<PAGE> 1
As filed with the Securities and Exchange Commission on May 6, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
TRISTAR CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-3129318
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12500 SAN PEDRO AVENUE, SUITE 500 78216
SAN ANTONIO, TEXAS (Zip Code)
(Address of Principal Executive Offices)
TRISTAR CORPORATION 401(k) RETIREMENT PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT BETWEEN
TRISTAR CORPORATION AND VIREN S. SHETH
NON-QUALIFIED STOCK OPTION AGREEMENT BETWEEN
TRISTAR CORPORATION AND LOREN M. ELTISTE
(Full title of the Plans)
VIREN S. SHETH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
TRISTAR CORPORATION
12500 SAN PEDRO AVENUE, SUITE 500
SAN ANTONIO, TEXAS 78216
(Name and address of agent for service)
(210) 402-2200
(Telephone number, including area code, of agent for service)
-----------------------
With Copy to:
FULBRIGHT & JAWORSKI L.L.P.
300 CONVENT, SUITE 2200
SAN ANTONIO, TEXAS 78205
(210) 224-5575
ATTENTION: PHILLIP M. RENFRO
-----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================
Proposed Proposed maximum
Title of securities Amount to maximum offering aggregate offering Amount of
to be registered be registered price per unit(1) price(1) registration fee
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value 619,908 shares(2) $9.375 $5,811,638 $1,761
==============================================================================================================
</TABLE>
(1) Pursuant to Rule 457(c), the maximum offering price per security and
maximum aggregate offering price of the Common Stock have been
calculated on the basis of the average of the high and low sale prices
of the Common Stock as reported in the NASDAQ SmallCap Market System
on May 2, 1997.
(2) Includes 73,702 shares of the Company's Common Stock acquired
previously or expected to be acquired in 1997 and 1998 under the
Tristar Corporation 401(k) Retirement Plan.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference
in this Registration Statement:
1. The Annual Report on Form 10-K of Tristar
Corporation, a Delaware corporation (the "Registrant"), for the year ended
August 31, 1996;
2. The Registrant's Quarterly Report on Form 10-Q for
the quarter ended November 30, 1996 and March 1, 1997;
3. The description of the Registrant's Common Stock,
$.01 par value, set forth under the caption "Description of Capital Stock"
contained in the Registrant's Form 8-A, filed by the Registrant with the
Securities Exchange Commission pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act") on January 15, 1985.
All documents filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the filing hereof
and prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing such
documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law empowers
the Registrant to, and the Bylaws of the Registrant provide that it shall,
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding by reason of
the fact that he is or was a director, officer, employee or agent of the
Registrant, or is or was serving at the request of the Registrant as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by
-2-
<PAGE> 3
him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to be the
best interest of the Registrant, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful; except
that, in the case of an action or suit by or in the right of the Registrant, no
indemnification may be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Registrant unless and only to
the extent that the Court of Chancery or the court in which such action or suit
was brought shall determine that such person is fairly and reasonably entitled
to indemnity for proper expenses.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
4.1 - Certificate of Incorporation of the Registrant, as
amended (incorporated by reference from Exhibit 3.1
to the Report on Form 8-K dated August 31, 1995).
4.2 - Bylaws of the Registrant (amended as of August 14,
1992) (incorporated by reference from Exhibit 3.2
to the Annual Report on Form 10-K for the year
ended August 31, 1992).
4.3 - Form of Common Stock certificate (incorporated by
reference from Exhibit 4.2 to the Quarterly Report
on Form 10-Q for the quarterly period ended
February 28, 1993).
4.4 - Non-Qualified Stock Option Agreement dated October
20, 1992, between Tristar Corporation and Loren M.
Eltiste (incorporated by reference to Exhibit 10.26
of the Annual Report on Form 10-K for the year
ended August 31, 1993).
4.5 - Non-Qualified Stock Option Agreement dated April
19, 1996, between Tristar Corporation and Viren S.
Sheth (incorporated by reference from Exhibit 10.29
to the Annual Report on Form 10-K for the fiscal
year ended August 31, 1996).
*4.6 - Tristar Corporation 401(k) Retirement Plan.
*5.1 - Opinion of Fulbright & Jaworski L.L.P. as to the
legality of the securities being registered.
*23.1 - Consent of Fulbright & Jaworski L.L.P. (included in
Exhibit 5.1).
-3-
<PAGE> 4
*23.2 - Consent of KPMG Peat Marwick L.L.P.
*24.1 - Powers of Attorney from the members of the Board of
Directors of the Registrant (contained on page 7
hereof).
- -------------------
* filed herewith
ITEM 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the
"Securities Act");
(ii) To reflect in the prospectus any facts or
events arising after the effective date of this Registration
Statement (or the most recent post-effective amendment hereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration
Statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in
this Registration Statement or any material change to such
information in this Registration Statement;
Provided, however, that paragraphs (i) and (ii) do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act, that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new
-4-
<PAGE> 5
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act 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
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant 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
Securities Act and will be governed by the final adjudication of such issue.
-5-
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Antonio, State of Texas, on April 28, 1997.
TRISTAR CORPORATION
By: /s/ Viren S. Sheth
--------------------------------------
Viren S. Sheth,
President and Chief Executive Officer
-6-
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose
signature appears below constitutes and appoints Viren S. Sheth and Loren M.
Eltiste, or either of them, his true and lawful attorney-in-fact and agent,
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
(including post-effective amendments) to this Registration Statement, and to
file the same and all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting said
attorney-in-fact and agent, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or either 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, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Viren S. Sheth President, Chief Executive April 28, 1997
- --------------------------
Viren S. Sheth Officer and a Director
(Principal Executive Officer)
/s/ Loren M. Eltiste Vice-President and Chief April 28, 1997
- --------------------------
Loren M. Eltiste Financial Officer (Principal
Financial and Accounting Officer)
/s/ Richard P. Rifenburgh Director April 28, 1997
- --------------------------
Richard P. Rifenburgh
/s/ Robert R. Sparacino Director April 28, 1997
- --------------------------
Robert R. Sparacino
/s/ Aaron Zutler Director April 28, 1997
- --------------------------
Aaron Zutler
/s/ Jay J. Sheth Director April 28, 1997
- --------------------------
Jay J. Sheth
</TABLE>
-7-
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description of Exhibits Pages
- ---- ----------------------- -----
<S> <C>
4.1 Certificate of Incorporation of the Registrant, as amended
(incorporated by reference from Exhibit 3.1 to the Report on
Form 8-K dated August 31, 1995).
4.2 Bylaws of the Registrant (amended as of August 14, 1992)
(incorporated by reference from Exhibit 3.2 to the Annual
Report on Form 10-K for the year ended August 31, 1992).
4.3 Form of Common Stock certificate (incorporated by reference
from Exhibit 4.2 to the Quarterly Report on Form 10-Q for the
quarterly period ended February 28, 1993).
4.4 Non-Qualified Stock Option Agreement dated October 20, 1992,
between Tristar Corporation and Loren M. Eltiste (incorporated
by reference to Exhibit 10.26 of the Annual Report on Form 10-K
for the year ended August 31, 1993).
4.5 Non-Qualified Stock Option Agreement dated April 19, 1996,
between Tristar Corporation and Viren S. Sheth (incorporated by
reference from Exhibit 10.29 to the Annual Report on Form 10-K
for the fiscal year ended August 31, 1996).
*4.6 Tristar Corporation 401(k) Retirement Plan
*5.1 Opinion of Fulbright & Jaworski L.L.P. as to the legality of
the securities being registered.
*23.1 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit
5.1).
*23.2 Consent of KPMG Peat Marwick L.L.P.
*24.1 Powers of Attorney from the members of the Board of Directors
of the Registrant (contained on page 7 hereof).
</TABLE>
- --------------------
* filed herewith
-8-
<PAGE> 1
ADOPTION AGREEMENT FOR
ATWELL AND ASSOCIATES
STANDARDIZED 401(K) PROFIT SHARING
PLAN AND TRUST
(WITH PAIRING PROVISIONS)
The undersigned Employer adopts the Atwell and Associates Standardized
401(K) Profit Sharing Plan and Trust for those Employees who shall qualify as
Participants hereunder, to be known as the
A1 Tristar Corporation 401(K) Plan
-------------------------------------
(Enter Plan Name)
It shall be effective as of the date specified below. The Employer hereby
selects the following Plan specifications:
CAUTION: The failure to properly fill out this Adoption Agreement may
result in disqualification of the Plan.
EMPLOYER INFORMATION
B1 Name of Employer Tristar Corporation
----------------------------
----------------------------
B2 Address 12500 San Pedro Ave., Suite 500
-------------------------------
San Antonio , Texas 78216
--------------------------------------------
City State Zip
Telephone: 210/402-2200
-----------------------------
B3 Employer Identification Number 13-3129318
-------------
B4 Date Business Commenced
-------------------------
B5 TYPE OF ENTITY
a. ( ) S Corporation
b. ( ) Professional Service Corporation
c. (x) Corporation
d. ( ) Sole Proprietorship
e. ( ) Partnership
f. ( ) Other
---------------------------
AND, is the Employer a member of . . .
<PAGE> 2
g. a controlled group ( ) Yes (x) No
h. an affiliated service group? ( ) Yes (x) No
B6 NAME(S) OF TRUSTEE(S)
a. Loren M. Eltiste
----------------
b.
c.
d.
e.
B7 TRUSTEES' ADDRESS
a. (x) Use Employer Address
b. (x)
Street
----------------------- ---------------------------
City State Zip
B8 LOCATION OF EMPLOYER'S PRINCIPAL OFFICE:
a. (x) State b. ( ) Commonwealth of c. Texas and this
Plan and Trust shall be governed under
the same.
B9 EMPLOYER FISCAL YEAR means the 12 consecutive month period:
Commencing on a. January 1st (e.g., January 1st) and
-------------------
month day
ending on b. December 31st .
-------------------
month day
<PAGE> 3
PLAN INFORMATION
C1 EFFECTIVE DATE
This Adoption Agreement of the Atwell and Associates Standardized
401(K) Profit Sharing Plan and Trust shall:
a. ( ) establish a new Plan and Trust effective as of
January 1, 1992 (hereinafter called the "Effective
Date").
b. (x) constitute an amendment and restatement in its
entirety of a previously established qualified Plan
and Trust of the Employer which was effective January
1, 1992 (hereinafter called the "Effective Date").
Except as specifically provided in the Plan, the
effective date of this amendment and restatement is
January 1, 1995 (For TRA '86 amendments, enter the
first day of the first Plan Year beginning in 1989).
C2 PLAN YEAR means the 12 consecutive month period:
Commencing on a. January 1st (e.g., January 1st)
-----------
and ending on b. December 31st.
-------------
IS THERE A SHORT PLAN YEAR?
c. (x) No
d. ( ) Yes, beginning
-------------------------
and ending .
-------------------------
C3 ANNIVERSARY DATE of Plan (Annual Valuation Date)
a. December 31st
------------------------
month day
C4 PLAN NUMBER assigned by the Employer (select one)
a. (x) 001 b. ( ) 002 c. ( ) 003 d. ( ) Other
-----
C5 NAME OF PLAN ADMINISTRATOR (Document provides for the Employer to
appoint an Administrator. If none is named, the Employer will become
the Administrator.)
a. (x) Employer (Use Employer Address)
b. ( ) Name
-----------------------------------------------
<PAGE> 4
Address
,
---------------------- ----------- -------
City State Zip
Telephone
--------------------------------
Administrator's I.D. Number
------------------------
C6 PLAN'S AGENT FOR SERVICE OF LEGAL PROCESS
a. (x) Employer (Use Employer Address)
b. ( ) Name
Address
<PAGE> 5
ELIGIBILITY, VESTING AND RETIREMENT AGE
D1 ELIGIBLE EMPLOYERS (Plan Section 1.15) shall mean all Employees who
have satisfied the eligibility requirements except those checked
below:
a. ( ) N.A. No exclusions.
b. (x) Employees whose employment is governed by a
collective bargaining agreement between the Employer
and "employee representatives" under which retirement
benefits were the subject of good faith bargaining.
For this purpose, the term "employee representatives"
does not include any organization more than half of
whose members are employees who are owners, officers,
or executives of the Employer.
c. (x) Employees who are nonresident aliens who received no
earned income (within the meaning of Code Section
911(d)(2)) from the Employer which constitutes income
from sources within the United States (within the
meaning of Code Section 861(a)(3)).
NOTE: For purposes of this section, the term Employee shall include all
Employees of this Employer, any Affiliated Employer, and any leased
employees deemed to be Employees under Code Section 414(n) or 414(o).
<PAGE> 6
D2 HOURS OF SERVICE (Plan Section 1.31) will be determined on the basis
of the method selected below. Only one method may be selected. The
method selected will be applied to all Employees covered under the
Plan.
a. (x) On the basis of actual hours for which an Employee is
paid or entitled to payment.
b. ( ) on the basis of days worked. An Employee will be
credited with ten (10) Hours of Service if under the
Plan such Employee would be credited with at least
one (1) Hour of Service during the day.
c. ( ) On the basis of weeks worked. An Employee will be
credited forty-five (45) Hours of Service if under
the Plan such Employee would be credited with at
least one (1) Hour of Service during the week.
d. ( ) On the basis of semi-monthly payroll periods. An
Employee will be credited with ninety-five (95) Hours
of Service if under the Plan such Employee would be
credited with at least one (1) Hour of Service during
the semi-monthly payroll period.
e. ( ) On the basis of months worked. An Employee will be
credited with one hundred ninety (190) Hours of
Service if under the Plan such Employee would be
credited with at least one (1) Hour of Service during
the month.
<PAGE> 7
D3 CONDITIONS OF ELIGIBILITY (Plan Section 3.1)
(Check either a OR b and c, and if applicable, d)
Any Eligible Employee will be eligible to participate in the Plan if
such Eligible Employee has satisfied the service and age requirements,
if any, specified below:
a. ( ) NO AGE OR SERVICE REQUIRED.
b. (x) SERVICE REQUIREMENT. (may not exceed 1 year)
1. ( ) None
2. ( ) 1/2 Year of Service
3. (x) 1 Year of Service
4. ( ) Other
--------------------------------
NOTE: If the Year(s) of Service selected is or includes a fractional
year, an Employee will not be required to complete any
specified number of Hours of Service to receive credit for
such fractional year. If expressed in Months of Service, an
Employee will not be required to complete any specified number
of Hours of Service in a particular month.
c. (x) AGE REQUIREMENT (may not exceed 21)
1. ( ) N/A - No Age Requirement.
2. ( ) 20 1/2
3. (x) 21
4. ( ) Other
--------------------------------
d. ( ) FOR NEW PLANS ONLY - Regardless of any of the above
age or service requirements, any Eligible Employee
who was employer on the Effective Date of the Plan
shall be eligible to participate hereunder and shall
enter the Plan as of such date.
<PAGE> 8
D4 EFFECTIVE DATE OF PARTICIPATION (Plan Section 3.2)
An Eligible Employee shall become a Participant as of:
a. ( ) the first day of the Plan Year in which he met the
requirements.
b. ( ) the first day of the Plan Year in which he met the
requirements, if he met the requirements in the first
6 months of the Plan Year, or as of the first day of
the next succeeding Plan Year if he met the
requirements in the last 6 months of the Plan Year.
c. ( ) the earlier of the first day of the seventh month or
the first day of the Plan Year coinciding with or
next following the date on which he met the
requirements.
d. (x) the first day of the Quarter next following the date
on which he met the requirements.
e. ( ) the first day of the month coinciding with or next
following the date on which he met the requirements.
f. ( ) Other: ________, provided that an Employee who has
satisfied the maximum age and service requirements
that are permissible in Section D3 above and who is
otherwise entitled to participate, shall commence
participation no later than the earlier of (a) 6
months after such requirement are satisfied, or (b)
the first day of the first Plan Year after such
requirements are satisfied, unless the Employee
separates from service before such participation
date.
<PAGE> 9
D5 VESTING OF PARTICIPANT'S INTEREST (Plan Section 6.4(b))
The vesting schedule, based on number of Years of Service, shall be as
follows:
<TABLE>
<S> <C> <C>
a. ( ) 100% upon entering Plan. (Required if eligibility
requirement is greater than one (1) Year of Service.)
b. ( ) 0-2 years 0% c. ( ) 0-4 years 0%
3 years 100% 5 years 100%
d. ( ) 0-1 year 0% e. ( ) 1 year 25%
2 years 20% 2 years 50%
3 years 40% 3 years 75%
4 years 60% 4 years 100%
5 years 80%
6 years 100%
f. ( ) 1 year 20% g. ( ) 0-2 years 0%
2 years 40% 3 years 20%
3 years 60% 4 years 40%
4 years 80% 5 years 60%
5 years 100% 6 years 80%
7 years 100%
h. (x) Other - Must be at least as liberal as either c or g above.
Years of Service Percentage
1 10%
---------------- -------------
2 25%
---------------- -------------
3 45%
---------------- -------------
4 70%
---------------- -------------
5 100%
---------------- --------------
6 100%
---------------- --------------
</TABLE>
<PAGE> 10
D6 FOR AMENDED PLANS (Plan Section 6.4(f)) If the vesting schedule has
been amended to a less favorable schedule, enter the pre-amended
schedule below:
a. (x) Vesting schedule has not been amended or amended
schedule is more favorable in all years.
b. ( ) Years of Service Percentage
---------------- ----------
---------------- ----------
---------------- ----------
---------------- ----------
---------------- ----------
D7 TOP HEAVY VESTING (Plan Section 6.4(c)) If this Plan becomes a Top
Heavy Plan, the following vesting schedule, based on number of Years
of Service, for such Plan Year and each succeeding Plan Year, whether
or not the Plan is a Top Heavy Plan, shall apply and shall be treated
as a Plan amendment pursuant to this Plan. Once effective, this
schedule shall also apply to any contributions made prior to the
effective date of Code Section 416 and/or before the Plan became a Top
Heavy Plan.
a. (x) N/A (D5a, b, d, e, or f was selected)
b. ( ) 0-1 year 0% c. ( ) 0-2 year 25%
2 years 20% 3 years 50%
3 years 40%
4 years 60%
5 years 80%
6 years 100%
NOTE: This section does not apply to the Account balances of any
Participant who does not have an Hour of Service after the
Plan has initially become top heavy. Such Participant's
Account balance attributable to Employer contributions and
Forfeitures will be determined without regard to this section.
<PAGE> 11
D8 VESTING (Plan Section 6.4(h). In determining Years of Service for
vesting purposes, Years of Service attributable to the following shall
be EXCLUDED:
a. (x) Service prior to the Effective Date of the Plan or a
predecessor plan.
b. ( ) N/A.
c. (x) Service prior to the time an Employee attained age 18.
d. ( ) N/A.
D9 PLAN SHALL RECOGNIZE SERVICE WITH PREDECESSOR EMPLOYER
a. ( ) No.
b. (x) Yes: Years of Service with Ross Cosmetics
Distribution Centers, Inc. shall be recognized for
the purpose of this Plan.
NOTE: If the predecessor Employer maintained this qualified Plan,
then Years of Service with such predecessor Employer shall be
recognized pursuant to Section 1.74, and b. must be marked.
D10 NORMAL RETIREMENT AGE ("NRA") (Plan Section 1.42) means:
a. (x) the date a Participant attains his 65th birthday.
(not to exceed 65th)
b. ( ) the later of the date a participant attains his _____
65th) or the c. ___________ (not to exceed 5th)
anniversary of the first day of the Plan Year in
which participation in the Plan commenced.
D11 NORMAL RETIREMENT DATE (Plan Section 1.43) shall commence:
a. ( ) as of the Participant's "NRA."
OR (must select b. or c. AND 1. or 2.)
b. (x) as of the first day of the month ...
c. ( ) as of the Anniversary Date ...
1. (x) coinciding with or next following the
Participant's "NRA."
2. ( ) nearest the Participant's "NRA."
D12 EARLY RETIREMENT DATE (Plan Section 1.12) means the:
a. (x) No Early Retirement provision provided.
b. ( ) date on which a Participant...
c. ( ) first day of the month coinciding with or next
following the date on which a Participant ...
d. ( ) Anniversary Date coinciding with or next following
the date on which a Participant ...
AND, if b. c or d was selected ...
1. ( ) attains his ____ birthday and has
2. ( ) completed at least ____ Years of Service.
<PAGE> 12
CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS
E1 a. COMPENSATION (Plan Section 1.9) with respect to any
Participant means:
1. ( ) "415 Compensation."
2. (x) Compensation reportable as wages on Form W-2.
b. COMPENSATION shall be
1. (x) actually paid (must be selected if Plan is
integrated)
2. ( ) accrued
c. FOR PURPOSES OF THIS SECTION E1, Compensation shall be based
on:
1. (x) the Plan Year.
2. ( ) the Fiscal Year coinciding with or ending
within the Plan Year.
3. ( ) the Calendar Year coinciding with or ending
within the Plan Year.
NOTE: The Limitation Year shall be the same as the year on which
Compensation is based.
d. HOWEVER, for an Employee's first year of participation,
Compensation shall be recognized as of:
1. ( ) the first day of the Plan Year.
2. (x) the date the Participant entered the Plan.
e. IN ADDITION, COMPENSATION and "414(s) Compensation"
1. (x) shall 2. ( ) shall not include
compensation which is not currently includable in the
Participant's gross income by reason of the application of
Code Sections 125, 401(a)(8), 402(h)(1)(B), or 403(b).
<PAGE> 13
E2 SALARY REDUCTION ARRANGEMENT - ELECTIVE CONTRIBUTION (Plan Section
11.2) Each Employee may elect to have his Compensation reduced by:
a. ( ) ______%
b. ( ) up to ______%
c. ( ) from ______% to ______%
d. (x) up to the maximum percentage allowable not to exceed
the limits of Code Sections 401(k), 404 and 415.
AND ...
e. (x) A Participant may elect to commence salary reductions
as of each plan year quarterly (ENTER AT LEAST ONE
DATE OR PERIOD). A Participant may modify the amount
of salary reductions as of each plan year
quarterly(ENTER AT LEAST ONE DATE OR PERIOD).
AND ...
Shall cash bonuses paid within 2 1/2 months after the end of
the Plan Year be subject to the salary reduction election?
f. (x) Yes
g. ( ) No
<PAGE> 14
E3 FORMULA FOR DETERMINING EMPLOYER'S MATCHING CONTRIBUTION (Plan Section
11.1(b))
a. ( ) N/A. There shall be no matching contributions.
b. ( ) The Employer shall make matching contributions equal
to _____% (e.g. 50%) of the Participant's salary
reductions.
c. (x) The Employer may make matching contributions equal to
a discretionary percentage, to be determined by the
Employer, of the Participant's salary reductions.
d. ( ) The Employer shall make matching contributions equal
to the sum of ______% of the portion of the
Participant's salary reduction which does not exceed
______% of the Participant's Compensation plus __%
of the portion of the Participant's salary reduction
which exceeds ____ % of the Participant's
Compensation, but does not exceed ___% of the
Participant's Compensation.
e. ( ) The Employer shall make matching contributions equal
to the percentage determined under the following
schedule:
Participant's Total Matching Percentage
years of Service
---------- -------
---------- -------
---------- -------
<PAGE> 15
FOR PLANS WITH MATCHING CONTRIBUTIONS
f. (x) Matching contributions g. ( ) shall h. (x) shall not be
used in satisfying the deferral percentage tests. (If used,
full vesting and restrictions on withdrawals will apply and
the match will be deemed to be an Elective Contribution).
i. ( ) For Plan Years beginning prior to 1990, a Year of Service ( )
shall j. ( ) shall not be required in order to share in the
matching contributions. For Plan Years beginning after 1989,
a Year of Service shall not be required in order to share in
the matching contributions.
k. ( ) In determining matching contributions, only salary reductions
up to ____% of a Participant's Compensation will be matched.
l. (x) N/A
m. ( ) The matching contribution made on behalf of a Participant for
any Plan Year shall not exceed $ ______. n. (x) N/A
o. (x) Matching contributions shall be made on behalf of
1. (x) All Participants.
2. ( ) only Non-Highly Compensated Employees.
<PAGE> 16
E4 WILL A DISCRETIONARY EMPLOYER CONTRIBUTION BE PROVIDED (OTHER THAN A
DISCRETIONARY MATCHING OR QUALIFIED NON- ELECTIVE CONTRIBUTIONS) (Plan
Section 11.1(c))?
a. ( ) No.
b. ( ) Yes, the Employer may make a discretionary
contribution out of its current or accumulated Net
Profit.
c. (x) Yes, the Employer may make a discretionary
contribution which is not limited to its current or
accumulated Net Profit.
IF YES (b. or c. is selected above), the Employer's discretionary
contribution shall be allocated as follows:
d. (x) FOR A NON-INTEGRATED PLAN
The Employer discretionary contribution for the Plan Year shall be
allocated in the same ratio as each Participant's Compensation bears
to the total of such Compensation of all Participants.
E. ( ) FOR AN INTEGRATED PLAN
The Employer discretionary contribution for the Plan Year shall be
allocated in accordance with Plan Section 4.3(b)(2) based on a
Participant's Compensation in excess of:
f. ( ) The Taxable Wage Base.
g. ( ) The greater of $10,000 or 20% of the Taxable Wage
Base.
h. ( ) _____% of the Taxable Wage Base. (See Note below)
i. ( ) $______. (see Note below)
NOTE: The integration percentage of 5.7% shall be reduced to:
1. 4.3% if h. or i. above is more than 20% and less than
or equal to 80% of the Taxable Wage Base.
2. 5.4% if h. or i. above is less than 100% and more
than 80% of the Taxable Wage Base.
<PAGE> 17
E5 QUALIFIED NON-ELECTIVE CONTRIBUTIONS (Plan Section 11.1(d))
a. ( ) N/A. There shall be no Qualified Non-Elective
Contributions except as provided in Section 11.5(b)
and 11.7(h).
b. ( ) The Employer shall make a Qualified Non-Elective
Contribution equal to ______% of the total
Compensation of all Participants eligible to share in
the allocations.
c. (x) The Employer may make a Qualified Non-Elective
Contribution in an amount to be determined by the
Employer.
E6 FORFEITURES (Plan Section 4.3(e))
a. Forfeitures of contributions other than matching contributions
shall be ...
1. ( ) added to the Employer's contribution under
the Plan.
2. (x) allocated to all Participants eligible to
share in the allocations in the same
proportion that each Participant's
Compensation for the year bears to the
Compensation of all Participants for such
year.
b. Forfeitures of matching contributions shall be...
1. ( ) N/A. No matching contributions or match is
fully vested.
2. ( ) used to reduce the Employer's matching
contribution.
3. (x) allocated to all Participant's eligible to
share in the allocations in proportion to
each such Participant's Compensation for the
year.
4. ( ) allocated to all Non-Highly Compensated
Employee's eligible to share in the
allocations in proportion to each such
Participant's Compensation for the year.
<PAGE> 18
E7 ALLOCATIONS TO TERMINATED PARTICIPANTS (Plan Section 4.4(1))
Any Participant who terminated employment during the Plan Year for
reasons other than death, Total and Permanent Disability or
retirement:
a. With respect to the allocation of Employer Non-Elective
Contributions (other than matching), Qualified Non-Elective
Contributions, and Forfeitures for Plan Years beginning prior
to 1990:
1. (x) N/A
2. ( ) shall share in such allocations provided such
Participant completed a Year of Service.
3. ( ) shall not share in such allocations
regardless of Hours of Service.
NOTE: The Plan provides that for Plan Years beginning after 1989, a
terminated Participant shall share in such allocations
provided such Participant completed more than 500 Hours of
Service.
b. With respect to the allocation of Employer Matching
Contributions, a Participant:
1. For Plan Years beginning after 1989,
i. ( ) N/A, Plan does not provide for
matching contributions.
ii. ( ) shall share in the allocations,
regardless of Hours of Service.
iii. (x) shall share in the allocations
provided such Participant completed
more than 500 Hours of Service.
2. For Plan Years beginning before 1990,
i. (x) N/A, new Plan, or same as Plan Years
beginning after 1989.
ii. ( ) shall share in the allocations,
regardless of Hours of Service.
iii. ( ) shall share in the allocations
provided such Participant completed
a Year of Service.
<PAGE> 19
E8 ALLOCATIONS OF EARNINGS (Plan Section 4.3(c))
Allocations of earnings with respect to amounts contributed to the
Plan after the previous Anniversary Date or other valuation date shall
be determined...
a. ( ) by using a weighted average.
b. ( ) by treating one-half of all such contributions as
being a part of the Participant's nonsegregated
account balance as of the previous Anniversary Date
or valuation date.
c. ( ) by using the method specified in Section 4.3(c).
d. (x) other ending balance excluding 1/2 YTD contributions
E9 LIMITATIONS ON ALLOCATIONS (Plan Section 4.4)
a. If any Participant is or was covered under another qualified
defined contribution plan maintained by the Employer, or if
the Employer maintains a welfare benefit fund, as defined in
Code Section 419(e), or an individual medical account, as
defined in Code Section 415(1)(2), under which amounts are
treated as Annual Additions with respect to any Participant in
this Plan:
1. (x) N/A.
2. ( ) The provisions of Section 4.4(b) of the Plan
will apply.
3. ( ) Provide the method under which the Plans will
limit total Annual Additions to the Maximum
Permissible Amount, and will properly reduce
any Excess Amount, and will properly reduce
any Excess Amounts, in a manner that
precludes Employer discretion.
---------------------------------------------
---------------------------------------------
---------------------------------------------
NOTE: If a.3 above is selected, an Employer may
not rely on the opinion letter issued by the
Internal Revenue Service that this Plan is
qualified under Code Section 401.
<PAGE> 20
b. If any Participant is or ever has been a Participant in a
defined benefit plan maintained by the Employer:
1. (x) N/A.
2. ( ) In any Limitation Year, the Annual Additions
credited to the Participant under this Plan
may not cause the sum of the Defined Benefit
Plan Fraction and the Defined Contribution
Fraction to exceed 1.0. If the Employer's
contribution that would otherwise be made on
the Participant's behalf during the
limitation year would cause the 1.0
limitation to be exceeded, the rate of
contribution under this Plan will be reduced
so that the sum of the fractions equals 1.0.
If the 1.0 limitation is exceeded because of
an Excess Amount, such Excess Amount will be
reduced in accordance with Section 4.4(a)(4)
of the Plan.
3. ( ) Provide the method under which the Plans
involved will satisfy the 1.0 limitation in a
manner that precludes Employer discretion.
---------------------------------------------
---------------------------------------------
---------------------------------------------
<PAGE> 21
E10 DISTRIBUTIONS UPON DEATH (Plan Section 6.6(H))
Distributions upon the death of a Participant prior to receiving any
benefits shall...
a. (x) be made pursuant to the election of the Participant
or beneficiary.
b. ( ) begin within 1 year of death for a designated
beneficiary and be payable over the life (or over a
period not exceeding the life expectancy) or such
beneficiary, except that if the beneficiary is the
Participant's spouse, begin within the time the
Participant would have attained age 70 1/2.
c. ( ) be made within 5 years of death for all
beneficiaries.
d. ( ) other ______
E11 LIFE EXPECTANCIES (Plan Section 6.5(f) for minimum distributions
required pursuant to Code Section 401(a)(9) shall ...
a. (x) be recalculated at the Participant's election.
b. ( ) be recalculated.
c. ( ) not be recalculated.
