<PAGE> 1
Registration No. 333-________________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
COLE NATIONAL CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 34-1453189
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
5915 Landerbrook Drive, Mayfield Heights, Ohio 44124
(Address of Principal Executive Offices Including Zip Code)
COLE NATIONAL CORPORATION 401(K) SAVINGS PLAN
FOR EMPLOYEES AT FORMER NUVISION LOCATIONS
(Full Title of the Plan)
Leslie D. Dunn
Secretary
5915 Landerbrook Drive, Mayfield Heights, Ohio 44124
(Name and Address of Agent For Service)
(440) 449-4100
(Telephone Number, Including Area Code, of Agent For Service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Proposed maximum Proposed maximum
Title of securities to Amount to be offering price per aggregate offering Amount of registration
be registered registered(1) share(2) price(2) fee
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of Common
Stock, $.001 par value
per share 20,000 $34.47 $689,400 $208.91
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416(c) of the Securities Act of 1933 (the "Securities
Act"), an indeterminate amount of interests in the Cole National Corporation
401(k) Savings Plan (the "Plan") are deemed to be registered hereby.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee, pursuant to paragraphs (c) and (h)(1) of Rule 457 of the
General Rules and Regulations under the Securities Act, on the basis of the
average high and low sale prices for such common stock, $.001 par value per
share of Cole National Corporation (the "Common Stock") on the New York Stock
Exchange on November 14, 1997, within five business days prior to filing.
<PAGE> 2
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents previously filed by Cole National Corporation (the
"Company") with the Securities and Exchange Commission (the "Commission") are
incorporated herein by reference: the Company's Annual Report on Form 10-K for
the year ended February 1, 1997 (File No. 1-12814); the Company's Quarterly
Reports on Form 10-Q for the quarter ended May 3, 1997 and August 2, 1997,
respectively (File No. 1-12814); the description of the Common Stock contained
in Form 8-A filed on September 7, 1995, as amended by Form 8-A/A filed on August
22,1997 (File No. 1-12814); the description of the Common Stock contained in
Form 8-A filed on February 15, 1994, as amended by Form 8-A/A filed on April 6,
1994 and as amended by Form 8-A/A filed on November 14, 1997 (File No. 1-12814);
the Company's Current Report on Form 8-K/A-1 filed on December 19, 1996 (File
No. 1-12814) and the Company's Current Report on Form 8-K filed on August 21,
1997 (File No. 1-12814).
All documents subsequently filed by the Company and by the Cole National
Corporation 401(K) Savings Plan For Employees at Former NuVision Locations (the
"Plan") pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") 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 herein by reference and to be part hereof from the date of
filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable. (Securities to be offered are registered under Section 12
of the Exchange Act.)
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Seventh of the Company's Certificate provides that the Company will
indemnify its officers, directors and each person who is or was serving or who
had agreed to serve at the request of the Board of Directors or an officer of
the Company as an employee or agent of the Company or as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise to the full extent permitted by the General Corporation Law of
the State of Delaware (the "DGCL") or any other applicable laws as from time to
time may be in effect and that the Company may enter into agreements which
provide for indemnification greater or different from that provided in the
Certificate. In addition, the Company has provided in Article Eighth of its
Certificate that no director will be personally liable to the Company or its
stockholders for or with respect to any acts or omissions in the performance of
his or her duty as a director, to the full extent permitted by the DGCL or any
other applicable laws as from time to time may be in effect. The Certificate
further provides that any repeal or modification of Article Seventh or Article
Eighth will not adversely affect the right or protection existing under such
provision prior to such repeal or modification.
Subsection (a) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative, or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation or enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor, by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such
II-1
<PAGE> 3
action or suit if he acted under standards similar to those set forth in the
paragraph above, except that no indemnification may be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation, unless and only to the extent that the court of
Chancery of the State of Delaware or the court in which such action or suit was
brought shall determine that despite the adjudication of liability but in view
of all the circumstances of the case, such person is fairly and reasonably
entitled to be indemnified for such expenses which the court shall deem proper.
Section 145 further provides that, to the extent that a director or officer
of a corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of Section
145, or in defense of any claim, issue or matter therein, he will be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith; that any indemnification under subsections (a) and
(b) of Section 145 (unless ordered by a court) will be made by a corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of Section 145; that expenses incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount
unless it is ultimately determined that he is not entitled to be indemnified by
the corporation; that indemnification provided for by Section 145 will not be
deemed exclusive of any other rights to which the indemnified party may be
entitled; and that a corporation is empowered to purchase and maintain insurance
on behalf of a director or officer of the corporation against any liability
asserted against him and incurred by him in such capacity, or arising out of his
status as such, whether or not the corporation would have the power to indemnify
him against such liability under Section 145.
The Company has entered into indemnity agreements (the "Indemnity
Agreements") with the current Directors and executive officers of the Company
and expects to enter into similar agreements with any Director or those
executive officers designated by the Board of Directors of the Company elected
or appointed in the future at the time of their election or appointment.
Pursuant to the Indemnity Agreements, the Company will indemnify a Director
or officer of the Company (the "Indemnitee") if the Indemnitee is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that the Indemnitee is or was a Director or officer of the
Company, or is or was serving at the request of the Company in certain
capacities with another entity, against any and all costs, charges and expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by the Indemnitee in connection with the defense or settlement of such
proceeding. Indemnity is available to the Indemnitee unless it proved by clear
and convincing evidence that the Indemnitee's action or failure to act was not
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company.
The Indemnity Agreements mandate advancement of expenses to the Indemnitee
if the Indemnitee provides the Company with a written promise that (i) he has
reasonably incurred or will reasonably incur actual expenses in defending an
actual civil, criminal, administrative, or investigative action, suit,
proceeding or claim and (ii) he will repay such amount if it is ultimately
determined that he is not entitled to be indemnified by the Company. In
addition, the Indemnity Agreements provide various procedures and presumptions
in favor of the Indemnitee's right to receive indemnification under the
Indemnity Agreement.
Under the Company's Director and Officer Liability Insurance Policy, each
Director and certain officers of the Company are insured against certain
liabilities which might arise in connection with their respective positions with
the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS
4.1 Form of Cole National Corporation 401(K) Savings Plan For Employees at
Former NuVision Locations.
II-2
<PAGE> 4
4.2 Indenture dated as of September 30, 1993 between Cole National Group.
Inc. ("CNG") and Norwest Bank Minnesota, N.A., as trustee, relating to
the 11 1/4% Senior Notes due 2001 (the form of which Senior Date is
included in such Indenture), incorporated by reference to Exhibit 4.1
to the Company's Annual Report on Form 10-K for the period ended
February 3, 1996 (File No. 1-12814).
4.3 The Company by this filing agrees, upon request, to file with the
Commission the instruments defining the rights of holders of long-term
debt of the Company and its subsidiaries where the total amount of
securities authorized thereunder does not exceed 10% of the total
assets of the Company and its subsidiaries on a consolidated basis.
4.4 Indenture dated November 15, 1996, between CNG and Norwest Bank
Minnesota, National Association, as trustee, relating to the 97/8%
Senior Subordinated Notes due 2006 (the form of which Senior
Subordinated Note is included in such Indenture), incorporated by
reference to Exhibit 4.1 of the Company's Current Report on Form 8-K,
filed with the Commission on December 2, 1996 (File No. 1-12814).
4.5 Indenture dated August 22, 1997, between CNG and Norwest Bank
Minnesota, National Association, as Trustee, relating to the 85/8%
Senior Subordinated Notes due 2007 (the form of which is included in
such Indenture), incorporated by reference to Exhibit 4.4 of CNG's
Registration Statement on Form S-1, filed with the Commission on
September 4, 1997 (Reg. No. 333-34963).
4.6 Rights Agreement, dated as of August 22, 1995, by and between the
Company and National City Bank, as Rights Agent, incorporated by
reference to Exhibit 4.3 of the Company's Annual Report on Form 10-K
for the year ended February 3, 1996 (File No. 1-12814).
4.7 Amendment No. 1 to the Rights Agreement, dated as of August 21, 1997,
by and between the Company and National City Bank, as Rights Agent,
incorporated herein by reference to Exhibit 4.1 to the Company's
Current Report on Form 8-K, filed with the Commission on August 22,
1997 (File No. 33-74228).
4.8 First Supplemental Indenture, dated as of August 14, 1997, between CNG
and Norwest Bank, Minnesota, National Association, as Trustee,
relating to the 11 1/4% Senior Notes due 2001, incorporated by
reference to Exhibit 4.6 of CNG's Registration Statement on Form S-1,
filed with the Commission on September 4, 1997 (Reg. No. 333-34963).
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of KPMG Peat Marwick LLP.
24.1 Powers of Attorney.
UNDERTAKING:
The undersigned Company will submit the Plan and any amendments thereto to
the Internal Revenue Service (the "IRS") in a timely manner and will make all
changes required by the IRS in order to qualify the Plan.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
II-3
<PAGE> 5
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Company
pursuant to section 13 or section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the Company's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by
reference in this 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 in
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or paid by
a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
II-4
<PAGE> 6
SIGNATURES
THE REGISTRANT. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE COMPANY CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-8 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF CLEVELAND, STATE OF OHIO, ON NOVEMBER 19, 1997.
COLE NATIONAL CORPORATION
By: /s/ Wayne L. Mosley
----------------------------------------
Name: Wayne L. Mosley
Title: Vice President and Controller
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
--------- ----- ----
* Chairman, Chief Executive November 19, 1997
- ----------------------- Officer, Chief Financial
Jeffrey A. Cole Officer and Director
(Principal Executive Officer
and Principal Financial
Officer)
* President, Chief Operating November 19, 1997
- ----------------------- Officer and Director
Brian B. Smith
/s/Wayne L. Mosley Vice President, Controller, November 19, 1997
- ----------------------- Assistant Secretary and
Wayne L. Mosley Assistant Treasurer (Principal
Accounting Officer)
* Director November 19, 1997
- -----------------------
Timothy F. Finley
* Director November 19, 1997
- -----------------------
Irwin N. Gold
* Director November 19, 1997
- -----------------------
Peter V. Handal
* Director November 19, 1997
- -----------------------
Charles A. Ratner
* Director November 19, 1997
- -----------------------
Walter J. Salmon
II-5
<PAGE> 7
* This registration statement has been signed on behalf of the above
officers and directors by Wayne L. Mosley, as attorney-in-fact pursuant to a
power of attorney filed as Exhibit 24.1 to this registration statement.
DATED: November 19, 1997 By: /s/ Wayne L. Mosley
------------------------------------
Wayne L. Mosley, Attorney-in-Fact
II-6
<PAGE> 8
THE PLAN. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
TRUSTEES (OR OTHER PERSONS WHO ADMINISTER THE EMPLOYEE BENEFIT PLAN) HAVE DULY
CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CLEVELAND, STATE OF OHIO,
ON NOVEMBER 19, 1997.
Cole National Corporation 401(K) Savings Plan
For Employees at Former NuVision Locations
By: /s/ Joseph Gaglioti
-----------------------------------------
Name: Joseph Gaglioti
Title: Cole National Corporation 401(K)
Savings Plan For Employees at
Former NuVision Locations,
Committee Member
II-7
<PAGE> 9
EXHIBIT INDEX
4.1 Form of Cole National Corporation 401(K) Savings Plan For Employees at
Former NuVision Locations.
4.2 Indenture dated as of September 30, 1993 between Cole National Group.
Inc. ("CNG") and Norwest Bank Minnesota, N.A., as trustee, relating to
the 11 1/4% Senior Notes due 2001 (the form of which Senior Date is
included in such Indenture), incorporated by reference to Exhibit 4.1
to the Company's Annual Report on Form 10-K for the period ended
February 3, 1996 (File No. 1-12814).
4.3 The Company by this filing agrees, upon request, to file with the
Commission the instruments defining the rights of holders of long-term
debt of the Company and its subsidiaries where the total amount of
securities authorized thereunder does not exceed 10% of the total
assets of the Company and its subsidiaries on a consolidated basis.
4.4 Indenture dated November 15, 1996, between CNG and Norwest Bank
Minnesota, National Association, as trustee, relating to the 9 7/8%
Senior Subordinated Notes due 2006 (the form of which Senior
Subordinated Note is included in such Indenture), incorporated by
reference to Exhibit 4.1 of the Company's Current Report on Form 8-K,
filed with the Commission on December 2, 1996 (File No. 1-12814).
4.5 Indenture dated August 22, 1997, between CNG and Norwest Bank
Minnesota, National Association, as Trustee, relating to the 8 5/8%
Senior Subordinated Notes due 2007 (the form of which is included in
such Indenture), incorporated by reference to Exhibit 4.4 of CNG's
Registration Statement on Form S-1, filed with the Commission on
September 4, 1997 (Reg. No. 333-34963).
4.6 Rights Agreement, dated as of August 22, 1995, by and between the
Company and National City Bank, as Rights Agent, incorporated by
reference to Exhibit 4.3 of the Company's Annual Report on Form 10-K
for the year ended February 3, 1996 (File No. 1-12814).
4.7 Amendment No. 1 to the Rights Agreement, dated as of August 21, 1997,
by and between the Company and National City Bank, as Rights Agent,
incorporated herein by reference to Exhibit 4.1 to the Company's
Current Report on Form 8-K, filed with the Commission on August 22,
1997 (File No. 33-74228).
4.8 First Supplemental Indenture, dated as of August 14, 1997, between CNG
and Norwest Bank, Minnesota, National Association, as Trustee,
relating to the 11 1/4% Senior Notes due 2001, incorporated by
reference to Exhibit 4.6 of CNG's Registration Statement on Form S-1,
filed with the Commission on September 4, 1997 (Reg. No. 333-34963).
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of KPMG Peat Marwick LLP.
24.1 Powers of Attorney.
II-8
<PAGE> 1
Exhibit 4.1
--------------------------
MERRILL LYNCH
--------------
SPECIAL
--------------
PROTOTYPE
DEFINED CONTRIBUTION PLAN
--------------------------
Base Plan Document #03 used in conjunction with:
Non-standardized Profit Sharing Plan with CODA
Letter Serial Number: D359287b
National Office Letter Date: 6/29/93
Non-standardized Money Purchase Pension Plan
Letter Serial Number: D359288b
National Office Letter Date: 6/29/93
Non-standardized Profit Sharing Plan
Letter Serial Number: D359289b
National Office Letter Date: 6/29/93
Non-standardized Target Benefit Plan
Letter Serial Number: D361009a
National Office Letter Date: 6/29/93
THIS PROTOTYPE PLAN AND ADOPTION AGREEMENT ARE IMPORTANT LEGAL
INSTRUMENTS WITH LEGAL AND TAX IMPLICATIONS FOR WHICH THE SPONSOR,
MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED, DOES NOT ASSUME
RESPONSIBILITY. THE EMPLOYER IS URGED TO CONSULT WITH ITS
OWN ATTORNEY WITH REGARD TO THE ADOPTION
OF THIS PLAN AND ITS SUITABILITY TO ITS
CIRCUMSTANCES.
<PAGE> 2
61
<TABLE>
<CAPTION>
INTERNAL REVENUE SERVICE Department of the Treasury
<S> <C>
Plan Description: Prototype Non-standardized Profit Sharing Plan with CODA
FFN: 50339816103-004 Case: 9201920 EIN: 13-5674085 Washington, DC: 20224
BPD: 03 Plan: 004 Letter Serial No: D359287b
Person to Contact: Mr. Wolf
MERRILL LYNCH PIERCE FENNER & SMITH INC
Telephone Number: (202) 622-8380
P O BOX 9038 Refer Reply to: E:EP:Q:1
PRINCETON, NJ 08543
Date: 06/29/93
</TABLE>
Dear Applicant:
In our opinion, the amendment to the form of the plan identified above does not
in and of itself adversely affect the plan's acceptability under section 401 of
the Internal Revenue Code. This opinion relates only to the amendment to the
form of the plan. It is not an opinion as to the acceptability of any other
amendment or of the form of the plan as a whole, or as to the effect of other
Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan:
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
An employer who adopts the amended form of the plan after the date of the
amendment should apply for a determination letter by filing an application with
the Key District Director of Internal Revenue on Form 5307, Short Form
Application for Determination for Employee Benefit Plan.
This letter with respect to the amendment to the form of the plan does not
affect the applicability to the plan of the continued, interim and extended
reliance provisions of sections 13 and 17.03 of Rev. Proc. 89-9, 1989-1 C.B.
780. The applicability of such provisions may be determined by reference to the
initial opinion letter issued with respect to the plan.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial Number
and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ Authorized Signatory
Chief, Employee Plans Qualifications Branch
<PAGE> 3
61
<TABLE>
<CAPTION>
INTERNAL REVENUE SERVICE Department of the Treasury
<S> <C>
Plan Description: Prototype Non-standardized Money Purchase Pension Plan
FFN: 50339816103-003 Case: 9201919 EIN: 13-5674085 Washington, DC: 20224
BPD: 03 Plan: 003 Letter Serial No: D359288b
Person to Contact: Mr. Wolf
MERRILL LYNCH PIERCE FENNER & SMITH INC
Telephone Number: (202) 622-8380
P O BOX 9038
Refer Reply to: E:EP:Q:1
PRINCETON, NJ 08543
Date: 06/29/93
</TABLE>
Dear Applicant:
In our opinion, the amendment to the form of the plan identified above does not
in and of itself adversely affect the plan's acceptability under section 401 of
the Internal Revenue Code. This opinion relates only to the amendment to the
form of the plan. It is not an opinion as to the acceptability of any other
amendment or of the form of the plan as a whole, or as to the effect of other
Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan:
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
An employer who adopts the amended form of the plan after the date of the
amendment should apply for a determination letter by filing an application with
the Key District Director of Internal Revenue on Form 5307, Short Form
Application for Determination for Employee Benefit Plan.
This letter with respect to the amendment to the form of the plan does not
affect the applicability to the plan of the continued, interim and extended
reliance provisions of sections 13 and 17.03 of Rev. Proc. 89-9, 1989-1 C.B.
780. The applicability of such provisions may be determined by reference to the
initial opinion letter issued with respect to the plan.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial Number
and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ Authorized Signatory
Chief, Employee Plans Qualifications Branch
<PAGE> 4
61
<TABLE>
<CAPTION>
INTERNAL REVENUE SERVICE Department of the Treasury
<S> <C>
Plan Description: Prototype Non-standardized Profit Sharing Plan Washington, DC: 20224
FFN: 50339816103-002 Case: 9201918 EIN: 13-5674085
BPD: 03 Plan: 002 Letter Serial No: D359289b Person to Contact: Mr. Wolf
MERRILL LYNCH PIERCE FENNER & SMITH INC Telephone Number: (202)
622-8380
P O BOX 9038 Refer Reply to: E:EP:Q:1
PRINCETON, NJ 08543 Date: 06/29/93
</TABLE>
Dear Applicant:
In our opinion, the amendment to the form of the plan identified above does not
in and of itself adversely affect the plan's acceptability under section 401 of
the Internal Revenue Code. This opinion relates only to the amendment to the
form of the plan. It is not an opinion as to the acceptability of any other
amendment or of the form of the plan as a whole, or as to the effect of other
Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
An employer who adopts the amended form of the plan after the date of the
amendment should apply for a determination letter by filing an application with
the Key District Director of Internal Revenue on Form 5307, Short Form
Application for Determination for Employee Benefit Plan.
This letter with respect to the amendment to the form of the plan does not
affect the applicability to the plan of the continued, interim and extended
reliance provisions of sections 13 and 17.03 of Rev. Proc. 89-9, 1989-1 C.B.
780. The applicability of such provisions may be determined by reference to the
initial opinion letter issued with respect to the plan.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial Number
and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ Authorized Signatory
Chief, Employee Plans Qualifications Branch
<PAGE> 5
61
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<CAPTION>
INTERNAL REVENUE SERVICE Department of the Treasury
<S> <C>
Plan Description: Prototype Non-standardized Target Benefit Plan
FFN: 50339816103-001 Case: 8904027 EIN: 13-5674085 Washington, DC: 20224
BPD: 03 Plan: 001 Letter Serial No: D361009a
Person to Contact: Mr. Wolf
MERRILL LYNCH PIERCE FENNER L SMITH INC
Telephone Number: (202) 622-8380
P O BOX 9038
Refer Reply to: E:EP:Q:1
PRINCETON, NJ 08543
Date: 06/29/93
</TABLE>
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). Therefore, an employer adopting the form of the plan should apply for a
determination letter by filing an application with the Key District Director of
Internal Revenue Service on Form 5307, Short Form Application for Determination
for Employee Benefit Plan.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial Number
and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ Authorized Signatory
Chief, Employee Plans Qualifications Branch
<PAGE> 6
TABLE OF CONTENTS
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<CAPTION>
ARTICLE I DEFINITIONS
<S> <C> <C>
1.1 "Account"
1.2 "Account Balance"
1.3 "ACP Test"
1.4 "Actual Deferral Percentage"
1.5 "Adjustment Factor"
1.6 "Administrator"
1.7 "Adoption Agreement"
1.8 "ADP Test
1.9 "Affiliate"
1.10 "Annuity Contract"
1.11 "Average Actual Deferral Percentage"
1.12 "Average Contribution Percentage"
1.13 "Beneficiary"
1.14 "Benefit Commencement Date"
1.15 "CODA"
1.16 "CODA Compensation"
1.17 "Code"
1.18 "Compensation"
1.19 "Contribution Percentage"
1.20 "Contribution Percentage Amounts"
1.21 "Defined Benefit Plan"
1.22 "Defined Contribution Plan"
1.23 "Disability"
1.24 "Early Retirement"
1.25 "Early Retirement Date"
1.26 "Earned Income"
1.27 "Elective Deferrals"
1.28 "Elective Deferrals Account"
1.29 "Eligible Employee"
1.30 "Eligible Participant"
1.31 "Employee"
1.32 "Employee Thrift Contributions"
1.33 "Employee Thrift Contributions Account"
1.34 "Employer"
1.35 "Employer Account"
1.36 "Employer Contributions"
1.37 "Employer Contributions Account"
1.38 "Employment"
1.39 "Entry Date"
1.40 "ERISA"
1.41 "Excess Aggregate Contributions"
1.42 "Excess Contributions"
1.43 "Excess Elective Deferrals"
1.44 "Family Member"
1.45 "401(k) Contributions Accounts"
1.46 "401(k) Election"
1.47 "Fully Vested Separation"
1.48 "Group Trust"
1.49 "Highly Compensated Employee"
1.50 "Hour of Service"
1.51 "Immediately Distributable"
1.52 "Investment Manager"
1.53 "Key Employee"
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<S> <C> <C>
1.54 "Leased Employee"
1.55 "Limitation Year"
1.56 "Master or Prototype Plan"
1.57 "Matching 401(k) Contribution"
1.58 "Matching 401(k) Contributions Account"
1.59 "Matching Thrift Contributions"
1.60 "Matching Thrift Contributions Account"
1.61 "Net Profits"
1.62 "Nonhighly Compensated Employee"
1.63 "Nonvested Separation"
1.64 "Normal Retirement Age"
1.65 "Owner-Employee"
1.66 "Partially Vested Separation"
1.67 "Participant"
1.68 "Participant Contributions Account"
1.69 "Participant-Directed Assets"
1.70 "Participant Voluntary Nondeductible Contributions"
1.71 "Participant Voluntary Nondeductible Contributions Account"
1.72 "Participating Affiliate"
1.73 "Period of Severance
1.74 "Plan"
1.75 "Plan Year"
1.76 "Prototype Plan"
1.77 "Qualified Joint and Survivor Annuity"
1.78 "Qualified Matching Contributions"
1.79 "Qualified Matching Contributions Account"
1.80 "Qualified Nonelective Contributions"
1.81 "Qualified Nonelective Contributions Account"
1.82 "Qualified Plan"
1.83 "Qualifying Employer Securities"
1.84 "Rollover Contribution"
1.85 "Rollover Contributions Account"
1.86 "Self-Employed Individual"
l.87 "Social Security Retirement Age"
1.88 "Sponsor"
1.89 "Spouse"
1.90 "Surviving Spouse"
1.91 "Taxable Wage Base"
1.92 "Transferred Account"
1.93 "Trust"
1.94 "Trust Fund"
1.95 "Trustee"
1.96 "Valuation Date"
1.97 "Vesting Service"
1.98 "Years of Service"
ARTICLE II PARTICIPATION
2.1 Admission as a Participant
2.2 Rollover Membership and Trust to Trust Transfer
2.3 Crediting of Service for Eligibility Purposes
2.4 Termination of Participation
2.5 Limitation for Owner-Employee
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<PAGE> 8
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<S> <C> <C>
2.6 Corrections with Regard to Participation
2.7 Provision of Information
ARTICLE III CONTRIBUTIONS AND ACCOUNT ALLOCATIONS
3.1 Employer Contributions and Allocations
3.2 Participant Voluntary Nondeductible Contributions
3.3 Rollover Contributions and Trust to Trust Transfers
3.4 Section 401(k) - Contributions and Account Allocations
3.5 Matching 401(k) Contributions
3.6 Thrift Contributions
3.7 Treatment of Forfeitures
3.8 Establishing of Accounts
3.9 Limitation on Amount of Allocations
3.10 Return of Employer Contributions Under Special Circumstances
ARTICLE IV VESTING
4.1 Determination of Vesting
4.2 Rules for Crediting Vesting Service
4.3 Employer Accounts Forfeitures
4.4 Top-Heavy Provisions
ARTICLE V AMOUNT AND DISTRIBUTION OF
BENEFITS, WITHDRAWALS AND LOANS
5.1 Distribution Upon Termination of Employment
5.2 Amount of Benefits Upon a Fully Vested Separation
5.3 Amount of Benefits Upon a Partially Vested Separation
5.4 Amount of Benefits Upon a Nonvested Separation
5.5 Amount of Benefits Upon a Separation Due to Disability
5.6 Distribution and Restoration
5.7 Withdrawals During Employment
5.8 Loans
5.9 Hardship Distributions
5.10 Limitation on Commencement of Benefits
5.11 Distribution Requirements
ARTICLE VI FORMS OF PAYMENT OF RETIREMENT BENEFITS
6.1 Methods of Distribution
6.2 Election of Optional Forms
6.3 Change in Form of Benefit Payments
6.4 Direct Rollovers
ARTICLE VII DEATH BENEFITS
7.1 Payment of Account Balances
7.2 Beneficiaries
7.3 Life Insurance
ARTICLE VIII FIDUCIARIES
8.1 Named Fiduciaries
8.2 Employment of Advisers
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<S> <C> <C>
8.3 Multiple Fiduciary Capacities
8.4 Indemnification
8.5 Payment of Expenses
ARTICLE IX PLAN ADMINISTRATION
9.1 The Administrator
9.2 Powers and Duties of the Administrator
9.3 Delegation of Responsibility
ARTICLE X TRUSTEE AND INVESTMENT COMMITTEE
10.1 Appointment of Trustee and Investment Committee
10.2 The Trust Fund
10.3 Relationship with Administrator
10.4 Investment of Assets
10.5 Investment Direction, Participant-Directed Assets and
Qualifying Employer Investments
10.6 Valuation of Accounts
10.7 Insurance Contracts
10.8 The Investment Manager
10.9 Powers of Trustee
10.10 Accounting and Records
10.11 Judicial Settlement of Accounts
10.12 Resignation and Removal of Trustee
10.13 Group Trust
ARTICLE XI PLAN AMENDMENT OR TERMINATION
11.1 Prototype Plan Amendment
11.2 Plan Amendment
11.3 Right of the Employer to Terminate Plan
11.4 Effect of Partial or Complete Termination or Complete
Discontinuance of Contributions
11.5 Bankruptcy
ARTICLE XII MISCELLANEOUS PROVISIONS
12.1 Exclusive Benefit of Participants
12.2 Plan Not a Contract of Employment
12.3 Action by Employer
12.4 Source of Benefits
12.5 Benefits Not Assignable
12.6 Domestic Relations Orders
12.7 Claims Procedure
12.8 Records and Documents; Errors
12.9 Benefits Payable to Minors, Incompetents and Others
12.10 Plan Merger or Transfer of Assets
12.11 Participating Affiliates
12.12 Controlling Law
12.13 Singular and Plural and Article and Section References
</TABLE>
<PAGE> 10
ARTICLE I
DEFINITIONS
As used in this Prototype Plan and in each Adoption Agreement, each of the
following terms shall have the meaning for that term set forth in this Article
I:
1.1 ACCOUNT: A separate Elective Deferrals Account, Employee Thrift
Contributions Account, Employer Contributions Account, Matching 401(k)
Contributions Account, Matching Thrift Contributions Account, Participant
Voluntary Nondeductible Contributions Account, Qualified Matching Contributions
Account, Qualified Nonelective Contributions Account, Rollover Contribution
Account, and Transferred Account, as the case may be.
