<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 7, 1997
REGISTRATION NO. _______________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 22-1807533
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) NUMBER)
280 NORTH HIGH STREET, SUITE 760
COLUMBUS, OHIO 43215
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
---------------------------
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION EMPLOYEE 401(k) PLAN
(FULL TITLE OF THE PLAN)
---------------------------
SHELDON A. GOLD, PRESIDENT
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
280 NORTH HIGH STREET, SUITE 760
COLUMBUS, OHIO 43215
(614) 221-6000
(NAME, ADDRESS, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
---------------------------
COPIES TO:
RICHARD A. BARNHART, ESQ.
SCHOTTENSTEIN, ZOX & DUNN
A LEGAL PROFESSIONAL ASSOCIATION
41 SOUTH HIGH STREET, SUITE 2600
COLUMBUS, OHIO 43215
---------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
========================================================================================================================
TITLE OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED (1) REGISTERED SHARE (2) PRICE (2) REGISTRATION FEE (2)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 125,000 $1.50 $187,500 $57.00
========================================================================================================================
<FN>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this Registration Statement also covers an
indeterminate amount of interests to be offered or sold pursuant to the employee benefit plan described herein.
(2) Estimated in accordance with Rule 457(h) solely for purposes of calculating the registration fee and based upon the
average of the high and low sale prices of the Registrant's Common Stock on the American Stock Exchange on November 7,
1997.
</TABLE>
- --------------------------------------------------------------------------------
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents which have been filed by The Wendt-Bristol Health
Services Corporation (the "Company") with the Commission, as noted below, are
incorporated by reference into this Registration Statement:
(1) The Annual Report of the Company on Form 10-K for the fiscal year
ending December 31, 1996;
(2) All other reports filed by the Company pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since December 31, 1996, the end of the Company's most
recently completed fiscal year for which an Annual Report on Form 10-K
was filed; and
(3) The description of the Company's common stock set forth in the
Company's Registration Statement on Form S-4 filed on November 18, 1988
(Registration No. 33-25648).
All documents and periodic reports filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Registration Statement and prior to the filing of a post-effective
amendment to the Registration Statement that indicates that all securities
offered hereby have been sold or that deregisters all such securities remaining
unsold shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of such documents. Any statement contained herein
or in any document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed to constitute a part of this
Registration Statement, except as so modified or superseded.
ITEM 4. DESCRIPTIONS OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
None.
II-2
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Wendt-Bristol Health Services Corporation (the "Company") is a
Delaware corporation. Section 102 of the General Corporation Law of the State of
Delaware ("GCL") provides that as part of the Company's Certificate of
Incorporation, the Company may provide for a provision eliminating or limiting,
with certain exceptions, the personal liability of a director to the Company or
its stockholders for monetary damages for breach of a fiduciary duty as a
director. Article Seven of the Company's Certificate of Incorporation currently
provides that each director shall not be personally liable to the Company or its
stockholders, to the extent provided by law, for monetary damages for a breach
of a fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the Company or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the GCL or (iv) for any
transaction from which the director derived an improper personal benefit.
Article Eight of the Company's Certification of Incorporation provides
that the Company shall indemnify its officers and directors to the full extent
permitted by Section 145 of the GCL. Section 145 of the GCL provides that a
Delaware corporation has the power to indemnify its officers and directors in
certain circumstances.
Subsection (a) of Section 145 of the GCL empowers a corporation to
indemnify any director or officer, or former director or officer, 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 (other than an action by or in the right of the corporation),
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding provided that such director or officer acted in good faith in
a manner reasonably believed to be in or not opposed to the best interests of
the corporation and, with respect to any criminal action or proceeding, provided
that such director or officer had no cause to believe his conduct was unlawful.
Subsection (b) of the Section 145 empowers a corporation to indemnify
any director or officer, or former director or officer, who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that such person acted in any of the capacities set forth
above, against expenses actually and reasonably incurred in connection with the
defense or settlement of such action or suit provided that such director or
officer acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the corporation, except that no indemnification
may be made in respect of any claim, issue or matter as to which such director
or officer shall have been adjudged to be liable to the corporation unless and
only to the extent that the Court of Chancery or the court in which such action
was brought shall determine that despite the adjudication of liability such
director or officer is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper.
II-3
<PAGE> 4
Section 145 further provides that to the extent a director or officer
of a corporation has been successful in the defense of any action, suit or
proceeding referred to in subsections (a) and (b) or in the defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith; that indemnification provided for by Section 145 shall not
be deemed exclusive of any other rights to which the indemnified party may be
entitled; and that the corporation shall have power to purchase and maintain
insurance on behalf of a director or officer of the corporation against any
liability asserted against him or incurred by him in any such capacity or
arising out of his status as such whether or not the corporation would have the
power to indemnify him against such liabilities under Section 145.
Section 145 of the GCL is reproduced in Article VI of the By-Laws of
the Company.
ITEM 7. EXEMPTIONS FROM REGISTRATION CLAIMED
Not applicable.
II-4
<PAGE> 5
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
4.1 Certificate of Incorporation of the Company. Filed as Exhibit B to the
Company's Proxy Statement (June 27, 1988) and
incorporated herein by reference pursuant to Rule
411(c).
4.2 By-Laws of the Company. Filed as Exhibit C to the
Company's Proxy Statement (June 27, 1988) and
incorporated herein by reference.
4.3 Savings Plan Adoption Agreement for The Wendt-Bristol Health Services
Corporation 401(k) Plan.*
4.4 Savings Plan for The Wendt-Bristol Health Services Corporation 401(k)
Plan.*
4.5 Savings Plan Trust for The Wendt-Bristol Health Services Corporation
401(k).*
5.1 Opinion of Schottenstein, Zox & Dunn as to the legality
of the shares registered herein.*
23.1 Consent of Schottenstein, Zox & Dunn - contained in the opinion filed as
Exhibits 5.1.
23.2 Consent of Hausser + Taylor.*
24 Powers of Attorney - contained on page S-1 herein.
- ---------------------------
<FN>
* Filed herewith.
</TABLE>
The Company undertakes that it will submit or has submitted the Plan and any
amendments thereto to the Internal Revenue Service (the "IRS"), in a timely
manner, to determine whether the Plan complies with the requirements of the
Employee Retirement Income Security Act (the "ERISA"). The Company further
undertakes that it will make or has made all changes required by the IRS in
order for the Plan to comply with the requirement of the ERISA.
II-5
<PAGE> 6
ITEM 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a)(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 (i) and (ii) above do not apply if
the Registration Statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are 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.
(b) The undersigned Registrant hereby further undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities 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
II-6
<PAGE> 7
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-7
<PAGE> 8
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE COMPANY
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 COLUMBUS, STATE OF OHIO, ON THIS 7TH DAY OF NOVEMBER,
1997.
The Wendt-Bristol Health Services Corporation
(Registrant)
By:/s/ Sheldon A. Gold
---------------------------------------------------
Sheldon A. Gold
President
By:/s/ Charles R. Cicerchi
---------------------------------------------------
Charles R. Cicerchi
Vice-President, Finance and Principal Financial and
Accounting officer
S-1
<PAGE> 9
KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS
BELOW CONSTITUTES AND APPOINTS SHELDON A. GOLD AND CHARLES R. CICERCHI, AND EACH
OF THEM, HIS TRUE AND LAWFUL ATTORNEYS-IN-FACT AND AGENTS WITH FULL POWER OF
SUBSTITUTION AND RESUBSTITUTION, FOR HIM AND IN HIS NAME, PLACE AND STEAD, IN
ANY AND ALL CAPACITIES, TO SIGN ANY AND ALL AMENDMENTS TO THIS REGISTRATION
STATEMENT, AND TO FILE THE SAME, WITH ALL EXHIBITS THERETO, AND OTHER DOCUMENTS
IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE COMMISSION, GRANTING
UNTO SAID ATTORNEYS-IN-FACT AND AGENTS, AND EACH OF THEM, FULL POWER AND
AUTHORITY TO DO AND PERFORM EACH AND EVERY ACT AND THING REQUISITE OR NECESSARY
TO BE DONE IN AND ABOUT THE PREMISES, AS FULLY TO ALL INTENTS AND PURPOSES AS HE
MIGHT OR COULD DO IN PERSON, HEREBY RATIFYING AND CONFIRMING ALL THAT SAID
ATTORNEYS-IN-FACT AND AGENTS OR ANY OF THEM, OR THEIR OR HIS SUBSTITUTE OR
SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURES CAPACITY DATE
---------- -------- ----
<S> <C> <C>
By:/s/ Marvin D. Kantor Chairman of the Board and Director November 7,
- ------------------------------------------- 1997
Marvin D. Kantor
By:/s/ Harold T. Kantor Vice Chairman of the Board and November 7,
- ------------------------------------------- Director 1997
Harold T. Kantor
By:/s/ Sheldon A. Gold President (Principal Executive November 7,
- ------------------------------------------- Officer) and Director 1997
Sheldon A. Gold
By:/s/ Reed A. Martin Executive Vice President, Chief November 7,
- ------------------------------------------- Operating Officer and Director 1997
Reed A. Martin
By:/s/ Paul H. Levine Director November 7,
- ------------------------------------------- 1997
Paul H. Levine
By:/s/ Gerald M. Penn Director November 7,
- ------------------------------------------- 1997
Gerald M. Penn
By: Director November 7,
- ------------------------------------------- 1997
Clemente Del Ponte
</TABLE>
S-2
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE NO.
- ------ ----------- --------
<S> <C> <C>
4.1 Certificate of Incorporation of the Company. Filed as Exhibit B
to the Company's Proxy Statement (June 27, 1988) and incorporated
herein by reference pursuant to Rule 411(c).
4.2 By-Laws of the Company. Filed as Exhibit C to the Company's Proxy
Statement (June 27, 1988) and incorporated herein by reference.
4.3 Savings Plan Adoption Agreement for The
Wendt-Bristol Health Services Corporation 401(k)
Plan. 11
4.4 Savings Plan for The Wendt-Bristol Health
Services Corporation 401(k) Plan. 35
4.5 Savings Plan Trust Agreement for The Wendt-
Bristol Health Services Corporation 401(k). 110
5.1 Opinion of Schottenstein, Zox & Dunn as to the
legality of the shares registered herein. 123
23.1 Consent of Schottenstein, Zox & Dunn -
contained in the opinion filed as Exhibits 5.1.
23.2 Consent of Hausser + Taylor. 124
24 Powers of Attorney - contained on page S-1
herein.
</TABLE>
<PAGE> 1
EXHIBIT 4.3
SAVINGS PLAN
ADOPTION AGREEMENT
I. IDENTIFICATION OF EMPLOYER
1.1 By completing this Adoption Agreement, WENDT-BRISTOL HEALTH
SERVICES CORPORATION AND THOSE OF ITS AFFILIATED EMPLOYERS
LISTED ON THE SCHEDULE 1 ATTACHED, with its principal office
at TWO NATIONWIDE PLAZA, 280 NORTH HIGH STREET, SUITE 760,
COLUMBUS, OHIO 43215 _______ :
(a)___ establishes as of the ___ day of ____________, 19___,
a savings plan. That plan will be known as:__________
_____________. The Effective Date of the Plan is:____
_______________.
(b) X amends, restates and continues as of the 1ST day of
--- JANUARY, 1997, its savings plan and trust originally
established on the 30TH day of MAY, 1989 . That
plan will be known as: THE WENDT-BRISTOL HEALTH
SERVICES CORPORATION 401(K) PLAN (F/K/A TEMCO
NATIONAL CORP. 401(K) PLAN). The original Effective
Date of the Plan is JULY 1, 1989 and this
amendment and restatement is effective as of JANUARY
1, 1997, unless otherwise provided in the Plan.
[Generally, the provisions of this plan are effective
for plan years beginning after December 31, 1988,
unless otherwise noted in the plan document.]
1.2 The Employer's taxpayer identification number is: 22-1807533.
----------
1.3 The Employer's fiscal year ends on: December 31 .
------------------------
1.4 The Plan Administrator is: (Select one)
(a)___ The Employer; or
(b) X Wendt-Bristol Health Services Corporation ,
--- -----------------------------------------------------
and their successors.
1.5 The Plan Year is the Year ending each: December 31 .
-------------
[Normally, Plan Years must be at least 12-months long.
However, the first Plan Year may be a shorter period but
subsequent Plan Years must be 12-months long.]
<PAGE> 2
1.6 The Limitation Year applied to determine whether the Plan
complies with Code Section 415 is: (Select one)
(a) X The Plan Year; or
---
(b)___ The period ending on ________________ (may not be
more than 12 months after the Effective Date).
Thereafter, the Limitation Year will be the 12-month
period beginning on each ____________ (insert date
12-months after the short Limitation Year ends).
1.7 For purposes of determining who is a Highly Compensated
Employee for a determination year, the Employer _X_ makes
________ declines to make (select one) the calendar year
calculation election described in Treas. Reg. Section
1.414(q) - 1T, Q&A 14(b), including any successor provision.
II. ELECTIVE PROVISIONS RELATING TO SERVICE AND ELIGIBILITY TO
PARTICIPATE
2.1 The Plan is extended by the Employer to all Eligible Employees
who are members of the Covered Unit. The Covered Unit includes
all Employees of the Employer except the following: (Select
all applicable)
(a) X excluding Leased Employees.
---
(b) X excluding nonresident aliens with no U.S. source
--- income.
(c)X(1) excluding Employees who are collectively bargained
--- employees (within the meaning of Code
Section 410(b)(3)(A)).
(d)___ excluding those Employees other than those who are
collectively bargained employees (within the meaning
of Code Section 410(b)(3)(A)).
(e)___ excluding those Employees described as follows:
_____________________________________________________
_____________________________________________________
_________________________________
NOTE: Any classification of Employees designated in Section
2.1(e) by the Employer to be excluded from the Covered Unit
must not cause the Plan to fail to comply with the
non-discrimination coverage and participation requirements of
Code Sections 410(b) and 401(a)(26).
- --------
(1) except that such Employees shall not be excluded commencing with Plan
Years beginning on or after January 1, 1995.
<PAGE> 3
2.2 An Employee who is a member of the Covered Unit:
(a) will be a Salary Deferral Employee (eligible to enter
the Plan to make Employee Deferred Contributions and
to share in Qualified Non-Elective Employer
Contributions and Qualified Matching Contributions)
once he or she: (Select each that applies)
(i)X(2) completes 1 Eligibility Year.
--- ------
(ii)___ attains age _______.
(iii)X(3) completes 1 Eligibility Year and attains
--- ----
age 21 .
--------
(iv)X(4) service and age requirements selected
---- above do not apply to those Employees
employed by the Employer as of JULY 1, 1989
as they will be Salary Deferral Employees as
of JULY 1, 1989 regardless of their age and
service.
Any age requirement may not exceed age 21, provided
if Section 2.4(a)(iii) of the Adoption Agreement is
selected, the age requirement may not exceed age
20-1/2. Any service requirement may not exceed one
Eligibility Year, provided if Section 2.4(a)(iii) of
the Adoption Agreement is selected, the service
requirement may not exceed 1/2 Eligibility Year. If
the service requirement selected is a fractional
Year, and if Section 2.5(a) of the Adoption Agreement
is selected, (A) an Employee will be required to
complete the fractional portion of the number of
Hours of Service specified in Section 2.3(c)(i) of
the Adoption Agreement to receive credit for that
fractional Year, and (B) at least two Entry Dates
must be designated pursuant to Sections 2.4(a)(i),
(vi) or (vii).
(b) will be an Eligible Employee (eligible to enter the
Plan to share in NonElective Employer Contributions)
once he or she: (Select each that applies)
(i) X(5) completes 1 Eligibility Years.
---- -----
(ii)____ attains age _______.
- --------
(2) effective for Plan Years ending on or before December 31, 1992
(3) effective for Plan Years beginning on or after January 1, 1993
(4) This section 2.2(a)(iv) applies only to those Employees who
generally perform over 20 work hours per week
(5) effective for Plan Years ending on or before December 31, 1992
<PAGE> 4
(iii) X(6) completes 1 Eligibility Years and
---- ----
attains age 21 .
--------
(iv) X(7) service and age requirements
---- selected above do not apply to those
Employees employed by the Employer as of
JULY 1, 1989 as they will be Eligible
Employees as of JULY 1, 1989 regardless of
their age and service
Any age requirement may not exceed age 21, provided
if Section 2.4(b)(iii) of the Adoption Agreement is
selected, the age requirement may not exceed age
20-1/2. If Section 2.4(b)(iii) and either Section
4.1(a)(i) or (ii), of the Adoption Agreement are
selected, the service requirement may not exceed 1/2
year. If Section 2.4(b)(iii) of the Adoption
Agreement is not selected, but Section 4.1(a)(iii) of
the Adoption Agreement is selected, the service
requirement may not exceed two Eligibility Years. If
both Sections 2.4(b)(iii) and 4.1(a)(iii) of the
Adoption Agreement are selected, the service
requirement may not exceed 1-1/2 Eligibility Years.
If more than one Eligibility Year is required, each
Member's Accrued Benefit must be fully vested at all
times and Section 4.1(a)(iii) of the Adoption
Agreement must be selected. If the service
requirement selected is a fractional Year or a whole
and a fractional Year, and if Section 2.5(a) of the
Adoption Agreement is selected, (A) an Employee will
be required to complete the fractional portion of the
number of Hours of Service specified in Section
2.3(c)(i) of the Adoption Agreement to receive credit
for that fractional Year, and (B) at least two Entry
Dates must be designated pursuant to Sections
2.4(b)(i), (vi) or (vii).
(c) will be eligible to enter the Plan to share in
Employer Matching Contributions once he or she
becomes:
(i) X a Salary Deferred Employee pursuant to
--- paragraph (a);
(ii)___ an Eligible Employee pursuant to paragraph
(b).
2.3 An Eligibility Year is the 12-consecutive month period
beginning on an Employee's Employment Date. After the first
Year, Eligibility Years will: (Select either (a) or (b) and
complete (c)(i), if applicable)
(a) continue to be calculated as the 12-consecutive month
period beginning on anniversaries of his Employment
Date;
- --------
(6) effective for Plan Years beginning on or after January 1, 1993
(7) This section 2.2(b)(iv) applies only to those Employees who
generally perform over 20 work hours per week
<PAGE> 5
(b) X be calculated on the basis of Plan Years beginning
--- with the first Plan Year beginning after his
Employment Date.(8) If the Hour-Count alternative is
selected in Section 2.5 of the Adoption Agreement, an
Employee who is credited with sufficient Hours of
Service required under Section 2.3(c)(i) of the
Adoption Agreement in both the initial Eligibility
Year and the first Eligibility Year which begins
after his Employment Date will be credited with two
Eligibility Years.
(c) an Employee will earn an Eligibility Year:
(i) If the Employer selects the Hour-Count
alternative in Section 2.5 of the Adoption
Agreement, for each Eligibility Year he
completes at least 1,000 (may not
exceed 1,000) Hours of Service;
(ii) If the Employer selects the Elapsed-Time
alternative in Section 2.5 of the Adoption
Agreement, for each Eligibility Year he is
an Employee.
2.4 The Entry Dates for participation in the Plan:
(a) with respect to Salary Deferral Employees are:
(Select one)
(i) X (I) January 1 ; and
--- --------------------
(II) JULY 1____________ . (Date specified
may not be more than 6 months after date
specified in (I); or
(ii)___ the first day of the Plan Year which is
nearest to the date an Employee becomes a
Salary Deferral Employee;
(iii)___ the first day of the Plan Year beginning
after an Employee becomes a Salary Deferral
Employee;
(iv)___ the first day of the Plan Year during which
an Employee becomes a Salary Deferral
Employee;
(v)___ the later of the Effective Date or a Salary
Deferral Employee's date of hire;
(vi)___ the first day of the month after an
Employee becomes a Salary Deferral
Employee; or
- --------
(8) For purposes of determining the Eligibility Years, Vesting Years and
other Years of Service of a Member who transferred employment from Magnetic
Resonance Equity Limited Partnership to Wendt-Bristol Crosswoods Ltd. effective
January 1, 1997, such Member's service with Magnetic Resonance Equity Limited
Partnership shall be taken into account.
<PAGE> 6
(vii)___ the following dates occurring after an
Employee becomes a Salary Deferral
Employee:
___________________
___________________
___________________
___________________
(at least two dates must be specified and no
date specified may be more than six months
after all other dates specified)
(b) with respect to Eligible Employees are: (Select one)
(i) X (I) January 1 ; and
--- --------------------
(II) JULY 1 ____________ . (Date specified
may not be more than 6 months after date
specified in (I); or
(ii)___ the first day of the Plan Year which is
nearest to the date an Employee becomes an
Eligible Employee;
(iii)___ the first day of the Plan Year beginning
after an Employee becomes an Eligible
Employee;
(iv)___ the first day of the Plan Year during which
an Employee becomes an Eligible Employee;
(v)___ the later of the Effective Date or an
Eligible Employee's date of hire;
(vi)___ the first day of the month after an Employee
becomes a Eligible Employee; or
<PAGE> 7
(vii)___ the following dates occurring after an
Employee becomes a Eligible Employee:
__________________
__________________
(at least two dates must be specified and no
date specified may be more than six months
after all other dates specified)
2.5 Service will be credited under the Plan using: (Select one)
(a) X the Hour-Count method; or
---
(b) ____ the Elapsed-Time method.
III. PROVISIONS RELATING TO EARNING A BENEFIT
3.1 Subject to Article IV of the Plan (Benefits, Limitations), the
Employer Contribution forms selected below and Forfeitures for
a given Plan Year will be allocated to the Trust Fund Account
of each Member described: (Select one or more as appropriate):
(a) X Non-Elective Employer Contributions made under
--- Section 3.3 of this Adoption Agreement will be
allocated as of each Allocation Date:
(i) among the Non-Elective Employer Contribution
Accounts of: (Select one or more)
(I) X Members who are Employees as of
--- that Allocation Date who completed
at least ___1___ (not to exceed
1,000) Hours of Service during the
Plan Year;
(II) X Members who died, Retired or
--- became Disabled during that Plan
Year and were not suspended under
Section 2.4 of the Plan (Suspension
of Participation);
(III)___ All persons who were Members at any
time during the Plan Year and who
completed at least ________ (not to
exceed 1,000) Hours of Service;
If more than 500 Hours of Service are
required under Section 3.1(a)(i)(I) or
(III), the number of hours required for a
given Plan Year will be reduced (but to no
less than 500 Hours of Service) to
<PAGE> 8
the extent necessary to cause the Plan to
comply with Code Sections 401(a)(26) and
410(b).
(ii) in the following manner: (Select one or
more)
(I) X in the proportion that the
--- Member's Compensation during that
Plan Year bears to the Compensation
paid during that Plan Year to all
Members described in subpart (i)
above; or
(II)___ in an amount equal to ______% of
the Member's Compensation during
that Plan Year in excess of the
"wage base" and ______% of his
Compensation during that Plan Year
below the "wage base." The first
percentage may not exceed the least
of (A) twice the second percentage
or (B) the second percentage plus
the Permitted Disparity Limit
(which, as described below, depends
on the "wage base" selected). Any
remaining Non-Elective Employer
Contribution during that Plan Year
will be allocated in the proportion
that the Compensation paid during
the Plan Year to each Member
described in subpart (i) bears to
the Compensation paid during that
Plan Year to all Members described
in subpart (i).
If the Non-Elective Employer
Contribution is insufficient to
support a full allocation, the
amount allocated above and below
the "wage base" will be
proportionately reduced.
For purposes of this allocation,
the "wage base" means: (Select one)
(A)___ $______ (may not
exceed current Social
Security Taxable Wage Base;
if you insert a specific
dollar amount, the "wage
base" allocation level may
be changed only by amending
the Plan (i.e. signing a
new Adoption Agreement))(9);
or
- --------
(9) For purposes of this "wage base", the Permitted Disparity Limit can
be no greater than:
- 5.7%, if the "wage base" does not exceed the greater of
$10,000 or 20% of the Social Security Taxable Wage
Base in effect as of the beginning of the Plan Year;
- 5.4%, if the "wage base" is an amount that is less than
the Social Security Taxable Wage Base in effect as
of the beginning of the Plan Year but that is more
than 80% of that Social Security Taxable Wage Base;
and
- 4.3%, if the "wage base" is more than the greater of
$10,000 or 20% of the Social Security Taxable Wage
Base in effect as of the beginning of the Plan
Year, but does not exceed 80% of that Social
Security Taxable Wage Base.
<PAGE> 9
(B) _____ the Social
Security Taxable Wage Base
in effect as of the first
day of the Plan Year for
which the allocation is
made (the "wage base" will
change as the Social
Security Taxable Wage Base
changes). For purposes of
this "wage base", the
Permitted Disparity Limit
is the greater of (1) 5.7%
or (2) the rate of tax paid
by the Employer under Code
Section 3111(a) in effect
as of the beginning of the
Plan Year and attributable
to Old-Age Insurance;
provided that the
percentages specified in
(1) and (2) shall be
reduced to the extent
required by applicable
regulations or other
pronouncements by the IRS
then in effect.
(III)___ other:____________________________
____________________________
____________________________
(Any method described in this
Section must not result in
discrimination in favor of Highly
Compensated Employees.)
(b) X An Employer Matching Contribution will be allocated:
---
(i) as of the Allocation Date and each of the
following additional Matching Contribution
Allocation Dates (select one):
(I) X none;
---
(II)___ June 30 and December 31;
(III)___ March 31, June 30, September 30 and
December 31; or
(IV)___ other (please specify):____________
___________________________________
___________________________________
A period beginning the day after each
Matching Contribution Allocation Date and
ending as of the next succeeding Matching
Contribution Allocation Date will be
referred to herein as an "allocation
period;"
(ii) to the Employer Matching Contribution
Accounts of those of the following Members
who make Employee Deferred Contributions
during the allocation period: (Select one or
more)
<PAGE> 10
(I) X Members who are Employees as of
--- that Matching Contribution
Allocation Date during the
allocation period;
(II) X Members who died, Retired or
--- became Disabled during that
allocation period and were not
suspended under Section 2.4 of the
Plan (Suspension of Participation);
(III)___ All persons who were Members at any
time during the allocation period;
(IV)___ other: (please specify)_____________
____________________________________
____________________________________
If more than 500 Hours of Service
are required under Section
3.1(b)(ii)(IV), the number of hours
required for a given Plan Year will
be reduced (but to no less than 500
Hours of Service) to the extent
necessary to cause the Plan to
comply with Code Sections 401(a)(26)
and 410(b).
(iii) Such Employer Matching Contributions will be
allocated as follows: (Select One)
(I)___ ___% of the portion of the Member's
Employee Deferred Contributions for
the allocation period not in excess
of __% of the Member's Compensation
for the allocation period;
(II)___ ___% of the portion of the Member's
Employee Deferred Contributions for
the allocation period which does not
exceed _____% of the Member's
Compensation for the allocation
period, plus _____% of the portion
of the Member's Employee Deferred
Contributions for the allocation
period in excess of that amount but
not in excess of _____% of the
Member's Compensation for the
allocation period; or
(III) X the percentage of the Member's
--- Employee Deferred Contributions for
the allocation period as determined
by the Employer and applied
uniformly with respect to those
Members entitled to receive an
Employer Matching Contribution.
<PAGE> 11
(c) Forfeitures arising during the Plan Year in
accordance with Section 4.5 of the Plan will be
applied as follows:
(i) To the extent attributable to former
Members' Non-Elective Employer Contribution
Accounts: (rank as appropriate)
(I)___ not applicable
(II) X reduce the Employer Matching
--- Contribution for the Plan Year
(III)___ allocate in the manner specified in
Section 3.1(a) of the Adoption
Agreement
(ii) To the extent attributable to former
Members' Employer Matching Contribution
Accounts: (rank as appropriate)
(I)___ not applicable
(II) X reduce the Employer Matching
--- Contribution for the Plan Year
(III)___ allocate among the Members described
in Section 3.1(b)(ii) of the
Adoption Agreement in proportion
that each Member's Employee Deferred
Contributions for the Plan Year bear
to the Employee Deferred
Contributions for the Plan Year of
all Members described in Section
3.1(b)(ii).
(d) For any Top-Heavy Plan Year, the amount (excluding
any amounts attributable to any salary reduction
arrangements) allocated to each Non-Key Employee who
is a Participant at any time during that Plan Year
(i)_X_ who is an Employee on the last day of the Plan
Year or (ii) whether or not he is an Employee on the
last day of the Plan Year (Select one) will at least
equal the lesser of:
(i) (I) X 3% of his Compensation
--- for that Plan Year (Select this
percentage if the Member does not
also participate in a defined
benefit plan sponsored by the
Employer or an Affiliate and the
Employer does not want to use a
"Defined Contribution Fraction" and
a "Defined Benefit Fraction" See
Sections 4.3(c) and (f) of the Plan
- in excess of 1.0).
(II)___ 4% of his Compensation for that Plan
Year (Select this percentage if the
Member does not also participate in
a defined benefit plan sponsored by
the Employer or an Affiliate and the
Employer does want to use a "Defined
<PAGE> 12
Contribution Fraction" and a
"Defined Benefit Fraction" See
Sections 4.3(c) and (f) of the Plan
- of 1.25).
(III)___ 5% of his Compensation for that Plan
Year (Select this percentage if the
Member does participate in a defined
benefit plan sponsored by the
Employer or an Affiliate, the top
heavy minimum is to be provided
under this Plan (or this Plan and
another defined contribution plan)
and the Employer does not want to
use a "Defined Contribution
Fraction" and a "Defined Benefit
Fraction" - See Sections 4.3(c) and
(f) of the Plan - in excess of 1.0).
(IV)___ 7-1/2% of his Compensation for that
Plan Year (Select this percentage if
the Member does participate in a
defined benefit plan sponsored by
the Employer or an Affiliate, the
top heavy minimum is to be provided
under this Plan (or this Plan and
another defined contribution plan)
and the Employer does want to use a
"Defined Contribution Fraction" and
a "Defined Benefit Fraction" - See
Sections 4.3(c) and (f) of the Plan
- of 1.25).
(V)___ an amount calculated under Rev. Rul.
81-202 sufficient to provide a
benefit comparable to the defined
benefit top heavy minimum required
under Code Section 416; or
(ii) Unless the Plan is part of a Required
Aggregation Group which includes a defined
benefit plan which complies with Code
Section 401(a)(4) solely because of the
Plan, the largest percentage of Compensation
allocated to a Key Employee.
This allocation will be made regardless of
the Member's Period of Service, Compensation
or contributions for that Year and may be
made under this Plan or any other defined
contribution plan in which he participates
and which is included in the Required
Aggregation Group or under a combination of
all such defined contribution plans in which
he participates. Neither Employee Deferred
Contributions nor Employer Matching
Contributions may be taken into account for
the purpose of satisfying the minimum
top-heavy contribution requirement, although
such may be taken into account for the
purposes of determining the largest
percentage of Compensation allocated to a
Key Employee.
(e) If a Member also participates in a qualified defined
benefit pension plan sponsored by the Employer or an
Affiliate, the Employer elects to provide the "top
heavy" minimum benefit under: (Select one)
<PAGE> 13
(i) X this Plan, regardless of whether the
--- Employer has Net Profits for that Year;
(ii)____ the defined benefit plan.
(f) Subject to Section 4.2(a)(iv) of the Plan, upon
complete termination of the Plan, all unallocated
Employer Contributions and forfeitures will be
allocated to the Trust Fund Accounts of all Members
who have not Severed from Service as of the
termination date. Those allocations will be made as
provided in the preceding paragraphs.
