION - FORFEITABILITY. A Participant's Accrued
Benefit is, at all times, 100% Nonforfeitable to the extent the value of his
Accrued Benefit is derived from his Participant contributions described in this
Article IV.
4.1
<PAGE> 25
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. A Participant, by
giving prior written notice to the Trustee, may withdraw all or any part of the
value of his Accrued Benefit derived from his Participant contributions
described in this Article IV. A distribution of Participant contributions must
comply with the joint and survivor requirements described in Article VI, if
those requirements apply to the Participant. A Participant may not exercise his
right to withdraw the value of his Accrued Benefit derived from his Participant
contributions more than once during any Plan Year. The Trustee, in accordance
with the direction of the Administrative Committee, will distribute a
Participant's unwithdrawn Accrued Benefit attributable to his Participant
contributions in accordance with the provisions of Article VI applicable to the
distribution of the Participant's Nonforfeitable Accrued Benefit.
4.06 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT. The Administrative
Committee must maintain a separate Account(s) in the name of each Participant to
reflect the Participant's Accrued Benefit under the Plan derived from his
Participant contributions. A Participant's Accrued Benefit derived from his
Participant contributions as of any applicable date is the balance of his
separate Participant contribution Account(s).
* * * * * * * * * * * * * * *
4.2
<PAGE> 26
ARTICLE V - TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT AGE. A Participant's Normal Retirement Age is the
earlier of (1) or (2):
(1) The date the Participant has attained age 55 and has completed 5
Years of Service as defined in Section 5.06.
(2) 65 years of age. A Participant's Accrued Benefit derived from
Employer contributions is 100% Nonforfeitable upon and after his
attaining Normal Retirement Age (if employed by the Employer on or
after that date).
5.02 PARTICIPANT DISABILITY OR DEATH. If a Participant's employment with
the Employer terminates as a result of death or disability, the Participant's
Accrued Benefit derived from Employer contributions will be 100% Nonforfeitable.
5.03 VESTING SCHEDULE.
(1) DEFERRAL CONTRIBUTIONS ACCOUNT AND QUALIFIED NONELECTIVE CONTRIBUTIONS
ACCOUNT. A Participant has a 100% Nonforfeitable interest at all times in his
Deferral Contributions Account and Qualified Nonelective Contributions Account.
(2) MATCHING CONTRIBUTION ACCOUNT AND EMPLOYER CONTRIBUTIONS ACCOUNT.
Except as provided in Sections 5.01 and 5.02, for each Year of Service, a
Participant's Nonforfeitable percentage of his Matching Contribution Account and
Employer Contributions Account equals the percentage in the following
vesting schedule:
<TABLE>
<CAPTION>
Percent of
Years of Service Nonforfeitable Interest
---------------- -----------------------
<S> <C>
Less than 5......................... 0%
5 or more........................... 100%
</TABLE>
Effective for the first Plan Year for which the Plan is top heavy and
then in all subsequent Plan Years, the Administrative Committee will calculate a
Participant's Nonforfeitable Percentage under the following schedule:
TOP HEAVY VESTING SCHEDULE
<TABLE>
<CAPTION>
Percent of
Years of Service Nonforfeitable Interest
---------------- -----------------------
<S> <C>
Less than 3......................... 0%
3 or more........................... 100%
</TABLE>
The Administrative Committee will apply the top heavy schedule to Participants
who earn at least one Hour of Service after the top heavy schedule becomes
effective. A shift between vesting schedules under this Section 5.03 is an
amendment to the vesting schedule and the Administrative Committee must apply
the rules of Section 7.05 accordingly. A shift to a new vesting schedule under
this Section 5.03 is effective on the first day of the Plan Year for which the
top heavy status of the Plan changes.
5.1
<PAGE> 27
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/RESTORATION
OF FORFEITED ACCRUED BENEFIT. If, pursuant to Article VI, a partially-vested
Participant receives a cash-out distribution before he incurs a Forfeiture Break
in Service (as defined in Section 5.08), the cash-out distribution will result
in an immediate forfeiture of the nonvested portion of the Participant's Accrued
Benefit derived from Employer contributions. See Section 5.09. A
partially-vested Participant is a Participant whose Nonforfeitable Percentage
determined under Section 5.03 is less than 100%. A cash-out distribution is a
distribution of the entire present value of the Participant's Nonforfeitable
Accrued Benefit.
(A) RESTORATION AND CONDITIONS UPON RESTORATION. A partially-vested Participant
who is re-employed by the Employer after receiving a cash-out distribution of
the Nonforfeitable percentage of his Accrued Benefit may repay the Trustee the
amount of the cash-out distribution attributable to Employer contributions,
unless the Participant no longer has a right to restoration by reason of the
conditions of this Section 5.04(A). If a partially-vested Participant makes the
cash-out distribution repayment, the Administrative Committee, subject to the
conditions of this Section 5.04(A), must restore his Accrued Benefit
attributable to Employer contributions to the same dollar amount as the dollar
amount of his Accrued Benefit on the Accounting Date, or other valuation date,
immediately preceding the date of the cash-out distribution, unadjusted for any
gains or losses occurring subsequent to that Accounting Date, or other valuation
date. Restoration of the Participant's Accrued Benefit includes restoration of
all Code Section 411(d)(6) protected benefits with respect to that restored
Accrued Benefit, in accordance with applicable Treasury regulations. The
Administrative Committee will not restore a re-employed Participant's Accrued
Benefit under this paragraph if:
(1) 5 years have elapsed since the Participant's first re-employment date
with the Employer following the cash-out distribution; or
(2) The Participant incurred a Forfeiture Break in Service (as defined in
Section 5.08). This condition also applies if the Participant makes
repayment within the Plan Year in which he incurs the Forfeiture Break in
Service and that Forfeiture Break in Service would result in a complete
forfeiture of the amount the Administrative Committee otherwise would
restore.
(B) TIME AND METHOD OF RESTORATION. If neither of the two conditions preventing
restoration of the Participant's Accrued Benefit applies, the Administrative
Committee will restore the Participant's Accrued Benefit as of the Plan Year
Accounting Date coincident with or immediately following the repayment. To
restore the Participant's Accrued Benefit, the Administrative Committee, to the
extent necessary, will allocate to the Participant's Account:
(1) First, the amount, if any, of Participant forfeitures the
Administrative Committee would otherwise allocate under Section 3.05;
(2) Second, the amount, if any, of the Trust Fund net income or gain for
the Plan Year; and
(3) Third, the Employer contribution for the Plan Year to the extent made
under a discretionary formula.
5.2
<PAGE> 28
To the extent the amounts described in clauses (1), (2) and (3) are
insufficient to enable the Administrative Committee to make the required
restoration, the Employer must contribute, without regard to any requirement or
condition of Section 3.01, the additional amount necessary to enable the
Administrative Committee to make the required restoration. If, for a particular
Plan Year, the Administrative Committee must restore the Accrued Benefit of more
than one re-employed Participant, then the Administrative Committee will make
the restoration allocations to each such Participant's Account in the same
proportion that a Participant's restored amount for the Plan Year bears to the
restored amount for the Plan Year of all re-employed Participants. The
Administrative Committee will not take into account any allocation under this
Section 5.04 in applying the limitation on allocations under Part 2 of Article
III.
(C) 0% VESTED PARTICIPANT. The deemed cash-out rule applies to a 0% vested
Participant. A 0% vested Participant is a Participant whose Accrued Benefit
derived from Employer contributions is entirely forfeitable at the time of his
Separation from Service. Under the deemed cash-out rule,the Administrative
Committee will treat the 0% vested Participant as having received a cash-out
distribution on the date of the Participant's Separation from Service or, if the
Participant's Account is entitled to an allocation of Employer contributions for
the Plan Year in which he separates from Service, on the last day of that Plan
Year. For purposes of applying the restoration provisions of this Section 5.04,
the Administrative Committee will treat the 0% vested Participant as repaying
his cash-out "distribution" on the first date of his re-employment with the
Employer.
5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT. Until the Administrative
Committee restores the Participant's Accrued Benefit, as described in Section
5.04, the Trustee will invest the cash-out amount the Participant has repaid in
a segregated Account maintained solely for that Participant. The Trustee must
invest the amount in the Participant's segregated Account in Federally insured
interest bearing savings account(s) or time deposit(s) (or a combination of
both), or in other fixed income investments. Until commingled with the balance
of the Trust Fund on the date the Administrative Committee restores the
Participant's Accrued Benefit, the Participant's segregated Account remains a
part of the Trust, but it alone shares in any income it earns and it alone bears
any expense or loss it incurs. Unless the repayment qualifies as a rollover
contribution, the Administrative Committee will direct the Trustee to repay to
the Participant as soon as is administratively practicable the full amount of
the Participant's segregated Account if the Administrative Committee determines
either of the conditions of Section 5.04(A) prevents restoration as of the
applicable Accounting Date, notwithstanding the Participant's repayment.
5.06 YEAR OF SERVICE - VESTING. For purposes of vesting under Section
5.03, Year of Service means any Plan Year during which an Employee completes not
less than 1000 Hours of Service with the Employer.
5.07 BREAK IN SERVICE - VESTING. For purposes of this Article V, a
Participant incurs a "Break in Service" if during any Plan Year he does not
complete more than 500 Hours of Service with the Employer.
5.08 INCLUDED YEARS OF SERVICE - VESTING.
(A) INCLUDED YEARS OF SERVICE. For purposes of determining "Years of Service"
under Section 5.06, the Plan takes into account all Years of Service an Employee
completes with the Employer, except:
(1) Any Year of Service before a Break in Service if the number of
consecutive Breaks in Service equals or exceeds the greater of 5 or
the aggregate number of the Years of Service prior to the Break.
This exception applies only if the Participant is 0% vested in his
Accrued Benefit derived from Employer contributions at the time he
has a Break in Service. Furthermore, the aggregate number of Years
of Service before a Break in Service does not include any Years of
Service not required to be
5.3
<PAGE> 29
taken into account under this exception by reason of any prior Break
in Service.
(B) FORFEITURE BREAK IN SERVICE. For the sole purpose of determining a
Participant's Nonforfeitable percentage of his Accrued Benefit derived from
Employer contributions which accrued for his benefit prior to a Forfeiture Break
in Service, the Plan disregards any Year of Service after the Participant first
incurs a Forfeiture Break in Service. The Participant incurs a Forfeiture Break
in Service when he incurs 5 consecutive Breaks in Service.
5.09 FORFEITURE OCCURS. A Participant's forfeiture, if any, of his Accrued
Benefit derived from Employer contributions occurs under the Plan on the earlier
of:
(a) The last day of the vesting computation period in which the
Participant first incurs a Forfeiture Break in Service; or
(b) The date the Participant receives a cash-out distribution.
The Administrative Committee determines the percentage of a Participant's
Accrued Benefit forfeiture, if any, under this Section 5.09 solely by reference
to the vesting schedule of Section 5.03. A Participant will not forfeit any
portion of his Accrued Benefit for any other reason or cause except as expressly
provided by this Section 5.09 or as provided under Section 9.14
* * * * * * * * * * * * * * *
5.4
<PAGE> 30
ARTICLE VI - TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Unless, pursuant to Section 6.03,
the Participant or the Beneficiary elects in writing to a different time or
method of payment, the Administrative Committee will direct the Trustee to
commence distribution of a Participant's Nonforfeitable Accrued Benefit in
accordance with this Section 6.01. A Participant must consent, in writing, to
any distribution required under this Section 6.01 if the present value of the
Participant's Nonforfeitable Accrued Benefit, at the time of the distribution to
the Participant, exceeds $5,000 and the Participant has not attained the later
of Normal Retirement Age or age 62. Furthermore, the Participant's spouse also
must consent, in writing, to any distribution, for which Section 6.04 requires
the spouse's consent. For all purposes of this Article VI, the term "Annuity
Starting Date" means the first day of the first period for which the Plan pays
an amount as an annuity or in any other form. A Distribution Date under this
Article VI, unless otherwise specified within the Plan, is the last day of each
Plan Year and the first day of each month following the attainment of Normal
Retirement Age, or as soon as administratively practicable following a
distribution date. For purposes of the consent requirements under this Article
VI, if the present value of the Participant's Nonforfeitable Accrued Benefit, at
the time of any distribution, exceeds $3,500, the Administrative Committee must
treat that present value as exceeding $3,500 for purposes of all subsequent Plan
distributions to the Participant.
(A) SEPARATION FROM SERVICE FOR A REASON OTHER THAN DEATH.
(1) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT NOT EXCEEDING $5,000. If
the Participant's Separation from Service is for any reason other than death,
the Administrative Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in a lump sum as soon as
administratively practicable following the close of the Plan Year in which the
Participant's Separation from Service occurs, but in no event later than the
60th day following the close of the Plan Year in which the Participant attains
Normal Retirement Age. In addition, the Participant shall have the option to
receive his deferral contributions (and any income thereon) as soon as
administratively practicable following the end of the calendar year quarter in
which the Participant's Separation from Service occurs.
(2) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $5,000. If the
Participant's Separation from Service is for any reason other than death, the
Administrative Committee will direct the Trustee to commence distribution of the
Participant's Nonforfeitable Accrued Benefit in a form and at the time elected
by the Participant, pursuant to Section 6.03. In the absence of an election by
the Participant, the Administrative Committee will direct the Trustee to
distribute the Participant's Nonforfeitable Accrued Benefit in a lump sum (or,
if applicable, the normal annuity form of distribution required under Section
6.04), on the 60th day following the close of the Plan Year in which the latest
of the following events occurs: (a) the Participant attains Normal Retirement
Age; (b) the Participant attains age 62; or (c) the Participant's Separation
from Service.
(3) DISABILITY. If the Participant's Separation from Service is because of
his disability, the Administrative Committee will direct the Trustee to pay the
Participant's Nonforfeitable Accrued Benefit in lump sum, as soon as
administratively feasible after the Participant's Separation from Service,
subject to the notice and consent requirements of this Article VI and to the
applicable mandatory commencement dates described in Paragraph (1) or in
Paragraph (2).
(B) REQUIRED BEGINNING DATE. If any distribution commencement date described
under Paragraph (A) of this Section 6.01, either by Plan provision or by
Participant election (or nonelection), is later than the Participant's Required
Beginning Date, the Administrative Committee instead must direct the Trustee to
make distribution on the Participant's Required Beginning Date. A Participant's
Required Beginning Date is the April 1 following the close of the calendar year
in which the Participant attains age 70 1/2. However, if the Participant, prior
to incurring a Separation
6.1
<PAGE> 31
from Service, attained age 70 1/2 by January 1, 1988, and, for the five Plan
Year period ending in the calendar year in which he attained age 70 1/2 and for
all subsequent years, the Participant was not a more than 5% owner, the Required
Beginning Date is the April 1 following the close of the calendar year in which
the Participant separates from Service or, if earlier, the April 1 following the
close of the calendar year in which the Participant becomes a more than 5%
owner. Furthermore, if a Participant who was not a more than 5% owner attained
age 70 1/2 during 1988 and did not incur a Separation from Service prior to
January 1, 1989, his Required Beginning Date is April 1, 1990. A mandatory
distribution at the Participant's Required Beginning Date will be in lump sum
(or, if applicable, the normal annuity form of distribution required under
Section 6.04) unless the Participant, pursuant to the provisions of this Article
VI, makes a valid election to receive an alternative form of payment.
(C) DEATH OF THE PARTICIPANT. The Administrative Committee will direct the
Trustee, in accordance with this Section 6.01(C), to distribute to the
Participant's Beneficiary the Participant's Nonforfeitable Accrued Benefit
remaining in the Trust at the time of the Participant's death. Subject to the
requirements of Section 6.04, the Administrative Committee will determine the
death benefit by reducing the Participant's Nonforfeitable Accrued Benefit by
any security interest the Plan has against that Nonforfeitable Accrued Benefit
by reason of an outstanding Participant loan.