1.2 ACCOUNT BALANCE: The value of an Account determined as of the applicable
Valuation Date.
1.3 ACP TEST: The Contribution Percentage test that is set forth in Section
3.5.2 of the Plan.
1.4 ACTUAL DEFERRAL PERCENTAGE: The ratio (expressed as a percentage), of (A)
Elective Deferrals made on behalf of an Eligible Participant for the Plan Year
(including Excess Elective Deferrals of Highly Compensated Employees and, at the
election of the Employer, Qualified Nonelective Contributions and/or Qualified
Matching Contributions), but excluding (1) Excess Elective Deferrals of
Nonhighly Compensated Employees that arise solely from Elective Deferrals made
under the Plan or plans of the Employer or an Affiliate and (2) Elective
Deferrals that are taken into account in the ACP Test (provided the ADP Test is
satisfied with or without the exclusion of such Elective Deferrals) to (B) the
Participant's CODA Compensation for the Plan Year (whether or not the Eligible
Employee was a Participant for the entire Plan Year). The Actual Deferral
Percentage of an Eligible Participant who would be a Participant but for the
failure to make an Elective Deferral is zero.
1.5 ADJUSTMENT FACTOR: The cost of living adjustment factor prescribed by the
Secretary of the Treasury under Code Section 415(d) for years beginning after
December 31, 1987, as applied to such items and in such manner as the Secretary
shall provide.
1.6 ADMINISTRATOR: The Employer, unless otherwise specified by duly authorized
action by the Employer.
1.7 ADOPTION AGREEMENT: The document so designated with respect to this
Prototype Plan that is executed by the Employer, as amended from time to time.
1.8 ADP TEST: The Average Actual Deferral Percentage test set forth in Section
3.4.2(B) of the Plan.
1.9 AFFILIATE: Any corporation or unincorporated trade or business (other than
the Employer) while it is:
(A) a member of a "controlled group of corporations" (within the meaning of Code
Section 414(b)) of which the Employer is a member;
(B) a member of any trade or business under "common control" (within the meaning
of Code Section 414(c)) with the Employer;
(C) a member of an "affiliated service group" (as that term is defined in Code
Section 414(m)) which includes the Employer; or
(D) any other entity required to be aggregated with the Employer pursuant to
Code Section 414(o). With respect to Section 3.9, "Affiliate" status shall be
determined in accordance with Code Section 415(h).
1.10 ANNUITY CONTRACT: An individual or group annuity contract issued by an
insurance company providing periodic benefits, whether fixed, variable or both,
the benefits or value of which a Participant or Beneficiary cannot transfer,
sell, assign, discount, or pledge as collateral for a loan or as security for
the performance of an obligation, or for any other purpose, to any person other
than the issuer thereof. The terms of any annuity contract purchased and
distributed by the Plan to a Participant or Spouse shall comply with the
requirements of this Plan.
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1.11 AVERAGE ACTUAL DEFERRAL PERCENTAGE: For any group of Eligible Participants,
the average (expressed as a percentage) of the Actual Deferral Percentages for
each of the Eligible Participants in that group, including those not making
Elective Deferrals.
1.12 AVERAGE CONTRIBUTION PERCENTAGE: For any group of Eligible Participants,
the average (expressed as a percentage) of the Contribution Percentages for each
of the Participants in that group, including those on whose behalf Matching
401(k) Contributions and/or Matching Thrift Contributions, if applicable, are
not being made.
1.13 BENEFICIARY: A person or persons entitled to receive any payment of
benefits pursuant to Article VII.
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<PAGE> 12
1.14 BENEFIT COMMENCEMENT DATE: The first day, determined pursuant to Article V,
for which a Participant or Beneficiary receives or begins to receive payment in
any form of distribution as a result of death, Disability, termination of
Employment, Early Retirement, Plan termination or upon or after Normal
Retirement Age or age 70-1/2.
1.15 CODA: A cash or deferred arrangement pursuant to Code Section 401(k) which
is part of a profit sharing plan and under which an Eligible Participant may
elect to make Elective Deferrals in accordance with Section 3.4.1.
1.16 CODA COMPENSATION: Solely for purposes of determining the Actual Deferral
Percentage and the Contribution Percentage, CODA Compensation shall be
Compensation excluding or including "elective contributions" as specified in the
Adoption Agreement. The preceding sentence shall be effective for Plan Years
beginning on or after January 1, 1989.
1.17 CODE: The Internal Revenue Code of 1986, as now in effect or as amended
from time to time. A reference to a specific provision of the Code shall include
such provision and any applicable regulation pertaining thereto.
1.18 COMPENSATION: For purposes of contributions, Compensation shall be defined
in the Adoption Agreement and Section 3.9.1(H), subject to any exclusions
elected under Section IAA(d) of the Adoption Agreement, Section 3.1.4 and the
following modifications:
(A) For a Self-Employed Individual, Compensation means his or her Earned Income,
provided that if the Self-Employed Individual is not a Participant for an entire
Plan Year, his or her Compensation for that Plan Year shall be his or her Earned
Income for that Plan Year multiplied by a fraction the numerator of which is the
number of days he or she is a Participant during the Plan Year and the
denominator of which is the number of days in the Plan Year.
(B) Compensation of each Participant taken into account under this Plan for any
Plan Year beginning after December 21, 1988 shall be limited to the first
$200,000 as adjusted by the Adjustment Factor. In determining the Compensation
of a Participant for purposes of this limitation, the rule of Code Section
414(q)(6) shall apply, except in applying such rules, the term "family" shall
include only the Spouse of the Participant and any lineal descendants of the
Participant who have not attained the age of 19 before the close of the year.
If, as a result of the application of such rules, the adjusted $200,000
limitation is exceeded, (except for purposes of determining the portion of
Compensation up to the Integration Level if this Plan is integrated with Social
Security), the limitation shall be prorated among the affected Participants in
proportion to each such Participant's Compensation as determined under this
Section 1.18 prior to the application of this limitation. In a manner applied
uniformly to all Eligible Employees, only Compensation during the period in
which the Employee is an Eligible Employee may be taken into account for
purposes of the nondiscrimination tests described in Code Section 401(k) and
401(m).
(C) If Compensation for any prior Plan Year is taken into account in determining
an Employee's contributions or benefits for the current year, the Compensation
for such prior year is subject to the applicable annual compensation limit in
effect for that prior year. For this purpose, for years beginning before January
1, 1990, the applicable annual compensation limit is $200,000.
(D) In addition to other applicable limitations set forth in the Plan, and not
withstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual compensation of each employee
taken into account under the Plan shall not exceed the OBRA'93 annual
compensation limit. The OBRA'93 annual compensation limit is $150,000 as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code.
The cost of living adjustment in effect for a calendar year applies to any
period, not exceeding 12 months, over which compensation is determined
(determination period) beginning in such calendar year. If a determination
period consists of fewer than 12 months, the OBRA'93 annual compensation limit
will be multiplied by a fraction the numerator of which is the number of months
in the determination period, and the denominator of which is 12.
For Plan years beginning on or after January 1, 1994, any reference in this Plan
to the limitations under Section 401(a)(17) of the Code
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shall mean the OBRA'93 annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into account in
determining an Employee's benefits accruing, in the current Plan year, the
Compensation for that prior determination period is subject to the OBRA'93
annual compensation limit in effect for that prior determination period. For
this purpose, for prior determination periods beginning before the first day of
the first Plan year beginning on or after January 1, 1994, the OBRA'93
Compensation limit is $150,000.
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1.19 CONTRIBUTION PERCENTAGE: The ratio (expressed as a percentage) of the
Participant's Contribution Percentage Amounts to the Participant's CODA
Compensation for the Plan Year, whether or not the Eligible Employee was a
Participant for the entire Plan
Year.
1.20 CONTRIBUTION PERCENTAGE AMOUNTS shall mean the sum of the: (A) Matching
401(k) Contributions; (B) Matching Thrift Contributions; (C) Qualified Matching
Contributions (to the extent not taken into account for purposes of the ADP
Test); (D) Employee Thrift Contributions; and (E) Participant Voluntary
Nondeductible Contributions, as applicable, made on behalf of the Participant
for the Plan Year. Such Contribution Percentage Amounts shall not include
Matching 401(k) Contributions that are forfeited either to correct Excess
Aggregate Contributions or because the contributions to which they relate are
Excess Elective Deferrals, Excess Contributions or Excess Aggregate
Contributions. The Employer may include Qualified Nonelective Contributions in
the Contribution Percentage Amounts, as specified in the Adoption Agreement.
Elective Deferrals may also be used in the Contribution Percentage Amounts so
long as the ADP Test is met before the Elective Deferrals are used in the ACP
Test and continues to be met following the exclusion of those Elective Deferrals
that are used to meet the ACP Test, as specified in the Adoption Agreement. An
Eligible Participant who does not direct an Elective Deferral or an Employee
Thrift Contribution shall be treated as an Eligible Participant on behalf of
whom no such contributions are made.
1.21 DEFINED BENEFIT PLAN: A plan of the type defined in Code Section 414(j)
maintained by the Employer or Affiliate, as applicable.
1.22 DEFINED CONTRIBUTION PLAN: A plan of the type defined in Code Section
414(i) maintained by the Employer or Affiliate, as applicable.
1.23 DISABILITY: Disability as defined in the Adoption Agreement. The permanence
and degree of such impairment shall be supported by medical evidence.
1.24 EARLY RETIREMENT: An actively employed Participant is eligible for Early
Retirement upon satisfying the requirements set forth in the Adoption Agreement.
1.25 EARLY RETIREMENT DATE: The Participant's Benefit Commencement Date
following his or her termination of Employment on or after satisfying the
requirements for Early Retirement and prior to Normal Retirement Age.
1.26 EARNED INCOME: The "net earnings from self-employment" within the meaning
of Code Section 401(c)(2) of a Self-Employed Individual from the trade or
business with respect to which the Plan is established, but only if the personal
services of the Self-Employed Individual are a material income-producing factor
in that trade or business. Net earnings will be determined without regard to
items not included in gross income and the deductions properly allocable to or
chargeable against such items and are to be reduced by contributions by the
Employer or Affiliate to a Qualified Plan to the extent deductible under Code
Section 404. Where this Plan refers to Earned Income in the context of a trade
or business other than that with respect to which the Plan is adopted, the term
Earned Income means such net earnings as would be Earned Income as defined above
if that trade or business was the trade or business with respect to which the
Plan is adopted.
Net earnings shall be determined with regard to the deduction allowed to the
Employer by Code Section 164(f) for taxable years beginning after December 31,
1989.
1.27 ELECTIVE DEFERRALS: Contributions made to the Plan during the Plan Year by
the Employer, at the election of the Participant, in lieu of cash compensation
and shall include contributions that are made pursuant to a 401(k) Election. A
Participant's Elective Deferral in any taxable year is the sum of all Employer
and Affiliate contributions pursuant to an election to defer under any qualified
cash or deferred arrangement, any simplified employee pension plan or deferred
arrangement as described in Code Section 402(h)(1)(B), any eligible deferred
compensation plan under Code Section 457, any plan as described under Code
Section 501(c)(18), and any Employer contributions made on behalf of a
Participant for the purchase of an annuity under Code Section 403(b) pursuant to
a salary reduction agreement. Such contributions are nonforfeitable when made
and are not distributable under the terms of the Plan to Participants or their
Beneficiaries earlier than the earlier of:
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(A) termination from Employment, death or Disability of the Participant;
(B) termination of the Plan without establishment of another Defined
Contribution Plan by the Employer or an Affiliate;
(C) disposition by the Employer or Affiliate to an unrelated corporation of
substantially all of its assets used in a trade or business if such unrelated
corporation continues to maintain this Plan after the disposition but only with
respect to Employees who continue employment with the acquiring unrelated
entity. The sale of 85% of the assets used in a trade or business will be deemed
a sale of "substantially all" the assets used in a trade or business;
(D) sale by the Employer or Affiliate to an unrelated entity of its interest in
an Affiliate if such unrelated entity continues to maintain the Plan but only
with respect to Employees who continue employment with such unrelated entity; or
(E) the events specified in Part B, Article VIII of the Adoption Agreement.
Elective Deferrals shall not include any deferrals properly distributed as an
"Excess Amount" pursuant to Section 3.9.2.
1.28 ELECTIVE DEFERRALS ACCOUNT: The Account established for a Participant
pursuant to Section 3.8.1.
1.29 ELIGIBLE EMPLOYEE: Those Employees specified in the Adoption Agreement.
1.30 ELIGIBLE PARTICIPANT: An Eligible Employee who has met the eligibility
requirements set forth in the Adoption Agreement whether or not he or she makes
Elective Deferrals and/or Employee Thrift
Contributions.
1.31 EMPLOYEE: A Self-Employed Individual, or any individual who is employed by
the Employer in the trade or business with respect to which the Plan is adopted
and any individual who is employed by an Affiliate. Each Leased Employee shall
also be treated as an Employee of the recipient Employer. The preceding sentence
shall not apply, however, to any Leased Employee who is (A) covered by a money
purchase pension plan maintained by the "leasing organization" referred to in
Section 1.54 which provides, with respect to such Leased Employee, a
nonintegrated Employer contribution rate of at least 10% of Limitation
Compensation, but including amounts contributed pursuant to a salary reduction
agreement which are excluded from the Employee's gross income under Code Section
402(a)(8), Code Section 402(h) or Code Section 403(b), immediate participation,
and full and immediate vesting and (B) such Leased Employees do not constitute
more than 20% of the Employer's and Affiliates' nonhighly compensated workforce.
For purposes of the Plan, all Employees will be treated as employed by a single
employer.
1.32 EMPLOYEE THRIFT CONTRIBUTIONS: Employee nondeductible contributions which
are required to be eligible for a Matching Thrift Contribution. Employee Thrift
Contributions do not include Participant Voluntary Nondeductible Contributions.
1.33 EMPLOYEE THRIFT CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.3.
1.34 EMPLOYER: The sole proprietorship, partnership or corporation that adopts
the Plan by executing the Adoption Agreement. For all purposes relating to
eligibility, participation, contributions, vesting and allocations, Employer
includes all Participating
Affiliates.
1.35 EMPLOYER ACCOUNT: The Participant's Matching 401(k) Contributions Account,
Matching Thrift Contributions Account, Employer Contributions Account, Qualified
Matching Contributions Account and Qualified Nonelective Contributions Account,
as the case may be.
1.36 EMPLOYER CONTRIBUTIONS: Any contributions made by the Employer for the Plan
Year on behalf of a Participant in accordance with Section 3.1 of the Plan.
1.37 EMPLOYER CONTRIBUTIONS ACCOUNT: The Account established for a Participant
pursuant to Section 3.8.2.
1.38 EMPLOYMENT: An Employee's employment or self-employment with the Employer,
Affiliate or a "leasing organization" referred to in Section 1.54 or, to the
extent required under Code Section 414(a)(2) or as otherwise specified by the
Administrator on a uniform and nondiscriminatory basis, any predecessor of any
of them. If any of them
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maintains a plan of a "predecessor employer" (within the meaning of Code Section
414(a)(1)) employment or self-employment with the "predecessor employer" will be
treated as Employment. Additionally, if the trade or business conducted by a
Self-Employed Individual becomes incorporated, all employment with that trade or
business or with any Affiliate shall be treated as Employment with the Employer.
1.39 ENTRY DATE: The date on which an Eligible Employee becomes a Participant,
as specified in the Adoption Agreement.
1.40 ERISA: The Employee Retirement Income Security Act of 1974, as amended from
time to time. Reference to a specific provision of ERISA shall include such
provision and any applicable regulation pertaining thereto.
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1.41 EXCESS AGGREGATE CONTRIBUTIONS: With respect to any Plan Year, the excess
of:
(A) The aggregate Contribution Percentage Amounts, taken into account in
computing the numerator of the Contribution Percentage actually made on behalf
of Highly Compensated Employees for such Plan Year, over
(B) The maximum Contribution Percentage Amounts permitted by the ACP Test
(determined by reducing contributions made on behalf of Highly Compensated
Employees in the order of their Contribution Percentages beginning with the
highest of such percentages) Such determination shall be made after first
determining Excess Elective Deferrals and then determining Excess Contributions.
1.42 EXCESS CONTRIBUTIONS: With respect to any Plan Year, the aggregate amount
of Elective Deferrals, Qualified Nonelective Contributions and Qualified
Matching Contributions, if applicable, actually paid over to the Trust Fund on
behalf of Highly Compensated Employees for such Plan Year, over the maximum
amount of such contributions permitted by the ADP Test (determined by reducing
contributions made on behalf of Highly Compensated Employees in order of the
Actual Deferral Percentages, beginning with the highest of such percentages).
1.43 EXCESS ELECTIVE DEFERRALS: The amount of Elective Deferrals for a
Participant's taxable year that are includible in the gross income of the
Participant to the extent that such Elective Deferrals exceed the Code Section
402(g) dollar limitation and which the Participant allocates to this Plan
pursuant to the procedure set forth in Section 3.4.2. Excess Elective Deferrals
shall be treated as an Annual Addition pursuant to Section 3.9, unless such
amounts are distributed no later than the first April 15th following the close
of the Participant's taxable year.
1.44 FAMILY MEMBER: An individual described in Code Section 414(q)(6)(B).
1.45 401(k) CONTRIBUTIONS ACCOUNTS: The Participant's Elective Deferral Account,
Qualified Nonelective Contributions Account, and/or Qualified Matching
Contributions Account, as the case may be.
1.46 401(k) ELECTION: The election by a Participant to make Elective Deferrals
in accordance with Section 3.4.1.
1.47 FULLY VESTED SEPARATION: Termination of Employment, by reason other than
death, of a Participant whose vested percentage in each Employer Account is
100%.
1.48 GROUP TRUST: A Trust Fund consisting of assets of any Plan maintained and
established by the Employer or an Affiliate pursuant to Section 10.14.
1.49 HIGHLY COMPENSATED EMPLOYEE: The term
Highly Compensated Employee includes highly compensated active Employees and
highly compensated former employees.
(A) A highly compensated active Employee includes any Employee who performs
service for the Employer or Affiliate during the Plan Year and who, during the
look-back year (the twelve-month period immediately preceding the Plan Year):
(i) received Compensation from the Employer or Affiliate in excess of $75,000
(as adjusted by the Adjustment Factor);
(ii) received Compensation from the Employer or Affiliate in excess of $50,000
(as adjusted by the Adjustment Factor) and was a member of the top-paid group
for such year; or
(iii) was an officer of the Employer or Affiliate and received Compensation
during such year that is greater than 50% of the Defined Benefit Dollar
Limitation.
(B) The term Highly Compensated Employee also includes:
(i) Employees who are both described in the preceding sentence if the term "Plan
Year" is substituted for the term "look-back year" and the Employee is one of
the 100 Employees who received the most Compensation from the Employer or
Affiliate during the Plan Year; and
(ii) Employees who are 5% owners at any time during the look-back year or Plan
Year.
(C) If no officer has received Compensation that is greater than 50% of the
Defined Benefit Dollar Limitation in effect during either the Plan Year or
look-back year, the highest paid officer of such year shall be treated as a
Highly Compensated Employee.
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(D) A highly compensated former employee includes any Employee who terminated
Employment (or was deemed to have terminated) prior to the Plan Year, performs
no service for the Employer or Affiliate during the Plan Year, and was a highly
compensated active employee for either the separation year or any Plan Year
ending on or after the Employee's 55th birthday.
(E) If an Employee is, during a Plan Year or look-back year, a Family Member of
either (i) a 5% owner who is an active or former Employee or (ii) a Highly
Compensated Employee who is one of the ten most highly compensated employees
ranked on the basis of Compensation paid by the Employer or Affiliate during
such year, then the Family Member and the 5% owner or top-ten Highly Compensated
Employee shall be aggregated. In such case, the Family Member and 5% owner or
top-ten Highly Compensated Employee shall be treated as a single Employee
receiving Compensation and plan contributions or benefits equal to the sum of
such Compensation and contributions or benefits of the Family Member and 5%
owner or top-ten Highly Compensated Employee. For purposes of this section,
Family Member includes the Spouse, lineal ascendants and descendants of the
Employee or former employee and the spouses of such lineal ascendants and
descendants.
(F) The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group;
the top 100 Employees; the number of Employees treated as officers; and the
Compensation that is considered will be made in accordance with Code Section
414(q).
1.50 HOUR OF SERVICE: If the Employer elects in the Adoption Agreement the
hourly record method, an Hour of Service shall include:
(A) Each hour for which an Employee is paid, or entitled to payment, by the
Employer or an Affiliate for the performance of duties for the Employer or an
Affiliate. These hours will be credited to the Employee for each Plan Year in
which the duties are performed, or with respect to eligibility under Article II,
the applicable computation period under the definition of Year of Service in
which the duties are performed;
(B) Each hour for which an Employee is paid, or entitled to payment, by the
Employer or an Affiliate due to a period of time during which no duties are
performed (irrespective of whether Employment has terminated) due to vacation,
holiday, illness, incapacity (including Disability), layoff, jury duty, military
duty, or leave of absence. No more than 501 Hours of Service will be credited
under this paragraph for any single continuous period (whether or not such
period occurs in a single computation period). Hours under this paragraph will
be calculated and credited pursuant to section 2530.200b-2 of the Department of
Labor Regulations which are incorporated herein by this reference; and
(C) Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Employer or an Affiliate. The same Hours of
Service will not be credited both under subparagraph (A) or subparagraph (B), as
the case may be, and under this subparagraph (C). These hours will be credited
to the Employee for the Year of Service or other computation period to which the
award or agreement pertains rather than the Year of Service or other computation
period in which the award, agreement or payment is made.
If the Employer elects in the Adoption Agreement the elapsed time method, an
Hour of Service is an hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer or an Affiliate.
With respect to both the hourly record method and the elapsed time method, in
addition to service with an Affiliate, Hours of Service will also be credited
for any individual considered an Employee for purposes of this Plan under Code
Section 414(n).
1.51 IMMEDIATELY DISTRIBUTABLE: A Participant's Account is Immediately
Distributable if any part of such Account could be distributed to the
Participant or Participant's Surviving Spouse before the Participant attains (or
would have attained if not deceased) the later of Normal Retirement Age or age
62.
1.52 INVESTMENT MANAGER: Any person appointed by the Trustee or, with respect to
Participant-Directed Assets, by the Participant or Beneficiary having the power
to direct the investment of such assets, to serve as such in accordance with
Section 10.8.
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1.53 KEY EMPLOYEE: Any Employee or former Employee (and the beneficiaries of
such Employee) who at any time during the "determination period" was (A) an
officer of the Employer or Affiliate, having an annual Compensation greater than
50% of the Defined Benefit Dollar Limitation for any Plan Year within the
"determination period"; (B) an owner (or considered an owner under Code Section
318) of one of the ten largest interests in the Employer or Affiliate if such
individual's Compensation exceeds 100% of the dollar limitation under Code
Section 415(c)(1)(A); (C) a "5% owner" (as defined in Code Section 416(i)) of
the Employer or Affiliate; or (D) a "1% owner" (as defined in Code Section
416(i)) of the Employer or Affiliate who has an annual Compensation of more than
$150,000. Annual Compensation means compensation as defined in Code Section
415(c)(3), but including amounts contributed by the Employer pursuant to a
salary reduction agreement which are excludible from the Employee's gross income
under Code Section 125, Code Section 402(a)(8), Code Section 402(h) or Code
Section 403(b). The "determination period" is the Plan Year containing the
"determination date" and the four preceding Plan Years. The "determination date"
for the first Plan Year is the last day of that Plan Year, and for any
subsequent Plan Year is the last day of the preceding Plan Year. The
determination of who is a Key Employee will be made in accordance with Code
Section 416(i).
1.54 LEASED EMPLOYEE: Any individual (other than an Employee of the recipient
Employer or Affiliate) who, pursuant to an agreement between the Employer or
Affiliate and any other person (the "leasing organization") has performed
services for the Employer (or for the Employer or Affiliate and "related
persons" determined in accordance with Code Section 414(n)(6)) on a
substantially full-time basis for a period of at least one year, which services
are of a type historically performed, in the business field of the recipient
Employer or Affiliate, by employees. Contributions or benefits provided a Leased
Employee by the leasing organization which are attributable to services
performed for the recipient Employer or Affiliate shall be treated as provided
by the recipient Employer.
