<PAGE> 1
As filed with the Securities and Exchange Commission on May 16, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
REMEC, INC.
-------------------------------
(Exact Name of Registrant as
Specified in Its Charter)
California 95-3814301
- ------------------ -----------------
(State or Other (I.R.S. Employer
Jurisdiction of Identification
Incorporation or No.)
Organization)
9404 Chesapeake Drive, San Diego, California 92123
------------------------------------------------
(Address of Principal Executive Offices)
REMEC, Inc. Profit Sharing 401(k) Plan
------------------------------------------
(Full Title of the Plan)
Ronald E. Ragland
Chairman of the Board and Chief Executive Officer
9404 Chesapeake Drive
San Diego, California 92123
----------------------------------------------
(Name and Address of Agent For Service)
(619) 560-1301
-----------------------------------
(Telephone Number, Including Area
Code, of Agent For Service)
Copy to:
Victor A. Hebert, Esq.
Heller Ehrman White & McAuliffe
333 Bush Street
San Francisco, California 94104
(415) 772-6000
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
Title of Securities to be Price Offering Registration
to be Registered Registered per Share(1) Price Fee
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value $.01(2) 400,000 $26 $10,400,000 $3,151.50
=========================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the amount of registration
fee pursuant to Rule 457(c) under the Securities Act, as amended, based on
the last sale reported of the Registrant's Common Stock on the Nasdaq
National Market on May 14, 1997.
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed or to be filed with the Securities and
Exchange Commission (the "Commission") by REMEC, Inc. (the "Registrant") are
incorporated by reference in this registration statement:
(a) The Registrant's latest annual report (Form 10-K) filed pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or the latest prospectus filed pursuant to Rule 424(b) under
the Securities Act of 1933, as amended (the "Securities Act") that contains
audited financial statements for the Registrant's latest fiscal year for which
such statements have been filed;
(b) All other fiscal reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by
the annual report or prospectus referred to (a) above; and
(c) The description of the Common Stock of the Registrant contained in the
registration statement filed under the Exchange Act registering such Common
Stock under Section 12 of the Exchange Act.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold should be
deemed to be incorporated by reference in this registration statement and to be
part thereof from the date of filing of such documents.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant has the power to indemnify its officers and directors
against liability for certain acts pursuant to Section 317 of the California
Corporations Code. Articles Fifth and Sixth of the Registrant's Amended and
Restated Articles of Incorporation provide as follows:
"Fifth: The liability of directors of this Corporation for monetary
damages shall be eliminated to the fullest extent permissible under
California law.
"Sixth: This Corporation is authorized to provide indemnification of
agents (as defined in Section 317 of the California Corporations Code) for
breach of duty to this Corporation and its shareholders through bylaw
provisions, or through agreements with
II-1
<PAGE> 3
the agents, or otherwise, in excess of the indemnification otherwise permitted
by Section 317 of the California Corporations Code, subject to the limits on
such excess indemnification set forth in Section 204 of the Code."
In addition, Article V of the Registrant's Bylaws provides that the
Registrant shall indemnify its directors and executive officers to the fullest
extent not prohibited by California Corporations Code and provides for the
advancement of expenses upon a receipt of an undertaking to repay such amounts
if the person is determined ultimately not to be entitled to indemnification.
The Registrant has entered into Indemnification Agreements with its
officers and directors.
ITEM 8. EXHIBITS
5.1 Undertaking re Status of Favorable Determination Letter
Covering the Plan.
The Registrant has received a favorable determination letter from
the Internal Revenue Service (the "IRS") concerning the REMEC,
Inc. Profit Sharing 401(k) Plan (the "Plan") under Section 401(a)
and related provisions of the Internal Revenue Code of 1986, as
amended. In addition, the Registrant will submit any future
amendments to the Plan to the IRS for a favorable determination
that the Plan, as amended, continues to so qualify.
23.2 Consent of Ernst & Young LLP, Independent Auditors
24 Power of Attorney (See pages II-5 - II-7)
99.1 REMEC, Inc. Profit Sharing 401(k) Plan
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective
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<PAGE> 4
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs A(1)(i) and A(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registrations statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining liability under the Securities Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act that is
incorporated by reference in the registration statement shall be deemed a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in San Diego, State of California, on May 15, 1997.
REMEC, INC.
By: /s/ RONALD E. RAGLAND
--------------------------------
Ronald E. Ragland
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY TO SIGN AMENDMENTS
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint Errol Ekaireb and Thomas A. George, or
either of them, with full power of substitution, such person's true and lawful
attorneys-in-fact and agents for such person in such person's name, place and
stead, in any and all capacities, to sign any or all amendments (including
post-effective amendments) to this Registration Statement on Form S-8 and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents 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
in order to effectuate the same as fully, to all intents and purposes, as he or
such person might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement on Form S-8 has been signed by the following persons in the capacities
and on the dates indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ RONALD E. RAGLAND Chairman of the Board, and May 15, 1997
- ----------------------- Chief Executive Officer and
Ronald E. Ragland Director (Principal
Executive Officer)
/s/ ERROL EKAIREB President and Chief May 14, 1997
- ----------------------- Operating Officer and
Errol Ekaireb Director
/s/ THOMAS A. GEORGE Chief Financial Officer, May 15, 1997
- ----------------------- Senior Vice President, and
Thomas A. George Secretary (Principal
Financial and Accounting
Officer)
/s/ JACK A. GILES Executive Vice President, May 15, 1997
- ----------------------- President of REMEC Microwave
Jack A. Giles Division and Director
- ----------------------- Director, Senior Vice May , 1997
Denny Morgan President and Chief Engineer
/s/ JOSEPH T. LEE Executive Vice President and May 15, 1997
- ----------------------- Director
Joseph T. Lee
/s/ ANDRE R. HORN Director May 15, 1997
- -----------------------
Andre R. Horn
</TABLE>
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<PAGE> 6
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ JEFFREY M. NASH Director May 15, 1997
- -----------------------
Jeffrey M. Nash
/s/ GARY L. LUICK Director May 15, 1997
- -----------------------
Gary L. Luick
/s/ THOMAS A. CORCORAN Director May 15, 1997
- -----------------------
Thomas A. Corcoran
/s/ WILLIAM H. GIBBS Director May 15, 1997
- -----------------------
William H. Gibbs
</TABLE>
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<PAGE> 7
Index to Exhibits
<TABLE>
<CAPTION>
Item
No. Description of Item
--- -------------------
<S> <C> <C>
5.1 Undertaking re Status of Favorable
Determination Letter Covering the Plan
23.2 Consent of Ernst & Young LLP, Independent
Auditors
24 Power of Attorney (See pages II-4 - II-5)
99.1 REMEC, Inc. Profit Sharing 401(k) Plan
</TABLE>
II-6
<PAGE> 1
Exhibit 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the REMEC, Inc. Profit Sharing 401(k) Plan of our report
dated February 24, 1997, with respect to the consolidated financial statements
and schedule of REMEC, Inc. included in its Annual Report (Form 10-K) for the
year ended January 31, 1997, filed with the Securities and Exchange Commission.
Ernst & Young
San Diego, California
May 16, 1997
<PAGE> 1
EXHIBIT 99.1
REMEC, INC. PROFIT SHARING 401(K) PLAN
(JANUARY 1, 1997 RESTATEMENT)
FIDELITY MANAGEMENT TRUST COMPANY, ITS AFFILIATES AND EMPLOYEES MAY NOT
PROVIDE YOU WITH LEGAL OR TAX ADVICE IN CONNECTION WITH THE EXECUTION
OF THIS DOCUMENT. IT SHOULD BE REVIEWED BY YOUR ATTORNEY AND/OR
ACCOUNTANT PRIOR TO EXECUTION.
CORPORATEPLAN FOR RETIREMENT(SM)
VOLUME SUBMITTER
PLAN DOCUMENT SYSTEMS(TM)
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.1 - Plan Definitions
1.2 - Interpretation
ARTICLE II
SERVICE
2.1 - Definitions
2.2 - Crediting of Hours of Service
2.3 - Crediting of Continuous Service
2.4 - Eligibility Service
2.5 - Vesting Service
2.6 - Crediting of Service on Transfer or Amendment
ARTICLE III
ELIGIBILITY
3.1 - Eligibility
3.2 - Transfers of Employment
3.3 - Reemployment
3.4 - Notification Concerning New Eligible Employees
3.5 - Effect and Duration
ARTICLE IV
TAX-DEFERRED CONTRIBUTIONS
4.1 - Tax-Deferred Contributions
4.2 - Amount of Tax-Deferred Contributions
4.3 - Changes in Reduction Authorization
4.4 - Suspension of Tax-Deferred Contributions
4.5 - Resumption of Tax-Deferred Contributions
4.6 - Delivery of Tax-Deferred Contributions
4.7 - Vesting of Tax-Deferred Contributions
ARTICLE V
AFTER-TAX AND ROLLOVER CONTRIBUTIONS
5.1 - No After-Tax Contributions
5.2 - Rollover Contributions
5.3 - Vesting of Rollover Contributions
(i)
<PAGE> 3
ARTICLE VI
EMPLOYER CONTRIBUTIONS
6.1 - Contribution Period
6.2 - Profit-Sharing Contributions
6.3 - Allocation of Profit-Sharing Contributions
6.4 - Qualified Nonelective Contributions
6.5 - Allocation of Qualified Nonelective Contributions
6.6 - Matching Contributions
6.7 - Allocation of Matching Contributions
6.8 - Verification of Amount of Employer Contributions by the Sponsor
6.9 - Payment of Employer Contributions
6.10 - Eligibility to Participate in Allocation
6.11 - Vesting of Employer Contributions
6.12 - Election of Former Vesting Schedule
6.13 - Forfeitures to Reduce Employer Contributions
ARTICLE VII
LIMITATIONS ON CONTRIBUTIONS
7.1 - Definitions
7.2 - Code Section 402(g) Limit
7.3 - Distribution of Excess Deferrals
7.4 - Limitation on Tax-Deferred Contributions of Highly Compensated
Employees
7.5 - Distribution of Excess Tax-Deferred Contributions
7.6 - Limitation on Matching Contributions of Highly Compensated
Employees
7.7 - Forfeiture or Distribution of Excess Contributions
7.8 - Multiple Use Limitation
7.9 - Determination of Income or Loss
7.10 - Code Section 415 Limitations on Crediting of Contributions and
Forfeitures
7.11 - Coverage Under Other Qualified Defined Contribution Plan
7.12 - Coverage Under Qualified Defined Benefit Plan
7.13 - Scope of Limitations
ARTICLE VIII
TRUST FUNDS AND SEPARATE ACCOUNTS
8.1 - General Fund
8.2 - Investment Funds
8.3 - Loan Investment Fund
8.4 - Income on Trust
8.5 - Separate Accounts
8.6 - Sub-Accounts
ARTICLE IX
LIFE INSURANCE CONTRACTS
9.1 - No Life Insurance Contracts
(ii)
<PAGE> 4
ARTICLE X
DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
10.1 - Future Contribution Investment Elections
10.2 - Deposit of Contributions
10.3 - Election to Transfer Between funds
ARTICLE XI
CREDITING AND VALUING SEPARATE ACCOUNTS
11.1 - Crediting Separate Accounts
11.2 - Valuing Separate Accounts
11.3 - Plan Valuation Procedures
11.4 - Finality of Determinations
11.5 - Notification
ARTICLE XII
LOANS
12.1 - Application for Loan
12.2 - Reduction of Account Upon Distribution
12.3 - Requirements to Prevent a Taxable Distribution
12.4 - Administration of Loan Investment Fund
12.5 - Default
12.6 - Special Rules Applicable to Loans
12.7 - Loans Granted Prior to Amendment
ARTICLE XIII
WITHDRAWALS WHILE EMPLOYED
13.1 - Withdrawals of Rollover Contributions
13.2 - Withdrawals of Employer Contributions
13.3 - Withdrawals of Tax-Deferred Contributions
13.4 - Limitations on Withdrawals Other Than Hardship Withdrawals
13.5 - Conditions and Limitations on Hardship Withdrawals
13.6 - Order of Withdrawal from a Participant's Sub-Accounts
ARTICLE XIV
TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
14.1 - Termination of Employment and Settlement Date
14.2 - Separate Accounting for Non-Vested Amounts
14.3 - Disposition of Non-Vested Amounts
14.4 - Recrediting of Forfeited Amounts
(iii)
<PAGE> 5
ARTICLE XV
DISTRIBUTIONS
15.1 - Distributions to Participants
15.2 - Distributions to Beneficiaries
15.3 - Cash Outs and Participant Consent
15.4 - Required Commencement of Distribution
15.5 - Reemployment of a Participant
15.6 - Restrictions on Alienation
15.7 - Facility of Payment
15.8 - Inability to Locate Payee
15.9 - Distribution Pursuant to Qualified Domestic Relations Orders
ARTICLE XVI
FORM OF PAYMENT
16.1 - Form of Payment
16.2 - Direct Rollover
16.3 - Notice Regarding Form of Payment
ARTICLE XVII
BENEFICIARIES
17.1 - Designation of Beneficiary
17.2 - Spousal Consent Requirements
ARTICLE XVIII
ADMINISTRATION
18.1 - Authority of the Sponsor
18.2 - Action of the Sponsor
18.3 - Claims Review Procedure
18.4 - Qualified Domestic Relations Orders
18.5 - Indemnification
18.6 - Actions Binding
ARTICLE XIX
AMENDMENT AND TERMINATION
19.1 - Amendment
19.2 - Limitation on Amendment
19.3 - Termination
19.4 - Reorganization
19.5 - Withdrawal of an Employer
ARTICLE XX
ADOPTION BY OTHER ENTITIES
20.1 - Adoption by Related Companies
(iv)
<PAGE> 6
20.2 - Effective Plan Provisions
ARTICLE XXI
MISCELLANEOUS PROVISIONS
21.1 - No Commitment as to Employment
21.2 - Benefits
21.3 - No Guarantees
21.4 - Expenses
21.5 - Precedent
21.6 - Duty to Furnish Information
21.7 - Withholding
21.8 - Merger, Consolidation, or Transfer of Plan Assets 21.9 - Back Pay
Awards 21.10 - Condition on Employer Contributions 21.11 - Return of
Contributions to an Employer 21.12 - Validity of Plan 21.13 - Trust Agreement
21.14 - Parties Bound 21.15 - Application of Certain Plan Provisions 21.16 -
Leased Employees 21.17 - Transferred Funds
ARTICLE XXII
TOP-HEAVY PROVISIONS
22.1 - Definitions
22.2 - Applicability
22.3 - Minimum Employer Contribution
22.4 - Adjustments to Section 415 Limitations
22.5 - Accelerated Vesting
ARTICLE XXIII
EFFECTIVE DATE
23.1 - Effective Date of Amendment and Restatement
(v)
<PAGE> 7
PREAMBLE
The REMEC, INC. Profit Sharing 401(k) Plan, originally effective as of January
1, 1990, is hereby amended and restated in its entirety. The Plan, as amended
and restated hereby, is intended to qualify as a profit-sharing plan under
Section 401(a) of the Code, and includes a cash or deferred arrangement that is
intended to qualify under Section 401(k) of the Code. The Plan is maintained for
the exclusive benefit of eligible employees and their beneficiaries.
Notwithstanding any other provision of the Plan to the contrary, a Participant's
vested interest in his Separate Account under the Plan on and after the
effective date of this amendment and restatement shall be not less than his
vested interest in his account on the day immediately preceding the effective
date. In addition, notwithstanding any other provision of the Plan to the
contrary, the forms of payment and other Plan provisions that were available
under the Plan immediately prior to the later of the effective date of this
amendment and restatement or the date this amendment and restatement is adopted
and that may not be eliminated under Section 411(d)(6) of the Code shall
continue to be available to Participants who had an account under the Plan on
the day immediately preceding the later of the effective date or the date this
amendment and restatement is adopted.
1
<PAGE> 8
ARTICLE I
DEFINITIONS
1.1 - PLAN DEFINITIONS
As used herein, the following words and phrases have the meanings hereinafter
set forth, unless a different meaning is plainly required by the context:
The "ADMINISTRATOR" means the Sponsor unless the Sponsor designates another
person or persons to act as such.
An "AFTER-TAX CONTRIBUTION" means any after-tax employee contribution made by a
Participant as may be permitted under Article V.
The "BENEFICIARY" of a Participant means the person or persons entitled under
the provisions of the Plan to receive distribution hereunder in the event the
Participant dies before receiving distribution of his entire interest under the
Plan.
The "CODE" means the Internal Revenue Code of 1986, as amended from time to
time. Reference to a section of the Code includes such section and any
comparable section or sections of any future legislation that amends,
supplements, or supersedes such section.
The "COMPENSATION" of a Participant for any period means the wages as defined in
Section 3401(a) of the Code, determined without regard to any rules that limit
compensation included in wages based on the nature or location of the employment
or services performed, and all other payments made to him for such period for
services as an Employee for which his Employer is required to furnish the
Participant a written statement under Sections 6041(d), 6051(a)(3), and 6052 of
the Code, and excluding reimbursements or other expense allowances, fringe
benefits, moving expenses, deferred compensation, and welfare benefits, but
determined prior to any exclusions for amounts deferred under Section 125,
402(e)(3), 402(h)(1)(B), 403(b), or 457(b) of the Code or for certain
contributions described in Section 414(h)(2) of the Code that are picked up by
the employing unit and treated as employer contributions.
