Registration No. 33 -_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
------------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
OLD REPUBLIC INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-2678171
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
307 North Michigan Avenue
Chicago, Illinois 60601
(Address of Principal Executive Offices)
REPUBLIC MORTGAGE INSURANCE COMPANY PROFIT SHARING PLAN
(Full title of the plan)
---------------------------------------
A. C. Zucaro
Old Republic International Corporation
307 North Michigan Avenue
Chicago, Illinois 60601
(Name and address of agent for service)
(312) 346-8100
(Telephone number, including area code, of agent for service)
---------------------------------------
copy to:
William J. Dasso
Old Republic International Corporation
307 North Michigan Avenue
Chicago, Illinois 60601
<PAGE>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Title of Amount Proposed Proposed Amount
Securities to be Maximum Maximum of
to be Registered Offering Aggregate Registration
Registered (1) Price Per Offering Fee
Share (2) Price (2)
- --------------------------------------------------------------------------------
Common
Stock, par 500,000 $17.28 $8,640,000 $2,280.96
value $1.00
per share
- --------------------------------------------------------------------------------
(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended, the
number of shares of the issuer's Common Stock registered hereunder will
be adjusted in the event of stock splits, stock dividends or similar
transactions.
(2) Estimated solely for the purpose of computing the registration fee
based upon the average of the high and low prices of the Common Stock
as reported by the New York Stock Exchange on May 12, 2000.
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
---------------------------------------
The following documents filed by Old Republic International Corporation
(the "Company") or Republic Mortgage Insurance Company Profit Sharing Plan (the
"Plan") with the Securities and Exchange Commission are incorporated herein by
reference:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1999, as amended under cover of Form 10-K/A filed by April 30, 2000
(including those portions of the Company's definitive proxy statement for the
Annual Meeting of Shareholders to be held on May 19, 2000, which are
incorporated by reference in such Annual Report on Form 10-K).
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2000.
3. The description of the Company's capital stock contained in the
Company's Registration Statement on Form S-3 filed on December 24, 1997,
including any amendment or report filed for the purpose of updating such
description.
All documents filed by the Company or the Plan pursuant to Section 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, as amended, after the
effective date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities offered hereunder
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of filing of such documents.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
--------------------------------------
The validity of the shares of Common Stock and participating interests
offered under the Plan has been passed upon by Spencer LeRoy III, Senior Vice
President, Secretary and General Counsel of the Company. As of April 25, 2000,
Mr. LeRoy owned stock and had options to purchase stock granted under the
Corporation's Employee Stock Plan, which are exercisable within 60 days, which
in the aggregate represents less than 1/10th of 1% of the Corporation's Common
Stock.
Item. 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
Section 145 of the Delaware General Corporation Law contains provisions
under which corporations organized thereunder are permitted or required in
certain circumstances to indemnify directors, officers and others against
certain liabilities and permitted to maintain insurance to cover such
liabilities and
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<PAGE>
liabilities against which such corporations may not directly indemnify such
persons. Article Thirteenth of the Restated Certificate of Incorporation of the
registrant grants indemnification to such persons to the extent permitted by
Delaware law and authorizes the purchase of such insurance. Pursuant to the
foregoing provisions, the registrant maintains policies of insurance for its
directors and certain of its officers.
Article Seventeenth of the Restated Certificate of Incorporation of the
registrant eliminates the liability of the registrant's directors for monetary
damages for breach of fiduciary duty as a director except where a director
breaches his duty of loyalty to the registrant and its stockholders, fails to
act in good faith or engages in intentional misconduct or a knowing violation of
law, authorizes the payment of a dividend or stock repurchase which is illegal
under Section 174 of the Delaware General Corporation Law or obtains an improper
personal benefit.
In addition, the registrant has entered or will enter into an Indemnity
Agreement with each of its directors and certain officers. Under the provisions
of the Indemnity Agreement, the registrant agrees with some limitations, to
indemnify directors and officers against all expenses of investigations,
judicial or administrative proceedings or appeals, whether threatened, pending
or completed, amounts paid in settlement, attorneys' fees and, in third party
proceedings, judgments and fines, actually and reasonably incurred in the
defense or settlement of a civil, criminal or administrative proceeding if the
officer or director acted in good faith in a manner which he believed to be in,
or not opposed to, the best interests of the registrant.
Item 8. EXHIBITS
--------
4 Instruments defining the rights of security holders,
including indentures.
(A) * Certificate of Designation with respect to Series A Junior
Participating Preferred Stock (Exhibit 4.1 to Form 8-K filed
May 30, 1997).
(B) * Certificate of Designation with respect to Series G-2
Convertible Preferred Stock (Exhibit 4(A) to Registrant's
Annual Report on Form 10-K for 1995).
(C) * Amended and Restated Rights Agreement dated as of May 15,
1997 between Old Republic International Corporation and First
Chicago Trust Company of New York (Exhibit 4.1 to Registrant's
Form 8-K filed May 30, 1997).
(D) * Agreement to furnish certain long term debt instruments to
the Securities & Exchange Commission upon request (Exhibit
4(D) on Form 8 dated August 28, 1987).
(E) * Form of Indenture dated as of August 15, 1992 between Old
Republic International Corporation and Wilmington Trust
Company, as Trustee (Exhibit 4(G) to Registrant's Annual
Report on Form 10-K for 1993).
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<PAGE>
(F) * Supplemental Indenture No. 1 dated as of June 16, 1997
supplementing the Indenture (Exhibit 4.3 to Registrant's Form
8-A filed June 16, 1997).
(G) * Supplemental Indenture No. 2 dated as of December 31, 1997
supplementing the Indenture. (Exhibit 4(G) to registrant's
Annual Report on Form 10-K for 1997).
5(A) Opinion of Spencer LeRoy III as to the validity of the
securities being registered.
5(B) Internal Revenue Service determination letter dated April 3,
1995.
10 Republic Mortgage Insurance Company Profit Sharing Plan.
23(A) Consent of PricewaterhouseCoopers, independent accountants.
23(B) Consent of Spencer LeRoy III (included as part of Exhibit 5).
24 * Powers of Attorney (Exhibit 24 to Registrant's Annual Report
on Form 10-K for 1999).
28 * Consolidated Schedule P (Exhibit 28 to Registrant's Annual
Report on Form 10-K for 1999).
- ------------
* Exhibit incorporated herein by reference.
The Registrant has submitted the Plan to the Internal Revenue Service ("IRS")
and undertakes to submit any amendment thereto to the IRS in a timely manner and
has made or will make all changes required by the IRS in order to qualify the
Plan.
Item 9. UNDERTAKINGS
------------
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section 10(a)
(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect
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<PAGE>
respect to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the registration
statement;
Provided, however, that paragraphs (1)(i) and (1)(ii)
do not apply if the registration statement is on Form
S-3 or Form S-8, and the information required to be
included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by
the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the provisions described in Item 6 above, or otherwise,
the Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company 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 Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
4
<PAGE>
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
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 Chicago and State of Illinois on the 17th day of May,
2000.
OLD REPUBLIC INTERNATIONAL CORPORATION
By /s/ A. C. Zucaro
------------------------------------
A. C. Zucaro, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on the 8th day of May, 2000.
Signature Title
--------- -----
/s/ A. C. Zucaro Director, Chairman of the Board,
- ----------------------------- President and Chief Executive
A. C. Zucaro
/s/ Paul D. Adams Senior Vice President, Chief
- ----------------------------- Financial Officer and Treasurer
Paul D. Adams
/s/ Harrington Bischof Director
- -----------------------------
Harrington Bischof
/s/ Anthony F. Colao Director and Chairman of
---------------------------- Old Republic RE, Inc.
Anthony F. Colao
/s/ Jimmy A. Dew Director and Sales Group Manager
- ----------------------------- Republic Mortgage Insurance Company
Jimmy A. Dew
/s/ Kurt W. Kreyling Director
- -----------------------------
Kurt W. Kreyling
/s/ Peter Lardner Director and Chief Executive
- ----------------------------- Officer of Bituminous Casualty
Peter Lardner Corporation
5
<PAGE>
/s/ Wilbur S. Legg Director
- -----------------------------
Wilbur S. Legg
/s/ John W. Popp Director
- -----------------------------
John W. Popp
/s/ William A. Simpson Director and President of
- ----------------------------- Republic Mortgage Insurance Company
William A. Simpson
/s/ Arnold L. Steiner Director
- -----------------------------
Arnold L. Steiner
/s/ David Sursa Director
- -----------------------------
David Sursa
/s/ William G. White, Jr. Director
- -----------------------------
William G. White, Jr.
Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Winston-Salem, State of
North Carolina on May 8, 2000.
Republic Mortgage Insurance Company Profit Sharing Plan
By: /s/ John E. Gerke
-------------------------------------
6
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INDEX TO EXHIBITS
-----------------
Exhibit No. Description
- ----------- -----------
4 Instruments defining the rights of security holders,
including indentures.
(A) * Certificate of Designation with respect to Series A
Junior Participating Preferred Stock (Exhibit 4.1 to
Form 8-K filed May 30, 1997).
(B) * Certificate of Designation with respect to Series
G-2 Convertible Preferred Stock (Exhibit 4(A) to
Registrant's Annual Report on Form 10-K for 1995).
(C) * Amended and Restated Rights Agreement dated as of
May 15, 1997 between Old Republic International
Corporation and First Chicago Trust Company of New
York (Exhibit 4.1 to Registrant's Form 8-K filed
May 30, 1997).
(D) * Agreement to furnish certain long term debt
instruments to the Securities & Exchange Commission
upon request (Exhibit 4(D) on Form 8 dated August 28,
1987).
(E) * Form of Indenture dated as of August 15, 1992
between Old Republic International Corporation and
Wilmington Trust Company, as Trustee (Exhibit 4(G)
to Registrant's Annual Report on Form 10-K for 1993).
(F) * Supplemental Indenture No. 1 dated as of June 16,
1997 supplementing the Indenture (Exhibit 4.3 to
Registrant's Form 8-A filed June 16 1997).
(G) * Supplemental Indenture No. 2 dated as of December
31, 1997 supplementing The Indenture. (Exhibit 4(G)
to Registrant's Annual Report on Form 10-K for 1997).
5(A) Opinion of Spencer LeRoy III as to the validity of
the securities being registered.
5(B) Internal Revenue Service determination letter dated
April 3, 1995.
10 Republic Mortgage Insurance Company Profit Sharing
Plan
23(A) Consent of PricewaterhouseCoopers LLP, independent
accountants.
23(B) Consent of Spencer LeRoy III (included as part of
Exhibit 5).
7
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INDEX TO EXHIBITS
-----------------
Exhibit No. Description
- ----------- -----------
24 * Powers of Attorney (Exhibit 24 to Registrant's
Annual Report on Form 10-K for 1999).
28 * Consolidated Schedule P (Exhibit 28 to Registrant's
Annual Report on Form 10-K for 1999).
- ----------
* Exhibit incorporated herein by reference.
8
Exhibit 5(A)
May 8, 2000
Old Republic International Corporation
307 North Michigan Avenue
Chicago, Illinois 60601
RE: Registration Statement on Form S-8
Gentlemen:
I am Senior Vice President, Secretary and General Counsel of Old
Republic International Corporation, a Delaware corporation (the "Company"). This
opinion is rendered in connection with the Registration Statement on Form S-8
filed with the Securities and Exchange Commission (the "Commission") relating to
the registration of 500,000 shares of the Company's Common Stock, $1.00 par
value per share (the "Shares"), and participating interests ("Participations")
pursuant to the terms of the Republic Mortgage Insurance Company Profit Sharing
Plan (the "Plan"). In this connection, I have examined originals or copies
identified to my satisfaction of such documents, corporate and other records,
certificates and other papers as I deemed necessary to examine for purposes of
this opinion, including but not limited to the Restated Certificate of
Incorporation and By-laws of the Company, as amended, resolutions of the board
of directors of the Company, and the Plan.
It is my opinion that the Shares and Participations, when issued
pursuant to the Plan will be legally issued, and that the Shares, when issued
pursuant to the Plan, will be fully paid and non-assessable.
I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to my name under "Interests of Named
Experts and Counsel" in the Registration Statement and under "Legal Opinions" in
the related Prospectus.
Very truly yours,
/s/ Spencer LeRoy III
Spencer LeRoy III
Senior Vice President,
Secretary and General Counsel
WJD:bm
Exhibit 5(B)
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
P.O. BOX 941
ATLANTA, GA 20370
Employer Identification Number:
Date: April 03, 1995 56-1031043
File Folder Number:
560005286
REPUBLIC MORTGAGE INSURANCE Person to Contact:
COMPANY PEGGY CALLAWAY
6964 UNIVERSITY PARKWAY Contact Telephone Number:
WINSTON SALEM, NC 27106 (404) 331-0576
Plan Name:
THE REPUBLIC MORTGAGE INSURANCE
CO. AND AFFL. COS PROFIT
SHARING
Plan Number: 001
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend
on its effect in operation. (See section 1.401-1(b) (3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal or
local statutes.
This determination letter is applicable for the amendment(s) adopted on
June 13, 1994.
This plan satisfies the nondiscriminating in amount requirement of
section 1.401(a) (4)-1 (b) (2) of the regulation on the basis of a design-based
safe harbor described in the regulations.
This letter is issued under Rev. Proc. 93-39 and considers the
amendments required by the Tax Reform Act of 1986 except as otherwise specified
in this letter.
This plan satisfies the nondiscriminatory current availability
requirements of section 1.401 (a) (4)-4(b) of the regulations with respect to
those benefits, rights, and features that are currently available to all
employees in the plan's coverage group. For this purpose, the plan's coverage
group consists of those employees
<PAGE>
-2-
REPUBLIC MORTGAGE INSURANCE COMPANY
treated as currently benefiting for purposes of demonstrating that the plan
satisfies the minimum coverage requirements of section 410(b) of the Code.
This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by the Uruguay Round
Agreements Act. Pub. L. 103-465.
The information on the enclosed addendum is an integral part of this
determination. Please be sure to read and keep it with this letter.
We have sent a copy of this letter to your representative as indicated
in the power of attorney.
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ Nelson A. Brooks
Nelson A. Brooks
District Director
Enclosures
Publication 794
Reporting & Disclosure Guide
for Employee Benefit Plans
Addendum
<PAGE>
-3-
REPUBLIC MORTGAGE INSURANCE COMPANY
This determination also applies to RMIC Corporation, Republic Mortgage
Ins. Co. of N.C. and Republic Mortgage Ins. Co. of Fla.
Exhibit 10
Prototype
- ------------------------------------------------------
FLEXINVEST(R)
Defined Contribution Plan
-------------------------
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
PROTOTYPE FLEXINVEST(R)DEFINED CONTRIBUTION PLAN
PART I DEFINITIONS
PART II CREDITING SERVICE
PART III ELIGIBILITY AND PARTICIPATION
PART IV CONTRIBUTIONS
PART V LIMITATION ON ALLOCATIONS
PART VI PLAN INVESTMENT - CONTRACT
PART VII PLAN INVESTMENT - POLICIES
PART VIII PARTICIPANT'S ACCOUNTS
PART IX VESTING
PART X IN-SERVICE WITHDRAWALS
PART XI PARTICIPANT LOANS
PART XII TERMINATION OF EMPLOYMENT
PART XIII FORFEITURES
PART XIV RETIREMENT BENEFITS
PART XV MINIMUM DISTRIBUTION REQUIREMENTS
PART XVI DEATH BENEFITS
PART XVII TOP-HEAVY REQUIREMENTS
PART XVIII INSURANCE COMPANY
PART XIX AMENDMENT, TERMINATION, MERGER, ETC. OF PLAN
PART XX ADMINISTRATION OF PLAN
PART XXI MISCELLANEOUS
PART XXII TRANSITIONAL RULES
PART XXIII ELIGIBLE ROLLOVERS
Copyright 1994 by Massachusetts Mutual Life Insurance Company.
All Rights Reserved. No reproduction of provisions in this document are
permitted without the express written consent of Massachusetts Mutual Life
Insurance Company, Springfield, Massachusetts 01111-0001.
1/94
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MASSACHUSETTS MUTUAL PROTOTYPE FLEXINVEST(R)
DEFINED CONTRIBUTION PLAN
Table of Contents
INTRODUCTION PAGE
Prototype Defined Contribution Plan 1
Purpose of Plan 1
PART I - DEFINITIONS
1.1 Administrator 2
1.2 Anniversary Date 2
1.3 Annual Additions 2
1.4 Automatic Joint and Survivor Annuity 2
1.5 Beneficiary 2
1.6 Business Day 3
1.7 Code 3
1.8 Company 3
1.9 Company Annual Contributions 3
1.10 Company Matching Contributions 3
1.11 Company Qualified Nonelective Contributions 3
1.12 Company Supplemental Contributions 3
1.13 Compensation 4
1.14 Contract 7
1.15 Effective Date 7
1.16 Election Period 7
1.17 Employee 7
1.18 Employer 7
1.19 Entry Date 8
1.20 Excess Aggregate Contributions 8
1.21 Excess Amount 8
1.22 Highly Compensated Employee 8
1.23 Hour of Service 9
1.24 Insurance Company 10
1.25 Leased Employee 11
1.26 Limitation Year 11
1.27 Maximum Permissible Amount 11
1.28 One-Year Break in Service 12
1.29 Participant 12
1.30 Participant Matched Contributions 12
1.31 Participant Nondeductible Voluntary
Contributions 12
1.32 Participant Supplemental Contributions 12
1.33 Plan 12
1.34 Plan Year 12
1.35 Policy 12
1.36 Prototype Plan 12
1.37 Qualified Election 12
1.38 Spouse 13
1.39 Termination of Employment 13
1.40 Valuation Date 13
1.41 Year of Service 13
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PART II - CREDITING SERVICE
2.1 General Method of Crediting Service 14
2.2 Equivalency Methods Based Upon Periods
of Employment 14
2.3 One Method of Crediting Service for All
Employees 14
2.4 Service With a Predecessor Company 14
PART III - ELIGIBILITY AND PARTICIPATION
3.1 Eligibility 14
3.2 Eligibility Computation Period 15
3.3 Break in Service/Return to Service 15
3.4 Notification of Eligible Employees 16
3.5 Conditions of Continued Participation 16
PART IV - CONTRIBUTIONS
4.1 Contributions to the Plan 16
4.2 Profit-Sharing Plans 17
4.3 Limitations on Company and Participant
Contributions 17
4.4 Excess Aggregate Contributions 19
4.5 Timing 21
4.6 Return of Contributions 21
4.7 Rollover Contributions 21
4.8 Transfers of Amounts from Other Plans 22
4.9 Participant Deductible Voluntary
Contributions 22
4.10 Additional Requirements for Owner-Employees 23
4.11 Permitted Disparity 23
PART V - LIMITATION ON ALLOCATIONS
5.1 Maximum Permissible Amount 25
5.2 Estimate of Maximum 25
5.3 Reconciliation 25
5.4 Excess Amounts 25
5.5 If Company Maintains Other
Defined Contribution Plans 26
5.6 If Company Maintains Other Plans 27
5.7 Controlled Group of Employers, Etc. 28
5.8 Definitions 28
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PART VI - PLAN INVESTMENT - CONTRACT
6.1 Funding Policy 29
6.2 Contract 30
6.3 Insurance Company's Authority to Direct
Investments 30
6.4 Participant-Directed Investments 31
6.5 Combining Assets of More Than One Plan
in a Single Contract 32
PART VII - PLAN INVESTMENT - POLICIES
7.1 Request of Participant 32
7.2 Limitations on Purchase 32
7.3 Company is Owner 33
7.4 Premium Payments 33
7.5 Dividends 33
7.6 Distribution of Policies 34
7.7 Change in Amount of Insurance 34
7.8 Policies upon Termination of Employment 34
PART VIII - PARTICIPANT'S ACCOUNTS
8.1 Participant's Accounts 34
8.2 Valuation of Accounts 35
PART IX - VESTING
9.1 Full Vesting in Certain Separate Accounts 35
9.2 Vesting in Participant's Accounts
Attributable to Company Contributions 36
9.3 Vesting Years of Service/Breaks in Service 36
PART X - IN-SERVICE WITHDRAWALS
10.1 In General 37
10.2 Sequence and Conditions for Withdrawal 37
10.3 No Forfeiture of Participant's Account
Attributable to Participant Contributions 38
PART XI - PARTICIPANT LOANS
11.1 In General 38
11.2 Application for Loans 39
11.3 Amount of Loan 39
11.4 Interest Rates 40
11.5 Repayments 40
11.6 Default and/or Acceleration 40
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PART XII - TERMINATION OF EMPLOYMENT
12.1 Notice of Termination of Employment 41
12.2 Amount of Participant's Benefit 41
12.3 Participant's Election of a Form of Benefit 41
12.4 Forfeiture of Nonvested Portion of
Participant's Account 42
12.5 Repayment 43
PART XIII - FORFEITURES
13.1 Occurrence of Forfeiture 44
13.2 Application of Forfeitures 44
PART XIV - RETIREMENT BENEFITS
14.1 Normal Form of Benefit 44
14.2 Optional Forms of Benefit 45
14.3 Notice Requirements 45
14.4 Special Rule for Profit-Sharing Plans 46
14.5 Amount of Retirement Benefit 46
14.6 Participant Election of a Retirement Date 46
14.7 Participant's Right to Defer Retirement 47
14.8 Distribution of Retirement Benefits 47
PART XV - MINIMUM DISTRIBUTION REQUIREMENTS
15.1 Required Beginning Date 48
15.2 Distribution of Benefits 48
15.3 Definitions, Minimum Distributions 49
PART XVI - DEATH BENEFITS
16.1 Preretirement Death of a Participant 49
16.2 Preretirement Survivor Annuity 51
16.3 Post-retirement Death of a Participant 52
16.4 Designation of a Beneficiary 52
PART XVII - TOP-HEAVY REQUIREMENTS
17.1 In General 52
17.2 Minimum Contribution Under a Top-Heavy Plan 52
17.3 Nonforfeitability of Minimum Contribution 53
17.4 Top-Heavy Vesting 53
17.5 Top-Heavy Definitions 53
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PART XVIII - INSURANCE COMPANY
18.1 Not a Party 56
18.2 Not Responsible for the Acts of the
Company or Administrator 57
18.3 Reliance on Signatures 57
18.4 Acquittance 57
18.5 Duties of Insurance Company 57
18.6 Plan Controls 57
PART XIX - AMENDMENT, TERMINATION, MERGER, ETC. OF PLAN
19.1 Permanency 57
19.2 Amendment by Insurance Company 57
19.3 Permissible Amendments by Company 58
19.4 Restrictions on Amendments 58
19.5 Termination of Plan 59
19.6 Full Vesting Upon Termination 59
19.7 Merger, Consolidation or Transfer
of Plan Assets 60
PART XX- ADMINISTRATION OF PLAN
20.1 Appointment of Administrator 60
20.2 Administrator's Powers and Duties 61
20.3 Delegation of Administrative
Responsibilities 62
20.4 Bonding 62
20.5 Fiduciary Liability Insurance
and Indemnification 62
20.6 Compensation of Administrator 63
20.7 Service of Legal Process 63
20.8 Company Census Report 63
20.9 Information About Plan 63
20.10 Information About Participants
and Beneficiaries 63
20.11 Claim for Benefits 64
20.12 Claims Review Procedure 64
20.13 Missing Participants or Beneficiaries 65
PART XXI - MISCELLANEOUS
21.1 Assignment or Alienation 65
21.2 Responsibility for Qualification of Plan 65
21.3 Original Document 66
21.4 State Law 66
21.5 Not an Employment Contract 66
21.6 Word Usage 66
21.7 Interpretation of Plan 66
21.8 Headings 66
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PART XXII - TRANSITIONAL RULES
22.1 Commencement of Benefits 66
22.2 Distribution of Benefits 68
PART XXIII - ELIGIBLE ROLLOVERS
23.1 Eligible Rollovers 69
23.2 Definitions 69
vii
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MONEY PURCHASE AND PROFIT-SHARING PLANS ADOPTION AGREEMENT
For Both Integrated and Non-Integrated Plans
(A) Plan Name
(B) Controlled Groups/Affiliated Employers
(C) Dates
(D) Eligibility for Participation
(E) Compensation
(F) Retirement
(G) Participant Contributions
(H) Company Contributions
(I) Forfeitures
(J) Investment Allocation
(K) Policies
(L) In-Service Withdrawals
(M) Loans
(N) Special Top-Heavy Elections
(O) Vesting
(P) Participant's Account Upon Termination of
Employment
(Q) Limitation on Allocating Contributions
(R) Present Value of Accrued Benefits
(S) Adoption Contingent on IRS Approval
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Massachusetts Mutual Life Insurance Company
PROTOTYPE FLEXINVEST(R)DEFINED CONTRIBUTION PLAN
Established Under Revenue Procedure 89-9
IRS Serial Nos. D357472a & D357472b (Profit Sharing Plan) and
D357473a & D357473b (Money Purchase Plan)
Massachusetts Mutual Life Insurance Company of Springfield, Massachusetts
("MassMutual") has prepared this Defined Contribution Plan for Employers
interested in providing retirement and other incidental life insurance benefits
for their Employees. Any Company may adopt this Plan, provided that it executes
an agreement, hereinafter referred to as the Adoption Agreement, delivers a copy
of the executed Adoption Agreement to MassMutual and agrees to conform to and
abide by all of the terms and provisions of this Plan. The Employer must also
apply for and have issued to it a group annuity contract to fund the Plan and to
provide benefits under the Plan. The Employer may also apply for and have issued
to it individual life insurance Policies.
