As filed with the Securities and
Exchange Commission on June 29 , 1998 Registration No. 333-____
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
BINDLEY WESTERN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Indiana 84-0601662
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
10333 North Meridian Street, Suite 300
Indianapolis, Indiana 46290
(Address of Principal Executive Offices) (Zip Code)
PROFIT SHARING PLAN OF
BINDLEY WESTERN INDUSTRIES, INC. & SUBSIDIARIES
(Full title of the plan)
Michael D. McCormick
10333 North Meridian Street, Suite 300,
Indianapolis, Indiana 46290 (Name and
address of agent for service)
(317) 298-9900
(Telephone number, including area code, of agent for service)
Copy to:
James A. Aschleman
Baker & Daniels
300 North Meridian Street, Suite 2700
Indianapolis, Indiana 46204
(317) 237-0300
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------
Title of Securities Amount to be Proposed maximum Proposed maximum Amount of
to registered registered (1) offering price per aggregate offering registration fee
share (2) price (2)
-----------------------------------------------------------------------------
Common Stock, 750,000 $29.00 $21,750,000 $6,417
$0.01 par value.......
=============================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933 (the
"Securities Act"), this Registration Statement also covers an indeterminate
amount of interests to be offered or sold pursuant to the employee benefit
plan described herein. Pursuant to Rule 457(h)(2) under the Securities Act,
no separate fee is required to register such interests.
(2) Estimated solely for purposes of calculating the registration fee and
computed in accordance with Rule 457(c) and (h) under the Securities Act
using the average of the high and low sale prices of the Common Stock as
reported by the NYSE on June 26, 1998, which was $29.00 per share.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
*Information required by Part I of Form S-8 to be contained in the
Section 10(a) Prospectus is omitted from this Registration Statement in
accordance with Rule 428 under the Securities Act and the Note to Part I of Form
S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed by Bindley Western Industries,
Inc. (the "Registrant") with the Securities and Exchange Commission are
incorporated by reference in this Registration Statement:
(1) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997;
(2) The Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998; and
(3) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement on Form 8-A filed with
the Securities and Exchange Commission on December 2, 1983,
including any amendment or report filed for the purpose of
updating such description.
In addition, all documents subsequently filed by the Registrant or the
Profit Sharing Plan of Bindley Western Industries, Inc. & Subsidiaries (the
"Plan") pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities offered hereby then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from their respective dates of filing.
The Registrant will promptly provide without charge to each person to
whom a prospectus is delivered, a copy of any or all information that has been
incorporated herein by reference (not including exhibits to the information that
is incorporated by reference unless such exhibits are specifically incorporated
by reference into such information), upon the written or oral request of such
person directed to the Secretary of the Registrant at its principal offices,
10333 North Meridian Street, Suite 300, Indianapolis, Indiana 46290, (317)
298-9900.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The following is a summary of the general effect of the indemnification
provisions of the Registrant's Amended and Restated Articles of Incorporation
and of the indemnification provided for under Indiana law. All statements made
herein, which are only intended to summarize the above-referenced provisions,
are qualified in their entirety by reference to the Registrant's Amended and
Restated Articles of Incorporation and the Indiana Business Corporation Law (the
"IBCL").
The Amended and Restated Articles of Incorporation of the Registrant
provide for the indemnification of the directors, officers, employees and agents
of the Registrant (or those serving at the request of the Registrant as such for
another entity, including an employee benefit plan) against expenses, judgments,
settlements, penalties and fines that may be incurred by them in connection with
or resulting from any pending, threatened or completed claim, action, suit or
proceeding, civil, criminal, administrative or investigative, formal or
informal, to which they are made parties if they are determined to have acted in
good faith and in a manner they reasonably believed to be in the best interests
of the Registrant or at least not opposed to the best interests of the
Registrant (or with respect to an employee benefit plan, if they reasonably
believed they were acting in conformity with ERISA or if they reasonably
believed their actions to be in the interests of the participants in or
beneficiaries of the plan) and, with respect to any criminal action or
proceeding, they either had reasonable cause to believe their conduct was lawful
or had no reasonable cause to believe their conduct was unlawful. Such
indemnification is required where there is termination of a claim against an
individual without any finding of liability or guilt against him and in cases
where a court approves, with knowledge of the indemnity provided, the settlement
of a claim. The Amended and Restated Articles of Incorporation of the Registrant
also set forth the procedures to be followed in connection with a claim for
indemnification.
Under the IBCL, a corporation may indemnify any individual who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal, by reason of the fact that he is
or was a director, officer, employee or agent of the corporation or, while a
director of a corporation, is or was serving at the request of the corporation
as a director, officer, partner, member, manager, trustee, employee or agent of
another foreign or domestic corporation, partnership, limited liability company,
joint venture, trust, employee benefit plan or other enterprise, whether for
profit or not, against reasonable expenses (including counsel fees), judgments,
fines (including any excise tax assessed with respect to an employee benefit
plan), penalties and amounts paid in settlement incurred by him in connection
with such action, suit or proceeding (i) if he acted in good faith, and (ii) in
the case of conduct in his official capacity with the corporation, if he
reasonably believed his conduct was in the best interests of the corporation or,
in all other cases, if he reasonably believed his conduct was at least not
opposed to the best interests of the corporation (or with respect to an employee
benefit plan, if he reasonably believed his conduct was in the interests of the
participants in and beneficiaries of the plan), and (iii) with respect to any
criminal action or proceeding, if he had reasonable cause to believe his conduct
was lawful or had no reasonable cause to believe his conduct was unlawful.
The IBCL further provides that a corporation shall, unless limited by
its articles of incorporation, indemnify a director or officer who was wholly
successful, on the merits or otherwise, in the defense of any action, suit or
proceeding to which he was a party because he is or was a director or officer of
the corporation against reasonable expenses incurred by him in connection
therewith. The IBCL empowers a corporation, under certain circumstances, to
advance to an individual expenses incurred in connection with an action, suit or
proceeding prior to the final disposition thereof. The IBCL also provides that,
unless limited by the corporation's articles of incorporation, a court of
competent jurisdiction may, in certain cases, order indemnification of a
director or officer irrespective of whether the director or officer met the
standards of conduct set forth above.
In addition, the Registrant has a directors' and officers' liability
policy that insures against certain liabilities, including liabilities under
the Securities Act, subject to applicable retentions.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
The list of Exhibits is incorporated herein by reference to the Index
to Exhibits.
The Registrant hereby undertakes that it will submit or has submitted
the Plan and any amendment thereto to the Internal Revenue Service ("IRS") in a
timely manner and has made or will make all changes required by the IRS in order
to qualify the Plan under Section 401 of the Internal Revenue Code.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to section
13 or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Indianapolis, State of Indiana, on June 29,
1998.
BINDLEY WESTERN INDUSTRIES, INC.
By:/s/William E. Bindley
---------------------
William E. Bindley
Chairman, President and
Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in their
respective capacities and on the respective dates indicated opposite their
names. Each person whose signature appears below hereby authorizes each of
William E. Bindley, Michael D. McCormick and Thomas J. Salentine, each with full
power of substitution, to execute in the name and on behalf of such person any
post-effective amendment to this Registration Statement and to file the same,
with exhibits thereto, and other documents in connection therewith, making such
changes in this Registration Statement as the registrant deems appropriate, and
appoints each of William E. Bindley, Michael D. McCormick and Thomas J.
Salentine, each with full power of substitution, attorney-in-fact to sign any
amendment and any post-effective amendment to this Registration Statement and to
file the same, with exhibits thereto, and other documents in connection
therewith.
Signature Title Date
--------- ----- ----
/s/ William E. Bindley Chairman, President, June 29, 1998
- ---------------------- Chief Executive
William E. Bindley Officer and Director
(Principal Executive Officer)
/s/ William F. Bindley, II Director June 29, 1998
- --------------------------
William F. Bindley, II
/s/ Keith W. Burks Executive Vice President June 29, 1998
- ------------------ and Director
Keith W. Burks
/s/ Seth B.Harris Director June 29, 1998
- -----------------
Seth B. Harris
/s/ Robert L. Koch, II Director June 29, 1998
- ----------------------
Robert L. Koch, II
/s/ Michael D. McCormick Executive Vice President, June 29, 1998
- ------------------------ General Counsel, Secretary
Michael D. McCormick and Director
/s/ J. Timothy McGinley Director June 29, 1998
- -----------------------
J. Timothy McGinley
/s/ James K. Risk, III Director June 29, 1998
- ----------------------
James K. Risk, III
/s/ Thomas J. Salentine Executive Vice President, June 29, 1998
- ----------------------- Chief Financial Officer
Thomas J. Salentine and Director (Principal
Accounting and Financial Officer)
/s/ K. Clay Smith Director June 29, 1998
- -----------------
K. Clay Smith
/s/ Carolyn Y. Woo Director June 29, 1998
- ------------------
Carolyn Y. Woo
The Plan. Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Indianapolis, State of
Indiana on June 29, 1998.
PROFIT SHARING PLAN OF BINDLEY
WESTERN INDUSTRIES, INC. &
SUBSIDIARIES
By:/s/Marion McDermott
Name: Marion McDermott
Title: Plan Administrator
<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Description of Exhibit
4.1 (i) Amended and Restated Articles of Incorporation of the
Registrant. (The copy of this Exhibit filed as Exhibit
3-A(i) to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1987 is incorporated by
reference.)
(ii) Amendment to Restated Articles of Incorporation
increasing number of authorized shares. (The copy of this
Exhibit filed as Exhibit 4(a)(ii) to the Registrant's
Registration Statement on Form S-3 (Registration No.
33-45965) is incorporated by reference.)
(iii) Amendment to Restated Articles of Incorporation
establishing terms of Class A Preferred Stock. (The copy of
this Exhibit filed as exhibit number 1 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June
30, 1992 is incorporated by reference.)
(iv) Amendment to Restated Articles of Incorporation
increasing number of authorized shares.
4.2 Restated By-Laws of the Registrant, as amended to date.
4.3 Profit Sharing Plan of Bindley Western Industries, Inc. &
Subsidiaries.
23 Consent of Price Waterhouse LLP.
24 Powers of Attorney (included on the Signature Page
of the Registration Statement).
-23-
Exhibit 4.1(iv)
ARTICLES OF AMENDMENT
OF
RESTATED ARTICLES OF INCORPORATION
OF
BINDLEY WESTERN INDUSTRIES, INC.
In compliance with the requirements of the Indiana Business
Corporation Law, as amended (the "IBCL"), Bindley Western Industries, Inc., an
Indiana corporation (the "Corporation"), desiring to amend its Restated Articles
of Incorporation, hereby certifies as follows:
Article I
Amendment to the Restated
Articles of Incorporation
Section 1. The name of the Corporation is, and following the
amendment effected hereby will continue to be, Bindley Western Industries, Inc.
Section 2. Article V, Section 5.1, of the Restated Articles of
Incorporation of the Corporation is hereby amended so that, as amended, such
Section 5.1 shall read in its entirety as follows:
"Section 5.1. Authorized Classes and Number of Shares. The
total number of shares which the Corporation has authority to issue
shall be 41,000,000 shares, consisting of 40,000,000 common shares (the
"Common Shares") and 1,000,000 special shares (the "Special Shares").
The Corporation's shares shall have a par or stated value of $.01 per
share.
Section 3. The effective date of the amendment hereby effected
shall be the date of filing of these Articles of Amendment with the office of
the Secretary of State of the State of Indiana.
Article II
Manner of Adoption and
Legal Compliance
Section 1. The foregoing amendment was duly adopted by the
Corporation's Board of Directors at a meeting duly called and held on May 21,
1998. The amendment was duly adopted by the Board of Directors without
shareholder action and, pursuant to IC 23-1-38-2(4), shareholder action was not
required.
Section 2. The manner of the adoption of the foregoing
amendment by the Corporation's Board of Directors constitutes full legal
compliance with the provisions of the IBCL and the Corporation's Restated
Articles of Incorporation and By-Laws.
IN WITNESS WHEREOF, the Corporation has caused these Articles
of Amendment to be signed on its behalf by the undersigned duly authorized
officer on June 4, 1998.
BINDLEY WESTERN INDUSTRIES, INC.
By /s/ Michael D. McCormick
Michael D. McCormick
Executive Vice President,
General Counsel and Secretary
BY-LAWS
OF
BINDLEY WESTERN INDUSTRIES, INC.
(As last amended effective May 21, 1998)
ARTICLE I
Meetings of Shareholders
Section 1.1. Annual Meetings.
(a) Annual meetings of the shareholders of the Corporation
shall be held on the third Thursday of May of each year, at such hour
and at such place within or without the State of Indiana as shall be
designated by the Board of Directors. In the absence of designation,
the meeting shall be held at the principal office of the Corporation at
11:00 a.m. (local time). The Board of Directors may, by resolution,
change the date or time of such annual meeting. If the day fixed for
any annual meeting of shareholders shall fall on a legal holiday, then
such annual meeting shall be held on the first following day that is
not a legal holiday.
(b) At each annual meeting, the shareholders shall elect the
Directors. At any such annual meeting any business properly brought
before the meeting may also be transacted.
(c) To be properly brought before an annual meeting, business
must be (i) specified in the notice of the meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, (ii)
otherwise properly brought before the meeting by or at the direction of
the Board of Directors or (iii) otherwise properly brought before the
meeting by a shareholder. For business to be properly brought before an
annual meeting by a shareholder, the shareholder must have given
written notice thereof, either by personal delivery or by United States
mail, postage prepaid, to the Secretary, at the principal executive
offices of the Corporation, not less than 70 days nor more than 90 days
prior to the anniversary date of the immediately preceding annual
meeting; provided, however, that in the event that the date of the
annual meeting is more than 30 days earlier or more than 60 days later
than such anniversary date, notice by the shareholder must be so
delivered or received not earlier than the 90th day prior to such
annual meeting and not later than the close of business on the later of
the 70th day prior to such annual meeting or the tenth day following
the day on which public announcement of the date of such meeting is
first made. Any such notice shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the meeting
and the reasons for conducting such business at the meeting and in the
event that such
business includes a proposal to amend the Restated Articles of
Incorporation of the Corporation, the language of the proposed
amendment, (ii) the name and address of the shareholder proposing such
business, (iii) a representation that the shareholder is a holder of
record of shares of the Corporation entitled to vote at such meeting
and intends to appear in person or by proxy at the meeting to propose
such business, (iv) any material interest of the shareholder in such
business, and (v) if the shareholder intends to solicit proxies in
support of such shareholder's proposal, a representation to that
effect. The foregoing notice requirements shall be deemed satisfied by
a shareholder if the shareholder has notified the Corporation of his or
her intention to present a proposal at an annual meeting and such
shareholder's proposal has been included in a proxy statement that has
been prepared by management of the Corporation to solicit proxies for
such annual meeting; provided, however, that if such shareholder does
not appear or send a qualified representative to present such proposal
at such annual meeting, the Corporation need not present such proposal
for a vote at such meeting, notwithstanding that proxies in respect of
such vote may have been received by the Corporation. No business shall
be conducted at an annual meeting of shareholders except in accordance
with this Section 1.1(c), and the chairman of any annual meeting of
shareholders may refuse to permit any business to be brought before an
annual meeting without compliance with the foregoing procedures or if
the shareholder solicits proxies in support of such shareholder's
proposal without such shareholder having made the representation
required by clause (v) of the preceding sentence.
Section 1.2. Special Meetings. Special meetings of the
shareholders of the Corporation may be called at any time by the Board of
Directors or the Chairman of the Board and shall be called by the Board of
Directors if the Secretary received written, dated and signed demands for a
special meeting, describing in reasonable detail the purpose or purposes for
which it is to be held, from the holders of shares representing at least
twenty-five percent (25%) of all votes entitled to be cast on any issue proposed
to be considered at the proposed special meeting. If the Secretary received one
(1) or more proper written demands for a special meeting of shareholders, the
Board of Directors may set a record date for determining shareholders entitled
to make such demand. The Board of Directors or the Chairman of the Board, as the
case may be, calling a special meeting of shareholders shall set the date, time
and place of such meeting, which may be held within or without the State of
Indiana.
Section 1.3. Notices. A written notice, stating the date, time
and place of any meeting of the shareholders, and in the case of a special
meeting the purpose or purposes for which such meeting is called, shall be
delivered or mailed by the Secretary of the Corporation, to each shareholder of
record of the Corporation entitled to notice of or to vote at such meeting no
fewer than ten (10) nor more than sixty (60) days before the date of the
meeting. In the event of a special meeting of shareholders required to be called
as the result of a demand therefor made by shareholders, such notice shall be
given no later than the sixtieth (60th) day after the Corporation's receipt of
the demand requiring the meeting to be called. Notice of shareholders' meetings,
if mailed, shall be mailed, postage prepaid, to each shareholder at his address
shown in the Corporation's current record of shareholders.
Notice of a meeting of shareholders shall be given to
shareholders not entitled to vote, but only if a purpose for the meeting is to
vote on any amendment to the Corporation's Restated Articles of Incorporation,
merger or share exchange to which the Corporation would be a party, sale of the
Corporation's assets, dissolution of the Corporation, or consideration of voting
rights to be accorded to shares acquired or to be acquired in a "control share
acquisition" (as such term is defined in the Indiana Business Corporation Law).
Except as required by the foregoing sentence or as otherwise required by the
Indiana Business Corporation Law or the Corporation's Restated Articles of
Incorporation, notice of a meeting of shareholders is required to be given only
to shareholders entitled to vote at the meeting.
A shareholder or his proxy may at any time waive notice of a meeting if the
waiver is in writing and is delivered to the corporation for inclusion in the
minutes or filing with the Corporation's records. A shareholder's attendance at
a meeting, whether in person or by proxy, (a) waives objection to lack of notice
or defective notice of the meeting, unless the shareholder or his proxy at the
beginning of the meeting objects to holding the meeting or transacting business
at the meeting, and (b) waives objection to consideration of a particular matter
at the meeting that is not within the purpose or purposes described in the
meeting notice, unless the shareholder or his proxy objects to considering the
matter when it is presented. Each shareholder who has in the manner above
provided waived notice or objection to notice of a shareholders' meeting shall
be conclusively presumed to have been given due notice of such meeting,
including the purpose or purposes thereof.
If an annual or special shareholders' meeting is adjourned to
a different date, time or place, notice need not be given of the new date, time
or place if the new date, time or place is announced at the meeting before
adjournment, unless a new record date is or must be established for the
adjourned meeting.
Section 1.4. Voting. Except as otherwise provided by the
Indiana Business Corporation Law or the Corporation's Restated Articles of
Incorporation, each share of the capital stock of any class of the Corporation
that is outstanding at the record date established for any annual or special
meeting of shareholders and is outstanding at the time of and represented in
person or by proxy at the annual or special meeting, shall entitle the record
holder thereof, or his proxy, to one (1) vote on each matter voted on at the
meeting.
Section 1.5. Quorum. Unless the Corporation's Restated
Articles of Incorporation or the Indiana Business Corporation Law provide
otherwise, at all meetings of shareholders a majority of the votes entitled to
be cast on a matter, represented in person or by proxy, constitutes a quorum for
action on the matter. Action may be taken at a shareholders' meeting only on
matters with respect to which a quorum exists; provided, however, that any
meeting of shareholders, including annual and special meetings and any
adjournments thereof, may be adjourned to a later date although less than a
quorum is present. Once a share is represented for any purpose at a meeting, it
is deemed present for quorum purposes for the remainder of the meeting and for
any adjournment of that meeting unless a new record date is or must be set for
that adjourned meeting.
Section 1.6. Vote Required to Take Action. If a quorum exists
as to a matter to be considered at a meeting of shareholders, action on such
matter (other than the election of Directors) is approved if the votes properly
cast favoring the action exceed the votes properly cast opposing the action,
except as the Corporation's Restated Articles of Incorporation or the Indiana
Business Corporation Law require a greater number of affirmative votes.
Directors shall be elected by a plurality of the votes properly cast.
Section 1.7. Record Date. Only such persons shall be entitled
to notice of or to vote, in person or by proxy, at any shareholders' meeting as
shall appear as shareholders upon the books of the Corporation as of such record
date as the Board of Directors shall determine, which date may not be earlier
than the date seventy (70) days immediately preceding the meeting. In the
absence of such determination, the record date shall be the fiftieth (50th) day
immediately preceding the date of such meeting. Unless otherwise provided by the
Board of Directors, shareholders shall be determined as of the close of business
on the record date.
Section 1.8. Proxies. A shareholder may vote his shares either
in person or by proxy. A shareholder may appoint a proxy to vote or otherwise
act for the shareholder (including authorizing the proxy to receive, or to
waive, notice of any shareholders' meetings within the effective Period of such
proxy) by signing an appointment form, either personally or by the shareholder's
attorney-in-fact. An appointment of a proxy is effective when received by the
Secretary or other officer or agent authorized to tabulate votes and is
effective for eleven (11) months unless a shorter or longer period is expressly
provided in the appointment form. The proxy's authority may be limited to a
particular meeting or may be general and authorize the proxy to represent the
shareholder at any meeting of shareholders held within the time provided in the
appointment form. Subject to the Indiana Business Corporation Law and to any
express limitation on the proxy's authority appearing on the face of the
appointment form, the Corporation is entitled to accept the proxy's vote or
other action as that of the shareholder making the appointment.
Section 1.9 Removal of Directors. Any or all of the members of
the Board of Directors may be removed, with or without cause, only at a meeting
of the shareholders called expressly for that purpose, by a vote of the holders
of shares representing a majority of the votes then entitled to be cast at an
election of Directors.
Section 1.10. Participation by Conference Telephone. The
Chairman of the Board or the Board of Directors may permit any or all
shareholders to participate in an annual or special meeting of shareholders by,
or through the use of, any means of communication, such as conference telephone,
by which all shareholders participating may simultaneously hear each other
during the meeting. A shareholder participating in a meeting by such means shall
be deemed to be present in person at the meeting.
ARTICLE II
Directors
Section 2.1. Number and Terms. The business and affairs of the
Corporation shall be managed under the direction of a Board of Directors
consisting of eleven (11) Directors. Each Director shall be elected for a term
of office to expire at the annual meeting of shareholders next following his
election.
Despite the expiration of a Director's term, the Director
shall continue to serve until his successor is elected and qualified, or until
the earlier of his death, resignation, disqualification or removal, or until
there is a decrease in the number of Directors. Any vacancy occurring in the
Board of Directors, from whatever cause arising, shall be filled by selection of
a successor by a majority vote of the remaining members of the Board of
Directors (although less than a quorum); provided, however, that if such vacancy
or vacancies leave the Board of Directors with no members or if the remaining
members of the Board are unable to agree upon a successor or determine not to
select a successor, such vacancy may be filled by a vote of the shareholders at
a special meeting called for that purpose or at the next annual meeting of
shareholders. The term of a Director elected or selected to fill a vacancy shall
expire at the end of the term for which such Director's predecessor was elected.
Nominations of persons for election as Directors may be made
by the Board or by any shareholder who is a shareholder of record at the time of
giving of the notice of nomination provided for in this Section 2.1 and who is
entitled to vote for the election of Directors. Any shareholder of record
entitled to vote for the election of Directors at a meeting may nominate a
person or persons for election as Directors only if written notice of such
shareholder's intent to make such nomination is given in accordance with the
procedures for bringing business before the meeting set forth in Section 1.1(c)
of these By-Laws, either by personal delivery or by United States mail, postage
prepaid, to the Secretary not later than (i) with respect to an election to be
held at an annual meeting of shareholders, not less than 70 nor more than 90
days in advance of the anniversary date of the immediately preceding annual
meeting; provided, however, that in the event that the date of the annual
meeting is more than 30 days earlier or more than 60 days later than such
anniversary date, notice by the shareholder must be so delivered or received not
earlier than the 90th day prior to such annual meeting and not later than the
close of business on the later of the 70th day prior to such annual meeting or
the 10th day following the day on which public announcement of the date of such
meeting is first made, and (ii) with respect to an election to be held at a
special meeting of shareholders for the election of Directors, not earlier than
the 90th day prior to such special meeting and not later than the close of
business on the later of the 60th day prior to such special meeting or the 10th
day following the day on which public announcement of the date of the special
meeting is first made and of the nominees to be elected at such meeting. Each
such notice shall set forth: (a) the name and address of the shareholder who
intends to make the nomination and of the person or persons to be nominated; (b)
a representation that the shareholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings between the
shareholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the shareholder; (d) such other information regarding each nominee proposed by
such shareholder as would have been required to be included in a proxy statement
filed pursuant to the proxy rules of the Securities and Exchange Commission had
each nominee been nominated, or intended to be nominated, by the Board; (e) the
consent of each nominee to serve as a Director if so elected; and (f) if the
shareholder intends to solicit proxies in support of such shareholder's
nominee(s), a representation to that effect. The chairman of any meeting of
shareholders to elect Directors and the Board may refuse to acknowledge the
nomination of any person not made in compliance with the foregoing procedure or
if the shareholder solicits proxies in support of such shareholder's nominee(s)
without such shareholder having made the representation required by clause (f)
of the preceding sentence.
The Directors and each of them shall have no authority to bind
the Corporation except when acting as a Board.
Section 2.2. Quorum and Vote Required to Take Action. A
majority of the whole Board of Directors shall be necessary to constitute a
quorum for the transaction of any business, except the filling of vacancies. If
a quorum is present when a vote is taken, the affirmative vote of a majority of
the Directors present shall be the act of the Board of Directors, unless the act
of a greater number is required by the Indiana Business Corporation Law, the
Corporation's Restated Articles of Incorporation or these By-Laws.
Section 2.3. Annual and Regular Meetings. The Board of
Directors shall meet annually, without notice, immediately following the annual
meeting of the shareholders, for the purpose of transacting such business as
properly may come before the meeting. Other regular meetings of the Board of
Directors, in addition to said annual meeting, shall be held on such dates, at
such times and at such places as shall be fixed by resolution adopted by the
Board of Directors and specified in a notice of each such regular meeting, or
otherwise communicated to the Directors. The Board of Directors may at any time
alter the date for the next regular meeting of the Board of Directors.
Section 2.4. Special Meetings. Special meetings of the Board
of Directors may be called by any member of the Board of Directors upon not less
than twenty-four (24) hours' notice given to each Director of the date, time and
place of the meeting, which notice need not specify the purpose or purposes of
the special meeting. Such notice may be communicated in person (either in
writing or orally), by telephone, telegraph, teletype or other form of wire or
wireless communication, or by mail, and shall be effective at the earlier of the
time of its receipt or, if mailed, five (5) days after its mailing. Notice of
any meeting of the Board may be waived in writing at any time if the waiver is
signed by the Director entitled to the notice and is filed with the minutes or
corporate records. A Director's attendance at or participation in a meeting
waives any required notice to the Director of the meeting, unless the Director
at the beginning of the meeting (or promptly upon the Director's arrival)
objects to holding the meeting or transacting business at the meeting and does
not thereafter vote for or assent to action taken at the meeting.
Section 2.5. Written Consents. Any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting if the action is taken by all members of the Board. The action
must be evidenced by one (1) or more written consents describing the action
taken, signed by each Director, and included in the minutes or filed with the
corporate records reflecting the action taken. Action taken under this Section
2.5 is effective when the last Director signs the consent, unless the consent
specifies a different prior or subsequent effective date, in which cases the
action is effective on or as of the specified date. A consent signed under this
Section 2.5 shall have the same effect as a unanimous vote of all members of the
Board and may be described as such in any document.
Section 2.6. Participation by Conference Telephone. The Board
of Directors may permit any or all Directors to participate in a regular or
special meeting by, or through the use of, any means of communication, such as
conference telephone, by which all Directors participating may simultaneously
hear each other during the meeting. A Director participating in a meeting by
such means shall be deemed to be present in person at the meeting.
Section 2.7. Committees.
(a) The Board of Directors may create one (1) or more
committees and appoint members of the Board of Directors to serve on
them, by resolution of the Board of Directors adopted by a majority of
all the Directors in office when the resolution is adopted. Each
committee may have one (1) or more members, and all the members of a
committee shall serve at the pleasure of the Board of Directors.
(b) To the extent specified by the Board of Directors in the
resolution creating a committee, each committee may exercise all of the
authority of the Board of Directors; provided, however, that a
committee may not:
(1) authorize dividends or other distributions,
except a committee (or an executive officer of the Corporation
designated by the Board of Directors) may authorize or approve
a reacquisition of shares or other distribution if done
according to a formula or method, or within a range,
prescribed by the Board of Directors;
(2) approve or propose to shareholders action
that is required to be approved by
shareholders;
(3) fill vacancies on the Board of Directors or
on any of its committees;
(4) amend the Corporation's Restated Articles of
Incorporation under IC 23-1-38-2;
(5) adopt, amend, repeal, or waive provisions of
these By-Laws;
(6) approve a plan of merger not requiring
shareholder approval; or
(7) authorize or approve the issuance or sale or a
contract for sale of shares, or determine the designation and
relative rights, preferences and limitations of a class or
series of shares, except the Board of Directors may authorize
a committee (or an executive officer of the Corporation
designated by the Board of Directors) to take action described
in this subdivision within limits prescribed by the Board of
Directors.
(c) Except to the extent inconsistent with the resolutions
creating a committee, Sections 2.1 through 2.6 of these By-Laws, which
govern meetings, action without meetings, notice and waiver of notice,
quorum and voting requirements and telephone participation in meetings
of the Board of Directors, apply to each committee and its members as
well.
ARTICLE III
Officers
Section 3.1. Designation, Selection and Terms. The officers of
the Corporation shall consist of the Chairman of the Board, the President, the
Executive Vice President and Chief Financial Officer, the Executive Vice
President and General Counsel, the Executive Vice President, the Treasurer, the
Secretary and the Controller. The Board of Directors may also elect other Vice
Presidents, Assistant Secretaries, Assistant Treasurers, Assistant Controllers,
and such other officers or assistant officers as it may from time to time
determine by resolution creating the office and defining the duties thereof. In
addition, the Chairman of the Board or the President may, by a certificate of
appointment creating the office and defining the duties thereof delivered to the
Secretary for inclusion with the corporate records, from time to time create and
appoint such assistant officers as they deem desirable. The officers of the
Corporation shall be elected by the Board of Directors (or appointed by the
Chairman of the Board or the President as provided above) and need not be
selected from among the members of the Board of Directors, except for the
Chairman of the Board and the President who shall be members of the Board of
Directors. Any two (2) or more offices may be held by the same person. All
officers shall serve at the pleasure of the Board of Directors and, with respect
to officers appointed by the Chairman of the Board or the President, also at the
pleasure of such officers. The election or appointment of an officer does not
itself create contract rights.
Section 3.2. Removal. The Board of Directors may remove any
officer at any time with or without cause. An officer appointed by the Chairman
of the Board or the President may also be removed at any time, with or without
cause, by either of such officers. Vacancies in such offices, however occurring,
may be filled by the Board of Directors at any meeting of the Board of Directors
(or by appointment by the Chairman of the Board or the President, to the extent
provided in Section 3.1 of these By-Laws).
Section 3.3. Chairman of the Board. The Chairman of the Board
shall be the chief executive and principal policy-making officer of the
Corporation. Subject to the authority of the Board of Directors, he shall
formulate the major policies to be pursued in the administration of the
Corporation's affairs. He shall study and make reports and recommendations to
the Board of Directors with respect to major problems and activities of the
Corporation and shall see that the established policies are placed into effect
and carried out under the direction of the President. The Chairman of the Board
shall, if present, preside at all meetings of the shareholders and of the Board
of Directors.
