<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 1, 1998
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
RECYCLING INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
COLORADO 84-1103445
(State or other jurisdiction of (IRS Employer Identification
of incorporation or organization) Number)
9780 SOUTH MERIDIAN BLVD., SUITE 180, ENGLEWOOD, COLORADO 80112 (303) 790-7372
(Address of Principal Executive Offices including Zip Code)
RECYCLING INDUSTRIES, INC. 401(k)
RETIREMENT PLAN
(Full title of the plan)
THOMAS J. WIENS
9780 SOUTH MERIDIAN BLVD., SUITE 180, ENGLEWOOD, COLORADO 80112 (303) 790-7372
(Name, address and telephone number of agent for service)
COPIES TO:
DAVID A. BRONNER, ESQ.
KATTEN MUCHIN & ZAVIS
525 W. MONROE STREET, SUITE 1600
CHICAGO, IL 60661-3693
FAX NUMBER: (312) 902-1061
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED AMOUNT TO BE REGISTERED PER SHARE PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $.001 par value . . . . . . . . . 1,000,000 shares $1.77 (1) $1,770,000 $522.15
Interests in the Plan . . . . . . . . . . . . . (2)
</TABLE>
(1) Estimated in accordance with Rule 457(h) under the Securities Act of 1933,
as amended (the "Securities Act"), solely for purposes of calculating the
registration fee and based upon the average of the high and low prices of
the registrant's common stock as reported on the Nasdaq National Market on
September 29, 1998.
(2) This Registration Statement covers an indeterminate amount of interests to
be offered or sold pursuant to the Recycling Industries, Inc. 401(k)
Retirement Plan in accordance with Rule 416(c) of the Securities Act.
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE PROSPECTUS
The information called for in Part I of Form S-8 is currently included
in the Summary Plan Description for the Recycling Industries, Inc. 401(k)
Plan (the "401(k) Plan") and the Supplement to the Summary Plan Description
for the 401(k) Plan and is not being filed with or included in this Form S-8
in accordance with the rules and regulations of the Securities and Exchange
Commission (the "Commission").
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents have been filed by Recycling Industries, Inc. (the
"Company") with the Commission under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and are incorporated in this Registration
Statement by reference:
1. The Company's Annual Report on Form 10-K for the year ended September
30, 1997;
2. The Company's Quarterly Reports on Form 10-Q for the quarters ending
December 31, 1997, March 31, 1998 and June 30, 1998;
3. The Company's Current Reports on Form 8-K filed December 22, 1997 (as
amended by the Current Report on Form 8-K/A filed February 11, 1998),
December 24, 1997, April 30, 1998, June 3, 1998, June 5, 1998 (as
amended by the Current Report on Form 8-K/A filed August 4, 1998),
June 12, 1998 (as amended by the Current Report on Form 8-K/A filed
August 5, 1998), and September 23, 1998; and
4. The description of the common stock contained in the Registrant's
Registration Statement on Form 8-A filed June 28, 1995 pursuant to
Section 12 of the Exchange Act and all amendments thereto and reports
filed for the purpose of updating such description.
In addition, all documents filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, subsequent to the date hereof and prior
to the filing of a post-effective amendment indicating that all securities
offered pursuant to this Registration Statement have been sold or deregistering
all such securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Colorado Business Corporation Act (the "CBCA") authorizes the
indemnification of and advancement of expenses to directors, officers,
employees, fiduciaries and agents of a Colorado corporation against liabilities
which they may incur in such capacities. Article V.B of the Company's Amended
and Restated Articles of Incorporation provides that the Company shall indemnify
and may advance expenses to its directors to the maximum extent permitted by the
CBCA and shall indemnify its officers, employees or agents who are not directors
to the maximum extent permitted by the CBCA or to a greater extent as may be
consistent with law and provided for by resolution of the Company's shareholders
or directors, or in a contract. A summary of the circumstances in which such
3
<PAGE>
indemnification is allowable under the CBCA is provided below, but that
description is qualified in its entirety by reference to the relevant section of
the CBCA.
In general, the CBCA provides that any director may be indemnified against
liabilities (including the obligation to pay a judgment, settlement, penalty,
fine or reasonable expense) incurred in a proceeding and have expenses advanced
for such a proceeding (including any civil, criminal or investigative proceeding
whether threatened, pending or completed) to which the director was made a party
because he is or was a director, except that, if the proceeding is brought by or
in the right of the Company in which a director is adjudged liable to the
Company, or in connection with any proceeding charging improper personal benefit
to the director in which the director is adjudged liable for receipt of an
improper personal benefit.
Indemnity may be provided only if the director's actions resulting in the
liability: (i) were taken in good faith; (ii) were reasonably believed to have
been in the Company's best interest with respect to actions taken in the
director's official capacity; (iii) were reasonably believed not to be opposed
to the Company's best interest with respect to actions other than those taken in
the director's official capacity; and (iv) with respect to any criminal action,
the director had no reasonable cause to believe his or her conduct was unlawful.
Indemnification may be awarded only after the applicable standard of conduct has
been met by the director to be indemnified as determined by (i) a majority vote
of directors not party to the proceeding comprising a quorum of the Board of
Directors or, if a quorum cannot be obtained, by committee thereof consisting of
two or more directors not party to the proceeding; (ii) by independent legal
counsel selected by the Board of Directors; or (iii) by the shareholders.
The CBCA further provides that unless limited by the Company's articles of
incorporation, a director or officer who is wholly successful, on the merits or
otherwise, in defense of any proceeding to which he was a party, is entitled to
receive indemnification against reasonable expenses, including attorneys' fees,
incurred in connection with the proceeding. The Company's Amended and Restated
Articles of Incorporation do not limit the foregoing provisions.
The Company may indemnify or advance expenses to an officer, employee,
fiduciary or agent who is not a director to a greater extent than permitted for
indemnification of directors, if consistent with law and if provided for by its
articles of incorporation, bylaws, resolution of its shareholders or directors
or in a contract. The provision of indemnification to persons other than
directors is subject to such limitations as may be imposed on general public
policy grounds.
Upon petition by a director or officer, a court may order the Company to
indemnify such director or officer against liabilities arising in connection
with any proceeding. A court may order the Company to provide such
indemnification, whether or not he was entitled to indemnification by the
Company. To order indemnification, the court must determine that the director
or officer is fairly and reasonably entitled to indemnification in light of the
circumstances. With respect to liability incurred by a director or officer, or
in any proceeding where liability results on the basis that a personal benefit
was received improperly, a court may only require that the director or officer
be indemnified as to reasonable expenses incurred.
The CBCA specifies that any provisions for indemnification of or advances
for expenses to directors which may be contained in the Company's articles of
incorporation, bylaws, resolutions of its shareholders or directors, or in a
contract (except for insurance policies) shall be valid only to the extent such
provisions are consistent with the CBCA and any limitations upon indemnification
set forth in the articles of incorporation.
4
<PAGE>
The CBCA also grants the power to the Company to purchase and maintain
insurance policies which protect any director, officer, employee, fiduciary or
agent against any liability asserted against or incurred by them in such
capacity arising out of their status as such. Such policies may provide for
indemnification whether or not the corporation would otherwise have the power to
provide for it. No such policies have been obtained by the Company.
Article V.A of the Company's Amended and Restated Articles of Incorporation
provides for the elimination of personal liability for monetary damages for the
breach of fiduciary duty as a director except for liability (i) resulting from a
breach of the director's duty of loyalty to the Company or its shareholders;
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of the law; (iii) for approving payment of a
dividend, a stock repurchase, a distribution of assets to shareholders during
liquidation or the making or guaranteeing of a loan to a director, to the extent
that any such actions are illegal under the CBCA; or (iv) for any transaction
from which a director derives an improper personal benefit. This Article
further provides that the personal liability of the Company's directors shall be
eliminated or limited to the fullest extent permitted by the CBCA.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
The registrant has submitted the Plan to the Internal Revenue
Service (the "IRS") and will make all changes to the Plan that are required by
the IRS to qualify the Plan under Section 401 of the Internal Revenue Code of
1986, as amended.
4.1 Amended and Restated Articles of Incorporation of the Company, as
amended (incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1, Registration No. 333-4574).
4.2 Amended and Restated Bylaws of the Company (incorporated by reference
to Exhibit 3.2 to the Company's Registration Statement on Form S-1,
Registration No. 333-4574).
4.3 Specimen stock certificate representing Common Stock (incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement on
Form S-1, Registration No. 333-4574).
4.4 Recycling Industries, Inc. 401(k) Retirement Plan.
4.5 Recycling Industries, Inc. 401(k) Retirement Trust Agreement.
23.1 Consent of BDO Seidman, LLP with respect to the Company's financial
statements.
24 Power of Attorney (included on the signature page of this Registration
Statement).
ITEM 9. UNDERTAKINGS.
1. The Company hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
5
<PAGE>
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(i) and (a)(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 with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration
Statement.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
(c) 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.
2. The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
BONA FIDE offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company and affiliated companies pursuant to the foregoing provisions, or
otherwise, the Company has been informed that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Englewood, State of Colorado, on this 1st day of
October, 1998.
Recycling Industries, Inc.
By: /s/ THOMAS J. WIENS
---------------------------------------------
Thomas J. Wiens
CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Thomas J. Wiens and Brian L. Klemsz and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution, to sign on his
behalf, individually and in each capacity stated below, all amendments and
post-effective amendments to this Registration Statement on Form S-8 and to file
the same, with all exhibits thereto and any other documents in connection
therewith, with the Securities and Exchange Commission under the Securities Act
of 1933, 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, as fully and to all intents and purposes
as each might or could do in person, hereby ratifying and confirming each act
that said attorneys-in-fact and agents may lawfully do or cause to be done by
virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on this 1st day of October, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ THOMAS J. WIENS
- --------------------------- Chairman of the Board of Directors and Chief
Thomas J. Wiens Executive Officer (principal executive officer)
/s/ LUKE F. BOTICA
- --------------------------- Vice Chairman and a Director
Luke F. Botica
/s/ BRIAN L. KLEMSZ
- --------------------------- Senior Vice President, Chief Financial Officer
Brian L. Klemsz (principal financial and accounting officer),
Treasurer and a Director
/s/ JEROME B. MISUKANIS
- --------------------------- Director
Jerome B. Misukanis
- --------------------------- Director
Graydon H. Neher
- --------------------------- Director
Barry L. Plost
</TABLE>
7
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Retirement Plan Committee of Recycling Industries, Inc., which administers the
Plan, has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Englewood, State of
Colorado, on October 1, 1998.
RECYCLING INDUSTRIES, INC.
401(k) RETIREMENT PLAN
By: RECYCLING INDUSTRIES, INC.
Retirement Plan Committee
By: /s/ Luke F. Botica
---------------------------------------------
Luke F. Botica
Committee Member
8
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C>
4.4 Recycling Industries, Inc. 401(k) Retirement Plan.
4.5 Recycling Industries, Inc. 401(k) Retirement Trust Agreement.
23.1 Consent of BDO Seidman, LLP with respect to the Company's financial
statements.
24 Power of Attorney (included on the signature page of this Registration
Statement).
</TABLE>
9
<PAGE>
RECYCLING INDUSTRIES, INC. 401(k) RETIREMENT PLAN
Effective August 1, 1998
<PAGE>
RECYCLING INDUSTRIES, INC. 401(k) RETIREMENT PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE 1
Definitions, Construction and Top-Heavy Restrictions 1-1
1.1 Definitions 1-1
1.2 Construction 1-5
1.3 Top-Heavy Restrictions 1-5
ARTICLE 2
Eligibility and Participation 2-1
2.1 Eligible Class of Employees 2-1
2.2 Conditions of Eligibility 2-1
2.3 Start of Participation 2-1
2.4 Termination of Participation 2-1
2.5 Reemployment 2-1
ARTICLE 3
Contributions and Allocations 3-1
3.1 Elective Contributions 3-1
3.2 401(k) Matching Contributions. 3-2
3.3 Profit Sharing Contributions 3-3
3.4 Allocation of Forfeitures 3-3
3.5 Top-Heavy Contributions 3-4
3.6 Rollovers from Other Employee Benefit Plans 3-4
3.7 Determination of Contributions 3-5
3.8 Time of Payment of Contributions 3-5
3.9 Return of Contributions 3-5
3.10 Military Service 3-6
ARTICLE 4
Valuation 4-1
4.1 Allocation of Income to Plan Accounts 4-1
4.2 Valuation of Participant's Account 4-1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE 5
Contribution and Allocation Restrictions 5-1
5.1 Maximum Limits on Allocations 5-1
5.2 Actual Deferral Percentage Test 5-3
5.3 Actual Contribution Percentage Test 5-4
5.4 Qualified Nonelective Contributions and Qualified Matching
Contributions 5-7
5.5 Highly Compensated 5-7
ARTICLE 6
Calculation of Years of Service 6-1
6.1 General Determination. 6-1
6.2 Years of Service for Military Service. 6-1
6.3 Years of Service with Acquired Employer's Prior Plans. 6-1
6.4 Years of Service with Acquired Employers That Did Not Maintain
Prior Plans. 6-1
ARTICLE 7
Vesting 7-1
7.1 Voting. 7-1
7.2 Top-Heavy Plan Years. 7-2
7.3 Forfeitures. 7-2
7.4 Reinstatement of Forfeitures. 7-2
ARTICLE 8
Distributions 8-1
8.1 Commencement of Retirement Benefits. 8-1
8.2 Method of Payment. 8-1
8.3 Direct Rollovers. 8-3
8.4 Changes in Payments. 8-4
8.5 Death Benefits. 8-4
8.6 Required Lifetime Distributions. 8-5
8.7 Qualified Domestic Relations Orders. 8-6
8.8 Loans. 8-7
8.9 Financial Hardship Withdrawals. 8-8
ARTICLE 9
Administration of the Plan 9-1
9.1 Appointment of Committee. 9-1
9.2 Powers and Duties. 9-1
9.3 Records and Notices. 9-2
9.4 Compensation and Expenses. 9-3
9.5 Limitation of Authority. 9-3
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE 10
Administration of the Trust 10-1
10.1 Appointment of Trustee. 10-1
10.2 Authorization for Trust Agreement. 10-1
10.3 Participant Direction of Investment. 10-1
10.4 Funding Policy. 10-2
ARTICLE 11
Claims Procedure 11-1
11.1 Application for Benefits. 11-1
11.2 Notice of Denied Claim for Benefits. 11-1
11.3 Review of Denied Claim. 11-1
ARTICLE 12
Amendment and Termination 12-1
12.1 Amendment or Restatement 12-1
12.2 Termination and Discontinuance of Contributions 12-1
12.3 Allocation of Trust Fund Upon Complete Termination of the Plan 12-1
12.4 Distribution Upon Termination 12-2
12.5 Merger, Consolidation or Transfer of Assets and Liabilities 12-2
12.6 Distribution Upon Disposition of Assets or Subsidiary 12-2
12.7 Successor Employer 12-2
ARTICLE 13
General Provisions 13-1
13.1 Limitation on Liability 13-1
13.2 Indemnification 13-1
13.3 Compliance with Employee Retirement Income Security Act of 1974 13-1
13.4 Nonalienation of Benefits 13-1
13.5 Employment Not Guaranteed by Plan 13-1
13.6 Form of Communication 13-2
13.7 Facility of Payment 13-2
13.8 Location of Participant or Beneficiary Unknown 13-2
13.9 Service in More Than One Fiduciary Capacity 13-2
13.10 Offset 13-3
</TABLE>
iii
<PAGE>
INTRODUCTION
Effective August 1, 1998, Recycling Industries, Inc. (the "Company")
adopted the Recycling Industries, Inc. 401(k) Retirement Plan.
The purpose of this Plan is to provide, in accordance with its terms,
retirement and other related benefits for eligible employees. It is intended
that the Plan qualify for tax exempt status under section 401(a) of the
Internal Revenue Code, and that the Plan qualify as a cash or deferred
arrangement described section 401(k) of the Internal Revenue Code. It is
intended that the Trust for the Plan qualify for approval under section 501
of the Code. It is further intended that the Plan comply with the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA) and section
404(c) of ERISA. In case of any ambiguity in the Plan's language, it will be
interpreted to accomplish the Plan's intent of qualifying under the Code and
complying with ERISA. This Plan and the Trust for the Plan are maintained
for the exclusive purpose of providing benefits to eligible employees and
their beneficiaries, and defraying reasonable administrative expenses.
<PAGE>
ARTICLE 1
Definitions, Construction and Top-Heavy Restrictions
1.1 DEFINITIONS.
(a) ACCOUNT. The record of each Participant's interest in the
Trust Fund, divided into the following subaccounts:
- 401(k) Elective Contribution Account
- 401(k) Matching Contribution Account
- Rollover Account
- Profit Sharing Contribution Account
(b) BREAK IN SERVICE. A calendar year during which a
Participant does not complete at least 500 Hours of Service.
(c) CODE. The Internal Revenue Code of 1986, as amended from
time to time, and as interpreted by applicable regulations and rulings.
(d) COMMITTEE. The person or persons designated in Article 9
who shall control and manage the operation and administration of the Plan as
the named fiduciary.
(e) COMPANY. Recycling Industries, Inc., the sponsoring
employer, and any successor which adopts the Plan.
(f) COMPENSATION. The total amount paid by the Employer to a
Participant as reported on Box 1of the Participant's Federal Income Tax
Withholding Statement (W-2) (or such other method used to report wages within
the meaning or code section 3401(a)) and all other payments of compensation
for which the Employer is required to furnish the employee a written
statement under Code sections 6041(d) and 6051(a)(3), adjusted by:
(i) Adding elective contributions made on the
Participant's behalf to a cash or deferred plan under Code section 401(k) or
to a cafeteria plan under Code section 125; and
(ii) Excluding any amounts not described in (i) that are
paid by the Employer for reimbursement or other expense allowances, fringe
benefits (cash and non-cash), moving expenses, deferred compensation, and
welfare benefits (e.g., contributions to any health, accident or other
welfare plan).