MassMutual has received a favorable Opinion Letter for this Prototype plan from
the Internal Revenue Service in accordance with Revenue Procedure 89-9 and
Announcement 89-118. A copy of that Opinion Letter is contained in the Adoption
Agreement. MassMutual strongly suggests that the adopting Company file with the
appropriate Internal Revenue Service Key District Office for a Determination
Letter. See IRS Notices 90-73 and 89-65, Section 3, and Rev. Proc. 90-20 for
more detailed information on the requirements for obtaining continued reliance
upon this document.
PURPOSE OF PLAN
The Company establishes this Plan to provide funds for its Employees' retirement
and to provide funds for their Beneficiaries in the event of death. The benefits
provided in this Plan shall be paid from a Contract and Policies issued to the
Company. The Plan and the Contract and Policies forming a part hereof are
established and shall be maintained for the exclusive benefit of eligible
Employees and their Beneficiaries. If the Company adopts this Plan as an
amendment to an existing plan, the existing plan shall be superseded by this
Plan.
This Plan and any related documents are instruments having IMPORTANT FINANCIAL,
LEGAL AND TAX IMPLICATIONS. Neither MassMutual, nor its representatives can give
assurances that the adoption of this Plan shall create a qualified Plan for a
particular Company. Each Company must assume responsibility for the tax or legal
aspects pertaining to its Plan. EACH COMPANY SHOULD CONSULT ITS OWN ATTORNEY FOR
LEGAL ADVICE.
References to Parts and to numbered Paragraphs relate to the Plan document and
those made to Sections relate to the Adoption Agreement.
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PART I - DEFINITIONS
1.1 ADMINISTRATOR - The person or persons designated by the
Company in accordance with Paragraph 20.1 to manage the
Plan. If no person is appointed, the Administrator shall be the
Company.
1.2 ANNIVERSARY DATE - The first day of each Plan Year designated in
Section (C)(2) by the Company.
1.3 ANNUAL ADDITIONS - The sum of the following amounts credited
to a Participant's Account for the Limitation Year:
(a) Company contributions,
(b) Participant contributions,
(c) Forfeitures, and
(d) Amounts allocated, after March 31, 1984, to an
individual medical account, as defined in Code
Section 415(l)(2), which is part of a pension or
annuity plan maintained by the Company, are treated
as Annual Additions to a defined contribution plan.
Also, amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years
ending after such date, which are attributable to
post-retirement medical benefits, allocated to the
separate account of a key employee, as defined in
Code Section 419A(d)(3), under a welfare benefit
fund, as defined in Code Section 419(e), maintained
by the Company, are treated as Annual Additions to
a defined contribution plan.
For this purpose, any Excess Amount applied under Paragraphs 5.4
or 5.5 in the Limitation Year to reduce Company contributions
shall be considered Annual Additions for such Limitation Year.
The Annual Addition for any Limitation Year beginning before
January 1, 1987 shall not be recomputed to treat all Participant
contributions as an Annual Addition.
1.4 AUTOMATIC JOINT AND SURVIVOR ANNUITY - An immediate annuity
for the life of the Participant with a survivor annuity for the
life of the Participant's Spouse which is not less than 50
percent and not more than 100 percent of the amount of the
annuity which is payable during the joint lives of the
Participant and his Spouse, and which is the amount of benefit
which can be purchased with the Participant's vested account
balance. The percentage of the survivor annuity under the Plan
shall be 50 percent (unless a different percentage is elected by
the Company in Section (F)(5)(a)).
1.5 BENEFICIARY - The person or persons designated under Paragraph
16.4 in accordance with Code Section 401(a)(9)
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(and the regulations thereunder), to receive any benefits under
the Plan on account of the death of the Participant. If any
Policy is issued hereunder on the life of a Participant, the
Beneficiary thereunder shall be designated separately under such
Policy.
1.6 BUSINESS DAY - A day on which the Insurance Company, the New
York Stock Exchange and the American Stock Exchange are open for
business.
1.7 CODE - The Internal Revenue Code of 1986, as amended.
1.8 COMPANY - The Employer adopting this Plan.
1.9 COMPANY ANNUAL CONTRIBUTIONS - (Money Purchase Plans Only) -
If elected in Section (H), contributions which the Company is
required to make on behalf of each Participant who has completed
at least 1,000 Hours of Service during the Plan Year. The Company
shall contribute to the Plan, for each Plan Year, Company Annual
Contributions in an amount determined in accordance with the
contribution formula elected in Section (H).
(Profit-Sharing Plans Only). If elected in Section (H), the
Company may contribute to the Plan, for each Plan Year, in
accordance with the formula elected in Section (H). The
Administrator shall allocate Company Annual Contributions to
Participants' Accounts in accordance with the allocation formula
elected in Section (H). Company Annual Contributions shall be
allocated to the Account of each Participant who has completed
the requirements elected in Section (H).
1.10 COMPANY MATCHING CONTRIBUTIONS - If elected in Section (H),
the Company may contribute money to match the Participant Matched
Contributions. The amount of the contribution shall be determined
in accordance with the formula elected in Section (H).
1.11 COMPANY QUALIFIED NONELECTIVE CONTRIBUTIONS - If elected in
Section (H), the Company may elect to make an extra annual
contribution to the Plan in accordance with the formula elected
in Section (H). These contributions are nonforfeitable when made,
and are distributable only in accordance with the distribution
provisions of Code Section 401(k).
In addition, in accordance with Paragraph 4.4(a), a Company may
make Qualified Nonelective Contributions on behalf of non-Highly
Compensated Employees that are sufficient to satisfy the Actual
Contribution Percentage test, pursuant to regulations under the
Code.
1.12 COMPANY SUPPLEMENTAL CONTRIBUTIONS - If elected in Section
(H), the Company may contribute money to match the Participant
Supplemental Contributions.
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<PAGE>
1.13 COMPENSATION - As elected by the Company in Section (E),
Compensation shall mean all of each Participant's:
(a) Information Required to be Reported under Code Sections
6041 and 6051 (Wages, Tips and Other Compensation box
on Form W-2): Compensation is defined as wages as
defined in Codess.3401(a) and all other payments of
compensation to an Employee by the Employer (in the
course of the Company's trade or business) for which
the employer is required to furnish the Employee a
written statement under Codess.6041(d) andss.6051(a)(3).
Compensation must be determined without regard to any
rules under Codess.3401(a) that limit the remuneration
included in wages based on the nature or location of
the employment or the services performed such as the
exception for agricultural labor in Codess.3401(a)(2)).
Compensation under this definition may, as elected in
the Adoption Agreement, exclude amounts paid or
reimbursed by the employer for moving expenses incurred
by an Employee if the Company had a reasonable belief
at the time of the payment such expenses were deductible
by the Employee under Codess.217.
(b) Section 3401(a) Wages: Wages as defined in Code ss.3401(a)
for the purposes of income tax withholding at the source,
but determined without regard to any rules that limit the
remuneration included in wages based on the nature or
location of the employment or the services performed (such
as the exception for agricultural labor in Code
ss.3401(a)(2).
(c) Section 415 Safe-Harbor Compensation under Reg.ss.1.415-
2(d)(10): Wages, salaries, and fees for professional
services and other amounts received (without regard to
whether or not an amount is paid in cash) for personal
services actually rendered in the course of employment
with the Company maintaining the Plan to the extent that
the amounts are includible in the gross income (including,
but not limited to, commissions paid to salesmen,
compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses,
fringe benefits, and reimbursements and expense allowances
under a nonaccountable plan as described in Reg.ss.1.62
-2), and excluding all other amounts including the
following:
(1) Company 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 Company contributions under a
simplified Employee pension plan to the extent such
contributions are deductible by the Employee, or
any distributions from a plan of deferred
compensation.
(2) Amounts realized from the exercise of a non-
qualified stock option, or when restricted
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<PAGE>
stock (or property) held by the Employee either
becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified
stock option; and
(4) Other amounts which received special tax benefits,
or contributions made by the Company (whether or
not under a salary reduction agreement) towards the
purchase of an annuity described in Code ss.403(b)
(whether or not the amounts are actually excludable
from the gross income of the Employee).
(d) Section 415 Total Compensation under Reg.ss.1.415- 2(d)(1)
and (2): Compensation as defined immediately above in
Subparagraph 1.14(c), but also including the following:
(1) In the case of a Participant who is an Employee
within the meaning of Code ss.401(c)(1) and the
regulations thereunder, the Participant's earned
income (as described in Code ss.401(c)(2) and the
regulations thereunder).
(2) Amounts described in Code ss.104(a)(3), ss.105(a)
and ss.105(h), but only to the extent that these
amounts are includable in the gross income of the
Employee.
(3) Amounts paid or reimbursed by the Company for
moving expenses incurred by an Employee, but only
to the extent that these amounts are not deductible
by the Employee under Code ss.217.
(4) The value of a non-qualified stock option granted
to an Employee by the Company, but only to the
extent that the value of the option is includable
in the gross income of the Employee for the taxable
year in which granted.
(5) The amount includable in the gross income of an
Employee upon making the election described in Code
ss.83(b).
The Company may elect to exclude from the above definitions of
Compensation all of the following items (even if includible in
gross income): reimbursements or other expense allowances, fringe
benefits (cash and noncash), moving expenses, deferred
compensation, and welfare benefits.
The annual Compensation of each Participant taken into account
under the Plan for any year shall not exceed $200,000, as
adjusted by the Secretary at the same time and in the same manner
as under Code ss.415(d). In determining the Compensation of a
Participant for purposes of this
5
<PAGE>
limitation, the rules of Code ss.414(q)(6) shall apply, except in
applying such rules, the term "family" shall include only the
Spouse of the Participant and any lineal descendants of the
Participant who have not attained age 19 before the close of the
year. If, as a result of the application of such rules, the
adjusted $200,000 limitation is exceeded, then (except for the
purposes of determining the portion of Compensation up to the
integration level if this Plan provides for permitted disparity),
the limitation shall be prorated among the affected individuals
in proportion to each such individual's Compensation as
determined under this Paragraph prior to the application of this
limitation.
In addition to other applicable limitations set forth in the
plan, and notwithstanding any other provision of the plan to the
contrary, for plan years beginning on or after January 1, 1994,
the annual compensation of each employee taken into account under
the plan shall not exceed the OBRA '93 annual compensation limit.
The OBRA '93 annual compensation limit is $150,000, as adjusted
by the Commissioner for increases in the cost of living in
accordance with section 401(a)(17)(B) of the Internal Revenue
Code. The cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which
compensation is determined (determination period) beginning in
such calendar year. If a determination period consists of fewer
than 12 months, the OBRA '93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which
is 12.
For plan years beginning on or after January 1, 1994, any
reference in this plan to the limitation under section 401(a)(17)
of the Code shall mean the OBRA '93 annual compensation limit set
forth in this provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the
current plan year, the compensation for that prior determination
period is subject to the OBRA '93 annual compensation limit in
effect for that prior determination period. For this purpose, for
determination periods beginning before the first day of the first
plan year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.
For any self-employed individual, Compensation shall mean earned
income. For Limitation Years beginning after December 31, 1991,
for purposes of applying the limitations of this paragraph,
Compensation for a Limitation Year is the compensation actually
paid or includible in gross income during such Limitation Year.
Notwithstanding the preceding sentence, Compensation for a
Participant in a defined contribution plan who is permanently and
totally disabled (as defined in Code ss.22(e)(3)) is the
compensation such Participant would have received for the
Limitation
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<PAGE>
Year if the Participant had been paid at the rate of compensation
paid immediately before becoming permanently and totally
disabled; such imputed compensation for the disabled Participant
may be taken into account only if the Participant is not a Highly
Compensated Employee (as defined in Code ss.414(q)) and
contributions made on behalf of such Participant are
nonforfeitable when made.
1.14 CONTRACT - The group annuity contract issued by the Insurance
Company to the Company or as specified in Section (B).
1.15 EFFECTIVE DATE - The date elected in Section (C)(1) as the first
day of the first Plan Year.
1.16 ELECTION PERIOD - The period during which a Participant may waive
the Preretirement Survivor Annuity under Paragraph 16.2. This
period begins on the first day of the Plan Year in which the
Participant attains age 35 and ends on the date of the
Participant's death. If a Participant separates from service
prior to the first day of the Plan Year in which age 35 is
attained, with respect to the account balance as of the date of
separation, the Election Period shall begin on the date of
separation.
In addition, a Participant who has not yet attained age 35 as of
the end of any current Plan Year may make a special Qualified
Election to waive the Preretirement Survivor Annuity for the
period beginning on the date of such election and ending on the
first day of the Plan Year in which the Participant attains age
35. Such election shall not be valid unless the Participant
receives a written explanation of the Preretirement Survivor
Annuity in such terms as are comparable to the explanation
required under Paragraph 14.3. Preretirement Survivor Annuity
coverage shall be automatically reinstated as of the first day of
the Plan Year in which the Participant attains age 35. Any new
waiver on or after such date shall be subject to the full
requirements of Paragraph 1.37.
1.17 EMPLOYEE - Any person employed by the Company or any other
company required to be aggregated under Paragraph 1.18. The term
Employee shall also include an individual who is self-employed,
an owner-Employee, or a Leased Employee.
Self-employed individual means a person who has earned income for
the taxable year from the trade or business for which the Plan is
established; also, a person who would have had earned income but
for the fact that the trade or business had no net profits for
the taxable year.
Owner-Employee means a person who is sole proprietor, or who is a
partner owning more than 10 percent of either the capital or
profits interest in the partnership.
1.18 EMPLOYER - The entity that establishes or maintains this Plan;
any organization which has adopted this Plan with the consent of
such establishing Employer; and any successor of
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<PAGE>
such Employer. Except as provided for purposes of separate lines
of business in Code Section 414(r), all Employees of all
corporations which are members of a controlled group of
corporations (as defined in Code Section 414(b)), all trades or
businesses (whether or not incorporated) which are under common
control (as defined in Code Section 414(c)), all members of an
affiliated service group (as defined in Code Section 414(m)) and
any other entity required to be aggregated pursuant to
regulations under Code Section 414(o) shall be treated as
employed by a single Employer.
1.19 ENTRY DATE - The date on which an Employee becomes a Participant,
after satisfying the eligibility requirements, as designated in
Section (D)(7).
1.20 EXCESS AGGREGATE CONTRIBUTIONS - With respect to any Plan Year,
the excess of:
(a) The aggregate Actual Contribution Percentage (ACP) amounts
taken into account in computing the numerator of the ACP
actually made on behalf of Highly Compensated Employees
for such Plan Year, over
(b) The maximum Actual Contribution Percentage amounts
permitted by the ACP test (determined by reducing
contributions made on behalf of Highly Compensated
Employees in order of their ACP, beginning with the
highest of such percentages).
1.21 EXCESS AMOUNT - The excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
1.22 HIGHLY COMPENSATED EMPLOYEE - Any Employee who performs service
for the Employer during the determination year and who, during
the look-back year: (i) received compensation from the Employer
in excess of $75,000 (as adjusted pursuant to Code Section
415(d)); (ii) received compensation from the Employer in excess
of $50,000 (as adjusted pursuant to Code Section 415(d)) and was
a member of the top-paid group for such year; or (iii) was an
officer of the Employer and received compensation during such
year that is greater than 50 percent of the dollar limitation in
effect under Code Section 415(b)(1)(A). The term Highly
Compensated Employee also includes: (1) Employees who are both
described in the preceding sentence if the term "determination
year" is substituted for the term "look-back year" and the
Employee is one of the 100 Employees who received the most
compensation from the Employer during the determination year; and
(2) Employees who are 5 percent owners at any time during the
look-back year or determination year.
If no officer has satisfied the compensation requirement of (iii)
above during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a Highly
Compensated Employee.
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<PAGE>
For purposes of this Paragraph, the determination year shall be
the Plan Year. The look-back year shall be the twelve-month
period elected in Section (C)(5).
If an Employee is, during a determination year or look-back year,
a family member of either a 5 percent owner who is an Employee,
or a Highly Compensated Employee who is one of the 10 most Highly
Compensated Employees ranked on the basis of Compensation paid by
the Employer during such year, then the family member and the 5
percent owner or top-ten Highly Compensated Employee shall be
aggregated. In such case, the family member and the 5 percent
owner or top-10 Highly Compensated Employee shall be treated as a
single Employee receiving Compensation and Plan contributions or
benefits equal to the sum of such Compensation and contributions
or benefits of the family member and 5 percent owner or top-ten
Highly Compensated Employee. For purposes of this Paragraph,
family member includes the Spouse, lineal ascendants and
descendants of the Employee or former Employee and the Spouses of
such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of
Employees in the top-paid group, the top 100 Employees, the
number of Employees treated as officers and the Compensation that
is considered, shall be made in accordance with Code Section
414(q) and the Regulations thereunder.
1.23 HOUR OF SERVICE -
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Company.
These hours shall be credited to the Employee for the
computation period in which the duties are performed;
(b) Each hour for which an Employee is paid, or entitled to
payment, by the Company on account of a period of time
during which no duties are performed (irrespective of
whether the employment relationship has terminated) due
to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave
of absence. No more than 501 Hours of Service shall be
credited under this Paragraph for any single continuous
period (whether or not such period occurs in a single
computation period). Hours under this Paragraph shall
be calculated and credited pursuant to Section 2530.200b-2
of the Department of Labor regulations which is
incorporated herein by this reference; and
(c) Each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by the Company.
The same Hours of Service shall not be credited both under
Subparagraph (a) or Subparagraph (b), as the case may be,
and under this Subparagraph (c). These Hours shall be
credited to the Employee for the computation period or
periods to which the award or
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<PAGE>
agreement pertains rather than the computation period in
which the award, agreement or payment is made.
(d) Where an Employee leaves a non-temporary position with the
Company to enter the United States military service,
receives an honorable discharge upon completion of
military service, makes application for reemployment
within 90 days of discharge (or within 90 days after
hospitalization up to one year in length following the
discharge) and is reemployed, the military service shall
be treated as service for the Company for participation
and vesting purposes.
(e) Hours of Service shall be credited for employment with
other members of an affiliated service group (under Code
Section 414(m)), a controlled group of corporations (under
Code Section 414(b)), a group of trades or businesses
under common control (under Code Section 414(c)), of which
the adopting Company is a member, and any other entity
required to be aggregated with the Company pursuant to
Code Section 414(o) and the regulations thereunder. Hours
of Service shall also be credited for any individual
considered an Employee for purposes of this Plan under
Code Section 414(n) or Section 414(o) and the regulations
thereunder.
(f) Hours of Service shall be determined on the basis of the
method selected in Section (D)(6).
(g) Solely for purposes of determining whether a One-Year
Break in Service, as defined in Paragraph 1.28, for
participation and vesting purposes has occurred in a
computation period, an individual who is absent from
work for maternity or paternity reasons shall receive
credit for the Hours of Service which would otherwise
have been credited to such individual but for such
absence, or in any case in which such hours cannot be
determined, 8 Hours of ervice per day of such absence.
For purposes of this Subparagraph, an absence from work
for maternity or paternity reasons means an absence (1)
by reason of the pregnancy of the individual, (2) by
reason of a birth of a child of the individual, (3) by
reason of the placement of a child with the individual
in connection with the adoption of such child by such
individual, or (4) for purposes of caring for such
child for a period beginning immediately following such
birth or placement.
The Hours of Service credited under this Subparagraph
shall be credited (1) in the computation period in which
the absence begins if the crediting is necessary to
prevent a One-Year Break in Service in that period, or (2)
in all other cases, in the following computation period.
1.24 INSURANCE COMPANY - Massachusetts Mutual Life Insurance Company
or MML Pension Insurance Company, or with respect
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<PAGE>
to Policies, any other legal reserve life insurance company
authorized to do business in the state of policy issue.
1.25 LEASED EMPLOYEE - Any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and
any other person ("leasing organization"), has performed services
for the recipient (or for the recipient and related persons
determined in accordance with 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 Company.
Contributions or benefits provided a leased Employee by the
leasing organization which are attributable to services performed
for the recipient Company shall be treated as provided by the
recipient Company.
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 Company contribution
rate of at least 10 percent of Compensation, as defined in
Paragraph 1.13, but including amounts contributed by the Company
pursuant to a deferred salary 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, (3) full and
immediate vesting; and (ii) leased Employees do not constitute
more than 20 percent of the recipient's non-Highly Compensated
workforce.
1.26 LIMITATION YEAR - A calendar year or any other 12 consecutive
month period elected by the Company in Section (C)(6). All
qualified plans maintained by the Company 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.
1.27 MAXIMUM PERMISSIBLE AMOUNT - The maximum Annual Addition that may
be contributed or allocated to a Participant's account under the
Plan for any Limitation Year shall not exceed the lesser of: (a)
the defined contribution dollar limitation, or (b) 25 percent of
the Participant's Compensation for the Limitation Year.
The Compensation limit referred to in (b), shall not apply to any
contribution for medical benefits (within the meaning of Code
Section 401(h) or 419A(f)(2)) which is otherwise treated as an
Annual Addition, under Code Section 415(l)(1) or 419A(d)(2).
The defined contribution dollar limitation is $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.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12
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consecutive month period, the Maximum Permissible Amount shall
not exceed the defined contribution dollar limitation multiplied
by the following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
1.28 ONE-YEAR BREAK IN SERVICE - A 12-consecutive month period
(computation period) during which the Participant does not
complete more than 500 Hours of Service with the Company.
1.29 PARTICIPANT - Any eligible active Employee of the Company who
became a member of this Plan on an Entry Date.
1.30 PARTICIPANT MATCHED CONTRIBUTIONS - The Company may elect in
Section (G)(2) to require Participants to contribute amounts to
the Plan either as a condition of employment or as a condition of
obtaining plan benefits attributable to Company Matching
Contributions.
1.31 PARTICIPANT NONDEDUCTIBLE VOLUNTARY CONTRIBUTIONS - The Company
may elect in Section (G)(4) to allow the Participant to
contribute amounts to the Plan which are not required and which
shall not cause the Company to contribute additional amounts to
the Plan on behalf of a Participant, but they provide additional
benefits for the Participant under the Plan.
1.32 PARTICIPANT SUPPLEMENTAL CONTRIBUTIONS - The Company may elect in
Section (G)(3) to allow the Participant to contribute an extra
amount to the Plan. The Participant is not required to make this
contribution to the Plan, but the contribution shall cause the
Company to contribute amounts to the Plan on behalf of the
Participant known as Company Supplemental Contributions.
1.33 PLAN - The MassMutual Prototype FLEXINVEST(R) Defined
Contribution Plan as applied separately to the Company.
1.34 PLAN YEAR - The 12-consecutive month period designated by the
Company in Section (C)(2).
1.35 POLICY - An individual life insurance policy issued by the
Insurance Company to the Company on the life of a Participant.
1.36 PROTOTYPE PLAN - A plan, the form of which is the subject of
a favorable opinion letter from the Internal Revenue Service.
1.37 QUALIFIED ELECTION - A waiver of an Automatic Joint and Survivor
Annuity or a Preretirement Survivor Annuity. A waiver shall not
be effective unless: (a) the Participant's Spouse consents in
writing to the election; (b) the election designates a specific
Beneficiary, including any class of Beneficiaries or any
contingent Beneficiary, which may not be changed without spousal
consent (or the Spouse expressly permits designations by
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the Participant without any further spousal consent); (c) the
Spouse's consent acknowledges the effect of the election; and (d)
the Spouse's consent is witnessed by a plan representative or
notary public. Additionally, a Participant's waiver of the
Automatic Joint and Survivor Annuity shall not be effective
unless the election designates a form of benefit payment which
may not be changed without spousal consent (or the Spouse
expressly permits designations by the Participant without any
further spousal consent). If it is established to the
satisfaction of a plan representative that there is no Spouse or
that the Spouse cannot be located, a waiver shall be deemed a
Qualified Election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained)
shall be effective only with respect to such Spouse. A consent
that permits designations by the Participant without any
requirement of further consent by such Spouse must acknowledge
that the Spouse has the right to limit consent to a specific
Beneficiary, and a specific form of benefit where applicable, and
that the Spouse voluntarily elects to relinquish either or both
of such rights. A revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any time before
the commencement of benefits. The number of revocations shall not
be limited. No consent obtained under this provision shall be
valid unless the Participant has received notice as provided in
Paragraph 14.3.
1.38 SPOUSE - The Spouse or surviving Spouse of the Participant,
provided that a former Spouse shall be treated as the Spouse or
surviving spouse and a current spouse shall not be treated as the
Spouse or surviving Spouse to the extent provided under a
qualified domestic relations order as described in Code Section
414(p).
1.39 TERMINATION OF EMPLOYMENT - The separation from service of the
Participant before Normal Retirement Date other than by reason of
death, disability as determined under Section (F)(4) or early
retirement, if elected in Section (F)(2).
1.40 VALUATION DATE - Wednesday of each week, except that if a
Wednesday is not a Business day, the next preceding Business day
shall be a Valuation Date and such other Business day or days as
the Insurance Company may deem desirable.
1.41 YEAR OF SERVICE - A 12 consecutive month period (computation
period) during which the Employee completes at least 1,000 Hours
of Service. The applicable 12 consecutive month period for
eligibility and participation purposes can be found in Part III,
and for vesting in Part IX.