(g) For purposes of determining "top heaviness," the
value of benefits accrued by a Participant under any
defined benefit plan which is sponsored by the
Employer and which is included in either a Required
or Permissive Aggregation Group with this Plan will
be determined using the following factors (Complete
this subsection only if the Employer sponsors a
defined benefit plan under which a Participant in
this Plan is accruing a benefit):
(i) interest rate:___________________________
(ii) mortality table:________________________
These same factors will be used to determine the rate
of accrual under all defined benefit plans sponsored
by the Employer which are included in either a
Required or Permissive Aggregation Group with this
Plan.
The Accrued Benefit of a Participant other than a Key
Employee will 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 by the fractional rule
of Code Section 411(b)(1)(C).
3.2 Compensation means amounts paid or made available by the
Employer to an Employee:
(a) for services performed during each: (Select one)
(i) X Plan Year as designated in Section 1.5 of
--- the Adoption Agreement;
(ii)___ 12 month period ending during the Plan Year
on ______________________;
mo/day
<PAGE> 14
(b) and including only: (Select one)
(i) X Wages required to be reported under
--- Code Sections 6041 and 6051 (Wages, Tips and
Other Compensation Box on Form W-2);
(ii) ____ Section 3401(a) wages (for purposes of
income tax withholding);
(iii)___ 415 safe harbor compensation;
(iv)____ All compensation within the meaning of Code
Section 415(c)(3) and excluding all other
compensation;
(c) and excluding (even if includible in gross income):
(Select one or more, if appropriate)
(i) reimbursements and other expense allowances;
(ii) fringe benefits (cash and noncash);
(iii) moving expenses;
(iv) deferred compensation;
(v) welfare benefits;
(vi) all of the above [(i) through (v)];
(d) X and (indicate as many as appropriate, if any)
---
Including Excluding
--------- ---------
(i)___ ____________ amounts contributed by the
Employer pursuant to a salary reduction
agreement and which are not includible in
gross income of the Employee under Code
Sections 125, 402(a)(8), 402(h) or 403(b);
(ii)___ ____________ amounts deferred under Code
Section 457(b) eligible deferred
compensation plan (of state and local
governments and tax exempt organizations);
(iii)___ ______________ employee contributions under
Code Section 414(h)(2) (under a governmental
plan) that are picked up by the Employer and
treated as employer contributions;
(iv) X all of the above;
--- ----------
<PAGE> 15
(e)___ and excluding the following items or amounts from the
Compensation of Highly Compensated Employees_________
_____________________________________________________
(f)___ and further modified as follows:_____________________
____________________________________________________;
(g) and further subject to the rules and definitions
stated in Section 1.13 of the Plan.
(h) If a Member's Entry Date is not on or before the
first day of the 12 month period described in Section
3.2(a) above, his Compensation for purposes of
allocating a portion of the Employer Contribution and
forfeitures:
(Select one)
(i)___ is limited to Compensation since his Entry
Date; or
(ii) X will include all Compensation during the
--- 12 month period described in Section 3.2(a)
above, including Compensation earned during
that period before his Entry Date.
(i) With respect to any Self-Employed Individual or
Owner-Employee, Compensation means his earned income
as defined under Code Section 401(c)(2).
NOTE: If Sections 3.2(c)(i), (c)(ii), (c)(iii),
(c)(iv), (c)(v), (d)(i), (d)(ii), d(iii), or (f) are
selected, the resulting definition of Compensation
must be reasonable and not discriminate in favor of
highly compensated employees (by design or in
operation). See Reg. Section 1.414(s)-1(d). If
Section 3.1(b)(ii) of this Adoption Agreement has
been selected and the Plan utilizes permitted
disparity under Code Section 401(l), no exclusions
from taxable compensation may be made.
3.3 The Non-Elective Employer Contribution for each Plan Year will
not exceed 15% of all Members' Compensation for the Employer's
taxable year and will be determined under the following
Employer Contribution Formula: (Select one)
(a)___ that portion of the Employer's Net Profits which it
elects to contribute;
(b)___ ___% of the Employer's Net Profits;
(c)___ $_________________; or
(d) X that portion of all Members' Compensation which the
--- Employer elects to contribute for any Plan Year.
<PAGE> 16
3.4 Investments will be controlled by the Trustee or an Investment
Manager unless the Employer allows Members to control
investment of their accounts under the following provisions:
(Select one)
(a)___ Members may not direct investment of their accounts
(If (a) is selected, do not complete any other parts
of this Section);
(b) X Members may direct investment of their accounts (If
--- (b) is selected, complete (i) or (ii) below):
(i) X Any investment discretion allowed to
--- Members will be limited to options made
available by the Trustee; or
(ii)___ Any investment discretion allowed to Members
will not be limited to options made
available by the Trustee.
3.5 Loans will X will not (Select one) be allowed under the
----- -----
Plan.
3.6 Voluntary Employee Contributions will X will not
----- -----
(Select one) be allowed under the Plan.
3.7 The receipt of Rollovers X will will not (Select
----- -----
one) be allowed under the Plan.
3.8 If a Participant is covered under another defined contribution
plan sponsored by the Employer and if that plan is not also a
regional prototype plan,
(a) X the provisions of Section 4.2 of the Plan
--- relating to limitation on Annual Additions allocated
to Members' Trust Fund Accounts, will apply as if the
other plan were a regional prototype plan.
(b)___ (Other):_______________________________________________
_______________________________________________________
_____________________________________
(Any method of limiting Annual Additions allocated to
Members' Trust Fund Accounts under this Plan and any
other defined contribution plan must do so in a
manner that precludes Employer discretion.)
IV. PROVISIONS RELATING TO VESTING, RETIREMENT AND DISTRIBUTIONS
4.1 (a) The following schedule will be applied to determine a
Member's Vested Amount in that portion of his Accrued Benefit
allocated to his Non-Elective Employer Contribution Account:
(Select one)
<PAGE> 17
<TABLE>
<CAPTION>
Non-Forfeitable
---------------
Vesting Years Percentage
------------- ----------
<S> <C>
(i)___ Less than 5 0%
5 or more 100%
(ii) X Less than 1 0%
--- ----
1 but Less than 2 20%
----
2 but Less than 3 40%
----
3 but Less than 4 60% (at least 20%)
----
4 but Less than 5 80% (at least 40%)
----
5 but Less than 6 100% (at least 60%)
----
6 but Less than 7 100% (at least 80%)
----
7 or More 100%
(iii) ____ a Member's Vested Amount always is 100%.
You must select (a)(iii) if an Employee must complete
more than one Eligibility Year to become an Eligible
Employee under Section 2.2(b) of the Adoption
Agreement.
</TABLE>
(b) The following schedule will be applied to determine a Member's
Vested Amount in that portion of his Accrued Benefit allocated
to his Employer Matching Contribution Account: (Select one)
<TABLE>
<CAPTION>
Non-Forfeitable
---------------
Vesting Years Percentage
------------- ----------
<S> <C>
(i)___ Less than 5 0%
5 or more 100%
(ii) X Less than 1 0%
--- ----
1 but Less than 2 20%
----
2 but Less than 3 40%
----
3 but Less than 4 60% (at least 20%)
----
4 but Less than 5 80% (at least 40%)
----
5 but Less than 6 100% (at least 60%)
----
6 but Less than 7 100% (at least 80%)
----
7 or More 100%
(iii) ____ a Member's Vested Amount always is 100%.
You must select (b)(iii) if an Employee must complete
more than one Eligibility Year to become eligible to
share in Employer Matching Contributions under
Section 2.2(c) of the Adoption Agreement.
</TABLE>
<PAGE> 18
(c) For any Top-Heavy Plan Year, the following special top-heavy
vesting schedule will be applied to determine a Member's
Vested Amount: (Select one)
<TABLE>
<CAPTION>
Non-Forfeitable
---------------
Vesting Years Percentage
------------- ----------
<S> <C>
(i)___ Less than 3 0%
3 or more 100%
(ii)___ Less than 2 0%
2 but Less than 3 20%
3 but Less than 4 40%
4 but Less than 5 60%
5 but Less than 6 80%
6 or More 100%
<CAPTION>
Non-Forfeitable
---------------
Vesting Years Percentage
------------- ----------
<S> <C>
(iii) X Less than 1 0%
-- ---
1 but Less than 2 20%
---
2 but Less than 3 40% (at least 20%)
---
3 but Less than 4 60% (at least 40%)
---
4 but Less than 5 80% (at least 60%)
---
5 but Less than 6 100% (at least 80%)
---
6 or More 100%
If an Employee must complete more than one
Eligibility Year to become an Eligible Employee under
Section 2.2(b) of the Adoption Agreement, you must
complete (c)(iii) by inserting 100% in each line.
</TABLE>
4.2 A Member will earn a Vesting Year for each one Year Period of
Service: (Select one)
(a)___ beginning on his Employment Date, and each
anniversary of that date.
(b)___ beginning on the later of his Employment Date or
__________ (not later than the Effective Date of the
Plan), or each anniversary of that date.
(c) X completed during Plan Years: (Select one)
---
(i)_____ beginning after his Employment Date.
(ii)_____ ending after his Employment Date.
<PAGE> 19
(iii)___ beginning after the later of
__________________ (not later than the
Effective Date) or his Employment Date.
(iv) X ending after the later of July 1, 1989
--- (not later than the Effective Date) or his
Employment Date.(10)
(d)___ determined in the same manner as Eligibility Years
under Section 2.3 of the Adoption Agreement.
(Check and complete (e) only if a minimum age requirement is
desired for vesting.)
(e)___ Effective for Plan Years beginning before December
31, 1984, Vesting Years will not include Years of
Service completed before the Employee attains age
_____ (not to exceed age 22). Effective for Plan
Years beginning after December 31, 1984, Vesting
Years will not include Years of Service completed
before the Employee attains age _____ (not to exceed
age 18).
4.3 A Member will attain his Early Retirement Date upon: (Select
one or both)
(a) X attaining age 60 (not to exceed age 65); or
--- -----
(b)___ attaining age ______ (not to exceed age 65) and
completing a Period of Service of at least _______
Years.
4.4 A Member will attain his Normal Retirement Date upon: (Select
one or both)
(a) X attaining age 65 (may not exceed age 65); or
--- ----
(b)___ attaining age ______ (not to exceed age 65) and
completing a Period of Service of at least _______
Years (may not exceed 5 Years).
4.5 Plan Benefits will be paid in the following forms: (Select as
appropriate)
(a) X a lump sum paid on the date specified by the
--- Member.
(b)___ in a fixed number of equal installments beginning on
the date specified by the Member and payable monthly
for a period of 5, 10 or 15 Years, but in no event
over a period to exceed the Member's life expectancy.
(c)___ in monthly installments beginning on the date
specified by the Member and
- --------
(10) For purposes of determining the Eligibility Years, Vesting Years
and other Years of Service of a Member who transferred employment from Magnetic
Resonance Equity Limited Partnership to Wendt-Bristol Crosswoods Ltd. effective
January 1, 1997, such Member's service with Magnetic Resonance Equity Limited
Partnership shall be taken into account.
<PAGE> 20
ending with the month he dies. No benefit will be
paid after the Member's death.
(If this option is elected, the Employer must also
select option (e) below. If a married Member selects
this form of payment, his benefit nevertheless must
be paid as described in (e) below unless the Member
waives that form of benefit and his spouse consents
to that waiver as described in Section 6.8 of the
Plan).
(d)___ in monthly installments beginning on the date
specified by the Member and before his Social
Security benefits begin and ending with the month he
dies. The amount of these benefits will be adjusted
so that each monthly benefit plus any Social Security
benefits are as nearly uniform as possible.
(If a married Member selects this form of payment,
his benefit nevertheless must be paid as described in
(e) below unless the Member waives that form of
benefit and his spouse consents to that waiver as
described in Section 6.8 of the Plan.)
(e)___ in monthly installments beginning on the date
specified by the Member and ending with the month he
dies. After the Member's death, his Beneficiary will
receive a monthly benefit equal to 50%, 66-2/3%, 75%
or 100% (as selected by the Member) of the monthly
benefit paid to the Member during his life. No
benefits will be paid after the Beneficiary's death.
If this option is elected, the Employer must also
select option (c) above.
(f)___ in the number of monthly installments selected by the
Member beginning on the date specified by the Member.
If the Member dies before receiving the specified
number of monthly payments, the balance of the
specified number of monthly payments will be made to
his Beneficiary. If the Member does not die before
receiving the specified number of monthly payments,
benefits will continue in the same amount until he
dies. In that case, no benefits will be paid after
the Member's death to a Beneficiary.
(g)___ in the number of monthly installments selected by the
Member and beginning on the date specified by the
Member. Benefits will end on the earlier of the
Member's death or the date he has received the
specified number of monthly benefits.
(h)X(11) Others: PAYMENTS OVER A PERIOD CERTAIN SELECTED
---- BY THE MEMBER THAT DOES NOT EXTEND BEYOND TEN (10)
YEARS. EACH PAYMENT SHALL EQUAL THE GREATER OF 10% OF
THE MEMBERS VESTED TRUST FUND ACCOUNT OR $500, AFTER
HAVING FIRST
- --------
(11) effective only with respect to benefits accrued before January 1,
1993
<PAGE> 21
SEGREGATED THE TRUST FUND ACCOUNT IN A RESERVE FUND.
(If an optional form of benefit is added under this
subparagraph which is, in effect, a life annuity, and
if a married Member selects this form of payment, his
benefit nevertheless must be paid as described in (e)
above unless the Member waives that form of benefit
and his spouse consents to that waiver as described
in Section 6.8 of the Plan.)
(Benefits _____ will _____ will not (Select one) be
offered under option (c), (d), (e), (f) and (g) if
the Plan Administrator is not able to purchase a
commercial annuity to pay the selected form of
benefit.)
Unless the Member makes an effective election
otherwise, his Distributable Credit will
automatically be distributed under the alternative
providing the largest monthly periodic payments to
the Member pursuant to option (a) above. (Insert one
of (a) through (h), as applicable)
4.6 Benefits will begin on the date specified by the Member on or
after his Early Retirement Date. Subject to any of the
following conditions selected, benefits also may begin on an
earlier date selected by the Member; that date must be after
the Member's Severance from Service unless (h) below has been
selected or appropriate limitations have been specified in
(i). (Select one or more as appropriate. You do not need to
check any of the following limitations)
(a)___ if the Plan has sufficient cash to pay the benefits:
(b)___ after the Member reaches age ______;
(c)___ if the Member completed a Period of Service of at
least _____ Years before be Severed from Service;
(d)___ after the Member reaches age _____ if he also
completed a Period of Service of at least _____ Years
before he Severed from Service;
(e)___ if the Member's account balance is not greater than
$________.
(f)___ with respect to a lump sum distribution, _________
Plan Years after the end of the Plan Year in which
the Member Severed from Service.
(g)___ with respect to a lump sum distribution, after the
Allocation Date that follows the Member's Severance
from Service, if the Member may be entitled to an
allocation of Employer Contributions or forfeitures
on that Allocation Date.
(h)____ while employed, with respect to Employer
Contributions which were
<PAGE> 22
contributed to the Plan at least two years before the
date of withdrawal.
(i)___ other:_______________________________________________
_____________________________________________________
_____________________________________________________
(any limitation added under (i) must be objective and
may not allow any discretion in its application);
(j)___ any restriction on distribution ____ will ____ will
not (Select one) also apply to distributions to
Beneficiaries.
(NOTE: A married Member may elect a lump-sum distribution of
benefits before his Severance from Service only as provided in
Section 5.3 of the Plan (Cash-Outs).)
Regardless of any restriction selected above, and subject to
Section 7.3 of the Plan, each Member who met any service
requirements specified as a condition of Early Retirement in
Section 4.3 of the Adoption Agreement before he Severed from
Service may elect to have benefits begin anytime after he
satisfied the age requirement specified as a condition of
Early Retirement. Also, any options selected in this Section
must comply with the minimum required distribution rules under
Plan Section 7.3.
4.7 Regardless of any other provision, benefits payable under any
Qualified Domestic Relations Order: (Select one)
(a)___ may not be paid before the earliest date the Member's
benefit could have been paid; or
(b) X may be paid on any date specified in that Order
--- even if that date precedes the earliest date the
Member's benefit could have been paid.
4.8 If a Member requests, cash-outs in part or whole from Vested
Accounts in excess of $3,500 __X__ will ______ will not
(Select one) be allowed in advance of the Member's death or
retirement to the extent provided under Section 5.3 of the
Plan. (If the Member is married, the Member's spouse must
consent to that distribution in the manner provided in Section
6.8 of the Plan.)
4.9 The provision of the Plan allowing advance hardship
distributions __X__ is _______ is not (Select one) available
under the Plan.
4.10 Effective for distributions made on or after January 1, 1993
and subject to Section 1.18 of the Plan, a Distributee may
elect, at the time and in the manner prescribed by the Plan
Administrator, to have all or a portion of an Eligible
Rollover
<PAGE> 23
Distribution paid directly to an Eligible Retirement Plan
specified by the Distributee in a Direct Rollover.
4.11 If an Excess Employee Deferred Contributions, Excess
Contributions or Excess Aggregate Contributions are
distributed to Member after the last day of the Plan Year to
which they relate, the income or loss allocable to the period
beginning the first day of the next Plan Year and the date
such excess amounts are distributed (the "Gap Period") shall
be:
(a)___ disregarded;
(b)___ determined based upon the actual income or loss
allocable to the Member's Trust Fund Account(s) to
which such excess relates;
(c) X determined by taking 10% of the income allocable to
--- the excess contributions for the Plan Year to which
they relate and multiplying that amount by the number
of calendar months that have elapsed since the end of
that Plan Year (including for this purpose the month
of the distribution only if such distribution is made
after the fifteenth day of such month); or
(d) ____ other (please specify):
4.12 If an Affiliate adopts this Plan with the Employer's consent
as provided in Section 14.12 of the Plan:
(a) the Employer Contribution Formula selected in Section
3.3 of the Adoption Agreement: (Select one)
(i) X will be applied in the aggregate for all
--- Employees of the Employer and the adopting
Affiliate; or
(ii)___ will be separately applied for Employees of
the Employer and the adopting Affiliate.
If the second alternative is adopted, the same
formula will be applied, it just will be applied
separately for each group of Employees.
(b) forfeitures generated by the Severance from Service
of Members employed by the Employer and the adopting
Affiliate will be allocated (i) __X__ among Members
employed by either the Employer or the adopting
Affiliate, or (ii)___ will be allocated only among
Members employed by the entity which employed the
severed Member (Select one).
<PAGE> 24
Failure to complete the Adoption Agreement properly may cause the Plan
to be disqualified.
IN WITNESS WHEREOF, Wendt-Bristol Health Services Corporation and the
Affiliated Employers listed on the Schedule 1, attached has caused this
instrument to be executed by its duly authorized officer this 1st day of
January, 1997.
Wendt-Bristol Health Services Corporation
-----------------------------------------
(name of employer)
Two Nationwide Plaza
280 North High Street, Suite 760
-----------------------------------------
(street address)
Columbus, Ohio 43215
-----------------------------------------
(city, state, zip code)
(614) 221-6000
-----------------------------------------
(telephone number)
By:/s/ Sheldon A. Gold
--------------------------------------
Sheldon A. Gold, President
NOTE: Even though the Internal Revenue Service has reviewed this Plan
and Adoption Agreement and issued a Notification Letter, an adopting Employer
may not rely on that Notification Letter unless it separately requests that the
Internal Revenue Service issue a determination letter with respect to the Plan
as adopted by that Employer.
<PAGE> 1
EXHIBIT 4.4
SAVINGS PLAN
ARTICLE I
DEFINITIONS
Where required by the context, the noun, verb, adjective and adverb
forms of each defined term includes any of its other forms and the singular
includes the plural and the plural includes the singular. "He", "him" and "his"
include "she", "her" and "hers".
1.1 ACCOUNTING YEAR: Each accounting year of the Employer while the
Plan is in effect.
1.2 ACCRUED BENEFIT: The balance of a Member's Trust Fund Account as
most recently determined under Article X (Trust Fund Valuation; Statements).
1.3 ADOPTION AGREEMENT: The Agreement by which the Employer adopts this
Plan.
1.4 AFFILIATE: Any corporation or unincorporated trade or business
under common control with the Employer (as determined under Code Sections
414(b), (c) and (o)) and, effective for Plan Years beginning after November 30,
1980, a member of an affiliated service group which includes the Employer (as
determined under Code Section 414(m)).
1.5 ALLOCATION DATE: The last day of each Plan Year.
1.6 ALLOCATION FORMULA: The formula described in Section 3.1 of the
Adoption Agreement [and Sections 1.59 (Qualified Matching Contribution) and 1.60
(Qualified Non-Election Employer Contribution)] and applied to allocate the
Employer Contribution for each Plan Year and the Forfeitures that arise during
that Plan Year among the Trust Fund Accounts of Members. That allocation will be
made no less frequently than annually as of each Allocation Date.
1.7 ALTERNATE PAYEE: Any spouse, former spouse, child or other
dependent of the Member who is recognized under a Qualified Domestic Relations
Order as having a right to receive all or a portion of the benefits payable to
that Member under the Plan.
1.8 APPROVED ABSENCE: An Employee's absence under a nondiscriminatory
policy established by the Employer:
(a) for a period authorized by the Employer;
(b) during a layoff or furlough ending when his recall rights
expire;
<PAGE> 2
(c) for any period his reemployment rights are protected by law;
or
(d) for any absence attributable to the Employee's pregnancy,
birth of the Employee's child, placement of a child in
connection with adoption of that child by the Employee or
caring for the child during the period immediately following
the birth or placing for adoption of that child (referred to
in this Plan as an absence for maternity/paternity purposes).
1.9 BENEFICIARY: The person or persons which a Member designates to
receive any death benefits under the Plan. This designation may be made only on
a form and in the manner approved by the Committee and may be revoked or amended
at any time in a similar manner. If there is no effective designation, the
Member's Beneficiary will be his surviving spouse, or his estate if there is no
surviving spouse. If a Member has designated his spouse as his Beneficiary,
except to the extent specifically provided otherwise by a Qualified Domestic
Relations Order, that designation shall be considered revoked at the time the
Member thereafter is divorced from that spouse, obtains a dissolution of
marriage, or has the marriage to that spouse annulled.
Effective for Plan Years beginning after December 31, 1984, a Member's
Beneficiary will be his surviving spouse, if any, unless the Member's spouse
consents in writing and acknowledges the effect of the Member's designation of
another named Beneficiary on a form prescribed by the Plan Administrator. The
spouse's consent must be witnessed by a representative of the Plan Administrator
or by a notary public and must be filed with the Plan Administrator. Once filed,
that consent may not be revoked and no further consent is required from that
spouse unless the Member changes his Beneficiary. In that case, the Member's
spouse must consent to the change unless the effect is to designate the Member's
spouse as his Beneficiary. However, a spouse's consent may expressly permit a
Member to change his Beneficiary designation without further consent by the
spouse. If an unmarried Member designates a Beneficiary and later marries, his
earlier designation will not be effective unless:
(a) he designated his spouse as his Beneficiary, or
(b) his spouse consents to his earlier designation of another
named Beneficiary.
If a consenting spouse dies, or a Member and his consenting spouse divorce, and
the Member remarries, except as provided in a Qualified Domestic Relations
Order, the Member's designation of a named Beneficiary other than the subsequent
spouse will not be effective unless the subsequent spouse consents in the manner
described in this Section.
1.10 BREAK-IN-SERVICE:
(a) If the Employer has elected the Elapsed-Time alternative under
Section 2.5 of the Adoption Agreement, a Period of Severance
of one Year. If a Member is absent for maternity/paternity
purposes (as defined in Section 1.8(d)) and if that absence
began during Plan Years beginning after December 31, 1984, the
twelve
<PAGE> 3
consecutive month period beginning on the first anniversary of
the date the absence began will not be counted as a
Break-in-Service.
(b) If the Employer has elected the Hour-Count alternative under
Section 2.5 of the Adoption Agreement, an Eligibility or
Vesting Year during which a Member is credited with fewer than
501 Hours of Service. Hours of Service credited during an
Approved Absence for maternity/paternity purposes (Section
1.8(d)) starting during Plan Years beginning after December
31, 1984, will be credited to the Year in which the absence
began if necessary to prevent a Break-in-Service. To the
extent not needed for that purpose, those Hours will be
credited to the following Year.
1.11 CODE: The Internal Revenue Code of 1986, as amended. Reference to
any Section of the Code includes any successor provision.
1.12 COMMITTEE: The committee established under Article XI
(Administration), or if no such committee is established, the Plan Administrator
shall have all of the rights, powers and duties granted to the Committee under
the Plan.
1.13 COMPENSATION:
(a) The amount paid or made available (as appropriate) to an
Employee by the Employer for services performed as specified
in Section 3.2 of the Adoption Agreement. The options
permitted to be elected by the Employer under Section 3.2(b)
of the Adoption Agreement are further defined as follows:
(1) "Information required to be reported under sections
6041 and 6051 (Wages, Tips and Other Compensation Box
on Form W-2" means wages as defined in Code 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 Code Sections 6041(d) and 6051(a)(3),
determined without regard to any rules under Code
Section 3401(a) 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)).
(2) "Section 3401(a) wages" means wages within the
meaning of Code 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 Code
Section 3401(a)(2)).
(3) "415 safe-harbor compensation" means wages, salaries,
and fees for professional services and other amounts
received (without regard to
<PAGE> 4
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 includable in gross
income (including, but not limited to, commissions
paid salesmen, 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 Reg. 1.62-2(c)),
and excluding the following:
(i) Employer contributions to a plan of deferred
compensation which are not includable 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
nonqualified stock option, or when
restricted stock (or property) held by the
Employee either becomes freely transferable
or is no longer subject to a substantial
risk of forfeiture;
(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 Code
Section 403(b) (whether or not the
contributions are actually excludable from
the gross income of the Employee).
(4) "All compensation within the meaning of Code Section
415(c)(3) and excluding all other compensation" means
415 safe-harbor compensation, as defined above, plus
the following:
(i) Amounts described in Code Sections
104(a)(3), 105(a) and 105(h), but only to
the extent that these amounts are includable
in the gross income of the Employee;
(ii) Amounts paid or reimbursed by the Employer
for moving expenses incurred by an Employee,
but only to the extent that at the time of
the payment it is reasonable to believe that
these amounts are not deductible by the
Employee under Code Section 217;
(iii) The value of a nonqualified stock option
granted to an Employee by the Employer, but
only to the extent that the value of the
option
<PAGE> 5
is includable in the gross income of the
Employee for the taxable year in which
granted; and
(iv) The amount includable in the gross income of
an Employee upon making the election
described in Code Section 83(b).
(b) (1) In addition to other exclusions selected in
Section 3.2 of the Adoption Agreement, annual
Compensation will not include Employer Contributions
or Forfeitures or amounts earned greater than
$200,000 (as adjusted by the Secretary of the
Treasury under Code Section 415(d)) for any Plan Year
beginning after December 31, 1988.
(2) In addition to other applicable limitations set forth
in the Plan, and notwithstanding any other provision
of the Plan to the contrary, for Plan Years beginning
on or after January 1, 1994, the annual Compensation
of each Employee taken into account under the Plan
shall not exceed the OBRA '93 annual compensation
limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for
increases in the cost of living in accordance with
Code Section 401(a)(17)(B).
(3) The cost-of-living adjustment in effect for a
calendar year applies to any period, not exceeding 12
months, over which Compensation is determined
("Determination Period") beginning in such calendar
year. If a Determination Period consists of fewer
than 12 months, the annual compensation limit under
paragraph (1) or (2) of this Section 1.13(b) will be
multiplied by a fraction, the numerator of which is
the number of months in the Determination Period, and
the denominator of which is 12.
(4) For Plan Years beginning on or after January 1, 1994,
any reference in this Plan to the limitation under
Code Section 401(a)(17) shall mean the OBRA '93
annual compensation limit set forth in this
provision. If Compensation for any prior
Determination Period is taken into account in
determining an Employee's benefits accruing in the
current Plan Year, the Compensation of that prior
Determination Period is subject to the OBRA '93
annual compensation limit in effect for the prior
Determination Period. For this purpose, for
Determination Periods beginning before the first day
of the first Plan Year beginning on or after January
1, 1994, the OBRA '93 annual compensation limit is
$150,000.
(5) In determining the Compensation of a Participant for
purposes of the Code Section 401(a)(17) limit on
Compensation, the rules under Code Section 414(q)(6)
will be applied except that the term "family" will
include only the Participant's spouse and any of the
Participant's lineal descendants who have not reached
age 19 before the end of the Plan Year. If, after
application of those rules, the Code Section
401(a)(17) limit has been exceeded [except for
purposes of determining the portion of Compensation
to be included in the
<PAGE> 6
"wage base" (as defined in Section 3.1(b)(i)(B) of
the Adoption Agreement), if the Employer has elected
to cause the Plan to take advantage of permitted
disparity under Section 3.1(b)(i)(B) of the Adoption
Agreement], the limitation will be prorated among
affected persons in proportion to the Compensation of
each of them as determined under this Section before
application of this limitation.
1.14 COVERED UNIT: Those Employees specified in Section 2.1 of the
Adoption Agreement.
1.15 DEDUCTIBLE EMPLOYEE CONTRIBUTIONS: A Member's contributions under
Section 3.4. No Deductible Employee Contributions will be accepted for calendar
years beginning after December 31, 1986.
1.16 DETERMINATION DATE: The date on which the Plan Administrator
determines whether the Plan is Top-Heavy, Super Top-Heavy or part of a Top-Heavy
Group. That date is the last day of the preceding Plan Year or the last day of
the first Plan Year.
1.17 DETERMINATION PERIOD: A period of five years ending on the
Determination Date.
1.18 DIRECT ROLLOVER: A payment by the Plan to the Eligible Retirement
Plan specified by the Distributee, provided that a Distributee's election of a
Direct Rollover shall be subject to the following requirements:
(a) If the Distributee elects to have only a portion of an
Eligible Rollover Distribution paid to an Eligible Retirement
Plan in a Direct Rollover, that portion must be equal to at
least $500.
(b) If the entire amount of a Distributee's Eligible Rollover
Distribution is $500 or less, the distribution may not be
divided. Instead, the entire amount must either be paid to the
Distributee or to an Eligible Retirement Plan in a Direct
Rollover.
(c) A Distributee may not elect a Direct Rollover if the
Distributee's Eligible Rollover Distributions during a year
are reasonably expected by the Plan Administrator to total
less than $200.
1.19 DISABILITY: An inability of the Member to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less than twelve months.
The permanence and degree of such impairment must be supported by medical
evidence. However, it does not include any injury or disease which:
(a) was contracted, suffered or incurred while the Member was
engaged in, or resulted from his having engaged in a criminal
enterprise;
(b) was intentionally self-inflicted;
<PAGE> 7
(c) arose out of service in the armed forces of any country;
(d) resulted from chronic or excessive use of intoxicants, drugs
or narcotics;
(e) arose as a result of or while working for an employer other
than the Employer or an Affiliate; or
(f) arose after his Severance from Service.
The Committee will determine whether a Member is Disabled on the basis
of medical advice and examination and any other facts known to it.
1.20 DISTRIBUTABLE CREDIT: The amount determined under Section 4.4
(Determination of Distributable Credit) to be distributable to a Member or his
Beneficiary after the Member's Severance from Service.
1.21 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 an Alternate Payee are
Distributees with regard to the interest of the spouse or former spouse.