E12 CONDITIONS FOR DISTRIBUTIONS UPON TERMINATION
Distributions upon termination of employment pursuant to Section
6.4(a) of the Plan shall not be made unless the following conditions
have been satisfied:
a. ( ) N/A. Immediate distributions may be made at
Participant's election.
b. ( ) The Participant has incurred ______ 1-Year Break(s)
in Service.
c. ( ) The Participant has reached his or her Early or
Normal Retirement Age.
d. (x) Distributions may be made at the Participant's
election on or after the Quarter following
termination of employment.
e. ( ) Other ______
<PAGE> 22
E13 FORM OF DISTRIBUTIONS (Plan Sections 6.5 and 6.6)
Distributions under the Plan may be made...
a. 1. (x) in lump sums.
2. ( ) in lump sums or installments.
b. AND, pursuant to Plan Section 6.13,
1. (x) no annuities are allowed (avoids Joint and
Survivor rules).
2. ( ) annuities are allowed (Plan Section 6.13
shall not apply).
NOTE: b.1. above may not be elected if this is an amendment to a
plan which permitted annuities as a form of distribution or if
this Plan has accepted a plan to plan transfer of assets from
a plan which permitted annuities as a form of distribution.
c. AND may be made in...
1. ( ) cash only (except for insurance or annuity
contracts).
2. (x) cash or property.
<PAGE> 23
TOP HEAVY REQUIREMENTS
F1 TOP HEAVY DUPLICATIONS (Plan Section 4.3(i)): When a Non-Key Employee
is a Participant in this Plan and a Defined Benefit Plan maintained by
the Employer, indicate which method shall be utilized to avoid
duplication of top heavy minimum benefits.
a. (x) The Employer does not maintain a Defined Benefit
Plan.
b. ( ) A minimum, non-integrated contribution of 5% of each
Non-Key Employee's total Compensation shall be
provided in this Plan, as specified in Section
4.3(i). (The Defined Benefit and Defined
Contribution Fractions will be computed using 100% if
this choice is selected.)
c. ( ) A minimum, non-integrated contribution of 7 1/2% of
each Non-Key Employee's total Compensation shall be
provided in this Plan, as specified in Section
4.3(i). (If this choice is selected, the Defined
Benefit and Defined Contribution Fractions will be
computed using 125% for all Plan Years in which the
Plan is Top Heavy, but not Super Top Heavy.)
d. ( ) Specify the method under which the Plans will provide
top heavy minimum benefits for Non-Key Employees that
will preclude Employer discretion and avoid
inadvertent omissions, including any adjustments
required under Code Section 415(e).
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
<PAGE> 24
F2 PRESENT VALUE OF ACCRUED BENEFIT (Plan Section 2.2) for Top Heavy
purposes where the Employer maintains a Defined Benefit Plan in
addition to this Plan, shall be based on...
a. (x) N/A. The Employer does not maintain a defined
benefit plan.
b. ( ) Interest Rate: ______
Mortality Table: ______
F3 TOP HEAVY DUPLICATIONS: Employer maintaining two (2) or more Defined
Contribution Plans (other than paired plans).
a. (x) N/A.
b. ( ) A minimum, non-integrated contribution of 3% of each
Non-Key Employee's total Compensation shall be
provided in the Money Purchase Plan (or other plan
subject to Code Section 412), where the Employer
maintains two (2) or more non-paired Defined
Contribution Plans.
c. ( ) Specify the method under which the Plans will provide
top heavy minimum benefits for Non-Key Employees that
will preclude Employer discretion and avoid
inadvertent omissions, including any adjustments
required under Code Section 415(e).
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
<PAGE> 25
MISCELLANEOUS
G1 LOANS TO PARTICIPANTS (Plan Section 7.4)
a. (x) Yes, loans may be made up to $50,000 or 1/2 Vested
interest.
b. ( ) No, loans may not be made.
If YES, (check all that apply)...
c. (x) loans shall be treated as a Directed Investment.
d. ( ) loans shall only be made for hardship or financial
necessity.
e. (x) the minimum loan shall be $1,000.
f. ( ) $10,000 de minimis loans may be made regardless of
Vested interest. (If selected, plan may need
security in addition to Vested interest).
NOTE: Department of Labor Regulations require the adoption of a
SEPARATE written loan program setting forth the requirements
outlined in Plan Section 7.4.
G2 DIRECTED INVESTMENT ACCOUNTS (Plan Section 4.8) are permitted for the
interest in any one or more accounts.
a. (x) Yes, regardless of the Participant's Vested interest
in the Plan.
b. ( ) Yes, but only with respect to the Participant's
Vested interest in the Plan
c. ( ) Yes, but only with respect to those accounts which
are 100% Vested.
d. ( ) No directed investments are permitted.
G3 TRANSFERS FROM QUALIFIED PLANS (Plan Section 4.6)
a. (x) Yes, transfers from qualified plans (and rollovers)
will be allowed.
b. ( ) No, transfers from qualified plans (and rollovers)
will not be allowed.
AND, transfers shall be permitted...
c. (x) from any Employee, even if not a Participant.
d. ( ) from Participants only.
<PAGE> 26
G4 EMPLOYEES' VOLUNTARY CONTRIBUTIONS (Plan Section 4.7)
a. ( ) Yes, Voluntary Contributions are allowed subject to
the limits of Section 4.10.
b. (x) No. Voluntary Contributions will not be allowed.
NOTE: TRA '86 subjects voluntary contributions to strict
discrimination rules.
G5 HARDSHIP DISTRIBUTIONS (Plan Section 6.11)
a. ( ) Yes, from any accounts which are 100% Vested.
b. ( ) Yes, from Participant's Elective Account only.
c. ( ) Yes, but limited to the Participant's Account only.
d. (x) No.
NOTE: Distributions from a Participant's Elective Account are
limited to the portion of such account attributable to such
Participant's Deferred Compensation and earnings attributable
thereto up to December 31, 1988. Also hardship distributions
are not permitted from a Participant's Qualified Non- Elective
Account.
G6 PRE-RETIREMENT DISTRIBUTION (Plan Section 6.10)
a. ( ) If a Participant has reached the age of _____,
distributions may be made, at the Participant's
election, from any accounts which are 100% Vested
without requiring the Participant to terminate
employment.
b. (x) No pre-retirement distribution may be made.
NOTE: Distributions from a Participant's Elective Account and
Qualified Non-Elective Account are not permitted prior to age
59 1/2.
<PAGE> 27
G7 LIFE INSURANCE (Plan Section 7.2(d)) may be purchased with Plan
contributions.
a. ( ) No life insurance may be purchased.
b. ( ) Yes, at the option of the Administrator.
c. (x) Yes, at the option of the Participant.
AND, the purchase of initial or additional life insurance shall be
subject to the following limitations: (select all that apply)
d. (x) N/A, no limitations.
e. ( ) each initial Contract shall have a minimum face
amount of $____.
f. ( ) each additional Contract shall have a minimum face
amount of $_____.
g. ( ) the Participant has completed _____ Years of Service.
h. ( ) the Participant has completed _____ Years of Service
while a Participant in the Plan.
i. ( ) the Participant is under age _____ on the Contract
issue date.
j. ( ) the maximum amount of all Contracts on behalf of a
Participant shall not exceed $_______.
K. ( ) the maximum face amount of life insurance shall be
$_____.
<PAGE> 28
An Employer who has ever maintained or who later adopts any plan in addition to
this Plan (including a welfare benefit fund, as defined in Code Section 419(e),
which provides post-retirement medical benefits allocated to separate accounts
for Key Employees, as defined in Code Section 419A(d)(3) or an individual
medical account, as defined in Code Section 415(1)(2)) (other than paired plan
001) may not rely on the opinion letter issued by the National Office of the
Internal Revenue Service as evidence that this Plan is qualified under Code
Section 401. If the Employer who adopts or maintains multiple plans wishes to
obtain reliance that the Employer's plan(s) are qualified, application for a
determination letter should be made to the appropriate kay district director of
Internal Revenue.
This Adoption Agreement may be used only in conjunction with basic Plan
document 001. This Adoption Agreement and the basic Plan document shall
together be known as Tristar Corporation 401(k) Plan Standardized 401(k) Profit
Sharing Plan and Trust 001.
The adoption of this Plan, its qualification by the IRS, and the related tax
consequences are the responsibility of the Employer and its independent tax and
legal advisors.
Atwell and Associates will notify the Employer of any amendments made to the
Plan or of the discontinuance or abandonment of the Plan provided this Plan has
been acknowledged by Atwell and Associates or its authorized representative.
Furthermore, in order to be eligible to receive such notification, we agree to
notify Atwell and Associates of any change in address.
<PAGE> 29
IN WITNESS WHEREOF, the Employer and Trustee hereby cause this Plan to be
executed on ____________________. Furthermore, this Plan may not be used
unless acknowledged by Tristar Corporation or its authorized representative.
EMPLOYER:
Tristar Corporation
- --------------------------------- ------------------------------------
(enter name) TRUSTEE
By:
----------------------------- -----------------------------
TRUSTEE
PARTICIPATING EMPLOYER:
------------------------------------
TRUSTEE
- ---------------------------------
(enter name)
By:
------------------------------
This Plan may not be used, and shall not be deemed to be a Regional Prototype
Plan, unless an authorized representative of Atwell and Associates has
acknowledged the use of the Plan. Such acknowledgment is for administerial
purposes only. It acknowledges that the Employer is using the Plan but does
not represent that this Plan, including the choices selected on the Adoption
Agreement, has been reviewed by a representative of the sponsor or constitutes
a qualified retirement plan.
Atwell and Associates
By:
-------------------------------
<PAGE> 30
ATWELL AND ASSOCIATES REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST
Copyright 1992 Atwell and Associates
<PAGE> 31
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
<TABLE>
<S> <C> <C>
2.1 TOP HEAVY PLAN REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.2 DETERMINATION OF TOP HEAVY STATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.7 RECORDS AND REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.8 APPOINTMENT OF ADVISERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.9 INFORMATION FROM EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.10 PAYMENT OF EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.11 MAJORITY ACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.12 CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.13 CLAIMS REVIEW PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.2 EFFECTIVE DATE OF PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.3 DETERMINATION OF ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.4 TERMINATION OF ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.5 OMISSION OF ELIGIBLE EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.6 INCLUSION OF INELIGIBLE EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.7 ELECTION NOT TO PARTICIPATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
-i-
<PAGE> 32
<TABLE>
<S> <C> <C>
4.4 MAXIMUM ANNUAL ADDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.6 TRANSFERS FROM QUALIFIED PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.7 VOLUNTARY CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.8 DIRECTED INVESTMENT ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.10 ACTUAL CONTRIBUTION PERCENTAGE TESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.11 INTEGRATION IN MORE THAN ONE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.2 METHOD OF VALUATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.2 DETERMINATION OF BENEFITS UPON DEATH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.3. DETERMINATION OF BENEFITS IN EVENT OF DISABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.4 DETERMINATION OF BENEFITS UPON TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.6 DISTRIBUTION OF BENEFITS UPON DEATH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.7 TIME OF SEGREGATION OR DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.8 DISTRIBUTION FOR MINOR BENEFICIARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.10 PRE-RETIREMENT DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
6.13 SPECIAL RULE FOR NON-ANNUITY PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
7.3 OTHER POWERS OF THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
7.4 LOANS TO PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
7.7 ANNUAL REPORT OF THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
7.8 AUDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
</TABLE>
-ii-
<PAGE> 33
<TABLE>
<S> <C> <C>
7.10 TRANSFER OF INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
7.11 TRUSTEE INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
7.12 EMPLOYER SECURITIES AND REAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
8.2 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
8.3 MERGER OR CONSOLIDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
ARTICLE IX
MISCELLANEOUS
9.1 EMPLOYER ADOPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.2 PARTICIPANT'S RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
9.3 ALIENATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
9.4 CONSTRUCTION OF PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
9.5 GENDER AND NUMBER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
9.6 LEGAL ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
9.8 BONDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.9 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.10 INSURER'S PROTECTIVE CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.11 RECEIPT AND RELEASE FOR PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.12 ACTION BY THE EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
9.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . 80
9.14 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
9.15 APPROVAL BY INTERNAL REVENUE SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
9.16 UNIFORMITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
9.17 PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
10.3 DESIGNATION OF AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
10.4 EMPLOYEE TRANSFERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES . . . . . . . . . . . . . . . . . . . . . . . 82
10.6 AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
10.7 DISCONTINUANCE OF PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
10.8 ADMINISTRATOR'S AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
</TABLE>
-iii-
<PAGE> 34
<TABLE>
<S> <C> <C>
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE . . . . . . . . . . . . . . . . . . . . . . . . . 83
ARTICLE XI
CASH OR DEFERRED PROVISIONS
11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.2 PARTICIPANT'S SALARY REDUCTION ELECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
11.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS . . . . . . . . . . . . . . . . . . . . . . . . 89
11.4 ACTUAL DEFERRAL PERCENTAGE TESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
11.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
11.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
11.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS . . . . . . . . . . . . . . . . . . . . . . . . . 100
11.8 ADVANCE DISTRIBUTION FOR HARDSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
</TABLE>
-iv-
<PAGE> 35
ARTICLE I
DEFINITIONS
As used in this Plan, the following words and phrases shall
have the meanings set forth herein unless a different meaning is clearly
required by the context:
1.1 "Act" means the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
1.2 "Administrator" means the person(s) or entity designated by
the Employer pursuant to Section 2.4 to administer the Plan on behalf of the
Employer.
1.3 "Adoption Agreement" means the separate Agreement which is
executed by the Employer and accepted by the Trustee which sets forth the
elective provisions of this Plan and Trust as specified by the Employer.
1.4 "Affiliated Employer" means the Employer and any corporation
which is a member of a controlled group of corporations (as defined in Code
Section 414(b)) which includes the Employer; any trade or business (whether or
not incorporated) which is under common control (as defined in Code Section
414(c)) with the Employer; any organization (whether or not incorporated) which
is a member of an affiliated service group (as defined in Code Section 414(m))
which includes the Employer; and any other entity required to be aggregated
with the Employer pursuant to Regulations under Code Section 414(o).
1.5 "Aggregate Account" means with respect to each Participant,
the value of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions, subject to the provisions
of Section 2.2.
1.6 "Anniversary Date" means the anniversary date specified in C3
of the Adoption Agreement.
1.7 "Beneficiary" means the person to whom a share of a deceased
Participant's interest in the Plan is payable, subject to the restrictions of
Sections 6.2 and 6.6.
1.8 "Code" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
1.9 "Compensation" with respect to any Participant means such
Participant's compensation as specified by the Employer in E1 of the Adoption
Agreement that is paid during the applicable period. Compensation for any
Self- Employee Individual shall be equal to his Earned Income.
In addition, if specified in the Adoption Agreement,
Compensation for all Plan purposes Plan purposes shall also include
compensation is not currently includible in the
-1-
<PAGE> 36
Participant's gross income by reason of the application of Code Sections 125,
402(a) (8), 402(h)(1)(B), or 403(b).
Compensation in excess of $200,000 shall be disregarded. Such
amount shall be adjusted at the same time and in such manner as permitted under
Code Section 415(d). In applying this limitation, the family group of a Highly
Compensated Participant who is subject to the Family Member aggregation rules
of Code Section 414(q)(6) because such Participant is either a "five percent
owner" of the Employer or one of the ten (10) Highly Compensated Employees paid
the greatest "415 Compensation" during the year, shall be treated as a single
Participant, except that for this purpose Family Members shall include only the
affected Participant's spouse and any lineal descendants who have not attained
age nineteen (19) before the close of the year. If, as a result of the
application of such rules, the adjusted $200,000 limitation is exceeded, then
(except for purposes of determining the portion of Compensation up to the
integration level if this plan is integrated), the limitation shall be prorated
among the affected individuals in proportion to each such individual's
Compensation as determined under this Section prior to the application of this
limitation.
For Plan Years beginning prior to January 1, 1989, the
$200,000 limit (without regard to Family Member aggregation) shall apply only
for Top Heavy Plan Years and shall not be adjusted.
1.10 "Contract" or "Policy" means any life insurance policy,
retirement income policy, or annuity contract (group or individual) issued by
the Insurer. In the event of any conflict between the terms of this Plan and
the terms of any insurance contract purchased hereunder, the Plan provisions
shall control.
1.11 "Deferred Compensation" means, with respect to any
Participant, that portion of the Participant's total Compensation which has
been contributed to the Plan in accordance with the Participant's deferral
election pursuant to Section 11.2.
1.12 "Early Retirement Date" means the date specified in the
Adoption Agreement on which a Participant or Former Participant has satisfied
the age and service requirements specified in the Adoption Agreement (early
Retirement Age). A Participant shall become fully Vested upon satisfying this
requirement if still employed at his Early Retirement Age.
A Former Participant who terminates employment after
satisfying the service requirement for Early Retirement and who thereafter
reaches the age requirement contained herein shall be entitled to receive his
benefits under this Plan.
1.13 "Earned Income" means with respect to a Self-Employed
Individual, the net earnings from self-employment in the trade or business with
respect to which the Plan is established, for which the personal services of
the individual are a material income-producing factor. Net earnings will be
determined without regard to items not included in gross income
-2-
<PAGE> 37
and the deductions allocable to such items. Net earnings are reduced by
contributions by the Employer to a qualified Plan to the extent deductible
under Code Section 404. In addition, for Plan Years beginning after December
31, 1989, net earnings shall be determined with regard to the deduction allowed
to the Employer by Code Section 164(f).
1.14 "Elective Contribution" Means the Employer's contributions to
the Plan that are made pursuant to the Participant's deferral election pursuant
to Section 11.2. In addition, if selected in E3 of the Adoption Agreement, the
Employer's matching contribution made pursuant to Section 11.1(b) shall be
considered an Elective Contribution for purposes of the Plan. Elective
Contributions shall be subject to the requirements of Sections 11.2(b) and
11.2(c) and shall further be required to satisfy the discrimination
requirements of Regulation 1.401(k)-1(b)(3), the provisions of which are
specifically incorporated herein by reference.
1.15 "Eligible Employee" means any Employee specified in D1 of the
Adoption Agreement.
1.16 "Employee" means any person who is employed by the Employer,
but excludes any person who is employed as an independent contractor. The term
Employee shall also include Leased Employees as provided in Code Section 414(n)
or (o).
Except as provided in the Non-Standardized Adoption Agreement,
all Employees of all entities which are an Affiliated Employer will be treated
as employed by a single employer.
1.17 "Employer" means the entity specified in the Adoption
Agreement, any Participating Employer (as defined in Section 10.1) which shall
adopt this Plan, any successor which shall maintain this Plan and any
predecessor which has maintained this Plan.
1.18 "Excess Compensation" means, with respect to a Plan that is
integrated with Social Security, a Participant's Compensation which is in
excess of the amount set forth in the Adoption Agreement.
1.19 "Excess Contribution" means, with respect to a Plan Year, the
excess of Elective Contributions and Qualified Non-Elective Contributions made
on behalf of Highly Compensated Participants for the Plan Year over the maximum
amount of such contributions permitted under Section 11.4(a).
1.20 "Excess Deferred Compensation" means, with respect to any
taxable year of a Participant, the excess of the aggregate amount of such
Participant's Deferred Compensation and the elective deferrals pursuant to
Section 11.2(f) actually made on behalf of such Participant for such taxable
year, over the dollar limitation provided for in Code Section 402(g), which is
incorporated herein by reference.
-3-
<PAGE> 38
1.21 "Family Member" means, with respect to an affected
Participant, such Participant's spouse, and such Participant's lineal
descendants and ascendants and their spouses, all as described in Code Section
414(q)(6)(B).
1.22 "Fiduciary" means any person who (a) exercises any
discretionary authority or discretionary control respecting management of the
Plan or exercises any authority or control respecting management or disposition
of its assets, (b) renders investment advice for a fee or other compensation,
direct or indirect, with respect to any monies or other property of the Plan or
has any authority or responsibility to do so, or (c) has any discretionary
authority or discretionary responsibility in the administration of the Plan,
including, but no limited to, the Trustee, the Employer and its representative
body, and the Administrator.
1.23 "Fiscal Year" means the Employer's accounting year as
specified in the Adoption Agreement.
1.24 "Forfeiture" means that portion of a Participant's Account
that is not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Participant's Account, pr
(b) the last day of the Plan Year in which the Participant
incurs five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case
of a Terminated Participant whose Vested benefit is zero, such Terminated
Participant shall be deemed to have received a distribution of his Vested
benefit upon his termination of employment. In addition, the term Forfeiture
shall also include amounts deemed to be Forfeitures pursuant to any other
provision of this Plan.
1.25 "Former Participant" means a person who has been a
Participant, but who has ceased to be a Participant for any reason.
1.26 "414(s) Compensation" with respect to any Employee means his
Compensation as defined in Section 1.9. However, for purposes of this Section,
Compensation shall be Compensation paid and shall be determined by including,
in the case of a non-standardized Adoption Agreement, any items that are
excluded from Compensation pursuant to the Adoption Agreement. The amount of
"414(s) Compensation" with respect to any Employee shall include "414(s)
Compensation" during the entire twelve (12) month period ending on the last day
of such Plan Year, except that for Plan Years beginning prior to the later of
January 1, 1992, or the date that is sixty (60) days after the date final
Regulations are issued, "414(s) days after the date final Regulations are
issued, "414(s) Compensation" shall only be recognized as of an Employee's
effective date of participation.
-4-
<PAGE> 39
In addition, if specified in the Adoption Agreement, "414(s)
Compensation" shall also include compensation which is not currently includible
in the Participant's gross income by reason of the application of Code Sections
125, 402(a)(8), 402(h)(1)(B), or 403(b), plus Elective Contributions
attributable to Deferred Compensation recharacterized as voluntary Employee
contributions pursuant to 11.5(a).
1.27 "415 Compensation" means compensation as defined in Section 4.4(f)(2).
1.28 "Highly compensated Employee" means an Employee described in
Code Section 414(q) and the Regulations thereunder and generally means an
Employee who performed services for the Employer 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" as defined in
Section 1.35(c).
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $50,000 and were in
the Top Paid Group of Employees for the Plan Year.
(d) Employees who during the "look-back ear" were
officers of the Employer (as that term is defined within the meaning
of the Regulations under Code Section 416) and 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 shall 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, then 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 are also described in (b), (c) or (d) above
when these paragraphs are modified to substitute "determination year"
for "look-back year".
The "determination year" shall be the Plan Year for which
testing is being performed, and the "look- back year" shall be the immediately
preceding twelve-month period. However, if the Plan Year is a calendar year,
or if another Plan of the Employer so provides, then the "look-back year" shall
be the calendar year ending with or within the Plan Year for which testing is
being performed, and the "determination year" (if applicable) shall be the
period
-5-
<PAGE> 40
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")/
With respect to this election, it shall be applied on a uniform and consistent
basis to all plans, entities, and arrangements of the Employer.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts that would otherwise be
excluded from a Participant's gross income by reason of the application of Code
Sections 125, 402(a) (8), 402(h)(1)(B) and, in the case of Employer
contributions made pursuant to a salary reduction agreement, Code Section
403(b). Additionally, the dollar threshold amounts specified in (b) and (c)
above shall be adjusted at such time and in such manner as is provided in
Regulations. In the case of such an adjustment, the dollar limits which shall
be applied are those for the calendar year in which the "determination year" or
"look back year" begins.
In determining who is a Highly Compensated Employee, Employees
who are non-resident aliens and who received no earned income (within the
meaning of Code Section 911(d)) from the Employer constituting United States
source income within the meaning of Code Section 911(d)) from the Employer
constituting United States source income within the meaning of Code Section
861(a)(3) shall not be treated as Employees. Additionally, all Affiliated
Employers shall be taken into account as a single employer and Leased Employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such Leased Employees are covered by a plan described in Code
Section 414(n)(5) and are not covered in any qualified plan maintained by the
Employer. The exclusion of Leased Employees for this purpose shall be applied
on a uniform and consistent basis for all of the Employer's retirement plans.
In addition, Highly Compensated Former Employees shall be treated as Highly
Compensated Employees without regard to whether they performed services during
the "determination year".
1.29 "Highly Compensated Former Employee" means a former Employee
who had a separation year prior to the "determination year" and was a Highly
Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. Notwithstanding the foregoing, an
Employee who separated from service prior to 1987 will be treated as a Highly
Compensated Former Employee only if during the separation year (or year
preceding the separation year) or any year after the Employee attains age 55
(or the last year ending before the Employee's 55th birthday), the Employee
either received "415 Compensation" in excess of $50,000 or was a "five percent
owner". For purposes of this Section, "determination year", "415 Compensation"
and "five percent owner" shall be determined in accordance with Section 1.28.
Highly Compensated Former Employees shall be treated as Highly Compensated
Employees. The method set forth in this Section for determining who is a
"Highly Compensated Former Employee" shall be applied on a uniform and
consistent basis for all purposes for which the Code Section 414(q) definition
is applicable.
-6-
<PAGE> 41
1.30 "Highly compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
1.31 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties during the applicable computation period; (2)
each hour for which an Employee is directly or indirectly compensated or
entitled to compensation by the Employer (irrespective of whether the
employment relationship has terminated) for reasons other than duty,
disability, lay-off, military duty or leave of absence) during the applicable
computation period; (3) each hour for which to mitigation of damages. The same
Hours of Service shall not be credited both under (1) or (2), as the case may
be, and under (3).
Notwithstanding the above, (i) no more than 501 hours of
Service are required to be credited to an Employee on account of any single
continuous period during which the Employee performs no duties (whether or not
such period occurs in a single computation period); (ii) an hour for which an
Employee is directly or indirectly paid, or entitled to payment, on account of
a period during which no duties are performed is not required to be credited to
the Employee if such payment is made or due under a plan maintained solely for
the purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be
made by or due from the Employer regardless of whether such payment is made by
or due from the Employer directly, or indirectly through, among others, a trust
fund, or insurer, to which the Employer contributes or pays premiums and
regardless of whether contributions made or due to the trust fund, insurer, or
other entity are for the benefit of particular Employees or are on behalf of a
group of Employees in the aggregate.
An Hour of Service must be counted for the purpose of
determining a Year of Service, a year of participation for purposes of accrued
benefits, a 1-Year Break in service, and employment commencement date (or
reemployment commencement date). The provisions of Department of Labor
regulations 2530.200b-2(b) and (c) are incorporated herein by reference.
Hours of Service will be credited for employment with all
Affiliated Employers and for any individual considered to be a Leased Employee
pursuant to Code Sections 414(n) or 414(o) and the Regulations thereunder.
Hours of Service will be determined on the basis of the method
selected in the Adoption Agreement.
-7-
<PAGE> 42
1.32 "Insurer" means any legal reserve insurance company which
shall issue one or more policies under the Plan.
1.33 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.34 "Joint and Survivor Annuity" means an annuity for the life of
a Participant with a survivor annuity for the life of the Participant's spouse
which is not less than 1/2, nor greater than the amount of the annuity payable
during the joint lives of the Participant and the Participant's spouse. The
Joint and Survivor Annuity will be the amount of benefit which can be purchased
with the Participant's Vested interest in the Plan.
1.35 "Key Employee" means an Employee as defined in Code Section
416(i) and the Regulations thereunder. Generally, any Employee or former
Employee (as well as each of his Beneficiaries) is considered a Key Employee if
he, at any time during the Plan Year that contains the "Determination Date" or
any of the preceding four (4) Plan Years, has been included in one of the
following categories:
(a) an officer of the Employer (as that term is
defined within the meaning of the Regulations under Code
Section 416) having annual "415 Compensation" greater than 50
percent of the amount in effect under Code Section
415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415
Compensation" from the Employer for a Plan Year greater than
the dollar limitation in effect under Code Section
415(c)(1)(a) for the calendar year in which such Plan Year
ends and owning (or considered as owning within the meaning of
Code Section 318) both more than one-half percent interest and
the largest interests in the Employer.
(c) A "five percent owner" 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 (5") of the outstanding stock of the
Employer or stock possessing more than five percent (5%) of
the capital or profits interest in the Employer. In
determining percentage ownership hereunder, employers that
would otherwise be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be treated as separate employers.
(d) a "one percent owner" of the Employer having
an annual "415 Compensation" from the Employer of more than
$150,000. "One percent owner" means any person who owns (or
is considered as owning within the meaning of Code Section
318) more than one percent (1%) of the outstanding stock of
the
-8-
<PAGE> 43
Employer or stock possessing more than one percent (1%) 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 one percent (1%) of the capital or profits interest
in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under
Code Sections 414(b), (c), (m) and (o) shall be taken into
account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts that would otherwise be
excluded from a Participant's gross income by reason of the application of Code
Sections 125, 402(a)(8), 402(h)(1)(B) and, in the case of Employer
contributions made pursuant to a salary reduction agreement, Code Section
$03(b).
1.36 "Late Retirement Date" means the date of, or the first day of
the month or the Anniversary Date coinciding with or next following, whichever
corresponds to the election made for the Normal Retirement Date, a
Participant's actual retirement after having reached his Normal Retirement
Date.
1.37 "Leased Employee" means any person (other than an Employee of
the recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or
for the recipient and related persons determined in accordance with Code
Section 414(n)(6) on a substantially full time basis for a period of at least
one year, and such services are of a type historically performed by employees
in the business field of the recipient employer. Contributions or benefits
provided a leased employee by the leasing organization which are attributable
to services performed for the recipient employer shall be treated as provided
by the recipient employer.
A leased employee shall not be considered an Employee of the
recipient if: (i) such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least 10
percent of compensation, as defined in Code Section 415(c)(3), but including
amounts contributed pursuant to a salary reduction agreement which are
excludable pursuant to a salary reduction agreement which are excludable from
the employee's gross income under Code Sections 125, 402(a)(8), 402(h), or
403(b), (2) immediate participation, and (3) full and immediate vesting; and
(ii) leased employees do not constitute more than 20 percent of the recipient's
nonhighly compensated workforce.
1.38 "Net Profit" means with respect to any Fiscal Year the
Employer's net income or profit for such Fiscal Year determined upon the basis
of the Employer's book of account in accordance with generally accepted
accounting principles, without any reduction for taxes based upon income, or
for contributions made by the Employer to this Plan and any other qualified
plan.
1.39 "Non-Elective Contribution" means the Employer's contributions
to the Plan other than those made pursuant to the Participant's deferral
election made pursuant to Section 11.2 and
-9-
<PAGE> 44
any Qualified NonElective Contribution. In addition, if selected in E3 of the
Adoption Agreement, the Employer's Matching Contribution made pursuant to
Section 4.3(b) shall be considered a Non-Elective Contribution for purposes of
the Plan.
1.40 "Non-Highly Compensated Participant" means any Participant who
is neither a Highly Compensated Employee nor a Family Member.
1.41 "Non-Key Employee" means any Employee or former Employee (and
his Beneficiaries) who is not a Key Employee.
1.42 "Normal Retirement Age" means the age specified in the
Adoption Agreement at which time a Participant shall become eligible to have
his benefits distributed to him.
1.43 "Normal Retirement Date" means the date specified in the
Adoption Agreement on which a Participant shall become eligible to have his
benefits distributed to him.
1.44 "1-Year Break in Service" means the applicable computation
period during which an Employee has not completed more that 500 Hours of
Service with the Employer. Further, solely for the purpose of determining
whether a Participant has incurred a 1-Year Break in Service, Hours of Service
shall be recognized for "authorized leaves of absence" and "maternity and
paternity leaves of absence."