(1) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT DOES NOT EXCEED
$3,500. The Administrative Committee, subject to the requirements of Section
6.04, must direct the Trustee to distribute the deceased Participant's
Nonforfeitable Accrued Benefit in a single cash sum, as soon as administratively
practicable following the Participant's death or, if later, the date on which
the Administrative Committee receives notification of or otherwise confirms the
Participant's death.
(2) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $3,500.
The Administrative Committee will direct the Trustee to distribute the deceased
Participant's Nonforfeitable Accrued Benefit at the time and in the form elected
by the Participant or, if applicable by the Beneficiary, as permitted under this
Article VI. In the absence of an election, subject to the requirements of
Section 6.04, the Administrative Committee will direct the Trustee to distribute
the Participant's undistributed Nonforfeitable Accrued Benefit in a lump sum on
the first distribution date following the close of the Plan Year in which the
Participant's death occurs or, if later, the first distribution date following
the date the Administrative Committee receives notification of or otherwise
confirms the Participant's death.
If the death benefit is payable in full to the Participant's surviving
spouse, the surviving spouse, in addition to the distribution options provided
in this Section 6.01(C), may elect distribution at any time or in any form
(other than a joint and survivor annuity) this Article VI would permit for a
Participant.
(D) DEFAULT ON A LOAN. If a Participant or Beneficiary defaults on a loan made
pursuant to a loan policy adopted by the Administrative Committee pursuant to
Section 9.04, the Plan treats the default as a distributable event. The Trustee,
at the time of the default, will reduce the Participant's Nonforfeitable Accrued
Benefit by the lesser of the amount in default (plus accrued interest) or the
Plan's security interest in that Nonforfeitable Accrued Benefit. To the extent
the loan is attributable to the Participant's Deferral Contributions Account or
Qualified Matching Contributions Account or Qualified Nonelective Contributions
Account, the Trustee will not reduce the Participant's Nonforfeitable Accrued
Benefit unless the Participant has separated from Service or unless the
Participant has attained age 59 1/2.
6.2
<PAGE> 32
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to the annuity
distribution requirements, if any, prescribed by Section 6.04, and any
restrictions prescribed by Section 6.03, a Participant or Beneficiary may elect
distribution under one, or any combination, of the following methods: (a) by
payment in a lump sum; or (b) by payment in a life annuity, a joint and 100%
survivor annuity, or an annuity for a period certain not exceeding beyond the
life expectancy of the participant or the joint and last survivor expectancy of
the participant and his designated beneficiary.
The distribution options permitted under this Section 6.02 are available
only if the present value of the Participant Nonforfeitable Accrued Benefit, at
the time of the distribution to the Participant, exceeds $3,500. To facilitate
installment payments under this Article VI, the Administrative Committee may
direct the Trustee to segregate all or any part of the Participant's Accrued
Benefit in a separate Account. The Trustee will invest the Participant's
segregated Account in Federally insured interest bearing savings account(s) or
time deposit(s) (or a combination of both), or in other fixed income
investments. A segregated Account remains a part of the Trust, but it alone
shares in any income it earns, and it alone bears any expense or loss it incurs.
A Participant or Beneficiary may elect to receive an installment distribution in
the form of a Nontransferable Annuity Contract. Under an installment
distribution, the Participant or Beneficiary, at any time, may elect to
accelerate the payment of all, or any portion, of the Participant's unpaid
Nonforfeitable Accrued Benefit, subject to the requirements of Section 6.04.
(A) MINIMUM DISTRIBUTION REQUIREMENTS FOR PARTICIPANTS. The Administrative
Committee may not direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit, nor may the Participant elect to have the
Trustee distribute his Nonforfeitable Accrued Benefit, under a method of payment
which, as of the Required Beginning Date, does not satisfy the minimum
distribution requirements under Code Section 401(a)(9) and the applicable
Treasury regulations. The minimum distribution for a calendar year equals the
Participant's Nonforfeitable Accrued Benefit as of the latest valuation date
preceding the beginning of the calendar year divided by the Participant's life
expectancy or, if applicable, the joint and last survivor expectancy of the
Participant and his designated Beneficiary (as determined under Article VIII,
subject to the requirements of the Code Section 401(a)(9) regulations). The
Administrative Committee will increase the Participant's Nonforfeitable Accrued
Benefit, as determined on the relevant valuation date, for contributions or
forfeitures allocated after the valuation date and by December 31 of the
valuation calendar year, and will decrease the valuation by distributions made
after the valuation date and by December 31 of the valuation calendar year. For
purposes of this valuation, the Administrative Committee will treat any portion
of the minimum distribution for the first distribution calendar year made after
the close of that year as a distribution occurring in that first distribution
calendar year. In computing a minimum distribution, the Administrative Committee
must use the unisex life expectancy multiples under Treas. Reg. Section 1.72-9.
The Administrative Committee, only upon the Participant's written request, will
compute the minimum distribution for a calendar year subsequent to the first
calendar year for which the Plan requires a minimum distribution by
redetermining the applicable life expectancy. However, the Administrative
Committee may not redetermine the joint life and last survivor expectancy of the
Participant and a nonspouse designated Beneficiary in a manner which takes into
account any adjustment to a life expectancy other than the Participant's life
expectancy.
If the Participant's spouse is not his designated Beneficiary, a method of
payment to the Participant (whether by Participant election or by Administrative
Committee direction) may not provide more than incidental benefits to the
Beneficiary. For Plan Years beginning after December 31, 1988, the Plan must
satisfy the Minimum Distribution Incidental Benefit ("MDIB") requirement in the
Treasury regulations issued under Code Section 401(a)(9) for distributions made
on or after the Participant's Required Beginning Date and before the
Participant's death. To satisfy the MDIB requirement, the Administrative
Committee will compute the minimum distribution required by this Section 6.02(A)
by substituting the applicable MDIB divisor for the applicable life expectancy
factor, if the MDIB divisor is a lesser number. Following the Participant's
death, the Administrative Committee will compute the minimum distribution
required by this Section 6.02(A) solely on the basis
6.3
<PAGE> 33
of the applicable life expectancy factor and will disregard the MDIB factor. For
Plan Years beginning prior to January 1, 1989, the Plan satisfies the incidental
benefits requirement if the distributions to the Participant satisfied the MDIB
requirement or if the present value of the retirement benefits payable solely to
the Participant is greater than 50% of the present value of the total benefits
payable to the Participant and his Beneficiaries. The Administrative Committee
must determine whether benefits to the Beneficiary are incidental as of the date
the Trustee is to commence payment of the retirement benefits to the
Participant, or as of any date the Trustee redetermines the payment period to
the Participant.
The minimum distribution for the first distribution calendar year is due
by the Participant's Required Beginning Date. The minimum distribution for each
subsequent distribution calendar year, including the calendar year in which the
Participant's Required Beginning Date occurs, is due by December 31 of that
year. If the Participant receives distribution in the form of a Nontransferable
Annuity Contract, the distribution satisfies this Section 6.02(A) if the
contract complies with the requirements of Code Section 401(a)(9) and the
applicable Treasury regulations.
(B) MINIMUM DISTRIBUTION REQUIREMENTS FOR BENEFICIARIES. The method of
distribution to the Participant's Beneficiary must satisfy Code Section
401(a)(9) and the applicable Treasury regulations. If the Participant's death
occurs after his Required Beginning Date or, if earlier, the date the
Participant commences an irrevocable annuity pursuant to Section 6.04, the
method of payment to the Beneficiary must provide for completion of payment over
a period which does not exceed the payment period which had commenced for the
Participant. If the Participant's death occurs prior to his Required Beginning
Date, and the Participant had not commenced an irrevocable annuity pursuant to
Section 6.04, the method of payment to the Beneficiary, subject to Section 6.04,
must provide for completion of payment to the Beneficiary over a period not
exceeding: (i) 5 years after the date of the Participant's death; or (ii) if the
Beneficiary is a designated Beneficiary, the designated Beneficiary's life
expectancy. The Administrative Committee may not direct payment of the
Participant's Nonforfeitable Accrued Benefit over a period described in clause
(ii) unless the Trustee will commence payment to the designated Beneficiary no
later than the December 31 following the close of the calendar year in which the
Participant's death occurred or, if later, and the designated Beneficiary is the
Participant's surviving spouse, December 31 of the calendar year in which the
Participant would have attained age 70 1/2. If the Trustee will make
distribution in accordance with clause (ii), the minimum distribution for a
calendar year equals the Participant's Nonforfeitable Accrued Benefit as of the
latest valuation date preceding the beginning of the calendar year divided by
the designated Beneficiary's life expectancy. The Administrative Committee must
use the unisex life expectancy multiples under Treas. Reg. Section 1.72-9 for
purposes of applying this paragraph. The Administrative Committee, only upon the
written request of the Participant or of the Participant's surviving spouse,
will recalculate the life expectancy of the Participant's surviving spouse not
more frequently than annually, but may not recalculate the life expectancy of a
nonspouse designated Beneficiary after the Trustee commences payment to the
designated Beneficiary. The Administrative Committee will apply this paragraph
by treating any amount paid to the Participant's child, which becomes payable to
the Participant's surviving spouse upon the child's attaining the age of
majority, as paid to the Participant's surviving spouse. Upon the Beneficiary's
written request, the Administrative Committee must direct the Trustee to
accelerate payment of all, or any portion, of the Participant's unpaid Accrued
Benefit, as soon as administratively practicable following the effective date of
that request.
6.03 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days, but not later
than 30 days, before the Participant's annuity starting date, the Administrative
Committee must provide a benefit notice to a Participant who is eligible to make
an election under this Section 6.03. The benefit notice must explain the
optional forms of benefit in the Plan, including the material features and
relative values of those options, and the Participant's right to defer
distribution until he attains the later of Normal Retirement Age or age 62.
6.4
<PAGE> 34
If a Participant or Beneficiary makes an election prescribed by this
Section 6.03, the Administrative Committee will direct the Trustee to distribute
the Participant's Nonforfeitable Accrued Benefit in accordance with that
election. Any election under this Section 6.03 is subject to the requirements of
Section 6.02 and of Section 6.04. The Participant or Beneficiary must make an
election under this Section 6.03 by filing his election with the Administrative
Committee at any time before the Trustee otherwise would commence to pay a
Participant's Accrued Benefit in accordance with the requirements of Article VI.
(A) PARTICIPANT ELECTIONS AFTER SEPARATION FROM SERVICE. If the present value of
a Participant's Nonforfeitable Accrued Benefit exceeds $3,500, he may elect to
have the Trustee commence distribution as of any distribution date following his
Separation from Service. In addition, the Participant shall have the option to
receive his deferral contributions (and any income thereon) as soon as
administratively practicable following the end of the calendar year quarter in
which the Participant's Separation from Service occurs. However, if the
Participant is entitled to an allocation of Employer contributions or
Participant forfeitures in the Plan Year in which his Separation from Service
occurs, the distribution may not commence earlier than the first day of the Plan
Year beginning after that Separation from Service. The Participant may
reconsider an election at any time prior to the annuity starting date and elect
to commence distribution as of any other distribution date, but not earlier than
the date described in the first sentence of this Paragraph (A). Following his
attainment of Normal Retirement Age, a Participant who has separated from
Service may elect distribution as of any distribution date, irrespective of the
restrictions otherwise applicable under this Section 6.03(A). If the Participant
is partially-vested in his Accrued Benefit, an election under this Paragraph (A)
to distribute prior to the Participant's incurring a Forfeiture Break in Service
(as defined in Section 5.08), must be in the form of a cash-out distribution (as
defined in Article V). A Participant may not receive a cash-out distribution if,
prior to the time the Trustee actually makes the cash-out distribution, the
Participant returns to employment with the Employer.
(B) PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE.
(1) DEFERRAL CONTRIBUTIONS ACCOUNT AND QUALIFIED NONELECTIVE CONTRIBUTIONS
ACCOUNT. A Participant, until he retires, has a continuing election to receive
all or any portion of his Deferral Contributions Account and Qualified
Nonelective Contributions Account if he satisfies the conditions for a hardship,
as described in paragraph (4).
(2) REGULAR MATCHING CONTRIBUTIONS AND EMPLOYER CONTRIBUTIONS ACCOUNT.
During his employment with the Employer, the Participant does not have any right
to commence distribution of his Regular Matching Contributions and Employer
Contributions Account for any reason, unless required by Section 6.01(B).
(3) PROCEDURE. A Participant must make an election under this Section
6.03(B) on a form prescribed by the Administrative Committee at any time during
the Plan Year for which his election is to be effective. In his written
election, the Participant must specify the percentage or dollar amount he wishes
the Trustee to distribute to him. The Participant's election relates solely to
the percentage or dollar amount specified in his election form and his right to
elect to receive an amount, if any, for a particular Plan Year greater than the
dollar amount or percentage specified in his election form terminates on the
Accounting Date. The Trustee must make a distribution to a Participant in
accordance with his election under this Section 6.03(B) within the 90 day period
(or as soon as administratively practicable) after the Participant files his
written election with the Trustee. The Trustee will distribute the balance of
the Participant's Accrued Benefit not distributed pursuant to his election(s) in
accordance with the other distribution provisions of this Plan.
(4) DEFINITION OF HARDSHIP. For purposes of this Section 6.03(B), a
hardship distribution must be on account of one or more of the following
immediate and heavy financial needs: (1) medical expenses described in Code
Section 213(d) incurred by the Participant, by the Participant's spouse, or by
any
6.5
<PAGE> 35
of the Participant's dependents; (2) the purchase (excluding mortgage payments)
of a principal residence for the Participant; (3) the payment of post-secondary
education tuition, for the next semester or for the next quarter, for the
Participant, for the Participant's spouse, or for any of the Participant's
dependents; (4) to prevent the eviction of the Participant from his principal
residence or the foreclosure on the mortgage of the Participant's principal
residence; or (5) any other event designated by Treasury regulations for the
safe harbor definition of hardship.
RESTRICTIONS. The following restrictions apply to a Participant who
receives a hardship distribution: (a) the Participant may not make elective
deferrals or employee contributions to the Plan for the 12-month period
following the date of his hardship distribution; (b) the distribution is not in
excess of the amount of the immediate and heavy financial need; (c) the
Participant must have obtained all distributions, other than hardship
distributions, and all nontaxable loans currently available under this Plan and
all other qualified plans maintained by the Employer; and (d) the Participant
agrees to limit elective deferrals under this Plan and under any other qualified
Plan maintained by the Employer, for the Participant's taxable year immediately
following the taxable year of the hardship distribution, to the 402(g)
limitation (as described in Section 14.03), reduced by the amount of the
Participant's elective deferrals made in the taxable year of the hardship
distribution. The suspension of elective deferrals and employee contributions
described in clause (a) also must apply to all other qualified plans and to all
nonqualified plans of deferred compensation maintained by the Employer, other
than any mandatory employee contribution portion of a defined benefit plan,
including stock option, stock purchase and other similar plans, but not
including health or welfare benefit plans (other than the cash or deferred
arrangement portion of a cafeteria plan). The minimum withdrawal shall be
$1,000.
EARNINGS. For Plan Years beginning after December 31, 1988, a hardship
distribution may not include earnings on an Employee's elective deferrals
credited after December 31, 1988, and may not include qualified matching
contributions and qualified nonelective contributions, nor any earnings on such
contributions, irrespective of when credited.
(C) DEATH BENEFIT ELECTIONS. If the present value of the deceased Participant's
Nonforfeitable Accrued Benefit exceeds $3,500, the Participant's Beneficiary may
elect to have the Trustee distribute the Participant's Nonforfeitable Accrued
Benefit in a form and within a period permitted under Section 6.02. The
Beneficiary's election is subject to any restrictions designated in writing by
the Participant and not revoked as of his date of death.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES.
