SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________________
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
_____________________________________________________________
PEOPLES FINANCIAL CORPORATION
(Exact name of Registrant as specified in its Articles)
Ohio 34-1822228
_______________________________ ____________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
211 Lincoln Way East
Massillon, Ohio 44646
_____________________________________________________________
(Address of Principal Execution Offices)
The Peoples Federal
401(K) Profit Sharing Plan
_____________________________________________________________
(Full title of the plan)
Peoples Federal Savings and Loan Association of Massillon
Attention: Paul von Gunten
211 Lincoln Way East
Massillon, Ohio 44646
_____________________________________________________________
(Name and address of agent for service)
(330) 832-7441
_____________________________________________________________
(Telephone number, including area code, of agent for service)
<TABLE>
CALCULATION OF REGISTRATION FEE
Title of Amount to be Proposed maximum Proposed maximum Amount of
securities registered(1) offering price per aggregate offering registration
to be registered share(2) price fee
---------------- ------------- ------------------ ------------------ ------------
<S> <C> <C> <C> <C>
Common Shares 100,000 $15.0625 $1,506,250 $457
No par value
</TABLE>
__________________
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the employee benefit plan described herein.
(2) Estimated solely for purposes of calculating the registration fee; based
upon the average of the high and low sale prices for a share of Peoples
Financial Corporation on February 19, 1997, as quoted on The Nasdaq
SmallCap Market.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents previously filed with the Securities and
Exchange Commission (the "Commission") by Peoples Financial Corporation (the
"Registrant") (SEC File No. 34-1822228) the The Peoples Federal 401(k) Profit
Sharing Plan (the "Plan") are incorporated herein by reference and made a part
hereof as of the respective dates of filing of such documents:
(1) The Registrant's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1996, and all documents filed with the Commission
pursuant to the requirements of Sections 13(a) or 15(d) of the Securities
Exchange Act of 1934 ("Exchange Act") since that date;
(2) The Registrant's Quarterly Report on Form 10-QSB filed with
the Commission for the period ended December 31, 1996;
(3) The description of the Common Shares of the Registrant con-
tained in the Registrant's Registration Statement on Form 8-A (No. 001-12103),
filed with the Commission on August 27, 1996; and
(4) The Annual Report on Form 11-K for the year ended September
30, 1996, filed by the Plan concurrently with the filing of this Registration
Statement.
Any documents that may be filed by the Registrant or the Plan
with the Commission 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 which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall also be
deemed to be incorporated herein by reference and to be made a part hereof from
the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
A. Division (E) of Section 1701.13 of the Ohio Revised Code
governs indemnification by a corporation and provides as follows:
(E)(1) A corporation may indemnify or agree to indemnify any
person who was or is a party or is threatened to be made a party, to any
threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, other than an action
by or in the right of the corporation, by reason of the fact that he is
or was a director, officer, employee, or agent of the corporation, or is
or was serving at the request of the corporation as a director, trustee,
officer, employee, or agent of another corporation, domestic or foreign,
nonprofit or for profit, a limited liability company, or a partnership,
joint venture, trust, or other enterprise, against expenses, including
attorney's fees, judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him in connection with such action,
suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, if
he had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order,
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<PAGE>
settlement, or conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation and, with
respect to any criminal action or proceeding, he had reasonable cause to
believe that his conduct was unlawful.
(2) A corporation may indemnify or agree to indemnify any person
who was or is a party or is threatened to be made a party, to any
threatened, pending, or completed action or suit by or in the right of
the corporation to procure a judgment in its favor, by reason of the
fact that he is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, trustee, officer, employee, member, manager, or agent of
another corporation, domestic or foreign, nonprofit or for profit, a
limited liability company, or a partnership, joint venture, trust, or
other enterprise, against expenses, including attorney's fees, actually
and reasonably incurred by him in connection with the defense or
settlement of such action or suit, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be
made in respect of any of the following:
(a) Any claim, issue, or matter as to which such person is
adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation unless, and only to
the extent that, the court of common pleas or the court in which
such action or suit was brought determines, upon application,
that, despite the adjudication of liability, but in view of all
the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses as the court
of common pleas or such other court shall deem proper;
(b) Any action or suit in which the only liability
asserted against a director is pursuant to section 1701.95 of the
Revised Code.