Notwithstanding the foregoing, Compensation shall not include the following:
2
<PAGE> 9
* bonuses.
* the value of any qualified or non-qualified stock option
granted to the Participant by his Employer to the extent such
value is includible in the Participant's taxable income.
In no event, however, shall the Compensation of a Participant taken into account
under the Plan for any Plan Year exceed (1) $200,000 for Plan Years beginning
prior to January 1, 1994, or (2) $150,000 for Plan Years beginning on or after
January 1, 1994 (subject to adjustment annually as provided in Section
401(a)(17)(B) and Section 415(d) of the Code; provided, however, that the dollar
increase in effect on January 1 of any calendar year, if any, is effective for
Plan Years beginning in such calendar year). If the Compensation of a
Participant is determined over a period of time that contains fewer than 12
calendar months, then the annual compensation limitation described above shall
be adjusted with respect to that Participant by multiplying the annual
compensation limitation in effect for the Plan Year by a fraction the numerator
of which is the number of full months in the period and the denominator of which
is 12; provided, however, that no proration is required for a Participant who is
covered under the Plan for less than one full Plan Year if the formula for
allocations is based on Compensation for a period of at least 12 months. In
determining the Compensation, for purposes of applying the annual compensation
limitation described above, of a Participant who is a five percent owner or
among the ten Highly Compensated Employees receiving the greatest Compensation
for the Plan Year, the Compensation of the Participant's spouse and of his
lineal descendants who have not attained age 19 as of the close of the Plan Year
shall be included as Compensation of the Participant for the Plan Year. If as a
result of applying the family aggregation rule described in the preceding
sentence the annual compensation limitation would be exceeded, the limitation
shall be prorated among the affected family members in proportion to each
member's Compensation as determined prior to application of the family
aggregation rules.
A "CONTRIBUTION PERIOD" means the period specified in Article VI for which
Employer Contributions shall be made.
3
<PAGE> 10
An "ELIGIBLE EMPLOYEE" means any Employee who has met the eligibility
requirements of Article III to have Tax-Deferred Contributions made to the Plan
on his behalf.
The "ELIGIBILITY SERVICE" of an employee means the period or periods of service
credited to him under the provisions of Article II for purposes of determining
his eligibility to participate in the Plan as may be required under Article III
or Article VI.
An "EMPLOYEE" means any employee of an Employer other than (i) a leased
employee, (ii) an employee who is covered by a collective bargaining agreement,
(iii) a nonresident alien who does not receive United States source income, (iv)
a temporary employee excluded from benefits eligibility, or (v) a student intern
or co-op student.
An "EMPLOYER" means the Sponsor and any entity which has adopted the Plan as may
be provided under Article XX.
An "EMPLOYER CONTRIBUTION" means the amount, if any, that an Employer
contributes to the Plan as may be provided under Article VI or Article XXII.
An "ENROLLMENT DATE" means the first day of each Plan Year quarter.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time. Reference to a section of ERISA includes such section and any
comparable section or sections of any future legislation that amends,
supplements, or supersedes such section.
The "GENERAL FUND" means a Trust Fund maintained by the Trustee as required to
hold and administer any assets of the Trust that are not allocated among any
separate Investment Funds as may be provided in the Plan or the Trust Agreement.
No General Fund shall be maintained if all assets of the Trust are allocated
among separate Investment Funds.
A "HIGHLY COMPENSATED EMPLOYEE" means an Employee or former Employee who is a
highly compensated active employee or highly compensated former employee as
defined hereunder.
4
<PAGE> 11
A "highly compensated active employee" includes any Employee who performs
services for an Employer during the determination year and who (i) was a five
percent owner at any time during the determination year or the look back year,
(ii) received compensation from an Employer during the look back year in excess
of $75,000 (subject to adjustment annually at the same time and in the same
manner as under Section 415(d) of the Code), (iii) was in the top paid group of
employees for the look back year and received compensation from an Employer
during the look back year in excess of $50,000 (subject to adjustment annually
at the same time and in the same manner as under Section 415(d) of the Code),
(iv) was an officer of an Employer during the look back year and received
compensation during that year in excess of 50 percent of the dollar limitation
in effect for that year under Section 415(b)(1)(A) of the Code or, if no officer
received compensation in excess of that amount for the look back year or the
determination year, received the greatest compensation for the look back year of
any officer, or (v) was one of the 100 employees paid the greatest compensation
by an Employer for the determination year and would be described in (ii), (iii),
or (iv) above if the term "determination year" were substituted for "look back
year".
A "highly compensated former employee" includes any Employee who separated from
service from an Employer and all Related Companies (or is deemed to have
separated from service from an Employer and all Related Companies) prior to the
determination year, performed no services for an Employer during the
determination year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the date the
Employee attains age 55.
The determination of who is a Highly Compensated Employee hereunder, including
determinations as to the number and identity of employees in the top paid group,
the 100 employees receiving the greatest compensation from an Employer, the
number of employees treated as officers, and the compensation considered, shall
be made in accordance with the provisions of Section 414(q) of the Code and
regulations issued thereunder. For purposes of this definition, the following
terms have the following meanings:
(a) The "determination year" means the Plan Year or, if the
Administrator makes the election provided in paragraph (b) below,
the period of time, if any, which extends beyond the look back year
and ends on the last day of the Plan
5
<PAGE> 12
Year for which testing is being performed (the "lag period"). If the
lag period is less than 12 months long, the dollar amounts specified in
(ii), (iii), and (iv) above shall be prorated based upon the number of
months in the lag period.
(b) The "look back year" means the 12-month period immediately preceding
the determination year; provided, however, that the Administrator may
elect instead to treat the calendar year ending with or within the
determination year as the "look back year".
An "HOUR OF SERVICE" with respect to a person means each hour, if any, that may
be credited to him in accordance with the provisions of Article II.
An "INVESTMENT FUND" means any separate investment Trust Fund maintained by the
Trustee as may be provided in the Plan or the Trust Agreement or any separate
investment fund maintained by the Trustee, to the extent that there are
Participant Sub-Accounts under such funds, to which assets of the Trust may be
allocated and separately invested.
A "MATCHING CONTRIBUTION" means any Employer Contribution made to the Plan on
account of a Participant's Tax-Deferred Contributions as provided in Article VI.
The "NORMAL RETIREMENT DATE" of an employee means the date he attains age 65.
A "PARTICIPANT" means any person who has a Separate Account in the Trust.
The "PLAN" means REMEC, INC. Profit Sharing 401(k) Plan, as from time to time in
effect.
A "PLAN YEAR" means the 12-consecutive-month period ending December 31.
A "PREDECESSOR EMPLOYER" means Humphrey, Inc.
A "PROFIT-SHARING CONTRIBUTION" means any Employer Contribution made to the Plan
as provided in Article VI, other than Matching Contributions and Qualified
Nonelective Contributions.
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<PAGE> 13
A "QUALIFIED NONELECTIVE CONTRIBUTION" means any Employer Contribution made to
the Plan as provided in Article VI that may be taken into account to satisfy the
limitations on contributions by Highly Compensated Employees under Article VII.
A "RELATED COMPANY" means any corporation or business, other than an Employer,
which would be aggregated with an Employer for a relevant purpose under Section
414 of the Code.
A "ROLLOVER CONTRIBUTION" means any rollover contribution to the Plan made by a
Participant as may be permitted under Article V.
A "SEPARATE ACCOUNT" means the account maintained by the Trustee in the name of
a Participant that reflects his interest in the Trust and any Sub-Accounts
maintained thereunder, as provided in Article VIII.
The "SETTLEMENT DATE" of a Participant means the date on which a Participant's
interest under the Plan becomes distributable in accordance with Article XV.
The "SPONSOR" means REMEC, INC., and any successor thereto.
A "SUB-ACCOUNT" means any of the individual sub-accounts of a Participant's
Separate Account that is maintained as provided in Article VIII.
A "TAX-DEFERRED CONTRIBUTION" means the amount contributed to the Plan on a
Participant's behalf by his Employer in accordance with his reduction
authorization executed pursuant to Article IV.
The "TRUST" means the trust maintained by the Trustee under the Trust Agreement.
The "TRUST AGREEMENT" means the agreement entered into between the Sponsor and
the Trustee relating to the holding, investment, and reinvestment of the assets
of the Plan, together with all amendments thereto.
The "TRUSTEE" means the trustee or any successor trustee which at the time shall
be designated, qualified, and acting under the Trust Agreement. The Sponsor may
designate a person or persons other than the Trustee to perform any
responsibility of the Trustee under the Plan, other than trustee
responsibilities as defined in Section 405(c)(3) of ERISA, and the Trustee shall
not
7
<PAGE> 14
be liable for the performance of such person in carrying out such
responsibility except as otherwise provided by ERISA. The term Trustee shall
include any delegate of the Trustee as may be provided in the Trust Agreement.
A "TRUST FUND" means any fund maintained under the Trust by the Trustee.
A "VALUATION DATE" means the date or dates designated by the Sponsor and
communicated in writing to the Trustee for the purpose of valuing the General
Fund and each Investment Fund and adjusting Separate Accounts and Sub-Accounts
hereunder, which dates need not be uniform with respect to the General Fund,
each Investment Fund, Separate Account, or Sub-Account; provided, however, that
the General Fund and each Investment Fund shall be valued and each Separate
Account and Sub-Account shall be adjusted no less often than once annually.
The "VESTING SERVICE" of an employee means the period or periods of service
credited to him under the provisions of Article II for purposes of determining
his vested interest in his Employer Contributions Sub-Account, if Employer
Contributions are provided for under either Article VI or Article XXII.
1.2 - INTERPRETATION
Where required by the context, the noun, verb, adjective, and adverb forms of
each defined term shall include any of its other forms. Wherever used herein,
the masculine pronoun shall include the feminine, the singular shall include the
plural, and the plural shall include the singular.
8
<PAGE> 15
ARTICLE II
SERVICE
2.1 - DEFINITIONS
For purposes of this Article, the following terms have the following meanings:
(a) The "continuous service" of an employee means the service credited to
him in accordance with the provisions of Section 2.3 of the Plan.
(b) The "employment commencement date" of an employee means the date he
first completes an Hour of Service.
(c) A "maternity/paternity absence" means a person's absence from
employment with an Employer or a Related Company because of the
person's pregnancy, the birth of the person's child, the placement
of a child with the person in connection with the person's adoption
of the child, or the caring for the person's child immediately
following the child's birth or adoption. A person's absence from
employment will not be considered a maternity/paternity absence
unless the person furnishes the Administrator such timely
information as may reasonably be required to establish that the
absence was for one of the purposes enumerated in this paragraph and
to establish the number of days of absence attributable to such
purpose.
(d) The "reemployment commencement date" of an employee means the first
date following a severance date on which he again completes an Hour of
Service.
(e) The "severance date" of an employee means the earlier of (i) the
date on which he retires, dies, or his employment with an Employer
and all Related Companies is otherwise terminated, or (ii) the first
anniversary of the first date of a period during which he is absent
from work with an Employer and all Related Companies for any other
reason; provided, however, that if he terminates employment with or
is absent from work with an Employer and all Related Companies on
account of service with the armed forces of the United States, he
shall not incur a severance date if he is eligible for reemployment
rights
9
<PAGE> 16
under the Uniformed Services Employment and Reemployment Rights Act of
1994 and he returns to work with an Employer or a Related Company
within the period during which he retains such reemployment rights.
2.2 - CREDITING OF HOURS OF SERVICE
A person shall be credited with an Hour of Service for each hour for which he is
paid, or entitled to payment, for the performance of duties for an Employer, a
Predecessor Employer, or any Related Company.
2.3 - CREDITING OF CONTINUOUS SERVICE
A person shall be credited with continuous service for the aggregate of the
periods of time between his employment commencement date or any reemployment
commencement date and the severance date that next follows such employment
commencement date or reemployment commencement date; provided, however, that an
employee who has a reemployment commencement date within the
12-consecutive-month period following the earlier of the first date of his
absence or his severance date shall be credited with continuous service for the
period between such severance date and reemployment commencement date.
2.4 - ELIGIBILITY SERVICE
There shall be no Eligibility Service credited under the Plan.
2.5 - VESTING SERVICE
Years of Vesting Service shall be determined in accordance with the following
provisions:
(a) An employee shall be credited with years of Vesting Service equal to
his period of continuous service.
(b) Notwithstanding the provisions of paragraph (a), continuous service
completed by an employee prior to a severance date shall not be
included in determining the employee's years of Vesting Service
unless the employee had a nonforfeitable right to any portion of his
Separate Account, excluding that portion of his Separate Account
that is attributable to Rollover Contributions, as of the severance
date, or the period of time between the
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<PAGE> 17
severance date and his reemployment commencement date is less than the
greater of five years or his period of continuous service determined as
of the severance date; and provided, however, that solely for purposes
of applying this paragraph, if a person is on a maternity/paternity
absence beyond the first anniversary of the first day of such absence,
his severance date shall be the second anniversary of the first day of
such maternity/paternity absence.
2.6 - CREDITING OF SERVICE ON TRANSFER OR AMENDMENT
Notwithstanding any other provision of the Plan to the contrary, if an Employee
is transferred from employment covered under a qualified plan maintained by an
Employer or a Related Company for which service is credited based on Hours of
Service and computation periods in accordance with Department of Labor
Regulations Section 2530.200 through 2530.203 to employment covered under the
Plan or, prior to amendment, the Plan provided for crediting of service on the
basis of Hours of Service and computation periods, an affected Employee shall be
credited with Vesting Service hereunder equal to:
(a) the Employee's years of service credited to him under the Hours of
Service method before the computation period in which the transfer or
the effective date of the amendment occurs, plus
(b) the greater of (i) the period of service that would be credited to the
Employee under the elapsed time method provided hereunder for his
employment during the entire computation period in which the transfer
or the effective date of the amendment occurs or (ii) the service taken
into account under the Hours of Service method for such computation
period as of the transfer date or the effective date of the amendment,
plus
(c) the service credited to such Employee under the elapsed time method
provided hereunder for the period of time beginning on the day after
the last day of the computation period in which the transfer or the
effective date of the amendment occurs.
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<PAGE> 18
ARTICLE III
ELIGIBILITY
3.1 - ELIGIBILITY
Each Employee who was an Eligible Employee immediately prior to the effective
date of this amendment and restatement shall continue to be an Eligible
Employee. Each other Employee shall become an Eligible Employee as of the
Enrollment Date coinciding with or next following the date on which he has
attained age 18.
3.2 - TRANSFERS OF EMPLOYMENT
If a person is transferred directly from employment with an Employer or with a
Related Company in a capacity other than as an Employee to employment as an
Employee, he shall become an Eligible Employee as of the date he is so
transferred if prior to an Enrollment Date coinciding with or preceding such
transfer date he has met the eligibility requirements of Section 3.1. Otherwise,
the eligibility of a person who is so transferred to elect to have Tax-Deferred
Contributions made to the Plan on his behalf shall be determined in accordance
with Section 3.1.
3.3 - REEMPLOYMENT
If a person who terminated employment with an Employer and all Related Companies
is reemployed as an Employee and if he had been an Eligible Employee prior to
his termination of employment, he shall again become an Eligible Employee on the
date he is reemployed. Otherwise, the eligibility of a person who terminated
employment with an Employer and all Related Companies and who is reemployed by
an Employer or a Related Company to elect to have Tax-Deferred Contributions
made to the Plan on his behalf shall be determined in accordance with Section
3.1 or 3.2.
3.4 - NOTIFICATION CONCERNING NEW ELIGIBLE EMPLOYEES
Each Employer shall notify the Administrator as soon as practicable of Employees
becoming Eligible Employees as of any date.
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<PAGE> 19
3.5 - EFFECT AND DURATION
Upon becoming an Eligible Employee, an Employee shall be entitled to elect to
have Tax-Deferred Contributions made to the Plan on his behalf and shall be
bound by all the terms and conditions of the Plan and the Trust Agreement. A
person shall continue as an Eligible Employee eligible to have Tax-Deferred
Contributions made to the Plan on his behalf only so long as he continues
employment as an Employee.
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<PAGE> 20
ARTICLE IV
TAX-DEFERRED CONTRIBUTIONS
4.1 - TAX-DEFERRED CONTRIBUTIONS
Effective as of the date he becomes an Eligible Employee, or any subsequent
Enrollment Date, each Eligible Employee may elect in writing in accordance with
rules prescribed by the Administrator to have Tax-Deferred Contributions made to
the Plan on his behalf by his Employer as hereinafter provided. An Eligible
Employee's written election shall include his authorization for his Employer to
reduce his Compensation and to make Tax-Deferred Contributions on his behalf and
his election as to the investment of his contributions in accordance with
Article X. Tax-Deferred Contributions on behalf of an Eligible Employee shall
commence with the first payment of Compensation made on or after the date on
which his election is effective.
4.2 - AMOUNT OF TAX-DEFERRED CONTRIBUTIONS
The amount of Tax-Deferred Contributions to be made to the Plan on behalf of an
Eligible Employee by his Employer shall be an integral percentage of his
Compensation of not less than 1 percent nor more than 15 percent. In the event
an Eligible Employee elects to have his Employer make Tax-Deferred Contributions
on his behalf, his Compensation shall be reduced for each payroll period by the
percentage he elects to have contributed on his behalf to the Plan in accordance
with the terms of his currently effective reduction authorization.