(A) JOINT AND SURVIVOR ANNUITY. The Administrative Committee must direct the
Trustee to distribute a Participant's Nonforfeitable Accrued Benefit in the form
of a qualified joint and survivor annuity, unless the Participant makes a valid
waiver election (described in Section 6.05) within the 90 day period ending on
the annuity starting date. If, as of the annuity starting date, the Participant
is married, a qualified joint and survivor annuity is an immediate annuity which
is purchasable with the Participant's Nonforfeitable Accrued Benefit and which
provides a life annuity for the Participant and a survivor annuity payable for
the remaining life of the Participant's surviving spouse equal to 50% of the
amount of the annuity payable during the life of the Participant. If, as of the
annuity starting date, the Participant is not married, a qualified joint and
survivor annuity is an immediate life annuity for the Participant which is
purchasable with the Participant's Nonforfeitable Accrued Benefit. On or before
the annuity starting date, the Administrative Committee, without Participant or
spousal consent, must direct the Trustee to pay the Participant's Nonforfeitable
Accrued Benefit in a lump sum, in lieu of a qualified joint and survivor
annuity, in accordance with Section 6.01, if the Participant's Nonforfeitable
Accrued Benefit is not greater than $3,500.
6.6
<PAGE> 36
(B) PRERETIREMENT SURVIVOR ANNUITY. If a married Participant dies prior to his
annuity starting date, the Administrative Committee will direct the Trustee to
distribute a portion of the Participant's Nonforfeitable Accrued Benefit to the
Participant's surviving spouse in the form of a preretirement survivor annuity,
unless the Participant has a valid waiver election (as described in Section
6.06) in effect, or unless the Participant and his spouse were not married
throughout the one year period ending on the date of his death. A preretirement
survivor annuity is an annuity which is purchasable with 50% of the
Participant's Nonforfeitable Accrued Benefit (determined as of the date of the
Participant's death) and which is payable for the life of the Participant's
surviving spouse. The value of the preretirement survivor annuity is
attributable to Employer contributions and to Employee contributions in the same
proportion as the Participant's Nonforfeitable Accrued Benefit is attributable
to those contributions. The portion of the Participant's Nonforfeitable Accrued
Benefit not payable under this paragraph is payable to the Participant's
Beneficiary, in accordance with the other provisions of this Article VI. If the
present value of the preretirement survivor annuity does not exceed $3,500, the
Administrative Committee, on or before the annuity starting date, must direct
the Trustee to make a lump sum distribution to the Participant's surviving
spouse, in lieu of a preretirement survivor annuity.
(C) SURVIVING SPOUSE ELECTIONS. If the present value of the preretirement
survivor annuity exceeds $3,500, the Participant's surviving spouse may elect to
have the Trustee commence payment of the preretirement survivor annuity at any
time following the date of the Participant's death, but not later than the
mandatory distribution periods described in Section 6.02, and may elect any of
the forms of payment described in Section 6.02, in lieu of the preretirement
survivor annuity. In the absence of an election by the surviving spouse, the
Administrative Committee must direct the Trustee to distribute the preretirement
survivor annuity on the first distribution date following the close of the Plan
Year in which the latest of the following events occurs: (i) the Participant's
death; (ii) the date the Administrative Committee receives notification of or
otherwise confirms the Participant's death; (iii) the date the Participant would
have attained Normal Retirement Age; or (iv) the date the Participant would have
attained age 62.
(D) SPECIAL RULES. If the Participant has in effect a valid waiver election
regarding the qualified joint and survivor annuity or the preretirement survivor
annuity, the Administrative Committee must direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in accordance with Sections 6.01,
6.02 and 6.03. The Administrative Committee will reduce the Participant's
Nonforfeitable Accrued Benefit by any security interest (pursuant to any offset
rights authorized by Section 10.03[E]) held by the Plan by reason of a
Participant loan to determine the value of the Participant's Nonforfeitable
Accrued Benefit distributable in the form of a qualified joint and survivor
annuity or preretirement survivor annuity, provided any post-August 18, 1985,
loan satisfied the spousal consent requirement described in Section 10.03[E] of
the Plan. For purposes of applying this Article VI, the Administrative Committee
treats a former spouse as the Participant's spouse or surviving spouse to the
extent provided under a qualified domestic relations order described in Section
6.07. The provisions of this Section 6.04, and of Sections 6.05 and 6.06, apply
separately to the portion of the Participant's Nonforfeitable Accrued Benefit
subject to the qualified domestic relations order and to the portion of the
Participant's Nonforfeitable Accrued Benefit not subject to that order.
(E) LIMITED APPLICATION OF SECTION 6.04. The preceding provisions of this
Section 6.04 apply only to: (1) a Participant as respects whom the Plan is a
direct or indirect transferee from a plan subject to the Code Section 417
requirements and the Plan received the transfer after December 31, 1984, unless
the transfer is an elective transfer described in Section 13.05; (2) a
Participant who elects a life annuity distribution (if Section 13.02 of the Plan
requires the Plan to provide a life annuity distribution option); and (3) a
Participant whose benefits under a defined benefit plan maintained by the
Employer are offset by benefits provided under this Plan. Sections 6.05 and 6.06
only apply to Participants to whom the preceding provisions of this Section 6.04
apply.
6.05 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY. Not earlier
than 90 days,
6.7
<PAGE> 37
but not later than 30 days, before the Participant's annuity starting date, the
Administrative Committee must provide the Participant a written explanation of
the terms and conditions of the qualified joint and survivor annuity, the
Participant's right to make, and the effect of, an election to waive the joint
and survivor form of benefit, the rights of the Participant's spouse regarding
the waiver election and the Participant's right to make, and the effect of, a
revocation of a waiver election. The Plan does not limit the number of times the
Participant may revoke a waiver of the qualified joint and survivor annuity or
make a new waiver during the election period.
A married Participant's waiver election is not valid unless (a) the
Participant's spouse (to whom the survivor annuity is payable under the
qualified joint and survivor annuity), after the Participant has received the
written explanation described in this Section 6.05, has consented in writing to
the waiver election, the spouse's consent acknowledges the effect of the
election, and a notary public or the Plan Administrator (or his representative)
witnesses the spouse's consent, (b) the spouse consents to the alternate form of
payment designated by the Participant or to any change in that designated form
of payment, and (c) unless the spouse is the Participant's sole primary
Beneficiary, the spouse consents to the Participant's Beneficiary designation or
to any change in the Participant's Beneficiary designation. The spouse's consent
to a waiver of the qualified joint and survivor annuity is irrevocable, unless
the Participant revokes the waiver election. The spouse may execute a blanket
consent to any form of payment designation or to any Beneficiary designation
made by the Participant, if the spouse acknowledges the right to limit that
consent to a specific designation but, in writing, waives that right. The
consent requirements of this Section 6.05 apply to a former spouse of the
Participant, to the extent required under a qualified domestic relations order
described in Section 6.07.
The Administrative Committee will accept as valid a waiver election which
does not satisfy the spousal consent requirements if the Administrative
Committee establishes the Participant does not have a spouse, the Administrative
Committee is not able to locate the Participant's spouse, the Participant is
legally separated or has been abandoned (within the meaning of State law) and
the Participant has a court order to that effect, or other circumstances exist
under which the Secretary of the Treasury will excuse the consent requirement.
If the Participant's spouse is legally incompetent to give consent, the spouse's
legal guardian (even if the guardian is the Participant) may give consent.
6.06 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. The Administrative
Committee must provide a written explanation of the preretirement survivor
annuity to each married Participant, within the following period which ends
last: (1) the period beginning on the first day of the Plan Year in which the
Participant attains age 32 and ending on the last day of the Plan Year in which
the Participant attains age 34; (2) a reasonable period after an Employee
becomes a Participant; (3) a reasonable period after the joint and survivor
rules become applicable to the Participant; or (4) a reasonable period after a
fully subsidized preretirement survivor annuity no longer satisfies the
requirements for a fully subsidized benefit. A reasonable period described in
clauses (2), (3) and (4) is the period beginning one year before and ending one
year after the applicable event. If the Participant separates from Service
before attaining age 35, clauses (1), (2), (3) and (4) do not apply and the
Administrative Committee must provide the written explanation within the period
beginning one year before and ending one year after the Separation from Service.
The written explanation must describe, in a manner consistent with Treasury
regulations, the terms and conditions of the preretirement survivor annuity
comparable to the explanation of the qualified joint and survivor annuity
required under Section 6.05. The Plan does not limit the number of times the
Participant may revoke a waiver of the preretirement survivor annuity or make a
new waiver during the election period.
A Participant's waiver election of the preretirement survivor annuity is
not valid unless (a) the Participant makes the waiver election no earlier than
the first day of the Plan Year in which he attains age 35 and (b) the
Participant's spouse (to whom the preretirement survivor annuity is
6.8
<PAGE> 38
payable) satisfies the consent requirements described in Section 6.05, except
the spouse need not consent to the form of benefit payable to the designated
Beneficiary. The spouse's consent to the waiver of the preretirement survivor
annuity is irrevocable, unless the Participant revokes the waiver election.
Irrespective of the time of election requirement described in clause (a), if the
Participant separates from Service prior to the first day of the Plan Year in
which he attains age 35, the Administrative Committee will accept a waiver
election as respects the Participant's Accrued Benefit attributable to his
Service prior to his Separation from Service. Furthermore, if a Participant who
has not separated from Service makes a valid waiver election, except for the
timing requirement of clause (a), the Administrative Committee will accept that
election as valid, but only until the first day of the Plan Year in which the
Participant attains age 35. A waiver election described in this paragraph is not
valid unless made after the Participant has received the written explanation
described in this Section 6.06.
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing contained in
this Plan prevents the Trustee, in accordance with the direction of the
Administrative Committee, from complying with the provisions of a Qualified
Domestic Relations Order (as defined in Code Section 414(p)). This Plan
specifically permits distribution to an alternate payee under a qualified
domestic relations order at any time, irrespective of whether the Participant
has attained his earliest retirement age (as defined under Code Section 414(p))
under the Plan. A distribution to an alternate payee prior to the Participant's
attainment of earliest retirement age is available only if: (1) the order
specifies distribution at that time or permits an agreement between the Plan and
the alternate payee to authorize an earlier distribution; and (2) if the present
value of the alternate payee's benefits under the Plan exceeds $3,500, and the
order requires, the alternate payee consents to any distribution occurring prior
to the Participant's attainment of earliest retirement age. Nothing in this
Section 6.07 gives a Participant a right to receive distribution at a time
otherwise not permitted under the Plan nor does it permit the alternate payee to
receive a form of payment not otherwise permitted under the Plan.
The Administrative Committee must establish reasonable procedures to
determine the qualified status of a domestic relations order. Upon receiving a
domestic relations order, the Administrative Committee promptly will notify the
Participant and any alternate payee named in the order, in writing, of the
receipt of the order and the Plan's procedures for determining the qualified
status of the order. Within a reasonable period of time after receiving the
domestic relations order, the Administrative Committee must determine the
qualified status of the order and must notify the Participant and each alternate
payee, in writing, of its determination. The Administrative Committee must
provide notice under this paragraph by mailing to the individual's address
specified in the domestic relations order, or in a manner consistent with
Department of Labor regulations.
If any portion of the Participant's Nonforfeitable Accrued Benefit is
payable during the period the Administrative Committee is making its
determination of the qualified status of the domestic relations order, the
Administrative Committee must make a separate accounting of the amounts payable.
If the Administrative Committee determines the order is a qualified domestic
relations order within 18 months of the date amounts first are payable following
receipt of the order, the Administrative Committee will direct the Trustee to
distribute the payable amounts in accordance with the order. If the
Administrative Committee does not make its determination of the qualified status
of the order within the 18-month determination period, the Administrative
Committee will direct the Trustee to distribute the payable amounts in the
manner the Plan would distribute if the order did not exist and will apply the
order prospectively if the Administrative Committee later determines the order
is a qualified domestic relations order.
6.9
<PAGE> 39
To the extent it is not inconsistent with the provisions of the qualified
domestic relations order, the Administrative Committee may direct the Trustee to
invest any partitioned amount in a segregated subaccount or separate account and
to invest the account in Federally insured, interest-bearing savings account(s)
or time deposit(s) (or a combination of both), or in other fixed income
investments. A segregated subaccount remains a part of the Trust, but it alone
shares in any income it earns, and it alone bears any expense or loss it incurs.
The Trustee will make any payments or distributions required under this Section
6.07 by separate benefit checks or other separate distribution to the alternate
payee(s).
* * * * * * * * * * * * * * *
6.10
<PAGE> 40
ARTICLE VII - EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 INFORMATION TO ADMINISTRATIVE COMMITTEE. The Employer must supply
current information to the Administrative Committee as to the name, date of
birth, date of employment, annual compensation, leaves of absence, Years of
Service and date of termination of employment of each Employee who is, or who
will be eligible to become, a Participant under the Plan, together with any
other information which the Administrative Committee considers necessary. The
Employer's records as to the current information the Employer furnishes to the
Administrative Committee are conclusive as to all persons.
7.02 NO LIABILITY. The Employer assumes no obligation or responsibility to
any of its Employees, Participants or Beneficiaries for any act of, or failure
to act, on the part of its Administrative Committee (unless the Employer is the
Administrative Committee).
7.03 INDEMNITY OF CERTAIN FIDUCIARIES. The Employer indemnifies and saves
harmless the Plan Administrator and the members of the Administrative Committee,
and each of them, from and against any and all loss resulting from liability to
which the Plan Administrator and the Administrative Committee, or the members of
the Administrative Committee, may be subjected by reason of any act or conduct
(except willful misconduct or gross negligence) in their official capacities in
the administration of this Trust or Plan or both, including all expenses
reasonably incurred in their defense, in case the Employer fails to provide such
defense. The indemnification provisions of this Section 7.03 do not relieve the
Plan Administrator or any Administrative Committee member from any liability he
may have under ERISA for breach of a fiduciary duty. Furthermore, the Plan
Administrator and the Administrative Committee members and the Employer may
execute a letter agreement further delineating the indemnification agreement of
this Section 7.03, provided the letter agreement must be consistent with and
does not violate ERISA. The indemnification provisions of this Section 7.03
extend to the Trustee (or to a Custodian, if any) solely to the extent provided
by a letter agreement executed by the Trustee (or Custodian) and the Employer.
7.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer has the right to
direct the Trustee with respect to the investment and re-investment of assets
comprising the Trust Fund only if the Trustee consents in writing to permit such
direction. If the Trustee consents to Employer direction of investment, the
Trustee and the Employer must execute a letter agreement as a part of this Plan
containing such conditions, limitations and other provisions they deem
appropriate before the Trustee will follow any Employer direction as respects
the investment or re-investment of any part of the Trust Fund.
7.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves the right
to amend the vesting schedule at any time, the Administrative Committee will not
apply the amended vesting schedule to reduce the Nonforfeitable percentage of
any Participant's Accrued Benefit derived from Employer contributions
(determined as of the later of the date the Employer adopts the amendment, or
the date the amendment becomes effective) to a percentage less than the
Nonforfeitable percentage computed under the Plan without regard to the
amendment. An amended vesting schedule will apply to a Participant only if the
Participant receives credit for at least one Hour of Service after the new
schedule becomes effective.
If the Employer makes a permissible amendment to the vesting schedule,
each Participant having at least 3 Years of Service with the Employer may elect
to have the percentage of his Nonforfeitable Accrued Benefit computed under the
Plan without regard to the amendment. For Plan Years beginning prior to January
1, 1989, the election described in the preceding sentence applies only to
Participants having at least 5 Years of Service with the Employer. The
Participant must file his election with the Administrative Committee within 60
days of the latest of (a) the Employer's adoption of the amendment; (b) the
effective date of the amendment; or (c) his receipt
7.1
<PAGE> 41
of a copy of the amendment. The Administrative Committee, as soon as
practicable, must forward a true copy of any amendment to the vesting schedule
to each affected Participant, together with an explanation of the effect of the
amendment, the appropriate form upon which the Participant may make an election
to remain under the vesting schedule provided under the Plan prior to the
amendment and notice of the time within which the Participant must make an
election to remain under the prior vesting schedule. The election described in
this Section 7.05 does not apply to a Participant if the amended vesting
schedule provides for vesting at least as rapid at all times as the vesting
schedule in effect prior to the amendment. For purposes of this Section 7.05, an
amendment to the vesting schedule includes any Plan amendment which directly or
indirectly affects the computation of the Nonforfeitable percentage of an
Employee's rights to his Employer derived Accrued Benefit.