(3) To the extent that a director, trustee, officer, employee,
member, manager, or agent has been successful on the merits or otherwise
in defense of any action, suit, or proceeding referred to in divisions
(E)(1) and (2) of this section, or in defense of any claim, issue, or
matter therein, he shall be indemnified against expenses, including
attorney's fees, actually and reasonably incurred by him in connection
with the action, suit, or proceeding.
(4) Any indemnification under division (E)(1) or (2) of this
section, unless ordered by a court, shall be made by the corporation
only as authorized in the specific case, upon a determination that
indemnification of the director, trustee, officer, employee, member,
manager, or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in division (E)(1) or (2) of
this section. Such determination shall be made as follows:
(a) By a majority vote of a quorum consisting of directors
of the indemnifying corporation who were not and are not parties
to or threatened with any such action, suit, or proceeding
referred to in division (E)(1) or (2) of this section;
(b) If the quorum described in division (E)(4)(a) of this
section is not obtainable or if a majority vote of a quorum of
disinterested directors so directs, in a written opinion by
independent legal counsel other than an attorney, or a firm
having associated with it an attorney, who has been retained by
or who has performed services for the corporation or any person
to be indemnified within the past five years;
(c) By the shareholders;
(d) By the court of common pleas or the court in which
such action, suit, or proceeding referred to in division (E)(1)
or (2) of this section was brought.
Any determination made by the disinterested directors under
division (E)(4)(a) or by independent legal counsel under division
(E)(4)(b) of this section shall be promptly communicated to the person
who threatened or brought the action or suit by or in the right of the
corporation under division (E)(2) of this section, and, within ten days
after receipt of such notification, such person shall have the right to
petition the court of common pleas or the court in which action or suit
was brought to review the reasonableness of such determination.
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<PAGE>
(5)(a) Unless at the time of a director's act or omission that is
the subject of an action, suit, or proceeding referred to in division
(E)(1) or (2) of this section, the articles or the regulations of a
corporation state, by specific reference to this division, that the
provisions of this division do not apply to the corporation and unless
the only liability asserted against a director in an action, suit, or
proceeding referred to in division (E)(1) or (2) of this section is
pursuant to section 1701.95 of the Revised Code, expenses, including
attorney's fees, incurred by a director in defending the action, suit,
or proceeding shall be paid by the corporation as they are incurred, in
advance of the final disposition of the action, suit, or proceeding,
upon receipt of an undertaking by or on behalf of the director in which
he agrees to do both of the following:
(i) Repay such amount if it is proved by clear and
convincing evidence in a court of competent jurisdiction that his
action or failure to act involved an act or omission undertaken
with deliberate intent to cause injury to the corporation or
undertaken with reckless disregard for the best interests of the
corporation;
(ii) Reasonably cooperate with the corporation concerning
the action, suit, or proceeding.
(b) Expenses, including attorney's fees, incurred by a director,
trustee, officer, employee, member, manager, or agent in
defending any action, suit, or proceeding referred to in division
(E)(1) or (2) of this section, may be paid by the corporation as
they are incurred, in advance of the final disposition of the
action, suit, or proceeding, as authorized by the directors in
the specific case, upon receipt of an undertaking by or on behalf
of the director, trustee, officer, employee, member, manager, or
agent to repay such amount, if it ultimately is determined that
he is not entitled to be indemnified by the corporation.
(6) The indemnification authorized by this section shall not be
exclusive of, and shall be in addition to, any other rights granted to
those seeking indemnification under the articles, the regulations, any
agreement, a vote of shareholders or disinterested directors, or
otherwise, both as to action in their official capacities and as to
action in another capacity while holding their offices or positions, and
shall continue as to a person who has ceased to be a director, trustee,
officer, employee, member, manager, or agent and shall inure to the
benefit of the heirs, executors, and administrators of such a person.