"Authorization leave of absence" means an unpaid, temporary
cessation from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
A "maternity or paternity leave of absence" means, for Plan
Years beginning after December 31, 1984, an absence from work for any period by
reason of the Employee's pregnancy, birth of the Employee's child, placement of
a child with the Employee in connection with the adoption of such child, or any
absence for the purpose of caring for such child for a period immediately
following such birth or placement. For this purpose, Hours of Service shall be
credited for the computation period in which the absence from work begins, only
if credit therefore is necessary to prevent the Employee from incurring a
1-Year Break in Service, or, in any other case, in the immediately following
computation period. The Hours of Service credited for a "maternity or
paternity leave of absence" shall be those which would normally have been
credited but for such absence, or, in any case in which the Administrator is
unable to determine such hours normally credited, eight (8) Hours of Service
per day. The total Hours of Service required to be credited for a "maternity
or Paternity leave of absence" shall not exceed 501.
1.45 "Owner-Employee" means a sole proprietor who owns the entire
interest in the Employer or a partner who owns more than 10% of either the
capital interest or the profits interest in the Employer and who receives
income for personal services from the Employer.
-10-
<PAGE> 45
1.46 "Participant" means any Eligible Employee who participated in
the Plan as provided in Section 3.2 and has not for any reason become
ineligible to participate further in the Plan.
1.47 "Participant's Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest under the Plan resulting from (a) The Employer's contributions in the
case of a Profit Sharing Plan or Money Purchase Plan, and (b) the Employer's
Non-Elective Contributions in the case of a 401(k) Profit Sharing Plan.
1.48 "Participant's Combined Account" means the account established
and maintained by the Administrator for each Participant with respect to his
total interest under the Plan resulting from the Employer's contributions.
1.49 "Participant's Elective Account" means the account established
and maintained by the Administrator for each Participant with respect to his
total interest in the Plan and Trust resulting from the Employer's Elective
Contributions and Trust resulting from the Employer's Elective Contributions
and Qualified Non-Elective Contributions. A separate accounting shall be
maintained with respect to that portion of the Participant's Elective Account
attributable to Elective Contributions made pursuant to Section 1.2, Employer
matching contributions if they are deemed to be Elective Contributions, and any
Qualified Non-Elective Contributions.
1.50 "Participant's Rollover Account" means the account established
and maintained by the Administrator for each Participant with respect to his
total interest in the Plan resulting from amounts transferred from another
qualified plan or "conduit" Individual Retirement Account in accordance with
Section 4.6.
1.51 "Plan" means this instrument (hereinafter referred to as
Atwell and Associates Regional Prototype Defined Contribution Plan and Trust
Basic Plan Document #01) including all amendments thereto, and the Adoption
Agreement as adopted by the Employer.
1.52 "Plan Year" means the Plan's accounting year as specified in
C2 of the Adoption Agreement.
1.53 "Pre-Retirement Survivor Annuity" means an immediate annuity
for the life of the Participant's spouse, the payments under which must be
equal to the actuarial equivalent of 50% of the Participant's Vested interest
in the Plan as of the date of death.
1.54 "Qualified Non-Elective Account" means the account established
hereunder to which Qualified Non- Elective Contributions are allocated.
1.55 "Qualified Non-Elective Contribution" means the Employer's
Contributions to the Plan that are made pursuant to E5 of the Adoption
Agreement and Section 11.1(d) which are used to satisfy the "Actual Deferral
Percentage" tests. Qualified Non-Elective Contributions are
-11-
<PAGE> 46
nonforfeitable when made and are distributable only as specified in Section
11.2(c) and 11.8. In addition, the Employer's contributions to the Plan that
are made pursuant to Section 11.7(h) and which are used to satisfy the "Actual
Contribution Percentage" tests shall be considered Qualified Non-Elective
Contributions.
1.56 "Qualified Voluntary Employee Contribution Account" means the
account established and maintained by the Administrator for each Participant
with respect to his total interest under the Plan resulting from the
Participant's tax deductible qualified voluntary employee contributions made
pursuant to Section 4.9.
1.57 "Regulation" means the Income Tax Regulations as promulgated
by the Secretary for the Treasury or his delegate, and as amended from time to
time.
1.58 "Retired Participant" means a person who has been a
Participant, but who has become entitled to retirement benefits under the Plan.
1.59 "Retirement Date" means the date as of which a Participant
retires for reasons other than Total and Permanent Disability, whether such
retirement occurs on a Participant's Normal Retirement Date, Early or Late
Retirement Date (see Section 6.1).
1.60 "Self-Employed Individual" means an individual who has earned
income for the taxable year from the trade or business for which the Plan is
established, and, also, an individual who would have had earned income but for
the fact that the trade or business had no net profits for the taxable year. A
Self-Employed Individual shall be treated as an Employee.
1.61 "Shareholder-Employee" means a Participant who owns more than
five percent (5%) of the Employer's outstanding capital stock during any year
in which the Employer elected to be taxed as a Small Business Corporation under
the applicable Code Section.
1.62 "Short Plan Year" means, if specified in the Adoption
Agreement, that the Plan Year shall be less than a 12 month period. If chosen,
the following rules shall apply in the administration of this Plan. In
determining whether an Employee has completed a Year of Service for benefit
accrual purposes in the Short Plan Year, the number of the Hours of Service
required shall be proportionately reduced based on the number of days in the
Short Plan Year. The determination of whether an Employee has completed a Year
of Service for vesting and eligibility purposes shall be made in accordance
with Department of Labor Regulation 2530.203-2(c). In addition, if this Plan
is integrated with Social Security, the integration level shall also be
proportionately reduced based on the number of days in the Short Plan Year.
1.63 "Super Top Heavy Plan" means a plan described in Section
2.2(b).
1.64 "Taxable Wage Base" means, with respect to any year, the
maximum amount of earnings which may be considered wages for such year under
Code Section 3121(a)(1).
-12-
<PAGE> 47
1.65 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by death,
Total and Permanent Disability or retirement.
1.66 "Top Heavy Plan Year" means a Plan Year commending after
December 31, 1983 during which the Plan is a Top Heavy Plan.
1.67 "Top Heavy Plan Year" means a Plan Year commending after
December 313, 1983 during which the Plan is a Top Heavy Plan.
1.68 "Top Paid Group" shall be determined pursuant to Code Section
414(q) and the Regulations thereunder and generally means the top 20 percent of
Employees who performed services for the Employer during the applicable year,
ranked according to the amount of "415 Compensation" (as determined pursuant
to Section 1.28) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased
Employees shall be treated as Employees pursuant to Code Section 414(n) or (o).
Employees who are non-resident aliens who received no earned income (within the
meaning of Code Section 911(d)(2)) from the Employer constituting United States
source income within the meaning of Code Section 861(a)(3) shall not be treated
as Employees. Additionally, for the purpose of determining the number of
active Employees in any year, the following additional Employees shall also be
excluded, however, such Employees shall still be considered for the purpose of
identifying the particular Employees in the Top Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours
per week;
(c) Employees who normally work less than six (6) months
during a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the
Employer are covered under agreements the Secretary of Labor finds to be
collective bargaining agreements between Employee representatives and the
Employer, and the Plan covers only Employees who are not covered under such
agreements, then Employees covered by such agreements shall be excluded from
both the total number of active Employees as well as from the identification of
particular Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be
applied on a uniform and consistent basis for all purposes for which the Code
Section 414(q) definition is applicable.
1.69 "Total and Permanent Disability" means the inability to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can
-13-
<PAGE> 48
be expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than 12 months. The disability of a
Participant shall be determined by a licensed physician chosen by the
Administrator. However, if the condition constitutes total disability under
the federal Social Security Acts, the Administrator may rely upon such
determination that the Participant is Totally and Permanently Disabled for the
purposes of this Plan. The determination shall be applied uniformly to all
Participants.
1.70 "Trustee" means the person or entity named in B6 of the
Adoption Agreement and any successors.
1.71 "Trust Fund" means the assets of the Plan and Trust as the
same shall exist from time to time.
1.72 "Voluntary Contribution Account" means the account established
and maintained by the Administrator for each Participant with respect to his
total interest in the Plan resulting from the Participant's nondeductible
voluntary contributions made pursuant to Section 4.7.
1.74 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, and during which an Employee has
completed at least 1000 Hours of Service.
For purposes of eligibility for participation, the initial
computation period shall begin with the date on which the Employee first
performs an Hour of Service (employment commencement date). The computation
period beginning after a 1-Year Break in Service shall be measured from the
date on which an Employee again performs an Hour of Service. The succeeding
computation periods shall begin with the first anniversary of the Employee's
employment commencement date. However, if one (1) Year of Service or less is
required as a condition of eligibility, then after the initial eligibility
computation period, the eligibility computation period shall shift to the
current Plan Year which includes the anniversary of the date on which the
Employee first performed an Hour of Service. An Employee who is credited with
1,000 Hours of Service in both the initial eligibility computation period and
the first Plan Year which commenced prior to the first anniversary of the
Employee's initial eligibility computation period will be credited with two
Years of Service for purposes of eligibility to participate.
For vesting purposes, and all other purposes not specifically
addressed in this Section, the computation period shall be the Plan Year,
including periods prior to the Effective Date of the Plan unless specifically
excluded pursuant to the Adoption Agreement.
Years of Service and breaks in service will be measured on the
same computation period.
-14-
<PAGE> 49
Years of Service with any predecessor Employer which
maintained this Plan shall be recognized. Years of Service with any other
predecessor Employer shall be recognized as specified in the Adoption
Agreement.
Years of service with any Affiliated Employer shall be
recognized.
-15-
<PAGE> 50
ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the
special vesting requirements of Code Section 416(b) pursuant to Section 6.4 of
the Plan and the special minimum allocation requirements of Code Section 416(c)
pursuant to Section 4.3(i) of the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year
beginning after December 31, 1983, in which, as of the Determination
Date, (1) the Present Value of Accrued Benefits of Key Employees and
(2) the sum of the Aggregate Accounts of Key Employees under this Plan
and all plans of an Aggregation Group, exceeds sixty percent (60%) of
the Present Value of Accrued Benefits and the Aggregate Accounts of
all Key and Non-Key Employees under t his Plan and all plans of an
Aggregation Group.
If any Participant is a Non-Key Employee for any Plan
Year, but such Participant was a Key Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit and/or aggregate Account balance
shall not be taken into account for purposes of determining whether this Plan
is a top Heavy or Super Top Heavy Plan (or whether any Aggregation Group which
includes this Plan is a Top Heavy Group). In addition, if a Participant or
Former Participant has not performed any services for any Employer maintaining
the Plan at any time during the five year period ending on the Determination
Date, any accrued benefit for such Participant or Former Participant shall not
be taken into account for the purposes of determining whether this Plan is a
Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan Year
beginning after December 31, 1983, in which, as of the Determination
Date, (1) the Present value of Accrued Benefits of Key Employees and
(2) the sum of the Aggregate Accounts of Key under this Plan and all
plans of an Aggregation Group, exceeds ninety percent (90%) of the
Present Value of Accrued Benefits and the Aggregate Accounts of all
Key and Non-Key Employees under this Plan and all plans of an
Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate Account as of the
Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the most
recent valuation occurring within a twelve (12) month period ending on
the Determination Date;
-16-
<PAGE> 51
(2) for a Profit Sharing Plan, an adjustment for any contributions
due as of the Determination Date. Such adjustment shall be the amount
of any contributions actually made after the valuation date but before
the determination Date, except for the first Plan Year when such
adjustment shall also reflect the amount of any contributions made
after the Determination Date that are allocated as of a date in that
first Plan Year;
(3) for a Money Purchase Plan, contributions that would be
allocated as of a date not later than the Determination Date, even
though those amounts are not yet made or required to be made.
(4) any Plan distributions made within the Plan Year that includes
the Determination Date or within the four (4) preceding Plan Years.
However, in the case of distributions made after the valuation date
and prior to the Determination Date, such distributions are not
included as distributions for to heavy purposes to the extent that
such distributions are already included in the Participant's Aggregate
Account balance as of the valuation date. In the case of a
distribution of an annuity Contract, the amount of such distribution
is deemed to be the current actuarial value of the Contract,
determined on the date of the distribution. Notwithstanding anything
herein to the contrary, all distributions, including distributions
made prior to January 1, 1984, and distributions under a terminated
plan which if it had not been terminated would have been required to
be included in an Aggregation Group, will be counted. Further,
distributions from the Plan (including the cash value of life
insurance policies) of a Participant's account balance because of
death shall be treated as a distribution for the purpose of this
paragraph.
(5) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified voluntary
employee contributions shall not be considered to be a part of the
Participant's Aggregate Account balance.
(6) with respect to unrelated rollovers and plan-to-plan transfers
(ones which are both initiated by the Employee and made from a plan
maintained by one employer to a plan maintained by another employer),
if this Plan provides the rollovers or plan-to-plan transfers, it
shall always consider such rollovers or plan-to-plan transfers as a
distribution for the purposes of this Section. If this Plan is the
plan accepting such rollovers or plan-to-plan transfers, it shall not
consider such rollovers or plan-to-plan transfers accepted after
December 31, 1983 as a part of the Participant's Aggregate Account
balance. However, rollovers or plan- to-plan transfers accepted prior
to January 1, 1984 shall be considered as part of the Participant's
Aggregate Account balance.
(7) with respect to related rollovers and plan-to-plan transfers
ones either not initiated by the Employee or made to a plan maintained
by the same employer), if this Plan provides the rollover or
plan-to-plan transfer, it shall not be counted as a distribution for
purposes of this Section. If this Plan is the plan accepting such
rollover or plan-to-plan
-17-
<PAGE> 52
transfer as part of the Participant's Aggregate Account balance,
irrespective of the date on which such rollover or plan-to-plan
transfer is accepted.
(8) For the purposes of determining whether two employers are to
be treated as the same employer in 2.2(c)(6) and 2.2(c)(7) above, all
employers aggregated under Code Section 414(b), (c), (m) and (o) are
treated as the same employer.
(d) "Aggregation Group" means either a Required
Aggregation Group or a Permissive Aggregation Group as hereinafter
determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each qualified plan of the Employer,
including any Simplified Employee Pension Plan, in which a Key
Employee is a participant in the Plan Year containing the
Determination Date of any of the four preceding Plan Years, and each
other qualified plan of the Employer which enables any qualified plan
in which a Key Employee participates to meet the requirements of Code
Sections (401(a)(4) or 410, will be required to be aggregated. Such
group shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the group
will be considered a Top Heavy Plan if the Required Aggregation Group
is a Top Heavy Group. No plan in the Required Aggregation Group will
be considered a Top Heavy Plan if the Required Aggregation Group is
not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also including
other plan of the Employer, including any Simplified Employee Pension
Plan, not required to be included in the Required Aggregation Group,
provided the resulting group, taken as a whole would continue to
satisfy the provisions of Code Sections 401(a)(4) and 410. Such
groups shall be known as a Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan that is
part of the Required Aggregation Group will be considered a Top Heavy
Plan if the Permissive Aggregation Group is a Top Heavy Group. No
plan in the Permissive Aggregation Group will be considered a Top
Heavy Plan if the Permissive Aggregation Group is not a Top heavy
Group.
(3) Only those plans of the Employer in which the Determination
Dates fall within the same calendar year shall be aggregated in order
to determine whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years ending on
the Determination Date.
-18-
<PAGE> 53
(e) "Determination Date" means (a) the last day of the
preceding Plan Year, or (b) in the case of the first Plan Year, the last day of
such Plan Year.
(f) Present Value of Accrued Benefit: In the case of a
defined benefit plan, the Present Value of Accrued Benefit for a participant
other than a Key Employee shall be as determined using the single accrual
method used for all plans of the Employer and Affiliated Employers, or if no
such single method exists, using a method used for all plans of the Employer
and Affiliated Employers, or if no such single method exists, using a method
which results in benefits accruing not more rapidly than the slowest accrual
rate permitted under Code Section 411(b)(1)(C). The determination of the
Present Value of Accrued Benefit shall be determined as of the most recent
valuation date that falls within or ends with the 12-month period ending on the
Determination Date, except as provided in Code Section 416 and the Regulations
thereunder for the first and second plan years of a defined benefit plan.
However, any such determination must include present value of
accrued benefit attributable to any Plan Employee contributions referred to in
Section 2.2(c)(5) above or any related or unrelated rollovers referred to in
Sections 2.2(c)(6) and 2.2(c)(7) above.
(g) "Top Heavy Group" means an Aggregation Group in
which, as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees under
all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum determined for all
Participants.
(h) The Administrator shall determine whether this Plan
is a Top Heavy Plan on the Anniversary Date specified in the Adoption
Agreement. Such determination of the top heavy ratio shall be in accordance
with Code Section 416 and the Regulations thereunder.
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint and remove the
Trustee and the Administrator from time to time as it deems necessary
for the proper administration of the Plan to assure that the Plan is
being operated for the exclusive benefit of the Participants and their
beneficiaries in accordance with the terms of the Plan, the Code, and
the Act.
(b) The Employer shall establish a "funding policy and method",
i.e., it shall determine whether the Plan has a short run need for
liquidity (e.g., to pay benefits) or
-19-
<PAGE> 54
whether liquidity is a long run goal and investment growth (and
stability of same) is a more current need, or shall appoint a
qualified person to do so. The Employer or its delegate shall
communicate such needs and goals to the Trustee, who shall coordinate
such Plan needs with its investment policy. The communication of such
a "funding policy and method" shall not, however, constitute a
directive to the Trustee as to investment of the Trust Funds. Such
"funding policy and method" shall be consistent with the objectives of
this Plan and with the requirements of Title I of the Act.
(c) The Employer may, in its discretion, appoint an Investment
Manager to manage all or a designated portion of the assets of the
Plan. In such event, the Trustee shall follow the directive of the
Investment Manager in investing the assets of the Plan managed by the
Investment Manager.
(d) The Employer shall periodically review the performance of any
Fiduciary or other person to whom duties have been delegated or
allocated by it under the provisions of this Plan or pursuant to
procedures established hereunder. This requirement may be satisfied
by formal periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day conduct
and evaluation, or through other appropriate ways.
-20-
<PAGE> 55
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any
person, including, but not limited to, the Employees of the Employer, shall be
eligible to serve as an Administrator. Any person so appointed shall signify
his acceptance by filing written acceptance with the Employer. An
Administrator may resign by delivering his written resignation to the Employer
or be removed by the Employer by delivery of written notice of removal, to take
effect at a date specified therein, or upon delivery to the Administrator if no
date is specified.
The Employer, upon the resignation or removal of an
Administrator, shall promptly designate in writing a successor to this
position. If the Employer does not appoint an Administrator, the Employer will
function as the Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Employer and
accepted in writing by each Administrator. In the event that no such
delegation is made by the Employer, the Administrators may allocate the
responsibilities among themselves, in which event the Administrators shall
notify the Employer and the Trustee in writing of such action and specify the
responsibilities of each Administrator. The Trustee thereafter shall accept
and rely upon any documents executed by the appropriate Administrator until
such time as the Employer or the Administrators file with the Trustee a written
revocation of such designation.
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to
administer the Plan for the exclusive benefit of the Participants and their
Beneficiaries, subject to the specific terms of the Plan. The Administrator
shall administer the Plan in accordance with its terms and shall have the power
and discretion to construe the terms of the Plan and determine all questions
arising in connection with the administration, interpretation, and application
of the Plan. Any such determination by the Administrator shall be conclusive
and binding upon all persons. The Administrator may establish procedures,
correct any defect, supply any information, or reconcile any inconsistency in
such manner and to such extent as shall be deemed necessary to advisable to
carry out the purpose of the Plan; provided, however, that any procedure,
discretionary act, interpretation or construction shall be done in a
nondiscriminatory manner based upon uniform principles consistently applied and
shall be consistent with the intent that the Plan shall continue to be deemed a
qualified plan under the terms of Code Section 401(a), and shall comply with
the terms of the Act and all regulations issued pursuant thereto. The
Administrator shall have all powers necessary or appropriate to accomplish his
duties under this Plan.
-21-
<PAGE> 56
The Administrator shall be charged with the duties of the
general administration of the Plan, including, but not limited to, the
following:
(a) the discretion to determine all questions relating to
the eligibility of Employees to participate or remain a Participant
hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with
respect to the amount and the kind of benefits to which any
Participant shall be entitled hereunder;
(c) to authorize and direct the Trustee with respect to
all nondiscretionary or otherwise directed disbursements from the
Trust Fund;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and to make
and publish such rules for regulation of the Plan as are consistent
with the terms hereof;
(f) to determine the size and type of any Contract to be
purchased from any Insurer, and to designate the Insurer from which
such Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or desirable to
be contributed to the Trust Fund;
(h) to consult with the Employer and the Trustee
regarding the short and long-term liquidity needs of the Plan in order
that the Trustee can exercise any investment discretion in a manner
designed to accomplish specific objectives;
(i) to prepare and distribute to Employees a procedure
for notifying Participants and Beneficiaries of their rights to elect
Joint and Survivor Annuities and Pre-Retirement Survivor Annuities if
required by the Code and Regulations thereunder;
(j) to assist any Participant regarding his rights,
benefits, or elections available under the Plan.
2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and
shall keep all other books of account, records, and other data that may be
necessary for proper administration of the Plan and shall be responsible for
supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by law.
-22-
<PAGE> 57
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, and other persons as
the Administrator or the Trustee deems necessary or desirable in connection
with the administration of this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the
Employer shall supply full and timely information to the Administrator on all
matters relating to the Compensation of all Participants, their Hours of
Service, their Years of Service, their retirement, death, disability, or
termination of employment, and such other pertinent facts as the Administrator
may require; and the Administrator shall advise the Trustee of such of the
foregoing facts as may be pertinent to the Trustee's duties under the Plan.
The Administrator may rely upon such information as is supplied by the Employer
and shall have no duty or responsibility to verify such information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust
Fund unless paid by the Employer. Such expenses shall include any expenses
incident to the functioning of the Administrator, including, but not limited
to, fees of accountants, counsel, and other specialists and their agents, and
other costs of administering the Plan. Until paid, the expenses shall
constitute a liability of the Trust Fund. However, the Employer may reimburse
the Trust Fund for any administration expense incurred. Any administration
expense paid to the Trust Fund as a reimbursement shall not be considered an
Employer contribution.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.5, if there shall be more than
one Administrator, they shall act by a majority of their number, but may
authorize one or more of them to sign all papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing
with the Administrator. Written notice of the disposition of a claim shall be
furnished to the claimant within 90 days after the application is filed. In
the event the claim is denied, the reasons for the denial shall be specifically
set forth in the notice in language calculated to be understood by the
claimant, pertinent provisions of the Plan shall be cited, and, where
appropriate, an explanation as to how the claimant can perfect the claim will
be provided. In addition, the claimant shall be furnished with an explanation
of the Plan's claims review procedure.
-23-
<PAGE> 58
2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who
has been denied a benefit by a decision of the Administrator pursuant to
Section 2.12 shall be entitled to request the Administrator to give further
consideration to his claim by filing with the Administrator a written request
for a hearing. Such request, together with a written statement of the reasons
why the claimant believes his claim should be allowed, shall be filed with the
Administrator no later than 60 days after receipt of the written notification
provided for in Section 2.12. The Administrator shall then conduct a hearing
within the next 60 days, at which the claimant may be represented by an
attorney or any other representative of his choosing and expense and at which
the claimant shall have an opportunity to submit written and oral evidence and
arguments in support of his claim. At the hearing (or prior thereto upon 5
business days written notice to the Administrator) the claimant or his
representative shall have an opportunity to review all documents in the
possession of the Administrator which are pertinent to the claim at issue and
its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate
hereunder on the date he has satisfied the requirements specified in the
Adoption Agreement.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee who has become eligible to be a
Participant shall become a Participant effective as of the day specified in the
Adoption Agreement.
In the event an Employee who has satisfied the Plan's
eligibility requirements and would otherwise have become a Participant shall go
from a classification of a noneligible Employee to an Eligible Employee, such
Employee shall become a Participant as of the date he becomes an Eligible
Employee.
-24-
<PAGE> 59
In the event an Employee who has satisfied the Plan's
eligibility requirements and would otherwise become a Participant shall go from
a classification of an Eligible Employee to a noneligible Employee and becomes
ineligible to participate and has not incurred a 1-Year Break in Service, such
Employee shall participate in the Plan as of the date he returns to an eligible
class of Employees. If such Employee does incur a 1-Year Break in Service,
eligibility will be determined under the Break in Service rules of the Plan.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each
Employee for participation in the Plan based upon information furnished by the
Employer. Such determination shall be conclusive and binding upon all persons,
as long as the same is made pursuant to the Plan and the Act. Such
determination shall be subject to review per Section 2.13.
3.4 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of
an Eligible Employee to an ineligible Employee, such Former Participant shall
continue to vest in his interest in the Plan for each Year of Service completed
while a noneligible Employee, until such time as his Participant's Account
shall be forfeited or distributed pursuant to the terms of the Plan.
Additionally, his interest in the Plan shall continue to share in the earnings
of the Trust Fund.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission
is not made until after a contribution by his Employer for the year has been
made, the Employer shall make a subsequent contribution, if necessary after the
application of Section 4.3(e), so that the omitted Employee receives a total
amount which the said Employee would have received had he not been omitted.
Such contribution shall be made regardless of whether or not it is deductible
in whole or in part in any taxable year under applicable provisions of the
Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been
included as a Participant in the Plan is erroneously included and discovery of
such incorrect inclusion is not made until after a contribution for the year
has been made, the Employer shall not be entitled to recover the contribution
made with respect to the ineligible person regardless of whether or not a
deduction is allowable with respect to such contribution. In such event, the
amount contributed with respect to the ineligible person shall constitute a
Forfeiture for the Plan Year in which the discovery is made.
-25-
<PAGE> 60
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer,
elect voluntarily not to participate in the Plan. The election not to
participate must be communicated to the Employer, in writing, at least thirty
(30) days before the beginning of a Plan Year. For Standardized Plans, a
Participant or an Eligible Employee may not elect not to participate.
Furthermore, the foregoing election not to participate shall not be available
with respect to partners in a partnership.
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE
(a) 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 entities, this Plan and
the plan established for 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 entities.
(b) If the Plan provides contributions or benefits for
one or more Owner-Employees who control one or more other trades or
businesses, the employees of the other trades or businesses must be
included in a plan which satisfies Code Sections 401(a) and (d) and
which provides contributions and benefits not less favorable than
provided for Owner-Employees under this Plan.
(c) If an individual is covered as an Owner-Employee
under the plans of two or more trades or businesses which are not
controlled and the individual controls a trade or business, then the
benefits or contributions 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.
(d) For purposes of the preceding paragraphs, an
Owner-Employee, or two or more Owner-Employees, will be considered to
control an entity if the Owner-Employee, or two or more
Owner-Employees together:
(1) own the entire interest in an unincorporated entity,
or
(2) in the case of a partnership, own more than 50
percent of either the capital interest or the profits interest
in the partnership.
(e) For purposes of the preceding sentence, an
Owner-Employee, or two or more Owner-Employees shall be treated as
owning any interest in a partnership which is owned, directly or
indirectly, by a partnership which such Owner-Employee, or such two or
more Owner-Employees, are considered to control within the meaning of
the preceding sentence.
-26-
<PAGE> 61
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
(a) For a Money Purchase Plan -
(1) The Employer shall make contributions over such
period of years as the Employer may determine on the following
basis. On behalf of each Participant eligible to share in
allocations, for each year of his participation in this Plan,
the Employer shall contribute the amount specified in the
Adoption Agreement. All contributions by the Employer shall
be made in cash or in such property as is acceptable to the
Trustee. The Employer shall be required to obtain a waiver
from the Internal Revenue Service for any Plan Year in which
it is unable to make the full required contribution to the
Plan. In the event a waiver is obtained, this Plan shall be
deemed to be an individually designed plan.
(2) For any Plan Year beginning prior to January 1, 1990,
and if elected in the non-standardized Adoption Agreement for
any Plan Year beginning on or after January 1, 1990, the
Employer shall not contribute on behalf of a Participant who
performs less than a Year of Service during any Plan Year,
unless there is a Short Plan Year or a contribution is
required pursuant to 4.3(h).
(3) Notwithstanding the foregoing, the Employer's
contribution for any Fiscal Year shall not exceed the maximum
amount allowable as a deduction to the Employer under the
provisions of Code Section 404. However, to the extent
necessary to provide the top heavy minimum allocations, the
Employer shall make a contribution even if it exceeds the
amount which is deductible under Code Section 404.
(b) For a Profit Sharing Plan -
(1) For each Plan Year, the Employer shall contribute to
the Plan such amount as specified by the Employer in the
Adoption Agreement. Notwithstanding the foregoing, however,
the Employer's contribution for any Fiscal Year shall not
exceed the maximum amount allowable as a deduction to the
Employer under the provisions of Code Section 404. All
contributions by the Employer shall be made in cash or in such
property as is acceptable to the Trustee.
(2) Except, however, to the extent necessary to provide
the top heavy minimum allocations, the Employer shall make a
contribution even if it exceeds current or accumulated Net
Profit or the amount which is deductible under Code Section
404.
-27-
<PAGE> 62
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its
contribution to the Plan for each Plan Year within the time prescribed by law,
including extensions of time, for the filing of the Employer's federal income
tax return for the Fiscal Year.
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an
account in the name of each Participant to which the Administrator
shall credit as of each Anniversary Date, or other valuation date, all
amounts allocated to each such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation
of the Employer's contributions for each Plan Year. Within a
reasonable period of time after the date of receipt by the
Administrator of such information, the Administrator shall allocate
such contribution as follows:
(1) For a Money Purchase Plan:
(i) The Employer's Contribution shall be
allocated to each Participant's Combined Account in
the manner set forth in Section 4.1 herein and as
specified in Section E2 of the Adoption Agreement.
(2) For an Integrated Profit Sharing Plan:
(i) The Employer's contribution shall be
allocated to each Participant's Account, except as
provided in Section 4.3(f), in a dollar amount equal
to 5.7% of the sum of each Participant's total
Compensation plus Excess Compensation. If the
Employer does not contribute such amount for all
Participants, such Participant will be allocated a
share of the contribution in the same proportion that
his total Compensation plus his total Excess
Compensation for the Plan Year bears to the total
Compensation plus the total Excess Compensation of
all Participants for that year.
Regardless of the preceding, 4.3% shall be substituted for
5.7% above if Excess Compensation is based on more than 20%
and less than or equal to 80% of the Taxable Wage Base. If
Excess Compensation is based on less than 100% and more than
80% of the Taxable Wage Base, then 5.4% shall be substituted
for 5.7% above.
(ii) The balance of the Employer's contribution
over the amount allocated above, if any, shall be
allocated to each Participant's Combined
-28-
<PAGE> 63
Account in the same proportion that his total
Compensation for the Year bears to the total
Compensation of all Participants for such year.
(iii) Except, however, for any Plan Year beginning
prior to January 1, 1990, and if elected in the
non-standardized Adoption Agreement for any Plan Year
beginning on or after January 1, 1990, a Participant
who performs less than a Year of Service during any
Plan Year shall not share in the Employer's
contribution for that year, unless there is a Short
Plan Year or a contribution is required pursuant to
Section 4.3(h).
(3) For a Non-Integrated Profit Sharing Plan:
(i) The Employer's contribution shall be
allocated to each Participant's Account in the same
proportion that each such Participant's Compensation
for the year bears to the total Compensation of all
Participants for such year.
(ii) Except, however, for any Plan Year beginning
prior to January 1, 1990, and if elected in the
non-standardized Adoption Agreement for any Plan Year
beginning on or after January 1, 1990, a Participant
who performs less than a Year of Service during any
Plan Year shall not share in the Employer's
contribution for that year, unless there is a Short
Plan Year or a contribution is required pursuant to
Section 4.3(h).