* * * * * * * * * * * * * * *
7.2
<PAGE> 42
ARTICLE VIII - PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 BENEFICIARY DESIGNATION. Any Participant may from time to time
designate, in writing, any person or persons, contingently or successively, to
whom the Trustee will pay his Nonforfeitable Accrued Benefit (including any life
insurance proceeds payable to the Participant's Account) in the event of his
death and the Participant may designate the form and method of payment. The
Administrative Committee will prescribe the form for the written designation of
Beneficiary and, upon the Participant's filing the form with the Administrative
Committee, the form effectively revokes all designations filed prior to that
date by the same Participant.
(A) COORDINATION WITH SURVIVOR REQUIREMENTS. If the joint and survivor
requirements of Article VI apply to the Participant, this Section 8.01 does not
impose any special spousal consent requirements on the Participant's Beneficiary
designation. However, in the absence of spousal consent (as required by Article
VI) to the Participant's Beneficiary designation: (1) any waiver of the joint
and survivor annuity or of the preretirement survivor annuity is not valid; and
(2) if the Participant dies prior to his annuity starting date, the
Participant's Beneficiary designation will apply only to the portion of the
death benefit which is not payable as a preretirement survivor annuity.
Regarding clause (2), if the Participant's surviving spouse is a primary
Beneficiary under the Participant's Beneficiary designation, the Trustee will
satisfy the spouse's interest in the Participant's death benefit first from the
portion which is payable as a preretirement survivor annuity.
(B) SPECIAL RULE FOR EXEMPT PARTICIPANTS. The Beneficiary designation of a
married Exempt Participant is not valid unless the Participant's spouse consents
(in a manner described in Section 6.05) to the Beneficiary designation. An
"Exempt Participant" is a Participant who is not subject to the joint and
survivor requirements of Article VI. The spousal consent requirement in this
paragraph does not apply if the Exempt Participant and his spouse are not
married throughout the one year period ending on the date of the Participant's
death, or if the Participant's spouse is the Participant's sole primary
Beneficiary.
8.02 NO BENEFICIARY DESIGNATION/DEATH OF BENEFICIARY. If a Participant
fails to name a Beneficiary in accordance with Section 8.01, or if the
Beneficiary named by a Participant predeceases him, then the Trustee will pay
the Participant's Nonforfeitable Accrued Benefit in accordance with Section 6.02
in the following order of priority to:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted children, in
equal shares;
(c) The Participant's surviving parents, in equal shares; or
(d) The Participant's estate.
If the Beneficiary does not predecease the Participant, but dies prior to
distribution of the Participant's entire Nonforfeitable Accrued Benefit, the
Trustee will pay the remaining Nonforfeitable Accrued Benefit to the
Beneficiary's estate unless the Participant's Beneficiary designation provides
otherwise. The Administrative Committee will direct the Trustee as to the method
and to whom the Trustee will make payment under this Section 8.02.
8.1
<PAGE> 43
8.03 PERSONAL DATA TO ADMINISTRATIVE COMMITTEE. Each Participant and each
Beneficiary of a deceased Participant must furnish to the Administrative
Committee such evidence, data or information as the Administrative Committee
considers necessary or desirable for the purpose of administering the Plan. The
provisions of this Plan are effective for the benefit of each Participant upon
the condition precedent that each Participant will furnish promptly full, true
and complete evidence, data and information when requested by the Administrative
Committee, provided the Administrative Committee advises each Participant of the
effect of his failure to comply with its request.
8.04 ADDRESS FOR NOTIFICATION. Each Participant and each Beneficiary of a
deceased Participant must file with the Administrative Committee from time to
time, in writing, his post office address and any change of post office address.
Any communication, statement or notice addressed to a Participant, or
Beneficiary, at his last post office address filed with the Administrative
Committee, or as shown on the records of the Employer, binds the Participant, or
Beneficiary, for all purposes of this Plan.
8.05 ASSIGNMENT OR ALIENATION. Subject to Code Section 414(p) relating to
qualified domestic relations orders, neither a Participant nor a Beneficiary may
anticipate, assign or alienate (either at law or in equity) any benefit provided
under the Plan, and the Trustee will not recognize any such anticipation,
assignment or alienation. Furthermore, a benefit under the Plan is not subject
to attachment, garnishment, levy, execution or other legal or equitable process.
8.06 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within the time
prescribed by ERISA and the applicable regulations, must furnish all
Participants and Beneficiaries a summary description of any material amendment
to the Plan or notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.
8.07 LITIGATION AGAINST THE TRUST. A court of competent jurisdiction may
authorize any appropriate equitable relief to redress violations of ERISA or to
enforce any provisions of ERISA or the terms of the Plan. A fiduciary may
receive reimbursement of expenses properly and actually incurred in the
performance of his duties with the Plan.
8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any Beneficiary
may examine copies of the Plan description, latest annual report, any bargaining
agreement, this Plan and Trust, contract or any other instrument under which the
Plan was established or is operated. The Plan Administrator will maintain all of
the items listed in this Section 8.08 in his office, or in such other place or
places as he may designate from time to time in order to comply with the
regulations issued under ERISA, for examination during reasonable business
hours. Upon the written request of a Participant or Beneficiary the Plan
Administrator must furnish him with a copy of any item listed in this Section
8.08. The Plan Administrator may make a reasonable charge to the requesting
person for the copy so furnished.
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. A Participant or a
Beneficiary ("Claimant") may file with the Administrative Committee a written
claim for benefits, if the Participant or Beneficiary determines the
distribution procedures of the Plan have not provided him his proper
Nonforfeitable Accrued Benefit. The Administrative Committee must render a
decision on the claim within 60 days of the Claimant's written claim for
benefits. The Plan Administrator must provide adequate notice in writing to the
Claimant whose claim for benefits under the Plan the Administrative Committee
has denied. The Plan Administrator's notice to the Claimant must set forth:
(a) The specific reason for the denial;
(b) Specific references to pertinent Plan provisions on which the
Administrative Committee based its denial;
8.2
<PAGE> 44
(c) A description of any additional material and information needed for
the Claimant to perfect his claim and an explanation of why the material
or information is needed; and
(d) That any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Administrative Committee within 75
days after receipt of the Plan Administrator's notice of denial of
benefits. The Plan Administrator's notice must further advise the Claimant
that his failure to appeal the action to the Administrative Committee in
writing within the 75-day period will render the Administrative
Committee's determination final, binding and conclusive.
If the Claimant should appeal to the Administrative Committee, he, or his
duly authorized representative, may submit, in writing, whatever issues and
comments he, or his duly authorized representative, feels are pertinent. The
Claimant, or his duly authorized representative, may review pertinent Plan
documents. The Administrative Committee will re-examine all facts related to the
appeal and make a final determination as to whether the denial of benefits is
justified under the circumstances. The Administrative Committee must advise the
Claimant of its decision within 60 days of the Claimant's written request for
review, unless special circumstances (such as a hearing) would make the
rendering of a decision within the 60-day limit unfeasible, but in no event may
the Administrative Committee render a decision respecting a denial for a claim
for benefits later than 120 days after its receipt of a request for review.
The Plan Administrator's notice of denial of benefits must identify the
name of each member of the Administrative Committee and the name and address of
the person to whom the Claimant may forward his appeal.
8.10 PARTICIPANT DIRECTION OF INVESTMENT. A Participant has the right to
direct the Trustee with respect to the investment or re-investment of the assets
comprising the Participant's individual Account only if the Trustee consents in
writing to permit such direction. If the Trustee consents to Participant
direction of investment, the Trustee will accept direction from each Participant
on a written election form (or other written agreement), as a part of this Plan,
containing such conditions, limitations and other provisions the parties deem
appropriate. The Trustee or, with the Trustee's consent, the Administrative
Committee, may establish written procedures, incorporated specifically as part
of this Plan, relating to Participant direction of investment under this Section
8.10. The Trustee will maintain a segregated investment Account to the extent a
Participant's Account is subject to Participant self-direction. The Trustee is
not liable for any loss, nor is the Trustee liable for any breach, resulting
from a Participant's direction of the investment of any part of his directed
Account.
The Administrative Committee, to the extent provided in a written loan
policy adopted under Section 9.04, will treat a loan made to a Participant as a
Participant direction of investment under this Section 8.10. To the extent of
the loan outstanding at any time, the borrowing Participant's Account alone
shares in any interest paid on the loan, and it alone bears any expense or loss
it incurs in connection with the loan. The Trustee may retain any principal or
interest paid on the borrowing Participant's loan in an interest bearing
segregated Account on behalf of the borrowing Participant until the Trustee (or
the Named Fiduciary, in the case of a nondiscretionary Trustee) deems it
appropriate to add the amount paid to the Participant's separate Account under
the Plan.
If the Trustee consents to Participant direction of investment of his
Account, the Plan treats any post-December 31, 1981, investment by a
Participant's directed Account in collectibles (as defined by Code Section
408(m)) as a deemed distribution to the Participant for Federal income tax
purposes.
* * * * * * * * * * * * * * *
8.3
<PAGE> 45
ARTICLE IX - ADMINISTRATIVE COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS'
ACCOUNTS
9.01 MEMBERS' COMPENSATION, EXPENSES. The Employer must appoint an
Administrative Committee to administer the Plan, the members of which may or may
not be Participants in the Plan, or which may be the Plan Administrator acting
alone. In the absence of an Administrative Committee appointment, the Plan
Administrator assumes the powers, duties and responsibilities of the
Administrative Committee. The members of the Administrative Committee will serve
without compensation for services as such, but the Employer will pay all
expenses of the Administrative Committee, except to the extent the Trust
properly pays for such expenses, pursuant to Article X.
9.02 TERM. Each member of the Administrative Committee serves until the
appointment of his successor.
9.03 POWERS. In case of a vacancy in the membership of the Administrative
Committee, the remaining members of the Administrative Committee may exercise
any and all of the powers, authority, duties and discretion conferred upon the
Administrative Committee pending the filling of the vacancy.
9.04 GENERAL. The Administrative Committee has the following powers and
duties:
(a) To select a Secretary, who need not be a member of the Administrative
Committee;
(b) To determine the rights of eligibility of an Employee to participate
in the Plan, the value of a Participant's Accrued Benefit and the
Nonforfeitable percentage of each Participant's Accrued Benefit;
(c) To adopt rules of procedure and regulations necessary for the proper
and efficient administration of the Plan provided the rules are not
inconsistent with the terms of this Agreement;
(d) To construe and enforce the terms of the Plan and the rules and
regulations it adopts, including interpretation of the Plan documents and
documents related to the Plan's operation;
(e) To direct the Trustee as respects the crediting and distribution of
the Trust;
(f) To review and render decisions respecting a claim for (or denial of a
claim for) a benefit under the Plan;
(g) To furnish the Employer with information which the Employer may
require for tax or other purposes;
(h) To engage the service of agents whom it may deem advisable to assist
it with the performance of its duties;
(i) To engage the services of an Investment Manager or Managers (as
defined in ERISA Section 3(38)), each of whom will have full power and
authority to manage, acquire or dispose (or direct the Trustee with
respect to acquisition or disposition) of any Plan asset under its
control;
(j) To establish, in its sole discretion, a nondiscriminatory policy (see
Section 9.04(A)) which the Trustee must observe in making loans, if any,
to Participants and Beneficiaries; and
9.1
<PAGE> 46
(k) To establish and maintain a funding standard account and to make
credits and charges to the account to the extent required by and in
accordance with the provisions of the Code.
The Administrative Committee must exercise all of its powers, duties and
discretion under the Plan in a uniform and nondiscriminatory manner.
9.05 FUNDING POLICY. The Administrative Committee will review, not less
often than annually, all pertinent Employee information and Plan data in order
to establish the funding policy of the Plan and to determine the appropriate
methods of carrying out the Plan's objectives. The Administrative Committee must
communicate periodically, as it deems appropriate, to the Trustee and to any
Plan Investment Manager the Plan's short-term and long-term financial needs so
investment policy can be coordinated with Plan financial requirements.
9.06 MANNER OF ACTION. The decision of a majority of the members appointed
and qualified controls.
9.07 AUTHORIZED REPRESENTATIVE. The Administrative Committee may authorize
any one of its members, or its Secretary, to sign on its behalf any notices,
directions, applications, certificates, consents, approvals, waivers, letters or
other documents. The Administrative Committee must evidence this authority by an
instrument signed by all members and filed with the Trustee.
9.08 INTERESTED MEMBER. No member of the Administrative Committee may
decide or determine any matter concerning the distribution, nature or method of
settlement of his own benefits under the Plan, except in exercising an election
available to that member in his capacity as a Participant, unless the Plan
Administrator is acting alone in the capacity of the Administrative Committee.
9.09 INDIVIDUAL ACCOUNTS. The Administrative Committee will maintain, or
direct the Trustee to maintain, a separate Account or multiple Accounts, in the
name of each Participant to reflect the Participant's Accrued Benefit under the
Plan. If a Participant re-enters the Plan subsequent to his having a Forfeiture
Break in Service, the Administrative Committee, or the Trustee, must maintain a
separate Account for the Participant's pre-Forfeiture Break in Service Accrued
Benefit and a separate Account for his post-Forfeiture Break in Service Accrued
Benefit, unless the Participant's entire Accrued Benefit under the Plan is 100%
Nonforfeitable.
The Administrative Committee will make its allocations, or request the
Trustee to make its allocations, to the Accounts of the Participants in
accordance with the provisions of Section 9.11. The Administrative Committee may
direct the Trustee to maintain a temporary segregated investment Account in the
name of a Participant to prevent a distortion of income, gain or loss
allocations under Section 9.11. The Administrative Committee must maintain
records of its activities.
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. The value of each
Participant's Accrued Benefit consists of that proportion of the net worth (at
fair market value) of the Employer's Trust Fund which the net credit balance in
his Account (exclusive of the cash value of incidental benefit insurance
contracts) bears to the total net credit balance in the Accounts (exclusive of
the cash value of the incidental benefit insurance contracts) of all
Participants plus the cash surrender value of any incidental benefit insurance
contracts held by the Trustee on the Participant's life.
For purposes of a distribution under the Plan, the value of a
Participant's Accrued Benefit is its value as of the valuation date immediately
preceding the date of the distribution.
9.2
<PAGE> 47
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. A "valuation
date" under this Plan is each Accounting Date and each interim valuation date
determined under Section 10.14. As of each valuation date the Administrative
Committee must adjust Accounts to reflect net income, gain or loss since the
last valuation date. The valuation period is the period beginning the day after
the last valuation date and ending on the current valuation date.
(A) TRUST FUND ACCOUNTS. The allocation provisions of this paragraph apply to
all Participant Accounts other than segregated investment Accounts. The
Administrative Committee first will adjust the Participant Accounts, as those
Accounts stood at the beginning of the current valuation period, by reducing the
Accounts for any forfeitures arising under Section 5.09 or under Section 9.14,
for amounts charged during the valuation period to the Accounts in accordance
with Section 9.13 (relating to distributions) and Section 11.01 (relating to
insurance premiums), and for the cash value of incidental benefit insurance
contracts. The Administrative Committee then, subject to the restoration
allocation requirements of Section 5.04 or of Section 9.14, will allocate the
net income, gain or loss pro rata to the adjusted Participant Accounts. The
allocable net income, gain or loss is the net income (or net loss), including
the increase or decrease in the fair market value of assets, since the last
valuation date.