4.3 - CHANGES IN REDUCTION AUTHORIZATION
An Eligible Employee may change the percentage of his future Compensation that
his Employer contributes on his behalf as Tax-Deferred Contributions at such
time or times during the Plan Year as the Administrator may prescribe by filing
an amended reduction authorization with his Employer such number of days prior
to the date such change is to become effective as the Administrator shall
prescribe. An Eligible Employee who changes his reduction authorization shall be
limited to selecting a percentage of his Compensation that is otherwise
permitted hereunder. Tax-Deferred Contributions shall be made on behalf of such
Eligible Employee by his Employer pursuant to his amended reduction
authorization filed in accordance with this Section
14
<PAGE> 21
commencing with Compensation paid to the Eligible Employee on or after the date
such filing is effective, until otherwise altered or terminated in accordance
with the Plan.
4.4 - SUSPENSION OF TAX-DEFERRED CONTRIBUTIONS
An Eligible Employee on whose behalf Tax-Deferred Contributions are being made
may have such contributions suspended at any time by giving such number of days
advance written notice to his Employer as the Administrator shall prescribe. Any
such voluntary suspension shall take effect commencing with Compensation paid to
such Eligible Employee on or after the expiration of the required notice period
and shall remain in effect until Tax-Deferred Contributions are resumed as
hereinafter set forth.
4.5 - RESUMPTION OF TAX-DEFERRED CONTRIBUTIONS
An Eligible Employee who has voluntarily suspended his Tax-Deferred
Contributions may have such contributions resumed at such time or times during
the Plan Year as the Administrator may prescribe, by filing a new reduction
authorization with his Employer such number of days prior to the date as of
which such contributions are to be resumed as the Administrator shall prescribe.
4.6 - DELIVERY OF TAX-DEFERRED CONTRIBUTIONS
As soon after the date an amount would otherwise be paid to an Employee as it
can reasonably be separated from Employer assets, each Employer shall cause to
be delivered to the Trustee in cash all Tax-Deferred Contributions attributable
to such amounts.
4.7 - VESTING OF TAX-DEFERRED CONTRIBUTIONS
A Participant's vested interest in his Tax-Deferred Contributions Sub-Account
shall be at all times 100 percent.
15
<PAGE> 22
ARTICLE V
AFTER-TAX AND ROLLOVER CONTRIBUTIONS
5.1 - NO AFTER-TAX CONTRIBUTIONS
There shall be no After-Tax Contributions made to the Plan.
5.2 - ROLLOVER CONTRIBUTIONS
An Employee who was a participant in a plan qualified under Section 401 or 403
of the Code and who receives a cash distribution from such plan that he elects
either (i) to roll over immediately to a qualified retirement plan or (ii) to
roll over into a conduit IRA from which he receives a later cash distribution,
may elect to make a Rollover Contribution to the Plan if he is entitled under
Section 402(c), Section 403(a)(4), or Section 408(d)(3)(A) of the Code to roll
over such distribution to another qualified retirement plan. The Administrator
may require an Employee to provide it with such information as it deems
necessary or desirable to show that he is entitled to roll over such
distribution to another qualified retirement plan. An Employee shall make a
Rollover Contribution to the Plan by delivering, or causing to be delivered, to
the Trustee the cash that constitutes the Rollover Contribution amount within 60
days of receipt of the distribution from the plan or from the conduit IRA in the
manner prescribed by the Administrator. If the Employee does not already have an
investment election on file with the Administrator, the Employee shall also
deliver to the Administrator his election as to the investment of his
contributions in accordance with Article X.
5.3 - VESTING OF ROLLOVER CONTRIBUTIONS
A Participant's vested interest in his Rollover Contributions Sub-Account shall
be at all times 100 percent.
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<PAGE> 23
ARTICLE VI
EMPLOYER CONTRIBUTIONS
6.1 - CONTRIBUTION PERIOD
The Contribution Period for Employer Contributions under the Plan shall be each
Plan Year.
6.2 - PROFIT-SHARING CONTRIBUTIONS
Each Employer may, in its discretion, make a Profit-Sharing Contribution to the
Plan for the Contribution Period in an amount determined by the Sponsor.
6.3 - ALLOCATION OF PROFIT-SHARING CONTRIBUTIONS
Any Profit-Sharing Contribution made for a Contribution Period shall be
allocated among the Employees who are eligible to participate in the allocation
of Profit-Sharing Contributions for the Contribution Period, as determined under
this Article. The allocable share of each such Employee shall be in the ratio
which his Compensation from the Employers for the Contribution Period bears to
the aggregate of such Compensation for all such Employees.
6.4 - QUALIFIED NONELECTIVE CONTRIBUTIONS
Each Employer may, in its discretion, make a Qualified Nonelective Contribution
to the Plan for the Contribution Period in an amount determined by the Sponsor.
6.5 - ALLOCATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS
Any Qualified Nonelective Contribution made by an Employer for the Contribution
Period shall be allocated among its Employees during the Contribution Period who
are eligible to participate in the allocation of Qualified Nonelective
Contributions for the Contribution Period, as determined under this Article,
other than any such Employee who is a Highly Compensated Employee. The allocable
share of each such Employee shall be either (i) in the ratio which his
Compensation from the Employer for the Contribution Period bears to the
aggregate of such Compensation for all such Employees or (ii) a flat dollar
amount, as determined by the Sponsor for the Contribution Period.
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<PAGE> 24
6.6 - MATCHING CONTRIBUTIONS
Each Employer may, in its discretion, make a Matching Contribution to the Plan
for each Contribution Period in an amount equal to the percentage, determined by
the Sponsor, in its discretion, for the Contribution Period, of all or a portion
(as determined by the Sponsor) of the Tax-Deferred Contributions for the
Contribution Period made on behalf of its Employees during the Contribution
Period who are eligible to participate in the allocation of Matching
Contributions for the Contribution Period, as determined under this Article;
provided, however, that in no event shall the Matching Contribution with respect
to an eligible Employee exceed $400.
6.7 - ALLOCATION OF MATCHING CONTRIBUTIONS
Any Matching Contribution made by an Employer for the Contribution Period shall
be allocated among its Employees during the Contribution Period who are eligible
to participate in the allocation of Matching Contributions for the Contribution
Period, as determined under this Article. The allocable share of each such
Employee shall be an amount equal to the percentage determined by the Sponsor of
all or portion (as determined by the Sponsor) of the Tax-Deferred Contributions
made on his behalf for the Contribution Period; provided, however, that in no
event shall the allocable of each such Employee exceed $400.
6.8 - VERIFICATION OF AMOUNT OF EMPLOYER CONTRIBUTIONS BY THE SPONSOR
The Sponsor shall verify the amount of Employer Contributions to be made by each
Employer in accordance with the provisions of the Plan. Notwithstanding any
other provision of the Plan to the contrary, the Sponsor shall determine the
portion of the Employer Contribution to be made by each Employer with respect to
an Employee who transfers from employment with one Employer as an Employee to
employment with another Employer as an Employee.
6.9 - PAYMENT OF EMPLOYER CONTRIBUTIONS
Employer Contributions made for a Contribution Period shall be paid in cash or
in qualifying employer securities, as defined in Section 407(d)(5) of ERISA, to
the Trustee within the period of time required under the Code in order for the
contribution to be
18
<PAGE> 25
deductible by the Employer in determining its Federal income taxes for the Plan
Year.
6.10 - ELIGIBILITY TO PARTICIPATE IN ALLOCATION
Each Employee shall be eligible to participate in the allocation of Employer
Contributions beginning on the date he becomes, or again becomes, an Eligible
Employee in accordance with the provisions of Article III. Notwithstanding the
foregoing, no person shall be eligible to participate in the allocation of
Profit-Sharing Contributions for a Contribution Period unless (i) he is employed
by an Employer or a Related Company on the last day of the Contribution Period
and (ii) he has completed at least 500 Hours of Service during the Plan Year;
provided, however, that if the Plan would not otherwise meet the minimum
coverage requirements of Section 410(b) of the Code in any Plan Year, the group
of Employees eligible to participate in the allocation of Profit-Sharing
Contributions shall be expanded to include the minimum number of Employees who
would be eligible to participate except for their failure to complete the
required number of Hours of Service during the Plan Year that is necessary to
meet the minimum coverage requirements. The Employees who become eligible to
participate under the provisions of the immediately preceding clause shall be
those Employees who have completed the greatest number of Hours of Service
during the Plan Year. If the Plan still would not meet the minimum coverage
requirements of Section 410(b) of the Code, the group of Employees shall be
expanded further to include the minimum number of Employees who are not employed
by an Employer or a Related Company on the last day of the Contribution Period
that is necessary to meet the minimum coverage requirements. The Employees who
become eligible to participate under the provisions of the immediately preceding
sentence shall be those Employees who have completed the greatest number of
Hours of Service during the Contribution Period.
6.11 - VESTING OF EMPLOYER CONTRIBUTIONS
A Participant's vested interest in his Qualified Nonelective Contributions
Sub-Account shall be at all times 100 percent. A Participant's vested interest
in his Profit-Sharing and Matching Contributions Sub-Accounts shall be
determined in accordance with the following schedule:
19
<PAGE> 26
<TABLE>
<CAPTION>
Years of Vesting Service Vested Interest
------------------------ ---------------
<S> <C>
Less than 1 0%
1 but less than 2 50%
2 or more 100%
</TABLE>
Notwithstanding the foregoing, if a Participant is employed by an Employer or a
Related Company on his Normal Retirement Date, the date he attains age 55, the
date he dies, or the date he becomes physically or mentally disabled such that
he can no longer continue in the service of his Employer, as determined by the
Administrator on the basis of a written certificate of a physician acceptable to
it or he is eligible to receive a disability benefit under the terms of the
Social Security Act, his vested interest in his Profit-Sharing and Matching
Contributions Sub-Accounts shall be 100 percent.
6.12 - ELECTION OF FORMER VESTING SCHEDULE
If the Sponsor adopts an amendment to the Plan that directly or indirectly
affects the computation of a Participant's vested interest in his Employer
Contributions Sub-Account, any Participant with three or more years of Vesting
Service shall have a right to have his vested interest in his Employer
Contributions Sub-Account continue to be determined under the vesting provisions
in effect prior to the amendment rather than under the new vesting provisions,
unless the vested interest of the Participant in his Employer Contributions
Sub-Account under the Plan as amended is not at any time less than such vested
interest determined without regard to the amendment. A Participant shall
exercise his right under this Section by giving written notice of his exercise
thereof to the Administrator within 60 days after the latest of (i) the date he
receives notice of the amendment from the Administrator, (ii) the effective date
of the amendment, or (iii) the date the amendment is adopted. Notwithstanding
the foregoing, a Participant's vested interest in his Employer Contributions
Sub-Account on the effective date of such an amendment shall not be less than
his vested interest in his Employer Contributions Sub-Account immediately prior
to the effective date of the amendment.
6.13 - FORFEITURES TO REDUCE EMPLOYER CONTRIBUTIONS
Notwithstanding any other provision of the Plan to the contrary, the amount of
the Employer Contribution required under this Article for a Plan Year shall be
reduced by the amount of any
20
<PAGE> 27
forfeitures occurring during the Plan Year that are not used to pay Plan
expenses.
21
<PAGE> 28
ARTICLE VII
LIMITATIONS ON CONTRIBUTIONS
7.1 - DEFINITIONS
For purposes of this Article, the following terms have the following meanings:
(a) The "actual deferral percentage" with respect to an Eligible
Employee for a particular Plan Year means the ratio of the
Tax-Deferred Contributions made on his behalf for the Plan Year to
his test compensation for the Plan Year, except that, to the extent
permitted by regulations issued under Section 401(k) of the Code,
the Sponsor may elect to take into account in computing the
numerator of each Eligible Employee's actual deferral percentage the
qualified nonelective contributions made to the Plan on his behalf
for the Plan Year; provided, however, that contributions made on a
Participant's behalf for a Plan Year shall be included in
determining his actual deferral percentage for such Plan Year only
if the contributions are made to the Plan prior to the end of the
12-month period immediately following the Plan Year to which the
contributions relate. The determination and treatment of the actual
deferral percentage amounts for any Participant shall satisfy such
other requirements as may be prescribed by the Secretary of the
Treasury.
(b) The "aggregate limit" means the sum of (i) 125 percent of the
greater of the average contribution percentage for eligible
participants other than Highly Compensated Employees or the average
actual deferral percentage for Eligible Employees other than Highly
Compensated Employees and (ii) the lesser of 200 percent or two plus
the lesser of such average contribution percentage or average actual
deferral percentage, or, if it would result in a larger aggregate
limit, the sum of (iii) 125 percent of the lesser of the average
contribution percentage for eligible participants other than Highly
Compensated Employees or the average actual deferral percentage for
Eligible Employees other than Highly Compensated Employees and (iv)
the lesser of 200 percent or two plus the greater of such average
contribution percentage or average actual deferral percentage.
22
<PAGE> 29
(c) The "annual addition" with respect to a Participant for a limitation
year means the sum of the Tax-Deferred Contributions and Employer
Contributions allocated to his Separate Account for the limitation
year (including any excess contributions that are distributed
pursuant to this Article), the employer contributions, employee
contributions, and forfeitures allocated to his accounts for the
limitation year under any other qualified defined contribution plan
(whether or not terminated) maintained by an Employer or a Related
Company concurrently with the Plan, and amounts described in
Sections 415(l)(2) and 419A(d)(2) of the Code allocated to his
account for the limitation year.
(d) The "Code Section 402(g) limit" means the dollar limit imposed by
Section 402(g)(1) of the Code or established by the Secretary of the
Treasury pursuant to Section 402(g)(5) of the Code in effect on January
1 of the calendar year in which an Eligible Employee's taxable year
begins.
(e) The "contribution percentage" with respect to an eligible
participant for a particular Plan Year means the ratio of the
matching contributions made to the Plan on his behalf for the Plan
Year to his test compensation for such Plan Year, except that, to
the extent permitted by regulations issued under Section 401(m) of
the Code, the Sponsor may elect to take into account in computing
the numerator of each eligible participant's contribution percentage
the Tax-Deferred Contributions and/or qualified nonelective
contributions made to the Plan on his behalf for the Plan Year;
provided, however, that any Tax-Deferred Contributions and/or
qualified nonelective contributions that were taken into account in
computing the numerator of an eligible participant's actual deferral
percentage may not be taken into account in computing the numerator
of his contribution percentage; and provided, further, that
contributions made by or on a Participant's behalf for a Plan Year
shall be included in determining his contribution percentage for
such Plan Year only if the contributions are made to the Plan prior
to the end of the 12-month period immediately following the Plan
Year to which the contributions relate. The determination and
treatment of the contribution percentage amounts for any
23
<PAGE> 30
Participant shall satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
(f) An "elective contribution" means any employer contribution made to a
plan maintained by an Employer or any Related Company on behalf of a
Participant in lieu of cash compensation pursuant to his written
election to defer under any qualified CODA as described in Section
401(k) of the Code, any simplified employee pension cash or deferred
arrangement as described in Section 402(h)(1)(B) of the Code, any
eligible deferred compensation plan under Section 457 of the Code,
or any plan as described in Section 501(c)(18) of the Code, and any
contribution made on behalf of the Participant by an Employer or a
Related Company for the purchase of an annuity contract under
Section 403(b) of the Code pursuant to a salary reduction agreement.
(g) An "eligible participant" means any Employee who is eligible to have
Tax-Deferred Contributions made on his behalf (if Tax-Deferred
Contributions are taken into account in computing contribution
percentages) or to participate in the allocation of matching
contributions.
(h) An "excess deferral" with respect to a Participant means that portion
of a Participant's Tax-Deferred Contributions that when added to
amounts deferred under other plans or arrangements described in
Sections 401(k), 408(k), or 403(b) of the Code, would exceed the Code
Section 402(g) limit and is includable in the Participant's gross
income under Section 402(g) of the Code.
(i) A "family member" of an Employee means the Employee's spouse, his
lineal ascendants, his lineal descendants, and the spouses of such
lineal ascendants and descendants.
(j) A "limitation year" means the calendar year.
(k) A "matching contribution" means any employer contribution allocated to
an Eligible Employee's account under the Plan or any other plan of an
Employer or a Related Company solely on account of elective
contributions made on his behalf or employee contributions made by him.
24
<PAGE> 31
(l) A "qualified nonelective contribution" means any employer contribution
made on behalf of a Participant that the Participant could not elect
instead to receive in cash, that is a qualified nonelective
contribution as defined in Section 401(k) and Section 401(m) of the
Code and regulations issued thereunder, is nonforfeitable when made,
and is distributable only as permitted in regulations issued under
Section 401(k) of the Code.