1.55 LIMITATION YEAR: The Limitation Year as specified in the Adoption
Agreement. All Qualified Plans maintained by the Employer must use the same
Limitation Year. If the Limitation Year is amended to a different 12-consecutive
month period, the new Limitation Year must begin on a date within the Limitation
Year in which the amendment is made.
1.56 MASTER OR PROTOTYPE PLAN: A plan the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
1.57 MATCHING 401(k) CONTRIBUTION: Any contribution made by the Employer to this
and/or any other Defined Contribution Plan for the Plan Year, by reason of the
Participant's 401(k) Election, and allocated to a Participant's Matching 401(k)
Contributions Account or to a comparable account in another Defined Contribution
Plan. Matching 401(k) Contributions are subject to the distribution provisions
applicable to Employer Accounts in the Plan.
1.58 MATCHING 401(k) CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.4.
1.59 MATCHING THRIFT CONTRIBUTIONS: Any contribution made by the Employer for
the Plan Year by reason of Employee Thrift Contributions. Matching Thrift
Contributions shall be subject to the distribution provisions applicable to
Employer Accounts in the
Plan.
1.60 MATCHING THRIFT CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.5.
1.61 NET PROFITS: The current and accumulated profits of the Employer from the
trade or business of the Employer with respect to which the Plan is
established, as determined by the Employer before deductions for federal, state
and local taxes on income and before contributions under the Plan or any other
Qualified Plan.
1.62 NONHIGHLY COMPENSATED EMPLOYEE: An Employee of the Employer who is neither
a Highly Compensated Employee nor a Family Member.
1.63 NONVESTED SEPARATION: Termination of Employment of a Participant whose
vested percentage in each Employer Account is 0%.
1.64 NORMAL RETIREMENT AGE: The age specified in the Adoption Agreement.
Notwithstanding the Employer's election in the Adoption Agreement, if, for Plan
Years
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beginning before January 1, 1988, Normal Retirement Age was determined with
reference to the anniversary of the participation commencement date (more than 5
but not to exceed 10 years), the anniversary date for Participants who first
commenced participation under the Plan before the first Plan Year beginning on
or after January 1, 1988, shall be the earlier of (A) the tenth anniversary of
the date the Participant commenced participation in the Plan (or such
anniversary as had been elected by the Employer, if less than 10) or (B) the
fifth anniversary of the first day of the first Plan Year beginning on or after
January 1, 1988.
1.65 OWNER-EMPLOYEE: An individual who is a sole proprietor, if the Employer is
a sole proprietorship, or if the Employer is a partnership, a partner owning
more than 10% of either the capital interest or the profits interest in the
Employer; provided that where this Plan refers to an Owner-Employee in the
context of a trade or business other than the trade or business with respect to
which the Plan is adopted, the term Owner-Employee means a person who would be
an Owner-Employer as defined above if that other trade or business was the
Employer.
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1.66 PARTIALLY VESTED SEPARATION: Termination of Employment of a Participant
whose vested percentage in any Employer Account is less than 100% but greater
than 0%.
1.67 PARTICIPANT: An Employee who has commenced, but not terminated,
participation in the Plan as provided in Article II.
1.68 PARTICIPANT CONTRIBUTIONS ACCOUNT: The Participant's Participant Voluntary
Nondeductible Contributions Account and/or Employee Thrift Contributions
Account, as the case may be.
1.69 PARTICIPANT-DIRECTED ASSETS: The assets of an Account which are invested,
as described in Section 10.5.1, according to the direction of the Participant or
the Participant's Beneficiary, as the case may be, in either individually
selected investments or in commingled funds or in shares of regulated investment
companies.
1.70 PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS: Any voluntary
nondeductible contributions made in cash by a Participant to this Plan other
than Employee Thrift Contributions.
1.71 PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS ACCOUNT: The Account
established for a Participant pursuant to Section 3.8.6.
1.72 PARTICIPATING AFFILIATE: Any Affiliate or any other employer designated as
such by the Employer, and, by duly authorized action, that has adopted the Plan
with the consent of the Employer and has not withdrawn therefrom.
1.73 PERIOD OF SEVERANCE: For purposes of the hourly records method, a Period of
Severance is a period equal to the number of consecutive Plan Years or, with
respect to eligibility, the applicable computation period under the definition
of Year of Service, in which an Employee has 500 Hours of Service or less. The
Period of Severance shall be determined on the basis of Hours of Service and
shall commence with the first Plan Year in which the Employee has 500 Hours of
Service or less. With respect to any period of absence during which a Period of
Severance does not commence, the Participant shall be credited with the Hours of
Service (up to a maximum of 501 Hours of Service in a Plan Year) which would
otherwise have been credited to him or her but for such absence, or if such
Hours of Service cannot be determined, 8 Hours of Service for each day of
absence.
For purposes of the elapsed time method, a Period of Severance is a continuous
period of at least 12- consecutive months during which an individual's
Employment is not continuing, beginning on the date an Employee retires, quits
or is discharged or, if earlier, the first 12-month anniversary of the date that
the individual is otherwise first absent from service (with or without pay) for
any other reason, and ending on the date the individual again performs an Hour
of Service.
Anything in the definition thereof to the contrary notwithstanding, a Period of
Severance shall not commence if the Participant is:
(A) On an authorized leave of absence in accordance with standard personnel
policies applied in a nondiscriminatory manner to all Employees similarly
situated and returns to active Employment by the Employer or Affiliate
immediately upon the expiration of such leave of absence;
(B) On a military leave while such Employee's re-employment rights are protected
by law and returns to active Employment within ninety days after his or her
discharge or release (or such longer period as may be prescribed by law); or
(C) Absent from work by reason of (i) the pregnancy of the Employee, (ii) the
birth of a child of the Employee, or (iii) the placement of a child with the
Employment in connection with the adoption of such child by such Employee, or
(iv) the care of such child for a period beginning immediately following such
birth or placement. In determining when such a Participant's Period of Severance
begins, the Participant will be credited with (i) for purposes of the elapsed
time method, the 12-consecutive month period beginning on the first anniversary
of the first date of such absence; or (ii) for purposes of the hourly records
method, the Hours of Service he or she would normally have had but for such
absence, or if such Hours cannot be determined, eight Hours of Service for each
day of such absence; provided, however, that such Hours of Service shall not
exceed 501 and shall be credited only in the year in which such absence began if
such crediting would prevent the Participant from
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incurring a Period of Severance in that year, or in any other case, shall be
credited in the immediately following year.
1.74 PLAN: The plan established by the Employer in the form of this Prototype
Plan and the applicable Adoption Agreement executed by the Employer. The Plan
shall have the name specified in the Adoption Agreement.
1.75 PLAN YEAR: Each 12-consecutive month period ending on the date specified in
the Adoption Agreement, during any part of which the Plan is in effect.
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1.76 PROTOTYPE PLAN: The Merrill Lynch Special Prototype Defined Contribution
Plan set forth in this document, as amended or restated from time to time.
1.77 QUALIFIED JOINT AND SURVIVOR ANNUITY: An immediate annuity for the life of
Participant with a survivor annuity continuing after the Participant's death to
the Participant's Surviving Spouse for the Surviving Spouse's life in an amount
equal to 50% of the amount of the annuity payable during the joint lives of the
Participant and such Surviving Spouse and which is the actuarial equivalent of a
single life annuity which could be provided for the Participant under an Annuity
Contract purchased with the aggregate vested Account Balances of the
Participant's Accounts at the Benefit Commencement Date.
1.78 QUALIFIED MATCHING CONTRIBUTIONS: Matching Contributions which, pursuant to
the election made by the Employer, and in accordance with Code Section 401(m),
are nonforfeitable when made and subject to the limitation on distribution set
forth in the definition of Qualified Nonelective Contributions.
1.79 QUALIFIED MATCHING CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.7.
1.80 QUALIFIED NONELECTIVE CONTRIBUTIONS: Contributions (other than Matching
401(k) Contributions, Qualified Matching 401(k) Contributions or Elective
Deferrals), if any, made by the Employer which the Participant may not elect to
receive in cash until distributed from the Plan, which are nonforfeitable when
made, and which are not distributable under the terms of the Plan to
Participants or their Beneficiaries earlier than the earlier of:
(A) termination of Employment, death, or Disability of the Participant;
(B) attainment of the age 59-1/2 by the Participant;
(C) termination of the Plan without establishment of another Defined
Contribution Plan by the Employer or an Affiliate;
(D) disposition by the Employer or Participating Affiliate to an unrelated
corporation of substantially all of its assets used in a trade or business if
such unrelated corporation continues to maintain this Plan after the disposition
but only with respect to Employees who continue employment with the acquiring
unrelated entity. The sale of 85% of the assets used in a trade or business will
be deemed a sale of "substantially all" the assets used in a trade or business;
(E) sale by the Employer to an unrelated entity of its interest in an Affiliate
if such unrelated entity continues to maintain the Plan but only with respect to
Employees who continue employment with such unrelated entity; and
(F) effective for Plan Years beginning before January 1, 1989, upon the hardship
of the Participant.
1.81 QUALIFIED NONELECTIVE CONTRIBUTIONS ACCOUNT: The Account established for a
Participant pursuant to Section 3.8.7.
1.82 QUALIFIED PLAN: A Defined Benefit Plan or Defined Contribution Plan.
1.83 QUALIFYING EMPLOYER SECURITIES: Employer securities, as that term is
defined in ERISA Section 407(d)(5).
1.84 ROLLOVER CONTRIBUTION: A contribution described in Section 3.4.
1.85 ROLLOVER CONTRIBUTIONS ACCOUNT: The Account established for a Participant
pursuant to Section 3.8.9.
1.86 SELF-EMPLOYED INDIVIDUAL: An individual who has Earned Income for the Plan
Year involved from the trade or business for which the Plan is established, or
who would have had such Earned Income but for the fact that the trade or
business with respect to which the Plan is established had no Net Profits for
that Plan Year.
1.87 SOCIAL SECURITY RETIREMENT AGE: Age 65 in the case of a Participant
attaining age 62 before January 1, 2000 (I.E., born before January 1, 1938), age
66 for a Participant attaining age 62 after December 31, 1999, and before
January 1, 2017 (I.E., born after December 31, 1937, but before January 1,
1955), and age 67 for a Participant attaining age 62 after December 31, 2016
(I.E., born after December 31, 1954).
1.88 SPONSOR: The mass submitter, Merrill Lynch, Pierce, Fenner & Smith
Incorporated and
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any successor thereto, and any other qualifying sponsoring organization who
sponsors with the consent of the mass submitter, the Prototype Plan and makes
the Prototype Plan available for adoption by Employers.
1.89 SPOUSE: The person married to a Participant, provided that a former spouse
will be treated as the Spouse to the extent provided under a "qualified domestic
relations order" (or a "domestic relations order" treated as such) as referred
to in Section 12.6.
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1.90 SURVIVING SPOUSE: The person married to a Participant on the earliest of:
(A) the date of the Participant's death;
(B) the Participant's Benefit Commencement Date; or
(C) the date on which an Annuity Contract is purchased for the Participant
providing benefits under the Plan;
Anything contained herein to the contrary notwithstanding, a former spouse will
be treated as the Surviving Spouse to the extent provided under a "qualified
domestic relations order" (or a "domestic relations order" treated as such) as
referred to in Section 12.6.
1.91 TAXABLE WAGE BASE: The maximum amount of earnings which may be considered
"wages" for the Plan Year involved under Code Section 3121(a)(1).
1.92 TRANSFERRED ACCOUNT: The Account established for a Participant pursuant to
Section 3.8.10.
1.93 TRUST: The trust established under the Plan to which Plan contributions are
made and in which Plan assets are held.
1.94 TRUST FUND: The assets of the Trust held by or in the name of the Trustee.
1.95 TRUSTEE: The person appointed as Trustee pursuant to Article X and any
successor Trustee.
1.96 VALUATION DATE: The last business day of each Plan Year, the date specified
in the Adoption Agreement or determined pursuant to Section 10.6, if applicable,
and each other date as may be determined by the Administrator.
1.97 VESTING SERVICE: The Years of Service credited to a Participant under
Article IV for purposes of determining the Participant's vested percentage in
any Employer Account established for the Participant.
1.98 YEARS OF SERVICE: If the Employer elects the hourly records method in the
Adoption Agreement, an Employee shall be credited with one Year of Service for
each Plan Year in which he or she has 1,000 Hours of Service. Solely for
purposes of eligibility to participate, an Employee shall be credited with a
Year of Service on the last day of the 12-consecutive month period which begins
on the first day on which he or she has an Hour of Service, if he or she has at
least 1,000 Hours of Service in that period. If an Employee fails to be credited
with a Year of Service on such date, he or she shall be credited with a Year of
Service on the last day of each succeeding 12-consecutive month period.
If the Employer elects the elapsed time method in the Adoption Agreement, the
Employee's Years of Service shall be a span of service equal to the sum of:
(A) the period commencing on the date the Employee first performs an Hour of
Service and ending on the date he or she quits, retires, is discharged, dies, or
if earlier, the 12-month anniversary of the date on which the Employee was
otherwise first absent from service (with or without pay) for any other reason;
and
(B) (i) if the Employee quits, retires, or is discharged, the period commencing
on the date the Employee terminated his or her Employment and ending on the
first date on which he or she again performs an Hour of Service, if such date is
within 12 months of the date on which he or she last performed an Hour of
Service; or
(ii) if the Employee is absent from work for any other reason and, within 12
months of the first day of such absence, the Employee quits, retires or is
discharged, the period commencing on the first day of such absence and ending on
the first day he or she again performs an Hour of Service if such day is within
12 months of the date his or her absence began.
With respect to both the elapsed time method and the hourly record method,
service with a predecessor employer, determined in the manner in which the rules
of this Plan would have credited such service had the Participant earned such
service under the terms of this Plan, may be included in Years of Service, as
specified in the Adoption Agreement.
ARTICLE II PARTICIPATION
2.1 ADMISSION AS A PARTICIPANT
2.1.1 An Eligible Employee shall become a Participant on the Entry Date
coincident with or next following the date on which he or she meets the
eligibility requirements specified in the Adoption Agreement; provided, however
that
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(A) an Eligible Employee who has met the eligibility requirements as of the
first day of the Plan Year in which the Plan is adopted as a new Plan shall
become a Participant as of such date;
(B) an Eligible Employee who had met the eligibility requirements of a plan that
is restated and/or amended to become this Plan shall become a Participant as of
the date this Plan is adopted; and
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(C) if selected in the Adoption Agreement, an Eligible Employee shall become a
Participant on the effective date of the Plan providing he or she is an Eligible
Employee on such date.
2.1.2 An Employee who did not become a Participant on the Entry Date coincident
with or next following the day on which he or she met the eligibility
requirements because he or she was not then an Eligible Employee shall become a
Participant on the first day on which he or she again becomes an Eligible
Employee unless determined otherwise in accordance with Section 2.3.1 of the
Plan.
2.1.3 If the Plan includes a CODA or thrift feature, in addition to the
participation requirements set forth in Section 2.1.1, an Eligible Employee
shall become a Participant upon filing his or her 401(k) Election or election to
make Employee Thrift Contributions with the Administrator. An election shall not
be required if the Employer has elected to make contributions to an Employer
Account and/or Qualified Nonelective Contributions with respect to all Eligible
Participants.
2.1.4 An individual who has ceased to be a Participant and who again becomes an
Eligible Employee shall become a Participant immediately upon reemployment as an
Eligible Employee unless determined otherwise in accordance with Section 2.3.1
of the Plan.
2.2 ROLLOVER MEMBERSHIP AND TRUST TO TRUST TRANSFER
An Eligible Employee who makes a Rollover Contribution or a trust to trust
transfer shall become a Participant as of the date of such contribution or
transfer even if he or she had not previously become a Participant. Such an
Eligible Employee shall be a Participant only for the purposes of such Rollover
Contribution or transfer and shall not be eligible to share in contributions
made by the Employer until he or she has become a Participant in accordance with
Section 2.1.
2.3 CREDITING OF SERVICE FOR ELIGIBILITY PURPOSES
2.3.1 For purposes of eligibility to participate, an Eligible Employee or
Participant without any vested interest in any Employer Account and without an
Elective Deferrals Account who terminates Employment shall lose credit for his
or her Years of Service prior to such termination of Employment if his or her
Period of Severance equals or exceeds five years or, if greater, the aggregate
number of Years of Service.
2.3.2. For purposes of eligibility to participate, a Participant who has a
vested interest in any Employer Account and who terminates Employment shall
retain credit for his or her Years of Service prior to such termination of
Employment without regard to the length of his or her Period of Severance. In
the event such Participant returns to Employment, he or she shall participate
immediately.
2.3.3 A former Eligible Employee who was not a Participant who again becomes an
Eligible Employee with no Years of Service to his or her credit shall be treated
as a new Employee.
2.4 TERMINATION OF PARTICIPATION
A Participant shall cease to be a Participant:
(A) upon his or her death;
(B) upon the payment to him or her of all nonforfeitable benefits due to him or
her under the Plan, whether directly or by the purchase of an Annuity Contract;
or
(C) upon his or her Nonvested Separation.
2.5 LIMITATION FOR OWNER-EMPLOYEE
2.5.1 If the Plan provides contributions or benefits for one or more
Owner-Employees who control the trade or business for which this Plan is
established and who also control as an Owner-Employee or as Owner-Employees one
or more other trades or businesses, this Plan and the plan established for each
such other trade or business must, when looked at as a single plan, satisfy the
requirements of Code Sections 401(a) and (d) with respect to the employees of
this and all of such other trades or businesses.
2.5.2 If the Plan provides contributions or benefits for one or more
Owner-Employees who control as an Owner-Employee or as Owner-Employees one or
more other trades or businesses, the employees of the other trades or businesses
must be included in a plan which satisfies the requirements of Code Sections
401(a) and (d) and which provides contributions and benefits for the employees
of such other trades or businesses not less favorable than the
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contributions and benefits provided for Owner-Employees under this Plan.
2.5.3 If an individual is covered as an Owner-Employee under the plans of two or
more trades or businesses which are not controlled and the individual controls a
trade or business, then the contributions or benefits of the employees under the
plan of the trades or businesses which are controlled must be as favorable as
those provided for such individual under the most favorable plan of the trade or
business which is not controlled.
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2.5.4 For purposes of the preceding three subsections, an Owner-Employee, or two
or more Owner-Employees, will be considered to control a trade or business if
the Owner-Employee, or two or more Owner-Employees together:
(A) own the entire interest in an unincorporated trade or business, or
(B) in the case of a partnership, own more than 50% of either the capital
interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees, shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control within the meaning
of the preceding sentence.
2.6 CORRECTIONS WITH REGARD TO PARTICIPATION
2.6.1 If in any Plan Year an Eligible Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by the Employer for the year has been made,
the Employer shall make a subsequent contribution with respect to the omitted
Eligible Employee in the amount which would have contributed with respect to
such Eligible Employee had he or she not been omitted. Such contribution shall
be made whether or not it is deductible in whole or in part in any taxable year
under applicable provisions of the Code. It shall be the responsibility of the
Employer and Administrator to take any and all actions as required by this
Section 2.6.1.
2.6.2 If in any Plan Year any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made, the
amount contributed on behalf of such ineligible person shall constitute a
forfeiture for the Plan Year in which the discovery is made. It shall be the
responsibility of the Employer and Administrator to take any and all actions as
required by this Section 2.6.2.
2.7 PROVISION OF INFORMATION
Each Employee shall execute such forms as may reasonably be required by the
Administrator, and shall make available to the Administrator any information the
Administrator may reasonably request in this regard. By virtue of his or her
participation in this Plan, an Employee agrees, on his or her own behalf and on
behalf of all persons who may have or claim any right by reason of the
Employee's participation in the Plan, to be bound by all provisions of the Plan.
ARTICLE III
CONTRIBUTIONS AND ACCOUNT ALLOCATIONS
3.1 EMPLOYER CONTRIBUTIONS AND ALLOCATIONS
3.1.1 If the Plan is a profit-sharing plan, the Employer will contribute cash
and/or Qualifying Employer Securities to the Trust Fund, in such amount, if any,
as specified in the Adoption Agreement and with respect to Qualifying Employer
Securities as is consistent with Sections 10.4.2 and 10.4.3. If the Plan is a
profit-sharing plan, Net Profits may be necessary for an Employer to make
contributions, as specified in the Adoption Agreement. Employer Contributions
for a Plan Year will be allocated no later than the last day of the Plan Year to
the Employer Contributions Account of Participants eligible for an allocation in
the manner specified in the Adoption Agreement. A not-for-profit corporation may
adopt a profit-sharing plan as an incentive plan; provided, however, that such a
plan may not contain a CODA feature unless otherwise permitted by law.
3.1.2 If the Plan is a money purchase pension plan, the Employer will contribute
cash to the Trust Fund in an amount equal to that percentage of the Compensation
of each Participant eligible for an allocation of Employer contributions for
that Plan Year as specified in the Adoption Agreement. Employer Contributions
for the Plan Year will be allocated as of the last day of the Plan Year to the
Employer Contributions Accounts of Participants eligible for an allocation and
entitled to share in such contributions in the manner specified in the Adoption
Agreement.
3.1.3 If the Plan is a target benefit plan, the Employer will contribute cash to
the Trust Fund in an amount specified in the Adoption Agreement. The amount
contributed with respect to the targeted benefit of each Participant eligible
for an allocation for that
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Plan Year will be allocated as of the last day of the Plan Year to the
Participant's Employer Contributions Account in the manner specified in the
Adoption Agreement.
3.1.4 If the Employer elects in the Adoption Agreement to make contributions on
behalf of a Participant whose Employment terminated due to Disability,
"Compensation" shall mean, with respect to
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such Participant, the Compensation he or she would have received for the entire
calendar year in which the Disability occurred if he or she had been paid for
such year at the rate at which he or she was being paid immediately prior to
such Disability. Employer Contributions may be taken into account only if the
Participant is a Nonhighly Compensated Employee and contributions made on his or
her behalf are nonforfeitable.
3.1.5 If an Employer has adopted more than one Adoption Agreement, or has
adopted a plan pursuant to the Merrill Lynch Special Prototype Defined Benefit
Plan and Trust, only one Adoption Agreement may be
integrated with Social Security.
3.1.6 For purposes of the Plan, contributions provided by the "leasing
organization" referred to in Section 1.37 of a Leased Employee which are
attributable to services performed for the Employer shall be treated as provided
by the Employer.
3.2 PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS
3.2.1 If elected by the Employer in the Adoption Agreement, each Participant
while actively employed may make Participant Voluntary Nondeductible
Contributions in cash in a dollar amount or a percentage of Compensation which
does not, when included in the Contribution Percentage Amount, exceed the
limitations set forth in Code Section 401(m).
3.2.2 Participant Voluntary Nondeductible Contributions shall be made in
accordance with rules and procedures adopted by the Administrator.
3.3 ROLLOVER CONTRIBUTIONS AND TRUST TO TRUST TRANSFERS
3.3.1 Any Eligible Employee or Participant may make a Rollover Contribution
under the Plan. A Rollover Contribution shall be in cash or in other property
acceptable to the Trustee and shall be a contribution attributable to (a) a
"qualified total distribution" (as defined in Code Section 402(a)(5)),
distributed to the contributing Employee under Code Section 402(a)(5) from a
Qualified Plan or distributed to the Employee under Code Section 403(a)(4) from
an "employee annuity" or referred to in that section, or (b) a payout or
distribution to the Employee referred to in Code Section 408(d)(3) from an
"individual retirement account" or an "individual retirement annuity" described,
respectively, in Code Section 408(a) or Section 408(b) consisting exclusively of
amounts attributable to "qualified total distributions" (as defined in Code
Section 402(a)(5)) from a Qualified Plan. The Plan shall not accept a Rollover
Contribution attributable to any accumulated deductible employee contributions
as defined by Code Section 72(o)(5)(B). The Trustee may condition acceptance of
a Rollover Contribution upon receipt of such documents as it may require. In the
event that an Employee makes a contribution pursuant to this Section 3.3
intended to be a Rollover Contribution but which did not qualify as a Rollover
Contribution, the Trustee shall distribute to the Employee as soon as
practicable after that conclusion is reached the entire Account balance in his
or her Rollover Contributions Account deriving from such contributions
determined as of the valuation date coincident with or immediately preceding
such discovery.
3.3.2 Any Eligible Employee or Participant may direct the Administrator to
direct the Trustee to accept a transfer to the Trust Fund from another trust
established pursuant to another Qualified Plan of all or any part of the assets
held in such other trust. The Plan shall not accept a direct transfer
attributable to accumulated deductible employee contributions as defined by Code
Section 72(o)(5)(B). The Trustee may condition acceptance of such a trust to
trust transfer upon receipt of such documents as it may require.
3.4 SECTION 401(k) CONTRIBUTIONS AND ACCOUNT ALLOCATIONS
3.4.1 ELECTIVE DEFERRALS
(A) AMOUNT OF ELECTIVE DEFERRALS
Subject to the limitations contained in Section 3.4.2, the Employer will
contribute cash to the Trust Fund in an amount equal to:
(i) as specified on the Participant's 401(k) Election form, the specific dollar
amount, or the deferral percentage multiplied by each such Participant's
Compensation; or
(ii) a bonus contribution made pursuant to Section 3.4.1(C).
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(B) The amount elected by a Participant pursuant to a 401(k) Election shall be
determined within the limits specified in the Adoption Agreement. The 401(k)
Election shall be made on a form provided by the Administrator but no election
shall be effective prior to approval by the Administrator. The Administrator may
reduce the amount of any 401(k) Election, or make such other modifications as
necessary, so that the Plan complies with the provisions of the Code. A
Participant's 401(k) Election shall remain in effect until modified or
terminated. Modification or termination of a 401(k) Election shall be made at
such time as specified in the Adoption Agreement.
(C) If elected by the Employer in the Adoption Agreement, an Eligible Employee
may make a 401(k) Election to have an amount withheld up to the amount of any
bonus payable for such Plan Year and direct the Employer to contribute the
amount so withheld to his or her Elective Deferrals Account.
3.4.2 LIMITATION ON ELECTIVE DEFERRALS
(A) MAXIMUM AMOUNT OF ELECTIVE DEFERRALS AND DISTRIBUTION OF EXCESS ELECTIVE
DEFERRALS
(i) No Participant shall be permitted to have Elective Deferrals made under this
Plan, or any other Qualified Plan maintained by the Employer, during any Plan
Year in excess of the dollar limitation contained in Code Section 402(g) in
effect at the beginning of the Participant's taxable year.