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PART II - CREDITING SERVICE
2.1 General Method of Crediting Service. If Section (D)(6)(a) is
elected, the Administrator shall count actual Hours of Service
during the applicable 12-consecutive month computation period.
The Employee shall receive credit for a Year of Service if the
Employee is credited with 1000 or more Hours of Service during
the computation period and shall incur a One-Year Break in
Service if the Participant is not credited with more than 500
Hours of Service during the computation period. In general, the
Employee's entitlement with respect to participation and vesting
shall be determined by totaling the number of Years of Service
credited to the Employee.
2.2 Equivalency Methods Based Upon Periods of Employment. If Section
(D)(6)(b), (c), (d) or (e) is elected, the Administrator shall
credit the Employee with a specified number of Hours of Service
for each period of employment if the Employee would receive
credit for at least one Hour of Service in that period of
employment. The periods of employment on which equivalency may be
based are: days worked (Section (D)(6)(b)), weeks worked (Section
(D)(6)(c)), semi-monthly payroll period (Section (D)(6)(d)) and
months worked (Section (D)(6)(e)). The Employee shall receive
credit for a Year of Service if the Employee is credited with
1000 or more equivalency Hours of Service during a computation
period and shall incur a One-Year Break in Service if the
Participant does not complete more than 500 equivalency Hours of
Service during the computation period. In general, the Employee's
entitlement with respect to participation and vesting shall be
determined by totaling the number of Years of Service credited to
the Employee.
2.3 One Method of Crediting Service for All Employees. The
Administrator shall credit Service for all classifications of
Employees under the Plan using the same method of crediting
service set forth in Section (D)(6).
2.4 Service With a Predecessor Company. Where the Company maintains
the plan of a predecessor company, service for such predecessor
company shall be treated as service for the Company for purposes
of determining an Employee's eligibility to participate in the
Plan and vesting. Where a Company establishes the Plan which was
not maintained by a predecessor company, service with the
predecessor company, including a sole proprietorship or
partnership, shall be treated as service with the Company for
eligibility to participate and vesting only if elected by the
Company in Section (D)(5).
PART III - ELIGIBILITY AND PARTICIPATION
3.1 Eligibility. Each present and future Employee of the Company
shall be entitled to participate in this Plan on the Effective
Date or on an Entry Date coincident with or
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immediately following the date on which he satisfies the
classification, service, and age requirements set forth in
Section (D). If this Plan amends and restates a former plan that
was qualified under Code Section 401(a) or 403(a), each Employee
who was a Participant (or entitled to participate) in the former
plan on the day before the Effective Date of this restated Plan
shall continue as a Participant (or continue to be entitled to
participate) in the Plan.
3.2 Eligibility Computation Period. Years of Service and One Year
Breaks in Service shall be measured on the same eligibility
computation period. The initial eligibility computation period is
the 12-consecutive month period beginning on the date the
Employee first performs an Hour of Service for the Company
(employment commencement date).
The succeeding 12-consecutive month periods commence with the
first Plan Year which commences prior to the first anniversary of
the Employee's employment commencement date regardless of whether
the Employee is entitled to be credited with 1,000 Hours of
Service during the initial eligibility computation period. An
Employee who is credited with 1,000 Hours of Service in both the
initial eligibility computation period and the first Plan Year
which commences prior to the first anniversary of the Employee's
initial eligibility computation period shall be credited with two
Years of Service for purposes of eligibility to participate.
3.3 Break in Service/Return to Service. A former Participant shall
become a Participant immediately upon his return to the employ of
the Company if such former Participant had a nonforfeitable right
to all or a portion of his account balance derived from Company
contributions at the time of his termination.
For a former Participant who did not have any nonforfeitable
right to the account balance derived from Company contributions,
Years of Service before a period of consecutive One-Year Breaks
in Service shall not be taken into account in computing
eligibility service if the number of consecutive One-Year Breaks
in Service in such period equals or exceeds the greater of 5 or
the aggregate number of Years of Service. Such aggregate number
of Years of Service shall not include any Years of Service
disregarded under the preceding sentence by reason of prior
Breaks in Service.
If a Participant's Years of Service are disregarded pursuant to
the preceding paragraph, such Participant shall be treated as a
new Employee for eligibility purposes. If a Participant's Years
of Service may not be disregarded pursuant to the preceding
paragraph, such Participant shall continue to participate in the
Plan, or, if terminated, shall participate immediately upon
reemployment.
In the event a Participant is no longer a member of an
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eligible class of Employees and becomes ineligible to participate
but has not incurred a Break in Service, such Employee shall
participate immediately upon returning to an eligible class of
Employees. If such Participant incurs a Break in Service,
eligibility shall be determined pursuant to the three preceding
paragraphs.
In the event an Employee who is not a member of the eligible
class of Employees becomes a member of the eligible class, such
Employee shall participate immediately if such Employee has
satisfied the minimum age and service requirements and would have
otherwise previously become a Participant.
3.4 Notification of Eligible Employees. The Administrator shall
notify each Employee of his right to participate in the Plan
prior to the Entry Date he first becomes entitled to participate.
On the date of such notification, the Administrator shall furnish
such Employee with a summary plan description of the Plan, the
options available to him under the Plan and an application form.
If a Participant requests to have a Policy purchased on his
behalf, the Participant shall also complete an application for
the Policy. To become a Participant as of the Entry Date provided
in Section (D)(7), the Employee must complete the form and file
it with the Administrator not later than one week after his Entry
Date. If the Employee files the form later than one week after
his Entry Date, he shall become a Participant on the first day of
the second calendar month next following the date he files the
form.
3.5 Conditions of Continued Participation. As a condition of
continued participation under the Plan, each Participant agrees
to:
(a) Limit his recourse for payment of any benefits to which he
is entitled to the assets of the Plan;
(b) Complete and file with the Administrator an enrollment
form, a salary deduction authorization form and such other
forms as required by the Administrator or Insurance
Company;
(c) Submit such evidence of insurability as may be required;
and
(d) Provide the Administrator with such information about
himself and his Beneficiary as required by Paragraph
20.10.
PART IV - CONTRIBUTIONS
4.1 Contributions to the Plan. The Company shall contribute to the
Plan, for each Plan Year:
(a) Company Matching Contributions (if elected in Section
(H));
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(b) Company Supplemental Contributions (if elected in Section
(H));
(c) Company Annual Contributions (if elected in Section (H));
and
(d) Company Qualified Nonelective Contributions (if elected in
Section (H)).
Each Participant may, by written direction to the Administrator,
make to the Plan:
(a) Participant Matched Contributions (if permitted by Section
(G)(2));
(b) Participant Supplemental Contributions (if permitted by
Section (G)(3)); and
(c) Participant Nondeductible Voluntary Contributions (if
permitted by Section (G)(4)).
The Participant may suspend his contributions, if allowed, during
any time period by filing a written notice with the
Administrator. No Company Matching Contributions shall be
allocated on behalf of a Participant during a time period in
which he elects to suspend making Participant Matched
Contributions. If Section (O)(3)(b) is elected, a Participant
shall not be credited with a Year of Service during a Plan Year
in which he suspended all of his Matched Contributions.
These contributions are subject to the general non-
discrimination requirements of Code Section 401(a)(4) and the
regulations thereunder. In the case of a Participant whose Entry
Date is other than the first day of the Plan Year, all Hours of
Service during the Plan Year in which participation commenced (or
recommenced), including Hours of Service credited to the
Participant prior to his Entry Date, shall be taken into account
when determining whether or not the Participant has at least
1,000 Hours of Service during the Plan Year.
A Participant whose employment is terminated before the end of
the Plan Year shall share in Company Annual Contributions for
such Plan Year allocated prior to the date of his Termination of
Employment, but shall or shall not share in Company Annual
Contributions allocated after the date of his Termination of
Employment as elected in Section (H).
4.2 Profit-Sharing Plans. If the Company so elects in Section (H)
(profit-sharing plans only), Company Annual Contributions to the
Plan may be made without regard to profits. The Plan shall
continue to qualify as a profit- sharing plan for purposes of
Code Section 401(a), 402, 412 and 417.
4.3 Limitations on Company and Participant Contributions. The
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Actual Contribution Percentage (hereinafter "ACP") for
Participants who are Highly Compensated Employees for each Plan
Year and the ACP for Participants who are non-Highly Compensated
Employees for the same Plan Year must satisfy one of the
following tests:
(a) The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for
Participants who are non-Highly Compensated Employees for
the same Plan Year multiplied by 1.25; or
(b) The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for
Participants who are non-Highly Compensated Employees for
the same Plan Year multiplied by 2.0, provided that the
ACP for Participants who are Highly Compensated Employees
does not exceed the ACP for Participants who are
non-Highly Compensated Employees by more than two (2)
percentage points.
'Actual Contribution Percentage' shall mean, for a specified
group of Participants for a Plan Year, the average of the ratios
(calculated separately for each Participant in such group) of (1)
the Participant's Actual Contribution Percentage amounts to (2)
the Participant's Compensation for the Plan Year. Compensation
taken into account for this purpose may be limited to
Compensation received by an Employee while the employee is a
Participant. Actual Contribution Percentage amounts are the sum
of the Participant Nondeductible Voluntary Contributions,
Participant Matched Contributions, Participant Supplemental
Contributions, Company Matching Contributions and Company
Supplemental Contributions made under the Plan on behalf of the
Participant for the Plan Year. Such Actual Contribution
Percentage amounts shall not include Matching Contributions that
are forfeited either to correct Excess Aggregate Contributions or
because the contributions to which they relate are Excess
Aggregate Contributions.
For purposes of computing the ACP, any Employee is eligible if he
can make a Participant contribution, or can receive a Company
Matching Contribution. If a Participant contribution is required
as a condition of participation in the Plan, any Employee who
would be a Participant in the Plan if such Employee made such a
contribution shall be treated as an eligible Participant on
behalf of whom no Participant contributions are made.
The ACP for any Participant who is a Highly Compensated Employee
for the Plan Year and who is eligible to have Actual Contribution
Percentage amounts allocated to his accounts under two or more
plans described in Code Section 401(a), or arrangements described
in Code Section 401(k) that are maintained by the Company, shall
be determined as if such Actual Contribution Percentage amounts
were made under a single plan. If a Highly Compensated Employee
participates in two or more plans described in Code Section
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<PAGE>
401(a) or arrangements described in Code Section 401(k) that have
different Plan Years, all such plans or arrangements ending with
or within the same calendar year shall be treated as a single
plan.
In the event that this Plan satisfies the requirements of Code
Section 401(m), 401(a)(4) or 410(b) only if aggregated with one
or more other plans, or if one or more other plans satisfy the
requirements of such Code Sections only if aggregated with this
Plan, then this Paragraph shall be applied by determining the ACP
of Employees as if all such plans were a single plan. Plans may
be aggregated to satisfy Code Section 401(m) only if they have
the same Plan Year.
For purposes of determining the ACP of a Participant who is a 5
percent owner or one of the ten most highly paid Highly
Compensated Employees, the Actual Contribution Percentage amounts
and Compensation of such Participant shall include the Actual
Contribution Percentage amounts and Compensation for the Plan
Year of family members (as defined in Code Section 414(q)(6)).
The combined actual contribution ratio for the family group shall
be the actual contribution ratio determined by combining the
Participant contributions, Compensation, matching contributions
and amounts treated as matching contributions of all the eligible
family members. Family members, to the extent required to be
aggregated with Highly Compensated Employees under Code Section
414(q), shall be disregarded as separate Employees in determining
the ACP both for Participants who are non-Highly Compensated
Employees and for Participants who are Highly Compensated
Employees.
For purposes of determining the ACP test, Participant
contributions are considered to have been made in the Plan Year
in which contributed to the Plan. Company Matching Contributions
shall be considered made for a Plan Year if made no later than
the end of the twelve-month period beginning on the day after the
close of the Plan Year.
The Company shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Company matching
contributions used in such test. The determination and treatment
of the ACP amounts of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
In addition, a Company shall not allocate contributions to a
Participant's Account which would result in an Excess Amount
under Part V, Limitation on Allocations. The aggregate Company
contributions for any Plan Year may also be limited to the amount
deductible by the Company under Code Section 404 with reductions
made, in order, to Company Annual Contributions, Company
Supplemental Contributions, and Company Matching Contributions.
4.4 Excess Aggregate Contributions.
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(a) Extra Contribution: If the ACP limitation in Paragraph 4.3
is not met, the Company may elect to make an extra Company
Qualified Nonelective Contribution to all eligible
non-Highly Compensated Employees sufficient to satisfy the
ACP limit. The contribution shall be subject to the
distribution and nonforfeitability requirements of Code
Section 401(m).
(b) Corrective Distribution of Excess: The Company may
also satisfy Paragraph 4.3 by distributing or forfeiting
the Excess Aggregate Contributions in accordance with this
Paragraph. Excess Aggregate Contributions, plus any income
and minus any loss allocable thereto, shall be forfeited,
if forfeitable, or if not forfeitable, distributed no
later than the last day of each Plan Year to Participants
to whose accounts such Excess Aggregate Contributions were
allocated for the preceding Plan Year. If such Excess
Aggregate Contributions are distributed more than 2 1/2
months after the last day of the Plan Year in which such
excess amounts arose, a ten (10) percent excise tax shall
be imposed on the Company maintaining the Plan with
respect to such amounts. Any distribution or forfeiture of
Excess Aggregate Contributions for any Plan Year shall be
made on the basis of the respective portions of such
amounts attributable to each Highly Compensated Employee.
Excess Aggregate Contributions shall be allocated to
Participants who are subject to the family member
aggregation rules of Code Section 414(q)(6) in proportion
to the Participant contributions and matching
contributions of each family member that are combined to
determine the actual contribution ratio. Excess Aggregate
Contributions shall be treated as Annual Additions under
the Plan.
Excess Aggregate Contributions shall be adjusted for any
income or loss up to the date of distribution. The income
or loss allocable to Excess Aggregate Contributions is the
income or loss allocable to the Participant's Participant
Contribution account and Company Matching Contribution
account for the Plan Year multiplied by a fraction, the
numerator of which is such Participant's Excess Aggregate
Contributions for the year and the denominator is the
Participant's account balance(s) attributable to Actual
Contribution Percentage amounts plus any withdrawals of
these amounts and without regard to any income or loss
occurring during such Plan Year.
Forfeitures of Excess Aggregate Contributions shall be
applied to reduce Company contributions. Excess Aggregate
Contributions attributable to amounts other than
Participant contributions, including forfeited matching
contributions, shall be treated as Company contributions
for purposes of Code Sections 404 and 415, even if
distributed from the Plan.
Excess Aggregate Contributions shall first be
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<PAGE>
distributed from the Participant Nondeductible Voluntary
Contributions Account. To the extent that Excess Aggregate
Contributions exceed the balance in the Participant
Nondeductible Voluntary Contribution Account, the Excess
Aggregate Contributions shall be forfeited, if
forfeitable, or distributed on a prorata basis from the
Participant Matched and Supplemental Contribution accounts
and Company Matching and Supplemental Contribution
accounts.
4.5 Timing. The Company shall pay the Insurance Company its
contributions for each Plan Year on or before the time required
by law for filing the Company's federal income tax return
(including extensions) for the taxable year with respect to which
the contributions are made.
4.6 Return of Contributions. Except as provided below, no part of the
Plan assets shall revert to the Company or be diverted for
purposes other than the exclusive benefit of the Employees or
their Beneficiaries:
(a) Any contribution made by the Company because of a mistake
of fact shall be returned to the Company upon written
notice to the Insurance Company. A contribution shall not
be refunded more than one year after the payment of the
contribution.
(b) In the event that the Commissioner of Internal Revenue
determines that the Plan is not initially qualified
under the Code, any contribution made incident to that
initial qualification by the Company must be returned
to the Company within one year of the date the initial
qualification is denied but only if the application for
the qualification is made by the time prescribed by law
for filing the Company's return for the taxable year in
which the Plan is adopted, or such later date as the
Secretary of the Treasury may prescribe. After the
denial of qualification and upon receipt of evidence
thereof, the Contract and Policies shall be canceled
and the Insurance Company shall pay to the Company an
amount equal to the value of all Participants' Accounts
as determined by the Insurance Company in accordance
with the terms of the Contract or Policies.
(c) All contributions made by the Company are conditioned
on the deductibility of such contributions. In the
event that the deduction of a contribution is disallowed
under Code Section 404, such contribution (to the extent
disallowed) shall be refunded to the Company upon written
notice to the Insurance Company. A contribution shall not
be returned more than one year after the disallowance of
the contribution. If the Internal Revenue Service
determines that the Plan is not qualified, the amount
returned shall be determined under Paragraph 21.2.
4.7 Rollover Contributions. Subject to approval by the Administrator
and Insurance Company, an Employee who
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<PAGE>
satisfies the classification requirements of Section (D)(1) may
contribute to the Plan an amount which qualifies as a rollover
contribution within the meaning of Code Sections 402(a)(5),
403(a)(4), or 408(d)(3)(A)(ii). As such, the rollover
contribution must have been distributed to the Employee from a
qualified employee trust or qualified annuity plan; or from an
individual retirement arrangement ("IRA"), but only if such funds
originated from a qualified employee trust or qualified annuity
plan. The amount distributed to the Employee from the qualified
employee trust, qualified annuity plan or IRA must be transferred
to the Plan in cash within 60 days after the Employee receives
it. The maximum amount which the Employee may rollover is the
amount distributed to him less the sum of nondeductible employee
contributions made to the prior qualified employee trust or
qualified annuity plan. A lesser amount may be rolled over and
the difference retained by the Employee. The amount retained
shall be subject to tax.
The rollover contribution shall be paid into the Contract, and
invested as selected in Section (J)(2). Rollover contributions
shall be accounted for separately and shall be fully vested at
all times. The separate account established for rollover
contributions shall be withdrawn in accordance with Section
(L)(2).
4.8 Transfers of Amounts From Other Plans. If the Plan amends and
restates, or replaces a former plan that was qualified under Code
Sections 401(a) or 403(a), the Company may cause amounts from
such former plan to be transferred into the Plan and the Contract
subject to consent of the Insurance Company. At the discretion of
the Administrator and subject to the consent of the Insurance
Company, the Plan may also accept other plan-to-plan transfers.
The amounts so contributed shall be accompanied by written
instructions from the Company identifying: the former plan; this
Plan; the name of each Participant; the amount of any account
balance transferred to the Plan from the former plan attributable
to the contributions of each Participant and of the Company on
his behalf; the vesting percentage for amounts attributable to
Company contributions; and any other information that may be
required by the Insurance Company.
The Administrator shall advise the Insurance Company in writing
of the allocation of such amounts within the Contract. The
amounts so transferred may be deposited in the Participant's
Account in accordance with the most recent allocation
instructions or with special allocation instructions. The amounts
transferred shall be distributed to Participants in accordance
with the terms of the Plan.
4.9 Participant Deductible Voluntary Contributions. The Administrator
shall not accept Participant Deductible Voluntary Contributions
which are made for a taxable year beginning after December 31,
1986. Contributions made prior to that date shall be maintained
in a separate account which shall be nonforfeitable at all times.
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The account shall share in the gains and losses of the Plan in
the same manner as described in Paragraph 8.1. No part of the
Participant Deductible Voluntary Contribution account shall be
used to purchase life insurance. Subject to Part X, the
Participant may withdraw any part of the Deductible Voluntary
Contribution account by making a written application to the
Administrator.
4.10 Additional Requirements for Owner-Employees. If this Plan
provides contributions for one or more owner-Employees who
control both the business for which this Plan is established and
one or more other trades or businesses, this Plan and the plan
established for other trades or businesses must, when looked at
as a single plan, satisfy Code Sections 401(a) and (d) for the
Employees of this and all other trades or businesses.
If this Plan provides contributions for one or more owner-
Employees who control one or more 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 not less favorable than provided for
owner-Employees under this Plan.
If an individual is covered as an owner-Employee under the plans
of two or more trades or businesses which are not controlled and
the individual controls a trade or business, then the
contributions of the Employees under the plan of the trades or
businesses which are controlled must be as favorable as those
provided for him under the most favorable plan of the trade or
business which is not controlled.
For purposes of the preceding Paragraphs, an owner-Employee or
two or more owner-Employees shall be considered to control a
trade or business if such owner-Employee, or such two or more
owner-Employees together:
(a) own the entire interest in an unincorporated trade or
business, or
(b) in the case of a partnership, own more than 50 percent of
either the capital interest or the profits interest in
such partnership.
For purposes of the preceding sentence, an owner-Employee, or two
or more owner-Employees shall be treated as owning any interest
in a partnership which is owned, directly or indirectly, by a
partnership which the owner-Employee, or such two or more
owner-Employees, are considered to control within the meaning of
the preceding sentence.
4.11 Permitted Disparity.
(a) Profit-Sharing Plans Only: Unless elected otherwise in
Section (H), the Company Annual Contribution for the Plan
Year shall be allocated to each Participant's account:
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First, in the ratio that each Participant's Compensation
not in excess of the integration level bears to all
Participants' Compensation not in excess of the
integration level, but such allocation percentage shall
not be in excess of the maximum disparity rate.
Second, any remaining contribution shall be allocated to
each Participant's account in the ratio that each
Participant's Compensation for the Plan Year in excess of
the integration level bears to the excess Compensation of
all Participants. This excess contribution, as a
percentage of excess Compensation, cannot exceed two times
the allocation percentage of the above paragraph.
Third, any remaining Company Annual Contribution shall be
allocated to each Participant's account in the ratio that
each Participant's total Compensation bears to the sum of
all Participants' total Compensation.
(b) Money Purchase Plans Only: The Company Annual Contribution
for the Plan Year shall be allocated to each Participant's
account as provided in Section (H).
(c) The integration level shall be equal to the taxable wage
base or such lesser amount elected by the Company in
Section (H). The taxable wage base is the maximum amount
of earnings which may be considered wages for a year under
Code Section 3121(a)(1) in effect as of the beginning of
the Plan Year.
In all events, the excess contribution percentage under the Plan
shall exceed the base allocation percentage under the Plan by an
amount that is uniform for all Participants and does not exceed
the maximum disparity rate.
The maximum disparity rate shall be as follows:
If the integration level is more than $0 but not more than 20
percent of the taxable wage base, the rate shall be 5.7 percent.
If the integration level is more than 20 percent of the taxable
wage base but not more than 80 percent of the taxable wage base,
the rate shall be 4.3 percent.
If the integration level is more than 80 percent of the taxable
wage base, but less than 100 percent of the taxable wage base,
the rate shall be 5.4 percent.
If the integration level used is equal to the taxable wage base,
the rate shall be 5.7 percent.
The Company Annual Contribution for top-heavy plans shall be
allocated in accordance with Paragraph 17.2, Minimum Contribution
Under a Top-Heavy Plan.
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PART V - LIMITATION ON ALLOCATIONS
5.1 Maximum Permissible Amount. If the Participant does not
participate in, and has never participated in another qualified
plan maintained by the Company, a welfare benefit fund, as
defined in Code Section 419(e), maintained by the adopting
Company, or an individual medical account as defined in Code
Section 415(l)(2), maintained by the Company, which provides an
Annual Addition as defined in Paragraph 1.3, the amount of Annual
Additions which may be credited to the Participant's Account for
any Limitation Year shall not exceed the lesser of the Maximum
Permissible Amount or any other limitation contained in this
Plan. If the Company contribution that would otherwise be
contributed or allocated to the Participant's Account would cause
the Annual Additions for the Limitation Year to exceed the
Maximum Permissible Amount, the amount contributed or allocated
shall be reduced so that the Annual Additions for the Limitation
Year shall equal the Maximum Permissible Amount.
5.2 Estimate of Maximum. Prior to determining the Participant's
actual Compensation for the Limitation Year, the Company may
determine the Maximum Permissible Amount for the Participant on
the basis of a reasonable estimation of the Participant's
Compensation for the Limitation Year, uniformly determined for
all Participants similarly situated.
5.3 Reconciliation. As soon as is administratively feasible after the
end of the Limitation Year, the Maximum Permissible Amount for
the Limitation Year shall be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
5.4 Excess Amounts. If, pursuant to Paragraph 5.3 or as a
result of the allocation of forfeitures, there is an Excess
Amount, the excess shall be disposed of as follows:
(a) First, any Participant Nondeductible Voluntary
Contributions, and any earnings thereon, to the extent
they reduce the Excess Amount, shall be returned to the
Participant.
Second, any Participant Supplemental Contributions, and
any earnings thereon, shall be returned to the
Participant.
Third, any Participant Matched Contributions, and any
earnings thereon, shall be returned to the Participant.
(b) If after the application of Paragraph (a) an Excess Amount
still exists and the Participant is covered by the Plan at
the end of the Limitation Year, the Excess Amount in the
Participant's Account shall be held unallocated in a
suspense account and used to reduce Company contributions
(including any allocation of forfeitures) for such
Participant in the next
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Limitation Year, and each succeeding Limitation Year if
necessary.
If after the application of Paragraph (a) an Excess Amount still
exists, and the Participant is not covered by the Plan at the end
of the Limitation Year, the Excess Amount shall be held
unallocated in a suspense account. The suspense account shall be
applied to reduce future Company contributions (including
allocation of any forfeitures) for all remaining Participants in
the next Limitation Year, and each succeeding Limitation Year if
necessary.
The Excess Amount in a Participant's Account shall be determined
as being first from Company Annual Contributions, then from
Company Supplemental Contributions, and finally from Company
Qualified Matching Contributions. Neither the consent of the
Participant nor the Participant's Spouse shall be required to the
extent that the distribution is required to satisfy Code Section
415.