1.22 EARLY RETIREMENT DATE: The date a Member satisfies the
requirements for Early Retirement specified in Section 4.3 of the Adoption
Agreement.
1.23 EFFECTIVE DATE: The date specified in Section 1.1 of the Adoption
Agreement.
1.24 ELIGIBILITY YEAR: The Year specified in Section 2.3 of the
Adoption Agreement, and applied to determine an Employee's eligibility to
participate in the Plan.
1.25 ELIGIBLE EMPLOYEE: Except as provided in Section 2.3 (Eligibility
for Re-Participation), each Employee who is a member of the Covered Unit, and
who has satisfied the eligibility conditions specified in Section 2.2(b) of the
Adoption Agreement.
1.26 ELIGIBLE RETIREMENT PLAN: An individual retirement account
described in Code Section 408(a), an individual retirement annuity described in
Code Section 408(b), an annuity plan described in Code Section 403(a), or a
qualified trust described in Code Section 401(a), 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.
1.27 ELIGIBLE ROLLOVER DISTRIBUTION: 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:
(a) any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the
<PAGE> 8
Distributee or the joint lives (or joint life expectancies) of
the Distributee and the Distributee's Beneficiary, or for a
specified period of ten years or more;
(b) any distribution to the extent such distribution is required
under Code Section 401(a)(9); and
(c) the portion of any distribution that is not includable in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities).
1.28 EMPLOYEE: Any person employed by and receiving Compensation from
the Employer or an Affiliate and any person on Approved Absence who was so
employed when his Approved Absence began.
1.29 EMPLOYEE DEFERRED CONTRIBUTION: The amount which a Member elects
to contribute to the Plan as provided in Section 3.2 in lieu of cash
compensation. That amount, when combined with the portion of the Employer
Contribution allocated to his Trust Fund Account, may not exceed the limit
imposed by Code Section 404 and, when combined with other "Annual Additions" (as
defined in Section 4.3(b)) for that Plan Year, may not exceed the limit imposed
by Code Section 415. These amounts are intended to qualify as an exclusion from
gross income under Code Section 401(k) for federal income tax purposes.
1.30 EMPLOYER: The entity adopting the Plan by execution of an Adoption
Agreement (and any successor to that entity as described in Section 14.4).
1.31 EMPLOYER CONTRIBUTION: The Employer's contribution to the Trust
Fund for a Plan Year consisting of the Non-Elective Employer Contribution, the
Qualified Non-Elective Employer Contribution, the Employer Matching
Contribution, and the Qualified Matching Contribution.
1.32 EMPLOYER MATCHING CONTRIBUTION: The Employer Contributions made
pursuant to Section 3.1(b)(ii) of the Adoption Agreement on account of Employee
Deferred Contributions or Voluntary Employee Contributions to the Plan.
1.33 EMPLOYMENT DATE: The date an Employee is credited with his first
Hour of Service following either initial employment or reemployment after a
Break-in-Service. If the Employer maintains the plan of a predecessor employer,
service with such predecessor will be treated as service for the Employer.
1.34 ENTRY DATE: The date(s) specified in Section 2.4 of the Adoption
Agreement and applied to determine when an Eligible Employee or a Salary
Deferral Employee becomes a Member.
1.35 ERISA: The Employee Retirement Income Security Act of 1974, as
amended. References to any Section of ERISA include any successor provision.
<PAGE> 9
1.36 FAMILY MEMBER: An affected Member's spouse, lineal descendants and
ascendants and their spouses, as described in Code Section 414(q)(6)(B).
1.37 414(S) COMPENSATION: The compensation measured using an underlying
definition that satisfies Code Section 414(s).
1.38 HIGHLY COMPENSATED EMPLOYEE: An Employee or a Family Member who
performed services for the Employer or an Affiliate during the "determination
year" and is in one or more of the following groups:
(a) Employees who at any time during the "determination year" or
"look-back year" were "five percent owners" of the Employer.
"Five percent owner" means any person who owns (or is
considered as owning within the meaning of Code Section 318)
more than five percent of the outstanding stock of the
Employer or stock possessing more than five percent of the
total combined voting power of all stock of the Employer or,
in the case of an unincorporated business, any person who owns
more than five percent of the capital or profits interest in
the Employer. In determining percentage ownership, employers
that otherwise would be aggregated under Code Sections 414(b),
(c), (m) and (o) will be treated as separate employers.
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $75,000,
adjusted as provided in Code Section 415(d).
(c) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $50,000,
adjusted as provided in Code Section 415(d) and were in the
Top Paid Group (as defined in Code Section 414(q)(4)) of
Employees for the Plan Year.
(d) Employees who during the "look-back year" were officers of the
Employer (as that term is defined in Regulations under Code
Section 416) and who received "415 Compensation" during the
"look-back year" from the Employer greater than 50 percent of
the limit in effect under Code Section 415(b)(1)(A) for any
such Plan Year. The number of officers will be limited to the
lesser of (i) 50 employees; or (ii) the greater of 3 employees
or 10 percent of all employees. If the Employer does not have
at least one officer whose annual "415 Compensation" is in
excess of 50 percent of the Code Section 415(b)(1)(A) limit,
the highest paid officer of the Employer will be treated as a
Highly Compensated Employee.
(e) Employees who are in the group consisting of the 100 Employees
paid the greatest "415 Compensation" during the "determination
year" and who also are described in part (b), (c) or (d) of
this Section if those paragraphs are modified to substitute
"determination year" for "look-back year".
(f) For purposes of this Section:
<PAGE> 10
(1) The "determination year" is the Plan Year for which
testing is being performed, and, subject to Section
1.7 of the Adoption Agreement, the "look-back year"
is the immediately preceding twelve-month period.
(2) The "look-back year" described in (i) above, if the
Employer elects pursuant to Section 1.7 of the
Adoption Agreement, may instead be the calendar Year
ending with or within the Plan Year for which testing
is being performed, and the "determination year" (if
applicable) is the period of time, if any, which
extends beyond the "look-back year" and ends on the
last day of the Plan Year for which testing is being
performed (the "lag period"). If the "lag period" is
less than twelve months long, the dollar threshold
amounts specified in (b), (c) and (d) above will be
prorated based upon the number of months in the "lag
period".
(3) "415 Compensation" is that compensation described in
Section 4.2(e).
(4) "Employee" includes all persons employed during the
"determination year" and the "look back year" and
former Employees who were Highly Compensated
Employees after attaining age 55.
(5) If an Employee is, during a "determination year" or
"look-back year," a Family Member of either a "five
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 that
year, then the Family Member and the "five percent
owner" or top-ten Highly Compensated Employee will be
aggregated. In that case, the Family Member and five
percent owner or top-ten Highly Compensated Employee
will be treated as a single employee receiving
compensation and plan compensation or benefits equal
to the sum of such compensation and contributions or
benefits of the Family Member and "five percent
owner" or top-ten Highly Compensated Employee.
(6) The determination of who is a Highly Compensated
Employee, including the determination of the number
and identity of the 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 Code
Section 414(q) and regulations under that Section.
1.39 HOUR OF SERVICE: An hour, determined under the Employer's or
Affiliate's customary personnel practices:
(a) which is compensable for the performance of duties. An hour
paid at a premium rate will be counted only as a single hour.
Each hour will be credited to the Year when the duties are
performed;
<PAGE> 11
(b) for which no duties are performed (whether or not the Employee
remains an Employee) due to vacation, holiday, illness,
incapacity (including Disability), layoff, jury duty, or leave
of absence, or Approved Absence to a maximum of eight hours
per day and 40 hours per week provided, however, that (except
in the case of U.S. military service) not more than 501 Hours
of Service will be credited under this subsection for any
continuous period of absence whether or not it occurs in a
single computation period. These Hours will be credited to the
Year in which the absence occurs unless the absence extends
beyond one Year. If it does, the hours will be allocated
between not more than the first two Years on a reasonable
basis consistently applied for all Employees in the same
reasonably defined job classification. However, Hours of
Service credited during an Approved Absence for
maternity/paternity purposes (Section 1.8(d)) starting during
Plan Years beginning after December 31, 1984, will be credited
to the Year in which the absence began if necessary to prevent
a Break-in-Service. To the extent not needed for that purpose,
those Hours will be credited to the following Year; or
(c) which is not credited under subsection (a) or (b) but for
which back pay is payable. These hours will not be reduced for
any interim earnings opportunities and will be credited to the
Years when the pay was lost rather than when the payment was
made.
(d) No Hours of Service will be credited for payment under a plan
maintained solely to comply with applicable workers'
compensation, unemployment compensation or disability
insurance laws, or for a payment which only reimburses an
Employee for his medical or medically-related expenses.
In applying these rules, no more than one Hour of Service will be
credited for any hour of an Employee's employment or absence from employment. To
the extent not included in this definition, the rules in Paragraphs (b) and (c)
of Department of Labor Regulation Section 2530.200b-2 (relating to the
calculation of Hours of Service when no duties are performed and to crediting
Hours of Service to computation periods) are made part of the Plan as provided
by Department of Labor Regulation Section 2530.200b-2(f).
1.40 INVESTMENT MANAGER: A fiduciary (other than those designated in
Section 11.1) appointed by the Employer to manage, acquire or dispose of any
asset of the Trust Fund who acknowledges in writing his fiduciary obligation to
the Plan and Trust and who is:
(a) an investment advisor registered under the Investment
Advisor's Act of 1940;
(b) a bank as defined in that Act; or
(c) an insurance company qualified to perform investment
management services under the laws of more than one State of
the United States.
<PAGE> 12
1.41 KEY EMPLOYEE:
(a) each Employee or former Employee (and his Beneficiary) who at
any time during the Determination Period:
(i) was an officer of the Employer or an Affiliate
receiving annual compensation greater than 50 percent
of the amounts in effect under Code Section
415(b)(l)(A) in any Plan Year during the
Determination Period;
(ii) was one of the ten Employees owning (or considered as
owning under Code Section 318) both more than 1/2
percent interest of the Employer or an Affiliate and
the largest interest of the Employer or an Affiliate
(considering the largest interest owned at any time
during the Year) but only if he had annual
compensation of more than the dollar limitation under
Code Section 415(c)(1)(A) for the calendar Year
ending coincident with or immediately after the
Determination Date;
(iii) was a "five percent owner" (as defined in Section
1.38(a)) of the Employer or an Affiliate; or
(iv) was a "one percent owner" of the Employer or an
Affiliate and had annual compensation of more than
$150,000 from the Employer and/or any Affiliate. The
term "one percent owner" means any person who would
be described under Section 1.38(a) as a "five percent
owner" if "one percent" were substituted for "five
percent" each place it appears in the definition of
"five percent owner" under Section 1.38(a).
(b) the determination of who is a Key Employee will be made in
accordance with Code Section 416(i)(1) and Regulations issued
under that Section.
(c) For purposes of this Section, "annual compensation" means the
amount used to determine compliance with Code Section 415
under Section 4.2, but including amounts contributed by the
Employer pursuant to a salary reduction agreement which are
excludable from the Employee's gross income under Code
Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b).
1.42 LEASED EMPLOYEE: Any person who is not an Employee of the Employer
or an Affiliate but who is performing services for the Employer or an Affiliate
(the "Recipient") if:
(a) those services are performed under an agreement between a
Recipient and another entity (the "Leasing Organization");
(b) the person has performed those services for the Recipient (or
the Recipient and related persons determined in accordance
with Code Section 414(n)(6)) on a substantially full-time
basis for at least one Year; and
<PAGE> 13
(c) those services are of a type historically performed in the
Recipient's business field by employees.
Contributions or benefits provided to a Leased Employee by the
Leasing Organization which are attributable to services
performed for the Recipient will be treated as provided by the
Recipient.
A Leased Employee will not be considered an Employee of the
Recipient if:
(d) Leased Employees do not constitute more than 20 percent of the
Recipient's nonhighly compensated workforce; and
(e) that Leased Employee is covered by a money purchase pension
plan providing:
(i) a nonintegrated employer contribution rate of at
least 10 percent of compensation as defined in Code
Section 415(c)(3) but including amounts which are
excluded from the person's gross income under Code
Sections 125, 402(a)(8), 402(h) or 403(b);
(ii) immediate participation; and
(iii) full and immediate vesting.
1.43 LIMITATION YEAR: The Year specified in Section 1.6 of the Adoption
Agreement, applied to determine whether the Plan complies with the benefit
limitation of Code Section 415. 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 during which the amendment is made.
1.44 MARRIED MEMBER ANNUITY: The form of benefit payment described
under Section 4.5(e) of the Adoption Agreement, if made available under the
Plan.
1.45 MEMBER: A Participant, a person with a deferred vested interest
(an inactive Participant), a Retiree with a retained interest in the Trust Fund,
or a former Participant who has been suspended under Section 2.4 (Suspension of
Participation), but not an Alternate Payee.
1.46 NET PROFITS: The Employer's earnings and profits for the current
or any preceding Accounting Year computed under generally accepted accounting
principles. Net Profits for any Accounting Year will be computed without
deduction for (a) amounts paid or payable as an Employer Contribution for any
Plan Year, or (b) the Employer's federal, state and local income taxes for any
Accounting Year.
1.47 NON-ELECTIVE EMPLOYER CONTRIBUTION: Contributions made pursuant to
Sections 3.1(a)(i) or 3.1(d) and 3.3 of the Adoption Agreement.
<PAGE> 14
1.48 NON-HIGHLY COMPENSATED EMPLOYEE: Any Employee who is neither a
Highly Compensated Employee nor a Family Member of a Highly Compensated Employee
who is either a five percent owner or in the group consisting of the ten Highly
Compensated Employers paid the greatest compensation during the year.
1.49 NON-KEY EMPLOYEE: Any Employee who is neither a Key Employee, nor
a Beneficiary of a Key Employee.
1.50 NORMAL RETIREMENT DATE: The date a Member satisfies the
requirements for normal retirement specified in Section 4.4 of the Adoption
Agreement.
1.51 OWNER-EMPLOYEE: An Employee who:
(a) owns the entire interest of the Employer or an Affiliate which
is an unincorporated trade or business;
(b) owns more than 10% of the capital or profits interest of the
Employer or an Affiliate which is a partnership; or
(c) to the extent provided in regulations under the Code, is an
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 those other trades or businesses must, when looked at as a single plan,
satisfy Code Sections 401(a) and (d) for the employees of this and all other of
those controlled trades or businesses.
If this 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 Code Sections 401(a) and (d) and which provides contributions and
benefits not less favorable than those 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 commonly controlled and that
individual controls a trade or business, the contributions on behalf of 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:
(d) own the entire interest in an unincorporated trade or
business; or
<PAGE> 15
(e) in the case of a partnership, own more than 50 percent of
either the capital interest or the profits interest in the
partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or
more Owner-Employees will be treated as owning any interest in a partnership
which is owned, directly or indirectly, by a partnership which the
Owner-Employee, or those two or more Owner-Employees, are considered to control
within the meaning of the preceding sentence.
1.52 PARTICIPANT: An Eligible Employee or Salary Deferral Employee who
has qualified for participation under Section 2.1 (Participation) and who has
not Severed from Service or who has not been suspended under Section 2.4
(Suspension of Participation).
1.53 PERIOD OF SERVICE:
(a) If the Employer has selected the Elapsed-Time alternative
under Section 2.5 of the Adoption Agreement, the period
between an Employee's Employment Date and his Severance from
Service. Since the Effective Date:
(i) Period of Service includes an Employee's Period of
Severance if he is re-employed by the Employer or an
Affiliate before a Break-in-Service;
(ii) Except for determining eligibility to participate and
subject to Sections 2.3 (Eligibility for
Re-Participation) and 4.6 (Forfeitures), Periods of
Service less than a full Year will be aggregated; and
(iii) Any portion of a Period of Service which is less than
a full Year will be stated as a fractional Year, with
each full or partial month equal to 1/12th of a Year.
(b) If the Employer has selected the Hour-Count alternative under
Section 2.5 of the Adoption Agreement, each Vesting Year or
Eligibility Year (as appropriate) since the later of the
Effective Date or the effective date of ERISA during which an
Employee is credited with at least 1,000 (or such other number
specified in Section 2.3(c)(i) of the Adoption Agreement)
Hours of Service. For years before the later of those dates,
Periods of Service will be credited under the terms of the
Plan as in effect when that service was performed.
(c) Periods of Service before the Effective Date remain credited
as they were under any plan which is a predecessor to this
Plan.
1.54 PERIOD OF SEVERANCE: The period between an Employee's Severance
from Service and the date on which he next is credited with an Hour of Service.
1.55 PERMISSIVE AGGREGATION GROUP: All qualified employee pension
benefit plans (as defined under Section 3(2) of ERISA) in the Required
Aggregation Group and any qualified employee pension benefit plan sponsored by
the Employer or an Affiliate which are not part of
<PAGE> 16
the Required Aggregation Group, but which satisfy the requirements of Code
Sections 401(a)(4) and 410 when considered together with the Required
Aggregation Group and which the Employer elects to include in the Permissive
Aggregation Group.
1.56 PLAN: This plan with any amendments.
1.57 PLAN ADMINISTRATOR: The person designated in Section 1.4 of the
Adoption Agreement, even though discretionary authority, control and
responsibility for management and administration of the Plan and Trust has been
or may be delegated to other persons or entities. The Plan Administrator is the
agent for service of legal process on the Plan.
1.58 PLAN YEAR: The period specified in Section 1.5 of the Adoption
Agreement.
1.59 QUALIFIED MATCHING CONTRIBUTION: The portion of the Employer
Contribution which is made on account of Employee Deferred Contributions or
Voluntary Employee Contributions and which is designated by the Employer as a
qualified matching contribution and thereby becomes (or pursuant to other
provisions of the Plan are) immediately nonforfeitable and nondistributable
before any of the events described in Code Section 401(k)(2)(B). Unless
otherwise specified by the Employer in connection with its making a Qualified
Matching Contribution, Qualified Matching Contributions shall be allocated among
the Qualified Matching Contribution Accounts of the Non-Highly Compensated
Participants in the same manner as the Employer Matching Contributions for the
Plan Year to which they relate.
1.60 QUALIFIED NON-ELECTIVE EMPLOYER CONTRIBUTION: The portion of the
Employer Contribution designated by the Employer as a qualified non-elective
employer contribution and which thereby become (or pursuant to other provisions
of the Plan are) immediately nonforfeitable and nondistributable before any of
the events described in Code Section 401(k)(2)(B). Unless otherwise specified by
the Employer in connection with its making a Qualified NonElective Employer
Contribution, Qualified Non-Elective Employer Contributions shall be allocated
among the Qualified Non-Elective Employer Contribution Accounts of the
Non-Highly Compensated Participants in the same manner as the Non-Elective
Employer Contributions for the Plan Year to which they relate.
1.61 QUALIFIED DOMESTIC RELATIONS ORDER: A judgment, decree or order
(including approval of a property settlement agreement) which is issued on or
after January l, 1985, pursuant to a State's domestic relations law (including a
community property law) and which meets the requirements of Code Section 414(p);
provided, however, that a judgment, decree, or order which is issued before
January 1, 1985, pursuant to a state's domestic relations law will be treated as
a Qualified Domestic Relations Order whether or not it meets the requirements of
Code Section 414(p) if payment of benefits pursuant to that judgment, decree, or
order has commenced as of January 1, 1985.
1.62 REQUIRED AGGREGATION GROUP: The Plan and any other qualified
employee pension benefit plan (as defined under Section 3(2) of ERISA) sponsored
by the Employer or an Affiliate (i) in which a Key Employee participates or
participated during the Determination Period, or (ii) which enables the Plan to
meet the requirements of Code Sections 401(a)(4) or 410. A
<PAGE> 17
terminated plan will be aggregated if it was maintained within the Determination
Period for the Plan Year in question and would, but for the fact that it
terminated, be part of the Required Aggregation Group for that Plan Year.
1.63 RESERVE ACCOUNT: The account established under Section 7.5
(Reserve Accounts) to which a Distributable Credit is transferred.
1.64 RETIREE: A Member who has Severed from Service because of
Retirement.
1.65 RETIREMENT: A Member's Severance from Service for (a) Disability
before his Early or Normal Retirement Date, or (b) any reason other than death,
after his Early or Normal Retirement Date.
1.66 ROLLOVER AMOUNT: With respect to distributions made on or before
December 31, 1992, any amount defined in (a) Code Sections 402(a)(5) or
403(a)(4) (relating to certain lump-sum distributions from an employee trust or
employee annuity described in Code Sections 401(a) or 403(a)), or (b) Code
Section 408(d)(3) (relating to certain distributions from an individual
retirement account or an individual retirement annuity), or (c) Code Section
409(b)(3)(C) (relating to certain distributions from a retirement bond). The
references to various Code sections in this section are references to those Code
Sections which were in effect prior to January 1, 1993.
1.67 SALARY DEFERRAL EMPLOYEE: Except as provided in Section 2.3
(Eligibility for Re-Participation), each Employee who is a Member of the Covered
Unit, and who has satisfied the eligibility conditions specified in Section
2.2(a) of the Adoption Agreement.
1.68 SEGREGATED AND INDIVIDUALLY DIRECTED ACCOUNT: A Member's Trust
Fund Account or Reserve Account, the investment of which is individually
directed by the Member as provided in Section 7.3 of the Trust, if such is
permitted under Section 3.4 of the Adoption Agreement.
1.69 SELF-EMPLOYED INDIVIDUAL: An Employee other than a common-law
employee who receives "earned income" as defined in Code Section 401(c) and, to
the extent provided in regulations issued by the Department of the Treasury, a
person who would be within the meaning of the preceding definition except that
the trade or business carried on has no net profits for the taxable year and an
individual who has been a self-employed individual within the meaning of the
preceding sentence for a prior taxable year. For those purposes, "earned income"
means net earnings from self-employment (as defined in Code Section 1402(a)),
but determined (i) only with respect to a trade or business in which the
taxpayer's personal services are a material income-producing factor, (ii)
without regard to Code Sections 1402(c)(4) and (5), (iii) in the case of any
individual who is treated as an employee under Code Sections 3121(d)(3)(A), (C)
or (D) without regard to Code Section 1402(c)(2), (iv) without regard to items
which are not included in gross income for purposes of Chapter 1 of the Code and
the deductions properly allocable to or chargeable against those items, (v) with
regard to the deductions allowed by Code Section 404 to the taxpayer, and (vi)
with regard to the deduction allowed to the taxpayer by Code Section 164(f) for
taxable years beginning after December 31, 1989.
<PAGE> 18
1.70 SETTLEMENT DATE: The date (plus any extension) on which the
Employer is required to file its federal income tax return for the preceding
Accounting Year.
1.71 SEVERANCE FROM SERVICE:
(a) If the Employer has elected the Elapsed-Time alternative under
Section 2.5 of the Adoption Agreement, the earliest of the
date an Employee:
(i) quits,
(ii) Retires,
(iii) is discharged,
(iv) dies, or
(v) is continuously absent (with or without pay) beyond
(A) the first anniversary the commencement of his
Approved Absence, or (B) the expiration of his
Approved Absence, whichever is longer.
(b) If the Employer has elected the Hour-Count alternative under
Section 2.5 of the Adoption Agreement, the date an Employee
ceases employment with an Employer and all Affiliates for any
reason.
An Employee will not Sever from Service while in active service with
the United States armed forces and while his re-employment rights are protected
by law.
If a Member Retires because of Disability and recovers before his Early
Retirement Date but is not rehired by the Employer or an Affiliate, he will be
treated as having Severed from Service (rather than Retired) on his Disability
Retirement Date.
1.72 SHAREHOLDER EMPLOYEE: A person employed by an electing small
business corporation (within the meaning of Code Section 1361(b)) who owns (or
is considered as owning within the meaning of Code Section 318(c)(1)), on any
day during the Accounting Year, more than 5% of the Employer's outstanding
stock. (This definition applies only if the Employer has made an effective
election under Code Section 1362(a)).
1.73 SUPER TOP-HEAVY PLAN: This Plan if it would be described under
Section 1.74 as a "Top-Heavy Plan" if "90 percent" were substituted for "60
percent" each place it appears in Section 1.74.
1.74 TOP-HEAVY PLAN: For any Plan Year beginning after December 31,
1983, this Plan is Top-Heavy if any of the following conditions exist:
(a) 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;
(b) If this Plan is part of a Required Aggregation Group of plans
but not part of a Permissive Aggregation Group, and the
Top-Heavy Ratio for the group of plans exceeds 60 percent; or
<PAGE> 19
(c) If this Plan is 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.
1.75 TOP-HEAVY PLAN YEAR: Any Plan Year during which the Plan is
Top-Heavy or Super Top-Heavy. If the Plan is or becomes Top-Heavy in any Plan
Year beginning after December 31, 1983, the Top-Heavy provisions of the Plan
will supersede any conflicting provisions in the Plan, including the Adoption
Agreement.
1.76 TOP-HEAVY RATIO:
(a) 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 Code
Section 416 and its regulations. Both the numerator and the
denominator of the Top-Heavy Ratio are increased to reflect
any contribution not actually made as of the Determination
Date, but which is required to be taken into account on that
date under Code Section 416 and its regulations.
(b) 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
under (a) 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 Members
determined in accordance with (a) above, and the Present Value
of accrued benefits under the defined benefit plan or plans
for all Members as of the Determination Date(s), all
determined in accordance with Code Section 416 and its
regulations. The accrued benefits under a defined benefit plan
in both the numerator and the denominator of the Top-Heavy
Ratio are increased by the amount of any accrued benefit
distributed during the 5-year period ending on the
Determination Date.
(c) For purposes of (a) and (b), the value of account balances and
the Present Value of accrued benefits will be determined as of
the most recent Valuation Date that
<PAGE> 20
falls within or ends with the 12-month period ending on the
Determination Date, except as provided in Code Section 416 and
its regulations for the first and second plan years of a
defined benefit plan. The account balances and accrued
benefits of a Member who is not a Key Employee but who was a
Key Employee in a prior year, or who has not been credited
with at least one Hour of Service with any Employer
maintaining the plan at any time during the 5-year period
ending on the Determination Date will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers, and transfers are taken into account
will be made in accordance with Code Section 416 and its
regulations. Deductible employee contributions (as defined
under Code Section 72(o)(5)(A)) 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 Member other than a Key Employee will
be determined under the method, if any, that uniformly applies
for accrual purposes under all defined benefit plans
maintained by the Employer, or if there is no such method, as
if the benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional rule of Code
Section 411(b)(1)(C).
(d) For purposes of this Section, Present Value will be calculated
based on the interest and mortality rates specified in Section
3.1(g) of the Adoption Agreement.
1.77 TRUST: The trust established and/or the insurance contract issued
under Section 9.1 (Trust Fund).
1.78 TRUSTEE: The person named as trustee under a trust agreement or
any insurance company holding Plan assets under Section 9.1 (Trust Fund).
1.79 TRUST FUND: The fund established under the terms of a trust
agreement and/or insurance contract to hold assets accumulated under the Plan.
1.80 TRUST FUND ACCOUNT: The account established under Section 9.2
(Trust Fund Accounts) for each Member. It will consist of the following
subaccounts as applicable: The Non-Elective Employer Contribution Account, the
Qualified Non-Elective Employer Contribution Account, the Employer Matching
Contribution Account, the Qualified Matching Contribution Account, the Employee
Deferred Contribution Account, the Rollover Account, the Voluntary Employee
Contributions Account; and, if any deductible employee contributions (which term
shall not be interpreted to include Employee Deferred Contributions) made prior
to a taxable year beginning after December 31, 1986 are held on behalf of any
Member, the Deductible Employee Contribution Account.
<PAGE> 21
1.81 VESTED AMOUNT:
(a) Whether or not the Plan is a Top-Heavy Plan, one hundred
percent (100%) of a Member's Accrued Benefit credited to his
Employee Deferred Contribution Account, Qualified Non-Elective
Employer Contribution Account, Qualified Matching Contribution
Account, Deductible Employee Contribution Account, Voluntary
Employee Contribution Account, and/or Rollover Account, plus
the percentage of that portion of a Member's Accrued Benefit
credited to his Non-Elective Employer Contribution Account
and/or Employer Matching Contribution Account, determined
under the schedule specified in Section 4.1 of the Adoption
Agreement.
(b) Regardless of the schedule specified in Section 4.1 of the
Adoption Agreement, a Member will be 100% vested in his
Accrued Benefit on the earliest of:
(i) his death, the date he Retires because of Disability,
or his Early or Normal Retirement Date, whichever
occurs first; or
(ii) the later of the date he reaches age 65, or the fifth
anniversary of the date he began to participate in
the Plan (if he began to participate within 5 Years
of his Normal Retirement Date); or
(iii) the complete discontinuance of Employer Contributions
to, or termination of, the Plan or a partial
termination of the Plan which affects the Member's
continued participation in the Plan.
(c) The Committee will apply the following rules when determining
a Member's Vested Amount:
(i) If a former Member is rehired by the Employer or an
Affiliate before he incurs a 1-Year Break-in-Service,
any Vesting Years credited to the Member before his
Severance from Service will be recredited for
purposes of computing his Vested Amount.
(ii) Effective for Plan Years beginning before December
31, 1984, if a former Member is reemployed by the
Employer or an Affiliate after he incurs a 1-Year
Break-in-Service, his prior Vesting Years will be
disregarded unless (A) his consecutive
Breaks-in-Service were fewer than his earlier Vesting
Years or (B) he had a Vested Amount in benefits
attributable to Employer Contributions and
forfeitures. In applying this rule, the Member's
Vesting Years earned before a Break-in-Service will
not include any Vesting Years previously eliminated
under this paragraph because of an earlier Break-in-
Service.
(iii) Effective for Plan Years beginning after December 31,
1984, if a former Member is reemployed by the
Employer or an Affiliate after he incurs a
<PAGE> 22
1-Year Break-in-Service, his prior Vesting Years will
be disregarded unless (A) his consecutive
Breaks-in-Service were fewer than his earlier Vesting
Years, (B) he incurred fewer than five consecutive
Breaks-in-Service, or (C) he has a Vested Amount in
benefits attributable to Employer Contributions and
Forfeitures. In applying this rule, the Member's
Vesting Years earned before a Break-in-Service will
not include any Vesting Years previously eliminated
under this paragraph c(iii) because of an earlier
Break-in-Service or by application of paragraph c(ii)
during Plan Years beginning before December 31, 1984.
(iv) If a Member is reemployed after incurring a
Forfeiture, he will be fully vested in the
non-forfeited portion of his Trust Fund Account
attributable to that prior service and not previously
distributed to him (unless it is repaid), even though
he is not fully vested in Employer Contributions and
Forfeitures allocated to his Trust Fund Account after
his reemployment.
1.82 VESTING YEAR: The Year specified in Section 4.2 of the Adoption
Agreement and applied to determine the extent to which a Member has earned a
Vested Amount.
1.83 VOLUNTARY EMPLOYEE CONTRIBUTIONS: A Member's Contributions, if
any, under Section 3.3.
1.84 YEAR: A full 365 (or, where appropriate, 366) day period.
ARTICLE II
PARTICIPATION
2.1 PARTICIPATION.
(a) Unless he elects not to participate under Section 2.5, each
Eligible Employee and each Salary Deferral Employee will
become a Member on the appropriate Entry Date specified in
Section 2.4 of the Adoption Agreement. By accepting
participation, each Eligible Employee and each Salary Deferral
Employee agrees to be bound by the terms and conditions of the
Plan and must deliver all information required by the
Committee.