Section 3.4. President. Subject to the provisions of Section
3.3, the President shall be the chief operating officer of the Corporation,
shall exercise the powers and perform the duties which ordinarily appertain to
that office and shall manage and operate the business and affairs of the
Corporation in conformity with the policies established by the Board of
Directors and by the Chairman of the Board, or as may be provided for in these
By-Laws. In connection with the performance of his duties, he shall keep the
Chairman of the Board fully informed as to all phases of the Corporation's
activities. In the absence of the Chairman of the Board, the President shall
preside at meetings of the shareholders and of the Board of Directors.
Section 3.5. Executive Vice President and Chief Financial
Officer. The Executive Vice President and Chief Financial Officer shall be the
chief financial officer of the Corporation and shall be responsible for the
Corporation's banking relations, cash management, investments, financing,
including short and long term debt, and capital expenditures and shall also be
the chief accounting officer of the Corporation and be responsible for
maintaining the Corporation's accounting books and records and preparing its
financial statements, all subject to the supervision and direction of the
Chairman of the Board or the President of the Corporation.
Section 3.6. Executive Vice President and General Counsel. The
Executive Vice President and General Counsel shall be responsible for all of the
legal and administrative affairs and ethics and compliance programs of the
Corporation and shall perform such further duties as the Chairman of the Board
or the President may, from time to time, prescribe or delegate.
Section 3.7. Executive Vice President. The Executive Vice
President shall be the chief operating officer of the Corporation's Bindley
Western Drug Company division and shall perform such additional duties as are
assigned or delegated to him by the Chairman of the Board or the President.
Section 3.8. Treasurer. The Treasurer shall be responsible for
the treasury function of the Corporation, including responsibility for the
Corporation's taxes, subject to the supervision and direction of the Executive
Vice President and Chief Financial Officer and shall have and perform such
further powers and duties as the Executive Vice President and Chief Financial
Officer may, from time to time, assign or delegate to him.
Section 3.9. Assistant Treasurer. In the absence or inability
of the Treasurer, the Assistant Treasurer, if any, shall perform only such
duties as are specifically assigned to him, in writing, by the Board of
Directors, the Chairman of the Board, the President, the Executive Vice
President and Chief Financial Officer or the Treasurer.
Section 3.10. Secretary. The Secretary shall be the custodian
of the books, papers and records of the Corporation and of its corporate seal,
if any, and shall be responsible for seeing that the Corporation maintains the
records required by IC 23-1-52-1 (other than accounting records) and that the
Corporation files with the Indiana Secretary of State the annual report required
by IC 23-1-53-3. The Secretary shall be responsible for preparing minutes of the
meetings of the shareholders and of the Board of Directors and for
authenticating records of the Corporation, and he shall perform all of the other
duties usual in the office of secretary of a corporation.
Section 3.11. Assistant Secretary. In the absence or inability
of the Secretary, the Assistant Secretary, if any, shall perform only such
duties as are provided herein or specifically assigned to him, in writing, by
the Board of Directors, the Chairman of the Board, the President or the
Secretary.
Section 3.12. Controller. The Controller shall be the
assistant chief accounting officer and shall assist the Executive Vice President
and Chief Financial Officer in maintaining the Corporation's accounting books
and records and preparing its financial statements, subject to the direction of
the Executive Vice President and Chief Financial Officer.
Section 3.13. Salary. The Board of Directors may, at its
discretion, from time to time, fix the salary of any officer by resolution
included in the minute book of the Corporation.
ARTICLE IV
Checks
All checks, drafts or other orders for payment of money shall
be signed in the name of the Corporation by such officers or persons as shall be
designated from time to time by resolution adopted by the Board of Directors and
included in the minute book of the Corporation; and in the absence of such
designation, such checks, drafts or other orders for payment shall be signed by
either the President or the Treasurer.
ARTICLE V
Loans
Such of the officers of the Corporation as shall be designated
from time to time by resolution adopted by the Board of Directors and included
in the minute book of the Corporation shall have the power, with such
limitations thereon as may be fixed by the Board of Directors, to borrow money
in the Corporation's behalf, to establish credit, to discount bills and papers,
to pledge collateral and to execute such notes, bonds, debentures or other
evidences of indebtedness, and such mortgages, trust indentures and other
instruments in connection therewith, as may be authorized from time to time by
such Board of Directors.
ARTICLE VI
Execution of Documents
The Chairman of the Board or the President may, in the
Corporation's name, sign all deeds, leases, contracts or similar documents that
may be authorized by the Board of Directors unless otherwise directed by the
Board of Directors or otherwise provided herein or in the Corporation's Restated
Articles of Incorporation, or as otherwise required by law.
ARTICLE VII
Stock
Section 7.1. Execution. Certificates for shares of the capital
stock of the Corporation shall be signed by the Chairman of the Board or the
President and by the Secretary and the seal of the Corporation (or a facsimile
thereof), if any, may be thereto affixed. Where any such certificate is also
signed by a transfer agent or a registrar, or both, the signatures of the
officers of the Corporation may be facsimiles. The Corporation may issue and
deliver any such certificate notwithstanding that any such officer who shall
have signed, or whose facsimile signature shall have been imprinted on, such
certificate shall have ceased to be such officer.
Section 7.2. Contents. Each certificate shall state on its
face the name of the Corporation and that it is organized under the laws of the
State of Indiana, the name of the person to whom it is issued, and the number
and class of shares and the designation of the series, if any, the certificate
represents, and shall state conspicuously on its front or back that the
Corporation will furnish the shareholder, upon his written request and without
charge, a summary of the designations, relative rights, preferences and
limitations applicable to each class and the variations in rights, preferences
and limitations determined for each series (and the authority of the Board of
Directors to determine variations for future series).
Section 7.3. Transfers. Except as otherwise provided by law or
by resolution of the Board of Directors, transfers of shares of the capital
stock of the Corporation shall be made only on the books of the Corporation by
the holder thereof in person or by duly authorized attorney, on payment of all
taxes thereon and surrender for cancellation of the certificate or certificates
for such shares (except as hereinafter provided in the case of loss, destruction
or mutilation of certificates) properly endorsed by the holder thereof or
accompanied by the proper evidence of succession, assignment or authority to
transfer, and delivered to the Secretary or an Assistant Secretary.
Section 7.4. Stock Transfer Records. There shall be entered
upon the stock records of the Corporation the number of each certificate issued,
the name and address of the registered holder of such certificate, the number,
kind and class of shares represented by such certificate, the date of issue,
whether the shares are originally issued or transferred, the registered holder
from whom transferred and such other information as is commonly required to be
shown by such records. The stock records of the Corporation shall be kept at its
principal office, unless the Corporation appoints a transfer agent or registrar,
in which case the Corporation shall keep at its principal office a complete and
accurate shareholders' list giving the names and addresses of all shareholders
and the number and class of shares held by each. If a transfer agent is
appointed by the Corporation, shareholders shall give written notice of any
changes in their addresses from time to time to the transfer agent.
Section 7.5. Transfer Agents and Registrars. The Board of
Directors may appoint one or more transfer agents and one or more registrars and
may require each stock certificate to bear the signature of either or both.
Section 7.6. Loss, Destruction, or Mutilation of Certificates.
The holder of any of the capital stock of the Corporation shall immediately
notify the Corporation of any loss, destruction, or mutilation of the
certificate therefor, and the Board of Directors may, in its discretion, cause
to be issued to him a new certificate or certificates of stock, upon the
surrender of the mutilated certificate, or, in the case of loss or destruction,
upon satisfactory proof of such loss or destruction. The Board of Directors may,
in its discretion, require the holder of the lost or destroyed certificate or
his legal representative to give the Corporation a bond in such sum and in such
form, and with such surety or sureties as it may direct, to indemnify the
Corporation, its transfer agents, and registrars, if any, against any claim that
may be made against them or any of them with respect to the capital stock
represented by the certificate or certificates alleged to have been lost or
destroyed, but the Board of Directors may, in its discretion, refuse to issue a
new certificate or certificates, save upon the order of a court having
jurisdiction in such matters.
Section 7.7. Form of Certificates. The form of the
certificates for shares of the capital stock of the Corporation shall conform to
the requirements of Section 7.2 of these By-Laws and be in such printed form as
shall from time to time be approved by resolution of the Board of Directors.
ARTICLE VIII
Seal
The corporate seal of the Corporation shall, if the
Corporation elects to have one, be in the form of a disc, with the name of the
Corporation and "INDIANA" on the periphery thereof and the word "SEAL" in the
center.
ARTICLE IX
Miscellaneous
Section 9.1. Indiana Business Corporation Law. The provisions
of the Indiana Business Corporation law, as amended, applicable to all matters
relevant to, but not specifically covered by, these By-Laws are hereby, by
reference, incorporated in and made a part of these By-Laws.
Section 9.2. Fiscal Year. The fiscal year of the Corporation
shall end on the 31st of December of each year.
Section 9.3. Election to be Governed by Indiana Code 23-1-43.
Effective October 23, 1992, the Corporation shall be governed by the provisions
of IC 23-1-43 regarding business combinations.
Section 9.4. Control Share Acquisition Statute. Effective
October 23, 1992, the provisions of IC 23-1-42 shall apply to the acquisition of
shares of the Corporation.
Section 9.5. Redemption of Shares Acquired in Control Share
Acquisitions. If and whenever the provisions of IC 23-1-42 apply to the
Corporation, any or all control shares acquired in a control share acquisition
shall be subject to redemption by the Corporation, if either:
(a) no acquiring person statement has been filed with the
Corporation with respect to such control share acquisition in
accordance with IC 23-1-42-6, or
(b) the control shares are not accorded full voting rights by
the Corporation's shareholders as provided in IC 23-1-42-9.
A redemption pursuant to Section 9.5(a) may be made at any
time during the period ending sixty (60) days after the last acquisition of
control shares by the acquiring person. A redemption pursuant to Section 9.5(b)
may be made at any time during the period ending two (2) years after the
shareholder vote with respect to the granting of voting rights to such control
shares. Any redemption pursuant to this Section 9.5 shall be made at the fair
value of the control shares and pursuant to such procedures for such redemption
as may be set forth in these By-Laws or adopted by resolution of the Board of
Directors.
As used in this Section 9.5, the terms "control shares",
"control share acquisition", "acquiring person statement" and "acquiring person"
shall have the meanings ascribed to such terms in IC 23-1-42.
Section 9.6. Amendments. These By-Laws may be rescinded,
changed or amended, and provisions hereof may be waived, at any meeting of the
Board of Directors by the affirmative vote of a majority of the entire number of
Directors at the time, except as otherwise required by the Corporation's
Restated Articles of Incorporation or by the Indiana Business Corporation Law.
PRISM(R) PROTOTYPE RETIREMENT PLAN AND TRUST
ARTICLE I
DEFINITIONS
1.1 Definitions. Unless the context indicates otherwise, the following terms,
when used herein with initial capital letters, shall have the meanings set
forth below:
(A) Accounting Date: The date which is the last business day of each
month of the Employer's Plan Year or such other date as may be
agreed upon between the Employer and the Trustee, but only if the
Employer has specifically requested the Trustee to prepare an
accounting on or before such date. Notwithstanding the foregoing,
the Trustee shall value the assets held in the Trust on each
business day that the Trustee and the New York Stock Exchange are
open for business.
(B) Adoption Agreement: The Adoption Agreement adopting this Plan which
has been executed by the Employer and accepted by the Trustee,
including any amendment thereof, which is incorporated herein by
reference.
(C) Basic Plan Document: This document, which, in connection with the
Adoption Agreement forms the Plan.
(D) Beneficiary: The person or persons to whom a deceased Participant's
benefits are payable under the Plan.
(E) Break In Service: A 12-consecutive month period during which the
Participant does not complete more than one-half of the Hours of
Service with the Employer required for a Year of Service, as elected
in the Adoption Agreement. For eligibility purposes, the initial
12-consecutive month period is the period beginning on the Employees
date of hire. Subsequent 12-consecutive month periods for
eligibility purposes will be either the period ending on the annual
anniversary of the Employee's date of hire or the Plan Year,
as selected in the Adoption Agreement. For all other purposes,
the 12-consecutive month period shall be the Plan Year, or other
computation period as selected in the Adoption Agreement. If the
elapsed time method of crediting service is elected in the
Adoption Agreement, "Break In Service" will mean a Period of
Severance of at least 12 consecutive months.
(F) Code: The Internal Revenue Code of 1986, and amendments thereto.
(G) Committee: The Committee provided for in Article XI, which shall be
a Named Fiduciary as defined in the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). To the extent that the
Employer does not appoint a Committee, the Employer shall have the
duty of the day to day administration of the Plan and shall be the
Named Fiduciary for that purpose.
(H) Compensation: Compensation shall have the following various
definitions, as may be appropriate within the context of the Plan:
(1) Compensation as that term is defined in Section 6.6(A) of the
Plan. For any Self-Employed Individual covered under the Plan,
Compensation will mean Earned Income. Compensation shall
include only that compensation which is actually paid to the
Participant during the determination period. Except as
provided elsewhere in this Plan, the determination period
shall be the period elected by the Employer in the Adoption
Agreement. If the Employer makes no election, the
determination period shall be the Plan Year. For purposes of
allocations of Employer Profit Sharing or Matching
Contributions, the definition of Compensation in Section
6.6(A)(2)(a) shall be used, as modified in the Adoption
Agreement.
Notwithstanding the above, if elected by the Employer in the
Adoption Agreement, Compensation for allocation purposes shall
include any amount which is contributed by the Employer
pursuant to a salary reduction agreement and which is not
includible in the gross income of the employee under Sections
125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code.
(2) For years beginning after December 31, 1988, and prior to
January 1, 1994, the annual Compensation of each Participant
taken into account for determining all benefits provided under
the Plan for any determination period shall not exceed
$200,000. This limitation shall be adjusted by the Secretary
at the same time and in the same manner as under Section
415(d) of the Code except that the dollar increase in effect
on January 1 of any calendar year is effective for plan years
beginning in such calendar year and the first adjustment to
the $200,000 limitation is effective on January 1, 1990. After
December 31, 1993, the annual Compensation of each Participant
taken into account for determining all benefits provided under
the Plan for any determination period shall not exceed
$150,000, or such other lesser amount as may be specified in
the Adoption Agreement. This limitation shall be adjusted by
the Secretary at the same time and in the same manner as under
Section 415(d) of the Code. If a Plan determines Compensation
on a period of time that contains fewer than 12 calendar
months, then the annual Compensation limit is an amount equal
to the annual Compensation limit for the calendar year in
which the Compensation period begins multiplied by a ratio
obtained by dividing the number of full months in the period
by 12.
In determining the Compensation of a Participant for purposes
of this limitation, the rules of Section 414(q)(6) of the Code
shall apply, except in applying such rules, the term "family"
shall include only the Spouse of the Participant and any
lineal descendants of the Participant who have not attained
age 19 before the close of the year. If, as a result of the
application of such rules the adjusted annual compensation
limitation is exceeded, then (except for purposes of
determining the portion of Compensation up to the integration
level if this Plan provides for permitted disparity), the
limitation shall be prorated among the affected individuals in
proportion to each such individual's Compensation as
determined under this Section prior to the application of this
limitation.
If compensation for any prior determination period is taken
into account in determining an Employee's allocations or
benefits for the current determination period, the
compensation for such prior year is subject to the applicable
annual compensation limit in effect for that prior year. For
this purpose, for years beginning before January 1, 1990, the
applicable compensation limit is $200,000. In addition, in
determining allocations in plan years beginning on or after
January 1, 1994, the annual compensation limit in effect for
determination periods beginning before that date is $150,000.
(I) Disability: The inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not
less than twelve (12) months. The permanence and degree of such
impairment shall be supported by medical evidence. The Employer
shall determine the existence of a Disability based on its current
disability policy, applied on a uniform and nondiscriminatory basis.
(J) Earned Income:The net earnings from self-employment in the trade or
business with respect to which the Plan is established, for which
personal services of the individual are a material income-producing
factor. Net earnings will be determined without regard to items not
included in gross income and the deductions allocable to such items.
Net earnings are reduced by contributions by the Employer to a
qualified Plan to the extent deductible under Section 404 of
the Code. Net earnings shall be determined with regard to the
deduction allowed to the taxpayer by Section 164(f) of the Code fo
taxable years beginning after December 31, 1989.
(K) Early Retirement Date: The date specified in the Adoption Agreement
at which a participating Employee may receive an early retirement
benefit.
(L) Effective Date: The date specified in the Adoption Agreement which
shall be the effective date of the provisions of this Plan, unless
modified in Item B(18) of the Adoption Agreement. If the Plan is a
restatement of an existing Plan, the original effective date of the
Plan shall be as specified in the Adoption Agreement.
(M) Eligible Employee: Any Employee who is eligible to receive an
Employer contribution (including forfeitures), as defined in Item
B(6) of the Adoption Agreement.
(N) Eligibility Computation Period: For purposes of determining Years of
Service and Breaks in Service for purposes of eligibility, the
initial Eligibility Computation Period is the 12-consecutive month
period beginning on the Employee's Employment Commencement Date.
(1) For plans in which the Eligibility Computation Periods
commence on the 12-consecutive month anniversary of the
Employee's Employment Commencement Date, the succeeding
12-consecutive month periods commence with the first
anniversary of the Employee's Employment Commencement Date.
(2) For plans in which the Eligibility Computation Period shifts
to the Plan Year, the succeeding 12-consecutive month periods
commence with the first Plan Year which commences prior to the
first anniversary of the Employee's Employment Commencement
Date regardless of whether the Employee is entitled to be
credited with number of Hours of Service specified in the
Adoption Agreement during the initial Eligibility Computation
Period. An Employee who is credited with number of Hours of
Service specified in the Adoption Agreement in both the
initial Eligibility Computation Period and the first Plan Year
which commences prior to the first anniversary of the
Employee's initial Eligibility Computation Period will be
credited with two Years of Service for purposes of eligibility
to participate.
Years of Service and Breaks in Service will be measured on the
same Eligibility Computation Period.
(3) Notwithstanding any other provisions of this section, if the
elapsed time method of crediting service is elected in the
Adoption Agreement for purposes of eligibility, an Employee
will receive credit for the aggregate of all time periods
completed (as may be elected in the Adoption Agreement)
beginning with the Employee's Employment Commencement Date or
Reemployment Commencement Date and ending on the date a Break
In Service begins. The Employee will receive credit for any
Period of Severance of less than 12 consecutive months.
(O) Employee: Any employee, including any Self Employed Individual, of
the Employer maintaining the Plan or of any other employer required
to be aggregated with such Employer under Sections 414(b), (c), (m)
or (o) of the Code.
The term Employee shall also include any Leased Employee deemed to
be an Employee of any Employer described in the previous paragraph
as provided in Sections 414(n) or (o) of the Code.
(P) Employer: The Employer specified in the Adoption Agreement and any
successor to the business of the Employer establishing the Plan,
which shall be the Plan Administrator for purposes of Section 3(16)
of ERISA, a Named Fiduciary as defined in ERISA, and which may
delegate all or any part of its powers, duties and authorities in
such capacity without ceasing to be such Plan Administrator.
(Q) Employment Commencement Date: The date on which an Employee first
performs an Hour of Service for the Employer.
(R) Entry Date: The date selected by the Employer in Item B(6)(d) of the
Adoption Agreement, which shall be:
(1) The Effective Date of the Plan, for any Employee who has
satisfied the eligibility requirements set forth in the
Adoption Agreement;
(2) The first day of the month which coincides with or immediately
follows the date on which the Employee satisfies the
eligibility requirements set forth in the Adoption Agreement;
(3) The first day of the Plan Year or the fourth, seventh, or
tenth month of the Plan Year which coincides with or
immediately follows the date on which the Employee satisfies
such eligibility requirements;
(4) The first day of the Plan Year or the seventh month of the
Plan Year which coincides with or immediately follows the date
on which the Employee satisfies such eligibility requirements;
(5) The first day of the Plan Year, but only if the eligibility
service requirements specified in Item B(6)(d) are six months
or less; or,
(6) As soon as practicable after the Employee satisfies such
eligibility requirements specified in the Adoption Agreement,
but in no event beyond the date which would be six months
following the date on which the Employee first completes the
eligibility requirements specified in the Adoption Agreement.
(S) ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
(T) Highly Compensated Employee: The term Highly Compensated Employee
includes highly compensated active employees and highly compensated
former employees.
A highly compensated active employee includes any Employee who
performs service for the Employer during the determination year and
who, during the look-back year: (i) received Compensation from the
Employer in excess of $75,000 (as adjusted pursuant to Section
415(d) of the Code); (ii) received Compensation from the Employer in
excess of $50,000 (as adjusted pursuant to Section 415(d) of the
Code) and was a member of the top-paid group for such year; or (iii)
was an officer of the Employer and received Compensation during such
year that is greater than 50 percent of the dollar limitation in
effect under section 415(b)(1)(A) of the Code. The term Highly
Compensated Employee also includes: (i) Employees who are both
described in the preceding sentence if the term "determination year"
is substituted for the term "look-back year" and the Employee is one
of the 100 Employees who receive the most compensation from the
Employer during the determination year; and (ii) Employees who are 5
percent owners at any time during the look-back year or
determination year.
If no officer has satisfied the Compensation requirement of (iii)
above during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a Highly
Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately
preceding the determination year. A highly compensated former
employee includes any Employee who separated from service (or was
deemed to have separated) prior to the determination year, performs
no service for the Employer during the determination year, and was a
highly compensated active employee for either the separation year or
any determination year ending on or after the Employee's 55th
birthday.
If an Employee is, during a determination year or look-back year, a
family member of either a 5 percent owner who is an active or former
employee or a Highly Compensated Employee who is one of the 10 most
Highly Compensated Employees ranked on the basis of Compensation
paid by the Employer during such year, then the family member and
the 5 percent owner or top-ten Highly Compensated Employee shall be
aggregated. In such case, the family member and 5 percent owner or
top-ten Highly Compensated Employee shall be treated as a single
employee receiving Compensation and Plan contributions or benefits
equal to the sum of such Compensation and contributions or benefits
of the family member and 5 percent owner or top-ten Highly
Compensated Employee.
For purposes of this Section, family member includes the Spouse,
lineal ascendants and descendants of the employee or former employee
and the spouses of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the
top-paid group, the top 100 Employees, the number of Employees
treated as officers and the Compensation that is considered, will be
made in accordance with Section 414(q) of the Code and the
regulations thereunder.
(U) Hour of Service:
(1) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. These
hours shall be credited to the Employee for the computation
period in which the duties are performed; and
(2) Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including Disability), layoff,
jury duty, military duty, or leave of absence. No more than
501 Hours of Service shall be credited under this paragraph
for any single continuous period (whether or not such period
occurs in a single computation period). Hours under this
paragraph shall be calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations which are
incorporated herein by reference; and
(3) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The
same Hours of Service shall not be credited both under
subparagraph (1) or subparagraph (2), as the case may be, and
under this subparagraph (3). These hours shall be credited to
the Employee for the computation period or periods to which
the award or agreement pertains rather than for the
computation period in which the award, agreement or payment is
made.
Hours of Service will be credited for employment with other
members of an affiliated service group (under Section 414(m)),
a controlled group of corporations (under Section 414(b)), or
a group of trades or businesses under common control (under
Section 414(c)) of which the adopting Employer is a member,
and any other entity required to be aggregated with the
Employer pursuant to Section 414(o).
Hours of Service will also be credited for any individual
considered an Employee for purposes of this Plan under
Sections 414(n) or 414(o).
(4) Where the Employer maintains the Plan of a predecessor
employer, service for such predecessor employer shall be
treated as service for the Employer. If the Employer does not
maintain the Plan of a predecessor employer, the Plan does not
credit service with the predecessor employer, unless the
Employer identifies the predecessor in its Adoption Agreement
and specifies the purposes for which the Plan will credit
service with that predecessor employer.
(5) Solely for purposes of determining whether a Break-in-Service,
as defined in Section 1.1(E), for participation and vesting
purposes has occurred in a computation period, an individual
who is absent from work for maternity or paternity reasons
shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such
absence, or in any case in which such hours cannot be
determined, 8 Hours of Service per day of such absence. For
purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (1) by reason of the
pregnancy of the individual, (2) by reason of a birth of a
child of the individual, (3) by reason of the placement of a
child with the individual in connection with the adoption of
such child by such individual, or (4) for purposes of caring
for such child for a period beginning immediately following
such birth or placement. The Hours of Service credited under
this paragraph shall be credited (1) in the computation period
in which the absence begins if the crediting is necessary to
prevent a Break-in-Service in that period, or (2) in all other
cases, in the following computation period.
(6) Hours of Service will be determined on the basis of the method
selected in the Adoption Agreement.
(V) Investment Fund: One of the funds provided for in Section 10.7, and
as selected by the Employer, as a Named Fiduciary, on the Investment
Fund Designation portion of the Adoption Agreement.
(W) Leased Employee: Any person(other than an employee of the recipient)
who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined in
accordance with Section 414(n)(6) of the Code) on a substantially
full time basis for a period of at least one year, and such
services are of a type historically performed by employees in
the business field of the recipient employer. Contributions or
benefits provided a leased employee by the leasing organization
which are attributable to services performed for the recipient
employer shall be treated as provided by the recipient employer.
A leased employee shall not be considered an employee of the
recipient if: (i) such employee is covered by a money purchase
pension Plan providing: (1) a nonintegrated employer contribution
rate of at least 10 percent of compensation, as defined in Section
415(c)(3) of the Code, but including amounts contributed pursuant to
a salary reduction agreement which are excludable from the
employee's gross income under Section 125, Section 402(e)(3),
Section 402(h)(1)(B) or Section 403(b) of the Code, (2) immediate
participation, and (3) full and immediate vesting; and (ii) leased
employees do not constitute more than 20 percent of the recipient's
nonhighly compensated workforce.
(X) Net Profits: Current and accumulated earnings of the Employer before
Federal and state taxes and contributions to this and any other
qualified Plan, determined by the Employer in accordance with
generally accepted accounting principles.
(Y) Nonhighly Compensated Employee: An Employee of the Employer who is
neither a Highly Compensated Employee nor a Family Member.
(Z) Normal Retirement Date: The date specified in the Adoption Agreement
at which a participant shall become fully vested in his account
balances, as provided for in this document.
(AA) Owner-Employee: An individual who is a sole proprietor, or who is a
partner owning more than 10 percent of either the capital or profits
interest of the partnership.
(BB) Paired Plans: The Employer has adopted Plan #001 and Plan # 003,
both using this basic Plan document, which constitutes a set of
"paired plans" as defined by the Internal Revenue Service in Revenue
Procedure 89-9, or any successor thereto.
(CC) Participant: A person who becomes eligible to participate in
accordance with the provisions of Article II, and whose
participation has not been terminated.
(DD) Permitted Disparity Level: The level selected in the Adoption
Agreement, not to exceed the Taxable Wage Base in effect at the
beginning of the Plan Year. The Taxable Wage Base is the
contribution and benefit base under section 230 of the Social
Security Act at the beginning of the year.
(EE) Period of Service: The period beginning on the Employee's Employment
Commencement Date or Reemployment Commencement Date, and ending on
the date a Period of Severance begins. The Employee will receive
credit for any Period of Service of less than 12 consecutive months.
Fractional periods of a year will be expressed in days.
(FF) Period of Severance: A continuous period of time during which the
Employee is not employed by the Employer. A Period of Severance
begins on the date the Employee retires, quits, or is discharged
or dies, or if earlier, the twelve month anniversary of the date
on which the Employee was first absent from work for any other
reason; provided, that if an Employee is absent from work for any
other reason and retires, quits, is discharged, or dies within
12 months, the Period of Severance begins on the day the Employee
quits, retires, is discharged, or dies.
(GG) Plan: This Plan established by the Employer as embodied in this
agreement and in the Adoption Agreement, and all subsequent
amendments thereto.
(HH) Plan Year: The 12-consecutive month period designated by the
Employer in the Adoption Agreement. In the event that the original
Effective Date is not the first day of the Plan Year, the first Plan
Year shall be a short Plan Year, beginning on the original Effective
Date, and ending on the last day of the Plan Year as specified in
the Adoption Agreement.
(II) Qualified Distribution Date: For purposes of Section 7.13, the
Qualified Distribution Date, if selected in the Adoption Agreement,
shall be the earliest retirement date specified in Code Section
414(p) and shall operate to allow a distribution to an Alternate
Payee at the time a domestic relations order is determined to be
qualified.
(JJ) Reemployment Commencement Date: The date on which an Employee
completes an Hour of Service with the Employer after a Break In
Service or a Period of Severance.
(KK) Related Employers: Any employer related to the Employer as a
controlled group of corporations (as defined in Sectionss.414(b
of the Code), a group of trades or businesses (whether or not
incorporated) which are under common control (as defined in
Section 414(c)) or an affiliated service group (as defined in
Section 414(m) or in Section 414(o) of the Code). 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 Article II, applying participation and coverage testing,
applying the limitations on allocations in Section 6.6, applying
the top heavy rules and the minimum allocation requirements of
Article IX, the definitions of Employee,Highly Compensated Employee,
Compensation and Leased Employee, and for any other purpose
required by the applicable Code section or by a Plan provision.
However, an Employer may contribute to the Plan only by signing
the Adoption Agreement or a Participation Agreement to the
Employer's Adoption Agreement. If one or more of the Employer's
related group members become Participating Employers by executing
a Participation Agreement to the Employer's Adoption Agreement,
the term "Employer" includes the participating related group
members for all purposes of the Plan, and "Plan Administrator"
means the Employer that is the signatory to the Adoption Agreement.
If the Employer's Plan is a standardized Plan, all Employees of the
Employer or of any member of the Employer's related group, are
eligible to participate in the Plan, irrespective of whether the
related group member directly employing the Employee is a
Participating Employer. If the Employer's Plan is a nonstandardized
Plan, the Employer must specify in Item B(5) of its Adoption
Agreement, whether the Employees of related group members that are
not Participating Employers are eligible to participate in the Plan.
Under a nonstandardized Plan, the Employer may elect to exclude from
the definition of "Compensation" for allocation purposes any
Compensation received from a related employer that has not executed
a Participation Agreement and whose Employees are not eligible to
participate in the Plan.
(LL) Self-employed Individual: An individual who has Earned Income for
the taxable year from the trade or business for which the Plan is
established; also, an individual who would have had Earned Income
but for the fact that the trade or business had no Net Profits for
the taxable year.
(MM) Spouse: The person to whom the Participant is legally married at the
relevant time. Notwithstanding the foregoing, if selected in the
Adoption Agreement, Spouse shall only refer to an individual to whom
a Participant has been married to for a period of at least one year,
ending at the relevant time.
(NN) Stockholder-Employee: An employee or officer of an electing small
business (Subchapter S) corporation who owns (or is considered as
owning within the meaning of Section 318(a)(1) of the Code), on any
day during the taxable year of such corporation, more than 5% of the
outstanding stock of the corporation.
(OO) Termination Date: The date on which a Participant's employment is
terminated as provided in Section 5.1.
(PP) Trustee: The entity specified in Item B(17) of the Adoption
Agreement, which shall be any bank or trust company which is
affiliated with KeyCorp. within the meaning of Section 1504 of the
Code, each of which with full trust powers, and its successors by
merger or reorganization.