(c) As of each Anniversary Date or other valuation date,
before allocation of Employer contributions and Forfeitures, any
earnings or losses (net appreciation or net depreciation) of the Trust
Fund shall be allocated in the same proportion that each Participant's
and Former Participant's nonsegregated accounts bear to the total of
all Participants' and Former Participants' nonsegregated accounts as
of such date. If any nonsegregated account of a Participant has been
distributed prior to the Anniversary Date or other valuation date
subsequent to a Participant's termination of employment, no earnings
or losses shall be credited to such account.
Notwithstanding the above, with respect to
contributions made to the Plan after the previous Anniversary Date or
allocation date, the method specified in the Adoption Agreement shall
be used.
(d) Participants' Accounts shall be debited for any
insurance or annuity premiums paid, if any, and credited with any
dividends or interest received on insurance contracts.
(e) As of each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date shall first be made
available to reinstate previously forfeited
-29-
<PAGE> 64
account balances of Former Participants, if any, in accordance with
Section 6.4(g) (2) to be used to satisfy any contribution that may be
required pursuant to Section 3.5 and/or 6.9. The remaining
Forfeitures, if any, shall be treated in accordance with the Adoption
Agreement. Provided, however, that in the event the allocation of
Forfeitures provided herein shall cause the "annual addition" (as
defined in Section 4.4) to any Participant's Account to exceed the
amount allowable by the Code, the excess shall be reallocated in
accordance with Section 4.5. Except, however, for any Plan Year
beginning prior to January 1, 1990, and if elected in the
non-standardized Adoption Agreement for any Plan Year beginning on or
after January 1, 1990, a Participant who performs less than a Year of
Service during any Plan Year shall not share in the Plan Forfeitures
for that year, unless there is a Short Plan Year or a contribution
required pursuant to Section 4.3(h).
(f) Minimum Allocations Required for Top Heavy Plan
Years: Notwithstanding the foregoing, for any Top Heavy Plan Year, the
sum of the Employer's contributions and Forfeitures allocated to the
Participant's Combined Account of each Non-Key Employee shall be equal
to at least three percent (3%) of such Non-Key Employee's "415
Compensation" (reduced by contributions and forfeitures, if any,
allocated to each Non-Key Employee in any defined contribution plan
included with this plan in a Required Aggregation Group). However, if
(i) the sum of the Employer's contributions and Forfeitures allocated
to the Participant's Combined Account of each Key Employee for such
Top Heavy Plan Year is less than three percent (3%) of each Key
Employee's "415 Compensation" and (ii) this Plan is not required to be
included in an Aggregation Group to enable a defined benefit plan to
meet the requirements of Code Section 401(a) (4) or 410, the sum of
the Employer's contributions and Forfeitures allocated to the
Participant's Combined Account of each Non-Key Employee shall be equal
to the largest percentage allocated to the Participant's Combined
Account of any Key Employee.
However, for each Non-Key Employee who is a
Participant in a paired Profit Sharing Plan or 401(k) Profit Sharing
Plan and a paired Money Purchase Plan, the minimum 3% allocation
specified above shall be provided in the Money Purchase Plan.
If this is an integrated Plan, then for any Top Heavy
Plan Year the Employer's contribution shall be allocated as follows:
(1) An amount equal to 3% multiplied by each
Participant's Compensation for the Plan Year shall be
allocated to each Participant's Account. If the Employer does
not contribute such amount for all Participants, the amount
shall be allocated to each Participant's Account in the same
proportion that his total Compensation for the Plan Year bears
to the total Compensation of all Participants for such year.
-30-
<PAGE> 65
(2) The balance of the Employer's contribution over the
amount allocated under subparagraph (1) hereof shall be
allocated to each Participant's Account in a dollar amount
equal to 3% multiplied by a Participant's Excess Compensation.
If the Employer does not contribute such amount for all
Participants, each Participant will be allocated a share of
the contribution in the same proportion that his Excess
Compensation bears to the total Excess Compensation of all
Participants for that year.
(3) The balance of the Employer's contribution over the
amount allocated under subparagraph (2) hereof shall be
allocated to each Participant's Account in a dollar amount
equal to 2.7% multiplied by the sum of each Participant's
total Compensation plus Excess Compensation. If the Employer
does not contribute such amount for all Participants, each
Participant will be allocated a share of the contribution in
the same proportion that his total Compensation plus his total
Excess Compensation for the Plan Year bears to the total
Compensation plus the total Excess Compensation of all
Participants for that year.
Regardless of the preceding, 1.3% shall be substituted for
2.7% above if Excess Compensation is based on more than 20%
and less than or equal to 80% of the Taxable Wage Base. If
Excess Compensation is based on less than 100% and more than
80% of the Taxable Wage Base, then 2.4% shall be substituted
for 2.7% above.
(4) The balance of the Employer's contributions over the
amount allocated above, if any, shall be allocated to each
Participant's Account in the same proportion that his total
Compensation for the Plan Year bears to the total Compensation
of all Participants for such year.
For each Non-Key Employee who is a Participant in
this Plan and another non-paired defined contribution plan maintained
by the Employer, the minimum 3% allocation specified above shall be
provided as specified in F3 of the Adoption Agreement.
(g) For purposes of the minimum allocations set forth
above, the percentage allocated to the Participant's Combined Account
of any Key Employee shall be equal to the ratio of the sum of the
Employer's contributions and Forfeitures allocated on behalf of such
Key Employee divided by the "415 Compensation" for such Key Employee.
(h) For any Top Heavy Plan Year, the minimum allocations
set forth in this Section shall be allocated to the Participant's
Combined Account of all Non-Key Employees who are Participants and who
are employed by the Employer on the last day of the Plan Year,
including Non-Key Employees who have (1) failed to complete a Year
-31-
<PAGE> 66
of Service; or (2) declined to make mandatory contributions (if
required) or, in the case of a cash or deferred arrangement, elective
contributions to the Plan.
(i) Notwithstanding anything herein to the contrary, in
any Plan Year in which the Employer maintains both this Plan and a
defined benefit pension plan included in a Required Aggregation Group
which is top heavy, the Employer shall not be required to provide a
Non-Key Employee with both the full separate minimum defined benefit
plan benefit and the full separate defined contribution plan
allocations. Therefore, if the Employer maintains both a Defined
Benefit and a Defined Contribution Plan that are a Top Heavy Group,
the top heavy minimum benefits shall be provided as follows:
(1) Applies if F1b of the Adoption Agreement is Selected
(i) The requirements of Section 2.1 shall apply
except that each Non-Key Employee who is a
Participant in the Profit Sharing Plan or Money
Purchase Plan and who is also a Participant in the
Defined Benefit Plan shall receive a minimum
allocation of five percent (5%) of such Participant's
"415 Compensation" from the applicable Defined
Contribution Plan(s).
(ii) For each Non-Key Employee who is a
Participant only in the Defined Benefit Plan the
Employer will provide a minimum non-integrated
benefit equal to 2% of his highest five consecutive
year average "415 Compensation" for each Year of
Service while a Participant in the Plan, in which the
Plan is top heavy, not to exceed ten.
(iii) For each Non-Key Employee who is a
Participant only in this Defined Contribution Plan,
the Employer shall provide a contribution equal to 3%
of his "415 Compensation."
(2) Applies if F1c of the Adoption Agreement is Selected
(i) The minimum allocation specified in Section
4.3 (i) (1) (i) shall be 7 1/2% if the Employer
elects in the Adoption Agreement for years in which
the Plan is Top Heavy, but not Super Top Heavy.
(ii) The minimum benefit specified in Section 4.3
(i) (1) (ii) shall be 3% if the Employer elects in
the Adoption Agreement for years in which the Plan is
Top Heavy, but not Super Top Heavy.
(iii) The minimum allocation specified in Section
4.3 (i) (1) (iii) shall be 4% if the Employer elects
in the Adoption Agreement for years in which the Plan
is Top Heavy, but not Super Top Heavy.
-32-
<PAGE> 67
(j) For the purposes of this Section, "415 Compensation"
shall be limited to $200,000 (unless adjusted in such manner as
permitted under Code Section 415 (d)). However, for Plan Years
beginning prior to January 1, 1989, the $200,000 limit shall apply
only for Top Heavy Plan Years and shall not be adjusted.
(k) Notwithstanding anything herein to the contrary, any
Participant who terminated employment during the Plan Year for reasons
other than death, Total and Permanent Disability, or retirement shall
or shall not share in the allocations of the Employer's Contributions
and Forfeitures as provided in the Adoption Agreement.
Notwithstanding the foregoing, for Plan Years beginning after 1989, if
this is a standardized Plan, any such terminated Participant shall
share in the allocations as provided in this Section provided such
Participant completed more than 500 Hours of Service.
(l) Notwithstanding anything herein to the contrary,
Participants terminating for reasons of death, Total and Permanent
Disability, or retirement shall share in the allocations as provided
in this Section regardless of whether they completed a Year of Service
during the Plan Year.
(m) If a Former Participant is reemployed after five (5)
consecutive 1-Year Breaks in Service, then separate accounts shall be
maintained as follows:
(1) one account for nonforfeitable benefits attributable
to pre-break service; and
(2) one account representing his employer derived account
balance in the Plan attributable to post- break
service.
(n) Notwithstanding any election in the Adoption
Agreement to the contrary, if this is a non- standardized Plan that
would otherwise fail to meet the requirements of Code Sections 401 (a)
(26), 410 (b) (1), or 410 (b) (2) (i) and the Regulations thereunder
because Employer Contributions have not been allocated to a sufficient
number or percentage of Participants for a Plan Year, then the
following rules shall apply:
(1) The group of Participants eligible to share in the
Employer's contribution and Forfeitures for the Plan Year
shall be expanded to include the minimum number of
Participants who would not otherwise be eligible as are
necessary to satisfy the applicable test specified above. The
specific participants who shall become eligible under the
terms of this paragraph shall be those who are actively
employed on the last day of the Plan Year and, when compared
to similarly situated Participants, have completed the
greatest number of Hours of Service in the Plan Year.
-33-
<PAGE> 68
(2) If after application of paragraph (1) above, the
applicable test is still not satisfied, then the group of
Participants eligible to share in the Employer's contribution
and Forfeitures for the Plan Year shall be further expanded to
include the minimum number of Participants who are not
actively employed on the last day of the Plan Year as are
necessary to satisfy the applicable test. The specific
Participants who shall become eligible to share shall be those
Participants, when compared to similarly situated
Participants, who have completed the greatest number of Hours
of Service in the Plan Year before terminating employment.
Nothing in this Section shall permit the reduction of
a Participant's accrued benefit. Therefore any amounts that have
previously been allocated to Participants may not be reallocated to
satisfy these requirements. In such event, the Employer shall make an
additional contribution equal to the amount such affected Participants
would have received had they been included in the allocations, even if
it exceeds the amount which would be deductible under Code Section
404. Any adjustment to the allocations pursuant to this paragraph
shall be considered a retroactive amendment adopted by the last day of
the Plan Year.
4.4 MAXIMUM ANNUAL ADDITIONS
(a) (1) If the Participant does not participate in, and has
never participated in another qualified plan maintained by the
Employer, or a welfare benefit fund (as defined in Code Section 419
(e)), maintained by the Employer, or an individual medical account (as
defined in Code Section 415 (1) (2)) maintained by the Employer, which
provides Annual Additions, the amount of Annual Additions which may be
credited to the Participant's accounts for any Limitation Year shall
not exceed the lesser of the Maximum Permissible Amount or any other
limitation contained in this Plan. If the Employer contribution that
would otherwise be contributed or allocated to the Participant's
accounts would cause the Annual Additions for the Limitation Year to
exceed the Maximum Permissible Amount, the amount contributed or
allocated will be reduced so that the Annual Additions for the
Limitation Year will equal the Maximum Permissible Amount.
(2) Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may determine the
Maximum Permissible Amount for a Participant on the basis of a
reasonable estimation of the Participant's Compensation for the
Limitation Year, uniformly determined for all Participants similarly
situated.
(3) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible Amount for such
Limitation Year shall be determined on the basis of the Participant's
actual compensation for such Limitation Year.
-34-
<PAGE> 69
(4) If pursuant to Section 4.1 (a) (2) or as a result of
the allocation of Forfeitures, there is an Excess Amount, the excess
will be disposed of as follows:
(i) Any nondeductible Voluntary Employee
Contributions, to the extent they would reduce the
Excess Amount, will be returned to the Participant;
(ii) If, after the application of subparagraph
(i), an Excess Amount still exists, and the
Participant is covered by the Plan at the end of the
Limitation Year, the Excess Amount in the
Participant's account will be used to reduce Employer
contributions (including any allocation of
Forfeitures) for such Participant in the next
Limitation Year, and each succeeding Limitation Year
if necessary;
(iii) If, after the application of subparagraph
(i), an Excess Amount still exists, and the
Participant is not covered by the Plan at the end of
a Limitation Year, the Excess Amount will be held
unallocated in a suspense account. The suspense
account will be applied to reduce future Employer
contributions (including allocation of any
Forfeitures) for all remaining Participants in the
next Limitation Year, and each succeeding Limitation
Year if necessary;
(iv) If a suspense account is in existence at any
time during a Limitation Year pursuant to this
Section, it will not participate in the allocation of
investment gains and losses. If a suspense account
is in existence at any time during a particular
limitation year, all amounts in the suspense account
must be allocated and reallocated to participants'
accounts before any employer contributions or any
employee contributions may be made to the plan for
that limitation year. Excess amounts may not be
distributed to participants or former participants.
(b) (1) This subsection applies if, in addition to this Plan,
the Participant is covered under another qualified Regional Prototype
defined contribution 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 (1) (2)) maintained by the Employer, which provides Annual
Additions, during any Limitation Year. The Annual Additions which may
be credited to a Participant's accounts under this Plan for any such
Limitation Year shall not exceed the Maximum Permissible Amount
reduced by the Annual Additions credited to a Participant's accounts
under the other plans and welfare benefit funds for the same
Limitation Year. If the Annual Additions with respect to the
Participant under other defined contribution plans and welfare benefit
funds maintained by the Employer are less than the Maximum Permissible
Amount and the Employer contribution that would
-35-
<PAGE> 70
otherwise be contributed or allocated to the Participant's accounts
under this Plan would cause the Annual Additions for the Limitation
Year to exceed this limitation, the amount contributed or allocated
will be reduced so that the Annual Additions under all such plans and
welfare benefit funds for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to the
Participant under such other defined contribution plans and welfare
benefit funds in the aggregate are equal to or greater than the
Maximum Permissible Amount, no amount will be contributed or allocated
to the Participant's account under this Plan for the Limitation Year.
(2) Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a Participant in
the manner described in Section 4.4 (a) (2).
(3) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
(4) If, pursuant to Section 4.4 (b) (2) or as a result of
the allocation of Forfeitures, a Participant's Annual
Additions under this Plan and such other plans would result in
an Excess Amount for a Limitation Year, the Excess Amount will
be deemed to consist of the Annual Additions last allocated,
except that Annual Additions attributable to a welfare benefit
fund or individual medical account will be deemed to have been
allocated first regardless of the actual allocation date.
(5) If an Excess Amount was allocated to a Participant on
an allocation date of this Plan which coincides with an
allocation date of another plan, the Excess Amount attributed
to this Plan, the Excess Amount attributed to this Plan will
be the product of:
(i) the total Excess Amount allocated as of such
date, times
(ii) the ratio of (1) the Annual Additions
allocated to the Participant for the Limitation Year
as of such date under this Plan to (2) the total
Annual Additions allocated to the Participant for the
Limitation Year as of such date under this and all
the other qualified defined contribution plans.
(6) Any Excess Amount attributed to this Plan will be
disposed in the manner described in Section 4.4 (a) (4).
(c) If the Participant 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
Participant's account under this Plan for any
-36-
<PAGE> 71
Limitation Year will be limited in accordance with Section 4.4 (b),
unless the Employer provides other limitations in the Adoption
Agreement.
(d) If the Employer maintains, or at any time maintained,
a qualified defined benefit plan covering any Participant in this Plan
the sum of the Participant's Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction will not exceed 1.0 in any Limitation Year.
The Annual Additions which may be credited to the Participant's
account under this Plan for any Limitation Year will be limited in
accordance with the Limitation on Allocations Section of the Adoption
Agreement.
(e) For purposes of applying the limitations of Code
Section 415, the transfer of funds from one qualified plan to another
is not an "annual addition". In addition, the following are not
Employee contributions for the purposes of Section 4.4 (f) (1) (2);
(1) rollover contributions (as defined in Code Sections 402 (a) (5),
403 (a) (4), 403 (b) (8) and 408 (d) (3)); (2) repayments of loans
made to a Participant from the Plan; (3) repayments of distributions
received by an Employee pursuant to Code Section 411 (a) (7) (B)
(cash-outs); (4) repayments of distributions received by an Employee
pursuant to Code Section 411 (a) (3) (D) (mandatory contributions);
and (5) Employee contributions to a simplified employee pension
excludable from gross income under Code Section 408 (k) (6).
(f) For purposes of this Section, the following terms
shall be defined as follows:
(1) Annual Additions means the sum credited to a
Participant's accounts for any Limitation Year of (1) Employer
contributions, (2) effective with respect to "limitation
years" beginning after December 31, 1986, Employee
contributions, (3) forfeitures, (4) amounts allocated, after
March 31, 1984, to an individual medical account, as defined
in Code Section 415 (1) (2), which is part of a pension or
annuity plan maintained by the Employer and (5) amounts
derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are
attributable to post- retirement medical benefits allocated to
the separate account of a key employee (as defined in Code
Section 419A (d) (3)) under a welfare benefit fund (as defined
in Code Section 419 (e)) maintained by the Employer. Except,
however, the "415 Compensation" percentage limitation referred
to in paragraph (a) (2) above shall not apply to: (1) any
contribution for medical benefits (within the meaning of Code
Section 419A (f) (2)) after separation from service which is
otherwise treated as an "annual addition", or (2) any amount
otherwise treated as an "annual addition" under Code Section
415 (1) (1). Notwithstanding the foregoing, for "limitation
years" beginning prior to January 1, 1987, only that portion
of Employee contributions equal to the lesser of Employee
contributions in excess of six percent (6%) of
-37-
<PAGE> 72
"415 Compensation" or one-half of Employee contributions shall
be considered an "annual addition."
For this purpose, any Excess Amount applied under Sections 4.4
(a) (4) and 4.4 (b) (6) in the Limitation Year to reduce
Employer contributions shall be considered Annual Additions
for such Limitation Year.
(2) Compensation means a Participant's earned income,
wages, salaries, fees for professional services and other
amounts received for personal services actually rendered in
the course of employment with the Employer maintaining the
Plan (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums,
tips, and bonuses) and excluding the following:
(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 excludable from the Employee's
gross income, or any distributions from a plan of
deferred compensation;
(ii) contributions made by the Employer to a plan
of deferred compensation to the extent that all or a
portion of such contributions are recharacterized as
a voluntary Employee contribution;
(iii) amounts realized from the exercise of a
non-qualified stock option, or when restricted stock
(or property) held by an Employee becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
(iv) amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified
stock option; and
(v) other amounts which received special tax
benefits, or contributions made by an Employer
(whether or not under a salary reduction agreement)
towards the purchase of an annuity contract described
in Code Section 403 (b) (whether or not the
contributions are excludable from the gross income of
the Employee).
For purposes of applying the limitations of this Section 4.4,
Compensation for any Limitation Year is the Compensation
actually paid or includible in gross income during such year.
Notwithstanding the preceding sentence, Compensation for a
Participant in a profit-sharing plan who is permanently and
totally disabled
-38-
<PAGE> 73
(as defined in Code Section 22 (e) (3)) is the Compensation
such Participant would have received for the Limitation Year
if the Participant had been paid at the rate of Compensation
paid immediately before becoming permanently and totally
disabled; such imputed Compensation for the disabled
Participant may be taken into account only if the Participant
is not a Highly Compensated Employee and contributions made on
behalf of such Participant are nonforfeitable when made.
(3) Defined Benefit Fraction means a fraction, the
numerator of which is the sum of the Participant's Projected
Annual Benefits under all the defined benefit plans (whether
or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of the
dollar limitation determined for the Limitation Year under
Code Sections 415 (b) and (d) or 140 percent of his Highest
Average Compensation including any adjustments under Code
Section 415 (b).
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined
benefit plans maintained by the Employer which were in
existence on May 6, 1986, the denominator of this fraction
will not be less than 125 percent of the sum of the annual
benefits under such plans which the Participant had accrued as
of the end 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.
Notwithstanding the foregoing, for any Top Heavy Plan Year,
100 shall be substituted for 125 unless the extra minimum
allocation is being made pursuant to the Employer's election
in F1 of the Adoption Agreement. However, for any Plan Year
in which this Plan is a Super Top Heavy Plan, 100 shall be
substituted for 125 in any event.
(4) 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.
(5) Defined Contribution Fraction means a fraction, the
numerator of which is the sum of the Annual Additions to the
Participant's account under all the defined contribution plans
(whether or not terminated) maintained by the Employer for the
current and all prior Limitation Years, (including the Annual
Additions attributable to the Participant's nondeductible
voluntary employee contributions to any defined benefit plans,
whether or not terminated, maintained
-39-
<PAGE> 74
by the Employer 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
(1) (2), maintained by the Employer), and the denominator of
which is the sum of the maximum aggregate amounts for the
current and all prior Limitation Years of Service with the
Employer (regardless of whether a defined contribution plan
was maintained by the Employer). the maximum aggregate amount
in any Limitation Year is the lesser of 125 percent of the
Defined Contribution Dollar Limitation or 35 percent of the
Participant's Compensation for such year. For Limitation
Years beginning prior to January 1, 1987, the "annual
addition" shall not be recomputed to treat all Employee
contributions as an Annual Addition.
If the Employee was a Participant as of the end of the first
day of the first Limitation Year beginning after December 31,
1986, in one or more defined contribution plans maintained by
the Employer which were in existence on May 5, 1986, the
numerator of this fraction will be adjusted if the sum of this
fraction and the Defined Benefit Fraction would otherwise
exceed 1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the excess
of the sum of the fractions over 1.0 times (2) the denominator
of this fraction, will be permanently subtracted from the
numerator of this fraction. The adjustment is calculated
using the fractions as they would be computed as of the end of
the last Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the
plan made after May 5, 1986, but using the Code Section 415
limitation applicable to the first Limitation Year beginning
on or after January 1, 1987.
Notwithstanding the foregoing, for any Top Heavy Plan Year,
100 shall be substituted for 125 unless the extra minimum
allocation is being made pursuant to the Employer's election
in F1 of the Adoption Agreement. However, for any Plan Year
in which this Plan is a Super Top Heavy Plan, 100 shall be
substituted for 125 in any event.
(6) Employer means the Employer that adopts this Plan and
all Affiliated Employers, except that for purposes of this
Section, Affiliated Employers shall be determined pursuant to
the modifications made by Code Section 415 (h).
(7) Excess Amount means the excess of the Participant's
Annual Additions for the Limitation Year over the Maximum
Permissible Amount.
(8) Highest Average Compensation means the average
Compensation for the three consecutive Years of Service with
the Employer that produces the highest average. A Year of
Service with the Employer is the 12 consecutive month
-40-
<PAGE> 75
period defined in Section E1 of the Adoption Agreement which
is used to determine Compensation under the Plan.
(9) Limitation Year means the Compensation Year (a 12
consecutive month period) as elected by the Employer in the
Adoption Agreement. All qualified plans maintained by the
Employer must use the same Limitation Year. If the Limitation
Year is amended to a different 12 consecutive month period,
the new Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.
(10) Maximum Permissible Amount means the maximum Annual
Addition that may be contributed or allocated to a
Participant's account under the plan for any Limitation Year,
which shall not exceed the lesser of:
(i) the Defined Contribution Dollar Limitation,
or
(ii) 25 percent of the Participant's Compensation
for the Limitation Year.
The Compensation Limitation referred to in (ii) shall
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 (1) (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 Contribution multiplied by the
following fraction:
number of months in the short Limitation Year
---------------------------------------------
12
(11) 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 Participant would be entitled under the terms of
the plan assuming:
(i) the Participant will continue employment
until Normal Retirement Age (or current age, if
later), and
(ii) the Participant's Compensation for the
current Limitation Year and all other relevant
factors used to determine benefits under the Plan
will remain constant for all future Limitation Years.
-41-
<PAGE> 76
(g) Regional Prototype Plan means a plan the form of
which has been the subject of a favorable notification letter from the
Internal Revenue Service.
(h) Notwithstanding anything contained in this Section to
the contrary, the limitations, adjustments and other requirements
prescribed in this Section shall at all times comply with the
provisions of Code Section 415 and the Regulations thereunder, the
terms of which are specifically incorporated herein by reference.
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If as a result of the allocation of Forfeitures, a
reasonable error in estimating a Participant's annual Compensation, or
other facts and circumstances to which Regulation 1.415-6(b) (6) shall
be applicable, the "annual additions" under this Plan would cause the
maximum provided in Section 4.4 to be exceeded, the Administrator
shall treat the excess in accordance with Section 4.4 (a) (4).
4.6 TRANSFERS FROM QUALIFIED PLANS
(a) If specified in the Adoption Agreement and with the
consent of the Administrator, amounts may be transferred from other
qualified plans, provided that the trust from which such funds are
transferred permits the transfer to be made and the transfer will not
jeopardize the tax exempt status of the Plan or create adverse tax
consequences for the Employer. The amounts transferred shall be set
up in a separate account herein referred to as a "Participant's
Rollover Account." Such account shall be fully Vested at all times
and shall not be subject to forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be
held by the Trustee pursuant to the provisions of this Plan and may
not be withdrawn by, or distributed to the Participant, in whole or in
part, except as provided in Paragraphs (c) and (d) of this Section.
(c) Amounts attributable to elective contributions (as
defined in Regulation 1.401(k)-1(g) (4)), including amounts treated as
elective contributions, which are transferred from another qualified
plan in a plan-to-plan transfer shall be subject to the distribution
limitations provided for in Regulation 1.401(k)- 1(d).
(d) At Normal Retirement Date, or such other date when
the Participant or his Beneficiary shall be entitled to receive
benefits, the fair market value of the Participant's Rollover Account
shall be used to provide additional benefits to the Participant or his
Beneficiary. Any distributions of amounts held in a Participant's
Rollover Account shall be made in a manner which is consistent with
and satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code Sections 411
(a) (11) and 417 and the Regulations thereunder. Furthermore, such
amounts shall be
-42-
<PAGE> 77
considered as part of a Participant's benefit in determining whether
an involuntary cash-out of benefits without Participant consent may be
made.
(e) The Administrator may direct that employee transfers
made after a valuation date be segregated into a separate account for
each Participant until such time as the allocations pursuant to this
Plan have been made, at which time they may remain segregated or be
invested as part of the general Trust Fund, to be determined by the
Administrator.
(f) For purposes of this Section, the term "qualified
plan" shall mean any tax qualified plan under Code Section 401 (a).
The term "amounts transferred from other qualified plans" shall mean:
(i) amounts transferred to this Plan directly from another qualified
plan; (ii) lump-sum distributions received by an Employee from another
qualified plan which are eligible for tax free rollover to a qualified
plan and which are transferred by the Employee to this Plan within
sixty (60) days following his receipt thereof; (iii) amounts
transferred to this Plan from a conduit individual retirement account
provided that the conduit individual retirement account has no assets
other than assets which (A) were previously distributed to the
Employee by another qualified plan as a lump-sum distribution (B) were
eligible for tax-free rollover to a qualified plan and (C) were
deposited in such conduit individual retirement account within sixty
(60) days of receipt thereof and other than earnings on said assets;
and (iv) amounts distributed to the Employee from a conduit individual
retirement account meeting the requirements of clause (iii) above, and
transferred by the Employee to this Plan within sixty (60) days of his
receipt thereof from such conduit individual retirement account.
(g) Prior to accepting any transfers to which this
Section applies, the Administrator may require the Employee to
establish that the amounts to be transferred to this Plan meet the
requirements of this Section and may also require the Employee to
provide an opinion of counsel satisfactory to the Employer that the
amounts to be transferred meet the requirements of this Section.
(h) Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from another qualified plan (or a
transaction having the effect of such a transfer) shall only be
permitted if it will not result in the elimination or reduction of any
"Section 411 (d) (6) protected benefit" as described in Section 8.1.
4.7 VOLUNTARY CONTRIBUTIONS
(a) If this is an amendment to a Plan that had previously
allowed voluntary Employee contributions, then, except as provided in
4.7 (b) below, this Plan will not accept voluntary Employee
contributions for Plan Years beginning after the Plan Year in which
this Plan is adopted by the Employer.
-43-
<PAGE> 78
(b) For 401 (k) Plans, if elected in the Adoption
Agreement, each Participant may, at the discretion of the
Administrator in a nondiscriminatory manner, elect to voluntarily
contribute a portion of his compensation earned while a Participant
under this Plan. Such contributions shall be paid to the Trustee
within a reasonable period of time but in no event later than 90 days
after the receipt of the contribution.
(c) The balance in each Participant's Voluntary
Contribution Account shall be fully Vested at all times and shall not
be subject to Forfeiture for any reason.
(d) A Participant may elect to withdraw his voluntary
contributions from his Voluntary Contribution Account and the actual
earnings thereon in a manner which is consistent with and satisfies
the provisions of Section 6.5, including, but not limited to, all
notice and consent requirements of Code Sections 411 (a) (11) and 417
and the Regulations thereunder. If the Administrator maintains
sub-accounts with respect to voluntary contributions (and earnings
thereon) which were made on or before a specified date, a Participant
shall be permitted to designate which sub-account shall be the source
for his withdrawal. No Forfeitures shall occur solely as a result of
an Employee's withdrawal of Employee contributions.
In the event such a withdrawal is made, or in the
event a Participant has received a hardship distribution pursuant to
Regulation 1.401(k)-1(d) (2) (iii) (B) from any plan maintained by the
Employer, then such Participant shall be barred from making any
voluntary contributions for a period of twelve (12) months after
receipt of the withdrawal or distribution.
(e) At Normal Retirement Date, or such other date when
the Participant or his Beneficiary shall be entitled to receive
benefits, the fair market value of the Voluntary Contribution Account
shall be used to provide additional benefits to the Participant or his
Beneficiary.
(f) The Administrator may direct that voluntary
contributions made after a valuation date be segregated into a
separate account until such time as the allocations pursuant to this
Plan have been made, at which time they may remain segregated or be
invested as part of the general Trust Fund, to be determined by the
Administrator.
4.8 DIRECTED INVESTMENT ACCOUNT
(a) If elected in the Adoption Agreement, all
Participants may direct the Trustee as to the investment of all or a
portion of any one or more of their individual account balances.
Participants may direct the Trustee in writing to invest their account
in specific assets as permitted by the Administrator provided such
investments are in accordance with the Department of Labor regulations
and are permitted by the Plan.
-44-
<PAGE> 79
That portion of the account of any Participant so directing will
thereupon be considered a Directed Investment Account.
(b) A separate Directed Investment Account shall be
established for each Participant who has directed an investment.
Transfers between the Participant's regular account and their Directed
Investment Account shall be charged and credited as the case may be to
each account. The Directed Investment Account shall not share in
Trust Fund Earnings, but it shall be charged or credited as
appropriate with the net earnings, gains, losses and expenses as well
as any appreciation or depreciation in market value during each Plan
Year attributable to such account.
(c) The Administrator shall establish a procedure, to be
applied in a uniform and nondiscriminatory manner, setting forth the
permissible investment options under this Section, how often changes
between investments may be made, and any other limitations that the
Administrator shall impose on a Participant's right to direct
investments.