(b) Each Salary Deferral Employee may begin to make Employee
Deferred Contributions and Voluntary Employee Contributions
(if allowed under Section 3.6 of the Adoption Agreement) and
be eligible to receive Employer Matching Contributions (if
Section 2.2(c)(i) of the Adoption Agreement is selected) and
Qualified Matching Contributions on his Entry Date specified
in Section 2.4(a) of the Adoption Agreement if he has filed a
timely written election authorizing the Employer to make
payroll deductions equal to the Employee Deferred
Contributions authorized by him under Section 3.2. A
Participant's written election hereunder will not be
considered timely filed unless filed with the Plan
<PAGE> 23
Administrator before the Entry Date on which the payroll
deductions are to commence. A Salary Deferral Employee who
elects to participate under this subpart (a) may revoke that
election by filing with the Plan Administrator a written
revocation to that effect. By electing to participate, each
Salary Deferral Employee agrees to be bound by the terms and
conditions of the Plan and must deliver all information
required by the Plan Administrator.
(c) Each Eligible Employee will become a Participant on his Entry
Date specified in Section 2.4(b) of the Adoption Agreement,
and will thereupon be eligible to receive an allocation of
Non-Elective Employer Contributions, Employer Matching
Contributions (if Section 2.2(c)(ii) of the Adoption Agreement
is selected) and Qualified Non-Elective Employer
Contributions. A Participant's ability to receive an
allocation of Non-Elective Employer Contributions and
Qualified Non-Elective Employer Contributions is not
contingent upon the Participant making Employee Deferred
Contributions or Voluntary Employee Contributions, if
applicable.
(d) A Participant is treated as benefiting under the Plan for any
Plan Year during which the Participant received or is deemed
to receive an allocation in accordance with Regulation
Section 1.410(b)-3(a).
2.2 CESSATION OF PARTICIPATION. Participation will end when a Member
Severs from Service.
2.3 ELIGIBILITY FOR RE-PARTICIPATION.
(a) If a former Salary Deferral or Eligible Employee Member is
rehired by the Employer before a Break-in-Service, he will
again become a Salary Deferral and Eligible Employee Member,
as appropriate, on the first date he is credited with an Hour
of Service after that reemployment if he then is a member of
the Covered Unit.
(b) Effective for Plan Years beginning before December 31, 1984,
if a former Member incurs a Break-in-Service, his prior
Eligibility Years will be disregarded unless (i) his
consecutive Breaks-in-Service were fewer than his earlier
Eligibility Years, or (ii) he had a Vested Amount in benefits
attributable to Employer Contributions and forfeitures. In
that case, he will become a Member as provided in subpart (d)
below if he then is a Member of the Covered Unit. In applying
this rule, the former Member's Eligibility Years earned before
a Break-in-Service will not include any Eligibility Years
previously eliminated under this subsection because of an
earlier Break-in-Service.
(c) Effective for Plan Years beginning after December 31, 1984, if
a former Member incurs a Break-in-Service, his prior
Eligibility Years will be disregarded unless (i) his
consecutive Breaks-in-Service were fewer than his earlier
Eligibility Years or (ii) he incurred fewer than five
consecutive Breaks-in-Service or (iii) he had a Vested Amount
in benefits attributable to Employer Contributions and
forfeitures.
<PAGE> 24
In that case, he will become a Member as provided in subpart
(d) below if he then is a Member of the Covered Unit. In
applying this rule, the former Member's Eligibility Years
earned before a Break-in-Service will not include any
Eligibility Years previously eliminated (iv) under this
subsection because of an earlier Break-in-Service or (v) by
application of subsection (b) during Plan Years beginning
before December 31, 1984.
(d) If a former Member who has incurred a Break-in-Service is
rehired under circumstances described in subpart (b) or (c),
his Eligibility Years before the Break-in-Service will not be
taken into account until he has completed an Eligibility Year
after returning to employment.
2.4 SUSPENSION OF PARTICIPATION. In the event a Participant shall
change from being an Eligible Employee to a non-eligible Employee, his
participation in the Plan shall be suspended, and such former Participant shall
continue to vest in his interest in the Plan for each Vesting Year completed
while a non-eligible Employee, until such time as his Trust Fund Account shall
be Forfeited or distributed pursuant to the terms of the Plan. Additionally, his
Trust Fund Account shall continue to share in income, gains, and losses of the
Trust Fund pursuant to Article X (Trust Fund Valuation; Statements). An Employee
shall be considered a non-eligible Employee as of any date (a) on which the
Employee is not a member of the Covered Unit, or (b) falling within a period
during which he has elected under Section 2.5 not to participate in the Plan.
2.5 ELECTION NOT TO PARTICIPATE. Any Member of the Covered Unit may
irrevocably elect not to participate in the Plan either upon the Employee's
commencement of employment with the Employer or Participating Affiliate or upon
the Employee's first becoming eligible under any employee pension benefit plan
(as defined in ERISA Section 3(2)) of the Employer or an Affiliate. An election
not to participate must be on a form approved by the Committee and must be
delivered to the Committee not later than the Entry Date for the Employee's
participation in the Plan.
ARTICLE III
CONTRIBUTIONS
3.1 EMPLOYER CONTRIBUTIONS. On or before the Settlement Date, the
Employer will make its Employer Contribution to the Trust Fund in cash or other
property acceptable to the Trustee. Any Employer Contribution made after the end
of an Accounting Year will be treated as made on the last day of the preceding
Accounting Year if (a) on or before the Settlement Date, the Employer gives the
Trustee a written statement that the Employer Contribution is made on account of
the preceding Accounting Year, or (b) the Employer claims that Employer
Contribution as a deduction on its federal income tax return for the preceding
Accounting Year.
<PAGE> 25
3.2 EMPLOYEE DEFERRED CONTRIBUTIONS.
(a) Employee Deferred Contributions will be made pursuant to a
salary deferral agreement in which the Member specifies, in
writing on a form approved by the Committee, the amount of his
Employee Deferred Contributions. No salary deferral agreement
may be made effective with regard to any date before the date
such agreement is filed with the Committee. Regardless of his
salary deferral agreement, the Committee may reduce a Member's
Employee Deferred Contributions and, subject to final rules or
regulations issued under Code Section 401(k), pay to the
Member any Employee Deferred Contributions previously made to
the Trust Fund on his behalf to the extent necessary to comply
with Section 4.2 (Limitation on Annual Addition).
(b) No Member may make Excess Employee Deferred Contributions to
the Plan, or to any other qualified plan maintained by the
Employer, during any taxable year; provided, however, that:
(i) if a Member does make Excess Employee Deferred
Contributions during a given taxable year, the Member
may submit a claim for such Excess Employee Deferred
Contributions in writing to the Committee by March 31
of that succeeding taxable year;
(ii) the Employer may submit a claim to the Plan
Administrator on behalf of any Member who made Excess
Employee Deferred Contributions for a taxable year by
March 31 of the next succeeding taxable year;
(iii) not later than the first April 15 following the close
of the taxable year for which a claim for Excess
Employee Deferred Contributions is timely received by
the Committee, the Plan will distribute to the Member
the amount claimed by or on behalf of the Member
adjusted for any income or loss up to the date of
distribution. The amount of Excess Employee Deferred
Contributions to be distributed with respect to a
Member for a taxable year shall be reduced by any
Excess Contributions previously distributed or
recharacterized with respect to the Member for the
Plan Year beginning with or within the taxable year.
The income or loss allocable to the Excess Employee
Deferred Contributions is the income or loss
allocable to the Member's Employee Deferred
Contribution Account for the taxable year, multiplied
by a fraction, the numerator of which is such
Member's Excess Employee Deferred Contributions for
the taxable year and the denominator is the Member's
Employee Deferred Contribution Account balance
without regard to any income or loss occurring during
such taxable year. Such amount will be adjusted for
any income or loss allocable to the Gap Period in
accordance with Section 4.11 of the Adoption
Agreement.
<PAGE> 26
(c) The Committee will deliver all Employee Deferred Contributions
to the Trustee as soon as possible but not later than the last
business day of the calendar month next succeeding the payroll
date on which the Employee Deferred Contributions were
deducted. Subject to Sections 4.2 (Limitation on Annual
Addition) and 4.3 (Definitions Relating to Annual Addition),
the Committee will credit a Member's Employee Deferred
Contributions to his Employee Deferred Contribution Account in
accordance with Section 4.4 (Determination of Distributable
Credit) and Article X (Trust Fund Valuation; Statements).
(d) A Member may change the amount of his Employee Deferred
Contributions effective as of the first day of each Plan Year
and as of such other dates as may be specified by the
Committee by filing an amended salary deferral agreement with
the Committee. That agreement must be filed in accordance with
the policies and procedures specified by the Committee.
Thereafter, Employee Deferred Contributions will be deducted
in accordance with the Member's amended salary deferral
agreement.
(e) A Member may completely suspend his Employee Deferred
Contributions by giving written notice to the Committee in
accordance with the policies and procedures specified by the
Committee preceding the payroll date on which the suspension
is to become effective, and he will be permitted to resume
making Employee Deferred Contributions only in accordance with
the policies and procedures specified by the Committee.
(f) An "Excess Employee Deferred Contribution" is the Member's
Employee Deferred Contributions that are includable in the
Member's gross income under Code Section 402(g) to the extent
such Member's Employee Deferred Contributions for a taxable
year exceed the dollar limitation under Code Section 402(g) in
effect at the beginning of such taxable Year.
3.3 VOLUNTARY EMPLOYEE CONTRIBUTIONS.
(a) If the Employer elects in Section 3.6 of the Adoption
Agreement to implement this Section, a Member who has not been
suspended under Section 2.4 may make Voluntary Employee
Contributions to the Plan. These contributions are subject to
Section 4.7 (Limitation on Employer Matching Contributions and
Voluntary Employee Contributions).
(b) Voluntary Employee Contributions may be paid to the Trustee
directly, or deducted from the Member's wages by the Employer
and forwarded to the Trustee. The Trustee will credit those
Voluntary Employee Contributions to the Member's Trust Fund
Account or to a Segregated and Individually Directed Account,
as determined by the Committee, on the date the Trustee
receives them. For purposes of the allocation under Article X
(Trust Fund Valuation; Statements), Voluntary Employee
Contributions not allocated to Segregated and Individually
Directed Accounts will be treated as if received on the first
valuation date after
<PAGE> 27
receipt by the Trustee. If there is a complete discontinuance
of Employer Contributions or a termination or partial
termination of the Plan or Trust during a Plan Year, Voluntary
Employee Contributions made between valuation dates will be
treated as if made as of the date of discontinuance or
termination for purposes of the allocation described in
Article X. Voluntary Employee Contributions will be stated
separately in each Trust Fund Account as the Member's
Voluntary Employee Contribution Account; any earnings and
losses allocable to those contributions also will be credited
to the Member's Voluntary Employee Contribution Account. Also,
the Trustee will separately account for Voluntary Employee
Contributions received before and after December 31, 1986.
3.4 DEDUCTIBLE EMPLOYEE CONTRIBUTIONS. Any Deductible Employee
Contributions made to the Trust Fund for calendar Years beginning before
December 31, 1986 will be stated separately in each Trust Fund Account as the
Member's Deductible Employee Contributions Account; any earnings and losses
allocable to those contributions also will be credited to the Member's
Deductible Employee Contributions Account. No Deductible Employee Contributions
will be accepted for any calendar year beginning after December 31, 1986.
3.5 ROLLOVER AMOUNTS. If permitted under Section 3.7 of the Adoption
Agreement, any Member may contribute a Rollover Amount or Eligible Rollover
Distribution, as applicable, to the Trust by notifying the Committee, in
writing, of the amount and type of property to be contributed and a
representation that the amount is a Rollover Amount or Eligible Rollover
Distribution, as applicable. For purposes of this Section, the term "Rollover"
will hereinafter be used to refer to a Rollover Amount or Eligible Rollover
Distribution as the context permits. The Trustee will credit the Rollover to the
Member's Trust Fund Account or to a Segregated and Individually Directed
Account, as determined by the Committee, on the date the Trustee receives it.
For purposes of the allocation under Article X (Trust Fund Valuation;
Statements), Rollovers not allocated to Segregated and Individually Directed
Accounts will be treated as if received on the first valuation date after
receipt by the Trustee. If there is a complete discontinuance of Employer
Contributions or a termination or partial termination of the Plan or Trust
during a Plan Year, Rollovers made between valuation dates will be treated as if
made as of the date of discontinuance or termination for purposes of the
allocation described in Article X (Trust Fund Valuation; Statements). Rollovers
will be separately stated in each Trust Fund account as the Member's Rollover
Account; any earnings and losses allocable to those contributions also will be
credited to the Member's Rollover Account.
If the Employer does not elect in Section 4.5 of the Adoption Agreement
to permit benefit distributions in the form of an annuity, this Plan may not
accept any direct transfer of assets (which is not a Direct Rollover) from any
plan which provides for the payment of benefits in the form of an annuity.
However, assets distributed from such a plan will be accepted as a Rollover if
they first have been distributed to the Member before transfer to this Plan or
if they are transferred in connection with a Direct Rollover.
If the Committee or the Member subsequently determine that an amount
deposited under this Section is not a Rollover, the Member must direct the
Committee, either to (a) immediately return the amount in full or (b) subject to
Sections 3.3 (Voluntary Employee Conditions), 4.2
<PAGE> 28
(Limitation on Annual Addition) and 4.7 (Limitation on Employer Matching
Contributions and Voluntary Employee Contributions), treat the amount as a
Voluntary Employee Contribution. If no direction is received within 90 days, the
entire amount will be returned to the Member.
ARTICLE IV
BENEFITS; LIMITATIONS
4.1 ALLOCATION. Subject to this Article, the Employer Contribution for
each Plan Year and Forfeitures arising during that Plan Year will be allocated
to each Member's Trust Fund Account in accordance with the Allocation Formula
and will not exceed any limitation contained in this Plan.
4.2 LIMITATION ON ANNUAL ADDITION.
(a) (i) If the Member does not participate in, and has
never participated in another qualified plan
maintained by the Employer, or a welfare benefit fund
as defined in Code Section 419(e) maintained by the
Employer, or an individual medical account as defined
in Code Section 415(l)(2) maintained by the Employer,
which provides an Annual Addition, the amount of
Annual Additions which may be credited to the
Member's Trust Fund 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 Member's
Trust Fund 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.
(ii) Before determining the Member's actual Compensation
for the Limitation Year, the Employer may determine
the Maximum Permissible Amount for a Member on the
basis of a reasonable estimation of the Member's
Compensation for the Limitation Year, uniformly
determined for all Members similarly situated.
(iii) As soon as 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 Member's actual Compensation for the
Limitation Year.
(iv) If pursuant to paragraph (iii) or as the result of
the allocation of Forfeitures or as the result of a
reasonable error in determining the amount of Excess
Employee Deferred Contributions (as defined in
Section 3.2(f)) that may be made with respect to any
individual under the limits of Code Section 415,
there is an Excess Amount, the excess will be
disposed of as follows:
<PAGE> 29
(A) Any Voluntary Employee Contributions, to the
extent they would reduce the Excess Amount,
will be returned to the Member. If the
Member made no Voluntary Employee
Contributions, or if the return of those
contributions does not sufficiently reduce
the Excess Amount, the Member's Employee
Deferred Contributions will be returned to
the Member to the extent they would reduce
the Excess Amount.
(B) If after the application of paragraph (A) an
Excess Amount still exists, and the Member
is covered by the Plan at the end of the
Limitation Year, the Excess Amount in the
Member's Trust Fund Account will be used to
reduce Employer Contributions (including any
allocation of Forfeitures) for that Member
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 Member
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 for all
remaining Members in the next Limitation
Year and each succeeding Limitation Year if
necessary.
(D) If a suspense account is in existence at any
time during a Limitation Year pursuant to
this paragraph, 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
Members' Trust Fund Accounts before any
Employer Contributions or any Employee
Deferred Contributions may be made to the
Plan for that Limitation Year. Excess
Amounts may not be distributed to Members or
former Members.
(b) (i) This paragraph applies if, in addition to this Plan,
the Member is covered under another qualified
regional prototype defined contribution plan
maintained by the Employer, a welfare benefit fund as
defined in Code Section 419(e) maintained by the
Employer, or an individual medical account as defined
in Code Section 415(l)(2) maintained by the Employer,
which provides an Annual Addition during any
Limitation Year. The Annual Additions which may be
credited to a Member's Trust Fund Account under this
Plan for any such Limitation Year will not exceed the
Maximum Permissible Amount reduced by the Annual
Additions credited to a Member's Trust Fund Account
under the other plans, welfare benefit funds, and
individual medical accounts for the same Limitation
Year. If the Annual Additions with respect to the
Member under other defined contribution plans,
welfare
<PAGE> 30
benefit funds, and individual medical accounts
maintained by the Employer are less than the Maximum
Permissible Amount and the Employer Contribution that
otherwise would be contributed or allocated to the
Member's Trust Fund 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 defined contribution plans,
welfare benefit funds and individual medical accounts
for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with
respect to the Member under other defined
contribution plans, welfare benefit funds, and
individual medical accounts in the aggregate are
equal to or greater than the Maximum Permissible
Amount, no amount will be contributed or allocated to
the Member's Trust Fund Account under this Plan for
the Limitation Year.
(ii) Before determining the Member's actual Compensation
for the Limitation Year, the Employer may determine
the Maximum Permissible Amount for a Member in the
manner described in paragraph (a)(ii).
(iii) As soon as 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 Member's actual Compensation for the
Limitation Year.
(iv) If, pursuant to Paragraph (b)(iii), a Member's Annual
Additions to this Plan and these other plans would
result in an Excess Amount for a Limitation Year, the
Excess Amount will be deemed to consist of the Annual
Additions last allocated, except that Annual
Additions attributable to a welfare benefit fund or
individual medical account will be deemed to have
been allocated first regardless of the actual
allocation date.
(v) If an Excess Amount was allocated to a Member 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 Member for the Limitation Year as of
that date under this Plan to (II) the total Annual
Additions allocated to the Member for the Limitation
Year as of that date under this and all other
qualified regional prototype defined contribution
plans.
(vi) Any Excess Amount attributed to this Plan will be
disposed of in the manner described in Paragraph
(a)(iv).
(c) If the Member is covered under another qualified defined
contribution plan maintained by the Employer which is not a
regional prototype plan, Annual Additions which may be
credited to the Member's Trust Fund Account under this Plan
for any Limitation Year will be limited in accordance with
Paragraphs (b)(i)
<PAGE> 31
through (b)(vi) as though the other plan were a regional
prototype plan unless the Employer provides other limitations
in Section 3.8 of the Adoption Agreement.
(d) If the Employer maintains, or at any time maintained, a
qualified defined benefit plan covering any Member in this
Plan, the sum of the Member'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 Member's Trust Fund Account under this Plan
for any Limitation Year will be limited in accordance with
Section 3.8 of the Adoption Agreement.
(e) For purposes of this Section, "compensation" means 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 includable in gross income
(including, but not limited to, commissions paid to salesmen,
compensation for services based on 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 Reg. Section
1.62-2(c)), and earned income (within the meaning of Code
Section 401(c)(2)) received from the Employer. The term also
includes income from sources outside the United States (as
defined in Code Section 911(b)). The term excludes 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 nonqualified
stock option, or when restricted stock (or property)
held by the employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
(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 Code
Section 403(b) (whether or not the contributions are
actually excludable from the gross income of the
Employee).
For Limitation Years beginning after December 31, 1991, for
purposes of applying the limitations of this article,
compensation for a Limitation Year is the compensation
actually paid or made available during that Limitation Year.
Notwithstanding the preceding sentence, compensation for a
Member in a defined
<PAGE> 32
contribution plan who is permanently and totally disabled (as
defined in Code Section 22(e)(3)) is the compensation such
Member would have received for the Limitation Year if the
Member had been paid at the rate of compensation paid
immediately before becoming permanently and totally disabled;
such imputed compensation for the disabled Member may be taken
into account only if the Member is not a Highly Compensated
Employee and contributions made on behalf of such Member are
nonforfeitable when made.
(f) If an amount is allocated to a Member's Trust Fund Account to
remedy an erroneous forfeiture or a failure to allocate
properly an amount in a prior Limitation Year, that allocation
will be considered an Annual Addition for the Limitation Year
to which the allocation relates, not for the Limitation Year
in which it is made.
4.3 DEFINITIONS RELATING TO ANNUAL ADDITION. For purposes of this
Article IV, the following definitions apply:
(a) "Affiliated Company" means any corporation or unincorporated
trade or business under common control with the Employer (as
determined under Code Sections 401(d) and 414, but
substituting "50%" for "80%" each place that it appears in
Code Section 1563(a)(l) and, effective for Plan Years
beginning after November 30, 1980, a member of an affiliated
service group which includes the Employer (as determined under
Code Section 414(m)).
(b) "Annual Addition" means the sum of:
(i) the Member's share of Employer Contributions and any
amount (including, but not limited to, the amount of
any Excess Employee Deferred Contributions made by
the Member to this Plan that are not distributed in
accordance with Section 3.2(b)) contributed by a
Member under a salary reduction agreement to a plan
described in Code Section 401(k) (sponsored by the
Employer or an Affiliated Company) for the Limitation
Year;
(ii) the Member's share of absolute forfeitures for the
Limitation Year;
(iii) amounts allocated after March 31, 1984, to an
individual medical benefit account (as defined in
Code Section 415(l)(2)) which is part of any pension
or annuity plan maintained by the Employer or an
Affiliated Company; and
(iv) if the Member is or, during any preceding Plan Year,
was a Key Employee (as defined in Section 1.41 and
determined pursuant to Code Section 419A(d)(3)), all
amounts attributable to contributions paid or accrued
in Accounting Years ending after December 31, 1985,
which are allocated to a separate account under a
welfare benefit fund (as defined in Code Section
419(e)) sponsored by the Employer or an Affiliated
Company to provide post-retirement medical benefits
to that Key Employee.
<PAGE> 33
For this purpose, any Excess Amount applied under
Sections 4.2(a)(iv) or 4.2(b)(vi) in the Limitation
Year to reduce Employer Contributions will be
considered Annual Additions for that Limitation Year.
The Annual Addition will not include payments to the Trust by
the Employer which reimburse the Trust solely for broker
commissions incurred by it.
(c) "Defined Benefit Fraction" is a fraction:
(i) the numerator of which is the Member's total
projected annual benefit under all Defined Benefit
Plans (whether or not terminated) maintained by the
Employer and all Affiliated Companies; and
(ii) the denominator of which is the lesser of:
(A) 1.25 times the dollar limit determined for
the Limitation Year under Code Sections
415(b) and (d); or
(B) 1.4 times 100% of the Member's compensation
during the three consecutive Limitation
Years that produce the highest average
compensation, including any adjustments
under Code Section 415(b).
Notwithstanding the above, if the Member 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 or an Affiliated Company which were
in existence on May 6, 1986, the denominator of this fraction
will not be less than 125 percent of the sum of the annual
benefits under such plans which the Member 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 Code Section 415 for
all Limitation Years beginning before January 1, 1987. If a
Member's benefit accrued under a Defined Benefit Plan (which
existed on July 1, 1982 and which satisfied the requirements
of Code Section 415 for all Limitation Years beginning before
January 1, 1983) exceeds the limit described in Code Section
415(b), the denominator of his Defined Benefit Fraction will
be increased to 1.25 times that benefit.
(d) "Defined Contribution Dollar Limitation" means $30,000 or if
greater, one-fourth of the defined benefit dollar limitation
set forth in Code Section 415(b)(1) as in effect for the
Limitation Year.
(e) "Defined Benefit Plan" means each plan defined in Code
Sections 414(j) and 415(k).
(f) "Defined Contribution Fraction" is a fraction:
<PAGE> 34
(i) the numerator of which is the sum of the Annual
Additions to the Member's account under all the
Defined Contribution Plans (whether or not
terminated) maintained by the Employer or an
Affiliated Company for the current and all prior
Limitation Years (including the Annual Additions
attributable to the Member's nondeductible employee
contributions to all Defined Benefit Plans, whether
or not terminated, maintained by the Employer or an
Affiliated Company, and the Annual Additions
attributable to all welfare benefit funds as defined
in Code Section 419(e) and individual medical
accounts as defined in Code Section 415(l)(2),
maintained by the Employer or an Affiliated Company);
and
(ii) 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 or an
Affiliated Company (regardless of whether a Defined
Contribution Plan was maintained by the Employer or
an Affiliated Company). The Maximum Aggregate Amount
in any Limitation Year is the lesser of 125 percent
of the dollar limitation determined under Code
Sections 415(b) and (d) in effect under Code Section
415(c)(1)(A) or 35 percent of the Member'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 or an Affiliated Company 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 Plan 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 Code 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, will not be recomputed to treat all employee contributions as annual
additions.
In computing the Defined Contribution Fraction for Limitation Years
beginning after December 31, 1982, the denominator for all Limitation Years
ending before January l, 1983 will equal the product of:
(I) the denominator of the Defined Contribution
Fraction for the Limitation Year ending in
1982; and
(II) a fraction:
(A) the numerator of which is the
lesser of 1.4 times 25% of the
Member's compensation for the
Limitation Year ending
<PAGE> 35
in 1981 or $51,875 ($41,500 for any
Limitation Year the Plan is
Top-Heavy or part of a Top-Heavy
Group if the Plan is not Super
Top-Heavy and either (1) if the
Member does not participate in a
Defined Benefit Plan sponsored by
the Employer or an Affiliated
Company, he receives an annual
allocation at least equal to 4% of
his Compensation for that Year
under the Plan or (2) if the Member
also participates in a Defined
Benefit Plan sponsored by the
Employer or an Affiliated Company,
the Employer has elected in Section
3.1(d) of the Adoption Agreement to
provide the minimum "top heavy"
benefit by providing an annual
allocation under the Plan of at
least 7-1/2% of the Member's
Compensation for that Year or has
elected to provide the minimum
defined benefit accrual (defined in
Code Section 416(c)(1) as adjusted
by Code Section
416(h)(2)(A)(ii)(I)) under the
Defined Benefit Plan); and
(B) the denominator of which is the
lesser of $41,500 or 25% of the
Member's compensation for the
Limitation Year ending in 1981.
In computing the Defined Contribution Fraction for Limitation Years
beginning before January l, 1976:
(III) the amount included in the numerator may not
exceed the amount included in the
denominator; and
(IV) the amount of a Member's employee
contributions to be included in the
numerator will be limited to the amount of
those contributions for Limitation Years
beginning before January l, 1976 in excess
of 10% of his compensation for those Years,
multiplied by a fraction, the numerator of
which is one and the denominator of which is
the number of Limitation Years beginning
before January l, 1976 during which he was
an active participant in the Plan. However,
employee contributions made on or after
October 2, 1973, will be included under this
subpart only to the extent that those
contributions were permissible under the
terms of the Plan as in effect on October 2,
1973.
(g) "Defined Contribution Plan" means each plan defined in Code
Sections 414(i) and 415(k). If a Defined Benefit Plan provides
for voluntary employee contributions, those contributions will
be treated as having been made to a separate Defined
Contribution Plan.
(h) "Excess Amount" means the excess of the Member's Annual
Additions for the Limitation Year over the Maximum Permissible
Amount.
<PAGE> 36
(i) "Highest Average Compensation" means the average compensation
from the Employer for the three consecutive Limitation Years
that produces the highest average.
(j) "Maximum Permissible Amount" means the maximum Annual Addition
that may be contributed or allocated to a Member's account
under the Plan for any Limitation Year and will not exceed the
lesser of:
(i) the Defined Contribution Dollar Limitation, or
(ii) 25 percent of the Member's compensation for the
Limitation Year.
The compensation limitation referred to in (ii) will not apply to any
contribution for medical benefits (within the meaning of Code Sections 401(h) or
419A(f)(2)) which is otherwise treated as an Annual Addition under Code
Sections 415(l)(1) or 419A(d)(2).
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
(k) "Projected Annual Benefit" means 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 Member would be entitled under the terms of the plan
assuming:
(i) the Member will continue employment until normal
retirement age under the plan (or current age, if
later), and
(ii) the Member'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.
(l) "Regional prototype plan" means a plan the form of which is
the subject of a favorable notification letter from the
Internal Revenue Service.
4.4 DETERMINATION OF DISTRIBUTABLE CREDIT. A Member's Distributable
Credit equals his Accrued Benefit (excluding the value of any death benefits
provided under contracts insuring his life) as most recently determined under
Article X (Trust Fund Valuation; Statements) and adjusted as follows:
(a) If he Severs from Service for reasons other than death, his
Accrued Benefit will be increased by the cash value of any
contracts insuring his life, determined as of
<PAGE> 37
his termination date under subsection 9.5(h) but reduced by
any amounts deducted under subsection (e) below.
(b) If he Severs from Service for reasons other than death or
Disability, and before his Normal or Early Retirement Date,
his Accrued Benefit (determined under subsection (a) above)
will be limited to his Vested Amount.
(c) If he Severs from Service during a Plan Year, his Accrued
Benefit (determined under subsection (a) above) will be
increased by his Employee Deferred Contributions and Voluntary
Employee Contributions made after the prior Valuation Date and
by his proportionate share of the Employer Contribution and
absolute forfeitures for that Plan Year to the extent provided
under Section 3.1 of the Adoption Agreement.
(d) If he Severs from Service because of death, his Accrued
Benefit (determined under subsection (a) above) will be
increased by the proceeds of any life insurance contracts held
on his behalf under Section 9.5.
(e) In all cases, the following amounts will be subtracted from a
Member's Accrued Benefit:
(i) amounts he has withdrawn under Section 8.3 since his
Accrued Benefit was most recently determined;
(ii) insurance premiums paid on his behalf as provided in
Section 9.5 since his Accrued Benefit was most
recently determined; and
(iii) the aggregate unpaid principal balance of any loan
made under Article VIII, together with any
outstanding but unpaid interest.
4.5 FORFEITURES.
(a) If a Member Severs from Service when he is less than 100%
vested and if no amount of his Accrued Benefit derived from
Employer Contributions and Forfeitures was distributed to him,
the nonvested portion of his Accrued Benefit will not be
absolutely forfeited until the time his prior service may be
disregarded under the "rule of parity" set forth in Section
1.81(c) (Vested Amount). If he returns to the employ of the
Employer or an Affiliate before that time, he will not
absolutely forfeit the nonvested portion of his Accrued
Benefit.
(b) If a Member Severs from Service when he is less than 100%
vested and if he receives a distribution of any part of his
Accrued Benefit derived from Employer Contributions and
Forfeitures, he will conditionally forfeit the nonvested
portion of his Accrued Benefit derived from Employer
Contributions and Forfeitures (the "Forfeitable Amount"). The
Forfeitable Amount will be forfeited or restored, and benefits
paid or set aside under Article VII, subject to the following
rules:
<PAGE> 38
(i) If he received a full distribution of his Accrued
Benefit, he will forfeit his Forfeitable Amount as of
the date of distribution.
(ii) If he received a partial distribution of his Accrued
Benefit, he will forfeit, as of the date of
distribution, his Forfeitable Amount multiplied by
the amount of the partial distribution and divided by
his Vested Amount immediately before the
distribution.
(iii) If he Severed from Service in Plan Years beginning
before December 31, 1984 and returns to the employ of
the Employer or an Affiliate before a
Break-in-Service, he may repay to the Trust Fund the
amount distributed before the end of the Plan Year in
which he would have had a Break-in-Service, in which
case his Forfeitable Amount will be restored and his
Accrued Benefit will be recomputed accordingly.