(7) A corporation may purchase and maintain insurance or furnish
similar protection, including, but not limited to, trust funds, letters
of credit, or self-insurance, on behalf of or for any person who is or
was a director, officer, employee, member, manager, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, trustee, officer, employee, or agent of another corporation,
domestic or foreign, nonprofit or for profit, a limited liability
company, or a partnership, joint venture, trust, or other enterprise,
against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability
under this section. Insurance may be purchased from or maintained with a
person in which the corporation has a financial interest.
(8) The authority of a corporation to indemnify persons pursuant
to division (E)(1) or (2) of this section does not limit the payment of
expenses as they are incurred, indemnification, insurance, or other
protection that may be provided pursuant to divisions (E)(5), (6), and
(7) of this section. Divisions (E)(1) and (2) of this section do not
create any obligation to repay or return payments made by the
corporation pursuant to division (E)(5), (6), or (7).
(9) As used in this division, references to "corporation"
includes all constituent corporations in a consolidation or merger and
the new or surviving corporation, so that any person who is or was a
director, officer, employee, trustee, member, manager or agent of such a
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, trustee, officer, employee,
member, manager, or agent of another corporation, domestic or foreign,
nonprofit or for profit, a limited liability company, or a partnership,
joint venture, trust, or other enterprise, shall stand in the same
position under this section with respect to the new or surviving
corporation as he would if he had served the new or surviving
corporation in the same capacity.
B. Article Five of the Registrant's Code of Regulations provides
for the indemnification of officers and directors as follows:
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<PAGE>
SECTION 5.01. MANDATORY INDEMNIFICATION. The corporation shall indemnify
any officer or director of the corporation who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including, without limitation, any action threatened or instituted by or in the
right of the corporation), by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, trustee, officer, employee or agent of
another corporation (domestic or foreign, nonprofit or for profit), partnership,
joint venture, trust or other enterprise, against expenses (including, without
limitation, attorneys' fees, filing fees, court reporters' fees and transcript
costs), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and with respect to any criminal action
or proceeding, he had no reasonable cause to believe his conduct was unlawful. A
person claiming indemnification under this Section 5.01 shall be presumed, in
respect of any act or omission giving rise to such claim for indemnification, to
have acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and with respect to any
criminal matter, to have had no reasonable cause to believe his conduct was
unlawful, and the termination of any action, suit or proceeding by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, rebut such presumption.
SECTION 5.02. COURT-APPROVED INDEMNIFICATION. Anything contained in the
Regulations or elsewhere to the contrary notwithstanding:
(A) the corporation shall not indemnify any officer or director
of the corporation who was a party to any completed action or suit instituted by
or in the right of the corporation to procure a judgment in its favor by reason
of the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, trustee, officer, employee or agent of another corporation (domestic
or foreign, nonprofit or for profit), partnership, joint venture, trust or other
enterprise, in respect of any claim, issue or matter asserted in such action or
suit as to which he shall have been adjudged to be liable for acting with
reckless disregard for the best interests of the corporation or misconduct
(other than negligence) in the performance of his duty to the corporation unless
and only to the extent that the Court of Common Pleas of Stark County, Ohio, or
the court in which such action or suit was brought shall determine upon
application that, despite such adjudication of liability, and in view of all the
circumstances of the case, he is fairly and reasonably entitled to such
indemnity as such Court of Common Pleas or such other court shall deem proper;
and
(B) the corporation shall promptly make any such unpaid
indemnification as is determined by a court to be proper as contemplated by this
Section 5.02.
SECTION 5.03. INDEMNIFICATION FOR EXPENSES. Anything contained in the
Regulations or elsewhere to the contrary notwithstanding, to the extent that an
officer or director of the corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Section
5.01, or in defense of any claim, issue or matter therein, he shall be promptly
indemnified by the corporation against expenses (including, without limitation,
attorneys' fees, filing fees, court reporters' fees and transcript costs)
actually and reasonably incurred by him in connection therewith.