(QQ) Trust Fund: All assets held under the Plan by the Trustee.
(RR) Valuation Date. The date on which the assets of the Trust shall be
valued, as provided for herein, with earning or losses since the
previous Valuation Date being credited,as appropriate to Participant
accounts. Notwithstanding anything to the contrary in the Plan,
the Valuation date shall be each business day that the Trustee
and the New York Stock Exchange are each open for business,
provided, however, that the Trustee shall not be obligated to
value the Trust in the event, through circumstances beyond its
control, appropriate prices may not be obtained for the assets held
in the Investment Funds.
(SS) Vesting Computation Period. The Vesting Computation Period shall be
the 12-consecutive month period selected by the Employer in the
Adoption Agreement.
(TT) Year of Participation: For purposes of vesting, a twelve (12) month
period in which an Employee has a balance in an account established
under a 401(k)/401(m) arrangement regardless of whether the Employee
is currently making contributions under the arrangement.
(UU) Year of Service: (i) If the elapsed time method of crediting
service is elected in the Adoption Agreement, a Year of Service
will mean a one-year Period of Service. If the actual hours method
of crediting service is elected in the Adoption Agreement, a Year
of Service will mean a 12-consecutive month period as specified in
the Adoption Agreement during which the Employee completes the
number of Hours of Service (not to exceed 1000) specified in the
Adoption Agreement.
1.2 Gender and Number. Unless the context indicates otherwise, the masculine
shall include the feminine, and the use of any words herein in the
singular shall include the plural and vice versa.
1.3 Control of Trades or Businesses by Owner-Employee. If this Plan provides
contributions or benefits for one or more Owner-Employees who control both
the business for which this Plan is established and one or more other
trades or businesses, this Plan and the Plan established for other trades
or businesses must, when looked at as a single Plan, satisfy Sections
401(a) and (d) for the employees of this and all other trades or
businesses.
If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a Plan
which satisfies Sections 401(a) and (d) and which provides contributions
and benefits not less favorable than provided for Owner-Employees under
this Plan.
If an individual is covered as an Owner-Employee under the plans of two or
more trades or businesses which are not controlled and the individual
controls a trade or business, then the contributions or benefits of the
employees under the Plan of the trades or businesses which are controlled
must be as favorable as those provided for him under the most favorable
Plan of the trade or business which is not controlled.
For purposes of the preceding paragraphs, an Owner-Employee, or two or
more Owner-Employees, will be considered to control a trade or business if
the Owner-Employee, or two or more Owner-Employees together:
(1) Own the entire interest in an unincorporated trade or business, or
(2) In the case of a partnership, own more than 50 percent of either
capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or
more Owner-Employees shall be treated as owning any interest in a
partnership which is owned, directly or indirectly, by a partnership
which such Owner-Employee, or such two or more Owner-Employees, are
considered to control within the meaning of the preceding sentence.
ARTICLE II
ELIGIBILITY AND VESTING
2.1 Eligibility.
(A) Participation. Every Employee who meets the eligibility requirements
specified by the Employer in the Adoption Agreement shall become
eligible to commence participation in this Plan.
(B) Commencement of Participation.
(1) For purposes of Money Purchase Pension Plans, Profit Sharing
Plans and 401(k) Plans with Profit Sharing Contributions, each
Eligible Employee shall commence participation on the Entry
Date.
(2) For purposes of 401(k) and 401(m) arrangements, an Eligible
Employee may, but is not required to, enroll as a Participant
as of the Entry Date on which such Employee is initially
eligible by filing with the Committee before such date, an
enrollment form prescribed by the Committee. The time period
for filing an enrollment form shall be determined by the
Committee. The form shall include an authorization and request
to the Employer to deduct from such Participant's Compensation
in each pay period the designated After Tax Contributions,
and/or to reduce such Participant's Compensation in each pay
period by the amount of the designated Before Tax
Contributions.
(C) Years of Service Counted Towards Eligibility. All Years of Service
with the Employer are counted toward eligibility except the
following:
(1) In a Plan which (a) requires an Employee to complete more than
one Year of Service as an eligibility requirement and (b)
provides immediate 100% vesting in a Participant's Employer
Contribution Account after not more than two (2) Years of
Service, if an Employee has a 1-year Break in Service before
satisfying the Plan's requirement for eligibility, service
before such break will not be taken into account.
(2) In the case of a Participant who does not have any
nonforfeitable right to the account balance derived from
Employer contributions, Years of Service before a period of
consecutive 1-year Breaks in Service will not be taken into
account in computing eligibility service if the number of
consecutive 1-year Breaks in Service in such period equals or
exceeds the greater of 5 or the aggregate number of Years of
Service. Such aggregate number of Years of Service will not
include any Years of Service disregarded under the preceding
sentence by reason of prior Breaks in Service.
(3) If a Participant's Years of Service are disregarded pursuant
to the preceding paragraph, such Participant will be treated
as a new Employee for eligibility purposes. If a Participant's
Years of Service may not be disregarded pursuant to the
preceding paragraph, such Participant shall continue to
participate in the Plan, or, if terminated, shall participate
immediately upon reemployment.
(D) Eligibility Break in Service, One Year Hold-Out Rule. If the Plan is
a nonstandardized Plan, then:
(1) In the case of any Participant who has a 1-year Break in
Service or Severance, years of eligibility service before such
break will not be taken into account until the Employee has
completed a Year of Service after returning to employment.
(2) For plans in which the eligibility computation is measured
with reference to the Employment Commencement Date, such Year
of Service will be measured beginning on the Employee's
Reemployment Commencement Date and, if necessary, subsequent
12-consecutive month periods beginning on anniversaries of the
Reemployment Commencement Date.
(3) For plans which shift the Eligibility Computation Period to
the Plan Year, such Year of Service will be measured by the
12-consecutive month period beginning on the Employee's
Reemployment Commencement Date and, if necessary, Plan Years
beginning with the Plan Year which includes the first
anniversary of the Reemployment Commencement Date.
(4) If a Participant completes a Year of Service in accordance
with this provision, his or her participation will be
reinstated as a Participant as of the Reemployment
Commencement Date.
(E) Participation Upon Return to Eligible Class.
(1) In the event a Participant is no longer a member of an
eligible class of Employees and becomes ineligible to
participate but has not incurred a Break In Service, such
Employee shall participate immediately upon returning to an
eligible class of Employees. If such Participant incurs a
Break In Service eligibility will be determined under the
Break in Service rules of the Plan.
(2) In the event an Employee who is not a member of an eligible
class of Employees becomes a member of an eligible class, such
Employee will participate immediately if such Employee has
satisfied the minimum age and service requirements and would
have otherwise previously become a Participant.
2.2 Vesting.
(A) Vesting Schedule. In the case of an Employee who terminates
participation under this Plan for any reason other than death,
Disability, or employment at the Normal Retirement Date, such
Participant, as of the last day of his participation under this
Plan, shall have a vested interest in his Employer Contribution
Account pursuant to the formula specified by the Employer in the
Adoption Agreement.
(B) Vesting Upon Normal Retirement Date. Notwithstanding the vesting
schedule elected by the Employer in Items B(7)(a) or C(4)(d) of the
Adoption Agreement, an Employee's right to his or her Employer
Contribution balance shall be nonforfeitable at the Employee's
Normal Retirement Date.
(C) Vesting Break in Service - 1 Year Holdout. In the case of any
Participant who has incurred a 1-year Break in Service, Years of
Service before such break will not be taken into account until the
Participant has completed a Year of Service after such Break in
Service.
(D) Vesting for Pre-Break and Post-Break Account. In the case of a
Participant who has 5 or more consecutive 1-year Breaks in Service,
all service after such Breaks in Service will be disregarded for the
purpose of vesting the employer-derived account balance that accrued
before such Breaks in Service. Such Participant's pre-break service
will count in vesting the post-break employer-derived account
balance only if either:
(1) such Participant has any nonforfeitable interest in the
account balance attributable to employer contributions at the
time of separation from service; or
(2) upon returning to service the number of consecutive 1-year
Breaks in Service is less than the number of Years of Service.
Separate accounts will be maintained for the Participant's
pre-break and post-break Employer Contribution Account
balance. Both accounts will share in the earnings and losses
of the Trust Fund.
(E) Amendment of Vesting Schedule. If the Plan's vesting schedule is
amended, or the Plan is amended in any way that directly or
indirectly affects the computation of the Participant's
nonforfeitable percentage or if the Plan is deemed amended by an
automatic change to or from a top-heavy vesting schedule, each
Participant with at least three (3) Years of Service with the
Employer may elect within a reasonable period after the adoption
of the amendment or change, to have the nonforfeitable
percentage computed under this Plan without regard to such
amendment or change. For Participants who do not have at least 1
Hour of Service in any Plan Year beginning after December 31,
1988, the preceding sentence shall be applied by substituting "5
Years of Service" for "3 Years of Service" where such language
appears.
This period during which the election may be made shall commence
with the date the amendment is adopted or deemed to be made and
shall end on the latest of:
(1) Sixty (60) days after the amendment is adopted;
(2) Sixty (60) days after the amendment becomes effective; or
(3) Sixty (60) days after the Participant is issued written
notice of the amendment by the Employer or Committee.
(F) Amendment Affecting Vested and/or Accrued Benefits. No amendment
to the Plan shall be effective to the extent that it has the
effect of decreasing a Participant's accrued benefit.
Notwithstanding the preceding sentence, a Participant's accoun
balance may be reduced to the extent permitted under Section
412(c)(8) of the Code. For purposes of this paragraph, a Plan
amendment which has the effect of decreasing a Participant's account
balance or eliminating an optional form of benefit, with respect
to benefits attributable to service before the amendment shall be
treated as reducing an accrued benefit. Furthermore,if the vesting
schedule of a Plan is amended, in the case of an Employee who is a
Participant as of the later of the date such amendment is
adopted or the date it becomes effective, the nonforfeitable
percentage (determined as of such date) of such Employee's Employer-
derived accrued benefit will not be less than the percentage
computed under the Plan without regard to such amendment.
ARTICLE III
CODE 401(k) AND CODE 401(m) ARRANGEMENTS
3.1 Provision Relating to Both Before Tax Contributions and After Tax
Contributions.
(A) Definitions: The following definitions are applicable to this
Article of the Plan.
(1) Actual Deferral Percentage or ADP: for a specified group of
Participants for a Plan Year, the average of the ratios
(calculated separately for each Participant in such group) of
(1) the amount of Employer contributions actually paid over to
the trust on behalf of such Participant for the Plan Year to
(2) the Participant's Compensation for such Plan Year (whether
or not the Employee was a Participant for the entire Plan
Year, but limited to that portion of the Plan Year in which
the Employee was an Eligible Participant if the Employer so
elects for such Plan Year to so limit Compensation for all
Eligible Employees). Employer contributions on behalf of any
Participant shall include (1) any Before Tax Contributions
made pursuant to the Participant's deferral election,
including Excess Before Tax Contributions, but excluding
Before Tax Contributions that are taken into account in the
Contribution Percentage test (provided the ADP test is
satisfied both with and without exclusion of these Before Tax
Contributions); and (2) at the election of the Employer,
Qualified Non-elective Contributions and Qualified Matching
Contributions. For purposes of computing Actual Deferral
Percentages, an Employee who would be a Participant but for
the failure to make Before Tax Contributions shall be treated
as a participant on whose behalf no Before Tax Contributions
are made.
(2) After Tax Contributions ("Employee Contributions"): Any
contribution made to the Plan by or on behalf of a Participant
that is included in the Participant's gross income in the year
in which made and that is maintained under a separate account
to which earnings and losses are allocated.
(3) Aggregate Limit: The sum of (i) 125 percent of the greater of
the ADP of the Non-highly Compensated Employees for the Plan
Year or the ACP of Non-highly Compensated Employees under the
Plan subject to Code Section 401(m) for the Plan Year
beginning with or within the Plan Year of the cash or deferred
arrangement and (ii) the lesser of 200% or two plus the lesser
of such ADP or ACP. "Lesser" is substituted for "greater" in
"(i)", above, and "greater" is substituted for "lesser" after
"two plus the" in "(ii)" if it would result in a larger
Aggregate Limit.
(4) Average Contribution Percentage or ACP: the average (expressed
as a percentage) of the Contribution Percentages of the
Eligible Participants in a group.
(5) Before Tax Contributions ("Elective Deferrals"): Employer
contributions made to the Plan at the election of the
Participant, in lieu of cash compensation, which shall include
contributions made pursuant to a salary reduction agreement or
other deferral mechanism. With respect to any taxable year, a
Participant's Before Tax Contributions are the sum of all
Employer contributions made on behalf of such Participant
pursuant to an election to defer under any qualified cash or
deferred arrangement as described in Section 401(k) of the
Code, any simplified employee pension cash or deferred
arrangement as described in Code Section 402(h)(1)(B), any
eligible deferred compensation Plan under Code Section 457,
any Plan as described under Code Section 457, any Plan as
described under Code Section 501(c)(18), and any Employer
contributions made on behalf of a Participant for the purchase
of an annuity contract under Code Section 403(b) pursuant to a
salary reduction agreement.
(6) Contribution Percentage: The ratio (expressed as a percentage)
of the Participant's Contribution Percentage Amounts to the
Participant's Compensation for the Plan Year (whether or not
the Employee was a Participant for the entire Plan Year, but
limited to that portion of the Plan Year in which the Employee
was an Eligible Participant if the Employer so elects for such
Plan Year to so limit Compensation for all Eligible
Employees).
(7) Contribution Percentage Amounts: The sum of the After Tax
Contributions, Matching Contributions, and Qualified Matching
Contributions (to the extent not taken into account for
purposes of the ADP test) made under the Plan on behalf of the
Participant for the Plan Year. Such Contribution Percentage
Amounts shall not include Matching Contributions that are
forfeited either to correct Excess Aggregate Contributions or
because the contributions to which they relate are Excess
Before Tax Contributions, Excess Contributions or Excess
Aggregate Contributions. If so elected in the Adoption
Agreement the Employer may include Qualified Non-elective
Contributions in the Contribution Percentage Amounts. The
Employer also may elect to use Before Tax Contributions in the
Contribution Percentage Amounts so long as the ADP test is met
before the Before Tax Contributions are used in the ACP test
and continues to be met following the exclusion of those
Before Tax Contributions that are used to meet the ACP test.
(8) Eligible Participant: Any Employee who is eligible to make an
After Tax Contribution or a Before Tax Contribution (if the
Employer takes such contributions into account in the
calculation of the Contribution Percentage), or to receive a
Matching Contribution (including forfeitures) or a Qualified
Matching Contribution. If an After Tax Contribution is
required as a condition of participation in the Plan, any
Employee who would be a Participant in the Plan if such
Employee made such a contribution shall be treated as an
eligible Employee on behalf of whom no After Tax Contributions
are made.
(9) Excess Aggregate Contributions: With respect to any Plan Year,
the excess of:
(a) The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution
Percentage actually made on behalf of Highly Compensated
Employees for such Plan Year, over
(b) The maximum Contribution Percentage Amounts permitted by
the ACP test (determined by reducing contributions made
on behalf of Highly Compensated Employees in order of
their Contribution Percentages beginning with the
highest of such percentages).
Such determination shall be made after first determining
Excess Before Tax Contributions pursuant to Section
3.2(D) and (E) and then determining Excess Contributions
pursuant to section 3.2(F), (G) and (H).
(10) Excess Before Tax Contributions ("Excess Elective Deferrals"):
Those Before Tax Contributions that are includible in a
Participant's gross income under Section 402(g) of the Code to
the extent such Participant's Before Tax Contributions for a
taxable year exceed the dollar limitation under such Code
section. Excess Before Tax Contributions shall be treated as
Annual Additions under the Plan, unless such amounts are
distributed no later than the first April 15 following the
close of the Participants taxable year. Excess Before Tax
Contributions shall be adjusted for income or loss up to the
end of the taxable year of the Employee, and if elected in the
Adoption Agreement, for the income or loss attributable to the
period from the end of the Employee's taxable year to the date
of distribution (the "Gap Period"). The income or loss
allocable to Excess Before Tax Contributions is (1) the income
or loss allocable to the Participant's Before Tax Contribution
Account for the taxable year multiplied by a fraction, the
numerator of which is such Participant's Excess Before Tax
Contributions for the year and the denominator is the
Participant's account balance attributable to Before Tax
Contributions without regard to any income or loss occurring
during such taxable year plus, (2) if Gap Period income or
loss applies, ten percent of the amount determined under (1)
multiplied by the number of whole calendar months between the
end of the Participant's taxable year and the date of
distribution, counting the month of distribution if
distribution occurs after the 15th of such month.
(11) Excess Contributions: With respect to any Plan Year, the
excess of:
(a) The aggregate amount of Employer contributions actually
taken into account in computing the ADP of Highly
Compensated Employee for such Plan Year, over
(b) The maximum amount of such contributions permitted by
the ADP test (determined by reducing contributions made
on behalf of Highly Compensated Employee in order of the
ADPs, beginning with the highest of such percentages).
(12) Matching Contributions: An Employer contribution made to this
or any other defined contribution Plan on behalf of a
Participant on account of an After Tax Contribution made by
such Participant, or on account of a Participant's Before Tax
Contribution, under a Plan maintained by the Employer.
(13) Qualified Matching Contributions: Matching Contributions which
are subject to the distribution and nonforfeitability
requirements under Section 401(k) of the Code when made.
Qualified Matching Contributions shall be allocated, in the
discretion of Employer, to the accounts of all Employees, or
only to the accounts of Non-highly Compensated Employees.
(14) Qualified Non-elective Contributions: Contributions (other
than Matching Contributions or Qualified Matching
Contributions) made by the Employer and allocated to
Participants' accounts that the Participants may not elect to
receive in cash until distributed from the Plan; that are
nonforfeitable when made; and that are distributable only in
accordance with the distribution provisions that are
applicable to Before Tax Contributions and Qualified Matching
Contributions. Qualified Non-elective Contributions shall be
allocated, in the discretion of Employer, to the accounts of
all Employees, or only to the accounts of Non-highly
Compensated Employees.
(B) Nonforfeitability and Vesting. The Participant's accrued benefits
derived from Before Tax Contributions and After Tax Contributions
are nonforfeitable and fully vested.
(C) Notice to Committee. The Committee shall set the time period during
which a Participant may provide written notice to increase, decrease
or terminate Before Tax Contributions and After Tax Contributions.
(D) Suspension After Receipt of Hardship Distribution. If the Employer
has elected in the Adoption Agreement to have the "safe harbor"
hardship rules apply, an Employee's Before Tax Contributions and
After Tax Contributions shall be suspended for twelve months after
the receipt by such Employee of a Hardship distribution (as defined
in Section 3.9) from this Plan or any other Plan maintained by the
Employer.
(E) Separate Accounts. Separate accounts for Before Tax Contributions
and After Tax Contributions will be maintained for each Participant.
Each account will be credited with the applicable contributions and
earnings thereon.
3.2 Before Tax Contributions. (Elective Deferrals).
(A) Allocation of Before Tax Contributions. If the Employer selects Item
C(2) in the Adoption Agreement, for each Plan Year the Employer will
contribute and allocate to each Participant's Before Tax
Contribution Account an amount equal to the amount of the
Participant's Before Tax Contributions. The provisions of the cash
or deferred arrangement may be made effective as of the first day
of the Plan Year in which the cash or deferred option is adopted,
however, under no circumstances may a salary reduction agreement
or other deferral mechanism be adopted retroactively. Before
Tax Contributions must be contributed and allocated to the Plan
no later than thirty (30) days after the close of the Plan Year for
which the contributions are deemed to be made, or such other time
as provided in applicable regulations under the Code.
(B) Before Tax Contributions Pursuant to a Salary Reduction Agreement.
To the extent provided in the Adoption Agreement, a Participant may
elect to have Before Tax Contributions made under this Plan. Before
Tax Contributions shall be continuing contributions through payroll
deduction made pursuant to a salary reduction agreement.
(1) Commencement of Before Tax Contributions. An Employee may
elect to commence Before Tax Contributions as of his or her
Entry Date as described in Section 2.1(B). Such election shall
not become effective before the Entry Date. Such election may
not be made retroactively.
(2) Modification and Termination of Before Tax Contributions. A
Participant's election to commence Before Tax Contributions
shall remain in effect until modified or terminated. A
Participant may increase or decrease his or her Before Tax
Contributions as of any date as selected by the Employer in
Item C(3) of the Adoption Agreement upon notice to the
Committee. A Participant may terminate his or her election to
make Before Tax Contributions as of the Participant's next
wage payment date upon notice to the Committee. Any
Participant who terminates Before Tax Contributions may elect
to recommence making Before Tax Contributions as of the date
selected by the Employer in Item C(3) of the Adoption
Agreement following his or her suspension of contributions.
(C) Cash bonuses. If Item C(2)(c) of the Adoption Agreement is selected
a Participant may also enter into a salary reduction agreement
on cash bonuses that, directing that the amount of such salary
reduction be contributed to the Plan as a Before Tax Contribution,
or received by the Participant in cash. A Participant shall be
afforded a reasonable period to elect to defer amounts described
in this Section 3.2 to the Plan. Such election shall not become
effective before the Participant's Entry Date.
(D) Maximum Amountof Before Tax Contributions. A Participant's Before
Tax Contributions are subject to any limitations imposed in Item
C(2) of the Adoption Agreement, calculated on an annual basis,
and any further limitations under the Plan. No Participant shall
be permitted to have Before Tax Contributions made under this Plan,
or any other qualified Plan maintained by the Employer, during
any taxable year in excess of the dollar limitation contained in
Code Section 402(g) in effect at the beginning of such taxable year.
Furthermore, if an Employee receives a Hardship distribution (as
defined in Section 3.9, utilizing the "safe harbor" rules) from
this Plan or any other Plan maintained by the Employer, the
Employee may not make Before Tax Contributions for the Employee's
taxable year immediately following the taxable year of the
Hardship distribution in excess of the applicable limit under
Section 402(g) of the Code for such taxable year less the
amount of the Employee's Before Tax Contributions for the taxable
year of the Hardship distribution.
(E) Distribution of Excess Before Tax Contributions. If a Participant
makes Before Tax Contributions to this Plan and to another Plan,
and the Participant has made Excess Before Tax Contributions to
one or more of the plans, the Participant may assign the amount
of any such Excess Before Tax Contributions among the plans under
which such Before Tax Contributions were made. The Participant
may assign to this Plan any Excess Before Tax Contributions made
during a taxable year of the Participant to this Plan by
notifying the Committee on or before the date specified in the
Adoption Agreement of the amount of the Excess Before Tax
Contributions to be assigned to the Plan. A Participant is deemed
to notify the Committee of any Excess Before Tax Contributions
that arise by taking into account only those Before Tax
Contributions made under the Plan or Plans of this Employer.
Notwithstanding any other provision of the Plan, Excess Before Tax
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than April 15 to any Participant to
whose account Excess Before Tax Contributions were assigned for the
preceding year and who claims Excess Before Tax Contributions for
such taxable year.
The Participant's claim shall be in writing; shall be submitted to
the Committee not later than the date elected in Item CC of the
Adoption Agreement; shall specify the amount of the Participant's
Excess Before Tax Contribution for the preceding calendar year; and
shall be accompanied by the Participant's written statement that if
such amounts are not distributed, such Excess Before Tax
Contributions, when added to amounts deferred under other plans or
arrangements described in Sections 401(k), 408(k), or 403(b) of the
Code, will exceed the limit imposed on the Participant by Section
402(g) of the Code for the year in which the deferral occurred.
(F) Actual Deferral Percentage. The ADP for Participants who are Highly
Compensated Employees for each Plan Year and the ADP for Non-highly
Compensated Employees for the same Plan Year must satisfy one of the
following tests:
(1) 1.25 Limit. The ADP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
ADP for Participants who are Non-highly Compensated Employees
for the same Plan Year multiplied by 1.25; or
(2) 2.0 Limit. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for
Participants who are Non-highly Compensated Employees for the
same Plan Year multiplied by 2.0, provided that the ADP for
Participants who are Highly Compensated Employees does not
exceed the ADP for Participants who are Non-highly Compensated
Employees by more than two (2) percentage points.
(3) Special Rules.
(a) The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have
Before Tax Contributions (and Qualifie Non-elective
Contributions, or Qualified Matching Contributions, or
both,if treated as Elective Deferrals for purposes
of the ADP test) allocated to his or her accounts
under two or more arrangements described in Section
401(k) of the Code, that are maintained by the
Employer, shall be determined as if such Before Tax
Contributions (and, if applicable, such Qualified
Non-elective Contributions or Qualified Matching
Contributions, or both,) were made under a
single arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred
arrangements that have different Plan Years, all cash
or deferred arrangements ending with or within the
same calendar year shall be treated as a single
arrangement.
(b) In the event that this Plan satisfies the requirements
of Sections 401(k), 401(a)(4), or 410(b) of the Code
only if aggregated with one or more other plans,
or if one or more other plans satisfy the requirements
of such Sections of the Code only if aggregated with
this Plan, then this section shall be applied by
determining the ADP of Employees as if all such plans
were a single Plan. For Plan Years beginning after
December 31, 1989, plans may be aggregated in order to
satisfy Section 401(k) of the Code only if they have
the same Plan Year.
(c) For purposes of determining the ADP of a Participant
who is a 5-percent owner or one of the ten most highly-
paid Highly Compensated Employees, the Before Tax
Contributions (and Qualified Non-elective Contributions
or Qualified Matching Contributions, or both, if
treated as Before Tax Contributions for purposes of
the ADP test) and Compensation of such Participant
shall include the Before TaxContributions (and
if applicable, Qualified Non-elective Contributions)
and Compensation for the Plan Year of Family Members
(as defined in Section 414(q)(6) of the Code).
Family Members, with respect to such Highly
Compensated Employees, shall be disregarded as separate
employees in determining the ADP both for Participants
who are Non-highly Compensated Employees and for
Participants who are Highly Compensated Employees.
(d) For purposes of determining the ADP test, Before Tax
Contributions if treated as Before Tax Contributions and
Qualified Non-elective Contributions must be made before
the last day of the twelve-month period immediately
following the Plan Year to which contributions relate.
(e) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount
of Qualified Non-elective Contributions used in such
test.
(f) The determination and treatment of the ADP amounts of
any Participant shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
(G) Distribution of Excess Contributions. Notwithstanding any other
provision of the Plan, Excess Contributions, plus any income and
minus any loss allocable thereto, shall be distributed no later
than the last day of each Plan Year to Participants to whose
accounts Excess Contributions were allocated for the preceding
Plan Year. If such excess amounts are distributed more than 2-1/2
months after the last day of the Plan Year in which such excess
amounts arose, a ten (10) percent excise tax will be imposed on the
Employer maintaining the Plan with respect to such amounts. Such
distributions shall be made to Highly Compensated Employee on the
basis of the respective portions of the Excess Contribution
attributable to each of such Employees. Excess Contributions
of Participants who are subject to the Family Member
aggregation rules shall be allocated among the Family Members
in proportion to the Before Tax Contributions(and amounts treated
as Before Tax Contributions) of each Family Member that is
combined to determine the combined ADP.
Excess Contributions (including the amounts recharacterized) shall
be treated as Annual Additions under the Plan.
(1) Determination of Income or Loss. The Excess Contributions
shall be adjusted for income or loss up to the date of
distribution. The income or loss allocable to Excess
Contributions is (1) the income or loss allocable to the
Participant's Before Tax Contribution Account (and, if
applicable, the Qualified Non-elective Contribution Account or
the Qualified Matching Contribution Account or both)
multiplied by a fraction, the numerator of which is such
Participant's Excess Contribution for the year and the
denominator is the Participant's account balance attributable
to Before Tax Contributions (and Qualified Non-Elective
Contributions or Qualified Matching Contributions or both, if
any of such contributions are included in the ADP test)
without regard to any income or loss occurring during such
taxable year, plus, (2) if Gap Period income or loss applies,
as elected in the Adoption Agreement, ten percent of the
amount determined under (1) multiplied by the number of whole
calendar months between the end of the Plan Year and the date
of distribution, counting the month of distribution if
distribution occurs after the 15th of such month.
(2) Accounting for Excess Contributions. Excess Contributions
shall be distributed from the Participant's Before Tax
Contribution Account and Qualified Matching Contribution
Account (if applicable) in proportion to the Participant's
Before Tax Contributions and Qualified Matching Contributions
(to the extent used in the ADP test) for the Plan Year. Excess
Contributions shall be distributed from the participant's
Qualified Non-elective Contribution Account only to the extent
that such Excess Contributions exceed the balance in the
Participant's Before Tax Contribution Account.
(H) Recharacterization. If the Plan permits After Tax Contributions
(Employee Contributions), Excess Contributions may be
recharacterized pursuant to this subsection. Recharacterized amounts
may be used in the Plan from which Excess Contributions arose or in
another Plan of the employer with the same Plan Year.
(1) Treatment of Amounts Recharacterized. A Participant may treat
his or her Excess Contributions as an amount distributed to
the Participant and then contributed by the Participant to the
Plan. Recharacterized amounts will remain nonforfeitable and
subject to the same distribution requirements as Before Tax
Contributions. Amounts may not be recharacterized by a Highly
Compensated Employee to the extent that such amount in
combination with other After Tax Contributions made by that
Employee would exceed any stated limit under the Plan on After
Tax Contributions.
(2) Timing of Recharacterization. Recharacterization must occur no
later than two and one-half months after the last day of the
Plan Year in which such Excess Contributions arose and is
deemed to occur no earlier than the date the last Highly
Compensated Employee is informed in writing of the amount
recharacterized and the consequences thereof. Recharacterized
amounts will be taxable to the Participant for the
Participant's tax year in which the Participant would have
received them in cash.
(I) Adjustments to Before Tax Contribution Percentages. Anything
to the contrary in this Article III notwithstanding, the Committee
shall have the right to reduce the percentages designated pursuant
to Section 3.2(B), of any one or more Highly Compensated Employees
in a manner prescribed or approved by the Committee to the extent
necessary or convenient to ensure that at least one of the ADP
tests set forth in Section 3.2(F) is satisfied, but in no event
shall such reduction result in a percentage less than zero. An
such reduction shall be effected quarterly, or more frequently
as the Committee may determine and each affected Highly Compensated
Employee shall be deemed to have elected the permissible percentage
determined by the Committee. The Committee may, on a prospective
basis, and subject to the percentage limits of Section 3.3 below,
treat amounts contributed to the Plan pursuant to a salary
reduction agreement as After Tax Contributions by each affected
Highly Compensated Employee; provided that if any such reduction
cannot be so treated because of the said percentage limits or
because of the nondiscrimination requirements of Code Section
401(m) or otherwise, then the amount of such reduction (and any
income allocable thereto) shall be distributed to each affected
Highly Compensated Employee pursuant to Code Section 401(k)(8)or
Code Section 401(m)(6), if applicable, not later than the close
of the first 2-1/2 months of the Plan Year following the Plan
Year in which the contribution was made.
3.3 After Tax Contributions. (Employee Contributions).
(A) Allocation of After Tax Contributions. If the Employer selects Item
C(2)(b) in the Adoption Agreement, the Employer will deduct from the
Participant's pay and allocate to each Participant's After Tax
Contribution Account an amount equal to the percentage of
Compensation authorized by the Participant as an After Tax
Contribution. The Employer shall transmit After Tax Contributions to
the Trustee within thirty (30) days after the month end in which
such deductions are made.