(iv) If he Severs from Service in Plan Years beginning
after December 31, 1984, received a distribution of
any part of his Accrued Benefit and returns to the
employ of the Employer or an Affiliate before five
consecutive Breaks-in-Service, he may repay to the
Trust Fund the amount distributed before the earlier
of (A) five Years after the first date on which he
first performs an Hour of Service after his
reemployment or (B) the close of the first period of
five consecutive Breaks-in-Service beginning after
the distribution. If that repayment is made, his
Forfeitable Amount will be restored and his Accrued
Benefit will be recomputed accordingly.
(v) If he had no Vested Amount at the time he Severed
from Service, he will be deemed to have received a
full distribution of his Accrued Benefit at the time
he Severed from Service. If he returns to the employ
of the Employer or an Affiliate before a
Break-in-Service (five consecutive Breaks-in-Service
if he Severed from Service in a Plan Year beginning
after December 31, 1984), his Forfeitable Amount will
be restored and his Accrued Benefit will be
recomputed accordingly.
(vi) Forfeitures arising in any Plan Year will be used
first to restore any Forfeitable Amount required to
be recredited under this Section. If those amounts
are insufficient, Trust Fund earnings will be used
next, unless the Employer designates otherwise upon
making a special Employer Contribution for this
purpose. If those earnings which are to be used are
insufficient, a special Employer Contribution will be
made for this purpose.
(vii) The balance, if any, of the Forfeitures which arise
during a Plan Year will be applied under the Plan in
the manner specified in Section 3.1(c) of the
Adoption Agreement.
4.6 EFFECT OF SOCIAL SECURITY INCREASES. No benefit under this Plan
will be decreased because of any increase in benefits payable under Title II of
the Social Security Act or any
<PAGE> 39
increase in the wage base under that Title occurring after a Member's Severance
from Service. If a Member is reemployed, this rule will be applied separately to
any benefit earned after his reemployment.
4.7 LIMITATION ON EMPLOYER MATCHING CONTRIBUTIONS AND VOLUNTARY
EMPLOYEE CONTRIBUTIONS.
(a) For any Plan Year beginning after December 31, 1986, Employer
Matching Contributions and Voluntary Employee Contributions
must satisfy the following requirements:
<PAGE> 40
<TABLE>
<CAPTION>
A B
- -
ACTUAL CONTRIBUTION PERCENTAGE OF NON- MAXIMUM ACTUAL CONTRIBUTION
- -------------------------------------- ---------------------------
HIGHLY COMPENSATED ELIGIBLE EMPLOYEES PERCENTAGE OF HIGHLY-COMPENSATED
- ------------------------------------- --------------------------------
ELIGIBLE EMPLOYEES
------------------
<S> <C>
More than 0% but not greater than 2% 2 times the Actual Contribution Percentage
of Non-Highly Compensated Eligible
Employees
More than 2% but not greater than 8% The Actual Contribution Percentage of Non-
Highly Compensated Eligible Employees +
2%
More than 8% 1.25 times the Actual Contribution
Percentage of Non-Highly Compensated
Eligible Employees
</TABLE>
(b) For purposes of this Section, "Actual Contribution Percentage"
is determined as follows:
(i) calculate the Contribution Amounts -- The
"Contribution Amount" of a Participant is the sum of
the Voluntary Employee Contributions, Employer
Matching Contributions, and Qualified Matching
Contributions (to the extent not taken into account
in determining the Actual Deferral Percentages under
Section 4.8) made on behalf of such Participant for
the Plan Year; provided that the Employer Matching
Contributions shall include forfeited Excess
Aggregate Contributions allocated to the
Participant's Trust Fund Account, which amounts shall
be taken into account in the Plan Year during which
such forfeitures are allocated;
(ii) calculate the Contribution Percentages -- divide the
Participant's Contribution Amount by his 414(s)
Compensation for that Plan Year; provided that this
calculation shall include only that 414(s)
Compensation received by the Participant for the
period the Participant is a Participant;
(iii) separately combine the Contribution Percentages
calculated under (ii) for Highly Compensated
Employees and Non-Highly Compensated Employees; and
(iv) divide the figure obtained under (iii) for each group
by the number of Participants in each group.
<PAGE> 41
Each year, at the Employer's option (subject, however, to
Section 4.7(c) and to such other requirements as may be
prescribed by the Secretary of the Treasury), the numerator of
the Participants' Contribution Percentages for any Plan Year
also will include such Employee Deferred Contributions to the
extent needed to satisfy the test under Section 4.7(a), (but
only so long as the test under Section 4.8(a) is met before
the Employee Deferred Contributions are used in the numerator
of the Participants' Contribution Percentages and continues to
be met following the exclusion of those Employee Deferred
Contributions in calculating the Actual Employee Deferred
Contribution Percentage under Section 4.8), any Qualified
Non-Elective Employer Contributions and any other non-elective
contributions made on the Participants' behalf under the Plan
or any other Defined Contribution Plan sponsored by the
Employer to the extent (1) such other includable contributions
are nonforfeitable when they are contributed to the plan, and
(2) at the time they are contributed to the plan, distribution
of those contributions is allowed no earlier than the
distribution of a Member's Employee Deferred Contributions
under this Plan, and (3) those contributions are made no later
than last day of the twelve month period immediately following
the Plan Year to which those contributions relate, and (4)
only to the extent those contributions are not used in the
calculation of the Actual Employee Deferred Contribution
Percentage under Section 4.8. For purposes of the preceding
sentence, the Employer may determine from year to year which
contributions to aggregate into the numerator of the
Participants' Contribution Percentages. Those contributions so
aggregated shall be considered "Contribution Percentage
Amounts" for the purposes of this Section 4.7.
(c) The following special rules will apply to this Section:
(i) For purposes of this section, the Contribution
Percentage for any Member who is a Highly Compensated
Employee and who is eligible to have Contribution
Percentage Amounts allocated to his or her account
under two or more plans described in Code Section
401(a), or arrangements described in Code Section
401(k) that are maintained by the Employer, will 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 will be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated
under regulations under Code Section 401(m).
(ii) In the event that this Plan satisfies the
requirements of Code Sections 401(m), 401(a)(4) or
410(b) 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 will 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,
<PAGE> 42
plans may be aggregated in order to satisfy Code
Section 401(m) only if they have the same Plan Year.
(iii) For purposes of determining the Contribution
Percentage of a Member who is a five-percent owner or
one of the ten most highly-paid Highly Compensated
Employees, the Contribution Percentage Amounts and
414(s) Compensation of such Member will include the
Contribution Percentage Amounts and 414(s)
Compensation for the Plan Year of Family Members (as
defined in Code Section 414(q)(6)). Family Members,
with respect to Highly Compensated Employees, will be
disregarded as separate employees in determining the
Contribution Percentage both for Members who are Non-
Highly Compensated Employees and for Members who are
Highly Compensated Employees.
(iv) For purposes of determining the Actual Contribution
Percentage, Employer Matching Contributions,
Qualified Matching Contributions and Qualified
Non-Elective Employer 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.
(v) The Employer will maintain records sufficient to
demonstrate satisfaction of Section 4.7(a) and the
amount of any Employee Deferred Contributions,
Qualified Non-Elective Employer Contributions,
Qualified Matching Contributions and any other
non-elective contributions used in satisfaction of
such test.
(vi) The determination and treatment of the Contribution
Percentage of any Member shall satisfy such other
requirements as may be prescribed by the Secretary of
the Treasury.
(vii) For purposes of Section 4.7, an Employee shall be
considered a Participant once he has become eligible
to make Employee Deferred Contributions or Voluntary
Employee Contributions (if applicable) pursuant to
Section 2.1(b) or 2.3 whether or not he actually
elects to do so.
(d) (i) If one or more Highly Compensated Employees
participate in both a cash or deferred arrangement
under Code Section 401(k) (a "CODA") and a plan that
is subject to the Actual Contribution Percentage test
set forth in Code Section 401(m) and that is
maintained by the Employer, and if the sum of the
Actual Contribution Percentage and the Actual
Employee Deferred Contribution Percentage of those
Highly Compensated Employees who are included in the
calculation of either or both of such percentages
exceeds the Aggregate Limit, then the Actual
Contribution Percentage Amount of those Highly
Compensated Employees who also participate in a CODA
will be reduced (beginning with the Highly
Compensated Employee whose Actual Contribution
Percentage is highest) so that the Aggregate Limit is
<PAGE> 43
not exceeded. The amount by which each Highly
Compensated Employee's Actual Contribution Percentage
Amount is reduced will be treated as an Excess
Aggregate Contribution. The Actual Employee Deferred
Contribution Percentages and the Actual Contribution
Percentages of the Highly Compensated Employees will
be determined for the purposes of this paragraph (d)
after any corrections required to meet the
requirements of Sections 4.7(a) and 4.8(a). There is
no Excess Aggregate Contribution under this paragraph
(d) if either the Actual Employee Deferred
Contribution Percentage or the Actual Contribution
Percentage of the Highly Compensated Employees does
not exceed 1.25 times the Actual Employee Deferred
Contribution Percentage or the Actual Contribution
Percentage, respectively, of the Non-Highly
Compensated Employees.
(ii) For purposes of this paragraph (d), "Aggregate Limit"
means the sum of (1) 125% of the greater of the
Actual Employee Deferred Contribution Percentage of
the Non-Highly Compensated Employees for the Plan
Year or the Actual Contribution Percentage of the
Non-Highly Compensated Employees for the Plan Year
beginning within the Plan Year of the CODA, and (2)
the lesser of 200% of, or two plus, the lesser of
such Actual Employee Deferred Contribution Percentage
or such Actual Contribution Percentage; provided if a
larger Aggregate Limit would result, "lesser" is
substituted for "greater" in subparagraph (d)(ii)(1)
above, and "greater" is substituted for "lesser"
after "or two plus, the" in subparagraph (d)(ii)(2),
above.
(e) (i) Notwithstanding any other provision of this Plan,
Excess Aggregate Contributions, plus any income and
minus any loss allocable thereto (as determined under
paragraph (e)(ii), below), shall be distributed (to
the extent attributable to unmatched Voluntary
Employee Contributions and Employee Deferred
Contributions included therein), and the balance, if
any, shall be treated as a Forfeiture, if
forfeitable, or if not forfeitable, shall be
distributed. Distributions pursuant to the preceding
sentence shall be made no later than the last day of
each Plan Year to the Members to whose Trust Fund
Accounts such Excess Aggregate Contributions were
allocated for the preceding Plan Year. Excess
Aggregate Contributions shall be allocated to Members
who are subject to the family member aggregation
rules of Code Section 414(q)(6) in the manner
prescribed by the regulations. Excess Aggregate
Contributions shall be treated as Annual Additions
under the Plan.
(ii) Excess Aggregate Contributions shall be adjusted for
any income or loss allocable thereto. The income or
loss allocable to Excess Aggregate Contributions is
the income or loss allocable to the Member's
Voluntary Employee Contribution Account, Employer
Matching Contribution Account, and, if applicable,
Qualified Non-Elective Employer Contribution Account
and Employee Deferred Contribution Account, for the
Plan Year
<PAGE> 44
multiplied by a fraction, the numerator of which is
such Member's Excess Aggregate Contributions for the
Plan Year and the denominator is the Member's Trust
Fund Account balance(s) attributable to Contribution
Percentage Amounts without regard to any income or
loss occurring during such Plan Year. Such amount
will be adjusted for any income or loss allocable to
the Gap Period in accordance with Section 4.11 of the
Adoption Agreement.
(iii) "Excess Aggregate Contributions" means with respect
to any Plan Year, the excess of:
(A) The Aggregate Contribution Percentage
Amounts taken into account under Section
4.7(b) 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 for Highly Compensated Employees
under Section 4.7(a) (including any
reduction required under Section 4.7(d))
(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 Employee Deferred Contributions
pursuant to Section 3.2(b) and then determining
Excess Contributions pursuant to Sections 4.8(d) and
(e).
4.8 LIMITATION ON EMPLOYEE DEFERRED CONTRIBUTIONS.
(a) For any Plan Year, Employee Deferred Contributions must
satisfy the following requirements:
<PAGE> 45
<TABLE>
<CAPTION>
A B
- -
ACTUAL EMPLOYEE DEFERRED CONTRIBUTION MAXIMUM ACTUAL EMPLOYEE DEFERRED
- ------------------------------------- --------------------------------
PERCENTAGE OF NON-HIGHLY COMPENSATED CONTRIBUTION PERCENTAGE OF HIGHLY
- ------------------------------------ ---------------------------------
ELIGIBLE EMPLOYEES COMPENSATED ELIGIBLE EMPLOYEES
------------------ ------------------------------
<S> <C>
More than 0% but not greater than 2% 2 times the Actual Employee Deferred
Contribution Percentage of Non-Highly
Compensated Eligible Employees
More than 2% but not greater than 8% The Actual Employee Deferred Contribution
Percentage of Non-Highly Compensated
Eligible Employees + 2%
More than 8% 1.25 times the Actual Employee Deferred
Contribution Percentage of Non-Highly
Compensated Eligible Employees
</TABLE>
(b) For purposes of this Section, "Actual Employee Deferred
Contribution Percentage" is determined as follows:
(i) divide the Employee Deferred Contributions made on
behalf of each Participant for the Plan Year by his
414(s) Compensation for that Plan Year; provided that
such Employee Deferred Contributions shall include
Excess Employee Deferred Contributions of Highly
Compensated Employees, but shall exclude Employee
Deferred Contributions that are taken into account in
the test under Section 4.7(a) (provided the test
under Section 4.8(a) is satisfied both with and
without the exclusion of those Employee Deferred
Contributions); and provided further that this
calculation shall include only that 414(s)
Compensation received by the Participant for the
period the Participant is a Participant;
(ii) separately combine the ratios calculated under (i)
for Highly Compensated and Non-Highly Compensated
Employees; and
(iii) divide the figures obtained under (ii) by the number
of Eligible Employees in each group.
Each Plan Year, to the extent designated by the Employer at
the Employer's option (subject, however, to Section 4.8(c)),
the numerator of the Actual Employee Deferred Contribution
Percentage for any Plan Year also will include any Qualified
Non-Elective Employer Contributions made on the Eligible
Employee's behalf under the Plan, any Qualified Matching
Contributions, and employer nonelective contributions under
any other Defined Contribution Plan sponsored by the Employer,
to the extent that all of the following conditions apply to
any contributions included in the said numerator:
<PAGE> 46
(1) such contributions are nonforfeitable when they are
contributed to the plan;
(2) at the time they are contributed to the plan,
distribution of those contributions is allowed no
earlier than the distribution of a Member's Employee
Deferred Contributions under this Plan; and
(3) those contributions are made no later than the last
day of the twelve month period immediately following
the Plan Year to which those contributions relate.
For purposes of the preceding sentence, the Employer may
determine from year to year which contributions to aggregate.
That determination may vary from year to year.
(c) The following special rules will apply to this Section:
(i) The Actual Employee Deferred Contribution Percentage
for any Member who is a Highly Compensated Employee
for the Plan Year and who is eligible have Employee
Deferred Contributions (and Qualified Non- Elective
Employer Contributions or Qualified Matching
Contributions or both, if included in the numerator
of the Actual Employee Deferred Contribution
Percentage under Section 4.8(b)) allocated to his or
her accounts under two or more arrangements that
qualify under Code Sections 401(a) or 401(k)
maintained by the Employer, shall be determined as if
such Employee Deferred Contributions (and, if
applicable, such Qualified Non-Elective Employer
Contributions or Qualified Matching Contributions, or
both) were made under a single arrangement. If two or
more of such plans have different plan years for the
purposes of their respective cash or deferred
arrangements, 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 mandatorily disaggregated under regulations under
Code Section 401(k).
(ii) In the event that this Plan satisfies the
requirements of Code Sections 401(k), 401(a)(4) or
410(b) 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 Actual Employee Deferred
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 Code Section 401(k) only if they
have the same Plan Year.
(iii) For purposes of determining the Actual Employee
Deferred Contribution Percentage of a Member who is a
five-percent owner or one of the ten most highly-paid
Highly Compensated Employees, the Employee Deferred
Contributions (and, if applicable, Qualified
Non-Elective Employer
<PAGE> 47
Contributions or Qualified Matching Contributions,
or both) and 414(s) Compensation of such Member
shall include the Employee Deferred Contribution
(and, if applicable, Qualified Non-Elective Employer
Contributions or Qualified Matching Contributions,
or both) and 414(s) Compensation for the Plan Year
of Family Members (as defined in Code Section
414(q)(6)). Family Members, with respect to Highly
Compensated Employees, shall be disregarded as
separate Employees in determining the Actual
Employee Deferred Contribution Percentage both for
Members who are Non-Highly Compensated Employees and
for Members who are Highly Compensated Employees.
(iv) For purposes of determining the Actual Employee
Deferred Contribution Percentage, Qualified
Non-Elective Employer Contributions and Qualified
Matching 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.
(v) The Employer shall maintain records sufficient to
demonstrate satisfaction of Section 4.8(a) and the
amount of Qualified Non-Elective Employer
Contributions or Qualified Matching Contributions, or
both, used in such test.
(vi) The determination and treatment of the Actual
Employee Deferred Contribution Percentage of any
Member shall satisfy such other requirements as may
be prescribed by the Secretary of the Treasury.
(vii) For purposes of Section 4.8, an Employee shall be
considered a Participant once he has become eligible
to make Employee Deferred Contributions pursuant to
Sections 2.1(b) or 2.3 whether or not he actually
elects to do so.
(d) (i) Notwithstanding any other provision of this Plan,
Excess Contributions, plus any income and minus any
loss allocable thereto (as determined under paragraph
(d)(iii), below), will be distributed no later than
the last day of each Plan Year to Members to whose
Trust Fund Accounts those Excess Contributions were
allocated for the preceding Plan Year. Such
distributions will be made to Highly Compensated
Employees on the basis of the respective portions of
the Excess Contributions attributable to each of such
Employees. Excess Contributions will be allocated to
Members who are subject to the Family Member
aggregation rules of Code Section 414(q)(6) in the
manner prescribed by the regulations.
(ii) Excess Contributions will be treated as Annual
Additions under the Plan.
(iii) Excess Contributions will be adjusted for any income
or loss allocable thereto. The income or loss
allocable to Excess Contributions is the
<PAGE> 48
income or loss allocable to the Member's Employee
Deferred Contribution Account (and, if applicable,
the Qualified Non-Elective Employer Contribution
Account or Qualified Matching Contribution Account,
or both) for the Plan Year, multiplied by a fraction,
the numerator of which is such Member's Excess
Contributions for the Plan Year and the denominator
is the Member's account balance attributable to
Employee Deferred Contributions (and Qualified
Non-Elective Contributions or Qualified Matching
Contributions, or both, if any of such contributions
are included in the test described in Section 4.8(a))
without regard to any income or loss occurring during
such Plan Year. Such amount will be adjusted for any
income or loss allocable to the Gap Period in
accordance with Section 4.11 of the Adoption
Agreement.
(iv) Excess Contributions will be distributed from the
Member's Employee Deferred Contribution Account and
Qualified Matching Contribution Account (if
applicable), in proportion to the Member's Employee
Deferred Contribution and Qualified Matching
Contributions (to the extent included in the test
described in Section 4.8(a)) for the Plan Year. The
amount of Excess Contributions to be distributed with
respect to a Member for a Plan Year shall be reduced
by Excess Employee Deferred Contributions previously
distributed to the Member for his taxable year ending
with or within the Plan Year. Excess Contributions
will be distributed from the Member's Qualified
Non-Elective Employer Contribution Account only to
the extent that such Excess Contributions exceed the
balance in the Member's Employee Deferred
Contribution Account and Qualified Matching
Contribution Account.
(v) Any Employer Matching Contributions or Qualified
Matching Contributions that relate to the Excess
Contributions being distributed will be forfeited.
(e) "Excess Contributions" means, with respect to any Plan Year,
the excess of:
(i) The aggregate amount of Employee Deferred
Contributions and Employer Contributions actually
taken into account in computing the Actual Employee
Deferred Contribution percentage of Highly
Compensated Employees for such Plan Year, over
(ii) The maximum amount of such contributions permitted by
the test described in Section 4.8(a) (determined by
reducing contributions made on behalf of Highly
Compensated Employees in order of their Actual
Employee Deferred Contribution Percentages, beginning
with the highest of such percentages).
(f) (i) If Voluntary Employee Contributions are allowed under
Section 3.6 of the Adoption Agreement, a Member may
treat his or her Excess Contributions
<PAGE> 49
as an amount distributed to the Member and then
contributed by the Member to the Plan.
Recharacterized amounts will remain nonforfeitable
and subject to the same distribution requirements as
Employee Deferred Contributions. The amount of Excess
Contributions to be recharacterized with respect to a
Member for a Plan Year shall be reduced by Excess
Employee Deferred Contributions previously
distributed to the Member for his taxable year ending
with or within the Plan Year. Amounts may not be
recharacterized by a Highly Compensated Employee to
the extent that such amount in combination with other
Voluntary Employee Contributions made by that
employee would exceed any stated limit under the Plan
on Voluntary Employee Contributions.
(ii) 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 Member for the Member's tax year(s) in which the
earliest dates any Employee Deferred Contributions
made on behalf of the Member during the Plan Year
would have been received by the Member had the Member
originally elected to receive the amounts in cash.
(iii) Any Employer Matching Contributions or Qualified
Employer Matching Contributions that relate to the
Excess Contributions being recharacterized, but that
would not relate to the amounts so recharacterized if
they had been contributed as Voluntary Employee
Contributions, will be forfeited.
ARTICLE V
ELIGIBILITY FOR BENEFITS
5.1 NORMAL OR EARLY RETIREMENT OR DEATH. Subject to Section 5.4
(Payments to Alternate Payee) and Article VII (Distribution of Benefits) if the
Committee determines that a Member has attained his Early or Normal Retirement
Date, the Member may elect to receive his Distributable Credit at the time
determined by the Committee under Article VII. If a Member dies, his Beneficiary
will receive the Member's Distributable Credit as provided in Article VII. If a
Participant who has elected a form of benefit other than a Married Member
Annuity dies before payment of the Distributable Credit has begun, his surviving
spouse, if any, will receive the value of the deceased Participant's account
balance unless the Participant, with his spouse's consent, waived that benefit
as provided in Section 6.8. If a Married Member Annuity was elected, his
surviving spouse will receive a benefit payable for life unless the Member has
waived that form of benefit within the 90 days preceding the date his benefits
were to begin as provided in Section 6.8. However, the surviving spouse may
select another form of benefit from among those specified in Section 4.5 of the
Adoption Agreement. As a condition of eligibility to receive benefits, the
Member or Beneficiary must complete and file any form required by the Committee.
<PAGE> 50
5.2 DISABILITY OR DEFERRED VESTED RETIREMENT. Subject to Section 5.4
(Payments to Alternate Payee) and Article VII (Distribution of Benefits), if the
Committee determines that a Member Severed from Service before his Early or
Normal Retirement Date for reasons other than death or if he Retired because of
Disability, he will receive his Distributable Credit at the time determined by
the Committee under Article VII. As a condition of eligibility to receive
benefits, the Member must complete and file any form required by the Committee.
5.3 CASH-OUTS. Subject to Section 5.4 (Payments to Alternate Payee) and
Article VII (Distribution of Benefits), if a Member Severs from Service or dies,
the Committee may authorize a distribution as provided below:
(a) If the Member's Vested Amount attributable to Employer
Contributions, Voluntary Employee Contributions and
forfeitures is $3,500 or less, the Committee will direct the
Trustee to distribute a lump sum payment equal to his
Distributable Credit. That distribution will be a full
discharge of the Plan's liability to the Member and his
Beneficiary.
(b) If the Employer elects this option under Section 4.8 of the
Adoption Agreement, a Member (or his Beneficiary, if the
Member is deceased) whose Vested Amount attributable to
Employer Contributions, Voluntary Employee Contributions and
forfeitures exceeds (or at the time of any prior distribution
exceeded) $3,500 may file a written request that the Plan
distribute that part of the Member's Vested Amount which the
Member or his Beneficiary elects to receive. That distribution
will be made subject to any objective criteria specified by
the Employer in Section 4.6 of the Adoption Agreement and, if
the Member is married, only if his spouse consents to that
distribution in the manner specified in Section 6.8. If the
Member or his Beneficiary elects a partial distribution, the
amount will be subtracted first from amounts attributable to
the Member's Voluntary Employee Contributions, if any. If a
distribution is made at a time when a Participant has a Vested
Amount of less than 100 percent of the Accrued Benefit derived
from Employer Contributions and the Participant may increase
the nonforfeitable percentage in the Accrued Benefit, at any
relevant time the Participant's nonforfeitable portion of the
separate account will be equal to an amount ("X") determined
by the formula:
X = P(AB + D) - D
For purposes of applying the formula: P is the nonforfeitable
percentage at the relevant time, AB is the Accrued Benefit at
the relevant time and D is the amount of the distribution.
5.4 PAYMENTS TO ALTERNATE PAYEE. A Member's benefits will be adjusted
to effect any Qualified Domestic Relations Order. If the Committee is unable
immediately to determine whether an order is a Qualified Domestic Relations
Order, it will segregate any amounts which may be payable to an Alternate Payee
as if the order had been a Qualified Domestic Relations Order. If, within 18
months of receipt of the claim, the Committee determines that the order is a
Qualified Domestic Relations Order, it will pay all amounts held in that
separate account
<PAGE> 51
(including allocable earnings, if any) as provided in that order. However, if,
within that period, the Committee determines that the order is not a Qualified
Domestic Relations Order or if no determination may be made within that period,
all amounts held under that account (including allocable earnings, if any) will
be re-credited to the Member's Trust Fund Account or Reserve Account. Any
further claim filed under this Section by an Alternate Payee will apply
prospectively only.
ARTICLE VI
FORM OF BENEFIT
6.1 FORMS OF BENEFITS. Subject to any limitations under this Article
VI, benefits will be paid in the form elected by the Member or Beneficiary from
those forms specified in Section 4.5 of the Adoption Agreement. If the form of
benefit selected by the Member or Beneficiary is other than a lump sum, the
Committee may direct the Trustee to purchase a non-transferable, conventional,
fixed or variable annuity contract providing payments in accordance with the
form of benefit elected by the Member or Beneficiary. Such annuity contract may
be of such type and from such insurance company approved by the Committee.
6.2 RESTRICTIONS ON FORMS OF BENEFIT. The following limitations
(including, if inconsistent, any other rules contained in Code Section 401(a)(9)
or Regulations issued under that Section), apply if benefits are paid in any
form other than the Married Member Annuity or an annuity for the life of the
Member only:
(a) Unless a Member's spouse is his Beneficiary, the present value
of payments to be made to the Member must be more than 50% of
the present value of all payments to be made to him and his
Beneficiary, determined as of the date benefits begin.
Distributions must begin under the rules of Section 7.3, and
the premiums of any insurance contracts held in a Member's
account must meet the requirement of Section 9.5(e), (f) or
(g), whichever applies.
(b) No Member may elect any option without revoking his election
of any other option (except the Social Security Adjustment
Option if selected by the Employer under Section 4.5 of the
Adoption Agreement). Moreover, if a Member is eligible for the
Married Member Annuity, he may not elect any option (except a
Social Security Adjustment Option if selected by the Employer
under Section 4.5 of the Adoption Agreement) unless he has
rejected the Married Member Annuity and that rejection has not
been revoked.
(c) Distributions may be made in cash or other property (or a
combination of both). The methods of payment under any
insurance contract distributed under the Plan and Trust will
be limited to those set forth in this Article VI.
(d) Subject to this Article VI, the Committee may transfer a
Member's or Beneficiary's Distributable Credit to a reserve
account under any other trust which is part of a qualified
employee benefit plan sponsored by the Employer. The
<PAGE> 52
amount transferred will form part of the Member's or
Beneficiary's distributable credit under that plan and will be
distributed under the terms of that plan.
(e) Except as provided in Article VII (Distribution of Benefits):
(i) if a Member dies before distribution of his
Distributable Credit has begun, the entire balance
will be paid to his Beneficiary not later than the
December 31 following the fifth anniversary of the
Member's death unless:
(A) If any portion of the Distributable Credit
is payable to a designated Beneficiary,
distributions may be made in substantially
equal installments over the life or life
expectancy of the designated Beneficiary
beginning no later than the December 31 of
the calendar Year beginning after the
calendar Year in which the Member died.
(B) If the designated Beneficiary is the
Member's surviving spouse, the date that
distributions are required to begin under
this Section 6.2(e)(i) will not be earlier
than the later of (I) December 31 of the
calendar Year beginning after the calendar
Year in which the Member died and (II)
December 31 of the calendar Year in which
the Member would have reached age 70 1/2. If
the spouse dies before payment of the
Distributable Credit begins, subsequent
distributions will be made as if the spouse
had been the Member.
(C) For purposes of this subsection, payments
will be calculated by use of the return
multiples specified in Section 1.72-9 of the
Income Tax Regulations. Life expectancy of a
surviving spouse may be recalculated
annually. In the case of any other
designated Beneficiary, life expectancy will
be calculated at the time payment first
begins without further recalculation.
(ii) if a Member dies after payment of his Distributable
Credit has begun but before it has been fully paid,
the balance, if not payable under Section 6.8
(Married Member Annuity), will be paid to his
Beneficiary in the same form it was being paid to the
Retiree. If any portion of the Distributable Credit
is unpaid after all payments have been made to the
Beneficiary, the remainder will be paid in a lump sum
to the Beneficiary (or to the Member's estate if the
Beneficiary is deceased).
(f) For purposes of this Section 6.2, any amount paid to a child
of the Member 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.
(g) If a Member has made an election under Section 242(b)(2) of
the Tax Equity and Fiscal Responsibility Act of 1982 to have
benefits paid at a time and in a form
<PAGE> 53
permitted by the Plan before the end of the last day of the
last Plan Year beginning before January 1, 1984, that election
will be effective even if the form of benefit elected is not
permitted under the Plan, if each of the following conditions
are met:
(i) the election was in a form approved by the Employer
or the Committee and filed with the Employer or the
Committee before January 1, 1984 (or any later date
permitted by law); and
(ii) the election specified a form of payment which was
permissible under the Plan at the time the election
was made.
To the extent necessary to comply with law and regardless of
that election, the Committee will:
(iii) reform the election to the extent necessary to
preserve the Plan's qualification under Code
Section 401(a); or, if reformation is not possible,
(iv) permit the Member to revoke the election, in whole or
in part, if that revocation would not adversely
effect the Plan's qualification under Code Section
401(a); or, if the Member fails to revoke that
election or if revocation is not possible without
affecting the Plan's qualifications,
(v) accelerate the distribution of benefits.
(h) No distribution will be made to any person who is barred from
profiting by their own crimes under any applicable State
Slayer's Act or statute of similar intent. For these purposes,
the applicable State statute will be that enacted by the State
in which the claimant resides. If such a statute applies,
benefits will be paid as if the claimant had not existed.
(i) Any annuity contract distributed under this Plan must be
non-transferable and the terms of that contract must be
consistent with the terms of this Plan.
6.3 FORM OF OPTION ELECTION. Every election and every revocation of an
election must be made on a form approved by the Committee, must be signed by the
person making the election, must specify the option which is being elected, and
must name a Beneficiary if the option selected calls for a Beneficiary. The
election must also specify the sex and date of birth of any Beneficiary or, if
omitted, this information must be delivered within six months after it has been
requested by the Committee. The Committee may require additional information
before approving any election.
6.4 TIME TO ELECT AN OPTION. Except as provided in Section 6.8 (Married
Member Annuity), an election of a form of benefit must be delivered to the
Committee within the 90-day period preceding the date benefits are to begin.