1-1
<PAGE>
(g) EFFECTIVE DATE. July 1, 1998, the date as of which the Plan
first applies to the Company, except as otherwise provided herein.
(h) EMPLOYER. The Company or any other entity listed in
Appendix A which, consistent with authorization by the Company, has adopted
the Plan, or any portion of the Plan, and any successor thereto. By its
adoption of this Plan, an Employer shall be deemed to appoint the Company,
Committee and Trustee its exclusive agents to exercise on its behalf all of
the power and authority conferred by this Plan upon the Employer. The
authority of the Company, Committee and Trustee to act as such agent shall
continue until this Plan is terminated as to the adopting Employer and the
relevant Trust Fund assets have been distributed by the Trustee.
(i) EMPLOYMENT. An individual's employment with the Employer or
any member of either a controlled group of corporations or a group of trades
or businesses under common control of which the Company is a member (a
"Controlled Group Member" under Code section 414(b) or (c)). Periods during
which an individual is an employee of an employer before the employer becomes
a Controlled Group Member shall count as Employment only if the individual is
an employee on the date the employer becomes a Controlled Group Member, and
such periods shall count toward Years of Vesting Service according to the
rules of Article 6. In the event an employee is transferred between
participating Employers, such employee shall not be deemed to have terminated
his/her Employment.
(j) FORFEITURE. The portion, if any, of a Participants Account
which, pursuant to Article 7, the Participant is not entitled to receive. A
Forfeiture shall occur upon the earlier of a distribution of the
Participant's vested Account due to the Participant's termination of
Employment or the date the Participant incurs a one-year Break in Service.
In the case of a Participant whose Employment has terminated and whose vested
Account is zero, the Participant is deemed to receive a distribution of the
zero vested Account upon the Participant's termination of Employment.
(k) HOURS OF SERVICE.
(1) Each hour for which an employee is paid, or entitled
to payment, for the performance of service for the Employer;
(2) Each hour for which an employee is paid, or entitled
to payment by the Employer without the performance of service (regardless of
whether the employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), lay off, jury duty, military
duty, or leave of absence; provided that pursuant to this paragraph (2), no
more than 501 Hours of Service will be credited for any single continuous
period--whether or not such period occurs in a single Plan Year or other
computation period, and 29 C.F.R. section 2530.200b-2 and 3 shall govern the
determination of an individual's Hours of Service; and
1-2
<PAGE>
(3) Each hour for which back pay, regardless of any
mitigation of damages, is either awarded or agreed to by the Employer.
The same Hours of Service will not be credited pursuant to
both paragraph (1) or (2), as the case may be, and paragraph (3).
If the Employer does not maintain records of Hours of
Service with respect to an employee but maintains records and compensates the
employee in relation to other periods of service, that employee shall accrue
45 Hours of Service each week in which the employee completes at least one
Hour of Service.
Solely to avoid a Break in Service (and in no case for
purposes of determining eligibility for allocation of a contribution), an
employee who is absent from work for maternity or paternity reasons shall
receive credit for the Hours of Service which would otherwise have been
credited to such employee but for such absence. An absence from work for
maternity or paternity reasons means an absence due to (i) the pregnancy of
the employee, (ii) the birth of a child of the employee, (iii) the placement
of a child with the employee for adoption by the employee or (iv) the caring
for such child immediately after birth or placement. The Plan shall credit
Hours of Service pursuant to this paragraph first to the Plan Year in which
the absence begins to the extent necessary to prevent a Break in Service in
that Plan Year, then to the Plan Year following the Plan Year in which the
absence begins. No more than 501 hours will be credited for maternity or
paternity absence. If the hours to be credited for an absence due to
maternity or paternity reasons cannot be determined, the Plan shall credit
eight Hours of Service for each day of the absence. The Plan shall not award
Hours of Service pursuant to this paragraph unless the employee involved
provides the Committee such information as the Committee reasonably requires
to establish the purpose of the absence as consistent with this paragraph and
to establish the number of days in the absence.
The Plan shall credit an Hour of Service to the Plan Year or
other computation period to which a payment, agreement or award relates
rather than the year or period in which the payment, agreement or award
occurs. Hours of Service shall be credited for employment with other members
of an affiliated service group (under Code section 414(m)), a controlled
group of corporations (under Code section 414(b)), a group of trades or
businesses under common control (under Code section 414(c)) of which the
Employer is a member, any other entity required to be aggregated with the
Employer pursuant to Code section 414(o) and as a Leased Employee, except as
provided in section 1.1(n).
(l) INCOME. The net gain or loss of the Accounts of the Trust
Fund from investments including, but not limited to, interest, dividends,
rents, profits, realized and unrealized gains and losses and expenses of the
Plan or Trust Fund paid from the Trust Fund. To determine the Income of the
Trust Fund for any period, the Trustee shall value the Trust Fund on the
basis of its assets' fair market value.
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(m) KEY EMPLOYEE. Any employee, former employee or beneficiary
who, pursuant to Code section 416(i), during the year involved or any of the
four immediately preceding years, is:
(1) An officer of the Employer receiving annual
compensation exceeding 50% of $90,000 or the amount then applicable pursuant
to Code section 415(b)(1(A) (as adjusted annually for increases in the cost
of living by the Secretary of the Treasury or his/her delegate);
(2) One of the ten employees of the Employer owning the
largest interests in an Employer and receiving annual compensation greater
than $30,000 or the amount then applicable pursuant to Code section
415(c)(1)(A) (as adjusted annually for increases in the cost of living by the
Secretary of the Treasury or his/her delegate);
(3) A 5% owner of the Employer; or
(4) A 1% owner of the Employer receiving annual
compensation exceeding $150,000.
In determining whether an individual is a Key Employee, the
Committee shall consider his/her compensation as defined in Code section
414(q)(7).
(n) LEASED EMPLOYEE. Any person (other than an employee of the
Employer) who, pursuant to an agreement between the Employer and any other
person (the "leasing organization"), has performed services for the Employer
(or for the Employer and related persons determined in accordance with Code
section 414(n)(6)) under the primary direction and control of the Employer on
a substantially full-time basis for a period of at least one year.
In no event shall a Leased Employee be considered an
employee of the Employer if: (l) the Leased Employee is covered by a money
purchase pension plan providing a nonintegrated employer contribution rate of
at least 10% of compensation as defined in section 5.1(c) (including amounts
contributed pursuant to a salary reduction agreement under Code sections 125,
401(a)(8), 401(h) or 403(b)), immediate participation and full and immediate
vesting and (2) the Leased Employees equal no more than 20% of the Employer's
nonhighly compensated employees.
(o) NORMAL RETIREMENT AGE. A Participant's 65th birthday.
(p) PARTICIPANT. Any individual who has satisfied the
eligibility and participation requirements of the Plan as provided in Article
2. Where appropriate, the term "Participant" also includes former
participants.
(q) PLAN. The Recycling Industries, Inc. 401(k) Retirement
Plan, as stated herein and as amended from time to time.
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(r) PLAN SERVICE PROVIDER. An entity to whom the Committee has
delegated certain administrative functions pursuant to a written agreement.
(s) PLAN YEAR. The calendar year, except that the first Plan
Year begins August 1, 1998 and ends December 31, 1998.
(t) TRUST FUND. The assets of the Plan held in trust by a
Trustee or the assets of the Plan which consist of insurance contracts or
policies issued by an insurance company.
(u) TRUSTEE. The person, persons or entity holding the assets
of the Plan in trust.
(v) VALUATION DATE. Any day that the New York Stock Exchange is
open for business and such other periods as the Committee determines for the
purpose of valuing the Trust Fund pursuant to Article 4.
(w) YEAR OF SERVICE. A calendar year (before or after August 1,
1998) in which an employee completes at least 1,000 Hours of Service, and a
period that counts as a Year of Service according to Article 6.
1.2 CONSTRUCTION. Except to the extent preempted by the Employee
Retirement Income Security Act of 1974 ("ERISA"), the laws of the State of
Colorado, as amended from time to time, shall govern the construction and
application of the Plan. Words used in the masculine gender shall include
the feminine and words in the singular shall include the plural, as
appropriate. The words "hereof," "herein," "hereunder" and other similar
compounds of the word "hereof" shall refer to the entire Plan, not to a
particular section. Any mention of "Articles," "sections" and subdivisions
thereof, unless stated specifically to the contrary, refers to Articles,
sections and subdivisions thereof in the Plan. All references to statutory
sections shall include the section so identified, as amended from time to
time, or any other statute of similar import. If any provisions of the Code
or the ERISA render any provision of this Plan unenforceable, such provision
shall be of no force and effect only to the minimum extent required by such
law.
1.3 TOP-HEAVY RESTRICTIONS. Annually, as of each determination date,
the Trustee shall apply the tests recited in Code section 416 to determine if
the Plan is top-heavy.
(a) GENERAL RULE. Generally, the Plan will be "top-heavy" for
any Plan Year, if, as of the determination date, the Plan's accumulations in
the Accounts of Key Employees exceed 60% of its accumulations in the Accounts
of all Participants. To determine if the Plan is top-heavy, the Trustee
shall (1) include in each Participant's Account distributions made with
respect to the Participant during the Plan Year containing the determination
date and the preceding four Plan Years and (2) exclude from the calculation
(A) the Account of any Participant who has not been a Key Employee at any
time during the Plan Year containing
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the determination date and the preceding four Plan Years and (B) the Account
of any individual who did not complete at least one Hour of Service during
the immediately preceding five-year period.
(b) DETERMINATION DATE. For the first Plan Year, the
"determination date" is the last day of that Plan Year. For any other Plan
Year, the "determination date" is the last day of the immediately preceding
Plan Year.
(c) AGGREGATING PLANS. In determining whether the Plan is
top-heavy, the Trustee shall aggregate the Plan with (1) each other plan of
the Employer in which a Key Employee participated during the plan year
containing the determination date or the four immediately preceding years
(regardless of whether the plan has terminated) and (2) each other plan of
the Employer which enables any plan in which a Key Employee participates to
meet the requirements of Code section 401(a)(4) or 410. The Trustee may, in
making its determination, aggregate the Plan with one or more other plans of
the Employer if such plans, as a group, would continue to meet the
requirements of Code section 401(a)(4) and 410. In determining whether this
Plan is top-heavy, the Trustee shall consider the present value of accrued
benefits and the sum of account balances under all plans aggregated pursuant
to Code section 416.
(d) CONSEQUENCES. If the Plan is top-heavy for a year, the
top-heavy contribution and allocation directions of Article 3, if any, and
the top-heavy vesting schedule of Article 6 shall apply.
END OF ARTICLE 1
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ARTICLE 2
Eligibility and Participation
2.1 ELIGIBLE CLASS OF EMPLOYEES. An employee eligible to participate
in the Plan is any employee of the Employer other than a Leased Employee,
other than an employee who is included in a unit of employees covered by a
collective bargaining agreement if there is evidence that retirement benefits
were the subject of good faith bargaining, and other than categories of
employees of an Employer specifically excluded on Appendix A.
2.2 CONDITIONS OF ELIGIBILITY. An employee who is eligible to
participate in the Plan, as defined in section 2.1 above, shall participate
in the Plan as of the commencement date described in section 2.3 below upon
attainment of age 21 and completion of 1,000 Hours of Service during the
employee's first 12 months of Employment or during any Plan Year beginning
after the employee's first day of Employment. In addition, an employee who
has attained age 21 and is eligible to participate in the Plan, as defined in
section 2.1 above, shall start participation in the Plan on August 1, 1998 if
the employee completed 90 days of Employment on August 1, 1998. For purposes
of this section 2.2, an employee employed by an Employer on the day before it
became an Employer shall be credited with employment and Hours of Service
completed before the Employer became an Employer.
2.3 START OF PARTICIPATION. An employee who meets the eligibility
requirements of sections 2.1 and 2.2 shall start participation in the Plan on
August 1, 1998 or, if later, the first day of the calendar quarter coincident
with or immediately following his/her satisfaction of the age 21 requirement
and the 12 month eligibility period applicable to the employee according to
section 2.2.
2.4 TERMINATION OF PARTICIPATION. On the date a Participant's
Employment terminates, the Participant shall be deemed a former Participant.
Status as a former Participant shall continue until the date the Plan has
satisfied all liabilities with respect to the former Participant.
2.5 REEMPLOYMENT. If an employee who began to participate in the Plan
as described in section 2.3 terminates Employment and subsequently resumes
Employment, the rehired employee shall participate in the Plan immediately
upon rehire. If an employee eligible to participate in the Plan terminates
Employment before starting participation in the Plan as described in section
2.3, and the employee subsequently resumes Employment, the employee shall
start to participate in the Plan on the first day of the calendar quarter
coincident with or immediately following the employee's completion of the
conditions of eligibility as described in section 2.2.
END OF ARTICLE 2
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ARTICLE 3
Contributions and Allocations
3.1 ELECTIVE CONTRIBUTIONS.
(a) AMOUNT. For each Plan Year, a Participant may direct the
Employer to make "elective contributions" on his/her behalf directly to the
Trust Fund for investment in the 401(k) Elective Contributions Account. The
Employer shall make elective contributions on behalf of a Participant in lieu
of the Employer's payment of an equal amount to the Participant as direct
remuneration for the Plan Year; provided the Participant elects to defer such
amounts prior to the date such amounts become currently available to the
Participant. A Participant may so elect only as to amounts becoming
currently available after the cash or deterred arrangement of this Plan is
adopted and effective. A Participant's elective contributions may not be
less than 1% of the Participant's Compensation for a Plan Year and may not
exceed the lesser of (1) 20% of the Participant's Compensation for a Plan
Year, or (2) for each calendar year, the $7,000 limit of Code section 402(g)
as adjusted annually for increases in the cost of living by the Secretary of
Treasury or his/her delegate and as in effect for such calendar year.
(b) ALLOCATION. The Plan Service Provider shall allocate the
elective contributions for each payroll period to the 401(k) Elective
Contributions Accounts of the Participants for whom such contributions were
made as soon as administratively feasible following the end of each payroll
period and the Trustee shall deposit the contributions in accordance with
such allocation.
(c) ENROLLMENT. Participants may enroll to make elective
contributions effective as of the first pay period of any calendar quarter.
A Participant shall enroll by providing the Plan Service
Provider with an election (in a form acceptable to the Plan Service Provider)
directing the Employer to make elective contributions. The Participant must
provide the election to the Plan Service Provider within a reasonable time as
determined by the Plan Service Provider prior to the effective date.
Once made, a Participant's election authorizing elective
contributions will remain in effect until amended or discontinued pursuant to
paragraphs (d) and (e) below.
(d) DISCONTINUE ELECTIVE CONTRIBUTIONS. Unless otherwise
authorized pursuant to rules prescribed by the Plan Service Provider, a
Participant may entirely discontinue his/her elective contributions effective
at any time by providing the Plan Service Provider, within a reasonable time
as determined by the Plan Service Provider prior to the effective date, an
election directing the Employer to discontinue his/her elective
contributions. A Participant who discontinues his/her elective contributions
may again enroll to make elective contributions effective as of the first day
of a calendar quarter.
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(e) DECREASE OR INCREASE IN ELECTIVE CONTRIBUTIONS. Unless
otherwise authorized pursuant to rules prescribed by the Plan Service
Provider, a Participant may decrease (but not below 1% of the Participant's
Compensation) or increase the amount of his/her elective contributions
effective as of the first day of a calendar quarter providing the Plan
Service Provider, within a reasonable period of time as determined by the
Plan Service Provider prior to the effective date, an election directing the
Employer to decrease or increase his elective contributions.
(f) RETURN OF EXCESS ELECTIVE CONTRIBUTIONS. If a Participant
notifies the Committee in writing by the February 15 following the close of a
calendar year, or the Employer designates on behalf of the Participant, that
the Participant has made excess elective contributions for that year, the
Trustee shall distribute to the Participant the amount of the excess elective
contributions allocable to the Plan (plus, or minus, any Income or loss
allocable thereto up to the close of the calendar year) by the March 1
immediately following the close of that calendar year. The amount of "excess
elective contributions" for any calendar year shall equal (1) the sum of
amounts contributed as elective contributions on behalf of the Participant
plus amounts deferred by the Participant pursuant to arrangements described
in Code sections 401(k), 408(k) and 403(b) (the "total elective
contributions") minus (2) the $7,000 limit of Code section 402(g), as
adjusted annually for increases in the cost of living by the Secretary of the
Treasury or his/her delegate from time to time. The Participants written
notification must contain a statement to the effect that, if such excess
elective contributions were not distributed, the Participant's total elective
contributions would exceed the limit specified in Code section 402(g) for the
calendar year in which such elective contributions were made.
Income allocable to excess elective contributions shall be
determined (1) under any reasonable method used for allocating Income to all
Participant's Accounts as applied consistently to all Participants for the
Plan Year or (2) by multiplying income allocable to the Participant's 401(k)
Elective Contribution Account for the calendar year by a fraction, the
numerator of which is such Participant's excess elective contributions for
the year and the denominator is the Participant's Account balance
attributable to elective contributions as of the beginning of the calendar
year plus the Participant's elective contributions for the calendar year.
3.2 401(k) MATCHING CONTRIBUTIONS.
(a) AMOUNT. The Employer will contribute a "matching contribution"
to the Trust Fund for each Plan Year. The matching contribution, when added to
the Forfeitures of matching contributions allocated for the Plan Year under
section 3.4, shall equal 25% of each qualifying Participant's elective
contributions not in excess of 6% of the Participant's Compensation for the Plan
Year.
