SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FPL GROUP, INC.
(Exact name of registrant as specified in its charter)
Florida 59-2449419
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 Universe Boulevard
Juno Beach, Florida 33408
(Address of Principal Executive Office) (Zip Code)
(Full title of the plan)
FPL Energy Operating Services, Inc. Employees Savings Plan
Dennis P. Coyle
General Counsel and Secretary
FPL Group, Inc.
700 Universe Boulevard
Juno Beach, Florida 33408
(561) 694-4644
Jeffrey I. Mullens, P.A.
Steel Hector & Davis LLP
1900 Phillips Point West
777 South Flagler Drive
West Palm Beach, Florida 33401-6198
(561) 650-7257
Robert J. Reger, Jr., Esq.
Thelen Reid & Priest LLP
40 West 57th Street
New York, New York 10019-4097
(212) 603-2000
(Names and addresses of agents for service) (Telephone number, including
area code, of agents for service)
Copies to:
Denise A. Gordon, Esq.
Steel Hector & Davis LLP
1900 Phillips Point West
777 S. Flagler Drive
West Palm Beach, Florida, 33401-6198
CALCULATION OF REGISTRATION FEE
<TABLE><CAPTION>
Proposed Proposed
Title of Each Amount Maximum Maximum Amount of
Class of Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Unit (1) Offering Price (1) Fee
- ------------------------------- ----------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 25,000 (2) $58.2813 $1,457,032.50 $405.06
Preferred Share Purchase Rights 25,000 (3) (4)
</TABLE>
(1) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457(h)(1) under the Securities
Act of 1933, as amended (the "Securities Act"), based upon the
average of the high and low sale prices of such Common Stock on
May 18, 1999 on the New York Stock Exchange Composite Tape.
(2) This Registration Statement also relates to such
indeterminate number of additional Common Shares of the
Registrant as may be issuable as a result of stock splits, stock
dividends, recapitalizations, mergers, reorganizations,
combinations or exchange of shares or other similar events.
(3) The Preferred Share Purchase Rights (the "Rights") are
attached to and will trade with the Common Stock. The value
attributable to the Rights, if any, is reflected in the market
price of the Common Stock.
(4) Since no separate consideration is paid for the Rights, the
registration fee for such securities is included in the
registration fee for the Common Stock.
This Registration Statement shall become effective upon filing
with the Securities and Exchange Commission (the "Commission")
in accordance with Section 8(a) of the Securities Act, and Rules
456 and 462 promulgated thereunder.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
Not required to be filed with the Commission.
Item 2. Registrant Information and Employee Plan
Annual Information.
Not required to be filed with the Commission.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by
Reference.
The following documents filed or to be filed by FPL Group, Inc.
(the "Registrant") with the Commission are incorporated herein
by reference:
1. Annual Report on Form 10-K (Commission File No. 1-
8841) for the fiscal year ended December 31, 1998.
2. Quarterly Report on Form 10-Q (Commission File No. 1-
8841) for the quarterly period ended March 31, 1999.
3. Current Reports on Form 8-K filed with the Commission
on March 17, 1999 and April 16, 1999.
4. The description of the Registrant's Common Stock to be
offered pursuant to the FPL Energy Operating Services, Inc.
Employees Savings Plan (the "Plan"), which is contained in its
Registration Statement on Form 8-B filed with the Commission on
December 31, 1984, including all amendments and reports filed
for the purpose of updating such description.
5. The description of the Rights contained in Item 1 of
the Registration Statement on Form 8-A filed with the
Commission on June 20, 1996, including all amendments or
reports filed for the purpose of updating such description.
6. All other reports filed by the Registrant pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), since the end of the fiscal
year covered by the report referred to in (1) above.
All documents filed by the Registrant pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
Any statement contained in this Registration Statement, or in a document
incorporated or deemed to be incorporated by reference herein, shall be
deemed to be modified or superseded for purposes of this Registration
Statement, to the extent that a statement contained herein or in any other
subsequently filed document which is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
None.
Item 6. Indemnification of Directors and Officers.
Section 607.0850 of the Florida Statutes generally permits the Registrant
to indemnify its directors, officers, employees or other agents who are
subject to any third-party actions because of their service to the
Registrant if such persons acted in good faith and in a manner they
reasonably believed to be in, or not opposed to, the best interests of the
Registrant. If the proceeding is a criminal one, such person must also
have had no reasonable cause to believe his conduct was unlawful. In
addition, the Registrant may indemnify its directors, officers, employees
or other agents who are subject to derivative actions against expenses and
amounts paid in settlement which do not exceed, in the judgment of the
board of directors, the estimated expense of litigating the proceeding to
conclusion, actually and reasonably incurred in connection with the defense
or settlement of such proceeding, if such person acted in good faith and in
a manner such person reasonably believed to be in, or not opposed to, the
best interests of the Registrant. To the extent that a director, officer,
employee or other agent is successful on the merits or otherwise in defense
of a third-party or derivative action, such person will be indemnified
against expenses actually and reasonably incurred in connection therewith.
This Section also permits a corporation further to indemnify such persons
by other means unless a judgment or other final adjudication establishes
that such person's actions or omissions which were material to the cause of
action constitute (1) a crime (unless such person had reasonable cause to
believe his conduct was lawful or had no reasonable cause to believe it
unlawful), (2) a transaction from which he derived an improper personal
benefit, (3) a transaction in violation of Florida Statutes Section
607.0834 (unlawful distributions to shareholders), or (4) willful
misconduct or a conscious disregard for the best interests of the
corporation in a proceeding by or in the right of the corporation to
procure a judgment in its favor or in a proceeding by or in the right of a
shareholder.
Furthermore, Florida Statutes Section 607.0831 provides, in
general, that no director shall be personally liable for monetary damages
to the Registrant or any other person for any statement, vote, decision, or
failure to act, regarding corporate management or policy, unless: (a) the
director breached or failed to perform his duties as a director; and (b)
the director's breach of, or failure to perform, those duties constitutes
(i) a violation of criminal law, unless the director had reasonable cause
to believe his conduct was lawful or had no reasonable cause to believe his
conduct was unlawful, (ii) a transaction from which the director derived an
improper personal benefit, either directly or indirectly, (iii) a
circumstance under which the liability provisions of Florida Statutes
Section 607.0834 are applicable, (iv) in a proceeding by or in the right of
the Registrant to procure a judgment in its favor or by or in the right of
a shareholder, conscious disregard for the best interest of the Registrant,
or willful misconduct, or (v) in a proceeding by or in the right of someone
other than the Registrant or a shareholder, recklessness or an act or
omission which was committed in bad faith or with malicious purpose or in a
manner exhibiting wanton and willful disregard of human rights, safety, or
property. The term "recklessness," as used above, means the action, or
omission to act, in conscious disregard of a risk: (a) known, or so obvious
that it should have been known, to the directors; and (b) known to the
director, or so obvious that it should have been known, to be so great as
to make it highly probable that harm would follow from such action or
omission.
The Registrant's Bylaws provide generally that the Registrant shall, to the
fullest extent permitted by law, indemnify all directors and officers of
the Registrant, directors, officers, or other employees serving as a
fiduciary of an employee benefit plan of the Registrant, as well as any
employees or agents of the Registrant or other persons serving at the
request of the Registrant in any capacity with any entity or enterprise
other than the Registrant to whom the Registrant has agreed to grant
indemnification (each, an "Indemnified Person") to the extent that any such
person is made a party or threatened to be made a party or called as a
witness or is otherwise involved in any action, suit, or proceeding in
connection with his status as an Indemnified Person. Such indemnification
covers all expenses incurred by any Indemnified Person (including
attorney's fees) and all liabilities and losses (including judgments,
fines, and amounts to be paid in settlement) incurred thereby in connection
with any such action, suit or proceeding.
In addition, the Registrant carries insurance permitted by the
laws of Florida on behalf of directors, officers, employees or agents which
may cover, among other things, liabilities under the Securities Act.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
*4(a) Restated Articles of Incorporation of Registrant dated December
31, 1984, as amended through December 17, 1990 (filed on July 16, 1993 as
Exhibit 4(a) to Post-Effective Amendment No. 5 to Form S-8, Registration
Statement No. 33-18669, File No. 1-8841).
*4(b) Amendment to Registrant's Restated Articles of Incorporation dated
June 27, 1996 (filed as Exhibit 3 to Form 10-Q for the quarter ended June
30, 1996, File No. 1-8841).
*4(c) Bylaws of Registrant dated November 15, 1993 (filed as Exhibit
3(ii) to Form 10-K for the fiscal year ended December 31, 1993, File No. 1-
8841).
*4(d) Rights Agreement, dated as of July 1, 1996, between Registrant and
The First National Bank of Boston (filed as Exhibit 4 to Form 8-K dated
June 17, 1996, File No. 1-8841).
5 Opinion of Steel Hector & Davis LLP.
23(a) Consent of Deloitte & Touche LLP.
23(b) Consent of Steel Hector & Davis LLP (included in Exhibit 5 to this
Registration Statement).
24 Power of Attorney (included on signature pages of this
Registration Statement).
99(a) FPL Energy Operating Services, Inc. Employees Savings Plan.
99(b) First Amendment to the FPL Energy Operating Services, Inc.
Employees Savings Plan.
* Incorporated by reference as indicated.
Item 9. Undertakings.
(a) 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;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that the Registrant need not file a post-effective
amendment to include the information required to be included by subsection
(i) or (ii) if the Registration Statement is on Form S-8 or Form S-3, and
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
POWER OF ATTORNEY
Each director and/or officer of the Registrant whose signature
appears below hereby appoints the agents for service named in this
Registration Statement, and each of them severally, as his attorney-in-fact
to sign in his name and on his behalf, in any and all capacities stated
below and to file with the Commission any and all amendments, including
post-effective amendments, to this Registration Statement, and the
Registrant hereby also appoints each such agent for service as its
attorney-in-fact with like authority to sign and file any such amendments
in its name and on its behalf.
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities
Act, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Juno Beach, State of
Florida, on this 10th day of May, 1999.
FPL GROUP, INC.
By: /s/ James L. Broadhead
James L. Broadhead
Chairman of the Board and Chief Executive Officer
[continued on next page]
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
/s/ James L. Broadhead Chairman of the Board and May 10, 1999
James L. Broadhead Chief Executive Officer
(Principal Executive Officer
and Director)
/s/ K. Michael Davis Controller and Chief Accounting May 10, 1999
K. Michael Davis Officer (Principal Accounting
Officer and Principal Financial
Officer)
/s/ H. Jesse Arnelle Directors May 10, 1999
H. Jesse Arnelle
/s/ Sherry S. Barrat May 10, 1999
Sherry S. Barrat
/s/ Robert M. Beall, II May 10, 1999
Robert M. Beall, II
/s/ J. Hyatt Brown May 10, 1999
J. Hyatt Brown
/s/ Armando M. Codina May 10, 1999
Armando M. Codina
/s/ Marshall M. Criser May 10, 1999
Marshall M. Criser
/s/ B. F. Dolan May 10, 1999
B. F. Dolan
/s/ Willard D. Dover May 10, 1999
Willard D. Dover
/s/ Alexander J. Dreyfoos Jr. May 10, 1999
Alexander J. Dreyfoos Jr.
/s/ Paul J. Evanson May 10, 1999
Paul J. Evanson
/s/ Drew Lewis May 10, 1999
Drew Lewis
/s/ Frederic V. Malek May 10, 1999
Frederic V. Malek
/s/ Paul R. Tregurtha May 10, 1999
Paul R. Tregurtha
/s/ Roger Young May 10, 1999
Roger Young
EXHIBIT INDEX
Exhibit No.
*4(a) Restated Articles of Incorporation of Registrant dated
December 31, 1984, as amended through December 17, 1990
(filed on July 16, 1993 as Exhibit 4(a) to Post-Effective
Amendment No. 5 to Form S-8, Registration Statement No.
33-18669, File No. 1-8841).
*4(b) Amendment to Registrant's Restated Articles of
Incorporation dated June 27, 1996 (filed as Exhibit 3 to
Form 10-Q for the quarter ended June 30, 1996, File No. 1-
8841).
*4(c) Bylaws of Registrant dated November 15, 1993 (filed as
Exhibit 3(ii) to Form 10-K for the fiscal year ended
December 31, 1993, File No. 1-8841).
*4(d) Rights Agreement, dated as of July 1, 1996, between
Registrant and The First National Bank of Boston (filed as
Exhibit 4 to Form 8-K dated June 17, 1996, File No. 1-
8841).
5 Opinion of Steel Hector & Davis LLP.
23(a) Consent of Deloitte & Touche LLP.
23(b) Consent of Steel Hector & Davis LLP (included in Exhibit 5
to this Registration Statement).
24 Power of Attorney (included on signature pages of this
Registration Statement).
99(a) FPL Energy Operating Services, Inc. Employees Savings
Plan.
99(b) First Amendment to the FPL Energy Operating Services, Inc.
Employees Savings Plan.
* Incorporated by reference as indicated.
Exhibit 5
May 24, 1999
FPL Group, Inc.
700 Universe Boulevard
Juno Beach, Florida 33408
Ladies and Gentlemen:
As counsel for FPL Group, Inc., a Florida corporation ("FPL
Group"), we have participated in the preparation of a registration
statement on Form S-8 to be filed by FPL Group with the Securities
and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Securities Act"), on or about the date
hereof in connection with the FPL Energy Operating Services, Inc.
Employees Savings Plan (the "Plan"). The Registration Statement
registers 25,000 shares (the "Shares") of FPL Group Common Stock,
$.01 par value (the "Common Stock"), and the Preferred Share
Purchase Rights attached thereto (the "Rights"). This opinion is
given with respect to the Shares to the extent they are newly-issued
shares of Common Stock.
In connection therewith, we have examined FPL Group's
Restated Articles of Incorporation and FPL Group's Bylaws, each as
amended to the date hereof; the Rights Agreement dated as of June 20,
1996 between FPL Group and The First National Bank of Boston (the
"Rights Agreement"), providing for the issuance of the Rights;
resolutions adopted by the Board of Directors of FPL Group on June
17, 1996 providing, among other things, for distribution of the
Rights and approving the Rights Agreement; and such other corporate
documents and records, certificates of public officials and questions
of law as we deemed necessary or appropriate for the purposes of this
opinion.
We have also reviewed the relevant statutory provisions of
the Florida Business Corporation Act, such other legal authority in
Florida as we have deemed relevant and, because the issuance of the
Rights would, if challenged, present as to a Florida corporation a
case of first impression in the courts of Florida and because the
issuance of interests such as the Rights has to our knowledge yet to
be the subject of any reported appellate opinion of a Florida court,
we have reviewed certain case law with respect to the distribution of
such rights in other jurisdictions.
For purposes of the opinion related to the Rights expressed
herein, we have assumed (1) that FPL Group has sufficient authorized
but unissued shares of preferred stock to provide fully for the
exercise of the Rights without amendment of FPL Group's Restated
Articles of Incorporation to increase the number of authorized but
unissued shares of preferred stock, (2) that no member of the Board
of Directors of FPL Group has any personal interest therein (except
for an interest arising solely from ownership of FPL Group Common
Stock) and (3) that in approving the Rights Agreement and the
transactions provided for therein, each member of the Board of
Directors has discharged his duties in the good faith exercise of his
business judgment, in a manner he reasonably believed to be in the
best interest of FPL Group and its shareholders and with such care as
an ordinarily prudent person in a like position would use under
similar circumstances, and that he did not act solely or primarily to
perpetuate his office. Nothing has come to our attention that would
lead us to believe that we are not justified in relying on such
assumptions.
Based on the foregoing, we advise you that:
1. The Shares of Common Stock, when issued in
accordance with the terms set forth in the Plan, will be validly
issued, fully paid and non-assessable.
2. The Rights, when issued as contemplated by the
Registration Statement, will be validly issued.
The foregoing opinions are rendered subject to the
qualification that we are members of the Florida Bar. The
foregoing opinions are limited to the laws of the State of
Florida and the federal laws of the United States insofar as they
bear on the matters covered hereby.
We further advise you that the statements made in the
Prospectus under the caption "Federal Income Tax Consequences"
constitute an accurate general description of certain federal
income tax consequences to participants in the Plan.
We hereby consent to the filing of this opinion as
Exhibit 5 to the Registration Statement. We also consent to the
reference to us in the Prospectus under the caption "Legal
Matters."
Very
truly yours,
STEEL HECTOR & DAVIS LLP
DAG/JIM
Exhibit 23(b)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of FPL Group, Inc. on Form S-8 of our report dated February 12, 1999
appearing in FPL Group, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1998.
Deloitte & Touche LLP
Miami, Florida
May 24, 1999
Exhibit 99 (a)
ESI OPERATING SERVICES, INC.