<PAGE> 54
6.5 REVOCATION OF ELECTION. Except as provided in Section 6.8 (Married
Member Annuity), an election of a form of benefit may be revoked at any time
during which it could have been made. Any revocation must be in writing and must
be delivered to the Committee or to its designated representative. Once revoked,
an election is void for all purposes.
6.6 BENEFICIARY CONSENT. Subject to the rules stated in Section 1.9
("Beneficiary"), a Member may change his Beneficiary and may change or revoke
any option elected without the consent of his Beneficiary.
6.7 DEATHS OF BENEFICIARIES. If a form of benefit provides for payments
to a Beneficiary, the following rules apply:
(a) If a Member dies before benefits begin, benefits will be paid
to a Beneficiary.
(b) If benefits are or will be paid in a form which provides for
payments to a Beneficiary and if the Member's Beneficiary dies
or ceases to exist, the following rules apply: (i) if his
Beneficiary dies or ceases to exist before benefits begin, the
Member may designate a new Beneficiary or elect another form
of benefit any time before his benefits begin; (ii) if his
Beneficiary dies or ceases to exist after his benefits begin,
the Member's benefits will continue in the same amount as if
his Beneficiary had not died; or (iii) if benefits are being
paid in any form not based on his Beneficiary's life
expectancy and if all Beneficiaries die or cease to exist
after the Member's benefits begin but before his death, he may
designate another Beneficiary. If the Member has not named a
successor Beneficiary, a Beneficiary receiving benefits in a
form not based on his life expectancy may designate a
successor beneficiary to receive the balance of those benefits
if the Beneficiary dies before all benefits have been paid. In
the absence of any designation, the balance, if any, of those
benefits will be paid to the estate of the Member or
Beneficiary, whichever dies last.
(c) If benefits are being paid in any form based on a
Beneficiary's life expectancy, no successor Beneficiary may be
designated.
6.8 MARRIED MEMBER ANNUITY. If the Married Member Annuity is made
available as a form of benefit under Section 4.5 of the Adoption Agreement, the
following rules will apply:
(a) A Member who is married and who has elected an annuity form of
benefit will automatically receive benefits in the form of an
immediate Married Member Annuity.
(b) The Committee will deliver to each married Member who has
elected an annuity form of benefit a written, nontechnical
explanation of the Married Member Annuity including:
(i) the terms and conditions of that form of benefit;
<PAGE> 55
(ii) a description of the Member's right to waive (and the
effect of waiving) that form of benefit;
(iii) a description of the rights of the Member's spouse;
and
(iv) a description of the right to revoke (and the effect
of revoking) a previous waiver of that form of
benefit.
This information will be delivered no less than 30 days and
not more than 90 days before the date the Member's benefits
are to begin.
(c) If a Member whose benefits are to be paid as a Married Member
Annuity dies before his benefits begin, his surviving spouse
will receive a benefit payable for life unless the Member has
waived that form of benefit within the 90 days preceding the
date his benefits were to begin. However, the surviving spouse
may select another form of benefit from among those specified
in Section 4.5 of the Adoption Agreement in the manner
described in Section 6.8(e).
If a Member who had not elected a Married Member Annuity dies
before payment of his Distributable Credit has begun, his
surviving spouse, if any, will receive the value of the
deceased Member's account balance unless the Member, with his
spouse's consent, waived that benefit. Those benefits payable
to surviving spouses will be paid in the form selected by that
surviving spouse from among those specified in Section 4.5 of
the Adoption Agreement.
(d) A Member may elect to receive or not to receive the Married
Member Annuity on a form prescribed by the Committee and must
deliver that form to the Committee during the 90-day period
ending on the date his benefits are to begin.
(e) Unless the spouse cannot be located, any waiver of the Married
Member Annuity or the benefit described in the preceding
paragraph will not be effective unless (i) the Member's spouse
consents in writing to that waiver, (ii) that waiver
designates a specific Beneficiary (and, if the spouse is
consenting to a waiver of the Married Member Annuity, the
waiver specifies an alternate form of payment) which may not
be changed without spousal consent (or the consent of the
spouse expressly permits designations by the Member without
further consent by the spouse), and (C) the spouse's consent
acknowledges the effect of that waiver and is witnessed by a
notary public or a representative of the Plan Administrator. A
spouse's consent to a Member's waiver may not be revoked and
will not be effective with respect to any other spouse.
6.9 MISSTATEMENTS IN APPLICATION. If the amount of benefits has been
incorrectly determined because of an arithmetical error or because of a
misstatement of fact, the amount of any overpayment or underpayment will be
deducted from or added to the remaining payments, as the Committee directs. A
"misstatement of fact" means any erroneous statement, omission of
<PAGE> 56
a material fact, or failure to correct information given by a Member or
Beneficiary in an application for retirement income or in response to a request
for information.
ARTICLE VII
DISTRIBUTION OF BENEFITS
7.1 ELIGIBILITY FOR BENEFITS. The Committee will determine the cause of
a Member's Severance from Service and whether he is eligible to receive his
Distributable Credit. As a condition of any person's eligibility to receive his
Distributable Credit, the Committee will require that an application form be
completed and delivered to the Committee.
The Committee will act on all applications within 90 days after
receipt. If an application is approved, the Committee will determine the
applicant's Distributable Credit and direct the Trustee in writing of the method
and time of distribution.
7.2 CLAIMS PROCEDURE. If any part of an application under Section 7.1
is denied, the following claims procedure will apply:
(a) The Committee will provide the applicant with a written notice
stating (i) the reason why the claim was denied, (ii) the
provisions of the Plan upon which the denial was based, and
(iii) an explanation of the Plan's review procedure. Any
written notice of denial will be sent to the applicant within
90 days after the claim is delivered to the Committee, unless
special circumstances require an extension of time for
processing the claim. If the Committee needs an extension of
time to process a claim, written notice will be delivered to
the applicant before the end of the initial 90 day period. The
notice of extension will include a statement of the special
circumstances requiring an extension of time and the date by
which the Committee expects to render its final decision.
However, that extension may not exceed 90 days after the end
of the initial period. If the Committee rejects an application
for failure to furnish necessary materials or information, the
written notice to the applicant will explain what more is
needed and why, and will tell the applicant that he may refile
a proper application.
(b) If a claim is denied or if the Committee does not act on an
application within 90 days of its delivery, the applicant may
appeal by delivering a written notice to the Committee
specifying the reasons for the appeal. That notice must be
delivered within 60 days after receiving the Committee's
notice of denial or, if no notice of denial was received,
within 150 days after the claim was filed. If he appeals, the
applicant may review pertinent documents at any reasonable
time and place specified by the Committee and may submit any
additional written material pertinent to the appeal. The
period during which an applicant may appeal may be extended by
the Committee if the nature of the claim warrants an
extension.
(c) The Committee will decide the appeal not later than 60 days
after delivery of the notice of appeal. If special
circumstances require an extension of time, the
<PAGE> 57
Committee will notify the applicant by written notice that a
decision will be made as soon as possible, but not later than
120 days after receipt of the notice of appeal. The applicant
may appear before the Committee to present his claim. The
Committee's decision will be in writing and will state clearly
the reasons for the decision, including specific reference to
Plan provisions supporting the decision. The applicant may
deem a claim denied if a decision is not furnished within the
time prescribed above.
7.3 TIME OF DISTRIBUTION. Subject to the following conditions and any
other objective criteria specified in Section 4.6 of the Adoption Agreement, a
Member's benefits will begin on the date he specifies or as soon as practicable
after that date but not later than 60 days after the close of the Plan Year in
which the latest of the following occurs:
(a) The earlier of the Member's Normal Retirement Date or his 65th
birthday;
(b) The 10th anniversary of his participation in the Plan;
(c) The Member's Severance from Service; or
(d) The date specified in the applicant's written election if that
date is consistent with any objective criteria specified in
Section 4.6 of the Adoption Agreement. If the Member is then
subject to the requirements of Code Section 401(a)(11), the
Member's spouse must consent to any such election in the
manner provided in Section 6.8.
Distribution to a Beneficiary will begin as soon as practicable after
the Member's death. A surviving spouse who is entitled to a distribution under
Section 6.8(c) may direct the Committee to begin distributions within a
reasonable time after the Participant's death.
Notwithstanding anything to the contrary that may be specified in
Section 4.6 of the Adoption Agreement, but subject to Article IV (Benefits,
Limitations), a Member's Employee Deferred Contribution Account, Qualified
Matching Contribution Account or Qualified NonElective Employer Contribution
Account shall not become distributable prior to the Member's severance from
service except upon
(f) Termination of the Plan without the establishment or
maintenance by the Employer of another defined contribution
plan (other than an employee stock ownership plan as defined
in Code Section 4975(e)(7);
(g) If the Employer is a corporation, the disposition by the
Employer to an unrelated corporation of substantially all of
its assets (within the meaning of Code Section 409(d)(2)) used
in a trade or business of the Employer if the Employer
continues this Plan after the disposition, but only with
respect to employees who continue employment with the
corporation acquiring such assets;
<PAGE> 58
(h) If the Employer is a corporation, the disposition by the
Employer to an unrelated entity of the Employer's interest in
a subsidiary (within the meaning of Code Section 409(d)(3)) if
the acquiring corporation continues to maintain this Plan, but
only with respect to employees who continue employment with
that subsidiary;
(i) The Member's attainment of age 59 1/2; and
(j) The hardship of the Participant as described in Section 7.4,
provided that advance distributions for hardship are permitted
under Section 4.9 of the Adoption Agreement.
Unless the Member has made the election described in Section 6.2(g),
distribution of benefits must begin no later than April 1 of the calendar Year
following the calendar Year in which he attains age 70 1/2. However, the benefit
of a Member who reached age 70 1/2 before January 1, 1988 who is not a "five
percent owner" (as defined in Section 1.38) must begin:
(k) On April 1, 1990, if that Member reached age 70 1/2 during
1988, and had not Retired before January 2, 1989; or
(l) The April 1 of the calendar Year beginning after the later of
the calendar Year in which the Member Retires or reaches age
70 1/2, if that Member reached age 70 1/2 before January 1,
1988.
The benefit of a Member who reached age 70 1/2 before January 1, 1988 and who is
a "five percent owner" (as defined in Section 1.30) during any Year beginning
after December 31, 1979, must begin the later of:
(m) April 1 of the calendar Year in which the Member attains age
70 1/2; or
(n) April 1 of the earlier of the calendar Year with or within
which ends the Plan Year in which the Member becomes a "five
percent owner" (as defined in Section 1.38), or the calendar
Year in which the Member retires.
A Member is treated as a "five percent owner" (as defined in Section
1.38) for purposes of this section if that Member is within that definition at
any time during the Plan Year ending with or within the calendar Year he reaches
age 66 1/2 or any subsequent Plan Year.
Once distributions have begun under this section to a "five percent
owner" (as defined in Section 1.38), they must continue, even if the Member
ceases to be a "five percent owner" (as defined in Section 1.38) in a subsequent
Year.
7.4 ADVANCE DISTRIBUTION FOR HARDSHIP. If made available under Section
4.9 of the Adoption Agreement, any Member who suffers a Hardship, as defined
below, may request a withdrawal from his Employee Deferred Contributions without
adjustment for investment income, gains or losses, less any portion which had
been loaned to the Member under Article VII. That request must be made by
written notice to the Committee setting forth the amount requested and
<PAGE> 59
the facts establishing the existence of the Hardship. Upon receipt of that
request, the Committee will determine whether a Hardship exists. If the
Committee determines that Hardship does exist, it will determine what portion of
the amount requested by the Member is required to meet the need created by the
Hardship, and will direct the Trustee to distribute that amount to the Member.
Any distribution made under this Section will be deemed made as of the first day
of the Plan Year during which the distribution is made, or, if later, the
Valuation Date immediately preceding the date of distribution, and the Member's
Employee Deferred Contribution Account will be reduced accordingly.
For purposes of this Section, a "Hardship" means an immediate and heavy
financial need of the Member where the Member lacks other available resources.
Financial needs that may be considered immediate and heavy include:
(a) Expenses for medical care described in Code Section 213(d)
previously incurred by the Member, his spouse, his children or
any of his dependents (as defined in Code Section 152), or
expenses necessary for those persons to obtain medical care
described in Code Section 213(d);
(b) The purchase (excluding mortgage payments) of a Member's
principal residence;
(c) Payment of tuition, related educational fees, and room and
board expenses for the next 12 months of post-secondary
education for the Member, his spouse, his children, or his
dependents;
(d) The need to prevent the eviction of the Member from his
principal residence or foreclosure of the mortgage on the
Member's principal residence; and
(e) Any other financial needs prescribed by the Internal Revenue
Service in regulations, revenue rulings, notices, and other
documents of general applicability.
A distribution will be considered as necessary to satisfy an immediate and heavy
financial need of the Member if:
(f) The Member has obtained all distributions, other than hardship
distributions, and all nontaxable (at the time of the loan)
loans currently available under all plans maintained by the
Employer;
(g) The Member is prohibited under the terms of the Plan or an
otherwise legally enforceable agreement, from making elective
deferrals and employee contributions to the Plan and all other
plans described in regulations under Code Section 401(k) and
maintained by the Employer (including all qualified and
nonqualified plans of deferred compensation maintained by the
Employer) for at least twelve months after the receipt of the
Hardship distribution;
(h) The distribution is not in excess of the amount of an
immediate and heavy financial need; and
<PAGE> 60
(i) All plans maintained by the Employer provide that the Member
may not make Employee Deferred Contributions or other elective
deferrals for the Member's taxable year immediately following
the taxable year of the hardship distribution in excess of the
applicable limit under Code Section 402(g) for such taxable
year less the amount of such Member's Employee Deferred
Contributions or other elective deferrals for the taxable year
of the Hardship distribution (and this Plan hereby so
provides).
7.5 RESERVE ACCOUNTS. If a Distributable Credit is to be distributed in
installments or is to be deferred and the Trustee fails to purchase a
nontransferable, conventional fixed or variable contract providing payments in
accordance with the form of benefit elected by the Member or Beneficiary
pursuant to Section 6.1, the Trustee will segregate and administer those amounts
as a separate Reserve Account from which all payments are to be made. If a
Member dies before the full amount of his Reserve Account has been paid to him,
the balance will be paid to his Beneficiary in the form provided under Article
VI, if appropriate to do so under any manner of payment selected by the Member.
Each Reserve Account will be invested to preserve principal and to produce a
reasonable return.
7.6 PAYMENT OF BENEFITS. The Committee shall direct the Trustee in
writing as to the manner in which to pay benefits from the Trust Fund,
specifying the name of the person to receive payments, his address and the
amount and frequency of payments. The Trustee shall comply with such written
direction it receives from the Committee. Each Member and Beneficiary must give
the Committee his correct mailing address.
7.7 PAYMENT IN CASE OF INCAPACITY. If the Committee determines that a
Member or Beneficiary is legally, physically or mentally incapable of personally
receiving any payment under the Plan, the Committee will notify the Trustee and
the Trustee will make payment to a court appointed guardian or legally appointed
representative.
7.8 SUSPENSION OF BENEFITS. Except as otherwise provided in Section 4.6
of the Adoption Agreement, if a former Member is reemployed by the Employer or
an Affiliate while he is receiving benefits under the Plan, or if a Member
continues employment after his Normal Retirement Date, the payment of benefits
will be suspended until the earlier of the date he again becomes eligible for
benefits or the April 1 of the calendar Year following the calendar Year in
which he attains age 70-1/2. During any period of suspension, the balance of
Distributable Credit will be set aside in a Reserve Account and will be held as
provided in Section 7.5.
7.9 INABILITY TO LOCATE PAYEE. If any benefit becomes payable to any
person, or to the executor or administrator of any deceased person, and if that
person or his executor or administrator does not present himself to the
Committee within five Years after the Committee mails written notice of
eligibility to his last known address, that benefit will be forfeited. However,
if the payee later files a claim for that benefit under Section 7.2 before his
benefit has been escheated under applicable law and if that claim is approved,
the benefit will be restored.
7.10 ALIENATION OF BENEFITS. Except as specifically provided in the
Plan or by applicable law or pursuant to a Qualified Domestic Relations Order,
no benefit payable under the
<PAGE> 61
Plan and no right or privilege under the Plan may be anticipated, alienated,
sold, transferred, assigned, pledged, encumbered or charged, and any action or
attempt to do so will be void. Except as specifically provided in the Plan, no
benefit, right or privilege may be subjected to the debts, contracts,
liabilities, engagements or torts of the person entitled to those benefits. This
Section does not preclude the enforcement of a federal tax levy under Code
Section 6331 nor the collection by the United States on a judgment resulting
from an unpaid tax assessment.
ARTICLE VIII
LOANS AND WITHDRAWALS
8.1 LOANS. If the Committee implements this Section under Section 3.5
of the Adoption Agreement, and subject to Section 8.2 (Conditions Concerning
Loans), the Trustee will loan to each Member and to each Beneficiary who is a
"party in interest" as defined in ERISA Section 408 the amount approved by the
Committee upon application made by such Member or Beneficiary on forms approved
by the Plan Administrator. Loans will not be made to any Owner-Employee or
Shareholder-Employee unless an applicable exemption is obtained from the
Department of Labor.
Unless otherwise specified in a writing signed on behalf of the
Committee and the Member or Beneficiary, loans will be debited against amounts
in his accounts in the following order:
(a) his Voluntary Employee Contributions, if any;
(b) earnings on his Voluntary Employee Contributions, if any;
(c) earnings on his Rollovers, if any;
(d) his Rollovers, if any;
(e) his Vested Amount attributable to Employer Contributions and
forfeitures; and
(f) his Employee Deferred Contributions and related earnings, if
any.
No part of a Member's Deductible Employee Contributions may be
borrowed.
8.2 CONDITIONS CONCERNING LOANS. Loans under Section 8.1 are subject to
the following terms and conditions:
(a) The total amount of any loans from the Plan and any other
qualified employee pension benefit plan sponsored by the
Employer or an Affiliate may not exceed the lesser of (i) the
greater of 50% of his vested interest in those plans as of the
date the loan was made or the lesser of $10,000 or his vested
interest in those plans, or (ii) $50,000, reduced by the
excess (if any) of the highest outstanding loan balance during
the one Year period ending on the day before the loan is
<PAGE> 62
made, over the outstanding loan balance from the Plan on the
date the loan is made. Loans will not be made available to
Highly Compensated Employees in an amount greater than the
amount made available to Non-Highly Compensated Employees.
(b) Each loan must be repaid within five Years of the date the
loan was made unless the Committee determines that the purpose
of the loan is to acquire any dwelling unit which within a
reasonable time which is to be used (determined at the time
the loan is made) as the principal residence of the Member. In
that case, the Committee may provide for repayment within a
specified period of time in excess of five Years, but not to
exceed thirty Years.
The loan must bear a reasonable rate of interest set by the
Committee. In determining the interest to be charged, all
relevant factors will be considered, including the amount and
duration of the loan, the nature, amount and adequacy of the
security, the credit standing of the Member and the interest
rate prevailing for comparable loans.
The loan must be secured adequately and must be evidenced by a
promissory note signed by the Member. All loans to Members
will be secured by the pledge of no more than 50% of the
Member's vested interest in the Members' Trust Fund Account
and/or by the pledge of any other collateral (including
tangible or intangible property) which the Trustee, in its
sole discretion, believes to be necessary or desirable to
ensure repayment of the principal and interest as provided in
the promissory note.
The Committee will approve and deny loans in a uniform and
nondiscriminatory manner. However, the Committee will make
reasonable distinctions based on credit worthiness and
financial need. The Committee will determine the amount (if
any) that a Member may borrow and will direct the Trustee to
lend that amount from the Trust Fund. The Committee will make
appropriate notations against the Member's Trust Fund Account
to reflect the loan.
(c) If a Member defaults on repayment of a loan which is secured
by his Accrued Benefit, foreclosure on the Member's promissory
note and attachment of his Accrued Benefit will not occur
until the Plan otherwise permits distribution of his Accrued
Benefit. However, the Trustee may immediately foreclose on any
other property pledged to secure repayment of the loan. If a
Member has pledged property other than his Accrued Benefit as
security for repayment of the loan, the Member's Accrued
Benefit will be applied to satisfy the loan only if the amount
of default may not be satisfied by application of all other
property pledged. A default will occur if the Member fails to
make any scheduled payment within 30 days of its due date.
Loan payments must be made no less frequently than quarterly
and must be made in substantially equal amounts under a
definite repayment schedule specified in the promissory note.
<PAGE> 63
(d) No loan will be permitted to the extent that it affects any
amount subject to a Qualified Domestic Relations Order.
(e) No loan or any renegotiation, extension, renewal or other
revision of an outstanding loan will be made to a married
Member unless his spouse consents to that loan as provided in
Section 6.8, and that consent is delivered to the Committee
within the 90-day period ending on the date on which the loan
is to be secured by the Member's Accrued Benefit.
8.3 WITHDRAWALS. Subject to Section 8.4 of this Plan and Section 4.6 of
the Adoption Agreement, the Trustee will allow a Member to withdraw all or a
portion of Voluntary Employee Contributions from his Trust Fund Account.
Withdrawals will be debited in the following order:
(a) his Voluntary Employee Contributions received by the Trustee
before December 31, 1986, if any; and
(b) his Voluntary Employee Contributions received by the Trustee
after December 31, 1986 (and a proportionate amount of
earnings realized on all Voluntary Employee Contributions
whenever received by the Trustee).
A withdrawal under this Section will not cause a Member to forfeit any
part of his Accrued Benefit attributable to Employer Contributions and
forfeitures.
8.4 CONDITIONS CONCERNING WITHDRAWALS. Withdrawals under Section 8.3
are subject to the following terms and conditions:
(a) Each application for a withdrawal must be in writing on a form
approved by the Committee. Applications for withdrawals will
be accepted by the Committee only with respect to withdrawals
to be made before the Member's Severance from Service. A
Member's spouse, if any, must consent in the manner described
in Section 6.8 to a withdrawal.
(b) The amount of a Member's withdrawal may not exceed (i) the
amount of his Voluntary Employee Contributions (adjusted for
earnings and losses), minus (ii) the aggregate amount of all
withdrawals previously made by the Member.
(c) The Committee will determine the amount that a Member may
withdraw and will direct the Trustee to pay that amount from
the Member's Trust Fund Account.
(d) No withdrawal will be permitted to the extent that it affects
any amount subject to a Qualified Domestic Relations Order.
<PAGE> 64
ARTICLE IX
ESTABLISHMENT OF TRUST FUND AND
TRUST FUND ACCOUNTS; LIFE INSURANCE
9.1 TRUST FUND. The Employer and the Trustee will execute a trust
agreement or insurance contract to manage and operate the Trust Fund.
9.2 TRUST FUND ACCOUNTS. The Trustee will establish and maintain an
account in the Trust Fund for each Member. The balance of each Trust Fund
Account will be the sum of amounts credited to that Trust Fund Account less the
sum of all amounts debited against that Trust Fund Account.
9.3 INVESTMENT; FUNDING POLICY. The Trustee will invest the Trust Fund
as provided in the trust agreement. The Committee will establish and
periodically review a policy which defines the Plan's funding needs and will
certify that policy and any changes in it to the Trustee.
9.4 IMPOSSIBILITY OF DIVERSION. The Trust Fund exists for the exclusive
benefit of Members or their Beneficiaries and for paying the reasonable expenses
of administering the Plan and Trust. If any Employer Contribution was made
because of a mistake of fact or was conditioned upon its deductibility under
Code Section 404, and if that deduction is disallowed, upon the certification of
those facts by the Committee, the Trustee will return to the Employer the amount
which exceeds the Employer Contribution that would have been made if that
mistake of fact or if that mistaken determination of deductibility had not
occurred, reduced to reflect any investment losses attributable to the excess
Employer Contributions. No excess Employer Contributions may be returned later
than one Year after their payment in the case of an Employer Contribution made
under a mistake of fact, or the disallowance of the deduction of an Employer
Contribution. If an Employer Contribution was conditioned upon initial
qualification of the Plan under Code Section 401 and the Plan does not qualify,
all amounts contributed by the Employer must be returned to the Employer not
later than one Year after the denial of the Plan's qualification but only if an
application for qualification of the Plan is made within the time prescribed by
law for filing the Employer's income tax return for the tax year in which the
Plan is adopted or any later date prescribed by the Secretary of the Treasury.
In no other cases may the Trust Fund be used for or diverted to any other
purpose except as provided in Article XIII and Section 14.5 (Expenses).
9.5 PURCHASE OF INSURANCE. If the Committee directs the Trustee to
purchase contracts insuring the life of any Member, the following rules apply:
(a) A contract insuring the life of a Member will be purchased
only if the Member has requested or consented to that
coverage.
(b) Premiums paid for life insurance will be charged against the
insured Member's Trust Fund Account. Dividends paid on any
life insurance contract may be applied to purchase additional
life insurance for the insured Member or retained under the
contract.
<PAGE> 65
(c) During any Top-Heavy Plan Year, the Trustee may not purchase
or pay premiums on any policy insuring the life of any Key
Employee unless that Key Employee specifically consents to
that purchase or payment.
(d) Subject to the consent of the Member's spouse as described in
Section 1.9 (Beneficiary), each insured Member may designate,
in the manner established by the insurer, the Beneficiary or
Beneficiaries of that insurance. Each Member also may
designate, in the manner established by the insurer, the
manner (settlement option) in which the proceeds of the
contract are to be paid.
(e) The amount expended for ordinary life insurance must be less
than one-half of the total Employer Contributions and
Forfeitures allocated to the insured Member's Trust Fund
Account.
(f) The amount expended for term life insurance must be less than
one-fourth of the total Employer Contributions and Forfeitures
allocated to the insured Member's Trust Fund Account.
(g) If both ordinary life insurance and term life insurance are
purchased, one-half of the aggregate amount expended for
ordinary life insurance plus the amount expended for term life
insurance, must be less than one-fourth of the total Employer
Contributions and Forfeitures allocated to the insured
Member's Trust Fund Account.
(h) Unless the Member Severs from Service because of death, the
Trustee will value any contracts insuring the life of a Member
who has Severed from Service based on the interpolated
terminal reserve value of those contracts, and, subject to
Section 6.8 (Married Member Annuity), (i) will convert those
contracts to cash or (ii) will distribute those contracts to
the insured Member as directed by the Committee.
(i) The method of payment under any insurance contract distributed
under the Plan will be limited to those specified in Article
VI.
(j) For purposes of this Plan, ordinary life insurance contracts
are contracts with both nondecreasing death benefits and
nonincreasing premiums, and term life insurance contracts
encompass all other life insurance contracts which are not
ordinary life.
9.6 TRANSFERS FROM OTHER PLANS. Unless the Employer has specified in
Section 4.5 of the Adoption Agreement that benefits may be paid as a life
annuity or a joint and survivor annuity, the Trustee will not accept funds
(except Rollovers if otherwise permitted by Section 3.7 of the Adoption
Agreement) as provided under Section 3.5 transferred directly from any plan
subject to Code Sections 401(a)(11) and 417.
<PAGE> 66
ARTICLE X
TRUST FUND VALUATION; STATEMENTS
10.1 VALUATION OF THE TRUST FUND. As of each Allocation Date, the
Trustee will determine the fair market value of the Trust Fund and its
liabilities. The Committee also may direct the Trustee to value the Trust Fund
as of such other "Valuation Dates" if the Trust is wholly or partially
terminated or whenever the Committee believes an interim valuation is needed
either to protect the Plan's interests or to provide equitable treatment under
the Plan. In valuing the Trust Fund, Forfeitable Amounts, Reserve Accounts, loan
accounts and Segregated and Individually Directed Accounts will be debited,
credited and stated separately with respect to their earnings, losses,
appreciation and depreciation. Those accounts also will be charged with any
direct liabilities and expenses as well as their proportionate share of general
liabilities and expenses of the Trust Fund as determined by the Committee after
consultation with the Trustee.
10.2 ALLOCATION TO TRUST FUND ACCOUNTS. Following the valuation
described in Section 10.1, the net worth of the Trust, excluding:
(a) Segregated and Individually Directed Accounts, Forfeitable
Amounts and Reserve Accounts;
(b) Employer Contributions paid or accrued for the Plan Year;
(c) One-half of the Employee Deferred Contributions that both were
not allocated to a Segregated and Individually Directed
Account and were deferred after the prior Valuation Date;
(d) Deductible Employee Contributions, Voluntary Employee
Contributions, loan accounts and Rollover Amounts received
during the Plan Year;
(e) Rollovers received during the Plan Year that were not
allocated to a Segregated and Individually Directed Account;
(f) Absolute forfeitures arising during the Plan Year; and
(g) Dividends or credits attributable to contracts insuring the
life of any Member will be allocated to Trust Fund Accounts in
the same ratio which the value of each Trust Fund Account
(determined as of the date of the most recent allocation under
this Article) bears to the value of all Trust Fund Accounts
(as of the same date).
However, before that allocation is made, the following amounts will be
subtracted from each Trust Fund Account:
(h) the value of all contracts insuring the life of the Member;
<PAGE> 67
(i) withdrawals made by the Member under Section 7.4 or 8.3 since
the most recent Allocation Date; and
(j) amounts paid for premiums on contracts insuring the Member's
life during the allocation period.
After the allocation, to the extent not credited to a Segregated and
Individually Directed Account, Deductible Employee Contributions, Voluntary
Employee Contributions and Rollovers received since the preceding valuation date
will be credited to Trust Fund Accounts. Any amount excluded under subsection
(h) will be restored. Also, dividends or credits earned on a life insurance
contract will be allocated to the Trust Fund Account of the Member whose life is
insured by that contract.
10.3 STATEMENTS OF ACCOUNTS. As soon as practicable after any valuation
(other than an interim valuation) under Section 10.1 and at the discretion of
the Committee, after any interim valuation, the Committee will prepare and
deliver to each Member a statement of his Trust Fund Account, Segregated and
Individually Directed Account or Reserve Account, together with a statement of
any outstanding loans from the Trust Fund to each Member. That statement will be
effective as of the first day following any valuation date of the Plan Year
following the Plan Year for which it is made. If an interim valuation is made
under Section 10.1, the computations under this Section will be made as soon as
practicable after the valuation date.
ARTICLE XI
ADMINISTRATION
11.1 DESIGNATION OF FIDUCIARIES. The persons designated in Sections
11.2 (Employer), 11.3 (Committee), and 11.5 (Trustee), and the persons they
designate to carry out their duties or responsibilities are fiduciaries under
the Plan and Trust. Each fiduciary has only those duties or responsibilities
specifically assigned to him under the Plan or Trust or delegated to him by
another fiduciary. Each fiduciary may assume that any direction, information or
action of another fiduciary is proper and need not inquire into the propriety of
any such action, direction or information. Except as provided by law, no
fiduciary will be responsible for the malfeasance, misfeasance or nonfeasance of
any other fiduciary. Any fiduciary may participate in the Plan, provided he
otherwise is eligible to do so. Except as permitted by law, no Employee or
director may receive any compensation from the Plan or Trust for his services as
a fiduciary.
11.2 EMPLOYER. The Employer will:
(a) appoint the members of the Committee;
(b) appoint the Trustee;
(c) act on any matter referred by the Committee under subsection
11.3(c);
<PAGE> 68
(d) receive and review reports submitted periodically by the
Committee concerning administration of the Plan and Trust;
(e) approve the termination or discontinuance of any insurance
contract used to fund the Plan;
(f) appoint, remove or replace the Trustee or insurance company
which holds Plan assets;
(g) appoint, remove or replace Investment Managers or investment
advisers;
(h) approve the amount of Employer Contributions to be made to the
Plan or approve discontinuance of Employer Contributions to
the Trust Fund; and
(i) approve the termination or partial termination of the Plan or
Trust.