(b) ALLOCATION. The Plan Service Provider shall allocate the
matching contributions for each Plan Year to the 401(k) Matching Contribution
Accounts of the Participants who are employed by an Employer on the last day of
the Plan Year and completed 1,000 Hours of Service during the Plan Year as soon
as administratively feasible following the
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end of the Plan Year. In addition, the Plan Service Provider shall allocate
the matching contributions for the Plan Year to the 401(k) Matching
Contribution Accounts of Participants who terminate Employment during the
Plan Year for the purpose of retiring from all active employment. The
Trustee shall deposit the contributions in accordance with such allocation.
(c) SUSPENSION, REDUCTION OR ELIMINATION OF MATCHING
CONTRIBUTIONS. Notwithstanding any other provisions of the Plan, the Employer
may act to suspend, reduce or eliminate matching contributions to be made by
the Employer. The Employer shall communicate any such action to all
Participants for the Plan Year to which the suspension, reduction or
elimination occurs and may rescind such action at any time.
3.3 PROFIT SHARING CONTRIBUTIONS.
(a) AMOUNT. The Employer may make one or more "profit sharing
contributions" to the Trust Fund for each Plan Year. The amount of the
profit sharing contribution(s), if any, for a Plan Year shall be determined
by the Employer.
(b) QUALIFYING PARTICIPANTS. The Account of each Participant
who is employed by an Employer on the last day of the Plan Year and has
completed 1,000 Hours or Service during the Plan Year shall receive an
allocation of the profit sharing contribution, if any, made to the Trust Fund
for the Plan Year.
(c) ALLOCATION. As soon as administratively feasible following
the funding of the profit sharing contribution for a Plan Year, the Plan
Service Provider shall allocate the profit sharing contribution for the Plan
Year the Profit Sharing Accounts of Qualifying Participants and the Trustee
shall deposit the contribution in accordance with such allocation.
The amount allocated on behalf of each Qualifying
Participant for each Plan Year shall bear the same proportion to the total
profit sharing contribution for the Plan Year as the Participant's total
Compensation for the Plan Year bears to the total Compensation of all
Qualifying Participants who are entitled to share in the same profit sharing
contribution for the Plan Year.
3.4 ALLOCATION OF FORFEITURES.
(a) MATCHING CONTRIBUTIONS. As of the last day of each Plan
Year and following the allocation of Income (reduced by investment expenses
paid by the Plan) pursuant to Article 4, the Plan Service Provider shall
allocate Forfeitures (reduced by investment and administrative expenses paid
by the Plan), if any, from the Matching Contribution Accounts, as a part of
(and an offset to) the Employer matching contribution described in section
3.2(a).
(b) PROFIT SHARING CONTRIBUTIONS. As of the last day of each
Plan Year and following the allocation of Income (reduced by investment
expenses paid by the Plan) pursuant to Article 4, the Plan Service Provider
shall allocate Forfeitures, if any, (reduced by investment
3-3
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and administrative expenses paid by the Plan) from the Profit Sharing
Accounts as a part of (and an offset to the profit sharing contribution
described in Section 3.3(a).
3.5 TOP-HEAVY CONTRIBUTIONS.
(a) REQUIRED CONTRIBUTION. For each Plan Year the Plan is
top-heavy within the meaning of section 1.3 above, the Employer shall
contribute to the Trust Fund such amount, if any, necessary for the
allocation specified in paragraph (b) below.
(b) ALLOCATION. Notwithstanding allocations otherwise specified
in this Article 3, as of the last day of any Plan Year during which the Plan
is top-heavy, the Trustee shall allocate a top-heavy contribution to the
Profit Sharing Contribution Account of each Participant who is not a Key
Employee and who is employed by the Employer on the last day of such Plan
Year (without regard to the number of Hours of Service he/she accumulated
during such Plan Year). A "top-heavy contribution" is an Employer
contribution (not including elective contributions) equaling (when combined
with Employer contributions on behalf of such participant to this and other
defined contribution plans) the lesser of (i) 3% of the Participant's
compensation (as defined in section 5.1(c) below) for such year or (ii) the
same percentage of the Participant's compensation for such year as the
highest percentage of a Key Employee's compensation that the allocation of
Employer contributions (including allocations of elective contributions) to
that Key Employee's Account totals for such year.
(c) AGGREGATION OF PLANS. For purposes of this section, the
Plan shall aggregate Employer contributions allocated on behalf of a
Participant pursuant to all defined contribution plans maintained by the
Employer and qualified pursuant to Code section 401(a). Unless the Employer
directs to the contrary, the top-heavy contribution on behalf of such
Participants shall occur first to this Plan.
3.6 ROLLOVERS FROM OTHER EMPLOYEE BENEFIT PLANS. Any Participant who
participated in another retirement plan and trust qualified pursuant to Code
sections 401(a) and 501(a) ("qualified plan") may, with the approval of the
Committee, instruct the Trustee to accept a direct rollover to the Trust Fund
of assets from such other qualified plan, or may deposit in the Trust Fund
some or all of the amounts received from such other qualified plan which
he/she received personally (either directly from such plan or after a
rollover of such amounts to a "conduit" individual retirement account or
annuity) provided (1) that he/she deposits such amounts in the Plan within 60
days following his/her receipt of such amounts, and (2) such amounts do not
consist of property other than money. Before accepting a rollover, the
Committee may require such documentation and information as it deems
necessary. A Participant who rolled over amounts pursuant to this section,
or on whose behalf such a rollover occurred, shall always remain 100% vested
in such rolled over amounts and the Income thereon and may request a
distribution of the Rollover Account at any time. The Plan Service Provider
shall allocate amounts rolled over by, or on behalf of, a Participant to
his/her 401(k) Rollover Account and the Trustee shall deposit the rollover
contribution in accordance with such allocation. This section 3.6 does not
apply to an individual who is not a Participant.
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3.7 DETERMINATION OF CONTRIBUTIONS. The Employer shall determine the
amount of any contribution made by it pursuant to this Plan. The Employer's
determination of such contribution shall bind all Participants, the Trustee
and the Committee. Such determination shall be final and conclusive and
shall not be subject to change as a result of a subsequent audit by the
Internal Revenue Service or as a result of any subsequent adjustment of the
Employee's records.
The Trustee shall have no right or duty to inquire into the amount
of the Employer's contribution or the method used in determining the amount
of such contribution. The Trustee shall be accountable for only funds it
actually receives.
3.8 TIME OF PAYMENT OF CONTRIBUTIONS. The Employer shall pay its
contribution for each of its fiscal years to the Trustee within the time
prescribed by law, including extensions, for the filing of the Employer's
federal income tax return for such year or within such other period as
provided in Code section 404(a)(6). The Employer shall pay elective
contributions made pursuant to a salary reduction agreement to the Trustee as
of the earliest date the Employer can reasonably segregate such contributions
from its general assets but not later than the date required by law.
3.9 RETURN OF CONTRIBUTIONS. The Trustee shall return Employer
contributions made to the Plan in the following circumstances:
(a) The Employer and the Plan hereby condition all Employer
contributions to the Plan upon the Employer obtaining a deduction pursuant to
Code section 404(a) in an equal amount for the Employer's taxable year ending
with or within the Plan Year for which the contribution is made. If all or
any portion of the Employee's contribution is not deductible for such year
pursuant to Code section 404(a), the Trustee shall return the nondeductible
amount to the Employer, without earnings, but reduced by any losses
attributable thereto, within one year of the disallowance of the deduction by
the Internal Revenue Service.
(b) The Trustee, at the direction of the Employer, shall return
to the Employer, without earnings, but reduced by any losses attributable
thereto, any contribution made due to a mistake of fact provided the
Committee determines that such mistake existed at the time of the
contribution. The Trustee may only return a contribution pursuant to this
subsection (b) within 12 months of the date the contribution was made.
(c) The Employer and the Plan condition all Employer
contributions to this Plan upon the initial qualification of the Plan
pursuant to Code section 401(a). Within one year after the date the Internal
Revenue Service determines that the Plan fails to qualify pursuant to Code
section 401(a), and provided that the Plan's application for determination to
the Internal Revenue Service is made within the time prescribed by law, the
Trustee shall return to the Employer the entire assets of the Plan
attributable to all amounts contributed during the time the Plan failed to
qualify.
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The Employer shall return elective contributions and amounts
rolled over into the Plan, if any, and Income thereon to the Participant if
such contributions are returned to the Employer pursuant to this section.
3.10 MILITARY SERVICE. Notwithstanding any provision of this Plan to
the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Code section
414(u).
END OF ARTICLE 3
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ARTICLE 4
Valuation
4.1 ALLOCATION OF INCOME TO PLAN ACCOUNTS. The Trustee shall,
following the end of each Valuation Date, value all assets of the Trust Fund,
allocate net gains or losses, and process additions to and withdrawals from
Account balances in the following manner:
(a) The Trustee shall first compute the fair market value of
securities and/or the other assets comprising each investment fund designated
by the Committee for direction of investment by Participants. Each Account
balance shall be adjusted each Valuation Date by applying the closing market
price of the investment fund on the Valuation Date to the share limit balance
of the investment fund as of the close of business on the current business
day.
(b) The Trustee shall then account for any requests for
additions or withdrawals made to or from a specific designated investment
fund by any Participant, including allocations of contributions and
Forfeitures. In completing the valuation procedure described above, such
adjustments in the amounts credited to such Accounts shall be made on the
Valuation Date to which the investment activity relates. A contribution
received by the Trustee pursuant to this Plan shall not be taken into account
until the Valuation Date coinciding with or next following the date such
contribution was both actually paid to the Trustee and allocated among the
Accounts of Participants.
(c) Notwithstanding paragraphs (a) and (b) above, in the event a
pooled investment fund is created as a designated fund for Participant
investment election in this Plan, valuation of the pooled investment fund and
allocation of earnings of the pooled investment fund shall be governed by the
Administrative Services Agreement for such pooled investment fund.
It is intended that this section operate to distribute among each
Participant Account in the Trust Fund, all income of the Trust Fund and changes
in the value of the assets of the Trust Fund.
4.2 VALUATION OF PARTICIPANT'S ACCOUNT. The Trustee shall determine the
value of a Participant's Account for purposes of Articles 6 and 7 as of the
Valuation Date coinciding with the date of the distribution, including in that
valuation the allocation of contributions or Forfeitures, if any, as of such
Valuation Date.
END OF ARTICLE 4
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ARTICLE 5
Contribution and Allocation Restrictions
5.1 MAXIMUM LIMITS ON ALLOCATIONS. This section 5.1 shall limit
contributions and allocations made pursuant to Article 3.
(a) The annual addition to a Participants Account for any
limitation year shall not exceed the lesser of:
(1) $30,000; or
(2) 25% of the compensation paid or made available to
the Participant in such year.
(b) The "annual addition" shall mean the sum allocated to a
Participant's Account for any year of contributions or Forfeitures, if any,
pursuant to this Plan and allocated to his/her benefit pursuant to all other
defined contribution plans maintained by the Employer for the limitation
year, including employee contributions. Contributions allocated to any
individual accounts which are part of a pension or annuity plan under Code
sections 415(l) and 419A(d)(2) shall be treated as annual additions to a
defined contribution plan. However, section 5.1(a)(2) above shall not apply
to any amounts treated as an annual addition under the preceding sentence.
The annual addition includes elective contributions in excess of (1) the
$7,000 limit of Code section 402(g) (as adjusted annually for increases in
the cost of living as specified by the Secretary of the Treasury or his/her
delegate) that are not distributed by the April 15 following the close of the
Plan Year, or (2) the nondiscrimination tests recited in this Article 5 even
if corrected through distribution after the close of the Plan Year.
The annual addition shall not include the allocation to a
Participant's Account of Income pursuant to Article 4 and rollovers, if any,
pursuant to Article 3.
(c) "Compensation" for purposes of this Section 5. 1, unless
otherwise elected by the Committee for a limitation year, shall mean an
employee's wages, salary, fees for professional service and other amounts
received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with the
Employer while a Participant to the extent that the amounts are includable in
gross income for the limitation year. "Compensation" includes, but is not
limited to, any elective deferral (as defined in Code section 402(g)(3), any
amount which is contributed or deferred by the employer at the election of
the employee and which is not includable in the gross income of the employee
by reason of Code section 125 or 457, commissions, compensation for services
on the basis of a percentage of profits, tips, bonuses, fringe benefits and
reimbursements or expense allowances under a nonaccountable plan (as
described in Treasury regulation section 1.62(c)). "Compensation" does not
include the following:
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(1) Employer contributions to a plan of deferred
compensation which are not includable in the employees gross income for the
taxable year in which contributed (except for elective deferrals under Code
section 402(g)(3) or 457), or any distributions from a plan of deferred
compensation;
(2) Amounts realized from the exercise of a nonqualified
stock option, or when restricted stock (or property) held by the employee
either becomes freely transferable or is no longer subject to a substantial
risk of forfeiture;
(3) Amounts realized from the sale, exchange or other
dispositions of stock acquired under a qualified stock option; and
(4) Other amounts which received special tax benefits,
or contributions made by the Employer (not under a salary reduction
agreement) towards the purchase of an annuity contract described in Code
section 403(b) (whether or not the contributions are excludeable from the
gross income of the employee).
(d) The "limitation year" shall be the calendar year.
(e) The Trustee shall reallocate the excess of a Participant's
annual addition over the limits stated above, provided such excess is not
subject to refund or reversion pursuant to Article 3, in accordance with
subparagraph (1) below, and any one of the other following subparagraphs
chosen by the Committee:
(1) To the extent the excess arises from the
Participant's elective contributions, such excess may be refunded to the
Participant as soon as administratively feasible.
(2) The excess amount shall be reallocated to the
Accounts of the Participants in the Plan who have not exceeded the limits
stated above. If the reallocation causes the limits stated above to be
exceeded with respect to each Participant for the limitation year, then these
amounts shall be held unallocated in a suspense account and reallocated to
Participants' Accounts in the next (or succeeding, if necessary) limitation
year before the allocation of Employer or employee contributions.
(3) The excess amount shall be used to reduce the
Employer contributions for the next (or succeeding, if necessary) limitation
year for the Participant who incurred the excess amounts provided the
Participant is covered by the Plan at the end of such limitation year. If
the Participant is no longer covered by the Plan as of the end of the
limitation year, the excess amounts shall be held unallocated in a suspense
account and reallocated in the next limitation year to all remaining
Participants in the Plan as a reduction of such Participants' Employer
contributions. Excess amounts may not be distributed to Participants or
former Participants.
5-2
<PAGE>
(4) The excess amount shall be held unallocated in a
suspense account for the limitation year and reallocated in the next (or
succeeding, if necessary) limitation year to all Participants in the Plan.
The excess amount must be used to reduce Employer contributions for the next
(and succeeding, if necessary) limitation years. Excess amounts may not be
distributed to Participants or former Participants.
Any excess amount held in a suspense account shall not
share in Income. If the Plan terminates before the allocation of such
excess, the excess shall revert to the Employer, to the extent that it may
not be allocated to any Participant's Account.
5.2 ACTUAL DEFERRAL PERCENTAGE TEST.
(a) APPLYING THE TEST. The actual deferral percentage (the
"ADP") for Participants who are highly compensated may not exceed the greater
of:
(1) 1.25 times the ADP for the preceding Plan Year for
all Participants who were not highly compensated in that Plan Year; or
(2) The lesser of (A) 2 times the ADP for the preceding
Plan Year of Participants who were not highly compensated in that Plan Year
or (B) the ADP for the preceding Plan Year of Participants, who were not
highly compensated in that Plan Year plus 2 percentage points.
The Plan Service Provider shall determine the Participants'
deferral percentages consistent with Code section 401 (k)(3) and applicable
Treasury Regulations, which the Plan incorporates by reference. The Employer
shall maintain records sufficient to demonstrate satisfaction of the ADP test
and the amount of qualified nonelective contributions or qualified matching
contributions, if any, used in such test.
(b) ADP DEFINED. For each Plan Year, the Plan Service Provider
shall determine the "ADP" for the highly compensated Participants and all
other Participants and all other Participants as follows:
(1) The ADP for a group of Participants shall equal the
average of the ratios, calculated separately for each Participant in the
group, of (A) the allocations of elective contributions and qualified
nonelective contributions or qualified matching contributions (to the extent
not taken into account for purposes of the actual contribution percentage
test), not including Income, which the Plan Service Provider determines for a
Plan Year to (B) the Participants compensation for that Plan Year. The ADP
of a Participant who makes no elective contributions is zero. Excess
elective, contributions of nonhighly compensated employees, determined
pursuant to section 3.1, are not taken into account for purposes of ADP
testing.
(2) "Compensation" for purposes of this paragraph shall
be determined (A) by the Trustee in a manner which satisfies Code section
414(s), (B) for the Plan Year or the
5-3
<PAGE>
calendar year ending within the Plan Year, and (C) by limiting the period
taken into account to that portion of the Plan Year or calendar year in which
the employee was a Participant, all as applied uniformly to determine the
compensation of every Participant for that Plan Year.
(3) The "ADP" for any highly compensated Participant who
is eligible to have elective contributions allocated to his/her account
pursuant to two or more plans or arrangements described in Code section
401(k) and maintained by an Employer shall be determined as if all such
contributions were made pursuant to a single arrangement.
(c) EXCESS CONTRIBUTIONS. If, for any Plan Year, the aggregate
amount of contributions to the Accounts of highly compensated Participants
exceeds the maximum amount permitted in paragraph (a) above, the Plan Service
Provider may distribute such excess amount plus or minus any Income or loss
allocable to such excess amount to some or all of the highly compensated
Participants (determined by reducing contributions made on behalf of highly
compensated Participants in order of the dollar amounts contributed beginning
with the highest of such dollar amounts) during the period beginning on the
first day following the close of the Plan Year in which the excess
contributions arose and ending on the date that is 2-1/2 months from the
close of such Plan Year, and in all events shall distribute such amount no
later than the close of the following Plan Year. The Plan Service Provider
shall calculate any excess pursuant to this paragraph (c) after determining
the amount of excess elective contributions pursuant to Article 3.