EMPLOYEES SAVINGS PLAN
Effective as of November 1, 1997
12/97
TABLE OF CONTENTS
PREAMBLE 1
ARTICLE I: DEFINITIONS 1
1.1 Plan Definitions 1
1.2 Interpretation 5
ARTICLE II: SERVICE 5
2.1 Definitions 5
2.2 Crediting of Hours of Service 5
2.3 Crediting of Continuous Service 6
2.4 Eligibility Service 6
2.5 Vesting Service 6
ARTICLE III: ELIGIBILITY 6
3.1 Eligibility 6
3.2 Transfers of Employment 7
3.3 Reemployment 7
3.4 Notification Concerning New Eligible Employees 7
3.5 Effect and Duration 7
ARTICLE IV: TAX-DEFERRED CONTRIBUTIONS 7
4.1 Tax-Deferred Contributions 7
4.2 Amount of Tax-Deferred Contributions 8
4.3 Changes in Reduction Authorization 8
4.4 Suspension of Tax-Deferred Contributions 8
4.5 Resumption of Tax-Deferred Contributions 8
4.6 Delivery of Tax-Deferred Contributions 8
4.7 Vesting of Tax-Deferred Contributions 9
ARTICLE V: AFTER-TAX AND ROLLOVER CONTRIBUTIONS 9
5.1 No After-Tax Contributions 9
5.2 Rollover Contributions 9
5.3 Vesting of Rollover Contributions 9
ARTICLE VI: EMPLOYER CONTRIBUTIONS
6.1 Contribution Period 9
6.2 Matching Contributions 9
6.3 Allocation of Matching Contributions 10
6.4 Verification of Amount of Employer Contributions by the
Sponsor 10
6.5 Payment of Employer Contributions 10
6.6 Eligibility to Participate in Allocation 10
6.7 Vesting of Employer Contributions 10
6.8 Election of Former Vesting Schedule 11
6.9 Forfeitures to Reduce Employer Contributions 11
ARTICLE VII: LIMITATIONS ON CONTRIBUTIONS 11
7.1 Definitions 11
7.2 Code Section 402(g) Limit 13
7.3 Distribution of Excess Deferrals 14
7.4 Limitation on Tax-Deferred Contributions of Highly
Compensated Employees 14
7.5 Distribution of Excess Tax-Deferred Contributions 15
7.6 Limitation on Matching Contributions of Highly
Compensated Employees 16
7.7 Forfeiture or Distribution of Excess Contributions 17
7.8 Multiple Use Limitation 18
7.9 Determination of Income or Loss 18
7.10 Code Section 415 Limitations on Crediting of
Contributions and Forfeitures 18
7.11 Coverage Under Other Qualified Defined Contribution Plan 19
7.12 Coverage Under Qualified Defined Benefit Plan 19
7.13 Scope of Limitations 19
ARTICLE VIII: TRUST FUNDS AND SEPARATE ACCOUNTS 20
8.1 General Fund 20
8.2 Investment Funds 20
8.3 Loan Investment Fund 20
8.4 Income on Trust 20
8.5 Separate Accounts 20
8.6 Sub-Accounts 20
ARTICLE IX: LIFE INSURANCE CONTRACTS 21
9.1 No Life Insurance Contracts 21
ARTICLE X: DEPOSIT AND INVESTMENT OF CONTRIBUTIONS 21
10.1 Future Contribution Investment Elections 21
10.2 Deposit of Contributions 21
10.3 Election to Transfer Between Funds 21
10.4 404(c) Plan 22
ARTICLE XI: CREDITING AND VALUING SEPARATE ACCOUNTS 22
11.1 Crediting Separate Accounts 22
11.2 Valuing Separate Accounts 22
11.3 Plan Valuation Procedures 22
11.4 Finality of Determinations 23
11.5 Notification 23
ARTICLE XII: LOANS 23
12.1 Application for Loan 23
12.2 Reduction of Account Upon Distribution 24
12.3 Requirements to Prevent a Taxable Distribution 24
12.4 Administration of Loan Investment Fund 25
12.5 Default 25
12.6 Special Rules Applicable to Loans 25
ARTICLE XIII: WITHDRAWALS WHILE EMPLOYED 26
13.1 Withdrawals of Rollover Contributions 26
13.2 Withdrawals of Employer Contributions 26
13.3 Withdrawals of Tax-Deferred Contributions 26
13.4 Conditions and Limitations on Hardship Withdrawals 26
13.5 Order of Withdrawal from a Participant's Sub-Accounts 27
ARTICLE XIV: TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE 27
14.1 Termination of Employment and Settlement Date 27
14.2 Separate Accounting for Non-Vested Amounts 28
14.3 Disposition of Non-Vested Amounts 28
14.4 Recrediting of Forfeited Amounts 29
ARTICLE XV: DISTRIBUTIONS 29
15.1 Distributions to Participants 29
15.2 Distributions to Beneficiaries 29
15.3 Cash Outs and Participant Consent 30
15.4 Required Commencement of Distribution 30
15.5 Reemployment of a Participant 31
15.6 Restrictions on Alienation 31
15.7 Facility of Payment 31
15.8 Inability to Locate Payee 31
15.9 Distribution Pursuant to Qualified Domestic Relations
Orders 32
ARTICLE XVI: FORM OF PAYMENT 32
16.1 Form of Payment 32
16.2 Direct Rollover 32
16.3 Notice Regarding Form of Payment 33
ARTICLE XVII: BENEFICIARIES 33
17.1 Designation of Beneficiary 33
17.2 Spousal Consent Requirements 33
ARTICLE XVIII: ADMINISTRATION 34
18.1 Authority of the Sponsor 34
18.2 Action of the Sponsor 34
18.3 Claims Review Procedure 34
18.4 Qualified Domestic Relations Orders 35
18.5 Indemnification 35
18.6 Actions Binding 36
ARTICLE XIX: AMENDMENT AND TERMINATION 36
19.1 Amendment 36
19.2 Limitation on Amendment 36
19.3 Termination 36
19.4 Reorganization 37
19.5 Withdrawal of an Employer 38
ARTICLE XX: ADOPTION BY OTHER ENTITIES 38
20.1 Adoption by Related Companies 38
20.2 Effective Plan Provisions 38
ARTICLE XXI: MISCELLANEOUS PROVISIONS 39
21.1 No Commitment as to Employment 39
21.2 Benefits 39
21.3 No Guarantees 39
21.4 Expenses 39
21.5 Precedent 39
21.6 Duty to Furnish Information 39
21.7 Withholding 39
21.8 Merger, Consolidation, or Transfer of Plan Assets 40
21.9 Back Pay Awards 40
21.10 Condition on Employer Contributions 40
21.11 Return of Contributions to an Employer 40
21.12 Validity of Plan 41
21.13 Trust Agreement 41
21.14 Parties Bound 41
21.15 Application of Certain Plan Provisions 41
21.16 Leased Employees 41
21.17 Transferred Funds 42
ARTICLE XXII: TOP-HEAVY PROVISIONS 42
22.1 Definitions 42
22.2 Applicability 44
22.3 Minimum Employer Contribution 44
22.4 Adjustments to Section 415 Limitations 45
ARTICLE XXIII: EFFECTIVE DATE 45
ESI OPERATING SERVICES, INC. EMPLOYEES SAVINGS PLAN
PREAMBLE
The Plan established hereunder, to be known as the ESI Operating Services,
Inc. Employees Savings Plan, is intended to qualify as a profit-sharing plan
under Section 401(a) of the Code, and includes a cash or deferred arrangement
that is intended to qualify under Section 401(k) of the Code. The Plan is
established and maintained for the exclusive benefit of eligible employees and
their beneficiaries.
ARTICLE I: DEFINITIONS
1.1 Plan Definitions
As used herein, the following words and phrases have the meanings hereinafter
set forth, unless a different meaning is plainly required by the context:
The "Administrator" means the Sponsor unless the Sponsor designates another
person or persons to act as such.
An "After-Tax Contribution" means any after-tax employee contribution made
by a Participant as may be permitted under Article V.
The "Beneficiary" of a Participant means the person or persons entitled under
the provisions of the Plan to receive distribution hereunder in the event the
Participant dies before receiving distribution of his entire interest under
the Plan.
The "Code" means the Internal Revenue Code of 1986, as amended from time to
time. Reference to a section of the Code includes such section and any
comparable section or sections of any future legislation that amends,
supplements, or supersedes such section.
The "Compensation" of a Participant for any period means the Participant's
regular base pay paid by the Employer for a 40 hour work week, as reported on
IRS Form W-2, excluding shift differentials, bonuses, overtime pay,
commissions, reimbursements or other expense allowances, fringe benefits,
moving expenses, deferred compensation, welfare benefits and other forms of
pay, but determined prior to any exclusions for amounts deferred under
Section 125, 402(e)(3), 402(h)(1)(B), 403(b), or 457(b) of the Code or for
certain contributions described in Section 414(h)(2) of the Code that are
picked up by the employing unit and treated as employer contributions.
In no event, however, shall the Compensation of a Participant taken into
account under the Plan for any Plan Year exceed $150,000 (subject to
adjustment annually as provided in Section 401(a)(17)(B) and Section 415(d)
of the Code; provided, however, that the dollar increase in effect on January
1 of any calendar year, if any, is effective for Plan Years beginning in such
calendar year). If the Compensation of a Participant is determined over a
period of time that contains fewer than 12 calendar months, then the annual
compensation limitation described above shall be adjusted with respect to that
Participant by multiplying the annual compensation limitation in effect for
the Plan Year by a fraction the numerator of which is the number of full
months in the period and the denominator of which is 12; provided, however,
that no proration is required for a Participant who is covered under the Plan
for less than one full Plan Year if the formula for allocations is based on
Compensation for a period of at least 12 months.
A "Contribution Period" means the period specified in Article VI for which
Employer Contributions shall be made.
The "Early Retirement Date" of an employee means the date he both attains age
60 and is credited with at least 10 Years of Service.
An "Eligible Employee" means any Employee who has met the eligibility
requirements of Article III to have Tax-Deferred Contributions made to the
Plan on his behalf.
The "Eligibility Service" of an employee means the period or periods of
service credited to him under the provisions of Article II for purposes of
determining his eligibility to participate in the Plan as may be required
under Article III or Article VI.
An "Employee" means any employee of an Employer other than an employee who (i)
is covered by a collective bargaining agreement that does not specifically
provide for coverage under the Plan or (ii) is classified by an Employer as
an independent contractor.
An "Employer" means the Sponsor and any entity which has adopted the Plan as
may be provided under Article XX.
An "Employer Contribution" means the amount, if any, that an Employer
contributes to the Plan as may be provided under Article VI or Article XXII.
An "Enrollment Date" means the first day of each calendar month of the Plan
Year.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time. Reference to a section of ERISA includes such section and
any comparable section or sections of any future legislation that amends,
supplements, or supersedes such section.
The "General Fund" means a Trust Fund maintained by the Trustee as required
to hold and administer any assets of the Trust that are not allocated among
any separate Investment Funds as may be provided in the Plan or the Trust
Agreement. No General Fund shall be maintained if all assets of the Trust are
allocated among separate Investment Funds.
A "Highly Compensated Employee" means an Employee or former Employee who is
a highly compensated active employee or highly compensated former employee as
defined hereunder.
A "highly compensated active employee" includes any Employee who performs
services for an Employer during the determination year and who (i) was a five
percent owner at any time during the determination year or the look back year,
or (ii) received compensation from an Employer during the look back year in
excess of $80,000 (subject to adjustment annually at the same time and in the
same manner as under Section 415(d) of the Code), and was in the top paid
group of employees for the look back year.
A "highly compensated former employee" includes any Employee who separated
from service from an Employer and all Related Companies (or is deemed to have
separated from service from an Employer and all Related Companies) prior to
the determination year, performed no services for an Employer during the
determination year, and was a highly compensated active employee for either
the separation year or any determination year ending on or after the date the
Employee attains age 55.
The determination of who is a Highly Compensated Employee hereunder, including
determinations as to the number and identity of employees in the top paid
group, the 100 employees receiving the greatest compensation from an Employer,
the number of employees treated as officers, and the compensation considered,
shall be made in accordance with the provisions of Section 414(q) of the Code
and regulations issued thereunder. For purposes of this definition, the
following terms have the following meanings:
(a) The "determination year" means the Plan Year.
(b) The "look back year" means the 12-month period immediately preceding
the determination year.
An "Hour of Service" with respect to a person means each hour, if any, that
may be credited to him in accordance with the provisions of Article II.
An "Investment Fund" means any separate investment Trust Fund maintained by
the Trustee as may be provided in the Plan or the Trust Agreement or any
separate investment fund maintained by the Trustee, to the extent that there
are Participant Sub-Accounts under such funds, to which assets of the Trust
may be allocated and separately invested.
A "Matching Contribution" means any Employer Contribution made to the Plan
on account of a Participant's Tax-Deferred Contributions as provided in
Article VI.
The "Normal Retirement Date" of an employee means the date he attains age 65.
A "Participant" means any person who has a Separate Account in the Trust.
The "Plan" means ESI Operating Services, Inc. Employees Savings Plan, as from
time to time in effect.
A "Plan Year" means the period beginning November 1, 1997 and ending December
31, 1997, and each 12-consecutive-month period thereafter.
A "Related Company" means any corporation or business, other than an
Employer, which would be aggregated with an Employer for a relevant purpose
under Section 414 of the Code.
A "Rollover Contribution" means any rollover contribution to the Plan made
by a Participant as may be permitted under Article V.
A "Separate Account" means the account maintained by the Trustee in the name
of a Participant that reflects his interest in the Trust and any Sub-Accounts
maintained thereunder, as provided in Article VIII.
The "Settlement Date" of a Participant means the date on which a
Participant's interest under the Plan becomes distributable in accordance with
Article XV.
The "Sponsor" means ESI Operating Services, Inc., and any successor thereto.
A "Sub-Account" means any of the individual sub-accounts of a Participant's
Separate Account that is maintained as provided in Article VIII.
A "Tax-Deferred Contribution" means the amount contributed to the Plan on a
Participant's behalf by his Employer in accordance with his reduction
authorization executed pursuant to Article IV.
The "Trust" means the trust, custodial accounts, annuity contracts, or
insurance contracts maintained by the Trustee under the Trust Agreement.
The "Trust Agreement" means the agreement entered into between the Sponsor
and the Trustee relating to the holding, investment, and reinvestment of the
assets of the Plan, together with all amendments thereto and shall include any
agreement establishing a custodial account, an annuity contract, or an
insurance contract (other than a life, health or accident, property, casualty,
or liability insurance contract) for the investment of assets if the custodial
account or contract would, except for the fact that it is not a trust,
constitute a qualified trust under Section 401 of the Code.
The "Trustee" means the trustee or any successor trustee which at the time
shall be designated, qualified, and acting under the Trust Agreement and shall
include any insurance company that issues an annuity or insurance contract
pursuant to the Trust Agreement or any person holding assets in a custodial
account pursuant to the Trust Agreement. The Sponsor may designate a person
or persons other than the Trustee to perform any responsibility of the Trustee
under the Plan, other than trustee responsibilities as defined in Section
405(c)(3) of ERISA, and the Trustee shall not be liable for the performance
of such person in carrying out such responsibility except as otherwise
provided by ERISA. The term Trustee shall include any delegate of the Trustee
as may be provided in the Trust Agreement.
A "Trust Fund" means any fund maintained under the Trust by the Trustee.
A "Valuation Date" means the date or dates designated by the Sponsor and
communicated in writing to the Trustee for the purpose of valuing the General
Fund and each Investment Fund and adjusting Separate Accounts and Sub-Accounts
hereunder, which dates need not be uniform with respect to the General Fund,
each Investment Fund, Separate Account, or Sub-Account; provided, however,
that the General Fund and each Investment Fund shall be valued and each
Separate Account and Sub-Account shall be adjusted no less often than once
annually.
The "Vesting Service" of an employee means the period or periods of service
credited to him under the provisions of Article II for purposes of determining
his vested interest in his Employer Contributions Sub-Account, if Employer
Contributions are provided for under either Article VI or Article XXII.
1.2 Interpretation
Where required by the context, the noun, verb, adjective, and adverb forms of
each defined term shall include any of its other forms. Wherever used herein,
the masculine pronoun shall include the feminine, the singular shall include
the plural, and the plural shall include the singular.
ARTICLE II: SERVICE
2.1 Definitions
For purposes of this Article, the following terms have the following meanings:
(a) The "continuous service" of an employee means the service credited
to him in accordance with the provisions of Section 2.3 of the Plan.
(b) The "employment commencement date" of an employee means the date he
first completes an Hour of Service.
(c) A "maternity/paternity absence" means a person's absence from
employment with an Employer or a Related Company because of the
person's pregnancy, the birth of the person's child, the placement
of a child with the person in connection with the person's adoption
of the child, or the caring for the person's child immediately
following the child's birth or adoption. A person's absence from
employment will not be considered a maternity/paternity absence
unless the person furnishes the Administrator such timely
information as may reasonably be required to establish that the
absence was for one of the purposes enumerated in this paragraph and
to establish the number of days of absence attributable to such
purpose.
(d) The "reemployment commencement date" of an employee means the first
date following a severance date on which he again completes an Hour
of Service.
(e) The "severance date" of an employee means the earlier of (i) the
date on which he retires, dies, or his employment with an Employer
and all Related Companies is otherwise terminated, or (ii) the first
anniversary of the first date of a period during which he is absent
from work with an Employer and all Related Companies for any other
reason; provided, however, that if he terminates employment with or
is absent from work with an Employer and all Related Companies on
account of service with the armed forces of the United States, he
shall not incur a severance date if he is eligible for reemployment
rights under the Uniformed Services Employment and Reemployment
Rights Act of 1994 and he returns to work with an Employer or a
Related Company within the period during which he retains such
reemployment rights.