(B) Employee Authorizes After Tax Contributions. To the extent provided
in the Adoption Agreement, a Participant may elect to make After Tax
Contributions under the Plan.
(1) Election to Make After Tax Contributions. An Employee may
elect to make After Tax Contributions as of his or her Entry
Date as described in Section 2.1(B). Such election will not
become effective before the Entry Date.
(2) Modification and Termination of After Tax Contributions. A
Participant's election to commence After Tax Contributions
shall remain in effect until modified or terminated. A
Participant may increase or decrease his or her After Tax
Contributions as selected by the Employer in Item C(3) of the
Adoption Agreement upon written notice to the Committee. A
Participant may terminate his or her election to make After
Tax Contributions at any time as of the Participant's next
wage payment date upon written notice to the Committee. Any
Participant who terminates After Tax Contributions may elect
to recommence making After Tax Contributions as of the date
selected by the Employer in Item C(3) of the Adoption
Agreement following his or her suspension of contributions.
(C) Maximum Amount of After Tax Contributions. A Participant's After Tax
Contributions are subject to any limitations imposed in Item C(3) of
the Adoption Agreement, calculated on an annual basis, and any
further limitations under the Plan.
(D) Cash Bonuses. If Item C(2)(c) of the Adoption Agreement is selected,
a Participant may also enter into a salary reduction agreement
on cash bonuses, directing that the amount of such salary
reduction be contributed to the Plan as an After Tax Contribution,
or received by the Participant in cash. A Participant shall be
afforded a reasonable period to elect to defer amounts described
in this Section 3.3 to the Plan. Such election shall not become
effective before the Participant's Entry Date.
3.4 Employer Contributions.
(A) Matching Contributions. If elected by the Employer in the Adoption
Agreement, the Employer will or may make Matching Contributions to
the Plan. The amount of such Matching Contributions shall be
calculated by reference to the Participants' Before Tax
Contributions and/or After Tax Contributions as specified by the
Employer in the Adoption Agreement.
(B) Qualified Matching Contributions. If elected by the Employer in the
Adoption Agreement, the Employer may make Qualified Matching
Contributions to the Plan.
In addition, in lieu of distributing Excess Contributions as
provided in Section 3.2(G) of the Plan, or Excess Aggregate
Contributions as provided in Section 3.5(C) of the Plan, the
Employer may make Qualified Matching Contributions on behalf of
Employees that are sufficient to satisfy either the Actual Deferral
Percentage or the Average Contribution Percentage test, or both,
pursuant to regulations under the Code.
(C) Qualified Non-elective Contributions. If elected by the Employer in
the Adoption Agreement, the Employer may make Qualified Non-elective
Contributions to the Plan.
In addition, in lieu of distributing Excess Contributions as
provided in Section 3.2(G) of the Plan, or Excess Aggregate
Contributions as provided in Section 3.5(C) of the Plan, the
Employer may make Qualified Non-elective Contributions on behalf of
Employees that are sufficient to satisfy either the Actual Deferral
Percentage or the Average Contribution Percentage test, or both,
pursuant to regulations under the Code.
(D) Separate Accounts. An Employer Matching Account shall be maintained
for a Participant's accrued benefit attributable to Matching
Contributions. A Qualified Matching Contribution Account shall
be maintained for a Participant's accrued benefit attributable
to Qualified Matching Contributions. A Qualified Non-elective
Contribution Account shall be maintained for a Participant's accrued
benefit attributable to Qualified Non-electiv Contributions. Such
accounts shall be credited with the applicable contributions,
earnings and losses, distributions, and other adjustments.
(E) Vesting. Matching Contributions will be vested in accordance with
the Employer's election in Items C(4)(d) and C(4)(e) of the Adoption
Agreement. In any event, Matching Contributions shall be fully
vested at Normal Retirement Date, upon the complete or partial
termination of the Plan, or upon the complete discontinuance of
Matching Contributions, as applicable. Qualified Non-elective
Contributions and Qualified Matching Contributions are
nonforfeitable when made.
(F) Forfeitures. Forfeitures of Matching Contributions shall be used to
reduce such contributions, or shall be allocated to Participants, in
accordance with the Employer's election in Item C(6) of the Adoption
Agreement.
(G) Allocation of Discretionary Matching Contributions. If he Employer
selects Item C(4)(b) in the Adoption Agreement, any discretionary
Matching Contributions shall be allocated as of the allocation
date specified in Item C(4)(c)(ii) of the Adoption Agreement, to the
Employer Matching Account of each Participant who has made
Before Tax Contributions and/or After Tax Contributions eligible
for matching. If Item C(4)(c)(ii)(e) has been selected (imposing
a last day of the Plan Year requirement) the allocation shall be
made to a Participant who (1)if a Participant in a nonstandardized
Plan, is employed or on leave of absence on the last day of the Plan
Year, and (2) if a Participant in a standardized Plan, either
completes more than 500 Hours of service during the Plan Year
or is employed on the last day of the Plan Year. The following
Participants will also share in the Matching Contributions for the
year, if elected in the Adoption Agreement: (1) Participants in
a nonstandardized Plan whose employment terminated before the end
of the Plan Year because of retirement, death, disability or as
specified in the Adoption Agreement, and (2) Participants in a
standardized Plan whose employment terminated before the end of
the Plan Year because of retirement, death, disability or as
specified in the Adoption Agreement,and completed 500 Hours of
Service or less. Notwithstanding the foregoing, if the Employer
makes a contribution prior to the end of the Plan Year, Participants
shall be entitled to an allocation of that contribution when
made, without regard to any end of the Plan Year requirement.
(H) Limitation on Employer Contributions. The Employer's contributions
for any Plan Year shall not exceed the maximum amount which the
Employer may deduct pursuant to Section 404 of the Code.
3.5 Limitations on After Tax Contributions(Employee Contributions)and Matching
Contributions.
(A) Contribution Percentage. The ACP for Participants who are Highly
Compensated Employees for each Plan Year and the ACP for
Participants who are Non-highly Compensated Employees for the same
Plan Year must satisfy one of the following tests:
(1) 1.25 Limit. The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
ACP for Participants who are Non-highly Compensated Employees
for the same Plan Year by 1.25, or
(2) 2.0 Limit. The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for
Participants who are Non-highly Compensated Employees for the
same Plan Year multiplied by two (2), provided that the ACP
for Participants who are Highly Compensated Employees does not
exceed the ACP for Participants who are Non-highly Compensated
Employees by more than two (2) percentage points.
(B) Special Rules.
(1) Multiple Use. If one or more Highly Compensated Employees
participate in both a cash or deferred arrangement and a Plan
subject to the ACP test maintained by the Employer and the sum
of the ADP and ACP of those Highly Compensated Employees
subject to either or both tests exceeds the Aggregate Limit,
then the ACP of those Highly Compensated Employees who also
participate in a cash or deferred arrangement will be reduced
(beginning with such Highly Compensated Employee whose ACP is
the highest) so that the limit is not exceeded. The amount by
which each Highly Compensated Employee's Contribution
Percentage amounts is reduced shall be treated as an Excess
Aggregate Contribution. The ADP and ACP of the Highly
Compensated Employees are determined after any corrections
required to meet the ADP and ACP tests. Multiple use does not
occur if either the ADP and ACP of the Highly Compensated
Employees does not exceed 1.25 multiplied by the ADP and ACP
of the Non-highly Compensated Employees.
(2) Aggregation of Contribution Percentages. For purposes of this
section, the Contribution Percentage for any Participant who
is a Highly Compensated Employee and who is eligible to have
Contribution Percentage Amounts allocated to his or her
accounts under two or more plans described in Section 401(a)
of the Code, or arrangements described in Section 401(k) of
the Code, that are maintained by the Employer, shall be
determined as if the total of such Contribution Percentage
Amounts was made under each Plan. If a Highly Compensated
Employee participates in two or more cash or deferred
arrangements that have different Plan years all cash or
deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement. Notwithstanding
the foregoing, certain plans shall be treated as separate if
mandated to be disaggregated under regulations under Section
401(m) of the Code.
(3) Aggregation of Plans. In the event that this Plan satisfies
the requirements of Sections 401(m), 401(a)(4) or 410(b) of
the Code only if aggregated with one or more other plans, or
if one or more other plans satisfy the requirements of such
sections of the Code only if aggregated with this Plan, then
this section shall be applied by determining the Contribution
Percentage of Employees as if all such plans were a single
Plan. For Plan Years beginning after December 31, 1989, plans
may be aggregated in order to satisfy Section 401(m) of the
Code only if they have the same Plan Year.
(4) Family Aggregation. For purposes of determining the
Contribution Percentage of a Participant who is a five-percent
owner or one of the ten most highly-paid Highly Compensated
Employees, the Contribution Percentage Amounts and
Compensation of such Employee shall include the Contribution
Percentage Amounts and Compensation for the Plan Year of
Family Members, as defined in Section 414(q)(6) of the Code.
Family Members, with respect to Highly Compensated Employees,
shall be disregarded as separate employees in determining the
Contribution Percentage both for Participants who are
Non-highly Compensated Employees and for Participants who are
Highly Compensated Employees.
(5) Time of Contributions. For purposes of determining the
Contribution Percentage test, After Tax Contributions are
considered to have been made in the Plan Year in which
contributed to the Trust. Matching Contributions and Qualified
Non-elective Contributions will be considered made for a Plan
Year if made no later than the end of the twelve-month period
beginning on the day after the close of the Plan Year.
(6) Records. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the amount of
Qualified Non-elective Contributions or Qualified Matching
Contributions, or both, used in such test.
(7) Regulations. The determination and treatment of the
Contribution Percentage of any Participant shall satisfy such
other requirements as may be prescribed by the Secretary of
the Treasury.
(C) Distribution of Excess Aggregate Contributions.
(1) General Rule. Notwithstanding any other provision of this
Plan, Excess Aggregate Contributions, plus any income and
minus any loss allocable thereto, shall be forfeited, if
forfeitable, or if not forfeitable, distributed no later than
the last day of each Plan Year to Participants to whose
accounts Excess Aggregate Contributions were allocated for the
preceding Plan Year. Excess Aggregate Contributions of
Participants who are subject to the Family Member aggregation
rules shall be allocated among the Family Members in
proportion to the After Tax and Matching Contributions (or
amounts treated as Matching Contributions) of each Family
Member that is combined to determine the combined ACP. If such
Excess Aggregate Contributions are distributed more than 2-1/2
months after the last day of the Plan Year in which such
excess amounts arose, a ten (10) percent excise tax will be
imposed on the Employer maintaining the Plan with respect to
those amounts. Excess Aggregate Contributions shall be treated
as Annual Additions under the Plan.
(2) Determination of Income or Loss. Excess Aggregate
Contributions shall be adjusted for income or loss up to the
date of distribution. The income or loss allocable to Excess
Aggregate Contributions is the sum of: (1) income or loss
allocable to the Participant's After Tax Contribution Account,
Matching Contribution Account, Qualified Matching Contribution
Account, (if any, and if all amounts therein are not used in
the ADP test) and, if applicable, the Qualified Non-elective
Contribution Account and Before Tax Contribution Account for
the Plan Year multiplied by a fraction, the numerator of which
is such Participant's Excess Aggregate Contributions for the
year and the denominator is the Participant's account
balance(s) attributable to Contribution Percentage Amounts
without regard to any income or loss occurring during such
Plan Year; and (2) ten percent of the amount determined under
(1) multiplied by the number of whole calendar months between
the end of the Plan Year and the date of distribution,
counting the month of distribution if distribution occurs
after the 15th of such month.
(3) Forfeitures of Excess Aggregate Contributions. Forfeitures of
Excess Aggregate Contributions may either be reallocated to
the accounts of Non-Highly Compensated Employees or applied to
reduce Employer Contributions, as elected by the Employer in
Item C(6)(c) of the Adoption Agreement.
(4) Accounting for Excess Aggregate Contributions. Excess
Aggregate Contributions shall be forfeited, if forfeitable, or
distributed on a pro-rata basis from the Participant's After
Tax Contribution Account and Matching Contribution Account and
Qualified Matching Contribution Account (and, if applicable,
the Participant's Qualified Non-elective Contribution Account
and Before Tax Contribution Account, or both).
3.6 Net Profits Not Required if So Elected in Adoption Agreement. If the
Employer elects, Matching Contributions may be made without regard to Net
Profits in accordance with Item C(4)(c)(iii) of the Adoption Agreement. If
the Plan is a profit-sharing Plan, the Plan shall continue to be designed
to qualify as a profit-sharing Plan for purposes of Sections 401(a), 402,
412, and 417 of the Code. Net Profits shall not be required for Before Tax
Contributions or After Tax Contributions to be made to the Plan.
3.7 Form, Payment and Allocation of Contributions. All contributions under
this Article III made for a Plan Year shall be made in cash, and shall be
delivered to the Trustee at such time or times as shall be agreed upon
between the Committee and the Trustee. The Committee shall instruct the
Trustee as to the allocation of contributions to the Participant's
accounts.
3.8 Distribution Requirements for Before Tax Contribution Account. Before Tax
Contributions, Qualified Non-elective Contributions and Qualified Matching
Contributions, and income allocable to each are not distributable to a
Participant or his or her Beneficiary or Beneficiaries, in accordance with
such Participant's, Beneficiary's or Beneficiaries' election, earlier than
upon separation from service, death, disability, or as selected in the
Adoption Agreement. Such amounts may not be distributed unless in
accordance with the Participant's election made pursuant to rules
established by the Committee as authorized in the Adoption Agreement, and
upon:
(A) Termination of the Plan without the establishment of another defined
contribution Plan, other than an employee stock ownership Plan (as
defined in Section 4975(e) or Section 409 of the Code) or a
simplified employee pension Plan as defined in Section 408(k).
(B) The disposition by a corporation to an unrelated corporation of
substantially all of the assets (within the meaning of Section
409(d)(2) of the Code) used in a trade or business of such
corporation if such corporation continues to maintain this Plan
after the disposition, but only with respect to Employees who
continue employment with the corporation acquiring such assets.
(C) The disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary (within the meaning of
Section 409(d)(3) of the Code) if such corporation continues to
maintain this Plan, but only with respect to Employees who continue
employment with such subsidiary.
(D) The attainment of age 59-1/2 in the case of a profit-sharing Plan,
or the attainment of the Plan's Normal Retirement Date, if either or
both are selected in the Adoption Agreement.
(E) The Hardship of the Participant as described in Section 3.9, if
selected in the Adoption Agreement.
All distributions that may be made pursuant to one or more of the
foregoing distributable events are subject to the spousal and
Participant consent requirements (if applicable) contained in
Sections 411(a)(11) and 417 of the Code. In addition, distributions
after March 31, 1988, that are triggered by any of the first three
events above, in Sections 3.8(A), (B) and (C) must be made in a lump
sum.
3.9 Hardship Distribution.
(A) Amount Available for Withdrawal. Upon the written request of a
Participant received and approved by the Committee, a Participan
may withdraw, in cash, up to one hundred per cent (100%) of the
amount of such Participant's Before Tax Contributions (and any
earnings credited to a Participant's account as of the end of the
last Plan Year ending before July 1, 1989) or such lesser amount
as the Committee may approve, in the event of Hardship. For
purposes of this Section, Hardship is defined as immediate and
heavy financial need of the Employee where such Employee lacks other
available resources. Hardship distributions are subject to the
spousal consent requirements contained in Sections 411(a)(11)
and 417 of the Code. The Committee is authorized to and
shall request from the Participant making such a request such
evidence as the Committee deems necessary and appropriate to
substantiate a Hardship, the amount of expenses resulting from
such Hardship and the other resources of the Participant
reasonably available to meet such expenses.
(B) Special Rules:
(1) Immediate and Heavy Need. The following are the only financial
needs considered immediate and heavy: expenses incurred or
necessary for medical care, described in Section 213(d) of the
Code, of the Employee, the Employee's Spouse or dependents;
the purchase (excluding mortgage payments) of a principal
residence for the Employee; payment of tuition and related
educational fees for the next twelve months of post-secondary
education for the Employee, the Employee's Spouse, children or
dependents; or the need to prevent the eviction of the
Employee from, or a foreclosure on the mortgage of, the
Employee's principal residence.
(2) Satisfaction of Need. A distribution will be considered as
necessary to satisfy an immediate and heavy financial need of
the Employee only if:
(a) The Employee has obtained all distributions, other than
Hardship distributions, and all nontaxable loans under
all plans maintained by the Employer;
(b) All plans maintained by the Employer provide that the
Employee's Before Tax Contributions (and After Tax
Contributions) will be suspended for twelve months after
the receipt of the Hardship distribution;
(c) The distribution is not in excess of an immediate and
heavy financial need (including amounts necessary to pay
any federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution);
and
(d) All plans maintained by the Employer provide that the
Employee may not make Before Tax Contributions for the
Employee's taxable year immediately following the
taxable year of the Hardship distribution in excess of
the applicable limit under Section 402(g) of the Code
for such taxable year less the amount of such Employee's
Before Tax Contributions for the taxable year of
the Hardship distribution.
(3) Taxes and Penalties. The amount of an immediate and heavy
financial need may include any amounts necessary to pay any
federal, state or local income taxes or penalties reasonably
anticipated to result from the distribution.
3.10 Withdrawal of After Tax Contributions. Subject to the provisions of the
Plan, in accordance with rules for giving notice as determined by the
Committee, a Participant may withdraw as of the first Accounting Date
subsequent to receipt by the Committee of such notice:
(A) Maximum Amount. An amount equal to not more than 100% o
the Participant's After Tax Contribution Account determined as
of such Accounting Date. No Participant who has made any withdrawa
of After Tax Contributions in the twelve (12) months preceding the
giving of such notice may make a withdrawal under this Section.
A Participant who makes a withdrawal of After Tax Contributions
shall be required to suspend After Tax Contributions for a
period of six (6) months, commencing with the effective date of
such withdrawal. A Participant may, pursuant to Article III, elect
to commence After Tax Contributions as of the first day of the
first payroll period of the month following the conclusion of such
suspension period, or the first payroll period of any month
thereafter, upon advance written notice to the Committee.
(B) Minimum Amount. Notwithstanding anything to the contrary in this
Section 3.10, any withdrawal made pursuant to Section 3.10(A) shall
be for a minimum whole dollar amount not less than Five Hundred
Dollars ($500.00); except that if the amount available for
withdrawal is less than Five Hundred Dollars ($500.00) then the
minimum amount of the withdrawal shall be the amount available.
(C) Forfeitures. No forfeitures will occur solely as a result of an
Employee's withdrawal of After Tax Contributions.
(D) Loan Security. Notwithstanding anything to the contrary in this
Section 3.10, a Participant may not make a withdrawal pursuant to
this Section of any portion of the Participants vested interest
which has been assigned to secure repayment of a loan in accordance
with Section 11.10, below, until such time as the Committee shall
have released said portion so assigned.
3.11. Withdrawal of Matching Contributions. Subject to the provisions of the
Plan, in accordance with rules for giving notice as determined by the
Committee, and as elected in the Adoption Agreement, a Participant may
withdraw as of the first Accounting Date subsequent to receipt by the
Committee of such notice:
(A) Maximum Amount. An amount equal to not more than 100% of the vested
amounts in the Participant's Matching Contribution Account
determined as of such Accounting Date. No Participant who has made
any withdrawal of Matching Contributions in the twelve (12) months
preceding the giving of such notice may make a withdrawal under this
Section.
(B) Minimum Amount. Notwithstanding anything to the contrary in this
Section 3.11, any withdrawal made pursuant to Section 3.11(A) shall
be for a minimum whole dollar amount not less than Five Hundred
Dollars ($500.00); except that if the amount available for
withdrawal is less than Five Hundred Dollars ($500.00) then the
minimum amount of the withdrawal shall be the amount available.
(C) Forfeitures. No forfeitures will occur solely as a result of an
Employee's withdrawal of Matching Contributions.
(D) Loan Security. Notwithstanding anything to the contrary in this
Section 3.11, a Participant may not make a withdrawal, pursuant to
this Section of any portion of the Participant's vested interest
which has been assigned to secure repayment of a loan in accordance
with Section 11.10, below, until such time as the Committee shall
have released said portion so assigned.
ARTICLE IV
OTHER CONTRIBUTIONS
4.1 Employer Contributions.
(A) Money Purchase Pension Plans Only. As elected by the Employer in the
Adoption Agreement, the Employer shall make contributions to the
Plan.
(B) Profit Sharing Plans and 401(k) Plans Only.
(1) Employer Contributions. For each Plan Year, the Employer,
shall or may make contributions to the Plan in an amount as
selected in the Adoption Agreement or determined by Resolution
of the Board of Directors of the Employer.
(2) Net Profits Not Required if So Elected in Adoption Agreement.
If the Employer elects, Employer Contributions under a profit
sharing Plan may be made without regard to Net Profits in
accordance with Item B(8)(a)(iii) of the Adoption Agreement.
The Plan shall continue to be designed to qualify as a
profit-sharing Plan for purposes of Sections 401(a), 402, 412,
and 417 of the Code.
4.2 Separate Accounts. An Employer Contribution Account shall be maintained
for each Participant to which will be credited the employer pension or
profit sharing contributions ("Employer Contributions"). Such accounts
shall be credited with the applicable contributions, earnings and losses,
distributions, and other adjustments.
4.3 Vesting. Employer Contributions will be vested in accordance with the
Employer's election in Item B(7), as applicable, of the Adoption
Agreement. In any event, Employer Contributions shall be fully vested at
Normal Retirement Date, upon the complete or partial termination of the
Plan, and, in profit sharing plans, upon the complete discontinuance of
Employer Contributions.
4.4 Limitation on Employer Contributions. The Employer's Contribution for any
Plan Year shall not exceed the maximum amount which the Employer may
deduct pursuant to Section 404 of the Code. The Employer Contributions
shall be payable not later than the time for filing the Employer's federal
income tax return, including extensions.
4.5 Employee Contributions.
(A) Distributions from Qualified Plans - Rollovers.
(1) If the Employer selects Item B(9) in the Adoption Agreement,
an Employee who is entitled to make a rollover contribution
described in Section 402(a)(5), Section 403(a)(4) or Section
408(d)(3) of the Code ("Rollover Contribution"), may elect,
with the approval of the Committee, to make such a Rollover
Contribution to the Plan. The Employee shall deliver or cause
to be delivered, to the Trustee the cash which constitutes
such Rollover Contribution at such time or times and in such
manner as shall be specified by the Committee. As of the date
of receipt of such property by the Trustee, a Rollover Account
shall be established in the name of the Employee who has made
a Rollover Contribution as provided in this Section 4.5 and
shall be credited with such assets on such date. A Rollover
Contribution shall not be deemed to be a contribution of such
Employee for any purpose of this Agreement. All Rollover
Contributions and the earnings on these contributions shall be
immediately fully vested and nonforfeitable.
(2) Subject to the provisions of the Plan, on advance notice given
to the Committee in accordance with rules established by the
Committee a Participant in a profit sharing Plan or 401(k)
profit sharing Plan may withdraw all or any part (in any whole
dollar amount specified by the Participant) of the value of
any Rollover Account, provided no Participant who has made any
withdrawal under Section 4.5(A) during the calendar year in
which such notice is given may make an additional withdrawal
under this Section 4.5(A) during the remainder of such year.
(B) Nondeductible Employee Contributions and Matching Contributions No
Longer Accepted.
(1) This Plan will not accept nondeductible employee contributions
and matching contributions except pursuant to a 401(m)
arrangement described in Article III. Employee contributions
for Plan Years beginning after December 31, 1986, together
with any matching contributions as defined in Section 401(m)
of the Code, will be limited so as to meet the
nondiscrimination test of Section 401(m).
(2) A separate account will be maintained by the Trustee for the
previously made nondeductible employee contributions of each
Participant.
(3) Employee contributions and earnings thereon will be
nonforfeitable at all times. No forfeitures will occur solely
as a result of an Employee's withdrawal of Employee
contributions.
(C) Deductible Employee Contributions No Longer ccepted. The Committee
will not accept deductible Employee contributions which are made
for a taxable year beginning after December 31, 1986. Contributions
made prior to that date will be maintained in a separate account
which will be nonforfeitable at all times. The account will share
in the gains and losses of the Trust Fund in the same manner as
described in Article VI of the Plan. No part of the deductible
voluntary contribution account will be used to purchase life
insurance. Subject to Section 7.10, Joint and survivor annuity
requirements (if applicable), the Participant may withdraw any part
of the deductible voluntary contribution account by making a
written application to the Committee.
4.6 Exclusive Benefit. Except as provided in the Plan, the Employer has no
beneficial interest in the Trust Fund, and no part of the Trust Fund shall
revert or be repaid to the Employer, directly or indirectly, or diverted
to purposes other than for the exclusive benefit of Participants and their
Beneficiaries, except that (1) any contribution made by the Employer
because of a mistake of fact must be returned to the Employer within one
year of the contribution; (2) in the event the deduction of a contribution
made by the Employer is disallowed under Section 404 of the Code, such
contribution (to the extent disallowed) must be returned to the Employer
within one year of the disallowance of the deduction; and (3) in the event
that the Commissioner of Internal Revenue determines that the Plan is not
initially qualified under the Internal Revenue Code, any contribution made
incident to that initial qualification by the Employer must be returned to
the Employer within one year after the date the initial qualification is
denied, but only if the application for the qualification is made by the
time prescribed by law for filing the Employer's return for the taxable
year in which the Plan is adopted or such later date as the Secretary of
the Treasury may prescribe.
4.7 Form, Payment and Allocation of Contributions. Contributions made for a
Plan Year shall be made in cash; provided, however, that if the Plan has
an Employer Stock Fund, contributions for the Employer Stock Fund may be
made in Employer Stock. Contributions shall be delivered to the Trustee at
such time or times as shall be agreed upon between the Committee and the
Trustee. The Committee shall instruct the Trustee as to the allocation of
contributions to the Participant's accounts pursuant to the elections made
in the Adoption Agreement. Employer Stock contributed to the Plan shall be
valued at fair market value at the time of its transfer to the Plan.
4.8 Safe Harbor Allocation. Notwithstanding anything to the contrary in the
Adoption Agreement, in the event the requirements of Code Sections
401(a)(26) or 410(b) are not met during the Plan Year, Employer
Contributions will be allocated to Eligible Employees in the following
order until the applicable requirements are met:
(A) Eligible Employees employed by the Employer on the last day of the
Plan Year and who have completed more than 750 Hours of Service
during the Plan Year;
(B) Eligible Employees employed by the Employer on the last day of the
Plan Year and who have completed more than 500 but less than 750
Hours of Service during the Plan Year;
(C) Eligible Employees employed by the Employer on the last day of the
Plan Year and who have completed 500 or fewer Hours of Service
during the Plan Year;
(D) Eligible Employees who have completed 750 or more Hours of Service
during the Plan Year;
(E) Eligible Employees who have completed more than 500 but less
than 750 Hours of Service during the Plan Year.
In no event will Employees who have terminated employment with the
Employer during the Plan Year and who have completed 500 or fewer
Hours of Service during the Plan Year receive any allocation of
Employer Profit Sharing Contributions.
ARTICLE V
PERIOD OF PARTICIPATION
5.1 Termination Dates. A Participant's Termination Date will be the date on
which his employment with the Employer is terminated because of the first
to occur of the following events:
(A) Normal Retirement. The Participant retires from the employ of the
Employer upon attaining the Normal Retirement Date selected in the
Adoption Agreement. If the Employer enforces a mandatory retirement
age the Normal Retirement Date is the date the Participant attains
the lesser of that mandatory age or the age specified in the
Adoption Agreement.
(B) Early Retirement. The Participant retires from the employ of the
Employer upon attaining the Early Retirement Date selected in the
Adoption Agreement. If a Participant terminates employment prior to
meeting any minimum age specified in the Adoption Agreement but
after having completed the specified minimum service requirement,
the terminated Participant shall be entitled to an early retirement
benefit upon attaining the minimum age required.
(C) Late Retirement. The Participant retires from the employ of the
Employer after the Normal Retirement Date. A Participant who
continues to work beyond the Normal Retirement Date shall continue
participation in the Plan on the same basis as the other
Participants.
(D) Disability Retirement. The Participant is terminated from the employ
of the Employer because of Disability, as determined by the
Committee, as defined in Section 1.1(I), irrespective of his age.
(E) Death. The Participant's death.
(F) Other Termination. The Participant terminates employment before
Normal, Early, Late or Disability Retirement.
If a Participant continues in the employ of the Employer but no
longer is a member of a class of Employees to which the Plan has
been and continues to be extended by the Employer, the Participant's
Termination Date nevertheless will be as stated above and his or her
accounts will be held as stated in Section 5.2.
5.2 Restricted Participation. When distribution of part or all of the benefits
to which a Participant is entitled under the Plan is deferred beyond or
cannot be made until after the Participant's Termination Date, or during
any period that a Participant continues in the employ of the Employer but
no longer is a member of a class of Employees to which the Plan has been
and continues to be extended by the Employer, the Participant, or in the
event of his or her death such Participant's Beneficiary, will be
considered and treated as a Participant for all purposes of the Plan,
except that no share of contributions or forfeitures will be credited to
his or her Accounts (a) for any period such Participant continues in the
employ of the Employer but no longer is a member of a class of Employees
to which the Plan has been and continues to be extended by the Employer,
or (b) after the Participant's Termination Date.
ARTICLE VI
ACCOUNTING
6.1 Accounts Established. There shall be established and maintained for each
Participant such accounts as are applicable, to reflect such Participant's
interest in each Investment Fund.
All income, expenses, gains and losses attributable to each account shall
be separately accounted for. The interest of each Participant in the Trust
Fund at any time shall consist of the amount credited to his or her
accounts as of the last preceding Valuation Date plus credits and minus
debits to such accounts since that date.
6.2 Employer Contributions Considered Made On Last Day of Plan Year. Unless
otherwise elected in the Adoption Agreement, for purposes of this Article
VI, the Employer's Contribution under Article IV will be considered to
have been made on the last day of the Plan Year for which contributed.
6.3 Accounting Steps. As of each Valuation Date, the Trustee shall:
(A) Charge to the prior account balances all previously uncharged
payments or distributions made from Participants' accounts since the
last preceding Valuation Date.
(B) Adjust the net credit balances in Participants' accounts upward or
downward, pro rata, so that the total of such net credit balances
will equal the then adjusted net worth of the Trust Fund;
(C) Allocate and credit Employer Contributions and any forfeitures (as
described in Section 7.3) that are to be allocated and credited as
of that date in accordance with Sections 6.5 and 6.6.
Notwithstanding the preceding, the Trustee shall be authorized to
utilize such other method of accounting for the gains or losses
experience by the Trust as may accurately reflect each Participant's
interest therein.
6.4 Allocation of Employer Contributions.
(A) Discretionary Profit Sharing Contributions.
(1) Nonstandardized Plans. If the Plan is a nonstandardized Plan,
Employer Contributions for the Plan Year shall be allocated
among and credited to the Employer Contribution Accounts of
each Participant, including a Participant on leave of absence,
who is entitled to receive a contribution as elected by the
Employer in the Adoption Agreement, pursuant to the formula
elected by the Employer in Item B(8)(b) of the Adoption
Agreement If elected in the Adoption Agreement, Participants
whose employment terminated because of retirement, death or
disability before the end of the Plan Year will share in the
contributions for the year if elected in the Adoption
Agreement.