(ii) Notwithstanding any other provision of the Plan, Excess Elective Deferrals
made to this Plan or assigned to this Plan, plus any income and minus any loss
allocable thereto, shall be distributed no later than April 15, 1988, and each
April 15 thereafter, to Participants to whose accounts Excess Elective Deferrals
were designated for the preceding Plan Year and who claim Excess Elective
Deferrals for such taxable year. Excess Elective Deferrals shall be treated as
Annual Additions.
(iii) CLAIMS. A Participant may designate to this Plan any amount of his or her
Elective Deferrals as Excess Elective Deferrals during his or her taxable year.
A Participant's claim shall be in writing, shall be submitted to the
Administrator no later than March 1, shall specify the Participant's Excess
Elective Deferral for the preceding Plan Year, and shall be accompanied by the
Participant's written statement that if such amounts are not distributed, such
Excess Elective Deferral, when added to amounts deferred under other plans or
arrangements described in Code Section 401(k), Code Section 408(k), Code Section
403(b) or Code Section 457, exceeds the limit imposed on the Participant by Code
Section 402(g) for the year in which the deferral occurred. A Participant is
deemed to notify the Administrator of any Excess Elective Deferrals that arise
by taking into account only those Elective Deferrals made to this Plan and any
other plans of the Employer or an Affiliate.
(iv) DETERMINATION OF INCOME OR LOSS. Excess Elective Deferrals shall be
adjusted for income or loss up to the date of distribution. The income or loss
allocable to Participant's Excess Elective Deferrals is the sum of: (1) the
income or loss allocable to the Participant's Elective Deferrals Account for the
Participant's taxable year multiplied by a fraction, the numerator of which is
the Participant's Excess Elective Deferrals for the Participant's taxable year
and the denominator of which is the Account Balance of the Participant's
Elective Deferrals Account without regard to any income or loss occurring during
such taxable year; and (2) ten percent of the amount determined under (1)
multiplied by the number of whole calendar months between the end of the
Participant's taxable year and the date of distribution, counting the month of
distribution if distribution occurs after the 15th of such month.
Anything in the preceding paragraph of this Section 3.4.2(A)(iv) to the contrary
notwithstanding, any reasonable method for computing the income or loss
allocable to Excess Elective Deferrals may be used, provided that such method is
used consistently for all Participants and for all corrective distributions
under the Plan, and is used by the Plan for allocating income or loss to
Participants' Accounts. Income or loss allocable to the period between the end
of the taxable year and the date of distribution may be disregarded in
determining income or loss.
(B) ADP TEST
The Average Actual Deferral Percentage for Highly Compensated Employees for each
Plan Year and the Average Actual Deferral Percentage for Nonhighly Compensated
Employees for the same Plan Year must satisfy one of the following tests:
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(i) The Average Actual Deferral Percentage for Eligible Participants who are
Highly Compensated Employees for the Plan Year shall not exceed the Average
Actual Deferral Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by 1.25; or
(ii) The Average Actual Deferral Percentage for Eligible Participants who are
Highly Compensated Employees for the Plan Year shall not exceed the Average
Actual Deferral Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by 2.0; provided that the
Average Actual Deferral Percentage for Eligible Participants who are Highly
Compensated Employees does not exceed the Average Actual Deferral Percentage for
Participants who are Nonhighly Compensated Employees by more than two percentage
points.
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(C) SPECIAL ACTUAL DEFERRAL PERCENTAGE RULES
(i) The Actual Deferral Percentage for any Eligible Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have Elective
Deferrals and Qualified Matching Contributions or Qualified Nonelective
Contributions, or both, if treated as Elective Deferrals for purposes of the ADP
Test, allocated to his or her accounts under two or more plans or arrangements
described in Code Section 401(k) that are maintained by the Employer shall be
determined as if all such Elective Deferrals, Qualified Matching Contributions
and Qualified Nonelective Contributions were made under a single arrangement. If
a Highly Compensated Employee participates in two or more cash or deferred
arrangements that have different plan years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated as a single
arrangement.
(ii) In the event that this Plan satisfies the requirements of Code Section
401(k), Code Section 401(a)(4) or Code Section 410(b) only if aggregated with
one or more other qualified plans, or if one or more other qualified plans
satisfy the requirements of such Code Sections only if aggregated with this
Plan, then this Section shall be applied by determining the Actual Deferral
Percentage of Employees as if all such qualified plans were a single qualified
plan. For Plan Years beginning after December 31, 1989, plans may be aggregated
in order to satisfy Code Section 401(k) only if they have the same plan year.
(iii) For purposes of determining the Actual Deferral Percentage of an Eligible
Participant who is a 5% owner or one of the ten most highly paid Highly
Compensated Employees, the Elective Deferrals (and Qualified Matching
Contributions or Qualified Nonelective Contributions, or both, if treated as
Elective Deferrals for purposes of one of the tests referred to in Section
3.4.2(B)) and CODA Compensation of such Participant shall include the Elective
Deferrals (and, if applicable, Qualified Matching Contributions, Qualified
Nonelective Contributions) and CODA Compensation for the Plan Year of Family
Members. Family Members with respect to such Highly Compensated Employees shall
be disregarded as separate employees in determining the Actual Deferral
Percentage both for Eligible Participants who are Nonhighly Compensated
Employees and for Eligible Participants who are Highly Compensated Employees.
(iv) For purposes of determining the ADP Test, Elective Deferrals, Qualified
Matching Contributions, and Qualified Nonelective must be made before the last
day of the 12-month period immediately following the Plan Year to which such
contributions relate.
(v) The Employer shall maintain records sufficient to demonstrate satisfaction
of the ADP Test and the amount of Qualified Nonelective Contributions and/or
Qualified Matching Contribution used in such test.
(vi) The determination and treatment of the Elective Deferrals, Qualified
Matching Contributions, and Qualified Nonelective Contributions, used in the ADP
Test shall satisfy such other requirements as may be prescribed by the Secretary
of the Treasury.
(D) DISTRIBUTION OF EXCESS CONTRIBUTIONS
(i) IN GENERAL. Notwithstanding any other provision of the Plan except Section
3.4.2(E), Excess Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of each Plan Year
beginning after December 31, 1987, to Participants to whose Accounts Elective
Deferrals, Qualified Matching Contributions, and Qualified Nonelective
Contributions were allocated for the preceding Plan Year.1 Excess Contributions
of Participants who are subject to the Family Member aggregation rules shall be
allocated among the Family Members in proportion to the Elective Deferrals (and
amounts treated as Elective Deferrals) of each Family Member that is combined to
determine the combined Actual Deferral Percentage. Excess Contributions shall be
treated as Annual Additions.
(ii) DETERMINATION OF INCOME OR LOSS. Excess Contributions shall be adjusted for
any income or loss up to the date of distribution. The income or loss allocable
to Excess Contributions is the sum of: (1) the income or loss allocable to the
Participant's Elective Deferrals Account (and, if applicable, the Qualified
Nonelective Contributions Account or the Qualified Matching Contributions
Account or both) for the Plan Year multiplied by a fraction, the numerator of
which is such Participant's Excess Contributions for the year and the
denominator of which is the Account Balances of Participant's Elective Deferrals
Account,
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Qualified Nonelective Contributions Account and Qualified Matching Contributions
Account if any of such contributions are included in the ADP Test, without
regard to any income or loss occurring during such Plan Year; and
- --------------
(1) Distribution of Excess Contributions on or before the last day of the Plan
Year after the Plan Year in which such excess amounts arose is required under
Code Section 401(k)(8) if the Plan is to maintain its tax-qualified status.
However, if such excess amounts, plus any income and minus any loss allocable
thereto, are distributed more than 2-1/2 months after the last day of the Plan
Year in which such excess amounts arose, then Code Section 4979 imposes a 10%
excise tax on the employer maintaining the plan with respect to such amounts.
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(2) 10% of the amount determined under (1) multiplied by the number of whole
calendar months between the end of the Plan Year and the date of distribution,
counting the month of distribution if distribution occurs after the 15th of such
month.
Anything in the preceding paragraph of this Section 3.4.2(D)(ii) to the contrary
notwithstanding, any reasonable method for computing the income or loss
allocable to Excess Contributions may be used, provided that such method is used
consistently for all Participants and for all corrective distributions under the
Plan for the Plan Year, and is used by the Plan for allocating income or loss to
Participant's Accounts. Income or loss allocable to the period between the end
of the Plan Year and the date of distribution may be disregarded in determining
income or loss.
(iii) ACCOUNTING FOR EXCESS CONTRIBUTIONS. Amounts distributed under this
Section 3.4.2(D) shall first be distributed from the Participant's Elective
Deferrals Account and Qualified Matching Contributions Account in proportion to
the Participant's Elective Deferrals and Qualified Matching Contributions (to
the extent used in the ADP Test) for the Plan Year. Excess Contributions shall
be distributed from the Participant's Qualified Nonelective Contributions
Account only to the extent that such Excess Contributions exceed the balance in
the Participant's Elective Deferrals Account and Qualified Matching
Contributions Account.
(E) In lieu of distributing Excess Contributions pursuant to the preceding
Section 3.4.2(D), and as specified in the Adoption Agreement, the Employer may
make special Qualified Nonelective Contributions on behalf of Nonhighly
Compensated Employees that are sufficient to satisfy the ADP Test.
(F) In lieu of distributing Excess Contributions, the Participant may treat his
or her Excess Contributions as an amount distributed and then re-contributed by
such Participant. Recharacterized amounts are 100% nonforfeitable and subject to
the same distribution requirements as Elective Deferrals. Amounts may not be
recharacterized by a Highly Compensated Employee to the extent that such amount
in combination with other amounts made to the Participant's Participant
Contributions Account would exceed any stated limit on such contributions, as
specified in the Adoption Agreement. If Excess Contributions are
recharacterized, they must be so no later than two and one half months after the
last day of the Plan Year in which such Excess Contributions arose and they are
deemed to occur no earlier than the date the last Highly Compensated Employee is
informed in writing of the amount recharacterized and the consequences thereof.
Recharacterized amounts are taxable to the Participant for the tax year in which
he or she would have received such contributions in cash.
(G) Under no circumstances may Elective Deferrals, Qualified Matching
Contributions and Qualified Nonelective Contributions be contributed and
allocated to the Trust later than the last day of the 12-month period
immediately following the Plan Year to which such contributions relate.
3.5 MATCHING 401(k) CONTRIBUTIONS
3.5.1 AMOUNT OF MATCHING CONTRIBUTIONS Subject to the limitations contained in
Sections 3.9 and 3.5.2, for each Plan Year the Employer will contribute in cash
and/or Qualifying Employer Securities, Matching 401(k) Contributions to the
Trust Fund in an amount, if any, calculated by reference to the Participants'
Elective Deferrals as specified in the Adoption Agreement.
3.5.2 LIMITATION ON CONTRIBUTION PERCENTAGE
(A) ACP TEST
The Average Contribution Percentage for Eligible Participants who are Highly
Compensated Employees for the Plan Year and the Average Contributions Percentage
for Eligible Participants who are Nonhighly Compensated Employees for the same
Plan Year must satisfy one of the following tests:
(i) the Average Contribution Percentage for Eligible Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the Average
Contribution Percentage for Eligible Participants who are Nonhighly Compensated
Employees for the same Plan Year multiplied by 1.25; or
(ii) the Average Contribution Percentage for Eligible Participants who are
Highly Compensated Employees shall not exceed the Average Contribution
Percentage for Eligible Participants who are Nonhighly Compensated Employees by
more than two percentage points or such lesser amount as the Secretary
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<PAGE> 37
of the Treasury shall prescribe to prevent the multiple use of this alternative
limitation with respect to any Highly Compensated Employee.
(B) SPECIAL AVERAGE CONTRIBUTION PERCENTAGE RULES
(i) For purposes of this Section 3.5.2, the Contribution Percentage for any
Eligible Participant who is a Highly Compensated Employee for the Plan Year and
who is eligible to have Matching 401(k) Contributions
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or Matching Thrift Contributions, as the case may be (other than Qualified
Matching Contributions), allocated to his or her account under two or more
qualified plans described in Code Section 401(a), or arrangements described in
Code Section 401(k) shall be determined as if the total of such Contribution
Percentage Amounts was made under each plan. If a Highly Compensated Employee
participates in 2 or more cash or deferred arrangements that have different plan
years, all cash or deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement.
(ii) In the event that this Plan satisfies the requirements of Code Section
410(b) only if aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of Code Section 410(b) only if aggregated with
this Plan, then this Section 3.5.2 shall be applied by determining the
Contribution Percentages of Employees as if all such plans were a single plan.
For Plan Years beginning after December 31, 1989, plans may be aggregated in
order to satisfy Code Section 401(m) only if they have the same plan year.
(iii) For purposes of determining the Contribution Percentage of an Eligible
Participant who is a 5% owner or one of the 10 most highly-paid Highly
Compensated Employees, the Contribution Percentage Amounts and the CODA
Compensation of such Participant shall include the Contribution Percentage
Amounts and CODA Compensation for the Plan Year of Family Members. Family
Members with respect to Highly Compensated Employees shall be disregarded as
separate employees in determining the Contribution Percentage both for
Participants who are Nonhighly Compensated Employees and for Participants who
are Highly Compensated Employees.
(iv) For purposes of determining the ACP Test, Matching 401(k) Contributions,
Matching Thrift Contributions and Qualified Nonelective Contributions will be
considered made for a Plan Year if made no later than the end of the 12-month
period beginning on the day after the close of the Plan Year.
(v) The Employer shall maintain records sufficient to demonstrate satisfaction
of the ACP Test and the amount of Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, used in such test.
(C) MULTIPLE USE
If one or more Highly Compensated Employees participate in both a cash or
deferred arrangement and a plan subject to the ACP Test and the sum of the
Actual Deferral Percentage and the Actual Contribution Percentage of those
Highly Compensated Employees exceeds the "aggregate limit", then the Actual
Contribution Percentage of those Highly Compensated Employees will be reduced,
beginning with such Highly Compensated Employee whose Actual Contribution
Percentage is the highest, so that the limit is not exceeded. The amount by
which each Highly Compensated Employee's Contribution Percentage is reduced
shall be treated as an Excess Aggregate Contribution. The Actual Deferral
Percentage and Actual Contribution Percentage of the Highly Compensated
Employees are determined after any corrections required to meet the ADP Test and
the ACP Test. Multiple use does not occur if either the Average Deferral
Percentage or Actual Contribution Percentage of the Highly Compensated Employees
does not exceed 1.25 multiplied by the Actual Deferral Percentage and the Actual
Contribution Percentage of the Nonhighly Compensated Employees.
(i) The "aggregate limit" is the sum of (1) 125% of the greater of the Actual
Deferral Percentage for Participants who are Nonhighly Compensated Employees for
the Plan Year or the Actual Deferral Percentage for Participants who are
Nonhighly Compensated Employees for the Plan Year beginning with or within the
Plan Year and (2) the lesser of 200% or two plus the lesser of such Actual
Deferral Percentage or Actual Contribution Percentage. "Lesser" is substituted
for "greater" in "(1)," above, and "greater" is substituted for "lesser" after
"two plus the" in "(2)" if it would result in a larger aggregate limit.
(D)FORFEITURE OF EXCESS AGGREGATE CONTRIBUTIONS
(i) IN GENERAL. Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited and applied to reduce subsequent Matching 401(k)
Contributions or Matching Thrift Contributions, as the case may be. No
forfeitures arising under this Section 3.6.2(D) shall be allocated to the
account of any Highly Compensated Employee. If not forfeitable, Excess Aggregate
Contributions shall be distributed no later than the last day of each Plan Year
beginning after
29
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December 31, 1987, to Participants to whose Accounts such Excess
Aggregate Contributions were allocated for the preceding Plan Year. Excess
Aggregate Contributions of Participants who are subject to the Family Member
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<PAGE> 40
aggregation rules shall be allocated among the Family Members in proportion to
the amounts constituting Contribution Percentage Amounts of each Family Member
that is combined to determine the combined Actual Contribution Percentage.
Excess Aggregate Contributions shall be treated as Annual Additions. Anything
above to the contrary notwithstanding, any forfeiture or distribution under this
Section 3.5.2(D)(i) shall occur only if sufficient Employee Thrift Contributions
and/or Participant Voluntary Nondeductible Contributions, as the case may be,
are not distributed from the qualified plan holding such Employee Thrift
Contributions and/or Participant Voluntary Nondeductible Contributions, as the
case may be.(2)
(ii) DETERMINATION OF INCOME OR LOSS. Excess Aggregate Contributions shall be
adjusted for any income or loss up to the date of distribution. The income or
loss allocable to Excess Aggregate Contributions is the sum of: (1) the income
or loss allocable to the Participant's Matching 401(k) Contribution Account or
Matching Thrift Contribution Account (if any, and if all amounts therein are not
used in the ADP Test) and, if applicable, Qualified Nonelective Contribution
Account and Elective Deferrals Account for the Plan Year multiplied by a
fraction, the numerator of which is such Participant's Excess Aggregate
Contributions for the year and the denominator of which is the Participant's
Account Balance(s) attributable to Contribution Percentage Amounts without
regard to any income or loss occurring during such Plan Year; and (2) 10% of the
amount determined under (1) multiplied by the number of whole calendar months
between the end of the Plan Year and the date of distribution, counting the
month of distribution if distribution occurs after the 15th of such month.
Anything in the preceding paragraph of this Section 3.5.2(D)(ii) to the contrary
notwithstanding, any reasonable method for computing the income or loss
allocable to Excess Aggregate Contributions may be used, provided that such
method is used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by the Plan for
allocating income or loss to Participants' Accounts. Income or loss allocable to
the period between the end of the Plan Year and the date of distribution may be
disregarded in determining income or loss.
(iii) The determination of the Excess Aggregate Contributions shall be made
after first determining the Excess Elective Deferrals, and then determining the
Excess Contributions.
3.5.3 For purposes of determining the ACP Test, Qualified Nonelective
Contributions, Matching 401(k) Contributions and Matching Thrift Contributions
will be considered made for a Plan Year if paid to the Trustee no later than the
end of the 12-month period beginning on the day after the close of the Plan
Year.
3.6 THRIFT CONTRIBUTIONS
3.6.1 EMPLOYEE THRIFT CONTRIBUTIONS. If elected by the Employer in the Adoption
Agreement to provide for Employee Thrift Contributions, the Employer will
contribute cash to the Trust Fund in an amount equal to (A) the Employee Thrift
Contribution percentage of each Participant on his or her Employee Thrift
Contribution election form multiplied by each such Participant's Compensation or
(B) the specific dollar amount set forth on the Participant's election form.
The amount elected by a Participant pursuant to a Participant's Employee Thrift
Contribution election shall be determined within the limits specified in the
Adoption Agreement. Such election shall be made on a form provided by the
Administrator but no election shall be effective prior to approval by the
Administrator. The Administrator may reduce the amount of any Employee Thrift
Contribution, or make such other modifications as necessary, so that the Plan
complies with the provisions of the Code. A Participant's election shall remain
in effect until modified or terminated at such times as specified in the
Adoption Agreement.
3.6.2 MATCHING THRIFT CONTRIBUTIONS. Subject to the limitations contained in
Sections 3.9 and 3.5.2, for each Plan Year the Employer will contribute in cash
and/or Qualifying Employer Securities, Matching Thrift Contributions to the
Trust Fund in an amount, if any, calculated by reference to the Participants'
Employee Thrift Contributions, as specified in the Adoption Agreement.
Matching Thrift Contributions made by the Employer will be allocated to the
Matching Thrift Contributions Account of those Participants who have contributed
Employee
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Thrift Contributions to the Plan, as specified in the Adoption Agreement.
- -----------
(2)Distribution or forfeiture of Excess Aggregate Contributions on or
before the last day of the Plan Year after the Plan Year in which such excess
amounts arose is required under Code Section 401(m)(6) if the Plan is to
maintain its tax-qualified status. However, if such excess amounts, plus any
income and minus any loss allocable thereto, are distributed more than 2-1/2
months after the last day of the Plan Year in which such excess amounts arose,
then Code Section 4979 imposes a 10% excise tax on the employer maintaining the
plan with respect to such amounts.
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3.7 TREATMENT OF FORFEITURES
3.7.1 If the Employer has elected in the Adoption Agreement to reallocate
forfeitures for a Plan Year among Participants, then such forfeitures, if any,
shall be allocated as of the last day of the Plan Year to the Employer Accounts
of those Participants who are eligible to share in the allocation of
contributions to that particular Employer Account (whether or not a contribution
was made for that Plan Year) for that Plan Year in that particular Employer
Account category with respect to which such forfeitures are attributable. If the
Plan is a Target Benefit Plan, forfeitures may only be used to reduce Employer
Contributions, in accordance with Section 3.7.2.
3.7.2 If the Employer has elected in the Adoption Agreement to use forfeiture to
reduce contributions, then forfeitures shall be applied in the succeeding Plan
Year to reduce Employer Contributions in that particular Employer Account
category to which such forfeitures were attributable.
3.8 ESTABLISHING OF ACCOUNTS
3.8.1 An Elective Deferrals Account shall be established for each Eligible
Participant who makes a 401(k) Election to which the Administrator shall credit,
or cause to be credited, Elective Deferrals allocable to each such Participant,
plus earnings or losses thereon.
3.8.2 An Employer Contributions Account shall be established for each
Participant to which the Administrator shall credit or cause to be credited
Employer contributions pursuant to Section 3.1, and forfeitures attributable to
such contributions, if any, plus earnings or losses thereon.
3.8.3 An Employee Thrift Contributions Account shall be established for each
Participant who makes Employee Thrift Contributions to the Plan, to which the
Administrator shall credit, or cause to be credited, all amounts allocable to
each such Participant, plus earnings or losses thereon.
3.8.4 A Matching 401(k) Contributions Account shall be established for each
Participant for whom Matching 401(k) Contributions are made, to which the
Administrator shall credit, or cause to be credited, all such amounts allocable
to each such Participant, plus earnings or losses thereon.
3.8.5 A Matching Thrift Contributions Account shall be established for each
Participant for whom Matching Thrift Contributions are made, to which the
Administrator shall credit, or cause to be credited, all amounts allocable to
each such Participant, plus earnings or losses thereon.
3.8.6 A Participant Voluntary Nondeductible Contributions Account shall be
established for each Participant who makes Participant Voluntary Nondeductible
Contributions to the Plan, plus earnings or losses thereon.
3.8.7 A Qualified Matching Contributions Account shall be established for each
Eligible Participant for whom Qualified Matching Contributions are made, to
which the Administrator shall credit, or cause to be credited, all amounts
allocable to each such Participant, plus earnings or losses thereon.
3.8.8 A Qualified Nonelective Contributions Account shall be established for
each Participant for whom Qualified Nonelective Contributions are made, to which
the Administrator shall credit, or cause to be credited, all amounts allocable
to each such Participant, plus earnings or losses thereon.
3.8.9 A Rollover Contributions Account shall be established for each Participant
who contributes to the Plan pursuant to Section 3.3 to which the Administrator
shall credit, or cause to be credited, Rollover Contributions made by the
Participant, plus earnings or losses thereon.
3.8.10 A Transferred Contributions Account shall be established for each
Participant for whom assets are transferred from another Qualified Plan, to
which the Administrator shall credit, or cause to be credited, transferred
assets, plus earnings or losses thereon.
3.9 LIMITATION ON AMOUNT OF ALLOCATIONS
3.9.1 As used in this Section 3.9, each of the following terms shall have the
meaning for that term set forth in this Section 3.9.1:
(A) ANNUAL ADDITIONS means, for each Participant, the sum of the following
amounts credited to the Participant's Accounts for the Limitation Year:
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(i) Employer Contributions within the meaning of IRS regulation 1.415-6(b);
(ii) Employee Contributions;
(iii) forfeitures;
(iv) allocation under a simplified employee pension; and
(v) any Excess Amount applied under a Defined Contribution Plan in the
Limitation Year to reduce Employer Contributions will also be considered as part
of the Annual Additions for such Limitation Year.
Amounts allocated after March 31, 1984, to an "individual medical benefit
account" as defined in Code Section 415(1)(2) ("Individual Medical Benefit
Account") which is part of a pension or annuity plan maintained by the Employer
or Affiliate are treated as Annual Additions to a Defined Contribution Plan.
Also, amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after that date, which are attributable to
post-retirement medical benefits allocated to the separate account of a "key
employee" as defined in Code Section 419A(d)(3) under a "welfare benefit fund"
as defined in Code Section 419(e) ("Welfare Benefit Fund") maintained by the
Employer or Affiliate, are treated as Annual Additions to a Defined Contribution
Plan.
(B) DEFINED BENEFIT DOLLAR LIMITATION means $90,000 multiplied by the Adjustment
Factor or such other limitation set forth in Code Section 415(b)(1) as in effect
for the Limitation Year.
(C) DEFINED BENEFIT FRACTION means a fraction, the numerator of which is the sum
of the Projected Annual Benefits of the Participant involved under all Defined
Benefit Plans (whether or not terminated) maintained by the Employer or
Affiliate, and the denominator of which is the lesser of 125% of the Defined
Benefit Dollar Limitation determined for the Limitation Year or 140% of the
Participant's Highest Average Limitation Compensation, including any adjustments
under Code Section 415(b).
Notwithstanding the above, if the Participant was a Participant as of the first
day of the first Limitation Year beginning after December 31, 1986, in one or
more Defined Benefit Plans maintained by the Employer or Affiliate which were in
existence on May 5, 1986, the denominator of this fraction will not be less than
125% of the sum of the annual benefits under such Plans which the Participant
had accrued as of the close of the last Limitation Year beginning before January
1, 1987, disregarding any changes in the terms and conditions of the plans after
May 5, 1986. The preceding sentence applies only if the Defined Benefit Plans
individually and in the aggregate satisfied the requirements of Code Section 415
for all Limitation Years beginning before January 1, 1987.
(D) DEFINED CONTRIBUTION DOLLAR LIMITATION means $30,000 or if greater,
one-fourth of the Defined Benefit Dollar Limitation as in effect for the
Limitation Year.