2.2 Crediting of Hours of Service
A person shall be credited with an Hour of Service for each hour for which he
is paid, or entitled to payment, for the performance of duties for an
Employer, a Predecessor Employer, or any Related Company.
2.3 Crediting of Continuous Service
A person shall be credited with continuous service for the aggregate of the
periods of time between his employment commencement date or any reemployment
commencement date and the severance date that next follows such employment
commencement date or reemployment commencement date; provided, however, that
an employee who has a reemployment commencement date within the
12-consecutive-month period following the earlier of the first date of his
absence or his severance date shall be credited with continuous service for
the period between such severance date and reemployment commencement date.
2.4 Eligibility Service
An employee shall be credited with Eligibility Service equal to his continuous
service; provided, however, that a Participant will be credited with a full
calendar month of Eligibility Service for each month in which the Participant
completes at least one Hour of Service.
2.5 Vesting Service
Years of Vesting Service shall be determined in accordance with the following
provisions:
(a) An employee shall be credited with years of Vesting Service equal
to his period of continuous service.
(b) Notwithstanding the provisions of paragraph (a), continuous service
completed by an employee prior to a severance date shall not be
included in determining the employee's years of Vesting Service
unless the employee had a nonforfeitable right to any portion of his
Separate Account, excluding that portion of his Separate Account
that is attributable to Rollover Contributions, as of the severance
date, or the period of time between the severance date and his
reemployment commencement date is less than the greater of five
years or his period of continuous service determined as of the
severance date; and provided, however, that solely for purposes of
applying this paragraph, if a person is on a maternity/paternity
absence beyond the first anniversary of the first day of such
absence, his severance date shall be the second anniversary of the
first day of such maternity/paternity absence.
(c) Notwithstanding any other provision of the Plan, an Employee shall
not be credited with Vesting Service for any period in which he does
not elect to have made on his behalf Tax-Deferred Contributions to
the Plan or contributions (as described in Section 402(e)(3) of the
Code) to any other 401(k) plan maintained by the Employer or a
Related Company for which the Participant is eligible to
participate.
ARTICLE III: ELIGIBILITY
3.1 Eligibility
Each Employee shall become an Eligible Employee as of the Enrollment Date
coinciding with or next following the date on which he has completed six
months of Eligibility Service. Notwithstanding the preceding sentence, an
individual who becomes an Employee of the Employer as a result of the Employer
assuming management responsibilities for the applicable facility from the
Employee's former employer will become an Eligible Employee on the same day
he becomes an Employee.
3.2 Transfers of Employment
If a person is transferred directly from employment with an Employer or with
a Related Company in a capacity other than as an Employee to employment as an
Employee, he shall become an Eligible Employee as of the date he is so
transferred if prior to an Enrollment Date coinciding with or preceding such
transfer date he has met the eligibility requirements of Section 3.1.
Otherwise, the eligibility of a person who is so transferred to elect to have
Tax-Deferred Contributions made to the Plan on his behalf shall be determined
in accordance with Section 3.1.
3.3 Reemployment
If a person who terminated employment with an Employer and all Related
Companies is reemployed as an Employee and if he had been an Eligible Employee
prior to his termination of employment, he shall again become an Eligible
Employee on the date he is reemployed. Otherwise, the eligibility of a person
who terminated employment with an Employer and all Related Companies and who
is reemployed by an Employer or a Related Company to elect to have
Tax-Deferred Contributions made to the Plan on his behalf shall be determined
in accordance with Section 3.1 or 3.2.
3.4 Notification Concerning New Eligible Employees
Each Employer shall notify the Administrator as soon as practicable of
Employees becoming Eligible Employees as of any date.
3.5 Effect and Duration
Upon becoming an Eligible Employee, an Employee shall be entitled to elect to
have Tax-Deferred Contributions made to the Plan on his behalf and shall be
bound by all the terms and conditions of the Plan and the Trust Agreement.
A person shall continue as an Eligible Employee eligible to have Tax-Deferred
Contributions made to the Plan on his behalf only so long as he continues
employment as an Employee.
ARTICLE IV: TAX-DEFERRED CONTRIBUTIONS
4.1 Tax-Deferred Contributions
Effective as of the date he becomes an Eligible Employee, or any subsequent
Enrollment Date, each Eligible Employee may elect in writing in accordance
with rules prescribed by the Administrator to have Tax-Deferred Contributions
made to the Plan on his behalf by his Employer as hereinafter provided. An
Eligible Employee's written election shall include his authorization for his
Employer to reduce his Compensation and to make Tax-Deferred Contributions on
his behalf and his election as to the investment of his contributions in
accordance with Article X. Tax-Deferred Contributions on behalf of an
Eligible Employee shall commence with the first payment of Compensation made
on or after the date on which his election is effective.
4.2 Amount of Tax-Deferred Contributions
The amount of Tax-Deferred Contributions to be made to the Plan on behalf of
an Eligible Employee by his Employer shall be an integral percentage of his
Compensation of not less than one percent nor more than 16 percent. In the
event an Eligible Employee elects to have his Employer make Tax-Deferred
Contributions on his behalf, his Compensation shall be reduced for each
payroll period by the percentage he elects to have contributed on his behalf
to the Plan in accordance with the terms of his currently effective reduction
authorization.
4.3 Changes in Reduction Authorization
An Eligible Employee may change the percentage of his future Compensation that
his Employer contributes on his behalf as Tax-Deferred Contributions at such
time or times during the Plan Year as the Administrator may prescribe by
filing an amended reduction authorization with his Employer such number of
days prior to the date such change is to become effective as the Administrator
shall prescribe. An Eligible Employee who changes his reduction authorization
shall be limited to selecting a percentage of his Compensation that is
otherwise permitted hereunder. Tax-Deferred Contributions shall be made on
behalf of such Eligible Employee by his Employer pursuant to his amended
reduction authorization filed in accordance with this Section commencing with
Compensation paid to the Eligible Employee on or after the date such filing
is effective, until otherwise altered or terminated in accordance with the
Plan.
4.4 Suspension of Tax-Deferred Contributions
An Eligible Employee on whose behalf Tax-Deferred Contributions are being made
may have such contributions suspended at any time by giving such number of
days advance written notice to his Employer as the Administrator shall
prescribe. Any such voluntary suspension shall take effect commencing with
Compensation paid to such Eligible Employee on or after the expiration of the
required notice period and shall remain in effect until Tax-Deferred
Contributions are resumed as hereinafter set forth.
4.5 Resumption of Tax-Deferred Contributions
An Eligible Employee who has voluntarily suspended his Tax-Deferred
Contributions may have such contributions resumed at such time or times during
the Plan Year as the Administrator may prescribe, by filing a new reduction
authorization with his Employer such number of days prior to the date as of
which such contributions are to be resumed as the Administrator shall
prescribe.
4.6 Delivery of Tax-Deferred Contributions
As soon after the date an amount would otherwise be paid to an Employee as it
can reasonably be separated from Employer assets, each Employer shall cause
to be delivered to the Trustee in cash all Tax-Deferred Contributions
attributable to such amounts.
4.7 Vesting of Tax-Deferred Contributions
A Participant's vested interest in his Tax-Deferred Contributions Sub-Account
shall be at all times 100 percent.
ARTICLE V: AFTER-TAX AND ROLLOVER CONTRIBUTIONS
5.1 No After-Tax Contributions
There shall be no After-Tax Contributions made to the Plan.
5.2 Rollover Contributions
An Employee who was a participant in a plan qualified under Section 401 or 403
of the Code and who receives a cash distribution from such plan that he elects
either (i) to roll over immediately to a qualified retirement plan or (ii) to
roll over into a conduit IRA from which he receives a later cash distribution,
may elect to make a Rollover Contribution to the Plan if he is entitled under
Section 402(c), Section 403(a)(4), or Section 408(d)(3)(A) of the Code to roll
over such distribution to another qualified retirement plan. The
Administrator may require an Employee to provide it with such information as
it deems necessary or desirable to show that he is entitled to roll over such
distribution to another qualified retirement plan. An Employee shall make a
Rollover Contribution to the Plan by delivering, or causing to be delivered,
to the Trustee the cash that constitutes the Rollover Contribution amount
within 60 days of receipt of the distribution from the plan or from the
conduit IRA in the manner prescribed by the Administrator. If the Employee
does not already have an investment election on file with the Administrator,
the Employee shall also deliver to the Administrator his election as to the
investment of his contributions in accordance with Article X.
5.3 Vesting of Rollover Contributions
A Participant's vested interest in his Rollover Contributions Sub-Account
shall be at all times 100 percent.
ARTICLE VI: EMPLOYER CONTRIBUTIONS
6.1 Contribution Period
The Contribution Period for Employer Contributions under the Plan shall be
each Plan Year.
6.2 Matching Contributions
Each Employer may make a Matching Contribution to the Plan for each
Contribution Period in an amount equal to the percentage, determined by the
Sponsor, in its discretion, for the Contribution Period, of the aggregate Tax-
Deferred Contributions for the Contribution Period made on behalf of its
Employees during the Contribution Period who are eligible to participate in
the allocation of Matching Contributions for the Contribution Period as
determined under this Article.
6.3 Allocation of Matching Contributions
Any Matching Contribution made by an Employer for the Contribution Period
shall be allocated among its Employees during the Contribution Period who are
eligible to participate in the allocation of Matching Contributions for the
Contribution Period, as determined under this Article. The allocable share
of each such Employee shall be an amount equal to the percentage determined
by the Sponsor of the Tax-Deferred Contributions made on his behalf for the
Contribution Period.
6.4 Verification of Amount of Employer Contributions by the Sponsor
The Sponsor shall verify the amount of Employer Contributions to be made by
each Employer in accordance with the provisions of the Plan. Notwithstanding
any other provision of the Plan to the contrary, the Sponsor shall determine
the portion of the Employer Contribution to be made by each Employer with
respect to an Employee who transfers from employment with one Employer as an
Employee to employment with another Employer as an Employee.
6.5 Payment of Employer Contributions
Employer Contributions made for a Contribution Period shall be paid in cash
to the Trustee within the period of time required under the Code in order for
the contribution to be deductible by the Employer in determining its Federal
income taxes for the Plan Year.
6.6 Eligibility to Participate in Allocation
Each Employee shall be eligible to participate in the allocation of Employer
Contributions beginning on the date he becomes, or again becomes, an Eligible
Employee in accordance with the provisions of Article III.
6.7 Vesting of Employer Contributions
A Participant's vested interest in his Matching Contributions Sub-Account
shall be determined in accordance with the following schedule:
Years of Vesting Service Vested Interest
Less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
Notwithstanding the foregoing, if a Participant is employed by an Employer or
a Related Company on his Normal or Early Retirement Date, the date he dies,
or the date he becomes physically or mentally disabled such that he can no
longer engage in the usual and customary responsibilities of his employment
with his Employer for a period of at least 12 months, as determined by the
Administrator on the basis of a written certificate of a physician acceptable
to it, his vested interest in his Matching Contributions Sub-Account shall be
100 percent.
6.8 Election of Former Vesting Schedule
If the Sponsor adopts an amendment to the Plan that directly or indirectly
affects the computation of a Participant's vested interest in his Employer
Contributions Sub-Account, any Participant with three or more years of Vesting
Service shall have a right to have his vested interest in his Employer
Contributions Sub-Account continue to be determined under the vesting
provisions in effect prior to the amendment rather than under the new vesting
provisions, unless the vested interest of the Participant in his Employer
Contributions Sub-Account under the Plan as amended is not at any time less
than such vested interest determined without regard to the amendment. A
Participant shall exercise his right under this Section by giving written
notice of his exercise thereof to the Administrator within 60 days after the
latest of (i) the date he receives notice of the amendment from the
Administrator, (ii) the effective date of the amendment, or (iii) the date the
amendment is adopted. Notwithstanding the foregoing, a Participant's vested
interest in his Employer Contributions Sub-Account on the effective date of
such an amendment shall not be less than his vested interest in his Employer
Contributions Sub-Account immediately prior to the effective date of the
amendment.
6.9 Forfeitures to Reduce Employer Contributions
Notwithstanding any other provision of the Plan to the contrary, the amount
of the Employer Contribution required under this Article for a Plan Year shall
be reduced by the amount of any forfeitures occurring during the Plan Year
that are not used to pay Plan expenses.
ARTICLE VII: LIMITATIONS ON CONTRIBUTIONS
7.1 Definitions
For purposes of this Article, the following terms have the following meanings:
(a) The "actual deferral percentage" with respect to an Eligible
Employee for a particular Plan Year means the ratio of the
Tax-Deferred Contributions made on his behalf for the Plan Year to
his test compensation for the Plan Year; provided, however, that
contributions made on a Participant's behalf for a Plan Year shall
be included in determining his actual deferral percentage for such
Plan Year only if the contributions are made to the Plan prior to
the end of the 12-month period immediately following the Plan Year
to which the contributions relate. The determination and treatment
of the actual deferral percentage amounts for any Participant shall
satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
(b) The "aggregate limit" means the sum of (i) 125 percent of the
greater of the average contribution percentage for eligible
participants other than Highly Compensated Employees or the average
actual deferral percentage for Eligible Employees other than Highly
Compensated Employees and (ii) the lesser of 200 percent or two plus
the lesser of such average contribution percentage or average actual
deferral percentage, or, if it would result in a larger aggregate
limit, the sum of (iii) 125 percent of the lesser of the average
contribution percentage for eligible participants other than Highly
Compensated Employees or the average actual deferral percentage for
Eligible Employees other than Highly Compensated Employees and
(iv) the lesser of 200 percent or two plus the greater of such
average contribution percentage or average actual deferral
percentage.
(c) The "annual addition" with respect to a Participant for a limitation
year means the sum of the Tax-Deferred Contributions and Employer
Contributions allocated to his Separate Account for the limitation
year (including any excess contributions that are distributed
pursuant to this Article), the employer contributions, employee
contributions, and forfeitures allocated to his accounts for the
limitation year under any other qualified defined contribution plan
(whether or not terminated) maintained by an Employer or a Related
Company concurrently with the Plan, and amounts described in
Sections 415(l)(2) and 419A(d)(2) of the Code allocated to his
account for the limitation year.
(d) The "Code Section 402(g) limit" means the dollar limit imposed by
Section 402(g)(1) of the Code or established by the Secretary of the
Treasury pursuant to Section 402(g)(5) of the Code in effect on
January 1 of the calendar year in which an Eligible Employee's
taxable year begins.
(e) The "contribution percentage" with respect to an eligible
participant for a particular Plan Year means the ratio of the
matching contributions made to the Plan on his behalf for the Plan
Year to his test compensation for such Plan Year, except that, to
the extent permitted by regulations issued under Section 401(m) of
the Code, the Sponsor may elect to take into account in computing
the numerator of each eligible participant's contribution percentage
the Tax-Deferred Contributions made to the Plan on his behalf for
the Plan Year; provided, however, that any Tax-Deferred
Contributions that were taken into account in computing the
numerator of an eligible participant's actual deferral percentage
may not be taken into account in computing the numerator of his
contribution percentage; and provided, further, that contributions
made by or on a Participant's behalf for a Plan Year shall be
included in determining his contribution percentage for such Plan
Year only if the contributions are made to the Plan prior to the end
of the 12-month period immediately following the Plan Year to which
the contributions relate. The determination and treatment of the
contribution percentage amounts for any Participant shall satisfy
such other requirements as may be prescribed by the Secretary of the
Treasury.
(f) An "elective contribution" means any employer contribution made to
a plan maintained by an Employer or any Related Company on behalf
of a Participant in lieu of cash compensation pursuant to his
written election to defer under any qualified CODA as described in
Section 401(k) of the Code, any simplified employee pension cash or
deferred arrangement as described in Section 402(h)(1)(B) of the
Code, any eligible deferred compensation plan under Section 457 of
the Code, or any plan as described in Section 501(c)(18) of the
Code, and any contribution made on behalf of the Participant by an
Employer or a Related Company for the purchase of an annuity
contract under Section 403(b) of the Code pursuant to a salary
reduction agreement.
(g) An "eligible participant" means any Employee who is eligible to have
Tax-Deferred Contributions made on his behalf (if Tax-Deferred
Contributions are taken into account in computing contribution
percentages) or to participate in the allocation of matching
contributions.
(h) An "excess deferral" with respect to a Participant means that
portion of a Participant's Tax-Deferred Contributions that when
added to amounts deferred under other plans or arrangements
described in Sections 401(k), 408(k), or 403(b) of the Code, would
exceed the Code Section 402(g) limit and is includable in the
Participant's gross income under Section 402(g) of the Code.
(i) A "family member" of an Employee means the Employee's spouse, his
lineal ascendants, his lineal descendants, and the spouses of such
lineal ascendants and descendants.
(j) A "limitation year" means the Plan Year.