(2) Standardized Plans. Employer Contributions for the Plan Year
shall be allocated among and credited to the Employer
Contribution Account of each Participant who either completes
more than 500 Hours of Service during the Plan Year (or such
lesser number of Hours of Service as may be specified in the
Adoption Agreement) or is employed on the last day of the Plan
Year pursuant to the formula elected by the Employer in Item
B(8)(b) of the Adoption Agreement. If elected in the Adoption
Agreement, Participants whose employment terminated before the
end of the Plan Year because of retirement, death or
disability will share in the contributions for the year if
elected in the Adoption Agreement.
(B) Money Purchase Pension Plans. Employer Contributions will be made
and allocated to the Employer Contribution Accounts of Participants
for the Plan Year as elected in the Adoption Agreement. Sections
6.4(A)(1) and (2) above also apply to the Money Purchase Pension
Plans.
(C) Paired Plans. Notwithstanding anything in the Plan to the contrary,
if the Employer maintains two plans which are Paired Plans, only one
may contain an allocation, as elected in the Adoption Agreement,
utilizing permitted disparity as defined in Code Section 401(l).
6.5 Allocation of Forfeitures. As elected in Items B(11) and/or C(6) of the
Adoption Agreement, as of the last day of the Plan Year, any forfeitures
which arose under the Plan during that year shall be used to: (i) pay the
expenses of the Plan; (ii) reduce Employer Contributions; or, (iii) be
allocated to Participants accounts, as may be selected in the Adoption
Agreement. Forfeitures under (iii) shall be allocated as provided in
Section 6.4.
6.6 Limitation on Allocations.
(A) Definitions: For purposes of limiting allocations pursuant to this
section, the following definitions shall apply:
(1) Annual Additions: The sum of the following amounts credited
to a Participant's account for the Limitation Year:
(a) Employer Contributions;
(b) Employee Contributions;
(c) forfeitures;
(d) amounts allocated, after March 31, 1984, to an
individual medical account, as defined in Section
415 (l)(2) of the Code, which is part of a pension
or annuity Plan maintained by the Employer are treated
as Annual Additions to a defined contribution Plan.
Also amounts derived from contributions paid or accrued
after December 31, 1985, in taxable years ending
after such date, which are attributable to
post-retirement medical benefits, allocated to the
separate account of a Key Employee, as defined in
Section 419A(d)(3) of the Code, under a welfare
benefit fund, as defined in Section 419(e) of the Code,
maintained by the Employer are treated as Annual
Additions to a defined contribution Plan; and,
(e) allocations under a simplified employee pension.
For this purpose, any Excess Amount applied under Sections
6.6(B)(4) or 6.6(C)(6) in the Limitation Year to reduce
Employer Contributions will be considered Annual Additions for
such Limitation Year.
(2) Compensation: Compensation as described below, interpreted
consistently with the provisions of Code Section 414(s) and
the regulations issued thereunder, as may be selected by the
Employer, and uniformly applied for testing purpose:
(a) W-2 Compensation (Wages, Tips, and Other Compensation
required to be reported under Sections 6041, 6051, and
6052 of the Code, as reported on Form W-2).
Compensation is defined as wages within the meaning of
Section 3401(a) and all other payments of compensation
to an Employee by the Employer (in the course of the
Employer's trade or business) for which the Employer is
required to furnish the Employee a written statement
under Sections 6041(d), 6051(a)(3) and 6052 of the
Code. Compensation must be determined without regard
to any rules under Section 3401(a) that limit the
remuneration included in wages based on the nature
or location of the employment or the service performed
(such as the exception for agricultural labor in
Section 3401(a)(2).
(b) Withholding Compensation (ss.3401(a)). Compensation is
defined as wages within the meaning of Section 3401(a)
for the purposes of income tax withholding at the
source but determined without regard to any rules that
limit the remuneration included in wages based on
the nature or location of the employment or the
services performed (such as the exception for
agricultural labor in Section 3401(a)(2)).
(c) Section 415 safe-harbor compensation. Compensation is
defined as wages, salaries, and fees for
professional services and other amounts received
(without regard to whether or not an amount is paid
in cash) for personal services actually rendered in
the course of employment with the Employer maintaining
the Plan to the extent that the amounts are includibl\
in gross income (including, but not limited to,
commissions paid salesman, compensation for services
on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses,
fringe benefits, and reimbursements or other expense
allowances under a nonaccountable Plan (as described in
1.62-2(c)), and excluding the following:
(i) Employer contributions to a Plan of deferred
compensation which are not includible in the
Employee's gross income for the taxable year in
which contributed, or Employer contributions under
a simplified employee pension Plan to the extent
such contributions are deductible by the Employee,
or any distributions from a Plan of deferred
compensation;
(ii) amounts realized from the exercise of a
non-qualified stock option, or when restricted
stock (or property) held by an Employee becomes
freely transferable or is no longer subject to a
substantial risk of forfeiture;
(iii) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified
stock option; and
(iv) other amounts which received special tax benefits,
or contributions made by the Employer (whether or
not under a salary reduction agreement) towards
the purchase of an annuity contract described in
Section 403(b) of the Code (whether or not the
contributions are actually excludable from the
gross income of the Employee).
Notwithstanding anything in the definitions of Compensation
preceding, at the discretion of the Employer, uniformly
applied, Compensation shall, for purposes of ADP and ACP
testing as provided for in Article III, include amounts not
currently includible in income pursuant to Code Sections 125,
402(a)(8), 402(h) and 403(b). For allocation purposes, such
amounts shall be includible as elected in the Adoption
Agreement.
For any self-employed Individual, Compensation will mean
Earned Income.
For Limitation Years beginning after December 31, 1991, for
purposes of applying the limitations of Section 6.6,
Compensation for a Limitation Year is the compensation
actually paid or made available during such Limitation Year.
Notwithstanding the preceding sentence, Compensation for a
Participant in a defined contribution Plan who is permanently
and totally disabled (as defined in Section 22(e)(3) of the
Code) is the Compensation such Participant would have received
for the Limitation Year if the Participant had been paid at
the rate of Compensation paid immediately before becoming
permanently and totally disabled; such imputed compensation
for the disabled Participant may be taken into account only if
the Participant is not a Highly Compensated Employee, (as
defined in Section 414(q) of the Code), and contributions made
on behalf of such Participant are nonforfeitable when made.
(3) Defined Benefit Fraction: A fraction, the numerator of which
is the sum of the Participant's Projected Annual Benefits
under all the defined benefit plans (whether or not
terminated) maintained by the Employer, and the denominator of
which is the lesser of 125 percent of the dollar limitation
determined for the Limitation Year under Sections 415(b) and
(d) of the Code or 140 percent of the Participant's Highest
Average Compensation, including any adjustments under Section
415(b) of the Code.
Notwithstanding the above if the Participant was a participant
as of the first day of the first Limitation Year beginning
after December 31, 1986, in one or more defined benefit plans
maintained by the Employer which were in existence on May 6,
1986, the denominator of this fraction will not be less than
125 per cent of the sum of the annual benefits under such
plans which the Participant had accrued as of the close of the
last Limitation Year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the
Plan after May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the aggregate
satisfied the requirements of Section 415 for all Limitation
Years beginning before January 1, 1987.
(4) Defined Contribution Dollar Limitation: For purposes of
calculating the Maximum Permissible Amount: $30,000 or, if
greater, one-fourth of the defined benefit dollar limitation
set forth in Section 415(b)(1) of the Code as in effect for
the Limitation Year.
(5) Defined Contribution Fraction: A fraction, the numerator of
which is the sum of the Annual Additions to the Participant's
accounts under all the defined contribution plans (whether or
not terminated) maintained by the Employer for the current and
all prior Limitation Years, (including the Annual Additions
attributable to the Participant's nondeductible employee
contributions to all defined benefit plans, whether or not
terminated, maintained by the Employer, and the Annual
Additions attributable to all welfare benefit funds, as
defined in Section 419(e) of the Code, individual medical
accounts, as defined in Section 415(l)(2) of the Code, and
simplified employee pension, maintained by the Employer), and
the denominator of which is the sum of the maximum aggregate
amounts for the current and all prior Limitation Years of
service with the Employer (regardless of whether a defined
contribution Plan was maintained by the Employer). The maximum
aggregate amount in any Limitation Year is the lesser of 125
percent of the dollar limitation determined under Sections
415(b) and (d) of the Code in effect under Section
415(c)(1)(A) of the Code or 35 percent of the Participant's
Compensation for such year.
If the Employee was a participant as of the end of the first
day of the first Limitation Year beginning after December 31,
1986, in one or more defined contribution plans maintained by
the Employer which were in existence on May 6, 1986, the
numerator of this fraction will be adjusted if the sum of this
fraction and the Defined Benefit Fraction would otherwise
exceed 1.0 under the terms of this Plan. Under the adjustment,
an amount equal to the product of (1) the excess of the sum of
the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of
this fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of the last
Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the
Plan made after May 5, 1986, but using the Section 415
limitation applicable to the first Limitation Year beginning
on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all Employee
contributions as Annual Additions.
(6) Employer: For purposes of this Section 6.6: the Employer that
adopts this Plan, and all members of a controlled group of
corporations (as defined in section 414(b) of the Code as
modified by Section 415(h), all commonly controlled trades or
businesses (as defined in Section 414(c) as modified by
Section 415(h)) or affiliated service groups (as defined in
Section 414(m)) of which the adopting Employer is a part, and
any other entity required to be aggregated with the Employer
pursuant to regulations under Section 414(o) of the Code.
(7) Excess Amount: The excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible
Amount.
(8) Highest Average Compensation: For purposes of calculating the
Defined Benefit Fraction, the average compensation for the
three (3) consecutive Years of Service with the Employer that
produces the highest average. A Year of Service with the
Employer is the twelve-consecutive month period defined in
Item B(4)(j) of the Adoption Agreement.
(9) Limitation Year: A calendar year or any other 12 consecutive
month period elected in Item B(4)(d) of the Adoption
Agreement. All qualified plans maintained by the Employer must
use the same Limitation Year. If the Limitation Year is
amended to a different 12-consecutive month period, the new
Limitation Year must begin on a date within the Limitation
Year in which the amendment is made.
(10) Master or Prototype Plan: A Plan the form of which is the
subject of a favorable opinion letter from the Internal
Revenue Service.
(11) Maximum Permissible Amount: The maximum Annual Addition that
may be contributed or allocated to a Participant's account
under the Plan for any Limitation Year shall not exceed the
lesser of:
(a) the Defined Contribution Dollar Limitation, or
(b) 25 percent of the Participant's Compensation for the
Limitation Year.
The Compensation limitation referred to in (b) shall not
apply to any contribution for medical benefits (within
the meaning of Section 401(h) or Section 419A(f)(2) of
the Code) which is otherwise treated as an Annual
Addition under Section 415(l)(1) or 419A(d)(2) of the
Code.
If a short Limitation Year is created because of an
amendment changing the Limitation Year to a different
12-consecutive month period, the Maximum Permissible
Amount will not exceed the Defined Contribution Dollar
Limitation multiplied by the following fraction:
Number of months in the short Limitation Year
12
(12) Projected Annual Benefit: For purposes of calculating the
Defined Benefit Fraction: the annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity
if such benefit is expressed in a form other than a straight
life annuity or qualified joint and survivor annuity) to which
the Participant would be entitled under the terms of the Plan,
assuming: (1) the Participant will continue employment until
Normal Retirement Date under the Plan, (or current age, if
later), and (2) the Participant's Compensation for the current
Limitation Year and all other relevant factors used to
determine benefits under the Plan will remain constant for all
future Limitation Years.
(B) Annual Addition Limitations:
(1) If the Participant does not participate in, and has never
participated in another qualified Plan or welfare benefit
fund, as defined in Section 419(e) of the Code maintained by
the Employer, or an individual medical account, as defined in
Section 415(l)(2) of the Code, maintained by the Employer, or
a simplified employee pension, as defined in Section 408(K) of
the Code, maintained by the Employer which provides an Annual
Addition as defined in Section 6.6(E), the amount of Annual
Additions which may be credited to the Participant's account
for any Limitation Year will not exceed the lesser of the
Maximum Permissible Amount or any other limitation contained
in this Plan. If the Employer Contribution that would
otherwise be contributed or allocated to the Participant's
account would cause the Annual Additions for the Limitation
Year to exceed the Maximum Permissible Amount, the amount
contributed or allocated will be reduced so that the Annual
Additions for the Limitation Year will equal the Maximum
Permissible Amount.
(2) Prior to determining the Participant's actual Compensation for
the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant on the basis of a
reasonable estimation of the Participant's Compensation for
the Limitation Year, uniformly determined for all Participants
similarly situated.
(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual
Compensation for the Limitation Year.
(4) If pursuant to Section 6.6(B)(3) or as result of the
allocation of forfeitures, there is an Excess Amount, the
excess will be disposed of as follows:
(a) Any nondeductible voluntary employee contributions, to
the extent they would reduce the Excess Amount, will be
returned to the Participant.
(b) If after the application of paragraph (a) an Excess
Amount still exists and the Participant is covered by
the Plan at the end of the Limitation Year, the Excess
Amount in the Participant's account will be used to
reduce Employer Contributions (including any allocation
of forfeitures) for such Participant in the next
Limitation year, and each succeeding Limitation Year, if
necessary.
(c) If after the application of paragraph (a) an Excess
Amount still exists, and the Participant is not covered
by the Plan at the end of a Limitation Year, the Excess
Amount will be held unallocated in a suspense account.
The suspense account will be applied to reduce
future Employer Contributions (including allocation of
any forfeitures) for all remaining Participants in the
next Limitation Year and each succeeding Limitation
Year, if necessary.
(d) If a suspense account is in existence at any time durin
a Limitation Year pursuant to this Section 6.6(A), it
will not participate in the allocation of the trust's
investment gains and losses. If a suspense account is in
existence at any time during a particular Limitation
Year, all amounts in the suspense account must be
allocated and reallocated to Participants' accounts
before any Employer Contributions or any Employee
contributions may be made to the Plan for that
Limitation Year. Excess Amounts may not be distribute
to Participants or former Participants.
(C) Multiple Plan Limitation.
(1) This Section 6.6(C) applies if, in addition to this Plan, the
Participant is covered under another qualified Master or
Prototype defined contribution Plan maintained by the
Employer, a welfare benefit fund, as defined in Section 419(e)
of the Code maintained by the Employer, or an individual
medical account, as defined in Section 415(l)(2) of the Code,
maintained by the Employer, or a simplified employee pension
maintained by the employer which provides an Annual Addition
as defined in Section 6.6(A) during any Limitation Year. The
Annual Additions which may be credited to a Participant's
accounts under this Plan for any such Limitation Year shall
not exceed the Maximum Permissible Amount reduced by the
Annual Additions credited to a Participant's accounts under
the other qualified master and prototype defined contribution
plans, welfare benefit funds, individual medical accounts, and
simplified employee pensions for the same Limitation Year. If
the Annual Additions with respect to the Participant under
other qualified master and prototype defined contribution
plans and welfare benefit funds, individual medical accounts,
and simplified employee pension, maintained by the Employer
are less than the Maximum Permissible Amount and the
contributions that would otherwise be contributed or allocated
to the Participant's Employer Contribution Account under this
Plan would cause the Annual Additions for the Limitation Year
to exceed this limitation, the amount contributed or allocated
will be reduced so that the Annual Additions under all such
plans and funds for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to
the Participant under such other qualified master and
prototype defined contribution plans, welfare benefit funds
individual medical accounts, and simplified employee pension,
in the aggregate are equal to or greater than the Maximum
Permissible Amount, no amount will be contributed or allocated
to the Participant's Employer Contribution Account under this
Plan for the Limitation Year.
(2) Prior to determining the Participant's actual Compensation for
the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant in the manner described
in Section 6.6(B)(2).
(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual
Compensation for the Limitation Year.
(4) If, pursuant to Section 6.6(C)(3) or as a result of the
allocation of forfeitures, a Participant's Annual Additions
under this Plan and all other plans result in an Excess Amount
for a Limitation Year, the Excess Amount shall be deemed to
consist of the amounts last allocated, except that Annual
Additions attributable to a simplified employee pension will
be deemed to have been allocated first, followed by annual
additions to a welfare benefit fund or individual medical
account regardless of the actual allocation date.
(5) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an
allocation date of another Plan, the Excess Amount attributed
to this Plan will be the product of:
(a) the total Excess Amount allocated as of such date, times
(b) the ratio of (i) the Annual Additions allocated to the
Participant for the Limitation Year as of such date
under this Plan to (ii) the total Annual Additions
allocated to the Participant for the Limitation Year as
of such date under this and all other qualified Master
or Prototype defined contribution plans.
(6) Any Excess Amount attributed to this Plan should be disposed
of as provided in Section 6.6(C)(4).
(D) If the Participant is covered under another qualified defined
contribution Plan maintained by the Employer which is not a Master
or Prototype Plan, Annual Additions which may be credited to the
Participant's accounts under this Plan for any Limitation Year will
be limited in accordance with Section 6.6(C) (1-6) as though the
Plan were a Master or Prototype Plan unless the Employer provides
other limitations in Item B(12) of the Adoption Agreement.
(E) If the Employer maintains, or at any time maintained, a qualified
defined benefit Plan covering any Participant in this Plan, the sum
of the Participant's Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction will not exceed 1.0 in any Limitation
Year. The Annual Additions which may be credited to the
Participant's accounts under this Plan for any Limitation Year will
be limited in accordance with Item B(12) of the Adoption Agreement.
6.7 Reports to Participants. The Committee shall cause reports to be made at
least annually to each Participant and to the Beneficiary of each deceased
Participant as to the value of each such Participant's accounts, as of an
appropriate preceding Valuation Date.
ARTICLE VII
PAYMENT OF ACCOUNT BALANCES
7.1 Termination of Employment Upon Disability or Death. A Participant shall
become fully vested in his or her Employer Contribution Accounts if the
Participant becomes Disabled under Sections 5.1(A), (B), (C) or (D) or
dies while still employed. The accounts of a Participant who retires
becomes Disabled or dies will become distributable to the Participant or
to his or her Spouse or Beneficiary. If distributed immediately, subject
to Section 7.4, the distributable balance, after adjustments, will be
determined as soon as practicable following the receipt by the Trustee of
written notice of the Participant's termination from the Committee.
7.2 Timing for Determining Account Balance Upon Termination of Employment
Prior to Retirement, Disability or Death. If a Participant terminates
employment with the Employer before retirement under Sections 5.1(F) the
vested portion of the Participant's Employer Contribution Account and/or
Matching Account shall be determined and such Participant's accounts will
be distributable to the Participant. If distributed immediately, subject
to Section 7.4, the distributable balance, after adjustments, will be
determined as soon as practicable following receipt by the Trustee of
written notice of the Participant's termination from the Committee. The
account balance shall be distributable at such time as elected in the
Adoption Agreement, but in no event shall an account balance not be
distributable later than the Participant's Normal Retirement Date.
7.3 Vesting On Distribution Before Break-in-Service; Cash-Outs.
(A) If an Employee terminates service, and the value of the Employee's
vested account balance derived from Employer and Employee
contributions is not greater than $3,500, the Employee will receive
a distribution of the value of the entire vested portion of such
account balances, and Rollover Account balance, if any. The
nonvested portion will be treated as a forfeiture. For purposes
of this Section 7.3, if the value of an Employee's vested account
balance is zero, the Employee shall be deemed to have received a
distribution of such vested account balance. A Participant's
vested account balance shall not include accumulated deductible
employee contributions within the meaning of Section 72(o)
(5)(B) of the Code for Plan Years beginning prior to January 1,
1989.
(B) If an Employee terminates service, and elects, in accordance with
the requirements of Section 7.4, to receive the value of the
Employee's vested account balance, the nonvested portion will
be treated as a forfeiture. If the Employee elects to have
distributed less than the entire vested portion of the balance
in the Employer Contribution Account, the part of the nonvested
portion that will be treated as a forfeiture is the total nonvested
portion multiplied by a fraction, the numerator of which is the
amount of the distribution attributable to Employer Contributions
and the denominator of which is the total value of the vested
balance in the Employer Contribution Account.
(C) If an Employee receives a distribution pursuant to this Section
7.3 and the Employee resumes employment covered under this Plan,
the Employee's Employer Contribution Account and/or Matching
Account balance will be restored to the amount on the date of
distribution if the Employee repays to the Plan the full amount of
the distribution attributable to Employer contributions before
the earlier of 5 years after the first date on which the
Participant is subsequently reemployed by the Employer, or the
date the Participant incurs five (5) consecutive one (1) yea Breaks
in Service following the date of the distribution. If an Employee
is deemed to receive a distribution pursuant to this Section 7.3,
and the Employee resumes employment covered under this Plan before
the date the Participant incurs five (5) consecutive one (1) year
Breaks in Service, upon the reemployment of such Employee,
the Employer Contribution Account balance and/or Matching Account
balance of the Employee will be restored to the amount on the
date of such deemed distribution.
7.4 Restrictions on Immediate Distributions.
(A) If the value of a Participant's vested account balance derived
from Employer and Employee contributions exceeds (or at the time of
any prior distribution exceeded) $3,500, and the account balance
is immediately distributable, the Participant and the
Participant's Spouse (or where either the Participant or the Spouse
has died, the survivor) must consent to any distribution of such
account balance. The consent of the Participant and the
Participant's Spouse shall be obtained in writing within the 90-day
period ending on the annuity starting date. The annuity starting
date is the first day of the first period for which an amount is
paid as an annuity or any other form. The Committee shall
notify the Participant and the Participant's Spouse of the right
to defer any distribution until the Participant's account balance
is no longer immediately distributable. Such notification shall
include a general description of the material features, and an
explanation of the relative values of, the optional forms of benefit
available under the Plan in a manner that would satisfy the notice
requirements of Section 417(a)(3), and shall be provided no less
than 30 days and no more than 90 days prior to the annuity starting
date. However, distribution may commence less than 30 days after
the notice described in the preceding sentence is given, provided
the distribution is one to which sections 401(a)(11) and 417 of
the Internal Revenue Code do not apply, the plan administrator
clearly informs the participant that the participant has a right to
a period of at least 30 days after receiving the notice to
consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and the
participant, after receiving the notice, affirmatively elects a
distribution.
Notwithstanding the foregoing, only the Participant need consent to
the commencement of a distribution in the form of a Qualified Joint
and Survivor Annuity while the account balance is immediately
distributable. (Furthermore, if payment in the form of a Qualified
Joint and Survivor Annuity is not required with respect to the
Participant pursuant to Section 7.10 of the Plan, only the
Participant need consent to the distribution of an account balance
that is immediately distributable. Neither the consent of the
Participant nor the Participant's Spouse shall be required to the
extent that a distribution is required to satisfy Section 401(a)(9)
or Section 415 of the Code. In addition, upon termination of this
Plan if the Plan does not offer an annuity option (purchased from a
commercial provider), and if the Employer or any entity within the
same controlled group as the Employer does not maintain another
defined contribution Plan (other than an employee stock ownership
Plan as defined in Section 4975(e)(7) of the Code), the
Participant's account balance will, without the Participant's
consent, be distributed to the Participant. However, if any entity
within the same controlled group as the Employer maintains another
defined contribution Plan (other than an employee stock ownership
Plan as defined in Section 4975(e)(7) of the Code) then the
Participant's account balance will be transferred, without the
Participant's consent, to the other Plan if the Participant does not
consent to an immediate distribution.
An account balance is immediately distributable if any part of the
account balance could be distributed to the Participant (or
surviving spouse) before the Participant attains or would have
attained if not deceased) the later of the Normal Retirement Date or
age 62.
(B) For purposes of determining the applicability of the foregoing
consent requirements to distributions made before the first day of
the first Plan Year beginning after December 31, 1988, the
Participant's vested account balance shall not include amounts
attributable to accumulated deductible employee contributions within
the meaning of Section 72(o)(5)(B) of the Code.
7.5 Commencement of Benefits. Unless the Participant elects otherwise,
payments will be made or commence to a Participant by the Trustee, as
directed by the Committee, no later than the sixtieth (60th) day after the
latest of the close of the Plan Year in which (1) the Participant attains
age sixty-five (65) (or Normal Retirement Date; if earlier); (2) occurs
the tenth (10th) anniversary of the year in which the Participant
commenced participation in the Plan; or (3) the Participant terminates his
or her service with the Employer.
Notwithstanding the foregoing, the failure of a Participant and Spouse to
consent to a distribution while a benefit is immediately distributable,
within the meaning of Section 7.4 of the Plan, shall be deemed to be an
election to defer commencement of payment of any benefit sufficient to
satisfy this section.
7.6 Timing and Modes of Distribution.
(A) General Rules.
(1) Subject to Section 7.10, Joint and Survivor Annuity
Requirements, the requirements of this Section 7.6 shall apply
to any distribution of a Participant's interest and will take
precedence over any inconsistent provisions of this Plan.
Unless otherwise specified, the provisions of this Section 7.6
apply to calendar years beginning after December 31, 1984.
(2) All distributions required under this Section 7.6 shall be
determined and made in accordance with the Income Tax
Regulations under Section 401(a)(9), including the minimum
distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the regulations.
(3) The normal form of payment for a profit-sharing Plan
satisfying the requirements of Section 7.10(F) hereof shall be
a single sum with no option for annuity payments; provided,
however, that distributions may be made:
(a) In installment payments, if the Employer has elected
installment payments in Item B(10)(a) of the Adoption
Agreement;
(b) Through such other form of benefit as may be identified
in Item B(10)(a) of the Adoption Agreement, which shall
be available to Participants as an optional form of
benefit payment, and shall preclude Employer discretion;
(c) Through such other form of benefits as may be required
to be protected as Section 411(d)(6) protected benefits.
(B) Required Beginning Date. The entire interest of a Participant must
be distributed or begin to be distributed no later than the
Participant's required beginning date.
(C) Limits on Distribution Periods. As of the first distribution
calendar year, distributions, if not made in a single-sum, may only
be made over one of the following periods (or a combination
thereof):
(1) the life of the Participant,
(2) the life of the Participant and a designated Beneficiary,
(3) a period certain not extending beyond the life expectancy of
the Participant, or
(4) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
Beneficiary.
(D) Determination of Amount to be Distributed Each Year. If the
Participant's interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or
after the required beginning date:
(1) Individual Account.
(a) If a Participant's benefit is to be distributed over:
(i) a period not extending beyond the life expectancy
of the participant or the joint life and last
survivor expectancy of the Participant and the
Participant's designated Beneficiary; or
(ii) a period not extending beyond the life expectancy
of the designated Beneficiary, the amount required
to be distributed for each calendar year,
beginning with distributions for the first
distribution calendar year, must at least equal
the quotient obtained by dividing the
Participant's benefit by the applicable life
expectancy.
(b) For calendar years beginning before January 1, 1989, if
the Participant's Spouse is not the designated
beneficiary, the method of distribution selected must
assure that at least 50% of the present value of the
amount available for distribution is paid within the
life expectancy of the Participant.
(c) For calendar years beginning after December 31, 1988
the amount to be distributed each year, beginning with
distributions for the first distribution calendar year
shall not be less than the quotient obtained by
dividing the Participant's benefit by the lesser of
(1) the applicable life expectancy or (2) if the
Participant's Spouse is not the designated Beneficiary,
the applicable divisor determined from the table set
forth in Q&A-4 of Section 1.401(a)(9)-2 of the Income
Tax Regulations. Distributions after the death of the
Participant shall be distributed using the applicable
life expectancy in Section (1)(a) above as the relevant
divisor without regard to Regulations Section 1.401(a)
(9)-2.
(d) The minimum distribution required for the Participant's
first distribution calendar year must be made on or
before the Participant's required beginning date. The
minimum distribution for other calendar years, including
the minimum distribution for the distribution calendar
year in which the Employee's required beginning date
occurs, must be made on or before December 31 of
that distribution calendar year.
(2) Other Forms. If the Participant's benefit is distributed in
the form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with the
requirements of Section 401(a)(9) of the Code and the
regulations thereunder.
(E) Death Distribution Provisions
(1) Distribution Beginning Before Death. If the Participant dies
after distribution of his or her interest has begun, the
remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
(2) Distribution Beginning After Death. If the Participant dies
before distribution of his or her interest begins,
distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing the
fifth anniversary of the Participant's death except to the
extent that an election is made to receive distributions in
accordance with (a) or (b) below:
(a) if any portion of the Participant's interest is payable
to a designated Beneficiary, distributions may be made
over the life or over a period certain not greater than
the life expectancy of the designated Beneficiary
commencing on or before December 31 of the calendar year
immediately following the calendar year in which the
Participant died;
(b) if the designated Beneficiary is the Participant's
surviving Spouse, the date distributions are required to
begin in accordance with (a) above shall not be earlier
than the later of (1) December 31 of the calendar year
immediately following the calendar year in which the
Participant died and (2) December 31 of the calendar
year in which the Participant would have attained age
70-1/2.
If the Participant has not made an election pursuant to
this Section 7.6(E)(2) by the time of his or her death,
the Participant's designated Beneficiary must elect the
method of distribution no later than the earlier of (1)
December 31 of the calendar year in which distributions
would be required to begin under this section, or (2)
December 31 of the calendar year in which contains the
fifth anniversary of the date of death of the
Participant. If the Participant has no designated
Beneficiary, or if the designated Beneficiary does not
elect a method of distribution, distribution of the
Participant's entire interest must be completed by
December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
(3) Surviving Spouse's Death. For purposes of Section (E)(2)
above, if the surviving Spouse dies after the Participant, but
before payments to such Spouse begin, the provisions of
Section (E)(2) with the exception of paragraph (b) therein,
shall be applied as if the surviving Spouse were the
Participant.
(4) Minor Beneficiary. For purposes of this Section (E), any
amount paid to a child of the Participant will be treated as
if it had been paid to the surviving Spouse if the amount
becomes payable to the surviving Spouse when the child reaches
the age of majority.
(5) Distribution Considered to Begin on Required Beginning Date.
For the purposes of this Section (E), distribution of a
Participant's interest is considered to begin on the
Participant's required beginning date (or, if Section (E)(3)
above is applicable, the date distribution is required to
begin to the surviving Spouse pursuant to Section (E)(2)
above). If distribution in the form of an annuity irrevocably
commences to the Participant before the required beginning
date, the date distribution is considered to begin is the date
distribution actually commences.
(F) Definitions.
(1) Applicable life expectancy: The life expectancy (or joint and
last survivor expectancy) calculated using the attained age of
the Participant (or designated Beneficiary) as of the
Participant's (or designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year
which has elapsed since the date life expectancy was first
calculated. If life expectancy is being recalculated, the
applicable life expectancy shall be the life expectancy as so
recalculated. The applicable calendar year shall be the first
distribution calendar year, and if life expectancy is being
recalculated such succeeding calendar year.
(2) Designated Beneficiary: The individual who is designated as
the Beneficiary under the Plan in accordance with Section
401(a)(9) and the proposed regulations thereunder.
(3) Distribution calendar year: A calendar year for which a
minimum distribution is required. For distributions beginning
before the Participant's death, the first distribution
calendar year is the calendar year immediately preceding the
calendar year which contains the Participant's required
beginning date. For distributions beginning after the
Participant's death, the first distribution calendar year is
the calendar year in which distributions are required to begin
pursuant to Section (E) above.