If a suspense account is in existence at any time during the
Limitation Year pursuant to this Paragraph 5.4, it shall
participate in the allocation of the gains and losses. All
amounts in a suspense account must be allocated to Participants
accounts before any Company or any Participant contributions may
be made to the Plan for that Limitation year. Excess amounts held
in the suspense account may not be distributed to Participants or
Former Participants.
5.5 If Company Maintains Other Defined Contribution Plans. Prior to
determining the Participant's actual Compensation for the
Limitation Year, the Company may determine the Maximum
Permissible Amount for a Participant in the manner described in
Paragraph 5.2. This Paragraph applies if, in addition to this
Plan, the Participant is covered under another qualified master
or prototype defined contribution plan maintained by the Company,
a welfare benefit fund, as defined in Code Section 419(e),
maintained by the Company, or an individual medical account, as
defined in Code Section 415(l)(2), maintained by the Company,
which provides an Annual Addition as defined in Paragraph 1.3,
during any Limitation Year. The Annual Additions which may be
credited to the Participant's Account under this Plan for any
such Limitation Year shall be limited in accordance with this
Paragraph, unless the Company provides other limitations in
Section (Q). Annual Additions shall not exceed the Maximum
Permissible Amount reduced by the Annual Additions credited to
the Participant's Account under the other plans and welfare
benefit funds for the same Limitation Year. If the Annual
Additions with respect to the Participant under other defined
contribution plans and welfare benefit funds maintained by the
Company are less than the Maximum Permissible Amount and the
Company contribution that would otherwise be contributed or
allocated to the Participant's Account under this Plan would
cause the Annual Additions for the Limitation Year to
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exceed this limitation, the amount contributed or allocated shall
be reduced so that the Annual Additions under all such plans and
funds for the Limitation Year shall 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 shall be contributed or allocated
to the Participant's Account under this Plan for the Limitation
Year.
As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year shall be determined on the basis of the
Participant's actual Compensation for the Limitation Year. If,
pursuant to the preceding sentence 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 shall be deemed to
consist of the Annual Additions last allocated, except that
Annual Additions attributable to a welfare benefit fund or
individual medical account shall be deemed to have been allocated
first regardless of the actual allocation date.
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
shall be the product of:
(a) The total Excess Amount allocated as of such date, times
(b) The ratio of (i) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under
this Plan to (ii) the total Annual Additions allocated to
the Participant for the Limitation Year as of such date
under this and all the other qualified master or prototype
defined contribution plans.
Any Excess Amounts attributed to the Plan shall be disposed of in
the manner described in Paragraph 5.4.
5.6 If Company Maintains Other Plans. If the Participant is covered
under another qualified defined contribution plan maintained by
the Company which is not a master or prototype plan, Annual
Additions which may be credited to the Participant's Account
under this Plan for any Limitation Year shall be limited in
accordance with Paragraphs 5.1 through 5.6 as though the other
plan were a master or Prototype Plan unless the Company provides
other limitations in Section (Q).
If the Company 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 shall
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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 shall be limited in accordance with Section
(Q).
5.7 Controlled Group of Employers, Etc. For purposes of this Part,
Company shall mean the Company that adopts this Plan, and all
members of a controlled group of corporations (as defined in Code
Section 414(b) as modified by Code Section 415(h)), all commonly
controlled trades or businesses (as defined in Code Section
414(c) as modified by Code Section 415(h)), or affiliated service
groups (as defined in Code Section 414(m)), of which the adopting
Company is a part, and any other entity required to be aggregated
with the Company pursuant to regulations under Code Section
414(o).
5.8 Definitions.
(a) Defined Benefit Fraction - A fraction, the numerator of
which is the sum of a Participant's Projected Annual
Benefit under all the defined benefit plans (whether or
not terminated) maintained by the Company, and the
denominator of which is the lesser of: 125 percent of the
dollar limitation determined for the Limitation Year under
Code Section 415(b) and (d) or 140 percent of the highest
average Compensation, including any adjustments under Code
Section 415(b).
The highest average Compensation is the Participant's average
Compensation for the three consecutive Years of Service with the
Company that produces the highest average. A Year of Service with
the Company is the 12-consecutive month period defined in
Paragraph 1.41.
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 Company which were in existence on May 6, 1986,
the denominator of this fraction shall not be less than 125
percent of the sum of the annual benefits under such plans which
the Participant had accrued as of the close of the last
Limitation Year beginning before January 1, 1987, disregarding
any changes in the terms and conditions of the Plan after May 5,
1986. The preceding sentence applies only if the defined benefit
plans individually and in the aggregate satisfied the
requirements of Code Section 415 for all Limitation Years
beginning before January 1, 1987.
(b) Projected Annual Benefit - The annual retirement benefit
(adjusted to an actuarially equivalent straight life
annuity if such benefit is expressed in a form other than
a straight life annuity or qualified joint and survivor
annuity) to which the Participant would be entitled under
the terms of the Plan assuming:
(i) the Participant shall continue employment until normal
retirement date under the Plan (or current age, if later)
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and
(ii) the Participant's Compensation for the current
Limitation Year and all other relevant factors used to
determine benefits under the Plan shall remain constant
for all future Limitation Years.
(c) Defined Contribution Fraction - A fraction, the
numerator of which is the sum of the Annual Additions to
the Participant's Accounts under all the defined
contribution plans (whether or not terminated) maintained
by the Company for the current and all prior Limitation
Years (including the Annual Additions attributable to the
Participant's Nondeductible Voluntary Contributions to all
defined benefit plans, whether or not terminated,
maintained by the Company and the Annual Additions
attributable to all welfare benefit funds, as defined in
Code Section 419(e), and individual medical accounts, as
defined in Code Section 415(l)(2), maintained by the
Company), 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 Company (regardless
of whether a defined contribution plan was maintained by
the Company). The maximum aggregate amount in any
Limitation Year is the lesser of: 125 percent of the
dollar limitation determined under Code Sections 415(b)
and (d) in effect under Code Section 415(c)(1)(A) or 35
percent of the Participant's Compensation for such year.
If the Employee was a Participant as of the end of the
first day of the first Limitation Year beginning after
December 31, 1986, in one or more defined contribution
plans maintained by the Company which were in existence on
May 6, 1986, the numerator of this fraction shall 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, shall 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 6, 1986, but using
the Code Section 415 limitation applicable to the first
Limitation Year beginning on or after January 1, 1987.
PART VI - PLAN INVESTMENT - CONTRACT
6.1 Funding Policy. Plan benefits shall be provided under a Contract
owned by the Company and any Policies purchased under Paragraph
7.1. The Company shall have the duty to establish attending
policy to carry out the objectives of
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the Plan. The funding policy is intended to establish a desired
ratio of fixed income to equity risk for the Plan taking into
account plan liquidity and diversification needs, the type of
qualified plan and the financial stability of the Company. The
funding policy shall include the selection of investment funds
offered by the Insurance Company and a determination of the
portion of contributions and funds held under the Contract to be
invested in the investment funds selected. The general funding
policy of the Plan shall be at all times to maintain a balance
between safety in capital investment and investment return. The
funding policy should consider anticipated future contributions
and rates of return on investments and should be designed to meet
the short and long-term financial needs of the Plan. Once the
Company has directed the investment of Plan assets under the
Contract to achieve the basic assets mix objective, the Company
shall monitor the Plan's participation in investment funds under
the Contract. The Company shall meet periodically for the purpose
of reviewing and, if necessary, revising the funding policy of
the Plan.
The Company may request the Insurance Company to amend the
Contract to change the investment funds offered under the
Contract. Any actions taken by the Company shall be communicated
in writing to the Administrator and shall be recorded in the
official records of the Company. The Company may delegate the
responsibility for allocation of Plan assets among investment
funds maintained by the Insurance Company to an investment
manager by entering into an agreement for discretionary asset
management services. An investment manager named by the Company
shall serve at the pleasure of the Company, but may resign by a
written resignation to the Company. The Company shall
periodically review the performance of the investment manager.
6.2 Contract. The Plan shall be funded by a Contract issued by the
Insurance Company. The Company shall execute the application for
the Contract and shall be the owner of such Contract. The
Contract shall provide for investment of contributions in the
general investment account and/or separate investment accounts
offered by the Insurance Company. The Contract shall provide for
the valuation of assets and Participants' Accounts as of each
Valuation Date. The Contract shall provide the terms and
conditions by which sums may be transferred between such
investment funds or withdrawn from the Contract.
6.3 Insurance Company's Authority to Direct Investments. The
Insurance Company shall be the fiduciary with authority to carry
out the funding policy of the Plan subject to the following
limitations:
(a) All contributions made under the Plan for a Participant,
less applicable Plan and Contract expenses, and premiums
to provide Policies shall be invested, as directed by the
Company (or investment manager, if appointed) in written
allocation
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instructions to the Insurance Company in the general
investment account and/or separate investment accounts of
the Insurance Company to the extent permissible under the
Contract.
(b) The Insurance Company shall follow directions of the
Company (or investment manager, if appointed) concerning
the exercise or non-exercise of any power or options
concerning the Contract and any Policies held under the
Plan. However, if sums under the contract are invested in
the separate investment accounts of the Insurance Company,
the Insurance Company retains the right to, in its sole
discretion, exercise any of the powers of an owner with
respect to stocks, bonds, securities or other property
held in the separate investment accounts. Sums held under
the Contract may be transferred in accordance with its
terms among investment funds within the Contract by
direction of the Company (or investment manager, if
appointed).
(c) The Insurance Company shall follow the directions of each
Participant to the extent provided in Paragraph 6.4.
(d) The Insurance Company shall invest funds according to the
stated objectives of its various investment funds. The
Company may obtain a description of such stated objectives
from the Insurance Company. The Insurance Company does
not make investments with a view to the needs of a
particular plan. The Company (or investment manager, if
appointed) retains the responsibility for allocation of
funds between the investment funds.
(e) For purposes of determining the fiduciary responsibilities
of the Insurance Company, the Contract is the Plan asset
with respect to contributions invested in the general
investment account. To the extent the Contract also
invests in separate investment accounts of the Insurance
Company, the Plan assets shall be the assets held by the
separate investment accounts.
6.4 Participant-Directed Investments. If permitted in Section (J)(1),
each Participant shall designate in writing the investment funds
under the Contract in which his Participant contributions and
Company contributions on his behalf are to be invested. The
investment funds which shall be available shall be stated in the
Contract. Subject to the terms of the Contract, such Participant
direction may be to allocate 100 percent of such contributions to
one of the investment funds or to allocate such contributions
among more than one investment fund. The Administrator shall
establish the minimum percentages of any contribution on account
of any Participant that may be allocated to each investment fund.
These integral percentages may not be less than 10 percent of
such contribution and the contribution must be exact multiples of
5 percent. Forfeitures shall be reallocated in the same
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percentages and in the same investment funds allocable to Company
contributions. A Participant may elect in writing to change his
allocation of future contributions. Such election shall become
effective upon receipt by the Insurance Company. Subject to any
restrictions in the Contract, a Participant may elect in writing
to transfer all or a portion of his Participant's Account between
investment funds as often as once every three months (or more
often as permitted by the Contract). There is no charge for
changing allocations of future contributions; a charge shall be
made against a Participant's Account for a transfer between funds
of amounts already invested unless the Company agrees otherwise.
If a Participant fails to make an initial written election, his
Participant's Account shall be allocated to an investment fund
designated by the Company and if none is designated, to the
Guaranteed Interest Fund under the Contract.
6.5 Combining Assets of More Than One Plan in a Single Contract. With
the consent of the Insurance Company, the assets of the Plan may
be combined with the assets of any other qualified retirement
plan of the Company, or an affiliated Company which is a member
of the same controlled group of corporations (as defined in Code
Section 414(b)), the same controlled group of trades or
businesses (as defined in Code Section 414(c)) or the same
affiliated service group (as defined in Code Section 414(m)) as
the Company; in a single Contract for investment purposes without
terminating the separateness of such Plan; provided that, in such
event:
(a) Accounting records shall be maintained so that the assets
of each Plan can be separately determined.
(b) All contributions to the Contract shall be accompanied by
written instructions from the Company designating the
amount or amounts allocable to each Plan in which such
Company participates.
(c) None of the contributions and assets attributable to one
Plan shall be used to pay benefits or expenses under any
other plan.
So long as the foregoing provisions are complied with, the
provisions of Paragraph 19.7 shall not be deemed to apply to such
combining of assets in one Contract.
PART VII - PLAN INVESTMENT - POLICIES
7.1 Request of Participant. At the Participant's request and if
permitted by Section (K), the Company shall purchase life
insurance Policies from the Insurance Company for the benefit of
a Participant and his Beneficiary and charged against the
Participant's Account. The premiums for the Policies shall be
paid with Company contributions.
7.2 Limitations on Purchase. In the event a Participant
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directs the Company to purchase a Policy or Policies on the
Participant's life, the Company shall limit the amount of Company
contributions to be invested in the Policies as follows:
(a) Ordinary life - For purposes of these incidental insurance
provisions, ordinary life insurance policies are policies
with both nondecreasing death benefits and nonincreasing
premiums. If such policies are purchased, less than 1/2 of
the aggregate Company contributions allocated to any
Participant shall be used to pay the premiums attributable
to them.
(b) Term and universal life - No more than 1/4 of the
aggregate Company contributions allocated to any
Participant shall be used to pay the premiums on term life
insurance policies, universal life insurance policies, and
all other life insurance policies which are not ordinary
life.
(c) Combination - The sum of 1/2 of the ordinary life
insurance premiums and all other life insurance premiums
shall not exceed 1/4 of the aggregate Company
contributions allocated to any Participant.
7.3 Company is Owner. The Company shall apply for and shall be the
owner of any Policies purchased under the terms of this Plan. The
Policies must provide that proceeds shall be payable to the
Company, however the Company shall be required to pay over all
proceeds of the policies to the Participant's designated
Beneficiary in accordance with the distribution provisions of
this Plan. A Participant's Spouse shall be the designated
Beneficiary of the proceeds in all circumstances unless a
Qualified Election in accordance with Paragraph 1.37. Under no
circumstances shall the Plan retain any part of the proceeds. In
the event of any conflict between the terms of this Plan and the
terms of any Policy purchased hereunder, the Plan provisions
shall control.
7.4 Premium Payments. All Policies shall, as far as is practical,
have a common premium due date. The Company shall pay the initial
and renewal premiums under the Policies on any Participant's
life. If no contribution is to be made at the time a policy
premium is due, the Company may pay the premium by a policy loan
or by withdrawing the amount from the Participant's Account under
the Contract if the limits set forth in Paragraph 7.2 are not
exceeded.
7.5 Dividends. At the discretion of the Company, a Policy may provide
that: (i) dividends be applied to accumulate with interest, or to
purchase annual additions, in which case dividends shall be added
to the proceeds of the Policy for the benefit of the Participant
or his Beneficiary, or (ii) dividends shall be used to reduce
premiums. Any dividends paid after retirement, however, shall be
paid to the Participant; and any dividends paid after the
Participant's death shall be added to and become a part of the
proceeds
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of the Policy.
7.6 Distribution of Policies. Subject to Paragraph 14.5, if
applicable, the Policies on the Participant's life shall be
converted to cash or an annuity or distributed to the Participant
upon commencement of benefits.
7.7 Change in Amount of Insurance. When an increase or decrease of
the amount of insurance is required because of a change in the
amount of contributions allocated to the Participant or because
the aggregate Policy premiums would exceed the limits in
Paragraph 7.2, the Company shall advise the Insurance Company to
adjust the amount of the Participant's Policies.
7.8 Policies upon Termination of Employment. In the event a
terminated Participant is entitled to the full value of a Policy
on his life, the Participant may request the Administrator to
transfer and distribute the Policy to him. In the event a
terminating Participant is not entitled to the full value of the
Policy, the Administrator after consulting with the Participant,
may:
(a) Surrender the Participant's Policy and pay the
Participant's vested portion to him;
(b) Obtain a policy loan equal to the nonvested portion of its
value and distribute the Policy to him; or
(c) Sell the Policy to the Participant for an amount equal to
its cash surrender value. The proceeds of the sale shall
be credited to the Participant's Account. If the
Participant declines to purchase the Policy, the Policy
may also be sold to: (i) a relative of the Participant
who is a Beneficiary under the Policy, (ii) the Company,
or (iii) to another employee benefit plan in which he is a
Participant.
PART VIII - PARTICIPANT'S ACCOUNTS
8.1 Participant's Account. A separate account shall be maintained for
each Participant to which shall be credited the Company
contributions and earnings thereon. At any time, a Participant's
account shall equal: (i) the value of the account established and
maintained under the Contract on behalf of the Participant as of
the latest Valuation Date and (ii) the value of any Policies on
the life of the Participant.
Contributions of a Participant shall be accounted for separately
from the Company's contributions. The Insurance Company shall
maintain appropriate contribution accounts for each type of
contribution referred to in Part IV and made to the Plan,
including accounts for:
(a) Company Matching Contributions (if elected in Section
(H));
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(b) Company Supplemental Contributions (if elected in Section
(H));
(c) Company Annual Contributions (if elected in Section (H));
(d) Company Qualified Nonelective Contributions (if elected in
Section (H));
(e) Participant Matched Contributions (if elected in Section
(G)(2));
(f) Participant Supplemental Contributions (if elected in
Section (G)(3));
(g) Participant Nondeductible Voluntary Contributions (if
elected in Section (G)(4));
(h) Rollover Contributions; and
(i) Direct transfers from other plans.
Contributions made by or for a Participant shall be credited to
the Participant's Account as of the date such contributions are
applied under the Contract. The amount of any premium for
Policies purchased by the Company shall be charged against the
value of the Participant's separate accounts under this Plan.
Contract expenses shall be charged against the value of the
Participant's accounts under the Contract, unless the Company
agrees to pay them.
Premiums for Policies on the life of the Participant shall be
paid for with contributions made by the Company as selected in
Section (K).
8.2 Valuation of Accounts. The Administrator shall determine the
value of each Participant's account at least annually as of the
last Valuation Date on or prior to the last day of the Plan Year.
PART IX - VESTING
9.1 Full Vesting in Certain Separate Accounts. Each Participant shall
at all times have a 100 percent vested interest in the following
accounts:
(a) Participant Matched Contribution account (if elected in
Section (G)(2));
(b) Participant Supplemental Contribution account (if elected
in Section (G)(3));
(c) Participant Nondeductible Voluntary Contribution account
(if elected in Section (G)(4));
(d) Rollover contributions account; and
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(e) Account for direct transfers from other plans.
9.2 Vesting in Participant's Accounts Attributable to Company
Contributions. Each Participant shall be vested in the value of
his: (i) Company Matching Contribution account, if any; (ii)
Company Supplemental Contribution account, if any; (iii) Company
Annual Contribution Account, if any; and (iv) the cash surrender
value of any Policy on his life derived from Company
contributions as follows:
(a) 100 percent upon attainment of Participant's Normal
Retirement Date (as elected in Section (F)(1));
(b) 100 percent upon retirement on or after Participant's
Early Retirement Date (if elected in Section (F)(2));
(c) 100 percent upon Participant's death prior to the date
an annuity becomes effective;
(d) 100 percent upon Participant's Disability Retirement
Date (if elected in Section (F)(3)); or
(e) at any other time, including Termination of Employment,
the percentage determined in accordance with the Vesting
schedule in Section (O).
9.3 Vesting Years of Service/Breaks in Service. All Years of Service
with the Company shall be included for purposes of determining
the Participant's vested interest under Paragraph 9.2(e), except
that Years of Service shall not include Service disregarded in
Section (O)(3)(a) through (f). For purposes of computing a
Participant's nonforfeitable right to the Account balance derived
from Company contributions, the Years of Service and One-Year
Breaks in Service shall be the Plan Year.
In the case of a Participant who incurred a One-Year Break in
Service, Years of Service before such Break shall not be taken
into account until the Participant has completed a Year of
Service after such One-Year Break in Service.
In the case of a Participant who has 5 or more consecutive
One-Year Breaks in Service, all service after such Breaks in
Service shall be disregarded for the purpose of vesting the
Company-derived account balance that accrued before such Breaks
in Service. Such Participant's pre-break service shall count in
vesting the post-break Company- derived account balance only if
either:
(i) such Participant has any nonforfeitable interest in the
account balance attributable to Company contributions at
the time of separation from service; or
(ii) upon returning to service, the number of consecutive
One-Year Breaks In Service is less than the number of
Years Of Service.
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Separate accounts shall be maintained for the Participant's
pre-break and post-break Company-derived account balance. Both
accounts shall share in the earnings and losses of the fund.
PART X - IN-SERVICE WITHDRAWALS
10.1 Conditions for Withdrawal. A Participant or former Participant
may request cash withdrawals under the Plan no more than twice
during any twelve-month period commencing with any withdrawal,
subject to the sequence and conditions for the withdrawal set
forth in Paragraph 10.2 and Section (L). The minimum amount of
withdrawal allowed shall be set by the Administrator. If
Paragraph 14.4 is operative, withdrawals that may be made are
subject to the spousal and Participant consent requirements
contained in Code Sections 401(a)(11) and 417.
10.2 Sequence and Conditions for Withdrawal. A Participant shall
request the Administrator to effect a cash withdrawal and such
amounts shall be debited from his Participant's Account. The
Administrator shall withdraw amounts in the following sequence
and upon the following conditions:
(a) First (if permitted by Section (L)(1)(a),(b) and (c)), a
Participant may withdraw all or part of the value from his
contribution accounts for Participant Nondeductible
Voluntary Contributions, for Participant Matched
Contributions, and for Participant Supplemental
Contributions.
(b) Second (profit sharing plans only if permitted by Section
(L)(2)), a Participant may withdraw all or part of the
value of his contribution account for Rollover
Contributions.
(c) Third (if permitted by Section (L)(3)(a)), a Participant
may withdraw all or part of the full value of his vested
interest determined under Section (O) in his contribution
accounts for: Company Matching Contributions; Company
Supplemental Contributions; Company Annual Contributions;
and transfers from Company-provided benefits from other
plans.
If a Participant receives a withdrawal attributable to
Company contributions, the Participant's future vested
interest after the distribution shall be equal to an
amount ("X") determined by the formula:
X = P(AB + (R x D)) - (R x D)
For purposes of applying the formula: P is the
nonforfeitable percentage at the relevant time, AB is the
account balance at the relevant time, D is the amount of
the withdrawal, and R is the ratio of the account balance
at the relevant time to the account balance after
distribution.
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Integrated Plans: No withdrawals shall be permitted from
the contribution account for Company contributions.
(d) Fourth (if permitted by Section (L)(3)(a), a Participant
may withdraw all or part of the value of his account for
Company Qualified Nonelective Contributions if the
Participant is age 59 1/2 or older.
10.3 No Forfeiture of Participant's Account Attributable to
Participant Contributions. No forfeiture of the Participant's
account shall occur solely as a result of the withdrawal of
Participant contributions.
PART XI - PARTICIPANT LOANS
11.1 In General. If permitted in Section (M) and if the Company has
designated Trustees for this loan program pursuant to a Trust
Agreement, a Participant or Beneficiary who is a
party-in-interest with respect to the Plan may request a loan
under the Plan. All loans made by the Trustees shall be subject
to the terms and conditions set forth in this Part and the Trust
Agreement. A loan to a Participant is considered a
Participant-directed investment.
The Trustees shall have the responsibility to develop rules
regarding the financial ability of the Participant to repay the
amount he seeks to borrow and the authority to adopt additional
terms and conditions, provided that all such rules, terms and
conditions shall apply to all Participants uniformly. Loans shall
be made available to all Participants and Beneficiaries who are
parties in interest on a reasonably equivalent basis and such
availability shall be communicated to all such individuals. The
amount available to Highly Compensated Employees shall not be in
an amount greater than the amount made available to other
Employees.
No loan shall be made to any owner-Employee or shareholder-
Employee unless such Participant has applied for and received a
prohibited transaction exemption. For purposes of this
requirement, a shareholder-Employee means an Employee or officer
of an electing small business (Subchapter S) corporation who owns
(or is considered as owning within the meaning of Code Section
318(a)(1)), on any day during the taxable year of such
corporation, more than 5 percent of the outstanding stock of the
corporation.
The Participant may decide from which contribution account(s) the
loan shall be paid. The amount withdrawn from the Participant's
accounts shall be prorated across all funds in which the accounts
are invested.
11.2 Application for Loans. The Participant shall make written
application for a loan to the Trustees, on a form provided by the
Administrator and executed by the Participant. The Participant
shall execute a promissory note in the amount
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of the loan including interest, payable to the Trustees, which
indicates the repayment period, the amount of loan, the rate of
interest and other provisions pertaining to repayment of the
loan.
Loans must be adequately secured. At the time each new loan is
made, in no event shall the sum of the new loan and remaining
principal balance of any loan outstanding be secured by less than
one-half of the Participant's current vested account balance
under the Plan. Additionally, no more than 50 percent of the
Participant's vested account balance will be considered by the
Plan as security for the outstanding loan balance of all Plan
loans made to that Participant.
If Paragraph 14.3 is operative, a Participant must obtain the
consent of his Spouse, if any, to use the account balance as
security for the loan. Spousal consent shall be obtained no
earlier than the beginning of the 90-day period that ends on the
date on which the loan is to be so secured. The consent must be
in writing, must acknowledge the effect of the loan, and must be
witnessed by a plan representative or notary public. Such consent
shall thereafter be binding with respect to the consenting Spouse
or any subsequent Spouse with respect to that loan. A new consent
shall be required if the account balance is used for
renegotiation, extension, renewal, or other revision of the loan.