4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS
(a) If this is an amendment to a Plan that previously
permitted deductible voluntary contributions, then each Participant
who made a "Qualified Voluntary Employee Contribution" within the
meaning of Code Section 219 (e) (2) as it existed prior to the
enactment of the Tax Reform Act of 1986, shall have his contribution
held in a separate Qualified Voluntary Employee Contribution Account
which shall be fully Vested at all times. Such contributions,
however, shall not be permitted if they are attributable to taxable
years beginning after December 31, 1986.
(b) A Participant may, upon written request delivered to
the Administrator, make withdrawals from his Qualified Voluntary
Employee Contribution Account. Any distribution shall be made in a
manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 411 (a) (11) and 417 and the Regulations
thereunder.
(c) At Normal Retirement Date, or such other date when
the Participant or his Beneficiary shall be entitled to receive
benefits, the fair market value of the Qualified Voluntary Employee
Contribution Account shall be used to provide additional benefits to
the Participant or his Beneficiary.
(d) Unless the Administrator directs Qualified Voluntary
Employee Contributions made pursuant to this Section be segregated
into a separate account for each Participant, they shall be invested
as part of the general Trust Fund and share in earnings and losses.
-45-
<PAGE> 80
4.10 ACTUAL CONTRIBUTION PERCENTAGE TESTS
In the event this Plan previously provided for voluntary or
mandatory Employee contributions, then, with respect to Plan Years beginning
after December 31, 1986, such contributions must satisfy the provisions of Code
Section 401 (m) and the Regulations thereunder.
4.11 INTEGRATION IN MORE THAN ONE PLAN
If the Employer and/or an Affiliated Employer maintain
qualified retirement plans integrated with Social Security such that any
Participant in this Plan is covered under more than one of such plans, then
such plans will be considered to be one plan and will be considered to be
integrated if the extent of the integration of all such plans does not exceed
100%. For purposes of the preceding sentence, the extent of integration of a
plan is the ratio, expressed as a percentage, which the actual benefits,
benefit rate, offset rate, or employer contribution rate, whatever is
applicable, under the Plan bears to the limitation applicable to such Plan. If
the Employer maintains two or more standardized paired plans, only one plan may
be integrated with Social Security.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each
Anniversary Date, and at such other date or dates deemed necessary by the
Administrator, herein called "valuation date", to determine the net worth of
the assets comprising the Trust Fund as it exists on the "valuation date." In
determining such net worth, the Trustee shall value the assets comprising the
Trust Fund at their fair market value as of the "valuation date" and shall
deduct all expenses for which the Trustee has not yet obtained reimbursement
from the Employer or the Trust Fund.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the
Trust Fund which are listed on a registered stock exchange, the Administrator
shall direct the Trustee to value the same at the prices they were last traded
on such exchange preceding the close of business on the "valuation date." If
such securities were not traded on the "valuation date", or if the exchange on
which they are traded was not open for business on the "valuation date", then
the securities shall be values at the prices at which they were last traded
prior to the "valuation date." Any unlisted security held in the Trust Fund
shall be valued at its bid price next preceding the close of business on the
"valuation date", which bid price shall be obtained from a registered broker or
an investment banker. In determining the fair market value of assets other
than securities for which trading or bid prices can be obtained, the Trustee
may appraise such assets itself, or in its discretion, employ one or more
appraisers for that purpose and rely on the values established by such
appraiser or appraisers.
-46-
<PAGE> 81
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the
Employer and retire for the purposes hereof on or after his Normal Retirement
Date or Early Retirement Date. Upon such Normal Retirement Date or Early
Retirement Date, all amounts credited to such Participant's Combined Account
shall become distributable. However, a Participant may postpone the
termination of his employment with the Employer to a later date, in which event
the participation of such Participant in the Plan, including the right to
receive allocations pursuant to Section 4.3., shall continue until his Late
Retirement Date. Upon a Participant's Retirement Date, or as soon thereafter
as is practicable, the Administrator shall direct the distribution of all
amounts credited to such Participant's Combined Account in accordance with
Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement
Date or other termination of his employment, all amounts credited to
such Participant's Combined Account shall become fully Vested. The
Administrator shall direct, in accordance with the provisions of
Sections 6.6 and 6.7, the distribution of the deceased Participant's
accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct, in accordance with the provisions of
Sections 6.6 and 6.7, the distribution of any remaining amounts
credited to the accounts of such deceased Former Participant to such
Former Participant's Beneficiary.
(c) The Administrator may require such proper proof of
death and such evidence of the right of any person to receive payment
of the value of the account of a deceased Participant or Former
Participant, as the Administrator may deem desirable. The
Administrator's determination of death and of the right of any person
to receive payment shall be conclusive.
(d) Unless otherwise elected in the manner prescribed in
Section 6.6, the Beneficiary of the Pre- Retirement Survivor Annuity
shall be the Participant's spouse. Except, however, the Participant
may designate a Beneficiary other than his spouse for the
Pre-Retirement Survivor Annuity if:
(1) the Participant and his spouse have validly waived
the Pre-Retirement Survivor Annuity in the manner prescribed
in Section 6.6, and the spouse has waived his or her right to
be the Participant's Beneficiary, or
-47-
<PAGE> 82
(2) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the
Participant has a court order to such effect (and there is no
"qualified domestic relations order" as defined in Code
Section 414 (p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall
be made on a form satisfactory to the Administrator. A Participant
may at any time revoke his designation of a Beneficiary or change his
Beneficiary by filing written notice of such revocation or change with
the Administrator. However, the Participant's spouse must again
consent in writing to any change in Beneficiary unless the original
consent acknowledged that the spouse had the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily elected
to relinquish such right. The Participant may, at any time, designate
a Beneficiary for death benefits payable under the Plan that are in
excess of the Pre-Retirement Survivor Annuity. In the event no valid
designation of Beneficiary exists at the time of the Participant's
death, the death benefit shall be payable to his estate.
(e) If the Plan provides an insured death benefit and a
Participant dies before any insurance coverage to which he is entitled
under the Plan is effected, his death benefit from such insurance
coverage shall be limited to the standard rated premium which was or
should have been used for such purpose.
(f) In the event of any conflict between the terms of
this Plan and the terms of any Contract issued hereunder, the Plan
provisions shall control.
6.3. DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability
prior to his Retirement Date or other termination of his employment, all
amounts credited to such Participant's Combined Account shall become fully
Vested. In the event of a Participant's Total and Permanent Disability, the
Administrator, in accordance with the provisions of Sections 6.5 and 6.7, shall
direct the distribution to such Participant of all amounts credited to such
Participant's Combined Account as though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date, or other valuation
date, coinciding with or subsequent to the termination of a
Participant's employment for any reason other than retirement, death,
or Total and Permanent Disability, the Administrator may direct that
the amount of the Vested portion of such Terminated Participant's
Combined
-48-
<PAGE> 83
Account be segregated and invested separately. In the event the
Vested portion of a Participant's Combined Account is not segregated,
the amount shall remain in a separate account for the Terminated
Participant and share in allocations pursuant to Section 4.3 until
such time as a distribution is made to the Terminated Participant.
The amount of the portion of the Participant's Combined Account which
is not Vested may be credited to a separate account (which will always
share in gains and losses of the Trust Fund) and at such time as the
amount becomes a Forfeiture shall be treated in accordance with the
provisions of the Plan regarding Forfeitures.
Regardless of whether distributions in kind are
permitted, in the event that the amount of the Vested portion of the
Terminated Participant's Combined Account equals or exceeds the fair
market value of any insurance Contracts, the Trustee, when so directed
by the Administrator and agreed to by the Terminated Participant,
shall assign, transfer, and set over to such Terminated Participant
all Contracts on his life in such form or with such endorsements, so
that the settlement options and forms of payment are consistent with
the provisions of Section 6.5. In the event that the Terminated
Participant's Vested portion does not at least equal the fair market
value of the Contracts, if any, the Terminated Participant may pay
over to the Trustee the sum needed to make the distribution equal to
the value of the Contracts being assigned or transferred, or the
Trustee, pursuant to the Participant's election, may borrow the cash
value of the Contracts from the Insurer so that the value of the
Contracts is equal to the Vested portion of the Terminated
Participant's Combined Account and then assign the Contracts to the
Terminated Participant.
Distribution of the funds due to a Terminated
Participant shall be made on the occurrence of an event which would
result in the distribution had the Terminated Participant remained in
the employ of the Employer (upon the Participant's death, Total and
Permanent Disability, Early or Normal Retirement). However, at the
election of the Participant, the Administrator shall direct that the
entire Vested portion of the Terminated Participant's Combined Account
to be payable to such Terminated Participant provided the conditions,
if any, set forth in the Adoption Agreement have been satisfied. Any
distribution under this paragraph shall be made in a manner which is
consistent with and satisfies the provisions of Section 6.5, including
but not limited to, all notice and consent requirements of Code
Sections 411 (a) (11) and 417 and the Regulations thereunder.
Notwithstanding the above, if the value of a
Terminated Participant's Vested benefit derived from Employer and
Employee contributions does not exceed, and at the time of any prior
distribution, has never exceeded $3,500, the Administrator shall
direct that the entire Vested benefit be paid to such Participant in a
single lump-sum without regard to the consent of the Participant or
the Participant's spouse. A Participant's Vested benefit shall not
include Qualified Voluntary Employee Contributions within the meaning
of Code Section 72 (o) (5) (B) for Plan Years beginning prior to
January 1, 1989.
-49-
<PAGE> 84
(b) The Vested portion of any Participant's Account shall
be a percentage of such Participant's Account determined on the basis
of the Participant's number of Years of Service according to the
vesting schedule specified in the Adoption Agreement.
(c) For any Top Heavy Plan Year, one of the minimum top
heavy vesting schedules as elected by the Employer in the Adoption
Agreement will automatically apply to the Plan. The minimum top heavy
vesting schedule applies to all benefits within the meaning of Code
Section 411 (a) (7) except those attributable to Employee
contributions, including benefits accrued before the effective date of
Code Section 416 and benefits accrued before the Plan became top
heavy. Further, no decrease in a Participant's Vested percentage may
occur in the event the Plan's status as top heavy changes for any Plan
Year. However, this Section does not apply to the account balances of
any Employee who does not have an Hour of Service after the Plan has
initially become top heavy and the Vested percentage of such
Employee's Participant's Account shall be determined without regard to
this Section 6.4 (c).
If in any subsequent Plan Year, the Plan ceases to be
a Top Heavy Plan, the Administrator shall continue to use the vesting
schedule in effect while the Plan was a Top Heavy Plan for each
Employee who had an Hour of Service during a Plan Year when the Plan
was Top Heavy.
(d) Notwithstanding the vesting schedule above, upon the
complete discontinuance of the Employer's contributions to the Plan or
upon any full or partial termination of the Plan, all amounts credited
to the account of any affected Participant shall become 100% Vested
and shall not thereafter be subject to Forfeiture.
(e) If this is an amended or restated Plan, then
notwithstanding the vesting schedule specified in the Adoption
Agreement, the Vested percentage of a Participant's Account shall not
be less than the Vested percentage attained as of the later of the
effective date or adoption date of this amendment and restatement.
The computation of a Participant's nonforfeitable percentage of his
interest in the Plan shall not be reduced as the result of any direct
or indirect amendment to this Article, or due to changes in the Plan's
status as a Top Heavy Plan.
(f) If the Plan's vesting schedule is amended, or if the
Plan is amended in any way that directly or indirectly affects the
computation of the Participant's nonforfeitable percentage or if the
Plan is deemed amended by an automatic change to a top heavy vesting
schedule, then each Participant with at least 3 years of Service as of
the expiration date of the election period may elect to have his
nonforfeitable percentage computed under the Plan without regard to
such amendment or change. Notwithstanding the foregoing, for Plan
Years beginning before January 1, 1989, or with respect to Employees
who fail to complete at least one (1) Hour of Service in a Plan Year
beginning after December 31, 1988, five (5) shall be substituted for
three (3) in the
-50-
<PAGE> 85
preceding sentence. If a Participant fails to make such election,
then such Participant shall be subject to the new vesting schedule.
The Participant's election period shall commence on the adoption date
of the amendment and shall end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of
the amendment from the Employer or Administrator.
(g) (1) If any Former Participant shall be reemployed by the
Employer before a 1-Year Break in Service occurs, he shall continue to
participate in the Plan in the same manner as if such termination had
not occurred.
(2) If any Former Participant shall be reemployed by the
Employer before five (5) consecutive 1- Year Breaks in
Service, and such Former Participant had received a
distribution of his entire Vested interest prior to his
reemployment, his forfeited account shall be reinstated only
if he repays the full amount distributed to him before the
earlier of five (5) years after the first date on which the
Participant is subsequently reemployed by the Employer or the
close of the first period of 5 consecutive 1-Year Breaks in
Service commencing after the distribution. If a distribution
occurs for any reason other than a separation from service,
the time for repayment may not end earlier than five (5) years
after the date of separation. In the event the Former
Participant does repay the full amount distributed to him, the
undistributed portion of the Participant's Account must be
restored in full, unadjusted by any gains or losses occurring
subsequent to the Anniversary Date or other valuation date
preceding his termination. If an employee receives a
distribution pursuant to this section and the employee resumes
employment covered under this plan, the employee's
employer-derived account balance will be restored to the
amount on the date of distribution if the employee repays to
the plan the full amount of the distribution attributable to
employer contributions before the earlier of 5 years after the
first date on which the participant is subsequently
re-employed by the employer, or the date the participant
incurs 5 consecutive 1-year breaks in service following the
date of the distribution. If a non-Vested Former Participant
was deemed to have received a distribution and such Former
Participant is reemployed by the Employer before five (5)
consecutive 1-Year Breaks in Service, then such Participant
will be deemed to have repaid the deemed distribution as of
the date of reemployment.
-51-
<PAGE> 86
(3) If any Former Participant is reemployed after a
1-Year Break in Service has occurred, Years of Service shall
include Years of Service prior to his 1-Year Break in Service
subject to the following rules:
(i) Any Former Participant who under the Plan
does not have a nonforfeitable right to any interest
in the Plan resulting from Employer contributions
shall lose credits if his consecutive 1-Year Breaks
in Service equal or exceed the greater of (A) five
(5) or (B) the aggregate number of his pre-break
Years of Service;
(ii) After five (5) consecutive 1-Year Breaks in
Service, a Former Participant's Vested Account
balance attributable to pre-break service shall not
be increased as a result of post- break service;
(iii) A Former Participant who is reemployed and
who has not had his Years of Service before a 1-Year
Break in Service disregarded pursuant to (i) above,
shall participate in the plan as of his date of
reemployment;
(iv) If a Former Participant completes a Year of
Service (a 1-Year Break in Service previously
occurred, but employment had not terminated), he
shall participate in the Plan retroactively from the
first day of the Plan Year during which he completes
one (1) Year of Service.
(h) In determining Years of Service for purposes of
vesting under the plan, Years of Service shall be excluded as
specified in the Adoption Agreement.
6.5 DISTRIBUTION OF BENEFITS
(a)(1) Unless otherwise elected as provided below, a
Participant who is married on the "annuity starting date: and who does
not die before the "annuity starting date" shall receive the value of
all of his benefits in the form of a Joint and Survivor Annuity. The
Joint and Survivor Annuity is an annuity that commences immediately
and shall be equal in value to a single life annuity. Such joint and
survivor benefits following the Participant's death shall continue to
the spouse during the spouse's lifetime at a rate equal to 50% of the
rat at which such benefits were payable to the Participant. This
Joint and Survivor Annuity shall be considered the designated
qualified Joint and Survivor annuity and automatic form of payment for
the purposed of this Plan. However, the Participant may elect to
receive a smaller annuity benefit with continuation of payments to the
spouse at a rate of seventy-five percent (75%) or one hundred percent
(100%) of the rate payable to a Participant during his lifetime which
alternative Joint and Survivor Annuity shall be equal in value to the
automatic Joint and 50% Survivor annuity. An unmarried Participant
shall receive the value of his benefit in the form of a life annuity.
Such unmarried Participant, however, may elect in writing to waive the
life annuity. The
-52-
<PAGE> 87
election must comply with the provisions of this Section as if it were
an election to waive the Joint and Survivor annuity by a married
Participant, but without the spousal consent requirement. The
Participant may elect to have any annuity provided for in this Section
distributed upon the attainment of the "earliest retirement age" under
the plan. The "earliest retirement age" is the earliest date on
which, under the Plan, the Participant could elect to receive
retirement benefits.
(2) Any election to waive the Joint and Survivor Annuity
must be made by the Participant in writing during the election
period and be consented to by the Participant's spouse. If
the spouse is legally incompetent to give consent, the
spouse's legal guardian, even if such guardian is the
Participant,may give consent. Such election shall designate a
Beneficiary (or a form of benefits) that may not be changed
without spousal consent (unless the consent of the spouse
expressly permits designations by the Participant without the
requirement of further consent by the spouse). Such spouse's
consent shall be irrevocable and must acknowledge the effect
of such election and be witnessed by a Plan representative or
a notary public. Such consent shall not be required if it is
established to the satisfaction of the Administrator that the
required consent cannot be obtained because there is no
spouse, the spouse cannot be ?????ocatd, or the circumstances
that may be prescribed by Regulations. The election made by
the Participant and consented to by his spouse may be revoked
by the Participant in writing without the consent of the
spouse at any time during the election period. The number of
revocations shall not be limited. Any new election must
comply with the requirements of this paragraph. A former
spouse's waiver shall not be binding on a new spouse.
(3) The election period to waive the Joint and Survivor
Annuity shall be the 90 day period ending on the "annuity
starting date."
(4) For purposes of this Section and Section 6.6, the
"annuity starting date" means the first day of the first
period for which an amount is paid as an annuity, or, in the
case of a benefit not payable in the form of an annuity, the
first day on which all events have occurred which entities the
Participant to such benefit.
(5) With regard to the election, the Administrator shall
provide to the Participant no less than 30 days and no more
than 90 days before the "annuity starting date" a written
explanation of:
(i) the terms and conditions of the Joint and
Survivor Annuity, and
(ii) the Participant's right to make and the
effect of an election to waive the Joint and Survivor
Annuity, and
-53-
<PAGE> 88
(iii) the right of the Participant's spouse to
consent to any election to waive the Joint and
Survivor Annuity, and
(iv) the right of the Participant to revoke such
election, and the effect of such revocation.
(b) In the event a married Participant duly elects
pursuant to paragraph (a)(2) above not to receive his benefit in the
form of a Joint and Survivor Annuity, or if such Participant is not
married, in the form of a life annuity, the Administrator, pursuant to
the election of the Participant, shall direct the distribution to a
Participant or his Beneficiary any amount to which he is entitled
under the Plan in one or more of the following methods which are
permitted pursuant to the Adoption Agreement:
(1) On lump-sum payment in cash or in property;
(2) Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments. In order to provide
such installment payments, the Administrator may direct that
the Participant's interest in the Plan be segregated and
invested separately, and that the funds in the segregated
account be used for the payment of the installments. The
period over which such payment is to be made shall not extend
beyond the Participant's life expectancy (or the life
expectancy of the Participant and his designated Beneficiary);
(3) Purchase of or providing an annuity. However, such
annuity may not be in any form that will provide for payments
over a period extending beyond either the life of the
Participant (or the lives of the Participant and his
designated Beneficiary) or the life expectancy of the
Participant (or the life expectancy of the Participant and his
designated Beneficiary).
(c) The present value of a Participant's Joint and
Survivor Annuity derived from Employer and Employee contributions may
not be paid without his written consent if the value exceeds, or has
ever exceeded at the time of any prior distribution, $3,500. Further,
the spouse of a Participant must consent in writing to any immediate
distribution. If the value of the Participant's benefit derived form
Employer and Employee contributions does not exceed $3,500 and has
never exceeded $3,500 at the time of any prior distribution, the
Administrator may immediately distribute such benefit without such
Participant's consent. No distribution may be made under the
preceding sentence after the "annuity starting date" unless the
Participant and his spouse consent in writing to such distribution.
Any written consent required under this paragraph must be obtained not
more than 90 days before commencement of the distribution and shall be
made in a manner consistent with Section 6.5(a)(2).
-54-
<PAGE> 89
(d) Any distribution to a Participant who has a benefit
which exceeds, or has ever exceeded at the time of any prior
distribution, $3,500 shall require such Participant's consent if such
distribution commences prior to the later of his Normal Retirement Age
or age 62. With regard to this required consent:
(1) No consent shall be valid unless the Participant has
received a general description of the material features and an
explanation of the relative values of the optional forms of
benefit available under the Plan that would satisfy the notice
requirements of Code Section 417.
(2) The Participant must be informed of his right to
defer receipt of the distribution. If a Participant fails to
consent, it shall be deemed an election to defer the
commencement of payment of any benefit. However, any election
to defer the receipt of benefits shall not apply with respect
to distributions which are required under Section 6.5(e).
(3) Notice of the rights specified under this paragraph
shall be provided no less than 30 days and no more than 90
days before the "annuity starting date".
(4) Written consent of the Participant to the
distribution must not be made before the Participant receives
the notice and must not be made more than 90 days before the
"annuity starting date".
(5) No consent shall be valid if a significant detriment
is imposed under the Plan on any Participant who does not
consent to the distribution.
(e) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's benefits, made on or
after January 1, 1985, whether under the plan or through the purchase
of an annuity Contract, shall be made in accordance with the following
requirements and shall otherwise comply with Code Section 401(a)(9)
and the Regulations thereunder (including Regulation Section
1.401(a)(9)-2), the provisions of which are incorporated herein by
reference:
(1) A Participant's benefits shall be distributed to him
not later than April 1st of the calendar year following the
alter of (i) the calendar year in which the Participant
attains age 70 1/2 or (ii) the calendar year in which the
Participant retires, provided, however, that this clause (ii)
shall not apply in the case of a Participant who is a "five
(5) percent owner" at any time during the five (5) Plan Year
period ending in the calendar year in which he attains age 70
1/2 or, in the case of a Participant who becomes a "five (5)
percent owner" during any subsequent plan Year, clause (ii)
shall no longer apply and the required beginning date shall be
the April 1st of the calendar year following the calendar year
in which such subsequent Plan Year ends. Alternatively,
distributions to a
-55-
<PAGE> 90
Participant must begin no later than the applicable April 1st
as determined under the preceding sentence and must be made
over the life of the Participant (or the lives of the
Participant and the Participant's designated Beneficiary) or,
if benefits are paid in the form of a Joint and Survivor
Annuity, the life expectancy of the Participant (or the life
expectancies of the Participant and his designated
Beneficiary) in accordance with Regulations. For Plan Years
beginning after December 31, 1988, clause (ii) above shall not
apply to any Participant unless the Participant had attained
age 70 1/2 before January 1, 1988 and was not a "five (5)
percent owner' at any time during the Plan Year ending with or
within the calendar year in which the Participant attained age
66 1/2 or any subsequent Plan Year.
(2) Distributions to a Participant and his Beneficiaries
shall only be made in accordance with the incidental death
benefit requirement of Code Section 401(1)(9)(G) and the
Regulations thereunder.
Additionally, for calendar years beginning before 1989,
distributions maybe also be made under an alternative method
which provides that he then present value of the payments to
be made over the period of the Participant's life expectancy
exceed fifty percent (50%) of the then present value of the
total payments to be made to the Participant and his
Beneficiaries.
(f) For purposes of this Section, the life expectancy of
a Participant and a Participant's spouse (other than in the case of a
life annuity) shall be redetermined annually i accordance with
Regulations if permitted pursuant to the Adoption Agreement. If the
Participant or the Participant's spouse may elect whether
recalculations will be made, then the election, once made, shall be
irrevocable. IF no election is made by the time distributions must
commence, then the life expectancy of the Participant and the
Participant's spouse shall not be subject to recalculation. Life
expectancy and joint and last survivor expectancy shall be computed
using the return multiples in Tables V and VI of Regulation 1.72-9.
(g) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of any
annuity Contact purchased and distributed to a Participant or spouse
shall comply with all of the requirements of this Plan.
(h) Subject to the spouse's right of consent afforded
under the Plan, the restrictions imposed by this Section shall not
apply if a Participant has, prior to January 1, 1984, made a written
designation to have his retirement benefit paid in an alternative
method acceptable under Code Section 401(a) as in effect prior to the
enactment of the Tax Equity and Fiscal Responsibility Act of 1982.
-56-
<PAGE> 91
(i) If a distribution is made at a time when a
Participant who has not terminated employment is not fully Vested in
his Participant's Account and the Participant may increase the Vested
in his Participant's Account and the Participant may increase the
Vested percentage in such account:
(1) A separate account shall be established for the
Participant's interest in the Plan as of the time of the
distribution, and
(2) At any relevant time the Participant's Vested portion
of the separate account shall be equal to an amount ("X")
determined by the formula:
X equals P(AB plus (RxD)) - (R x D)
For purposes of applying the formula: P is the Vested
percentage at the relevant time, AB is the account balance at
the relevant time, D is the amount of distribution, and R is
the ratio of the account balance at the relevant time to the
account balance after distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below, a Vested
Participant who dies before the annuity starting date and who has a
surviving spouse shall have the Pre-Retirement Survivor Annuity paid
to his surviving spouse. The Participant's spouse may direct that
payment of the Pre-Retirement Survivor Annuity commence within a
reasonable period after the Participant's death. If the spouse does
not so direct, payment of such benefit will commence at the time the
Participant would have attained the later of his ?????Gnarl Retirement
Age or age 62. However, the spouse may elect a later commencement
date. Any distribution to the Participant's spouse shall be subject
to the rules specified in Section 6.6(h).
(b) Any election to waive the Pre-Retirement Survivor
Annuity before the Participant's death must be made by the Participant
in writing during the election period and shall require the spouse's
irrevocable consent in the same manner provided for in Section
6.5(a)(2). Further, the spouse's consent must acknowledge the
specific nonspouse Beneficiary. Notwithstanding the foregoing, the
nonspouse Beneficiary need not be acknowledged, provided the consent
of the spouse acknowledges that the spouse has the right to limit
consent only to a specific Beneficiary and that the spouse voluntarily
elects to relinquish such right.
(c) The election period to waive the Pre-Retirement
Survivor Annuity shall begin on the first day of the plan Year in
which the Participant attains age 35 and end ont he date of the
Participant's death. An earlier waiver (with spousal consent) may be
made provided a written explanation of the Pre-Retirement Survivor
Annuity is given to
-57-
<PAGE> 92
the Participant and such waiver becomes invalid at the beginning of
the Plan Year in which the Participant turns age 35. In the event a
Vested Participant separates from service prior to the beginning of
the election period, the election period shall begin no the date of
such separation from service.
(d) With regard to the election, the Administrator shall
provide each Participant within the applicable period, with respect to
such Participant (and consistent with Regulations), a written
explanation of the Pre-Retirement Survivor annuity containing
comparable information to that required pursuant to Section 6.5
(a)(5). For the purposes of this paragraph, the term "applicable
period" means, with respect to a Participant, whichever of the
following periods ends last:
(1) The period beginning with the first day of the Plan
Year in which the Participant attains age 32 and ending with
the close of the plan Year preceding the Plan Year in which
the Participant attains age 35;
(2) A reasonable period after the individual becomes a
Participant. for this purpose, in the case of an individual
who becomes a Participant after age 32, the explanation must
be provided by the end of the three-year period beginning with
the first day of the first Plan Year for which the individual
is a Participant;
(3) A reasonable period ending after the Plan no longer
fully subsidizes the cost of the Pre- Retirement Survivor
Annuity with respect to the Participant;
(4) A reasonable period after Code Section 401(a)(11)
applies to the Participant; or
(5) A reasonable period after separation from service in
the case of a Participant who separates before attaining age
35. For this purpose, the Administrator must provide the
explanation beginning one year before the separation from
service and ending one year after separation.
(e) The Pre-Retirement Survivor Annuity provided for in
this Section shall apply only to Participants who are credited with an
Hour of Service on or after August 23, 1984. Former Participants who
are not credited with an ?????Housr of Service on or after August 23,
1984 shall be provided with rights to the Pre-Retirement Survivor
Annuity in accordance with Section 303(e)(2) of the Retirement Equity
Act of 1984.
(f) If the value of the Pre-Retirement Survivor Annuity
derived from Employer and Employee contributions does not exceed
$3,500 and had never exceeded $3,500 at the time of any prior
distribution, the Administrator shall direct eh immediate distribution
of such amount to the Participant's spouse. No distribution may be
made under the preceding sentence after the annuity starting date
unless the spouse consents
-58-
<PAGE> 93
in writing. IF the value exceeds, or has ever exceeded at the time of
any prior distribution, $3,500, an immediate distribution of the
entire amount may be made to the surviving spouse, provided such
surviving spouse consents in writing to such distribution. Any
written consent reburied under this paragraph must be obtained not
more than 0 days before commencement of the distribution and shall be
made in a manner consistent with Section 6.5(a)(2).
(g)(1) In the event there is an election to waive the
Pre-Retirement Survivor Annuity, and for death benefits in excess of
the Pre-Retirement Survivor Annuity, such death benefits shall be paid
to the Participant's Beneficiary by either of the following methods,
as elected by the Participant (or if no election has been made prior
to the Participant's death, by his Beneficiary) subject to the rules
specified in Section 6.6(h) and the selections made in the Adoption
Agreement:
(i) One lump-sum payment in cash or in property;
(ii) Payment in monthly, quarterly, semi-annual,
or annual cash installments over a period to be
determined by the Participant or his Beneficiary.
After periodic installments commence, the Beneficiary
shall have the right to reduce the period over which
such periodic installments shall be made, and the
cash amount of such periodic installments shall be
adjusted accordingly.
(iii) If death benefits in excess of the
Pre-Retirement Survivor Annuity are to be paid to the
surviving spouse, such benefits may be paid pursuant
to (i) or (ii) above, or used to purchase an annuity
so as to increase the payments made an annuity so as
to increase the payments made pursuant to the
Pre-Retirement Survivor Annuity;
(2) In the event the death benefit payable pursuant to
Section 6.2 is payable in installments, then, upon the death
of the Participant, the Administrator may direct that the
death benefit be segregated and invested separately, and that
the funds accumulated in the segregated account be used for
the payment of the installments.
(h) Notwithstanding any provision in the plan to the
contrary, distributions upon the death of a Participant made on or
after January 1, 1985, shall be made in accordance with the following
requirements and shall otherwise comply with Code Section 401(a)(9)
and the Regulations thereunder.
(1) If it is determined, pursuant to Regulations, that
the distribution of a Participant's interest has begun and the
Participant dies before his entire interest has been
distributed to him, the remaining portion of such interest
shall be
-59-
<PAGE> 94
distributed at least as rapidly as under the method of
distribution selected pursuant to Section 6.5 as of his date
of death.
(2) If a Participant dies before he has begun to receive
any distributions of his interest in the Plan or before
distributions are deemed to have begun pursuant to
Regulations, then his death benefit shall be distributed to
his Beneficiaries in accordance with the following rules
subject to the selections made in the Adoption Agreement and
Subsections 6.6(h)(3) and 6.6(i) below:
(i) The entire death benefit shall be distributed
to the Participant's Beneficiaries by December se of
the calendar year in which the fifth anniversary of
the Participant's death occurs;
(ii) The 5-year distribution requirement of (i)
above shall not apply to any portion of the deceased
Participant's interest which is payable to or for the
benefit of a designated Beneficiary. In such event,
such portion shall be distributed over the life of
such designated Beneficiary (or over a period not
extending beyond the life expectancy of such
designated Beneficiary) provided such distribution
begins not later than December 31st of the calendar
year immediately following the calendar year in which
the Participant died;
(iii) However, in the event the Participant's
spouse (determined as of the date of the
Participant's death) is his designated Beneficiary,
the provisions of (ii) above shall apply except that
the requirement that distributions commence within
one year of the Participant's death shall not apply,
In lieu thereof, distributions must commence on or
before the late of: (1) December 31st of the calendar
year immediately following the calendar year in which
the Participant died; or (2) December 31st of the
calendar year in which the Participant would have
attained age 70 1/2. If the surviving spouse dies
before distributions to such spouse begin, then the
5-year distribution requirement of this Section shall
apply as if the spouse was the Participant.