11.3 COMMITTEE.
(a) DESIGNATION. The Employer will name the members of the
Committee and will fix the number of its members.
(b) PURPOSE. The Committee will control and administer the Plan.
(c) POWERS. The Committee has all powers necessary to carry out
its purpose, including the following:
(i) establishing rules, regulations and procedures it
finds necessary or appropriate to discharge its
duties;
(ii) interpreting the Plan, including supplying any
omissions in accordance with the intent of the Plan;
(iii) deciding all questions concerning eligibility of any
Employee to become a Member;
(iv) determining the existence and duration of Approved
Absences and Disabilities;
(v) computing the amount of benefits and determining to
whom such benefits will be paid;
(vi) authorizing or denying the payment of Plan benefits;
(vii) delegating its powers and duties to others as it sees
fit, including:
(A) the preparation and filing of all reports
with governmental agencies;
<PAGE> 69
(B) the preparation and distribution of
booklets, announcements, reports and
descriptions of the Plan to Employees, as
required by law;
(C) the maintenance of all records relating to
the Plan and Trust, including those
sufficient to demonstrate satisfaction of
the tests described in Sections 4.7
(Limitation on Employer Matching
Contributions and Voluntary Employee
Contributions) and 4.8 (Limitation on
Employee Deferred Contributions) and the
amount of Employer Contributions used in
those tests;
(D) the establishment and administration of a
uniform claims procedure; and
(E) the performance of all other duties
necessary to administer the Plan;
(viii) employing those accountants, actuaries, agents,
consultants, physicians and attorneys (who may be
counsel to the Employer) it finds necessary, and to
receive and evaluate their reports;
(ix) reviewing bonding and insurance requirements;
(x) designating an agent for service of legal process
upon the Plan;
(xi) reviewing and implementing long-term planning in
developing modifications of the Plan;
(xii) establishing and enforcing the rules, regulations,
procedures, investment policies and investment
programs it considers desirable;
(xiii) receiving and evaluating monthly, quarterly and
annual reports of Trustees, Investment Managers and
investment advisers;
(xiv) reviewing the performance of the Trustees, Investment
Managers and/or investment advisers at least
quarterly;
(xv) allocating the amount of assets to be managed by each
Trustee, Investment Manager and investment adviser;
(xvi) accepting or rejecting Rollovers;
(xvii) establishing any accounts called for by the Plan or
Trust;
(xviii) reporting at least annually to the Employer on the
investment performance of the Trust Fund; and
<PAGE> 70
(xix) performing any other act or acts necessary to the
performance of its powers and duties.
Nothing in this Plan precludes the Committee from exercising
full discretionary authority and responsibility with respect
to all aspects of Plan administration and managing of Plan
assets.
(d) RESIGNATION, REMOVAL AND DESIGNATION OF SUCCESSOR. The
Employer may remove any member of the Committee at any time.
Any member of that Committee may resign at any time by
delivering his written resignation to the Employer and the
Committee. New members will be named by the Employer. Any new
member will have the same rights, powers, privileges,
immunities and duties as the other members of the Committee.
The Committee must promptly notify the Trustee of any change
in its membership.
11.4 ACTION OF COMMITTEE. Any act authorized, permitted or required to
be taken by the Committee may be taken by a majority of its members, either by
vote at a meeting or in writing without a meeting. All members must be notified
of the proposed action and must have an opportunity to vote. A majority of the
members of the Committee constitutes a quorum. All notices, advices, directions,
certifications, approvals and instructions required or authorized to be given by
the Committee must be in writing and signed (a) by a majority of the members of
the Committee, (b) by the member or members of the Committee designated as
having authority to execute documents on its behalf or (c) by a person
authorized to act for the Committee under subsection 11.3(c)(vii).
11.5 TRUSTEE.
(a) DESIGNATION. The Employer will appoint the Trustee.
(b) POWERS AND DUTIES. The Trustee has the duties and powers set
forth in the agreement executed by the Employer and the
Trustee.
11.6 EMPLOYER RECORDS. The Committee may inspect the Employer's books
and records to determine any fact in connection with acts to be performed by it
under the Plan, or it may rely on the Employer's statement. If the Committee
wants any statement certified it may rely on a certification of the Employer or
Affiliate, as appropriate.
11.7 INDEMNIFICATION. All fiduciaries designated in Section 11.1 (other
than a bank or trust company or an insurance company acting as a Trustee) and
anyone else delegated any power, authority or responsibility under this Article,
have all rights of indemnification provided by law or agreement or under the
Employer's Articles of Incorporation, regulations or by-laws. In addition, the
Employer will satisfy any liability actually and reasonably incurred by all
fiduciaries (other than a bank or trust company or an insurance company acting
as Trustee) including expenses, attorneys fees, judgments, fines and amounts
paid in settlement, in connection with any threatened, pending, or completed
action, suit or other proceeding related to their exercise or failure to
exercise any of the powers, authority, responsibilities or discretion provided
<PAGE> 71
under the Plan and the Trust, or reasonably believed by them to be provided
under the Plan, and any action taken by them in connection with those matters if
they acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interest of the Plan, and with respect to any criminal
action or proceeding, if they had no reasonable cause to believe that their
conduct was unlawful.
11.8 DISCRIMINATION PROHIBITED. In exercising any discretionary or
absolute authority under the Plan, the Committee will act in a consistent and
non-discriminatory manner, treating all persons in similar circumstances in a
similar manner. The Committee may take no action which would discriminate in
favor of Members, Beneficiaries or Employees who are Highly-Compensated
Employees, or which would result in benefitting one employee or group of
employees at the expense of others similarly situated.
11.9 REPRESENTATION IN PROCEEDINGS. In any court proceeding arising
under the Plan, the Committee will be the representative of the Members,
Beneficiaries and all others claiming any interest under the Plan.
11.10 TIME OF DELIVERY. Any information, forms of election, rejection
or other materials required to be filed with or delivered to the Employer or any
fiduciary will be deemed filed or delivered when actually received. Except as
provided in Section 7.2 (Claims Procedure), any consents, approvals,
information, requests for information or other materials required to be filed or
delivered to a Member or Beneficiary by the Employer or any fiduciary will be
deemed filed or delivered on the earlier of the date of personal delivery or the
date deposited in first class mail.
ARTICLE XII
AMENDMENT
12.1 GENERAL AMENDMENT.
(a) The entity which has received the Notification Letter issued
by the Internal Revenue Service covering this Plan may amend
the Plan at any time in a writing signed by a person
authorized to act on behalf of such entity. Any such amendment
shall become effective as provided therein upon its execution
by such entity provided, however, that any amendment which
affects the rights, duties or responsibilities of the Trustee
or the Employer shall not become effective with respect to
such Trustee or Employer without the written consent of such
Trustee or Employer, as appropriate. A copy of that amendment
will be given to each Employer.
(b) The Employer, through any person authorized to so act on
behalf of the Employer, may (i) change between options
selected in the Adoption Agreement, (ii) adopt other
amendments to the Adoption Agreement to satisfy Code Section
415 or to avoid duplication of minimum benefits under Code
Section 416 because of the required aggregation of multiple
plans and (iii) add certain model amendments published by the
Internal Revenue Service which specifically provide that their
adoption will
<PAGE> 72
not cause the Plan to be treated as individually designed. The
Employer may amend the Plan or the Adoption Agreement at any
time in a writing signed by a person authorized to do so on
behalf of the Employer. Any such amendment shall become
effective as provided therein upon its execution.
(c) If an Employer amends the Plan or inserts a non-elective
option into the Adoption Agreement in a manner that is
inconsistent with the first sentence of Section 12.1(b), it
may no longer utilize this Plan as a regional prototype plan,
but will be considered to have adopted an individually
designed plan.
(d) Neither the entity which has received the Notification Letter
issued by the Internal Revenue Service covering this Plan nor
the Employer may adopt any amendment which will increase the
duties or liabilities of the Trustee or the Committee without
its written consent, and no amendment may authorize or permit
any part of the Trust Fund to be used for or diverted to any
purpose other than the exclusive benefit of Members or their
Beneficiaries, and for defraying the reasonable expenses of
administering the Plan and Trust. Except as permitted by law
or under regulations issued by the Secretary of the Treasury
or his delegate, no amendment may (i) decrease a Member's
accrued benefits, (ii) eliminate or reduce any subsidy or
early retirement benefit or (iii) eliminate an optional method
of distribution with respect to benefits attributable to a
Member's service before the adoption of the amendment. The
prohibition on reducing or eliminating a retirement subsidy
will apply only with respect to a person who was a Member when
that subsidy was reduced or eliminated and who satisfies,
before or after the adoption of the amendment, the conditions
of the subsidy as in effect before the adoption of the
amendment. However, the entity which has received the
Notification Letter issued by the Internal Revenue Service
covering this Plan and the Employer specifically reserves the
right to make any amendment designed to comply, or to
eliminate any uncertainty of compliance, with the Code, ERISA,
any other law relating to qualified employees' trusts or any
regulations or rulings issued under those laws, even though
accrued benefits are eliminated or reduced retroactively.
12.2 AMENDMENT OF VESTING SCHEDULE. If the Plan is amended to provide a
different vesting schedule, each person adversely affected:
(a) who is a Member during the election period below; and
(b) who has completed a Period of Service of at least three Years
before that period ends may elect to have the amendment
disregarded in determining his Vested Amount. The election
must be in writing and delivered to the Committee within the
election period. Upon delivery, his election will be
irrevocable. The election period begins on the date the
amendment is adopted and ends 60 days after the latest of the
date:
(c) the amendment is adopted;
<PAGE> 73
(d) the amendment becomes effective; or
(e) the Committee delivers a written notice of the amendment to
the Member.
No amendment to the Plan's vesting schedule may decrease the Vested
Amount which any Member has earned as of the date of the amendment or, if later,
the date that amendment is effective.
ARTICLE XIII
SUSPENSION, DISCONTINUANCE OR TERMINATION
13.1 TERMINATION OR PARTIAL TERMINATION OF THE PLAN. The Employer may
terminate or partially terminate the Plan at any time. Upon such termination,
the vesting provisions of Section 1.81(b) will apply.
13.2 TERMINATION OF THE TRUST. If the Employer ceases the accrual of
benefits under the Plan under Section 13.1, the Trust may be liquidated by the
Employer, or, so long as the Plan continues to meet the qualification
requirements under Section 401(a) and other applicable sections of the Code,
continued indefinitely until liquidated by the Employer. The Trust Fund and each
account under the Trust Fund will be valued as provided in Section 10.1 and
allocated as provided in Section 10.2. The Committee will determine the method
and means of distribution and will certify that information to the Trustee.
After receiving that certification and after making necessary adjustments to
reflect additional earnings, losses and liquidation expenses, the Trustee will
distribute the Trust assets promptly. If one but not all Employers terminates or
partially terminates the Plan, that Employer will determine whether or not the
Trust will continue for its Members. If those interests are terminated, the
Committee will direct their liquidation under this Section.
13.3 DISCONTINUANCE OF EMPLOYER CONTRIBUTIONS. The Employer expects to
continue the Plan and to make Employer Contributions indefinitely. However, the
Employer does not assume a contractual obligation to continue the Plan and,
subject to Section 12.1 (General Amendment), reserves the right to reduce,
suspend or discontinue Employer Contributions. Any suspension or discontinuance
of Employer Contributions will not constitute a discontinuance of the Plan. If
Employer Contributions are discontinued or suspended the Trust will be continued
until terminated by the Employer or until all Trust assets have been
distributed.
ARTICLE XIV
GENERAL
14.1 SEVERABILITY. Each provision of the Plan is independent of each
other provision. If any provision of the Plan proves to be, or is finally held
by any court or tribunal, board or authority of competent jurisdiction to be
illegal, unenforceable or in conflict with the Code, ERISA or any other law
relating to qualified employees' trusts, that provision will be disregarded and
will be void. That invalidation will not impair the Plan or any of its other
provisions.
<PAGE> 74
14.2 MERGER OF PLANS. No merger or consolidation of the Plan with, or
transfer in whole or in part of the assets and liabilities of the Trust Fund to,
any other plan of deferred compensation or trust fund maintained or established
for the benefit of all or some Members may occur unless:
(a) each Member would receive (if the other plan then terminated)
a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit he
would have been entitled to receive immediately before the
merger, consolidation or transfer (if the Plan had then
terminated);
(b) resolutions adopted by the Employer, and by any new or
successor employer of the affected Members, authorize the
transfer of assets and, in the case of the new or successor
employer of the affected Members, its resolutions specifically
assume liabilities for those Members' benefits; and
(c) the other plan and trust are qualified under Code Sections
401(a) and 501(a).
14.3 PLAN NOT A CONTRACT OF EMPLOYMENT. Neither the creation of the
Plan nor any amendment to it nor the creation of the Trust Fund nor the payment
of benefits gives any legal or equitable right to any person against the
Employer or any Affiliate, their officers or employees, or against the Trustee
except as provided in the Plan. All liabilities under the Plan will be
satisfied, if at all, only out of the Trust Fund. Participation in the Plan does
not give any Member any right to continued employment.
14.4 SUCCESSORS; REORGANIZATIONS. In the case of the merger,
consolidation, sale of assets, liquidation or other reorganization of the
Employer under circumstances in which a successor person, firm or company (a)
continues all or a substantial part of the Employer's business and (b) employs a
substantial number of the Employer's employees, the successor will be
substituted for the Employer under the Plan if it files a written election with
the Trustee and the Committee to carry on the provisions of the Plan.
14.5 EXPENSES. The Employer will pay all the expenses of administering
the Plan (including attorneys' fees), including the Trustee's compensation and
expenses, any broker's fees incurred by the Trust, the Committee's expenses and
any other expenses incurred at the direction of the Committee. Any of those
expenses not paid by the Employer will be paid out of the Trust Fund.
14.6 CONTROLLING LAW. The Plan will be construed and enforced according
to the laws of the United States and the State in which the Employer has its
principal place of business.
14.7 CONSTRUCTION. If the Plan contains contradictory clauses or if
there appears to be a conflict between its provisions, the following rules of
construction will apply:
(a) The interpretation that favors the Plan as a tax- free
retirement plan and the deduction of Employer Contributions
for federal income tax purposes will prevail
<PAGE> 75
over any interpretation that might render the Plan taxable or
prevent that deduction.
(b) Subject to subsection (a), the rules established by the
Supreme Court of the State in which the Employer has its
principal place of business for the construction of like
instruments will apply.
14.8 HEADINGS. The headings and subheadings in the Plan are inserted
for convenience of reference only and are not to be considered in the
construction of its provisions.
14.9 COUNTERPARTS. The Plan may be executed in any number of
counterparts, each of which is an original. All counterparts constitute one and
the same instrument, sufficiently evidenced by any one counterpart.
14.10 TREASURY QUALIFICATION. The Plan is designed to comply with Code
Section 401(a) and will terminate automatically if the Internal Revenue Service
issues a written determination that the Plan as initially adopted is not
qualified and the Employer elects not to amend or further amend the Plan. Upon
termination of the Plan under this Section, the Trust will terminate and all
amounts contributed by the Employer and Members (adjusted for net earnings and
losses) will be returned to them.
14.11 DENIAL OF GUARANTY. There is no guarantee that the Trust Fund
will not incur losses or depreciate in value. Also, there is no guarantee that
any benefit or amount which may become due to any Member or Beneficiary, or to
any creditor of the Trust will be paid, nor does the Employer or the Committee
guarantee or assume any obligation to enforce payment by any insurance company
of any benefit or amount which may become due under any insurance contract. Each
Member or Beneficiary and any creditor of the Trust may look only to the Trust
Fund for payment. After a Member's benefit has been fully distributed to him or
to his Beneficiary, or to the persons designated in Sections 7.6 (Payment of
Benefits) or 7.7 (Payment in Case of Incapacity), his interest in the Trust Fund
is extinguished. The Employer is not liable in any manner to any Member,
Beneficiary or other person for any act or omission of the Committee or Trustee.
14.12 ADOPTION BY AFFILIATES. If the Employer consents, any entity
which is an Affiliate of the Employer may adopt this Plan to provide benefits
for its employees. In that case, all of the terms of the Plan will apply
identically to all Employees of the Employer and the adopting Affiliate.
However, the Employer and Affiliate may, if specified in Section 4.12 of the
Adoption Agreement, agree that (a) the Employer Contribution Formula will be
separately determined for Employees of the Employer and Employees of the
adopting Affiliate; (b) the Allocation Formula will be separately applied to
each group of Employees and (c) Forfeitures will be allocated solely among
persons who are employed by the adopting entity which employed the persons whose
termination generated the forfeiture.
<PAGE> 1
Exhibit 4.5
TRUST AGREEMENT
between
Merrill Lynch Trust Company, the Trustee and
The Wendt Bristol Health Corp. as the Employer
<TABLE>
<CAPTION>
ARTICLE PAGE
- ------- ----
<S> <C> <C>
I STATUS OF TRUST AND APPOINTMENT AND ACCEPTANCE OF TRUSTEE
---------------------------------------------------------
1.01 Status of Trust 1
1.02 Appointment of Trustee 1
1.03 Acceptance of Appointment 1
1.04 Title of Trust 1
1.05 Effectiveness 1
II ADMINISTRATIVE AND INVESTMENT FIDUCIARIES
-----------------------------------------
2.01 Named Administrative and Investment Fiduciaries 1
2.02 Identification of Named Fiduciaries and Designees 1
III RECEIPTS AND TRUST FUND
-----------------------
3.01 Receipt by Trustee 2
3.02 Trust Fund 2
3.03 Second Trust Fund 2
IV PAYMENTS, ADMINISTRATIVE DIRECTIONS AND EXPENSES
------------------------------------------------
4.01 Payments by Trustee 2
4.02 Named Administrative Fiduciary's Directions 3
4.03 Disputed Payments 3
4.04 Trustee's Compensation and Expenses 3
4.05 Taxes 3
4.06 Expenses of Administration 3
4.07 Restriction on Alienation 4
4.08 Payment on Court Order 4
V INVESTMENTS
-----------
5.01 Investment Management 4
5.02 Investment Managers 4
5.03 Direction of Voting and Other Rights 5
5.04 Investment Directions 5
5.05 Communication of Proxy and Other Materials 5
5.06 Common and Collective Trust Funds 6
VI RESPONSIBILITIES AND INDEMNITY
------------------------------
6.01 Relationship of Fiduciaries 6
6.02 Benefit of Participants 6
6.03 Status of Trustee 6
6.04 Location of Indicia of Ownership 6
6.05 Trustee's Reliance 6
6.06 Indemnification 6
6.07 Protection of Designees 7
VII POWERS OF TRUSTEE
-----------------
7.01 Nondiscretionary Investment Powers 7
7.02 Additional Powers of Trustee 8
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
ARTICLE PAGE
- ------- -----
<S> <C> <C>
VIII RECORDS, ACCOUNTINGS AND VALUATIONS
-----------------------------------
8.01 Records 8
8.02 Accountings 8
8.03 Valuation 8
IX RESIGNATION AND REMOVAL OF TRUSTEE
-----------------------------------
9.01 Resignation 9
9.02 Removal 9
9.03 Appointment of a Successor 9
9.04 Settlement of Account 9
9.05 Expenses and Compensation 9
9.06 Termination of Responsibility and Liability 9
X AMENDMENT AND TERMINATION
-------------------------
10.01 Amendment 9
10.02 Termination 9
XI MISCELLANEOUS
-------------
11.01 Exclusive Benefit Rule 10
11.02 Refunds to Employer 10
11.03 Authorized Action 10
11.04 Text of Plan 10
11.05 Conflict with Plan 10
11.06 Failure to Maintain Qualification 10
11.07 Governing Law and Construction 10
11.08 Arbitration 10
11.09 Successors and Assigns 11
11.10 Gender 11
11.11 Headings 11
11.12 Counterparts 11
</TABLE>
<PAGE> 3
TRUST AGREEMENT
between
Merrill Lynch Trust Company, as the Trustee
The Wendt Bristol Health Corp., as the Employer
Trust Agreement entered into as April 16, 1993 by and between the
above-named employer (the "Employer") and Merrill Lynch Trust Company, a New
Jersey corporation (the "Trustee"), with respect to a trust ("Trust") forming
part of the The Wendt Bristol Health Services 401(K) (the "Plan").
The Employer and the Trustee hereby agree as follows:
ARTICLE I
STATUS OF TRUST AND APPOINTMENT
AND ACCEPTANCE OF TRUSTEE
-------------------------
1.01 STATUS OF TRUST. The Trust is intended to be a qualified trust under
section 401(a) of the Internal Revenue Code of 1986, as amended from
time to time (the "Code"), and exempt from taxation pursuant to section
501(a) of the Code.
1.02 APPOINTMENT OF TRUSTEE. The Employer represents that all necessary
action has been taken for the appointment of Merrill Lynch Trust
Company (the "Trust Company") as trustee of the Trust and that the
Trust Agreement constitutes a legal, valid and binding obligation of
the Employer.
1.03 ACCEPTANCE OF APPOINTMENT. The Trustee accepts its appointment as
trustee of the Trust
1.04 TITLE OF TRUST. The Trust shall be known as the ________________Trust.
1.05 EFFECTIVENESS. This Trust Agreement shall not become effective until
executed and delivered by both the Employer and the Trustee.
ARTICLE II
ADMINISTRATIVE AND INVESTMENT FIDUCIARIES
----------------------------------------
2.01 NAMED ADMINISTRATIVE AND INVESTMENT FIDUCIARIES. For purposes of this
Trust Agreement, the term "Named Administrative Fiduciary" refers to
the person named or provided for in the Plan as responsible for the
administration and operation of the Plan, and the term "Named
Investment Fiduciary" refers to the person provided for in the Plan as
responsible for the investment and management of Plan assets to the
extent provided for in this Trust Agreement The Named Administrative
Fiduciary and the Named Investment Fiduciary may be the same person. If
any such person is not named or provided for in the Plan, or if so
named or provided for, is not then serving, the Employer shall be the
Named Administrative Fiduciary or the Named Investment Fiduciary or
both, as the case may be.
2.02 IDENTIFICATION OF NAMED FIDUCIARIES AND DESIGNEES. The Named
Administrative Fiduciary and the Named Investment Fiduciary under the
Plan shall each be identified to the Trustee in writing by the
Employer, and specimen signatures of each, or of each member thereof,
as appropriate, shall be provided to the Trustee by the Employer. The
Employer shall promptly give written notice to the Trustee of a change
in the identity either of the Named Administrative Fiduciary or Named
Investment Fiduciary, or any member thereof, as appropriate, and until
such notice is received by the Trustee, the Trustee shall be fully
protected in assuming that the identity of the Named Administrative
Fiduciary or Named Investment Fiduciary, and the members thereof, as
appropriate, is unchanged. Each person authorized in accordance with
the Plan to give a direction to the Trustee on behalf of the Named
Administrative Fiduciary or the Named Investment Fiduciary shall be
identified to the Trustee by written notice from the Employer or the
Named Administrative Fiduciary or the Named Investment Fiduciary, as
the case may be, and such notice shall contain a specimen of the
signature. The Trustee shall be entitled to rely upon each such written
notice as evidence of the identity and authority of the persons
appointed until a written cancellation of the appointment, or the
written appointment of a successor, is received by the Trustee from the
Employer, the Named Administrative Fiduciary or the Named Investment
Fiduciary; as the case may be.
1
<PAGE> 4
ARTICLE III
RECEIPTS AND TRUST FUND
-----------------------
3:01 RECEIPT BY TRUSTEE. The Trustee shall receive in cash or other assets
acceptable to the Trustee all contributions paid or delivered to it
which are allocable under the Plan and to the Trust and all transfers
paid or delivered under the Plan to the Trust from a predecessor
trustee or another trust (including a trust forming part of another
plan qualified under section 401(a) of the Code), provided that the
Trustee shall not be obligated to receive any such contribution or
transfer unless prior thereto or coincident therewith, as the Trustee
may specify, the Trustee has received such reconciliation, allocation,
investment or other information concerning, or such direction,
contribution or representation with respect to, the contribution or
transfer or the source thereof as the Trustee may require. The Trustee
shall have no duty or authority to (a) require any contributions or
transfers to be made under the Plan or to the Trustee, (b)compute any
amount to be contributed or transferred under the Plan to the Trustee,
or (c) determine whether amounts received by the Trustee comply with
the Plan.
3.02 TRUST FUND. For purposes of this Trust Agreement, the "Trust Fund"
consists of all money and other property received by the Trustee
pursuant to Section 3.01 hereof, increased by any income or gains on or
increment in such assets and decreased by any investment loss or
expense, benefit or disbursement paid pursuant to this Trust
Agreement. The Trustee shall hold the Trust Fund, without distinction
between principal and income, as a nondiscretionary trustee pursuant
to the terms of this Trust Agreement. All assets of the Trust other
than those, if any, held by a second trustee as provided for in Section
3.03 shall be held in an account governed by the terms and conditions
of the Cash Management Account(R) Financial Service for Business
Retirement Plans Agreement (the "CMA(R) Account") which the Employer,
having reviewed and understood the CMA Account Program Description,
hereby directs the Trustee to establish for the Trust with Merrill
Lynch, Pierce, Fenner & Smith Incorporated or such other account or
accounts as the Employer and the Trustee may agree upon from time to
time.
3.03 SECOND TRUST FUND. If the Employer so elects, and the Trust Company
consents, the Employer may appoint a second trustee under the Plan with
respect to assets which the Employer desires to contribute or have
transferred to the Trust Company, as Trustee, but which the Trust
Company does not choose to accept. The appointment of a second trustee
shall be deemed a representation by the Employer that the Plan contains
all appropriate provisions relating to the second trustee. In the event
and upon the effectiveness of the acceptance of the second trustee's
appointment, the Employer shall be deemed to have created two trust
funds under the Plan each governed separately by this Trust Agreement
except that with respect to the second trust, this Trust Agreement
shall apply as if the second trustee were referred to by name in the
introductory paragraph and in Section 1.02 hereof. Each Trustee under
such an arrangement shall, however, discharge its duties and
responsibilities solely with respect to those assets of the Trust
delivered into its possession and, except pursuant to the Employer
Retirement Income Security Act of 1974, as amended from time to time
("ERISA"), shall have no duties, responsibilities or obligations with
respect to property of the other Trust nor any liability for the acts
or omissions of the other Trustee. As a condition to its consent to the
appointment of a second trustee, the Trust Company shall assure that
recordkeeping, distribution and reporting procedures are established
on a coordinated basis between it and the second trustee as the Trust
Company considers necessary or appropriate with respect to the Trust.
ARTICLE IV
PAYMENTS, ADMINISTRATIVE DIRECTIONS AND EXPENSES
------------------------------------------------
4.01 PAYMENTS BY TRUSTEE. Payments of money or property from the Trust Fund
shall be made by the Trustee upon direction from the Named
Administrative Fiduciary or its designee. Payments by the Trustee shall
be transmitted to the Named Administrative Fiduciary or its designee
for delivery to the proper payees or to payee addresses supplied by the
Named Administrative Fiduciary or its designee, and the Trustee's
obligation to make such payments shall be satisfied upon such
transmittal. The Trustee shall have no obligation to determine the
identity of persons entitled to payments under the Plan or their
addresses.
2
<PAGE> 5
4.02 NAMED ADMINISTRATIVE FIDUCIARY'S DIRECTIONS. Directions from or on
behalf of the Named Administrative Fiduciary or its designee shall be
communicated to the Trustee or the Trustee's designee for the purpose
only in a manner and in accordance with procedures acceptable to the
Trustee. The Trustee's designee shall not, however, be empowered to
implement any such directions except in accordance with procedures
acceptable to the Trustee. The Trustee shall have no liability for
following any such directions or failing to act in the absence of any
such directions. The Trustee shall have no liability for the acts or
omissions of any person making or failing to make any directions
under the Plan or this Trust Agreement nor any duty or obligation to
review any such direction, act or omission.
4.03 DISPUTED PAYMENTS. If a dispute arises over the propriety of the
Trustee making any payment from the Trust Fund, the Trustee may
withhold the payment until the dispute has been resolved by a court of
competent jurisdiction or settled by the parties to the dispute. The
Trustee may consult legal counsel and shall be fully protected in
acting upon the advice of counsel.
4.04 TRUSTEE'S COMPENSATION AND EXPENSES. If the Employer so elects on the
Client Authorization Form submitted to the Trust Company with respect
to the Plan (the "Client Authorization Form") or otherwise, the
Employer shall (a) pay the Trustee compensation for its services
under this Trust Agreement in accordance with the Trustee's fee
schedule in effect and applicable at the time such compensation
becomes payable, and (b)pay or reimburse the Trustee for all expenses
incurred by the Trustee in connection with or relating to the
performance of its duties under this Trust Agreement or its status as
Trustee, including reasonable attorneys fees. If the Employer does not
so elect, such compensation and expenses shall be charged against and
withdrawn from the Trust Fund as provided below.
Until paid by the Employer or charged against and withdrawn from the
Trust Fund, as the case may he, the Trustee's compensation and expenses
shall be a lien upon the Trust Fund. The Trustee is authorized to
charge the Trust Fund for and withdraw from the Trust Fund, without
direction from the Named Administrative Fiduciary or any other person,
the amount of any such fees or expenses which the Employer has not
elected to pay and the amount of any such fees or expenses which the
Employer has so elected to pay but which remain unpaid for a period of
60 days after presentation of a statement for such amount to the
Employer. Trust Fund assets shall be applied to pay such fees and
expenses in the following priority by asset category to the extent
thereof held at the time of withdrawal in the Trust Fund subfund or
account to which the fee or expense is allocated: (i) uninvested cash
balances; (ii) shares of any money market fund or funds held in the
Trust Fund; and (iii) any other Trust Fund asset. The Trustee is
authorized to allocate its fees and expenses among these subfunds or
accounts to which the fees or expenses pertain in such manner as the
Trustee deems appropriate under the circumstances unless prior to such
allocation the Employer or the Named Administrative Fiduciary specifies
the manner in which the allocation is to be made. The Trustee is also
authorized but not required to sell any shares or other assets referred
to above to the extent necessary for the purpose.
4.05 TAXES. The Trustee is authorized, with or without direction from the
Named Administrative Fiduciary or any other person, to withdraw from
the Trust Fund and pay any federal, state or local taxes, charges or
assessments of any kind levied or assessed against the Trust or assets
thereof. Until paid, such taxes shall be a lien against the Trust Fund.
The Trustee shall give notice to the Named Administrative Fiduciary of
its receipt of a demand for any such taxes, charges or assessment. The
Trustee shall not be personally liable for any such taxes, charges or
assessments
4.06 EXPENSES OF ADMINISTRATION. Expenses incurred by the Employer, the
Named Administrative Fiduciary, the Named Investment Fiduciary, any
Investment Manager designated pursuant to Section 5.02 or any other
persons designated to act on behalf of the Employer, the Named
Administrative Fiduciary or the Named Investment Fiduciary, including
reimbursement for expenses incurred in the performance of their
respective duties, shall be the obligation of the Employer or other
person specified in the Plan. Such expenses, however, may be paid from
the Trust Fund upon the written direction to the Trustee of the Named
Administrative Fiduciary.