SECTION 5.04 DETERMINATION REQUIRED. Any indemnification required under
Section 5.01 and not precluded under Section 5.02 shall be made by the
corporation only upon a determination that such indemnification of the officer
or director is proper in the circumstances because he has met the applicable
standard of conduct set forth in Section 5.01. Such determination may be made
only (A) by a majority vote of a quorum consisting of directors of the
corporation who were not and are not parties to, or threatened with, any such
action, suit or proceeding, or (B) if such a quorum is not obtainable or if a
majority of a quorum of disinterested directors so directs, in a written opinion
by independent legal counsel other than an attorney, or a firm having associated
with it an attorney, who has been retained by or who has performed services for
the corporation, or any person to be indemnified, within the past five years, or
(C) by the shareholders, or (D) by the Court of Common Pleas of Stark County,
Ohio, or (if the corporation is a party thereto) the court in which such action,
suit or proceeding was brought, if any; any such determination may be made by a
court under division (D) of this Section 5.04 at any time including, without
limitation, any time before, during or after the time when any such
determination may be requested of, be under consideration by or have been denied
or disregarded by the disinterested directors under division (A) or by
independent legal counsel under division (B) or by the shareholders under
division (C) of this Section 5.04; and no failure for any reason to make any
such determination, and no decision for any reason to deny any such
determination, by the disinterested directors under division (A) or by
independent legal counsel under division (B) or by shareholders under division
(C) of this Section 5.04 shall be evidence in rebuttal of the presumption
recited in Section 5.01. Any determination made by the disinterested directors
under division (A) or by independent legal counsel under division (B) of this
Section 5.04 to make indemnification in respect of any claim, issue or matter
asserted in an action or suit threatened or brought by or in the right of the
corporation shall be promptly communicated to the person who threatened or
brought such action or suit, and within ten (10) days after receipt of such
notification such person shall have the right to petition the Court of Common
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<PAGE>
Pleas of Stark County, Ohio, or the court in which such action or suit was
brought, if any, to review the reasonableness of such determination.
SECTION 5.05. ADVANCES FOR EXPENSES. Expenses (including, without
limitation, attorneys' fees, filing fees, court reporters' fees and transcript
costs) incurred in defending any action, suit or proceeding referred to in
Section 5.01 shall be paid by the corporation in advance of the final
disposition of such action, suit or proceeding to or on behalf of the officer or
director promptly as such expenses are incurred by him, but only if such officer
or director shall first agree, in writing, to repay all amounts so paid in
respect of any claim, issue or other matter asserted in such action, suit or
proceeding in defense of which he shall not have been successful on the merits
or otherwise:
(A) if it shall ultimately be determined as provided in Section
5.04 that he is not entitled to be indemnified by the corporation as provided
under Section 5.01; or
(B) if, in respect of any claim, issue or other matter asserted
by or in the right of the corporation in such action or suit, he shall have been
adjudged to be liable for acting with reckless disregard for the best interests
of the corporation or misconduct (other than negligence) in the performance of
his duty to the corporation, unless and only to the extent that the Court of
Common Pleas of Stark County, Ohio, or the court in which such action or suit
was brought shall determine upon application that, despite such adjudication of
liability, and in view of all the circumstances, he is fairly and reasonably
entitled to all or part of such indemnification.
SECTION 5.06. ARTICLE FIVE NOT EXCLUSIVE. The indemnification provided
by this Article Five shall not be deemed exclusive of any other rights to which
any person seeking indemnification may be entitled under the Articles or the
Regulations or any agreement, vote of shareholders or disinterested directors,
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be an officer or director of the corporation and shall inure
to the benefit of the heirs, executors, and administrators of such a person.
SECTION 5.07. INSURANCE. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, trustee, officer, employee, or agent of another corporation
(domestic or foreign, nonprofit or for profit), partnership, joint venture,
trust or other enterprise, against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the obligation or the power to
indemnify him against such liability under the provisions of this Article Five.