If valid spousal consent has been obtained in accordance with the
prior paragraph, then, notwithstanding any other provision of
this Plan, the portion of the Participant's vested account
balance used as a security interest held by the Plan by reason of
a loan outstanding to the Participant shall be taken into account
for purposes of determining the amount of the account balance
payable at the time of death or distribution, but only if the
reduction is used as repayment of the loan.
11.3 Amount of Loan. The minimum loan shall be $1,000. The aggregate
amount of any new loan and of all other outstanding loans made
to the Participant shall be limited to the lesser of:
(a) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans during the 1-year period
ending on the day before the loan application is approved
by the Trustees over the outstanding balance of loans from
the Plan on the date the loan application is approved, or
(b) One-half the present value of the nonforfeitable accrued
benefit of the Participant.
For the purpose of the above limitation, all loans from all plans
of the Company and other members of a group of Companies
described in Code Sections 414(b), 414(c) and 414(m) are
aggregated.
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11.4 Interest Rate. Loans must bear a reasonable rate of interest. The
rate of interest shall be the prevailing rate used by commercial
lending institutions.
11.5 Repayments. The loan repayment period shall not exceed five
years. If elected in Section (M)(2), this 5-year requirement
shall not apply to any loan used to acquire a principal residence
for the Participant. The maximum repayment period for such home
loans shall be a reasonable number of years.
Repayment of loans (principal and interest) shall be by payroll
deduction, on a level amortization basis over the term of the
loan. All loan repayments shall be transmitted monthly to the
Insurance Company, and invested pursuant to the terms of the
Contract. Subject to approval by the Insurance Company, a
Participant may prepay all or a portion of the loan principal
prior to separation from service.
Loan repayments returned to the Participant's account(s) shall be
prorated based on the amount of the loan withdrawn from the
account(s). The money shall be placed in the Contract's funds
based on the Participant's and/or Company's current investment
selections, unless otherwise stipulated in a prepayment agreement
with the Insurance Company. In no event shall any part of a
Participant's loan repayment be allocated to an alternate payee's
account.
11.6 Default and/or Acceleration. Default shall be defined in the
Participant's promissory note or other loan documents. The
Company must notify the Insurance Company when a Participant
defaults on a loan repayment. In the event the Participant
defaults on a loan repayment, the Trustees shall notify the
Participant that the loan is immediately due and payable. The
Trustees may also direct the Administrator to refuse to make any
Plan benefit payment otherwise due to the Participant or
Beneficiary until scheduled loan repayments are made, or to
offset overdue loan repayments against the amount of benefits
which otherwise may be due. In the event of default, attachment
of security shall not occur until a distributable event occurs in
the Plan.
The loan must be paid in full upon the Participant's death,
disability or separation from service, upon the Participant's
failure to make loan repayments for three consecutive months or
failure to receive Compensation in an amount at least equivalent
to the periodic loan repayment amount for over three consecutive
months, or upon termination of this Plan or the Trust Agreement.
The Trustees may also direct the Administrator to offset the
remaining loan balance against the amount of benefits which
otherwise may be due the Participant or Beneficiary.
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PART XII - TERMINATION OF EMPLOYMENT
12.1 Notice of Termination of Employment. If the Termination of
Employment of a Participant occurs, the Company shall immediately
give written notice to the Administrator of the date of
Termination of Employment of such Participant. Upon receipt of
such notice, the Administrator shall determine the Participant's
vested interest in his Participant's Account pursuant to Part IX,
Vesting, or if the Plan is or was top-heavy pursuant to Part
XVII.
12.2 Amount of Participant's Benefit. The amount of a Participant's
Plan benefit upon Termination of Employment shall equal his
vested Participant's Account. A Participant whose Termination of
Employment occurs prior to the end of the Plan Year shall share
in Company contributions and reallocations of forfeitures
credited prior to his Termination of Employment, but shall or
shall not share in Company contributions and reallocated
forfeitures for such Plan Year credited after the date of his
Termination of Employment as elected in Section (H).
12.3 Participant's Election of a Form of Benefit. If Termination of
Employment occurs, the Participant shall receive his vested
Participant's Account in a form of benefit elected by him. The
Participant's election shall occur within 60 days after the forms
of benefit first become available to him. Written notice shall be
made on a form provided by the Administrator. The election once
made shall be irrevocable. The forms of benefit are:
(a) Option A. The Participant may elect to continue his
Account until age 70 1/2(if elected in Section (P)(1)),
his Normal Retirement Date or earlier, at which time he
may elect Option B, Option C, Option D, or Option E (if
permitted in Section (P)(1)). If the Participant dies
prior to commencement of retirement benefits, the value of
the Participant's Account shall be paid in one sum to his
Beneficiary.
(b) Option B. The Participant may elect to receive an annuity
in accordance with Part XIV, Retirement Benefits, to
commence on his Early Retirement Date, if permitted in
Section (F)(2), or on his Normal Retirement Date as
specified in Section (F)(1).
(c) Option C. If permitted in Section (P)(1), the Participant
may elect a one-sum cash payment. Such election is subject
to a Qualified Election if Paragraph 14.3 is operative.
(d) Option D. If permitted in Section (P)(1), the Participant
may elect installment payments, in accordance with
Paragraph 14.2, to commence upon separation from service.
(e) Option E. If permitted in Section (P)(1) and in accordance
with procedures set forth in the recipient
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plan, the Participant may elect a plan-to-plan transfer.
The account balance shall be transferred to the
Participant's account under a plan maintained by his new
company that is qualified under Code Section 401(a) or
403(a).
If the value of the Participant's vested Account balance derived
from Company and Participant contributions exceeds (or at the
time of any prior distribution exceeded) $3,500, and the account
balance is immediately distributable, the Participant and the
Participant's Spouse (or where either the Participant or the
Spouse has died, the survivor), must consent to any distributions
of such Account balance. Consent is not valid unless the
Administrator notifies the Participant and the Participant's
Spouse of the right to defer any distribution until the
Participant's Account balance is no longer immediately
distributable. The notice shall acknowledge the right, if any, to
defer distributions and must describe the investment features.
One-sum cash payments shall be made during the Plan Year in which
the event which gives rise to the distribution occurs or as soon
thereafter as is reasonably practical.
An amount distributed to a Participant prior to his attaining age
59 1/2 (except for amounts distributed due to disability, death,
separation from service on or after attaining age 55 or equal
periodic payments made for the life or life expectancy of the
Participant and Spouse) may be deemed to be a premature
distribution made during a taxable year. The distribution is
subject to a 10 percent excise tax on the portion of the amount
received which is includible in his gross income for the taxable
year.
12.4 Forfeiture of Nonvested Portion of Participant's Account. If a
Participant terminates employment, the amounts which were in
excess of his vested interest shall be withdrawn from the
appropriate investment funds under the Contract and any Policies
and shall be allocated to the Guaranteed Interest Fund under the
Contract. If the value of the Participant's vested account
balance derived from Company and Participant contributions is not
greater than $3,500, the Participant shall receive a distribution
of the value of the entire vested portion of such account balance
and the nonvested portion shall be treated as a forfeiture. For
purposes of this Paragraph, if the value of a Participant's
vested account balance is zero, the Participant shall be deemed
to have received a distribution of such vested account balance. A
Participant's vested account balance shall not include
accumulated Participant Deductible Voluntary Contributions within
the meaning of Code Section 72(o)(5)(B) for Plan Years beginning
prior to January 1, 1989.
If a Participant terminates service, and elects, in accordance
with Section (P), to receive the value of the Participant's
vested account balance, the nonvested portion shall be treated as
a forfeiture. If the Participant elects to have distributed less
than the entire vested
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portion of the account balance derived from Company
contributions, the part of the nonvested portion that shall be
treated as a forfeiture is the total nonvested portion multiplied
by a fraction, the numerator of which is the amount of the
distribution attributable to Company contributions and the
denominator of which is the total value of the vested Company
derived account balance.
If a Participant receives or is deemed to receive a distribution
pursuant to this Paragraph and the Participant resumes employment
covered under this Plan before incurring five consecutive
One-Year Breaks in Service, the amount so forfeited, unadjusted
for subsequent gains and losses, shall be restored to the
Participant's Account at the end of the Plan Year, subject to the
repayment requirement if elected in Section (P)(2).
Permissible sources for restoration of the Participant's Account
are amounts forfeited from his Account, other forfeitures, and if
necessary an extraordinary Company contribution sufficient when
added to the forfeiture to restore the Participant's Account.
In the case of a Participant who receives a distribution of part
of his Account attributable to Company contributions and does not
repay under Paragraph 12.5, the Participant's future
nonforfeitable interest at any relevant time shall be equal to an
amount ("X") determined by the formula:
X = P(AB + (R x D)) - (R x D)
For purposes of applying the formula: P is the nonforfeitable
percentage at the relevant time, AB is the account balance at the
relevant time, D is the amount of the distribution, and R is the
ratio of the account balance at the relevant time to the account
balance after distribution.
12.5 Repayment. In accordance with Section (P)(2), a returning
Participant may repay the full amount of any distribution from
the Plan attributable to Company contributions made on account of
Termination of Employment. All or part of the amount of the
distribution attributable to Participant contributions may also
be repaid. Such repayment, if any, must be made before the
earlier of:
(a) five years after the first date on which the Participant
is subsequently reemployed by the Company; or
(b) the date the Participant incurs five consecutive One- Year
Breaks in Service following the date of distribution.
Any Policy distributed to the Participant that is still in effect
on a premium-paying basis on the date of repayment may be
transferred to the Plan, and the cash value shall be counted as
part of the amount repaid.
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PART XIII - FORFEITURES
13.1 Occurrence of Forfeiture. In accordance with Paragraph 12.4, a
forfeiture shall occur as of the date a Participant terminates
employment with the Company and receives a distribution. If the
Participant does not receive a distribution, forfeiture shall
occur after five (5) consecutive One-Year Breaks in Service. The
forfeiture shall be the Participant's account attributable to
Company Matching Contributions, Company Supplemental
Contributions and Company Annual Contributions which has not
become vested under Part IX. In addition, a Highly Compensated
Employee shall forfeit his nonvested Company contributions (and
earnings thereon) in excess of the amount permitted under the
Actual Contribution Percentage limits of Paragraph 4.3 and such
forfeitures shall be applied under Paragraph 4.4(b). A
Participant shall not forfeit any part of his nonvested
Participant's account attributable to Company contributions
solely as a result of a withdrawal prior to retirement under Part
X. Furthermore, a Participant shall not forfeit any part of his
Participant's account for any other cause.
The nonvested portion of a Company contribution or a forfeiture
allocation credited to a Participant's account in a Plan Year
following his Termination of Employment shall be allocated at the
next allocation date.
13.2 Application of Forfeitures. Forfeitures shall first be allocated
to the accounts of Participants whose benefits are entitled to be
restored under Paragraph 12.4. The remaining forfeitures shall
then be applied in the manner elected in Section (I). If
forfeitures are reallocated, a Participant whose employment is
terminated before the end of the Plan Year, but after he has
completed 1,000 Hours of Service or more during the Plan Year
shall or shall not share in reallocated forfeitures for the Plan
Year allocated after the date of his Termination of Employment as
elected in Section (I). Forfeitures derived from Company Matching
Contributions, Company Supplemental Contributions and Company
Annual Contributions shall be reallocated to the account for
Company Annual Contributions of each Participant who is entitled
to share in the forfeitures. Forfeitures shall not be reallocated
to a Participant to the extent it would be an Excess Amount under
Part V, Limitation on Allocations. If more than one Company
adopts the Plan, any forfeitures reallocated will be applied in
accordance with Section (I).
PART XIV - RETIREMENT BENEFITS
14.1 Normal Form of Benefit. The normal form of benefit for the
profit-sharing plan shall be a one-sum cash payment unless
Paragraph 14.3 is operative.
For a money purchase plan, the normal form of benefit shall be a
full cash refund life annuity. The normal form of
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benefit shall be paid to a Participant who is not married and
does not elect a one-sum cash payment or an optional form of
benefit under 14.2. A married Participant's entire account
balance (attributable to both Company and Participant
contributions) shall be paid in the form of an Automatic Joint
and Survivor Annuity, unless a one-sum cash payment or an
optional form of benefit is selected (pursuant to a Qualified
Election) within the 90-day period ending on the annuity starting
date. The annuity starting date is the first day of the first
period for which an amount is paid as an annuity or any other
form.
14.2 Optional Forms of Benefit. The Participant may elect an
installment payment or an annuity payment available under the
Contract instead of the normal form described in Paragraph 14.1:
(a) Selection of Installment Payments. Installment payments
shall be made over a period not to exceed the
Participant's (or the Participant's and Spouse's) life
expectancy.
(b) Selection of annuity payment. Annuity payment may be made
over one of the following periods:
(i) the life of the Participant,
(ii) the lives of the Participant and a designated
Beneficiary,
(iii) a period certain and continuous not extending
beyond the life expectancy of the Participant, or
(iv) a period certain and continuous not extending
beyond the joint and last survivor expectancy
of the Participant and a designated Beneficiary.
Any annuity contract transferred or purchased under this part
must be nontransferable. The terms of any annuity contract
purchased and distributed by the Plan to a Participant and Spouse
shall comply with the requirements of this Plan.
14.3 Notice Requirements. This Paragraph applies unless Paragraph 14.4
is operative. This Paragraph shall apply to a Participant if it
is determined that this Plan is a direct or indirect transferee
of a defined benefit plan, money purchase plan, target benefit
plan, stock bonus or profit-sharing plan which is subject to the
survivor annuity requirements of Code Sections 401(a)(11) and
417.
In the case of an Automatic Joint and Survivor Annuity described
in Paragraph 14.1 or Paragraph 14.2, the Administrator shall
provide each Participant no less than 30 days and no more than 90
days prior to the annuity starting date a written explanation of:
(i) the terms and conditions of an Automatic Joint and Survivor
Annuity; (ii) the Participant's right to make and effect of an
election
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to waive the Automatic Joint and Survivor Annuity form of
benefit; (iii) the rights of a Participant's Spouse; and (iv) the
right to make, and the effect of, a revocation of a previous
election to waive the Automatic Joint and Survivor Annuity.
14.4 Special Rules for Profit-Sharing Plans. Paragraph 14.3
shall not apply to any distribution, made on or after the first
day of the first Plan Year beginning after December 31, 1988,
from or under a separate Account attributable solely to
accumulated deductible employee contributions, as defined in
Section 72(o)(5)(B) of the Code, and maintained on behalf of a
Participant in a money purchase pension plan. It shall also not
apply to a Participant in a profit sharing plan if the following
conditions are satisfied: (1) the Participant does not or cannot
elect retirement benefits in the form of a life annuity under
Paragraph 14.2, and (2) on the death of the Participant, the
Participant's vested account balance will be paid to the
Participant's surviving Spouse in accordance with Paragraph 16.1.
14.5 Amount of Retirement Benefit. The amount of a Participant's
retirement benefit shall equal the Participant's vested account
balance. The vested account balance is the aggregate value of the
Participant's vested account balances derived from Company and
Participant contributions (including Rollover Contributions),
including the proceeds of insurance contracts, if any, on the
Participant's life.
Upon retirement, contributions by or on behalf of a Participant
shall cease. If a Participant retires prior to the end of a Plan
Year, any contributions credited prior to retirement to his
Participant's Account for the Plan Year shall be applied for him
as part of his retirement benefit.
14.6 Participant Election of a Retirement Date. A Participant shall be
entitled to a retirement benefit upon separation from service:
(a) On or after his Normal Retirement Date as designated in
Section (F)(1);
(b) On his Early Retirement Date as permitted in Section
(F)(2);
(c) On his Disability Retirement Date as permitted in Section
(F)(3).
The Participant's Account shall be paid in a form and on a
Retirement Date elected by the Participant. A Participant shall
give the Administrator written notice of his intention to retire
on a Retirement Date within 90 days prior to separation from
service. Written notice shall be made on a form required by the
Administrator.
If a Participant separates from service before satisfying
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the age requirement for early retirement, if elected in Section
(F)(2)(c), but has satisfied the Service requirement, the
Participant shall be entitled to elect an early retirement
benefit upon satisfaction of such age requirement.
14.7 Participant's Right to Defer Retirement. A Participant
may, subject to the provisions of the federal Age Discrimination
in Employment Act, defer retirement without Company approval.
In the case of continued employment after Normal Retirement Date,
Company contributions and forfeitures shall continue to be
allocated on behalf of Participants. Investment gains and losses
shall continue to be credited to the Participant's Account. A
Participant who defers retirement after his Normal Retirement
Date shall defer distribution of his Participant's Account, in
accordance with Paragraph 14.8.
14.8 Distribution of Retirement Benefits. If the Participant's Account
balance is $3,500 or less, the entire Participant's Account shall
be distributed. No one-sum cash distribution shall be made under
the preceding sentence after the annuity starting date.
Unless the Participant elects otherwise, distribution of benefits
shall begin the first day of the calendar month coincident with
or, otherwise, next following the later of:
(a) the Participant attaining age 65 (or Normal Retirement
Date, if earlier);
(b) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or,
(c) the Participant terminates service with the Company;
provided, however, that if the Participant's vested
account balance derived from Company and Participant
contribution s exceeds $3,500, no distribution shall be
made without the consent of the Participant (and
surviving Spouse) before the Participant attains or
would have attained, if not deceased, the later of the
Normal Retirement Date or age 62. Failure to consent
shall be deemed an election to defer commencement of
payment of any benefit.
If allowed in Section (F)(5)(b), a retired Participant may also
elect to defer payment of any benefit after retirement. However,
the entire interest of the Participant must be distributed or
begin to be distributed no later than the Participant's required
beginning date. The required beginning date of a retired
Participant is the first day of April following the calendar year
in which such individual attains age 70 1/2, except as otherwise
elected in accordance with Part XXII.
The minimum distribution for other calendar years,
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including the minimum distribution for the distribution calendar
year in which the Participant's required beginning date occurs,
must be made on or before December 31 of that distribution
calendar year. A distribution calendar year is a calendar year
for which a minimum distribution is required. The first
distribution calendar year is the calendar year immediately
preceding the calendar year which contains the Participant's
required beginning date. Neither the consent of the Participant
nor of the Participant's Spouse shall be required to the extent
that a distribution is required to satisfy this Paragraph. All
distributions required under this part shall be determined and
made in accordance with Code Section 401(a)(9) and the
regulations thereunder , including the minimum distribution
incidental benefit requirement of Section 1.401(a)(9)-2 of the
Proposed Regulations.
PART XV - MINIMUM DISTRIBUTION REQUIREMENTS
15.1 Required Beginning Date. The entire interest of the active
Participant must be distributed or begin to be distributed no
later than the Participant's required beginning date. The
required beginning date of an active Participant is the first day
of April following the calendar year in which such individual
attains age 70 1/2, except as otherwise elected in accordance
with Paragraph 22.1. Neither the consent of the Participant nor
the Participant's Spouse shall be required to the extent that a
distribution is required to satisfy this Paragraph.
Notwithstanding the prior sentence, if an active Participant
attained age 70 1/2 in 1987 or earlier, and was not a 5-percent
owner in any year since attaining age 66 1/2, the Participant's
account balance can be distributed upon retirement.
The required beginning date of a Participant who is not a
5-percent owner who attains age 70 1/2 during 1988 and who has
not retired as of January 1, 1989, is April 1, 1990.
15.2 Distribution of Benefits.
All distributions required under this Part shall be determined
and made in accordance with the Code Section 401(a)(9) and the
regulations thereunder, including the minimum distribution
incidental benefit requirement of Section 1.401(a)(9)-2 of the
Proposed Regulations. If the Participant's Account balance is
$3,500 or less, the entire Participant's Account shall be
distributed. If the Participant's account balance is greater than
$3,500, the Participant may elect to receive his account balance
in the form of a one-sum cash payment or an annuity in accordance
with Part XIV, Retirement Benefits, or a yearly minimum
distribution as provided in this Paragraph. Written notice shall
be made on a form provided by the Administrator.
If a Participant's benefit is to be distributed in a yearly
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minimum distribution, the benefit is calculated as if distributed
over a period not extending beyond the life expectancy of the
Participant or the joint life and last survivor expectancy of the
Participant and the Participant's Spouse. The amount required to
be distributed for each calendar year, beginning with
distributions for the first distribution calendar year, shall not
be less than the quotient obtained by dividing the Participant's
benefit by the applicable life expectancy. Upon retirement, the
Participant must select a retirement benefit in accordance with
Part XIV.
The minimum distribution for other calendar years, including the
minimum distribution for the distribution calendar year in which
the Participant's required beginning date occurs, must be made on
or before December 31 of that distribution calendar year.
15.3 Definitions.
(a) The life expectancy (or joint and last survivor
expectancy) is calculated using the attained age of the
Participant (or Participant and Spouse) as of the
Participant's (or Participant's and Spouse's) birthday in
the applicable calendar year. If life expectancy is being
recalculated, the applicable life expectancy shall be the
life expectancy as so recalculated. The applicable
calendar year shall be the first distribution calendar
year, and if life expectancy is being recalculated such
succeeding calendar year.
(b) A distribution calendar year is a calendar year for which
a minimum distribution is required. The first distribution
calendar year is the calendar year immediately preceding
the calendar year which contains the Participant's
required beginning date.
(c) The Participant's benefit is the account balance as of
the last Valuation Date in the calendar year (valuation
calendar year) immediately preceding the distribution
calendar year increased by the amount of any contributions
or forfeitures allocated to the account balance as of
dates in the distribution calendar year after the
Valuation Date and decreased by distributions made in the
distribution calendar year after the valuation date. For
purposes of this Paragraph, if any portion of the minimum
distribution for the first distribution calendar year is
made in the second distribution calendar year on or before
the required beginning date, the amount of the minimum
distribution made in the second distribution calendar year
shall be treated as if it had been made in the immediately
preceding distribution calendar year.
PART XVI - DEATH BENEFITS
16.1 Preretirement Death of a Participant. If the Participant
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dies before distribution of his interest begins, the
Participant's Account balance shall become fully vested. The
Account balance shall be paid to the Participant's Spouse. The
Spouse may elect whether to receive the Participant's Account
balance in the form of an Preretirement Survivor Annuity,
installments, or a one-sum cash payment.
If there is no Spouse, or, if the Spouse has already consented in
a manner conforming to a Qualified Election, the account balance
shall be paid to the Participant's designated Beneficiary. Unless
otherwise elected by the Participant, any portion of the
Participant's interest payable to a designated Beneficiary other
than the Participant's Spouse shall be paid in the form of an
annuity, installments or a one-sum cash payment. A Qualified
Election is not required with respect to the amount at risk
portion of any Policies. For purposes of the foregoing consent
requirements, the Participant's vested account balance shall not
include amounts attributable to accumulated Participant
Deductible Voluntary Contributions within the meaning of Code
Section 72(o)(5)(B).
Distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing the
fifth anniversary of the Participant's death except to the extent
that an election is made to receive distributions in accordance
with (a) or (b) below:
(a) If any portion of the Participant's interest is payable to
a designated Beneficiary, distributions may be made over
the life or over a period certain not greater than the
life expectancy of the designated Beneficiary commencing
on or before December 31 of the calendar year immediately
following the calendar year in which the Participant died;
(b) If the designated Beneficiary is the Participant's Spouse,
the date distributions are required to begin in accordance
with (a) above shall not be earlier than the later of (1)
December 31 of the calendar year immediately following the
calendar year in which the Participant died and (2)
December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If the Participant has not made an election pursuant to this
Paragraph by the time of his death, the Participant's designated
Beneficiary must elect the method of distribution no later than
the earlier of (1) December 31 of the calendar year in which
distributions would be required to begin under this Paragraph, or
(2) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Participant. If the
Participant has no designated Beneficiary, or if the designated
Beneficiary does not elect a method of distribution, distribution
of the Participant's entire
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interest must be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death.
For purposes of this Paragraph, if the Spouse dies after the
Participant, but before payments to such Spouse begin, the
provisions of this Paragraph, with the exception of Paragraph (b)
therein, shall be applied as if the Spouse were the Participant.
For the purposes of this Paragraph, distribution of a
Participant's interest is considered to begin on the
Participant's required beginning date (or, if the Spouse dies
after the Participant, the date distribution is required to begin
to the Spouse). If distribution in the form of an annuity
irrevocably commences to the Participant before the required
beginning date, the date distribution is considered to begin is
the date distribution actually commences.
16.2 Preretirement Survivor Annuity. The Preretirement Survivor
Annuity is an annuity for the life of the Spouse. The Spouse may
elect to have such annuity distributed within a reasonable period
after the Participant's death. If Paragraph 14.3 is operative,
the Administrator shall provide each Participant a written
explanation of the Preretirement Survivor Annuity in such terms
and in such manner as would be comparable to the explanation
provided for meeting the requirements applicable to an Automatic
Joint and Survivor Annuity.
The applicable period for a Participant is whichever of the
following periods end last:
(a) The period beginning with the first day of the Plan Year
in which the Participant attains age 32 and ending with
the close of the Plan Year preceding the Plan Year in
which the Participant attains age 35;
(b) A reasonable period ending after the Employee becomes a
Participant;
(c) A reasonable period ending after Paragraph 14.4 first
applies to the Participant.
Notwithstanding the foregoing, notice must be provided within a
reasonable period ending after Termination of Employment in the
case of a Participant who separates from service before attaining
age 35.