3
<PAGE> 6
4.07 RESTRICTION ON ALIENATION. Except as provided in Section 4.08 or under
section 401(a)(13) of the Code, the interest of any Plan participant
or beneficiary in the Trust Fund shall not be subject to the claims of
such person's creditors and may not be assigned, sold, transferred,
alienated or encumbered. Any attempt to do so shall be void; and the
Trustee shall disregard any attempt. Trust assets shall not in any
manner be liable for or subject to debts, contracts, liabilities,
engagement or torts of any Plan participant or beneficiary, and
benefits shall not be considered an asset of any such a person in the
event of the persons insolvency or bankruptcy.
4.08 PAYMENT ON COURT ORDER. The Trustee is authorized to make any payments
directed by court order in any action in which the Trustee is a party
or pursuant to a "qualified domestic relations order" under section
414(p) of the Code; provided that the Trustee shall not make such
payment if the Trustee is indemnified and held harmless by the
Employer in a manner satisfactory to the Trustee against all
consequences of such failure to pay. The Trustee is not obligated to
defend actions in which the Trustee is named but shall notify the
Employer or Named Administrative Fiduciary of any such action and may
tender defense of the action to the Employer, the Named Administrative
Fiduciary or the participant or beneficiary whose interest is
affected. The Trustee may in its discretion defend any action in which
the Trustee is named and any expenses, including reasonable attorneys
fees, incurred by the Trustee in that connection shall be paid or
reimbursed in accordance with Section 4.04 hereof.
ARTICLE V
INVESTMENTS
-----------
5.01 INVESTMENT MANAGEMENT. The Named Investment Fiduciary shall manage the
investment of the Trust Fund except insofar as (a) a person (an
"Investment Manager") who meets the requirements of section 3(38) of
ERISA has authority to manage Trust assets as referred to in Section
5.02 hereof or (b) the Plan provides for participant or beneficiary
direction of the investment of assets allocable under the Plan to the
accounts of such participants and beneficiaries and the Trustee
notifies the Employer that such directions will be acceptable. In the
latter situation, a list of the participants and beneficiaries and
such information concerning them as the Trustee may specify shall be
provided by the Employer or the Named Administrative Fiduciary to the
Trustee and/or such person(s) as are necessary for the implementation
of the directions in accordance with the procedure acceptable to the
Trustee. Except as required by ERISA, the Trustee shall invest the
Trust Fund as directed by the Named Investment Fiduciary, an
Investment Manager or a Plan participant or beneficiary, as the case
may be, and the Trustee shall have no discretionary control over, nor
any other discretion regarding, the investment reinvestment of any
asset of the Trust. The Trustee may limit the categories of assets in
which the Trust Fund may be invested.
It is understood that the Trustee may, from time to time, have on hand
funds which are received as contributions or transfers to the Trust
which are awaiting investment or funds from the sale of Trust assets
which are awaiting reinvestment. Absent receipt by the Trustee of
a direction from the proper person for the investment or reinvestment
of such funds or otherwise prior to the application of funds in
implementation of such a direction, the Trustee shall in accordance
with the applicable CMA(R) Account procedures cause such funds to be
invested in shares of the money market fund specified by the Employer
on the Client Information Form or such other money market fund
acceptable to the Trust Company as the Employer or Named Investment
Fiduciary may in writing to the Trust Company specify for this purpose
from time to time. Any such fund may be sponsored, managed or
distributed by an affiliate of the Trust Company. The Employer or the
Named Investment Fiduciary, as the case may be, hereby acknowledges
that prior to any such specification it has read or will have read the
then current prospectus for the specified fund.
5.02 INVESTMENT MANAGERS. Notwithstanding any provision of the Plan to the
contrary, the Employer or the Named Investment Fiduciary may appoint
one or more Investment Managers, who may be an affiliate of the Trust
Company, to direct the Trustee in the investment of all or a
specified portion of the assets of the Trust. Any such Investment
Manager shall be directed by the Employer or the Named Investment
Fiduciary; as the case may be, to act in accordance with the procedures
referred to in Section 5.04. The Named Investment Fiduciary shall
notify the Trustee in writing before the effectiveness of the
appointment or removal of any Investment Manager.
4
<PAGE> 7
If there is more than one Investment Manager whose appointment is
effective under the Plan at any one time, the Trustee shall, upon
written instructions from the Employer or the Named Investment
Fiduciary, establish separate funds for control by each such Investment
Manager. The funds shall consist of those Trust assets designated by
the Employer or the Named Investment Fiduciary.
5.03 DIRECTION OF VOTING AND OTHER RIGHTS. The voting and other rights in
securities or other assets held in the Trust shall be exercised by the
Trustee as directed by the Named Investment Fiduciary or other person
who at the time has the right as referred to in Section 5.01 hereof to
direct the investment or reinvestment of the security or other asset
involved, provided that notwithstanding any provision of the Plan to
the contrary, (a) except as provided in cause (b) of this Section, such
voting and other rights in any such security or other asset selected by
the Employer or the Named Investment Fiduciary shall be exercised by
the Named Investment Fiduciary and (b) such voting and other rights in
any "employer security" with respect to the Plan within the meaning of
Section 407(d)(1) of ERISA which is held in an account under the Plan
over which a Plan participant or beneficiary has control as to
specific assets to be held therein or which is held in an account which
consists solely or primarily of "employer securities" shall be
exercised by the participants or beneficiaries having interests in
that account. Notwithstanding any provision hereof or of the Plan to
the contrary, (i) in the event a Plan participant or beneficiary or an
Investment Manager with the right to direct a voting or other decision
with respect to any security or other asset held in the Trust does not
communicate any decision on the matter to the Trustee or the Trustee's
designee by the time prescribed by the Trustee or the Trustee's
designee for that purpose or if the Trustee notifies the Named
Investment Fiduciary either that it does not have precise information
as to the securities or other assets involved allocated on the
applicable record date to the accounts of all participants and
beneficiaries or that time constraints make it unlikely that
participant, beneficiary or Investment Manager direction, as the case
may be, can be received on a timely basis, the decision shall be the
responsibility of the Named Investment Fiduciary and shall be
communicated to the Trustee on a timely basis, and (ii) in the event
the Named Investment Fiduciary with any right under the Plan or
hereunder to direct a voting or other decision with respect to any
security or other asset held in the Trust, including any such right
under clause (a) or clause (i) of this Section, does not communicate
any decision on the matter to the Trustee or the Trustee's designee by
the time prescribed by the Trustee for that purpose, the Trustee may,
at the cost of the Employer, retain an Investment Manager with full
discretion to make the decision. Except as required by ERISA, the
Trustee shall (a) follow all directions above-referred to in this
Section and (b) shall have no duty to exercise voting or other rights
relating to any such security or other asset.
5.04 INVESTMENT DIRECTIONS. Directions for the investment or reinvestment of
Trust assets or of a type referred to in Section 5.03 from the
Employer, the Named Investment Fiduciary; an Investment Manager or a
Plan participant or beneficiary, as the case may be, shall, in a
manner and in accordance with procedures acceptable to the Trustee, be
communicated to and implemented by, as the case may be, the Trustee,
the Trustee's designee or, with the Trustee's consent, broker/dealer
designated for the purpose by the Employer or the Named Investment
Fiduciary. Communication of any such direction to such a designee or
broker/dealer shall conclusively be deemed an authorization to the
designee or broker/dealer to implement the direction even though
coming from a person other than the Trustee. The Trustee shall have no
liability for its or any other person's following such directions or
failing to act in the absence of any such directions. The Trustee
shall have no liability for the acts or omissions of any person
directing the investment or reinvestment of Trust Fund assets or
making or failing to make any direction referred to in Section 5.03.
Neither shall the Trustee have any duty or obligation to review any
such investment or other direction, act or omission or, except upon
receipt of a proper direction, to invest or otherwise manage any asset
of the Trust which is subject to the control of any such person or to
exercise any voting or other right referred to in Section 5.03.
5.05 COMMUNICATION OF PROXY AND OTHER MATERIALS. The Employer or Named
Administrative Fiduciary shall establish a procedure acceptable to the
Trustee for the timely dissemination to each person entitled to direct
the Trustee or its designee as to a voting or other decision called for
thereby or referred to therein of all proxy and other materials bearing
on the decision.
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<PAGE> 8
5.06 COMMON AND COLLECTIVE TRUST FUNDS. Any person authorized to direct the
investment of Trust assets may, if the Trustee and the Named Investment
Fiduciary so permit, direct the Trustee to invest such assets in a com-
mon or collective trust maintained by the Trustee for the investment of
assets of qualified trusts under section 401(a) of the Code, individual
retirement accounts under section 408(a) of the Code and plans or
governmental units described in section 818(a)(6) of the Code. The
documents governing any such common or collective trust fund maintained
by the Trustee, and in which Trust assets have been invested, are
hereby incorporated into this Trust Agreement by reference.
ARTICLE VI
RESPONSIBILITIES AND INDEMNITY
------------------------------
6.01 RELATIONSHIP OF FIDUCIARIES. Each fiduciary of the Plan and this Trust
shall be solely responsible for its own acts or omissions. The Trustee
shall have no duty to question any other Plan fiduciary's performance
of fiduciary duties allocated to such other fiduciary pursuant to the
Plan. The Trustee shall not be responsible for the breach of
responsibility by any other Plan fiduciary except as provided for in
ERISA.
6.02 BENEFIT OF PARTICIPANTS. Each fiduciary shall, within the meaning of
the Code and ERISA, discharge its duties with respect to the Trust
solely in the interest of participants in the Plan and their
beneficiaries and for the exclusive purpose of providing benefits to
such participants and beneficiaries and defraying reasonable expenses
of administering the Plan.
6.03 STATUS OF TRUSTEE. The Trustee acknowledges its status as a
"fiduciary" of the Plan within the meaning of ERISA.
6.04 LOCATION OF INDICIA OF OWNERSHIP. Except as permitted by ERISA, the
Trustee shall not maintain the indicia of ownership of any assets of
the Trust outside the jurisdiction of the district courts of the United
States.
6.05 TRUSTEE'S RELIANCE. The Trustee shall have no duty to inquire whether
directions by the Employer, the Named Administrative Fiduciary, the
Named Investment Fiduciary or any other person conform to the Plan, and
the Trustee shall be fully protected in relying on any such direction
communicated in accordance with procedures acceptable to the Trustee
from any person who the Trustee reasonably believes is a proper person
to give the direction. The Trustee shall have no liability to any
participant, any beneficiary or any other person for payments made, any
failure to make payments, or any discontinuance of payments, on
direction of the Named Administrative Fiduciary, the Named Investment
Fiduciary or any designee of either of them or for any failure to
make payments in the absence of directions from the Named
Administrative Fiduciary or any person responsible for or purporting to
be responsible for directing the investment of Trust assets. The
Trustee shall have no obligation to request proper directions from
any person. The Trustee may request instructions from the Named
Administrative Fiduciary or the Named Investment Fiduciary and shall
have no duty to act or liability for failure to act if such
instructions are not forthcoming. The Trustee shall have no
responsibility to determine whether the Trust Fund is sufficient to
meet the liabilities under the Plan, and shall not be liable for
payments or Plan liabilities in excess of the Trust Fund.
6.06 INDEMNIFICATION. The Employer hereby indemnifies the Trustee against
and shall hold the Trustee harmless from, any and all loss, claims,
liability, and expense, including reasonable attorneys fees, imposed
upon the Trustee or incurred by the Trustee as a result of any acts
taken, or any failure to act, in accordance with the directions from
the Named Administrative Fiduciary, Named Investment Fiduciary,
Investment Manager or any other person specified in Article IV or V
hereof, or any designee of any such person, or by reason of the
Trustee's good faith execution of its duties with respect to the Trust,
including, but not limited to, its holding of assets of the Trust as
provided for in Section 3.02, the Employer's obligations in the
foregoing regard to be satisfied promptly on request by the Trustee,
provided that in the event that the loss, claim, liability or expense
involved is determined by a no longer appealable final judgment entered
in a lawsuit or proceeding to have resulted from the gross negligence
or willful misconduct of the Trustee, the Trustee shall promptly
thereafter return to the Employer any amount previously received by the
Trustee under this Section with respect to such loss, claim, liability
or expense.
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<PAGE> 9
6.07 PROTECTION OF DESIGNEES. To the extent that any designee of the Trustee
is performing a function of the Trustee under this Trust Agreement, the
designee shall have the benefit of all of the applicable limitations
on the scope of the Trustee's duties and liabilities, all applicable
rights of indemnification granted hereunder to the Trustee and all
other applicable protections of any nature afforded to the Trustee.
ARTICLE VII
POWERS OF TRUSTEE
-----------------
7.01 NONDISCRETIONARY INVESTMENT POWERS. At the direction of the person
authorized to direct such action as referred to in Article V hereof,
hut limited to those assets or categories of assets acceptable to the
Trustee as referred to in Section 5.01, the Trustee, or the Trustee's
designee or a broker/dealer as referred to in Section 5.04, is
authorized and empowered:
(a) To invest and reinvest the Trust Fund, together with the income
therefrom, in common stock, preferred stock, convertible
preferred stock, bonds, debentures, convertible debentures and
bonds, mortgages, notes, commercial paper and other evidences of
indebtedness (including those issued by the Trustee), shares of
mutual funds (which funds may be sponsored, managed or offered by
an affiliate of the Trustee), guaranteed investment contracts,
bank investment contracts, other securities, policies of life
insurance, annuity contracts, options, options to buy or sell
securities or other assets, and all other property of any type
(personal, real or mixed, and tangible or intangible);
(b) To deposit or invest all or any part of the assets of the
Trust in savings accounts or certificates of deposit or other
deposits in a bank or savings and loan association or other
depository institution, including the Trustee or any of its
affiliates, provided with respect to such deposits with the
Trustee or an affiliate the deposits bear a reasonable interest
rate;
(c) To hold, manage, improve, repair and control all property, real
or personal, forming part of the Trust Fund; to sell, convey,
transfer, exchange, partition, lease for any term, even extending
beyond the duration of this Trust, and otherwise dispose of the
same from time to time;
(d) To have, respecting securities, all the rights, powers and
privileges of an owner, including the power to give proxies, pay
assessments and other sums deemed by the Trustee necessary for the
protection of the Trust Fund; to vote any corporate stock either
in person or by proxy; with or without power of substitution, for
any purpose; to participate in voting trusts, pooling agreements,
foreclosures, reorganizations, consolidations, mergers and
liquidations, and in connection therewith to deposit securities
with or transfer title to any protective or other committee; to
exercise or sell stock subscriptions or conversion rights; and,
regardless of any limitation elsewhere in this instrument relative
to investments by the Trustee, to accept and retain as an
investment any securities or other property received through the
exercise of any of the foregoing powers;
(e) Subject to Section 5.01 hereof, to hold in cash, without liability
for interest, such portion of the Trust Fund which it
is directed to so hold pending investments, or payment of
expenses, or the distribution of benefits;
(f) To take such actions as may be necessary or desirable to protect
the Trust from loss due to the default on mortgages held in the
Trust including the appointment of agents or trustees in such
other jurisdictions as may seem desirable, to transfer property to
such agents or trustees, to grant to such agents such powers as
are necessary or desirable to protect the Trust Fund, to direct
such agent or trustee, or to delegate such power to direct, and to
remove such agent or trustee;
(g) To settle, compromise or abandon all claims and demands in favor
of or against the Trust Fund;
(h) To invest in any common or collective trust fund of the type
referred to in Section 5.06 hereof maintained by the Trustee;
(i) To exercise all of the further rights, powers, options and
privileges granted, provided for, or vested in trustees generally
under the laws of the State of New Jersey, so that the powers
conferred upon the Trustee herein shall not be in limitation of
any authority conferred by law, but shall be in addition thereto;
(j) To borrow money from any source and to execute promissory notes,
mortgages or other obligations and to pledge or mortgage any
trust assets as security, subject to applicable requirements of
the Code and ERISA; and
7
<PAGE> 10
(k) To maintain accounts at, execute transactions through, and
lend on an adequately secured basis stocks, bonds or other
securities to, any brokerage or other firm, including any firm
which is an affiliate of the Trustee.
7.02 ADDITIONAL POWERS OF TRUSTEE. To the extent necessary or which it deems
appropriate to implement its powers under Section 7.01 or otherwise to
fulfill any of its duties and responsibilities as trustee of the Trust
Fund, the Trustee shall have the following additional powers and
authority:
(a) to register securities, or any other property in its name or in
the name of any nominee, including the name of any affiliate or
the nominee name designated by any affiliate, with or without
indication of the capacity in which property shall be held, or to
hold securities in bearer form and to deposit any securities or
other property in a depository or clearing corporation;
(b) to designate and engage the services of, and to delegate
powers and responsibilities to such agents, representatives,
advisers, counsel and accountants as the Trustee considers
necessary or appropriate, any of whom may be an affiliate of the
Trustee or a person who renders services to such an affiliate,
and, as a part of its expenses under this Trust Agreement and to
the extent permissible under ERISA, to pay their reasonable
expenses and compensation;
(c) to make, execute and deliver, as Trustee, any and all deeds,
leases, mortgages, conveyances, waivers, releases or other
instruments in writing necessary or appropriate for the
accomplishment of any of the powers listed in this Trust
Agreement; and
(d) generally to do all other acts which the Trustee deems necessary
or appropriate for the protection of the Trust Fund.
ARTICLE VIII
RECORDS, ACCOUNTINGS AND VALUATIONS
-----------------------------------
8.01 RECORDS. The Trustee shall maintain or cause to be maintained accurate
records and accounts of all Trust transactions and assets. The
records and accounts shall be available at reasonable times during
normal business hours for inspection or audit by the Named
Administrative Fiduciary and the Named Investment Fiduciary or any
person designated for the purpose by either of them.
8.02 ACCOUNTINGS. Within 90 days following the close of each fiscal year of
the Plan or the effective date of the removal or resignation of the
Trustee, the Trustee shall file with the Named Administrative Fiduciary
a written accounting setting forth all transactions since the end of
the period covered by the last previous accounting. The accounting
shall include a listing of the assets of the Trust showing the value of
such assets at the close of the period covered by the accounting. On
direction of the Named Administrative Fiduciary, and if previously
agreed to by the Trustee, the Trustee shall submit to the Named
Administrative Fiduciary interim valuations, reports or other
information pertaining to the Trust.
The Named Administrative Fiduciary may approve the accounting by
written approval delivered to the Trustee or by failure to deliver
written objections to the Trustee within 60 days after receipt of the
accounting. Any such approval shall be binding on the Employer, the
Named Administrative Fiduciary; the Named Investment Fiduciary and, to
the extent permitted by ERISA, all other persons.
8.03 Valuation. The assets of the Trust shall be valued as of each valuation
date under the Plan at fair market value as determined by the Trustee
based upon such sources of information as it may deem reliable,
including, but not limited to, stock market quotations, statistical
evaluation services, newspapers of general circulation, financial
publications, advice from investment counselors or brokerage firms, or
any combination of sources. The reasonable costs incurred in
establishing values of the Trust Fund shall be a charge against the
Trust Fund, unless paid by the Employer.
When the Trustee is unable to arrive at a value based upon information
from independent sources, it may rely upon information from the
Employer, Named Administrative Fiduciary, Named Investment Fiduciary,
appraisers, or other sources, and shall not incur any liability for
inaccurate valuation based in good faith upon such information.
8
<PAGE> 11
ARTICLE IX
RESIGNATION AND REMOVAL OF TRUSTEE
----------------------------------
9.01 RESIGNATION. The Trustee may resign at any time upon at least 30 days
written notice to the Employer.
9.02 REMOVAL. The Employer may remove the Trustee upon at least 30 days
written notice to the Trustee.
9.03 APPOINTMENT OF A SUCCESSOR. Upon resignation or removal of the
Trustee, the Employer shall appoint a successor trustee. Upon failure
of the Employer to appoint, or the failure of the effectiveness of the
appointment by the Employer of, a successor trustee by the effective
date of the resignation or removal, the Trustee may apply to any court
of competent jurisdiction for the appointment of a successor.
Promptly after receipt by the Trustee of notice of the effectiveness of
the appointment of the successor trustee, the Trustee shall deliver to
the successor trustee such records as may be reasonably requested to
enable the successor trustee to properly administer the Trust Fund and
all property of the Trust after deducting therefrom such amounts as the
Trustee deems necessary to provide for expenses, taxes, compensation or
other amounts due to or by the Trustee pursuant to Sections 4.04 or
5.03 hereof not paid by the Employer prior to the delivery.
9.04 SETTLEMENT OF ACCOUNT. Upon resignation or removal of the Trustee, the
Trustee shall have the right to a settlement of its account, which
settlement shall be made, at the Trustee's option, either by an
agreement of settlement between the Trustee and the Employer or by a
judicial settlement in an action instituted by the Trustee. The
Employer shall bear the cost of any such judicial settlement,
including reasonable attorneys fees.
9.05 EXPENSES AND COMPENSATION. The Trustee shall not be obligated to
transfer Trust assets until the Trustee is provided assurance by the
Employer satisfactory to the Trustee that all fees and expenses
reasonably anticipated will be paid.
9.06 TERMINATION OF RESPONSIBILITY AND LIABILITY. Upon settlement of the
account and transfer of the Trust Fund to the successor trustee, all
rights and privileges under this Trust Agreement shall vest in the
successor trustee and all responsibility and liability of the Trustee
with respect to the Trust and assets thereof shall, except as otherwise
required by ERISA, terminate subject only to the requirement that the
Trustee execute all necessary documents to transfer the Trust assets to
the successor trustee.
ARTICLE X
AMENDMENT AND TERMINATION
-------------------------
10.01 AMENDMENT. The Employer reserves the right to amend this Trust
Agreement, provided that no amendment of this Trust Agreement or the
Plan shall be effective which would (a) cause any assets of the Trust
Fund to be used for, or diverted to, purposes other than the exclusive
benefit of Plan participants or their beneficiaries other than an
amendment permissible under the Code and ERISA, or (b)affect the
rights, duties, responsibilities, obligations or liabilities of the
Trustee without the Trustee's written consent. The Employer shall amend
this Trust Agreement as requested by the Trustee to reflect changes in
law which counsel for the Trustee advises the Trustee require such
changes. Amendments to the Trust Agreement or a certified copy of the
amendments shall be delivered to the Trustee promptly after adoption,
and if practicable under the circumstances, any proposed amendment
under consideration by the Employer shall be communicated to the
Trustee to permit the Trustee to review and comment thereon in due
course before the Employer acts on the proposed amendment.
10.02 TERMINATION. The Trust may be terminated by the Employer upon at least
60 days written notice to the Trustee. Upon such termination, and
subject to Section 11.01 hereof, the Trust Fund shall be distributed
as directed by the Named Administrative Fiduciary.
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<PAGE> 12
ARTICLE XI
MISCELLANEOUS
-------------
11.01 EXCLUSIVE BENEFIT RULE. Except as provided in Section 11.02, or as
otherwise permitted as required by ERISA or the Code, no asset of this
Trust shall be used for, or diverted to, purposes other than the
exclusive benefit of Plan participants or their beneficiaries or for
the reasonable expenses of administering the Plan and Trust until all
liabilities for benefits due Plan participants or their beneficiaries
have been satisfied.
11.02 REFUNDS TO EMPLOYER. The Trustee shall, upon the written direction of
the Named Administrative Fiduciary which shall include a certification
that such action is proper under the Plan, ERISA and the Code
specifying any relevant sections thereof, return to the Employer any
amount referred to in section 403(c)(2) of ERISA.
11.03 AUTHORIZED ACTION. Any action to be taken under this Trust Agreement by
an Employer or other person which is: (a) a corporation shall be taken
by the board of directors of the corporation or any person or persons
duly empowered by the board of directors to take the action involved,
(b) a partnership shall be taken by an authorized general partner of
the partnership, and (c) a sole proprietorship by the sole proprietor.
11.04 TEXT OF PLAN. The Employer represents that prior to the execution of
this Trust Agreement by both parties it delivered to the Trustee the
text of the Plan as in effect as of the date of this Trust Agreement.
The Employer shall deliver to the Trustee promptly after adoption
thereof a certified copy of each other amendment of the Plan.
11.05 CONFLICT WITH PLAN. The rights, duties, responsibilities, obligations
and liabilities of the Trustee are as set forth in this Trust
Agreement, and no provision of the Plan or any other document shall be
deemed to affect such rights, duties, responsibilities, obligations and
liabilities. If there is a conflict between provisions of the Plan
and this Trust Agreement with respect to any subject involving the
Trustee, including but not limited to the responsibility, authority or
powers of the Trustee, the provisions of this Trust Agreement shall be
controlling.
11.06 FAILURE TO MAINTAIN QUALIFICATION. If the Trust falls to qualify as a
qualified trust under section 401(a) of the Code, or loses its status
as such a qualified trust, the Employer shall immediately so notify the
Trustee, and the Trustee shall, without further notice or direction,
remove the Trust assets from any common or collective trust fund
maintained by the Trustee for investments by qualified trusts.
11.07 GOVERNING LAW AND CONSTRUCTION. THIS TRUST AGREEMENT AND THE TRUST
SHALL BE CONSTRUED, ADMINISTERED AND GOVERNED UNDER ERISA AND OTHER
PERTINENT FEDERAL LAW, AND TO THE EXTENT THAT FEDERAL LAW IS
INAPPLICABLE, UNDER THE LAWS OF THE STATE OF NEW JERSEY. IF ANY
PROVISION OF THIS TRUST AGREEMENT IS SUSCEPTIBLE TO MORE THAN ONE
INTERPRETATION, THE INTERPRETATION TO BE GIVEN IS THAT WHICH IS
CONSISTENT WITH THE TRUST BEING A QUALIFIED TRUST UNDER SECTION 401(a)
OF THE CODE. IF ANY PROVISION OF THIS TRUST AGREEMENT IS HELD BY A
COURT OF COMPETENT JURISDICTION TO BE INVALID OR UNENFORCEABLE, THE
REMAINING PROVISIONS SHALL CONTINUE TO BE FULLY EFFECTIVE TO THE EXTENT
POSSIBLE UNDER THE CIRCUMSTANCES.
11.08 ARBITRATION.
- Arbitration is final and binding on the parties.
- The parties are waiving their right to seek remedies
in court, including the right to jury trial.
- Pre-arbitration discovery is generally more limited
than and different from court proceedings.
- The arbitrators' award is not required to include
factual findings or legal reasoning and any party's
right to appeal or to seek modification of rulings by
the arbitrators is strictly limited.
- The panel of arbitrators will typically include a
minority of arbitrators who were or are affiliated
with the securities industry.
The Employer agrees that all controversies which may arise between the
Employer and either or both the Trustee and its affiliate Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") in connection
with the trust, including, but not limited to, those involving conduct
of the CMA Account, and any transactions therein, or the construction,
performance, or breach of this or any other agreement between the
Employer and either or both the Trustee and MLPF&S, whether entered
into prior, on, or subsequent to the date thereof, shall be determined
by arbitration. Any arbitration under this agreement shall be conducted
only before the New York Stock Exchange, Inc., The American Stock
Exchange, Inc., or arbitration facility provided by any other
10
<PAGE> 13
exchange of which MLPF&S is a member, The National Association of
Securities Dealers, Inc., or the Municipal Securities Rulemaking Board,
and in accordance with its arbitration rules then in force. The
Employer may elect in the first instance whether arbitration shall be
conducted before The New York Stock Exchange, Inc., The American Stock
Exchange, Inc., other exchange of which MLPF&S is a member, The
National Association of Securities Dealers, Inc., or The Municipal
Securities Rulemaking Board, but if the employer fails to make such
election, by registered letter or telegram addressed to Merrill Lynch
Trust Company, Employee Benefit Trust Operations, P.O. Box 30532,
New Brunswick, New Jersey 08989-0532, before the expiration of five
days after receipt of a written request from MLPF&S and/or the
Trustee to make such election, then MLPF&S and/or the Trustee may
make such election. Judgment upon the award or arbitrators may be
entered in any court, state or federal, having jurisdiction.
11.09 SUCCESSORS AND ASSIGNS. This Trust Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns.
11.10 GENDER. As used in this Trust Agreement, the masculine gender shall
include the feminine and the neuter genders and the singular shall
include the plural and the plural the singular as the context requires.
11.11 HEADINGS. Headings and subheadings in this Trust Agreement are for
convenience of reference only and are not to be considered in the
construction of the provisions of the Trust Agreement.
11.12 COUNTERPARTS. This Trust Agreement may be executed in several
counterparts, each of which shall be deemed an original, and these
counterparts shall constitute one and the same instrument which may be
sufficiently evidenced by any one counterpart.
IN WITNESS WHEREOF, the Employer and the Trustee have executed this
Trust Agreement each by action of a duly authorized person.
By signing this Agreement, the undersigned Employer acknowledges (1)
that, in accordance with paragraph 11.08 on page 10 of this Agreement, the
Employer is agreeing in advance to arbitration any controversies which may arise
with either or both Merrill Lynch Trust Company or Merrill Lynch, Pierce, Fenner
& Smith Incorporated, and (2) receipt of a copy of this Agreement.
The Wendt Bristol Health Services Corporation
---------------------------------------------
(Employer)
By:/s/ Sheldon A. Gold
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
MERRILL LYNCH TRUST COMPANY, TRUSTEE
By:/s/ Chris Rosin
-----------------------------------------
Name: Chris Rosin
------------------------------------
Title: V.P. - Section Manager
-----------------------------------
11
<PAGE> 1
Exhibit 5.1
[LETTERHEAD OF SCHOTTENSTEIN, ZOX, & DUNN]
November 7, 1997
The Wendt-Bristol Health Services Corporation
280 North High Street, Suite 760
Columbus, Ohio 43215
RE: The Wendt-Bristol Health Services Corporation
Registration Statement on Form S-8
Ladies and Gentlemen:
You have requested our opinion with respect to 125,000 shares of the
Common Stock, par value $0.01 per share (the "Shares"), of The Wendt-Bristol
Health Services Corporation, a Delaware corporation (the "Company") and an
indeterminate number of participation interests (the "Plan Interests") in The
Wendt-Bristol Health Services 401(k) Plan (the "Plan"), that are to be offered
pursuant to the Plan. The Shares and the Plan Interests are the subject of a
Registration Statement on Form S-8 (the "Registration Statement"), to which this
opinion is attached as an exhibit, to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended.
We have examined the Company's Amended Certificate of Incorporation and
Bylaws and the Plan's Adoption Agreement, Savings Plan and Savings Plan Trust.
We have also examined the records of corporate proceedings taken in connection
with the adoption of the Plan.
Based upon the foregoing examinations and subject to compliance with
the applicable state securities and "blue sky" laws, we are of the opinion that
the Shares, when offered, sold and paid for pursuant to the Plan, will be duly
authorized, validly issued, fully paid and non-assessable.
This opinion is issued to you solely for use in connection with this
Registration Statement, and is not to be quoted or otherwise referred to in any
financial statements of the Company or related document, nor is it to be filed
with or furnished to any government agency, firm, corporation or any other
person without our prior written consent.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Schottenstein, Zox & Dunn Co. L.P.A.
/s/ Schottenstein, Zox & Dunn Co. L.P.A.
- -----------------------------------------
<PAGE> 1
Exhibit 23.2
Independent Auditors' Consent
We consent to incorporation by reference in the Registration Statement on Form
S-8 of The Wendt-Bristol Health Services Corporation Employee 401(k) Plan of our
report dated April 11, 1997 relating to the consolidated balance sheets of The
Wendt-Bristol Health Services Corporation and subsidiary as of December 31,
1996, and 1995, and the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the three years in the period
ending December 31, 1996, which report appears in the December 31, 1996 annual
report on Form 10-K of The Wendt-Bristol Health Services Corporation.
Hausser + Taylor
/s/ Hausser + Taylor
- ---------------------
Columbus, Ohio
November 4, 1997