SECTION 5.08. CERTAIN DEFINITIONS. For purposes of this Article Five,
and as examples and not by way of limitation:
(A) A person claiming indemnification under this Article 5 shall
be deemed to have been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section 5.01, or in defense of any
claim, issue or other matter therein, if such action, suit or proceeding shall
be terminated as to such person, with or without prejudice, without the entry of
a judgment or order against him, without a conviction of him, without the
imposition of a fine upon him and without his payment or agreement to pay any
amount in settlement thereof (whether or not any such termination is based upon
a judicial or other determination of the lack of merit of the claims made
against him or otherwise results in a vindication of him); and
(B) References to an "other enterprise" shall include employee
benefit plans; references to a "fine" shall include any excise taxes assessed on
a person with respect to an employee benefit plan; and references to "serving at
the request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee or agent with respect to
an employee benefit plan, its participants or beneficiaries; and a person who
acted in good faith and in a manner he reasonably believed to be in the best
interests of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the corporation" within the meaning of that term as used in this Article Five.
SECTION 5.09. VENUE. Any action, suit or proceeding to determine a claim
for indemnification under this Article Five may be maintained by the person
claiming such indemnification, or by the corporation, in the Court of Common
Pleas of Stark County, Ohio. The corporation and (by claiming such
indemnification) each such person consent to the exercise of jurisdiction over
its or his person by the Court of Common Pleas of Stark County, Ohio, in any
such action, suit or proceeding.
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<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
See the Exhibit Index attached hereto.
A copy of the Internal Revenue Service (the "IRS") determination
letter is included herewith as Exhibit 5. The Registrant hereby
undertakes to submit any amendments to the Plan to the IRS in a
timely manner and to make those changes, if any, required by the
IRS in order for the Plan to qualify as a tax-qualified employee
benefit plan meeting the requirements of Section 401(a) of the
Internal Revenue Code of 1986, as amended.
ITEM 9. UNDERTAKINGS.
Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this registration
statement to:
(i) Include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental
change i the information in the registration statement;
and Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value 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 prospects filed with the
commission pursuant to rule 424(b), if, in the
aggregate, the changes in the volume and price
represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective
registration statement.
(iii)Include any additional or changed material information
on the plan of distribution;
PROVIDED, HOWEVER, That paragraphs (a)(1)(i) and
(a)(1)(ii) of this section do not apply if the
information required in a post-effective amendment
is incorporated by reference from periodic reports
filed by the small business issuer under the
Exchange Act.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration
statement of the securities offered, and the offering of the
securities at that time to be the initial bona fide
offering.
(3) File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering.
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<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Massillon, State of Ohio, on February 25, 1997.
PEOPLES FINANCIAL CORPORATION
By: /s/ Paul von Gunten
______________________________
Paul von Gunten
President, Chief Executive Officer
and Director
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and as of the dates indicated.
Signature Title Date
- --------- ------- ------
/s/ Victor C. Baker Director February 25, 1997
- -------------------------
Victor C. Baker
/s/ James P. Bordner Director February 25, 1997
- -------------------------
James P. Bordner
/s/ Vincent G. Matecheck Director February 25, 1997
- -------------------------
Vincent G. Matecheck
/s/ Thomas E. Shelt Director February 25, 1997
- -------------------------
Thomas E. Shelt
/s/ Vince E. Stephan Director February 25, 1997
- -------------------------
Vince E. Stephan
/s/ Paul von Gunten President, Chief February 25, 1997
- ------------------------- Executive Officer,
Paul von Gunten Director
/s/ James R. Rinehart Treasurer (Chief February 25, 1997
- ------------------------- Financial Officer)
James R. Rinehart
<PAGE>
THE PLAN. Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Massillon, State of Ohio,
on February 25, 1997.
PEOPLES FEDERAL 401(K) PROFIT SHARING PLAN
By United National Bank & Trust Co.