Income allocable to excess contributions shall be determined
(1) under any reasonable method used for allocating Income to all
Participants' Accounts as applied consistently to all participants for the
Plan Year or (2) by multiplying Income allocable to the Participants elective
contributions (and qualified nonelective contributions and qualified matching
contributions, if any) for the Plan Year by a fraction, the numerator of
which equals the Participants excess contributions for the year and the
denominator of which equals the Participant's Account balance attributable to
elective contributions (and qualified nonelective contributions and qualified
matching contributions, if any) as of the beginning of the Plan Year plus the
Participants elective contributions (and qualified nonelective contributions
and qualified matching contributions, if any) for the Plan Year. The Plan
may distribute excess contributions (and Income) without regard to consent
otherwise required for Plan distributions.
5.3 ACTUAL CONTRIBUTION PERCENTAGE TEST.
(a) APPLYING THE TEST. The actual contribution percentage (the
"ACP") for Participants who are highly compensated may not exceed the greater
of:
(1) 1.25 times the ACP for the preceding Plan Year for
all Participants who were not highly compensated in that Plan Year; or
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<PAGE>
(2) The lesser of (A) 2 times the ACP of Participants
who were not highly compensated in the preceding Plan Year or (B) the ACP of
Participants who are not highly compensated in the preceding Plan Year plus 2
percentage points.
The Plan Service Provider shall adjust the limit
described in (2) above in accordance with section 1.401(m)-2 of the Treasury
Regulations to avoid multiple use of that limit for any highly compensated
Participant in violation of Code section 401(m)(9). Multiple use does not
occur if the sum of the ADP and ACP for highly compensated employees does not
exceed the aggregate limit. The aggregate limit is the greater of (1) or (2)
below:
(1) The aggregate limit is:
(A) 1.25 times the greater of:
(i) The ADP for all Participants who are
highly compensated; or
(ii) The ACP for all Participants who are not
highly compensated;
Plus
(B) The lesser of (i) or (ii) above, plus 2%
(provided this number does not exceed 2 times the lesser of (i) or (ii)).
(2) The aggregate limit is:
(A) 1.25 times the lesser of:
(i) The ADP for nonhighly compensated
employees; or
(ii) The ACP for nonhighly compensated
employees;
Plus
(B) The greater of (i) or (ii) above, plus 2%
(provided this number does not exceed 2 times the greater of either (i) or
(ii)).
If multiple use occurs, such multiple use shall be corrected
by reducing the ACP of highly compensated employees who are eligible in both
the cash or deferred arrangement and the Plan subject to Code section 401(m)
in accordance with section 5.4(c) below.
5-5
<PAGE>
The Plan Service Provider shall determine the Participants'
contribution percentages consistent with Code section 401(m)(3) and
applicable Treasury regulations, which the Plan incorporates by reference.
The Employer shall maintain records sufficient to demonstrate satisfaction of
the ACP test and the amount of qualified nonelective contributions and
qualified matching contributions, if any, used in such test.
(b) ACP DEFINED. For each Plan Year, Provider shall
determine the, "ACP" for the highly compensated Participants and all other
Participants as follows:
(1) The "ACP" for a group of participants shall equal
the average of the ratios, calculated separately for each Participant in the
group, of (A) the allocations of after-tax contributions or matching
contributions (to the extent not taken into account for purposes of the ADP
test) (not including Income) for a Plan Year to (B) the Participant's
compensation for that Plan Year. Qualified nonelective contributions or
qualified matching contributions, if any, (to the extent not taken into
account for purposes of the ADP test) may be taken into account for purposes
of calculating the ACP for Participants.
(2) "Compensation" for purposes of this paragraph shall
be determined (A) by the Trustee in a manner which satisfies Code section
414(s), (B) for the Plan Year or the calendar year ending within the Plan
Year, and (C) by limiting the period taken into account to that portion of
the Plan Year or calendar year in which the employee was a Participant, all
as applied uniformly to determine the compensation of every Participant for
that Plan Year.
(3) The "ACP" for any highly compensated Participant who
is eligible to have matching contributions, if any, allocated to his/her
account pursuant to two or more plans or arrangements described in Code
section 401(m) and maintained by an Employer shall be determined as if all
such matching were made pursuant to a single arrangement.
(c) EXCESS AGGREGATE CONTRIBUTIONS. If, for any Plan
Year, the aggregate amount of contributions to the Matching Contributions
Accounts or Profit Sharing After-Tax Participant Contribution Accounts, if
any, of highly compensated Participants exceeds the maximum amount permitted
in paragraph (a) above ("excess aggregate contributions"), the Plan Service
Provider shall distribute such excess amount plus or minus any Income or loss
allocable to such excess amount to some or all of the highly compensated
Participants (determined by reducing contributions made on behalf of highly
compensated Participants in order of the ACPS, beginning with the highest of
such percentages) during the period beginning on the first day following the
close of the Plan Year in which the excess contributions arose and ending on
the date that is 2-1/2 months from the close of the Plan Year and, in no
event, later than the close of the following Plan Year. The Plan Service
Provider shall calculate any excess pursuant to this paragraph (c) after
determining the amount of excess elective deferrals pursuant to Article 3 and
the amount of contributions in excess of the ADP test pursuant to section 5.3.
5-6
<PAGE>
Income allocable to excess aggregate contributions shall be
determined (1) under any reasonable method used for allocating Income to all
Participants' Accounts as applied consistently to all Participants for the
Plan Year or (2) by multiplying Income allocated to the Participant's
matching contributions for the Plan Year by a fraction, the numerator of
which equals the Participant's excess aggregate contributions for the year
and the denominator of which equals the Participants Account balance
attributable to matching contributions (and qualified matching contributions,
if any) as of the beginning of the Plan Year and qualified matching
contributions, if any, for the Plan Year. The Plan may distribute excess
aggregate contributions (and Income) without regard to consent otherwise
required for Plan distributions.
5.4 QUALIFIED NONELECTIVE CONTRIBUTIONS AND QUALIFIED MATCHING
CONTRIBUTIONS. Pursuant to Treasury Regulations and in lieu of distributing
excess contributions, the Employer may elect to make qualified nonelective
contributions or qualified matching contributions to the Plan on behalf of
Participants.
(a) QUALIFIED NONELECTIVE CONTRIBUTIONS. "Qualified nonelective
contributions" means contributions (other than matching contributions) made
by the Employer and allocated to Participants' Accounts that the Participants
may not elect to receive in cash until distributed from the Plan; that are
nonforfeitable when made; and that are distributable only in accordance with
the distribution provisions applicable to elective contributions, all as
pursuant to Code sections 401(k)(2)(B) and (C). The Plan Service Provider
shall allocate qualified nonelective contributions to the Participants'
Elective Contribution Accounts in a manner that does not discriminate in
favor of highly compensated employees and the Trustee shall deposit the
contributions in accordance with such allocation.
(b) QUALIFIED MATCHING CONTRIBUTIONS. "Qualified matching
contributions" means matching contributions made by the Employer that are
nonforfeitable when made and that are distributable only in accordance with
the distribution provisions applicable to elective contributions. The Plan
Service Provider shall allocate qualified matching contributions in a
uniform, nondiscriminatory manner to the Participants' Elective Contribution
Accounts and the Trustee shall deposit the contributions in accordance with
such allocation.
5.5 HIGHLY COMPENSATED. For purposes of this Article 5, "highly
compensated" shall have the meaning required by Code section 414(q), which is
any employee who was a five percent owner of the Company during the current
Plan Year or the preceding Plan Year or whose compensation, as defined in
Section 5.1, for the preceding Plan Year exceeded $80,000, as adjusted for
increases in the cost of living by the Secretary of the Treasury or his/her
delegate.
END OF ARTICLE 5
5-7
<PAGE>
ARTICLE 6
Calculation of Years of Service
6.1 GENERAL DETERMINATION. An employee shall receive one Year of
Service for each calendar year in which he completes 1,000 Hours of Service,
plus the Years of Service described in sections 6.2, 6.3 and 6.4, below.
6.2 YEARS OF SERVICE FOR MILITARY SERVICE. If an employee leaves
Employment to enter the armed forces of the United States under circumstances
entitling the employee to reemployment rights under applicable law and
returns to Employment during the period within which his reemployment rights
are guaranteed by law, the employee shall receive credit towards Years of
Service for the period during which the employee is serving in the armed
forces and the period after his discharge from such armed forces during which
his reemployment rights are guaranteed by law.
6.3 YEARS OF SERVICE WITH ACQUIRED EMPLOYER'S PRIOR PLANS. An
employee employed by one of the Employers listed in Appendix B on the
Effective Date listed in Appendix B shall receive a Year of Service for years
of vesting service the employee earned under the Prior Plan listed for the
Employer in Appendix B.
6.4 YEARS OF SERVICE WITH ACQUIRED EMPLOYERS THAT DID NOT MAINTAIN
PRIOR PLANS. An employee employed by an Employer that did not maintain a tax
qualified retirement plan on the day before it became an Employer shall
receive one Year of Service for each calendar year in which the employee
completed 1,000 Hours of Service with the Employer before the date it became
an Employer.
END OF ARTICLE 6
6-1
<PAGE>
ARTICLE 7
Vesting
7.1 VESTING.
(a) RETIREMENT. A Participant's interest in his/her Account
shall always be fully vested and nonforfeitable if the Participant's
Employment terminates on or after his/her Normal Retirement Date (age 65).
(b) DEATH OR DISABILITY. A Participant's interest in his/her
Account shall be fully vested and nonforfeitable if his/her Employment
terminates due to his/her death or Disability. "Disability" means a physical
condition which, in the judgment of the Committee (based upon medical reports
and other evidence satisfactory to the Committee) and pursuant to uniform
principles consistently applied, is presumed to permanently prevent an
individual from satisfactorily performing his/her duties for the Employer,
with reasonable accommodation, or the duties of such other position or job
which the Employer makes available to him/her, with reasonable accommodation,
and for which the individual is qualified by reason of his/her training,
education or experience.
(c) TERMINATION OF EMPLOYMENT PRIOR TO RETIREMENT, DISABILITY OR
DEATH. A Participant's interest in his/her 401(k) Elective Contribution and
Rollover Accounts shall be fully vested and nonforfeitable at all times. If
a Participant terminates Employment prior to his/her Normal Retirement Date,
disability or death, his/her interest in his/her 401(k) Matching Contribution
and Profit Sharing Contribution Account shall vest, and be nonforfeitable, in
relation to his/her Years of Service, as follows:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
0 but less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
</TABLE>
(d) ATTAINMENT OF NORMAL RETIREMENT DATE. Notwithstanding the
above vesting provisions, a Participant's interest in his/her Account shall
be fully vested and nonforfeitable if the Participant attains his/her Normal
Retirement Date while employed by the Employer.
(e) CHANGE IN VESTING SCHEDULE. In no event shall a change in
the Plan's vesting schedule reduce a Participant's vested and nonforfeitable
interest in his/her Account. Upon a change in the Plan's vesting schedule, a
Participant who has accumulated at least three
7-1
<PAGE>
Years of Service may elect to determine the vested interest in his/her
Account pursuant to either the revised vesting schedule or the vesting
schedule without regard to such change. Such election shall be made during
an election period which shall commence with the date the amendment is
adopted or deemed to be made and shall end 60 days after the latest of the
date the amendment is adopted, become effective, or the date the Participant
is issued written notice of the amendment by the Company or the Committee.
7.2 TOP-HEAVY PLAN YEARS. If the Plan is top-heavy for any Plan Year,
the following vesting schedule shall replace the vesting schedule of section
7.1:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
Fewer than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
</TABLE>
7.3 FORFEITURES. The nonvested portion of a Participant's Account
shall constitute a Forfeiture (be "forfeited") as of the earlier of the date
the Participant receives a distribution from his/her Account following the
termination of his/her Employment or the date the Participant incurs a one
year Break in Service. For purposes of this section 7.3, if the value of the
vested Profit Sharing Account of a Participant whose Employment has
terminated is zero, the Participant will be deemed to have received a
distribution of the Profit Sharing Contribution Account upon the termination
of Employment.
7.4 REINSTATEMENT OF FORFEITURES.
(a) FIVE OR MORE CONSECUTIVE ONE-YEAR BREAKS IN SERVICE. If a
former Participant resumes participation in the Plan after experiencing at
least five consecutive one-year Breaks in Service, such Participant shall
retain no right to any previously forfeited portion of his/her Account.
(b) BEFORE FIVE CONSECUTIVE ONE-YEAR BREAKS IN SERVICE. If a
former Participant resumes participation in the Plan before experiencing five
consecutive one-year Breaks in Service, the Committee shall restore any
previously forfeited portion of such a reinstated Participant's Account only
if the Participant repays to the Plan the full amount of any distribution
received from the Plan. The Participant must repay the full amount of the
distribution before completing five consecutive one-year Breaks in Service.
Any amount so restored shall not constitute an annual addition pursuant to
section 5.1.
END OF ARTICLE 7
7-2
<PAGE>
ARTICLE 8
Distributions
8.1 COMMENCEMENT OF RETIREMENT BENEFITS.
(a) EARLIEST PAYMENT DATE. Distribution shall occur no earlier
than the termination of a Participant's Employment, unless specifically
authorized elsewhere in the Plan. Distribution may commence less than 30 days
after the notice required under section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that: (i) the Committee informs the Participant
that the Participant has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a distribution;
and (ii) the Participant, after receiving the notice, affirmatively elects a
distribution.
(b) PAYMENT DUE TO TERMINATION OF EMPLOYMENT. If a Participant's
Employment terminates for any reason prior to the April 1 following the calendar
year in which the Participant attains age 70-1/2, the distribution of his/her
Account shall commence as follows:
(1) ACCOUNTS OF $5,000 OR LESS. The Committee shall
mandate distribution in a single lump sum of any Participant's vested Account
that equals $5,000 or less prior to the commencement of distributions.
(2) ACCOUNTS OF MORE THAN $5,000. If a Participant's
vested Account balance exceeds $5,000 prior to the commencement of
distributions, the Committee shall notify the Participant in writing of his/her
right to defer distribution of his/her Account to a date on or before the April
1 following the calendar year in which the Participant attains age 70-1/2. The
Committee shall provide such notice not less than 30 days and not more than 90
days prior to the date a Participant's Account becomes payable. The Participant
may elect, in writing, on a form approved by, and filed with, the Committee, the
distribution of his/her vested Account (i) as soon as administratively feasible
following the Valuation Date on or immediately after the date the Participant's
Employment terminates or (ii) as soon as administratively feasible following any
later Valuation Date, but no later than the April 1 following the calendar year
in which the Participant attains age 70-1/2.
(c) PAYMENT AFTER AGE 59-1/2. Even if a Participant's Employment
has not terminated, the Participant may elect that distribution shall commence
once the Participant attains age 59-1/2.
8.2 METHOD OF PAYMENT.
(a) FORM OF BENEFITS. Distribution of a Participant's Account(s)
shall be in a single lump sum, except that in the case of a Participant's
Account(s) that include assets
8-1
<PAGE>
transferred to this Plan from a plan listed in Appendix C to this Plan, the
additional rules of this section 8.2 shall apply:
(1) MARRIED PARTICIPANTS. Unless a Participant elects
an optional form of benefit pursuant to paragraph (3) below, the Committee
shall distribute the Account of a Participant married at the time of the
commencement of distributions in the form of a joint and survivor annuity
contract purchased from an insurer. "Joint and survivor annuity" means an
annuity for the life of the Participant with a survivor annuity for the life
of the Participant's spouse equal to 50% of the monthly benefit payable
during the joint lives of the Participant and spouse and which is the
actuarial equivalent of the balance in the Participant's Account upon the
commencement of distributions.
(2) UNMARRIED PARTICIPANTS. Unless a Participant elects
an optional form of benefit pursuant to paragraph (3) below, the Committee
shall distribute the Account of a Participant not married at the commencement
of distributions in the form of a life annuity contract purchased from an
insurer. "Life annuity" means a monthly benefit for the life of the
Participant which is the actuarial equivalent of the balance in the
Participant's Account upon the commencement of distributions.
(3) OPTIONAL BENEFIT FORMS. In lieu of the normal form of
benefit required by paragraphs (1) and (2) above, a Participant may elect
distribution of his/her Account in one of the following forms upon satisfying
the requirements of paragraph (b) below:
(A) LUMP SUM. A single lump sum.
(B) LIFE ANNUITY. An income payable monthly for the
lifetime of the Participant with the last payment being made as of the first day
of the month in which the Participant's death occurs.
(C) 100%, 75%, 66-2/3% OR 50% JOINT AND SURVIVOR ANNUITY.
An income payable monthly to the Participant for his/her lifetime with an amount
equal to 100%, 75%, 66-2/3% or 50% of such monthly benefit to be paid to a
beneficiary designated by the Participant on forms provided by and filed with
the Committee. Payments shall continue for the beneficiary's lifetime after the
Participant's death.
(D) INSTALLMENTS. Equal monthly, quarterly or annual
installments over a period specified by the Participant, with the last payment
adjusted to reflect Income allocated to the Participant's Account subsequent to
the commencement of payments.
(b) ELECTION PERIOD FOR OPTIONAL BENEFIT FORM. A Participant may
elect to receive an optional form of benefit, and may revoke any such election,
at any time within the 90-day period immediately preceding the date the
Participant's Account becomes payable. Such election shall be in writing on
forms approved by, and filed with, the Committee and shall (1) clearly indicate
the particular payment option selected by the Participant and the alternate
8-2
<PAGE>
beneficiary and (2) shall contain the consent of the Participant's spouse, if
any. Such spousal consent shall be in writing, witnessed by a Plan
representative or notary public and filed with the Committee. A Participant
may revoke any payment option selected during the election period by filing a
subsequent written election, with spousal consent if necessary, prior to the
end of the election period.