(B) SEGREGATED INVESTMENT ACCOUNTS. A segregated investment Account receives all
income it earns and bears all expense or loss it incurs. The Administrative
Committee will adopt uniform and nondiscriminatory procedures for determining
income or loss of a segregated investment Account in a manner which reasonably
reflects investment directions relating to pooled investments and investment
directions occurring during a valuation period. As of the valuation date, the
Administrative Committee must reduce a segregated Account for any forfeiture
arising under Section 5.09 after the Administrative Committee has made all other
allocations, changes or adjustments to the Account for the Plan Year.
(C) ADDITIONAL RULES. An Excess Amount or suspense account described in Part 2
of Article III does not share in the allocation of net income, gain or loss
described in this Section 9.11. This Section 9.11 applies solely to the
allocation of net income, gain or loss of the Trust. The Administrative
Committee will allocate the Employer contributions and Participant forfeitures,
if any, in accordance with Article III.
(D) SPECIAL RULE FOR CERTAIN CONTRIBUTIONS. To apply Section 9.11(A) to the
allocation of net income, gain or loss, the Administrative Committee will apply
the weighted average method with respect to the following contributions:
deferral contributions and matching contributions. The "weighted average
allocation" method treats a weighted portion of the applicable contributions as
if includible in the Participant's Account as of the beginning of the valuation
period. The weighted portion is a fraction, the numerator of which is the number
of days in the valuation period, excluding each day in the valuation period
which begins prior to the contribution date of the applicable contributions, and
the denominator of which is the number of days in the valuation period. The
Administrative Committee will treat matching contributions as contributed on the
allocation date.
9.12 INDIVIDUAL STATEMENT. As soon as practicable after the Accounting
Date of each Plan Year, but within the time prescribed by ERISA and the
regulations under ERISA, the Plan Administrator will deliver to each Participant
(and to each Beneficiary) a statement reflecting the condition of his Accrued
Benefit in the Trust as of that date and such other information ERISA requires
be furnished the Participant or Beneficiary. No Participant, except a member of
the Administrative Committee, has the right to inspect the records reflecting
the Account of any other Participant.
9.3
<PAGE> 48
9.13 ACCOUNT CHARGED. The Administrative Committee will charge a
Participant's Account for all distributions made from that Account to the
Participant, to his Beneficiary or to an alternate payee. The Administrative
Committee also will charge a Participant's Account for any administrative
expenses incurred by the Plan directly related to that Account.
9.14 UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require either the
Trustee or the Administrative Committee to search for, or to ascertain the
whereabouts of, any Participant or Beneficiary. At the time the Participant's or
Beneficiary's benefit becomes distributable under Article VI, the Administrative
Committee, by certified or registered mail addressed to his last known address
of record with the Administrative Committee or the Employer, must notify any
Participant, or Beneficiary, that he is entitled to a distribution under this
Plan. The notice must quote the provisions of this Section 9.14 and otherwise
must comply with the notice requirements of Article VI. If the Participant, or
Beneficiary, fails to claim his distributive share or make his whereabouts known
in writing to the Administrative Committee within 6 months from the date of
mailing of the notice, the Administrative Committee will treat the Participant's
or Beneficiary's unclaimed payable Accrued Benefit as forfeited and will
reallocate the unclaimed payable Accrued Benefit in accordance with Section
3.05. A forfeiture under this paragraph will occur at the end of the notice
period or, if later, the earliest date applicable Treasury regulations would
permit the forfeiture. Pending forfeiture, the Administrative Committee,
following the expiration of the notice period, may direct the Trustee to
segregate the Nonforfeitable Accrued Benefit in a segregated Account and to
invest that segregated Account in Federally insured interest bearing savings
accounts or time deposits (or in a combination of both), or in other fixed
income investments.
If a Participant or Beneficiary who has incurred a forfeiture of his
Accrued Benefit under the provisions of the first paragraph of this Section 9.14
makes a claim, at any time, for his forfeited Accrued Benefit, the
Administrative Committee must restore the Participant's or Beneficiary's
forfeited Accrued Benefit to the same dollar amount as the dollar amount of the
Accrued Benefit forfeited, unadjusted for any gains or losses occurring
subsequent to the date of the forfeiture. The Administrative Committee will make
the restoration during the Plan Year in which the Participant or Beneficiary
makes the claim, first from the amount, if any, of Participant forfeitures the
Administrative Committee otherwise would allocate for the Plan Year, then from
the amount, if any, of the Trust Fund net income or gain for the Plan Year and
then from the amount, or additional amount, the Employer contributes to enable
the Administrative Committee to make the required restoration. The
Administrative Committee must direct the Trustee to distribute the Participant's
or Beneficiary's restored Accrued Benefit to him not later than 60 days after
the close of the Plan Year in which the Administrative Committee restores the
forfeited Accrued Benefit. The forfeiture provisions of this Section 9.14 apply
solely to the Participant's or to the Beneficiary's Accrued Benefit derived from
Employer contributions.
* * * * * * * * * * * * * * *
9.4
<PAGE> 49
ARTICLE X - CUSTODIAN/TRUSTEE, POWERS AND DUTIES
10.01 ACCEPTANCE. The Trustee accepts the Trust created under the Plan and
agrees to perform the obligations imposed. The Trustee must provide bond for the
faithful performance of its duties under the Trust to the extent required by
ERISA.
10.02 RECEIPT OF CONTRIBUTIONS. The Trustee is accountable to the Employer
for the funds contributed to it by the Employer, but does not have any duty to
see that the contributions received comply with the provisions of the Plan. The
Trustee is not obliged to collect any contributions from the Employer, nor is
obliged to see that funds deposited with it are deposited according to the
provisions of the Plan.
10.03 INVESTMENT POWERS.
(A) TRUSTEE POWERS. The Trustee has full discretion and authority with regard to
the investment of the Trust Fund, except with respect to a Plan asset under the
control or direction of a properly appointed Investment Manager or with respect
to a Plan asset properly subject to Employer, Participant or Administrative
Committee direction of investment. The Trustee must coordinate its investment
policy with Plan financial needs as communicated to it by the Administrative
Committee. The Trustee is authorized and empowered, but not by way of
limitation, with the following powers, rights and duties:
(a) To invest any part or all of the Trust Fund in any common or preferred
stocks, open-end or closed-end mutual funds, put and call options traded
on a national exchange, United States retirement plan bonds, corporate
bonds, debentures, convertible debentures, commercial paper, U.S. Treasury
bills, U.S. Treasury notes and other direct or indirect obligations of the
United States Government or its agencies, improved or unimproved real
estate situated in the United States, limited partnerships, insurance
contracts of any type, mortgages, notes or other property of any kind,
real or personal, to buy or sell options on common stock on a nationally
recognized exchange with or without holding the underlying common stock,
to buy and sell commodities, commodity options and contracts for the
future delivery of commodities, and to make any other investments the
Trustee deems appropriate, as a prudent man would do under like
circumstances with due regard for the purposes of this Plan. Any
investment made or retained by the Trustee in good faith is proper but
must be of a kind constituting a diversification considered by law
suitable for trust investments.
(b) To retain in cash so much of the Trust Fund as it may deem advisable
to satisfy liquidity needs of the Plan and to deposit any cash held in the
Trust Fund in a bank account at reasonable interest.
(c) To invest, if the Trustee is a bank or similar financial institution
supervised by the United States or by a State, in any type of deposit of
the Trustee (or of a bank related to the Trustee within the meaning of
Code Section 414(b)) at a reasonable rate of interest or in a common trust
fund, as described in Code Section 584, or in a collective investment
fund, the provisions of which govern the investment of such assets and
which the Plan incorporates by this reference, which the Trustee (or its
affiliate, as defined in Code Section 1504) maintains exclusively for the
collective investment of money contributed by the bank (or the affiliate)
in its capacity as trustee and which conforms to the rules of the
Comptroller of the Currency.
10.1
<PAGE> 50
(d) To manage, sell, contract to sell, grant options to purchase, convey,
exchange, transfer, abandon, improve, repair, insure, lease for any term
even though commencing in the future or extending beyond the term of the
Trust, and otherwise deal with all property, real or personal, in such
manner, for such considerations and on such terms and conditions as the
Trustee decides.
(e) To credit and distribute the Trust as directed by the Administrative
Committee. The Trustee is not obliged to inquire as to whether any payee
or distributee is entitled to any payment or whether the distribution is
proper or within the terms of the Plan, or as to the manner of making any
payment or distribution. The Trustee is accountable only to the
Administrative Committee for any payment or distribution made by it in
good faith on the order or direction of the Administrative Committee.
(f) To borrow money, to assume indebtedness, extend mortgages and encumber
by mortgage or pledge.
(g) To compromise, contest, arbitrate or abandon claims and demands, in
its discretion.
(h) To have with respect to the Trust all of the rights of an individual
owner, including the power to give proxies, to participate in any voting
trusts, mergers, consolidations or liquidations, and to exercise or sell
stock subscriptions or conversion rights.
(i) To lease for oil, gas and other mineral purposes and to create mineral
severances by grant or reservation; to pool or unitize interests in oil,
gas and other minerals; and to enter into operating agreements and to
execute division and transfer orders.
(j) To hold any securities or other property in the name of the Trustee or
its nominee, with depositories or agent depositories or in another form as
it may deem best, with or without disclosing the trust relationship.
(k) To perform any and all other acts in its judgment necessary or
appropriate for the proper and advantageous management, investment and
distribution of the Trust.
(l) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make payment or
delivery of the funds or property until final adjudication is made by a
court of competent jurisdiction.
(m) To file all tax returns required of the Trustee.
(n) To furnish to the Employer, the Plan Administrator and the
Administrative Committee an annual statement of account showing the
condition of the Trust Fund and all investments, receipts, disbursements
and other transactions effected by the Trustee during the Plan Year
covered by the statement and also stating the assets of the Trust held at
the end of the Plan Year, which accounts are conclusive on all persons,
including the Employer, the Plan Administrator and the Administrative
Committee, except as to any act or transaction concerning which the
Employer, the Plan Administrator or the Administrative Committee files
with the Trustee written exceptions or objections within 90 days after the
receipt of the accounts or for which ERISA authorizes a longer period
within which to object.
(o) To begin, maintain or defend any litigation necessary in connection
with the administration of the Plan, except that the Trustee is not
obliged or required to do so unless indemnified to its satisfaction.
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<PAGE> 51
(B) PARTICIPANT LOANS. The Plan does not permit loans to Participants or to
Beneficiaries.
(C) INVESTMENT IN QUALIFYING EMPLOYER SECURITIES AND QUALIFYING EMPLOYER REAL
PROPERTY. The Trustee may invest in qualifying Employer securities or qualifying
Employer real property, as defined in and as limited by ERISA. The aggregate
investments in qualifying Employer securities and in qualifying Employer real
property may not exceed 100% of the value of Plan assets.
10.04 RECORDS AND STATEMENTS. The records of the Trustee pertaining to the
Plan must be open to the inspection of the Plan Administrator, Administrative
Committee and the Employer at all reasonable times and may be audited from time
to time by any person or persons as the Employer, Plan Administrator or
Administrative Committee may specify in writing. The Trustee must furnish the
Plan Administrator or Administrative Committee with whatever information
relating to the Trust Fund the Plan Administrator or Administrative Committee
considers necessary.
10.05 FEES AND EXPENSES FROM FUND. The Trustee will receive reasonable
annual compensation as may be agreed upon from time to time between the Employer
and the Trustee. No person who is receiving full pay from the Employer may
receive compensation for services as Trustee. The Trustee will pay from the
Trust Fund all fees and expenses reasonably incurred by the Plan, to the extent
such fees and expenses are for the ordinary and necessary administration and
operation of the Plan, unless the Employer pays such fees and expenses. Any fee
or expense paid, directly or indirectly, by the Employer is not an Employer
contribution to the Plan, provided the fee or expense relates to the ordinary
and necessary administration of the Fund.
10.06 PARTIES TO LITIGATION. Except as otherwise provided by ERISA, no
Participant or Beneficiary is a necessary party or is required to receive notice
of process in any court proceeding involving the Plan, the Trust Fund or any
fiduciary of the Plan. Any final judgment entered in any proceeding will be
conclusive upon the Employer, the Plan Administrator, the Administrative
Committee,, the Trustee, Custodian, Participants and Beneficiaries.
10.07 PROFESSIONAL AGENTS. The Trustee may employ and pay from the Trust
Fund reasonable compensation to agents, attorneys, accountants and other persons
to advise the Trustee as in its opinion may be necessary. The Trustee may
delegate to any agent, attorney, accountant or other person selected by it any
non-Trustee power or duty vested in it by the Plan, and the Trustee may act or
refrain from acting on the advice or opinion of any agent, attorney, accountant
or other person so selected.
10.08 DISTRIBUTION OF CASH OR PROPERTY. The Trustee may make distribution
under the Plan in cash or property, or partly in each, at its fair market value
as determined by the Trustee. For purposes of a distribution to a Participant or
to a Participant's designated Beneficiary or surviving spouse, "property"
includes a Nontransferable Annuity Contract, provided the contract satisfies the
requirements of this Plan.
10.09 DISTRIBUTION DIRECTIONS. If no one claims a payment or distribution
made from the Trust, the Trustee must promptly notify the Administrative
Committee and then dispose of the payment in accordance with the subsequent
direction of the Administrative Committee.
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<PAGE> 52
10.10 THIRD PARTY/MULTIPLE TRUSTEES. No person dealing with the Trustee is
obligated to see to the proper application of any money paid or property
delivered to the Trustee, or to inquire whether the Trustee has acted pursuant
to any of the terms of the Plan. Each person dealing with the Trustee may act
upon any notice, request or representation in writing by the Trustee, or by the
Trustee's duly authorized agent, and is not liable to any person in so acting.
The certificate of the Trustee that it is acting in accordance with the Plan
will be conclusive in favor of any person relying on the certificate. If more
than two persons act as Trustee, a decision of the majority of such persons
controls with respect to any decision regarding the administration or investment
of the Trust Fund or of any portion of the Trust Fund with respect to which such
persons act as Trustee. However, the signature of only one Trustee is necessary
to effect any transaction on behalf of the Trust.
10.11 RESIGNATION. The Trustee may resign its position at any time by
giving 30 days' written notice in advance to the Employer and to the
Administrative Committee. If the Employer fails to appoint a successor Trustee
within 60 days of its receipt of the Trustee's written notice of resignation,
the Trustee will treat the Employer as having appointed itself as Trustee and as
having filed its acceptance of appointment with the former Trustee.
10.12 REMOVAL. The Employer, by giving 30 days' written notice in advance
to the Trustee, may remove any Trustee. In the event of the resignation or
removal of a Trustee, the Employer must appoint a successor Trustee if it
intends to continue the Plan. If two or more persons hold the position of
Trustee, in the event of the removal of one such person, during any period the
selection of a replacement is pending, or during any period such person is
unable to serve for any reason, the remaining person or persons will act as the
Trustee.
10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE. Each successor Trustee
succeeds to the title to the Trust vested in his predecessor by accepting in
writing his appointment as successor Trustee and by filing the acceptance with
the former Trustee and the Administrative Committee without the signing or
filing of any further statement. The resigning or removed Trustee, upon receipt
of acceptance in writing of the Trust by the successor Trustee, must execute all
documents and do all acts necessary to vest the title of record in any successor
Trustee. Each successor Trustee has and enjoys all of the powers, both
discretionary and ministerial, conferred under this Agreement upon his
predecessor. A successor Trustee is not personally liable for any act or failure
to act of any predecessor Trustee, except as required under ERISA. With the
approval of the Employer and the Administrative Committee, a successor Trustee,
with respect to the Plan, may accept the account rendered and the property
delivered to it by a predecessor Trustee without incurring any liability or
responsibility for so doing.
10.14 VALUATION OF TRUST. The Trustee must value the Trust Fund as of each
Accounting Date to determine the fair market value of each Participant's Accrued
Benefit in the Trust. The Trustee also must value the Trust Fund on such other
valuation dates as directed in writing by the Administrative Committee.