For purposes of applying the preceding Paragraph, a reasonable
period ending after the enumerated events is the end of the
two-year period beginning one year prior to the date of the
applicable event occurs, and ending one year after that date.
In the case of a Participant who separates from service before
the Plan Year in which age 35 is attained, notice
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shall be provided within the two-year period beginning one year
prior to separation and ending one year after separation. If such
a Participant thereafter returns to employment with the Company,
the applicable period for such Participant shall be redetermined.
The Insurance Company may require the distribution of the entire
Participant's Account, provided that the Account is $3,500 or
less. No one-sum cash distribution shall be made to the Spouse
under the preceding sentence after the annuity starting date or
if the Account exceeds $3,500 unless the Spouse consents in
writing to such distribution.
16.3 Post-retirement Death of a Participant. If the Participant dies
after distribution of his interest has begun, the remaining
portion of such interest shall continue to be distributed at
least as rapidly as under the method of distribution being used
prior the Participant's death. In the case of an installment
payment option, installment payments remaining at the
Participant's death shall be distributed as a one-sum cash
payment.
16.4 Designation of a Beneficiary. Subject to Code Sections 401(a)(11)
and 417, the Participant shall have the right to designate his
Beneficiary and to change his Beneficiary in accordance with the
terms of the Contract and Policy. The Participant shall also have
the right to designate or change the form of death benefit to his
Beneficiary in accordance with the terms of the Contract and
Policy. Any such right may be exercised by filing written
notice(s) with the Insurance Company, and the effective date
thereof shall be as provided in the Contract or Policy, whichever
is applicable. If no Beneficiary is named, the payment of death
benefits shall be made in accordance with the terms of the
Contract and the Policy. A designation of a Beneficiary other
than the Spouse of a married Participant may be made only as a
Qualified Election.
PART XVII - TOP-HEAVY REQUIREMENTS
17.1 In General. If the Plan is or becomes top-heavy in any Plan Year,
the provisions of this Part XVII shall supersede any conflicting
provisions in the Plan or Adoption Agreement.
17.2 Minimum Contribution Under a Top-Heavy Plan. Company
contributions and forfeitures allocated on behalf of any
Participant who is a non-Key Employee shall not be less than the
lesser of 3 percent of such Participant's Compensation or in the
case where the Company has no defined benefit plan which
designates this Plan to satisfy Code Section 401, the largest
percentage of Company contributions and forfeitures, as a
percentage of the first $200,000 of the Key Employee's
Compensation, allocated on behalf of any Key Employee for that
year. This minimum contribution is determined without regard to
any Social
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Security contribution. The minimum contribution shall be made
even though, under other Plan provisions, the Participant would
not otherwise be entitled to receive a contribution, or would
have received a lesser contribution for the year because of:
(a) the Participant's failure to complete 1,000 Hours
of Service (or any equivalent provided in the
Plan),
(b) the Particpant's failure to make mandatory
Employee contributions to the Plan, or
(c) Compensation less than a stated amount.
Notwithstanding the above, the provision contained in the
preceding Subparagraph shall not apply to any Participant who was
not employed by the Company on the last day of the Plan Year.
Also, such provision shall not apply to any Participant to the
extent provided by Section (N).
17.3 Nonforfeitability of Minimum Contribution. The minimum
contribution required (to the extent required to be
nonforfeitable under Code Section 416(b)) may not be forfeited
under Code Section 411(a)(3)(B) or 411(a)(3)(D).
17.4 Top-Heavy Vesting. During and subsequent to the first Plan Year
in which this Plan is top-heavy, one of the minimum vesting
schedules as elected by the Company in Section (O)(2) shall
automatically apply to the Plan. The minimum vesting schedule
applies to all benefits derived from Company contributions within
the meaning of Code Section 411(a)(7) including benefits accrued
before the effective date of Code Section 416 and benefits
accrued before the Plan became top-heavy. However, this Paragraph
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 and such Participant's account balance
attributable to Company contributions and forfeitures shall be
determined without regard to this Paragraph.
17.5 Top-Heavy Definitions.
(a) Key Employee: Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the
determination period was an officer of the Company if such
individual's annual Compensation exceeded 50% of the
dollar limitation under Code Section 415(b)(1)(A), an
owner (or considered an owner under Code Section 318) of
one of the ten largest interests in the Company if such
individual's Compensation exceeds 100 percent of the
dollar limitation under Code Section 415(c)(1)(A), a 5
percent owner of the Company, or a 1 percent owner of the
Company who has annual Compensation of more than $150,000.
Annual Compensation means Compensation as defined in Code
Section 415(c)(3) but including amounts contributed by the
Company pursuant to a
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deferred salary agreement which are excludable from the
Employee's gross income under Code Sections 125,
402(a)(8), 402(h) or 403(b).
For purposes of determining the number of officers taken
into account, Employees described in Code Section
414(q)(8) shall be excluded. The determination period is
the Plan Year containing the Determination Date and the
four preceding Plan Years. The determination of who is a
Key Employee shall be made in accordance with Code Section
416(i)(1) and the regulations thereunder.
(b) Top-heavy plan: For any Plan Year beginning after December
31, 1983, this Plan is top-heavy if any of the following
conditions exists:
(i) If the top-heavy ratio for this Plan exceeds 60
percent and this Plan is not part of any
required aggregation group or permissive
aggregation group of plans.
(ii) If this Plan is a part of a required
aggregation group of plans but not part of a
permissive aggregation group and the top-heavy
ratio for the group of plans exceeds 60
percent.
(iii) If this Plan is a part of a required
aggregation group and part of a permissive
aggregation group of plans and the top-heavy
ratio for the permissive aggregation group
exceeds 60 percent.
(c) Top-heavy ratio
(i) Defined Contribution Plan Only:
If the Company maintains one or more defined
contribution plans (including any simplified
employee pension plan) and the Company has
never maintained any defined benefit plan which
during the 5-year period ending on the
Determination Date(s) has or has had accrued
benefits, the top-heavy ratio for this Plan
alone or for the required or permissive
aggregation group as appropriate is a fraction,
the numerator of which is the sum of the
account balances of all Key Employees as of the
Determination Date(s) (including any part of
any account balance distributed in the 5-year
period ending on the Determination Date(s)),
and the denominator of which is the sum of all
account balances (including any part of any
account balance distributed in the 5-year
period ending on the Determination Date(s)),
both computed in accordance with Code Section
416 and the regulations thereunder.
Both the numerator and denominator of the top-
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heavy ratio are increased to reflect any
contribution not actually made as of the
Determination Date, but which is required to be
taken into account on that date under Code
Section 416 and the regulations thereunder.
(ii) Defined Contribution and Defined Benefit Plan:
If the Company maintains one or more defined
contribution plans (including any simplified
employee pension plan) and the Company
maintains or has maintained one or more defined
benefit plans which during the 5-year period
ending on the Determination Date(s) has or has
had any accrued benefits, the top-heavy ratio
for any required or permissive aggregation
group as appropriate is a fraction, the
numerator of which is the sum of account
balances under the aggregated defined
contribution plan or plans for all Key
Employees determined in accordance with (i)
above, and the present value of accrued
benefits under the aggregated defined benefit
plan or plans for all Key Employees as of the
Determination Date(s), and the denominator of
which is the sum of the account balances under
the aggregated defined contribution plan or
plans for all Participants determined in
accordance with (i) above, and the present
value of accrued benefits under the defined
benefit plans for all Participants as of the
Determination Date(s), all determined in
accordance with Code Section 416 and the
regulations thereunder.
The accrued benefits under a defined benefit
plan in both the numerator and denominator of
the top-heavy ratio are adjusted for any
distribution of an accrued benefit made in the
5-year period ending on the Determination Date.
(iii) For purposes of (i) and (ii) above, the value
of account balances and the present value of
accrued benefits 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. The account balances and accrued
benefits of a Participant (1) who is a non-Key
Employee but who was a Key Employee in a prior
year or (2) who has not been credited with at
least one Hour of Service with any Company
maintaining the Plan at any time during the 5
year period ending on the Determination Date
shall be disregarded. The calculation of the
top-heavy ratio, and the extent to which
distributions, rollovers, and transfers are
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taken into account shall be made in accordance
with Code Section 416(g)(4)(A) and the
regulations thereunder.
When aggregating plans, the value of account
balances and accrued benefits shall be
calculated with reference to the Determination
Dates that fall within the same calendar year.
The accrued benefit of an Employee other than a
Key Employee shall be determined under (a) the
method, if any, that uniformly applies for
accrual purposes under all plans maintained by
the Company, or (b) if there is no such method,
as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under
the fractional accrual rate of Code Section
411(b)(1)(C).
(d) Permissive aggregation group: The required aggregation
group of plans plus any other plan or plans of the Company
which, when considered as a group with the required
aggregation group, would continue to satisfy the
requirements of Code Sections 401(a)(4) and 410(b).
(e) Required aggregation group:
(i) Each qualified plan of the Company in which at
least one Key Employee participates, or
participated at any time during the determination
period (regardless of whether the Plan has
terminated), and
(ii) any other qualified plan of the Company which
enables a plan described in (i) to meet the
requirements of Code Sections 401(a)(4) or
410(b).
(f) Determination Date: For any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan Year.
For the first Plan Year of the Plan, the last day of that
year.
(g) Valuation Date: The date stated in Section (C)(4) as of
which account balances or accrued benefits are valued for
purposes of calculating the top-heavy ratio.
(h) Present Value: Present value shall be based only on the
interest and mortality rates specified in Section (R).
PART XVIII - INSURANCE COMPANY
18.1 Not a Party. The Insurance Company is not a party to the Plan
and it is not responsible for the validity of the Plan
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as adopted by the Company or the qualification of the Plan under
the tax laws.
18.2 Not Responsible for the Acts of the Company or Administrator. The
Insurance Company shall not be responsible to look to the terms
of the Plan to determine whether or not any action of the Company
or Administrator is authorized by its terms.
18.3 Reliance on Signatures. Any instruments executed by the
Administrator or officers of the Company may be accepted by the
Insurance Company as the duly authorized act of the Administrator
or the Company.
18.4 Acquittance. The Insurance Company shall be discharged from all
liability for any amount paid to the Administrator or paid in
accordance with the direction of the Administrator and shall not
be obliged to see to the distribution or further application of
any monies by it.
18.5 Duties of Insurance Company. The obligations of the Insurance
Company shall be determined solely by the terms of its Contracts,
Policies and other agreements executed by it. The Insurance
Company shall maintain records concerning its Contracts and
Policies and shall supply such records to the Company or
Administrator when necessary to assure proper administration of
the Plan.
18.6 Plan Controls. In the event of any conflict between the
provisions of the Plan and the terms of any Contract or Policy,
the provisions of the Plan shall control, provided that the
mutual rights and obligations of the parties to any Contract or
Policy shall not thereby be altered.
PART XIX - AMENDMENT, TERMINATION, MERGER, ETC. OF PLAN
19.1 Permanency. The expectation of the Company is that the Plan and
the payment of contributions hereunder, shall be continued
indefinitely, but continuance of the Plan is not assured as a
contractual obligation of the Company. This Plan may be amended
or terminated only as provided in this Part. All Plan amendments,
including one to terminate the Plan, shall be adopted in writing
by the Company's board of directors. Any material modification of
the Plan by amendment or termination shall be communicated to all
interested parties, the Department of Labor, and the Internal
Revenue Service in the time and manner prescribed by law.
19.2 Amendment by Insurance Company. The Company hereby delegates to
the Insurance Company, the Sponsoring Organization, the right to
amend the Plan and its Adoption Agreement and the Company and
Administrator shall be deemed to have consented to such
amendment. Such delegation shall be limited to the right to
amend and shall not be construed to make the Insurance Company a
party to this Plan or the Adoption Agreement. The Insurance
Company shall, after
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amendment, contact each Company of record who has previously
adopted the Prototype Plan and give the Company the opportunity
to continue under the amended Prototype Plan.
19.3 Permissible Amendments by Company. Subject to Paragraph 19.4, the
Company 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
shall not cause the Plan to be treated as individually designed.
A Company that amends the Plan for any other reason, including a
waiver of the minimum funding requirement under Code Section
412(d), shall no longer participate in this master or Prototype
Plan and shall be considered to have an individually designed
plan.
Any amendment shall be stated by executing an amended Adoption
Agreement and delivering a copy of such amendment to the
Administrator and the Insurance Company. Upon execution and
delivery of the executed Adoption Agreement, the Participants and
Beneficiaries shall be bound thereby.
19.4 Restrictions on Amendment. No amendment:
(a) Shall increase the duties of the Administrator and any
other plan fiduciary without their written consent,
(b) To the vesting schedule under Section (O) shall deprive a
Participant of his nonforfeitable rights to benefits
accrued to the date of the amendment. Further, if the
vesting schedule of the Plan is amended, if the Plan is
amended in any way that directly or indirectly affects the
computation of a Participant's nonforfeitable percentage,
or if the Plan is deemed amended by an automatic change to
a top-heavy vesting schedule, each Participant with at
least 3 Years of Service with the Company may elect,
within a reasonable period after the adoption of the
amendment, to have his nonforfeitable percentage computed
under the Plan without regard to such amendment or
changes. The period during which the election may be made
shall commence with the date the amendment is adopted and
shall end on the later of:
(i) 60 days after the amendment is adopted;
(ii) 60 days after the amendment becomes effective;
or
(iii) 60 days after the Participant is issued written
notice of the amendment by the Company or
Administrator.
(c) Shall be effective to the extent that it has the
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effect of decreasing a Participant's accrued benefit.
Notwithstanding the preceding sentence, a Participant's
account balance may be reduced to the extent permitted
under Code Section 412(c)(8). For purposes of this
Paragraph, a Plan amendment which has the effect of
decreasing a Participant's account balance or eliminating
an optional form of benefit, with respect to benefits
attributable to service before the amendment, shall be
treated as reducing an accrued benefit. Furthermore, if
the vesting schedule of the Plan is amended, in the case
of an Employee who is a Participant as of the later of the
date of the date such amendment is adopted or the date it
becomes effective, the nonforfeitable percentage
(determined as of such date) of such Employee's
Company-derived accrued benefit shall not be less than the
percentage computed under the Plan without regard to such
amendment.
(d) Shall change the funding method unless the new funding
method has been approved by the Internal Revenue Service;
and,
(e) Shall change the Plan Year unless the new Plan Year has
been approved by the Internal Revenue Service or is
permitted by IRS Revenue Procedure 87-27.
19.5 Termination of Plan. The Company expressly reserves the right to
terminate the Plan in whole or in part at any time without the
consent of any Participant or Beneficiary. The Company shall give
written notice of termination of this Plan to the Administrator
and Insurance Company. The Plan shall terminate upon the first of
the following events:
(a) The date terminated by the Company without establishment
of another defined contribution plan;
(b) The date the Company is judicially determined bankrupt or
insolvent;
(c) The date of the disposition by a corporation to an
unrelated corporation of substantially all of the assets
(within the meaning of Code Section 409(d)(2)) used in a
trade or business of such corporation if such corporation
continues to maintain this Plan after the disposition, but
only with respect to Employees who continue employment
with the corporation acquiring such assets; or
(d) The date of the disposition by a corporation to an
unrelated corporation of such corporation's interest in a
subsidiary (within the meaning of Code Section 409(d)(3))
if such corporation continues to maintain this Plan after
the disposition, but only with respect to Employees who
continue employment with such subsidiary.
19.6 Full Vesting Upon Termination. If this Plan is terminated
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or partially terminated or upon a complete discontinuance of
contributions, each affected Participant shall be fully vested in
his Participant's Account. The value of the Participants'
accounts shall be distributed to all affected Participants as
one-sum cash payments. However, if elected by the Administrator,
all affected Participants shall have their benefits distributed
to them in the form of an annuity under the Contract.
If one-sum cash payments are made to the Participants and the
Contract values include allocations to the general investment
account of the Insurance Company, the amounts distributed shall
be less any investment loss charges and other deductions
authorized by the Contract. Any distributions pursuant to this
Paragraph are subject to the spousal and Participant consent
requirements contained in Code Sections 401(a)(11) and 417.
Notwithstanding the above provision, if any affected Participant
had commenced to receive annuity payments upon retirement or
Termination of Employment, he shall continue to receive payments
in the form elected.
19.7 Merger, Consolidation, or Transfer of Plan Assets. No merger or
consolidation of this Plan with, or transfer of assets or
liabilities to any other plan shall become effective until at
least 30 days after the Company or Administrator has filed with
the Secretary of the Treasury such statement as shall be required
by law. In the case of any such merger, consolidation or transfer
of assets to any other plan, each Participant shall receive a
benefit immediately after the merger, etc., (if the plan then
terminated) which is at least equal to the benefit the
Participant was entitled to immediately before such merger, etc.,
(if the Plan had terminated).
PART XX - ADMINISTRATION OF PLAN
20.1 Appointment of Administrator. The Company shall appoint an
Administrator. A written appointment shall be filed in the
Company's official records. The Insurance Company may not be
appointed as Administrator. The Administrator may be a person,
organization, or Plan committee. Any person so appointed shall
accept by filing a written acceptance with the Company. The
Administrator shall serve at the discretion of the Company, but
may resign by filing a written resignation with the Company.
The discharge of an Administrator shall be made in writing by the
Company, delivered to the person and filed in the official
records of the Company. A new Administrator shall be appointed as
soon as possible after an Administrator resigns or is discharged.
If no appointment is effective at any time, the Administrator
shall be the Company. The Secretary of the Company shall certify
in writing the name and signature of the Administrator, or person
acting on behalf of the Administrator, his address and telephone
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number to the Insurance Company. The Insurance Company may assume
that such person continues to hold office until a new certificate
is received from the Company. The Company agrees to fully protect
and to indemnify the Insurance Company in relying upon any
authorization or direction the Insurance Company reasonably
believes to be authentic.
20.2 Administrator's Powers and Duties. The Administrator shall be
responsible for the day-to-day administration of this Plan and
for the exercise of all fiduciary responsibilities provided for
in the Plan that are not assigned to other parties pursuant to
the terms of the Plan. The Administrator's duties shall include,
but not be limited to the following:
(a) To construe and interpret the provisions of the Plan;
(b) To decide all questions of eligibility for Plan
participation and for the payment of benefits;
(c) To provide appropriate parties, including government
agencies, with such returns, reports, schedules,
descriptions, and individual statements as are required by
law within the times prescribed by law; and to furnish to
the Company, upon request, copies of any or all such
materials, and further,to make copies of such instruments,
reports, and descriptions as are required by law to be
available for examination by Participants and such of
their Beneficiaries who are or may be entitled to benefits
under the Plan in such places and in such manner as
required by law (the Administrator may make a reasonable
charge for copies);
(d) To furnish to each Participant and each Beneficiary
receiving benefits under the Plan a copy of a summary plan
description and a summary of any material modifications
thereof at the time and in the manner prescribed by law;
(e) To obtain from the Company, the Employees and the
Insurance Company such information as shall be necessary
for the proper administration of the Plan;
(f) To determine the amount, manner and time of payment of
benefits thereunder;
(g) Subject to the approval of the Company only as to any
additional expense, to appoint and retain such agents,
counsel, and accountants for the purpose of properly
administering the Plan;
(h) To take all actions and to communicate to the Insurance
Company in writing all necessary information to carry out
the terms of the Plan;
(i) To notify the Insurance Company in writing of a
termination, a partial termination or a complete
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discontinuance of contributions to the Plan;
(j) To direct the Insurance Company to distribute benefits of
the Plan to each Participant and Beneficiary in accordance
with the terms of the Plan;
(k) To provide each Participant within the time period set
forth in Paragraphs 14.3 and 16.2, if applicable, a
written explanation of: the Automatic Joint and Survivor
Annuity and the Preretirement Survivor Annuity; and
(l) To do such other acts reasonably required to administer
the Plan in accordance with its provisions or as may be
provided for or required by law.
The Administrator and each other fiduciary shall discharge their
duties with respect to the Plan in accordance with the provisions
of the Plan, including the Adoption Agreement.
20.3 Delegation of Administrative Responsibilities. The Administrator
may appoint other persons to perform any of his administrative
functions. Such appointment shall be made in writing and shall be
effective upon the written approval of the Company. The
Administrator and any such appointee may employ advisors and
other persons necessary to help the Administrator carry out his
functions, including fiduciary functions. The Administrator shall
monitor the work and review the performance of each such
appointee, and he shall remove any such appointee from his
position if the Administrator determines that his performance is
unsatisfactory. Any person or group of persons may serve in more
than one fiduciary capacity. The Administrator may delegate one
or more of his responsibilities to the Insurance Company by a
written administrative services agreement entered into with the
Insurance Company. The Insurance Company's administrative
responsibilities shall be limited to those services set forth in
such agreement.
20.4 Bonding. The Administrator, and any other fiduciary, officer of
the Company and Employee of the Company who handles funds of the
Plan shall be bonded as required by ERISA. Such bond shall
protect the Plan against loss by reason of acts of fraud or
dishonesty by such persons directly or through the connivance of
others. The amount of the bond shall not be less than 10 percent
of the value of the Contract at the beginning of the Year nor
more than $500,000. In no event shall the bond be less than
$1,000. If the Secretary of the U.S. Department of Labor
prescribes an amount in excess of $500,000, however, a bond in
the prescribed amount shall be obtained.
20.5 Fiduciary Liability Insurance and Indemnification. The
Company may purchase fiduciary liability insurance or agree to
indemnify and hold harmless the Administrator and persons
appointed by the Administrator or Company to carry
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out fiduciary functions against any and all claims, loss, damage,
expense or liability arising from their official capacities in
the administration of the Plan, unless the same is determined to
be due to gross negligence or willful misconduct.
20.6 Compensation of Administrator. The Company shall reimburse the
Administrator for any reasonable costs and expenses, including
fiduciary liability insurance, incurred by the Administrator as a
result of performance of his duties or functions. The Company
shall compensate the Administrator for services rendered under
this Plan, except that no Administrator who receives full-time
compensation from the Company shall be so compensated.
20.7 Service of Legal Process. The Administrator is the designated
agent to receive service of legal process on behalf of the Plan,
unless the Company designates some other party in writing in the
summary plan description.
20.8 Company Census Report. To enable the Administrator to perform his
functions, the Company shall furnish the Administrator full and
timely information on or before each Plan Year (and more
frequently, if required) on all matters relating to
classification of Employees, their dates of employment, ages,
Hours of Service, Compensation, dates of retirement, death,
Disability or Termination of Employment, causes of Termination of
Employment and such other census data as may be required to
administer the Plan. The Administrator shall advise the Insurance
Company in writing of such information about Participants' and
Beneficiaries' status, including changes in status, pertinent to
determining benefit entitlements under the Contract or Policies.
20.9 Information About Plan. Any Participant in the Plan, or any
Beneficiary receiving benefits under the Plan, may examine copies
of the Plan, the Contract, any Policies on his life, the summary
plan description, the latest annual report, any collective
bargaining agreement, Contract or any other instrument under
which this Plan is maintained or operated. The Administrator
shall maintain all items listed in this Paragraph in his office,
or in other places as he may designate from time to time to
comply with regulations issued under ERISA, for examination
during normal business hours. Upon written request of a
Participant or Beneficiary receiving benefits under this Plan,
the Administrator shall furnish him with a copy of any item
listed in this Paragraph. The Administrator may impose a charge
equal to the costs of reproduction, but in no event shall the
costs exceed 25 cents per page.
20.10 Information About Participants and Beneficiaries. Each
Participant and each Beneficiary of a deceased Participant shall
file with the Administrator from time to time in writing his
current post office address. Any communication, statement, or
notice addressed to a Participant or a Beneficiary at his last
post office
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address filed with the Administrator or as shown on the Company's
records, shall bind the Participant or Beneficiary for all
purposes of this Plan. Each Participant shall file with the
Administrator his name, Social Security number, date of birth,
and marital status. Each married Participant shall file, upon
request, with the Administrator the name, date of birth, and date
of marriage to his Spouse. The Administrator may require
satisfactory evidence of any personal information required to
administer the Plan. The information provided by the Participant
concerning his Spouse shall bind the Participant, the
Participant's Spouse and their heirs for all purposes of the
Plan. The Participant shall be required to notify the
Administrator of any changes in information previously filed.
20.11 Claim for Benefits. All applications for benefits under the Plan
shall be submitted to the Administrator in writing on forms
prescribed by the Administrator. The application shall be signed
by the Participant, and the Participant's Spouse if required by
the Administrator, or in the case of a death benefit by the
Beneficiary or legal representative of the deceased Participant.
Each Participant and each Beneficiary of a deceased Participant
must furnish the Administrator with such evidence, data or other
information as the Administrator or Insurance Company considers
necessary or desirable for purposes of administering the Plan.
The provisions of this Plan are effective for the benefit of each
Participant subject to the condition that each Participant or
Beneficiary shall furnish promptly full, true and complete
evidence, data or other information when requested by the
Administrator, provided the Participant or Beneficiary is advised
of the affect of his failure to comply with the request. The
Administrator shall make all determinations as to the right of
any person to a benefit under the Plan. The Administrator shall
notify the claimant of the acceptance or denial of any claim
within 90 days, unless special circumstances are deemed by the
Administrator to require an additional period of no more than 90
days. If an extension is necessary the Administrator shall notify
the claimant in writing explaining why more time is needed and
indicate a date by which the Administrator expects to render a
decision.