(k) A "matching contribution" means any employer contribution allocated
to an Eligible Employee's account under the Plan or any other plan
of an Employer or a Related Company solely on account of elective
contributions made on his behalf or employee contributions made by
him.
(l) The "test compensation" of an Eligible Employee for a Plan Year
means compensation as defined in Section 414(s) of the Code and
regulations issued thereunder, limited, however, to $150,000
(subject to adjustment annually as provided in Section 401(a)(17)(B)
and Section 415(d) of the Code; provided, however, that the dollar
increase in effect on January 1 of any calendar year, if any, is
effective for Plan Years beginning in such calendar year). If the
test compensation of a Participant is determined over a period of
time that contains fewer than 12 calendar months, then the annual
compensation limitation described above shall be adjusted with
respect to that Participant by multiplying the annual compensation
limitation in effect for the Plan Year by a fraction the numerator
of which is the number of full months in the period and the
denominator of which is 12; provided, however, that no proration is
required for a Participant who is covered under the Plan for less
than one full Plan Year if the formula for allocations is based on
Compensation for a period of at least 12 months.
7.2 Code Section 402(g) Limit
In no event shall the amount of the Tax-Deferred Contributions made on behalf
of an Eligible Employee for his taxable year, when aggregated with any
elective contributions made on behalf of the Eligible Employee under any other
plan of an Employer or a Related Company for his taxable year, exceed the Code
Section 402(g) limit. In the event that the Administrator determines that the
reduction percentage elected by an Eligible Employee will result in his
exceeding the Code Section 402(g) limit, the Administrator may adjust the
reduction authorization of such Eligible Employee by reducing the percentage
of his Tax-Deferred Contributions to such smaller percentage that will result
in the Code Section 402(g) limit not being exceeded. If the Administrator
determines that the Tax-Deferred Contributions made on behalf of an Eligible
Employee would exceed the Code Section 402(g) limit for his taxable year, the
Tax-Deferred Contributions for such Participant shall be automatically
suspended for the remainder, if any, of such taxable year.
If an Employer notifies the Administrator that the Code Section 402(g) limit
has nevertheless been exceeded by an Eligible Employee for his taxable year,
the Tax-Deferred Contributions that, when aggregated with elective
contributions made on behalf of the Eligible Employee under any other plan of
an Employer or a Related Company, would exceed the Code Section 402(g) limit,
plus any income and minus any losses attributable thereto, shall be
distributed to the Eligible Employee no later than the April 15 immediately
following such taxable year. Any Tax-Deferred Contributions that are
distributed to an Eligible Employee in accordance with this Section shall not
be taken into account in computing the Eligible Employee's actual deferral
percentage for the Plan Year in which the Tax-Deferred Contributions were
made, unless the Eligible Employee is a Highly Compensated Employee. If an
amount of Tax-Deferred Contributions is distributed to a Participant in
accordance with this Section, matching contributions that are attributable
solely to the distributed Tax-Deferred Contributions, plus any income and
minus any losses attributable thereto, shall be forfeited by the Participant.
Any such forfeited amounts shall be treated as a forfeiture under the Plan
in accordance with the provisions of Article XIV as of the last day of the
month in which the distribution of Tax-Deferred Contributions pursuant to this
Section occurs.
7.3 Distribution of Excess Deferrals
Notwithstanding any other provision of the Plan to the contrary, if a
Participant notifies the Administrator in writing no later than the March 1
following the close of the Participant's taxable year that excess deferrals
have been made on his behalf under the Plan for such taxable year, the excess
deferrals, plus any income and minus any losses attributable thereto, shall
be distributed to the Participant no later than the April 15 immediately
following such taxable year. Any Tax-Deferred Contributions that are
distributed to a Participant in accordance with this Section shall
nevertheless be taken into account in computing the Participant's actual
deferral percentage for the Plan Year in which the Tax-Deferred Contributions
were made. If an amount of Tax-Deferred Contributions is distributed to a
Participant in accordance with this Section, matching contributions that are
attributable solely to the distributed Tax-Deferred Contributions, plus any
income and minus any losses attributable thereto, shall be forfeited by the
Participant. Any such forfeited amounts shall be treated as a forfeiture
under the Plan in accordance with the provisions of Article XIV as of the last
day of the month in which the distribution of Tax-Deferred Contributions
pursuant to this Section occurs.
7.4 Limitation on Tax-Deferred Contributions of Highly Compensated
Employees
Notwithstanding any other provision of the Plan to the contrary, the
Tax-Deferred Contributions made with respect to a Plan Year on behalf of
Eligible Employees who are Highly Compensated Employees may not result in an
average actual deferral percentage for such Eligible Employees that exceeds
the greater of:
(a) a percentage that is equal to 125 percent of the average actual
deferral percentage for all other Eligible Employees; or
(b) a percentage that is not more than 200 percent of the average actual
deferral percentage for all other Eligible Employees and that is not
more than two percentage points higher than the average actual
deferral percentage for all other Eligible Employees.
In order to assure that the limitation contained herein is not exceeded with
respect to a Plan Year, the Administrator is authorized to suspend completely
further Tax-Deferred Contributions on behalf of Highly Compensated Employees
for any remaining portion of a Plan Year or to adjust the projected actual
deferral percentages of Highly Compensated Employees by reducing their
percentage elections with respect to Tax-Deferred Contributions for any
remaining portion of a Plan Year to such smaller percentages that will result
in the limitation set forth above not being exceeded. In the event of any
such suspension or reduction, Highly Compensated Employees affected thereby
shall be notified of the reduction or suspension as soon as possible and shall
be given an opportunity to make a new Tax-Deferred Contribution election to
be effective the first day of the next following Plan Year. In the absence
of such an election, the election in effect immediately prior to the
suspension or adjustment described above shall be reinstated as of the first
day of the next following Plan Year.
For purposes of applying the limitation contained in this Section, the
Tax-Deferred Contributions and test compensation of any Eligible Employee who
is a family member of another Eligible Employee who is a five percent owner
or among the ten Highly Compensated Employees receiving the greatest test
compensation for the Plan Year shall be aggregated with the Tax-Deferred
Contributions and test compensation of such other Eligible Employee, and such
family member shall not be considered an Eligible Employee for purposes of
determining the average actual deferral percentage for all other Eligible
Employees.
In determining the actual deferral percentage for any Eligible Employee who
is a Highly Compensated Employee for the Plan Year, elective contributions
made to his accounts under any other plan of an Employer or a Related Company
shall be treated as if all such contributions were made to the Plan; provided,
however, that if such a plan has a plan year different from the Plan Year, any
such contributions made to the Highly Compensated Employee's accounts under
the plan for the plan year ending with or within the same calendar year as the
Plan Year shall be treated as if such contributions were made to the Plan.
Notwithstanding the foregoing, such contributions shall not be treated as if
they were made to the Plan if regulations issued under Section 401(k) of the
Code do not permit such plan to be aggregated with the Plan.
If one or more plans of an Employer or Related Company are aggregated with the
Plan for purposes of satisfying the requirements of Section 401(a)(4) or
410(b) of the Code, then actual deferral percentages under the Plan shall be
calculated as if the Plan and such one or more other plans were a single plan.
Plans may be aggregated to satisfy Section 401(k) of the Code only if they
have the same plan year.
The Administrator shall maintain records sufficient to show that the
limitation contained in this Section was not exceeded with respect to any Plan
Year.
7.5 Distribution of Excess Tax-Deferred Contributions
Notwithstanding any other provision of the Plan to the contrary, in the event
that the limitation contained in Section 7.4 is exceeded in any Plan Year, the
Tax-Deferred Contributions made with respect to a Highly Compensated Employee
that exceed the maximum amount permitted to be contributed to the Plan on his
behalf under Section 7.4, plus any income and minus any losses attributable
thereto, shall be distributed to the Highly Compensated Employee prior to the
end of the next succeeding Plan Year. If excess amounts are attributable to
Participants aggregated under the family aggregation rules described in
Section 7.4, the excess shall be allocated among family members in proportion
to the Tax-Deferred Contributions made with respect to each family member.
If such excess amounts are distributed more than
2 1/2 months after the last day of the Plan Year for which the excess
occurred, an excise tax may be imposed under Section 4979 of the Code on the
Employer maintaining the Plan with respect to such amounts.
The maximum amount permitted to be contributed to the Plan on a Highly
Compensated Employee's behalf under Section 7.4 shall be determined by
reducing Tax-Deferred Contributions made on behalf of Highly Compensated
Employees in order of their actual deferral percentages beginning with the
highest of such percentages. The determination of the amount of excess
Tax-Deferred Contributions shall be made after application of Section 7.3, if
applicable.
If an amount of Tax-Deferred Contributions is distributed to a Participant in
accordance with this Section, matching contributions that are attributable
solely to the distributed Tax-Deferred Contributions, plus any income and
minus any losses attributable thereto, shall be forfeited by the Participant.
Any such forfeited amounts shall be treated as a forfeiture under the Plan
in accordance with the provisions of Article XIV as of the last day of the
month in which the distribution of Tax-Deferred Contributions pursuant to this
Section occurs.
7.6 Limitation on Matching Contributions of Highly Compensated
Employees
Notwithstanding any other provision of the Plan to the contrary, the matching
contributions made with respect to a Plan Year on behalf of eligible
participants who are Highly Compensated Employees may not result in an average
contribution percentage for such eligible participants that exceeds the
greater of:
(a) a percentage that is equal to 125 percent of the average
contribution percentage for all other eligible participants; or
(b) a percentage that is not more than 200 percent of the average
contribution percentage for all other eligible participants and that
is not more than two percentage points higher than the average
contribution percentage for all other eligible participants.
For purposes of applying the limitation contained in this Section, the
matching contributions, Tax-Deferred Contributions (to the extent that such
Tax-Deferred Contributions are taken into account in computing contribution
percentages), and test compensation of any eligible participant who is a
family member of another eligible participant who is a five percent owner or
among the ten Highly Compensated Employees receiving the greatest test
compensation for the Plan Year shall be aggregated with the matching
contributions, Tax-Deferred Contributions, and test compensation of such other
eligible participant, and such family member shall not be considered an
eligible participant for purposes of determining the average contribution
percentage for all other eligible participants.
In determining the contribution percentage for any eligible participant who
is a Highly Compensated Employee for the Plan Year, matching contributions,
employee contributions, and elective contributions (to the extent that
elective contributions are taken into account in computing contribution
percentages) made to his accounts under any other plan of an Employer or a
Related Company shall be treated as if all such contributions were made to the
Plan; provided, however, that if such a plan has a plan year different from
the Plan Year, any such contributions made to the Highly Compensated
Employee's accounts under the plan for the plan year ending with or within the
same calendar year as the Plan Year shall be treated as if such contributions
were made to the Plan. Notwithstanding the foregoing, such contributions
shall not be treated as if they were made to the Plan if regulations issued
under Section 401(m) of the Code do not permit such plan to be aggregated with
the Plan.
If one or more plans of an Employer or a Related Company are aggregated with
the Plan for purposes of satisfying the requirements of Section 401(a)(4) or
410(b) of the Code, the contribution percentages under the Plan shall be
calculated as if the Plan and such one or more other plans were a single plan.
Plans may be aggregated to satisfy Section 401(m) of the Code only if they
have the same plan year.
The Administrator shall maintain records sufficient to show that the
limitation contained in this Section was not exceeded with respect to any Plan
Year and the amount of the elective contributions taken into account in
computing contribution percentages for any Plan Year.
7.7 Forfeiture or Distribution of Excess Contributions
Notwithstanding any other provision of the Plan to the contrary, in the event
that the limitation contained in Section 7.6 is exceeded in any Plan Year, the
matching contributions made on behalf of a Highly Compensated Employee that
exceed the maximum amount permitted to be contributed to the Plan on behalf
of such Highly Compensated Employee under Section 7.6, plus any income and
minus any losses attributable thereto, shall be forfeited, to the extent
forfeitable, or distributed to the Participant prior to the end of the next
succeeding Plan Year as hereinafter provided. If excess amounts are
attributable to Participants aggregated under the family aggregation rules
described in Section 7.5, the excess shall be allocated among family members
in proportion to the matching contributions made with respect to each family
member. If such excess amounts are distributed more than 2 1/2 months after
the last day of the Plan Year for which the excess occurred, an excise tax may
be imposed under Section 4979 of the Code on the Employer maintaining the Plan
with respect to such amounts.
The maximum amount permitted to be contributed to the Plan on behalf of a
Highly Compensated Employee under Section 7.6 shall be determined by reducing
matching contributions made on behalf of Highly Compensated Employees in order
of their contribution percentages beginning with the highest of such
percentages.
Any amounts forfeited with respect to a Participant pursuant to this Section
shall be treated as a forfeiture under the Plan in accordance with the
provisions of Article XIV as of the last day of the month in which the
distribution of contributions pursuant to this Section occurs. Excess
matching contributions shall be distributable to the extent the Participant
has a vested interest in his Employer Contributions Sub-Account that is
attributable to matching contributions and shall otherwise be forfeitable.
The determination of the amount of excess matching contributions shall be
made after application of Section 7.3, if applicable, and after application
of Section 7.5, if applicable.
7.8 Multiple Use Limitation
Notwithstanding any other provision of the Plan to the contrary, the following
multiple use limitation as required under Section 401(m) of the Code shall
apply: the sum of the average actual deferral percentage for Eligible
Employees who are Highly Compensated Employees and the average contribution
percentage for eligible participants who are Highly Compensated Employees may
not exceed the aggregate limit. In the event that, after satisfaction of
Section 7.5 and Section 7.7, it is determined that contributions under the
Plan fail to satisfy the multiple use limitation contained herein, the
multiple use limitation shall be satisfied by further reducing the actual
deferral percentages of Eligible Employees who are Highly Compensated
Employees (beginning with the highest such percentage) to the extent necessary
to eliminate the excess, with such further reductions to be treated as excess
Tax-Deferred Contributions and disposed of as provided in Section 7.5, or in
an alternative manner, consistently applied, that may be permitted by
regulations issued under Section 401(m) of the Code.
7.9 Determination of Income or Loss
The income or loss attributable to excess contributions that are distributed
pursuant to this Article shall be determined for the preceding Plan Year under
the method otherwise used for allocating income or loss to Participant's
Separate Accounts.
7.10 Code Section 415 Limitations on Crediting of Contributions and
Forfeitures
Notwithstanding any other provision of the Plan to the contrary, the annual
addition with respect to a Participant for a limitation year shall in no event
exceed the lesser of (i) $30,000 (adjusted as provided in Section 415(d) of
the Code, with the first adjustment being made for limitation years beginning
on or after January 1, 1996) or (ii) 25 percent of the Participant's
compensation, as defined in Section 415(c)(3) of the Code and regulations
issued thereunder, for the limitation year. If the annual addition to the
Separate Account of a Participant in any limitation year would otherwise
exceed the amount that may be applied for his benefit under the limitation
contained in this Section, the limitation shall be satisfied by reducing
Tax-Deferred Contributions made on the Participant's behalf for the limitation
year and the matching contributions attributable thereto, if any, shall be
reduced pro rata.
The amount of any reduction of Tax-Deferred Contributions (plus any income
attributable thereto) shall be returned to the Participant. The amount of any
reduction of Employer Contributions shall be deemed a forfeiture for the
limitation year. Amounts deemed to be forfeitures under this Section shall
be held unallocated in a suspense account established for the limitation year
and shall be applied against the Employer's contribution obligation for the
next following limitation year (and succeeding limitation years, as
necessary). If a suspense account is in existence at any time during a
limitation year, all amounts in the suspense account must be allocated to
Participants' Separate Accounts (subject to the limitations contained herein)
before any further Tax-Deferred Contributions or Employer Contributions may
be made to the Plan on behalf of Participants. No suspense account
established hereunder shall share in any increase or decrease in the net worth
of the Trust. For purposes of this Article, excesses shall result only from
the allocation of forfeitures, a reasonable error in estimating a
Participant's annual compensation (as defined in Section 415(c)(3) of the Code
and regulations issued thereunder), a reasonable error in determining the
amount of Tax-Deferred Contributions that may be made with respect to any
Participant under the limits of Section 415 of the Code, or other limited
facts and circumstances that justify the availability of the provisions set
forth above.
7.11 Coverage Under Other Qualified Defined Contribution Plan
If a Participant is covered by any other qualified defined contribution plan
(whether or not terminated) maintained by an Employer or a Related Company
concurrently with the Plan, and if the annual addition for the limitation year
would otherwise exceed the amount that may be applied for the Participant's
benefit under the limitation contained in Section 7.10, such excess shall be
reduced first by returning the employee contributions made by the Participant
for the limitation year under all of the defined contribution plans other than
the Plan and the income attributable thereto to the extent necessary. If the
limitation contained in Section 7.10 is still not satisfied after returning
all of the employee contributions made by the Participant under all such other
plans, the excess shall be reduced by returning the elective contributions
made on the Participant's behalf for the limitation year under all such other
plans and the income attributable thereto to the extent necessary on a pro
rata basis among all of such plans. If the limitation contained in Section
7.10 is still not satisfied after returning all of the elective contributions
made on the Participant's behalf under all such other plans, the procedure set
forth in Section 7.10 shall be invoked to eliminate any such excess. If the
limitation contained in Section 7.10 is still not satisfied after invocation
of the procedure set forth in Section 7.10, the portion of the employer
contributions and of forfeitures for the limitation year under all such other
plans that has been allocated to the Participant thereunder, but which exceeds
the limitation set forth in Section 7.10, shall be deemed a forfeiture for the
limitation year and shall be disposed of as provided in such other plans;
provided, however, that if the Participant is covered by a money purchase
pension plan, the forfeiture shall be effected first under any other defined
contribution plan that is not a money purchase pension plan and, if the
limitation is still not satisfied, then under such money purchase pension
plan.