By /s/ Samuel M. Lincoln VP & TO
_______________________________________
Samuel M. Lincoln VP & TO
<PAGE>
EXHIBIT INDEX
Exhibit No. Document
----------- ----------
4(a) The Peoples Federal 401(k) Profit
Sharing Plan, as amended
4(b) Articles of Incorporation (Incorporated
by reference to the Registration
Statement on Form 8-A filed with
the SEC on August 27, 1997)
5 Internal Revenue Service determination
letters
23(a) Consent of Independent Public
Accountant
23(b)
Consent of Independent Public
Accountant
EXHIBIT 4(a)
PEOPLES FEDERAL 401(K)
PROFIT SHARING PLAN
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS................................ 19
2.2 DETERMINATION OF TOP HEAVY STATUS.......................... 19
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER................ 23
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY.................... 24
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES.............. 24
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR..................... 24
2.7 RECORDS AND REPORTS........................................ 26
2.8 APPOINTMENT OF ADVISERS.................................... 26
2.9 INFORMATION FROM EMPLOYER.................................. 26
2.10 PAYMENT OF EXPENSES........................................ 26
2.11 MAJORITY ACTIONS........................................... 27
2.12 CLAIMS PROCEDURE........................................... 27
2.13 CLAIMS REVIEW PROCEDURE.................................... 27
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY.................................. 28
3.2 APPLICATION FOR PARTICIPATION.............................. 28
3.3 EFFECTIVE DATE OF PARTICIPATION............................ 28
3.4 DETERMINATION OF ELIGIBILITY............................... 29
3.5 TERMINATION OF ELIGIBILITY................................. 29
3.6 OMISSION OF ELIGIBLE EMPLOYEE.............................. 29
3.7 INCLUSION OF INELIGIBLE EMPLOYEE........................... 29
3.8 ELECTION NOT TO PARTICIPATE................................ 30
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION............ 30
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION.................... 31
<PAGE>
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION................. 35
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS....... 35
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS........................... 44
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS............. 46
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS....................... 48
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS......... 52
4.9 MAXIMUM ANNUAL ADDITIONS................................... 54
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS.................. 59
4.11 TRANSFERS FROM QUALIFIED PLANS............................. 60
4.12 DIRECTED INVESTMENT ACCOUNT................................ 62
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND................................ 62
5.2 METHOD OF VALUATION........................................ 63
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT.................. 63
6.2 DETERMINATION OF BENEFITS UPON DEATH....................... 63
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY........... 65
6.4 DETERMINATION OF BENEFITS UPON TERMINATION................. 65
6.5 DISTRIBUTION OF BENEFITS................................... 69
6.6 DISTRIBUTION OF BENEFITS UPON DEATH........................ 73
6.7 TIME OF SEGREGATION OR DISTRIBUTION........................ 75
6.8 DISTRIBUTION FOR MINOR BENEFICIARY......................... 75
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN............. 75
6.10 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION............ 76
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE...................... 76
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE................ 76
7.3 OTHER POWERS OF THE TRUSTEE................................ 77
7.4 LOANS TO PARTICIPANTS...................................... 80
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS................... 82
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES.............. 82
<PAGE>
7.7 ANNUAL REPORT OF THE TRUSTEE............................... 82
7.8 AUDIT...................................................... 83
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE............. 84
7.10 TRANSFER OF INTEREST....................................... 85
7.11 DIRECT ROLLOVER............................................ 85
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT.................................................. 86
8.2 TERMINATION................................................ 87
8.3 MERGER OR CONSOLIDATION.................................... 87
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS....................................... 88
9.2 ALIENATION................................................. 88
9.3 CONSTRUCTION OF PLAN....................................... 89
9.4 GENDER AND NUMBER.......................................... 89
9.5 LEGAL ACTION............................................... 89
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS..................... 89
9.7 BONDING.................................................... 90
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE................. 90
9.9 INSURER'S PROTECTIVE CLAUSE................................ 90
9.10 RECEIPT AND RELEASE FOR PAYMENTS........................... 91
9.11 ACTION BY THE EMPLOYER..................................... 91
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY......... 91
9.13 HEADINGS................................................... 92
9.14 APPROVAL BY INTERNAL REVENUE SERVICE....................... 92
9.15 UNIFORMITY................................................. 92
<PAGE>
PEOPLES FEDERAL 401(K)
PROFIT SHARING PLAN
THIS AGREEMENT, hereby made and entered into this 19th day of
September, 1994, by and between Peoples Federal Savings and Loan Association of
Massillon (herein referred to as the "Employer") and Paul von Gunten, Thomas E.