(4) Life expectancy: Life expectancy and joint and last survivor
expectancy are computed by use of the expected return
multiples in Tables V and VI of Section 1.72-9 of the Income
Tax Regulations.
Unless otherwise elected by the Participant (or Spouse, in the
case of distributions described in Section (E)(2)(b) above) by
the time distributions are required to begin, life
expectancies shall be recalculated annually. Such election
shall be irrevocable as to the Participant (or Spouse) and
shall apply to all subsequent years. The life expectancy of a
non-spouse Beneficiary may not be recalculated.
(5) Participant's benefit:
(a) The account balance as of the last valuation date in the
calendar year immediately preceding the distribution
calendar year (valuation calendar year) increased by the
amount of any contributions or forfeitures allocated to
the account balance as of dates in the valuation
calendar year after the valuation date and decreased
by distributions made in the valuation calendar year
after the valuation date.
(b) Exception for second distribution calendar year.
For purposes of paragraph (a) above, if any portion
of the minimum distribution for the first distribution
calendar year is made in the second distribution
calendar year on or before the required beginning date,
the amount of the minimum distribution made in the
second distribution calendar year shall be treated
as if it had been made in the immediately preceding
distribution calendar year.
(6) Required beginning date:
(a) General rule. The required beginning date of a
Participant is the first day of April of the calendar
year following the calendar year in which the
Participant attains age 70-1/2.
(b) Transitional rules. The required beginning date of a
Participant who attains age 70-1/2 before January 1,
1988, shall be determined in accordance with (1) or (2)
below:
(i) Non-5-percent owners. The required beginning date
of a Participant who is not a 5-percent owner is
the first day of April of the calendar year
following the calendar year in which the later of
retirement or attainment of age 70-1/2 occurs.
(ii) 5-percent owners. The required beginning date of a
Participant who is a 5-percent owner during any
year beginning after December 31, 1979, is the
first day of April following the later of:
(a) the calendar year in which the participant
attains age 70-1/2, or
(b) the earlier of the calendar year with or
within which ends the Plan Year in which the
Participant becomes a 5-percent owner, or
the calendar year in which the Participant
retires.
The required beginning date of a Participant who is not
a 5-percent owner who attains age 70-1/2 during 1988 and
who has not retired as of January 1, 1989, is April 1,
1990.
(c) 5-percent owner. A Participant is treated as a 5-percent
owner for purposes of this Section if such Participant
is a 5-percent owner as defined in Section 416(i)
of the Code(determined in accordance with Section
416 but without regard to whether the Plan is top-heavy)
at any time during the Plan Year ending with or within
the calendar year in which such owner attains age
66-1/2 or any subsequent Plan Year.
(d) Once distributions have begun to a 5-percent owner under
this Section, they must continue to be distributed, even
if the Participant ceases to be a 5-percent owner in a
subsequent year.
(G) Transitional Rule.
(1) Distributions to 5-percent Owners. Notwithstanding the other
requirements of this Section 7.6 and subject to the
requirements of Section 7.10, Joint and Survivor Annuity
Requirements, distributions on behalf of any Employee,
including a 5-percent owner, may be made in accordance with
all of the following requirements (regardless of when such
distribution commences):
(a) The distribution by the plan is one which would not have
disqualified such plan under Section 401(a)(9) of the
Internal Revenue Code as in effect prior to amendment by
the Deficit Reduction Act of 1984.
(b) The distribution is in accordance with a method of
distribution designated by the Employee whose interest
in the plan is being distributed or, if the Employee is
deceased, by a Beneficiary of such Employee.
(c) Such designation was in writing, was signed by the
Employee or the Beneficiary, and was made before January
1, 1984.
(d) The Employee had accrued a benefit under the Plan as of
December 31, 1983.
(e) The method of distribution designated by the Employee or
the Beneficiary specifies the time at which distribution
will commence, the period over which distributions will
be made, and in the case of any distribution upon the
Employee's death, the Beneficiaries of the Employee
listed in order of priority.
(2) Distribution on Death. A distribution upon death will not be
covered by this transitional rule unless the information in
the designation contains the required information described
above with respect to the distributions to be made upon the
death of the Employee.
(3) Designation of Distribution Method. For any distribution which
commences before January 1, 1984, but continues after December
31, 1983, the Employee, or the Beneficiary, to whom such
distribution is being made, will be presumed to have
designated the method of distribution under which the
distribution is being made if the method of distribution was
specified in writing and the distribution satisfies the
requirements in subsections (G)(1)(a) and (e).
(4) Revocation of Designations. If a designation is revoked any
subsequent distribution must satisfy the requirements of
Section 401(a)(9) of the Code and the regulations thereunder.
If a designation is revoked subsequent to the date
distributions are required to begin, the plan must distribute
by the end of the calendar year following the calendar year in
which the revocation occurs the total amount not yet
distributed which would have been required to have been
distributed to satisfy Section 401(a)(9) of the Code and the
regulations thereunder, but for the Section 242(b)(2)
election. For calendar years beginning after December 31,
1988, such distributions must meet the minimum distribution
incidental benefit requirements in Section 1.401(a)(9)-2 of
the Income Tax Regulations. Any changes in the designation
will be considered to be a revocation of the designation.
However, the mere substitution or addition of another
Beneficiary (one not named in the designation) under the
designation will not be considered to be a revocation of the
designation, so long as such substitution or addition does not
alter the period over which distributions are to be made under
the designation, directly or indirectly (for example, by
altering the relevant measuring life). In the case in which an
amount is transferred or rolled over from one Plan to another
Plan, the rules in Q&A J-2 and Q&A J-3 shall apply.
7.7 Designation of Beneficiary.
(A) Default Beneficiary. In the case of a Participant who is married,
the Participant's Beneficiary shall be the Participant's Spouse, but
if the Participant's Spouse consents as provided in this Section
7.7, or if the Participant is not married, then the Participant
shall have the right to designate that after such Participant's
death such Participant's accounts shall be distributed to a
designated Beneficiary or Beneficiaries.
(B) Spousal Consent. Any consent of a Spouse given pursuant to this
Section must be in writing and given prior to the death of the
Participant. Such consent must acknowledge the effect of
the Participant's Beneficiary designation, the identity of any
non-Spouse Beneficiary, including any class of Beneficiaries and
contingent Beneficiaries, and the consent must be witnessed by
a Plan representative or a Notary Public. The Participant may not
subsequently change the designation of his or her Beneficiary
unless his Spouse consents to the new designation in accordance
with the requirements set forth in the preceding sentence
The consent of a Participant's Spouse shall not be required
if the Participant establishes to the satisfaction of the Committee
that consent may not be obtained because there is no Spouse,
the Spouse cannot be located or because of such other
circumstances as the Secretary of the Treasury may prescribe
by regulations. A Spouse's consent shall be irrevocable.
Any consent by a Spouse, or establishment that the consent
of the Spouse may not be obtained, shall be effective only with
respect to that Spouse.
(C) Changing Beneficiaries. Subject to Subparagraphs (A) and (B) above,
the Participant's designation of Beneficiary may be made, changed
or revoked by the Participant at any time by a written
instrument, in form satisfactory to the Committee, and shall
become effective only when executed by such Participant (and, i
applicable, consented to by the Participant's Spouse as set forth
in Section 7.7(B)) and filed with the Committee prior to such
Participant's death. If all of the Beneficiaries named in
such designation shall have predeceased such Participant, or die
prior to complete distribution of the Participant's accounts, or if
such Participant fails to execute and file a designation and is not
survived by a Spouse the payment of such Participant's
accounts shall be made pursuant to the Plan and to such
Beneficiaries as required by state law. Neither the Employer,
the Committee, nor the Trustee, shall have any duty to see that such
Participant, any Spouse or any Beneficiary executes and files
any such designation with the Committee.
7.8 Optional Forms of Benefit. The optional forms of benefit provided by this
Plan are not subject to Employer discretion and are made available to all
Participants on a nondiscriminatory basis. The optional forms of benefit
are described in Articles III and VII, as may be selected in the Adoption
Agreement. If selected in Item B(13) of the Adoption Agreement, the
Employer may attach to the Plan a list of the Section "411(d)(6) protected
benefits" that must be preserved from a individually designed Plan or
other prototype Plan which this Plan amends.
7.9 Distribution Upon Disability. In the event of the Disability of the
Participant, the Trustee, following receipt of notification of such
Disability from the Committee, shall make distributions from the Account.
7.10 Joint and Survivor Annuity Requirements.
(A) Application. The provisions of this Section 7.10 shall apply to any
Participant who is credited with at least one Hour of Service with
the Employer on or after August 23, 1984, and such other
Participants as provided in Section 7.10(G).
(B) Qualified Joint and Survivor Annuity. Unless an optional form
of benefit is selected pursuant to a Qualified Election within
the ninety-day period ending on the Annuity Starting Date,
a married Participant's Vested Account Balance will be paid
in the form of a Qualified Joint and Survivor Annuity and an
unmarried Participant's Vested Account Balance will be paid in the
form of a life annuity. The Participant may elect to have such
annuity distributed upon attainment of the Earliest Retirement Age
under the Plan.
(C) Qualified Pre-Retirement Survivor Annuity. Unless an optional form
of benefit has been selected within the election period pursuant to
a Qualified Election, if a Participant dies before the Annuity
Starting Date then the Participant's Vested Account Balance shall be
applied toward the purchase of an annuity for the life of the
surviving Spouse. The surviving Spouse may elect to have such
annuity distributed within a reasonable period after the
Participant's death.
(D) Definitions.
(1) Election period: The period which begins on the first day of
the Plan Year in which the Participant attains age 35 and ends
on the date of the Participant's death. If a Participant
separates from service prior to the first day of the Plan Year
in which age 35 is attained, with respect to the account
balance as of the date of separation, the election period
shall begin on the date of separation.
Pre-age 35 waiver: A Participant who will not yet attain age
35 as of the end of any current Plan Year may make a special
Qualified Election to waive the Qualified Preretirement
Survivor Annuity for the period beginning on the date of such
election and ending on the first day of the Plan Year in which
the Participant will attain age 35. Such election shall not be
valid unless the Participant receives a written explanation of
the Qualified Preretirement Survivor Annuity in such terms as
are comparable to the explanation required under Section
7.10(E). Qualified Preretirement Survivor Annuity coverage
will be automatically reinstated as of the first day of the
Plan Year in which the Participant attains age 35. Any new
waiver on or after such date shall be subject to the full
requirements of this Section 7.10.
(2) Earliest retirement age: The earliest date on which, under the
Plan, the Participant could elect to receive retirement
benefits.
(3) Qualified Election: A waiver of a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity. Any
waiver of a Qualified Joint and Survivor Annuity or a
Qualified Preretirement Survivor Annuity shall not be
effective unless: (a) the Participant's Spouse consents in
writing to the election; (b) the election designates a
specific Beneficiary including any class of Beneficiaries or
any contingent Beneficiaries, which may not be changed without
spousal consent (or the Spouse expressly permits designations
by the Participant without any further spousal consent); (c)
the Spouse's consent acknowledges the effect of the election;
and (d) the Spouse's consent is witnessed by a Plan
representative or Notary Public. Additionally, a Participant's
waiver of the Qualified Joint and Survivor Annuity shall not
be effective unless the election designates a form of benefit
payment which may not be changed without spousal consent (or
the spouse expressly permits designations by the Participant
without any further spousal consent). If it is established to
the satisfaction of a Plan representative that there is no
Spouse or that the Spouse cannot be located, a waiver will be
deemed a Qualified Election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be
obtained) shall be effective only with respect to such Spouse.
A consent that permits designations by the Participant without
any requirement of further consent by such Spouse must
acknowledge that the Spouse has the right to limit consent to
a specific Beneficiary, and a specific form of benefit where
applicable, and that the Spouse voluntarily elects to
relinquish either or both of such rights. A revocation of a
prior waiver may be made by a Participant without the consent
of the Spouse at any time before the commencement of benefits.
The number of revocations shall not be limited. No consent
obtained under this provision shall be valid unless the
Participant has received notice as provided in Paragraph (E)
below.
(4) Qualified Joint and Survivor Annuity: An immediate annuity for
the life of the Participant with a survivor annuity for the
life of the Spouse which is not less than 50 percent and not
more than 100 percent of the amount of the annuity which is
payable during the joint lives of the Participant and the
Spouse and which is the amount of benefit which can be
purchased with the Participant's vested account balance. The
percentage of the survivor annuity under the Plan shall be
50%.
(5) Spouse (surviving spouse): the Spouse or surviving Spouse of
the Participant, provided that a former Spouse will be treated
as the Spouse or surviving Spouse and the current Spouse will
not be treated as the Spouse or surviving Spouse to the extent
provided under a qualified domestic relations order as
described in Section 414(p) of the Code.
(6) Annuity Starting Date: The first day of the first period for
which an amount is payable as an annuity or any other form.
(7) Vested Account Balance: The aggregate value of the
Participant's vested account balances derived from Employer
and Employee contributions (including rollovers), whether
vested before or upon death. The provisions of this Section
7.10 shall apply to a Participant who is vested in amounts
attributable to Employer contributions, Employee contributions
(or both) at the time of death or distribution.
(E) Notice Requirements.
(1) Qualified Joint and Survivor Annuity. In the case of a
Qualified Joint and Survivor Annuity as described in Section
7.10(B), the Committee shall no less than 30 days and no more
than 90 days prior to the Annuity Starting Date provide each
Participant a written explanation of: (i) the terms and
conditions of a Qualified Joint and Survivor Annuity; (ii) the
Participant's right to make and the effect of an election to
waive the Qualified Joint and Survivor Annuity form of
benefit; (iii) the rights of a Participant's Spouse; and (iv)
the right to make, and the effect of, a revocation of a
previous election to waive the Qualified Joint and Survivor
Annuity.
(2) Qualified Pre-Retirement Survivor Annuity. In the case of a
Qualified Pre-Retirement Survivor Annuity as described in
Section 7.10(C), the Committee shall provide each Participant
within the applicable period for such Participant a written
explanation of the Qualified Pre-Retirement Survivor Annuity
in such terms and in such manner as would be comparable to the
explanation provided for meeting the requirements of Section
7.10(E) applicable to a Qualified Joint and Survivor Annuity.
The applicable period for a Participant is whichever of the
following periods ends last: (i) the period beginning with the
first day of the Plan Year preceding the Plan Year in which
the Participant attains age thirty-two (32) and ending with
the close of the Plan Year in which the Participant attains
age thirty-five (35); (ii) a reasonable period ending after
the individual becomes a Participant; (iii) a reasonable
period ending after Section 7.10(E)(3) ceases to apply to the
Participant; and (iv) a reasonable period ending after Section
7.10 first applies to the Participant. Notwithstanding the
foregoing, notice must be provided within a reasonable period
ending after separation from service in the case of a
Participant who separates from service before attaining age
thirty-five (35).
For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in (ii),
(iii) and (iv) is the end of the two-year period beginning one
year prior to the date the applicable event occurs, and ending
one year after that date. In the case of a Participant who
separates from service before the Plan Year in which age 35 is
attained, notice shall be provided within the two-year period
beginning one-year prior to separation and ending one year
after separation. If such a Participant thereafter returns to
employment with the Employer, the applicable period for such
participant shall be redetermined.
(3) Subsidized Annuity Distributions. Notwithstanding the other
requirements of this Section 7.10(E), the respective notices
prescribed by this Section 7.10(E) need not be given to a
Participant if (1) the Plan "fully subsidizes" the cost of a
Qualified Joint and Survivor Annuity or Qualified
Pre-Retirement Survivor Annuity, and (2) the Plan does not
allow the Participant to waive the Qualified Joint and
Survivor Annuity or Qualified Preretirement Survivor Annuity
and does not allow a married Participant to designate a
non-Spouse Beneficiary. For purposes of this Section 7.10(E),
a Plan fully subsidizes the cost of a benefit if no increase
in cost, or decrease in benefits to the Participant may result
from the Participant's failure to elect another benefit.
(F) Safe harbor rules.
(1) Application. This Section shall apply to a Participant in a
profit-sharing Plan, and to any distribution, made on or after
the first day of the first Plan Year beginning after December
31, 1988, from or under a separate account attributable solely
to accumulated deductible employee contributions, as defined
in Section 72(o)(5)(B) of the Code, and maintained on behalf
of a Participant in a money purchase pension Plan, (including
a target benefit Plan) if the following conditions are
satisfied: (1) the Participant does not or cannot elect
payments in the form of a life annuity, and (2) on the death
of the Participant, the Participant's vested account balance
will be paid to the Participant's surviving Spouse, but if
there is no surviving Spouse or, if the surviving Spouse has
already consented in a manner conforming to a Qualified
Election, then to the Participant's designated Beneficiary.
The surviving Spouse may elect to have distribution of the
vested account balance commence within the 90-day period
following the date of the Participant's death. The account
balance shall be adjusted for gains or losses occurring after
the Participant's death in accordance with the provisions of
the Plan governing the adjustment of account balances for
other types of distributions. This Section 7.10(F) shall not
be operative with respect to a Participant in a profit-sharing
Plan if the Plan is a direct or indirect transferee of a
defined benefit Plan, money purchase Plan, a target benefit
Plan, stock bonus, or profit-sharing Plan which is subject to
the survivor annuity requirements of Section 401(a)(11) and
Section 417 of the Code. If this Section 7.10(F) is operative,
then the provisions of this Section 7.10, other than in
Section 7.10(G), shall be inoperative.
(2) Waiver. The Participant may waive the spousal death benefit
described in this section at any time provided that no such
waiver shall be effective unless it satisfies the conditions
of Section 7.10(D)(3) (other than the notification requirement
referred to therein) that would apply to the Participant's
waiver of the Qualified Preretirement Survivor Annuity.
(3) Vested Account Balance. For purposes of this Section 7.10(F),
vested account balance shall mean, in the case of a money
purchase pension Plan or a target benefit Plan, the
Participant's separate account balance attributable solely to
accumulated deductible employee contributions within the
meaning of Section 72(o)(5) (B) of the Code. In the case of a
profit-sharing Plan, vested account balance shall have the
same meaning as provided in Section 7.10(D)(7).
(G) Transitional Rules.
(1) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed
by the previous sections of this Section 7.10 must be given
the opportunity to elect to have the prior sections of this
Section 7.10 apply if such Participant is credited with at
least one Hour of Service under this Plan or a predecessor
Plan in a Plan Year beginning on or after January 1, 1976, and
such Participant had at least ten (10) years of vesting
service when he or she separated from service.
(2) Any living Participant not receiving benefits on August 23,
1984 who was credited with at least one Hour of Service under
this Plan or predecessor Plan on or after September 2, 1974,
and who is not otherwise credited with any service in a Plan
Year beginning on or after January 1, 1976 must be given the
opportunity to have his or her benefits paid in accordance
with Section 7.10(G)(4).
(3) The respective opportunities to elect (as described in Section
7.10(G)(1) and (2) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984
and ending on the date benefits would otherwise commence to
these Participants.
(4) Any Participant who has elected pursuant to Section 7.10(G)(2)
and any Participant who does not elect under Section
7.10(G)(1) or who meets the requirements of Section 7.10(G)(1)
except that such Participant does not have at least ten (10)
years of vesting service when he or she separates from
service, shall have his or her benefits distributed in
accordance with all of the following requirements of benefits
would have been payable in the form of a life annuity:
a) Automatic joint and survivor annuity. If benefits in the
form of a life annuity become payable to a married
participant who:
(i) begins to receive payments under the Plan on or
after Normal Retirement Date; or
(ii) dies on or after Normal Retirement Date while
still working for the Employer; or
(iii) begins to receive payments on or after the
Qualified Early Retirement Age; or
(iv) separates from service on or after attaining
Normal Retirement Date (or the Qualified Early
Retirement Age) and after satisfying the
eligibility requirements for the payment of
benefits under the Plan and thereafter dies before
beginning to receive such benefits;
then such benefits will be received under this Plan in
the form of a Qualified Joint and Survivor Annuity,
unless the Participant has elected otherwise during the
election period. The election period must begin at least
6 months before the Participant attains Qualified Early
Retirement Age and end not more than 90 days before the
commencement of benefits. Any election hereunder will be
in writing and may be changed by the Participant at any
time.
b) Election of early survivor annuity. A Participant
who is employed after attaining the Qualified Early
Retirement Age will be given the opportunity to
elect, during the election period, to have a survivor
annuity payable on death. If the Participant elects
the survivor annuity, payments under such annuity
must not be less than the payments which would
have been made to the Spouse under the Qualified Joint
and Survivor Annuity if the Participant had retired
on the day before his or her death. Any
election under this provision will be in writing and
may be changed by the Participant at any time.
The election period begins on the later of (1) the
90th day before the Participant attains the Qualified
Early Retirement Age, or (2) the date on which
participation begins, and ends on the date the
Participant terminates employment.
c) For purposes of this Section 7.10(G)(4):
(i) Qualified Early Retirement Age is the latest of:
(i) the earliest date, under the Plan, on which
the Participant may elect to receive retirement
benefits, (ii) the first day of the 120th month
beginning before the Participant reaches Normal
Retirement Date, or (iii) the date the Participant
begins participation.
(ii) Qualified Joint and Survivor Annuity is an annuity
for the life of the participant with a survivor
annuity for the life of the Spouse as described in
Section 7.10(D)(4).
(H) Nontransferability. Any annuity distributed from the Plan must be
nontransferable.
(I) Incorporation of Terms. The terms of any annuity contract purchased
and distributed by the Plan to a Participant or Spouse shall comply
with the requirements of this Plan.
7.11 Distributions to Qualified Plans. In the event a former Employee whose
accounts have not been fully distributed becomes an active participant in
a Plan qualified under Section 401(a) of the Code, the Committee may
direct the Trustee to transfer the amount in such Participant's account(s)
to any such Plan provided the Plan to receive such transfers authorizes
accepting the transfer, provides that assets transferred shall be held in
a separate account and requires that the assets transferred shall not be
subject to any forfeiture provisions.
7.12 Profit Sharing Plans and 401(k) Profit Sharing Plans Only - Withdrawal of
Employer Contributions. Subject to the provisions of the Plan, in
accordance with rules for giving notice as determined by the Committee,
and as elected in the Adoption Agreement, a Participant may withdraw as of
the first Accounting Date subsequent to receipt by the Committee of such
notice:
(A) An amount equal to not more than 100% of the Participant's Employer
Contribution Account determined as of such Accounting Date. No
Participant who has made any withdrawal of Employer Contributions in
the twelve (12) months preceding the giving of such notice may make
a withdrawal under this Section.
(B) Notwithstanding anything to the contrary in this Section 7.12, any
withdrawal made pursuant to Section 7.12(A) shall be for a minimum
whole dollar amount not less than Five Hundred Dollars ($500.00);
except that if the amount available for withdrawal is less than Five
Hundred Dollars ($500.00) then the minimum amount of the withdrawal
shall be the amount available.
(C) No forfeitures will occur solely as a result of an Employee's
withdrawal of Employer Contributions.
(D) Notwithstanding anything to the contrary in this Section 7.12, a
Participant may not make a withdrawal, pursuant to this Section of
any portion of the Participant's vested interest which has been
assigned to secure repayment of a loan in accordance with Section
10.10, below, until such time as the Committee shall have released
said portion so assigned.
7.13. Prohibition Against Alienation.
(A) Except as provided in Sections 401(a)(13) and 414(p) of the Code, no
benefit or interest available under this Plan will be subject to
assignment or alienation, either voluntarily or involuntarily.
(B) The preceding sentence shall also apply to the creation, assignment,
or recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless the
Committee determines that such order is a qualified domestic
relations order, as defined in Section 414(p) of the Code, or any
domestic relations order entered before January 1, 1985.
(C) All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded
to any "alternate payee" under a "qualified domestic relations
order." Furthermore, an immediate distribution to an "alternate
payee" shall be permitted if such distribution is authorized by
a "qualified domestic relations order," even if the affected
Participant has not reached the "earliest retirement age" under the
Plan, provided that in no event will any such distribution
accelerate the repayment of any loan made to the affected
Participant under the Plan, unless such Participan consents thereto
in writing. For purposes of this Section 7.13, "alternate
payee," "qualified domestic relations order" and "earliest
retirement age" shall have the meaning set forth under Code Section
414(p), unless a Qualified Distribution Date has been selected in
the Adoption Agreement, in which case the earliest retirement age
shall be the date on which the domestic relations order is
determined to be qualified.
7.14 Missing Participant or Beneficiary. Each Participant and/or each
Beneficiary must file with the Committee from time to time in writing his
or her post office address and each change of post office address. Any
communication, statement or notice addressed to a Participant and/or
Beneficiary at such last post office address filed with the Committee or
if no address is filed with the Committee then at the last post office
address as shown on the Employer's records, will be binding on the
Participant and/or Beneficiary for all purposes of the Plan. Neither the
Committee nor the Trustee shall be required to search for or locate a
Participant or Beneficiary.
Any other provision of the Plan to the contrary notwithstanding, if any
application for a benefit has not been filed by a Participant otherwise
eligible therefor within ninety (90) days after the Plan Year in which
occurred his or her termination date, the Committee shall mail to such
Participant and/or Beneficiary at his or her last known address an
application for benefit and a reminder that he or she is eligible for such
benefit. If such application is not filed with the Committee in accordance
with the provisions of the Plan within ninety (90) days after it is so
mailed to such Participant or his or her termination date, whichever is
later, the benefit shall be forfeited and shall be used to reduce future
Employer Contributions as though the Participant were not vested in his or
her accounts as of the end of said ninety (90) day period. Upon the
subsequent filing of an application therefor by the Participant and/or his
Beneficiary, such accounts shall be immediately reinstated pursuant to
this provision as though the Participant were 100% vested in his or her
accounts in an amount equal to the cash value of the accounts on the date
forfeited. To the extent forfeited amounts are not available, the Employer
shall contribute the amount required to reinstate the Participant's
account balance.
7.15 Limitation on Certain Distributions. Notwithstanding anything contained
herein to the contrary, the Trustee may, in its discretion, delay
satisfying requests for distributions for up to one year where
distributions require amounts to be withdrawn from the Guaranteed
Investment Contract Fund; provided, however, that in no event shall the
Trustee delay distributions to a Participant beyond the legally required
time for distribution as set forth in Section 7.5.
7.16 Form of Distributions and Withdrawals. The Trustee shall make all
distributions and withdrawals under the Plan, including Hardship
withdrawals, other withdrawals while the Participant is still employed,
and distributions upon retirement, disability, death and separation from
service, pro rata, from all accounts and Investment Funds, as follows:
(A) In a Plan with no Employer Stock Fund, all withdrawals and
distributions under the Plan shall be made in cash.
(B) In a Plan with an Employer Stock Fund:
(1) Withdrawals and distributions under the Plan from the other
Investment Fund(s) shall be made in cash.
(2) Withdrawals and distributions under the Plan from the Employer
Stock Fund may be made in cash or in full shares of Employer
Stock, with any fractional share paid in cash, as elected by
the Participant. For the cash portion of any distribution or
withdrawal, the Participant will receive the cash proceeds
from the sale of shares of Employer Stock as of the sale date.
ARTICLE VIII
DIRECT ROLLOVERS
8.1 General. This Article applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Article, a distributee
may elect, at the time and in the manner prescribed by the Plan
administrator, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement Plan specified by the distributee
in a direct rollover.
8.2 Definitions.
(A) Eligible rollover distribution: An eligible rollover distribution
is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently
than annually ) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated Beneficiary, or
for a specified period of ten years or more; any distribution
to the extent such distribution is required under section 401(a)
(9) of the Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer
securities).
(B) Eligible retirement Plan: An eligible retirement Plan is an
individual retirement account described in section 408(a) of
the Code, an individual retirement annuity described in section
408(b) of the Code, an annuity Plan described in section 403(a) of
the Code, or a qualified trust described in section 401(a) of
the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement Plan
is an individual retirement account or individual retirement
annuity.
(C) Distributee: A distributee includes an Employee or former Employee.
In addition, the Employee's or former Employee's surviving Spouse
and the Employee's or former Employee's Spouse or former Spouse who
is the alternate payee under a qualified domestic relations order,
as defined in section 414(p) of the Code, are distributees with
regard to the interest of the Spouse or former Spouse.
(D) Direct Rollover: A direct rollover is a payment by the Plan to the
eligible retirement Plan specified by the distributee.
(E) Waiver of Notice. If a distribution is one to which Sections 401(a)
(11) and 417 of the Internal Revenue Code do not apply, such
distribution may commence less than 30 days after the notice
required under Section 1.411(a)-(11)(c) of the Income Tax
Regulations is given, provided that: (1) the plan administrator
clearly informs the Participant that the Participant has a right
to a period of at least 30 days after receiving the notice to
consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and
(2) the Participant, after receiving the notice, affirmatively
elects a distribution.
ARTICLE IX
TOP-HEAVY PROVISIONS
9.1 Use of Top-Heavy Provisions. If the Plan becomes a Top-Heavy Plan in any
Plan Year after December 31, 1983, the provisions of this Article IX will
supersede any conflicting provision in the Plan or the Adoption Agreement.
The Committee has sole responsibility to make the determination as to the
top-heavy status of the Plan.
9.2 Top-Heavy Definitions.
(A) Key Employee: Any Employee or former Employee (and the Beneficiaries
of such Employee) who at any time during the determination period
was an officer of the Employer if such individual's annual
Compensation exceeds 50% of the dollar limitation under Section
415(b)(1)(A) of the Code, an owner (or considered an owner under
Section 318 of the Code) of one of the ten largest interests in
the Employer if such individual's Compensation exceeds 100%
of the dollar limitation under Section 415(c)(1)(A) of the
Code, a 5 per cent owner of the Employer, or a 1 per cent owner of
the Employer who has an annual Compensation of more than
$150,000. Annual compensation means compensation as defined in
Item B(4)(a) of the Adoption Agreement, but including amounts
contributed by the Employer pursuant to a salary reduction
agreement which are excludable from the Employee's gross income
under Section 125, Section 402(e)(3), Section 402(h)(1)(B) or
Section 403(b) of the Code. The determination period is the Plan
Year containing the Determination Date and the 4 preceding Plan
Years.
The determination of who is Key Employee will made by the Committee
in accordance with Section 416(i)(1) of the Code and the regulations
thereunder.
(B) Top-Heavy Plan: This Plan, for any Plan Year beginning after
December 31, 1983, if any of the following conditions exists:
(1) If the Top-Heavy Ratio for this Plan exceeds 60 percent and
this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans.
(2) If this Plan is a part of a Required Aggregation Group of
plans but not part of a Permissive Aggregation Group and the
Top-Heavy Ratio for the group of plans exceeds 60 percent.
(3) If this Plan is a part of a Required Aggregation Group and
part of a Permissive Aggregation Group of plans and the
Top-Heavy Ratio for the Permissive Aggregation Group exceeds
60 percent.
(C) Top-Heavy Ratio: For purposes of determining if the Plan is a
Top-Heavy Plan:
(1) If the Employer maintains one or more defined contribution
plans (including any Simplified employee pension Plan) and the
Employer has not maintained any defined benefit Plan which
during the 5-year period ending on the Determination Date(s)
has or has had accrued benefits, the Top-Heavy Ratio for this
Plan alone or for the Required or Permissive Aggregation Group
as appropriate is a fraction, the numerator of which is the
sum of the account balances of all Key Employees as of the
Determination Date(s) (including any part of any account
balance distributed in the 5-year period ending on the
Determination Date(s)), and the denominator of which is the
sum of all account balances (including any part of any account
balance distributed in the 5-year period ending on the
Determination Date(s), both computed in accordance with
Section 416 of the Code and the regulations thereunder. Both
the numerator and denominator of the Top-Heavy Ratio are
increased to reflect any contribution not actually made as of
the Determination Date, but which is required to be taken into
account on that date under Section 416 of the Code and the
regulations thereunder.