20.12 Claims Review Procedure. The Administrator shall provide to any
claimant whose claim for benefits under the Plan has been fully
or partially denied a written notice setting forth the specific
reasons for such denial. Such notice shall state that the
claimant is entitled to request a review by the Administrator of
the decision denying the claim, the reasons for denial, the Plan
provisions upon which the denial is based, a description and
reason for needing any additional information needed to consider
the claim, and an explanation of the review procedure. The
claimant or his authorized representative may within 60 days of
the denial of the claim: request a claim review by the
Administrator, review pertinent documents relating to the denial,
and submit issues and comments in writing to
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the Administrator. The Administrator must make a final decision
on a claim reviewed within sixty days. The Administrator shall
make a full and fair review of such claim and any written
materials submitted by the claimant and may require the claimant
or the Company to submit such additional evidence as the
Administrator deems necessary or advisable to make a claims
review.
On the basis of the review, the Administrator shall make an
independent determination of the claimant's entitlement to
benefits under the Plan. The decision of the Administrator upon
review, if supported by substantial evidence in the record, shall
be final and conclusive on all parties to the Plan. The
Administrator shall give the claimant written notice of his
decision upon review which shall include specific reasons and
references to the Plan provision upon which his decision is
based. The 60-day review period may be extended for another 60
days if the Administrator finds that special circumstances
require an extension of time. If after such review the
Administrator concludes that the denial of benefits was erroneous
or contrary to the Plan or to the law, the Administrator shall
take such action as shall be appropriate to provide such benefit.
20.13 Missing Participants or Beneficiaries. In the event a person
entitled to a benefit is unable to be found after a diligent
one-year search by the Administrator, the benefit payable to that
person shall be forfeited and applied to reduce the Company's
contributions under the Plan, provided, however, that the
Administrator shall reinstate the benefit in the event the person
entitled thereto is found or makes a claim. The sources for
restoration of the benefit shall be forfeitures or an additional
Company contribution.
PART XXI - MISCELLANEOUS
21.1 Assignment or Alienation. No benefit or interest available
hereunder shall be subject to assignment or alienation, either
voluntarily or involuntarily. The preceding sentence shall also
apply to the creation, assignment, or recognition of a right to
any benefit payable with respect to a Participant pursuant to a
domestic relations order, unless such order is determined to be a
qualified domestic relations order, as defined in Code Section
414(p), or any domestic relations order entered before January 1,
1985.
21.2 Responsibility for Qualification of Plan. The Company is solely
responsible for the qualification of the Plan under the Code.
Should the Plan fail to initially attain qualified plan status,
the Plan shall terminate and contributions shall be returned to
the Company and to Participants in accordance with Subparagraph
4.6(b). If an initially qualified plan fails to retain qualified
plan status, the Plan shall terminate and the interest of each
Participant shall be distributed in the same manner as provided
under Paragraph 19.6.
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<PAGE>
21.3 Original Document. The Plan may be executed in any number
of counterparts, each of which shall be deemed an original, and
said counterparts shall constitute but one and the same
instrument and may be sufficiently evidenced by any one
counterpart.
21.4 State Law. The Plan is to be regulated and construed in
accordance with the laws of the State in which the Company
maintains its principal office, except to the extent such laws
are preempted by Federal law.
21.5 Not an Employment Contract. No Employee of the Company nor anyone
else shall have any rights against the Company as a result of
this Plan, except those expressly granted hereunder. Nothing
herein shall be construed to give any Participant the right to
remain in the employ of the Company.
21.6 Word Usage. Words when used herein are used irrespective of
number or gender unless the context clearly requires otherwise.
21.7 Interpretation of Plan. The intention of the Company is that the
Plan shall comply with the provisions of the Code, the Employee
Retirement Income Security Act, corresponding provisions of any
subsequent laws, and the provisions of the Plan shall be
construed to effectuate such intention.
In the event any provision or provisions shall be determined to
be illegal or invalid for any reason, the illegal or invalid
provision shall not affect the remaining parts of the Plan and
the Company or Administrator may perform such alternative acts
which most clearly carry out the intent and purpose of the Plan.
21.8 Headings. The headings of the Parts, Paragraphs and Sections of
this Plan are for convenience and reference only, and any
conflict between such headings and the text shall be resolved in
favor of the text.
PART XXII - TRANSITIONAL RULE - RETIREMENT DISTRIBUTIONS
22.1 Commencement of Distributions. Subject to Part XIV and XVI,
distributions on behalf of any Participant, including a 5-percent
owner, may be made in accordance with all of the following
requirements (regardless of when such distribution commences):
(a) The distribution by the Plan is one which would not have
disqualified such Plan under Code Section 401(a)(9) as in
effect prior to amendment by DEFRA.
(b) The distribution is in accordance with a method of
distribution designated by the Participant whose interest
in the Plan is being distributed or, if the Participant is
deceased, by a Beneficiary of such
66
<PAGE>
Participant.
(c) Such designation was in writing, was signed by the
Participant or the Beneficiary, and was made before
January 1, 1984.
(d) The Participant had accrued a benefit under the Plan as of
December 31, 1983.
(e) The method of distribution designated by the Participant
or the Beneficiary specifies the time at which
distribution shall commence, the period over which
distributions shall be made, and in the case of any
distribution upon the Participant's death, the
Beneficiaries of the Participant listed in order of
priority.
A distribution upon death shall not be covered by this
transitional rule unless the information in the designation
contains the required information described above with respect to
the distributions to be made upon the death of the Participant.
For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Participant, or the
Beneficiary, to whom such distribution is being made, shall be
presumed to have designated the method of distribution under
which the distribution is being made if the method of
distribution was specified in writing and the distribution
satisfies the requirement in Subparagraph (5) above.
If a designation is revoked any subsequent distribution must
satisfy the requirements of Code Section 401(a)(9) and the
regulations thereunder. If a designation is revoked subsequent to
the date distributions are required to begin, the Plan must
distribute by the end of the calendar year following the calendar
year in which the revocation occurs the total amount not yet
distributed which would have been required to have been
distributed to satisfy Code Section 401(a)(9) and the regulations
thereunder, but for the Section 242(b)(2) election. For calendar
years beginning after December 31, 1988, such distributions must
meet the minimum distribution incidental benefit requirements in
Section 1.401(a)(9)-2 of the income tax regulations. Any changes
in the designation shall be considered to be a revocation of the
designation. However, the mere substitution or addition of
another Beneficiary (one not named in the designation) under the
designation shall not be considered to be a revocation of the
designation, so long as such substitution or addition does not
alter the period over which distributions are to be made under
the designation, directly or indirectly (for example, by altering
the relevant measuring life). In the case in which an amount is
transferred or rolled over from one plan to another plan, the
rules in Q&A J-2 and Q&A J-3 shall apply.
67
<PAGE>
22.2 Distribution of Benefits.
(a) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed by
Paragraphs 14.1 and 16.2 of the Plan must be given the
opportunity to elect to have such Paragraphs apply if the
Participant is credited with at least one Hour Of Service under
this Plan or a predecessor Plan in a Plan Year beginning on or
after January 1, 1976, and such Participant had at least 10 years
of vesting service when he separated from Service.
(b) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour Of Service under
this Plan or a predecessor Plan on or after September 2, 1974,
and who is not otherwise credited with any Service in a Plan Year
beginning on or after January 1, 1976, must be given the
opportunity to have his benefits paid in accordance with
subparagraph 22.2(d).
(c) The respective opportunities to elect (as described in this
paragraph) must be afforded to the appropriate Participants
during the period commencing on August 23, 1984, and ending on
the date benefits would otherwise commence to said Participants.
(d) Any Participant who has elected pursuant to Paragraph 22.2(c)
and any Participant who does not elect under Paragraph 22.2(b) or
who meets the requirements except that such Participant does not
have at least 10 years of vesting Service when he separates from
Service, shall have his benefits distributed in accordance with
all of the following requirements if benefits would have been
payable in the form of a life annuity:
(1) Automatic Joint and Survivor Annuity. If
benefits in the form of a life annuity become
payable to a married Participant who:
(a) begins to receive payments under the Plan
on or after Normal Retirement Date;
(b) dies on or after Normal Retirement Date
while still working for the Company;
(c) begins to receive payments on or after
the Qualified Early Retirement Date; or
(d) separates from Service on or after
attaining Normal Retirement Date (or the
Qualified Early Retirement Date) and
after satisfying the eligibility
requirements for the payment of benefits
under the Plan and thereafter dies before
beginning to receive such benefits; then
such benefits shall be received under
this Plan in the form of an Automatic
Joint and Survivor Annuity, unless the
68
<PAGE>
Participant has elected otherwise during
the Election Period. The Election Period
must begin at least 6 months before the
Participant attains Qualified Early
Retirement Date and end not more than 90
days before the commencement of benefits.
Any election hereunder shall be in writing
and may be changed by the Participant at
any time.
(2) Election of Early Survivor Annuity. A
Participant who is employed after attaining the
Qualified Early Retirement Date shall be given
the opportunity to elect, during the Election
Period, to have a survivor annuity payable on
death. If the Participant elects the survivor
annuity, payments under such annuity must not
be less than the payments which would have been
made to the Spouse under the Automatic Joint
and Survivor Annuity if the Participant had
retired on the day before his death. Any
election under this provision shall be in
writing and may be changed by the Participant
at any time. The election period begins on the
later of (1) the 90th day before the
Participant attains the Qualified Early
Retirement Date, or (2) the date on which
participation begins, and ends on the date the
Participant terminates employment.
(3) For purposes of this Paragraph 22.2, Qualified
Early Retirement Date is the latest of:
(a) the earliest date, under the Plan, on
which the Participant may elect to receive
retirement benefits,
(b) the first day of the 120th month beginning
before the Participant reaches Normal
Retirement Date, or
(c) the date the Participant begins
participation.
PART XXIII - ELIGIBLE ROLLOVERS
23.1 This Part applies to distributions made on or after January 1,
1993. Notwithstanding any other provision of the plan to the
contrary that would otherwise limit a distributee's election
under this Appendix, a distributee may elect, at the time and in
the manner prescribed by the plan administrator, or have any
portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct
rollover.
23.2 Definitions.
(a) Eligible Rollover Distribution: An eligible rollover
69
<PAGE>
distribution is any distribution of all or a portion of
the balance to the credit of the distributee, except that
an eligible rollover distribution does not include: any
distribution that is one of a series of substantially
equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such
distribution is required under Code ss.401(a)(9); and the
portion of any distribution that is not includible in
gross income.
(b) Eligible Retirement Plan: An eligible retirement plan is
an individual retirement account described in Code ss.
408(a), an individual retirement annuity described in
Codess.408(b), an annuity plan described in Code
ss.403(a), or a qualified trust described in Code
ss.401(a), that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or
individual retirement annuity.
(c) Distributee: A distributee includes an employee or
former employee. In addition, the employee's or former
employee's surviving spouse and the employee's or former
employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as
defined in Codess.414(p), are distributees with regard to
the interest of the spouse or former spouse.
(d) Direct Rollover: A direct rollover is a payment by the
plan to the eligible retirement plan specified by the
distributee.
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<PAGE>
SF 2174
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
PROTOTYPE FLEXINVEST DEFINED CONTRIBUTION PLAN
----------------------------------------------
Established under Internal Revenue Procedure 89-9
Internal Revenue Service Serial No. D357472(a)
PROFIT-SHARING PLAN ADOPTION AGREEMENT
For Both Integrated and Non-Integrated Plans
In accordance with and as permitted by the provisions of the Massachusetts
Mutual Life Insurance Company Prototype FLEXINVEST Defined Contribution Plan,
herein called the Plan, a copy of which is hereto attached, the undersigned
Company pursuant to vote of its Board of Directors hereby adopts the Plan to
provide retirement and incidental benefits for its Employees, and agrees
1. to conform to and abide by all of the terms, provisions
and requirements of the Plan;
2. that any action taken or to be taken in accordance with or
as required by the Plan or any action taken in conjunction
with the Plan as required by any law or regulations is and
will be its sole responsibility;
3. that the liability of Massachusetts Mutual Life Insurance
Company is limited to the obligations under the terms of
the Conti-act and the Policies.
Sponsoring organization:
Massachusetts Mutual Life Insurance Company
Defined Contribution Operations Department
Pension Management
1295 State Street
Springfield, Massachusetts 01111-0001
Telephone: (413) 788-8411
The Sponsoring Organization will notify the undersigned Company of any
amendments made to the Plan or of the discontinuance or abandonment of the Plan.
Please Note: Failure to properly fill out this Adoption Agreement may result in
disqualification of the Plan.
3/91
<PAGE>
The undersigned Company elects as follows:
(A) Plan Name
---------
The Plan will be known as The Republic Mortgage Insurance Company
And Affiliated Companies Profit Sharing Plan.
Amended (or Restated) Plans: The Plan is adopted by amendment in
substitution for The Republic Mortgage Insurance Company And
Affiliated-Companies Profit Sharing Plan, the Company's
pre-existing Plan, which is hereby replaced.
(B) Controlled Groups/Affiliated Employers (Paragraph 6.5)
------------------------------------------------------
The Plan will be funded through the Contract of an
affiliated Employer's Plan, Contract No._________________,
issued by the Insurance Company to
_________________________________________________________
_________________________________________________________.
(C) Dates
-----
(1) The Effective Date of the Plan is January 1, 1984.(The
original effective date of the Plan prior to any
amendment.)
Amended (or Restated) Plans: The Effective Date of this
Amendment is January 1, 1994. Notwithstanding any other
plan provision, this Effective Date applies to all current
and future Participants including terminated vested
Participants who return to employment with the Company.
(2) The Plan Year is a period beginning on January 1, 1994,
and ending on December 31, 1994. Subsequent Plan Years
will be consecutive 12-month periods ending on the same
date each year thereafter.
(3) In the case of a top-heavy plan, the Determination Date
will be the last day of the Plan Year for the first Plan
Year, and for any other Plan Year, the last day of the
preceding Plan Year.
(4) The Valuation Date, for purposes of Part XVI, will be the
most recent Valuation Date occurring within the 12-month
period ending on the Determination Date.
(5) The Look-Back Year, for purposes of determining Highly
Compensated Employees will be: (Paragraph 1.27)
(a) [ ] the Inconsecutive month period preceding the
Plan Year.
1
<PAGE>
(C) Dates (continued)
-----------------
(b) [x] the calendar year ending with or within the
Plan Year.
(6) Limitation Year will mean:
(a) [ ] the calendar year.
(b) [X] the 12-consecutive month period coinciding with
the Plan Year.
(c) [ ] the 12-consecutive month period from
________________ to _________________.
NOTE: If the Company is a member of a controlled group of
corporations, a controlled group of trades or businesses
or an affiliated service group, the Limitation Year must
be the same for all members of the group.
(D) Eligibility for Participation (Part III)
----------------------------------------
(1) Classification(s) of eligible employees:
(a) [X] All
[ ] Salaried
[ ] Hourly
[ ] Commissioned
(b) [ ] Division, Plant, Location or Other
(Specify).
_______________________________________
(c) [ ] Employees not covered by a collective
bargaining agreement.
(2) Present Employees:
(a) [ ] An Employee who is employed on the Effective
Date (or Amendment Date, if later) will become
a Participant on the Effective Date (or
Amendment Date, if later).
(b) [X] An Employee who is employed on the Effective
Date (or Amendment Date, if later) will become
a Participant upon meeting the requirements
in (D)(3).
(3) Future Employees: An Employee who becomes employed after
the Effective Date (or the Amendment Date, if later) will
become a Participant upon meeting the following
requirements:
2
<PAGE>
(D) Eligibility for Participation (Part 111) (continued)
----------------------------------------------------
(a) Service Requirement:
(i) [ ] None
(ii) [X] Completion of 1/4 Years of Service
(Not to exceed 2, or if (D)(7)(a)is
elected, ik. If years exceed 1,
(0)(1)(a) must be elected.)
NOTE: If a fractional year is elected, an
Employee will not be required to complete any
specified number of Hours of Service to receive
credit for such fractional year.
(b) Age Requirement
(i) [X] None
(ii) [ ] Attainment of age _______not to
exceed 21, or if (D)(7)(a) is
elected, 20-1/2).
(4) Employees eligible for participation under another plan
qualified under Code Sections 401 or 403 to which the
Company contributes will be eligible for participation in
this Plan.
[X] Yes [ ] No [ ] Not Applicable. There is no
other Plan.
Name of other plan: Old Republic International
Corporation Employees Savings and Stock Ownership Plan.
(5) If the Company has acquired the trade or business from
another Company, including a sole proprietorship or
partnership, service with the predecessor Company (Name
of predecessor Company: RMIC West, Inc.) which did not
maintain this Plan will be considered. Service with the
Company for purposes of determining:
(a) [X] Initial and continued eligibility to
participate in the Plan.
(b) [X] A Participant's vested interest in his
Participant's Account.
(c) [ ] No credit for prior service.
(d) [ ] Not Applicable. There was no predecessor
Company, or the predecessor Company
maintained this Plan.
3
<PAGE>
(D) Eligibility (continued)
-----------------------
(6) Hours of Service will be determined on the basis of the
method selected below. Only one method may be selected.
The method selected will be applied to all Employees
covered under the Plan.
(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 Paragraph 1.23
of 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 with forty-five
(45) Hours of Service if under Paragraph
1.23 of 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 Paragraph 1.23 of 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 Paragraph 1.23 of the Plan such
Employee would be credited with at least
one (1) Hour of Service during the month.
(7) The Entry Date will be:
(a) [ ] an Anniversary Date of the Plan.
(b) [ ] semi-annually, i.e., an Anniversary Date
or the first day of the sixth month
following an Anniversary Date.
(c) [ ] quarterly, i.e., an Anniversary Date or
or first day of the third, sixth, or ninth
month following an Anniversary Date.
(d) [X] the first day of any calendar month.
(E) Compensation
------------
(1) Compensation will mean all of each Participant's:
4
<PAGE>
E) Compensation (continued)
------------------------
(a) (i) [ ] Section 3401(a) wages.
(ii) [ ] Section 3121(a) wages
(iii) [ ] Total. Section 415 compensation for the
[X] Plan Year
[ ] Limitation Year ending with or
within the Plan Year.
(iv) [ ] Section 415 safe-harbor compensation
for the
[ ] Plan Year
[ ] Limitation Year ending with or
within the Plan Year.
(b) (i) [X] The definition selected in (a) above
will apply to integrated contributions
and the operation of The ACP test.
However, for all other Plan purposes,
including forfeiture allocation,
Compensation will mean all of each
Participant's Regular or Base Salary
or Wages including
[x] bonuses
[x] overtime
[x] commissions
[x] discretionary bonuses
(ii) [ ] Not applicable. The definition selected
in (a) will apply for all Plan purposes.
NOTE: If (i) above is elected, the compensation
percentage for the Highly Compensated Employees
cannot be greater than the Compensation
percentage for other Employees. The Compensation
percentage for a group of Employees may be
calculated by averaging the separately calculated
Compensation ratios for each Employee in the
group. An Employee's Compensation ratio is
calculated by dividing the Employee's
compensation under (b) by the Employee's basic
Compensation under (a)(i).
5
<PAGE>
E) Compensation (continued)
------------------------
(2) Compensation for the purpose of applicable
nondiscrimination testing will include company
contributions made pursuant to a deferred salary agreement
which are not includible in the gross income of the
Employees under Code Sections 125, 402(a)(8), 402(h) and
403(b).
[ ] Yes
[ ] No
[x] Not applicable. Company does not maintain any plan
listed above.
(F) Retirement (Part XIV)
---------------------
(1) The Normal Retirement Date of a Participant will be:
(a) [X] Age 65 (not to exceed 65).
(b) [ ] The later of age ___(not to exceed 65) or the
________(not to exceed 5th) anniversary of
the participation commencement date. The
participation commencement date is the first
day of the first plan year in which the
Participant commences participation in the
Plan. If, for plan years beginning before
January 1, 1988, normal retirement age was
determined with reference to the anniversary
of the participation commencement date (more
than 5 but not to exceed 10 years), the
anniversary date for Participants who first
commenced participation under the plan
before the first plan year beginning on or
after January 1, 1988 shall be the earlier
of (A) the tenth anniversary of the date the
participant commenced participation in the
plan (or such anniversary as had been
elected by the employer, if less than 10) or
(B) the fifth anniversary of the first day
of the first plan year beginning on or after
January 1, 1988.
NOTE: The Normal Retirement Date, as elected above, may
not exceed any mandatory retirement age enforced by the
Company.
(2) The Early Retirement Date of a Participant will be:
(a) [ ] None.
(b) [ ] The first day of any calendar month after his
______ birthday.
6
<PAGE>
F) Retirement (continued)
----------------------
(c) [X] The first day of any calendar month after his
50th birthday and his completion of
(i) 7 Years of Service.
(ii) __ Years of Service following
commencement of participation.
(d) [ ] The first day of any calendar month after his
completion of
(i) _____ Years of Service.
(ii) _____ Years of Service following
commencement of participation.
(3) The Disability Retirement Date of a Participant will be:
(a) [ ] None.
(b) [ ] The first day of any calendar month after his
_____ birthday.
(c) [ ] The first day of any calendar month after his
_____ birthday and his completion of _____
Years of Service.
(d) [X] The first day of any calendar month.
(4) Determination of Disability
(a) [X] If entitled to disability benefits under the
Federal Social Security Act.
(b) [ ] Determined by the Company in accordance with
its normal personnel practice applied in a
uniform and nondiscriminatory manner.
(c) [ ] Determined by the Company in accordance with
the collective bargaining agreement.
(d) [ ] If entitled to disability benefits under the
Company's Long Term Disability Insurance
Plan.
(e) [ ] Not Applicable. Disability Retirement is
not allowed.
(5) Benefit Options:
(a) In lieu of a 50 percent survivor annuity, the
amount of the survivor annuity portion of the
Automatic Joint and Survivor Annuity will be the
7
<PAGE>
F) Retirement (continued)
----------------------
following percent of the annuity payable during
their joint lives:
[ ] 66 2/3 percent.
[ ] 100 percent.
[X] Not Applicable. The Annuity will be 50
percent.
(b) Continuation of retired Participant's Account
until the first day of April following the
calendar year in which the retired Participant
attains age 70-1/2 is
[x] Permitted.
[ ] Not Permitted.
If permitted, the retired Participant's account
balance will
[ ] Be withdrawn from the appropriate
separate investment funds and allocated
to the Fixed Income Fund or Guaranteed
Interest Fund under the Contract.
[X) Remain in the appropriate investment funds.
(G) Participant Contributions (Paragraphs 1.30. 1.31, and 1.32)
-----------------------------------------------------------
(1) Participant contributions [X] will [ ] will not be
allowed in the Plan.
(2) Participant Matched Contributions
(a) [X] None
(b) [ ] Will be required as a condition of
(i) [ ] Employment
(ii) [ ] Participation
(c) May be suspended
[ ] Yes
[ ] No
[ ] Not applicable. Contribution
required as a condition of
employment.
8
<PAGE>
G) Participant Contributions (continued)
-------------------------------------
(d) Such contribution will be:
[ ] an amount equal to ___% of the
Participant's Compensation.
[ ] _____cents per hour worked by
the Participant.
[ ] a flat dollar amount of $____per
Plan Year, due ratably each pay
period.
(3) Participant Supplemental Contributions
(a) [X] None
(b) [ ] Will be permitted. Such contribution will
be an amount equal to a percentage of the
Participant's Compensation elected by him
which is not less than ___% and not more
than ____%.
NOTE: (3)(b) may only be elected if (2) (b) (i) is
elected.
(4) Participant Nondeductible Voluntary Contributions
(a) [ ] None
(b) [X] Will be permitted only while
contributions are being made in
accordance with Sections (G) (2) and (3).
Such contribution will be an amount equal
to a percentage of the Participant"s
Compensation elected by him which is not
more than 10 %[not to exceed 10 percent).
(H) Company Contributions
---------------------
(1) The Company will contribute to the Plan:
(a) [ ] __% of net profits in excess of $_____.
(b) [ ] __% of net profits, but in no event more
than $_____ for any Plan Year.
(c) [ ] __% (not to exceed 15 percent) of
Compensation of all Participants eligible
to share in the allocation.
(d) [X] An amount determined by the Company
immediately prior to the Anniversary date.
(e) [ ] ________________________________
9
<PAGE>
(H) Company Contributions (continued)
---------------------------------
NOTE 1: The Company will make contributions to
the Plan based on current or accumulated
earnings and profits for the taxable year
or years ending with or within the Plan
Year.
[ ] Yes [X] No
Contributions will be made from [ ]
current profits only, or [ ] current and
accumulated profits.
NOTE 2: Company contributions will be first be
allocated to Participants' accounts in
accordance with Section (H)(2). Any balance
of Company contributions after this
allocation will be allocated in accordance
with Section (H)(3). Finally, any remaining
company contributions will be allocated in
accordance with Section (H) (4) or(H)(5).
(2) Company Matching Contributions (Paragraph 1.10).
(a) Company Matching Contributions [ ] will [X] will
not be allowed in the Plan. If allowed, the
Sponsoring organization will maintain records to
monitor compliance with Code Section 401(m), will
perform the ACP test, and will notify the Company
if correction is required.
(b) The Formula for determining the Company Matching
Contribution will be:
(i) [ ] ___% of Compensation.
(ii) [ ] ____ times the Participant's
Matched Contributions.