(3) Notwithstanding subparagraph (2) above, or any
selections made in the Adoption Agreement, if a Participant's
death benefits are to be paid in the form of a Pre-retirement
Survivor Annuity, then distributions to the Participant's
surviving spouse must commence on or before the later of: (1)
December 31st of the calendar year immediately following the
calendar year in which the Participant died; or (2) December
31st of the calendar year in which the Participant would have
attained age 70 1/2.
-60-
<PAGE> 95
(i) For purposes of Section 6.6(h)(2), the election by a
designated Beneficiary to be excepted from the 5-year distribution
requirement (if permitted in the Adoption Agreement) must be made no
later than December 31st of the calendar year following the calendar
year of the Participant's death. Except, however, with respect to a
designated Beneficiary who is the Participant's surviving spouse, the
election must be made by the earlier of (1) December 31st of the
calendar year immediately following the calendar year in which the
Participant died or, of attained ag 70 1/2; or (2) December 31st of
the calendar year which contains the fifth anniversary of the date of
the Participant's death. An election by a designated Beneficiary must
be in writing and shall be irrevocable as of the last day of the
election period stated herein. IN the absence of an election by the
Participant or a designated Beneficiary, the 5-year distribution
requirement shall apply.
(j) For purposes of this Section, the life expectancy of
a Participant and a Participant's spouse (other than in the case of a
life annuity) shall or shall not be redetermined annually as provided
in the Adoption Agreement and in accordance with Regulations. If the
Participant or the Participant's spouse may ?????elite, elite to the
adoption Agreement, to have life expectancies recalculated, then the
election, once made shall be irrevocable. If no election is made by
the time distributions must commence, then the life expectancy of the
Participant and the Participant's spouse shall not be subject to
recalculation. Life expectancy and joint and last survivor expectancy
shall be computed using the return multiples in Tables V and VI of
Regulation Section 1.72-9.
(k) In the event that less than 100% of a Participant's
interest in the Plan is distributed to such Participant's spouse, the
portion of the distribution attributable to the Participant's
Voluntary Contribution Account shall be in the same proportion that
the Participant's Voluntary Contribution Account bears to the
Participant's total interest in the Plan.
(l) Subject to the spouse's right of consent afforded
under the Plan, the restrictions imposed by this Section shall not
apply if a Participant has, prior to January 1, 1984, made a written
designation to have his death benefits paid in an alternative method
acceptable under Code Section 401(a) as in effect prior to the
enactment of the Tax Equity and Fiscal Responsibility Act of 1982.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever a
distribution is to be made, or a series of payments are to commence, on or as
of an Anniversary Date, the distribution or series of payments may be made or
begun on such date or as soon thereafter as is practicable, but i no even later
than 180 days after the Anniversary Date. However, unless a Former Participant
elects in writing to defer the receipt of benefits (such election may not
result in a death benefit that is more than incidental), the payment of
benefits shall begin not later than the
-61-
<PAGE> 96
60th day after the close of the plan Year in which the latest of the following
events occurs: (a) the date on which the Participant attains the earlier of
age 65 or the Normal Retirement Age specified herein; (b) the 10th anniversary
of the year in which the Participant commenced participation in the Plan; or
(c) the date the Participant terminates his service with the Employer.
Notwithstanding the foregoing, the failure of a Participant
and, if applicable, the Participant's spouse, to consent to a distribution
pursuant to Section 6.5(d), shall be deemed to be an election to defer the
commencement of payment of any benefit sufficient to satisfy this Section.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom
the Beneficiary maintains his residence, or to be custodian for such
Beneficiary under the Uniform Gift to Minors Act or Gift to Minors Act, if such
is permitted by the laws of the state in ?????which said Beneficiary resides.
Such a payment to the legal guardian, custodian or parent of a minor
Beneficiary shall fully discharge the Trustee, Employer, and Plan from further
liability on account thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution
payable to a Participant or his Beneficiary hereunder shall, at the alter of
the Participant's attainment of age 62 or his Normal Retirement Age, remain
unpaid solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary is located subsequent to his benefit being reallocated, such
benefit shall be restored, first from Forfeitures, if any, and then from an
additional Employer contribution if necessary.
6.10 PRE-RETIREMENT DISTRIBUTION
For Profit Sharing Plans and 401(k) Profit Sharing Plans, if
elected in the Adoption Agreement, at such time as a Participant shall have
attained the age specified in the Adoption Agreement, the Administrator, at the
election of the Participant, shall direct the distribution of up the entire
amount then credited to the accounts maintained on behalf of the Participant.
However, no such distribution from the Participant's Account shall occur prior
to 100% Vesting. In the even that the Administrator makes such a distribution,
the Participant shall continue to be eligible to participate in the Plan on the
same basis as any other Employee. Any distribution made pursuant to this
Section shall be made in a manner consistent with Section 6.5, including, but
not limited to, all notice and consent requirements of Code Sections 411(a)(11)
and 417 and the Regulations thereunder.
-62-
<PAGE> 97
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) For Profit Sharing Plans, if elected in the Adoption
Agreement, the Administrator, at the election of the Participant,
shall direct the distribution to any Participant in any one Plan Year
up to the lesser of 100% of his Participant's Combined Account valued
as of the last Anniversary Date or other valuation date or the amount
necessary to satisfy the immediate and heavy financial need of the
Participant. Any distribution made pursuant to this Section shall be
deemed to be made as of the first day of the Plan Year or, if later,
the valuation date immediately preceding the date of distribution, and
the account from which the distribution is made shall be reduced
accordingly. Withdrawal under this Section shall be authorized only
if the distribute is on account of:
(1) Medical expenses described in Code Section 213(d)
incurred by the Participant, his spouse, or any of his
dependents (as defined in Code Section 152);
(2) The purchase (excluding mortgage payments)of a
principal residence for the Participant;
(3) Funeral expenses for a member of the Participant's
family;
(4) Payment of tuition for the next semester or quarter
of post-secondary education for the Participant, his spouse,
children, or dependents; or
(5) The need to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage of
the Participant's principal residence.
(b) No such distribution shall be made from the
Participant's Account until such Account has become fully vested.
(c) Any distribution made pursuant to this Section shall
be made in a manner which is consistent with and satisfies the
provision of Section 6.5, including, but not limited to, all notice
and consent requirements of Code Sections 411(a)(11) and 417 and the
Regulations thereunder.
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not reached the "earliest retirement age" under the Plan. For
the purposes of this
-63-
<PAGE> 98
Section, "alternate payee," "qualified domestic relations order" and "earliest
retirement age" shall have the meaning set forth under Code Section 414(p).
6.13 SPECIAL RULE FOR NON-ANNUITY PLANS
If elected in the Adoption Agreement, the following shall
apply to a Participant in a Profit Sharing Plan or 401(k) Profit Sharing Plan
and to any distribution, made on or after the first day of the first plan year
beginning after December 31, 1988, from or under a separate account
attributable solely to accumulated deductible employee contributions, as
defined in Code Section 72(o)(5)(B), and maintained on behalf of a participant
in a money purchase pension plan, (including a target benefit plan):
(a) The Participant shall be prohibited from electing
benefits in the form of a life annuity;
(b) Upon the death of the Participant, the Participant's
entire Vested account balances will be paid to his or her surviving
spouse, or, if there is no surviving spouse or the surviving spouse
has already consented to waive his or her benefit, in accordance with
Section 6.6, to his designated Beneficiary; and
(c) Except to the extent otherwise provided in this
Section and Section 6.5(h), the other provisions of Sections 6.2, 6.5
and 6.6 regarding spousal consent and the forms of distributions shall
be inoperative with respect to this Plan.
This Section shall not apply to any Participant if it is
determined that this Plan is a direct or indirect transferee of a
defined benefit plan or money purchase plan, or a target benefit plan,
stock bonus or profit sharing plan which would otherwise provide for a
life annuity form of payment to the Participant.
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of
responsibilities:
(a) Consistent with the "funding policy and method"
determined by the Employer to invest, manage, and control the Plan
assets subject, however, to the direction of an Investment Manager if
the Employer should appoint such manger as to all or a portion of the
assets of the Plan;
(b) At the direction of the Administrator, to pay
benefits reburied under the plan to be paid to Participants, or, in
the event of their death, to their Beneficiaries;
-64-
<PAGE> 99
(c) To maintain records of receipts and disbursements and
furnish to the Employer and/or Administrator for each Plan Year a
written annual report per Section 7.7; and
(d) If there shall be more than one Trustee, they shall
act by a majority of their number, but may authorize one or more of
them to sign papers on their behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust Fund
to keep the Trust Fund invested without distinction between principal
and income and in such securities or property, real or personal,
wherever situated, as the Trustee shall deem advisable, including, but
not limited to, stocks, common or preferred, bonds and other
residences of indebtedness or ownership, and real estate or any
interest therein. The Trustee shall at all times in making
investments of the Trust Fund consider, among other factors, the short
and long- term financial needs of the plan on the basis of information
furnished by the Employer. In making such investments, the Trustee
shall not be restricted to securities or other property of the
character expressly authorized by the applicable law for trust
investments; however, the Trustee shall give due regard to any
limitations imposed by the Code or the Act so that at all times this
Plan may qualify as a qualified Plan and Trust.
(b) The Trustee may employ a ban or trust company
pursuant to the terms of its usual and customary bank agency
agreement, under which the duties of such bank or trust company shall
be of a custodia, clerical and record-keeping nature.
(c) The Trustee may from time to time transfer to a
common, collective, or pooled trust fund maintained by any corporate
Trustee hereunder pursuant to Revenue Ruling 81-100, all or such part
of the Trust Fund as the Trustee may deem advisable, and such part or
all of the Trust Fund so transferred shall be subject to all the terms
and provisions of the common, collective, or pooled trust fund which
contemplate the commingling for investment purposes of such trust
assets with trust assets of other trusts. The Trustee may withdraw
from such ?????omon, collective, or pooled trust fund all or such part
of the Trust Fund as the Trustee may deem advisable.
(d) The Trustee, at the direction of the Administrator
and pursuant to instructions from the individual designated in the
Adoption Agreement for such purpose and subject to the conditions set
forth in the Adoption Agreement, shall ratably apply for, own, and pay
all premiums on Contracts on the lives of the Participants. Any
initial or additional Contract purchased on behalf of a Participant
shall have a face amount of not less than $1,000, the amount set forth
in the Adoption Agreement, or the limitation of the Insurer, whichever
is greater. If a life insurance Contract is to be purchased for a
Participant, the aggregate premium for ordinary life insurance for
each Participant must
-65-
<PAGE> 100
be less than 50% of the aggregate contributions and Forfeitures
allocated to a Participants's Combined Account. For purposes of this
limitation, ordinary life insurance Contracts are Contracts with both
non-decreasing death benefits and non-increasing premiums. If term
insurance or universal life insurance is purchased with such
contributions, the aggregate premium must be 25% or less of the
aggregate contributions and Forfeitures allocated to a Participant's
Combined Account. If both term insurance and ordinary life insurance
are purchased with such contributions, the amount expended for term
insurance plus one-half of the premium for ordinary life insurance may
not in the aggregate exceed 25% of the aggregate Employer
contributions and forfeitures allocated to a Participant's Combined
Account The Trustee must distribute the Contracts to the Participant
or convert the entire value of the Contract at or before retirement
into cash or provide for a periodic income so that no portion of such
value may be used to continue life insurance protection beyond
retirement. Notwithstanding the above, the limitations imposed herein
with respect to the purchase of life insurance shall not apply, in the
case of a Profit Sharing Plan, to the portion of a Participant's
Account that has accumulated for at least two (2) Plan Years.
Notwithstanding anything hereinabove to the contrary, amounts
credited to a participant's ????Caliphate Voluntary Employee
Contribution Account pursuant to Section 4.9, shall not be applied to
the purchase of life insurance contracts.
(e) The Trustee will be the owner of any life insurance
Contract purchased under the terms of this Plan. The Contract must
provide that the proceeds will be payable to the Trustee; however, the
Trustee shall be required to pay over all proceeds of the Contract to
the Participant's designated Beneficiary in accordance with the
distribution provision of Article VI. A Participants's spouse will be
the designated Beneficiary pursuant to Section 6.2, unless a qualified
election has been made in accordance with Sections 6.5 and 6.6 of the
Plan, if applicable. Under no circumstances shall the Trust retain
any part of the proceeds. However, the Trustee shall not pay the
proceeds in a method that would violate the requirements of the
Retirement Equity Act, as stated in Article VI of the Plan, or Code
Section 401(a)(9) and the Regulations thereunder.
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under
common law, statutory authority, including the Act, and other provisions of
this Plan, shall have the following powers and authorities to be exercised in
the Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or
other property and to retain the same. In conjunction with the
purchase of securities, margin accounts may be opened and maintained;
-66-
<PAGE> 101
(b) To sell, exchange, convey, transfer, grant options to
purchase, or otherwise dispose of any securities or other property
held by the Trustee, by private contract or at public auction. No
person delaying with the Trustee shall be bound to see to the
application of the purchase money or to inquire into the validity,
expediency, or propriety of any such sale or other disposition, with
or without advertisement;
(c) To vote upon any stocks, bonds, or other securities;
to give general or special proxies or powers of attorney with or
without power of substitution; to exercise any conversion privileges,
subscription rights or other options, and to make any payments
incidental thereto; to oppose, or to consent to, or otherwise
participate in, corporate reorganizations or other changes affecting
corporate securities, and to delegate discretionary powers, and to pay
any assessments or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to stocks, bonds,
securities, or other property;
(d) To cause any securities or other property to be
registered in the Trustee's own name or in the mae of one or more of
the Trustee's nominees, and to hold nay investments in bearer form,
but the books and records of the Trustee shall at all times show that
all such investments are part of the Trust Fund;
(e) To borrow or raise money for the purposes of the Plan
in such amount, and upon such terms and conditions, as the Trustee
shall deem advisable; and for any sum so borrowed, to issue a
promissory note as Trustee, and to secure the repayment thereof by
pledging all, or any part, of the Trust Fund; and no person lending
money to the Trustee shall be bound to see to the application of the
money lent or to inquire into the validity, expediency, or propriety
of any borrowing;
(f) To keep such portion of the Trust Fund in cash or
cash balances as the Trustee may, from time to time, deem to be in the
best interests of the Plan, without liability for interest thereon;
(g) To accept and retain for such time as it may deem
advisable any securities or other property received or acquired by it
as Trustee hereunder, whether or not such securities or other property
would normally be purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and
all documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry out the
powers herein granted;
(i) To settle compromise, or submit to arbitration any
claims, debts, or damages due or owing to or from the Plan, to
commence or defend suits r legal or administrative proceedings, and to
represent the Plan in all suits and legal and administrative
proceedings;
-67-
<PAGE> 102
(j) To employ suitable agents and counsel and to pay
their reasonable expenses and compensation, and such agent or counsel
may or may not e ????/agent or counsel for the Employer;
(k) To apply for and procure from the Insurer as an
investment of the Trust Fund such annuity, or other Contracts (on life
of any Participant) as the Administrator shall deem proper; to
exercise, at any time or from time to time, whatever rights and
privileges may be granted under such annuity, or other Contracts; to
collect, receive, and settle for the proceeds of all such annuity, or
other Contracts as and when entitled to do so under the provisions
thereof;
(l) To invest funds of the Trust in time deposits or
savings accounts bearing a reasonable rate of interest in the
Trustee's bank;
(m) To invest in Treasury Bills and other reforms of
United State government obligations;
(n) To sell, purchase and acquire put or call options if
the options are traded on and purchased through a national securities
exchange registered under the Securities Exchange Act of 1934, as
amended, or, if the options are not traded on a national securities
exchange, are guaranteed by a member firm of the New York Stock
Exchange;
(o) To deposit monies in federally insured savings
accounts or certificates of deposit in banks or savings and loan
associations;
(p) To pool all or any of the Trust Fund, from time to
time, with assets belonging to any other qualified employee pension
benefit trust created by the Employer or any Affiliated Employer, and
to commingle such assets and make joint or common investments and
carry joint accounts on behalf of this Plan and such other trust or
trusts, allocating undivided shares or interests in such investments
or accounts or any pooled assets of the two or more trusts in
accordance with their respective interests;
(q) To do all such acts and exercise all such rights and
privileges, although not specifically mentioned herein, as the Trustee
may deem necessary to carry out the purposes of the Plan.
(r) Directed Investment Account. The powers granted to
the Trustee shall be exercised in the sole fiduciary discretion of the
Trustee. However, if elected in the Adoption Agreement, each
Participant may direct the Trustee to separate and keep separate all
or a portion of his interest in the Plan; and further reach
Participant is authorized and empowered, in his sole and absolute
discretion, to give directions to the Trustee in such form as the
Trustee may require concerning the investment of the
-68-
<PAGE> 103
Participant's Directed Investment Account, which directions must be
followed by the Trustee subject, however, to restrictions on payment
of life insurance premiums. Neither the Trustee nor any other persons
including the Administrator or otherwise shall be under any duty to
question any such direction of the Participant or to review any
securities or other property, real or personal, or to make any
suggestions to the Participant in connection therewith, and the
Trustee shall comply as promptly as practicable with directions given
by the participant hereunder. Any such direction may be of a
continuing nature or otherwise and may be revoked by the Participant
at any time in such form as the Trustee may require. The Trustee may
refuse to comply with any direction form the Participant in the even
the Trustee, in its sole and absolute discretion, deems such
directions improper by virtue of applicable law, and in such event,
the Trustee shall not be responsible or liable for any loss or expense
which may result. any costs and expenses related to compliance with
the Participant's directions shall be borne by the Participant's
Directed Investment Account.
Notwithstanding anything hereinabove to the contrary, the
Trustee shall not, at any time after December 21, 1981, invest any
portion of a Directed Investment Account in "collectibles" within the
meaning of that term as employed in Code Section 408(m).
7.4 LOANS TO PARTICIPANTS
(a) If specified in the Adoption Agreement, the Trustee
(or, if loans are treated as Directed Investment pursuant to the
Adoption Agreement, the Administrator) may, in the Trustee's (or, if
applicable, the Administrator's) sole discretion, make loans to
Participants or Beneficiaries under the following circumstances: (1)
loans shall be made available to all Participants and Beneficiaries on
a reasonably equivalent basis; (2) loans shall not be made available
to Highly Compensated Employees in an amount greater than the amount
made available to other Participants; (3) loans shall bear a
reasonable rate of interest; (4) loans shall be adequately secured;
and (5) shall provide for periodic repayment over a reasonable period
of time.
(b) Loans shall not be made to any Shareholder-Employee
or Owner-Employee unless an exception for such loan is obtained
pursuant to Act Section 408 and further provided that such loan would
not be subject to tax pursuant to Code Section 4975.
(c) Loans shall not be granted to any Participant that
provide for a repayment period extending beyond such Participant's
Normal Retirement Date.
(d) Loans made pursuant to this Section (when added to
the outstanding balance of all other loans made by the Plan to the
Participant) shall be limited to the lesser of:
-69-
<PAGE> 104
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the Participant
during the one year period ending on the day before the date
on which loan is made, over the outstanding balance of loans
from the Plan to the Participant on the date on which such
loan was made, or
(2) the greater of (A) one-half (1/2) of the present
value of the non-forfeitable accrued benefit of the Employee
under the Plan, or (B), if permitted pursuant to the Adoption
Agreement, $10,000.
For purposes of this limit, all plans of the Employer
shall be considered one plan. Additionally, with respect to any loan
made prior to January 1, 1987, the $50,000 limit specified in (1)
above shall be unreduced.
(e) No Participant loan shall take into account the
present value of such Participant's Qualified Voluntary Employee
Contribution Account.
(f) Loans shall provide for level amortization with
payments to be made not less frequently than quarterly over a period
not to exceed five (5) years. However, loans used to acquire any
dwelling unit which, within a reasonable time, is to be used
(determined at the time the loan is made) as a principal residence of
the Participant shall provide for periodic repayment over a reasonable
period of time that may exceed five (5) years. Notwithstanding the
foregoing, loans made prior to January 1, 1987 which are used to
acquire, construct, reconstruct or substantially rehabilitate any
dwelling unit which, within a reasonable period of time is to be used
(determined at the time the loan is made) as a principal residence of
the Participant or a member of his family (within the meaning of Code
Section 267(c)(4)) made provide for periodic repayment over a
reasonable period of time that may exceed five (5) years.
Additionally, loans made prior to January 1, 1987, may provided for
periodic payments which are made less frequently than quarterly and
which do not necessarily result in level amortization.
(g) As assignment or pledge of any portion of a
Participant's interest in the Plan and a loan, pledge, or assignment
with respect to any insurance Contract purchased under the Plan, shall
be treated as a loan under this Section.
(h) Any loan made pursuant to this Section after August
18, 1985 where the Vested interest of the Participant is used to
secure such loan shall require the written consent of the
Participant's spouse in a manner consistent with Section 6.5(a)
provided the spousal consent requirements of such Section apply to the
Plan. Such written consent must be obtained within the 90-day period
prior to the date the loan is Made: Any security interest held by the
Plan by reason of an outstanding loan to the Participant shall be
taken into account in determining the amount of the death benefit or
Pre-Retirement Survivor Annuity. However, no spousal consent shall be
required under this paragraph if the total accrued benefit subject to
the security is not in excess of $3,500.
-70-
<PAGE> 105
(i) With regard to any loans granted or renewed on or
after the last day of the first Plan Year beginning after December 31,
1988, a Participant loan program shall be established which must
include, but need not be limited to, the following:
(1) the identify of the person or positions authorized to
administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of
loans offered, including what constitutes a hardship or
financial need if selected in the Adoption Agreement;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a
Participant loan; and
(7) the events constituting default and the steps that
will be taken to preserve plan assets.
Such Participant loan program shall be contained in a
separate written document which, when properly executed, is hereby
incorporated by reference and made a part of this plan. Furthermore,
such Participant loan program may be modified or amended in writing
from time to time without the necessity of amending this Section of
the Plan.
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from
time to time, in accordance with the terms of the Plan, make payments out of
the Trust Fund. The Trustee shall not be responsible in any way for the
application of such payments.
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as set
forth in Trustee's fee schedule (if the Trustee has such a schedule) or as
agreed upon in writing by the Employer and the Trustee. An individual serving
as Trustee who already receives full-time pay from the Employer shall not
receive compensation from this Plan. In addition, the Trustee shall be
reimbursed for any reasonable expenses, including reasonable counsel fees
incurred by it as Trustee. Such compensation and expenses shall be paid from
the Trust Fund unless paid or
-71-
<PAGE> 106
advanced by the Employer. All taxes of any kind and all kinds whatsoever that
may be levied or assessed under existing or future laws upon, or in respect of,
the Trust Fund or the income thereof, shall be paid from the Trust Fund.
7.7 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer's contribution for each Plan Year,
the Trustee, or its agent, shall furnish to the Employer and Administrator a
written statement of account with respect to the Plan Year for which such
contribution was made setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund upon
sales or other disposition of the assets;
(c) the increase, or decrease, in the value of the Trust
Fund;
(d) all payments and distributions made from the Trust
Fund; and
(e) such further information as the Trustee and/or
Administrator deems appropriate. The Employer, forthwith upon its
receipt of each such statement of account, shall acknowledge receipt
thereof in writing and advise the Trustee and/or Administrator of its
approval or disapproval thereof. Failure by the Employer to
disapprove any such statement of account within thirty (30) days after
its receipt thereof shall be deemed an approval thereof. The approval
by the Employer of any statement of account shall be binding as to all
matters embraced therein as between the Employer and the Trustee to
the same extent as if the account of the Trustee had been settled by
judgment or decree in an action for a judicial settlement of its
account in a court of competent jurisdiction in which the Trustee, the
Employer and all persons having or claiming an interest in the Plan
were parties; provided, however, that nothing herein contained shall
deprive the Trustee of its right to have its accounts judicially
settled if the Trustee so desires.
7.8 AUDIT
(a) If an audit of the Plan's records shall be required
by the Act and the regulations thereunder for any Plan Year, the
Administrator shall direct the Trustee to engage on behalf of all
Participants an independent qualified public accountant for that
purpose. Such accountant shall, after an audit of the books and
records of the Plan in accordance with generally accepted auditing
standards, within a reasonable period after the close of the Plan
Year, furnish to the Administrator and the Trustee a report of his
audit setting forth his opinion as to whether any statements,
schedules or lists, that are required by Act Section 103 or the
Secretary of Labor to be filed with the Plan's annual
-72-
<PAGE> 107
report, are presented fairly in conformity with generally accepted
accounting principles applied consistently.
(b) All auditing and accounting fees shall be an expense
of and may, at the election of the Administrator, be paid from the
Trust Fund.
(c) If some or all of the information necessary to enable
the Administrator to comply with Act Section 103 is maintained by a
bank, insurance company, or similar institution, regulated and
supervised and subject to periodic examination by a state or federal
agency, it shall transit and certify the accuracy of that information
to the Administrator as provided in Action Section 103(b) within one
hundred twenty (120) days after the end of the Plan Year of such other
date as may be prescribed under regulations of the Secretary of Labor.
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering to
the Employer, at least thirty (30) days before its effective date, a
written notice of his resignation.
(b) The Employer may remove the Trustee by mailing by
registered or certified mail, addressed to such Trustee at his last
known address, at least thirty (30) days before its effective date, a
written notice of his removal.
(c) Upon the death, resignation, incapacity, or removal
of any Trustee, a successor may be appointed by the Employer; and such
successor, upon accepting such appointment in writing and delivering
same to the Employer, shall, without further act, become vested with
all the estate, rights, powers, discretions, and duties of his
predecessor with like respect as if he were originally named as a
Trustee herein. Until such a successor is appointed, the remaining
Trustee or Trustees shall have full authority to act under the terms
of the Plan.
(d) The Employer may designate one or more successors
prior to the death, resignation, incapacity, or removal of a Trustee.
In the event a successor is so designated by the Employer and accepts
such designation, the successor shall, without further act, become
vested with all the estate, rights, powers, discretions, and duties of
his predecessor with the like effect as if he were originally named as
Trustee herein immediately upon the death, resignation, incapacity, or
removal of his predecessor.
(e) Whenever any Trustee hereunder ceases to serve as
such, he shall furnish to the Employer and Administrator a written
statement of account with respect to the portion of the Plan Year
during which he served as Trustee. This statement shall be either (i)
included as part of the annual statement of account for the Plan Year
required under Section 7.7 or (ii) set forth in a special statement.
Any such special statement of
-73-
<PAGE> 108
account shall be rendered to the Employer no later than the due date
of the annual statement of account for the Plan Year. The procedures
set forth in Section 7.7 for the approval by the Employer of annual
statements of account shall apply to any special statement of account
rendered hereunder and approval by the Employer of any such special
statement in the manner provided in Section 7.7 shall have the same
effect upon the statement as the Employer's approval of an annual
statement of account. No successor to the Trustee shall have any duty
or responsibility to investigate the acts or transactions of any
predecessor who has rendered all statements of account required by
Section 7.7 and this subparagraph.
7.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan,
the Trustee at the direction of the Administrator shall transfer the Vested
interest, if any, of such Participant in his account to another trust forming
part of a pension, profit sharing, or stock bonus plan maintained by such
Participant's new employer and represented by said employer in writing as
meeting the requirements of Code Section 401(a), provided that the trust to
which such transfers are made permits the transfer to be made.
7.11 TRUSTEE INDEMNIFICATION
The Employer agrees to indemnify and save harmless the Trustee
against any and all claims, losses, damages, expenses and liabilities the
Trustee may incur in the exercise and performance of the Trustee's powers and
duties hereunder, unless the same are determined to be due to gross negligence
or willful misconduct.
7.12 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold "qualifying
Employer securities" and "qualifying Employer real property," as those terms
are defined in the Act. However, no more than 100%, in the case of a Profit
Sharing Plan or 401(k) Plan or 10%, in the case of a Money Purchase Plan of the
fair market value of all the assets in the Trust Fund may be invested in
"qualifying Employer securities" and "qualifying Employer real property".
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to
amend this Plan subject to the limitations of this Section. However,
any amendment which affects the rights, duties or responsibilities of
the Trustee and Administrator may only be made with the Trustee's and
Administrator's written consent. Any such amendment shall become
-74-
<PAGE> 109
effective as provided therein upon its execution. The Trustee shall
not be required to execute any such amendment unless the amendment
affects the duties of the Trustee hereunder.
(b) The Employer may (1) change the choice of options in
the Adoption Agreement, (2) add overriding language in the Adoption
Agreement when such language is necessary to satisfy Code Sections 415
or 416 because of the required aggregation of multiple plans, and (3)
add certain model amendments published by the Internal Revenue Service
which specifically provide that their adoption will not cause the Plan
to be treated as an individually designed plan. An Employer that
amends the Plan for any other reason, including a waiver of the
minimum funding requirement under Code Section 412(d), will no longer
participate in this Regional Prototype Plan and will be considered to
have an individually designed plan.
(c) The Employer expressly delegates authority to the
sponsoring organization of this Plan, the right to amend this Plan by
submitting a copy of the amendment to each Employer who has adopted
this Plan after first having received a ruling or favorable
determination from the Internal Revenue Service that the Plan as
amended qualifies under Code Section 401(a) and the Act.
(d) No amendment to the Plan shall be effective if it
authorizes or permits any part of the Trust Fund (other than such part
as is required to pay taxes and administration expenses) to be used
for or diverted to any purpose other than for the exclusive benefit of
the Participants or their Beneficiaries or estates; or causes any
reduction in the amount credited to the account of any Participant; or
causes or permits any portion of the Trust Fund to revert to or become
property of the Employer.
(e) Except as permitted by Regulations (including
Regulation 1.411(d)-4), no Plan amendment or transaction having the
effect of a Plan amendment (such as a merger, plan transfer or similar
transaction) shall be effective if it eliminates or reduces any
"Section 411(d)(6) protected benefit" or adds or modifies conditions
relating to "Section 411(d)(6) protected benefits" the result of which
is a further restriction on such benefit unless such protected
benefits are preserved with respect to benefits accrued as of the
later of the adoption date or effective date of the amendment.
"Section 411(d)(6) protected benefits" are benefits described in Code
Section 411(d)(A), early retirement benefits and retirement-type
subsidies, and optional forms of benefit.
8.2 TERMINATION
(a) The Employer shall have the right at any time to
terminate the Plan by delivering to the Trustee and Administrator
written notice of such termination. Upon any full or partial
termination all amounts credited to the affected Participants'
Combined Accounts shall become 100% Vested and shall not thereafter be
subject to forfeiture, and
-75-
<PAGE> 110
all unallocated amounts shall be allocated to the accounts of all
Participants in accordance with the provisions hereof.