(c) BENEFIT INFORMATION. Not less than 30 days and not more than
90 days prior to the date a married Participant's Account becomes payable, the
Committee shall furnish the Participant with information concerning the joint
and survivor annuity benefit form and his/her right to request optional benefit
forms from the Plan. Such information shall contain a written explanation of
(1) the terms and conditions of the joint and survivor annuity, (2) the
Participant's right to request an optional benefit form and the material
features and relative financial values of the optional forms of benefit, (3) the
necessity for the Participant's spouse to consent to the election of an optional
benefit form, and (4) the Participant's right to revoke an election of an
optional benefit form and the effect of such revocation.
8.3 DIRECT ROLLOVERS. A distributee may elect, at the time and in the
manner prescribed by the Committee, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributes in a direct rollover. For purposes of applying this section 8.3,
the following definitions shall apply:
(a) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance to the
credit of the distributes, except that an eligible rollover distribution does
not include any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the distributes or the joint lives (or joint life expectancies)
of the distributes and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the Code; and the portion of
any distribution that is not includable in gross income.
(b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement annuity.
(c) Distributee: A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving spouse and
the employee's or former employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
8-3
<PAGE>
(d) Direct rollover: A direct rollover is a payment by the plan to
the eligible retirement plan specified by the distributes.
8.4 CHANGES IN PAYMENTS. A Participant may not change the form of
payment once payments have begun, except as required by law.
8.5 DEATH BENEFITS.
(a) DISTRIBUTION TO A BENEFICIARY. The Plan shall distribute the
Account of a deceased Participant to the beneficiary identified in the
beneficiary designation in effect at the time of the Participant's death or, if
no such designation exists, to the Participant's surviving spouse or, if none,
to the Participant's estate. Each Participant may designate, in writing, on
forms approved by and filed with the Committee, one or more beneficiaries to
receive payment of the Participant's Account and may, in addition, name a
contingent beneficiary. The Participant's properly executed beneficiary
designation becomes effective upon receipt by the Employer's Human Resources
Department.
The beneficiary as to 100% of the Account of a Participant married at
the time of the Participant's death shall be the Participant's surviving spouse,
unless the spouse consents to the designation of an alternative beneficiary or
the spouse cannot be located, or such other circumstances permitted by Treasury
Regulations. Spousal consent shall be in writing, acknowledging the effect of
such election and witnessed by a Plan representative or notary public. Any
change in, or revocation of, a Participant's designated beneficiary shall again
require spousal consent unless the earlier consent of the spouse expressly
permitted subsequent designations by the Participant without further spousal
consent. The death benefit shall be made available to the surviving spouse
within a reasonable time after the Participants death and in no event later than
the earliest date benefits would be payable to the Participant if the
Participant's Employment terminated on the date of the Participant's death for a
reason other than death.
(b) FORM OF DEATH BENEFIT. The death benefit will be paid in a
single lump sum, except that in the case of a Participant's Account(s) that
include assets transferred to this Plan from a plan listed in Appendix C to this
Plan, the additional rules of this section 8.5(b), (c) and (d) shall apply. The
normal form of death benefit provided to the surviving spouse of a married
Participant shall be a monthly benefit for the life of the spouse which is equal
to the actuarial equivalent of the Participant's Account commencing within 90
days after the Participant's death. The surviving spouse, and any other
beneficiary, may elect, in writing on forms approved by, and filed with, the
Committee, payment in any optional benefit form available under the Plan.
(c) DEATH BENEFIT ELECTION PERIOD.
(A) UNMARRIED PARTICIPANTS. A Participant may elect a
beneficiary or an optional form of death benefit at any time prior to his/her
date of death.
8-4
<PAGE>
(B) MARRIED PARTICIPANTS. A married Participant may elect
a beneficiary other than his/her spouse or an optional form of benefit at any
time during the period beginning on the earlier of (i) the first day of the Plan
Year in which he/she attains age 35 or (ii) the termination of his/her
Employment and ending on his/her date of death.
(d) DEATH BENEFIT INFORMATION. Within the later of the three-year
period beginning on the first day of the Plan Year in which the Participant
attains age 32 or the one-year period beginning on the date the Participant
commences Plan participation, the Committee shall provide the Participant
information concerning the death benefit and the Participant's right to request
an optional form of death benefit payment pursuant to the Plan. Such
information shall contain a written explanation of (A) the terms and conditions
of the death benefits, (B) the Participant's right to request an optional form
of death benefits and the material features and relative financial values of the
optional forms of benefit, (C) the necessity for the Participant's spouse to
consent to the election of an optional form of benefit and (D) the Participant's
right to revoke the election of all optional form of death benefit and the
effect of such revocation.
(e) TIMING OF PAYMENT. Payment to a Participant's beneficiary
shall begin as soon as administratively feasible after the Participant's death
if the Participant had begun to receive payments from the Plan before death. If
the Participant died before beginning to receive payments from the Plan, the
Plan shall pay the beneficiary at a time elected by the beneficiary and allowed
by the Plan's normal administration, provided that:
(i) If the beneficiary is not the Participant's spouse,
payment shall occur no later than the end of the calendar year that contains the
fifth anniversary of the Participant's death; and
(ii) If the beneficiary is the Participant's spouse, payment
shall occur no later than the December 31 of the calendar year in which the
Participant would have attained age 70-1/2.
8.6 REQUIRED LIFETIME DISTRIBUTIONS. Notwithstanding the other
provisions of this Article 8, the Plan shall distribute each Participant's
entire Account consistent with Code section 401(a)(9) and applicable
Regulations, which the Plan hereby incorporates by reference, and the following:
(a) REQUIRED BEGINNING DATE. Distribution of a Participant's
Account shall commence no later than his/her "required beginning date." A
Participant's required beginning date is the April 1 following the calendar year
in which the Participant attains age 70-1/2 or the calendar year in which the
Participant's Employment terminates.
(b) LIMITS ON DISTRIBUTION PERIODS. Installment payments of a
Participant's Account (in the limited circumstances available under this Plan)
shall occur over a period of time calculated as of the calendar year immediately
preceding the calendar year which contains the
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Participant's required beginning date (the "first distribution calendar
year"). The time period for payment of installments shall be no longer than:
(1) The Participant's life or life expectancy determined
using the Participant's attained age as of the first distribution calendar year,
if the Participant has not designated a beneficiary; or
(2) If the Participant has designated a beneficiary, the
life or joint and last survivor expectancy of the Participant and the designated
beneficiary determined using the attained ages of the Participant and the
designated beneficiary as of the first distribution calendar year.
(c) AMOUNT REQUIRED TO BE DISTRIBUTED. Installments paid each
calendar year beginning with the first distribution calendar year shall not be
less than the quotient obtained upon dividing the Participant's Account by the
lesser of (1) the applicable life expectancy, or (2) if the beneficiary is not
the Participant's spouse, the applicable minimum distribution incidental benefit
divisor determined from the table recited in Q&A-4 of proposed regulation
section 1.401(a)(9)-2. The "applicable life expectancy" is the life expectancy
(or joint and last survivor expectancy) calculated using the attained age of the
Participant (or designated beneficiary) as of the Participant's (or designated
beneficiary's) birthday in the first distribution calendar year reduced by one
in each year thereafter. If the Participant's benefit is distributed in the
form of an annuity purchased from an insurance company, distributions thereunder
shall be made in accordance with the requirements of Code section 401(a)(9).
The Participant may elect to recalculate his/her life expectancy and/or that of
his/her spouse, provided such election is irrevocable and is made prior to the
Participant's required distribution date.
A Participant's Account is determined as of the last Valuation
Date in the calendar year immediately preceding the calendar year for which a
distribution is required, adjusted as follows: Increased by the amount of any
contributions or Forfeitures, if any, allocated to the Account as of dates in
such calendar year after the Valuation Date and decreased by distributions made
in such calendar year after the Valuation Date.
8.7 QUALIFIED DOMESTIC RELATIONS ORDERS. Upon receipt of a domestic
relations order issued by a court of competent jurisdiction with respect to a
Participant's interest in the Plan, the Committee shall determine whether such
domestic relations Order constitutes a qualified domestic relations order (as
defined in Code section 414(p)(1), a "QDRO"). The Committee shall establish
procedures to determine the qualified status of a domestic relations order and
to administer distributions mandated by a QDRO.
If the Committee determines that the domestic relations order is a
QDRO, an alternate payee as defined in Code section 414(p)(8) may receive
distributions in a single lump sum payable as if the alternate payee were a
Participant who experienced a termination of Employment as of the date of the
order as described in section 8.1.
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8.8 LOANS. The Committee may, pursuant to the provisions of this
section, implement a nondiscriminatory policy to extend loans to Participants
secured by the borrowing Participant's Account.
(a) ELIGIBLE PARTICIPANTS. The term "Participant," for purposes of
this section, excludes a former Participant except to the extent (1) required to
avoid a prohibited transaction or (2) permitted by the Committee's loan policy.
(b) LOAN PRIVILEGE. To obtain a loan, a Participant must apply in
writing and the Participant's spouse must consent in writing to the loan, on
forms approved by the Committee. The Committee shall direct the Trustee to
extend a loan from the Trust Fund upon a Participant satisfying the requirements
of this section. Processing the loan application, after receipt of all
necessary material from the Participant, shall extend no more than 45 days. A
promissory note signed by a Participant and secured by no more than 50% of the
total Account balances of the Participant, determined as of the most recent
Valuation Date, must evidence the loan. The Committee may adopt a policy
regarding the circumstances in which loans shall be available.
(c) AMOUNT. The Committee shall not approve a loan to a
Participant for a principal amount less than $1,000 or for a principal amount
which exceeds the lesser of: (1) $50,000 reduced by the highest unpaid balance
(principal and accrued interest) of all the Participant's loans from the Plan,
if any, during the period beginning on the date that is one year prior to the
day before the loan was made and ending on the date of the new loan; or (2) 50%
of the Participant's total Account balances. The limitations recited in this
paragraph apply to the aggregate of all loans from all plans of the Employer or
other members of the controlled group of which the Employer is a member,
pursuant to Code sections 414(b), (c), (m) and (o).
(d) INTEREST RATE. Interest on the loan shall equal the prime rate
published in the Wall Street Journal at the time of extending the loan, plus two
percent.
(e) REPAYMENT. Repayment of the loan shall occur by payroll
deduction in level payments of principal and interest for each payroll period
and, in the case of payment by a Participant who is on an unpaid leave of
absence of longer than 12 weeks, in at least quarterly payments of principal and
interest.
The period of repayment for the principal balance and interest
on any loan shall extend for five years from the date of the loan. A
Participant may request a shorter repayment period provided such request does
not, in the judgment of the Committee, place an unreasonable administrative
burden upon the Plan, the Committee or the Trustee.
If any payment on a loan does not occur within a period of time
set by Committee rules after its due date, the Committee may declare such loan
in default. In addition to any legal remedies available, the unpaid amount of
such loan (including interest accrued thereon) will reduce the Participants
Account at such time as benefits would otherwise become
8-7
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distributable hereunder. The unpaid amount of any loan (including interest
accrued thereon) shall be deducted from any distribution to the Participant
under the Plan.
A loan shall constitute an investment of the Participant's
Account. Only the borrowing Participant's Account shall share in the interest
paid on the loan or bear any expense or loss incurred because of the loan.
8.9 FINANCIAL HARDSHIP WITHDRAWALS. Before attaining age 59-1/2, or
incurring a disability or separating from service with the Employer, a
Participant may withdraw any portion of the Participant's Account (excluding
income on the Participant's Elective Contributions) upon appropriate notice to
the Committee and in accordance with rules established by the Committee. The
Withdrawal must be on account of "financial hardship." A withdrawal will be
deemed to be on account of "financial hardship" if (a) and (b) are satisfied:
(a) The distribution is for the purpose of:
(1) the payment of medical expenses (described in Code
section 213(d)) incurred by the Participant, his/her spouse or dependents.
(2) the purchase (excluding mortgage payments) of a
principal residence for the Participant;
(3) the payment of tuition, related educational fees, and
room and board expenses, for the next 12 months of post-secondary education for
the Participant, his/her spouse or dependents;
(4) the need to prevent the eviction from or mortgage
foreclosure of, the Participants principal residence; or
(5) any other purpose specified by the Internal Revenue
Service as a deemed immediate and heavy financial need.
(b) The Participant must certify to the Committee that the money is
not available;
(1) Through reimbursement or compensation by insurance
carrier or otherwise; or
(2) By reasonable liquidation of the Participant's assets,
to the extent such liquidation would not itself cause an immediate and heavy
financial need; or
(3) By cessation of the Participant's Elective
Contributions to this Plan; or
8-8
<PAGE>
(4) By other distributions or nontaxable (at the time of
the loan) loans from plans maintained by an Employer or any other employer, or
by borrowing from commercial sources on reasonable commercial terms.
END OF ARTICLE 8
8-9
<PAGE>
ARTICLE 9
Administration of the Plan
9.1 APPOINTMENT OF COMMITTEE. The Company shall, in writing,
including, but not appoint a Plan Committee of three or more persons. Any
person, limited to, employees of the Employer, shall be eligible to serve on the
Committee. Persons serving on the Committee may resign by written notice to the
Company and the Company may appoint or remove such persons. The Committee shall
act by a majority of its members at the time in office, either by vote at a
meeting or in writing without a meeting. The Committee may authorize any one or
more of its members to execute any document or documents on behalf of the
Committee, in which event the Committee shall notify the Trustee of the member
or members so designated. The Trustee shall accept and rely upon any document
executed by such member or members as representing action by the Committee until
the Committee shall file with the Trustee a written revocation of such
designation. No person serving on the Committee shall vote or decide upon any
matter relating solely to himself or solely to any of his/her rights or benefits
pursuant to the Plan.
9.2 POWERS AND DUTIES. The Committee shall administer the Plan in
accordance with its terms and shall discharge its duties with the care, skill,
prudence and diligence under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims. The Committee
shall have full and complete authority and control with respect to Plan
operations and administration unless the Committee allocates and delegates such
authority or control pursuant to the procedures stated in subsection (b) or (c)
below. Any decisions of the Committee or its delegate shall be final and
binding upon all persons dealing with the Plan or claiming any benefit under the
Plan. The Committee shall have all powers which are necessary to manage and
control Plan operations and administration including, but not limited to, the
following:
(a) To employ such accountants, counsel or other persons as it
deems necessary or desirable in connection with Plan administration. The Trust
Fund shall bear the costs, of such services and other administrative expenses,
unless paid by the Company.
(b) To designate in writing persons other than the Committee to
perform any of its powers and duties hereunder including, but not limited to,
Plan fiduciary responsibilities (other than any responsibility to manage or
control the Plan assets).
(c) To allocate in writing any of its powers and duties hereunder,
including but not limited to fiduciary responsibilities (other than any
responsibilities to responsibility to
9-1
<PAGE>
manage or control the plan assets) to those persons who have been designated
to perform Plan fiduciary responsibilities.
(d) To construe and interpret the Plan in a discretionary
manner, including the power to construe disputed provisions.
(e) Subject to Article 11, to resolve all questions arising in the
administration, interpretation and application of the Plan, including, but not
limited to, questions as to the eligibility or the right of any person to a
benefit.
(f) To adopt such by-laws, rules, regulations, forms and procedures
from time to time as it deems advisable and appropriate in the proper
administration of the Plan.
(g) To receive from the Company or from Participants such
information as shall be necessary for the proper administration of the Plan.
(h) To furnish, upon request, such annual reports with respect to
the administration of the Plan as are reasonable and appropriate.
(i) To receive from the Trustee and review reports of the financial
condition and receipts and disbursements of the Trust Fund.
(j) To prescribe procedures to be followed by any person in
applying for distributions pursuant to the Plan and to designate the forms or
documents, evidence and such other information as the Committee may reasonably
deem necessary, desirable or convenient to support an application for such
distribution.
(k) To issue directions to the Trustee and thereby bind the
Trustee, concerning all benefits to be paid pursuant to the Plan.
(l) To apply consistently and uniformly the Committee rules,
regulations and determinations to all Participants and beneficiaries in similar
circumstances.
(m) To engage the Plan Service Provider who shall perform, without
discretionary authority or control, administrative functions within the
framework of policies, interpretations, rules, practices, and procedures made by
the Committee or other Plan Fiduciary. Any action made or taken by the Plan
Service Provider may by appealed by an affected Participant to the Committee in
accordance with the claims review procedures provided in Article 11. Any
decisions which call for interpretations of Plan provisions not previously made
by Committee shall be made only by the Committee. The Plan Service Provider is
not expected to be considered a fiduciary with respect to the services it
provides
9.3 RECORDS AND NOTICES. The Committee shall keep a record of all its
proceedings and acts and shall maintain all such books of accounts, records and
other data as may be
9-2
<PAGE>
necessary for proper plan administration. The Committee shall notify the
Trustee of any action taken by the Committee which affects the Trustee's
obligations or rights with respect to the Plan and, when required, shall
notify any other interested parties.
9.4 COMPENSATION AND EXPENSES. The expenses incurred by the Committee in
the proper administration of the Plan shall be paid from the Trust Fund. The
Employer may pay such expenses directly or may, in the event such expenses have
already been paid, reimburse the Trust Fund. A Committee member who is an
employee of the Employer shall not receive any fee or compensation for services
rendered.
9.5 LIMITATION OF AUTHORITY. The Committee shall not add to, subtract
from or modify any of the terms of the Plan, change or add to any benefits
prescribed by the Plan, or waive or fail to apply any Plan requirement for
benefit eligibility.
END OF ARTICLE 9
9-3
<PAGE>
ARTICLE 10
Administration of the Trust
10.1 APPOINTMENT OF TRUSTEE. The Company shall appoint one or more
Trustees to receive and hold in trust all contributions, and Income, paid into
the Trust Fund. The Company may remove the Trustee or the Trustee may resign
and a successor trustee shall be appointed all pursuant to the requirements and
procedure recited in the Trust Agreement.