(E) DEFINED CONTRIBUTION FRACTION means a fraction, the numerator of which is
the sum of the Annual Additions to the Participant's Account or Accounts under
all the Defined Contribution Plans (whether or not terminated) maintained by the
Employer or Affiliate for the current and all prior Limitation Years (including
the Annual Additions attributable to the Participant's nondeductible
contributions to all Defined Benefit Plans, whether or not terminated,
maintained by the Employer or Affiliate and the Annual Additions attributable to
all Welfare Benefit Funds, Individual Medical Benefit Accounts, and simplified
employee pensions maintained by the Employer or Affiliate), and the denominator
of which is the sum of the "maximum aggregate amounts" (as defined in the
following sentence) for the current and all prior Limitation Years of service
with the Employer or Affiliate (regardless of whether a Defined Contribution
Plan was maintained by the Employer or Affiliate). The "maximum aggregate
amount" in any Limitation Year is the lesser of (i) 125% of the Defined Benefit
Dollar Limitation in effect under Code Section 415(c)(1)(A) or (ii) 35% of the
Participant's Compensation for such year.
If the Employee was a Participant as of the first day of the first Limitation
Year beginning after December 31, 1986, in one or more Defined Contribution
Plans maintained by the Employer or Affiliate in existence on May 5, 1986, the
numerator of this fraction will be adjusted if the sum of this fraction and the
Defined Benefit Fraction would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the product of (A) the excess of
the sum of the fractions over 1.0 times (B) the denominator of this fraction
will be permanently subtracted from the
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numerator of this fraction. The adjustment is calculated using the fractions as
they would be computed as of the later of the end of the last Limitation Year
beginning before January 1, 1987, and disregarding any changes in the terms and
conditions of the Plans made after May 6, 1986, but using the Code Section 415
limitation applicable to the first Limitation Year beginning on or after January
1, 1987. The Annual Addition for any Limitation Year beginning before January 1,
1987, shall not be recomputed to treat all Participant contributions as Annual
Additions.
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(F) EXCESS AMOUNTS means the excess of the Participant's Annual Additions for
the Limitation Year involved over the Maximum Permissible Amount for
that Limitation Year.
(G) HIGHEST AVERAGE LIMITATION COMPENSATION means the average Compensation as
defined in Code Section 415(c)(3) of the Participant involved for that period of
three consecutive Years of Service with the Employer or Affiliate (or if the
Participant has less than three such Years of Service, the actual number
thereof) that produces the highest average.
(H) LIMITATION COMPENSATION means Compensation, as defined in either (i), (ii)
or (iii) below, as specified in the Adoption Agreement:
(i) CODE SECTION 415 SAFE-HARBOR COMPENSATION
For an Employee other than a Self-Employed Individual, the Employee's earned
income, wages, salaries, and fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of Employment (including, but
not limited to, commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits, and reimbursements or other expense allowances under a
nonaccountable plan (as described in Reg. 1.62-2(c)) and excluding the
following:
(1) Employer contributions to a plan of deferred compensation which are not
includible in the Employee's gross income for the taxable year in which
contributed, or contributions under a "simplified employee pension" plan (within
the meaning of Code Section 408(k)) to the extent such contributions are
deductible by the Employee, or any distributions from a plan of deferred
compensation;
(2) amounts realized from the exercise of a non-qualified stock option, or when
restricted stock (or other property) held by the Employee either becomes freely
"transferable" or is no longer subject to a "substantial risk of forfeiture"
(both quoted terms within the meaning of Code Section 83(a));
(3) amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and
(4) other amounts which received special tax benefits, or contributions made
(whether or not under a salary reduction agreement) towards the purchase of an
annuity described in Code Section 403(b) (whether or not the amounts are
actually excludable from the gross income of the Employee); or For Limitation
Years beginning after December 31, 1991, Limitation Compensation shall include
only that compensation which is actually paid or made available during the
Limitation Year.
(ii) Information required to be reported under Sections 6041 and 6051. ("Wages,
Tips and other Compensation Box" Form W-2) Limitation Compensation is defined as
wages as defined in Code Section 3401(a) and all other payments of compensation
to an Employee by the Employer (in the course of the Employer's trade or
business) for which the Employer is required to furnish the Employee a written
statement under Sections 6041(d) and 6051(a)(3) of the Code. Compensation must
be determined without regard to any rules under Section 3401(a) that limit the
remuneration included in wages based on the nature or location of the employment
or the services performed (such as the exception for agricultural labor in
Section 3401(a)(2)).
(iii) CODE SECTION 3401(a) WAGES
Limitation Compensation is defined as wages within the meaning of Code Section
3401(a) for the purposes of income tax withholding at the source but determined
without regard to any rules that limit the remuneration included in wages based
on the nature or location of the employment or the services performed (such as
the exception for agricultural labor in Code Section 3401(a)(2)).
Without regard to the definition of Limitation Compensation elected by the
Employer, for a Self-Employed Individual, Limitation Compensation means his or
her Earned Income, provided that if the Self-Employed Individual is not a
Participant for an entire Plan Year, his or her Limitation Compensation for that
Plan Year shall be his or her Earned Income for that Plan Year multiplied by a
fraction the numerator of which is the number of days he or she is a Participant
during the Plan Year and the denominator of which is the number of days in the
Plan Year. Additionally, Limitation
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Compensation for a Participant in a Defined Contribution Plan who is permanently
and totally disabled (as defined in Code Section 22(e)) is the compensation such
Participant would have received for the Limitation Year if the Participant had
been paid at the rate of compensation paid immediately before becoming disabled;
such imputed compensation may be taken into account only if the Participant is
not a Highly Compensated Employee and contributions made on behalf of such
Participant are nonforfeitable when made.
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(I) MAXIMUM PERMISSIBLE AMOUNT means the maximum Annual Addition which may be
contributed or allocated to a Participant's Account under the Plan for any
Limitation Year. The maximum Annual Addition shall not exceed the lesser of: (a)
the Defined Contribution Dollar Limitation, or (b) 25% of the Participant's
Compensation for the Limitation Year. The Compensation limitation referred to in
(b) shall not apply to any contribution for medical benefits (within the meaning
of Code Sections 401(h) or 419A(f)(2)) which is otherwise treated as an Annual
Addition under Code Section 415(l)(1) or 419A(d)(2). If a short Limitation Year
is created because of an amendment changing the Limitation Year to a different
12- consecutive month period, the Maximum Permissible Amount will not exceed the
Defined Contribution Dollar Limitation multiplied by the following fraction:
NUMBER OF MONTHS IN THE SHORT LIMITATION YEAR
---------------------------------------------
12
(J) PROJECTED ANNUAL BENEFIT means the annual retirement benefit (adjusted to an
actuarially equivalent straight life annuity if such benefit is expressed in a
form other than a straight life annuity or Qualified Joint and Survivor Annuity)
to which the Participant would be entitled under the terms of a Defined Benefit
Plan assuming:
(i) the Participant continues in employment with the Employer or Affiliate until
the Participant's "normal retirement age" under the Plan within the meaning of
Code Section 411(a)(8) (or the Participant's current age, if later); and
(ii) the Participant's Limitation Compensation for the current Limitation Year
and all other relevant factors used to determine benefits under the Plan will
remain constant for all future Limitation Years.
3.9.2 The provisions of this subsection 3.9.2 apply with respect to a
Participant who does not participate in, and has never participated in, another
Qualified Plan, a Welfare Benefit Fund or an Individual Medical Benefit Account
or a simplified employee pension, as defined in Code Section 401(k), maintained
by the Employer or an Affiliate, which provides an Annual Addition as defined in
Section 3.9.1(A) of the Plan, other than this Plan:
(A) The amount of Annual Additions which may be credited to the Participant's
Account for any Limitation Year will not exceed the lesser of the Maximum
Permissible Amount or any other limitation contained in this Plan. If the
Employer Contribution that would otherwise be contributed or allocated to the
Participant's Account would cause the Annual Additions on behalf of the
Participant for the Limitation Year to exceed the Maximum Permissible Amount
with respect to that Participant for the Limitation Year, the amount contributed
or allocated will be reduced so that the Annual Additions on behalf of the
Participant for the Limitation Year will equal such Maximum Permissible Amount.
(B) Prior to determining the Participant's actual Limitation Compensation for a
Limitation Year, the Employer may determine the Maximum Permissible Amount for
the Participant for the Limitation Year on the basis of a reasonable estimation
of the Participant's Compensation for that Limitation Year. Such estimated
Compensation shall be uniformly determined for all Participants similarly
situated.
(C) As soon as is administratively feasible after the end of a Limitation Year,
the Maximum Permissible Amount for the Limitation Year will be determined on the
basis of the Participant's actual compensation for the Limitation Year.
(D) If pursuant to Section 3.9.2(C) or as a result of the allocation of
forfeitures, there is an Excess Amount with respect to the Participant for a
Limitation Year, the Excess Amount shall be disposed of as follows:
(i) First, any contribution to the Participant's Elective Deferrals Account,
Participant Voluntary Nondeductible Contributions Account or Employee Thrift
Contributions Account, if applicable, and any earnings allocable thereto will be
distributed to the Participant to the extent that the return thereof would
reduce the Excess Amount in such Participant's Accounts;
(ii) If after the application of Section 3.9.2(D)(i) an Excess Amount still
exists, and the Participant is covered by the Plan at the end of the Limitation
Year, the remaining Excess Amount in the Participant's Account will be used to
reduce Employer contributions (including allocation of any forfeitures) under
this Plan for such Participant in the next Limitation Year, and in each
succeeding Limitation Year, if necessary.
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(iii) If after the application of Section 3.9.2(D)(i) an Excess Amount still
exists, and the Participant is not covered by the Plan at the end of the
Limitation Year, the Excess Amount will be held unallocated in a suspense
account. The suspense account will be applied to reduce future Employer
contributions under this Plan for all remaining Participants in the next
Limitation Year, and in each succeeding Limitation Year, if necessary; provided,
however, that if all or any part of the Excess Amount held in a suspense account
is attributable to a Participant's Elective Deferrals, such Excess Amount shall
be held unallocated in a suspense account to be used for such Participant in the
next Limitation Year and each succeeding Limitation Year as an Elective Deferral
if such Participant is covered by the Plan in the next and each succeeding
Limitation Year, if necessary.
(iv) If a suspense account is in existence at any time during a Limitation Year
pursuant to Section 3.9.2(D)(iii), the suspense account will not participate in
the allocation of the Trust Fund's investment gains or losses to or from any
other Account. If a suspense account is in existence at any time during a
particular Limitation Year, all amounts in the suspense account must be
allocated and reallocated to Participants' Accounts before any Employer or
Participant contributions may be made to the Plan for the Limitation Year.
Excess Amounts, other than those Excess Amounts referred to in Section
3.9.2(D)(i), may not be distributed to Participants or Former Participants.
3.9.3 The provisions of this subsection 3.9.3 apply with respect to a
Participant who, in addition to this Plan, is covered or has been covered under
one or more Defined Contribution Plans which are Master or Prototype Plans,
Welfare Benefit Funds an Individual Medical Benefit Account or a simplified
employee pension maintained by the Employer or an Affiliate, which provides an
Annual Addition as described in Section 3.9.1(A) of the Plan during any
Limitation Year:
(A) The Annual Additions which may be credited to a Participant's Accounts under
this Plan for any such Limitation Year will not exceed the Maximum Permissible
Amount reduced by the Annual Additions credited to the Participant's account or
accounts under any other plans and Welfare Benefit Fund, Individual Medical
Benefit Account or simplified employee pension for the same Limitation Year. If
the Annual Additions with respect to the Participant under any one or more other
such Defined Contribution Plans or Welfare Benefit Funds, Individual Medical
Benefit Account or simplified employee pension maintained by the Employer are
less than the Maximum Permissible Amount and the Employer Contribution that
would otherwise be contributed or allocated to a Participant's Account under
this Plan would cause the Annual Additions for the Limitation Year to exceed
this limitation, the amount contributed or allocated shall be reduced so that
the Annual Additions under all such plans and funds for the Limitation Year will
equal the Maximum Permissible Amount.
If the Annual Additions with respect to the Participant under such other Defined
Contribution Plans and Welfare Benefit Funds, Individual Medical Benefit Account
or simplified employee pension in the aggregate are equal to or greater than the
Maximum Permissible Amount, no amount will be contributed or allocated to any of
the Participant's Account under this Plan for the Limitation Year. (B) Prior to
determining the Participant's actual compensation for a Limitation Year, the
Maximum Permissible Amount for a Participant may be determined in the manner
described in Section 3.9.2(B).
(C) As soon as is administratively feasible after the end of a Limitation Year,
the Maximum Permissible Amount for the Limitation Year will be determined on the
basis of the Participant's actual Limitation Compensation for
the Limitation Year.
(D) If, pursuant to subsection 3.9.3(C) above, or as a result of the allocation
of forfeitures, a Participant's Annual Additions under this Plan and the
Participant's Annual Additions under such other plans would result in an Excess
Amount for a Limitation Year, the Excess Amount will be deemed to consist of the
Annual Additions last allocated, except that Annual Additions attributable to
simplified employee pension will be deemed to have been allocated first,
followed by Annual Additions to a Welfare Benefit Fund or Individual Medical
Benefit Account regardless of the actual allocation date.
(E) If an Excess Amount was allocated to a Participant on an allocation date of
this Plan which coincides with an allocation date of
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another such plan, the Excess Amount attributed to this Plan will be the product
of:
(i) the total Excess Amount allocated as of such date, times
(ii) the ratio of (A) the Annual Additions allocated to the Participant for the
Limitation Year as of such date under this Plan to (B) the total Annual
Additions allocated to the Participant for the Limitation Year as of such date
under this Plan and all of the other plans referred to in the first sentence of
this Section 3.9.3.
(F) Any Excess Amount attributed to this Plan will be disposed in the manner
described in Section 3.9.2(D).
3.9.4 If a Participant is covered under one or more Defined Contribution Plans,
other than this Plan, maintained by the Employer or an Affiliate which are not
Master or Prototype Plans, or Welfare Benefit Funds or an Individual Medical
Benefit Account maintained by the Employer, Annual Additions which may be
credited to the Participant's Account under this Plan for any Limitation Year
shall be limited in accordance with the provisions of subsections 3.9.3(A) - (F)
above as though each such other plan was a Master or Prototype Plan.
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3.9.5 If the Employer maintains, or at any time maintained, a Defined Benefit
Plan covering any Participant in this Plan, the sum of the Participant's Defined
Benefit Fraction and Defined Contribution Fraction will not exceed 1.0 in any
Limitation Year. If such sum would otherwise exceed 1.0 and if such Defined
Benefit Plan does not provide for a reduction in benefits thereunder, Annual
Additions which may be credited to a Participant's Account under this Plan for
any Limitation Year shall be limited in accordance with the provisions of
Section 3.9.2.
3.9.6 If required pursuant to Section 4.4.4, "100%" shall be substituted for
"125%" wherever the latter percentage appears in this Section 3.9.
3.10 RETURN OF EMPLOYER CONTRIBUTIONS UNDER SPECIAL CIRCUMSTANCES
Notwithstanding any provision of this Plan to the contrary, upon timely written
demand by the Employer or the Administrator to the Trustee:
(A) Any contribution by the Employer to the Plan under a mistake of fact shall
be returned to the Employer by the Trustee within one year after the payment of
the contribution.
(B) Any contribution made by the Employer incident to the determination by the
Commissioner of Internal Revenue that the Plan is initially a Qualified Plan
shall be returned to the Employer by the Trustee within one year after
notification from the Internal Revenue Service that the Plan is not initially a
Qualified Plan but only if the application for the qualification is made by the
time prescribed by law for filing the Employer's return for the taxable year in
which the Plan is adopted, or such later date as the Secretary of the Treasury
may prescribe.
(C) In the event the deduction of a contribution made by the Employer is
disallowed under Code Section 404, such contribution (to the extent disallowed)
must be returned to the Employer within one year of the disallowance of the
deduction.
ARTICLE IV VESTING
4.1 DETERMINATION OF VESTING
4.1.1 A Participant shall at all times have a vested percentage of 100% in the
Account Balance of each of his or her Participant Contributions Accounts, 401(k)
Contributions Accounts, Rollover Contributions Account and Transferred Account.
4.1.2 A Participant shall have a vested percentage of 100% in his or her Account
Balance of each of his or her Employer Accounts if he or she terminates
Employment due to the attainment of Normal Retirement Age, Early Retirement
specified in the Adoption Agreement, if elected by the Employer in the Adoption
Agreement, or upon Disability or death.
4.1.3 The vested percentage of a Participant in the Account Balance of each of
his or her Employer Accounts not vested pursuant to Section 4.1.1 or 4.1.2 shall
be determined in accordance with the vesting rule or schedule specified in the
Adoption Agreement.
4.2 RULES FOR CREDITING VESTING SERVICE
4.2.1 Subject to Section 4.2.2, Years of Service shall be credited for purposes
of determining a Participant's Vesting Service as specified in the Adoption
Agreement. If the Employer maintains the plan of a predecessor employer, service
with such predecessor employer shall be treated as service with the Employer for
purposes of Vesting Service.
4.2.2 An Employee who terminates Employment with no vested percentage in an
Employer Account shall, if he or she returns to Employment, have no credit for
Vesting Service prior to such termination of Employment if his or her Period of
Severance equals or exceeds five years.
4.2.3 Vesting Service of an Employee following a Period of Severance of five
years or more shall not be counted for the purpose of computing his or her
vested percentage in his or her Employer Accounts derived from contributions
accrued prior to the Period of Severance. If applicable, separate records shall
be maintained reflecting the Participant's vested rights in his or her Account
Balance attributable to service prior to the Period of Severance and reflecting
the Participant's vested percentage in his or her Account Balance attributable
to service after the Period of Severance. Vesting Service prior to and following
an Employee's Period of Severance shall be counted for purposes of computing his
or her vested percentage in an Employer
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Account derived from contributions made after the Period of Severance.
4.3 EMPLOYER ACCOUNTS FORFEITURES
4.3.1 Subject to Section 5.6, upon the Nonvested Separation of a Participant,
the nonvested portion of each Employer Account of such Participant will be
forfeited as of the date of termination of Employment.
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Upon the Partially Vested Separation of a Participant, the nonvested portion of
each Employer Account of such Participant will be forfeited as of the date of
termination of Employment; provided, however, that such Participant receives a
distribution in accordance with Section 5.6. If a Participant does not receive a
distribution following his or her termination of Employment, the nonvested
portion of each Employer Account of the Participant shall be forfeited following
a Period of Severance of five years.
4.3.2 If the Employer elects in the Adoption Agreement to reallocate
forfeitures, forfeitures for a Plan Year shall be allocated in accordance with
Section 3.7.1. If the Employer elects in the Adoption Agreement to use
forfeitures to reduce Employer contributions, forfeitures shall be applied in
accordance with Section 3.7.2.
4.4 TOP-HEAVY PROVISIONS
4.4.1 As used in this Section 4.4, each of the following terms shall have the
meanings for that term set forth in this Section 4.4.1:
(A) DETERMINATION DATE means, for any Plan Year subsequent to the first Plan
Year, the last day of the preceding Plan year. For the first Plan Year of the
Plan, the last day of that year.
(B) PERMISSIVE AGGREGATION GROUP means the Required Aggregation Group of plans
plus any other plan or plans of the Employer or Affiliate which, when considered
as a group with the Required Aggregation Group, would continue to satisfy the
requirements of Code Sections 401(a)(4) and 410.
(C) REQUIRED AGGREGATION GROUP means (i) each Qualified Plan of the Employer or
Affiliate in which at least one Key Employee participates or participated at any
time during the determination period (regardless of whether the Plan has
terminated), and (ii) any other qualified plan of the Employer or Affiliate
which enables a plan described in (i) to meet the requirements of Code Sections
401(a)(4) or 410.
(D) SUPER TOP-HEAVY means, for any Plan Year beginning after December 31, 1983,
the Plan if any Top-Heavy Ratio as determined under the definition of Top-Heavy
Plan exceeds 90%.
(E) TOP-HEAVY PLAN means, for any Plan Year beginning after December 31, 1983,
the Plan if any of the following conditions exists:
(i) If the Top-Heavy Ratio for the Plan exceeds 60% and the Plan is not part of
any Required Aggregation Group or Permissive Aggregation Group of Plans.
(ii) If the Plan is a part of a Required Aggregation Group of plans but not part
of a Permissive Aggregation Group and the Top-Heavy Ratio for the group of plans
exceeds 60%.
(iii) If the Plan is a part of a Required Aggregation Group and part of a
Permissive Aggregation Group of plans and the Top-Heavy Ratio for the Permissive
Aggregation Group exceeds 60%.
(F) TOP-HEAVY RATIO means
(i) If the Employer or Affiliate maintains one or more Defined Contribution
Plans (including any Simplified Employee Pension Plan) and the Employer or
Affiliate has never maintained any Defined Benefit Plan which during the
five-year period ending on the Determination Date has or has had accrued
benefits, the Top-Heavy Ratio for this Plan alone or for the Required or
Permissive Aggregation Group as appropriate is a fraction, the numerator of
which is the sum of the Account Balances of all Key Employees as of the
Determination Date (including any part of any Account Balance distributed in the
five-year period ending on the Determination Date), and the denominator of which
is the sum of all Account Balances (including any part of any Account Balance
distributed in the five-year period ending on the Determination Date), both
computed in accordance with Code Section 416. Both the numerator and denominator
of the Top-Heavy Ratio are increased to reflect any contribution not actually
made as of the Determination Date, but which is required to be taken into
account on that date under Code Section 416. (ii) If the Employer or an
Affiliate maintains one or more Defined Contribution Plans (including any
Simplified Employee Pension Plan) and the Employer or an Affiliate maintains or
has maintained one or more Defined Benefit Plans which during the five-year
period ending on the Determination Date has or has had any accrued benefits, the
Top-Heavy Ratio for any Required or Permissive Aggregation Group as appropriate
is a fraction, the numerator of which is the sum of Account Balances under
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the aggregated Defined Contribution Plans for all Key Employees, determined in
accordance with (i) above, and the present value of accrued benefits under the
aggregated Defined Benefit Plans for all Key Employees as of the Determination
Date, and the denominator of which is the sum of the Account Balances under the
aggregated Defined Contribution Plans for all Participants, determined in
accordance with (i) above, and the present value of accrued benefits under the
Defined Benefit Plans for all Participants as of the Determination Date, all
determined in accordance with Code Section 416. The accrued benefit under a
Defined Benefit Plan in both the numerator and denominator of the Top-Heavy
Ratio are increased for any distribution of an accrued benefit made in the
five-year period ending on the Determination Date.
(iii) For purposes of (i) and (ii) above, the value of Account Balances and the
present value of accrued benefits will be determined as of the most recent
Valuation Date that falls within or ends with the 12- month period ending on the
Determination Date, except as provided in Code Section 416 for the first and
second Plan Years of a Defined Benefit Plan. The Account Balances and accrued
benefits of a Participant (1) who is not a Key Employee but who was a Key
Employee in a prior year, or (2) who has not been credited with at least one
Hour of Service with the Employer or an Affiliate at any time during the
five-year period ending on the Determination Date, will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which distributions,
rollovers, and transfers are taken into account will be made in accordance with
Code Section 416.
Elective Deferrals will not be taken into account for purposes of computing the
Top-Heavy Ratio. When aggregating plans the value of Account Balances and
accrued benefits will be calculated with reference to the Determination Dates
that fall within the same calendar year.
The accrued benefit of a Participant who is not a Key Employee shall be
determined under (A) the method, if any, that uniformly applies for accrual
purposes under all Defined Benefit Plans or (B) if there is no such method, as
if such benefit accrued not more rapidly than the slowest accrual rate permitted
under the fractional rule of Code Section 411(b)(1)(C).
4.4.2 If the Plan is determined to be a Top-Heavy Plan or a Super Top-Heavy Plan
as of any Determination Date after December 31, 1983, then the Top-Heavy vesting
schedule specified in the Adoption Agreement, beginning with the first Plan Year
commencing after such Determination Date, shall apply only for those Plan Years
in which the Plan continues to be a Top-Heavy Plan or Super Top-Heavy Plan, as
the case may be.
4.4.3 (A) Except as provided in Sections 4.4.3(C) and (D), for any Plan Year in
which the Plan is a Top-Heavy Plan, contributions and forfeitures allocated to
the Employer Contributions Account of any Participant who is not a Key Employee
in respect of that Plan Year shall not be less than the lesser of:
(i) 3% of such Participant's Limitation Compensation, or
(ii) if the Employer has no Defined Benefit Plan which designates this Plan to
satisfy Code Section 401, the largest percentage of contributions and
forfeitures, as a percentage of the Key Employee's Limitation Compensation,
allocated to the Employer Contributions Account of any Key Employee for that
year. The minimum allocation is determined without regard to any Social Security
contribution. This minimum allocation shall be made even though, under other
Plan provisions, the Participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation for the Plan Year because
of (a) the Participant's failure to complete a Year of Service, (b) the
Participant's failure to make mandatory Participant contributions to the Plan or
(c) compensation less than a stated amount.
(B) For purposes of computing the minimum allocation, a Participant's Limitation
Compensation will be applied.
(C) The provision in (A) above shall not apply to any Participant who was not
employed by the Employer or an Affiliate on the last day of the Plan Year.
(D) If the Employer or an Affiliate has executed Adoption Agreements covering
Participants by a plan which is a profit-sharing plan and by another plan which
is a money purchase pension plan or a target benefit plan, the minimum
allocation specified in the preceding Section 4.4.3(A) shall be provided by the
money purchase pension plan or by the target benefit plan, as the case may be.
If a Participant is
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covered under this Plan and a Defined Benefit Plan maintained pursuant to
Adoption Agreements offered by the Sponsor, the minimum allocation specified in
the preceding Section 4.4.3(A) shall not be applicable and the Participant shall
receive the minimum benefit specified in the Defined Benefit Plan.
(E) With respect to any profit-sharing or money purchase pension plan which
becomes Top-Heavy and is integrated with Social Security, prior to making the
allocations specified in the Adoption Agreement, anything contained therein to
the contrary notwithstanding, there shall be an allocation of the Employer
Contribution to each eligible Participant's Employer Contribution Account in the
ratio that each such Participant's Limitation Compensation for the Plan Year
bears to the Limitation Compensation of all such Participants for the Plan Year,
but not in excess of 3% of such Limitation Compensation.
4.4.4 If the Plan becomes a Top-Heavy Plan, then the maximum benefit which can
be provided under Section 3.9 shall continue to be determined by applying "125%"
wherever it appears in that Section and by substituting "4%" for "3%" wherever
that appears in Section 4.4.3. However, if the Plan becomes a Super Top-Heavy
Plan, the maximum benefit which can be provided under Section 3.9 shall be
determined by substituting "100%" for "125%" wherever the latter percentage
appears and the 3% minimum contribution provided for in Section 4.4.4 shall
remain unchanged.