(m) The "test compensation" of an Eligible Employee for a Plan Year
means compensation as defined in Section 414(s) of the Code and
regulations issued thereunder, limited, however, to (1) $200,000 for
Plan Years beginning prior to January 1, 1994, or (2) $150,000 for
Plan Years beginning on or after January 1, 1994 (subject to
adjustment annually as provided in Section 401(a)(17)(B) and Section
415(d) of the Code; provided, however, that the dollar increase in
effect on January 1 of any calendar year, if any, is effective for
Plan Years beginning in such calendar year). If the test
compensation of a Participant is determined over a period of time
that contains fewer than 12 calendar months, then the annual
compensation limitation described above shall be adjusted with
respect to that Participant by multiplying the annual compensation
limitation in effect for the Plan Year by a fraction the numerator
of which is the number of full months in the period and the
denominator of which is 12; provided, however, that no proration is
required for a Participant who is covered under the Plan for less
than one full Plan Year if the formula for allocations is based on
Compensation for a period of at least 12 months. In determining the
test compensation, for purposes of applying the annual compensation
limitation described above, of a Participant who is a five percent
owner or among the ten Highly Compensated Employees receiving the
greatest test compensation for the limitation year, the test
compensation of the Participant's spouse and of his lineal
descendants who have not attained age 19 as of the close of the
limitation year shall be included as test compensation of the
Participant for the limitation year. If as a result of applying the
family aggregation rule described in the preceding sentence the
annual compensation limitation would be exceeded, the limitation
shall be prorated among the affected family members in proportion to
each member's test compensation as
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determined prior to application of the family aggregation rules.
7.2 - CODE SECTION 402(g) LIMIT
In no event shall the amount of the Tax-Deferred Contributions made on behalf of
an Eligible Employee for his taxable year, when aggregated with any elective
contributions made on behalf of the Eligible Employee under any other plan of an
Employer or a Related Company for his taxable year, exceed the Code Section
402(g) limit. In the event that the Administrator determines that the reduction
percentage elected by an Eligible Employee will result in his exceeding the Code
Section 402(g) limit, the Administrator may adjust the reduction authorization
of such Eligible Employee by reducing the percentage of his Tax-Deferred
Contributions to such smaller percentage that will result in the Code Section
402(g) limit not being exceeded. If the Administrator determines that the
Tax-Deferred Contributions made on behalf of an Eligible Employee would exceed
the Code Section 402(g) limit for his taxable year, the Tax-Deferred
Contributions for such Participant shall be automatically suspended for the
remainder, if any, of such taxable year.
If an Employer notifies the Administrator that the Code Section 402(g) limit has
nevertheless been exceeded by an Eligible Employee for his taxable year, the
Tax-Deferred Contributions that, when aggregated with elective contributions
made on behalf of the Eligible Employee under any other plan of an Employer or a
Related Company, would exceed the Code Section 402(g) limit, plus any income and
minus any losses attributable thereto, shall be distributed to the Eligible
Employee no later than the April 15 immediately following such taxable year. Any
Tax-Deferred Contributions that are distributed to an Eligible Employee in
accordance with this Section shall not be taken into account in computing the
Eligible Employee's actual deferral percentage for the Plan Year in which the
Tax-Deferred Contributions were made, unless the Eligible Employee is a Highly
Compensated Employee. If an amount of Tax-Deferred Contributions is distributed
to a Participant in accordance with this Section, matching contributions that
are attributable solely to the distributed Tax-Deferred Contributions, plus any
income and minus any losses attributable thereto, shall be forfeited by the
Participant. Any such forfeited amounts shall be treated as a forfeiture under
the Plan in accordance with the provisions of Article XIV as of the
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last day of the month in which the distribution of Tax-Deferred Contributions
pursuant to this Section occurs.
7.3 - DISTRIBUTION OF EXCESS DEFERRALS
Notwithstanding any other provision of the Plan to the contrary, if a
Participant notifies the Administrator in writing no later than the March 1
following the close of the Participant's taxable year that excess deferrals have
been made on his behalf under the Plan for such taxable year, the excess
deferrals, plus any income and minus any losses attributable thereto, shall be
distributed to the Participant no later than the April 15 immediately following
such taxable year. Any Tax-Deferred Contributions that are distributed to a
Participant in accordance with this Section shall nevertheless be taken into
account in computing the Participant's actual deferral percentage for the Plan
Year in which the Tax-Deferred Contributions were made. If an amount of
Tax-Deferred Contributions is distributed to a Participant in accordance with
this Section, matching contributions that are attributable solely to the
distributed Tax-Deferred Contributions, plus any income and minus any losses
attributable thereto, shall be forfeited by the Participant. Any such forfeited
amounts shall be treated as a forfeiture under the Plan in accordance with the
provisions of Article XIV as of the last day of the month in which the
distribution of Tax-Deferred Contributions pursuant to this Section occurs.
7.4 - LIMITATION ON TAX-DEFERRED CONTRIBUTIONS OF HIGHLY COMPENSATED
EMPLOYEES
Notwithstanding any other provision of the Plan to the contrary, the
Tax-Deferred Contributions made with respect to a Plan Year on behalf of
Eligible Employees who are Highly Compensated Employees may not result in an
average actual deferral percentage for such Eligible Employees that exceeds the
greater of:
(a) a percentage that is equal to 125 percent of the average actual
deferral percentage for all other Eligible Employees; or
(b) a percentage that is not more than 200 percent of the average actual
deferral percentage for all other Eligible Employees and that is not
more than two percentage points higher than the average actual deferral
percentage for all other Eligible Employees.
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In order to assure that the limitation contained herein is not exceeded with
respect to a Plan Year, the Administrator is authorized to suspend completely
further Tax-Deferred Contributions on behalf of Highly Compensated Employees for
any remaining portion of a Plan Year or to adjust the projected actual deferral
percentages of Highly Compensated Employees by reducing their percentage
elections with respect to Tax-Deferred Contributions for any remaining portion
of a Plan Year to such smaller percentages that will result in the limitation
set forth above not being exceeded. In the event of any such suspension or
reduction, Highly Compensated Employees affected thereby shall be notified of
the reduction or suspension as soon as possible and shall be given an
opportunity to make a new Tax-Deferred Contribution election to be effective the
first day of the next following Plan Year. In the absence of such an election,
the election in effect immediately prior to the suspension or adjustment
described above shall be reinstated as of the first day of the next following
Plan Year.
For purposes of applying the limitation contained in this Section, the
Tax-Deferred Contributions, qualified nonelective contributions (to the extent
that such qualified nonelective contributions are taken into account in
computing actual deferral percentages), and test compensation of any Eligible
Employee who is a family member of another Eligible Employee who is a five
percent owner or among the ten Highly Compensated Employees receiving the
greatest test compensation for the Plan Year shall be aggregated with the
Tax-Deferred Contributions, qualified nonelective contributions, and test
compensation of such other Eligible Employee, and such family member shall not
be considered an Eligible Employee for purposes of determining the average
actual deferral percentage for all other Eligible Employees.
In determining the actual deferral percentage for any Eligible Employee who is a
Highly Compensated Employee for the Plan Year, elective contributions and
qualified nonelective contributions (to the extent that qualified nonelective
contributions are taken into account in computing actual deferral percentages)
made to his accounts under any other plan of an Employer or a Related Company
shall be treated as if all such contributions were made to the Plan; provided,
however, that if such a plan has a plan year different from the Plan Year, any
such contributions made to the Highly Compensated Employee's accounts under the
plan for the plan year ending with or within the same calendar year as the
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<PAGE> 35
Plan Year shall be treated as if such contributions were made to the Plan.
Notwithstanding the foregoing, such contributions shall not be treated as if
they were made to the Plan if regulations issued under Section 401(k) of the
Code do not permit such plan to be aggregated with the Plan.
If one or more plans of an Employer or Related Company are aggregated with the
Plan for purposes of satisfying the requirements of Section 401(a)(4) or 410(b)
of the Code, then actual deferral percentages under the Plan shall be calculated
as if the Plan and such one or more other plans were a single plan. For Plan
Years beginning after December 31, 1991, plans may be aggregated to satisfy
Section 401(k) of the Code only if they have the same plan year.
The Administrator shall maintain records sufficient to show that the limitation
contained in this Section was not exceeded with respect to any Plan Year and the
amount of the qualified nonelective contributions taken into account in
computing actual deferral percentages for any Plan Year.
7.5 - DISTRIBUTION OF EXCESS TAX-DEFERRED CONTRIBUTIONS
Notwithstanding any other provision of the Plan to the contrary, in the event
that the limitation contained in Section 7.4 is exceeded in any Plan Year, the
Tax-Deferred Contributions made with respect to a Highly Compensated Employee
that exceed the maximum amount permitted to be contributed to the Plan on his
behalf under Section 7.4, plus any income and minus any losses attributable
thereto, shall be distributed to the Highly Compensated Employee prior to the
end of the next succeeding Plan Year. If excess amounts are attributable to
Participants aggregated under the family aggregation rules described in Section
7.4, the excess shall be allocated among family members in proportion to the
Tax-Deferred Contributions made with respect to each family member. If such
excess amounts are distributed more than 2 1/2 months after the last day of the
Plan Year for which the excess occurred, an excise tax may be imposed under
Section 4979 of the Code on the Employer maintaining the Plan with respect to
such amounts.
The maximum amount permitted to be contributed to the Plan on a Highly
Compensated Employee's behalf under Section 7.4 shall be determined by reducing
Tax-Deferred Contributions made on behalf of Highly Compensated Employees in
order of their actual deferral
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<PAGE> 36
percentages beginning with the highest of such percentages. The determination of
the amount of excess Tax-Deferred Contributions shall be made after application
of Section 7.3, if applicable.
If an amount of Tax-Deferred Contributions is distributed to a Participant in
accordance with this Section, matching contributions that are attributable
solely to the distributed Tax-Deferred Contributions, plus any income and minus
any losses attributable thereto, shall be forfeited by the Participant. Any such
forfeited amounts shall be treated as a forfeiture under the Plan in accordance
with the provisions of Article XIV as of the last day of the month in which the
distribution of Tax-Deferred Contributions pursuant to this Section occurs.
7.6 - LIMITATION ON MATCHING CONTRIBUTIONS OF HIGHLY COMPENSATED EMPLOYEES
Notwithstanding any other provision of the Plan to the contrary, the matching
contributions made with respect to a Plan Year on behalf of eligible
participants who are Highly Compensated Employees may not result in an average
contribution percentage for such eligible participants that exceeds the greater
of:
(a) a percentage that is equal to 125 percent of the average
contribution percentage for all other eligible participants; or
(b) a percentage that is not more than 200 percent of the average
contribution percentage for all other eligible participants and that is
not more than two percentage points higher than the average
contribution percentage for all other eligible participants.
For purposes of applying the limitation contained in this Section, the matching
contributions, qualified nonelective contributions and Tax-Deferred
Contributions (to the extent that such qualified nonelective contributions and
Tax-Deferred Contributions are taken into account in computing contribution
percentages), and test compensation of any eligible participant who is a family
member of another eligible participant who is a five percent owner or among the
ten Highly Compensated Employees receiving the greatest test compensation for
the Plan Year shall be aggregated with the matching contributions, qualified
nonelective contributions, Tax-Deferred Contributions, and test compensation of
such other eligible participant, and such family
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member shall not be considered an eligible participant for purposes of
determining the average contribution percentage for all other eligible
participants.
In determining the contribution percentage for any eligible participant who is a
Highly Compensated Employee for the Plan Year, matching contributions, employee
contributions, qualified nonelective contributions, and elective contributions
(to the extent that qualified nonelective contributions and elective
contributions are taken into account in computing contribution percentages) made
to his accounts under any other plan of an Employer or a Related Company shall
be treated as if all such contributions were made to the Plan; provided,
however, that if such a plan has a plan year different from the Plan Year, any
such contributions made to the Highly Compensated Employee's accounts under the
plan for the plan year ending with or within the same calendar year as the Plan
Year shall be treated as if such contributions were made to the Plan.
Notwithstanding the foregoing, such contributions shall not be treated as if
they were made to the Plan if regulations issued under Section 401(m) of the
Code do not permit such plan to be aggregated with the Plan.
If one or more plans of an Employer or a Related Company are aggregated with the
Plan for purposes of satisfying the requirements of Section 401(a)(4) or 410(b)
of the Code, the contribution percentages under the Plan shall be calculated as
if the Plan and such one or more other plans were a single plan. Plans may be
aggregated to satisfy Section 401(m) of the Code only if they have the same plan
year.
The Administrator shall maintain records sufficient to show that the limitation
contained in this Section was not exceeded with respect to any Plan Year and the
amount of the elective contributions and qualified nonelective contributions
taken into account in computing contribution percentages for any Plan Year.
7.7 - FORFEITURE OR DISTRIBUTION OF EXCESS CONTRIBUTIONS
Notwithstanding any other provision of the Plan to the contrary, in the event
that the limitation contained in Section 7.6 is exceeded in any Plan Year, the
matching contributions made on behalf of a Highly Compensated Employee that
exceed the maximum amount permitted to be contributed to the Plan on behalf of
such Highly Compensated Employee under Section 7.6, plus any income
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and minus any losses attributable thereto, shall be forfeited, to the extent
forfeitable, or distributed to the Participant prior to the end of the next
succeeding Plan Year as hereinafter provided. If excess amounts are attributable
to Participants aggregated under the family aggregation rules described in
Section 7.5, the excess shall be allocated among family members in proportion to
the matching contributions and qualified nonelective contributions (to the
extent that qualified nonelective contributions are taken into account in
computing contribution percentages) made with respect to each family member. If
such excess amounts are distributed more than 2 1/2 months after the last day of
the Plan Year for which the excess occurred, an excise tax may be imposed under
Section 4979 of the Code on the Employer maintaining the Plan with respect to
such amounts.
The maximum amount permitted to be contributed to the Plan on behalf of a Highly
Compensated Employee under Section 7.6 shall be determined by reducing matching
contributions made on behalf of Highly Compensated Employees in order of their
contribution percentages beginning with the highest of such percentages.
Any amounts forfeited with respect to a Participant pursuant to this Section
shall be treated as a forfeiture under the Plan in accordance with the
provisions of Article XIV as of the last day of the month in which the
distribution of contributions pursuant to this Section occurs. Excess matching
contributions shall be distributable to the extent the Participant has a vested
interest in his Employer Contributions Sub-Account that is attributable to
matching contributions and shall otherwise be forfeitable. The determination of
the amount of excess matching contributions shall be made after application of
Section 7.3, if applicable, and after application of Section 7.5, if applicable.
7.8 - MULTIPLE USE LIMITATION
Notwithstanding any other provision of the Plan to the contrary, the following
multiple use limitation as required under Section 401(m) of the Code shall
apply: the sum of the average actual deferral percentage for Eligible Employees
who are Highly Compensated Employees and the average contribution percentage for
eligible participants who are Highly Compensated Employees may not exceed the
aggregate limit. In the event that, after satisfaction of Section 7.5 and
Section 7.7, it is determined that contributions under the Plan fail to satisfy
the multiple
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use limitation contained herein, the multiple use limitation shall be satisfied
by further reducing the contribution percentages of eligible participants who
are Highly Compensated Employees (beginning with the highest such percentage) to
the extent necessary to eliminate the excess, with such further reductions to be
treated as excess contributions and disposed of as provided in Section 7.7, or
in an alternative manner, consistently applied, that may be permitted by
regulations issued under Section 401(m) of the Code.
7.9 - DETERMINATION OF INCOME OR LOSS
The income or loss attributable to excess contributions that are distributed
pursuant to this Article shall be determined for the preceding Plan Year under
the method otherwise used for allocating income or loss to Participant's
Separate Accounts.
7.10 - CODE SECTION 415 LIMITATIONS ON CREDITING OF CONTRIBUTIONS AND
FORFEITURES
Notwithstanding any other provision of the Plan to the contrary, the annual
addition with respect to a Participant for a limitation year shall in no event
exceed the lesser of (i) $30,000 (adjusted as provided in Section 415(d) of the
Code, with the first adjustment being made for limitation years beginning on or
after January 1, 1996) or (ii) 25 percent of the Participant's compensation, as
defined in Section 415(c)(3) of the Code and regulations issued thereunder, for
the limitation year. If the annual addition to the Separate Account of a
Participant in any limitation year would otherwise exceed the amount that may be
applied for his benefit under the limitation contained in this Section, the
limitation shall be satisfied by reducing contributions made on behalf of the
Participant to the extent necessary in the following order:
Tax-Deferred Contributions made on the Participant's behalf for the
limitation year that have not been matched, if any, shall be reduced.
Tax-Deferred Contributions made on the Participant's behalf for the
limitation year that have been matched and the matching contributions
attributable thereto, if any, shall be reduced pro rata.
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Employer Contributions (other than matching contributions and qualified
nonelective contributions) otherwise allocable to the Participant's
Separate Account for the limitation year shall be reduced.
Qualified nonelective contributions made on the Participant's behalf
for the limitation year shall be reduced.
The amount of any reduction of Tax-Deferred Contributions (plus any income
attributable thereto) shall be returned to the Participant. The amount of any
reduction of Employer Contributions shall be deemed a forfeiture for the
limitation year. Amounts deemed to be forfeitures under this Section shall be
held unallocated in a suspense account established for the limitation year and
shall be applied against the Employer's contribution obligation for the next
following limitation year (and succeeding limitation years, as necessary). If a
suspense account is in existence at any time during a limitation year, all
amounts in the suspense account must be allocated to Participants' Separate
Accounts (subject to the limitations contained herein) before any further
Tax-Deferred Contributions or Employer Contributions may be made to the Plan on
behalf of Participants. No suspense account established hereunder shall share in
any increase or decrease in the net worth of the Trust. For purposes of this
Article, excesses shall result only from the allocation of forfeitures, a
reasonable error in estimating a Participant's annual compensation (as defined
in Section 415(c)(3) of the Code and regulations issued thereunder), a
reasonable error in determining the amount of Tax-Deferred Contributions that
may be made with respect to any Participant under the limits of Section 415 of
the Code, or other limited facts and circumstances that justify the availability
of the provisions set forth above.