10.15 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER, ANCILLARY TRUSTEE
OR INDEPENDENT FIDUCIARY APPOINTED. The Trustee is not liable for the acts or
omissions of any Investment Manager the Administrative Committee may appoint,
nor is the Trustee under any obligation to invest or otherwise manage any asset
of the Plan which is subject to the management of a properly appointed
Investment Manager. The Administrative Committee, the Trustee and any properly
appointed Investment Manager may execute a letter agreement as a part of this
Plan delineating the duties, responsibilities and liabilities of the Investment
Manager with respect to any part of the Trust Fund under the control of the
Investment Manager.
10.4
<PAGE> 53
The limitation on liability described in this Section 10.15 also applies
to the acts or omissions of any ancillary trustee or independent fiduciary
properly appointed under Section 10.17 of the Plan. However, if a discretionary
Trustee, pursuant to the delegation described in Section 10.17 of the Plan,
appoints an ancillary trustee, the discretionary Trustee is responsible for the
periodic review of the ancillary trustee's actions and must exercise its
delegated authority in accordance with the terms of the Plan and in a manner
consistent with ERISA. The Employer, the discretionary Trustee and an ancillary
trustee may execute a letter agreement as a part of this Plan delineating any
indemnification agreement between the parties.
10.16 INVESTMENT IN GROUP TRUST FUND. The Trustee, for collective
investment purposes, may combine into one trust fund the Trust created under
this Plan with the Trust created under any other qualified retirement plan the
Employer maintains. However, the Trustee must maintain separate records of
account for the assets of each Trust in order to reflect properly each
Participant's Accrued Benefit under the plan(s) in which he is a Participant.
10.17 APPOINTMENT OF ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY. The
Employer, in writing, may appoint any person in any State to act as ancillary
trustee with respect to a designated portion of the Trust Fund. An ancillary
trustee must acknowledge in writing its acceptance of the terms and conditions
of its appointment as ancillary trustee and its fiduciary status under ERISA.
The ancillary trustee has the rights, powers, duties and discretion as the
Employer may delegate, subject to any limitations or directions specified in the
instrument evidencing appointment of the ancillary trustee and to the terms of
the Plan or of ERISA. The investment powers delegated to the ancillary trustee
may include any investment powers available under Section 10.03 of the Plan
including the right to invest any portion of the assets of the Trust Fund in a
common trust fund, as described in Code Section 584, or in any collective
investment fund, the provisions of which govern the investment of such assets
and which the Plan incorporates by this reference, but only if the ancillary
trustee is a bank or similar financial institution supervised by the United
States or by a State and the ancillary trustee (or its affiliate, as defined in
Code Section 1504) maintains the common trust fund or collective investment fund
exclusively for the collective investment of money contributed by the ancillary
trustee (or its affiliate) in a trustee capacity and which conforms to the rules
of the Comptroller of the Currency. The Employer also may appoint as an
ancillary trustee, the trustee of any group trust fund designated for investment
pursuant to the provisions of Section 10.16 of the Plan.
The ancillary trustee may resign its position at any time by providing at
least 30 days' advance written notice to the Employer, unless the Employer
waives this notice requirement. The Employer, in writing, may remove an
ancillary trustee at any time. In the event of resignation or removal, the
Employer may appoint another ancillary trustee, return the assets to the control
and management of the Trustee or receive such assets in the capacity of
ancillary trustee. The Employer may delegate its responsibilities under this
Section 10.17 to a Trustee under the Plan.
If the U.S. Department of Labor ("the Department") requires engagement of
an independent fiduciary to have control or management of all or a portion of
the Trust Fund, the Employer will appoint such independent fiduciary, as
directed by the Department. The independent fiduciary will have the duties,
responsibilities and powers prescribed by the Department and will exercise those
duties, responsibilities and powers in accordance with the terms, restrictions
and conditions established by the Department and, to the extent not inconsistent
with ERISA, the terms of the Plan. The independent fiduciary must accept its
appointment in writing and must acknowledge its status as a fiduciary of the
Plan.
* * * * * * * * * * * * * * *
10.5
<PAGE> 54
ARTICLE XI - PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
11.01 INSURANCE BENEFIT. The Plan does not provide Incidental Life
Insurance Benefits for Participants.
* * * * * * * * * * * * * * *
11.1
<PAGE> 55
ARTICLE XII - MISCELLANEOUS
12.01 EVIDENCE. Anyone required to give evidence under the terms of the
Plan may do so by certificate, affidavit, document or other information which
the person to act in reliance may consider pertinent, reliable and genuine, and
to have been signed, made or presented by the proper party or parties. The
Administrative Committee and the Trustee are fully protected in acting and
relying upon any evidence described under the immediately preceding sentence.
12.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee nor the
Administrative Committee has any obligation or responsibility with respect to
any action required by the Plan to be taken by the Employer, any Participant or
eligible Employee, or for the failure of any of the above persons to act or make
any payment or contribution, or to otherwise provide any benefit contemplated
under this Plan. Furthermore, the Plan does not require the Trustee or the
Administrative Committee to collect any contribution required under the Plan, or
to determine the correctness of the amount of any Employer contribution. Neither
the Trustee nor the Administrative Committee need inquire into or be responsible
for any action or failure to act on the part of the others, or on the part of
any other person who has any responsibility regarding the management,
administration or operation of the Plan, whether by the express terms of the
Plan or by a separate agreement authorized by the Plan or by the applicable
provisions of ERISA. Any action required of a corporate Employer must be by its
Board of Directors or its designate.
12.03 FIDUCIARIES NOT INSURERS. The Trustee, the Administrative Committee,
the Plan Administrator and the Employer in no way guarantee the Trust Fund from
loss or depreciation. The Employer does not guarantee the payment of any money
which may be or becomes due to any person from the Trust Fund. The liability of
the Administrative Committee and the Trustee to make any payment from the Trust
Fund at any time and all times is limited to the then available assets of the
Trust.
12.04 WAIVER OF NOTICE. Any person entitled to notice under the Plan may
waive the notice, unless the Code or Treasury regulations prescribe the notice
or ERISA specifically or impliedly prohibits such a waiver.
12.05 SUCCESSORS. The Plan is binding upon all persons entitled to
benefits under the Plan, their respective heirs and legal representatives, upon
the Employer, its successors and assigns, and upon the Trustee, the
Administrative Committee,the Plan Administrator and their successors.
12.06 WORD USAGE. Words used in the masculine also apply to the feminine
where applicable, and wherever the context of the Employer's Plan dictates, the
plural includes the singular and the singular includes the plural.
12.07 STATE LAW. Pennsylvania law will determine all questions arising
with respect to the provisions of this Agreement except to the extent superseded
by Federal law.
12.08 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or with
respect to the establishment of the Trust, or any modification or amendment to
the Plan or Trust, or in the creation of any Account, or the payment of any
benefit, gives any Employee, Employee-Participant or any Beneficiary any right
to continue employment, any legal or equitable right against the Employer, or
Employee of the Employer, or against the Trustee, or its agents or employees, or
against the Plan Administrator, except as expressly provided by the Plan, the
Trust, ERISA or by a separate agreement.
* * * * * * * * * * * * * * *
12.1
<PAGE> 56
ARTICLE XIII - EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the
Employer has no beneficial interest in any asset of the Trust and no part of any
asset in the Trust may ever revert to or be repaid to an Employer, either
directly or indirectly; nor, prior to the satisfaction of all liabilities with
respect to the Participants and their Beneficiaries under the Plan, may any part
of the corpus or income of the Trust Fund, or any asset of the Trust, be (at any
time) used for, or diverted to, purposes other than the exclusive benefit of the
Participants or their Beneficiaries.
13.02 AMENDMENT BY EMPLOYER. The Employer has the right at any time and
from time to time:
(a) To amend this Agreement in any manner it deems necessary or advisable
in order to qualify (or maintain qualification of) this Plan and the Trust
created under it under the provisions of Code Section 401(a);
(b) To amend the Plan to allow the Plan to operate under a waiver of the
minimum funding requirement; and
(c) To amend this Agreement in any other manner.
No amendment may authorize or permit any of the Trust Fund (other than the
part which is required to pay taxes and administration expenses) to be used for
or diverted to purposes other than for the exclusive benefit of the Participants
or their Beneficiaries or estates. No amendment may cause or permit any portion
of the Trust Fund to revert to or become a property of the Employer. The
Employer also may not make any amendment which affects the rights, duties or
responsibilities of the Trustee, the Plan Administrator or the Administrative
Committee without the written consent of the affected Trustee, the Plan
Administrator or the affected member of the Administrative Committee. The
Employer must make all amendments in writing. Each amendment must state the date
to which it is either retroactively or prospectively effective.
(A) CODE SECTION 411(d)(6) PROTECTED BENEFITS. An amendment (including the
adoption of this Plan as a restatement of an existing plan) may not decrease a
Participant's Accrued Benefit, except to the extent permitted under Code Section
412(c)(8), and may not reduce or eliminate Code Section 411(d)(6) protected
benefits determined immediately prior to the adoption date (or, if later, the
effective date) of the amendment. An amendment reduces or eliminates Code
Section 411(d)(6) protected benefits if the amendment has the effect of either
(1) eliminating or reducing an early retirement benefit or a retirement-type
subsidy (as defined in Treasury regulations), or (2) except as provided by
Treasury regulations, eliminating an optional form of benefit. The
Administrative Committee must disregard an amendment to the extent application
of the amendment would fail to satisfy this paragraph. If the Administrative
Committee must disregard an amendment because the amendment would violate clause
(1) or clause (2), the Administrative Committee must maintain a schedule of the
early retirement option or other optional forms of benefit the Plan must
continue for the affected Participants.
13.03 DISCONTINUANCE. The Employer has the right, at any time, to suspend
or discontinue its contributions under the Plan, and to terminate, at any time,
this Plan and the Trust created under this Agreement. The Plan will terminate
upon the first to occur of the following:
(a) The date terminated by action of the Employer;
13.1
<PAGE> 57
(b) The dissolution or merger of the Employer, unless the successor makes
provision to continue the Plan, in which event the successor must
substitute itself as the Employer under this Plan. Any termination of the
Plan resulting from this paragraph (b) is not effective until compliance
with any applicable notice requirements under ERISA.
13.04 FULL VESTING ON TERMINATION. Upon either full or partial termination
of the Plan, or, if applicable, upon complete discontinuance of profit sharing
plan contributions to the Plan, an affected Participant's right to his Accrued
Benefit is 100% Nonforfeitable, irrespective of the Nonforfeitable percentage
which otherwise would apply under Article V.
13.05 MERGER/DIRECT TRANSFER. The Trustee may not consent to, or be a
party to, any merger or consolidation with another plan, or to a transfer of
assets or liabilities to another plan, unless immediately after the merger,
consolidation or transfer, the surviving Plan provides each Participant a
benefit equal to or greater than the benefit each Participant would have
received had the Plan terminated immediately before the merger or consolidation
or transfer. The Trustee possesses the specific authority to enter into merger
agreements or direct transfer of assets agreements with the trustees of other
retirement plans described in Code Section 401(a), including an elective
transfer, and to accept the direct transfer of plan assets, or to transfer plan
assets, as a party to any such agreement.
The Trustee may accept a direct transfer of plan assets on behalf of an
Employee prior to the date the Employee satisfies the Plan's eligibility
conditions. If the Trustee accepts such a direct transfer of plan assets, the
Administrative Committee and Trustee must treat the Employee as a Participant
for all purposes of the Plan except the Employee is not a Participant for
purposes of sharing in Employer contributions or Participant forfeitures under
the Plan until he actually becomes a Participant in the Plan.
(A) ELECTIVE TRANSFERS. The Trustee, after August 9, 1988, may not consent to,
or be a party to a merger, consolidation or transfer of assets with a defined
benefit plan, except with respect to an elective transfer, or unless the
transferred benefits are in the form of paid-up individual annuity contracts
guaranteeing the payment of the transferred benefits in accordance with the
terms of the transferor plan and in a manner consistent with the Code and with
ERISA. The Trustee will hold, administer and distribute the transferred assets
as a part of the Trust Fund and the Trustee must maintain a separate Employer
contribution Account for the benefit of the Employee on whose behalf the Trustee
accepted the transfer in order to reflect the value of the transferred assets.
Unless a transfer of assets to this Plan is an elective transfer, the Plan will
preserve all Code Section 411(d)(6) protected benefits with respect to those
transferred assets, in the manner described in Section 13.02. A transfer is an
elective transfer if: (1) the transfer satisfies the first paragraph of this
Section 13.06; (2) the transfer is voluntary, under a fully informed election by
the Participant; (3) the Participant has an alternative that retains his Code
Section 411(d)(6) protected benefits (including an option to leave his benefit
in the transferor plan, if that plan is not terminating); (4) the transfer
satisfies the applicable spousal consent requirements of the Code; (5) the
transferor plan satisfies the joint and survivor notice requirements of the
Code, if the Participant's transferred benefit is subject to those requirements;
(6) the Participant has a right to immediate distribution from the transferor
plan, in lieu of the elective transfer; (7) the transferred benefit is at least
the greater of the single sum distribution provided by the transferor plan for
which the Participant is eligible or the present value of the Participant's
accrued benefit under the transferor plan payable at that plan's normal
retirement age; (8) the Participant has a 100% Nonforfeitable interest in the
transferred benefit; and (9) the transfer otherwise satisfies applicable
Treasury regulations. An elective transfer may occur between qualified plans of
any type.
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<PAGE> 58
(B) DISTRIBUTION RESTRICTIONS UNDER CODE SECTION 401(k). If the Plan receives a
direct transfer (by merger or otherwise) of elective contributions (or amounts
treated as elective contributions) under a Plan with a Code Section 401(k)
arrangement, the distribution restrictions of Code Sections 401(k)(2) and (10)
continue to apply to those transferred elective contributions.
13.06 TERMINATION. Upon termination of the Plan, the distribution
provisions of Article VI remain operative, with the following exceptions:
(1) if the present value of the Participant's Nonforfeitable Accrued
Benefit does not exceed $3,500, the Administrative Committee will direct
the Trustee to distribute the Participant's Nonforfeitable Accrued Benefit
to him in lump sum as soon as administratively practicable after the Plan
terminates; and
(2) if the present value of the Participant's Nonforfeitable Accrued
Benefit exceeds $3,500, the Participant or the Beneficiary, in addition to
the distribution events permitted under Article VI, may elect to have the
Trustee commence distribution of his Nonforfeitable Accrued Benefit as
soon as administratively practicable after the Plan terminates.
To liquidate the Trust, the Administrative Committee will purchase a
deferred annuity contract for each Participant which protects the Participant's
distribution rights under the Plan, if the Participant's Nonforfeitable Accrued
Benefit exceeds $3,500 and the Participant does not elect an immediate
distribution pursuant to Paragraph (2).
The Trust will continue until the Trustee in accordance with the direction
of the Administrative Committee has distributed all of the benefits under the
Plan. On each valuation date, the Administrative Committee will credit any part
of a Participant's Accrued Benefit retained in the Trust with its proportionate
share of the Trust's income, expenses, gains and losses, both realized and
unrealized. Upon termination of the Plan, the amount, if any, in a suspense
account under Article III will revert to the Employer, subject to the conditions
of the Treasury regulations permitting such a reversion. A resolution or
amendment to freeze all future benefit accrual but otherwise to continue
maintenance of this Plan, is not a termination for purposes of this Section
13.06.
DISTRIBUTION RESTRICTIONS UNDER CODE Section 401(k). The portion of the
Participant's Nonforfeitable Accrued Benefit attributable to elective
contributions under a Code Section 401(k) arrangement (or to amounts treated
under the Code Section 401(k) arrangement as elective contributions) is not
distributable on account of Plan termination, as described in Section 13.06,
unless: (a) the Participant otherwise is entitled under the Plan to a
distribution of that portion of his Nonforfeitable Accrued Benefit; or (b) the
Plan termination occurs without the establishment of a successor plan. A
successor plan under clause (b) is a defined contribution plan (other than an
ESOP maintained by the Employer (or by a related employer) at the time of the
termination of the Plan or within the period ending twelve months after the
final disposition of assets. A distribution made after March 31, 1988, pursuant
to clause (b), must be part of a lump sum distribution to the Participant of his
Nonforfeitable Accrued Benefit.