4.4.5 Beginning with the Plan Year in which this Plan is Top-Heavy, one of the
minimum Top-Heavy vesting schedules as specified in the Adoption Agreement will
apply. The minimum vesting schedule applies to all benefits within the meaning
of Code Section 411(a)(7) except those attributable to Employee contributions,
including benefits accrued before the effective date of Code Section 416 and
benefits accrued before the Plan became Top-Heavy. However, this Section 4.4
does not apply to the Account Balances of any Employee who does not have an Hour
of Service after the Plan has initially become Top-Heavy and such Employee's
vesting in his or her Employer Contributions Account will be determined without
regard to this Section 4.4. The minimum allocation pursuant to Section 4.4.3 (to
the extent required to be nonforfeitable under Code Section 416(b)) may not be
forfeited under Code Section 411(a)(3)(B) or Code Section 411(a)(3)(D).
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ARTICLE V
AMOUNT AND DISTRIBUTION OF BENEFITS,
WITHDRAWALS AND LOANS
5.1 DISTRIBUTION UPON TERMINATION OF EMPLOYMENT
5.1.1 Subject to Section 5.1.2, a Participant's Benefit Commencement Date shall
be as soon as practicable following his or her Fully Vested Separation,
Partially Vested Separation or Nonvested Separation, if applicable, and in
accordance with Section 5.6. If the Plan includes a CODA feature, each 401(k)
Contributions Account of a Participant shall be payable in accordance with the
events specified in Section 1.27 of the Plan.
5.1.2 If specified in the Adoption Agreement, a Participant's Benefit
Commencement Date shall be deferred until the earliest of his or her Normal
Retirement Age, Disability, or if elected by the Employer in the Adoption
Agreement, Early Retirement. If a Participant terminates Employment after
satisfying any service requirement for Early Retirement specified in the
Adoption Agreement, he or she shall be entitled to elect to receive a
distribution of his or her vested Employer Accounts upon satisfaction of any age
requirement for Early Retirement.
5.2 AMOUNT OF BENEFITS UPON A FULLY VESTED SEPARATION
A Participant's benefits upon his or her Fully Vested Separation for any reason
other than Disability shall be the Account Balance of all of his or her Accounts
determined in accordance with Section 10.6.2.
5.3 AMOUNT OF BENEFITS UPON A PARTIALLY VESTED SEPARATION
A Participant's benefits upon his or her Partially Vested Separation for any
reason other than Disability shall be: (A) the Account Balance of his or her
Employer Accounts determined in accordance with Section 10.6.2 multiplied by his
or her vested percentage determined pursuant to Section 4.1.3, or, if
applicable, Section 4.4.2, plus (B) the Account Balance of his or her other
Accounts determined in accordance with Section 10.6.2.
5.4 Amount of Benefits Upon a Nonvested Separation A Participant's benefits upon
his or her Nonvested Separation shall be the Account Balance of his or her
Accounts other than Employer Accounts, if any, determined in accordance with
Section 10.6.2.
5.5 AMOUNT OF BENEFITS UPON A SEPARATION DUE TO DISABILITY
If a Participant terminates Employment due to a Disability, his or her benefit
shall be the Account Balance of all of his or her Accounts determined as a Fully
Vested Separation in accordance with Section 5.2 and Section 10.6.2. The Benefit
Commencement Date of any such Participant on whose behalf contributions are
being made pursuant to Section 3.1.4 shall be as soon as practicable after the
date such contributions cease.
5.6 DISTRIBUTION AND RESTORATION
5.6.1 If, upon a Participant's termination of Employment, the vested Account
Balance of his or her Accounts as of the applicable Valuation Date is equal to
or less than $3,500, such Participant will receive a distribution of his or her
entire vested benefit and the nonvested portion will be treated as forfeiture.
If the value of a Participant's vested Account is zero, the Participant shall be
deemed to have received a distribution of such vested Account.
5.6.2 If, upon a Participant's termination of Employment, the vested Account
Balance of his or her Accounts as of the applicable Valuation Date exceeds
$3,500, the Participant may elect, in accordance with Article VI, to receive a
distribution of the entire vested portion of such Accounts and the nonvested
portion, if any, will be treated as a forfeiture.
5.6.3 If the vested Account Balance of a Participant's Accounts as of the
applicable Valuation Date has an
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aggregate value exceeding (or at the time of any prior distribution exceeded)
$3,500, and the Participant's benefit is Immediately Distributable, the
Participant and the Participant's Spouse (or where either the Participant or the
Spouse has died, the survivor) must consent to any distribution of such benefit.
The consent of the Participant and the Participant's Spouse shall be obtained in
writing within the 90-day period ending on the Participant's Benefit
Commencement Date; provided, however, that if the Plan is a profit-sharing plan
and Section 6.1.2 applies, the consent of the Participant's Spouse will not be
required. The Administrator shall notify the Participant and the Participant's
Spouse of the right to defer any distribution until the Participant's benefit is
no longer Immediately Distributable. Such notification shall include a general
description of the material features, and an explanation of the relative values
of, the optional forms of benefit available under the Plan in a manner that
would satisfy the notice requirements of Code Section 417(a)(3), and shall be
provided no less than 30 days and no more than 90 days prior to the Benefit
Commencement Date.
5.6.4 Notwithstanding the foregoing, only the Participant need consent to the
commencement of a distribution in the form of a Qualified Joint and Survivor
Annuity while the Participant's benefit is Immediately Distributable. Neither
the consent of the Participant nor the Participant's Spouse shall be required to
the extent that a distribution is required to satisfy Code Section 401(a)(9) or
Code Section 415.
5.6.5 For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first Plan Year
beginning after December 31, 1988, the Participant's vested benefit shall not
include amounts attributable to accumulated deductible Participant contributions
within the meaning of Code Section 72(o)(5)(B).
5.6.6 If a Participant, who after termination of Employment received a
distribution and forfeited any portion of an Employer Account or is deemed to
have received a distribution in accordance with Section 5.6.1, resumes
Employment, he or she shall have the right, while an Employee, to repay the full
amount previously distributed from such Employer Account. Such repayment must
occur before the earlier of (i) the date on which he or she would have incurred
a Period of Severance of five years commencing after the distribution or (ii)
five years after the first date on which the Participant is subsequently
reemployed. If the Participant makes a repayment, the Account Balance of his or
her relevant Employer Account shall be restored to its value as of the date of
distribution. The restored amount shall be derived from forfeitures during the
Plan Year and, if such forfeitures are not sufficient, from a contribution by
the Employer made as of that date (determined without reference to Net Profits).
If an Employee who had a Nonvested Separation and was deemed to receive a
distribution resumes Employment before a Period of Severance of five years, his
or her Employer Account will be restored, upon reemployment, to the amount on
the date of such deemed distribution.
5.7 WITHDRAWALS DURING EMPLOYMENT
-----------------------------
5.7.1 If the Plan is a profit-sharing plan, and if the Employer has elected in
the Adoption Agreement to permit withdrawals during Employment, prior to
termination of Employment, each Participant upon attainment of age 59-1/2 may
elect to withdraw, as of the Valuation Date next following the receipt of an
election by the Administrator, and upon such notice as the Administrator may
require, all or any part of the vested Account Balance of all of his or her
Accounts, as of such Valuation Date.
5.7.2 Notwithstanding Section 5.7.1, prior to termination of Employment, each
Participant with a Rollover Contributions Account and/or a Participant Voluntary
Nondeductible Contributions Account may elect to withdraw, as of the Valuation
Date next following the receipt of an election by the Administrator, and upon
such notice as the Administrator may require, all or any of such Account, as of
such Valuation Date.
5.7.3 The Administrator may establish from time to time rules and procedures
with respect to any withdrawals including the order of Accounts from which such
withdrawals shall be made.
5.7.4 No forfeitures shall occur as a result of a withdrawal pursuant to this
Section 5.7.
5.7.5 If a Participant is married at the time of such election, the
Participant's Spouse must consent to such a withdrawal in the same
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manner as provided in Section 6.2.4; provided, however, that if the Plan is a
profit-sharing plan and Section 6.1.2 applies, the consent of the Participant's
Spouse will not be required.
5.8 LOANS
5.8.1 If the Employer has elected in the Adoption Agreement to make loans
available, a Participant may submit an application to the Administrator to
borrow from any Account maintained for the Participant (on such terms and
conditions as the Administrator shall prescribe) an amount which when added to
the outstanding balance of all other loans to the Participant would not exceed
the lesser of (a) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans during the one year period ending on the day before
the loan is made, over the outstanding balance of loans from the Plan on the
date the loan is made, or (b) 50% of the vested portion of his or her Account
from which the borrowing is to be made as of the Valuation Date next following
the receipt of his or her loan application by the Administrator and the
expiration of such notice period as the Administrator may require. For this
purpose, all loans from Qualified Plans of the Employer or an Affiliate shall be
aggregated, and an assignment or pledge of any portion of the Participant's
interest in the Plan, and a loan, pledge or assignment with respect to any
insurance contract purchased under the Plan, will be treated as a loan under
this Section 5.8.1.
5.8.2 If approved, each such loan shall comply with the following conditions:
(A) it shall be evidenced by a negotiable promissory note;
(B) the rate of interest payable on the unpaid balance of such loan shall be a
reasonable rate determined by the Administrator;
(C) the Participant must obtain the consent of his or her Spouse, if any, within
the 90-day period before the time an Account is used as security for the loan;
provided, however, that if the Plan is a profit-sharing plan that meets the
requirements in Section 6.1.2 of the Plan, the consent of the Participant's
Spouse will not be required. A new consent is required if an Account is used for
any increase in the amount of security. The consent shall comply with the
requirements of Section 6.2.4, but shall be deemed to meet any requirements
contained in section 6.2.4 relating to the consent of any subsequent Spouse. A
new consent shall be required if an Account is used for renegotiation,
extension, renewal, or other revision of the loan;
(D) the loan, by its terms, must require repayment (principal and interest) be
amortized in level payments, not less frequently than quarterly, over a period
not extending beyond five years from the date of the loan; provided, however,
that if the proceeds of the loan are used to acquire a dwelling unit which
within a reasonable time (determined at the time the loan is made) will be used
as the principal residence of the Participant, the repayment schedule may be for
a term in excess of five years; and
(E) the loan shall be adequately secured and may be secured by no more than 50%
of the Participant's vested interest in the Account Balance of his or her
Accounts.
5.8.3 If a Participant or Beneficiary requests and is granted a loan, and the
loan is made from Participant-Directed Assets, principal and interest payments
with respect to the loan shall be credited solely to the Account of the
borrowing Participant from which the loan was made. Any loss caused by
nonpayment or other default on a Participant's loan obligations shall be charged
solely to that Account. Any other loan shall be treated as an investment of the
Trust Fund and interest and principal payments on account thereof shall be
credited to the Trust Fund. The Administrator shall determine the order of
Accounts from which a loan may be made.
5.8.4 Anything herein to the contrary notwithstanding:
(A) in the event of a default, foreclosure on the promissory note will not occur
until a distributable event occurs under this Article V;
(B) no loan will be made to any Owner-Employee or to any "shareholder-employee"
of the Employer or a Participating Affiliate or with respect to any amounts
attributable to a Rollover Contribution or a trust to trust transfer and
relating to prior participation by such an individual in a Qualified Plan. For
this purpose, a "shareholder-employee" means an employee or officer of an
electing small business, I.E., an "S corporation" as defined in Code Section
1361, who owns (or is considered as owning within the meaning of Code
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Section 318(a)(1)) on any day during the taxable year of such corporation, more
than 5% of the outstanding stock of the corporation; and
(C) loans shall not be made available to Highly Compensated Employees in an
amount greater than the amount made available to other Employees.
5.8.5 If a valid spousal consent has been obtained in accordance with Section
5.8.2(C), then, notwithstanding any other provision of this Plan, the portion of
the Participant's vested Account used as a security interest held by the Plan by
reason of a loan outstanding to the Participant shall be taken into account for
purposes of determining the amount of the Participant's benefit payable at the
time of death or distribution; but only if the reduction is used as repayment of
the loan. If less than 100% of the Participant's vested benefit (determined
without regard to the preceding sentence) is payable to the Surviving Spouse,
then the Participant's benefit shall be adjusted by first reducing the
Participant's vested benefit by the amount of the security used as repayment of
the loan, and then determining the benefit payable to the Surviving Spouse.
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5.9 HARDSHIP DISTRIBUTIONS
5.9.1 Effective January 1, 1989, if available and elected by the Employer in the
Adoption Agreement, a Participant may request a distribution due to hardship
from the vested portion of his or her Accounts, (other than from his or her
Qualified Nonelective Contributions Account, Qualified Matching Contributions
Account or earnings accrued after December 31, 1988, on the Participant's
Elective Deferrals) only if the distribution is made both due to an immediate
and heavy financial need of the Participant and is necessary to satisfy such
financial need.
5.9.2 A hardship distribution shall be permitted only if the distribution is due
to:
(A) expenses incurred or necessary for medical care described in Code Section
213(d) incurred by the Participant, the Participant's Spouse, or any dependents
of the Participant (as defined in Code
Section 152);
(B) purchase (excluding mortgage payments) of a principal residence for the
Participant;
(C) payment of tuition and related educational fees for the next 12 months of
post-secondary education for the Participant, his or her Spouse, children or
dependents;
(D) the need to prevent the eviction of the Participant from his or her
principal residence or foreclosure on the mortgage of the Participant's
principal residence; or
(E) any other condition or event which the Commissioner of the Internal Revenue
Service determines is a deemed immediate and financial need.
5.9.3 A distribution will be considered necessary to satisfy an immediate and
heavy financial need of a Participant if all of the following requirements are
satisfied:
(A) the distribution will not be in excess of the amount of the immediate and
heavy financial need of the Participant (including amounts necessary to pay any
Federal, state or local income taxes or penalties reasonably anticipated to
result from the distribution);
(B) the Participant obtains all distributions, other than hardship
distributions, and all nontaxable loans currently available under all plans
maintained by the Employer or an Affiliate;
(C) the Participant's Elective Deferrals, Employee Thrift Contributions and
Participant Voluntary Nondeductible Contributions will be suspended for at least
12 months after receipt of the hardship distribution in this Plan and in all
other plans maintained by the Employer or an Affiliate; and (D) the Participant
may not make Elective Deferrals for the Participant's taxable year immediately
following the taxable year of the hardship distribution in excess of the
applicable limit under Code Section 402(g) for such next taxable year less the
amount of such Participant's Elective Deferrals for the taxable year of the
distribution in this Plan and in all other plans maintained by the Employer or
an Affiliate.
5.9.4 If the distribution is made from any Account other than a 401(k)
Contributions Account, a distribution due to hardship may be made without
application of Section 5.9.3(B), 5.9.3(C), or 5.9.3(D).
5.10 LIMITATION ON COMMENCEMENT OF BENEFITS
5.10.1 Anything in this Article V to the contrary notwithstanding, a
Participant's Benefit Commencement Date shall in no event be later than the 60th
day after the close of the Plan Year in which the latest of the following events
occur:
(A) the attainment by the Participant of his or her Normal Retirement Age;
(B) the tenth anniversary of the year in which the Participant commenced
participation in the Plan; or
(C) the Participant's termination of Employment. Notwithstanding the foregoing,
the failure of a Participant and Spouse to consent to a distribution while a
benefit is Immediately Distributable, shall be deemed to be an election to defer
commencement of payment of any benefit sufficient to satisfy this Section.
5.10.2 If it is not possible to distribute a Participant's Accounts because the
Administrator has been unable to locate the Participant after making reasonable
efforts to do so, then a distribution of the Participant's
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Accounts shall be made when the Participant can be located.
5.11 DISTRIBUTION REQUIREMENTS
5.11.1 Subject to the Joint and Survivor Annuity rules set forth in Article VI,
the requirements of this Article shall apply to any distribution of a
Participant's interest and will take precedence over any inconsistent provisions
of this Plan. Unless otherwise specified, the provisions of this article apply
to calendar years beginning after December 31, 1984. As used in this Section
5.11, each of the following terms shall have the meaning for that term set forth
in this Section 5.11.1:
(A) APPLICABLE LIFE EXPECTANCY. The life expectancy (or joint and last survivor
expectancy) calculated using the attained age of the Participant (or designated
Beneficiary) as of the Participant's (or designated Beneficiary's) birthday in
the applicable calendar year reduced by one for each calendar year which has
elapsed since the date Life Expectancy was first calculated. If Life Expectancy
is being recalculated, the Applicable Life Expectancy shall be the Life
Expectancy as so recalculated. The applicable calendar year shall be the first
distribution calendar year, and if Life Expectancy is being recalculated such
succeeding calendar year.
(B) DESIGNATED BENEFICIARY. The individual who is designated as the Beneficiary
under the Plan in accordance with Code Section 401(a)(9). In the event that a
Participant names a trust to be a designated Beneficiary, such designation shall
provide that, as of the later of the date on which the trust is named as a
Beneficiary or the Participant's Required Beginning Date, and as of all
subsequent periods during which the trust is named as a Beneficiary, the
following requirements are met: (i) the trust is a valid trust under state law,
or would be but for the fact that there is no corpus; (ii) the trust is
irrevocable; (iii) the Beneficiaries of the trust who are Beneficiaries with
respect to the trust's interest in the Participant's benefits are identifiable
from the trust instrument within the meaning of Code Section 401(a)(9); and (iv)
a copy of the trust is provided to the Plan.
(C) DISTRIBUTION CALENDAR YEAR. A calendar year for which a minimum distribution
is required. For distributions beginning before the Participant's death, the
first Distribution Calendar Year is the calendar year immediately preceding the
calendar year which contains the Participant's Required Beginning Date. For
distributions beginning after the Participant's death, the first Distribution
Calendar Year is the calendar year in which distributions are required to begin
pursuant to Section 7.2.
(D) LIFE EXPECTANCY. Life Expectancy and joint and last survivor expectancy are
computed by use of the expected return multiples in Tables V and VI of section
1.72-9 of the regulations issued under the Code.
Unless otherwise elected by the Participant (or Spouse, in the case of
distributions described in Section 7.2) by the time distributions are required
to begin, Life Expectancies shall not be recalculated annually. Such election
shall be irrevocable as to the Participant or Spouse and shall apply to all
subsequent years. The Life Expectancy of a nonspouse Beneficiary may not be
recalculated.
(E) REQUIRED BEGINNING DATE.
------------------------
(i) GENERAL RULE. The Required Beginning Date of a Participant is the first day
of April of the calendar year following the calendar year in which the
Participant attains age 70-1/2.
(ii) TRANSITIONAL RULE. The Required Beginning Date of a Participant who attains
age 70-1/2 before January 1, 1988, shall be determined in accordance with (1) or
(2) below:
(1) NON-5% OWNERS. The Required Beginning Date of a Participant who is not a "5%
owner" as defined in (iii) below is the first day of April of the calendar year
following the calendar year in which the later of retirement or attainment of
age 70-1/2 occurs.
(2) 5% OWNERS. The Required Beginning Date of a Participant who is a 5% owner
during any year beginning after December 31, 1979, is the first day of April
following the later of:
(a) the calendar year in which the Participant attains age 70-1/2; or
(b) the earlier of the calendar year with or within which ends the Plan Year in
which the Participant becomes a 5% owner, or the calendar year in which the
Participant retires.
The Required Beginning Date of a Participant who is not a 5% owner who attains
age 70-1/2 during 1988 and who has not retired as of January 1, 1989, is April
1, 1990.
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(iii) 5% OWNER. A Participant is treated as a 5% owner for purposes of this
Section 5.11 if such Participant is a 5% owner as defined in Code Section 416(i)
(determined in accordance with section 416 but without regard to whether the
plan is top-heavy) at any time during the Plan Year ending with or within the
calendar year in which such owner attains age 66-1/2 or any subsequent Plan
Year.
(iv) Once distributions have begun to a 5% owner under this Section 5.11, they
must continue to be distributed, even if the Participant ceases to be a 5% owner
in a subsequent year.
5.11.2 All distributions required under this Section 5.11 shall be determined
and made in accordance with the Income Tax Regulations under Code Section
401(a)(9), including the minimum distribution incidental benefit requirement of
section 1.401(a)(9)-2 of the regulations issued under the Code. The entire
interest of a Participant must be distributed or begin to be distributed no
later than the Participant's Required Beginning Date.
5.11.3 LIMITS ON DISTRIBUTION PERIODS. As of the first Distribution Calendar
Year, distributions, if not made in a lump sum, may only be made over one of the
following periods (or a combination thereof):
(A) the life of the Participant;
(B) the life of the Participant and a Designated Beneficiary;
(C) a period certain not extending beyond the Life Expectancy of the
Participant; or
(D) a period certain not extending beyond the joint and last survivor expectancy
of the Participant and a Designated Beneficiary.
For calendar years beginning before January 1, 1989, if the Participant's Spouse
is not the Designated Beneficiary, the method of distribution selected must
assure that at least 50% of the present value of the amount available for
distribution is paid within the Life Expectancy of the Participant.
5.11.4 DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR. (A) If the
Participant's interest is to be paid in the form of annuity distributions under
the Plan (whether directly or in the form of an annuity purchased from an
insurance company), payments under the annuity shall satisfy the following
requirements:
(i) the annuity distributions must be paid in periodic payments made at
intervals not longer than one year;
(ii) the distribution period must be over a life (or lives) or over a period
certain not longer than a Life Expectancy (or joint life and last survivor
expectancy) described in Code Section 401(a)(9)(A)(ii) or Code Section
401(a)(9)(B)(iii), whichever is applicable;
(iii) the Life Expectancy (or joint life and last survivor expectancy) for
purposes of determining the period certain shall be determined without
recalculation of Life Expectancy;
(iv) once payments have begun over a period certain, the period certain may not
be lengthened even if the period certain is shorter than the maximum permitted;
(v) payments must either be nonincreasing or increase only as follows:
(1) with any percentage increase in a specified and
generally recognized cost-of-living index;
(2) to the extent of the reduction to the amount of the Participant's payments
to provide for a survivor benefit upon death, but only if the Beneficiary whose
life was being used to determine the distribution period described in Section
5.11.4(A)(iii) dies and the payments continue otherwise in accordance with that
section over the life of the Participant;
(3) to provide cash refunds of Employee contributions upon the Participant's
death; or
(4) because of an increase in benefits under the Plan.
(vi) If the annuity is a life annuity (or a life annuity with a period certain
not exceeding 20 years), the amount which must be distributed on or before the
Participant's Required Beginning Date (or, in the case of distributions after
the death of the Participant, the date distributions are required to begin
pursuant to Section 7.2) shall be the payment which is required for one payment
interval. The second payment need not be made until the end of the next payment
interval even if that payment interval ends in the next calendar
52
<PAGE> 62
year. Payment intervals are the periods for which payments are received, E.G.,
bimonthly, monthly, semi-annually, or annually.
If the annuity is a period certain annuity without a life contingency (or is a
life annuity with a period certain exceeding 20 years) periodic payments for
each distribution calendar year shall be combined and treated as an annual
amount. The amount which must be distributed by the Participant's Required
Beginning Date (or, in the case of distributions after the death of the
Participant, the date distributions are required to begin pursuant to Section
7.2) is the annual amount for the first Distribution Calendar Year. The annual
amount for other Distribution Calendar Years, including the annual amount for
the calendar year in which the Participant's Required Beginning Date (or the
date distributions are required to begin pursuant to Section 7.2) occurs, must
be distributed on or before December 31 of the calendar year for which the
distribution is required.
(B) Annuities purchased after December 31, 1988, are subject to the following
additional conditions:
(i) Unless the Participant's Spouse is the Designated Beneficiary, if the
Participant's interest is being distributed in the form of a period certain
annuity without a life contingency, the period certain as of the beginning of
the first Distribution Calendar Year may not exceed the applicable period
determined using the table set forth in Q&A A-5 of section 1.401(a)(9)-2 of the
regulations issued under the Code.
(ii) If the Participant's interest is being distributed in the form of a joint
and survivor annuity for the joint lives of the Participant and a nonspouse
Beneficiary, annuity payments to be made on or after the Participant's Required
Beginning Date to the Designated Beneficiary after the Participant's death must
not at any time exceed the applicable percentage of the annuity payment for such
period that would have been payable to the Participant using the table set forth
in Q&A A-6 of section 1.401(a)(9)-2 of the regulations under the Code.
(C) TRANSITIONAL RULE. If payments under an annuity which complies with Section
5.11.4(A) begin prior to January 1, 1989, the minimum distribution requirements
in effect as of July 27, 1987, shall apply to distributions from this Plan,
regardless of whether the annuity form
53
<PAGE> 63
of payment is irrevocable. This transitional rule also applies to deferred
annuity contracts distributed to or owned by the Participant prior to January 1,
1989, unless additional contributions are made under the Plan by the Employer or
Affiliate with respect to such contract.
(D) If the form of distribution is an annuity made in accordance with Section
5.11.4, any additional benefits accruing to the Participant after his or her
Required Beginning Date shall be distributed as a separate and identifiable
component of the annuity beginning with the first payment interval ending in the
calendar year immediately following the calendar year in which such amount
accrues.
(E) Any part of the Participant's interest which is in the form of an individual
account shall be distributed in a manner satisfying the requirements of Code
Section 401(a)(9).
5.11.5 TRANSITIONAL RULE: SECTION 242 ELECTION. Notwithstanding the other
requirements of this Article and subject to the Joint and Survivor Annuity rules
set forth in Article VI, distribution on behalf of any Employee, including a 5%
owner, may be made in accordance with all of the following requirements
(regardless of when such distribution commences):
(A) the distribution by the trust is one which would not have disqualified such
trust under Code Section 401(a)(9) as in effect prior to amendment by the
Deficit Reduction Act of 1984;
(B) the distribution is in accordance with a method of distribution designated
by the Employee whose interest in the trust is being distributed or, if the
Employee is deceased, by a Beneficiary of such Employee;
(C) such designation was in writing, was signed by the Employee or the
Beneficiary, and was made before January 1, 1984;
(D) the Employee had accrued a benefit under the Plan as of December 31, 1983;
and
(E) the method of distribution designated by the Employee or the Beneficiary
specifies the time at which distribution will commence, the period over which
distributions will be made, and in the case of any distribution upon the
Employee's death, the Beneficiaries of the Employee listed in order of priority.
A distribution upon death will not be covered by this transitional rule unless
the information in the designation contains the required information described
above with respect to the distributions to be made upon the death of the
Employee.