(2) If the Employer maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and the
Employer maintains or has maintained one or more defined
benefit plans which during the 5-year period ending on the
Determination Date(s) has or has had any accrued benefits, the
Top-Heavy Ratio for any Required or Permissive Aggregation
Group as appropriate is a fraction, the numerator of which is
the sum of account balances under the aggregated defined
contribution plan or plans for all Key Employees determined in
accordance with (1) above, and the Present Value of accrued
benefits under the aggregated defined benefit plan or plans
for all Key Employees as of the Determination Date(s), and the
denominator of which is the sum of the account balances under
the aggregated defined contribution plan or plans for all
Participants, determined in accordance with (1) above, and the
Present Value of accrued benefits under the defined benefit
plan or plans for all Participants as of the Determination
Date(s), all determined in accordance with Section 416 of the
Code and regulations thereunder. The accrued benefits under a
defined benefit plan in both the numerator and denominator of
the Top-Heavy Ratio are increased for any distribution of an
accrued benefit made in the five-year period ending on the
Determination Date.
(3) For purposes of (1) and (2) above, the value of account
balances and the Present Value of accrued benefits will be
determined as of the most recent Valuation Date that falls
within or ends with the 12-month period ending on the
Determination Date, except as provided in Section 416 of the
Code and the regulations thereunder for the first and second
Plan years of a defined benefit Plan. The account balances and
accrued benefits of a Participant (a) who is not a Key
Employee but who was a Key Employee in a prior year, or (b)
who has not been credited with at least one Hour of Service
with any Employer maintaining the Plan at any time during the
five-year period ending on the Determination Date will be
disregarded. The calculation of the Top-Heavy Ratio, and the
extent to which distributions, rollovers, and transfers are
taken into account will be made in accordance with Section 416
of the Code and the regulations thereunder. Voluntary
deductible employee contributions will not be taken into
account for purposes of computing the Top-Heavy Ratio. When
aggregating plans the value of account balances and accrued
benefits will be calculated with reference to the
Determination Dates that fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee
shall be determined under (a) the method, if any, that
uniformly applies for accrual purposes under all defined
benefit plans maintained by the Employer, or (b) if there is
no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional
rule of Section 411(b)(1)(C) of the Code.
(D) Permissive Aggregation Group: The Required Aggregation Group of
plans plus any other Plan or plans of the Employer which, when
considered as a group with the Required Aggregation Group, would
continue to satisfy the requirements of Section 401(a)(4) and
Section 410 of the Code.
(E) Required Aggregation Group: (1) Each qualified Plan of the Employer
in which at least one Key Employee participates or participated at
any time during the determination period (regardless of whether the
Plan has terminated), and (2) any other qualified Plan of Employer
which enables a Plan described in (1) to meet the requirements of
Section 401(a)(4) or Section 410 of the Code.
(F) Determination Date: For purposes of determining if there is a Key
Employee and for calculating the Top-Heavy Ratio: 1) for any Plan
Year subsequent to the first Plan Year, the last day of the
preceding Plan Year, and 2) for the first Plan Year of the Plan, the
last day of that year.
(G) Valuation Date: The date specified in Item B(14)(c) of the Adoption
Agreement as of which account balances or accrued benefits are
valued for purposes of calculating the Top-Heavy Ratio.
(H) Present Value: Present Value shall be based only on the interest and
mortality rates specified in the Adoption Agreement.
9.3 Minimum Allocation.
(A) Except as otherwise provided in Section 9.3(C) and (D) below,
the Employer Contributions and forfeitures allocated on behalf
of any Participant who is not a Key Employee shall not be less
than the lesser of three per cent (3%) of such Participant's
Compensation or in the case where the Employer has no defined
benefit Plan which designates this Plan to satisfy Section 401
of the Code, the largest percentage of Employer contributions
and forfeitures, as a percentage of the Key Employee's
Compensation, as limited by Section 401(a)(17) of the Code,
allocated on behalf of any Key Employee for that year. The
minimum allocation is determined without regard to any
Social Security contribution. This minimum allocation shall be
made even though, under other Plan provisions, the Participant
would not otherwise be entitled to receive an allocation or would
have received a lesser allocation for the year because of (i)
such Participants failure to complete 1,000 Hours of Service
(or any other equivalent provided in the Plan) or (ii) the
Employee's failure to make mandatory contributions or (iii)
Compensation less than a stated amount.
(B) For purposes of computing the minimum allocation, Compensation shall
mean Compensation as defined in Section 6.6(A) as limited by Section
401(a)(17) of the Code.
(C) Section 9.3(A) shall not apply to any Participant who was not
employed by the Employer on the last day of the Plan Year.
(D) Section 9.3(A) shall not apply to any Participant to the extent the
Participant is covered under any other plan or plans of the Employer
and the Employer has provided in Item B(14) of the Adoption
Agreement that the minimum allocation or benefit requirement
applicable to Top-Heavy Plans will be met in the other plan or
plans.
(E) The minimum allocation required (to the extent required to be
nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Section 411(a)(3)(B) or Section 411(a)(3)(D) of the
Code.
(F) For each Plan Year in which the Paired Plans are Top-Heavy, the
Top-Heavy requirements set forth in Article VIII of the Plan and
Item B(14) of the Adoption Agreement shall apply.
(G) Neither Before Tax Contributions nor Matching Contributions may be
taken into account for the purpose of satisfying the minimum
Top-Heavy contribution requirements.
9.4 Minimum Vesting Schedules. For any Plan Year in which this Plan is a
Top-Heavy Plan, the vesting schedule elected by the Employer in Item B(14)
and/or C(4)(d) of the Adoption Agreement will automatically apply to the
Plan. The minimum vesting schedule applies to all benefits within the
meaning of Section 411(a)(7) of the Code except those attributable to
Employee contributions, including benefits accrued before the effective
date of Section 416 and benefits accrued before the Plan became a
Top-Heavy Plan. Further, no decrease in a Participant's nonforfeitable
percentage may occur in the event the Plan's status as a Top-Heavy Plan
changes for any Plan Year. However, this Section 9.4 does not apply to the
account balance of any Employee who does not have an Hour of Service after
the Plan has initially become a Top-Heavy Plan and such Employee's account
balance attributable to employer contributions and forfeitures will be
determined without regard to this Section 9.4.
ARTICLE X
TRUSTEE
10.1 Trustee. The Trustee shall receive, hold, invest, administer and
distribute the Trust Fund in accordance with the provisions of the Plan as
herein set forth.
10.2 Records and Accounts of Trustee. The Trustee shall maintain accurate and
detailed records and accounts of all its transactions of the Trust Fund,
which shall be available at all reasonable times for inspection or audit
by any person designated by the Employer and by any other person or entity
to the extent required by law.
10.3 Reports to Employer. As soon as practicable following the close of each
accounting period and following the effective date of the termination of
the Plan, the Trustee shall file a written report with the Employer. The
report shall set forth all transactions with respect to the Trust Fund
during the period listing the Trust Fund assets with their market value as
of the close of the period covered by the report.
10.4 Powers of Trustee. The Trustee shall administer the Trust Fund as a
nondiscretionary Trustee, and the Trustee shall not have any discretion or
authority with regard to the investment of the Trust Fund and shall act
solely as a directed Trustee of the fund contributed to it. The Trustee,
as a nondiscretionary Trustee, as may be directed by the Employer (or the
Participants to the extent provided herein) is authorized and empowered,
by way of limitation, with the following powers, rights and duties, each
of which the Trustee shall exercise in a nondiscretionary manner as
directed in accordance with the direction of the Employer (or the
Participants) as a Named Fiduciary (except to the extent that Plan assets
are subject to the control and management of a properly appointed
Investment Manager):
(A) At the direction of the Named Fiduciary, to sell, write options
on, convey or transfer, invest and reinvest any part thereof in
each and every kind of property, whether real, personal or mixed,
tangible orintangible, whether income or non-income producing
and wherever situated, including, but not limited to, time deposits
(including time deposits in the Trustee or its affiliates, or any
successor thereto, if the deposits bear a reasonable rate of
interest), fee simple, leasehold or lesser estates in real estate,
shares of common and preferred stock, mortgages, bonds, leases,
notes, debentures, equipment or collateral trust certificates,
rights, warrants, convertible or exchangeable, and other corporate,
individual or government securities or obligations, annuity,
retirement or other insurance contracts, mutual funds
(including funds for which the Trustee or its affiliates serve
as investment advisor), units of group or collective trusts
established to permit the pooling of funds of separate pension
and profit sharing trusts, provided the Internal Revenue Service
has ruled such group trust to be qualified under Code Section 401(a)
and exempt under Code Section 501(a) (or the applicable
corresponding provision of any other Revenue Act) or in units of
any other common, collective o commingled trust fund heretofore
or hereafter established and maintained by the Trustee or its
affiliates; as long as the Trustee holds any units hereunder, the
instrument establishing such common trust fund (including all
amendments thereto) shall be deemed to have been adopted and made
a part of this Plan, and such other investments as the Named
Fiduciary shall direct the Trustee to invest Plan assets or hold
as an Investment Fund for the investment of Plan assets pursuant to
Participant direction.
(B) At the direction of the Named Fiduciary, to sell, convert, redeem,
exchange, grant options for the purchase or exchange of, or
otherwise dispose of any property held hereunder, at public or
private sale, for cash or upon credit with or without security,
without obligation on the part of any person dealing with the
Trustee to see to the application of the proceeds of or to inquire
into the validity, expediency, or propriety of any such disposal;
(C) At the direction of the Named Fiduciary, to manage, operate,
repair, partition and improve and mortgage or lease (with or
without an option to purchase) for any length of time any property
held in the Trust Fund; to renew or extend any mortgage or lease,
upon such terms as the Trustee may deem expedient; to agree to
reduction of the rate of interest on any mortgage; to agree to any
modification in the terms of any lease or mortgage, or of an
guarantee pertaining to either of them; to exercise and enforce any
right of foreclosure; to bid in property on foreclosure; to take
a deed in lieu of foreclosure with or without paying
consideration therefor and in connection therewith to release
the obligation on the bond secured by the mortgage; and to
exercise and enforce in any action, suit or proceeding at law
or in equity any rights, covenants, conditions, or remedies with
respect to any lease or mortgage or to any guarantee pertaining
to either of them or to waive any default in the performance
thereof;
(D) In accordance with the direction of a Named Fiduciary, to vote,
personally or by general or limited proxy, any shares of stock or
other securities held in the Trust Fund, provided that all voting
rights pertaining to shares of any financial institution in the
state where the Trustee is located shall be exercised by the
trustee only if and as directed in writing by the Committee;
provided further, that the Trustee and the Employer may agree in
writing that such voting rights be passed through to the
Participant's in proportion to their interest in the Investment
Funds, to delegate discretionary voting power to the trustees of a
voting trust for any period of time; and to exercise or sell,
personally or by power of attorney, any conversion or subscription
or other rights appurtenant to any securities or other property held
in the Trust Fund;
(E) As may be directed by the Named Fiduciary, to join in or oppose
any reorganization, recapitalization, consolidation, merger or
liquidation, or any Plan therefor, or any lease (with or without
an option to purchase), mortgage or sale of the property of
any organization the securities of which are held in the Trust
Fund; to pay from the Trust Fund any assessments, charges, or
compensation specified in any Plan of reorganization,
recapitalization, consolidation, merger or liquidation; to deposit
any property with any committee or depository; and to retain any
property allotted to the Trust Fund in any reorganization,
recapitalization, consolidation, merger or liquidation;
(F) In accordance with the written instructions of a Named Fiduciary, to
settle, compromise or commit to arbitration any claim, debt or
obligation of or against the Trust Fund; to enforce or abstain from
enforcing any right, claim, debt, or obligation; and to abandon any
property determined by it to be worthless;
(G) As may be directed by the Named Fiduciary, to continue to hold any
property of the Trust Fund, whether or not productive of income; to
reserve from investment and keep unproductive of income, without
liability for interest, such cash as it deems advisable and,
consistent with its obligations as Trustee hereunder, to hold such
cash in a demand deposit in the Trustee bank, its affiliates, or any
successor thereto;
(H) To hold property of the Trust Fund in its own name, or in the
name of nominee, without disclosure of this trust, or in bearer
form so that it may pass by delivery, and to deposit property with
any depository, but no such holding or depositing shall
relieve the Trustee of its responsibility for the safe custody
and disposition of the Trust Fund in accordance with the provisions
of this agreement as may be directed by the Named Fiduciary, and
the Trustee's records shall at all times show that such property
is part of the Trust Fund;
(I) As directed by the Named Fiduciary, to make, execute and deliver, as
Trustee, any deeds, conveyances, leases (with or without option to
purchase), mortgages, options, contracts, waivers, or other
instruments that the Trustee shall deem necessary or desirable in
the exercise of its powers under this agreement;
(J) To employ, at the expense of the Employer or the Trust Fund, agents
and delegate to them such duties as the Trustee sees fit; the
Trustee shall not be responsible for any loss occasioned by any
such agents selected by it with reasonable care; the Trustee may
consult with legal counsel(who may be counsel for the Employer)
concerning any questions which may arise with reference to its
power or duties under this Plan, and the written opinion of such
counsel shall be full and complete protection with respect to
any action taken or not taken by the Trustee in good faith and
in accordance with the written opinion of such counsel;
(K) To pay out of the Trust Fund any taxes imposed or levied with
respect to the Trust Fund and may contest the validity or amount of
any tax, assessment, penalty, claim or demand respecting the Trust
Fund; however, unless the Trustee shall have first been indemnified
to its satisfaction, it shall not be required to contest the
validity of any tax, or to institute, maintain or defend against any
other action or proceeding either at law or in equity;
(L) To make loans to Participants in accordance with policies
established by the Committee and in accordance with the terms of the
Plan and the and to segregate or otherwise identify property of the
Trust Fund as directed by the Committee for such purpose including
providing collateral for loans made pursuant to the Plan.
10.5 Trustee's Fees and Expenses. The Trustee shall be entitled to receive
reasonable fees for its services hereunder in accordance with its schedule
of fees then in effect and shall be entitled to receive reimbursement for
all reasonable expenses incurred by it in the administration of this Plan.
Except to the extent that the Employer shall pay such fees and expenses,
they shall be charged to and collected by the Trustee from each
Participant's accounts. The Trustee's fees and expenses for extraordinary
services in connection with any Participant's accounts may be charged to
and collected by the Trustee from such accounts.
10.6 Trustee May Resign or Be Removed. The Trustee may resign by written notice
to the Employer which shall be effective sixty (60) days after delivery
unless the Trustee and the Employer agree to an earlier effective date.
The Trustee may be removed by the Employer by written notice to the
Trustee which shall be effective sixty (60) days after delivery unless the
Trustee and the Employer agree to an earlier effective date. Prior to the
effective date of such resignation or removal, the Employer shall amend
its Plan to eliminate any reference to the PRISM(R) Prototype Retirement
Plan and Trust, and appoint a new trustee. The Trustee shall deliver the
Trust Fund to its successor on the effective date of resignation or
removal, or as soon after such effective date as practicable. However, the
Trustee may first subtract any amounts owed it from the Trust Fund for
compensation, expenses and taxes due.
If the Employer fails to so amend the Plan and appoint a successor trustee
within the sixty (60) days, or longer period as the Trustee permits in
writing, the Trustee shall apply to a court of competent jurisdiction for
appointment of a successor trustee.
10.7 Separate Investment Funds.
(A) The assets of the Trust Fund shall be held in such number of
Investment Funds as the Employer and the Trustee may agree, plus an
Employer Stock Fund if selected by the Employer in the
Adoption Agreement, as the Employer shall designate in writing
on the Investment Fund Designation form affixed to the Adoption
Agreement. Such Investment Funds shall be selected by the Employer
from among the funds offered by the Trustee for use as Investment
Funds in the PRISM(R)Prototype Retirement Plan & Trust. The
Trustee reserves the right to change the funds available for use
as Investment Funds in the PRISM(R)Prototype Retirement Plan Trust,
from time to time, and the Employer agrees to execute an
amended Investment Fund Designation form to reflect any such
changes as may impact the Investment Funds available to the
Employer's Plan. The Employer hereby acknowledges that,
available as Investment Funds are interests in registered
investment companies (i.e. mutual funds) for which the sponsoring
organization, its parent, affiliates or successors may serve as
investment advisor and receive compensation from the registered
investment company for its services as investment advisor. The
Employer acknowledges that it, as Named Fiduciary, has the sole
responsibility for selection of the Investment Funds offered under
the Plan, and it has done so on the basis of the Employer's
determination, after due inquiry, of the appropriateness of the
selected Investment Funds as vehicles for the investment of Plan
assets pursuant to the terms of the Plan, considering all relevant
facts and circumstances, including but not limited to (i) the
investment policy and philosophy of the Employer developed
pursuant to ERISA ss.402(b)(1); (ii) the Participants, including
average level of investment experience and sophistication;
(iii) the ability of Participants, using an appropriate mix of
Investment Funds, to diversify the investment of Plan assets held
for their benefit; (iv) the ability of Participants to, utilizing
an appropriate mix of Investment Funds, to structure an
investment portfolio within their account in the Plan with
risk and return characteristics within the normal range
of risk and return characteristics for individuals with similar
investment backgrounds, experience and expectations; and, (v)
in making the selection of Investment Funds, the Employer did
not rely on any representations or recommendations from the Trustee
or any of its employees, except as may have been provided through
written materials, including marketing materials provided by
the various sponsors or distributors of the Investment Funds,
and that the Investment Fund selection has not be influenced,
approved, or encouraged through the actions of the Trustee or
its employees.
For purposes of the Plan, "Employer Stock" shall mean common stock
listed on a recognized securities exchange issued by an Employer of
Employees covered by the Plan or by an affiliate of such Employer
and which shall be a "qualifying employer security" as defined in
ERISA. The Employer Stock Fund shall be invested and reinvested in
shares of Employer Stock, which stock shall be purchased by the
Trustee to the extent not contributed to the Plan by the Employer,
except for amounts which may reasonably be expected to be necessary
to satisfy distributions to be made in cash. No Employer Stock shall
be acquired or held in any Investment Fund other than the Employer
Stock Fund. Up to 100% of the assets of the Trust Fund may be
invested in Employer Stock.
All contributions shall be allocated by the Trustee to the Plan's
Investment Funds specified by the Employer. Dividends, interest and
other distributions shall be reinvested in the same Investment Fund
from which received.
Employers sponsoring 401(k) profit sharing plans may elect to
determine the Investment Funds, including an Employer Stock Fund, if
applicable, into which Matching Contributions and/or Employer
Contributions will be invested and/or into which Participants may
not direct contributions. By making these designations, the Employer
shall be deemed to have advised the Trustee in writing regarding the
retention of investment powers.
Notwithstanding the foregoing provisions of this Section 10.7(A),
the Trustee may, in its discretion, accept certain investments which
have been, and are, held as part of the Trust Fund prior to the date
the Employer adopted this Plan. Such investments shall be considered
investments directed by the Employer or an Investment Committee for
the Plan ("Investment Committee"), if one is acting. The Trustee
shall hold, administer and dispose of such investments in accordance
with directions to the Trustee contained in a written notice from
the Employer or Investment Committee. Any such notice shall advise
the Trustee regarding the retention of investment powers by the
Employer or the Investment Committee and shall be of a continuing
nature or otherwise, and may be revoked in writing by the Employer
or Investment Committee.
The Trustee shall not be liable but shall be fully protected by
reason of its taking or refraining from taking any action at the
direction of the Employer or Investment Committee, nor shall the
Trustee be liable but shall be fully protected by reason of its
refraining from taking any action because of the failure of the
Employer or the Investment Committee to give a direction or order.
The Trustee shall be under no duty to question or make inquiry as to
any direction, notification or order or failure to give a direction,
notification or order by the Employer or the Investment Committee.
The Trustee shall be under no duty to make any review of investments
directed by the Employer or Investment Committee acquired for the
Trust Fund and under no duty at any time to make any recommendation
with respect to disposing of or continuing to retain any such
investments. While the Employer may direct the Trustee with respect
to Plan investments, the Employer may not (1) borrow from the Fund
or pledge any assets of the Fund as security for a loan; (2) buy
property or assets from or sell property or assets to the Fund; (3)
charge any fee for services rendered to the Fund; or (4) receive any
services from the Fund on a preferential basis.
The Employer hereby indemnifies and holds the Trustee or its nominee
harmless from any and all actions, claims, demands, liabilities,
losses, damages or reasonable expenses of whatsoever kind and nature
in connection with or arising out of (1) any action taken or omitted
in good faith or any investment or disbursement of any part of the
Trust Fund made by the Trustee in accordance with the directions of
the Employer or the Investment Committee or any inaction with
respect to any Employer or Investment Committee directed investment
or with respect to any investment previously made at the direction
of the Employer or Investment Committee in the absence of directions
from the Employer or Investment Committee therefor, or (2) any
failure by the Trustee to pay for any property purchased by the
Employer or the Investment Committee for the Trust Fund by reason of
the insufficiency of funds in the Trust Fund.
Anything hereinabove to the contrary notwithstanding, the Employer
shall have no responsibility to the Trustee under the foregoing
indemnification if the Trustee knowingly participated in or
knowingly concealed any act or omission of the Employer or
Investment Committee knowing that such act or omission constituted a
breach of fiduciary responsibility, or if the Trustee fails to
perform any of the duties undertaken by it under the provisions of
this Plan, or if the Trustee fails to act in conformity with the
directions of an authorized representative of the Employer or the
Investment Committee.
(B) Each Participant shall by such mechanism as may be agreed upon
between the Trustee and Employer, direct that the contributions
made to his or her accounts for which the Participant may direct
investments, as selected by the Employer in the Adoption Agreement,
be invested in one or more of the Investment Funds, including the
Employer Stock Fund, if applicable. At the time an Employee becomes
eligible for the Plan, he or she shall specify the percentage of
his or her accounts (expressed in percentage increments as may be
agreed to between the Employer and the Trustee) to be invested
pro-rata in each such Investment Fund.
(C) Upon prior written notice to the Trustee, or other form of
notice acceptable to the Trustee, a Participant may change an
investment direction with respect to future contributions.
Through acceptable notice to the Trustee, the Participant may
elect to transfer all or a portion of such Participant's interest
in each Investment Fund (based on the value of such interest on the
Valuation Date immediately preceding such election), including
an Employer Stock Fund, if applicable, to any other of the
Investment Funds selected by the Employer so that the
Participant's interest in the said Investment Funds immediately
after the transfer is allocated in percentage increments as may
be agreed to by the Employer and the Trustee.
Notwithstanding any Participant's election to change Investment
Funds, the Trustee may, in its discretion, delay satisfaction of
requests to change from a guaranteed investment contract fund for up
to one year, or delay satisfaction of changes in Investment Funds
pending settlement of prior changes in Investment Funds.
(D) The Employer will be responsible when transmitting Employer and
Employee contributions to show the dollar amount to be credited to
each Investment Fund for each Employee.
(E) Except as otherwise provided in the Plan, neither the Trustee, nor
the Employer, nor any fiduciary of the Plan shall be liable to the
Participant or any of his or her beneficiaries for any loss
resulting from action taken at the direction of the Participant.
(F) In a 401(k) profit sharing Plan where the Employer has elected to
invest a portion or all of the Matching Contributions and/or
Employer Contributions in the Employer Stock Fund, then the
following shall apply:
If selected by the Employer in the Adoption Agreement, a Participant
who is fifty-five (55) years of age or older and who is 100% vested
in his Matching Contribution account and/or Employer Contribution
account may elect to have the Employer Stock (and any earnings
thereon) attributable to such Matching Contributions and/or Employer
Contributions diversified in the other Investment Funds under the
Plan in accordance with the following rules and limitations. The
amount of Employer Stock which may be diversified each Plan Year
shall be determined in accordance with the following schedule:
======================================================
then the percent of the
number of whole shares
(rounded to the nearest
whole number) credited to
If the age attained by the Participants' Matching
the Participant Account and/or Employer
during the Plan Year is: Contribution Account on the
last day of the preceding
Plan Year which may be
diversified pursuant to the
rules below may not exceed
======================================================
55 25%
======================================================
56 25%
======================================================
57 30%
======================================================
58 40%
======================================================
59 50%
======================================================
60 60%
======================================================
61 70%
======================================================
62 80%
======================================================
63 90%
======================================================
64 100%
======================================================
The election to diversify may only be made once each Plan Year. The
election may be made in any month by providing notice to the
Committee in accordance with the frequency selected by the Employer
for other Investment Fund changes under the Plan. Each election to
make a transfer pursuant to this Section shall specify the
Investment Fund(s) into which the shares subject to diversification
will be reinvested so that the Participant's interest in the said
Investment Fund(s), immediately after the transfer, is allocated in
increments as may be allowed by the Trustee. Thereafter, the
Participant's interest in said Investment Fund(s) shall be subject
to transfer in accordance with this Section.
(G) Forfeitures arising under the Plan will be invested in an Investment
Fund as may be selected in the discretion of the Employer.
(H) In the event the Trust holds life insurance, the following
restrictions shall apply:
(1) Limitations on Premium Payments
(a) If ordinary or whole life insurance contracts are
purchased on the life of a Participant, less than
one-half of the insured Participant's current allocation
of contributions will be used to pay premiums
attributable to such insurance. Ordinary or whole life
insurance contracts are those with both nondecreasing
benefits and nonincreasing premiums.
(b) If term or universal life insurance contracts are
purchased, no more than one-quarter of the insured
Participant's current allocation of contributions will
be used to pay premiums attributable to such insurance.
(c) If a combination of ordinary or whole life insurance
contracts and term or universal life insurance contracts
are purchased, the sum of one-half of the ordinary life
insurance premiums and all other life insurance premiums
will not exceed one-fourth of the aggregate employer
contributions allocated to any participant.
(2) The Plan Administrator will direct the Trustee to convert the
entire value of any life insurance contract at or before the
Participant's actual retirement or distribution on termination
of employment, but not later than the Participant's Required
Beginning Date to provide cash values or retirement annuity
income, or, subject to the Joint and Survivor Annuity waiver
requirements of Section 7.10, the Plan Administrator may
direct the Trustee to distribute the insurance contract
directly to the Participant.
(3) The Trustee, at the direction of the Employer shall be
entitled to exercise all rights and options with respect to
any such life insurance contracts held by the Plan.
10.8 Registration, Distribution and Voting of Employer Stock and Procedures
Regarding Tender Offers.
(A) All voting rights on shares of Employer Stock held in the Employer
Stock Fund shall be exercised by the Trustee only as directed by the
Participants acting in their capacity as "Named Fiduciaries" (as
defined in Section 402 of the Act) in accordance with the following
provisions of this Section 10.8(A):
(1) As soon as practicable before each annual or special
shareholders' meeting of the Employer, the Trustee shall
furnish to each Participant sufficient copies of the proxy
solicitation material sent generally to shareholders, together
with a form requesting confidential instructions on how the
shares of Employer Stock allocated to such Participant's
account, and, separately, such shares of Employer Stock as may
be unallocated ("Unallocated Shares") or allocated to
Participant accounts but for which the Trustee does not
receive timely voting instruction from the Participant
("Non-Directed Shares"), (including fractional shares to
1/1000th of a share) are to be voted. The direction with
respect to Non-Directed Shares and Unallocated Shares shall
apply to such number of votes equal to the total number of
votes attributable to Non-Directed Shares and Unallocated
Shares multiplied by a fraction, the numerator of which is the
number of shares of Employer Stock credited to the
Participant's account and the denominator of which is the
total number of shares credited to the accounts of all such
Participants who have timely provided directions to the
Trustee with respect to Non-Directed Shares and Unallocated
Shares under this Section 10.8(A)(1). The Employer and the
Committee will cooperate with the Trustee to ensure that
Participants receive the requisite information in a timely
manner. The materials furnished to the Participants shall
include a notice from the Trustee that the Trustee will vote
any shares for which timely instructions are not received by
the Trustee as may be directed by those voting Participants,
acting in their capacity as Named Fiduciaries of the Plan as
provided above. Upon timely receipt of such instructions, the
Trustee shall vote the shares as instructed. The instructions
received by the Trustee from Participants or Beneficiaries
shall be held by the Trustee in strict confidence and shall
not be divulged or released to any person including directors,
officers or employees of the Employer, or of any other
company, except as otherwise required by law.
(2) With respect to all corporate matters submitted to
shareholders, all shares of Employer Stock shall be voted only
in accordance with the directions of such Participants as
Named Fiduciaries as given to the Trustee as provided in
Section 10.8(A)(1). With respect to shares of Employer Stock
allocated to the account of a deceased Participant, such
Participant's Beneficiary, as Named Fiduciary, shall be
entitled to direct the voting of shares of Employer Sock as if
such Beneficiary were the Participant.
(B) All tender or exchange decisions with respect to Employer Stock held
in the Employer Stock Fund shall be made only by the Participants
acting in their capacity as Named Fiduciaries with respect to the
Employer Stock allocated to their accounts in accordance with the
following provisions of this Section 10.8(B):
(1) In the event an offer shall be received by the Trustee
(including a tender offer for shares of Employer Stock subject
to Section 14(d)(1) of the Securities Exchange Act of 1934 or
subject to Rule 13e-4 promulgated under that Act, as those
provisions may from time to time be amended) to purchase or
exchange any shares of Employer Stock held by the Trust, the
Trustee will advise each Participant who has shares of
Employer Stock credited to such Participant's account in
writing of the terms of the offer as soon as practicable after
its commencement and will furnish each Participant with a form
by which he may instruct the Trustee confidentially whether or
not to tender or exchange shares allocated to such
Participant's account, and, separately, Unallocated Shares and
Non-Directed Shares (including fractional shares to 1/1000th
of a share). The directions with respect to Non-Directed
Shares and Unallocated Shares shall apply to such number of
Non-Directed Shares and Unallocated Shares equal to the total
number of Non-Directed Shares and Unallocated Shares
multiplied by a fraction, the numerator of which is the number
of shares of Employer Stock credited to the Participant's
account and the denominator of which is the total number of
shares credited to the accounts of all such Participants who
have timely provided directions to the Trustee with respect to
Non-Directed Shares and Unallocated Shares under this Section
10.8(B). The materials furnished to the Participants shall
include (i) a notice from the Trustee that, except as provided
in this Section 10.8(B), the Trustee will not tender or
exchange any shares for which timely instructions are not
received by the Trustee and (ii) such related documents as are
prepared by any person and provided to the shareholders of the
Employer pursuant to the Securities Exchange Act of 1934. The
Committee and the Trustee may also provide Participants with
such other material concerning the tender or exchange offer as
the Trustee or the Committee in its discretion determines to
be appropriate; provided, however, that prior to any
distribution of materials by the Committee, the Trustee shall
be furnished with sufficient numbers of complete copies of all
such materials. The Employer and the Committee will cooperate
with the Trustee to ensure that Participants receive the
requisite information in a timely manner.