(3) Company Supplemental Contributions (Paragraph 1.12)
(a) [ ] Will be made after the allocation of Company
Matching Contributions above, of
(i) [ ] ____ times the Participant
Supplemental Contribution
for the Plan Year.
(ii) [ ] ____ (a fraction) of the
Participant Supplemental
Contribution for the Plan
Year.
(b) [X] Will not be made.
(4) Company Annual Contributions (Paragraph 1.9)
10
<PAGE>
H) Company Contributions (continued)
---------------------------------
(a) Company Annual Contributions [X] will [ ] will
not be allowed in the Plan.
(b) FOR NON-INTEGRATED PLANS. Company Annual
contributions, for the Plan Year, will be
allocated to each Participant's Account:
(i) [ ] ___% of Compensation for each Participant.
(ii) [X] The ratio which a Participant's Compensation
bears to the total Compensation of all
Participants calculated to the nearest
dollar).
(iii) [ ] The ratio which the units allocated to a
Participant bear to the total units
allocated to all Participants, with one
unit allocated for each $100 of
Compensation and
[ ] no units
[ ] one unit
[ ] two units
for each completed Year of Service.
(iv) [ ] Not Applicable. The Plan is integrated
or no Company Annual Contribution will
be made.
(c) FOR INTEGRATED PLANS. Company Annual Contributions, for
the Plan Year, will be allocated to each Participant's
Account:
(i) [ ] Based on the provisions of Paragraph
4.11, with the initial contribution
amount determined by the Company prior to
the end of the Plan Year.
(ii) [ ] Based on the provisions of Paragraph
4.11 except that the limit of
Compensation in the first step will be
_____% (an amount not in excess of the
permitted disparity rate).
NOTE: If this integrated contribution is to be used as
the top-heavy minimum contribution, the percentage
selected cannot be lower than 3%.
(iii) [X] Not Applicable. The Plan is non-integrated
or no Company Annual Contributions will be
made.
(iv) [ ] The integration level is equal to:
11
<PAGE>
H) Company Contributions (continued)
---------------------------------
[ ] The Taxable Wage Base in effect on the
first day of the Plan Year. It is the
maximum amount of earnings which may be
considered wages for such year under Code
Section 3121 a)(1).
[ ] $_______(a dollar amount less than the
Taxable Wage Base).
[ ] _____% of the Taxable Wage Base (not to
exceed 100%).
(5) Company Qualified Nonelective Contributions (Paragraph
1.11)
(a) The Company [ ] will [X] will not make Qualified
Nonelective Contributions to the Plan.
(b) (i) Company Qualified Nonelective Contributions
will be allocated to the accounts of:
[ ] All Participants.
[ ] All non-Highly Compensated
Participants.
(ii) The formula for allocating of Company
Qualified Nonelective Contributions will be:
[ ] In the ratio in which each
Participant's Compensation for
the Plan Year bears to the total
Compensation of all Participants
for such Plan Year.
[ ] In the ratio in which each
Participant's Compensation not in
excess of $___________ for the
Plan Year bears to the total
Compensation of all Participants
not in excess of $_______ for
such Plan Year.
[X] Not Applicable. No Company Qualified
Nonelective Contributions will be made.
(6) Restrictions. Company Matching and Supplemental
Contributions made on an annual basis, and Company Annual
and Company Qualified Nonelective Contributions for any
Plan Year will be allocated to the Accounts of all
Participants except:
(a) [ ] Those Participants who have not been
credited with 1,000 or more Hours of
Service during the Plan Year.
12
<PAGE>
H) Company Contributions (continued)
---------------------------------
(b) [X] Those Participants whose employment with
the Company terminated prior to the end of
the Plan Year will not share in
contributions allocated after the date of
Termination of Employment.
(c) [ ] No exceptions.
Notwithstanding (H) (6) (a) or (b), if a Participant
terminates employment due to death, disability or
retirement, Company Annual Contributions [ ] will [X] will
not be allocated to the Participant in that Plan Year.
(I) Forfeitures (Paragraph 13.2)
----------------------------
(1) All forfeitures will be:
(a) [ ] Applied to reduce Company contributions to
the Plan.
(b) [X] Reallocated among Participants in the
ratio that the Compensation of each
Participant bears to the total Compensation
of all Participants.
(c) [ ] Not Applicable. The Plan has 100% immediate
vesting.
NOTE: Amounts forfeited by Highly Compensated Employees
as a result of Excess Aggregate Contributions will only
be applied under (a).
(2) If forfeitures will be reallocated in (1)(b) above for any
Plan Year, the allocation will be made to the Accounts of
all Participants except:
(a) [ ] Those Participants who have not been
credited with 1,000 or more Hours of Service
during the Plan Year.
(b) [X] Those Participants whose employment with
the Company, terminated prior to the end of
the Plan Year will not share in
contributions allocated after the date of
Termination of Employment.
(c) [ ] No exceptions.
Notwithstanding (1)(2)(a) or (b), if a Participant
terminates employment due to death, disability or
retirement, forfeitures C] will Cx) will not be
13
<PAGE>
(I) Forfeitures (Paragraph 13.2) (continued)
----------------------------------------
allocated to the Participant in that Plan Year.
(3) If more than one Company adopts the Plan, and forfeitures
will be reallocated in (1)(b) above for any Plan Year,
(a) [ ] The allocation will be made to the
Accounts of the remaining Participants of
the Company in which the forfeiting
Participant was employed.
(b) [X] The allocation will be made to all
Participant Accounts of companies who are
members of an affiliated or controlled
group.
(J) Investment Allocation (Paragraphs 6.4, 4.7 and 4.8)
---------------------------------------------------
(1) Investment allocation instructions will be made by the:
(a) [ ] Administrator.
(b) [ ] Participant.
(c) [ ] Administrator for Company contributions and
Participant for Participant contributions.
(2) Rollover Contributions will be invested:
(a) [ ] The same as Participant contributions.
(b) [ ] The same as Company contributions.
(c) [X] By a separate election of the Participant.
(d) [ ] Not applicable. All contributions will be
invested in the same manner.
(K) Policies [ ]will be [X]will not be purchased under the Plan as
provided by Paragraph 7.1. Policies will be purchased with
Company contributions.
(L) In-Service Withdrawals (Part X)
-------------------------------
(1) Participant Contributions - The Participant may
withdraw:
(a) [X] His separate account attributable to
Participant Nondeductible Voluntary
Contributions.
14
<PAGE>
(L) In-Service Withdrawals (Part X) (continued)
-------------------------------------------
(b) [ ] His separate account attributable to
Participant Matched Contributions.
(c) [ ] His separate account attributable to
Participant Supplemental Contributions.
(d) [ ] No withdrawals permitted.
(e) [ ] Not Applicable. No Participant contributions
are permitted in Plan.
(2) Rollover Contributions - The Participant may withdraw his
separate account attributable to Rollover Contributions.
[X] Yes [ ] No
If 'Yes', withdrawal restrictions will be as follows:
(a) [ ] Same restrictions as Company Contributions
in (L)(3)(a)
(b) [X] No restrictions.
(3) Company Contributions - If withdrawal of all Participant
contributions and the earnings attributable to them is
permitted in (L)(1), or if no Participant contributions
are allowed in the Plan, the Participant may withdraw:
(a) [X] The vested portion of the Participant's
Account attributable to Company Matching
Contributions, Company Supplemental
Contributions, and Company Annual
Contributions (only in a non-integrated
plan). Participants may only withdraw this
portion if:
(i) [X] The Participant has 5 or more
years of Plan participation.
[ ] The Company contributions and
their earnings have been in the
Plan for at least two years.
[ ] Amended/Restated Plans: The
Participant has 5 or more years
of Plan participation. However,
if the Participant was employed
on the Amendment Date, the
Participant may withdraw the
Company contributions and their
earnings that have accrued up
until the
15
<PAGE>
(L) In-Service Withdrawals (Part X) (continued)
-------------------------------------------
Amendment Date after they have
been in the Participant's
Account for at least two years.
(ii) [ ] The withdrawal is based on the
Participant's attaining age
59-1/2 notwithstanding any of the
restrictions elected above.
NOTE: Only one or no election may be made in (I).
(b) [ ] The portion of the Participant's account
attributable to Company Qualified
Nonelective Contributions based on the
Participant's attainment of age 59-1/2.
(c) [ ] Company contributions cannot be withdrawn.
(4) Suspension - If Company contributions may be withdrawn in
(L)(3)(a), will the Participant, upon withdrawal, forfeit
the right to future Company Matching Contributions,
Company Supplemental Contributions, or Company Annual
Contributions (in a non-integrated plan) for 12
consecutive months beginning from the date of withdrawal?
[ ] Yes [X) No [ ] Not Applicable
NOTE: Notwithstandiing the elections made in this
Section, a Participant who has attained age 70-1/2 may
withdraw all or any portion of his vested account
balance.
(M) Loans (Part XI)
---------------
(1) Loans [ ] will [X] will not be permitted to Participants.
A Participant may have up to _____ [not to exceed 5]
loan(s) outstanding at any one time.
(2) The Repayment Period for loans to purchase a principal
residence [ ] can [ ] cannot exceed 5 years.
(N) Special Top-Heavy Elections (Paragraph 17.2)
--------------------------------------------
(1) If Employees Participate in Multiple Plans of the Company:
If the Company maintains one or more plans in addition to
this Plan and if one or more Employees participate in this
Plan and in another plan, the minimum top-heavy
contribution or benefit will be determined as follows:
(a) [ ] a Minimum Contribution will be made to this
Plan of
16
<PAGE>
N) Special Top-Heavy Elections (continued)
---------------------------------------
(i) [ ] 3 percent of compensation (for
Participants in defined
contribution plans only).
(ii) [ ] 5 percent of compensation (for
Participants in this Plan and in
a defined benefit plan).
(b) [X] the Minimum Contribution or benefit will be
satisfied by the Plan named hereafter: Old
Republic International Corporation Employees
Savings and Stock Ownership Plan.
(c) [ ] Not Applicable. Company has only this Plan.
(2) Maximum Defined Contribution and Defined Benefit
Fractions: If the Plan becomes top-heavy, the dollar
limitation factor in the denominators of the Defined
Benefit Fraction and Defined contribution Fraction is
computed by substituting a factor of 1.0 for 1.25. The
dollar limitation factor can be restored under this Plan
to 1.25 by electing one of the following options. This
election will be effective in any year in which the
top-heavy ratio is more than 60 percent but not more than
90 percent. (Paragraph 5.8(a) and 5.8(c).
(a) [ ] the Minimum Contribution under this Plan
will be 4 percent of compensation (if
additional benefits are provided under this
Plan and the defined benefit plan of the
Company).
(b) [ ] the Minimum Contribution under this Plan
will be 7-1/2 percent of compensation for
Participants entitled to minimum benefits
under both this Plan and the Company's
defined benefit plan, and 4 percent of
compensation for Participants who are not
entitled to minimum benefits under the
defined benefit plan.
(c) [ ] Other (specify)
_____________________________________.
(d) [X] Not Applicable. Company doe not have a
defined benefit plan.
(3) The Company may set forth in the space provided below
any provisions to override Plan provisions in order to
comply with the rules regarding required aggregation of
multiple plans under Code Section 415 and 416.
17
<PAGE>
(O) Vesting
-------
Prior to retirement or Plan termination, the value of a
participant's Account attributable to Company contributions is as
follows: [Select one option each under (1) and (2) below.]
(Paragraphs 9.1 and 17.4)
(1) Regular Vesting Schedule.
(a) [ ] 100%
(b) [ ] 100% upon completion of
____ Years of Service (not more than 5).
(c) [ ] ____% after 1 Year of Service
____% after 2 Years of Service
____% after 3 Years of Service
____% after 4 Years of Service
____% after 5 years of Service
(no less than 100%)
(d) [X] 40% after 1 Year of Service
50% after 2 Years of Service
60% after 3 Years of Service
(no less than 20%)
70% after 4 Years of Service
(no less than 40%)
80% after 5 Years of Service
(no less than 60%)
90% after 5 Years of Service
(no less than 80%)
100% after 7 or more Years of Service
(no less than 100%)
(2) Top-Heavy Vesting Schedule. During and subsequent to the
first Plan Year for which the Plan is a Top-Heavy Plan,
the following vesting schedule will apply notwithstanding
the vesting schedule elected Section (O) (1) (Paragraph
17.4)
(a) [ ] 100%
(b) [ ] ___% after 1 Year of Service
___% after 2 Years of Service
___% after 3 Years of Service
(no less than 100%)
(c) [X] 40% after 1 Year of Service
50% after 2 Years of Service
(no less than 20%)
60% after 3 Years of Service
(no less than 40%)
70% after 4 Years of Service
(no less than 60%)
18
<PAGE>
(O) Vesting (continued)
-------------------
80% after 5 Years of Service
(no less than 80%)
100% after 6 or more Years of Service
(no less than 100%)
(d) [ ] Not Applicable. Plan's schedule elected in
(O) (1) has the same or more rapid vesting
than the above schedules.
(3) For purposes of this Section, 'Years of Service' will not
include: (Paragraph 9.3)
N/A (a) [ ] Years of Service before age 18.
(b) [ ] Years during which the Participant
declined to contribute all of his Matched
Contributions, if the Plan requires
Participant Matched Contributions.
(c) [ ] Years of Service during a period for
which the Employee made no Participant
Matched Contributions, if required by
Section (G)(2)(b).
(d) [ ] Years of Service before the Company
maintained this Plan or a predecessor plan.
(e) [ ] Years of Service before January 1, 1971,
unless the Participant has had at least
three Years of Service after December 31,
1970.
(f) [ ] Years of Service before the effective
date of ERISA if such Service would have
been disregarded under the Break In Service
rules of the prior Plan in effect before
such date.
(P) Participant's Account Upon Termination of Employment
(Paragraph 12.3)
----------------------------------------------------
(1) Benefit Options:
Option A - Continuation of his Account. The Participant's
vested interest will:
(a) [ ] Be withdrawn from the appropriate
separate investment funds and
allocated to the Fixed Income Fund
or Guaranteed Interest Fund under
the Contract.
(b) [x] Continuation of terminated
19
<PAGE>
(P) Participant's Account (continued)
---------------------------------
Participant's Account until the
first day of April following the
calendar year in which the
terminated Participant attains
age 70-1/2 is
[X] Permitted
[ ] Not Permitted
Option B - Deferred Annuity.
Option C - One-Sum Cash Distribution is:
(a) [X] Permitted immediately upon
Termination of Employment of a
Participant.
(b) [ ] Permitted at the beginning of the
Plan Year following the Plan Year
in which the Participant incurs a
One-Year Break in Service after
terminating employment.
(c) [ ] Permitted only for distribution of
Participant Nondeductible Voluntary
contributions, if any.
Option D - Immediate installment payments are:
(a) [ ] Permitted
(b) [X] Not Permitted
Option E - Plan-to-Plan Transfers are:
(a) [X] Permitted
(b) [ ] Not Permitted
NOTE: If the vested Participant's Account is $3,500 or
less, the entire vested Participant's Account will be
distributed with or without the Participant's consent.
(2) Forfeiture Restoration. (Paragraph 12.4 and 12.5) A
reinstated Participant must repay the full amount
distributed to him attributable to Company contributions
at Termination of Employment prior to restoration of any
forfeited nonvested Account balance.
[ ] Yes [X] No [ ] Not Applicable. Plan provides
immediate 100% vesting.
20
<PAGE>
(Q) Limitation on Allocating Contributions (Paragraphs 5.5 and 5.6)
---------------------------------------------------------------
This Section will apply if the Company maintains or ever
maintained another qualified plan in which any Participant in
this Plan is; (or was) a Participant or could become a
Participant. It also applies if the Company maintains a
welfare, benefit fund, as defined in Code Section 419(e) or an
individual medical account, as defined in Code Section
415(l)(2), under which amounts are treated as Annual Additions
with respect to any Participant in this Plan.
(1) If the Participant is covered under another qualified
defined contribution plan maintained by the Company,
other than a master or prototype plan:
(a) [X] Annual Additions under this Plan
will be reduced until the plans
satisfy the Maximum Permissible
Amount limit.
(b) [ ] The Annual Additions under the
other plan(s) will be reduced until
the plans satisfy the Maximum
Permissible Amount limit.
(Name of Plan)_________________________.
(c) [ ] The provisions of Paragraph 5.5 will apply
as if the other plan were a master or
prototype plan.
(d) [ ] Other method of limiting Annual Additions.
(Describe below)
(e) [ ] Not Applicable. Company has only this
Plan.
(2) If the Participant is or has ever been a Participant
in a defined benefit plan maintained by the Company:
(a) [ ] The Annual Additions will be limited to
this and/or other qualified defined
contribution plans for the Limitation Year
so that the sum of the Defined
Contribution, Fraction and the Defined
Benefit fraction does not exceed 1.O.
(State which plan will be limited and
describe below if limitation is not under
this Plan.)
(b) [ ] The Projected Annual Benefit will be
reduced in one or more of the qualified
defined benefit plans so that the sum of
the Defined Contribution Fraction and the
21
<PAGE>
(Q) Limitation on Allocating Contributions (continued)
--------------------------------------------------
Defined Benefit Fraction does not
exceed 1.0. (As described below.)
(c) [ ] The Annual Additions will be limited and
the Projected Annual Benefit will be
reduced as described below.
(d) [X] Not Applicable. Company does not maintain
a defined benefit plan.
(R) Present Value of Accrued Benefits (Paragraph 17.5(h))
-----------------------------------------------------
If the Company maintains or has maintained, one or more
qualified defined benefit plans for purposes of establishing
present value to compute the top-heavy ratio, any benefit will
be discounted only for mortality and interest based on the
following:
(1) [ ] Interest Rate ____% Mortality Rate ____
(2) [X] Not Applicable. Company does not have a defined
benefit plan.
(S) Adoption Contingent on IRS Approval
-----------------------------------
The opinion letter issued to MassMutual by the National Office
of the Internal Revenue Service evidences the acceptability of
the form of the Prototype Plan under Code Section 401. The
adopting Company may not rely on an opinion letter issued 'by
the National Office of the Internal Revenue Service as evidence
that the Plan is qualified under Code Section 401. To obtain
reliance with respect to plan qualification, the Company must
apply to the appropriate Key District Office of the Internal
Revenue Service for a determination letter.
The adoption of the Plan and contributions thereto are subject
to the condition that the Internal Revenue Service will
determine that initially the Plan, as it relates to the
undersigned Company, meets the requirements of the Internal
Revenue Code and Regulations issued thereunder and, until the
Company has received a favorable determination letter from the
Internal Revenue Service, no Participant will have any vested
interest in any equity created by contributions made by the
Company. As soon as reasonably possible, after the execution of
this Adoption Agreement, the Administrator will submit to the
Internal Revenue Service the documents required to obtain a
determination as to the qualified status of this Plan as it
relates to the Company. Upon receipt of a determination letter,
the Administrator will submit evidence thereof to the Insurance
Company.
22
<PAGE>
(S) Adoption Contingent on IRS Approval (continued)
-----------------------------------------------
Upon receipt of evidence that the Plan is not so qualified or
if evidence is not received within one year after adoption of
the Plan, or such longer period as may be agreed to by the
Insurance Company, the Contract will be canceled and the
insurance Company will pay to the Company an amount equal to
the value of the total of all the Participant's Accounts as
determined by the Insurance Company in accordance with the
terms of the Contract and Policies.
This Adoption Agreement may be used only in conjunction with
basic plan document #02, IRS Serial No. 9015627/D357472(a).
The Company is [X] incorporated [ ] unincorporated.
Plan Serial Number is 001
Company's Fiscal Year is January 1 to December 31
The undersigned has consulted their own tax-counsel in completing this document.
Signed this 13th day of June, 1994 at Winston-Salem, North Carolina.
By: /s/ John E. Gerke
-----------------------------
John E. Gerke
Senior Vice President
Printed Name and Title
Republic Mortgage Insurance Company
Company Name
56-1031043
Company's Employer I.D. No.
23
<PAGE>
For Participating Employers Adopting this Plan:
By: /s/ John E. Gerke By: /s/ John E. Gerke
------------------------------ -------------------------------
John E. Gerke, Sr. Vice President John E. Gerke, Controller
- --------------------------------- ----------------------------------
Printed Name and Title Printed Name and Title
Republic Mortgage Insurance
RMIC Corporation Co. Of North Carolina
- --------------------------------- ----------------------------------
Company Name Company Name
36-3048119 52-0090482
- --------------------------------- ----------------------------------
Company's Employer I.D. No. Company's Employer I.D. No.
By: /s/ John E. Gerke
------------------------------
John E. Gerke, Controller
- ---------------------------------
Printed Name and Title
Republic Mortgage Insurance Co.
Co. Of Florida
- ---------------------------------
Company Name
59-1583209
- ---------------------------------
Company's Employer I.D. No.
24
<PAGE>
ADDENDUM NO. 2 TO THE
MassMutual Prototype FLEXINVEST
Profit-Sharing/401(k) Plan
1. The second subparagraph following (d) of paragraph 1.14 is deleted in
its entirety.
2. The new subparagraphs are inserted at the end of Paragraph 1.14
as follows:
In addition to other applicable limitations set forth in the
plan, and notwithstanding any other provision of the plan to
the contrary, for plan years beginning on or after January
1, 1994, the annual compensation of each employee taken into
account under the plan shall not exceed the C)BRA '93 annual
compensation limit. The OBRA '93 annual compensation limit
is $150,000, as adjusted by the Commissioner for increases
in the cost of living in accordance with section
401(a)(17)(B) of the Internal Revenue Code. The
cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which
compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of
fewer than 12 months, the OBRA '93 annual compensation limit
will be multiplied by a fraction, the numerator of which is
the number of months in the determination period, and the
denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any
reference in this plan to the limitation under section
401(a)(17) of the Code shall mean the OBRA '93 annual
compensation limit set forth in this provision.
If compensation for any prior determination period is taken
into account in determining an employee's benefits accruing
in the current plan year, the compensation for that prior
determination period is subject to the OBRA '93 annual
compensation limit in effect for that prior determination
period. For this purpose, for determination periods
beginning before the first day of the first plan year
beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
In determining the Compensation of a Participant for
purposes of this limitation, the rules of Code Section
414(q)(6) shall apply, except in applying such rules, the
term 'family' shall include only the Spouse of the
Participant and any lineal descendants of the Participant
who have not attained age 19 before the close of the year.
If, as a result of the application of such rules, the
$150,000 limitation is exceeded, then (except for the
purposes of determining the
25
<PAGE>
portion of Compensation up to the integration level if this
Plan provides for permitted disparity), the limitation shall
be prorated among affected individuals in proportion to each
such individual's Compensation as determined under this
Paragraph prior to the application of this limitation.
3. The new subparagraph is inserted at the end of Paragraph 9.3 as
follows:
If the distribution is one to which sections 401(a)(11) and
417 of the Internal Revenue Code do not apply, a
distribution may commence less than 30 days after the notice
required under section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that: (1) the Plan
Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days
after receiving the notice to consider the decision of
whether or not to elect a distribution (and, if applicable,
a particular distribution option); and (2) the Participant,
after receiving the notice, affirmatively elects a
distribution.
[Note: The provisions of Paragraph 9.3 apply to
distributions subject to Code Sections 401(a)(11) and 417.
The above 30-day waiver provision applies to distributions
in Parts 9, 10, 12, 13, 14 and 18 of this Plan which are not
subject to Code Sections 401(a)(11) and 417.]
26
<PAGE>
SF2174
(L) In-Service Withdrawals (continued)
Contributions, or Company Annual Contributions (in non-integrated
plan) for 12 consecutive months beginning from the date of
withdrawal?
[ ] Yes [ ] No [ ] Not Applicable
NOTE: Notwithstanding the elections made in this Section, a
Participant who has attained age 70-1/2 may withdraw all or a
portion of his vested account balance.
(M) Loans (Part XI)
(1) Loans [X] will [ ] will not be permitted to Participants.
A Participant may have up to 2 [not to exceed 5] loans
outstanding at any one time.
(2) The Repayment Period for loans to purchase a principal
residence [ ] can [X} cannot exceed 5 years.
(N) Special Top-Heavy Elections (Paragraph 17.2)
(1) If Employees Participate in Multiple Plans of the Company:
If the Company maintains one or more plans in addition to
this Plan and if one or more Employees participate in this
Plan and in another plan, the minimum top-heavy
contribution or benefit will be determined as follows:
(a) [ ] a Minimum Contribution will be made to
this Plan of
(i) [ ] 3 percent of compensation (for
Participants in defined
contribution plans only).
(ii) [ ] 5 percent of compensation (for
participants in this Plan and
in a defined benefit plan).
(b) [ ] the Minimum Contribution or benefit will
be satisfied by the Plan named hereafter:
_________________________________________
(c) [ ] Not Applicable. Company has only this
Plan.
27
<PAGE>
(2) Maximum Defined Contribution and Defined Benefit
Fractions: If the Plan becomes top-heavy, the
This page amends, effective January 1, 1996, the Adoption Agreement as executed
on June 13, 1994.
REPUBLIC MORTGAGE INSURANCE COMPANY
Date: 12/13/95 By: /S/ John E. Gerke, SVP
---------- --------------------------------
Signature and Title
28
Exhibit 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our reports dated March 10, 2000 relating to the
financial statements and financial statement schedules of Old Republic
International Corporation, which appear in Old Republic International
Corporation's Annual Report on Form 10-K and Amendment NO. 1 to the Annual
Report on Form 10-K/A1, respectively, for the year ended December 31, 1999.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
May 15, 2000