7.11 - COVERAGE UNDER OTHER QUALIFIED DEFINED CONTRIBUTION PLAN
If a Participant is covered by any other qualified defined contribution plan
(whether or not terminated) maintained by an Employer or a Related Company
concurrently with the Plan, and if the annual addition for the limitation year
would otherwise exceed the amount that may be applied for the Participant's
benefit under the limitation contained in Section 7.10, such excess shall be
reduced first by returning the employee contributions made by the Participant
for the limitation year
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under all of the defined contribution plans other than the Plan and the income
attributable thereto to the extent necessary. If the limitation contained in
Section 7.10 is still not satisfied after returning all of the employee
contributions made by the Participant under all such other plans, the excess
shall be reduced by returning the elective contributions made on the
Participant's behalf for the limitation year under all such other plans and the
income attributable thereto to the extent necessary on a pro rata basis among
all of such plans. If the limitation contained in Section 7.10 is still not
satisfied after returning all of the elective contributions made on the
Participant's behalf under all such other plans, the procedure set forth in
Section 7.10 shall be invoked to eliminate any such excess. If the limitation
contained in Section 7.10 is still not satisfied after invocation of the
procedure set forth in Section 7.10, the portion of the employer contributions
and of forfeitures for the limitation year under all such other plans that has
been allocated to the Participant thereunder, but which exceeds the limitation
set forth in Section 7.10, shall be deemed a forfeiture for the limitation year
and shall be disposed of as provided in such other plans; provided, however,
that if the Participant is covered by a money purchase pension plan, the
forfeiture shall be effected first under any other defined contribution plan
that is not a money purchase pension plan and, if the limitation is still not
satisfied, then under such money purchase pension plan.
7.12 - COVERAGE UNDER QUALIFIED DEFINED BENEFIT PLAN
If a Participant in the Plan is also covered by a qualified defined benefit plan
(whether or not terminated) maintained by an Employer or a Related Company, in
no event shall the sum of the defined benefit plan fraction (as defined in
Section 415(e)(2) of the Code) and the defined contribution plan fraction (as
defined in Section 415(e)(3) of the Code) exceed 1.0 in any limitation year. If,
before October 3, 1973, the Participant was an active participant in a qualified
defined benefit plan maintained by an Employer or a Related Company and
otherwise satisfies the requirements of Section 2004(d)(2) of ERISA, then for
purposes of applying this Section, the defined benefit plan fraction shall not
exceed 1.0. In the event the special limitation contained in this Section is
exceeded, the benefits otherwise payable to the Participant under any such
qualified defined benefit plan shall be reduced to the extent necessary to meet
such limitation.
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7.13 - SCOPE OF LIMITATIONS
The limitations contained in Sections 7.10, 7.11, and 7.12 shall be applicable
only with respect to benefits provided pursuant to defined contribution plans
and defined benefit plans described in Section 415(k) of the Code.
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ARTICLE VIII
TRUST FUNDS AND SEPARATE ACCOUNTS
8.1 - GENERAL FUND
The Trustee shall maintain a General Fund as required to hold and administer any
assets of the Trust that are not allocated among the Investment Funds as
provided in the Plan or the Trust Agreement. The General Fund shall be held and
administered as a separate common trust fund. The interest of each Participant
or Beneficiary under the Plan in the General Fund shall be an undivided
interest. The General Fund may be invested in whole or in part in equity
securities issued by an Employer or a Related Company that are publicly traded
and are "qualifying employer securities" as defined in Section 407(d)(5) of
ERISA.
8.2 - INVESTMENT FUNDS
The Sponsor shall determine the number and type of Investment Funds and select
the investments for such Investment Funds. The Sponsor shall communicate the
same and any changes therein in writing to the Administrator and the Trustee.
Each Investment Fund shall be held and administered as a separate common trust
fund. The interest of each Participant or Beneficiary under the Plan in any
Investment Fund shall be an undivided interest.
The Sponsor may determine to offer one or more Investment Funds that are
invested in whole or in part in equity securities issued by an Employer or a
Related Company that are publicly traded and are "qualifying employer
securities" as defined in Section 407(d)(5) of ERISA.
8.3 - LOAN INVESTMENT FUND
If a loan from the Plan to a Participant is approved in accordance with the
provisions of Article XII, the Sponsor shall direct the establishment and
maintenance of a loan Investment Fund in the Participant's name. The assets of
the loan Investment Fund shall be held as a separate trust fund. A Participant's
loan Investment Fund shall be invested in the note reflecting the loan that is
executed by the Participant in accordance with the provisions of Article XII.
Notwithstanding any other provision of the Plan to the contrary, income received
with respect to a Participant's loan Investment Fund shall be
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allocated and the loan Investment Fund shall be administered as provided in
Article XII.
8.4 - INCOME ON TRUST
Any dividends, interest, distributions, or other income received by the Trustee
with respect to any Trust Fund maintained hereunder shall be allocated by the
Trustee to the Trust Fund for which the income was received.
8.5 - SEPARATE ACCOUNTS
As of the first date a contribution is made by or on behalf of an Employee,
there shall be established a Separate Account in his name reflecting his
interest in the Trust. Each Separate Account shall be maintained and
administered for each Participant and Beneficiary in accordance with the
provisions of the Plan. The balance of each Separate Account shall be the
balance of the account after all credits and charges thereto, for and as of such
date, have been made as provided herein.
8.6 - SUB-ACCOUNTS
A Participant's Separate Account shall be divided into individual Sub-Accounts
reflecting the portion of the Participant's Separate Account that is derived
from Tax-Deferred Contributions, Rollover Contributions, or Employer
Contributions. Each Sub-Account shall reflect separately contributions allocated
to each Trust Fund maintained hereunder and the earnings and losses attributable
thereto. The Employer Contributions Sub-Account shall reflect separately that
portion of such Sub-Account that is derived from Employer Contributions that may
be taken into account to satisfy the limitations on contributions for Highly
Compensated Employees contained in Article VII. Such other Sub-Accounts may be
established as are necessary or appropriate to reflect a Participant's interest
in the Trust.
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ARTICLE IX
LIFE INSURANCE CONTRACTS
9.1 - NO LIFE INSURANCE CONTRACTS
There shall be no life insurance contracts purchased under the Plan.
39
<PAGE> 46
ARTICLE X
DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
10.1 - FUTURE CONTRIBUTION INVESTMENT ELECTIONS
Each Eligible Employee shall make an investment election in the manner and form
prescribed by the Administrator directing the manner in which his Tax-Deferred
Contributions, Rollover Contributions, and Employer Contributions shall be
invested. An Eligible Employee's investment election shall specify the
percentage, in the percentage increments prescribed by the Administrator, of
such contributions that shall be allocated to one or more of the Investment
Funds with the sum of such percentages equaling 100 percent. The investment
election by a Participant shall remain in effect until his entire interest under
the Plan is distributed or forfeited in accordance with the provisions of the
Plan or until he files a change of investment election with the Administrator,
in such form as the Administrator shall prescribe. A Participant's change of
investment election may be made effective as of the date or dates prescribed by
the Administrator.
10.2 - DEPOSIT OF CONTRIBUTIONS
All Tax-Deferred Contributions, Rollover Contributions, and Employer
Contributions shall be deposited in the Trust and allocated among the Investment
Funds in accordance with the Participant's currently effective investment
election; provided, however, that any contributions made to the Plan in
qualifying employer securities shall be allocated to the Employer securities
Investment Fund established by the Sponsor, pending directions to the
Administrator regarding their future investment. If no investment election is on
file with the Administrator at the time contributions are to be deposited to a
Participant's Separate Account, the Participant shall be notified and an
investment election form shall be provided to him. Until such Participant shall
make an effective election under this Section, his contributions shall be
allocated to the default Investment Fund.
10.3 - ELECTION TO TRANSFER BETWEEN FUNDS
A Participant may elect to transfer investments from any Investment Fund to any
other Investment Fund. The Participant's transfer election shall specify either
(i) a percentage, in the
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percentage increments prescribed by the Administrator,
of the amount eligible for transfer, which percentage may not exceed 100
percent, or (ii) a dollar amount that is to be transferred. Subject to any
restrictions pertaining to a particular Investment Fund, a Participant's
transfer election may be made effective as of the date or dates prescribed by
the Administrator.
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ARTICLE XI
CREDITING AND VALUING SEPARATE ACCOUNTS
11.1 - CREDITING SEPARATE ACCOUNTS
All contributions made under the provisions of the Plan shall be credited to
Separate Accounts in the Trust Funds by the Trustee, in accordance with
procedures established in writing by the Administrator, either when received or
on the succeeding Valuation Date after valuation of the Trust Fund has been
completed for such Valuation Date as provided in Section 11.2, as shall be
determined by the Administrator.
11.2 - VALUING SEPARATE ACCOUNTS
Separate Accounts in the Trust Funds shall be valued by the Trustee on the
Valuation Date, in accordance with procedures established in writing by the
Administrator, either in the manner adopted by the Trustee and approved by the
Administrator or in the manner set forth in Section 11.3 as Plan valuation
procedures, as determined by the Administrator.
11.3 - PLAN VALUATION PROCEDURES
With respect to the Trust Funds, the Administrator may determine that the
following valuation procedures shall be applied. As of each Valuation Date
hereunder, the portion of any Separate Accounts in a Trust Fund shall be
adjusted to reflect any increase or decrease in the value of the Trust Fund for
the period of time occurring since the immediately preceding Valuation Date for
the Trust Fund (the "valuation period") in the following manner:
(a) First, the value of the Trust Fund shall be determined by valuing all
of the assets of the Trust Fund at fair market value.
(b) Next, the net increase or decrease in the value of the Trust Fund
attributable to net income and all profits and losses, realized and
unrealized, during the valuation period shall be determined on the
basis of the valuation under paragraph (a) taking into account
appropriate adjustments for contributions, loan payments, and
transfers to and distributions, withdrawals, loans, and
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transfers from such Trust Fund during the valuation period.
(c) Finally, the net increase or decrease in the value of the Trust Fund
shall be allocated among Separate Accounts in the Trust Fund in the
ratio of the balance of the portion of such Separate Account in the
Trust Fund as of the preceding Valuation Date less any
distributions, withdrawals, loans, and transfers from such Separate
Account balance in the Trust Fund since the Valuation Date to the
aggregate balances of the portions of all Separate Accounts in the
Trust Fund similarly adjusted, and each Separate Account in the
Trust Fund shall be credited or charged with the amount of its
allocated share. Notwithstanding the foregoing, the Administrator
may adopt such accounting procedures as it considers appropriate and
equitable to establish a proportionate crediting of net increase or
decrease in the value of the Trust Fund for contributions, loan
payments, and transfers to and distributions, withdrawals, loans,
and transfers from such Trust Fund made by or on behalf of a
Participant during the valuation period.
11.4 - FINALITY OF DETERMINATIONS
The Trustee shall have exclusive responsibility for determining the balance of
each Separate Account maintained hereunder. The Trustee's determinations thereof
shall be conclusive upon all interested parties.
11.5 - NOTIFICATION
Within a reasonable period of time after the end of each Plan Year, the
Administrator shall notify each Participant and Beneficiary of the balances of
his Separate Account and Sub-Accounts as of a Valuation Date during the Plan
Year.
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ARTICLE XII
LOANS
12.1 - APPLICATION FOR LOAN
A Participant who is a party in interest may make written application to the
Administrator for a loan from his Separate Account.
As collateral for any loan granted hereunder, the Participant shall grant to the
Plan a security interest in his vested interest under the Plan equal to the
amount of the loan; provided, however, that in no event may the security
interest exceed 50 percent of the Participant's vested interest under the Plan
determined as of the date as of which the loan is originated in accordance with
Plan provisions. In the case of a Participant who is an active employee, the
Participant also shall enter into an agreement to repay the loan by payroll
withholding. No loan in excess of 50 percent of the Participant's vested
interest under the Plan shall be made from the Plan. Loans shall not be made
available to Highly Compensated Employees in an amount greater than the amount
made available to other employees.
A loan shall not be granted unless the Participant consents in writing to the
charging of his Separate Account for unpaid principal and interest amounts in
the event the loan is declared to be in default.
12.2 - REDUCTION OF ACCOUNT UPON DISTRIBUTION
Notwithstanding any other provision of the Plan, the amount of a Participant's
Separate Account that is distributable to the Participant or his Beneficiary
under Article XIII or XV shall be reduced by the portion of his vested interest
that is held by the Plan as security for any loan outstanding to the
Participant, provided that the reduction is used to repay the loan. If
distribution is made because of the Participant's death prior to the
commencement of distribution of his Separate Account and less than 100 percent
of the Participant's vested interest in his Separate Account (determined without
regard to the preceding sentence) is payable to his surviving spouse, then the
balance of the Participant's vested interest in his Separate Account shall be
adjusted by reducing the vested account balance by the amount of the security
used to repay the loan, as provided in the
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preceding sentence, prior to determining the amount of the benefit payable to
the surviving spouse.
12.3 - REQUIREMENTS TO PREVENT A TAXABLE DISTRIBUTION
Notwithstanding any other provision of the Plan to the contrary, the following
terms and conditions shall apply to any loan made to a Participant under this
Article:
(a) The interest rate on any loan to a Participant shall be a reasonable
interest rate commensurate with current interest rates charged for
loans made under similar circumstances by persons in the business of
lending money.
(b) The amount of any loan to a Participant (when added to the outstanding
balance of all other loans to the Participant from the Plan or any
other plan maintained by an Employer or a Related Company) shall not
exceed the lesser of:
(i) $50,000, reduced by the excess, if any, of the highest
outstanding balance of any other loan to the Participant from
the Plan or any other plan maintained by an Employer or a
Related Company during the preceding 12-month period over the
outstanding balance of such loans on the date a loan is made
hereunder; or
(ii) 50 percent of the vested portions of the Participant's Separate
Account and his vested interest under all other plans
maintained by an Employer or a Related Company.
(c) The term of any loan to a Participant shall be no greater than five
years, except in the case of a loan used to acquire any dwelling unit
which within a reasonable period of time is to be used (determined at
the time the loan is made) as a principal residence of the Participant.
(d) Except as otherwise permitted under Treasury regulations, substantially
level amortization shall be required over the term of the loan with
payments made not less frequently than quarterly.
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12.4 - ADMINISTRATION OF LOAN INVESTMENT FUND
Upon approval of a loan to a Participant, the Administrator shall direct the
Trustee to transfer an amount equal to the loan amount from the Investment Funds
in which it is invested, as directed by the Administrator, to the loan
Investment Fund established in the Participant's name. Any loan approved by the
Administrator shall be made to the Participant out of the Participant's loan
Investment Fund. All principal and interest paid by the Participant on a loan
made under this Article shall be deposited to his Separate Account and shall be
allocated upon receipt among the Investment Funds in accordance with the
Participant's currently effective investment election. The balance of the
Participant's loan Investment Fund shall be decreased by the amount of principal
payments and the loan Investment Fund shall be terminated when the loan has been
repaid in full.
12.5 - DEFAULT
If a Participant fails to make or cause to be made, any payment required under
the terms of the loan within 90 days following the date on which such payment
shall become due or there is an outstanding principal balance existing on a loan
after the last scheduled repayment date, the Administrator shall direct the
Trustee to declare the loan to be in default, and the entire unpaid balance of
such loan, together with accrued interest, shall be immediately due and payable.
In any such event, if such balance and interest thereon is not then paid, the
Trustee shall charge the Separate Account of the borrower with the amount of
such balance and interest as of the earliest date a distribution may be made
from the Plan to the borrower without adversely affecting the tax qualification
of the Plan or of the cash or deferred arrangement.
12.6 - SPECIAL RULES APPLICABLE TO LOANS
Any loan made hereunder shall be subject to the following rules:
(a) Loans limited to Eligible Employees: No loans shall be made to an
Employee who makes a Rollover Contribution in accordance with Article
V, but who is not an Eligible Employee as provided in Article III.
(b) Minimum Loan Amount: A Participant may not request a loan for less
than $1,000.
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(c) Maximum Number of Outstanding Loans: A Participant with an
outstanding loan may not apply for another loan until the existing
loan is paid in full and may not refinance an existing loan or
attain a second loan for the purpose of paying off the existing
loan. A Participant may not apply for more than one loan during the
Plan Year. The provisions of this paragraph shall not apply to any
loans made prior to the effective date of this amendment and
restatement; provided, however, that a Participant may not apply for
a new loan hereunder until all outstanding loans made to the
Participant prior to the effective date of this amendment and
restatement have been paid in full.
(d) Maximum Period for Real Estate Loans: The term of any loan to a
Participant that is used to acquire any dwelling unit which within a
reasonable period of time is to be used (determined at the time the
loan is made) as a principal residence of the Participant shall be no
greater than ten years.
(e) Pre-Payment Without Penalty: A Participant may pre-pay the balance
of any loan hereunder prior to the date it is due without penalty.
(f) Effect of Termination of Employment: Upon a Participant's
termination of employment, the balance of any outstanding loan
hereunder shall immediately become due and owing.
12.7 - LOANS GRANTED PRIOR TO AMENDMENT
Notwithstanding any other provision of this Article to the contrary, any loan
made under the provisions of the Plan as in effect prior to this amendment and
restatement shall remain outstanding until repaid in accordance with its terms
or the otherwise applicable Plan provisions.