For any distribution which commences before January 1, 1984, but continues after
December 31, 1983, the Employee, or the Beneficiary, to whom such distribution
is being made, will be presumed to have designated the method of distribution
under which the distribution is being made if the method of distribution was
specified in writing and the distribution satisfies the requirements in
subsections 5.11.5(A) and (E).
If a designation is revoked any subsequent distribution must satisfy the
requirements of Code Section 401(a)(9). If a designation is revoked subsequent
to the date distributions are required to begin, the trust must distribute by
the end of the calendar year following the calendar year in which the revocation
occurs the total amount not yet distributed to satisfy Code Section 401(a)(9)
but for the Section 242(b)(2) election. For calendar years beginning after
December 31, 1988, such distributions must meet the minimum distribution
incidental benefit requirements in section 1.401(a)(9)-2 of the regulations
issued under the Code. Any changes in the designation will be considered to be a
revocation of the designation. However, the mere substitution or addition of
another Beneficiary (one not named in the designation) under the designation
will not be considered to be a revocation of the designation, so long as such
substitution or addition does not alter the period over which distributions are
to be made under the designation, directly or indirectly (for example, by
altering the relevant measuring life). In the case in which an amount is
transferred or rolled over from one plan to another plan, the rules in Q&A J-2
and Q&A J-3 of section 1.401(a)(9)-1 of the regulations issued under the Code.
ARTICLE VI
FORMS OF PAYMENT OF RETIREMENT BENEFITS
6.1 METHODS OF DISTRIBUTION
6.1.1 If the Plan is a money purchase pension plan or a target benefit plan, a
Participant's
54
<PAGE> 64
benefit shall be payable in the normal form of a Qualified Joint and Survivor
Annuity if the Participant is married on his or her Benefit Commencement Date
and in the normal form of an immediate annuity for the life of the Participant
if the Participant is not married on that date. A Participant who terminated
Employment on or after satisfying the requirements for Early Retirement may
elect to have his or her Qualified Joint and Survivor Annuity distributed upon
attainment of such Early Retirement. If the Plan is a profit-sharing plan that
satisfies the requirements set forth in Section 6.1.2, a Participant's Accounts
shall only be payable in the normal form of a lump-sum distribution in
accordance with Section 6.1.1(B) below. A Participant in a money purchase
pension plan, a target benefit plan, or a profit-sharing plan that does not
satisfy the requirements set forth in Section 6.1.2, may at any time after
attaining age 35 and prior to his or her Benefit Commencement Date elect, in
accordance with Section 6.2, any of the following optional forms of payment
instead of the normal form:
(A) An Annuity Contract payable as:
(i) a single life annuity;
(ii) a joint and 50% survivor annuity with a contingent annuitant;
(iii) a joint and 100% survivor annuity with a contingent annuitant;
(iv) an annuity for the life of the Participant with 120 monthly payments
certain;
(B) A lump-sum distribution in cash or in kind, or part in cash and part in
kind; or
(C) In installments payable in cash or in kind, or part in cash and part in kind
over a period not in excess of that required to comply with Section 5.11.4.
Anything in this Section 6.1.1 to the contrary notwithstanding, if the value of
a Participant's vested Account as of the applicable Valuation Date is $3,500 or
less, his or her benefit shall be paid in the form of a lump-sum distribution
and no optional form of benefit payment shall be available.
6.1.2 If the Plan is a profit-sharing plan then:(A) the Participant cannot elect
payments in the form of a Life annuity (this Section 6.1.2 shall not apply if a
life annuity form is an optional form preserved under Code Section 411(d)(6));
(B) on the death of the Participant, the Participant's benefits will be paid to
his or her Surviving Spouse, if any, or, if his or her Surviving Spouse has
already consented in a
55
<PAGE> 65
manner conforming to an election under Section 6.2.4, then to the Participant's
Beneficiary; and(C) the normal form of benefit shall be a lump-sum and Sections
6.2.1, 6.2.2 and 6.2.4 shall not be applied by the Administrator. A Participant
in such a profit-sharing plan may also elect to receive his or her benefit in
the form of installments in accordance with Section 6.1.1(C) of the Plan. This
Section 6.1.2 shall not apply, however, with respect to the Participant if it is
determined that the Plan is a direct or indirect transferee of a defined benefit
plan, a money purchase pension plan (including a target benefit plan) or a stock
bonus or profit-sharing plan which is subject to the survivor annuity
requirements of Code Sections 401(a)(11) and 417. In addition, this Section
6.1.2 shall not apply unless the Participant's Surviving Spouse, if any, is the
Beneficiary of (i) the proceeds of any insurance on the Participant's life
purchased by Employer contributions or (ii) forfeitures allocated to the
Participant's Employer Account or unless the Participant's Surviving Spouse has
consented to the Participant's designation of another Beneficiary as referred to
in subsection (C) of this Section 6.1.2.
6.1.3 The following transitional rules shall apply for those Participants
entitled to but not receiving benefits as of August 23, 1984:
(A) Any living Participant not receiving benefits on August 23, 1984, who would
otherwise not receive the benefits prescribed by Section 6.1 must be given the
opportunity to elect to have Section 6.1 apply if such Participant is credited
with at least one Hour of Service under this Plan or a predecessor plan in a
Plan Year beginning on or after January 1, 1976, and such Participant had at
least 10 Years of Service when he or she terminated from Employment.
(B) Any living Participant not receiving benefits on August 23, 1984, who was
credited with at least one Hour of Service under this Plan or a predecessor plan
on or after September 2, 1974, and who is not otherwise credited with an Hour of
Service in a Plan Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance with this Section
6.1.3(D).
(C) The respective opportunities to elect (as described in these Sections
6.1.3(A) and (B)) must be afforded to the appropriate Participants during the
period commencing on August 23, 1984, and ending on such Participant's Benefit
Commencement Date.
56
<PAGE> 66
(D) Any Participant who has elected pursuant to this Section 6.1.3(B) and any
Participant who does not elect under this Section 6.1.3(A) or who meets the
requirements of this Section 6.1.3(A) except that such Participant does not have
at least ten Years of Service when he or she terminates from Employment, shall
have his or her benefits distributed in accordance with all of the following
requirements if benefits would have been payable in the form of a single life
annuity:
(1) AUTOMATIC QUALIFIED JOINT AND SURVIVOR ANNUITY
If benefits in the form of a single life annuity become payable to a married
Participant who:
(a) begins to receive payments on or after Normal Retirement Age; or
(b) dies on or after Normal Retirement Age while in active Employment; or
(c) begins to receive payments on or after the "Qualified Early Retirement Age",
as that term is defined in Section 6.1.3(D)(3)(a); or
(d) terminates from Employment on or after attaining Normal Retirement Age (or
Qualified Early Retirement Age) and after satisfying the eligibility requirement
for the payment of benefits under the Plan and thereafter dies before his or her
Benefit Commencement Date; then such benefits will be received in the form of a
Qualified Joint and Survivor Annuity, unless the Participant has elected
otherwise during the election period which begins at least six months before the
Participant attains Qualified Early Retirement Age and ends no earlier than 90
days before his or her Benefit Commencement Date. Any election hereunder will be
in writing and may be changed by the Participant at any time.
(2) ELECTION OF EARLY SURVIVOR ANNUITY
A Participant who is employed after attaining the Qualified Early Retirement Age
will be given the opportunity to elect, beginning on the later of (1) the 90th
day before he or she attains his or her Qualified Early Retirement Age, or (2)
the date on which participation begins, and ending on the date he or she
terminates Employment, to have a survivor annuity payable on death. If the
Participant elects the survivor annuity, payments under such annuity must not be
less than the payments which would have been made to the Spouse under the
Qualified Joint and Survivor Annuity if the Participant had retired on the day
before his or her death. Any election
57
<PAGE> 67
under this provision will be in writing and may be changed by the Participant at
any time.
(3) QUALIFIED EARLY RETIREMENT AGE
(a) For purposes of this section 6.1.3, Qualified Early Retirement Age is the
latest of:
(i) the earliest date, under the Plan, on which the Participant may elect to
receive retirement benefits,
(ii) the first day of the 120th month beginning before the Participant reaches
Normal Retirement Age, or
(iii) the date the Participant begins participation.
(b) Qualified Joint and Survivor Annuity is an annuity for the life of the
Participant with a survivor annuity for the life of the Spouse as described in
Section 1.77.
6.2 ELECTION OF OPTIONAL FORMS
6.2.1 By notice to the Administrator at any time prior to a Participant's date
of death and beginning on the first day of the Plan Year in which the
Participant attains age 35, the Participant may elect, in writing, not to
receive the normal form of benefit payment otherwise applicable and to receive
instead an optional form of benefit payment provided for in Section 6.1.1. If
the Participant separates from Employment prior to the first day of the Plan
Year in which the Participant attains age 35, the Participant may make such
election beginning on the date he or she separates from Employment. This Section
6.2.1 shall not be applicable if Section 6.1.2 applies to a Participant.
6.2.2 Within a reasonable period, but in any event no less than 30 and no more
than 90 days prior to each Participant's Benefit Commencement Date, the
Administrator shall provide to each Participant a written explanation of the
terms and conditions of a Qualified Joint and Survivor Annuity. Such written
explanation shall consist of:
(A) the terms and conditions of the Qualified Joint and Survivor Annuity;
(B) the Participant's right to make, and the effect of, an election to waive the
Qualified Joint and Survivor Annuity;
(C) the rights of the Participant's Spouse under Section 6.2.4;
(D) the right to make, and the effect of, a revocation of a previous election to
waive the Qualified Joint and Survivor Annuity; and
(E) the relative values of the various optional forms of benefit under the Plan.
58
<PAGE> 68
MLII
--------------------------------------------------------
MERRILL LYNCH
---------------
SPECIAL
---------------
PROTOTYPE DEFINED
CONTRIBUTION PLAN
ADOPTION AGREEMENT
--------------------------------------------------------
401(k) PLAN
EMPLOYEE THRIFT PLAN
PROFIT-SHARING PLAN
LETTER SERIAL NUMBER: D359287B
NATIONAL OFFICE LETTER DATE: 6/29/93
THIS PROTOTYPE PLAN AND ADOPTION AGREEMENT ARE IMPORTANT LEGAL
INSTRUMENTS WITH LEGAL AND TAX IMPLICATIONS FOR WHICH THE SPONSOR,
MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED, DOES NOT ASSUME
RESPONSIBILITY. THE EMPLOYER IS URGED TO CONSULT WITH ITS OWN ATTORNEY
WITH REGARD TO THE ADOPTION OF THIS PLAN AND ITS SUITABILITY TO
ITS CIRCUMSTANCES.
[MERRILL LYNCH LOGO]
<PAGE> 69
ADOPTION OF PLAN
- ----------------
The Employer named below hereby establishes or restates a profit-sharing plan
that includes a [X] 401(k), [ ] profit-sharing and/or [ ] thrift plan feature
(the "Plan") by adopting the Merrill Lynch Special Prototype Defined
Contribution Plan and Trust as modified by the terms and provisions of this
Adoption Agreement.
EMPLOYER AND PLAN INFORMATION
- -----------------------------
Employer Name:* NuVision, Inc.
Business Address: C\O Cole Corporate Benefits Department, 5340 Avion Park
Drive
Highland Heights, OH 44143
Telephone Number: (440) 473-2000
Employer Taxpayer ID Number: 38-1412890
Employer Taxable Year ends on: December 31st
Plan Name: Cole National Corporation 401(k) Plan For Employees at Former
AVC/NuVision Locations
Plan Number : 002
<TABLE>
<CAPTION>
401(K) PROFIT- THRIFT
SHARING
<S> <C> <C> <C>
Effective Date of Adoption
or Restatement: 1/1/98 ????? ---/---/---.
------ ----- -----------
Original Effective Date: 1/1/84 ---/---/--- ---/---/---.
------ ----- -----------
</TABLE>
IF THIS PLAN IS A CONTINUATION OR AN AMENDMENT OF A PRIOR PLAN, ALL OPTIONAL
FORMS OF BENEFITS PROVIDED IN THE PRIOR PLAN MUST BE PROVIDED UNDER THIS PLAN TO
ANY PARTICIPANT WHO HAD AN ACCOUNT BALANCE, WHETHER OR NOT VESTED, IN THE PRIOR
PLAN.
- -------------------------------------------------
* If there are any Participating Affiliates in this Plan, list below the proper
name of each Participating Affiliate.
Bell Optical, Inc., American Vision Centers, Inc., AVC of New Jersey, Inc.
- --------------------------------------------------------------------------
?????
- -----
?????
- -----
?????
- -----
2
<PAGE> 70
ARTICLE I. DEFINITIONS
A. "COMPENSATION"
--------------
(1) With respect to each Participant, except as provided below,
Compensation shall mean the (select all those applicable for each
column):
401(k) AND/ PROFIT
OR THRIFT SHARING
[ ] [ ] (a) amount reported in the "Wages Tips and Other
Compensation" Box on Form W-2 for the applicable
period selected in Item 5 below.
[X] [ ] (b) compensation for Code Section 415 safe-harbor
purposes (as defined in Section 3.9.1 (H)(i) of
basic plan document #03) for the applicable period
selected in Item 5 below.
[ ] [ ] (c) amount reported pursuant to Code Section 3401(a)
for the applicable period selected in Item 5
below.
[X] [ ] (d) all amounts received (under either option (a) or
(b) above) for personal services rendered to the
Employer but excluding (select one):
[ ] overtime
[ ] bonuses
[ ] commissions
[ ] amounts in excess of $?????
[X] other (specify) IMPUTED LIFE INSURANCE INCOME, MOVING
COSTS, COMPANY CAR, EDUCATIONAL ASSISTANCE BENEFITS.
(2) Treatment of Elective Contributions (select one):
[X] (a) For purposes of contributions, Compensation shall include
Elective Deferrals and amounts excludable from the gross
income of the Employee under Code Section 125, Code Section
402(e)(3), Code Section 402(h) or Code Section 403(b)
("elective contributions").
(b) For purposes of contributions, Compensation shall not include
"elective contributions."
(3) CODA Compensation (select one):
[X] (a) For purposes of the ADP and ACP Tests, Compensation shall
include "elective contributions."
(b) For purposes of the ADP and ACP Tests, Compensation shall
not include "elective contributions."
3
<PAGE> 71
(4) With respect to Contributions to an Employer Contributions
Account, Compensation shall include all Compensation (select
one):
[ ] (a) during the Plan Year in which the Participant enters the
Plan.
[X] (b) after the Participant's Entry Date.
(5) The applicable period for determining Compensation shall be
(select one):
[X] (a) the Plan Year.
[ ] (b) the Limitation Year.
[ ] (c) the consecutive 12-month period ending on ?????.
B. "DISABILITY"
------------
(1) Definition
----------
Disability shall mean a condition which results in the Participant's
(select one):
[ ] (a) inability to engage in any substantial gainful activity
by reason of any medically determinable physical or
mental impairment that can be expected to result in
death or which has lasted or can be expected to last for
a continuous period of not less than 12 months.
[X] (b) total and permanent inability to meet the requirements
of the Participant's customary employment which can be
expected to last for a continuous period of not less
than 12 months.
[ ] (c) qualification for Social Security disability benefits.
[ ] (d) qualification for benefits under the Employer's
long-term disability plan.
(2) Contributions Due to Disability (select one):
-------------------------------
[X] (a) No contributions to an Employer Contributions Account
will be made on behalf of a Participant due to his or
her Disability.
[ ] (b) Contributions to an Employer Contributions Account will
be made on behalf of a Participant due to his or her
Disability PROVIDED THAT: the Employer elected option
(a) or (c) above as the definition of Disability,
contributions are not made on behalf of a Highly
Compensated Employee, the contribution is based on the
Compensation each such Participant would have received
for the Limitation Year if the Participant had been paid
at the rate of Compensation paid immediately before his
or her Disability, and contributions made on behalf of
such Participant will be nonforfeitable when made.
4
<PAGE> 72
C "EARLY RETIREMENT" is (select one):
---------------------
[X] (1) not permitted.
[ ] (2) permitted if a Participant terminates Employment before Normal
Retirement Age and has (select one):
[ ] (a) attained age ?????.
[ ] (b) attained age ????? and completed ????? Years
of Service.
[ ] (c) attained age ????? and completed ????? Years
of Service as a Participant.
D. "ELIGIBLE EMPLOYEES" (select one):
--------------------
[ ] (1) All Employees are eligible to participate in the Plan.
[X] (2) The following Employees are not eligible to participate in the
Plan (select all those applicable):
[ ] (a) Employees included in a unit of Employees covered by a
collective bargaining agreement between the Employer or
a Participating Affiliate and the Employee
representatives (not including any organization more
than half of whose members are Employees who are owners,
officers, or executives of the Employer or Participating
Affiliate) in the negotiation of which retirement
benefits were the subject of good faith bargaining,
unless the bargaining agreement provides for
participation in the Plan.
[X] (b) non-resident aliens who received no earned income from
the Employer or a Participating Affiliate which
constitutes income from sources within the United
States.
[ ] (c) Employees of an Affiliate.
[X] (d) Employees employed in or by the following specified
division, plant, location, job category or other
identifiable individual or group of Employees: Resident
aliens who received earned income from the Employer or a
Participating Affiliate which constitutes income from
within the U.S.; persons who perform services for the
Employer or a Participating Affiliate under a lease or
sublease arrangement and are not compensated directly by
the Employer or a Participating Affiliate for their
services including, without limitation, professional
optometrists performing services under a lease or
sublease arrangement; Employees included in a unit of
Employees covered by a collective bargaining agreement
between the Employer or Participating Affiliate and the
Employee representatives (not including any organization
more than half of whose members are Employees who are
owners, officers, or executives of the Employer or
Participating Affiliate) in the negotiation of which
retirement benefits were the subject of good faith
bargaining, except for Employees covered by the
collective bargaining agreement between NuVision, Inc.
and its subsidiary Bell Optical, Inc. And United
Automobile, Aerospace, and Agricultural Implement
Workers of America (UAW), and its Local union 1811;
persons who are not classified as Employees by the
Employer or a Participating Affiliate; and persons who
are eligible to make Elective Deferrals to the Cole
National Corporation 401(k) Plan or the Cole National
Corporation 401(k) Plan for Employees at Pearle Vision
Centers.??????????????
5
<PAGE> 73
E. "ENTRY DATE"
------------
Entry Date shall mean (select as applicable):
401(K)
AND/OR PROFIT-
THRIFT SHARING
[ ] [ ] (1) If the initial Plan Year is less than twelve
months, the ????? day of ????? and thereafter:
[ ] [ ] (2) the first day of the Plan Year following the date
the Employee meets the eligibility requirements. If
the Employer elects this option (2) establishing
only one Entry Date, the eligibility "age and
service" requirements elected in Article II must be
no more than age 20-1/2 and 6 months of service.
[X] [ ] (3) the first day of the month following the date the
Employee meets the eligibility requirements.
[ ] [ ] (4) the first day of the Plan Year and the first day of
the seventh month of the Plan Year following the
date the Employee meets the eligibility
requirements.
[ ] [ ] (5) the first day of the Plan Year, the first day of
the fourth month of the Plan Year, the first day of
the seventh month of the Plan Year, and the first
day of the tenth month of the Plan Year following
the date the Employee meets the eligibility
requirements.
[ ] [ ] (6) other: ?????
provided that the Entry Date or Dates selected are
no later than any of the options above.
F. "HOURS OF SERVICE"
------------------
Hours of Service for the purpose of determining a Participant's Period of
Severance and Year of Service shall be determined on the basis of the
method specified below:
(1) ELIGIBILITY SERVICE: For purposes of determining whether a
Participant has satisfied the eligibility requirements, the
following method shall be used (select one):
401(k)
AND/OR PROFIT-
THRIFT SHARING
[ ] [ ] (a) elapsed time method
[X] [ ] (b) hourly records method
6
<PAGE> 74
(2) VESTING SERVICE: A Participant's nonforfeitable interest shall be
determined on the basis of the method specified below (select one):
[ ](a) elapsed time method
[X](b) hourly records method
[ ](c) If this item (c) is checked, the Plan only provides
for contributions that are always 100% vested and this
item (2) will not apply.
(3) HOURLY RECORDS: For the purpose of determining Hours of Service
under the hourly record method (select one):
[X](a) only actual hours for which an Employee is paid or
entitled to payment shall be counted.
[ ](b) an Employee shall be credited with 45 Hours of Service if
such Employee would be credited with at least 1 Hour of
Service during the week.
G. "INTEGRATION LEVEL"
-------------------
[X](1) This Plan is not integrated with Social Security.
[ ](2) This Plan is integrated with Social Security. The
Integration Level shall be (select one):
[ ](a) the Taxable Wage Base.
[ ](b) $????? (a dollar amount less than the Taxable
Wage Base).
[ ](c) ?????% of the Taxable Wage Base (not to exceed
100%).
[ ](d) the greater of $10,000 or 20% of the Taxable Wage
Base.
H. "LIMITATION COMPENSATION"
-------------------------
For purposes of Code Section 415, Limitation Compensation shall be
compensation as determined for purposes of (select one):
[X](1) Code Section 415 Safe-Harbor as defined in Section
3.9.1(H)(i) of basic plan document #03.
[ ](2) the "Wages, Tips and Other Compensation" Box on Form W-2.
[ ](3) Code Section 3401(a) Federal Income Tax Withholding.
I. "LIMITATION YEAR"
-----------------
For purposes of Code Section 415, the Limitation Year shall be (select
one):
[X](1) the Plan Year.
[ ](2) the twelve consecutive month period ending on the ????? day of
the month of ?????.
7
<PAGE> 75
J. "NET PROFITS" are (select one):
-------------
[X](1) not necessary for any contribution.
[ ](2) necessary for (select all those applicable):
[ ](a) Profit-Sharing Contributions.
[ ](b) Matching 401(k) Contributions.
[ ](c) Matching Thrift Contributions.
K. "NORMAL RETIREMENT AGE"
-----------------------
Normal Retirement Age shall be (select one):
[X](1) attainment of age 65 (not more than 65) by the Participant.
[ ](2) attainment of age ????? (not more than 65) by the Participant or
the ????? anniversary (not more than the 5th) of the first day of
the Plan Year in which the Eligible Employee became a Participant,
whichever is later.
[ ](3) attainment of age ????? (not more than 65) by the Participant or
the ????? anniversary (not more than the 5th) of the first day on
which the Eligible Employee performed an Hour of Service, whichever
is later.
L. "PARTICIPANT DIRECTED ASSETS" are:
----------------------------------
401(k) AND/ PROFIT-
OR THRIFT SHARING
[X] [ ] (1) permitted.
(2) not permitted.
M. "PLAN YEAR"
-----------
The Plan Year shall end on the 31ST day of DECEMBER.
N. "PREDECESSOR SERVICE"
---------------------
Predecessor service will be credited (select one):
[ ](1) only as required by the Plan.
[X](2) to include, in addition to the Plan requirements and subject to the
limitations set forth below, service with the following predecessor
employer(s) determined as if such predecessors were the Employer:
PEARLE VISION, INC.
8
<PAGE> 76
Service with such predecessor employer applies [select either or
both (a) and/or (b); (c) is only available in addition to (a)
and/or (b)]:
[X](a) for purposes of eligibility to participate;
[X](b) for purposes of vesting;
[X](c) except for the following service: Service after
1/1/98.
O. "VALUATION DATE"
----------------
Valuation Date shall mean (select one for each column, as applicable):
401(k) AND/ PROFIT-
OR THRIFT SHARING
(1) the last business day of each month.
(2) the last business day of each quarter within the
Plan Year.
(3) the last business day of each semi-annual period
within the Plan Year.
(4) the last business day of the Plan Year.
[X] [ ] (5) other: DAILY.
ARTICLE II. PARTICIPATION
-------------
PARTICIPATION REQUIREMENTS
--------------------------
An Eligible Employee must meet the following requirements to become a
Participant (select one or more for each column, as applicable):
401(k) AND/ PROFIT-
OR THRIFT SHARING
[ ] [ ](1) Performance of one Hour of Service.
[ ] [ ](2) Attainment of age ????? (maximum 20 1/2) and completion of
?????(not more than 1/2) Years of Service. If this item is
selected, no Hours of Service shall be counted.
[X] [ ](3) Attainment of age 21 (maximum 21) and completion of 1 Year(s)
of Service. If more than one Year of Service is selected, the
immediate 100% vesting schedule must be selected in Article VII
of this Adoption Agreement.
9
<PAGE> 77
[ ] [ ](4) Attainment of age ????? (maximum 21) and completion of ?????
Years of Service. If more than one Year of Service is selected,
the immediate 100% vesting schedule must be selected in Article
VII of this Adoption Agreement.
[ ] [ ](5) Each Employee who is an Eligible Employee on ????? will be
deemed to have satisfied the participation requirements on the
effective date without regard to such Eligible Employee's
actual age and/or service.
ARTICLE III. 401(k) CONTRIBUTIONS AND ACCOUNT ALLOCATION
-------------------------------------------
A. ELECTIVE DEFERRALS
------------------
If selected below, a Participant's Elective Deferrals will be (select all
applicable):
[X] (1) a dollar amount or a percentage of Compensation, as specified by
the Participant on his or her 401(k) Election form, which may not
exceed 17 % of his or her Compensation.
[ ] (2) with respect to bonuses, such dollar amount or percentage as
specified by the Participant on his or her 401(k) Election form
with respect to such bonus.
B. MATCHING 401(K) CONTRIBUTIONS
-----------------------------
If selected below, the Employer may make Matching 401(k) Contributions
for each Plan Year (select one):
[X] (1) Discretionary Formula:
Discretionary Matching 401(k) Contribution equal to
such a dollar amount or percentage of Elective
Deferrals, as determined by the Employer, which shall
be allocated (select one):
[X](a) based on the ratio of each Participant's Elective
Deferral for the Plan Year to the total Elective
Deferrals of all Participants for the Plan Year. If
inserted, Matching 40l(k) Contributions shall be
subject to a maximum amount of $????? for each
Participant or ????? % of each Participant's
Compensation.
10
<PAGE> 78
[ ](b) in an amount not to exceed ?????% of each
Participant's first ????? % of Compensation
contributed as Elective Deferrals for the Plan Year.
If any Matching 401(k) Contribution remains, it is
allocated to each such Participant in an amount not
to exceed ?????% of the next ?????% of each
Participant's Compensation contributed as Elective
Deferrals for the Plan Year.