10.2 AUTHORIZATION FOR TRUST AGREEMENT. The Company shall enter into an
agreement with the Trustee to provide for the administration of the Trust Fund.
In accordance with the provisions of the agreement, the Company shall have the
right at any time, and from time to time, to amend the agreement.
10.3 PARTICIPANT DIRECTION OF INVESTMENT.
(a) INVESTMENT OF SUBFUNDS. The Company, upon written request of a
Participant and in accordance with its uniform and nondiscriminatory rules,
shall authorize Participants to direct the investment of their Plan Accounts in
such subfunds as the Company may select. The Participants' directions shall
bind the Trustee unless and until the Company amends or revokes the
authorization for investment direction by Participants. After the death of a
Participant, the Participant's Beneficiary shall have the same right to direct
investment as a Participant, with respect to the portion of the Plan Account
that the Beneficiary is entitled to receives. After the Plan determines that it
has received a qualified domestic relations order ("QDRO"), the alternate payee
named in the QDRO shall have the same right to direct investment as a
Participant, with respect to the portion of 401(k) subaccounts which the QDRO
gives the alternate payee a future right to receive. If the Trustee acts at the
direction of a Participant, Beneficiary, or alternate payee, then the Employer,
the Company, its board of directors, officers and employees, the Committee and
the Trustee shall not be liable or responsible for any loss resulting to the
Trust Fund or to any Account for any breach of fiduciary responsibility by
reason of any act done pursuant to the direction of the Participant, Beneficiary
or alternate payee.
(b) INVESTMENT ELECTIONS.
(1) Participants may choose to invest their Plan Accounts
among the available subfunds in any whole percentage. Elections shall be in a
form approved by the Committee. A Participant's election will remain in effect
until amended or discontinued pursuant to this paragraph.
(2) A Participant may change his/her investment election as
to further contributions and Income thereon pursuant to rules prescribed by the
Committee. A Participant
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may change his/her investment election as to his/her existing Account
pursuant to rules prescribed by the Committee.
10.4 FUNDING POLICY. The funding policy for the Plan is to invest the
Trust Fund for the exclusive benefit of Plan Participants and their
beneficiaries in a manner consistent with ERISA. As part of such funding
policy, the Company shall from time to time choose different subfunds that the
Plan will offer Participants as investment alternatives.
END OF ARTICLE 10
10-2
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ARTICLE 11
Claims Procedure
11.1 APPLICATION FOR BENEFITS. Any person entitled to benefits must file
a written claim with the Committee on forms provided by the Committee. Such
application shall include all information and evidence the Committee deems
necessary to properly evaluate the merit or and to make any necessary
determinations on a claim for benefits. Unless special circumstances exist, a
Participant shall be informed of the decision on his/her claim within 90 days of
the date all the information and evidence necessary to process the claim is
received. Within such 90-day period, he/she shall receive a notice of the
decision or a notice that explains the special circumstances requiring a delay
in the decision and sets a date, no later than 180 days after all the
information and evidence necessary to process his/her claim have been received,
by which he/she can expect to receive a decision.
The claimant may assume that the claim has been denied and may proceed to
appeal the denial if the claimant does not receive any notice from the Committee
within the 90-day period, or a notice of a delayed decision within such 90 day
period.
11.2 NOTICE OF DENIED CLAIM FOR BENEFITS. If a claim for benefits is
partially or wholly denied, the claimant will receive a notice that: states the
reason or reasons for denial; refers to provisions of the Plan documents on
which the denial is based; describes and explains the need for any additional
material or information that the claimant must supply in order to make his/her
claim valid; and explains the steps that must be taken to submit his/her claim
for review.
11.3 REVIEW OF DENIED CLAIM. A claimant may file a written appeal of a
denied claim with the Committee within 60 days after receiving notice that
his/her claim has been denied, including any comments, statements or documents
he/she may wish to provide. The claimant may review all pertinent Plan
documents upon reasonable request to the Committee. The Committee shall, within
a reasonable time after the submission of a written appeal by a claimant,
entertain any oral presentation the claimant or his/her duly authorized
representative wishes to make. Within 60 days after the later of the submission
of the written appeal or the oral presentation by the claimant, the Committee
shall render a determination on the appeal of the claim in a written statement.
The written decision shall contain the reason or reasons for the decision and
refer to the Plan provisions on which the decision is based. If special
circumstances require a delay in the decision, the Committee shall notify the
claimant of the reasons for the delay within the 60-day period. A delayed
decision shall be issued no later than 120 days after the date the Committee
receives a request for review. The determination rendered by the Committee
shall be binding upon all parties.
END OF ARTICLE 11
11-1
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ARTICLE 12
Amendment and Termination
12.1 AMENDMENT OR RESTATEMENT. The Company may amend or restate the Plan
at any time and from time to time by resolution of the Company's Board of
Directors. No amendment or restatement shall authorize any part of the Trust
Fund, other than amounts which are necessary to pay taxes and administration
expenses, to be used for or diverted to purposes other than for the exclusive
benefit of the Participants or their beneficiaries or estates. No amendment or
restatement shall be construed to: (1) Reduce a Participant's Account balance
determined as of the date immediately preceding the effective date of the
amendment or restatement; (2) Reduce or eliminate any benefit protected by Code
section 411(d)(6); or (3) Cause or permit any portion of the Trust Fund to
revert to, or become property of, the Company. No amendment which affects the
rights, duties or responsibilities of the Trustee shall be effective with
respect to the Trustee without the Trustee's written consent. The provisions of
the Plan as in effect at the time of a Participant's termination of Employment
shall control as to that Participant, unless otherwise specified in the Plan.
The Committee is authorized and empowered from time to time to make, by
written resolution, any amendments to the Plan which may be required (i) to
ensure continued tax qualification of the Plan under Code section 401(a), (ii)
to ensure continued compliance of the Plan with any provision of the ERISA,
(iii) to ensure continued compliance with any other applicable legal
requirement, (iv) to add to the list of Employers participating in the Plan and
determine the terms by which their employees shall participate in the Plan, or
(v) to make any additional amendments to the Plan which may be advisable or
necessary in the opinion of the Committee, provided that such additional
amendments do not increase or substantially change the benefits available to
anyone then participating in the Plan.
12.2 TERMINATION AND DISCONTINUANCE OF CONTRIBUTIONS. The Company
reserves the right to terminate the Plan at any time with respect to any or all
Participants by resolution of the Company's board of directors. Any
participating Employer shall be permitted to discontinue or revoke its
participation in the Plan by resolution of the Employer's Board of Directors.
Upon discontinuance of Plan Contributions or full or partial termination of the
Plan, the Account of each Participant who has not received a distribution of the
vested portion of his/her Account or incurred five consecutive one-year Breaks
in Service shall become fully vested and nonforfeitable. The Company shall
provide the Trustee with written notification of the termination of the Plan.
In the event of partial or complete termination, the Employees liability to pay
plan benefits shall be strictly limited to assets of the Trust Fund. No one
shall have any claim against the Company to provide any or all of the plan
benefits regardless of the sufficiency of the Trust Fund, except as otherwise
required by law.
12.3 ALLOCATION OF TRUST FUND UPON COMPLETE TERMINATION OF THE PLAN. Upon
complete termination of the Plan, the Committee shall direct the Trustee to
distribute all assets remaining
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after payment of expenses properly chargeable to the Trust Fund. The
Committee shall charge expenses to the Accounts of Participants in proportion
to the amount credited to the Account of each Participant as of the date of
termination. The termination of the Plan shall not result in the reduction
of any benefit protected by Code section 411(d)(6) except to the extent
permitted by applicable Treasury regulations.
12.4 DISTRIBUTION UPON TERMINATION. If the Plan terminates pursuant to
section 12.2, the Company shall distribute each Participant's Account in a lump
sum; however, if the Employer (or any member of a controlled group within the
meaning of Code sections 414(b), (c), (m) and (o) of which the Employer is a
member) establishes or maintains at any time within the 24-month period
beginning 12 months before the time of termination another defined contribution
plan, other than an employee stock ownership plan or simplified employee pension
(as defined in Code section 408(k)) which covers 2% or more of the employees
covered under the Plan at the time of termination, each Participant's Account
shall be transferred to such other defined contribution plan. Participant
consent to such a transfer shall be required only if transfer of the
Participant's Account results in an elimination or reduction of Code section
411(d)(6) protected benefits. Participant consent shall not be required if
Participants' Accounts are to be paid in a lump sum.
12.5 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS AND LIABILITIES. Upon
any merger or consolidation with, or a transfer of assets or liabilities to
another plan, each Participant is entitled to receive a benefit immediately
after such event which is equal to or greater than the benefit he/she would have
been entitled to receive if the Plan had terminated immediately prior to such
event. Any such transfer, merger or consolidation must not otherwise result in
the elimination or reduction of any benefit protected by Code section 411(d)(6).
12.6 DISTRIBUTION UPON DISPOSITION OF ASSETS OR SUBSIDIARY.
Notwithstanding the distribution rules of Article 8, a Participant's Account may
be distributed in a lump sum in the event of the disposition of at least 85% of
the assets of the Employer (within the meaning of Code section 409(d)(2)), or,
if the Employer is a subsidiary of the Company, the disposition by the Company
of its interests in the Employer (within the meaning of Code section 409(d)(3))
to an unrelated entity provided (1) the Company or Employer continues to
maintain the Plan, and (2) the Participant continues employment with the
corporation acquiring such assets or such subsidiary.
12.7 SUCCESSOR EMPLOYER. Any successor to the business of the Employer
may, with the written consent of the Company, continue the Plan and Trust. Such
successor shall succeed to all the rights, powers and duties of the Employer.
The Employment of any employee of the Employer who continues in the employ of
the successor shall not be deemed to have been terminated or severed for any
purpose of the Plan.
END OF ARTICLE 12
12-2
<PAGE>
ARTICLE 13
General Provisions
13.1 LIMITATION ON LIABILITY. In no event shall the Company, Employer,
Committee or any member thereof or any employee, officer or director of the
Company or Employer incur any liability for any act or failure to act unless
such act or failure to act constitutes a lack of good faith, willful misconduct
or gross negligence with respect to the Plan or Trust Fund.
13.2 INDEMNIFICATION. The Trust Fund shall indemnify the Committee and
any member thereof and any employee, officer or director of the Employer against
all liabilities arising by reason of any act or failure to act unless such act
or failure to act is due to such person's own gross negligence or willful
misconduct or lack of good faith in the performance of his/her duties to the
Plan or Trust Fund. Such indemnification shall include, but not be limited to,
expenses reasonably incurred in the defense of any claim, including attorney and
legal fees, and amounts paid in any settlement or compromise; provided, however,
that indemnification shall not occur to the extent that it is not permitted by
applicable law. If Trust Fund assets are insufficient or indemnification is not
permitted by applicable law, the Employer shall indemnify such person.
Indemnification shall not be deemed the exclusive remedy of any person entitled
to indemnification pursuant to this section. The indemnification provided
hereunder shall continue as to a person who has ceased acting as a Committee
member, or as an officer, director or employee of the Employer, and such
person's rights shall inure to the benefit of his/her heirs and representatives.
13.3 COMPLIANCE WITH EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.
Notwithstanding any other provisions of this Plan, a fiduciary or other person
shall not be relieved of any responsibility or liability for any responsibility,
obligation or duty imposed upon such person pursuant to the ERISA.
13.4 NONALIENATION OF BENEFITS. Except with respect to any indebtedness
owing to the Trust Fund or payments required pursuant to a qualified domestic
relations order as defined by the Code, benefits payable by the Plan shall not
be subject to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution or levy, either voluntary or
involuntary. Any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, charge or otherwise dispose of any right to Plan benefits
shall be void.
13.5 EMPLOYMENT NOT GUARANTEED BY PLAN. The establishment of this Plan,
its amendments and the granting of a benefit pursuant to the Plan shall not give
any Participant the right to continued Employment with the Employer, or limit
the right of the Employer to dismiss or impose penalties upon the Participant or
modify the terms of Employment of any Participant.
13-1
<PAGE>
13.6 FORM OF COMMUNICATION. Any election, application, claim, notice or
other communication required or permitted to be made by or to a Participant, the
Committee or Company shall be made in writing or in such form as the Committee
or Company shall prescribe. A communication shall be effective upon mailing if
sent first class, postage prepaid and addressed to the Committee or Company at
the principal office of the Committee or Company or to the Participant at
his/her last known address.
13.7 FACILITY OF PAYMENT. If a Participant's duly qualified guardian or
legal representative makes claim for any amount owing to the Participant, the
Trustee shall pay the amount to which the Participant is entitled to such
guardian or legal representative. In the event a distribution is to be made to
a minor, the Committee may direct that such distribution be paid to the legal
guardian, or if none, to a parent of such minor or an adult with whom the
beneficiary maintains his/her residence, or to the custodian for such
beneficiary under the Uniform Gift to Minors Act if permitted by the laws of the
state in which the beneficiary resides. Any payment made pursuant to this
section in good faith shall be a payment for the Account of the Participant and
shall be a complete discharge from any liability of the Fund or the Trustee.
13.8 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN. If the Committee is
unable to pay benefits from the Plan to any Participant or beneficiary due to
the Committee's inability to locate such Participant or beneficiary, after
forwarding a certified letter, return receipt requested, to the last known
address of such Participant or beneficiary and after further diligent effort,
the amount to be distributed shall be treated as a Forfeiture. If the
Participant or beneficiary is located subsequent to the allocation of the
Forfeiture, the forfeited amount should be restored, first from Forfeitures, if
any, then Income and, last, as an additional Employer contribution. In the
event a Participant or beneficiary cannot be located upon termination of the
Plan, any amount payable to such Participant or beneficiary shall be transferred
at the earliest possible date to the state of the Participant's or beneficiary's
last known address pursuant to the terms of that State's abandoned property law.
Upon such transfer, the Employer, Committee and Trustee shall have no further
liability for the amount so transferred.
13.9 SERVICE IN MORE THAN ONE FIDUCIARY CAPACITY. Any individual, entity
or group of persons may serve in more than one fiduciary capacity with respect
to the Plan and Trust Fund.
13-2
<PAGE>
13.10 OFFSET. In the event any payment is made by the Trustee to any
individual who is not entitled to such payment, the Trustee shall have the right
to reduce future payments due to such individual by the amount of any such
erroneous payment. This right of offset, however, shall not limit the rights of
the Trustee to recover such overpayments in any other manner.
END OF ARTICLE 13
Dated this ______ day of _______________ , 1998.
RECYCLING INDUSTRIES. INC.
BY_________________________________________
13-3
<PAGE>
RECYCLING INDUSTRIES, INC. 401(k) RETIREMENT TRUST
Effective August 1, 1998
Copyright 1996
Reinihart, Boerner, Van Deuren,
Norris & Rieselbach, s.c.
All Rights Reserved.
<PAGE>
RECYCLING INDUSTRIES, INC.
401(k) RETIREMENT TRUST
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE 1
Definitions and Construction. . . . . . . . . . . . . . . . . . . . . . . . .1-1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-1
1.2 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-2
ARTICLE 2
Establishment, Acceptance and Purpose . . . . . . . . . . . . . . . . . . . .2-1
2.1 Establishment and Acceptance . . . . . . . . . . . . . . . . . . . . . .2-1
2.2 Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-1
ARTICLE 3
Management and Administration of Trust Fund . . . . . . . . . . . . . . . . .3-1
3.1 Control of Trust Fund. . . . . . . . . . . . . . . . . . . . . . . . . .3-1
3.2 Management of Trust Fund . . . . . . . . . . . . . . . . . . . . . . . .3-1
3.3 Appointment of Investment Manager. . . . . . . . . . . . . . . . . . . .3-1
3.4 Limitation of Duty . . . . . . . . . . . . . . . . . . . . . . . . . . .3-2
3.5 Establishment of Other Trusts. . . . . . . . . . . . . . . . . . . . . .3-2
ARTICLE 4
Investment of Trust Fund. . . . . . . . . . . . . . . . . . . . . . . . . . .4-1
4.1 Investment of Trustee's Account. . . . . . . . . . . . . . . . . . . . .4-1
4.2 Investment of Investment Manager's Account . . . . . . . . . . . . . . .4-1
4.3 Investment Pursuant to Direction by the Company, its
Delegate or a Participant. . . . . . . . . . . . . . . . . . . . . . .4-1
4.4 Purchaser of Insurance Contracts . . . . . . . . . . . . . . . . . . . .4-1
4.5 Investment in Company Property . . . . . . . . . . . . . . . . . . . . .4-1
4.6 Commingled Funds.. . . . . . . . . . . . . . . . . . . . . . . . . . . .4-2
ARTICLE 5
Duties of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . .5-1
5.1 Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5-1
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
5.2 Contributions to the Plan. . . . . . . . . . . . . . . . . . . . . . . .5-1
5.3 Payments from the Trust Fund . . . . . . . . . . . . . . . . . . . . . .5-1
ARTICLE 6
Powers of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6-1
ARTICLE 7
Compensation, Expenses and Taxes. . . . . . . . . . . . . . . . . . . . . . .7-1
7.1 Payment of Compensation and Expenses . . . . . . . . . . . . . . . . . .7-1
7.2 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .7-1
ARTICLE 8
Protection, Indemnification and Litigation. . . . . . . . . . . . . . . . . .8-1
8.1 Limitation of Liability. . . . . . . . . . . . . . . . . . . . . . . . .8-1
8.2 Reliance Upon Verified Communications. . . . . . . . . . . . . . . . . .8-1
8.3 Liability of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . .8-1
8.4 Indemnification of Company . . . . . . . . . . . . . . . . . . . . . . .8-2
8.5 Trustee Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . .8-2
ARTICLE 9
Resignation and Removal of Trustee. . . . . . . . . . . . . . . . . . . . . .9-1
9.1 Removal by Company . . . . . . . . . . . . . . . . . . . . . . . . . . .9-1
9.2 Resignation of Trustee . . . . . . . . . . . . . . . . . . . . . . . . .9-1
9.3 Appointment of Successor Trustee by Company. . . . . . . . . . . . . . .9-1
9.4 Appointment of Successor Trustee by Court. . . . . . . . . . . . . . . .9-1
9.5 Duty of Company and Trustee to Successor Trustee . . . . . . . . . . . .9-1
9.6 Mergers and Consolidations Involving Trustee . . . . . . . . . . . . . .9-1
ARTICLE 10
Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-1
ARTICLE 11
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-1
11.1 Termination by the Company . . . . . . . . . . . . . . . . . . . . . . 11-1
11.2 Merger, Consolidation or Transfer of Assets of the Company . . . . . . 11-1
11.3 Procedures Upon Termination. . . . . . . . . . . . . . . . . . . . . . 11-1
11.4 Reversion of Trust Fund. . . . . . . . . . . . . . . . . . . . . . . . 11-1
11.5 Discharge of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 11-1
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE 12
General Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12-1
12.1 Individual's Rights; Acquittance . . . . . . . . . . . . . . . . . . . 12-1
12.2 Nonalienation of Benefits. . . . . . . . . . . . . . . . . . . . . . . 12-1
12.3 Exercise of Authority by the Company . . . . . . . . . . . . . . . . . 12-1
12.4 Exercise of Discretion of Corporate Trustee. . . . . . . . . . . . . . 12-1
12.5 Qualification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12-1
12.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12-1
12.7 Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12-2
12.8 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . 12-2
12.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12-2
</TABLE>
iii
<PAGE>
RECYCLING INDUSTRIES, INC.