(b) Upon the full termination of the Plan, the Employer
shall direct the distribution of the assets to Participants in a
manner which is consistent with and satisfies the provisions of
Section 6.5. Distributions to a Participant shall be made in cash (or
in property if permitted in the Adoption Agreement) or through the
purchase of irrevocable nontransferable deferred commitments from the
Insurer. Except as permitted by Regulations, the termination of the
Plan shall not result in the reduction of "Section 411(d)(6) protected
benefits" as described in Section 8.1.
8.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan only if the benefits
which would be received by a Participant of this Plan, in the event of a
termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation and such merger or consolidation does not otherwise result in the
elimination or reduction of any "Section 411(d)(6) protected benefits" as
described in Section 8.1(e).
ARTICLE IX
MISCELLANEOUS
9.1 EMPLOYER ADOPTIONS
(a) Any organization may become the Employer hereunder by
executing the Adoption Agreement in from satisfactory to the Trustee,
and it shall provide such additional information as the Trustee may
require. The consent of the Trustee to act as such shall be signified
by its execution of the Adoption Agreement.
(b) Except as otherwise provided in this Plan, the
affiliation of the Employer and the participation of its Participants
shall be separate and apart from that of any other employer and its
participants hereunder.
9.2 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between
the Employer and any Participant or to be a consideration or an inducement for
the employment of any Participant or Employee. Nothing contained in this Plan
shall be deemed to give any Participant or Employee the right to be retained in
the service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect
which such discharge shall have upon him as a Participant of this Plan.
-76-
<PAGE> 111
9.3 ALIENATION
(a) Subject to the exceptions provided below, no benefit
which shall be payable to any person (including a Participant or his
Beneficiary) shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or
charge, and any attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber, or charge the same shall be void; and no
such benefit shall in any manner be liable for, or subject to, the
debts, contracts, liabilities, engagements, or torts of any such
person, nor shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized except to
such extent as may be required by law.
(b) This provision shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan, for any reason,
under any provision of this Plan. At the time a distribution is to be
made to or for a Participant's or Beneficiary's benefit, such
proportion of the amount to be distributed as shall equal such
indebtedness shall be paid to the Plan, to apply against or discharge
such indebtedness. Prior to making a payment, however, the
Participant or Beneficiary must be given written notice by the
Administrator that such indebtedness is to be so paid in whole or in
part from his Participant's Combined Account. If the Participant or
Beneficiary does not agree that the indebtedness is a valid claim
against his Vested Participant's Combined Account, he shall be
entitled to a review of the validity of the claim in accordance with
procedures provided in Sections 2.12 and 3.13.
(c) This provision shall not apply to a "qualified
domestic relations order" defined in Code Section 414(p), and those
other domestic relations orders permitted to be so treated by the
Administrator under the provisions of the Retirement Equity Act of
1984. The Administrator shall establish a written procedure to
determine the qualified status of domestic relations orders and to
administer distributions under such qualified orders. Further, to the
extent provided under a "qualified domestic relations order", a former
spouse of a Participant shall be treated as the spouse or surviving
spouse for all purposes under the Plan.
9.4 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according
to the Act and the laws of the State of Commonwealth in which the Employer's
principal office is located, other than its laws respecting choice of law, to
the extent not pre-empted by the Act.
9.5 GENDER AND NUMBER
Wherever any words are used in the masculine, feminine or
neuter gender, they shall be construed as though they were also used in another
gender in all cases where they would so apply, and whenever any words are used
herein in the singular or plural form, they shall be
-77-
<PAGE> 112
construed as though they were also used in the other form in all cases where
they would so apply.
9.6 LEGAL ACTION
In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which the Trustee or
the Administrator may be a party, and such claim, suit, or proceeding is
resolved in favor of the Trustee or Administrator, they shall be entitled to be
reimbursed from the Trust Fund for any and all costs, attorney's fees, and
other expenses pertaining thereto incurred by them for which they shall have
become liable.
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically
permitted by law, it shall be impossible by operation of the Plan or
of the Trust, by termination of either, by power of revocation or
amendment, by the happening of any contingency, by collateral
arrangement or by any other means, for any part of the corpus or
income of any Trust Fund maintained pursuant to the Plan or any funds
contributed thereto to be used for, diverted to, purposes other than
the exclusive benefit of Participants, Retired Participants, or their
Beneficiaries.
(b) In the event the Employer shall make a contribution
under a mistake of fact pursuant to Section 403(c)(2)(A) of the Act,
the Employer may demand repayment of such contribution at any time
within one (1) year following the time of payment and the Trustee
shall return such amount to the Employer within the one (1) year
period. Earnings of the Plan attributable to the contributions may
not be returned to the Employer but any losses attributable thereto
must reduce the amount so returned.
9.8 BONDING
Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act and regulations thereunder, shall be bonded in an amount
not less than 10% of the amount of the funds such Fiduciary handles; provided,
however, that the minimum bond shall be $1,000 and the maximum bond, $500,000.
The amount of funds handled shall be determined at the beginning of each Plan
Year by the amount of funds handled by such person, group, or class to be
covered and their predecessors, if any, during the preceding Plan Year, or if
there is no preceding Plan Year, then by the amount of the funds to be handled
during the then current year. the bond shall provide protection to the Plan
against any loss by reason of acts of fraud or dishonesty by the Fiduciary
alone or in connivance with others. The surety shall be a corporate surety
company (as such term is used in Act Section 412(a)(2), and the bond shall be
in a form approved by the Secretary of Labor. Notwithstanding anything in the
Plan to the contrary, the cost of such bonds shall be an expense of and may, at
the election of the Administrator, be paid from the Trust Fund or by the
Employer.
-78-
<PAGE> 113
9.9 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors,
shall be responsible for the validity of any Contract issued hereunder or for
the failure on the part of the Insurers to make payments provided by any such
Contract, or for the action of any person which may delay payment or render a
Contract null and void or unenforceable in whole or in part.
9.10 INSURER'S PROTECTIVE CLAUSE
The Insurer who shall issue Contracts hereunder shall not have
any responsibility for the validity of this Plan or for the tax or legal
aspects of this Plan. The Insurer shall be protected and held harmless in
acting in accordance with any written direction of the Trustee, and shall have
no duty to see to the application of any funds paid to the Trustee, nor be
required to question any action directed by the Trustee. Regardless of any
provision of this Plan, the Insurer shall not be required to take or permit any
action or allow any benefit or privilege contrary to the terms of any Contract
which it issues hereunder, or the rules of the Insurer.
9.11 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian committee appointed for such Participant or
Beneficiary in accordance with the provisions of this Plan, shall, to the
extent thereof, be in full satisfaction of all claims hereunder against the
Trustee and the Employer.
9.12 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted
or required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
9.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2)
the Administrator, (3) the Trustee, and (4) any Investment Manager appointed
hereunder. The named Fiduciaries shall have only those specific powers,
duties, responsibilities, and obligations as are specifically given them under
the Plan. In general, the Employer shall have the sole responsibility for
making the contributions provided for under Section 4.1; and shall have the
sole authority to appoint and remove the Trustee and the Administrator; to
formulate the Plan's "funding policy and method"; and to amend the elective
provisions of the Adoption Agreement or terminate, in whole or in part, the
Plan. The Administrator shall have the sole responsibility for the
administration of the Plan, which responsibility is specifically described in
the Plan. The Trustee shall have the sole responsibility of management of the
assets held under the Trust, except those assets, the management of which has
been assigned to an Investment Manager, who
-79-
<PAGE> 114
shall be solely responsible for the management of the assets assigned to it,
all as specifically provided in the Plan. Each named Fiduciary warrants that
any directions given, information furnished, or action taken by it shall be in
accordance with the provisions of the Plan, authorizing or providing for such
direction, information or action. Furthermore, each named Fiduciary may rely
upon any such direction, information or action of another named Fiduciary as
being proper under the Plan, and is not required under the Plan to inquire into
the propriety of any such direction, information or action. It is intended
under the Plan that each named Fiduciary shall be responsible for the proper
exercise of its own powers, duties, responsibilities and obligations under the
Plan. No named Fiduciary shall guarantee the Trust Fund in any manner against
investment loss or depreciation in asset value. Any person or group may serve
in more than one Fiduciary capacity.
9.14 HEADINGS
The headings and subheadings of this Plan have been inserted
for convenience of reference and are to be ignored in any construction of the
provisions hereof.
9.15 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary, if,
pursuant to a timely application filed by or in behalf of the Plan,
the Commissioner of Internal Revenue Service or his delegate should
determine that the Plan does not initially qualify as a tax-exempt
plan under Code Sections 401 and 501, and such determination is not
contested, or if contested, is finally upheld, then if the Plan is a
new plan, it shall be void ab initio and all amounts contributed to
the Plan, by the Employer, less expenses paid, shall be returned
within one year and the Plan shall terminate, and the Trustee shall be
discharged from all further obligations. If the disqualification
relates to an amended plan, then the Plan shall operate as if it had
not been amended and restated.
(b) Except as specifically stated in the Plan, any
contribution by the Employer to the Trust Fund is conditioned upon the
deductibility of the contribution by the Employer under the Code and,
to the extent any such deduction is disallowed, the Employer may
within one (1) year following a final determination of the
disallowance, whether by agreement with the Internal Revenue Service
or by final decision of a court of competent jurisdiction, demand
repayment of such disallowed contribution and the Trustee shall return
such contribution within one (1) year following the disallowance.
Earnings of the Plan attributable to the excess contribution may not
be returned to the Employer, but any losses attributable thereto must
reduce the amount so returned.
9.16 UNIFORMITY
All provisions of this Plan shall be interpreted and applied
in a uniform, nondiscriminatory manner.
-80-
<PAGE> 115
9.17 PAYMENT OF BENEFITS
Benefits under this Plan shall be paid, subject to Section
6.10 and Section 6.11 only upon death, Total and Permanent Disability, normal
or early retirement, termination of employment, or upon Plan Termination.
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER
Notwithstanding anything herein to the contrary, with the
consent of the Employer and Trustee, any Affiliated Employer may adopt this
Plan and all of the provisions hereof, and participate herein and be known as a
Participating Employer, by a properly executed document evidencing said intent
and will of such Participating Employer.
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each Participating Employer shall be required to
select the same Adoption Agreement provisions as those selected by the
Employer other than the Plan Year, the Fiscal Year, and such other
items that must, by necessity, vary among employers.
(b) Each such Participating Employer shall be required to
use the same Trustee as provided in this Plan.
(c) The Trustee may, but shall not be required to,
commingle, hold and invest as one Trust Fund all contributions made by
Participating Employers, as well as all increments thereof.
(d) The transfer of any Participant from or to an
Employer participating in this Plan, whether he be an Employee of the
Employer or a Participating Employer, shall not affect such
Participant's rights under the Plan, and all amounts credited to such
Participant's Combine Account as well as his accumulated service time
with the transferor or predecessor, and his length of participation in
the Plan, shall continue to his credit.
(e) Any expenses of the Plan which are to be paid by the
Employer or borne by the Trust Fund shall be paid by each
Participating Employer in the same proportion that the total amount
standing to the credit of all Participants employed by such Employer
bears to the total standing to the credit of all Participants.
-81-
<PAGE> 116
10.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a part of
this Plan; provided, however, that with respect to all of its relations with
the Trustee and Administrator for the purpose of this Plan, each Participating
Employer shall be deemed to have designated irrevocably the Employer as its
agent. Unless the context of the Plan clearly indicates the contrary, the word
"Employer" shall be deemed to include each Participating Employer as related to
its adoption of the Plan.
10.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the Employee
involved shall carry with him his accumulated service and eligibility. No such
transfer shall effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall thereupon
become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred.
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES
Any contribution or Forfeiture subject to allocation during
each Plan Year shall be allocated among all Participants of all Participating
Employers in accordance with the provisions of this Plan. On the basis of the
information furnished by the Administrator, the Trustee shall keep separate
books and records concerning the affairs of each Participating Employer
hereunder and as to the accounts and credits of the Employees of each
Participating Employer. The Trustee may, but need not, register Contracts so
as to evidence that a particular Participating Employer is the interested
Employer hereunder, but in the event of an Employee transfer from one
Participating Employer to another, the employing Employer shall immediately
notify the Trustee thereof.
10.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there
shall be a Participating Employer hereunder shall only be by the written action
of each and every Participating Employer and with the consent of the Trustee
where such consent is necessary in accordance with the terms of this Plan.
10.7 DISCONTINUANCE OF PARTICIPATION
Except in the case of a Standardized Plan, any Participating
Employer shall be permitted to discontinue or revoke its participation in the
Plan at any time. At the time of any such discontinuance or revocation,
satisfactory evidence thereof and of any applicable conditions imposed shall be
delivered to the Trustee. The Trustee shall thereafter transfer, deliver and
assign Contracts and other Trust Fund assets allocable to the Participants f
such Participating Employer to such new Trustee as shall have been designated
by such Participating Employer,
-82-
<PAGE> 117
in the event that it has established a separate pension plan for its Employees
provided, however, that no such transfer shall be made if the result is the
elimination or reduction of any "Section 411(d)(6) protected benefits" in
accordance with Section 8.1(e). If no successor is designated, the Trustee
shall retain such assets for the Employees of said Participating Employer
pursuant to the provisions of Article VII hereof. In no such event shall any
part of the corpus or income of the Trust Fund as it relates to such
Participating Employer be used for or diverted for purposes other than for the
exclusive benefit of the Employees of such Participating Employer.
10.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all
necessary rules or regulations, binding upon all Participating Employers and
all Participants, to effectuate the purpose of this Article.
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE
If any Participating Employer is prevented in whole or in part
from making a contribution which it would otherwise have made under the Plan by
reason of having no current or accumulated earnings or profits, or because such
earnings or profits are less than the contribution which it would otherwise
have made, then, pursuant to Code Section 404(a)(3)(B), so much of the
contribution which such Participating Employer was so prevented from making may
be made, for the benefit of the participating employees of such Participating
Employer, by other Participating Employers who are members of the same
affiliated group within the meaning of Code Section 1504 to the extent of their
current or accumulated earnings or profits, except that such contribution by
each such other Participating Employer shall be limited to the proportion of
its total current and accumulated earnings or profits remaining after
adjustment for its contribution to the Plan made without regard to this
paragraph which the total prevented contribution bears to the total current and
accumulated earnings or profits of all the Participating Employer remaining
after adjustment for all contributions made to the Plan without regard to this
paragraph.
A Participating Employer on behalf of whose employees a
contribution is made under this paragraph shall not be required to reimburse
the contributing Participating Employers.
ARTICLE XI
CASH OR DEFERRED PROVISIONS
Notwithstanding any provision in the Plan to the contrary, the
provisions of this Article shall apply with respect to any 401(k) Profit
Sharing Plan.
11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
-83-
<PAGE> 118
(a) The amount of the total salary reduction elections of
all Participants made pursuant to Section 11.2(a), which amount shall
be deemed an Employer's Elective Contribution, plus
(b) If specified in E3 of the Adoption Agreement, a
matching contribution equal to the percentage specified in the
Adoption Agreement of the Deferred Compensation of each Participant
eligible to share in the allocations of the matching contribution,
which amount shall be deemed an Employer's Non-Elective or Elective
Contribution as selected in the Adoption Agreement, plus
(c) If specified in E4 of the Adoption Agreement, a
discretionary amount, if any, which shall be deemed an Employer's
Non-Elective Contribution, plus
(d) If specified in E5 of the Adoption Agreement, a
Qualified Non-Elective Contribution.
(e) Notwithstanding the foregoing, however, the
Employer's contributions for any Fiscal Year shall not exceed the
maximum amount allowable as a deduction to the Employer under the
provisions of Code Section 404. All contributions by the Employer
shall be made in cash or in such property as is acceptable to the
Trustee.
(f) Except, however, to the extent necessary to provide
the top heavy minimum allocations, the Employer shall make a
contribution even if it exceeds current or accumulated Net Profit or
the amount which is deductible under Code Section 404.
(g) Employer Elective Contributions accumulated through
payroll deductions shall be paid to the Trustee as of the earliest
date on which such contributions can reasonably be segregated from the
Employer's general assets, but in any event within ninety (90) days
from the date on which such amounts would otherwise have been payable
to the Participant in cash. The provisions of Department of Labor
regulations 2510.3-102 are incorporated herein by reference.
Furthermore, any additional Employer contributions which are allocable
to the Participant's Elective Account for a Plan Year shall be paid to
the Plan no later than the twelve-month period immediately following
the close of such Plan Year.
11.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) If selected in the Adoption Agreement, each
Participant may elect to defer his Compensation which would have been
received in the Plan Year, but for the deferral election, subject to
the limitations of this Section and the Adoption Agreement. A
deferral election (or modification of an earlier election) may not be
made with respect to Compensation which is currently available on or
before the date the Participant executed such election, or if later,
the latest of the date the Employer adopts this cash
-84-
<PAGE> 119
or deferred arrangement, or the date such arrangement first became
effective. Any elections made pursuant to this Section shall become
effective as soon as is administratively feasible.
Additionally, if elected in the Adoption Agreement,
each Participant may elect to defer and have allocated for a Plan Year
all or a portion of any cash bonus attributable to services performed
by the Participant for the Employer during such Plan Year and which
would have been received by the Participant on or before two and
one-half months following the end of the Plan Year but for the
deferral. A deferral election may not be made with respect to cash
bonuses which are currently available on or before the date the
Participant executed such election. Notwithstanding the foregoing,
cash bonuses attributable to services performed by the Participant
during a Plan Year but which are to be paid to the Participant later
than two and one-half months after the close of such Plan Year will be
subjected to whatever deferral election is in effect at the time such
cash bonus would have otherwise been received.
The amount by which Compensation and/or cash bonuses
are reduced shall be that Participant's Deferred Compensation and be
treated as an Employer Elective Contribution and allocated to that
Participant's Elective Account.
Once made, a Participant's election to reduce
Compensation shall remain in effect until modified or terminated.
Modifications may be made as specified in the Adoption Agreement, and
terminations may be made at any time. Any modification or termination
of an election will become effective as soon as is administratively
feasible.
(b) The balance in each Participant's Elective Account
shall be fully Vested at all times and shall not be subject to
Forfeiture for any reason.
(c) Amounts held in the Participant's Elective Account
and Qualified Non-Elective Account may be distributable as permitted
under the Plan, but in no event prior to the earlier of:
(1) a Participant's termination of employment, Total and
Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the proven financial hardship of a Participant,
subject to the limitations of Section 11.8;
(4) the termination of the Plan without the existence at
the time of Plan termination of another defined contribution
plan (other than an employee stock ownership plan as defined
in Code Section 4975(e)(7)) or the establishment of a
-85-
<PAGE> 120
successor defined contribution plan (other than an employee
stock ownership plan as defined in Code Section 4975(e)(7)) by
the Employer or an Affiliated Employer within the period
ending twelve months after distribution of all assets from the
Plan maintained by the Employer;
(5) the date of the sale by the Employer to an entity
that is not an Affiliated Employer of substantially all of the
assets (within the meaning of Code Section 509(d)(2)) with
respect to a Participant who continues employment with the
corporation acquiring such assets; or
(6) the date of the sale by the Employer or an Affiliated
Employer of its interest in a subsidiary (within the meaning
of Code Section 409(d)(3)) to an entity that is not an
Affiliated Employer with respect to a Participant who
continues employment with such subsidiary.
(d) In any Plan Year beginning after December 31, 1987, a
Participant's Deferred Compensation made under this Plan and all other
plans, contracts or arrangements of the Employer maintaining this Plan
shall not exceed the limitation imposed by Code Section 402(g), as in
effect for the calendar year in which such Plan Year began. This
dollar limitation shall be adjusted annually pursuant to the method
provided in Code Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship
distribution pursuant to Regulation 1.401(k)-1(d)(2)(iii)(B) from any
other plan maintained by the Employer or from his Participant's
Elective Account pursuant to Section 11.8, then such Participant shall
not be permitted to elect to have Deferred Compensation contributed to
the Plan on his behalf for a period of twelve (12) months following
the receipt of the distribution. Furthermore, the dollar limitation
under Code Section 402(g) shall be reduced, with respect to the
Participant's taxable year following the taxable year in which the
hardship distribution was made, by the amount of such Participant's
Deferred Compensation, if any, made pursuant to this Plan (and any
other plan maintained by the Employer) for the taxable year of the
hardship distribution.
(f) If a Participant's Deferred Compensation under this
Plan together with any elective deferrals (as defined in Regulation
1.402(g)-1(b)) under another qualified cash or deferred arrangement
(as defined in Code Section 401(i)), a simplified employee pension (as
defined in Code Section 408(i)), a salary reduction arrangement
(within the meaning of Code Section 3121(a)(5)(D)), a deferred
compensation plan under Code Section 457, or a trust described in Code
Section 501(c)(18) cumulatively exceed the limitation imposed by Code
Section 402(g) (as adjusted annually in accordance with the method
provided in Code Section 415(d) pursuant to Regulations) for such
Participant's taxable year, the Participant may, not later than March
1st following the close of his taxable year, notify the Administrator
in writing of such excess and request that his
-86-
<PAGE> 121
Deferred Compensation under this Plan be reduced by an amount
specified by the Participant. In such event, the Administrator shall
direct the Trustee to distribute such excess amount (and any Income
allocable to such excess amount) to the Participant not later than the
first April 15th following the close of the Participant's taxable
year. Distributions in accordance with this paragraph may be made for
any taxable year of the Participant which begins after December 31,
1986. Any distribution of less than the entire amount of Excess
Deferred Compensation and Income shall be treated as a pro rata
distribution of Excess Deferred Compensation and Income. The amount
distributed shall not exceed the Participant's Deferred Compensation
under the Plan for the taxable year. Any distribution on or before
the last day of the Participant's taxable year must satisfy each of
the following conditions:
(1) the Participant shall designate the distribution as
Excess Deferred Compensation;
(2) the distribution must be made after the date on which
the Plan received the Excess Deferred Compensation; and
(3) The Plan must designate the distribution as a
distribution of Excess Deferred Compensation.
For the purpose of this Section, "Income" means the
amount of income or loss allocable to a Participant's Excess Deferred
Compensation and shall be equal to the sum of the allocable gain or
loss for the taxable year of the Participant and the allocable gain or
loss for the period between the end of the taxable year of the
Participant and the date of distribution ("gap period"). The income
or loss allocated to each such period is calculated separately and is
determined by multiplying the income or loss allocable to the
Participant's Deferred Compensation for the respective period by a
fraction. The numerator of the fraction is the Participant's Excess
Deferred Compensation for the taxable year of the Participant. The
denominator is the balance, as of the last day of the respective
period, of the Participant's Elective Account that is attributable to
the Participant's Deferred Compensation reduced by the gain allocable
to such total amount for the respective period and increased by the
loss allocable to such total amount for the respective period.
In lieu of the "fractional method" described above, a
"safe harbor method" may be used to calculate the allocable income or
loss for the "gap period." Under such "safe harbor method," allocable
income or loss for the "gap period" shall be deemed to equal ten
percent (10%) of the income or loss allocable to a Participant's
Excess Deferred Compensation for the taxable year of the Participant
multiplied by the number of calendar months in the "gap period." For
purposes of determining the number of calendar months in the "gap
period," a distribution occurring on or before the fifteenth day of
the month shall be treated as having been made o the last day of the
preceding
-87-
<PAGE> 122
month and a distribution occurring after such fifteenth day shall be
treated as having been made on the first day of the next subsequent
month.
Income or loss allocable to any distribution of
Excess Deferred Compensation on or before the last day of the taxable
year of the Participant shall be calculated from the first day of the
taxable year of the Participant to the date on which the distribution
is made pursuant to either the "fractional method" or the "safe harbor
method."
Notwithstanding the above, for the 1987 calendar
year, Income during the "gap period" shall not be taken into account.
(g) Notwithstanding the above, a Participant's Excess
Deferred Compensation shall be reduced, but not below zero, by any
distribution and/or recharacterization of Excess Contributions
pursuant to Section 11.5(a) for the Plan Year beginning with or within
the taxable year of the Participant.
(h) At Normal Retirement Date, or such other date when
the Participant shall be entitled to receive benefits, the fair market
value of the Participant's Elective Account shall be used to provide
benefits to the Participant or his Beneficiary.
(i) Employer Elective Contributions made pursuant to this
Section may be segregated into a separate account for each Participant
in a federally insured savings account, certificate of deposit in a
bank or savings and loan association, money market certificate, or
other short-term debt security acceptable to the Trustee until such
time as the allocations pursuant to Section 11.3 have been made.
(j) The Employer and the Administrator shall adopt a
procedure necessary to implement the salary reduction elections
provided for herein.
11.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an
account in the name of each Participant to which the Administrator
shall credit as of each Anniversary Date, or other valuation date, all
amounts allocated to each such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation
of the Employer's contributions for each Plan Year. Within a
reasonable period of time after the date of receipt by the
Administrator of such information, the Administrator shall allocate
such contribution as follows:
-88-
<PAGE> 123
(1) With respect to the Employer's Elective Contribution
made pursuant to Section 11.1(a), to each Participant's
Elective Account in an amount equal to each such Participant's
Deferred Compensation for the year.
(2) With respect to the Employer's Matching Contribution
made pursuant to Section 11.1(b), to each Participant's
Account, or Participant's Elective Account as selected in E3
of the Adoption Agreement, in accordance with Section 11.1(b).
Except, however, a Participant who is not credited with a Year
of Service during any Plan Year shall or shall not share in
the Employer's Matching Contribution for that y ear as
provided in E3 of the Adoption Agreement. However, for Plan
Years beginning after 1989, if this is a standardized Plan, a
Participant shall share in the Employer's Matching
Contribution regardless of Hours of Service.
(3) With respect to the Employer's Non-Elective
Contribution made pursuant to Section 11.1(c), to each
Participant's Account in accordance with the provisions of
Sections 4.3(b)(2) or 4.3(b)(3), whichever is applicable,
4.3(i) and 4.3(l).
(4) With respect to the Employer's Qualified Non-Elective
Contribution made pursuant to Section 11.1(d), to each
Participant's Qualified Non-Elective Contribution Account in
the same proportion that each such Participant's Compensation
for the year bears to the total Compensation of all
Participants for such year. However, for any Plan Year
beginning prior to January 1, 1990, and if elected in the
non-standardized Adoption Agreement for any Plan Year
beginning on or after January 1, 1990, a Participant who is
not credited with a Year of Service during any Plan Year shall
not share in the Employer's Qualified Non-Elective
Contribution for that year, unless required pursuant to
Section 4.3(h). In addition, the provisions of Sections
4.3(k) and 4.3(l) shall apply with respect to the allocation
of the Employer's Qualified Non-Elective contribution.
(c) Notwithstanding anything in the Plan to the contrary,
for Plan Years beginning after December 31, 1988, in determining
whether a Non-Key Employee has received the required minimum
allocation pursuant to Section 4.3(f) such Non-Key Employee's Deferred
Compensation and matching contributions used to satisfy the "Actual
Deferral Percentage" test pursuant to Section 11.4(a) or the "Actual
Contribution Percentage" test of Section 11.6(a) shall not be taken
into account.
(d) Notwithstanding anything herein to the contrary,
participants who terminated employment during the Plan Year shall
share in the salary reduction contributions made by the Employer for
the year of termination without regard to the Hours of Service
credited.
-89-
<PAGE> 124
(e) Notwithstanding anything herein to the contrary
(other than Sections 11.3(d) and 11.3(g)), any Participant who
terminated employment during the Plan Year for reasons other than
death, Total and Permanent Disability, or retirement shall or shall
not share in the allocations of the Employer's Matching Contribution
made pursuant to Section 11.1(b), the Employer's Non-Elective
Contributions made pursuant to Section 11.1(c), the Employer's
Qualified Non-Elective Contribution made pursuant to Section 11.1(d),
and Forfeitures as provided in the Adoption Agreement.
Notwithstanding the foregoing, for Plan Years beginning after 1989, if
this is a standardized Plan, any such terminated Participant shall
share in such allocations provided the terminated Participant
completed more than 500 Hours of Service.
(f) Notwithstanding anything herein to the contrary,
Participants terminating for reasons of death, Total and Permanent
Disability, or retirement shall share in the allocation of the
Employer's Matching Contribution made pursuant to Section 11.1(b), the
Employer's Non-Elective Contributions made pursuant to Section
11.1(c), the Employer's Qualified Non-Elective Contribution made
pursuant to Section 11.1(d), and Forfeitures as provided in this
Section regardless of whether they completed a Year of Service during
the Plan Year.
(g) Notwithstanding any election in the Adoption
Agreement to the contrary, if this is a non- standardized Plan that
would otherwise fail to meet the requirements of Code Sections
401(a)(26), 410(b)(1), or 410(b)(2)(A)(i) and the Regulations
thereunder because Employer matching Contributions made pursuant to
Section 11.1(b), Employer Non-Elective Contributions made pursuant to
Section 11.1(c) or Employer Qualified Non-Elective Contributions made
pursuant to Section 11.1(d) have not been allocated to a sufficient
number or percentage of Participants for a Plan Year, then the
following rules shall apply:
(1) The group of Participants eligible to share in the
respective contributions for the Plan Year shall be expanded
to include the minimum number of Participants who would not
otherwise be eligible as are necessary to satisfy the
applicable test specified above. The specific participants
who shall become eligible under the terms of this paragraph
shall be those who are actively employed on the last day of
the Plan Year and, when compared to similarly situated
Participants, have completed the greatest number of Hours of
Service in the Plan Year.
(2) If after application of paragraph (1) above, the
applicable test is still not satisfied, then the group of
Participants eligible to share for the Plan Year shall be
further expanded to include the minimum number of Participants
who are not actively employed on the last day of the Plan Year
as are necessary to satisfy the applicable test. The specific
Participants who shall become eligible to share shall be those
Participants, when compared to similarly situated
Participants, who have
-90-
<PAGE> 125
completed the greatest number of Hours of Service in the Plan
Year before terminating employment.
11.4 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year
beginning after December 31, 1986, the annual allocation derived from
Employer Elective Contributions and Qualified Non-Elective
Contributions to a Participant's Elective Account and Qualified
Non-Elective Account shall satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not be more than the
"Actual Deferral Percentage" of the Non-Highly Compensated
Participant group multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for
Highly Compensated Participant group over the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
shall not be more than two percentage points. Additionally,
the "Actual Deferral Percentage" for the Highly Compensated
Participant group shall not exceed the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
multiplied by 2. The provisions of Code Section 401(k)(3) and
Regulation 1.401(k)- 1(b) are incorporated herein by
reference.
However, for Plan Years beginning after December 31, 1988, to
prevent the multiple use of the alternative method described
in (2) above and Code Section 401(m)(9)(A), any Highly
Compensated Participant eligible to make elective deferrals
pursuant to Section 11.2 and to make Employee contributions or
to receive matching contributions under this Plan or under any
other plan maintained by the Employer or an Affiliated
Employer shall have his actual contribution ratio reduced
pursuant to Regulation 1.40(m)-2, the provisions of which are
incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral
Percentage" means, with respect to the Highly Compensated Participant
group and Non-Highly Compensated Participant group for a Plan Year,
the average of the ratios, calculated separately for each Participant
in such group, of the amount of Employer Elective Contributions and
Qualified Non-Elective Contributions allocated to each Participant's
Elective Account and Qualified Non-Elective Account for such Plan
Year, to such Participant's "414(s) Compensation" for such Plan Year.
The actual deferral ratio for each Participant and the "Actual
Deferral Percentage" for each group, for Plan Years beginning after
December 31, 1988, shall be calculated to the nearest one-hundredth of
one percent of the Participant's "414(s) Compensation". Employer
Elective Contributions allocated to each Non-Highly Compensated
Participant's Elective Account shall be reduced by Excess
-91-
<PAGE> 126
Deferred Compensation to the extent such excess amounts are made under
this Plan or any other plan maintained by the Employer.