7.12 Coverage Under Qualified Defined Benefit Plan
If a Participant in the Plan is also covered by a qualified defined benefit
plan (whether or not terminated) maintained by an Employer or a Related
Company, in no event shall the sum of the defined benefit plan fraction (as
defined in Section 415(e)(2) of the Code) and the defined contribution plan
fraction (as defined in Section 415(e)(3) of the Code) exceed 1.0 in any
limitation year. If, before October 3, 1973, the Participant was an active
participant in a qualified defined benefit plan maintained by an Employer or
a Related Company and otherwise satisfies the requirements of Section
2004(d)(2) of ERISA, then for purposes of applying this Section, the defined
benefit plan fraction shall not exceed 1.0. In the event the special
limitation contained in this Section is exceeded, the benefits otherwise
payable to the Participant under any such qualified defined benefit plan shall
be reduced to the extent necessary to meet such limitation.
7.13 Scope of Limitations
The limitations contained in Sections 7.10, 7.11, and 7.12 shall be applicable
only with respect to benefits provided pursuant to defined contribution plans
and defined benefit plans described in Section 415(k) of the Code.
ARTICLE VIII: TRUST FUNDS AND SEPARATE ACCOUNTS
8.1 General Fund
The Trustee shall maintain a General Fund as required to hold and administer
any assets of the Trust that are not allocated among the Investment Funds as
provided in the Plan or the Trust Agreement. The General Fund shall be held
and administered as a separate common trust fund. The interest of each
Participant or Beneficiary under the Plan in the General Fund shall be an
undivided interest.
8.2 Investment Funds
The Sponsor shall determine the number and type of Investment Funds and select
the investments for such Investment Funds. The Sponsor shall communicate the
same and any changes therein in writing to the Administrator and the Trustee.
Each Investment Fund shall be held and administered as a separate common
trust fund. The interest of each Participant or Beneficiary under the Plan
in any Investment Fund shall be an undivided interest.
8.3 Loan Investment Fund
If a loan from the Plan to a Participant is approved in accordance with the
provisions of Article XII, the Sponsor shall direct the establishment and
maintenance of a loan Investment Fund in the Participant's name. The assets
of the loan Investment Fund shall be held as a separate trust fund. A
Participant's loan Investment Fund shall be invested in the note reflecting
the loan that is executed by the Participant in accordance with the provisions
of Article XII. Notwithstanding any other provision of the Plan to the
contrary, income received with respect to a Participant's loan Investment Fund
shall be allocated and the loan Investment Fund shall be administered as
provided in Article XII.
8.4 Income on Trust
Any dividends, interest, distributions, or other income received by the
Trustee with respect to any Trust Fund maintained hereunder shall be allocated
by the Trustee to the Trust Fund for which the income was received.
8.5 Separate Accounts
As of the first date a contribution is made by or on behalf of an Employee,
there shall be established a Separate Account in his name reflecting his
interest in the Trust. Each Separate Account shall be maintained and
administered for each Participant and Beneficiary in accordance with the
provisions of the Plan. The balance of each Separate Account shall be the
balance of the account after all credits and charges thereto, for and as of
such date, have been made as provided herein.
8.6 Sub-Accounts
A Participant's Separate Account shall be divided into individual Sub-Accounts
reflecting the portion of the Participant's Separate Account that is derived
from Tax-Deferred Contributions, Rollover Contributions, or Employer
Contributions. Each Sub-Account shall reflect separately contributions
allocated to each Trust Fund maintained hereunder and the earnings and losses
attributable thereto. Such other Sub-Accounts may be established as are
necessary or appropriate to reflect a Participant's interest in the Trust.
ARTICLE IX: LIFE INSURANCE CONTRACTS
9.1 No Life Insurance Contracts
There shall be no life insurance contracts purchased under the Plan.
ARTICLE X: DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
10.1 Future Contribution Investment Elections
Each Eligible Employee shall make an investment election in the manner and
form prescribed by the Administrator directing the manner in which his
Tax-Deferred Contributions, Rollover Contributions, and Employer Contributions
shall be invested. An Eligible Employee's investment election shall specify
the percentage, in the percentage increments prescribed by the Administrator,
of such contributions that shall be allocated to one or more of the Investment
Funds with the sum of such percentages equaling 100 percent. The investment
election by a Participant shall remain in effect until his entire interest
under the Plan is distributed or forfeited in accordance with the provisions
of the Plan or until he files a change of investment election with the
Administrator, in such form as the Administrator shall prescribe. A
Participant's change of investment election may be made effective as of the
date or dates prescribed by the Administrator.
10.2 Deposit of Contributions
All Tax-Deferred Contributions, Rollover Contributions, and Employer
Contributions shall be deposited in the Trust and allocated among the
Investment Funds in accordance with the Participant's currently effective
investment election. If no investment election is on file with the
Administrator at the time contributions are to be deposited to a Participant's
Separate Account, the Participant shall be notified and an investment election
form shall be provided to him. Until such Participant shall make an effective
election under this Section, his contributions shall be allocated among the
Investment Funds as directed by the Administrator.
10.3 Election to Transfer Between Funds
A Participant may elect to transfer investments from any Investment Fund to
any other Investment Fund. The Participant's transfer election shall specify
either (i) a percentage, in the percentage increments prescribed by the
Administrator, of the amount eligible for transfer, which percentage may not
exceed 100 percent, or (ii) a dollar amount that is to be transferred.
Subject to any restrictions pertaining to a particular Investment Fund, a
Participant's transfer election may be made effective as of the date or dates
prescribed by the Administrator.
10.4 404(c) Plan
The Plan is intended to constitute a plan described in Section 404(c) of ERISA
and regulations issued thereunder. The fiduciaries of the Plan may be
relieved of liability for any losses that are the direct and necessary result
of investment instructions given by a Participant, his Beneficiary, or an
alternate payee under a qualified domestic relations order.
ARTICLE XI: CREDITING AND VALUING SEPARATE ACCOUNTS
11.1 Crediting Separate Accounts
All contributions made under the provisions of the Plan shall be credited to
Separate Accounts in the Trust Funds by the Trustee, in accordance with
procedures established in writing by the Administrator, either when received
or on the succeeding Valuation Date after valuation of the Trust Fund has been
completed for such Valuation Date as provided in Section 11.2, as shall be
determined by the Administrator.
11.2 Valuing Separate Accounts
Separate Accounts in the Trust Funds shall be valued by the Trustee on the
Valuation Date, in accordance with procedures established in writing by the
Administrator, either in the manner adopted by the Trustee and approved by the
Administrator or in the manner set forth in Section 11.3 as Plan valuation
procedures, as determined by the Administrator.
11.3 Plan Valuation Procedures
With respect to the Trust Funds, the Administrator may determine that the
following valuation procedures shall be applied. As of each Valuation Date
hereunder, the portion of any Separate Accounts in a Trust Fund shall be
adjusted to reflect any increase or decrease in the value of the Trust Fund
for the period of time occurring since the immediately preceding Valuation
Date for the Trust Fund (the "valuation period") in the following manner:
(a) First, the value of the Trust Fund shall be determined by valuing
all of the assets of the Trust Fund at fair market value.
(b) Next, the net increase or decrease in the value of the Trust Fund
attributable to net income and all profits and losses, realized and
unrealized, during the valuation period shall be determined on the
basis of the valuation under paragraph (a) taking into account
appropriate adjustments for contributions, loan payments, and
transfers to and distributions, withdrawals, loans, and transfers
from such Trust Fund during the valuation period.
(c) Finally, the net increase or decrease in the value of the Trust Fund
shall be allocated among Separate Accounts in the Trust Fund in the
ratio of the balance of the portion of such Separate Account in the
Trust Fund as of the preceding Valuation Date less any
distributions, withdrawals, loans, and transfers from such Separate
Account balance in the Trust Fund since the Valuation Date to the
aggregate balances of the portions of all Separate Accounts in the
Trust Fund similarly adjusted, and each Separate Account in the
Trust Fund shall be credited or charged with the amount of its
allocated share. Notwithstanding the foregoing, the Administrator
may adopt such accounting procedures as it considers appropriate and
equitable to establish a proportionate crediting of net increase or
decrease in the value of the Trust Fund for contributions, loan
payments, and transfers to and distributions, withdrawals, loans,
and transfers from such Trust Fund made by or on behalf of a
Participant during the valuation period.
11.4 Finality of Determinations
The Trustee shall have exclusive responsibility for determining the balance
of each Separate Account maintained hereunder. The Trustee's determinations
thereof shall be conclusive upon all interested parties.
11.5 Notification
Within a reasonable period of time after the end of each Plan Year, the
Administrator shall notify each Participant and Beneficiary of the balances
of his Separate Account and Sub-Accounts as of a Valuation Date during the
Plan Year.
ARTICLE XII: LOANS
12.1 Application for Loan
A Participant who is a party in interest may make written application to the
Administrator for a loan from his Separate Account. Loans shall be made to
Participants in accordance with written rules prescribed by the Administrator
which are hereby incorporated into and made a part of the Plan.
As collateral for any loan granted hereunder, the Participant shall grant to
the Plan a security interest in his vested interest under the Plan equal to
the amount of the loan; provided, however, that in no event may the security
interest exceed 50 percent of the Participant's vested interest under the Plan
determined as of the date as of which the loan is originated in accordance
with Plan provisions. In the case of a Participant who is an active employee,
the Participant also shall enter into an agreement to repay the loan by
payroll withholding. No loan in excess of the lessor of (i) 50 percent of the
Participant's vested interest under the Plan or (ii) 100% of a Participant's
vested interest in the Plan attributable to Tax-Deferred Contributions shall
be made from the Plan. Loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount made available to
other employees.
A loan shall not be granted unless the Participant consents in writing to the
charging of his Separate Account for unpaid principal and interest amounts in
the event the loan is declared to be in default.
12.2 Reduction of Account Upon Distribution
Notwithstanding any other provision of the Plan, the amount of a Participant's
Separate Account that is distributable to the Participant or his Beneficiary
under Article XIII or XV shall be reduced by the portion of his vested
interest that is held by the Plan as security for any loan outstanding to the
Participant, provided that the reduction is used to repay the loan. If
distribution is made because of the Participant's death prior to the
commencement of distribution of his Separate Account and less than 100 percent
of the Participant's vested interest in his Separate Account (determined
without regard to the preceding sentence) is payable to his surviving spouse,
then the balance of the Participant's vested interest in his Separate Account
shall be adjusted by reducing the vested account balance by the amount of the
security used to repay the loan, as provided in the preceding sentence, prior
to determining the amount of the benefit payable to the surviving spouse.
12.3 Requirements to Prevent a Taxable Distribution
Notwithstanding any other provision of the Plan to the contrary, the following
terms and conditions shall apply to any loan made to a Participant under this
Article:
(a) The interest rate on any loan to a Participant shall be a reasonable
interest rate commensurate with current interest rates charged for
loans made under similar circumstances by persons in the business
of lending money.
(b) The amount of any loan to a Participant (when added to the
outstanding balance of all other loans to the Participant from the
Plan or any other plan maintained by an Employer or a Related
Company) shall not exceed the lesser of:
(i) $50,000, reduced by the excess, if any, of the highest
outstanding balance of any other loan to the Participant
from the Plan or any other plan maintained by an Employer
or a Related Company during the preceding 12-month period
over the outstanding balance of such loans on the date a
loan is made hereunder; or
(ii) 50 percent of the vested portions of the Participant's
Separate Account and his vested interest under all other
plans maintained by an Employer or a Related Company.
(c) The term of any loan to a Participant shall be no greater than five
years, except in the case of a loan used to acquire any dwelling
unit which within a reasonable period of time is to be used
(determined at the time the loan is made) as a principal residence
of the Participant.
(d) Except as otherwise permitted under Treasury regulations,
substantially level amortization shall be required over the term of
the loan with payments made not less frequently than quarterly.
12.4 Administration of Loan Investment Fund
Upon approval of a loan to a Participant, the Administrator shall direct the
Trustee to transfer an amount equal to the loan amount from the Investment
Funds in which it is invested, as directed by the Administrator, to the loan
Investment Fund established in the Participant's name. Any loan approved by
the Administrator shall be made to the Participant out of the Participant's
loan Investment Fund. All principal and interest paid by the Participant on
a loan made under this Article shall be deposited to his Separate Account and
shall be allocated upon receipt among the Investment Funds in accordance with
the Participant's currently effective investment election. The balance of the
Participant's loan Investment Fund shall be decreased by the amount of
principal payments and the loan Investment Fund shall be terminated when the
loan has been repaid in full.
12.5 Default
If a Participant fails to make or cause to be made, any payment required under
the terms of the loan within 90 days following the date on which such payment
shall become due or there is an outstanding principal balance existing on a
loan after the last scheduled repayment date, the Administrator shall direct
the Trustee to declare the loan to be in default, and the entire unpaid
balance of such loan, together with accrued interest, shall be immediately due
and payable. In any such event, if such balance and interest thereon is not
then paid, the Trustee shall charge the Separate Account of the borrower with
the amount of such balance and interest as of the earliest date a distribution
may be made from the Plan to the borrower without adversely affecting the tax
qualification of the Plan or of the cash or deferred arrangement.
12.6 Special Rules Applicable to Loans
Any loan made hereunder shall be subject to the following rules:
(a) Loans limited to Eligible Employees: No loans shall be made to an
Employee who makes a Rollover Contribution in accordance with
Article V, but who is not an Eligible Employee as provided in
Article III.
(b) Minimum Loan Amount: A Participant may not request a loan for less
than $1,000.
(c) Maximum Period for Real Estate Loans: The term of any loan to a
Participant that is used to acquire any dwelling unit which within
a reasonable period of time is to be used (determined at the time
the loan is made) as a principal residence of the Participant shall
be no greater than ten years.
(d) Pre-Payment Without Penalty: A Participant may pre-pay the balance
of any loan hereunder prior to the date it is due without penalty.
(e) Effect of Termination of Employment: Upon a Participant's
termination of employment, the balance of any outstanding loan
hereunder shall immediately become due and owing.
ARTICLE XIII: WITHDRAWALS WHILE EMPLOYED
13.1 Withdrawals of Rollover Contributions
A Participant who is employed by an Employer or a Related Company and has
attained age 65 may elect in writing, subject to the limitations and
conditions prescribed in this Article, to make a cash withdrawal from his
Rollover Contributions Sub-Account.
13.2 Withdrawals of Employer Contributions
A Participant whose vested interest in his Employer Contributions Sub-Account
is 100 percent and who is employed by an Employer or a Related Company and
either (a) has attained age 65 or (b) is determined by the Administrator to
have incurred a hardship as defined in this Article may elect in writing,
subject to the limitations and conditions prescribed in this Article to make
a cash withdrawal from his Employer Contributions Sub-Account.
13.3 Withdrawals of Tax-Deferred Contributions
A Participant who is employed by an Employer or a Related Company and either
(a) has attained age 65 or (b) is determined by the Administrator to have
incurred a hardship as defined in this Article may elect in writing, subject
to the limitations and conditions prescribed in this Article, to make a cash
withdrawal from his Tax-Deferred Contributions Sub-Account. The maximum
amount that a Participant may withdraw pursuant to this Section because of a
hardship is the balance of his Tax-Deferred Contributions Sub-Account,
exclusive of any earnings credited to such Sub-Account.
13.4 Conditions and Limitations on Hardship Withdrawals
A Participant must file a written application for a hardship withdrawal with
the Administrator such number of days prior to the date as of which it is to
be effective as the Administrator may prescribe. Hardship withdrawals may be
made effective as soon as reasonably practicable following the Administrator's
receipt of the Participant's directions. The Administrator shall grant a
hardship withdrawal only if it determines that the withdrawal is necessary to
meet an immediate and heavy financial need of the Participant. An immediate
and heavy financial need of the Participant means a financial need on account
of:
(a) expenses previously incurred by or necessary to obtain for the
Participant, the Participant's spouse, or any dependent of the
Participant (as defined in Section 152 of the Code) medical care
described in Section 213(d) of the Code;
(b) costs directly related to the purchase (excluding mortgage payments)
of a principal residence for the Participant;
(c) payment of tuition, related educational fees, and room and board
expenses for the next 12 months of post-secondary education for the
Participant, the Participant's spouse, or any dependent of the
Participant;
(d) the need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence; or
(e) the payment of funeral expenses on behalf of a family member.
A withdrawal shall be deemed to be necessary to satisfy an immediate and heavy
financial need of a Participant only if all of the following requirements are
satisfied:
The withdrawal is not in excess of the amount of the immediate and
heavy financial need of the Participant.