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ARTICLE XIII
WITHDRAWALS WHILE EMPLOYED
13.1 - WITHDRAWALS OF ROLLOVER CONTRIBUTIONS
A Participant who is employed by an Employer or a Related Company and has
attained age 59 1/2 or is determined by the Administrator to have incurred a
hardship as defined in this Article may elect in writing, subject to the
limitations and conditions prescribed in this Article, to make a cash withdrawal
from his Rollover Contributions Sub-Account.
13.2 - WITHDRAWALS OF EMPLOYER CONTRIBUTIONS
A Participant who is employed by an Employer or a Related Company and has
attained age 59 1/2 may elect in writing, subject to the limitations and
conditions prescribed in this Article to make a cash withdrawal from his vested
interest in his Employer Contributions Sub-Account. The maximum amount that a
Participant may withdraw pursuant to this Section shall be an amount ("X")
determined by the following formula:
X = P(AB + D) - D
For purposes of the formula:
P = The Participant's vested interest in his Employer
Contributions Sub-Account on the date distribution is to be
made.
AB = The balance of the Participant's Employer Contributions
Sub-Account as of the Valuation Date immediately preceding the
date distribution is to be made.
D = The amount of all prior withdrawals from the Participant's
Employer Contributions Sub-Account made pursuant to this
Section.
13.3 - WITHDRAWALS OF TAX-DEFERRED CONTRIBUTIONS
A Participant who is employed by an Employer or a Related Company and who has
attained age 59 1/2 or is determined by the Administrator to have incurred a
hardship as defined in this
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Article may elect in writing, subject to the limitations and conditions
prescribed in this Article, to make a cash withdrawal from his Tax-Deferred
Contributions Sub-Account. The maximum amount that a Participant may withdraw
pursuant to this Section because of a hardship is the balance of his
Tax-Deferred Contributions Sub-Account, exclusive of any earnings credited to
such Sub-Account.
13.4 - LIMITATIONS ON WITHDRAWALS OTHER THAN HARDSHIP WITHDRAWALS
Withdrawals made pursuant to this Article, other than hardship withdrawals,
shall be subject to the following conditions and limitations:
A Participant must file a written withdrawal application with the
Administrator such number of days prior to the date as of which it is
to be effective as the Administrator shall prescribe.
Withdrawals may be made effective as soon as reasonably practicable
following the Administrator's receipt of the Participant's directions.
13.5 - CONDITIONS AND LIMITATIONS ON HARDSHIP WITHDRAWALS
A Participant must file a written application for a hardship withdrawal with the
Administrator such number of days prior to the date as of which it is to be
effective as the Administrator may prescribe. Hardship withdrawals may be made
effective as soon as reasonably practicable following the Administrator's
receipt of the Participant's directions. The Administrator shall grant a
hardship withdrawal only if it determines that the withdrawal is necessary to
meet an immediate and heavy financial need of the Participant. An immediate and
heavy financial need of the Participant means a financial need on account of:
(a) expenses previously incurred by or necessary to obtain for the
Participant, the Participant's spouse, or any dependent of the
Participant (as defined in Section 152 of the Code) medical care
described in Section 213(d) of the Code;
(b) costs directly related to the purchase (excluding mortgage payments)
of a principal residence for the Participant;
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(c) payment of tuition, related educational fees, and room and board
expenses for the next 12 months of post-secondary education for the
Participant, the Participant's spouse, or any dependent of the
Participant; or
(d) the need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence.
A withdrawal shall be deemed to be necessary to satisfy an immediate and heavy
financial need of a Participant only if all of the following requirements are
satisfied:
The withdrawal is not in excess of the amount of the immediate and
heavy financial need of the Participant.
The Participant has obtained all distributions, other than hardship
distributions, and all non-taxable loans currently available under all
plans maintained by an Employer or any Related Company.
The Participant's Tax-Deferred Contributions and the Participant's
elective tax-deferred contributions and employee after-tax
contributions under all other tax-qualified plans maintained by an
Employer or any Related Company shall be suspended for at least twelve
months after his receipt of the withdrawal.
The Participant shall not make Tax-Deferred Contributions or elective
tax-deferred contributions under any other tax-qualified plan
maintained by an Employer or any Related Company for the Participant's
taxable year immediately following the taxable year of the withdrawal
in excess of the applicable limit under Section 402(g) of the Code for
such next taxable year less the amount of the Participant's
Tax-Deferred Contributions and elective tax-deferred contributions
under any other plan maintained by an Employer or any Related Company
for the taxable year of the withdrawal.
The minimum hardship withdrawal that a Participant may make is $1,000. The
amount of a hardship withdrawal may include any amounts necessary to pay any
Federal, state, or local income taxes or penalties reasonably anticipated to
result from the distribution. A Participant shall not fail to be treated as an
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Eligible Employee for purposes of applying the limitations contained in Article
VII of the Plan merely because his Tax-Deferred Contributions are suspended in
accordance with this Section.
13.6 - ORDER OF WITHDRAWAL FROM A PARTICIPANT'S SUB-ACCOUNTS
Distribution of a withdrawal amount shall be made from a Participant's
Sub-Accounts, to the extent necessary, in the order prescribed by the
Administrator, which order shall be uniform with respect to all Participants and
non-discriminatory. If the Sub-Account from which a Participant is receiving a
withdrawal is invested in more than one Investment Fund, the withdrawal shall be
charged against the Investment Funds as directed by the Administrator.
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ARTICLE XIV
TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
14.1 - TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
A Participant's Settlement Date shall occur on the date he terminates employment
with an Employer and all Related Companies because of death, disability,
retirement, or other termination of employment. Written notice of a
Participant's Settlement Date shall be given by the Administrator to the
Trustee.
14.2 - SEPARATE ACCOUNTING FOR NON-VESTED AMOUNTS
If as of a Participant's Settlement Date the Participant's vested interest in
his Employer Contributions Sub-Account is less than 100 percent, that portion of
his Employer Contributions Sub-Account that is not vested shall be accounted for
separately from the vested portion and shall be disposed of as provided in the
following Section. If prior to his Settlement Date such a Participant made a
withdrawal in accordance with the provisions of Article XIII, the vested portion
of his Employer Contributions Sub-Account shall be equal to the maximum
withdrawable amount as determined under Article XIII.
14.3 - DISPOSITION OF NON-VESTED AMOUNTS
That portion of a Participant's Employer Contributions Sub-Account that is not
vested upon the occurrence of his Settlement Date shall be disposed of as
follows:
(a) If the Participant has no vested interest in his Separate Account
upon the occurrence of his Settlement Date or his vested interest in
his Separate Account as of the date of distribution does not exceed
$3,500 resulting in the Participant's receipt of a single sum
payment of such vested interest, the non-vested balance remaining in
the Participant's Employer Contributions Sub-Account will be
forfeited and his Separate Account closed as of (i) the
Participant's Settlement Date, if the Participant has no vested
interest in his Separate Account, or (ii) the date the single sum
payment occurs.
(b) If the Participant's vested interest in his Separate Account exceeds
$3,500 and the Participant is eligible for
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and consents in writing to a single sum payment of his vested interest
in his Separate Account, the non-vested balance remaining in the
Participant's Employer Contributions Sub-Account will be forfeited and
his Separate Account closed as of the date the single sum payment
occurs, provided that such distribution occurs prior to the end of the
second Plan Year beginning on or after the Participant's Settlement
Date.
(c) If neither paragraph (a) nor paragraph (b) is applicable, the
non-vested portion of the Participant's Employer Contributions
Sub-Account will continue to be held in such Sub-Account and will not
be forfeited until the end of the five-year period beginning on his
Settlement Date.
Whenever the non-vested portion of a Participant's Employer Contributions
Sub-Account is forfeited under the provisions of the Plan with respect to a Plan
Year, the amount of such forfeiture, as of the last day of the Plan Year, shall
be applied first against Plan expenses for the Plan Year and then against the
Employer Contribution obligations for the Plan Year of the Employer for which
the Participant last performed services as an Employee. Notwithstanding the
foregoing, however, should the amount of all such forfeitures for any Plan Year
with respect to any Employer exceed the amount of such Employer's Employer
Contribution obligation for the Plan Year, the excess amount of such forfeitures
shall be held unallocated in a suspense account established with respect to the
Employer and shall for all Plan purposes be applied against the Employer's
Employer Contribution obligations for the following Plan Year.
14.4 - RECREDITING OF FORFEITED AMOUNTS
A former Participant who forfeited the non-vested portion of his Employer
Contributions Sub-Account in accordance with the provisions of this Article and
who is reemployed by an Employer or a Related Company shall have such forfeited
amounts recredited to a new Separate Account in his name, without adjustment for
interim gains or losses experienced by the Trust, if:
(a) he returns to employment with an Employer or a Related Company before
the end of the five-year period beginning on the later of his
Settlement Date or the date he received distribution of his vested
interest in his Separate Account;
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(b) he resumes employment covered under the Plan before the end of the
five-year period beginning on the date he is reemployed; and
(c) if he received distribution of his vested interest in his Separate
Account, he repays to the Plan the full amount of such distribution
before the end of the five-year period beginning on the date he is
reemployed.
Funds needed in any Plan Year to recredit the Separate Account of a Participant
with the amounts of prior forfeitures in accordance with the preceding sentence
shall come first from forfeitures that arise during such Plan Year, and then
from Trust income earned in such Plan Year, with each Trust Fund being charged
with the amount of such income proportionately, unless his Employer chooses to
make an additional Employer Contribution, and shall finally be provided by his
Employer by way of a separate Employer Contribution.
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ARTICLE XV
DISTRIBUTIONS
15.1 - DISTRIBUTIONS TO PARTICIPANTS
A Participant whose Settlement Date occurs shall receive distribution of his
vested interest in his Separate Account in the form provided under Article XVI
beginning as soon as reasonably practicable following his Settlement Date or the
date his application for distribution is filed with the Administrator, if later.
In addition, a Participant who continues in employment with an Employer or a
Related Company after his Normal Retirement Date may elect to receive
distribution of all or any portion of his Separate Account in the form provided
under Article XVI at any time following his Normal Retirement Date.
15.2 - DISTRIBUTIONS TO BENEFICIARIES
If a Participant dies prior to the date distribution of his vested interest in
his Separate Account begins under this Article, his Beneficiary shall receive
distribution of the Participant's vested interest in his Separate Account in the
form provided under Article XVI beginning as soon as reasonably practicable
following the date the Beneficiary's application for distribution is filed with
the Administrator. Unless distribution is to be made over the life or over a
period certain not greater than the life expectancy of the Beneficiary,
distribution of the Participant's entire vested interest shall be made to the
Beneficiary no later than the end of the fifth calendar year beginning after the
Participant's death. If distribution is to be made over the life or over a
period certain no greater than the life expectancy of the Beneficiary,
distribution shall commence no later than:
(a) If the Beneficiary is not the Participant's spouse, the end of the
first calendar year beginning after the Participant's death; or
(b) If the Beneficiary is the Participant's spouse, the later of (i) the
end of the first calendar year beginning after the Participant's death
or (ii) the end of the calendar year in which the Participant would
have attained age 70 1/2.
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If distribution is to be made to a Participant's spouse, it shall be made
available within a reasonable period of time after the Participant's death that
is no less favorable than the period of time applicable to other distributions.
If a Participant dies after the date distribution of his vested interest in his
Separate Account begins under this Article, but before his entire vested
interest in his Separate Account is distributed, his Beneficiary shall receive
distribution of the remainder of the Participant's vested interest in his
Separate Account beginning as soon as reasonably practicable following the
Participant's date of death in a form that provides for distribution at least as
rapidly as under the form in which the Participant was receiving distribution.
15.3 - CASH OUTS AND PARTICIPANT CONSENT
Notwithstanding any other provision of the Plan to the contrary, if a
Participant's vested interest in his Separate Account does not exceed $3,500,
distribution of such vested interest shall be made to the Participant in a
single sum payment as soon as reasonably practicable following his Settlement
Date. If a Participant's vested interest in his Separate Account is $0, he shall
be deemed to have received distribution of such vested interest as of his
Settlement Date. If a Participant's vested interest in his Separate Account
exceeds $3,500, distribution shall not commence to such Participant prior to his
Normal Retirement Date without the Participant's written consent. If at the time
of a distribution or deemed distribution to a Participant from his Separate
Account, the Participant's vested interest in his Separate Account exceeded
$3,500, then for purposes of this Section, the Participant's vested interest in
his Separate Account on any subsequent date shall be deemed to exceed $3,500.
15.4 - REQUIRED COMMENCEMENT OF DISTRIBUTION
Notwithstanding any other provision of the Plan to the contrary, distribution of
a Participant's vested interest in his Separate Account shall commence to the
Participant no later than the earlier of:
(a) 60 days after the close of the Plan Year in which (i) the Participant's
Normal Retirement Date occurs, (ii) the 10th anniversary of the year in
which he commenced
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participation in the Plan occurs, or (iii) his Settlement Date occurs,
whichever is latest; or
(b) the April 1 following the close of the calendar year in which he
attains age 70 1/2, whether or not his Settlement Date has occurred,
except that if a Participant attained age 70 1/2 prior to January 1,
1988, and was not a five-percent owner (as defined in Section 416 of
the Code) at any time during the five-Plan-Year period ending within
the calendar year in which he attained age 70 1/2, distribution of
such Participant's vested interest in his Separate Account shall
commence no later than the April 1 following the close of the
calendar year in which he attains age 70 1/2 or retires, whichever
is later.
Distributions required to commence under this Section shall be made in the form
provided under Article XVI and in accordance with Section 401(a)(9) of the Code
and regulations issued thereunder, including the minimum distribution incidental
benefit requirements.
15.5 - REEMPLOYMENT OF A PARTICIPANT
If a Participant whose Settlement Date has occurred is reemployed by an Employer
or a Related Company, he shall lose his right to any distribution or further
distributions from the Trust arising from his prior Settlement Date and his
interest in the Trust shall thereafter be treated in the same manner as that of
any other Participant whose Settlement Date has not occurred.
15.6 - RESTRICTIONS ON ALIENATION
Except as provided in Section 401(a)(13) of the Code relating to qualified
domestic relations orders and Section 1.401(a)-13(b)(2) of Treasury regulations
relating to Federal tax levies and judgments, no benefit under the Plan at any
time shall be subject in any manner to anticipation, alienation, assignment
(either at law or in equity), encumbrance, garnishment, levy, execution, or
other legal or equitable process; and no person shall have power in any manner
to anticipate, transfer, assign (either at law or in equity), alienate or
subject to attachment, garnishment, levy, execution, or other legal or equitable
process, or in any way encumber his benefits under the Plan, or any part
thereof, and any attempt to do so shall be void.
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15.7 - FACILITY OF PAYMENT
If the Administrator finds that any individual to whom an amount is payable
hereunder is incapable of attending to his financial affairs because of any
mental or physical condition, including the infirmities of advanced age, such
amount (unless prior claim therefor shall have been made by a duly qualified
guardian or other legal representative) may, in the discretion of the
Administrator, be paid to another person for the use or benefit of the
individual found incapable of attending to his financial affairs or in
satisfaction of legal obligations incurred by or on behalf of such individual.
The Trustee shall make such payment only upon receipt of written instructions to
such effect from the Administrator. Any such payment shall be charged to the
Separate Account from which any such payment would otherwise have been paid to
the individual found incapable of attending to his financial affairs and shall
be a complete discharge of any liability therefor under the Plan.
15.8 - INABILITY TO LOCATE PAYEE
If any benefit becomes payable to any person, or to the executor or
administrator of any deceased person, and if that person or his executor or
administrator does not present himself to the Administrator within a reasonable
period after the Administrator mails written notice of his eligibility to
receive a distribution hereunder to his last known address and makes such other
diligent effort to locate the person as the Administrator determines, that
benefit will be forfeited. However, if the payee later files a claim for that
benefit, the benefit will be restored.
15.9 - DISTRIBUTION PURSUANT TO QUALIFIED DOMESTIC RELATIONS ORDERS
Notwithstanding any other provision of the Plan to the contrary, if a qualified
domestic relations order so provides, distribution may be made to an alternate
payee pursuant to a qualified domestic relations order, as defined in Section
414(p) of the Code, regardless of whether the Participant's Settlement Date has
occurred or whether the Participant is otherwise entitled to receive a
distribution under the Plan.
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ARTICLE XVI
FORM OF PAYMENT
16.1 - FORM OF PAYMENT
Distribution shall be made to a Participant, or his Beneficiary, if the
Participant has died, in a single sum payment. Notwithstanding the foregoing, if
a Participant continues in employment with an Employer or a Related Company
after the date as of which distribution of his vested interest must commence in
accordance with the requirements of Section 401(a)(9) of the Code, such
Participant may elect to receive distribution in periodic payments, made not
less frequently than annually, equal to the minimum amount necessary to satisfy
the distribution requirements of Section 401(a)(9) of the Code and regulations
issued thereunder for the remainder of the period that he continues in
employment with an Employer or a Related Company. Distribution of the fair
market value of the Participant's Separate Account shall be made in cash or in
kind, as elected by the Participant, except that distribution shall not be made
in Employer stock.