* * * * * * * * * * * * * * *
13.3
<PAGE> 59
ARTICLE XIV - PROVISIONS RELATING TO CODE SECTION 401(k) AND TO CODE
SECTION 401(m)
14.01 SECTION 401(k) ARRANGEMENT. The Employer makes the deferral
contributions described in Section 3.01 pursuant to a 401(k) arrangement. An
Employee who is eligible to participate in the Plan may file a salary reduction
agreement with the Administrative Committee. The salary reduction agreement may
not be effective earlier than the following date which occurs last: (i) the
Employee's Plan Entry Date (or, in the case of a reemployed Employee, his
reparticipation date under Article II); (ii) the execution date of the
Employee's salary reduction agreement; (iii) the date the Employer adopts the
Code Section 401(k) arrangement by executing the Plan; or (iv) the effective
date of the Code Section 401(k) arrangement. A salary reduction agreement must
specify the amount of Compensation (as defined in Section 1.10) or percentage of
Compensation the Employee wishes to defer. The salary reduction agreement will
apply only to Compensation which becomes currently available to the Employee
after the effective date of the salary reduction agreement. The Employer will
apply a reduction election to all Compensation (and to increases in such
Compensation) unless the Employee specifies in his salary reduction agreement to
limit the election to certain Compensation.
An Employee's salary reduction contributions for the Plan Year, subject to
the elective deferral limitation of Section 14.03, may not exceed 15% of his
Compensation for the entire Plan Year. An Employee may modify his salary
reduction agreement, either to reduce or to increase the amount of deferral
contributions, as of each January 1st. The Employee will make this modification
by filing a new salary reduction agreement with the Administrative Committee. An
Employee may revoke a salary reduction agreement as of any the first day of any
payroll period. An Employee who revokes his salary reduction agreement may file
a new salary reduction agreement effective as of each January 1st.
14.02 DEFINITIONS. For purposes of this Article XIV:
(a) "Highly Compensated Employee" means an Eligible Employee who satisfies
the definition in Section 1.07 of the Plan. Family members aggregated as a
single Employee under Section 1.09 constitute a single Highly Compensated
Employee, whether a particular family member is a Highly Compensated
Employee or a Nonhighly Compensated Employee without the application of
family aggregation.
(b) "Nonhighly Compensated Employee" means an Eligible Employee who is not
a Highly Compensated Employee and who is not a family member treated as a
Highly Compensated Employee.
(c) "Eligible Employee" means, for purposes of the ADP test described in
Section 14.04, an Employee who is eligible to participate in the Code
Section 401(k) arrangement, irrespective of whether the Employer actually
makes deferral contributions on behalf of the Employee. For purposes of
the ACP test described in Section 14.05, an "Eligible Employee" means a
Participant who is eligible to receive an allocation of matching
contributions (or would be eligible if he made the type of contributions
necessary to receive an allocation of matching contributions) and a
Participant who is eligible to make employee contributions, irrespective
of whether he actually makes employee contributions. An Employee continues
to be an Eligible Employee during a period the Plan suspends the
Employee's right to make elective deferrals or nondeductible contributions
following a hardship distribution.
(d) "Highly Compensated Group" means the group of Eligible Employees who
are Highly Compensated Employees for the Plan Year.
(e) "Nonhighly Compensated Group" means the group of Eligible Employees
who are Nonhighly Compensated Employees for the Plan Year.
14.1
<PAGE> 60
(f) "Compensation" means, except as specifically provided in this Article
XIV, Compensation as defined for nondiscrimination purposes in Section
1.10(B) of the Plan. For Plan Years beginning prior to the later of
January 1, 1992, or 60 days after the Treasury issues final regulations
under Code Sections 401(k) and 401(m), the Plan may limit Compensation
taken into account to Compensation received only for the portion of the
Plan Year in which the Employee was an Eligible Employee and only for the
portion of the Plan Year in which the Plan or the Code Section 401(k)
arrangement was in effect. For subsequent Plan Years, Compensation must
include Compensation for the entire Plan Year, irrespective of whether the
Plan or the Code Section 401(k) arrangement was in effect for the entire
Plan Year or whether the Employee begins, resumes or ceases to be an
Eligible Employee during the Plan Year.
(g) "Deferral contributions" means the sum of the deferral contributions
the Employer contributes to the Trust on behalf of an Eligible Employee,
pursuant to Section 3.01.
(h) "Elective deferrals" are the deferral contributions the Employer
contributes to the Trust at the election of an Eligible Employee. If the
Code Section 401(k) arrangement includes a cash or deferred feature, any
portion of a cash or deferred contribution contributed to the Trust
because of the Employee's failure to make a cash election is an elective
deferral, but any portion of a cash or deferred contribution over which
the Employee does not have a cash election is not an elective deferral.
Elective deferrals do not include amounts which have become currently
available to the Employee prior to the election nor amounts designated as
employee contributions at the time of deferral or contribution.
(i) "Matching contributions" are contributions made by the Employer on
account of elective deferrals under a Code Section 401(k) arrangement or
on account of employee contributions. Matching contributions also include
Participant forfeitures allocated on account of such elective deferrals or
employee contributions.
(j) "Nonelective contributions" are contributions made by the Employer
which are not subject to a deferral election by an Employee and which are
not matching contributions.
(k) "Qualified matching contributions" are matching contributions which
are 100% Nonforfeitable at all times and which are subject to the
distribution restrictions described in paragraph (m). Matching
contributions are not 100% Nonforfeitable at all times if the Employee has
a 100% Nonforfeitable interest because of his Years of Service taken into
account under a vesting schedule.
(l) "Qualified nonelective contributions" are nonelective contributions
which are 100% Nonforfeitable at all times and which are subject to the
distribution restrictions described in paragraph (m). Nonelective
contributions are not 100% Nonforfeitable at all times if the Employee has
a 100% Nonforfeitable interest because of his Years of Service taken into
account under a vesting schedule. Any nonelective contributions allocated
to a Participant's Qualified Nonelective Contributions Account under the
Plan automatically satisfy the definition of qualified nonelective
contributions.
14.2
<PAGE> 61
(m) "Distribution restrictions" means the Employee may not receive a
distribution of the specified contributions (nor earnings on those
contributions) except in the event of (1) the Participant's death,
disability, termination of employment or attainment of age 59 1/2, (2)
financial hardship satisfying the requirements of Code Section 401(k) and
the applicable Treasury regulations, (3) a plan termination, without
establishment of a successor defined contribution plan (other than an
ESOP), (4) a sale of substantially all of the assets (within the meaning
of Code Section 409(d)(2)) used in a trade or business, but only to an
employee who continues employment with the corporation acquiring those
assets, or (5) a sale by a corporation of its interest in a subsidiary
(within the meaning of Code Section 409(d)(3)), but only to an employee
who continues employment with the subsidiary. For Plan Years beginning
after December 31, 1988, a distribution on account of financial hardship,
as described in clause (2), may not include earnings on elective deferrals
credited as of a date later than December 31, 1988, and may not include
qualified matching contributions and qualified nonelective contributions,
nor any earnings on such contributions, irrespective of when credited. A
distribution described in clauses (3), (4) or (5), if made after March 31,
1988, must be a lump sum distribution, as required under Code Section
401(k)(10).
(n) "Employee contributions" are contributions made by a Participant on an
after-tax basis, whether voluntary or mandatory, and designated, at the
time of contribution, as an employee (or nondeductible) contribution.
Elective deferrals and deferral contributions are not employee
contributions. Participant nondeductible contributions, made pursuant to
Section 4.01 of the Plan, are employee contributions.
14.03 ANNUAL ELECTIVE DEFERRAL LIMITATION.
(A) ANNUAL ELECTIVE DEFERRAL LIMITATION. An Employee's elective deferrals for a
calendar year beginning after December 31, 1986, may not exceed the 402(g)
limitation. The 402(g) limitation is the greater of $7,000 or the adjusted
amount determined by the Secretary of the Treasury. If, pursuant to a salary
reduction agreement or pursuant to a cash or deferral election, the Employer
determines the Employee's elective deferrals to the Plan for a calendar year
would exceed the 402(g) limitation, the Employer will not make any additional
elective deferrals with respect to that Employee for the remainder of that
calendar year, paying in cash to the Employee any amounts which would result in
the Employee's elective deferrals for the calendar year exceeding the 402(g)
limitation. If the Administrative Committee determines an Employee's elective
deferrals already contributed to the Plan for a calendar year exceed the 402(g)
limitation, the Administrative Committee will distribute the amount in excess of
the 402(g) limitation (the "excess deferral"), as adjusted for allocable income,
no later than April 15 of the following calendar year. If the Administrative
Committee distributes the excess deferral by the appropriate April 15, it may
make the distribution irrespective of any other provision under this Plan or
under the Code. The Administrative Committee will reduce the amount of excess
deferrals for a calendar year distributable to the Employee by the amount of
excess contributions (as determined in Section 14.04), if any, previously
distributed to the Employee for the Plan Year beginning in that calendar year.
If an Employee participates in another plan under which he makes elective
deferrals pursuant to a Code Section 401(k) arrangement, elective deferrals
under a Simplified Employee Pension, or salary reduction contributions to a
tax-sheltered annuity, irrespective of whether the Employer maintains the other
plan, he may provide the Administrative Committee a written claim for excess
deferrals made for a calendar year. The Employee must submit the claim no later
than the March 1 following the close of the particular calendar year and the
claim must specify the amount of the Employee's elective deferrals under this
Plan which are excess deferrals. If the Administrative Committee receives a
timely claim, it will distribute the excess deferral (as adjusted for allocable
income) the Employee has assigned to this Plan, in accordance with the
distribution procedure described in the immediately preceding paragraph.
14.3
<PAGE> 62
(B) ALLOCABLE INCOME. For purposes of making a distribution of excess deferrals,
allocable income means net income or net loss allocable to the excess deferrals
for the calendar year in which the Employee made the excess deferral and for the
"gap period" measured from the beginning of the next calendar year to the date
of the distribution. If the distribution of the excess deferral occurs during
the calendar year in which the Employee made the excess deferral, the
Administrative Committee will treat as a "gap period" the period from the first
day of that calendar year to the date of the distribution. The Administrative
Committee will determine allocable income in the same manner as described in
Section 14.08(F) for excess contributions, except the numerator of the
allocation fraction will be the amount of the Employee's excess deferrals and
the denominator of the allocation fraction will be the Employee's Accrued
Benefit attributable to his elective deferrals.
14.04 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST. For each Plan Year, the
Administrative Committee must determine whether the Plan's Code Section 401(k)
arrangement satisfies either of the following ADP tests:
(i) The average ADP for the Highly Compensated Group does not exceed 1.25
times the average ADP of the Nonhighly Compensated Group; or
(ii) The average ADP for the Highly Compensated Group does not exceed the
average ADP for the Nonhighly Compensated Group by more than two percentage
points (or the lesser percentage permitted by the multiple use limitation
in Section 14.10) and the average ADP for the Highly Compensated Group is
not more than twice the average ADP for the Nonhighly Compensated Group.
(A) CALCULATION OF ADP. The average ADP for a group is the average of the
separate ADPs calculated for each Eligible Employee who is a member of that
group. An Eligible Employee's ADP for a Plan Year is the ratio of the Eligible
Employee's deferral contributions for the Plan Year to the Employee's
Compensation for the Plan Year. For aggregated family members treated as a
single Highly Compensated Employee, the ADP of the family unit is the greater
of: (i) the ADP determined by combining the deferral contributions and
Compensation of the family members who are Highly Compensated Employees without
family aggregation; or (ii) the ADP determined by combining the deferral
contributions and Compensation of all aggregated family members. A Nonhighly
Compensated Employee's ADP does not include elective deferrals made to this Plan
or to any other Plan maintained by the Employer, to the extent such elective
deferrals exceed the 402(g) limitation described in Section 14.03.
The Administrative Committee may determine (in a manner consistent with
Treasury regulations) the ADPs of the Eligible Employees by taking into account
qualified nonelective contributions or qualified matching contributions, or
both, made to this Plan or to any other qualified Plan maintained by the
Employer. The Administrative Committee may not include qualified nonelective
contributions in the ADP test unless the allocation of nonelective contributions
is nondiscriminatory when the Administrative Committee takes into account all
nonelective contributions (including the qualified nonelective contributions)
and also when the Administrative Committee takes into account only the
nonelective contributions not used in either the ADP test or the ACP test
described in Section 14.05. For Plan Years beginning after December 31, 1989,
the Administrative Committee may not include in the ADP test any qualified
nonelective contributions or qualified matching contributions under another
qualified plan unless that plan has the same plan year as this Plan. The
Administrative Committee must maintain records to demonstrate compliance with
the ADP test, including the extent to which the Plan used qualified nonelective
contributions or qualified matching contributions to satisfy the test.
14.4
<PAGE> 63
(B) SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES. To determine the
ADP of any Highly Compensated Employee, the deferral contributions taken into
account must include any elective deferrals made by the Highly Compensated
Employee under any other Code Section 401(k) arrangement maintained by the
Employer, unless the elective deferrals are to an ESOP. If the plans containing
the Code Section 401(k) arrangements have different plan years, the
Administrative Committee will determine the combined deferral contributions on
the basis of the plan years ending in the same calendar year.
(C) AGGREGATION OF CERTAIN CODE SECTION 401(k) ARRANGEMENTS. If the Employer
treats two plans as a unit for coverage or nondiscrimination purposes, the
Employer must combine the Code Section 401(k) arrangements under such plans to
determine whether either plan satisfies the ADP test. This aggregation rule
applies to the ADP determination for all Eligible Employees, irrespective of
whether an Eligible Employee is a Highly Compensated Employee or a Nonhighly
Compensated Employee. The Administrative Committee also may elect to aggregate
the Code Section 401(k) arrangements under plans which the Employer does not
treat as a unit for coverage or nondiscrimination purposes. For Plan Years
beginning after December 31, 1989, an aggregation of Code Section 401(k)
arrangements under this paragraph does not apply to plans which have different
plan years and, for Plan Years beginning after December 31, 1988, the
Administrative Committee may not aggregate an ESOP (or the ESOP portion of a
plan) with a non-ESOP plan (or non-ESOP portion of a plan).
(D) CHARACTERIZATION OF EXCESS CONTRIBUTIONS. If, pursuant to this Section
14.04, the Administrative Committee has elected to include qualified matching
contributions in the average ADP, the Administrative Committee will treat excess
contributions as attributable proportionately to deferral contributions and to
qualified matching contributions allocated on the basis of those deferral
contributions. If the total amount of a Highly Compensated Employee's excess
contributions for the Plan Year exceeds his deferral contributions or qualified
matching contributions for the Plan Year, the Administrative Committee will
treat the remaining portion of his excess contributions as attributable to
qualified nonelective contributions. The Administrative Committee will reduce
the amount of excess contributions for a Plan Year distributable to a Highly
Compensated Employee by the amount of excess deferrals (as determined in Section
14.03), if any, previously distributed to that Employee for the Employee's
taxable year ending in that Plan Year.