Any remaining Matching 401(k) Contribution shall be allocated to each such
Participant in the ratio that such Participant's Elective Deferral for the
Plan Year bears to the total Elective Deferrals of all such Participants for
the Plan Year. If inserted, Matching 40l(k) Contributions shall be subject
to a maximum amount of $????? for each Participant or ?????% of each
Participant's Compensation.
[X](2) Nondiscretionary Formula:
A nondiscretionary Matching 401(k) Contribution for each Plan
Year equal to (select one):
[X] (a) 10% of each Participant's Compensation
contributed as Elective Deferrals. If inserted,
Matching 40l(k) Contributions shall be subject to
a maximum amount of $ ????? for each Participant
or ?????% of each Participant's Compensation.
[ ] (b) ?????% of the first ?????% of the Participant's
Compensation contributed as Elective Deferrals
and ?????% of the next ?????% of the
Participant's Compensation contributed as
Elective Deferrals. If inserted, Matching 40l(k)
Contributions shall be subject to a maximum
amount of $????? for each Participant or ?????%
of each Participant's Compensation.
C. PARTICIPANTS ELIGIBLE FOR MATCHING 401(k) CONTRIBUTION ALLOCATION
-----------------------------------------------------------------
The following Participants shall be eligible for an allocation to their
Matching 401(k) Contributions Account (select all those applicable):
[ ](1) Any Participant who makes Elective Deferrals.
[X](2) Any Participant who satisfies those requirements elected by the
Employer for an allocation to his or her Employer Contributions
Account as provided in Article IV Section C.
[ ](3) Solely with respect to a Plan in which Matching 401(k)
Contributions are made quarterly (or on any other regular
interval that is more frequent than annually) any Participant
whose 401(k) Election is in effect throughout such entire quarter
(or other interval).
11
<PAGE> 79
D. QUALIFIED MATCHING CONTRIBUTIONS
--------------------------------
If selected below, the Employer may make Qualified Matching Contributions
for each Plan Year (select all those applicable):
(1) In its discretion, the Employer may make Qualified
Matching Contributions on behalf of (select one):
[ ](a) all Participants who make Elective Deferrals
in that Plan Year.
[X](b) only those Participants who are Nonhighly
Compensated Employees and who make Elective
Deferrals for that Plan Year.
(2) Qualified Matching Contributions will be contributed and
allocated to each Participant in an amount equal to:
[ ](a) ?????% of the Participant's Compensation
contributed as Elective Deferrals. If
inserted, Qualified Matching Contributions
shall not exceed ?????% of the Participant's
Compensation.
[X](b) Such an amount, determined by the Employer,
which is needed to meet the ACP Test.
(3) In its discretion, the Employer may elect to designate all
or any part of Matching 401(k) Contributions as Qualified
Matching Contributions that are taken into account as
Elective Deferrals -- included in the ADP Test and excluded
from the ACP Test -- on behalf of (select one):
[ ](a) all Participants who make Elective Deferrals
for that Plan Year.
[X](b) Only Participants who are Nonhighly
Compensated Employees who make Elective
Deferrals for that Plan Year.
E. QUALIFIED NONELECTIVE CONTRIBUTIONS
-----------------------------------
If selected below, the Employer may make Qualified Nonelective
Contributions for each Plan Year (select all those applicable):
(1) In its discretion, the Employer may make Qualified Nonelective
Contributions on behalf of (select one):
[ ] (a) all Eligible Participants.
[X] (b) only Eligible Participants who are Nonhighly
Compensated Employees.
12
<PAGE> 80
(2) Qualified Nonelective Contributions will be contributed
and allocated to each Eligible Participant in an amount
equal to (select one):
[ ](a) ?????% (no more than 15%) of the Compensation
of each Eligible Participant eligible to
share in the allocation.
[X](b) Such an amount determined by the Employer,
which is needed to meet either the ADP Test
or ACP Test.
(3) At the discretion of the Employer, as needed and taken
into account as Elective Deferrals included in the ADP
Test on behalf of (select one):
[ ] (a) all Eligible Participants.
[X] (b) only those Eligible Participants who are
Nonhighly Compensated Employees.
F. ELECTIVE DEFERRALS USED IN ACP TEST (select one):
[X] (1) At the discretion of the Employer, Elective Deferrals may be used to
satisfy the ACP Test.
[ ] (2) Elective Deferrals may not be used to satisfy the ACP Test.
G. MAKING AND MODIFYING A 401(k) ELECTION
An Eligible Employee shall be entitled to increase, decrease or resume
his or her Elective Deferral percentage with the following frequency
during the Plan Year (select one):
[ ](1) annually.
[ ](2) semi-annually.
[ ](3) quarterly.
[ ](4) monthly
[X](5) other (specify): EFFECTIVE AS OF THE FIRST
ADMINISTRATIVELY FEASIBLE PAYROLL PERIOD COINCIDENT WITH OR NEXT
FOLLOWING THE FIRST DAY OF EACH PAY PERIOD.
Any such increase, decrease or resumption shall be effective as of the
first payroll period coincident with or next following the first day of
each period set forth above. A Participant may completely discontinue
making Elective Deferrals at any time effective for the payroll period
after written notice is provided to the Administrator.
13
<PAGE> 81
ARTICLE IV. PROFIT-SHARING CONTRIBUTIONS AND ACCOUNT ALLOCATION
---------------------------------------------------
A. PROFIT-SHARING CONTRIBUTIONS
----------------------------
If selected below, the following contributions for each Plan Year will be
made:
Contributions to Employer Contributions Accounts (select one):
[ ] (a) Such an amount, if any, as determined by the Employer.
[ ] (b) ?????% of each Participant's Compensation.
B. ALLOCATION OF CONTRIBUTIONS TO EMPLOYER CONTRIBUTIONS ACCOUNTS (select
one):
[ ](1) Non-Integrated Allocation
The Employer Contributions Account of each Participant
eligible to share in the allocation for a Plan Year shall
be credited with a portion of the contribution, plus any
forfeitures if forfeitures are reallocated to
Participants, equal to the ratio that the Participant's
Compensation for the Plan Year bears to the Compensation
for that Plan Year of all Participants entitled to share
in the contribution.
[ ](2) Integrated Allocation
Contributions to Employer Contributions Accounts with
respect to a Plan Year, plus any forfeitures if
forfeitures are reallocated to Participants, shall be
allocated to the Employer Contributions Account of each
eligible Participant as follows:
(a) First, in the ratio that each such eligible
Participant's Compensation for the Plan
Year bears to the Compensation for that
Plan Year of all eligible Participants but
not in excess of 3% of each Participant's
Compensation.
(b) Second, any remaining contributions and
forfeitures will be allocated in the ratio
that each eligible Participant's
Compensation for the Plan Year in excess of
the Integration Level bears to all such
Participants' excess Compensation for the
Plan Year but not in excess of 3%.
14
<PAGE> 82
(c) Third, any remaining contributions and
forfeitures will be allocated in the ratio
that the sum of each Participant's
Compensation and Compensation in excess of
the Integration Level bears to the sum of
all Participants' Compensation and
Compensation in excess of the Integration
Level, but not in excess of the Maximum
Profit-Sharing Disparity Rate (defined
below).
(d) Fourth, any remaining contributions or
forfeitures will be allocated in the ratio
that each Participant's Compensation for
that year bears to all Participants'
Compensation for that year.
The Maximum Profit-Sharing Disparity Rate is
equal to the lesser of:
(a) 2.7% or
(b) The applicable percentage determined in
accordance with the following table:
<TABLE>
<CAPTION>
IF THE INTEGRATION
LEVEL IS (AS A % OF THE APPLICABLE
THE TAXABLE WAGE BASE ("TWB")). PERCENTAGE IS:
<S> <C>
20% (or $10,000 if greater)
or less of the TWB 2.7%
More than 20% (but not less
than $10,001) but not more
than 80% of the TWB 1.3%
More than 80% but not less
than 100% of the TWB 2.4%
100% of the TWB 2.7%
</TABLE>
15
<PAGE> 83
C. PARTICIPANTS ELIGIBLE FOR EMPLOYER CONTRIBUTION ALLOCATION
----------------------------------------------------------
The following Participants shall be eligible for an allocation to their
Employer Contributions Account (select all those applicable):
[ ] (1) Any Participant who was employed during the Plan Year.
[ ] (2) In the case of a Plan using the hourly record method for
determining Vesting Service, any Participant who was
credited with a Year of Service during the Plan Year.
[X] (3) Any Participant who was employed on the last day of the
Plan Year.
[X] (4) Any Participant who was on a leave of absence on the last
day of the Plan Year.
[X] (5) Any Participant who during the Plan Year died or became
Disabled while an Employee or terminated employment after
attaining Normal Retirement Age.
[ ] (6) Any Participant who was credited with at least 501 Hours
of Service whether or not employed on the last day of the
Plan Year.
[ ] (7) Any Participant who was credited with at least 1,000 Hours
of Service and was employed on the last day of the Plan
Year.
ARTICLE V. THRIFT CONTRIBUTIONS
--------------------
THIS ARTICLE V IS NOT APPLICABLE
A. EMPLOYEE THRIFT CONTRIBUTIONS
-----------------------------
If selected below, Employee Thrift Contributions, which are required for
Matching Thrift Contributions, may be made by a Participant in an amount
equal to (select one):
[ ] (1) A dollar amount or a percentage of the Participant's
Compensation which may not be less than ?????% nor may not exceed
?????% of his or her Compensation.
[ ] (2) An amount not less than ?????% of and not more than ?????% of
each Participant's Compensation.
16
<PAGE> 84
B. MAKING AND MODIFYING AN EMPLOYEE THRIFT CONTRIBUTION ELECTION
-------------------------------------------------------------
A Participant shall be entitled to increase, decrease or resume his or
her Employee Thrift Contribution percentage with the following frequency
during the Plan Year (select one):
[ ](1) annually
[ ](2) semi-annually
[ ](3) quarterly
[ ](4) monthly
[ ](5) other (specify): ?????.
Any such increase, decrease or resumption shall be effective as of the
first payroll period coincident with or next following the first day of
each period set forth above. A Participant may completely discontinue
making Employee Thrift Contributions at any time effective for the
payroll period after written notice is provided to the Administrator.
C. THRIFT MATCHING CONTRIBUTIONS
-----------------------------
If selected below, the Employer will make Matching Thrift Contributions
for each Plan Year (select one):
[ ](1) Discretionary Formula:
A discretionary Matching Thrift Contribution equal to such a
dollar amount or percentage as determined by the Employer,
which shall be allocated (select one):
[ ](a) based on the ratio of each Participant's Employee
Thrift Contribution for the Plan Year to the total
Employee Thrift Contributions of all Participants for
the Plan Year. If inserted, Matching Thrift
Contributions shall be subject to a maximum amount of
$????? for each Participant or ?????% of each
Participant's Compensation.
[ ](b) in an amount not to exceed ?????% of each
Participant's first ?????% of Compensation
contributed as Employee Thrift Contributions for the
Plan Year. If any Matching Thrift Contribution
remains, it is allocated to each such Participant in
an amount not to exceed ?????% of the next ?????% of
each Participant's Compensation contributed as
Employee Thrift Contributions for the Plan Year.
Any remaining Matching Thrift Contribution shall be allocated
to each such Participant in the ratio that such Participant's
Employee Thrift Contributions for the Plan Year bears to the
total Employee Thrift Contributions of all such Participants
for the Plan Year. If inserted, Matching Thrift Contributions
shall be subject to a maximum amount of $????? for each
Participant or ?????% of each Participant's Compensation.
17
<PAGE> 85
[ ](2) Nondiscretionary Formula:
A nondiscretionary Matching Thrift Contribution for each Plan
Year equal to (select one):
[ ] (a) ?????% of each Participant's Compensation contributed as
Employee Thrift Contributions. If inserted, Matching
Thrift Contributions shall be subject to a maximum
amount of $ ????? for each Participant or ?????% of each
Participant's Compensation.
[ ] (b) ?????% of the first ?????% of the Participant's
Compensation contributed as Employee Thrift
Contributions and ?????% of the next ?????% of the
Participant's Compensation contributed as Employee
Thrift Contributions. If inserted, Matching Thrift
Contributions shall be subject to a maximum amount of
$????? for each Participant or ?????% of each
Participant's Compensation.
D. QUALIFIED MATCHING CONTRIBUTIONS
--------------------------------
If selected below, the Employer may make Qualified Matching Contributions
for each Plan Year (select all those applicable):
(1) In its discretion, the Employer may make Qualified Matching
Contributions on behalf of (select one):
[ ] (a) all Participants who make Employee Thrift
Contributions.
[ ] (b) only those Participants who are Nonhighly
Compensated Employees and who make Employee
Thrift Contributions.
(2) Qualified Matching Contributions will be contributed and
allocated to each Participant in an amount equal to:
[ ] (a) ?????% of the Participant's Employee Thrift
Contributions. If inserted, Qualified
Matching Contributions shall not exceed
?????% of the Participant's Compensation.
[ ] (b) such an amount, determined by the Employer,
which is needed to meet the ACP Test.
ARTICLE VI. PARTICIPANT CONTRIBUTIONS
-------------------------
PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS
-------------------------------------------------
Participant Voluntary Nondeductible Contributions are (select one):
[ ] (a) permitted.
[X] (b) not permitted.
18
<PAGE> 86
ARTICLE VII. VESTING
-------
A. EMPLOYER CONTRIBUTION ACCOUNTS
------------------------------
(1) A Participant shall have a vested percentage in his or her Profit-Sharing
Contributions, Matching 401(k) Contributions and/or Matching Thrift
Contributions, if applicable, in accordance with the following schedule
(Select one):
MATCHING 401(k)
AND/OR MATCHING
THRIFT PROFIT-SHARING
CONTRIBUTIONS CONTRIBUTIONS
- ------------- -------------
[ ] [ ] (a) 100% vesting immediately upon participation.
[ ] [ ] (b) 100% after ????? (not more than 5) years of
Vesting Service.
[X] [ ] (c) Graded vesting schedule:
25% ?????% after 1 year of Vesting Service;
------ ------
50% ?????% after 2 years of Vesting Service;
----- ------
75% ?????% (not less than 20%) after 3 years of Vesting
----- ------ Service;
100% ?????% (not less than 40%) after 4 years of Vesting
----- ------ Service;
100% ?????% (not less than 60%) after 5 years of Vesting
----- ------ Service;
100% ?????% (not less than 80%) after 6 years of Vesting
----- ------ Service;
100% after 7 years of Vesting Service.
19
<PAGE> 87
(2) Top Heavy Plan
MATCHING 401(K)
AND/OR MATCHING
THRIFT PROFIT-SHARING
CONTRIBUTIONS CONTRIBUTIONS
- ------------- -------------
Vesting Schedule (Select one):
[ ] [ ] (a) 100% vesting immediately upon participation.
[ ] [ ] (b) 100% after ????? (not more than 3) years of
Vesting Service.
[X] [ ] (c) Graded vesting schedule:
25% ?????% after 1 year of Vesting Service;
- ------ ------
50% ?????% (not less than 20%) after 2 years of Vesting
- ------ ------ Service;
75% ?????% (not less than 40%) after 3 years of Vesting
- ------ ------ Service;
100% ?????% (not less than 60%) after 4 years of Vesting
- ------ ------ Service;
100% ?????% (not less than 80%) after 5 years of Vesting
- ------ ------ Service;
100% after 6 years of Vesting Service.
Top Heavy Ratio:
(a) If the adopting Employer maintains or has ever maintained a
qualified defined benefit plan, for purposes of establishing
present value to compute the top-heavy ratio, any benefit shall
be discounted only for mortality and interest based on the
following:
Interest Rate: 8 %
---
Mortality Table: UP '84
--------
(b) For purposes of computing the top-heavy ratio, the valuation
date shall be the last business day of each Plan Year.
20
<PAGE> 88
B. ALLOCATION OF FORFEITURES
-------------------------
Forfeitures shall be (select one from each applicable column):
MATCHING 401(k)
AND/OR MATCHING PROFIT-SHARING
THRIFT CONTRIBUTIONS CONTRIBUTIONS
- -------------------- -------------
[X] [ ](1) used to reduce Employer contributions for
succeeding Plan Year.
[ ] [ ](2) allocated in the succeeding Plan Year in the
ratio which the Compensation of each
Participant for the Plan Year bears to the
total Compensation of all Participants
entitled to share in the Contributions. If the
Plan is integrated with Social Security,
forfeitures shall be allocated in accordance
with the formula elected by the Employer.
C. VESTING SERVICE
---------------
For purposes of determining Years of Service for Vesting Service [select
(1) or (2) and/or (3)]:
[X] (1) All Years of Service shall be included.
[ ] (2) Years of Service before the Participant attained age 18 shall be
excluded.
[ ] (3) Service with the Employer prior to the effective date of the
Plan shall be excluded.
ARTICLE VIII. DEFERRAL OF BENEFIT DISTRIBUTIONS,
IN-SERVICE WITHDRAWALS AND LOANS
A. DEFERRAL OF BENEFIT DISTRIBUTIONS
401(k) AND/ PROFIT-
OR THRIFT SHARING
--------- -------
[ ] [ ] If this item is checked, a Participant's vested
benefit in his or her Employer Accounts shall be payable as soon as
practicable after the earlier of: (1) the date the Participant
terminates Employment due to Disability or (2) the end of the Plan Year
in which a terminated Participant attains Early Retirement Age, if
applicable, or Normal Retirement Age.
21
<PAGE> 89
B. IN-SERVICE DISTRIBUTIONS
[X] (1) In-service distributions may be made from any of the
Participant's vested Accounts, at any time upon or after the
occurrence of the following events (select all applicable):
[X] (a) a Participant's attainment of age 59-1/2.
[X] (b) due to hardships as defined in Section 5.9 of the Plan.
[ ] (2) In-service distributions are not permitted.
C. LOANS ARE:
----------
401(k) AND/ PROFIT-
OR THRIFT SHARING
- --------- -------
[X] [ ] (1) permitted.
[ ] [ ] (2) not permitted.
ARTICLE IX. GROUP TRUST
-----------
[ ] If this item is checked, the Employer elects to establish a Group Trust
consisting of such Plan assets as shall from time to time be transferred
to the Trustee pursuant to Article X of the Plan. The Trust Fund shall be
a Group Trust consisting of assets of this Plan plus assets of the
following plans of the Employer or of an Affiliate: ?????
ARTICLE X. MISCELLANEOUS
-------------
A. IDENTIFICATION OF SPONSOR
-------------------------
The address and telephone number of the Sponsor's authorized representative
is 800 Scudders Mill Road, Plainsboro, New Jersey 08536; (609) 282-2272.
This authorized representative can answer inquiries regarding the adoption
of the Plan, the intended meaning of any Plan provisions, and the effect of
the opinion letter.
The Sponsor will inform the adopting Employer of any amendments made to the
Plan or the discontinuance or abandonment of the Plan.
22
<PAGE> 90
B. PLAN REGISTRATION
-----------------
1. Initial Registration
--------------------
This Plan must be registered with the Sponsor, Merrill Lynch,
Pierce, Fenner & Smith Incorporated, in order to be considered a
Prototype Plan by the Sponsor. Registration is required so that the
Sponsor is able to provide the Administrator with documents, forms
and announcements relating to the administration of the Plan and
with Plan amendments and other documents, all of which relate to
administering the Plan in accordance with applicable law and
maintaining compliance of the Plan with the law.
The Employer must complete and sign the Adoption Agreement. Upon
receipt of the Adoption Agreement, the Plan will be registered as a
Prototype Plan of Merrill Lynch, Pierce, Fenner & Smith
Incorporated. The Adoption Agreement will be countersigned by an
authorized representative and a copy of the countersigned Adoption
Agreement will be returned to the Employer.
2. Registration Renewal
--------------------
Annual registration renewal is required in order for the Employer to
continue to receive any and all necessary updating documents. There
is an annual registration renewal fee in the amount set forth with
the initial registration material. The adopting Employer authorizes
Merrill Lynch, Pierce, Fenner & Smith Incorporated, to debit the
account established for the Plan for payment of agreed upon annual
fee; provided, however, if the assets of an account are invested
solely in Participant-Directed Assets, a notice for this annual fee
will be sent to the Employer annually. The Sponsor reserves the
right to change this fee from time to time and will provide written
notice in advance of any change.
C. PROTOTYPE REPLACEMENT PLAN
--------------------------
This Adoption Agreement is a replacement prototype plan for the (1)
Merrill Lynch Special Prototype Defined Contribution Plan and Trust -
401(k) Plan #03-004 and (2) Merrill Lynch Asset Management, Inc., Special
Prototype Defined Contribution Plan and Trust - 401(k) Plan Adoption
Agreement #03-004.
D. RELIANCE
--------
The adopting Employer may not rely on the opinion letter issued by the
National Office of the Internal Revenue Service as evidence that this
Plan is qualified under Code Section 401. In order to obtain reliance,
the Employer must apply to the appropriate Key District Director of the
Internal Revenue Service for a determination letter with respect to the
Plan.
23
<PAGE> 91
EMPLOYER'S SIGNATURE
--------------------
Name of Employer: [X]
----------------------------------------
By: [X]
------------------------------------------------------
Authorized Signature
[X]
------------------------------------------------------
Print Name
[X]
------------------------------------------------------
Title
Dated: , 19 [X]
----------------------------- --------
TO BE COMPLETED BY MERRILL LYNCH:
- ---------------------------------
SPONSOR ACCEPTANCE:
- -------------------
Subject to the terms and conditions of the Prototype Plan and this Adoption
Agreement, this Adoption Agreement is accepted by Merrill Lynch, Pierce, Fenner
& Smith Incorporated as the Prototype Sponsor.
Authorized Signature:
-----------------------------------------------------------
24
<PAGE> 92
TRUSTEE(S) SIGNATURE
--------------------
This Trustee Acceptance is to be completed only if the Employer appoints one or
more Trustees and does not appoint a Merrill Lynch Trust Company as Trustee.
The undersigned hereby accept all of the terms, conditions, and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group Trust
in this Adoption Agreement, the undersigned Trustee(s) shall be the Trustee(s)
of the Group Trust.
AS TRUSTEE:
[X]
- ------------------------------------ -------------------------------------
(Signature) (print or type name)
[X]
- ------------------------------------ -------------------------------------
(Signature) (print or type name)
[X]
- ------------------------------------ -------------------------------------
(Signature) (print or type name)
[X]
- ------------------------------------ -------------------------------------
(Signature) (print or type name)
DATED: , 19 [X]
------------------------ --------
25
<PAGE> 93
THE MERRILL LYNCH TRUST COMPANIES AS TRUSTEE
--------------------------------------------
This Trustee Acceptance and designation of Investment Committee are to be
completed only when a Merrill Lynch Trust Company is appointed as Trustee.
TO BE COMPLETED BY THE EMPLOYER:
DESIGNATION OF INVESTMENT COMMITTEE
The Investment Committee for the Plan is (print or type names):
Name:
----------------------------------------------------------------------
Name:
----------------------------------------------------------------------
Name:
----------------------------------------------------------------------
Name:
----------------------------------------------------------------------
TO BE COMPLETED BY MERRILL LYNCH TRUST COMPANY:
ACCEPTANCE BY TRUSTEE:
The undersigned hereby accept all of the terms, conditions, and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group Trust
in this Adoption Agreement, the undersigned Trustee(s) shall be the Trustee(s)
of the Group Trust.
SEAL MERRILL LYNCH TRUST COMPANY [___________________]
By:
-------------------------------------
DATED: , 19
---------- ----
26
<PAGE> 94
THE MERRILL LYNCH TRUST COMPANIES AS ONE OF THE TRUSTEES
This Trustee Acceptance is to be completed only if, in addition to a
Merrill Lynch Trust Companies as Trustee, the Employer appoints an
additional Trustee of a second trust fund.
The undersigned hereby accept all of the terms, conditions, and
obligations of appointment as Trustee under the Plan. If the Employer has
elected a Group Trust in this Adoption Agreement, the undersigned
Trustee(s) shall be the Trustee(s) of the Group Trust.
AS TRUSTEE
- ------------------------------------ -------------------------------------
(Signature) (print or type name)
DATED: , 19
--------------- ---------
SEAL MERRILL LYNCH TRUST COMPANY [_______________________]
---------------------------------------------------------
DATED: , 19
--------------- ---------
DESIGNATION OF INVESTMENT COMMITTEE
The Investment Committee for the Plan is (print or type names):
Name:
----------------------------------------------------------------------
Name:
----------------------------------------------------------------------
Name:
----------------------------------------------------------------------
Name:
----------------------------------------------------------------------
27
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of this
registration statement.
/s/ Arthur Andersen LLP
Cleveland, Ohio,
November 19, 1997.
<PAGE> 1
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Directors
Pearle, Inc.:
We consent to the use of our report incorporated herein by reference.
/s/ KPMG PEAT MARWICK LLP
Dallas, Texas
November 18, 1997
<PAGE> 1
Exhibit 24.1
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and
directors of Cole National Corporation, a Delaware corporation (the
"Corporation"), hereby constitutes and appoints Jeffrey A. Cole, Wayne L. Mosley
and Leslie D. Dunn, and each of them, his or her true and lawful attorney or
attorneys-in-fact, with full power of substitution and revocation, for him or
her and in his or her name, place, and stead, to sign on his or her behalf as an
officer or director of the Corporation a Registration Statement pursuant to the
Securities Act of 1933 on form S-8 concerning certain Common Stock of the
Corporation to be offered in connection with the Cole National Corporation
401(K) Savings Plan For Employees at Former NuVision Locations, and to sign any
and all amendments or post-effective amendments to such Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission or any state
regulatory authority, granting unto said attorney or attorneys-in-fact, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as they might or could do in person, hereby ratifying and
confirming all that said attorney or attorneys-in-fact or any of them or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the
19th day of November 1997.
/s/ Jeffrey A. Cole /s/ Brian B. Smith
- ------------------------------------- ---------------------------------------
Jeffrey A. Cole Brian B. Smith
Chairman, Chief Executive Officer, President, Chief Operating Officer
Chief Financial Officer and Director and Director
/s/ Wayne L. Mosley /s/ Timothy F. Finley
- ------------------------------------- ---------------------------------------
Wayne L. Mosley Timothy F. Finley
Vice President, Controller, Assistant Director
Treasurer and Assistant Secretary
/s/ Peter V. Handal /s/ Irwin N. Gold
- ------------------------------------- ---------------------------------------
Peter V. Handal Irwin N. Gold
Director Director
/s/ Charles A. Ratner /s/ Walter J. Salmon
- ------------------------------------- ---------------------------------------
Charles A. Ratner Walter J. Salmon
Director Director