16.2 - DIRECT ROLLOVER
Notwithstanding any other provision of the Plan to the contrary, in lieu of
receiving distribution in the form of payment provided under this Article, a
"qualified distributee" may elect in writing, in accordance with rules
prescribed by the Administrator, to have any portion or all of a distribution
made on or after January 1, 1993, that is an "eligible rollover distribution"
paid directly by the Plan to the "eligible retirement plan" designated by the
"qualified distributee"; provided, however, that this provision shall not apply
if the total distribution is less than $200 and that a "qualified distributee"
may not elect this provision with respect to a portion of a distribution that is
less than $500. Any such payment by the Plan to another "eligible retirement
plan" shall be a direct rollover. For purposes of this Section, the following
terms have the following meanings:
(a) An "eligible retirement plan" means an individual retirement account
described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan
described in
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Section 403(a) of the Code, or a qualified trust described in Section
401(a) of the Code that accepts rollovers; provided, however, that, in
the case of a direct rollover by a surviving spouse, an eligible
retirement plan does not include a qualified trust described in Section
401(a) of the Code.
(b) An "eligible rollover distribution" means any distribution of all or
any portion of the balance of a Participant's Separate Account;
provided, however, that an eligible rollover distribution does not
include any distribution to the extent such distribution is required
under Section 401(a)(9) of the Code.
(c) A "qualified distributee" means a Participant, his surviving spouse, or
his spouse or former spouse who is an alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the Code.
16.3 - NOTICE REGARDING FORM OF PAYMENT
Within the 60 day period ending 30 days before the date as of which distribution
of a Participant's Separate Account commences, the Administrator shall provide
the Participant with a written explanation of his right to defer distribution
until his Normal Retirement Date, or such later date as may be provided in the
Plan, his right to make a direct rollover, and the form of payment provided
under the Plan. Distribution of the Participant's Separate Account may commence
less than 30 days after such notice is provided to the Participant if (i) the
Administrator clearly informs the Participant of his right to consider his
election of whether or not to make a direct rollover or to receive a
distribution prior to his Normal Retirement Date for a period of at least 30
days following his receipt of the notice and (ii) the Participant, after
receiving the notice, affirmatively elects an early distribution.
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ARTICLE XVII
BENEFICIARIES
17.1 - DESIGNATION OF BENEFICIARY
A married Participant's Beneficiary shall be his spouse, unless the Participant
designates a person or persons other than his spouse as Beneficiary with his
spouse's written consent. A Participant may designate a Beneficiary on the form
prescribed by the Administrator. If no Beneficiary has been designated pursuant
to the provisions of this Section, or if no Beneficiary survives the Participant
and he has no surviving spouse, then the Beneficiary under the Plan shall be the
Participant's estate. If a Beneficiary dies after becoming entitled to receive a
distribution under the Plan but before distribution is made to him in full, and
if no other Beneficiary has been designated to receive the balance of the
distribution in that event, the estate of the deceased Beneficiary shall be the
Beneficiary as to the balance of the distribution.
17.2 - SPOUSAL CONSENT REQUIREMENTS
Any written spousal consent given pursuant to this Article must acknowledge the
effect of the action taken and must be witnessed by a Plan representative or a
notary public. In addition, the spouse's written consent must either (i) specify
any non-spouse Beneficiary designated by the Participant and that such
Beneficiary may not be changed without written spousal consent or (ii)
acknowledge that the spouse has the right to limit consent to a specific
Beneficiary, but permit the Participant to change the designated Beneficiary
without the spouse's further consent. A Participant's spouse will be deemed to
have given written consent to the Participant's designation of Beneficiary if
the Participant establishes to the satisfaction of a Plan representative that
such consent cannot be obtained because the spouse cannot be located or because
of other circumstances set forth in Section 401(a)(11) of the Code and
regulations issued thereunder. Any written consent given or deemed to have been
given by a Participant's spouse hereunder shall be valid only with respect to
the spouse who signs the consent.
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ARTICLE XVIII
ADMINISTRATION
18.1 - AUTHORITY OF THE SPONSOR
The Sponsor, which shall be the administrator for purposes of ERISA and the plan
administrator for purposes of the Code, shall be responsible for the
administration of the Plan and, in addition to the powers and authorities
expressly conferred upon it in the Plan, shall have all such powers and
authorities as may be necessary to carry out the provisions of the Plan,
including the power and authority to interpret and construe the provisions of
the Plan, to make benefit determinations, and to resolve any disputes which
arise under the Plan. The Sponsor may employ such attorneys, agents, and
accountants as it may deem necessary or advisable to assist in carrying out its
duties hereunder. The Sponsor shall be a "named fiduciary" as that term is
defined in Section 402(a)(2) of ERISA. The Sponsor may:
(a) allocate any of the powers, authority, or responsibilities for the
operation and administration of the Plan (other than trustee
responsibilities as defined in Section 405(c)(3) of ERISA) among named
fiduciaries; and
(b) designate a person or persons other than a named fiduciary to carry
out any of such powers, authority, or responsibilities;
except that no allocation by the Sponsor of, or designation by the Sponsor with
respect to, any of such powers, authority, or responsibilities to another named
fiduciary or a person other than a named fiduciary shall become effective unless
such allocation or designation shall first be accepted by such named fiduciary
or other person in a writing signed by it and delivered to the Sponsor.
18.2 - ACTION OF THE SPONSOR
Any act authorized, permitted, or required to be taken under the Plan by the
Sponsor and which has not been delegated in accordance with Section 18.1, may be
taken by a majority of the members of the board of directors of the Sponsor,
either by vote at a meeting, or in writing without a meeting, or by the employee
or employees of the Sponsor designated by the board of directors
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to carry out such acts on behalf of the Sponsor. All notices, advice,
directions, certifications, approvals, and instructions required or authorized
to be given by the Sponsor as under the Plan shall be in writing and signed by
either (i) a majority of the members of the board of directors of the Sponsor or
by such member or members as may be designated by an instrument in writing,
signed by all the members thereof, as having authority to execute such documents
on its behalf, or (ii) the employee or employees authorized to act for the
Sponsor in accordance with the provisions of this Section.
18.3 - CLAIMS REVIEW PROCEDURE
Whenever a claim for benefits under the Plan filed by any person (herein
referred to as the "Claimant") is denied, whether in whole or in part, the
Sponsor shall transmit a written notice of such decision to the Claimant within
90 days of the date the claim was filed or, if special circumstances require an
extension, within 180 days of such date, which notice shall be written in a
manner calculated to be understood by the Claimant and shall contain a statement
of (i) the specific reasons for the denial of the claim, (ii) specific reference
to pertinent Plan provisions on which the denial is based, and (iii) a
description of any additional material or information necessary for the Claimant
to perfect the claim and an explanation of why such information is necessary.
The notice shall also include a statement advising the Claimant that, within 60
days of the date on which he receives such notice, he may obtain review of such
decision in accordance with the procedures hereinafter set forth. Within such
60-day period, the Claimant or his authorized representative may request that
the claim denial be reviewed by filing with the Sponsor a written request
therefor, which request shall contain the following information:
(a) the date on which the Claimant's request was filed with the Sponsor;
provided, however, that the date on which the Claimant's request for
review was in fact filed with the Sponsor shall control in the event
that the date of the actual filing is later than the date stated by the
Claimant pursuant to this paragraph;
(b) the specific portions of the denial of his claim which the Claimant
requests the Sponsor to review;
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(c) a statement by the Claimant setting forth the basis upon which he
believes the Sponsor should reverse the previous denial of his claim
for benefits and accept his claim as made; and
(d) any written material (offered as exhibits) which the Claimant desires
the Sponsor to examine in its consideration of his position as stated
pursuant to paragraph (c) of this Section.
Within 60 days of the date determined pursuant to paragraph (a) of this Section
or, if special circumstances require an extension, within 120 days of such date,
the Sponsor shall conduct a full and fair review of the decision denying the
Claimant's claim for benefits and shall render its written decision on review to
the Claimant. The Sponsor's decision on review shall be written in a manner
calculated to be understood by the Claimant and shall specify the reasons and
Plan provisions upon which the Sponsor's decision was based.
18.4 - QUALIFIED DOMESTIC RELATIONS ORDERS
The Sponsor shall establish reasonable procedures to determine the status of
domestic relations orders and to administer distributions under domestic
relations orders which are deemed to be qualified orders. Such procedures shall
be in writing and shall comply with the provisions of Section 414(p) of the Code
and regulations issued thereunder.
18.5 - INDEMNIFICATION
In addition to whatever rights of indemnification the members of the board of
directors of the Sponsor or any employee or employees of the Sponsor to whom any
power, authority, or responsibility is delegated pursuant to Section 18.2, may
be entitled under the articles of incorporation or regulations of the Sponsor,
under any provision of law, or under any other agreement, the Sponsor shall
satisfy any liability actually and reasonably incurred by any such person or
persons, including expenses, attorneys' fees, judgments, fines, and amounts paid
in settlement (other than amounts paid in settlement not approved by the
Sponsor), in connection with any threatened, pending or completed action, suit,
or proceeding which is related to the exercising or failure to exercise by such
person or persons of any of the powers, authority, responsibilities, or
discretion as
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provided under the Plan, or reasonably believed by such person or persons to be
provided hereunder, and any action taken by such person or persons in connection
therewith, unless the same is judicially determined to be the result of such
person or persons' gross negligence or willful misconduct.
18.6 - ACTIONS BINDING
Subject to the provisions of Section 18.3, any action taken by the Sponsor which
is authorized, permitted, or required under the Plan shall be final and binding
upon the Employers, the Trustee, all persons who have or who claim an interest
under the Plan, and all third parties dealing with the Employers or the Trustee.
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ARTICLE XIX
AMENDMENT AND TERMINATION
19.1 - AMENDMENT
Subject to the provisions of Section 19.2, the Sponsor may at any time and from
time to time, by action of its board of directors, or such officers of the
Sponsor as are authorized by its board of directors, amend the Plan, either
prospectively or retroactively. Any such amendment shall be by written
instrument executed by the Sponsor.
19.2 - LIMITATION ON AMENDMENT
The Sponsor shall make no amendment to the Plan which shall decrease the accrued
benefit of any Participant or Beneficiary, except that nothing contained herein
shall restrict the right to amend the provisions of the Plan relating to the
administration of the Plan and Trust. Moreover, no such amendment shall be made
hereunder which shall permit any part of the Trust to revert to an Employer or
any Related Company or be used or be diverted to purposes other than the
exclusive benefit of Participants and Beneficiaries.
19.3 - TERMINATION
The Sponsor reserves the right, by action of its board of directors, to
terminate the Plan as to all Employers at any time (the effective date of such
termination being hereinafter referred to as the "termination date"). Upon any
such termination of the Plan, the following actions shall be taken for the
benefit of Participants and Beneficiaries:
(a) As of the termination date, each Investment Fund shall be valued and
all Separate Accounts and Sub-Accounts shall be adjusted in the
manner provided in Article XI, with any unallocated contributions or
forfeitures being allocated as of the termination date in the manner
otherwise provided in the Plan. The termination date shall become a
Valuation Date for purposes of Article XI. In determining the net
worth of the Trust, there shall be included as a liability such
amounts as shall be necessary to pay all expenses in connection with
the termination of the Trust and the liquidation and distribution of
the property of
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the Trust, as well as other expenses, whether or not accrued, and shall
include as an asset all accrued income.
(b) All Separate Accounts shall then be disposed of to or for the
benefit of each Participant or Beneficiary in accordance with the
provisions of Article XV as if the termination date were his
Settlement Date; provided, however, that notwithstanding the
provisions of Article XV, if the Plan does not offer an annuity
option and if neither his Employer nor a Related Company establishes
or maintains another defined contribution plan (other than an
employee stock ownership plan as defined in Section 4975(e)(7) of
the Code), the Participant's written consent to the commencement of
distribution shall not be required regardless of the value of the
vested portions of his Separate Account.
(c) Notwithstanding the provisions of paragraph (b) of this Section, no
distribution shall be made to a Participant of any portion of the
balance of his Tax-Deferred Contributions Sub-Account prior to his
separation from service (other than a distribution made in
accordance with Article XIII or required in accordance with Section
401(a)(9) of the Code) unless (i) neither his Employer nor a Related
Company establishes or maintains another defined contribution plan
(other than an employee stock ownership plan as defined in Section
4975(e)(7) of the Code, a tax credit employee stock ownership plan
as defined in Section 409 of the Code, or a simplified employee
pension as defined in Section 408(k) of the Code) either at the time
the Plan is terminated or at any time during the period ending 12
months after distribution of all assets from the Plan; provided,
however, that this provision shall not apply if fewer than two
percent of the Eligible Employees under the Plan were eligible to
participate at any time in such other defined contribution plan
during the 24-month period beginning 12 months before the Plan
termination, and (ii) the distribution the Participant receives is a
"lump sum distribution" as defined in Section 402(e)(4) of the Code,
without regard to clauses (i), (ii), (iii), and (iv) of
sub-paragraph (A), sub-paragraph (B), or sub-paragraph (H) thereof.
Notwithstanding anything to the contrary contained in the Plan, upon any such
Plan termination, the vested interest of each
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Participant and Beneficiary in his Employer Contributions Sub-Account shall be
100 percent; and, if there is a partial termination of the Plan, the vested
interest of each Participant and Beneficiary who is affected by the partial
termination in his Employer Contributions Sub-Account shall be 100 percent. For
purposes of the preceding sentence only, the Plan shall be deemed to terminate
automatically if there shall be a complete discontinuance of contributions
hereunder by all Employers.
19.4 - REORGANIZATION
The merger, consolidation, or liquidation of any Employer with or into any other
Employer or a Related Company shall not constitute a termination of the Plan as
to such Employer. If an Employer disposes of substantially all of the assets
used by the Employer in a trade or business or disposes of a subsidiary and in
connection therewith one or more Participants terminates employment but
continues in employment with the purchaser of the assets or with such
subsidiary, no distribution from the Plan shall be made to any such Participant
prior to his separation from service (other than a distribution made in
accordance with Article XIII or required in accordance with Section 401(a)(9) of
the Code), except that a distribution shall be permitted to be made in such a
case, subject to the Participant's consent (to the extent required by law), if
(i) the distribution would constitute a "lump sum distribution" as defined in
section 402(e)(4) of the Code, without regard to clauses (i), (ii), (iii), or
(iv) of sub-paragraph (A), sub-paragraph (B), or sub-paragraph (H) thereof, (ii)
the Employer continues to maintain the Plan after the disposition, (iii) the
purchaser does not maintain the Plan after the disposition, and (iv) the
distribution is made by the end of the second calendar year after the calendar
year in which the disposition occurred.
19.5 - WITHDRAWAL OF AN EMPLOYER
An Employer other than the Sponsor may withdraw from the Plan at any time upon
notice in writing to the Administrator (the effective date of such withdrawal
being hereinafter referred to as the "withdrawal date"), and shall thereupon
cease to be an Employer for all purposes of the Plan. An Employer shall be
deemed automatically to withdraw from the Plan in the event of its complete
discontinuance of contributions, or, subject to Section 19.4 and unless the
Sponsor otherwise directs, it ceases to be a Related Company of the Sponsor or
any other Employer.
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Upon the withdrawal of an Employer, the withdrawing Employer shall determine
whether a partial termination has occurred with respect to its Employees. In the
event that the withdrawing Employer determines a partial termination has
occurred, the action specified in Section 19.3 shall be taken as of the
withdrawal date, as on a termination of the Plan, but with respect only to
Participants who are employed solely by the withdrawing Employer, and who, upon
such withdrawal, are neither transferred to nor continued in employment with any
other Employer or a Related Company. The interest of any Participant employed by
the withdrawing Employer who is transferred to or continues in employment with
any other Employer or a Related Company, and the interest of any Participant
employed solely by an Employer or a Related Company other than the withdrawing
Employer, shall remain unaffected by such withdrawal; no adjustment to his
Separate Accounts shall be made by reason of the withdrawal; and he shall
continue as a Participant hereunder subject to the remaining provisions of the
Plan.
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ARTICLE XX
ADOPTION BY OTHER ENTITIES
20.1 - ADOPTION BY RELATED COMPANIES
A Related Company that is not an Employer may, with the consent of the Sponsor,
adopt the Plan and become an Employer hereunder by causing an appropriate
written instrument evidencing such adoption to be executed in accordance with
the requirements of its organizational authority. Any such instrument shall
specify the effective date of the adoption.
20.2 - EFFECTIVE PLAN PROVISIONS
An Employer who adopts the Plan shall be bound by the provisions of the Plan in
effect at the time of the adoption and as subsequently in effect because of any
amendment to the Plan.
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ARTICLE XXI
MISCELLANEOUS PROVISIONS
21.1 - NO COMMITMENT AS TO EMPLOYMENT
Nothing contained herein shall be construed as a commitment or agreement upon
the part of any person to continue his employment with an Employer or Related
Company, or as a commitment on the part of any Employer or Related Company to
continue the employment, compensation, or benefits of any person for any period.
21.2 - BENEFITS
Nothing in the Plan nor the Trust Agreement shall be construed to confer any
right or claim upon any person, firm, or corporation other than the Employers,
the Trustee, Participants, and Beneficiaries.
21.3 - NO GUARANTEES
The Employers, the Administrator, and the Trustee do not guarantee the Trust
from loss or depreciation, nor do they guarantee the payment of any amount which
may become due to any person hereunder.