The Participant has obtained all distributions, other than hardship
distributions, and all non-taxable loans currently available under
all plans maintained by an Employer or any Related Company.
The Participant's Tax-Deferred Contributions and the Participant's
elective tax-deferred contributions and employee after-tax
contributions under all other tax-qualified plans maintained by an
Employer or any Related Company shall be suspended for at least
twelve months after his receipt of the withdrawal.
The Participant shall not make Tax-Deferred Contributions or
elective tax-deferred contributions under any other tax-qualified
plan maintained by an Employer or any Related Company for the
Participant's taxable year immediately following the taxable year
of the withdrawal in excess of the applicable limit under Section
402(g) of the Code for such next taxable year less the amount of the
Participant's Tax-Deferred Contributions and elective tax-deferred
contributions under any other plan maintained by an Employer or any
Related Company for the taxable year of the withdrawal.
The amount of a hardship withdrawal may include any amounts necessary to pay
any Federal, state, or local income taxes or penalties reasonably anticipated
to result from the distribution. A Participant shall not fail to be treated
as an Eligible Employee for purposes of applying the limitations contained in
Article VII of the Plan merely because his Tax-Deferred Contributions are
suspended in accordance with this Section.
13.5 Order of Withdrawal from a Participant's Sub-Accounts
Distribution of a withdrawal amount shall be made from a Participant's
Sub-Accounts, to the extent necessary, in the order prescribed by the
Administrator, which order shall be uniform with respect to all Participants
and non-discriminatory. If the Sub-Account from which a Participant is
receiving a withdrawal is invested in more than one Investment Fund, the
withdrawal shall be charged against the Investment Funds as directed by the
Administrator.
ARTICLE XIV: TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
14.1 Termination of Employment and Settlement Date
A Participant's Settlement Date shall occur on the date he terminates
employment with an Employer and all Related Companies because of death,
disability, retirement, or other termination of employment. Written notice
of a Participant's Settlement Date shall be given by the Administrator to the
Trustee.
14.2 Separate Accounting for Non-Vested Amounts
If as of a Participant's Settlement Date the Participant's vested interest in
his Employer Contributions Sub-Account is less than 100 percent, that portion
of his Employer Contributions Sub-Account that is not vested shall be
accounted for separately from the vested portion and shall be disposed of as
provided in the following Section. If prior to his Settlement Date such a
Participant made a withdrawal in accordance with the provisions of Article
XIII, the vested portion of his Employer Contributions Sub-Account shall be
equal to the maximum withdrawable amount as determined under Article XIII.
14.3 Disposition of Non-Vested Amounts
That portion of a Participant's Employer Contributions Sub-Account that is not
vested upon the occurrence of his Settlement Date shall be disposed of as
follows:
(a) If the Participant has no vested interest in his Separate Account
upon the occurrence of his Settlement Date or his vested interest
in his Separate Account as of the date of distribution does not
exceed $3,500 resulting in the Participant's receipt of a single sum
payment of such vested interest, the non-vested balance remaining
in the Participant's Employer Contributions Sub-Account will be
forfeited and his Separate Account closed as of (i) the
Participant's Settlement Date, if the Participant has no vested
interest in his Separate Account, or (ii) the date the single sum
payment occurs.
(b) If the Participant's vested interest in his Separate Account exceeds
$3,500 and the Participant is eligible for and consents in writing
to a single sum payment of his vested interest in his Separate
Account, the non-vested balance remaining in the Participant's
Employer Contributions Sub-Account will be forfeited and his
Separate Account closed as of the date the single sum payment
occurs, provided that such distribution occurs prior to the end of
the second Plan Year beginning on or after the Participant's
Settlement Date.
(c) If neither paragraph (a) nor paragraph (b) is applicable, the
non-vested portion of the Participant's Employer Contributions
Sub-Account will continue to be held in such Sub-Account and will
not be forfeited until the end of the five-year period beginning on
his Settlement Date.
Effective as of January 1, 1998, the reference, above, to $3,500 is changed
to $5,000. Whenever the non-vested portion of a Participant's Employer
Contributions Sub-Account is forfeited under the provisions of the Plan with
respect to a Plan Year, the amount of such forfeiture, as of the last day of
the Plan Year, shall be applied first against Plan expenses for the Plan Year
and then against the Employer Contribution obligations for the Plan Year of
the Employer for which the Participant last performed services as an Employee.
Notwithstanding the foregoing, however, should the amount of all such
forfeitures for any Plan Year with respect to any Employer exceed the amount
of such Employer's Employer Contribution obligation for the Plan Year, the
excess amount of such forfeitures shall be held unallocated in a suspense
account established with respect to the Employer and shall for all Plan
purposes be applied against the Employer's Employer Contribution obligations
for the following Plan Year.
14.4 Recrediting of Forfeited Amounts
A former Participant who forfeited the non-vested portion of his Employer
Contributions Sub-Account in accordance with the provisions of this Article
and who is reemployed by an Employer or a Related Company shall have such
forfeited amounts recredited to a new Separate Account in his name, without
adjustment for interim gains or losses experienced by the Trust, if:
(a) he returns to employment with an Employer or a Related Company
before the end of the five-year period beginning on the later of his
Settlement Date or the date he received distribution of his vested
interest in his Separate Account;
(b) he resumes employment covered under the Plan before the end of the
five-year period beginning on the date he is reemployed; and
(c) if he received distribution of his vested interest in his Separate
Account, he repays to the Plan the full amount of such distribution
before the end of the five-year period beginning on the date he is
reemployed.
Funds needed in any Plan Year to recredit the Separate Account of a
Participant with the amounts of prior forfeitures in accordance with the
preceding sentence shall come first from forfeitures that arise during such
Plan Year, and then from Trust income earned in such Plan Year, with each
Trust Fund being charged with the amount of such income proportionately,
unless his Employer chooses to make an additional Employer Contribution, and
shall finally be provided by his Employer by way of a separate Employer
Contribution.
ARTICLE XV: DISTRIBUTIONS
15.1 Distributions to Participants
A Participant whose Settlement Date occurs shall receive distribution of his
vested interest in his Separate Account in the form provided under Article XVI
beginning as soon as reasonably practicable following his Settlement Date or
the date his application for distribution is filed with the Administrator, if
later. In addition, a Participant who continues in employment with an
Employer or a Related Company after his Normal Retirement Date may elect to
receive distribution of all or any portion of his Separate Account in the form
provided under Article XVI at any time following his Normal Retirement Date.
15.2 Distributions to Beneficiaries
If a Participant dies prior to the date distribution of his vested interest
in his Separate Account begins under this Article, his Beneficiary shall
receive distribution of the Participant's vested interest in his Separate
Account in the form provided under Article XVI beginning as soon as reasonably
practicable following the date the Beneficiary's application for distribution
is filed with the Administrator. Unless distribution is to be made over the
life or over a period certain not greater than the life expectancy of the
Beneficiary, distribution of the Participant's entire vested interest shall
be made to the Beneficiary no later than the end of the fifth calendar year
beginning after the Participant's death. If distribution is to be made over
the life or over a period certain no greater than the life expectancy of the
Beneficiary, distribution shall commence no later than:
(a) If the Beneficiary is not the Participant's spouse, the end of the
first calendar year beginning after the Participant's death; or
(b) If the Beneficiary is the Participant's spouse, the later of (i) the
end of the first calendar year beginning after the Participant's
death or (ii) the end of the calendar year in which the Participant
would have attained age 70 1/2.
If distribution is to be made to a Participant's spouse, it shall be made
available within a reasonable period of time after the Participant's death
that is no less favorable than the period of time applicable to other
distributions. If a Participant dies after the date distribution of his
vested interest in his Separate Account begins under this Article, but before
his entire vested interest in his Separate Account is distributed, his
Beneficiary shall receive distribution of the remainder of the Participant's
vested interest in his Separate Account beginning as soon as reasonably
practicable following the Participant's date of death in a form that provides
for distribution at least as rapidly as under the form in which the
Participant was receiving distribution.
15.3 Cash Outs and Participant Consent
Notwithstanding any other provision of the Plan to the contrary, if a
Participant's vested interest in his Separate Account does not exceed $3,500,
distribution of such vested interest shall be made to the Participant in a
single sum payment as soon as reasonably practicable following his Settlement
Date. If a Participant's vested interest in his Separate Account is $0, he
shall be deemed to have received distribution of such vested interest as of
his Settlement Date. If a Participant's vested interest in his Separate
Account exceeds $3,500, distribution shall not commence to such Participant
prior to his Normal Retirement Date without the Participant's written consent.
If at the time of a distribution or deemed distribution to a Participant from
his Separate Account, the Participant's vested interest in his Separate
Account exceeded $3,500, then for purposes of this Section, the Participant's
vested interest in his Separate Account on any subsequent date shall be deemed
to exceed $3,500. Effective as of January 1, 1998, the reference in this
paragraph to $3,500 is changed to $5,000.
15.4 Required Commencement of Distribution
Notwithstanding any other provision of the Plan to the contrary, distribution
of a Participant's vested interest in his Separate Account shall commence to
the Participant no later than the earlier of:
(a) 60 days after the close of the Plan Year in which (i) the
Participant's Normal Retirement Date occurs, (ii) the 10th
anniversary of the year in which he commenced participation in the
Plan occurs, or (iii) his Settlement Date occurs, whichever is
latest; or
(b) the April 1 following the close of the calendar year in which he
attains age 70 1/2, if he is a five percent owner (as defined in
Section 416 of the Code) or on the April 1 following the later of
(i) the calendar year in which he attains age 70 1/2 or (ii) his
Settlement Date, if he is not a five-percent owner (as defined in
Section 416 of the Code), except that if a Participant attained age
70 1/2 prior to January 1, 1988, and was not a five-percent owner
(as defined in Section 416 of the Code) at any time during the five-
Plan-Year period ending within the calendar year in which he
attained age 70 1/2, distribution of such Participant's vested
interest in his Separate Account shall commence no later than the
April 1 following the close of the calendar year in which he attains
age 70 1/2 or retires, whichever is later.
Distributions required to commence under this Section shall be made in the
form provided under Article XVI and in accordance with Section 401(a)(9) of
the Code and regulations issued thereunder, including the minimum distribution
incidental benefit requirements.
15.5 Reemployment of a Participant
If a Participant whose Settlement Date has occurred is reemployed by an
Employer or a Related Company, he shall lose his right to any distribution or
further distributions from the Trust arising from his prior Settlement Date
and his interest in the Trust shall thereafter be treated in the same manner
as that of any other Participant whose Settlement Date has not occurred.
15.6 Restrictions on Alienation
Except as provided in Section 401(a)(13) of the Code relating to qualified
domestic relations orders and Section 1.401(a)-13(b)(2) of Treasury
regulations relating to Federal tax levies and judgments, no benefit under the
Plan at any time shall be subject in any manner to anticipation, alienation,
assignment (either at law or in equity), encumbrance, garnishment, levy,
execution, or other legal or equitable process; and no person shall have power
in any manner to anticipate, transfer, assign (either at law or in equity),
alienate or subject to attachment, garnishment, levy, execution, or other
legal or equitable process, or in any way encumber his benefits under the
Plan, or any part thereof, and any attempt to do so shall be void.
15.7 Facility of Payment
If the Administrator finds that any individual to whom an amount is payable
hereunder is incapable of attending to his financial affairs because of any
mental or physical condition, including the infirmities of advanced age, such
amount (unless prior claim therefor shall have been made by a duly qualified
guardian or other legal representative) may, in the discretion of the
Administrator, be paid to another person for the use or benefit of the
individual found incapable of attending to his financial affairs or in
satisfaction of legal obligations incurred by or on behalf of such individual.
The Trustee shall make such payment only upon receipt of written instructions
to such effect from the Administrator. Any such payment shall be charged to
the Separate Account from which any such payment would otherwise have been
paid to the individual found incapable of attending to his financial affairs
and shall be a complete discharge of any liability therefor under the Plan.
15.8 Inability to Locate Payee
If any benefit becomes payable to any person, or to the executor or
administrator of any deceased person, and if that person or his executor or
administrator does not present himself to the Administrator within a
reasonable period after the Administrator mails written notice of his
eligibility to receive a distribution hereunder to his last known address and
makes such other diligent effort to locate the person as the Administrator
determines, that benefit will be forfeited. However, if the payee later files
a claim for that benefit, the benefit will be restored.
15.9 Distribution Pursuant to Qualified Domestic Relations Orders
Notwithstanding any other provision of the Plan to the contrary, if a
qualified domestic relations order so provides, distribution may be made to
an alternate payee pursuant to a qualified domestic relations order, as
defined in Section 414(p) of the Code, regardless of whether the Participant's
Settlement Date has occurred or whether the Participant is otherwise entitled
to receive a distribution under the Plan.
ARTICLE XVI: FORM OF PAYMENT
16.1 Form of Payment
Distribution shall be made to a Participant, or his Beneficiary, if the
Participant has died, in a single sum payment. Notwithstanding the foregoing,
if a Participant continues in employment with an Employer or a Related Company
after the date as of which distribution of his vested interest must commence
in accordance with the requirements of Section 401(a)(9) of the Code, such
Participant may elect to receive distribution in periodic payments, made not
less frequently than annually, equal to the minimum amount necessary to
satisfy the distribution requirements of Section 401(a)(9) of the Code and
regulations issued thereunder for the remainder of the period that he
continues in employment with an Employer or a Related Company.
16.2 Direct Rollover
Notwithstanding any other provision of the Plan to the contrary, in lieu of
receiving distribution in the form of payment provided under this Article, a
"qualified distributee" may elect in writing, in accordance with rules
prescribed by the Administrator, to have any portion or all of a distribution
that is an "eligible rollover distribution" paid directly by the Plan to the
"eligible retirement plan" designated by the "qualified distributee";
provided, however, that this provision shall not apply if the total
distribution is less than $200 and that a "qualified distributee" may not
elect this provision with respect to a portion of a distribution that is less
than $500. Any such payment by the Plan to another "eligible retirement plan"
shall be a direct rollover. For purposes of this Section, the following terms
have the following meanings:
(a) An "eligible retirement plan" means an individual retirement account
described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code that accepts rollovers;
provided, however, that, in the case of a direct rollover by a
surviving spouse, an eligible retirement plan does not include a
qualified trust described in Section 401(a) of the Code.
(b) An "eligible rollover distribution" means any distribution of all
or any portion of the balance of a Participant's Separate Account;
provided, however, that an eligible rollover distribution does not
include any distribution to the extent such distribution is required
under Section 401(a)(9) of the Code.
(c) A "qualified distributee" means a Participant, his surviving spouse,
or his spouse or former spouse who is an alternate payee under a
qualified domestic relations order, as defined in Section 414(p) of
the Code.
16.3 Notice Regarding Form of Payment
Within the 60 day period ending 30 days before the date as of which
distribution of a Participant's Separate Account commences, the Administrator
shall provide the Participant with a written explanation of his right to make
a direct rollover and the form of payment provided under the Plan.
Distribution of the Participant's Separate Account may commence less than 30
days after such notice is provided to the Participant if (i) the Administrator
clearly informs the Participant of his right to consider his election of
whether or not to make a direct rollover for a period of at least 30 days
following his receipt of the notice and (ii) the Participant, after receiving
the notice, affirmatively elects an early distribution.
ARTICLE XVII: BENEFICIARIES
17.1 Designation of Beneficiary
A married Participant's Beneficiary shall be his spouse, unless the
Participant designates a person or persons other than his spouse as
Beneficiary with his spouse's written consent. A Participant may designate
a Beneficiary on the form prescribed by the Administrator. If no Beneficiary
has been designated pursuant to the provisions of this Section, or if no
Beneficiary survives the Participant and he has no surviving spouse, then the
Beneficiary under the Plan shall be the Participant's estate. If a
Beneficiary dies after becoming entitled to receive a distribution under the
Plan but before distribution is made to him in full, and if no other
Beneficiary has been designated to receive the balance of the distribution in
that event, the estate of the deceased Beneficiary shall be the Beneficiary
as to the balance of the distribution.
17.2 Spousal Consent Requirements
Any written spousal consent given pursuant to this Article must acknowledge
the effect of the action taken and must be witnessed by a Plan representative
or a notary public. In addition, the spouse's written consent must either
(i) specify any non-spouse Beneficiary designated by the Participant and that
such Beneficiary may not be changed without written spousal consent or (ii)
acknowledge that the spouse has the right to limit consent to a specific
Beneficiary, but permit the Participant to change the designated Beneficiary
without the spouse's further consent. A Participant's spouse will be deemed
to have given written consent to the Participant's designation of Beneficiary
if the Participant establishes to the satisfaction of a Plan representative
that such consent cannot be obtained because the spouse cannot be located or
because of other circumstances set forth in Section 401(a)(11) of the Code and
regulations issued thereunder. Any written consent given or deemed to have
been given by a Participant's spouse hereunder shall be valid only with
respect to the spouse who signs the consent.