(c) For the purpose of determining the actual deferral
ratio of a Highly Compensated Participant who is subject to the Family
Member aggregation rules of Code Section 414(q)(6) because such
Participant is either a "five percent owner" of the Employer or one of
the ten (10) Highly Compensated Employees paid the greatest "415
Compensation" during the year, the following shall apply:
(1) The combined actual deferral ratio for the family
group (which shall be treated as one Highly Compensated
Participant) shall be the greater of: (i) the ratio
determined by aggregating Employer Elective Contributions and
"414(s) Compensation" of all eligible Family Members who are
Highly Compensated Participants without regard to family
aggregation; and (ii) the ratio determined by aggregating
Employer Elective contributions and "414(s) Compensation" of
all eligible Family Members (including Highly Compensated
Participants). However, in applying the $200,000 limit to
"414(s) Compensation" for Plan Years beginning after December
31, 1988, Family Members shall include only the affected
Employee's spouse and any lineal descendants who have not
attained age 19 before the close of the Plan Year.
(2) The Employer Elective Contributions and "414(s)
Compensation" of all Family Members shall be disregarded for
purposes of determining the "Actual Deferral Percentage" of
the Non-Highly Compensated Participant group except to the
extent taken into account in paragraph (1) above.
(3) If a Participant is required to be aggregated as a
member of more than one family group in a plan, all
Participants who are members of those family groups that
include the Participant are aggregated as one family group in
accordance with paragraphs (1) and (2) above.
(d) For the purposes of this Section and Code Sections
401(a)(4), 410(b) and 401 (k), if two or more plans which include cash
or deferred arrangements are considered one plan for the purposes of
Code Section 401(a)(4) or 410(b) (other than Code Section
401(b)(2)(A)(ii) as in effect for Plan Years beginning after December
31, 1988), the cash or deferred arrangements included in such plans
shall be treated as one arrangement. In addition, two or more cash or
deferred arrangements may be considered as a single arrangement for
purposes of determining whether or not such arrangements satisfy code
Sections 401(a)(4), 410(b) and 401(k). In such a case, the cash or
deferred arrangements included in such plans and the plans included
such arrangements shall be treated as one arrangement and as one plan
for purposes of this Section and Code Sections 401(a)(4), 410(b) and
401(k). For plan years beginning after December 31,
-92-
<PAGE> 127
1989, plans may be aggregated under this paragraph (e) only if they
have the same plan year.
Notwithstanding the above, the Plan Years beginning
after December 31, 1988, an employee stock ownership plan described in
Code Section 4975(e)(7) may not be combined with this Plan for
purposes of determining whether the employee stock ownership plan or
this Plan satisfies this Section and Code Sections 401(a)(4), 410(b)
and 401(k).
(e) For the purposes of this Section, if a Highly
Compensated Participant is a Participant under two (2) or more cash or
deferred arrangements (other than a cash or deferred arrangement which
is part of an employee stock ownership plan as defined in Code Section
4975(e)(7) for Plan Years beginning after December 31, 1988) of the
Employer or an Affiliated Employer, all such cash or deferred
arrangements shall be treated as one cash or deferred arrangement for
the purpose of determining the actual deferral ratio with respect to
such Highly Compensated Participant. However, for Plan Years
beginning after December 31, 1988, if the cash or deferred
arrangements have different Plan Years, this paragraph shall be
applied by treating all cash or deferred arrangements ending with or
within the same calendar year as a single arrangement.
11.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's
Elective Contributions and Qualified Non- Elective Contributions do not satisfy
one of the tests set forth in Section 11.4, for Plan Years beginning after
December 31, 1986, the Administrator shall adjust Excess Contributions pursuant
to the options set forth below:
(a) On or before the fifteenth day of the third month
following the end of each Plan Year, the Highly Compensated
Participant having the highest actual deferral ratio shall have his
portion of Excess Contributions distributed to him and/or at his
election recharacterized as a voluntary Employee contribution pursuant
to Section 4.7 until one of the tests set forth in Section 11.4 is
satisfied, or until his actual deferral ratio equals the actual
deferral ratio of the Highly Compensated Participant having the second
highest actual deferral ratio. This process shall continue until one
of the tests set forth in Section 11.4 is satisfied. For each Highly
Compensated Participant, the amount of Excess Contributions is equal
to the Elective Contributions and Qualified Non-Elective Contributions
made on behalf of such Highly Compensated Participant (determined
prior to the application of this paragraph) minus the amount
determined by multiplying the Highly Compensated Participant's actual
deferral ratio (determined after application of this paragraph) by his
"414(s) Compensation". However, in determining the amount of Excess
Contributions to be distributed and/or recharacterized with respect to
an affected Highly Compensated Participant as determined herein, such
amount shall be reduced by an Excess Deferred Compensation previously
distributed to such affected Highly
-93-
<PAGE> 128
Compensated Participant for his taxable year ending with or within
such Plan Year. Any distribution and/or recharacterization of Excess
Contributions shall be made in accordance with the following:
(1) With respect to the distribution of Excess
Contributions pursuant to (a) above, such distribution:
(i) may be postponed but not later than the close
of the Plan Year following the Plan Year to which
they are allocable;
(ii) shall be made first from unmatched Deferred
Compensation and, thereafter, simultaneously from
Deferred Compensation which is matched and matching
contributions which relate to such Deferred
Compensation. However, any such matching
contributions which are not Vested shall be forfeited
in lieu of being distributed;
(iii) shall be made from Qualified Non-Elective
Contributions only to the extent that Excess
Contributions exceed the balance in the Participant's
Elective Account attributable to Deferred
Compensation and Employer matching contributions.
(iv) shall be adjusted for Income; and
(v) shall be designated by the Employer as a
distribution of Excess Contributions (and Income).
(2) With respect to the recharacterization of
Excess Contributions pursuant to (a) above, such
recharacterized amounts:
(i) shall be deemed to have occurred on the date
on which the last of those Highly Compensated
Participants with Excess Contributions to be
recharacterized is notified of the recharacterization
and the tax consequences of such recharacterization;
(ii) for Plan Years ending on or before August 8,
1988, may be postponed but not later than October 24,
1988;
(iii) shall not exceed the amount of Deferred
Compensation on behalf of any Highly Compensated
Participant for any Plan Year;
(iv) shall be treated as voluntary Employee
contributions for purposes of Code Section 401(a)(4)
and Regulation 1.401(k)-1(b). However, for purposes
of Section 2.2 and 4.3(f), recharacterized Excess
Contributions
-94-
<PAGE> 129
continue to be treated as Employer contributions that
are Deferred Compensation. For Plan Years beginning
after December 31, 1988, Excess Contributions
recharacterized as voluntary Employee contributions
shall continue to be nonforfeitable provided for in
Section 11.2(c);
(v) which relate to Plan Years ending on or
before October 24, 1988, may be treated as either
Employer contributions or voluntary Employee
contributions and therefore shall not be subject to
the restrictions of Section 11.2(c);
(vi) are not permitted if the amount
recharacterized plus voluntary Employee contributions
actually made by such Highly Compensated Participant,
exceed the maximum amount of voluntary Employee
contributions (determined prior to application of
Section 11.6) that such Highly Compensated
Participant is permitted to make under the Plan in
the absence of recharacterization;
(vii) shall be adjusted for Income.
(3) Any distribution and/or recharacterization of
less than the entire amount of Excess Contributions shall be
treated as a pro rata distribution and/or recharacterization
of Excess Contributions and Income.
(4) The determination and correction of Excess
Contributions of a Highly Compensated Participant whose actual
deferral ratio is determined under the family aggregation
rules shall be accomplished as follows:
(i) If the actual deferral ratio for the Highly
Compensated Participant is determined in accordance
with Section 11.4(c)(1)(ii), then the actual deferral
ratio shall be reduced as required herein and the
Excess Contributions for the family unit shall be
allocated among the Family Members in proportion to
the Elective Contributions of each Family Member that
were combined to determine the group actual deferral
ratio.
(ii) If the actual deferral ratio for the Highly
Compensated Participant is determined under Section
11.4(c)(1)(i), then the actual deferral ratio shall
first be reduced as required herein, but not below
the actual deferral ratio of the group of Family
Members who are not Highly Compensated Participants
without regard to family aggregation. The Excess
Contributions resulting from this initial reduction
shall be allocated (in proportion to Elective
Contributions) among the Highly Compensated
Participants whose Elective Contributions were
combined to determine the actual deferral ratio. If
further reduction is still required, then Excess
-95-
<PAGE> 130
Contributions resulting from this further reduction
shall be determined by taking into account the
contributions of all Family Members and shall be
allocated among them in proportion to their
respective Elective Contributions.
(b) Within twelve (12) months after the end of the Plan
Year, the Employer shall make a special Qualified Non-Elective
Contribution on behalf of Non-Highly Compensated Participants in an
amount sufficient to satisfy one of the tests set forth in Section
11.4(a). Such contribution shall be allocated to the Participant's
Qualified Non-Elective Account of each Non-Highly Compensated
Participant in the same proportion that each Non-Highly Compensated
Participant's Compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants.
(c) For purposes of this Section, "Income" means the
income or loss allocable to Excess Contributions which shall equal the
sum of the allocable gain or loss for the Plan Year and the allocable
gain or loss for the period between the end of the Plan Year and the
date of distribution ("gap period"). The income or loss allocable to
Excess Contributions for the Plan Year and the "gap period" is
calculated separately and is determined by multiplying the income or
loss for the Plan Year or the "gap period" by a fraction. The
numerator of the fraction is the Excess Contributions for the Plan
Year. The denominator of the fraction is the total of the
Participant's Elective Account attributable to Elective Contributions
and the Participant's Qualified Non-Elective Account as of the end of
the Plan Year or the "gap period", reduced by the gain allocable to
such total amount for the Plan Year or the "gap period" and increased
by the loss allocable to such total amount for the Plan Year or the
"gap period".
In lieu of the "fractional method" described above, a
"safe harbor method" may be used to calculate the allocable Income for
the "gap period". Under such "safe harbor method", allocable Income
for the "gap period" shall be deemed to equal ten percent (10%) of the
Income allocable to Excess Contributions for the Plan Year of the
Participant multiplied by the number of calendar months in the "gap
period". For purposes of determining the number of calendar months in
the "gap period", a distribution occurring on or before the fifteenth
day of the month shall be treated as having been made on the last day
of the preceding month and a distribution occurring after such
fifteenth day shall be treated as having been made on the first day of
the next subsequent month.
Notwithstanding the above, for Plan Years which began
in 1987, Income during the "gap period" shall not be taken into
account.
(d) Any amounts not distributed or recharacterized within
2 1/2 months after the end of the Plan year shall be subject to the
10% Employer excise tax imposed by Code Section 4979.
-96-
<PAGE> 131
11.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage", for Plan Years
beginning after the later of the Effective Date of this Plan or
December 31, 1986, for the Highly Compensated Participant group shall
not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly
Compensated Participant group; or
(2) the lesser of 200 percent of such percentage for the
Non-Highly Compensated Participant group, or such percentage
for the Non-Highly Compensated Participant group plus 2
percentage points. However, for Plan Years beginning after
December 31, 1988, to prevent the multiple use of the
alternative method described in this paragraph and Code
Section 401(m)(9)(A), any Highly Compensated Participant
eligible to make elective deferrals pursuant to Section 11.2
or any other cash or deferred arrangement maintained by the
Employer or an Affiliated Employer and to make Employee
contributions or to receive matching contributions under any
plan maintained by the Employer or an Affiliated Employer
shall have his actual contribution ratio reduced pursuant to
Regulation 1.401(m)-2. The provisions of Code Section 401(m)
and Regulations 1.401(m)-1(b) and 1.401(m)-2 are incorporated
herein by reference.
(b) For the purposes of this Section and Section 11.7,
"Actual Contribution Percentage" for a Plan Year means, with respect
to the Highly Compensated Participant group and Non-Highly Compensated
Participant group, the average of the ratios (calculated separately
for each Participant in each group) of:
(1) the sum of Employer matching contributions made
pursuant to Section 11.1(b) (to the extent such matching
contributions are not used to satisfy the tests set forth in
Section 11.4), voluntary Employee contributions made pursuant
to Section 4.7 and Excess Contributions recharacterized as
voluntary Employee contributions pursuant to Section 11.5 on
behalf of each such Participant for such Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan
Year.
(c) For purposes of determining the "Actual Contribution
Percentage" and the amount of Excess Aggregate Contributions pursuant
to Section 11.7(d), only Employer matching contributions contributed
to the Plan prior to the end of the succeeding Plan Year shall be
considered. In addition, the Administrator may elect to take into
account, with respect to Employees eligible to have Employer matching
contributions made pursuant to Section 11.1(b) or voluntary Employee
contributions made pursuant to Section 4.7 allocated to their
accounts, elective deferrals (as defined in Regulation
-97-
<PAGE> 132
1.402(g)-1(b)) and qualified non-elective contributions (as defined in
Code Section 401(m)(4)(C)) contributed to any plan maintained by the
Employer. Such elective deferrals and qualified non-elective
contributions shall be treated as Employer matching contributions
subject to Regulation 1.40(m)-1(b)(2) which is incorporated herein by
reference. However, for Plan Years beginning after December 31, 1988,
the Plan Year must be the same as the plan year of the plan to which
the elective deferrals and the qualified non-elective contributions
are made.
(d) For the purpose of determining the actual
contribution ratio of a Highly Compensated Employee who is subject to
the Family Member aggregation rules of Code Section 414(q)(6) because
such Employee is either a "five percent owner" of the Employer or one
of the ten (10) Highly Compensated Employees paid the greatest "415
Compensation" during the year, the following shall apply:
(1) The combined actual contribution ratio for the family
group (which shall be treated as one Highly Compensated
Participant) shall be the greater of: (i) the ratio determined
by aggregating Employer matching contributions made pursuant
to Section 11.1(b) (to the extent such matching contributions
are not used to satisfy the tests set forth in Section 11.4),
voluntary Employee contributions made pursuant to Section 4.7,
Excess Contributions recharacterized as voluntary Employee
Contributions recharacterized as voluntary Employee
contributions pursuant to Section 11.5 and "414(s)
Compensation" of all eligible Family Members who are Highly
Compensated Participants without regard to family aggregation;
and (ii) the ratio determined by aggregating Employee matching
contributions made pursuant to Section 11.1(b) (to the extent
such matching contributions are not used to satisfy the tests
set forth in Section 11.4), voluntary Employee contributions
made pursuant to Section 4.7, Excess Contributions
recharacterized as voluntary Employee contributions pursuant
to Section 11.5 and "414(s) Compensation" of all eligible
Family Members (including Highly compensated Participants).
However, in applying the $200,000 limit to "414(s)
Compensation" for Plan Years beginning after December 31,
1988, Family Members shall include only the affected
Employee's spouse and any lineal descendants who have not
attained age 19 before the close of the Plan Year.
(2) The Employer matching contributions made pursuant to
Section 11.1(b) (to the extent such matching contributions are
not used to satisfy the tests set forth in Section 11.4),
voluntary Employee contributions made pursuant to Section 4.7,
Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 11.5 and "414(s)
Compensation" of all Family Members shall be disregarded for
purposes of determining the "Actual Contribution Percentage"
of the Non-Highly Compensated Participant group except to the
extent taken into account in paragraph (1) above.
-98-
<PAGE> 133
(3) If a Participant is required to be aggregated as a
member of more than one family group in a plan, all
Participants who are members of those family groups that
include the Participant are aggregated as one family group in
accordance with paragraphs (1) and (2) above.
(e) For purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(m), if two or more plans of the Employer to
which matching contributions, Employee contributions, or both, are
made are treated as one plan for purposes of Code Sections 401(a)(4)
or (410(b) (other than the average benefits test under code Section
410(b)(2)(A)(ii) as in effect for Plan Years beginning after December
31, 1988), such plans shall be treated as one plan. In addition, two
or more plans of the Employer to which matching contributions,
Employee contributions, or both, are made may be considered as a
single plan for purposes of determining whether or not such plans
satisfy Code Sections 401(a)(4), 410(b) and 401(m). In such a case,
the aggregated plans must satisfy this Section and Code Sections
401(a)(4), 410(b) and 401(m) as though such aggregated plans were a
single plan. For plan years beginning after December 31, 1989, plans
may be aggregated under this paragraph only if they have the same plan
year.
Notwithstanding the above, for Plan Years beginning
after December 31, 1988, an employee stock ownership plan described in
Code Section 4975(e)(7) may not be aggregated with this Plan for
purposes of determining whether the employee stock ownership plan or
this Plan satisfies this Section and Code Sections 401(a)(4), 410(b)
and 401(m).
(f) If a Highly Compensated Participant is a Participant
under two or more plans (other than an employee stock ownership plan
as defined in Code Section 4975(e)(7) for Plan Years beginning after
December 31, 1988) which are maintained by the Employer or an
Affiliated Employer to which matching contributions, Employee
contributions, or both, are made, all such contributions on behalf of
such Highly Compensated Participant shall be aggregated for purposes
of determining such Highly Compensated Participant's actual
contribution ratio. However, for Plan Years beginning after December
31, 1988, if the plans have different plan years, this paragraph shall
be applied by treating all plans ending with or within the same
calendar year as a single plan.
(g) For purposes of Section 11.6(a) and 11.7, a Highly
Compensated Participant and a Non-Highly Compensated Participant shall
include any Employee eligible to have matching contributions made
pursuant to Section 11.1(b) (whether or not a deferred election was
made or suspended pursuant to Section 11.2(e) allocated to his account
for the Plan Year or to make salary deferrals pursuant to Section 11.2
(if the Employer uses salary deferrals to satisfy the provisions of
this Section) or voluntary Employee contributions pursuant to Section
4.7 (whether or not voluntary Employee contributions are made)
allocated to his account for the Plan Year.
-99-
<PAGE> 134
(h) For purposes of this Section, "Matching Contribution"
shall mean an Employer contribution made to the Plan, or to a contract
described in Code Section 403(b), on behalf of a Participant on
account of an Employee contribution made by such Participant, or on
account of a participant's deferred compensation, under a plan
maintained by the Employer.
11.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that for Plan Years beginning after
December 31, 1986, the "Actual Contribution Percentage" for the Highly
Compensated Participant group exceeds the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group pursuant
to Section 11.6(a), the Administrator (on or before the fifteenth day
of the third month following the end of the Plan Year, but in no event
later than the close of the following Plan Year) shall direct the
Trustee to distribute to the Highly Compensated Participant having the
highest actual contribution ratio, his portion of Excess Aggregate
Contributions (and Income allocable to such contributions) or, if
forfeitable, forfeit such non-Vested Excess Aggregate Contributions
attributable to Employer matching contributions (and Income allocable
to such Forfeitures) until either one of the tests set forth in
Section 11.6(a) is satisfied, or until his actual contribution ratio
equals the actual contribution ratio of the Highly Compensated
Participant having the second highest actual contribution ratio. This
process shall continue until one of the tests set forth in Section
11.6(a) is satisfied. The distribution and/or Forfeiture of Excess
Aggregate Contributions shall be made in the following order:
(1) Employer matching contributions distributed and/or
forfeited pursuant to Section 11.5(a) (1);
(2) Voluntary Employee contributions including Excess
Contributions recharacterized as voluntary Employee
contributions pursuant to Section 11.5(a) (2);
(3) Remaining Employer matching contributions.
(b) Any distribution or Forfeiture of less than the
entire amount of Excess Aggregate Contributions (and Income) shall be
treated as a pro rata distribution of Excess Aggregate Contributions
and Income. Distribution of Excess Aggregate Contributions shall be
designated by the Employer as a distribution of Excess Aggregate
Contributions (and Income). Forfeitures of Excess Aggregate
Contributions shall be treated in accordance with Section 4.3.
However, no such Forfeiture may be allocated to a Highly Compensated
Participant whose contributions are reduced pursuant to this Section.
(c) Excess Aggregate Contributions attributable to
amounts other than voluntary Employee contributions, including
forfeited matching contributions, shall be
-100-
<PAGE> 135
treated as Employer contributions for purposes of Code Sections 404
and 415 even if distributed from the Plan.
(d) For the purposes of this Section and Section 11.6,
"Excess Aggregate Contributions" means, with respect to any Plan Year,
the excess of:
(1) the aggregate amount of Employer matching
contributions made pursuant to Section 11.1(a) (to the extent
such contributions are taken into account pursuant to Section
11.6(a)), voluntary Employee contributions made pursuant to
Section 4.7, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 11.5 and any
Qualified Non-Elective Contributions or elective deferrals
taken into account pursuant to Section 11.6(c) actually made
on behalf of the Highly Compensated Participant group for such
Plan Year, over
(2) the maximum amount of such contributions permitted
under the limitations of Section 11.6(a).
(e) For each Highly Compensated Participant, the amount
of Excess Aggregate Contributions is equal to the total Employer
matching contributions made pursuant to Section 11.1(b) (to the extent
taken into account pursuant to Section 11.6(a)), voluntary Employee
contributions made pursuant to Section 4.7, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 11.5 and any Qualified Non-Elective Contributions or elective
deferrals taken into account pursuant to Section 11.6(c) on behalf of
the Highly Compensated Participant (determined prior to the
application of this paragraph) minus the amount determined by
multiplying the Highly Compensated Participant's actual contribution
ratio (determined after application of this paragraph) by his "414(s)
Compensation." The actual contribution ratio must be rounded to the
nearest one-hundredth of one percent for Plan Years beginning after
December 31, 1988. In no case shall the amount of Excess Aggregate
Contribution with respect to any Highly Compensated Participant exceed
the amount of Employer matching contributions made pursuant to Section
11.1(b) (to the extent taken into account pursuant to Section
11.6(a)), voluntary Employee contributions made pursuant to Section
4.7, Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 11.5 and any Qualified Non-Elective
Contributions or elective deferrals taken into account pursuant to
Section 11.6(c) on behalf of such Highly Compensated Participant for
such Plan Year.
(f) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to be treated a
voluntary Employee contributions due to recharacterization for the
plan year of any other qualified cash or deferred arrangement (as
defined in Code Section 401(k) maintained by the Employer that ends
with or within the Plan Year or which are
-101-
<PAGE> 136
treated as voluntary Employee contributions due to recharacterization
pursuant to Section 11.5.
(g) The determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual
contribution ratio is determined under the family aggregation rules
shall be accomplished as follows:
(1) If the actual contribution ratio for the Highly
Compensated Participant is determined in accordance with
Section 11.6(d) (1), then the actual contribution ratio shall
be reduced and the Excess Aggregate Contributions for the
family unit shall be allocated among the Family Members in
proportion to the sum of Employer matching contributions made
pursuant to Section 11.1(b) (to the extent taken into account
pursuant to Section 11.6(a)), voluntary Employee contributions
made pursuant to Section 4.7, Excess Contributions
recharacaterized as voluntary Employee contributions pursuant
to Section 11.5 and any Qualified Non-Elective Contributions
or elective deferrals taken into account pursuant to Section
11.6(c) of each Family Member that were combined to determine
the group actual contribution ratio.
(2) If the actual contribution ratio for the Highly
Compensated Participant is determined under Section 11.6(d)
(2), then the actual contribution ratio shall first be
reduced, as required herein, but not below the actual
contribution ratio of the group of Family Members who are not
Highly Compensated Participants without regard to family
aggregation. The Excess Aggregate Contributions resulting
from this initial reduction shall be allocated among the
Highly Compensated Participants whose Employer matching
contributions made pursuant to Section 11.1(b) (to the extent
taken into account pursuant to Section 11.6(a)), voluntary
Employee contributions made pursuant to Section 4.7, Excess
Contributions recharacterized as voluntary Employee
contributions pursuant to Section 11.5 and any Qualified Non-
Elective Contributions or elective deferrals taken into
account pursuant to Section 11.6(c) were combined to determine
the actual contribution ratio. If further reduction is still
required, then Excess Aggregate Contributions resulting from
this further reduction shall be determined by taking into
account the contributions of all Family Members and shall be
allocated among them in proportion to their respective
Employer matching contributions made pursuant to Section
11.1(b) (to the extent taken into account pursuant to Section
11.6(a)), voluntary Employee contributions recharacterized as
voluntary Employee contributions pursuant to Section 11.5 and
any Qualified Non-Elective Contributions or elective deferrals
taken into account pursuant to Section 11.6(c).
(h) Notwithstanding the above, within twelve (12) months
after the end of the Plan Year, the Employer may make a special
Qualified Non-Elective Contribution on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy one of
-102-
<PAGE> 137
the tests set forth in Section 11.6. Such contribution shall be
allocated to the Participant's Qualified Non- Elective Account of each
Non-Highly Compensated Participant in the same proportion that each
Non-Highly Compensated Participant's Compensation for the year bears
to the total Compensation of all Non-Highly Compensated Participants.
A separate accounting shall be maintained for the purpose of excluding
such contributions from the "Actual Deferral Percentage" tests
pursuant to Section 11.4.
(i) For purposes of this Section, "Income" means the
income or loss allocable to Excess Aggregate Contributions which shall
equal the sum of the allocable gain or loss for the Plan Year and the
allocable gain or loss for the period between the end of the Plan Year
and the date of distribution ("gap period"). The income or loss
allocable to Excess Aggregate Contributions for the Plan Year and the
"gap period" is calculated separately and is determined by multiplying
the income or loss for the Plan Year or the "gap period" by a
fraction. The numerator of the fraction is the Excess Aggregate
Contributions for the Plan Year. the denominator of the fraction is
the total Participant's Account and Voluntary Contribution Account
attributable to Employer matching contributions subject to Section
11.6, voluntary Employee contributions made pursuant to Section 4.7,
and any Qualified Non-Elective Contributions and elective deferrals
taken into account pursuant to Section 11.6(c) as of the end of the
Plan Year or the "gap period", reduced by the gain allocable to such
total amount for the Plan Year or the "gap period" and increased by
the loss allocable to such total amount for the Plan Year or the "gap
period."
In lieu of the "fractional method" described above, a
"safe harbor method" may be used to calculate the allocable Income for
the "gap period." Under such "safe harbor method", allocable Income
for the "gap period" shall be deemed to equal ten percent (10%) of the
Income allocable to Excess Aggregate Contributions for the Plan Year
of the Participant multiplied by the number of calendar months in the
"gap period." For purposes of determining the number of calendar
months in the "gap period", a distribution occurring on or before the
fifteenth day of the month shall be treated as having been made on the
last day of the preceding month and a distribution occurring after
such fifteenth day shall be treated as having been made on the first
day of the next subsequent month.
The Income allocable to Excess Aggregate
Contributions resulting from recharacterization of Elective
Contributions shall be determined and distributed as if such
recharacterized Elective Contributions had been distributed as Excess
Contributions.
Notwithstanding the above, for Plan Years which began
in 1987, Income during the "gap period" shall not be taken into
account.
-103-
<PAGE> 138
11.8 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the
Participant, shall direct the Trustee to distribute to any Participant
in any one Plan Year up to the lesser of (1) 100% of his account as
specified in the Adoption Agreement valued as of the last Anniversary
Date or other valuation date or (2) the amount necessary to satisfy
the immediate and heavy financial need of the Participant. Any
distribution made pursuant to this Section shall be deemed to be made
as of the first day of the Plan Year or, if later, the valuation date
immediately preceding the date of distribution, and the account from
which the distribution is made shall be reduced accordingly.
Withdrawal under this Section shall be authorized only if the
distribution is on account of one of the following or any other items
permitted by the Internal Revenue Service:
(1) Medical expenses described in Code Section 213(d)
incurred by the Participant, his spouse, or any of his
dependents (as defined in Code Section 152);
(2) The purchase (excluding mortgage payments) of a
principal residence for the Participant;
(3) Payment of tuition for the next semester or quarter
of post-secondary education for the Participant, his spouse,
children, or dependents; or
(4) The need to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage of
the Participant's principal residence.
(b) No such distribution shall be made from the
Participant's Account until such Account has become fully Vested.
(c) No distribution shall be made pursuant to this
Section unless the Administrator, based upon the Participant's
representation and such other facts as are known to the Administrator,
determines that all of the following conditions are satisfied:
(1) The distribution is not in excess of the amount of
the immediate and heavy financial need of the Participant;
(2) The Participant has obtained all distributions, other
than hardship distributions, and all nontaxable loans
currently available under all plans maintained by the
Employer;
(3) The Plan, and all other plans maintained by the
Employer, provide that the Participant's elective deferrals
and voluntary Employee contributions will be suspended for at
least twelve (12) months after receipt of the hardship
distribution; and
-104-
<PAGE> 139
(4) The Plan, and all other plans maintained by the
Employer, provide that the Participant may not make elective
deferrals for the Participant's taxable year immediately
following the taxable year of the hardship distribution in
excess of the applicable limit under Code Section 402(g) for
such next taxable year less that amount of such Participant's
elective deferrals for the taxable year of the hardship
distribution.
(d) Notwithstanding the above, distributions from the
Participant's Elective Account and Qualified Non-Elective Account
pursuant to this Section shall be limited solely to the Participant's
Deferred Compensation and any income attributable thereto credited to
the Participant's Elective Account as of December 31, 1988.
(e) Any distribution made pursuant to this Section shall
be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice
and consent requirements of Code Sections 411(a) (11) and 417 and the
Regulations thereunder.
-105-
<PAGE> 1
[FULBRIGHT & JAWORSKI L.L.P. LETTERHEAD]
April 28, 1997
Tristar Corporation
12500 San Pedro Avenue, Suite 500
San Antonio, Texas 78216
Gentlemen:
We have acted as counsel for Tristar Corporation, a Delaware
corporation (the "Company"), in connection with the authorization of 619,908
shares (the "Shares") of Common Stock, $.01 par value ("Common Stock"), of the
Company, issued or to be issued pursuant to the Non-Qualified Stock Option
Agreement between the Company and Viren S. Sheth, the Non-Qualified Stock
Option Agreement between the Company and Loren M. Eltiste and the Company's
401(k) Retirement Plan (collectively, the "Plans").
In connection therewith, we have examined, among other things, the
Plans, the Certificate of Incorporation and Bylaws of the Company and the
corporate proceedings with respect to the issuance of the Shares and such other
corporate documents as we have deemed appropriate.
Based on the foregoing, and having due regard for such legal
considerations as we have deemed relevant, we are of the opinion that the
Shares to be issued by the Company pursuant to the terms of the Plans have been
duly authorized by all requisite corporate action and, when issued in
accordance with the respective terms thereof, will be validly issued, fully
paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the use of our names in the Registration
Statement.
The opinions expressed herein are limited exclusively to the
General Corporation Law of the State of Delaware and the federal securities law
of the United States of America.
<PAGE> 2
April 28, 1997
Page 2
The opinions expressed herein are for your sole benefit and may be
relied upon only by you.
Very truly yours,
/s/ Fulbright & Jaworski L.L.P.
<PAGE> 1
Independent Auditors' Consent
Board of Directors
Tristar Corporation:
We consent to incorporation herein by reference of our report dated December
11, 1996, related to the consolidated balance sheets of Tristar Corporation and
subsidiaries, as of August 31, 1996 and 1995, and the related consolidated
statement of operations, shareholders' equity, and cash flows for each of the
years in the two-year period ended August 31, 1996, and the related schedule,
which report appears in the August 31, 1996 annual report on Form 10-K of
Tristar Corporation.
Our report refers to a change to the LIFO method of valuing inventory.
/s/ KPMG Peat Marwick LLP
San Antonio, Texas
May 1, 1997