21.4 - EXPENSES
The expenses of administration of the Plan, including the expenses of the
Administrator and fees of the Trustee, shall be paid from the Trust as a general
charge thereon, unless the Sponsor elects to make payment. Notwithstanding the
foregoing, the Sponsor may direct that administrative expenses that are
allocable to the Separate Account of a specific Participant shall be paid from
that Separate Account and the costs incident to the management of the assets of
an Investment Fund or to the purchase or sale of securities held in an
Investment Fund shall be paid by the Trustee from such Investment Fund.
21.5 - PRECEDENT
Except as otherwise specifically provided, no action taken in accordance with
the Plan shall be construed or relied upon as a precedent for similar action
under similar circumstances.
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21.6 - DUTY TO FURNISH INFORMATION
The Employers, the Administrator, and the Trustee shall furnish to any of the
others any documents, reports, returns, statements, or other information that
the other reasonably deems necessary to perform its duties hereunder or
otherwise imposed by law.
21.7 - WITHHOLDING
The Trustee shall withhold any tax which by any present or future law is
required to be withheld, and which the Administrator notifies the Trustee in
writing is to be so withheld, from any payment to any Participant or Beneficiary
hereunder.
21.8 - MERGER, CONSOLIDATION, OR TRANSFER OF PLAN ASSETS
The Plan shall not be merged or consolidated with any other plan, nor shall any
of its assets or liabilities be transferred to another plan, unless, immediately
after such merger, consolidation, or transfer of assets or liabilities, each
Participant in the Plan would receive a benefit under the Plan which is at least
equal to the benefit he would have received immediately prior to such merger,
consolidation, or transfer of assets or liabilities (assuming in each instance
that the Plan had then terminated).
21.9 - BACK PAY AWARDS
The provisions of this Section shall apply only to an Employee or former
Employee who becomes entitled to back pay by an award or agreement of an
Employer without regard to mitigation of damages. If a person to whom this
Section applies was or would have become an Eligible Employee after such back
pay award or agreement has been effected, and if any such person who had not
previously elected to make Tax-Deferred Contributions pursuant to Section 4.1
shall within 30 days of the date he receives notice of the provisions of this
Section make an election to make Tax-Deferred Contributions in accordance with
such Section 4.1 (retroactive to any Enrollment Date as of which he was or has
become eligible to do so), then such Participant may elect that any Tax-Deferred
Contributions not previously made on his behalf but which, after application of
the foregoing provisions of this Section, would have been made under the
provisions of Article IV, shall be made out of the proceeds of such back pay
award or agreement. In
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addition, if any such Employee or former Employee would have been eligible to
participate in the allocation of Employer Contributions under the provisions of
Article VI for any prior Plan Year after such back pay award or agreement has
been effected, his Employer shall make an Employer Contribution equal to the
amount of the Employer Contribution which would have been allocated to such
Participant under the provisions of Article VI as in effect during each such
Plan Year. The amounts of such additional contributions shall be credited to the
Separate Account of such Participant. Any additional contributions made by such
Participant and by an Employer pursuant to this Section shall be made in
accordance with, and subject to the limitations of the applicable provisions of
Articles IV, VI, and VII.
21.10 - CONDITION ON EMPLOYER CONTRIBUTIONS
Notwithstanding anything to the contrary contained in the Plan or the Trust
Agreement, any contribution of an Employer hereunder is conditioned upon the
continued qualification of the Plan under Section 401(a) of the Code, the exempt
status of the Trust under Section 501(a) of the Code, and the deductibility of
the contribution under Section 404 of the Code. Except as otherwise provided in
this Section and Section 21.11, however, in no event shall any portion of the
property of the Trust ever revert to or otherwise inure to the benefit of an
Employer or any Related Company.
21.11 - RETURN OF CONTRIBUTIONS TO AN EMPLOYER
Notwithstanding any other provision of the Plan or the Trust Agreement to the
contrary, in the event any contribution of an Employer made hereunder:
(a) is made under a mistake of fact, or
(b) is disallowed as a deduction under Section 404 of the Code,
such contribution may be returned to the Employer within one year after the
payment of the contribution or the disallowance of the deduction to the extent
disallowed, whichever is applicable. In the event the Plan does not initially
qualify under Section 401(a) of the Code, any contribution of an Employer made
hereunder may be returned to the Employer within one year of the date of denial
of the initial qualification of the Plan, but only
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if an application for determination was made within the period of time
prescribed under Section 403(c)(2)(B) of ERISA.
21.12 - VALIDITY OF PLAN
The validity of the Plan shall be determined and the Plan shall be construed and
interpreted in accordance with the laws of the State or Commonwealth in which
the Sponsor has its principal place of business, except as preempted by
applicable Federal law. The invalidity or illegality of any provision of the
Plan shall not affect the legality or validity of any other part thereof.
21.13 - TRUST AGREEMENT
The Trust Agreement and the Trust maintained thereunder shall be deemed to be a
part of the Plan as if fully set forth herein and the provisions of the Trust
Agreement are hereby incorporated by reference into the Plan.
21.14 - PARTIES BOUND
The Plan shall be binding upon the Employers, all Participants and Beneficiaries
hereunder, and, as the case may be, the heirs, executors, administrators,
successors, and assigns of each of them.
21.15 - APPLICATION OF CERTAIN PLAN PROVISIONS
A Participant's Beneficiary, if the Participant has died, or alternate payee
under a qualified domestic relations order shall be treated as a Participant for
purposes of directing investments as provided in Article X. For purposes of the
general administrative provisions and limitations of the Plan, a Participant's
Beneficiary or alternate payee under a qualified domestic relations order shall
be treated as any other person entitled to receive benefits under the Plan. Upon
any termination of the Plan, any such Beneficiary or alternate payee under a
qualified domestic relations order who has an interest under the Plan at the
time of such termination, which does not cease by reason thereof, shall be
deemed to be a Participant for all purposes of the Plan.
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21.16 - LEASED EMPLOYEES
Any leased employee, other than an excludable leased employee, shall be treated
as an employee of the Employer for which he performs services for all purposes
of the Plan with respect to the provisions of Sections 401(a)(3), (4), (7), and
(16), and 408(k), 410, 411, 415, and 416 of the Code; provided, however, that no
leased employee shall accrue a benefit hereunder based on service as a leased
employee except as otherwise specifically provided in the Plan. A "leased
employee" means any person who performs services for an Employer or a Related
Company (the "recipient") (other than an employee of the recipient) pursuant to
an agreement between the recipient and any other person (the "leasing
organization") on a substantially full-time basis for a period of at least one
year, provided that such services are of a type historically performed, in the
business field of the recipient, by employees. An "excludable leased employee"
means any leased employee of the recipient who is covered by a money purchase
pension plan maintained by the leasing organization which provides for (i) a
nonintegrated employer contribution on behalf of each participant in the plan
equal to at least ten percent of compensation, (ii) full and immediate vesting,
and (iii) immediate participation by employees of the leasing organization
(other than employees who perform substantially all of their services for the
leasing organization or whose compensation from the leasing organization in each
plan year during the four-year period ending with the plan year is less than
$1,000); provided, however, that leased employees do not constitute more than 20
percent of the recipient's nonhighly compensated work force. For purposes of
this Section, contributions or benefits provided to a leased employee by the
leasing organization that are attributable to services performed for the
recipient shall be treated as provided by the recipient.
21.17 - TRANSFERRED FUNDS
If funds from another qualified plan are transferred or merged into the Plan,
such funds shall be held and administered in accordance with any restrictions
applicable to them under such other plan to the extent required by law and shall
be accounted for separately to the extent necessary to accomplish the foregoing.
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ARTICLE XXII
TOP-HEAVY PROVISIONS
22.1 - DEFINITIONS
For purposes of this Article, the following terms shall have the following
meanings:
(a) The "compensation" of an employee means compensation as defined in
Section 415 of the Code and regulations issued thereunder. In no
event, however, shall the compensation of a Participant taken into
account under the Plan for any Plan Year exceed (1) $200,000 for
Plan Years beginning prior to January 1, 1994, or (2) $150,000 for
Plan Years beginning on or after January 1, 1994 (subject to
adjustment annually as provided in Section 401(a)(17)(B) and Section
415(d) of the Code; provided, however, that the dollar increase in
effect on January 1 of any calendar year, if any, is effective for
Plan Years beginning in such calendar year). If the compensation of
a Participant is determined over a period of time that contains
fewer than 12 calendar months, then the annual compensation
limitation described above shall be adjusted with respect to that
Participant by multiplying the annual compensation limitation in
effect for the Plan Year by a fraction the numerator of which is the
number of full months in the period and the denominator of which is
12; provided, however, that no proration is required for a
Participant who is covered under the Plan for less than one full
Plan Year if the formula for allocations is based on Compensation
for a period of at least 12 months. In determining the
compensation, for purposes of applying the annual compensation
limitation described above, of a Participant who is a five-percent
owner or one of the ten Highly Compensated Employees receiving the
greatest compensation for the Plan Year, the compensation of the
Participant's spouse and of his lineal descendants who have not
attained age 19 as of the close of the Plan Year shall be included
as compensation of the Participant for the Plan Year. If as a
result of applying the family aggregation rule described in the
preceding sentence the annual compensation limitation would be
exceeded, the limitation shall be prorated among the affected family
members in proportion to each member's compensation as
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determined prior to application of the family aggregation rules.
(b) The "determination date" with respect to any Plan Year means the last
day of the preceding Plan Year, except that the determination date with
respect to the first Plan Year of the Plan, shall mean the last day of
such Plan Year.
(c) A "key employee" means any Employee or former Employee who is a key
employee pursuant to the provisions of Section 416(i)(1) of the Code
and any Beneficiary of such Employee or former Employee.
(d) A "non-key employee" means any Employee who is not a key employee.
(e) A "permissive aggregation group" means those plans included in each
Employer's required aggregation group together with any other plan or
plans of the Employer, so long as the entire group of plans would
continue to meet the requirements of Sections 401(a)(4) and 410 of the
Code.
(f) A "required aggregation group" means the group of tax-qualified plans
maintained by an Employer or a Related Company consisting of each plan
in which a key employee participates and each other plan that enables a
plan in which a key employee participates to meet the requirements of
Section 401(a)(4) or Section 410 of the Code, including any plan that
terminated within the five-year period ending on the relevant
determination date.
(g) A "super top-heavy group" with respect to a particular Plan Year means
a required or permissive aggregation group that, as of the
determination date, would qualify as a top-heavy group under the
definition in paragraph (i) of this Section with "90 percent"
substituted for "60 percent" each place where "60 percent" appears in
the definition.
(h) A "super top-heavy plan" with respect to a particular Plan Year means a
plan that, as of the determination date, would qualify as a top-heavy
plan under the definition in paragraph (j) of this Section with "90
percent" substituted for "60 percent" each place where "60 percent"
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appears in the definition. A plan is also a "super top-heavy plan" if
it is part of a super top-heavy group.
(i) A "top-heavy group" with respect to a particular Plan Year means a
required or permissive aggregation group if the sum, as of the
determination date, of the present value of the cumulative accrued
benefits for key employees under all defined benefit plans included
in such group and the aggregate of the account balances of key
employees under all defined contribution plans included in such
group exceeds 60 percent of a similar sum determined for all
employees covered by the plans included in such group.
(j) A "top-heavy plan" with respect to a particular Plan Year means (i),
in the case of a defined contribution plan (including any simplified
employee pension plan), a plan for which, as of the determination
date, the aggregate of the accounts (within the meaning of Section
416(g) of the Code and the regulations and rulings thereunder) of
key employees exceeds 60 percent of the aggregate of the accounts of
all participants under the plan, with the accounts valued as of the
relevant valuation date and increased for any distribution of an
account balance made in the five-year period ending on the
determination date, (ii), in the case of a defined benefit plan, a
plan for which, as of the determination date, the present value of
the cumulative accrued benefits payable under the plan (within the
meaning of Section 416(g) of the Code and the regulations and
rulings thereunder) to key employees exceeds 60 percent of the
present value of the cumulative accrued benefits under the plan for
all employees, with the present value of accrued benefits to be
determined under the accrual method uniformly used under all plans
maintained by an Employer or, if no such method exists, under the
slowest accrual method permitted under the fractional accrual rate
of Section 411(b)(1)(C) of the Code and including the present value
of any part of any accrued benefits distributed in the five-year
period ending on the determination date, and (iii) any plan
(including any simplified employee pension plan) included in a
required aggregation group that is a top-heavy group. For purposes
of this paragraph, the accounts and accrued benefits of any employee
who has not performed services for an Employer or a Related Company
during the five-year period ending on the determination date shall
be
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disregarded. For purposes of this paragraph, the present value of
cumulative accrued benefits under a defined benefit plan for purposes
of top-heavy determinations shall be calculated using the actuarial
assumptions otherwise employed under such plan, except that the same
actuarial assumptions shall be used for all plans within a required or
permissive aggregation group. A Participant's interest in the Plan
attributable to any Rollover Contributions, except Rollover
Contributions made from a plan maintained by an Employer or a Related
Company, shall not be considered in determining whether the Plan is
top-heavy. Notwithstanding the foregoing, if a plan is included in a
required or permissive aggregation group that is not a top-heavy group,
such plan shall not be a top-heavy plan.
(k) The "valuation date" with respect to any determination date means the
most recent Valuation Date occurring within the 12-month period ending
on the determination date.
22.2 - APPLICABILITY
Notwithstanding any other provision of the Plan to the contrary, the provisions
of this Article shall be applicable during any Plan Year in which the Plan is
determined to be a top-heavy plan as hereinafter defined. If the Plan is
determined to be a top-heavy plan and upon a subsequent determination date is
determined no longer to be a top-heavy plan, the vesting provisions of Article
VI shall again become applicable as of such subsequent determination date;
provided, however, that if the prior vesting provisions do again become
applicable, any Employee with three or more years of Vesting Service may elect
in accordance with the provisions of Article VI, to continue to have his vested
interest in his Employer Contributions Sub-Account determined in accordance with
the vesting schedule specified in Section 22.5.
22.3 - MINIMUM EMPLOYER CONTRIBUTION
If the Plan is determined to be a top-heavy plan, the Employer Contributions
allocated to the Separate Account of each non-key employee who is an Eligible
Employee and who is employed by an Employer or a Related Company on the last day
of such top-heavy Plan Year shall be no less than the lesser of (i) three
percent of his compensation or (ii) the largest percentage of compensation that
is allocated as an Employer Contribution and/or
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Tax-Deferred Contribution for such Plan Year to the Separate Account of any key
employee; except that, in the event the Plan is part of a required aggregation
group, and the Plan enables a defined benefit plan included in such group to
meet the requirements of Section 401(a)(4) or 410 of the Code, the minimum
allocation of Employer Contributions to each such non-key employee shall be
three percent of the compensation of such non-key employee. Any minimum
allocation to a non-key employee required by this Section shall be made without
regard to any social security contribution made on behalf of the non-key
employee, his number of hours of service, his level of compensation, or whether
he declined to make elective or mandatory contributions. Notwithstanding the
minimum top-heavy allocation requirements of this Section, if the Plan is a
top-heavy plan, each non-key employee who is an Eligible Employee and who is
employed by an Employer or a Related Company on the last day of a top-heavy Plan
Year and who is also covered under any other top-heavy plan or plans of an
Employer will receive the top-heavy benefits provided under such other plan in
lieu of the minimum top-heavy allocation under the Plan.
22.4 - ADJUSTMENTS TO SECTION 415 LIMITATIONS
If the Plan is determined to be a top-heavy plan and an Employer maintains a
defined benefit plan covering some or all of the Employees that are covered by
the Plan, the defined benefit plan fraction and the defined contribution plan
fraction, described in Article VII, shall be determined as provided in Section
415 of the Code by substituting "1.0" for "1.25" each place where "1.25"
appears, except that such substitutions shall not be applied to the Plan if (i)
the Plan is not a super top-heavy plan, (ii) the Employer Contribution for such
top-heavy Plan Year for each non-key employee who is to receive a minimum
top-heavy benefit hereunder is not less than four percent of such non-key
employee's compensation, and (iii) the minimum annual retirement benefit accrued
by a non-key employee who participates under one or more defined benefit plans
of an Employer or a Related Company for such top-heavy Plan Year is not less
than the lesser of three percent times years of service with an Employer or a
Related Company or thirty percent.
22.5 - ACCELERATED VESTING
If the Plan is determined to be a top-heavy plan, a Participant's vested
interest in his Employer Contributions Sub-Account shall
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<PAGE> 87
be determined no less rapidly than in accordance with the following vesting
schedule:
<TABLE>
<CAPTION>
Years of Vesting Service Vested Interest
------------------------ ---------------
<S> <C>
less than 1 0%
1 but less than 2 50%
2 or more 100%
</TABLE>
81
<PAGE> 88
ARTICLE XXIII
EFFECTIVE DATE
23.1 - EFFECTIVE DATE OF AMENDMENT AND RESTATEMENT
This amendment and restatement is effective as of January 1, 1997.
* * *
EXECUTED AT ______________________________________,
________________________, this _________ day of ________________, 19__.
REMEC, INC.
By: _________________________________
Title:
82
<PAGE> 89
ARTICLE XXIII
EFFECTIVE DATE
23.1 - EFFECTIVE DATE OF AMENDMENT AND RESTATEMENT
This amendment and restatement is effective as of January 1, 1997.
* * *
EXECUTED AT ______________________________________,
________________________, this _________ day of ________________, 19__.
REMEC, INC.
By: _________________________________
Title:
83