ARTICLE XVIII: ADMINISTRATION
18.1 Authority of the Sponsor
The Sponsor, which shall be the administrator for purposes of ERISA and the
plan administrator for purposes of the Code, shall be responsible for the
administration of the Plan and, in addition to the powers and authorities
expressly conferred upon it in the Plan, shall have all such powers and
authorities as may be necessary to carry out the provisions of the Plan,
including the power and authority to interpret and construe the provisions of
the Plan, to make benefit determinations, and to resolve any disputes which
arise under the Plan. The Sponsor may employ such attorneys, agents, and
accountants as it may deem necessary or advisable to assist in carrying out
its duties hereunder. The Sponsor shall be a "named fiduciary" as that term
is defined in Section 402(a)(2) of ERISA. The Sponsor may:
(a) allocate any of the powers, authority, or responsibilities for the
operation and administration of the Plan (other than trustee
responsibilities as defined in Section 405(c)(3) of ERISA) among
named fiduciaries; and
(b) designate a person or persons other than a named fiduciary to carry
out any of such powers, authority, or responsibilities;
except that no allocation by the Sponsor of, or designation by the Sponsor
with respect to, any of such powers, authority, or responsibilities to another
named fiduciary or a person other than a named fiduciary shall become
effective unless such allocation or designation shall first be accepted by
such named fiduciary or other person in a writing signed by it and delivered
to the Sponsor.
18.2 Action of the Sponsor
Any act authorized, permitted, or required to be taken under the Plan by the
Sponsor and which has not been delegated in accordance with Section 18.1, may
be taken by a majority of the members of the board of directors of the
Sponsor, either by vote at a meeting, or in writing without a meeting, or by
the employee or employees of the Sponsor designated by the board of directors
to carry out such acts on behalf of the Sponsor. All notices, advice,
directions, certifications, approvals, and instructions required or authorized
to be given by the Sponsor as under the Plan shall be in writing and signed
by either (i) a majority of the members of the board of directors of the
Sponsor or by such member or members as may be designated by an instrument in
writing, signed by all the members thereof, as having authority to execute
such documents on its behalf, or (ii) the employee or employees authorized to
act for the Sponsor in accordance with the provisions of this Section.
18.3 Claims Review Procedure
Whenever a claim for benefits under the Plan filed by any person (herein
referred to as the "Claimant") is denied, whether in whole or in part, the
Sponsor shall transmit a written notice of such decision to the Claimant
within 90 days of the date the claim was filed or, if special circumstances
require an extension, within 180 days of such date, which notice shall be
written in a manner calculated to be understood by the Claimant and shall
contain a statement of (i) the specific reasons for the denial of the claim,
(ii) specific reference to pertinent Plan provisions on which the denial is
based, and (iii) a description of any additional material or information
necessary for the Claimant to perfect the claim and an explanation of why such
information is necessary. The notice shall also include a statement advising
the Claimant that, within 60 days of the date on which he receives such
notice, he may obtain review of such decision in accordance with the
procedures hereinafter set forth. Within such 60-day period, the Claimant or
his authorized representative may request that the claim denial be reviewed
by filing with the Sponsor a written request therefor, which request shall
contain the following information:
(a) the date on which the Claimant's request was filed with the Sponsor;
provided, however, that the date on which the Claimant's request for
review was in fact filed with the Sponsor shall control in the event
that the date of the actual filing is later than the date stated by
the Claimant pursuant to this paragraph;
(b) the specific portions of the denial of his claim which the Claimant
requests the Sponsor to review;
(c) a statement by the Claimant setting forth the basis upon which he
believes the Sponsor should reverse the previous denial of his claim
for benefits and accept his claim as made; and
(d) any written material (offered as exhibits) which the Claimant
desires the Sponsor to examine in its consideration of his position
as stated pursuant to paragraph (c) of this Section.
Within 60 days of the date determined pursuant to paragraph (a) of this
Section or, if special circumstances require an extension, within 120 days of
such date, the Sponsor shall conduct a full and fair review of the decision
denying the Claimant's claim for benefits and shall render its written
decision on review to the Claimant. The Sponsor's decision on review shall
be written in a manner calculated to be understood by the Claimant and shall
specify the reasons and Plan provisions upon which the Sponsor's decision was
based.
18.4 Qualified Domestic Relations Orders
The Sponsor shall establish reasonable procedures to determine the status of
domestic relations orders and to administer distributions under domestic
relations orders which are deemed to be qualified orders. Such procedures
shall be in writing and shall comply with the provisions of Section 414(p) of
the Code and regulations issued thereunder.
18.5 Indemnification
In addition to whatever rights of indemnification the Trustee or the members
of the board of directors of the Sponsor or any employee or employees of the
Sponsor to whom any power, authority, or responsibility is delegated pursuant
to Section 18.2, may be entitled under the articles of incorporation or
regulations of the Sponsor, under any provision of law, or under any other
agreement, the Sponsor shall satisfy any liability actually and reasonably
incurred by any such person or persons, including expenses, attorneys' fees,
judgments, fines, and amounts paid in settlement (other than amounts paid in
settlement not approved by the Sponsor), in connection with any threatened,
pending or completed action, suit, or proceeding which is related to the
exercising or failure to exercise by such person or persons of any of the
powers, authority, responsibilities, or discretion as provided under the Plan,
or reasonably believed by such person or persons to be provided hereunder, and
any action taken by such person or persons in connection therewith, unless the
same is judicially determined to be the result of such person or persons'
gross negligence or willful misconduct.
18.6 Actions Binding
Subject to the provisions of Section 18.3, any action taken by the Sponsor
which is authorized, permitted, or required under the Plan shall be final and
binding upon the Employers, the Trustee, all persons who have or who claim an
interest under the Plan, and all third parties dealing with the Employers or
the Trustee.
ARTICLE XIX: AMENDMENT AND TERMINATION
19.1 Amendment
Subject to the provisions of Section 19.2, the Sponsor may at any time and
from time to time, by action of its board of directors, or such officers of
the Sponsor as are authorized by its board of directors, amend the Plan,
either prospectively or retroactively. Any such amendment shall be by written
instrument executed by the Sponsor.
19.2 Limitation on Amendment
The Sponsor shall make no amendment to the Plan which shall decrease the
accrued benefit of any Participant or Beneficiary, except that nothing
contained herein shall restrict the right to amend the provisions of the Plan
relating to the administration of the Plan and Trust. Moreover, no such
amendment shall be made hereunder which shall permit any part of the Trust to
revert to an Employer or any Related Company or be used or be diverted to
purposes other than the exclusive benefit of Participants and Beneficiaries.
19.3 Termination
The Sponsor reserves the right, by action of its board of directors, to
terminate the Plan as to all Employers at any time (the effective date of such
termination being hereinafter referred to as the "termination date"). Upon
any such termination of the Plan, the following actions shall be taken for the
benefit of Participants and Beneficiaries:
(a) As of the termination date, each Investment Fund shall be valued and
all Separate Accounts and Sub-Accounts shall be adjusted in the
manner provided in Article XI, with any unallocated contributions
or forfeitures being allocated as of the termination date in the
manner otherwise provided in the Plan. The termination date shall
become a Valuation Date for purposes of Article XI. In determining
the net worth of the Trust, there shall be included as a liability
such amounts as shall be necessary to pay all expenses in connection
with the termination of the Trust and the liquidation and
distribution of the property of the Trust, as well as other
expenses, whether or not accrued, and shall include as an asset all
accrued income.
(b) All Separate Accounts shall then be disposed of to or for the
benefit of each Participant or Beneficiary in accordance with the
provisions of Article XV as if the termination date were his
Settlement Date; provided, however, that notwithstanding the
provisions of Article XV, if the Plan does not offer an annuity
option and if neither his Employer nor a Related Company establishes
or maintains another defined contribution plan (other than an
employee stock ownership plan as defined in Section 4975(e)(7) of
the Code), the Participant's written consent to the commencement of
distribution shall not be required regardless of the value of the
vested portions of his Separate Account.
(c) Notwithstanding the provisions of paragraph (b) of this Section, no
distribution shall be made to a Participant of any portion of the
balance of his Tax-Deferred Contributions Sub-Account prior to his
separation from service (other than a distribution made in
accordance with Article XIII or required in accordance with Section
401(a)(9) of the Code) unless (i) neither his Employer nor a Related
Company establishes or maintains another defined contribution plan
(other than an employee stock ownership plan as defined in Section
4975(e)(7) of the Code, a tax credit employee stock ownership plan
as defined in Section 409 of the Code, or a simplified employee
pension as defined in Section 408(k) of the Code) either at the time
the Plan is terminated or at any time during the period ending
12 months after distribution of all assets from the Plan; provided,
however, that this provision shall not apply if fewer than two
percent of the Eligible Employees under the Plan were eligible to
participate at any time in such other defined contribution plan
during the 24-month period beginning 12 months before the Plan
termination, and (ii) the distribution the Participant receives is
a "lump sum distribution" as defined in Section 402(e)(4) of the
Code, without regard to clauses (i), (ii), (iii), and (iv) of
sub-paragraph (A), sub-paragraph (B), or sub-paragraph (H) thereof.
Notwithstanding anything to the contrary contained in the Plan, upon any such
Plan termination, the vested interest of each Participant and Beneficiary in
his Employer Contributions Sub-Account shall be 100 percent; and, if there is
a partial termination of the Plan, the vested interest of each Participant and
Beneficiary who is affected by the partial termination in his Employer
Contributions Sub-Account shall be 100 percent. For purposes of the preceding
sentence only, the Plan shall be deemed to terminate automatically if there
shall be a complete discontinuance of contributions hereunder by all
Employers.
19.4 Reorganization
The merger, consolidation, or liquidation of any Employer with or into any
other Employer or a Related Company shall not constitute a termination of the
Plan as to such Employer. If an Employer disposes of substantially all of the
assets used by the Employer in a trade or business or disposes of a subsidiary
and in connection therewith one or more Participants terminates employment but
continues in employment with the purchaser of the assets or with such
subsidiary, no distribution from the Plan shall be made to any such
Participant prior to his separation from service (other than a distribution
made in accordance with Article XIII or required in accordance with Section
401(a)(9) of the Code), except that a distribution shall be permitted to be
made in such a case, subject to the Participant's consent (to the extent
required by law), if (i) the distribution would constitute a "lump sum
distribution" as defined in section 402(e)(4) of the Code, without regard to
clauses (i), (ii), (iii), or (iv) of sub-paragraph (A), sub-paragraph (B), or
sub-paragraph (H) thereof, (ii) the Employer continues to maintain the Plan
after the disposition, (iii) the purchaser does not maintain the Plan after
the disposition, and (iv) the distribution is made by the end of the second
calendar year after the calendar year in which the disposition occurred.
19.5 Withdrawal of an Employer
An Employer other than the Sponsor may withdraw from the Plan at any time upon
notice in writing to the Administrator (the effective date of such withdrawal
being hereinafter referred to as the "withdrawal date"), and shall thereupon
cease to be an Employer for all purposes of the Plan. An Employer shall be
deemed automatically to withdraw from the Plan in the event of its complete
discontinuance of contributions, or, subject to Section 19.4 and unless the
Sponsor otherwise directs, it ceases to be a Related Company of the Sponsor
or any other Employer. Upon the withdrawal of an Employer, the withdrawing
Employer shall determine whether a partial termination has occurred with
respect to its Employees. In the event that the withdrawing Employer
determines a partial termination has occurred, the action specified in Section
19.3 shall be taken as of the withdrawal date, as on a termination of the
Plan, but with respect only to Participants who are employed solely by the
withdrawing Employer, and who, upon such withdrawal, are neither transferred
to nor continued in employment with any other Employer or a Related Company.
The interest of any Participant employed by the withdrawing Employer who is
transferred to or continues in employment with any other Employer or a Related
Company, and the interest of any Participant employed solely by an Employer
or a Related Company other than the withdrawing Employer, shall remain
unaffected by such withdrawal; no adjustment to his Separate Accounts shall
be made by reason of the withdrawal; and he shall continue as a Participant
hereunder subject to the remaining provisions of the Plan.
ARTICLE XX: ADOPTION BY OTHER ENTITIES
20.1 Adoption by Related Companies
A Related Company that is not an Employer may, with the consent of the
Sponsor, adopt the Plan and become an Employer hereunder by causing an
appropriate written instrument evidencing such adoption to be executed in
accordance with the requirements of its organizational authority. Any such
instrument shall specify the effective date of the adoption.
20.2 Effective Plan Provisions
An Employer who adopts the Plan shall be bound by the provisions of the Plan
in effect at the time of the adoption and as subsequently in effect because
of any amendment to the Plan.
ARTICLE XXI: MISCELLANEOUS PROVISIONS
21.1 No Commitment as to Employment
Nothing contained herein shall be construed as a commitment or agreement upon
the part of any person to continue his employment with an Employer or Related
Company, or as a commitment on the part of any Employer or Related Company to
continue the employment, compensation, or benefits of any person for any
period.
21.2 Benefits
Nothing in the Plan nor the Trust Agreement shall be construed to confer any
right or claim upon any person, firm, or corporation other than the Employers,
the Trustee, Participants, and Beneficiaries.
21.3 No Guarantees
The Employers, the Administrator, and the Trustee do not guarantee the Trust
from loss or depreciation, nor do they guarantee the payment of any amount
which may become due to any person hereunder.
21.4 Expenses
The expenses of administration of the Plan, including the expenses of the
Administrator and fees of the Trustee, shall be paid from the Trust as a
general charge thereon, unless the Sponsor elects to make payment.
Notwithstanding the foregoing, the Sponsor may direct that administrative
expenses that are allocable to the Separate Account of a specific Participant
shall be paid from that Separate Account and the costs incident to the
management of the assets of an Investment Fund or to the purchase or sale of
securities held in an Investment Fund shall be paid by the Trustee from such
Investment Fund.
21.5 Precedent
Except as otherwise specifically provided, no action taken in accordance with
the Plan shall be construed or relied upon as a precedent for similar action
under similar circumstances.
21.6 Duty to Furnish Information
The Employers, the Administrator, and the Trustee shall furnish to any of the
others any documents, reports, returns, statements, or other information that
the other reasonably deems necessary to perform its duties hereunder or
otherwise imposed by law.
21.7 Withholding
The Trustee shall withhold any tax which by any present or future law is
required to be withheld, and which the Administrator notifies the Trustee in
writing is to be so withheld, from any payment to any Participant or
Beneficiary hereunder.
21.8 Merger, Consolidation, or Transfer of Plan Assets
The Plan shall not be merged or consolidated with any other plan, nor shall
any of its assets or liabilities be transferred to another plan, unless,
immediately after such merger, consolidation, or transfer of assets or
liabilities, each Participant in the Plan would receive a benefit under the
Plan which is at least equal to the benefit he would have received immediately
prior to such merger, consolidation, or transfer of assets or liabilities
(assuming in each instance that the Plan had then terminated).
21.9 Back Pay Awards
The provisions of this Section shall apply only to an Employee or former
Employee who becomes entitled to back pay by an award or agreement of an
Employer without regard to mitigation of damages. If a person to whom this
Section applies was or would have become an Eligible Employee after such back
pay award or agreement has been effected, and if any such person who had not
previously elected to make Tax-Deferred Contributions pursuant to Section 4.1
shall within 30 days of the date he receives notice of the provisions of this
Section make an election to make Tax-Deferred Contributions in accordance with
such Section 4.1 (retroactive to any Enrollment Date as of which he was or has
become eligible to do so), then such Participant may elect that any
Tax-Deferred Contributions not previously made on his behalf but which, after
application of the foregoing provisions of this Section, would have been made
under the provisions of Article IV, shall be made out of the proceeds of such
back pay award or agreement. In addition, if any such Employee or former
Employee would have been eligible to participate in the allocation of Employer
Contributions under the provisions of Article VI for any prior Plan Year after
such back pay award or agreement has been effected, his Employer shall make
an Employer Contribution equal to the amount of the Employer Contribution
which would have been allocated to such Participant under the provisions of
Article VI as in effect during each such Plan Year. The amounts of such
additional contributions shall be credited to the Separate Account of such
Participant. Any additional contributions made by such Participant and by an
Employer pursuant to this Section shall be made in accordance with, and
subject to the limitations of the applicable provisions of Articles IV, VI,
and VII.
21.10 Condition on Employer Contributions
Notwithstanding anything to the contrary contained in the Plan or the Trust
Agreement, any contribution of an Employer hereunder is conditioned upon the
continued qualification of the Plan under Section 401(a) of the Code, the
exempt status of the Trust under Section 501(a) of the Code, and the
deductibility of the contribution under Section 404 of the Code. Except as
otherwise provided in this Section and Section 21.11, however, in no event
shall any portion of the property of the Trust ever revert to or otherwise
inure to the benefit of an Employer or any Related Company.
21.11 Return of Contributions to an Employer
Notwithstanding any other provision of the Plan or the Trust Agreement to the
contrary, in the event any contribution of an Employer made hereunder:
(a) is made under a mistake of fact, or
(b) is disallowed as a deduction under Section 404 of the Code,
such contribution may be returned to the Employer within one year after the
payment of the contribution or the disallowance of the deduction to the extent
disallowed, whichever is applicable. In the event the Plan does not initially
qualify under Section 401(a) of the Code, any contribution of an Employer made
hereunder may be returned to the Employer within one year of the date of
denial of the initial qualification of the Plan, but only if an application
for determination was made within the period of time prescribed under Section
403(c)(2)(B) of ERISA.