401(k) RETIREMENT TRUST
THIS AGREEMENT is originally entered into as of the 1st day of August,
1998, by and between Recycling Industries, Inc., with its principal office in
Englewood, Colorado (the "Company"), and Central Bank & Trust Co. as Trustee of
the trust hereby created by this Agreement. The Trustee, however, has no
duties, responsibilities or obligations under this Agreement prior to its
receipt of any assets of the Trust Fund created pursuant to this Agreement.
1. The Company has established and maintains the Recycling
Industries, Inc. 401(k) Retirement Plan.
2. The Company wishes to create a trust to fund the benefits payable
pursuant to the Plan, as amended from time to time.
3. The Company and the Trustee intend that the trust established
pursuant to this Agreement be maintained as part of a plan qualified pursuant to
Code section 401(a) and be exempt from federal tax pursuant to Code section
501(a).
4. In consideration of the promises and of the mutual covenants,
agreements, terms and provisions set forth in this Agreement, the Company and
the Trustee agree as follows:
<PAGE>
ARTICLE 1
Definitions and Construction
1.1 DEFINITIONS. The following words and phrases shall have the
meanings stated below:
(a) ADMINISTRATOR. The person or persons appointed by the
Company pursuant to the Plan, who shall control and manage the operation and
administration of the Plan. If the Company does not appoint any such person or
persons, then the Company shall be the Administrator.
(b) AGREEMENT. This agreement between the Trustee and the
Company which creates the trust.
(c) CODE. The Internal Revenue Code of 1986, as amended from
time to time, and as interpreted by applicable regulations and rulings.
(d) COMPANY. Recycling Industries, Inc., a Colorado
corporation, and any successor which adopts the Plan.
(e) EFFECTIVE DATE. August 1, 1998, the date the trust created
by this Agreement commences.
(f) ERISA. The Employee Retirement Income Security Act of 1974,
as amended from time to time.
(g) INVESTMENT MANAGER. An investment advisor registered
pursuant to the Investment Advisors Act of 1940, a bank as defined in such Act
or an insurance company qualified to manage the assets of employee benefit plans
pursuant to the laws of more than one state, which is appointed by the Company
to supervise and direct the investment and reinvestment of all or a portion of
the Trust Fund.
(h) INVESTMENT MANAGER'S ACCOUNT. The portion of the Trust Fund
designated by the Company with respect to which an Investment Manager has given
the Trustee investment directions pursuant to section 3.2.
(i) PARTICIPANT. A person who is a "Participant" pursuant to
the Plan.
(j) PLAN. The Recycling Industries, Inc., 401(k) Retirement
Plan, as amended from time to time.
(k) TRUST FUND. The assets of the Plan held in trust by the
Trustee pursuant to this Agreement.
1-1
<PAGE>
(l) TRUSTEE. The individual, group of individuals, trust
company, bank or other entity identified as Trustee on the first page of this
Agreement and any successor or successors of such Trustee.
(m) TRUSTEE'S ACCOUNT. The portion of the Trust Fund with
respect to which the Trustee has not received investment directions from any
authorized party pursuant to section 3.2.
1.2 CONSTRUCTION. Except to the extent preempted by ERISA, the laws
of the State of Colorado, as amended from time to time, shall govern the
construction and application of this Agreement. Words used in the masculine
gender shall include the feminine and words used in the singular shall include
the plural, as appropriate. The words "hereof," "herein," "hereunder" and other
similar compounds of the word "here" shall refer to the entire Agreement, not to
a particular section. All references to statutory sections shall include the
section so identified as amended from time to time or any other statute of
similar import. If any provisions of the Code or ERISA render any provisions of
this Plan unenforceable, such provision shall be of no force and effect only to
the minimum extent required by such law.
1-2
<PAGE>
ARTICLE 2
Establishment, Acceptance and Purpose
2.1 ESTABLISHMENT AND ACCEPTANCE. As of the Effective Date, the
Company establishes with the Trustee the Trust Fund, which shall consist of all
property transferred to the Trustee pursuant to the Plan and all transfers to
the Trustee from the trustee of any other retirement plan formerly covering a
Participant, together with all interest, income and profits which accrue on such
property. The Trustee shall hold, manage and administer the assets of the Trust
Fund in accordance with this Agreement. The Trustee accepts the trust created
pursuant to this Agreement and agrees to perform the duties, responsibilities
and obligations required of it by this Agreement.
2.2 PURPOSE. The exclusive purpose of the Trust Fund is to provide
benefits for Participants and their beneficiaries and to defray reasonable
expenses of administering and operating the Plan and Trust Fund. Except for the
Company's right to receive certain amounts pursuant to the terms of the Plan or
Trust, no part of the Trust Fund shall be used for, or diverted to, another
purpose except upon termination of the Plan and satisfaction of Trust expenses
and all liabilities to Participants and their beneficiaries.
2-1
<PAGE>
ARTICLE 3
Management and Administration of Trust Fund
3.1 CONTROL OF TRUST FUND. In addition to the powers otherwise
granted the Trustee in this Agreement, the Trustee shall have the power to
control the Trust Fund and to do all such acts, to take all such proceedings and
to exercise all such rights and privileges as the Trustee deems necessary or
advisable to administer the Trust Fund or to carry out the purposes of this
Agreement.
3.2 MANAGEMENT OF TRUST FUND. The property comprising the Trust Fund
shall be managed, acquired and disposed of as follows:
(a) Except as provided in the following sentence, the Trustee
shall have exclusive responsibility, discretion and authority to manage the
Trust Fund consistent with the Plan. As to those portions of the Trust Fund
regarding which the Company, its delegates, an Investment Manager or a
Participant has given the Trustee verified investment directions, the Trustee
shall exercise the powers granted it by this Agreement only pursuant to or
consistent with such directions.
(b) The Company or its delegate may, by verified direction to
the Trustee, direct the investment of all or a portion of the Trust Fund
(except any Investment Manager's Account) in a manner consistent with the terms
of this Agreement, the Plan and applicable law.
(c) An Investment Manager shall have the authority, by verified
direction to the Trustee, to direct the investment of that portion of the Trust
Fund with respect to which it has been appointed an Investment Manager pursuant
to section 3.3. The Investment Manager must direct investments in a manner
consistent with this Agreement, the Plan and applicable law.
(d) To the extent authorized by the Company and the Plan, a
Participant may, by verified direction to the Trustee, direct the investment of
that portion of the Trust Fund allocated to his account. The Participant must
direct investments in a manner consistent with this Agreement, the Plan and
applicable law.
All directions pursuant to this section 3.2 shall be verified in
writing or as otherwise agreed to by the Company and Trustee.
3.3 APPOINTMENT OF INVESTMENT MANAGER. The Company may appoint one
or more Investment Managers to direct the investment of or all or a portion of
the Trust Fund. As a condition to its appointment, an Investment Manager shall
acknowledge in writing its acceptance of such appointment and that it is a
fiduciary with respect to the assets of the Trust Fund subject to its investment
discretion. An Investment Manager, who is not also a Trustee, shall not have
authority to take custody of any property which is a part of the Trust Fund.
The Company may furnish an Investment Manager with written investment guidelines
for investment of the Investment Manager's Account and these guidelines may
include directions with respect to diversification of
3-1
<PAGE>
the investments. The Company shall notify the Trustee in writing of the
appointment, resignation or termination of an Investment Manager.
3.4 LIMITATION OF DUTY. The authority reserved to the Company in
sections 3.2 and 3.3 shall not impose upon the Company any duty, responsibility
or obligation to exercise such authority or to manage all or any portion of the
Trust Fund.
3.5 ESTABLISHMENT OF OTHER TRUSTS. If the Company adopts or
establishes one or more other trusts exempt from income tax pursuant to Code
section 501(a) for the purpose of implementing the Plan and the Company notifies
the Trustee in writing of this purpose, the Trustee shall:
(a) Transfer and pay over to the trustee of any such other trust
such cash and other property as the Company, from time to time, directs in
writing; and
(b) Receive and hold as a part of the Trust Fund the cash and
other property as may, from time to time, be delivered to it by the Trustee of
any such other trust.
3-2
<PAGE>
ARTICLE 4
Investment of Trust Fund
4.1 INVESTMENT OF TRUSTEE'S ACCOUNT. Except as specified below or as
required by the Plan, the Trustee shall invest and reinvest the principal and
income of the Trustee's Account and keep the Trustee's Account portion of the
Trust Fund invested pursuant to the Plan's requirements and applicable law.
4.2 INVESTMENT OF INVESTMENT MANAGER'S ACCOUNT. The Trustee shall
invest the principal and income of the Investment Manager's Account as directed
by the Investment Manager, provided the direction accords with this Agreement,
the Plan and applicable law and is in the form agreed to by the Trustee and
Company. The Trustee shall have no further duties or obligations with respect
to any investment made pursuant to such direction.
4.3 INVESTMENT PURSUANT TO DIRECTION BY THE COMPANY, ITS DELEGATE OR
A PARTICIPANT. The Trustee shall invest the principal and income of the portion
of the Trustee's Account with regard to which the Trustee received direction
pursuant to subsection 3.2(b) or (d) above, as directed by the Company, its
delegate or a Participant, provided the direction accords with this Agreement,
the Plan and applicable law and is in the form agreed to by the Trustee and
Company. The Trustee shall have no further duties or obligations with respect
to any investment made pursuant to such direction.
4.4 PURCHASER OF INSURANCE CONTRACTS. Subject to the Plan, the
Trustee may apply for and purchase life insurance, retirement annuity,
retirement income or other contracts from responsible insurance companies. The
Trustee may exercise at any time the rights of the absolute owner of such
contracts or rights which may be granted pursuant to such contracts. The
Trustee may collect, receive, settle for and disburse the benefits of all such
contracts as and when entitled to do so pursuant to the provisions of such
contracts. The Trustee may execute all necessary receipts and releases to the
issuing insurance companies. The Trustee shall own and hold all contracts
issued by insurance companies and purchased pursuant to the Plan and deal with
such contracts in any manner as may be necessary and prudent pursuant to the
terms and provisions of the Plan and this Agreement.
4.5 INVESTMENT IN COMPANY PROPERTY. Except as otherwise provided in
this section 4.5, the Trustee shall not invest in the stocks, bonds, notes,
other obligations, or any other property, real or personal, of the Company or
any of its subsidiaries or affiliates. If the Plan is not an "eligible
individual account plan" as that term is defined in ERISA, the Trustee may
invest up to 10% of the assets of the Plan in "qualifying employer securities"
and/or "qualifying employer real property" as those terms are defined in ERISA.
If the Plan or a part thereof is an "eligible individual account plan" as that
term is defined in ERISA, the Trustee may invest up to 100% of the assets of the
Plan in "qualifying employer securities" and/or "qualifying employer real
property" as those terms are defined in ERISA. The Trustee may not invest any
amounts allocated to a Participant's Account attributable to employee pre-tax
deferrals or after-tax contributions, in
4-1
<PAGE>
qualifying employer securities or qualifying employer real property unless
applicable securities laws are satisfied.
4.6 COMMINGLED FUNDS. Declarations of Trust executed by the Trustee
create commingled funds for the investment of the Trustee's fiduciary accounts.
The Declarations of Trust for the commingled funds identified in Exhibit A,
attached, if any, are made a part of this Agreement; provided that such
Declarations of Trust comply, if necessary, with the Rules and Regulations of
the Comptroller of the Currency and the laws of any state having jurisdiction
and have, where appropriate, been approved by the Internal Revenue Service.
Notwithstanding any other provision of this Agreement, the Trustee may
commingle all or any part of the assets of this trust with assets of other
trusts and invested as part of the above described commingled funds, provided
that a proper accounting is maintained in the Trustee's books and records. Any
part of the Trust Fund added to commingled funds shall be subject to all the
provisions of the applicable Declaration of Trust, as amended from time to time.
The Trustee may, from time to time, withdraw from such commingled
trust all or part of the Trust Fund as the Trustee deems advisable.
4-2
<PAGE>
ARTICLE 5
Duties of the Trustee
5.1 DUTIES. In addition to any duty or responsibility otherwise
imposed on the Trustee by law or this Agreement, the Trustee shall:
(a) Perform all of its functions pursuant to this Agreement with
the care, skill, prudence and diligence under the circumstances then prevailing
that a prudent man acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and with like
aims.
(b) Hold and administer the Trust Fund in trust.
(c) Furnish such information with respect to the Trust Fund,
including valuations, as the Administrator or Investment Manager may reasonably
request.
(d) Cooperate with, and furnish the necessary information for,
the performance measuring services the Company retains from time to time to
monitor the investment activities of the Trust Fund.
(e) Maintain accurate and detailed accounts of all investments,
receipts, disbursements and all other transactions affecting all or any portion
of the Trust Fund. All accounts, books and records relating to these
transactions shall be open to inspection and audit at any time during business
hours by any person designated by the Company or the Administrator.
(f) Within 60 days following the close of each calendar quarter
or at such other time as agreed upon by the Company and the Trustee, and within
60 days after the removal or resignation of the Trustee (as provided in Article
9), file with the Company a written account listing all investments, receipts,
disbursements and other transactions effected by it during such period or during
the period from the last written accounting to the date of such removal or
resignation. That accounting shall state the current book and market values of
the Trust Fund. If the Trustee invests a part or all of the assets of the Trust
Fund in one or more contracts issued by an insurance company, delivery of the
insurance company's annual report shall satisfy the requirements of this
subsection as to assets so invested. The Trustee shall use such valuation
methods for purposes of valuing the Trust Fund as required by any regulations
issued by the Department of Labor under ERISA regarding the valuation of
securities or other assets for purposes of the reports required by ERISA.
5.2 CONTRIBUTIONS TO THE PLAN. The Trustee shall have no duty or
authority to inquire into the accuracy or sufficiency of any contribution or the
source of any contribution, or to take any action to compel the Company to
contribute to the Plan.
5.3 PAYMENTS FROM THE TRUST FUND. The Trustee shall pay amounts from
the Trust Fund as directed by the Administrator, in writing or as otherwise
agreed to by the Administrator and Trustee, to provide for payments pursuant to
the Plan or the payment or reimbursement for expenses
5-1
<PAGE>
of administering the Plan or Trust Fund. The Administrator's directions to
the Trustee shall specify the person or entity to whom payment should be
made, the manner of payment, the amount of the payment and the purposes of
the payment. The Trustee shall make payments either directly to persons
certified by the Administrator to be entitled to them or to the Administrator
or its delegate for transmittal to such persons or as otherwise directed by
the Administrator. The Trustee shall be liable for failure to make any
payment of any kind only if the Trustee has been directed by the
Administrator to make such payment and funds sufficient to make such payment
are available to the Trustee from the Trust Fund. The Trustee shall not be
responsible for the application of any payments directed by the
Administrator, for the adequacy of the Trust Fund to meet and discharge any
liabilities arising pursuant to the Plan or for ascertaining whether such
payments are in compliance with the terms of the Plan.
If the Trustee makes a payment as described in this section, the
amount paid shall no longer constitute a part of the Trust Fund unless the
payment is for a contract or other asset intended to be a part of the Trust
Fund.
5-2
<PAGE>
ARTICLE 6
Powers of Trustee
In addition to the powers stated elsewhere in this Agreement, the
Trustee shall have the following powers and authority in the control of the
Trust Fund (all consistent with direction by the Company, its delegate, an
Investment Manager or a Participant pursuant to Article 3):
(a) To purchase, subscribe for and retain any securities or
other property held by it, including units of shares in any mutual fund,
including any such fund operated by the Trustee or an officiate thereof.
(b) To sell, exchange, convey, transfer or otherwise dispose of,
and also to grant options with respect to, any securities or other property held
by it, by private contract or at public auction. Any sale may be made for cash
or upon credit, or partly in cash and partly on credit. No person dealing with
the Trustee shall be bound to see to the application of the purchase money or to
inquire into the validity, expedience or propriety of any such sale or other
disposition.
(c) To surrender for cash value any contracts issued by an
insurance company which may at any time constitute a part of the Trust Fund.