(E) DISTRIBUTION OF EXCESS CONTRIBUTIONS. If the Administrative Committee
determines the Plan fails to satisfy the ADP test for a Plan Year, it must
distribute the excess contributions, as adjusted for allocable income, during
the next Plan Year. However, the Employer will incur an excise tax equal to 10%
of the amount of excess contributions for a Plan Year not distributed to the
appropriate Highly Compensated Employees during the first 2 1/2 months of that
next Plan Year. The excess contributions are the amount of deferral
contributions made by the Highly Compensated Employees which causes the Plan to
fail to satisfy the ADP test. The Administrative Committee will distribute to
each Highly Compensated Employee his respective share of the excess
contributions. The Administrative Committee will determine the respective shares
of excess contributions by starting with the Highly Compensated Employee(s) who
has the greatest ADP, reducing his ADP to the next highest ADP, then, if
necessary, reducing the ADP of the Highly Compensated Employee(s) at the next
highest ADP level (including the ADP of the Highly Compensated Employee(s) whose
ADP the Administrative Committee already has reduced), and continuing in this
manner until the average ADP for the Highly Compensated Group satisfies the ADP
test. If the Highly Compensated Employee is part of an aggregated family group,
the Administrative Committee, in accordance with the applicable Treasury
regulations, will determine each aggregated family member's allocable share of
the excess contributions assigned to the family unit.
14.5
<PAGE> 64
(F) ALLOCABLE INCOME. To determine the amount of the corrective distribution
required under this Section 14.04, the Administrative Committee must calculate
the allocable income for the Plan Year in which the excess contributions arose
and for the "gap period" measured from the beginning of the next Plan Year to
the date of the distribution. "Allocable income" means net income or net loss.
To calculate allocable income for the Plan Year, the Administrative Committee:
(1) first will determine the net income or net loss for the Plan Year on the
Highly Compensated Employee's Accrued Benefit attributable to deferral
contributions; and (2) then will multiply this net income or net loss by the
following fraction:
Amount of the Highly Compensated Employee's excess contributions
----------------------------------------------------------------
Accrued Benefit attributable to deferral contributions
The Accrued Benefit attributable to deferral contributions includes the Accrued
Benefit attributable to qualified matching contributions and qualified
nonelective contributions taken into account in the ADP test for the Plan Year
or for any prior Plan Year. For purposes of the denominator of the fraction, the
Administrative Committee will calculate the Accrued Benefit attributable to
deferral contributions as of the last day of the Plan Year (without regard to
the net income or net loss for the Plan Year on that Accrued Benefit).
To calculate allocable income for the "gap period," the Administrative
Committee will perform the same calculation as described in the preceding
paragraph, except in clause (1) the Administrative Committee will determine, as
of the last day of the month preceding the date of distribution, the net income
or net loss for the "gap period" and in clause (2) will calculate the Accrued
Benefit attributable to deferral contributions as of the day before the
distribution. If the Plan does not perform a valuation on the last day of the
month preceding the date of distribution, the Administrative Committee, in lieu
of the calculation described in this paragraph, will calculate allocable income
for each month in the "gap period" as equal to 10% of the allocable income for
the Plan Year. Under this alternate calculation, the Administrative Committee
will disregard the month in which the distribution occurs, if the Plan makes the
distribution no later than the 15th day of that month.
14.05 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING
CONTRIBUTIONS/PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. For Plan Years beginning
after December 31, 1986, the Administrative Committee must determine whether the
annual Employer matching contributions (other than qualified matching
contributions used in the ADP test), if any, and the Employee contributions, if
any, satisfy either of the following average contribution percentage ("ACP")
tests:
(i) The ACP for the Highly Compensated Group does not exceed 1.25 times the
ACP of the Nonhighly Compensated Group; or
(ii) The ACP for the Highly Compensated Group does not exceed the ACP for
the Nonhighly Compensated Group by more than two percentage points (or the
lesser percentage permitted by the multiple use limitation in Section
14.06) and the ACP for the Highly Compensated Group is not more than twice
the ACP for the Nonhighly Compensated Group.
(A) CALCULATION OF ACP. The average contribution percentage for a group is the
average of the separate contribution percentages calculated for each Eligible
Employee who is a member of that group. An Eligible Employee's contribution
percentage for a Plan Year is the ratio of the Eligible Employee's aggregate
contributions for the Plan Year to the Employee's Compensation for the Plan
Year. "Aggregate contributions" are Employer matching contributions (other than
qualified matching contributions used in the ADP test) and employee
contributions. For aggregated family members treated as a single Highly
Compensated Employee, the contribution percentage of the family unit is the
contribution percentage determined by combining the aggregate contributions and
Compensation of all aggregated family members.
14.6
<PAGE> 65
The Administrative Committee, in a manner consistent with Treasury
regulations, may determine the contribution percentages of the Eligible
Employees by taking into account qualified nonelective contributions (other than
qualified nonelective contributions used in the ADP test) or elective deferrals,
or both, made to this Plan or to any other qualified Plan maintained by the
Employer. The Administrative Committee may not include qualified nonelective
contributions in the ACP test unless the allocation of nonelective contributions
is nondiscriminatory when the Administrative Committee takes into account all
nonelective contributions (including the qualified nonelective contributions)
and also when the Administrative Committee takes into account only the
nonelective contributions not used in either the ADP test or the ACP test. The
Administrative Committee may not include elective deferrals in the ACP test,
unless the Plan which includes the elective deferrals satisfies the ADP test
both with and without the elective deferrals included in this ACP test. For Plan
Years beginning after December 31, 1989, the Administrative Committee may not
include in the ACP test any qualified nonelective contributions or elective
deferrals under another qualified plan unless that plan has the same plan year
as this Plan. The Administrative Committee must maintain records to demonstrate
compliance with the ACP test, including the extent to which the Plan used
qualified nonelective contributions or elective deferrals to satisfy the test.
(B) SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES. To determine the
contribution percentage of any Highly Compensated Employee, the aggregate
contributions taken into account must include any matching contributions (other
than qualified matching contributions used in the ADP test) and any Employee
contributions made on his behalf to any other plan maintained by the Employer,
unless the other plan is an ESOP. If the plans have different plan years, the
Administrative Committee will determine the combined aggregate contributions on
the basis of the plan years ending in the same calendar year.
(C) AGGREGATION OF CERTAIN PLANS. If the Employer treats two plans as a unit for
coverage or nondiscrimination purposes, the Employer must combine the plans to
determine whether either plan satisfies the ACP test. This aggregation rule
applies to the contribution percentage determination for all Eligible Employees,
irrespective of whether an Eligible Employee is a Highly Compensated Employee or
a Nonhighly Compensated Employee. The Administrative Committee also may elect to
aggregate plans which the Employer does not treat as a unit for coverage or
nondiscrimination purposes. For Plan Years beginning after December 31, 1989, an
aggregation of plans under this paragraph does not apply to plans which have
different plan years and, for Plan Years beginning after December 31, 1988, the
Administrative Committee may not aggregate an ESOP (or the ESOP portion of a
plan) with a non-ESOP plan (or non-ESOP portion of a plan).
(D) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. The Administrative Committee
will determine excess aggregate contributions after determining excess deferrals
under Section 14.03 and excess contributions under Section 14.04. If the
Administrative Committee determines the Plan fails to satisfy the ACP test for a
Plan Year, it must distribute the excess aggregate contributions, as adjusted
for allocable income, during the next Plan Year. However, the Employer will
incur an excise tax equal to 10% of the amount of excess aggregate contributions
for a Plan Year not distributed to the appropriate Highly Compensated Employees
during the first 2 1/2 months of that next Plan Year. The excess aggregate
contributions are the amount of aggregate contributions allocated on behalf of
the Highly Compensated Employees which causes the Plan to fail to satisfy the
ACP test. The Administrative Committee will distribute to each Highly
Compensated Employee his respective share of the excess aggregate contributions.
The Administrative Committee will determine the respective shares of excess
aggregate contributions by starting with the Highly Compensated Employee(s) who
has the greatest contribution percentage, reducing his contribution percentage
to the next highest contribution percentage, then, if necessary, reducing the
contribution percentage of the Highly Compensated Employee(s) at the next
highest contribution percentage level (including the contribution percentage of
the Highly Compensated Employee(s) whose contribution percentage the
Administrative Committee already has reduced), and continuing in this manner
until the ACP for the Highly Compensated Group satisfies the ACP test. If the
Highly Compensated Employee is part of
14.7
<PAGE> 66
an aggregated family group, the Administrative Committee, in accordance with the
applicable Treasury regulations, will determine each aggregated family member's
allocable share of the excess aggregate contributions assigned to the family
unit.
(E) ALLOCABLE INCOME. To determine the amount of the corrective distribution
required under this Section 14.05, the Administrative Committee must calculate
the allocable income for the Plan Year in which the excess aggregate
contributions arose and for the "gap period" measured from the beginning of the
next Plan Year to the date of the distribution. "Allocable income" means net
income or net loss. The Administrative Committee will determine allocable income
in the same manner as described in Section 14.04(F) for excess contributions,
except the numerator of the allocation fraction will be the Highly Compensated
Employee's excess aggregate contributions and the denominator of the allocation
fraction will be the Employee's Accrued Benefit attributable to aggregate
contributions and, if applicable, to qualified nonelective contributions and
elective deferrals included in the ACP test for the Plan Year or for any prior
Plan Year.
(F) CHARACTERIZATION OF EXCESS AGGREGATE CONTRIBUTIONS. The Administrative
Committee will treat a Highly Compensated Employee's allocable share of excess
aggregate contributions in the following priority: (1) first as attributable to
his Employee contributions which are voluntary contributions, if any; (2) then
as matching contributions allocable with respect to excess contributions
determined under the ADP test; (3) then on a pro rata basis to matching
contributions and to the deferral contributions relating to those matching
contributions which the Administrative Committee has included in the ACP test;
(4) then on a pro rata basis to Employee contributions which are mandatory
contributions, if any, and to the matching contributions allocated on the basis
of those mandatory contributions; and (5) last to qualified nonelective
contributions used in the ACP test. To the extent the Highly Compensated
Employee's excess aggregate contributions are attributable to matching
contributions, and he is not 100% vested in his Accrued Benefit attributable to
matching contributions, the Administrative Committee will distribute only the
vested portion and forfeit the nonvested portion. The vested portion of the
Highly Compensated Employee's excess aggregate contributions attributable to
Employer matching contributions is the total amount of such excess aggregate
contributions (as adjusted for allocable income) multiplied by his vested
percentage (determined as of the last day of the Plan Year for which the
Employer made the matching contribution). The Plan will allocate forfeited
excess aggregate contributions to reduce Employer matching contributions for the
Plan Year in which the forfeiture occurs.
14.06 MULTIPLE USE LIMITATION. For Plan Years beginning after December 31,
1988, if at least one Highly Compensated Employee is includible in the ADP test
and in the ACP test, the sum of the Highly Compensated Group's ADP and ACP may
not exceed the multiple use limitation.
The multiple use limitation is the sum of (i) and (ii):
(i) 125% of the greater of: (a) the ADP of the Nonhighly Compensated Group
under the Code Section 401(k) arrangement; or (b) the ACP of the Nonhighly
Compensated Group for the Plan Year beginning with or within the Plan Year
of the Code Section 401(k) arrangement.
(ii) 2% plus the lesser of (i)(a) or (i)(b), but no more than twice the
lesser of (i)(a) or (i)(b).
For Plan Years beginning prior to the later of January 1, 1992, or 60 days
after the Treasury issues final regulations under Code Section 401(m), the
Administrative Committee, in lieu of determining the multiple use limitation as
the sum of (i) and (ii), may elect to determine the multiple use limitation as
the sum of (iii) and (iv):
(iii) 125% of the lesser of: (a) the ADP of the Nonhighly Compensated Group
under the Code Section 401(k) arrangement; or (b) the ACP of the Nonhighly
Compensated Group for the Plan Year beginning with or within the Plan Year
of the Code Section 401(k) arrangement.
14.8
<PAGE> 67
(iv) 2% plus the greater of (iii)(a) or (iii)(b), but no more than twice
the greater of (iii)(a) or (iii)(b).
The Administrative Committee will determine whether the Plan satisfies the
multiple use limitation after applying the ADP test under Section 14.04 and the
ACP test under Section 14.05 and after making any corrective distributions
required by those Sections. If, after applying this Section 14.06, the
Administrative Committee determines the Plan has failed to satisfy the multiple
use limitation, the Administrative Committee will correct the failure by
treating the excess amount as excess aggregate contributions under Section
14.05. This Section 14.06 does not apply unless, prior to application of the
multiple use limitation, the ADP and the ACP of the Highly Compensated Group
each exceeds 125% of the respective percentages for the Nonhighly Compensated
Group.
IN WITNESS WHEREOF, the Employer and the Trustee have executed this Plan
and Trust in Selinsgrove, PA this 10th day of September, 1992.
Sun Bancorp, Inc.
By: /s/ Fred W. Kelly Jr.
----------------------------------
President
"EMPLOYER"
(Illegible)
-----------------------------------
Snyder County Trust Company
"TRUSTEE"
14.9
<PAGE> 68
ALPHABETICAL LISTING OF DEFINITIONS
<TABLE>
<S> <C>
Account ........................................................ 1.4
Accounting Date ................................................ 1.4
Accrued Benefit ................................................ 1.4
Actual Deferral Percentage ("ADP") Test ........................ 14.4
Administrative Committee ....................................... 1.1
Annual Addition ................................................ 3.6
Annuity Starting Date .......................................... 6.1
Average contribution percentage ("ACP") test ................... 14.6
Beneficiary ................................................... 1.2
Break in Service ............................................... 2.1
Cash-Out Distribution .......................................... 5.1
Code ........................................................... 1.5
Code Section 411(d)(6) Protected Benefits ...................... 13.1
Compensation ................................................... 1.2, 1.8, 3.6
Deferral contributions ......................................... 14.2
Deferral Contributions Account ................................. 3.2
Defined benefit plan ........................................... 3.7
Defined contribution plan ...................................... 3.7
Determination Date ............................................. 1.8
Disability ..................................................... 1.6
Distribution Date .............................................. 6.1
Effective Date ................................................. 1.4
Elective contributions ......................................... 1.3
Elective deferrals ............................................. 14.2
Elective Transfer .............................................. 13.2
Employee ....................................................... 1.1
Employer ....................................................... 1.1, 1.8, 3.7
ERISA .......................................................... 1.5
Excess aggregate contributions ................................. 14.7
Excess Amount .................................................. 3.7
Excess contributions ........................................... 14.5
Exempt Participant ............................................. 8.1
Forfeiture Break in Service .................................... 5.3
Highly Compensated Employee .................................... 1.1
Hour of Service ................................................ 1.5
Incidental Life Insurance Benefits ............................. 11.1
Investment Manager ............................................. 9.1
Joint and Survivor Annuity ..................................... 6.6
Key Employee ................................................... 1.8
Leased Employees ............................................... 1.7
Limitation Year ................................................ 3.7
Maximum Permissible Amount ..................................... 3.6
Minimum Distribution Incidental Benefit ........................ 6.3
Multiple Use Limitation ........................................ 14.8
Non-Key Employee ............................................... 1.8
Nonelective contributions ...................................... 14.2
Nonforfeitable ................................................. 1.4
Nontransferable Annuity ........................................ 1.5
Normal Retirement Age .......................................... 5.1
Participant .................................................... 1.2
Participant Forfeiture ......................................... 3.4
Participant Loans .............................................. 10.3
Permissive Aggregation Group ................................... 1.8
Plan ........................................................... 1.1
Plan Administrator ............................................. 1.1
Plan Entry Date ................................................ 1.4
Plan Year ...................................................... 1.4
Predecessor Employer ........................................... 1.6
Preretirement Survivor Annuity ................................. 6.7
Qualified Domestic Relations Order ............................. 6.9
Qualified matching contributions ............................... 14.2
Qualified nonelective contributions ............................ 14.2
Qualifying Employer Real Property .............................. 10.3
Qualifying Employer Securities ................................. 10.3
Related Employers .............................................. 1.6
Required Aggregation Group ..................................... 1.8
Required Beginning Date ........................................ 6.1
Rollover Contributions ......................................... 4.1
Service ........................................................ 1.5
Top Heavy Minimum Allocation ................................... 3.2
Top Heavy Ratio ................................................ 1.7
Trust .......................................................... 1.4
Trust Fund ..................................................... 1.4
Trustee ........................................................ 1.1
Year of Service ................................................ 2.1
</TABLE>
14.10