21.12 Validity of Plan
The validity of the Plan shall be determined and the Plan shall be construed
and interpreted in accordance with the laws of the State or Commonwealth in
which the Sponsor has its principal place of business, except as preempted by
applicable Federal law. The invalidity or illegality of any provision of the
Plan shall not affect the legality or validity of any other part thereof.
21.13 Trust Agreement
The Trust Agreement and the Trust maintained thereunder shall be deemed to be
a part of the Plan as if fully set forth herein and the provisions of the
Trust Agreement are hereby incorporated by reference into the Plan.
21.14 Parties Bound
The Plan shall be binding upon the Employers, all Participants and
Beneficiaries hereunder, and, as the case may be, the heirs, executors,
administrators, successors, and assigns of each of them.
21.15 Application of Certain Plan Provisions
A Participant's Beneficiary, if the Participant has died, or alternate payee
under a qualified domestic relations order shall be treated as a Participant
for purposes of directing investments as provided in Article X. For purposes
of the general administrative provisions and limitations of the Plan, a
Participant's Beneficiary or alternate payee under a qualified domestic
relations order shall be treated as any other person entitled to receive
benefits under the Plan. Upon any termination of the Plan, any such
Beneficiary or alternate payee under a qualified domestic relations order who
has an interest under the Plan at the time of such termination, which does not
cease by reason thereof, shall be deemed to be a Participant for all purposes
of the Plan.
21.16 Leased Employees
Any leased employee, other than an excludable leased employee, shall be
treated as an employee of the Employer for which he performs services for all
purposes of the Plan; provided, however, that contributions to a qualified
plan made on behalf of a leased employee by the leasing organization that are
attributable to services for the Employer shall be treated as having been made
by the Employer and there shall be no duplication of benefits under this Plan.
A "leased employee" means any person who performs services for an Employer
or a Related Company (the "recipient") (other than an employee of the
recipient) pursuant to an agreement between the recipient and any other person
(the "leasing organization") on a substantially full-time basis for a period
of at least one year, provided that such services are of a type historically
performed, in the business field of the recipient, by employees. An
"excludable leased employee" means any leased employee of the recipient who
is covered by a money purchase pension plan maintained by the leasing
organization which provides for (i) a nonintegrated employer contribution on
behalf of each participant in the plan equal to at least ten percent of
compensation, (ii) full and immediate vesting, and (iii) immediate
participation by employees of the leasing organization (other than employees
who perform substantially all of their services for the leasing organization
or whose compensation from the leasing organization in each plan year during
the four-year period ending with the plan year is less than $1,000); provided,
however, that leased employees do not constitute more than 20 percent of the
recipient's nonhighly compensated work force. For purposes of this Section,
contributions or benefits provided to a leased employee by the leasing
organization that are attributable to services performed for the recipient
shall be treated as provided by the recipient.
21.17 Transferred Funds
If funds from another qualified plan are transferred or merged into the Plan,
such funds shall be held and administered in accordance with any restrictions
applicable to them under such other plan to the extent required by law and
shall be accounted for separately to the extent necessary to accomplish the
foregoing.
ARTICLE XXII: TOP-HEAVY PROVISIONS
22.1 Definitions
For purposes of this Article, the following terms shall have the following
meanings:
(a) The "compensation" of an employee means compensation as defined in
Section 415 of the Code and regulations issued thereunder. In no
event, however, shall the compensation of a Participant taken into
account under the Plan for any Plan Year exceed (1) $200,000 for
Plan Years beginning prior to January 1, 1994, or (2) $150,000 for
Plan Years beginning on or after January 1, 1994 (subject to
adjustment annually as provided in Section 401(a)(17)(B) and
Section 415(d) of the Code; provided, however, that the dollar
increase in effect on January 1 of any calendar year, if any, is
effective for Plan Years beginning in such calendar year). If the
compensation of a Participant is determined over a period of time
that contains fewer than 12 calendar months, then the annual
compensation limitation described above shall be adjusted with
respect to that Participant by multiplying the annual compensation
limitation in effect for the Plan Year by a fraction the numerator
of which is the number of full months in the period and the
denominator of which is 12; provided, however, that no proration is
required for a Participant who is covered under the Plan for less
than one full Plan Year if the formula for allocations is based on
Compensation for a period of at least 12 months.
(b) The "determination date" with respect to any Plan Year means the
last day of the preceding Plan Year, except that the determination
date with respect to the first Plan Year of the Plan, shall mean the
last day of such Plan Year.
(c) A "key employee" means any Employee or former Employee who is a key
employee pursuant to the provisions of Section 416(i)(1) of the Code
and any Beneficiary of such Employee or former Employee.
(d) A "non-key employee" means any Employee who is not a key employee.
(e) A "permissive aggregation group" means those plans included in each
Employer's required aggregation group together with any other plan
or plans of the Employer, so long as the entire group of plans would
continue to meet the requirements of Sections 401(a)(4) and 410 of
the Code.
(f) A "required aggregation group" means the group of tax-qualified
plans maintained by an Employer or a Related Company consisting of
each plan in which a key employee participates and each other plan
that enables a plan in which a key employee participates to meet the
requirements of Section 401(a)(4) or Section 410 of the Code,
including any plan that terminated within the five-year period
ending on the relevant determination date.
(g) A "super top-heavy group" with respect to a particular Plan Year
means a required or permissive aggregation group that, as of the
determination date, would qualify as a top-heavy group under the
definition in paragraph (i) of this Section with "90 percent"
substituted for "60 percent" each place where "60 percent" appears
in the definition.
(h) A "super top-heavy plan" with respect to a particular Plan Year
means a plan that, as of the determination date, would qualify as
a top-heavy plan under the definition in paragraph (j) of this
Section with "90 percent" substituted for "60 percent" each place
where "60 percent" appears in the definition. A plan is also a
"super top-heavy plan" if it is part of a super top-heavy group.
(i) A "top-heavy group" with respect to a particular Plan Year means a
required or permissive aggregation group if the sum, as of the
determination date, of the present value of the cumulative accrued
benefits for key employees under all defined benefit plans included
in such group and the aggregate of the account balances of key
employees under all defined contribution plans included in such
group exceeds 60 percent of a similar sum determined for all
employees covered by the plans included in such group.
(j) A "top-heavy plan" with respect to a particular Plan Year means (i),
in the case of a defined contribution plan (including any simplified
employee pension plan), a plan for which, as of the determination
date, the aggregate of the accounts (within the meaning of Section
416(g) of the Code and the regulations and rulings thereunder) of
key employees exceeds 60 percent of the aggregate of the accounts
of all participants under the plan, with the accounts valued as of
the relevant valuation date and increased for any distribution of
an account balance made in the five-year period ending on the
determination date, (ii), in the case of a defined benefit plan, a
plan for which, as of the determination date, the present value of
the cumulative accrued benefits payable under the plan (within the
meaning of Section 416(g) of the Code and the regulations and
rulings thereunder) to key employees exceeds 60 percent of the
present value of the cumulative accrued benefits under the plan for
all employees, with the present value of accrued benefits to be
determined under the accrual method uniformly used under all plans
maintained by an Employer or, if no such method exists, under the
slowest accrual method permitted under the fractional accrual rate
of Section 411(b)(1)(C) of the Code and including the present value
of any part of any accrued benefits distributed in the five-year
period ending on the determination date, and (iii) any plan
(including any simplified employee pension plan) included in a
required aggregation group that is a top-heavy group. For purposes
of this paragraph, the accounts and accrued benefits of any employee
who has not performed services for an Employer or a Related Company
during the five-year period ending on the determination date shall
be disregarded. For purposes of this paragraph, the present value
of cumulative accrued benefits under a defined benefit plan for
purposes of top-heavy determinations shall be calculated using the
actuarial assumptions otherwise employed under such plan, except
that the same actuarial assumptions shall be used for all plans
within a required or permissive aggregation group. A Participant's
interest in the Plan attributable to any Rollover Contributions,
except Rollover Contributions made from a plan maintained by an
Employer or a Related Company, shall not be considered in
determining whether the Plan is top-heavy. Notwithstanding the
foregoing, if a plan is included in a required or permissive
aggregation group that is not a top-heavy group, such plan shall not
be a top-heavy plan.
(k) The "valuation date" with respect to any determination date means
the most recent Valuation Date occurring within the 12-month period
ending on the determination date.
22.2 Applicability
Notwithstanding any other provision of the Plan to the contrary, the
provisions of this Article shall be applicable during any Plan Year in which
the Plan is determined to be a top-heavy plan as hereinafter defined. If the
Plan is determined to be a top-heavy plan and upon a subsequent determination
date is determined no longer to be a top-heavy plan, the vesting provisions
of Article VI shall again become applicable as of such subsequent
determination date; provided, however, that if the prior vesting provisions
do again become applicable, any Employee with three or more years of Vesting
Service may elect in accordance with the provisions of Article VI, to continue
to have his vested interest in his Employer Contributions Sub-Account
determined in accordance with the vesting schedule specified in Section 22.5.
22.3 Minimum Employer Contribution
If the Plan is determined to be a top-heavy plan, the Employer Contributions
allocated to the Separate Account of each non-key employee who is an Eligible
Employee and who is employed by an Employer or a Related Company on the last
day of such top-heavy Plan Year shall be no less than the lesser of (i) three
percent of his compensation or (ii) the largest percentage of compensation
that is allocated as an Employer Contribution and/or Tax-Deferred Contribution
for such Plan Year to the Separate Account of any key employee; except that,
in the event the Plan is part of a required aggregation group, and the Plan
enables a defined benefit plan included in such group to meet the requirements
of Section 401(a)(4) or 410 of the Code, the minimum allocation of Employer
Contributions to each such non-key employee shall be three percent of the
compensation of such non-key employee. Any minimum allocation to a non-key
employee required by this Section shall be made without regard to any social
security contribution made on behalf of the non-key employee, his number of
hours of service, his level of compensation, or whether he declined to make
elective or mandatory contributions. Notwithstanding the minimum top-heavy
allocation requirements of this Section, if the Plan is a top-heavy plan, each
non-key employee who is an Eligible Employee and who is employed by an
Employer or a Related Company on the last day of a top-heavy Plan Year and who
is also covered under any other top-heavy plan or plans of an Employer will
receive the top-heavy benefits provided under such other plan in lieu of the
minimum top-heavy allocation under the Plan.
22.4 Adjustments to Section 415 Limitations
If the Plan is determined to be a top-heavy plan and an Employer maintains a
defined benefit plan covering some or all of the Employees that are covered
by the Plan, the defined benefit plan fraction and the defined contribution
plan fraction, described in Article VII, shall be determined as provided in
Section 415 of the Code by substituting "1.0" for "1.25" each place where
"1.25" appears, except that such substitutions shall not be applied to the
Plan if (i) the Plan is not a super top-heavy plan, (ii) the Employer
Contribution for such top-heavy Plan Year for each non-key employee who is to
receive a minimum top-heavy benefit hereunder is not less than four percent
of such non-key employee's compensation, and (iii) the minimum annual
retirement benefit accrued by a non-key employee who participates under one
or more defined benefit plans of an Employer or a Related Company for such
top-heavy Plan Year is not less than the lesser of three percent times years
of service with an Employer or a Related Company or thirty percent.
ARTICLE XXIII: EFFECTIVE DATE
The Plan is effective as of November 1, 1997 and is executed this 30th day of
December, 1997.
ESI OPERATING SERVICES, INC.
By: /s/Kenneth P. Hoffman
Kenneth P. Hoffman, Vice President
Exhibit 99 (b)
FIRST AMENDMENT TO THE
ESI OPERATING SERVICES, INC.
EMPLOYEES SAVINGS PLAN
FPL Energy Operating Services, Inc., formerly known as ESI
Operating Services, Inc. (the "Company") maintains the ESI Operating
Services, Inc. Employees Savings Plan, originally effective as of November
1, 1997 (the "Plan"). The Company now wishes to amend the Plan as follows:
I. A new second paragraph is added to the Preamble of the Plan,
immediately before Article I, to read as follows:
Effective as of April 1, 1998, the following plans merged
into this Plan:
a) ESI Doswell Power Services, Inc. Employees Savings Plan;
b) ESI Brady Power Services, Inc. Employees' Savings Plan;
c) ESI Virginia Power Services, Inc. Employee Savings Plan; and
d) ESI Calistoga Power Services, Inc. Employees Savings Plan.
In order to accommodate the merger of the plans, special
provisions have been added to Sections 2.4 and 2.5 of the
Plan.
II. Effective as of November 1, 1997, the definition of Compensation in
Section 1.1 of the Plan is amended in its entirety to read as follows:
The "Compensation" of a Participant for any period means
the Participant's total compensation paid by the
Employer, as reported on IRS Form W-2, which is subject
to federal income tax withholding, excluding
reimbursements or other expense allowances, fringe
benefits, moving expenses, deferred compensation, welfare
benefits and other forms of pay, but determined prior to
any exclusions for amounts deferred under Section 125,
402(e)(3), 402(h)(1)(B), 403(b), or 457(b) of the Code or
for certain contributions described in Section 414(h)(2)
of the Code that are picked up by the employing unit and
treated as employer contributions.
In no event, however, shall the Compensation of a
Participant taken into account under the Plan for any Plan
Year exceed $150,000 (subject to adjustment annually as
provided in Section 401(a)(17)(B) and Section 415(d) of
the Code; provided, however, that the dollar increase in
effect on January 1 of any calendar year, if any, is
effective for Plan Years beginning in such calendar year).
If the Compensation of a Participant is determined over a
period of time that contains fewer than 12 calendar
months, then the annual compensation limitation described
above shall be adjusted with respect to that Participant
by multiplying the annual compensation limitation in
effect for the Plan Year by a fraction the numerator of
which is the number of full months in the period and the
denominator of which is 12; provided, however, that no
proration is required for a Participant who is covered
under the Plan for less than one full Plan Year if the
formula for allocations is based on Compensation for a
period of at least 12 months.
III. The Plan is amended by deleting the name "ESI Operating Services,
Inc." and replacing it with "FPL Energy Operating Services, Inc." each time
it appears in the Plan. The Plan also is amended by deleting the name "ESI
Operating Services, Inc. Employees Savings Plan" and replacing it with "FPL
Energy Operating Services, Inc. Employees Savings Plan" each time it
appears in the Plan.
IV. Section 2.2 of the Plan is amended in its entirety to read
as follows:
2.2 Crediting of Hours of Service
a) A person shall be credited with an Hour of Service for
each hour for which he is paid, or entitled to payment,
for the performance of duties for an Employer, a
Predecessor Employer, or any Related Company.
b) The term "Predecessor Employer" means the company from
whom the Employer assumed management
responsibilities for the following facilities:
(i) Calistoga Power Services;
(ii) Virginia Power Services;
(iii) Brady Power Services;
(iv) Cannon Energy;
(v) SEGS;
(vi) Cherokee;
(vii) Ormesa; and
(viii) Bellingham.
3) For purposes of this Section 2.2, Florida Power & Light Company
and FPL Group, Inc. are "Related Companies".
V. Section 2.4 of the Plan is amended in its entirety to read as follows:
An employee shall be credited with Eligibility Service equal to
his continuous service.
An Employee who was a Participant in any of the following
plans as of April 1, 1998 will become a Participant in
this Plan as of April 1, 1998:
a) ESI Doswell Power Services, Inc. Employees Savings Plan;
b) ESI Brady Power Services, Inc. Employees' Savings Plan;
c) ESI Virginia Power Services, Inc. Employee Savings Plan;
d) ESI Calistoga Power Services, Inc. Employees Savings Plan.
VI. The following new paragraph is added to the end of Section 2.5 of the
Plan to read as follows:
Subsection 2.5(c) shall not apply to any individual who
became a Participant in this Plan as a result of the
merger of the following plans into this Plan:
1) ESI Doswell Power Services, Inc. Employees Savings Plan;
2) ESI Brady Power Services, Inc. Employees' Savings Plan;
3) ESI Virginia Power Services, Inc. Employee Savings Plan;
4) ESI Calistoga Power Services, Inc. Employees Savings Plan.
Employees at each of the following locations currently
VII. Section 3.1 is amended in its entirety to read as follows:
3.1 Eligibility
Each Employee shall become an Eligible Employee as of the
Enrollment Date coinciding with or next following the
earlier of (a) or (b):
1) the date on which he has completed six months of
Eligibility Service;
2) January 1, 1999 or, if later, the date on which he
has completed thirty days of Eligibility Service.
Notwithstanding the preceding sentence, an individual who
becomes an Employee of the Employer as a result of the
Employer assuming management responsibilities for the
applicable facility from the Employee's former employer
will become an Eligible Employee on the same day he
becomes an Employee.
VIII. Unless otherwise stated, the effective date of this Amendment is
January 1, 1999.
IX. In all respects not amended, the Plan is hereby ratified and
confirmed.
EXECUTED this 11th day of May, 1999.
FPL ENERGY OPERATING SERVICES, INC.
By: /s/ Edward F. Tancer
Edward F. Tancer, Assistant Secretary