(d) To purchase and sell contracts or other properties through
such broker or brokers as the Trustee may choose, unless directed otherwise by
the Company.
(e) To vote any stocks, bonds or other securities; to give
general or special proxies or powers of attorney with or without power of
substitution; to appoint one or more individuals or corporations as voting
trustees under voting trust agreements and, pursuant to such voting agreements,
to delegate to such voting trustees discretion to vote; to exercise any
conversion privileges, subscription rights, or other options, and to make any
payments incidental thereto; to oppose, consent to, or otherwise participate in,
corporate reorganizations or other changes affecting corporate securities, and
to pay any assessments or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to property held as part of
the Trust Fund. The foregoing notwithstanding, an Investment Manager appointed
to manage any assets of the Trust Fund (and not the Trustee) shall have the
authority to take the actions described in this paragraph (e) with respect to
such assets.
(f) To cause any securities or other property to be registered
in its own name or in the name of its nominee without designating the same as
trust property, and to hold any investments in bearer form. The books and
records of the Trustee, however, shall at all times show that all such
investments are part of the Trust Fund. Any such registration or holding by the
Trustee shall not relieve it from its responsibility for the safe custody and
disposition of the Trust Fund in accordance with the terms and provisions of
this Agreement.
(g) To borrow or raise money for the purposes of the Trust in
the amount and upon the terms and conditions the Trustee deems advisable. The
Trustee may also issue its
6-1
<PAGE>
promissory note as the Trustee and secure the repayment of any sum so
borrowed by creating a security interest in all or any part of the Trust
Fund. No person lending money to the Trustee shall be bound to see to the
application of the money lent or to inquire into the validity, expedience or
propriety of any such borrowing. The Trustee, in its capacity as trustee,
may also borrow from itself, provided in such case the interest charged on
the loan does not exceed the prevailing interest rate for a loan of the type
made and the loan is not prohibited by applicable law.
(h) To hold cash uninvested for such length of time as the
Trustee deems prudent and in the best interests of the trust crated by this
Agreement, without liability for interest on such amounts, to facilitate
disbursements or for other operational reasons. The Trustee may deposit any
cash it receives or holds pursuant to this Agreement with itself in its
commercial banking or savings department, or with any other bank trust company
or other financial institution, including those affiliated in ownership with the
Trustee, under such provisions with respect to interest as may be permitted by
law.
(i) To make, execute, acknowledge and deliver any and all
documents of transfer and conveyance, including but not limited to, deeds,
leases, mortgages, conveyances, contracts, waivers and releases, and any and all
other instruments that may be necessary or appropriate to carry out the powers
granted by this Agreement.
(j) To renew or extend or participate in the renewal or
extension of any mortgage, upon such terms as the Trustee deems advisable. The
Trustee may agree to a reduction in the rate of interest on any mortgage or to
any other modification or change in the terms of any mortgage, or of any
guarantee pertaining to any such mortgage, in any manner and to any extent it
deems advisable for the protection of the Trust Fund or the preservation of the
value of the investment. The Trustee may waive any default, whether in the
performance of any covenant or conditions of any mortgage or in the performance
of any guarantee, or enforce any such default in the manner and to the extent it
deems advisable. The Trustee may exercise and enforce any and all rights of
foreclosure, bid on property in foreclosure, take a deed in lieu of foreclosure
(with or without paying consideration therefor) and, in connection therewith,
release the obligation on the bond secured by such mortgage. The Trustee may
exercise and enforce, in any action, suit or proceeding at law or in equity, any
rights or remedies with respect to any such mortgage or guarantee.
(k) To employ suitable agents and counsel, including but not
limited to, individuals who may be agents or counsel for the Company, and to pay
their reasonable expenses and compensation if not paid directly by the Company.
(l) To act at any time and in any jurisdiction without bond or
other security to insure the faithful performance of its duties, except as
required by ERISA or other applicable law.
(m) To continue to have and to exercise after the termination of
the Plan and until final distribution, all of the title, powers, discretions,
rights and duties conferred or imposed upon the Trustee by this Agreement or by
law.
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(n) To commence, maintain or defend any litigation or legal or
proceedings in connection with and, with the consent of the Company to settle,
compromise or submit to arbitration, any claims, debts or damages due or owing
to or from the Trust Fund.
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ARTICLE 7
Compensation, Expenses and Taxes
7.1 PAYMENT OF COMPENSATION AND EXPENSES. The Trustee shall be paid
the reasonable compensation and shall be reimbursed for the reasonable expenses
as the Trustee and the Company may agree upon in writing, from time to time.
Such compensation and expenses may be paid by the Company or all participating
employers in the proportion determined by the Company and, if not so paid, shall
be charged to the Trust Fund. However, an employee of the Company receiving
full-time pay from the Company shall not be paid any compensation from the Trust
Fund for serving as Trustee.
7.2 PAYMENT OF TAXES. The Trustee shall pay from the Trust Fund all
taxes of any and all kinds whatsoever that may be levied or assessed upon, or in
respect of, the Trust Fund or its income pursuant to existing or future laws.
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ARTICLE 8
Protection, Indemnification and Litigation
8.1 LIMITATION OF LIABILITY. Except for such liability as is imposed
by Title I of ERISA, neither the Company, its delegate, the Trustee nor an
Investment Manager shall be liable for the making, retention or sale of any
investment, nor for any loss to, or diminution of the Trust Fund, unless due to
its own negligence, misconduct or lack of good faith.
8.2 RELIANCE UPON VERIFIED COMMUNICATIONS. The Administrator, the
Company and any Investment Manager shall each provide the Trustee with a
verified certification identifying the person or persons authorized to give
instructions or directions on its behalf. Such certification shall be effective
until a verified revocation is filed with the Trustee. The Trustee may rely
upon any verified communication by the persons identified with respect to any
instruction or direction of the Administrator or an Investment Manager and may
continue to rely upon such verified communication until a subsequent verified
communication is filed with the Trustee. The Trustee may act upon any
instrument, verified communication or paper it reasonably believes to be genuine
and to be signed or presented by the proper person or persons. The Trustee
shall be under no duty to make any investigation or inquiry as to any statement
contained in any such document, and the Trustee may accept the document as
conclusive evidence of the truth and accuracy of the statements it contains.
All certifications, revocations or other communications made pursuant to this
section 8.2 shall be verified in writing or as otherwise agreed to by the
Company and Trustee.
8.3 LIABILITY OF TRUSTEE. The Trustee, and its directors, officers,
employees, agents and affiliates shall not be liable for:
(a) Any loss, expense, cost, liability or attorneys' or other
legal fees it incurs or suffers resulting from or incident to any claimed breach
of fiduciary duty by the Trustee acting in its official capacity as a direct or
indirect result of:
(1) Any act or omission done (or alleged to have been done
or omitted) in good faith by or on behalf of the Trustees in connection with the
Plan or Trust in reliance upon verified directions (or absence of verified
directions) of the Company, Administrator or any Investment Manager; or
(2) The failure of the Company, Administrator or any other
fiduciary under the Plan or Trust, directly or through its agents, to
adequately, carefully and diligently discharge their respective duties and
responsibilities under the Plan, Trust and ERISA, provided the Trustee did not
act negligently, dishonestly or in willful violation of the law or regulation
under which such loss, expense, cost or liability arose.
(b) Any liability resulting from or incident to any claimed
interest in a payment from the Trust Fund which may be asserted by any person or
persons under the community property or other laws of any state if the Trustee
has acted in good faith in reliance on a written direction of the Administrator.
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8.4 INDEMNIFICATION OF COMPANY. The Trustee agrees to indemnify the
Company and its directors, officers and employees for any loss, expense, cost or
liability suffered or incurred by any of them as a result of (a) any breach of
the duties imposed upon the Trustee by this Agreement or applicable law or (b)
the failure of the Trustee to qualify as an entity eligible to serve as Trustee
of the Trust Fund pursuant to applicable law.
8.5 TRUSTEE LITIGATION. Notwithstanding any other provision herein
to the contrary, the Trustee shall not be required to institute suit or maintain
any litigation to collect the proceeds of any insurance or other contract
forming a part of the Trust Fund or unless the Trust Fund holds sufficient funds
for this purpose, or unless the Trustee has been indemnified to its satisfaction
for its counsel fees, costs, disbursements, and all other expenses and
liabilities to which it may be subjected by such suit. Furthermore, the Trustee
may utilize the proceeds of any contract to meet expenses incurred in enforcing
payment of such contract.
The Trustee shall not be obligated to participate in any suit or legal
or administrative proceeding which would subject it to expense or liability
(unless such suit involves any alleged breach of fiduciary duty by the Trustee)
unless it is first indemnified of the Company in an amount and manner
satisfactory to the Trustee or is furnished with funds sufficient, in its sole
judgment, to cover any such expense or liability.
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ARTICLE 9
Resignation and Removal of Trustee
9.1 REMOVAL BY COMPANY. The Trustee may be removed by the Company at
any time upon 30 days' prior written notice to the Trustee.
9.2 RESIGNATION OF TRUSTEE. The Trustee may resign at any time upon
30 days' prior written notice to the Company.
9.3 APPOINTMENT OF SUCCESSOR TRUSTEE BY COMPANY. Upon the removal or
resignation of any Trustee who is the sole trustee, the Company shall appoint a
successor trustee who shall have the same powers and duties as those conferred
upon the Trustee by this Agreement. Upon acceptance of that appointment by the
successor trustee, the Trustee shall assign, transfer and promptly pay over to
the successor trustee the funds and properties then constituting the Trust Fund.
In connection with any such assignment, transfer or payment, the Trustee shall
cause any part of the Trust Fund held in any commingled trust to be withdrawn on
the next available withdrawal date under that commingled trust. The Trustee
shall not be entitled to any termination charge.
9.4 APPOINTMENT OF SUCCESSOR TRUSTEE BY COURT. In the event the
Company fails to appoint a successor trustee as required by section 9.3 within a
reasonable time after the Trustee's resignation or removal, the Trustee may
apply to a court of competent jurisdiction to name a successor trustee. Upon
appointment by the Court, the successor trustee shall have the same powers and
duties as those conferred upon the Trustee by this Agreement. Upon acceptance
of such appointment by the successor trustee, the Trustee shall assign, transfer
and pay over to the successor trustee the funds and properties then constituting
the Trust Fund.
9.5 DUTY OF COMPANY AND TRUSTEE TO SUCCESSOR TRUSTEE. Upon request
of a successor trustee, the Company and the Trustee shall execute and deliver
such instruments of conveyance and do such other things as may reasonably be
required to fully and certainly vest and confirm in the successor trustee all of
the right to, title in and interest in the Trust Fund previously held by the
retiring trustee.
9.6 MERGERS AND CONSOLIDATIONS INVOLVING TRUSTEE. In the case of a
corporate Trustee, any corporation into which any such Trustee may be merged or
with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which any Trustee may be a party, or any corporation to
which all or substantially all the trust business of any Trustee may be
transferred, shall be successor of such Trustee without the performance of any
further act.
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ARTICLE 10
Amendment
The Company shall have the right at any time, and from time to time to
amend this Agreement:
(a) In the manner it deems necessary or advisable to cause this
Agreement and the Plan to qualify or continue to qualify pursuant to the
provisions of Code section 401(a) and be exempt from taxation pursuant to the
terms of Code section 501(a). Any such amendment may by its terms be
retroactive to the extent permitted by applicable law.
(b) In any other manner provided (1) no such amendment shall
authorize or permit any part of the Trust Fund to be used for or diverted to
purposes other than those stated in section 2.2, (2) no such amendment may cause
or permit any portion of the Trust Fund to revert to or become the property of
the Company (except as permitted by Article 11 below), and (3) no such amendment
which affects the rights, duties or responsibilities of the Trustee may be made
without the Trustee's written consent.
Any amendment to this Agreement shall become effective (unless
retroactively effective as described in paragraph (a)) upon delivery of a
written instrument, executed by persons duly authorized, to the Trustee and upon
endorsement by the Trustee of its receipt and of its written consent, if such
consent is required.
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ARTICLE 11
Termination
11.1 TERMINATION BY THE COMPANY. The Company shall have the right to
terminate the Trust Fund and this Agreement at any time by delivering to the
Trustee written notice of such termination.
11.2 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS OF THE COMPANY. In
the event of the merger or consolidation of the Company with or into any other
corporation or in case substantially all of the assets of the Company shall be
transferred to another corporation the following shall apply:
(a) If the surviving or transferee corporation has, or shall
then establish, a retirement income trust for the benefit of its employees
qualified under Code section 401(a) and exempt under Code section 501(a), the
portion of the Trust required to satisfy liabilities with respect to
Participants who continue in the employ of the surviving or transferee
corporation may be turned over to the trustee of the trust of the surviving or
transferee corporation upon direction of the Company.
(b) If the surviving or transferee corporation adopts the Plan
and this Agreement (either formally or by operation of law) and assumes all the
related liabilities, the Trust Fund and this Agreement shall continue as if
there had been no such merger, consolidation or transfer of assets.
(c) If the surviving or transferee corporation does not have and
does not establish a qualified trust and does not adopt the Plan and this
Agreement, to the extent that Participants do not continue in the employ of the
surviving or transferee corporation or to the extent that the assets of the
Trust Fund cannot be transferred to another trust, the provisions of section
11.3 shall apply.
11.3 PROCEDURES UPON TERMINATION. Upon the occurrence of any of the
circumstances described in section 11.1 or 11.2 above, the Administrator shall
instruct the Trustee to appraise the value of the Trust Fund and shall instruct
the Trustee concerning allocation and distribution of the Trust Fund.
11.4 REVERSION OF TRUST FUND. The Company shall have no right, title,
or interest in the Trust Fund, nor shall any part of the Trust Fund revert to
the Company directly or indirectly, except as otherwise provided in the Plan or
Trust.
11.5 DISCHARGE OF TRUSTEE. Upon making final distribution, the
Trustee shall be discharged from all obligations under the Trust.
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ARTICLE 12
General Provisions
12.1 INDIVIDUAL'S RIGHTS; ACQUITTANCE. Neither the establishment of
the Trust Fund created by this Agreement, nor any modification to the Trust
Fund, nor the creation of any fund or account, nor the issuance of any annuity
policy, nor the payment of any benefits, shall be construed as giving any person
any legal or equitable right against (a) the Company, (b) any director, officer
or employee of the Company, (c) the Administrator (or its directors, officers,
members, agents or employees), (d) any Investment Manager, (e) the Trustee, or
(f) any insurance company, except as provided by the terms of any such annuity
policy, the Plan or applicable law. Under no circumstances shall the terms of
employment of any Participant be modified or in any way affected by this
Agreement.
12.2 NONALIENATION OF BENEFITS. Except with respect to any
indebtedness owing to the Trust Fund or payment required pursuant to a qualified
domestic relations order as defined by the Code, benefits payable from the Trust
Fund shall not be subject in any manner to anticipation, alienation, sale,
transfer, assignment, ledge, encumbrance, charge, garnishment, execution or levy
of any kind, either voluntary or involuntary, except to the extent provided by
law or the Plan. Any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, charge or otherwise dispose of any right to Plan benefits
shall be void.
12.3 EXERCISE OF AUTHORITY BY THE COMPANY. Whenever the Company,
under the terms of this Agreement, is permitted or required to do or perform any
act, or matter or thing, it shall be done and performed by its Board of
Directors or by any officer or agent of the Company duly authorized by its Board
of Directors.
12.4 EXERCISE OF DISCRETION OF CORPORATE TRUSTEE. Any judgment or
discretion to be exercised by the Trustee pursuant to this Agreement may, in the
case of a corporate Trustee, be exercised by any officer or agent duly
authorized by its Board of Directors.
12.5 QUALIFICATION. Subject to any amendment to this Agreement which
specifically expresses a contrary intention, the trust existing pursuant to this
Agreement is intended to be exempt from income tax pursuant to Code section
501(a) and shall be construed to carry out that intention. The Trustee shall
take no action which would adversely affect the tax-exempt status of the trust.
The Trustee may demand assurances satisfactory to it that any action which it is
directed to take will not adversely affect the tax-exempt status.
12.6 SEVERABILITY. In the event any provision of this Agreement shall
be considered illegal or invalid for any reason, the illegal or invalid
provision shall not affect the remaining provisions of this Agreement. The
illegal or invalid provisions shall be fully severable and this Agreement shall
be construed and enforced as if the illegal or invalid provisions had never been
inserted in this Agreement. Any provision of this Agreement providing for any
indemnification or limitation upon the liability of any person or entity shall
be construed to be fully effective except
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to the extent that such construction would relieve any person from
responsibility or liability for any responsibility, obligation or duty
imposed by Part 4, Title I of ERISA.
12.7 COMMUNICATIONS. Any communication by any party to this Agreement
which is required or permitted by this Agreement shall be deemed sufficiently
given or served if in writing and delivered to the party to whom addressed or,
with postage prepaid, addressed to such party as shown on the records of the
sender. Any communication required or permitted by this Agreement shall be
deemed to have been received on the date of mailing or other delivery.
12.8 WAIVER OF NOTICE. Any notice required under this Agreement may
be waived by the person entitled to such notice.
12.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and no other counterpart
need be produced.
IN WITNESS WHEREOF, the Company and the Trustee have caused this
Agreement to be executed by their respective duly appointed officers as of the
1st day of August, 1998.
RECYCLING INDUSTRIES, INC.
BY_____________________________________
Its:_____________________________________
CENTRAL BANK & TRUST CO.,
Trustee
BY______________________________________
Its:______________________________________
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[IBDO LETTERHEAD]
CONSENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Recycling Industries, Inc.
Denver, Colorado
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated
December 30, 1997, relating to the consolidated financial statements of
Recycling Industries, Inc. appearing in the Company's Annual Report on
Form 10-K for the year ended September 30, 1997.
/s/ BDO Seidman, LLP
Denver, Colorado
September 30, 1998