(2) The Trustee shall tender or not tender shares or exchange
shares of Employer Stock (including fractional shares to
1/1000th of a share) only as and to the extent instructed by
the Participants as Named Fiduciaries as provided in Section
10.8(B)(1). With respect to shares of Employer Stock allocated
to the account of a deceased Participant, such Participant's
Beneficiary, as a Named Fiduciary, shall be entitled to direct
the Trustee whether or not to tender or exchange such shares
as if such Beneficiary were the Participant. If tender or
exchange instructions for shares of Employer Stock allocated
to the account of any Participant are not timely received by
the Trustee, the Trustee will treat the non-receipt as a
direction not to tender or exchange such shares. The
instructions received by the Trustee from Participants or
Beneficiaries shall be held by the Trustee in strict
confidence and shall not be divulged or released to any
person, including directors, officers or employees of the
Employer, or of any other company, except as otherwise
required by law.
(3) In the event, under the terms of a tender offer or otherwise,
any shares of Employer Stock tendered for sale, exchange or
transfer pursuant to such offer may be withdrawn from such
offer, the Trustee shall follow such instructions respecting
the withdrawal of such securities from such offer in the same
manner and the same proportion as shall be timely received by
the Trustee from the Participants, as Named Fiduciaries,
entitled under this Section 10.8(B) to give instructions as to
the sale, exchange or transfer of securities pursuant to such
offer.
(4) In the event an offer shall be received by the Trustee and
instructions shall be solicited from Participants pursuant to
Section 10.8(B)(1-3) regarding such offer, and prior to
termination of such offer, another offer is received by the
Trustee for the securities subject to the first offer, the
Trustee shall use its best efforts under the circumstances to
solicit instructions from the Participants to the Trustee (i)
with respect to securities tendered for sale, exchange or
transfer pursuant to the first offer, whether to withdraw such
tender, if possible, and, if withdrawn, whether to tender any
securities so withdrawn for sale, exchange or transfer
pursuant to the second offer and (ii) with respect to
securities not tendered for sale, exchange or transfer
pursuant to the first offer, whether to tender or not to
tender such securities for sale, exchange or transfer pursuant
to the second offer. The Trustee shall follow all such
instructions received in a timely manner from Participants in
the same manner and in the same proportion as provided in
Section 10.8(B)(1-3). With respect to any further offer for
any Employer Stock received by the Trustee and subject to any
earlier offer (including successive offers from one or more
existing offerors), the Trustee shall act in the same manner
as described above.
(5) A Participant's instructions to the Trustee to tender or
exchange shares of Employer Stock will not be deemed a
withdrawal or suspension from the Plan or a forfeiture of any
portion of the Participant's interest in the Plan. Funds
received in exchange for tendered shares will be credited to
the account of the Participant whose shares were tendered and
will be used by the Trustee to purchase Employer Stock, as
soon as practicable. In the interim, the Trustee will invest
such funds in short-term investments permitted under the Plan,
and in the same manner in which forfeited amounts are
invested.
(6) In the event the Employer initiates a tender or exchange
offer, the Trustee may, in its sole discretion, enter into an
agreement with the Employer not to tender or exchange any
shares of Employer Stock in such offer, in which event, the
foregoing provisions of this Section 10.8(B) shall have no
effect with respect to such offer and the Trustee shall not
tender or exchange any shares of Employer Stock in such offer.
(C) The Trustee acting with respect to the Employer Stock Fund may with
the consent of the Committee designate any Employee or other
Trustee as agent to solicit the instructions to vote provided for
in Subsection (A) of this Section, and shall be held harmless in
relying upon such agent's written advice as to how shares are to be
voted, and said Trustee may, with the consent of the Committee,
designate any Employee as agent to solicit instructions from
Participants regarding such a tender offer, as required under
Subsection (B) above, and shall be held harmless in relying
upon such agent's written advice as to whether shares of
Employer Stock are to be tendered.
(D) The Employer shall be responsible for complying with applicable
federal and state securities laws and regulations.
10.9 Valuation of Investment Funds and Accounts.
(A) As of each Valuation Date, the Trustee shall determine the fair
market value of each Investment Fund, including an Employer Stock
Fund, if any, being administered by the Trustee. With respect to
each such Investment Fund, the Trustee shall determine (a) the
change in value between the current Valuation Date and the then
last preceding Valuation Date, (b)the net gain or loss resulting
from expenses paid (including fees and expenses, if any, which
are to be charged to such Fund) and (c) realized and unrealized
gains and losses.
The transfer of funds to or from an Investment Fund pursuant to
Section 10.7(C) and payments, distributions and withdrawals from an
Investment Fund to provide benefits under the Plan for Participants
or Beneficiaries shall not be deemed to be gains, expenses or losses
of an Investment Fund.
After each Valuation Date, the Trustee shall allocate the net gain
or loss of each Investment Fund as of such Valuation Date to the
accounts of Participants participating in such Investment Fund on
such Valuation Date. Contributions, forfeitures and rollovers
received and credited to Participants' accounts as of such Valuation
Date, or as of any earlier date since the last preceding Valuation
Date shall not be considered in allocating gains or losses allocated
to Participants' accounts.
(B) The reasonable and equitable decision of the Trustee as to the value
of each Investment Fund, including an Employer Stock Fund, if any,
and of any account as of each Valuation Date shall be conclusive and
binding upon all persons having any interest, direct or indirect, in
the Investment Funds or in any account.
ARTICLE XI
ADMINISTRATION
11.1 Committee Membership. The Employer shall appoint a Committee which shall
consist of at least one member. The Committee members will be named in the
Adoption Agreement and may be, but are not required to be, Employees of
the Employer. All members of the Committee shall serve at the pleasure of
the Employer. In the event that the Committee has more than one member,
one member shall serve as Chairman and one as Secretary. Any member of the
Committee may resign by notice in writing to the Employer. Any vacancy in
the Committee shall be filled by the Employer as soon as practicable after
a vacancy. If the Employer does not designate a Committee, the Employer
shall assume all of the duties of the Committee.
11.2 Powers and Duties of Committee. The Committee shall have all powers and
duties and only the powers and duties as are specifically conferred upon
it by this Plan or as the Employer may delegate to or impose upon it
consistent with the provisions of this Plan, ERISA and the Code. Without
limiting the generality of the foregoing, the Committee shall have the
following powers and duties:
(A) to interpret and construe the terms and provisions of this Plan and
to decide any questions which may arise hereunder, including but not
limited to --
(1) the amount of a Participant's Compensation,
(2) a Participant's Years of Service,
(3) the age of any person who might be entitled to receive benefits,
(4) the right of any person to receive benefits,
(5) the amount of any benefits to be paid to any persons;
(B) to cause to be maintained all necessary records and accounts under
this Plan and to keep in convenient form any data as may be
necessary for valuation of the assets and liabilities;
(C) to rely upon the records of the Employer or upon any certificate,
statement or other representation made to it by a Participant, a
Beneficiary, the authorized representative of the Participant or
Beneficiary, or the Trustee concerning any fact required to be
determined under any of the provisions of this Plan, and the
Committee shall not be required to make inquiry into the propriety
of any action by the Employer or the Trustee;
(D) to give written notice to a Participant, a Beneficiary, or the
authorized representative of the Participant or Beneficiary, of the
amount of benefits payable under this Plan;
(E) to make and enforce any rules, not inconsistent with this Plan, as
it shall deem necessary or proper for the efficient administration
of this Plan;
(F) to have and exercise such other authority as it deems necessary to
carry out the purposes and provisions of this Plan, provided that
any act of discretion permitted shall be exercised in a uniform
non-discriminatory manner with respect to individuals in like or
similar circumstances;
(G) to adopt rules and guidelines for the administration of this Plan,
provided that they are not inconsistent with the terms of this Plan
and are uniformly applicable to all persons similarly situated and
to delegate in accordance with Section 11.8 such functions and
duties as the Committee deems advisable;
(H) to establish a funding policy and investment objectives consistent
with the purposes of the Plan and the requirements of law;
(I) to employ such attorneys, accountants and agents as it shall
determine to assist it in carrying out its duties hereunder.
Except as otherwise provided in this Plan or determined by the Employer,
any action or determination taken or made by the Committee or any
interpretation or construction made by the Committee shall be final and
shall be binding upon all persons. The Committee shall at all times
exercise the power and authority given to it under this Plan in a fair,
reasonable and non-discriminatory manner.
11.3 Actions of the Committee. Any act authorized or required to be taken by
the Committee shall be taken by a decision of the majority of the members
acting at the time. Any decision of the Committee may be expressed by a
vote at a Committee meeting or in writing, signed by all members of the
Committee, without a meeting. All allocation statements, notices,
directions, approvals, instructions and all other communications required
or authorized to be given by the Committee under this Plan shall be in
writing and signed by a majority of the members of the Committee. The
Committee may, however, by an instrument in writing signed by all the
members and filed with the Trustee, designate one or more if its members
as having the authority to sign all such communications on behalf of the
Committee. Until notified in writing to the contrary, the Trustee shall be
fully protected in acting in accordance with all communications which it
considers genuine and to have been signed on behalf of the Committee by
the members authorized to sign communications. If at any time for any
reason the Committee shall be unable to act with respect to any matter,
the Employer shall act with respect to that matter and its action shall be
final and it shall be binding upon all persons.
11.4 Resignation, Removal and Designation of Successors. Any member of the
Committee may resign at any time and any member may be removed by the
Employer with or without cause. In case of resignation, death, removal or
inability or failure for any cause of any member of the Committee to serve
or to continue to serve, a successor shall be appointed by the Employer.
The Committee shall promptly notify the Trustee of any change in its
membership.
11.5 Committee Review. If any Participant, Spouse, Beneficiary, or other
authorized representative of a Participant, Spouse or Beneficiary shall
file an application with the Committee for benefits under the Plan and the
application is denied, in whole or in part, such applicant shall be
notified of the denial in writing within ninety (90) days of receipt of
the claim. The notice to the applicant shall state that the Committee has
denied the application pursuant to the exercise of its discretionary
powers. This notice shall set forth the specific reasons for the denial,
specific reference to pertinent Plan provisions upon which the denial is
based, a description of any additional information needed to perfect the
claim with an explanation of why it is necessary and an explanation of
procedure for appeal.
Any Participant, Spouse, Beneficiary, or other authorized representative
of the Participant, Spouse or Beneficiary whose application for benefits
has been denied may, within sixty (60) days after receiving the
notification, make a written application to the Committee to review the
denial. The applicant may request that the review be made by written
statements submitted by the applicant and the Committee, at a hearing, or
by both. Any hearing shall be held in the main offices of the Employer on
a date and time as the Employer shall designate with at least seven (7)
days notice to the applicant unless the applicant accepts shorter notice.
Within sixty (60) days after the review has been completed, the Employer
shall render a written decision and shall send a copy to the applicant.
This decision shall include specific reasons for the decision, as well as
specific references to the pertinent Plan provisions upon which the
decision is based.
If the Participant, Spouse, Beneficiary, or other authorized
representative of a Participant, Spouse or Beneficiary does not file
written notice with the Employer at the times set forth above, the
individual shall have waived all benefits under this Plan other than as
set forth in the notice from the Committee.
11.6 Records. The Committee shall keep or cause to be kept records of all
meetings, proceedings and actions held, undertaken or performed by it and
shall furnish to the Employer reports as the Employer may request.
11.7 Compensation. The members of the Committee shall serve without
compensation for services as such, but all reasonably incurred fees and
expenses shall be paid by the Employer.
11.8 Designation of Named Fiduciaries and Allocation of Responsibility Among
Fiduciaries. The Employer, the Committee and the Trustee shall be "Named
Fiduciaries" with respect to this Plan as that term is defined in ERISA.
The Named Fiduciaries shall have only those specific powers, duties,
responsibilities and obligations as are given to them under this Plan. The
Named Fiduciaries may designate any person or persons as a fiduciary and
may delegate to such person or persons any one or more of their powers,
functions, duties and responsibilities with respect to the Plan as set
forth in this Plan, authorizing or providing for such direction,
information or action. Any such designation shall be made in writing and
shall become effective upon written acceptance. No such designation or
delegation by the Employer or the Committee of any of its powers,
authority or responsibilities to the Trustee shall become effective unless
such designation or delegation shall first be accepted by the Trustee in a
writing signed by it and delivered to the Employer or the Committee, as
applicable. Furthermore, each Named Fiduciary may rely upon any such
direction, information or action of another Named Fiduciary as being
proper under this Plan and is not required to inquire into the propriety
of any such direction, information or action. It is intended that under
this Plan each Named Fiduciary shall be responsible for the proper
exercise of its own powers, duties, responsibilities and obligations and
shall not be responsible for act or failure to act of another fiduciary.
11.9 Notice by Committee or Employer. Any communication or notice to any person
by the Committee or the Employer shall be in writing and may be given by
delivery to the person or by first class mail with postage prepaid
addressed to the person at the last address on file with the Committee or
the Employer. Any notice delivered as provided above shall be deemed to
have been given when delivered, and any notice mailed as provided above
shall be deemed to have been given when mailed.
11.10 Loans to Participants.
(A) (1) In accordance with Section 11.8 above, the Committee is
hereby designated as the named fiduciary with sole
authority and responsibility to approve or deny loans and,
except as provided in subsections (G) and (H) of this Section,
collect unpaid loans, in accordance with the provisions
of this Section 11.10. This Section 11.10 shall apply
if the Employer is eligible to and elects Item B(16) of the
Adoption Agreement.
(2) Subject to the consent of the Committee, loans may be made
upon approval of the written application of a Participant or
Beneficiary submitted to the Committee. Such application shall
be submitted during a specified period established by the
Committee prior to the date the loan is to be made. The
Committee shall notify the Participant or Beneficiary whether
the loan has been approved or denied. Loans shall be made
available to all Participants and Beneficiaries on a
reasonably equivalent basis, except that no loans will be made
to any Stockholder-Employee or Owner-Employee and no loan
shall be made to any Participant which the Committee, upon
reviewing the Participant's written application determines may
be reasonably expected to be unable to repay the loan. Loans
shall not be made available to Highly Compensated Employees
(as defined in Section 414(q) of the Code) in an amount
greater than the amount made available to other Employees.
Except for loans made prior to the date this Plan is adopted,
a Participant or Beneficiary shall have no more than five
loans outstanding at any given time.
(3) All loans will be adequately secured and will bear a
reasonable rate of interest. Rates of interest will be
determined daily by the Trustee for Plan loans. The Committee
will determine the minimum loan amount for the Plan.
(B) In reviewing and approving or denying loan applications hereunder,
the Committee shall bear sole responsibility for ensuring compliance
with all applicable federal or state laws and regulations, including
the federal Truth In Lending Act (15 U.S.C. ss.1601 et seq.), and
Equal Credit Opportunity Act (15 U.S.C. ss.1691 et seq.). The
Committee shall upon request supply the Trustee with evidence that
it has complied with such federal or state law.
(C) Notwithstanding Section 7.13 above, each loan made hereunder shall
be secured by a written assignment, in favor of the Plan, of that
portion of the Participant's accounts which the Committee determines
to be necessary to adequately secure repayment of the loan.
(D) A Participant must obtain the consent of his or her Spouse, if
any, to use the account balance as security for the loan. Spousal
consent shall be obtained no earlier than the beginning of the
ninety (90) day period that ends on the date the loan is to be so
secured. The consent must be in writing and must be witnessed
by a Plan representative or Notary Public. Such consent shall
thereafter be binding with respect to the consenting spouse or
any subsequent spouse with respect to that loan. A new consent
shall be required if the account balance is used for
renegotiation, extension, renewal, or other revision of the loan.
Notwithstanding the preceding paragraph, no spousal consent is
required for the use of the account balance as security for a Plan
loan to the Participant under a safe-harbor profit sharing Plan as
described in Section 7.10(F).
(E) No loan shall be approved by the Committee to any Participant or
Beneficiary in any amount which exceeds the lesser of
(1) $50,000, reduced by the excess (if any) of -
(a) the highest outstanding balance of loans from the Plan
during the one-year period ending on the day before the
date on which such loan was made, over,
(b) the outstanding balance of loans from the Plan on the
date on which such loan was made, or
(2) fifty percent (50%) of the present value of the Participant's
nonforfeitable accrued benefit.
For purposes of the above limitation, all loans from all plans of
the Employer and other members of a group of employers described in
Sections 414(b), (c), (m) and (o) of the Code are aggregated.
The term of the loan shall be determined by the Committee.
Furthermore, any loan shall, by its terms require that repayment
(principal and interest) be amortized in level payments, not less
frequently than quarterly over a period not extending beyond five
years from the date of the loan, except that the Committee, in its
discretion, may permit a repayment period in excess of five years
for loans made to a Participant or Beneficiary used to acquire a
dwelling unit which, within a reasonable time (determined at the
time the loan is made) will be used as a principal residence of the
borrower.
An assignment or pledge of any portion of the participant's interest
in the Plan will be treated as a loan under this paragraph.
(F) Each loan hereunder shall be made pro rata from the borrowing
Participant's available accounts and Investment Funds. Loan
repayments shall generally be made via payroll deduction, except
that the repayment of outstanding principal at maturity, in the
event the loan is called, or in the event the Participant chooses
to prepay the loan shall be made in such manner as the Committee
shall determine. Loan repayments and interest thereon shall be
credited to the Investment Funds and accounts in accordance wit
current elections. No loan shall be considered a general investment
of the Trust Fund. Each loan shall be evidenced by a written
agreement, evidencing the Participant's obligation to repay the
borrowed amount to the Plan, in such form and with such
provisions consistent with this Section 11.10 as is acceptable to
the Trustee. All loan agreements shall be deposited with the
Trustee.
(G) In the event a Participant does not repay the principal of such loan
or interest thereon at such times as are required by the terms of
the loan or if the Participant ceases to be an Employee while such
Participant has a loan made hereunder which is outstanding, the
Committee, in its discretion, may direct the Trustee to take such
action as the Committee may reasonably determine, including:
(1) demand repayment of the loan and, subject to Section 10.4(K),
institute legal action against the Participant to enforce
collection of any balance due from the Participant, or
(2) demand repayment of the loan, and charge the total amount of
the unpaid loan and unpaid interest against the balance
credited to the Participant's vested account balance which was
assigned as security for the loan and reduce any payment or
distribution from the Trust Fund to which the Participant or
the Participant's Beneficiary may become entitled to the
extent necessary to discharge the obligation on the loan.
Notwithstanding the foregoing provisions of this Paragraph (G), in
the event of default, foreclosure on the note and attachment of
security will not occur until a distributable event occurs in the
Plan.
(H) In the event the Committee fails or refuses for any reason to direct
the Trustee as provided in Paragraph (G) above or if the Trustee
otherwise reasonably concludes that the collectibility of a loan
hereunder is in jeopardy, the Trustee is authorized to take such
action as it may reasonably determine to enforce repayment and
satisfaction of the loan. The Employer shall be responsible for
costs and expenses incurred in collecting any loan balance.
(I) In the event that the amount of any payment or distribution from the
Trust Fund is insufficient to repay the balance due on any loan, the
Participant shall be liable for and continue to make repayments on
such balance.
(J) If a valid spousal consent has been obtained in accordance
with Paragraph (D), then, notwithstanding any other provision of
this Plan, the portion of the Participant's vested account
balance used as a security interest held by the Plan by reason
of a loan outstanding to the Participant shall be taken into
account for purposes of determining the amount of the account
balance payable at the time of death or distribution, but only
if the reduction is used as repayment of the loan. If less than
100% of the Participant's vested account balance (determined
without regard to the preceding sentence) is payable to the
surviving Spouse, then the account balance shall be adjusted by
first reducing the vested account balance by the amount of the
security usedas repayment of the loan, and then determining the
benefit payable to the surviving Spouse.
ARTICLE XII
FAILURE TO ATTAIN OR RETAIN QUALIFIED STATUS
12.1 Failure to Qualify as a Prototype. This Plan is established with the
intent that it shall qualify under Section 401 of the Code and that it
shall comply with ERISA and all other applicable laws, regulations and
rulings. It may be modified and amended retroactively, if necessary, to
secure such qualification. Should the Internal Revenue Service determine
that this Plan does not qualify under the Code or any statute of similar
import, or fails or refuses to issue an opinion, and if the Plan is not
amended, as required to qualify, before the time allowed by law for the
Employer to file its corporate federal tax return for the taxable year in
which the Effective Date occurs, the Plan shall be considered to be
rescinded and of no force and effect. Any assets attributable to
contributions made by the Employer shall be returned to the Employer by
the Trustee as soon as administratively feasible. The Employer shall
refund to the Participant any contributions made by the Participant to the
Plan.
12.2 Failure of Employer to Attain or Retain Qualification. If the Employer's
Plan fails to attain or retain qualification, such Plan will no longer
participate in this prototype Plan and will be considered an individually
designed Plan.
ARTICLE XIII
MISCELLANEOUS
13.1 Employer Action. Except as may be specifically provided herein, any action
required or permitted to be taken by the Employer may be taken on behalf
of the Employer by any officer of the Employer.
13.2 No Guarantee of Interests. Neither the Trustee, the Employer nor any other
named fiduciary in any way guarantees the Trust Fund from loss or
depreciation, nor do they guarantee any payment to any person. The
liability of the Trustee, the Employer and a named fiduciary to make any
payments hereunder is limited to the available assets of the Trust Fund.
13.3 Employment Rights. The Plan is not a contract of employment. Participation
in the Plan will not give any Participant the right to be retained in the
Employer's employ, nor any right or claim to any benefit under the Plan,
unless the right or claim has specifically accrued under the Plan.
13.4 Interpretations and Adjustments. To the extent permitted by law, an
interpretation of the Plan and a decision on any matter within a named
fiduciary's discretion made in good faith is binding on all persons. A
misstatement or other mistake of fact shall be corrected when it becomes
known and the person responsible shall make such adjustment on account
thereof as he or she considers equitable and practicable.
13.5 Uniform Rules. In the administration of the Plan, uniform rules will be
applied to all Participants similarly situated.
13.6 Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person
acting on it considers pertinent and reliable and signed, made or
presented by the proper party or parties.
13.7 Waiver of Notice. Any notice required under the Plan may be waived by the
person entitled to notice.
13.8 Controlling Law. The law of the state where the Trustee is located shall
be the controlling state law in all matters relating to the Plan and shall
apply to the extent that it is not preempted by the laws of the United
States of America.
13.9 Tax Exemption of Trust. The trust herein created is designated as
constituting a part of a Plan intended to qualify under Sections 401(a) of
the Code and to be tax-exempt under Section 501(a) of the Code.
13.10 Counterparts. The Plan may be executed in two or more counterparts, any
one of which will be an original without reference to the others.
13.11 Annual Statement of Account. The assets of the Trust Fund will be valued
annually at fair market as of the last day of each Plan Year. On such date
the earning and losses of the Trust Fund will be allocated to each
Participant's accounts in the ratio that such account balance bears to all
account balances. The Trustee will deliver to the Employer a statement of
each Participant's account balances as of the last day of Plan Year.
13.12 No Duty to Inquire. No person shall have any duty to make any inquiry as
to the application or use of the Trust Fund, or any part thereof, or to
inquire into the validity, expediency or propriety of any matter or thing
done or proposed to be done by the Trustee.
13.13 Invalidity. In case any provisions of this Plan shall be invalid, this
fact shall not affect the validity of any other provision.
13.14 Titles. Titles to Articles and Sections are for convenience only and shall
have no bearing upon the construction or interpretation of this Plan.
13.15 No Duty of Trustee to Collect Contributions. The Trustee shall be
accountable for all contributions received but shall have no duty to
require any contributions to be delivered or to determine if the
contributions received comply with the Plan or with any Board of Directors
resolution of the Employer providing for contributions.
13.16 Trustee Distributes by Committee Direction. The Trustee shall make
distributions only through Committee direction. The Trustee shall have no
responsibility to see how distributions are applied or to ascertain
whether the Committee's directions comply with the Plan. Notwithstanding
anything in the Plan to the contrary, payments made in accordance with
these provisions will continue only so long as amounts remain in the
Participant's accounts.
ARTICLE XIV
AMENDMENT OR TERMINATION
14.1 Amendment by the Sponsor. Society National Bank, the sponsoring
organization, reserves the right without being required to obtain the
approval of the Employer to amend any part of the Plan from time to time,
subject to the provisions of Article XII, Section 14.2 and the following:
(A) Except as provided in Section 14.1(B) and (C), no amendment shall
become effective until at least thirty (30) days' prior written
notice (unless the Employer agrees to shorter notice) has been given
to the Employer, nor shall any such amendment reduce Participants'
benefits to less than the benefits to which they would have been
entitled if they had resigned from the employ of the Employer on the
effective date of the amendment;
(B) An amendment of the Plan and Trust which the sponsor deems necessary
to enable the Plan and Trust to meet the requirements of Section
401(a) of the Code may be made effective as of the date the Plan and
Trust was established by the sponsor or as of any subsequent date;
(C) An amendment of the Plan and Trust to conform the Plan and Trust
to any change in the law, regulations or rulings of the United
States may take effect as of the date such amendment is required
to be effective. Any amendment executed pursuant to the provisions
of this Section 14.1 shall be executed by an authorized officer of
the sponsor, or its successor. For purposes of this Section 14.1,
the Employer shall be deemed to have been furnished a copy of any
amendment on the business day next following the mailing by the
sponsor or the Trustee.
14.2 Amendment by Adopting Employer. The Employer may (1) change the choice of
options in the Adoption Agreement, (2) add overriding language in the
Adoption Agreement when such language is necessary to satisfy Section 415
or Section 416 of the Code because of the required aggregation of multiple
plans, and (3) add certain model amendments published by the Internal
Revenue Service which specifically provide that their adoption will not
cause the Plan to be treated as individually designed. An Employer that
amends the Plan for any other reason, including a waiver of the minimum
funding requirement under Section 412(d) of the Code, will no longer
participate in this Master or Prototype Plan and will be considered to
have an individually designed Plan.
14.3 Vesting - Plan Termination. In the event of termination or partial
termination of the Plan, the account balance of each affected Participant
will be nonforfeitable.
14.4 Vesting - Complete Discontinuance of Contributions. In the event of a
complete discontinuance of contributions under the Plan, the account
balance of each affected Participant will be nonforfeitable.
14.5 Plan Merger - Maintenance of Benefit. In the event of a merger or
consolidation with, or transfer of assets to any other Plan, each
Participant will receive a benefit immediately after the merger,
consolidation or transfer (if the Plan then terminated) which is at least
equal to the benefit the Participant was entitled to immediately before
such merger, consolidation or transfer (if the Plan had then terminated).
14.6 Direct Transfer. In its discretion, the Trustee may accept the direct
transfer of Plan assets from the trustee of other retirement plans
described in Code Section 401(a). If the Plan receives a direct transfer
of elective deferrals (or amounts treated as elective deferrals) 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 deferrals.
14.7 Termination of Participation by Employer. The Employer expects to continue
its participation in this Plan indefinitely but reserves the right to
terminate this Plan as to its Employees at any time by written instrument
filed with the Trustee. In the event of such termination, partial
termination or complete discontinuance of contributions, or termination as
provided in Section 13.3, the account balance of each affected Participant
will be nonforfeitable. Distribution to Participants who have theretofore
become entitled to the payment of any benefits hereunder or to Spouses or
Beneficiaries of deceased Participants shall be made in the same manner as
if the Employer's participation had not terminated or contributions had
not been discontinued.
The account(s) of each such Participant, in the event of payment in other
than a single sum, need not be converted into cash, but may continue to
remain in the trust, with a right and obligation thereafter to participate
in the net earnings, losses, taxes and expenses of the trust.
If any Participant shall die after the termination of the Employer's
participation and before all of said Participant's interest has been paid,
then, upon the written direction of Employer, the entire undistributed
portion shall be paid in a single sum to the Participant's Beneficiary.
In the event of complete discontinuance of contributions, the Employer
shall terminate this Plan as to its Employees and each Participant's
interest shall be distributed to such Participant.
14.8 Notice of Amendment, Termination or Partial Termination. The Committee
will notify affected Participants of an amendment, termination or partial
termination of the Plan within a reasonable time.
14.9 Substitution of Trustee. Any corporation or association into which the
Trustee may be converted, merged or with which it may be consolidated, or
any corporation or association resulting from any conversion, merger,
reorganization or consolidation to which the Trustee may be a party, shall
be the successor of the Trustee hereunder without the execution or filing
of any instrument or the performance of any further act.
ARTICLE XV
DISCHARGE OF DUTIES BY FIDUCIARIES
15.1 Discharge of Duties. Subject to the provisions of Articles IX and X, the
Named Fiduciaries and any other fiduciary shall discharge their respective
duties set forth in the Plan solely in the interest of the Participants
and their Spouses and Beneficiaries and:
(A) for the exclusive purpose of:
(1) providing benefits to Participants and their Spouses and
Beneficiaries; and
(2) defraying reasonable expenses of administering the Plan;
(B) with the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent person acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise
of a like character and with like aims; and
(C) by diversifying the investments of the Plan so as to minimize the
risk of large losses, unless under the circumstances it is clearly
prudent not to do so.
ARTICLE XVI
AMENDMENT AND CONTINUATION OF ORIGINAL PLAN
16.1 Amendment and Continuation. Notwithstanding any of the foregoing
provisions of the Plan to the contrary, an Employer which has previously
established a profit sharing Plan and trust or money purchase pension Plan
and trust, as applicable, (the "Original Plan") may, in accordance with
the provisions of the Original Plan, amend and continue that Plan in the
form of this Plan and Trust and become an Employer hereunder, subject to
the following:
(A) Subject to the conditions and limitations of the Plan, each person
who is a Participant or former Participant under the Original Plan
immediately prior to the Effective Date of the amendment and
continuation thereof in the form of this Plan will continue as a
Participant under this Plan;
(B) The words "Original Plan" shall be substituted for the word "Plan"
where the word appears in Section 2.2 of the Plan;
(C) No election may be made in the Adoption Agreement if such election
will reduce the benefits of a Participant under the Original Plan to
less than the benefits to which he would have been entitled if he
had resigned from the employ of the Employer on the date of the
amendment and continuation of the Original Plan in the form of this
Plan;
(D) The amounts, if any, credited to a Participant's or former
Participant's accounts, immediately prior to the Effective Date of
the amendment and continuation of the Original Plan in the form of
this Plan shall constitute the opening balances in his or her
accounts, as appropriate, under this Plan and Trust;
(E) Amounts being paid to a former Participant or Beneficiary in
accordance with the provisions of the Original Plan shall continue
to be paid in accordance with such provisions; and
(F) Any Beneficiary designation in effect under the Original Plan
immediately before its amendment and continuation in the form of
this Plan shall be deemed to be a valid Beneficiary designation
filed with the Employer under Section 7.7 of this Plan, to the
extent consistent with the provisions of this Plan, unless and until
the Participant or former Participant revokes such Beneficiary
designation or makes a new Beneficiary designation under this Plan.
IN WITNESS WHEREOF, Society National Bank has established this prototype
Plan as of the 24th day of March, 1995.
SOCIETY NATIONAL BANK
By:/s/ Ed Tognetti
------------------
Ed Tognetti
Title:Senior Vice President and
General Counsel
Exhibit 23
Consent of Independent Accountants
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 2, 1998, which appears on page
30 of Bindley Western Industries, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1997.
PRICE WATERHOUSE LLP
Indianapolis, Indiana
June 26, 1998