Shelt and Linda L. Fowler (herein referred to as the "Trustee").
W I T N E S S E T H:
WHEREAS, the Employer heretofore established a Profit Sharing
Plan and Trust effective October 1, 1988, (hereinafter called the "Effective
Date") known as Peoples Federal 401(k) Profit Sharing Trust and which plan shall
hereinafter be known as Peoples Federal 401(k) Profit Sharing Plan (herein
referred to as the "Plan") in recognition of the contribution made to its
successful operation by its employees and for the exclusive benefit of its
eligible employees; and
WHEREAS, under the terms of the Plan, the Employer has the
ability to amend the Plan, provided the Trustee joins in such amendment if the
provisions of the Plan affecting the Trustee are amended;
NOW, THEREFORE, effective October 1, 1993, except as otherwise
provided, the Employer and the Trustee in accordance with the provisions of the
Plan pertaining to amendments thereof, hereby amend the Plan in its entirety and
restate the Plan to provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.2 "Administrator" means the person or entity designated by the Employer
pursuant to Section 2.4 to administer the Plan on behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414 (o).
1.4 "Aggregate Account" means, with respect to each Participant, the value
of all accounts maintained on behalf of a Participant, whether attributable to
Employer or Employee contributions, subject to the provisions of Section 2.2.
1.5 "Anniversary Date" means September 30th.
1.6 "Beneficiary" means the person to whom the share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
6.2 and 6.6.
1.7 "Code" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.8 "Compensation" with respect to any Participant means such Participant's
wages as defined in Code Section 3401(a) and all other payments of compensation
by the Employer (in the course of the Employer's trade or business) for a Plan
Year for which the Employer is required to furnish the Participant a written
statement under Code Sections 6041(d), 6051(a)(3) and 6052. Compensation must be
determined without regard to any rules under Code Section 3401(a) that limit the
remuneration included in wages based on the nature or location of the employment
or the services performed (such as the exception for agricultural labor in Code
Section 3401(a)(2)).
For purposes of this Section, the determination of Compensation shall be
made by:
<PAGE>
(a) including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are
not includible in the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457, and
Employee contributions described in Code Section 414(h)(2) that
are treated as Employer contributions.
For a Participant's initial year of participation, Compensation shall be
recognized as of such Employee's effective date of participation pursuant to
Section 3.3.
Compensation in excess of $200,000 shall be disregarded. Such amount shall
be adjusted at the same time and in such manner as permitted under Code Section
415(d), except that the dollar increase in effect on January 1 of any calendar
year shall be effective for the Plan Year beginning with or within such calendar
year and the first adjustment to the $200,000 limitation shall be effective on
January 1, 1990. For any short Plan Year the Compensation limit shall be an
amount equal to the Compensation limit for the calendar year in which the Plan
Year begins multiplied by the ratio obtained by dividing the number of full
months in the short Plan Year by twelve (12). In applying this limitation, the
family group of a Highly Compensated Participant who is subject to the Family
Member aggregation rules of Code Section 414(q)(6) because such Participant is
either a "five percent owner" of the Employer or one of the ten (10) Highly
Compensated Employees paid the greatest "415 Compensation" during the year,
shall be treated as a single Participant, except that for this purpose Family
Members shall include only the affected Participant's spouse and any lineal
descendants who have not attained age nineteen (19) before the close of the
year. If, as a result of the application of such rules the adjusted $200,000
limitation is exceeded, then the limitation shall be prorated among the affected
Family Members in proportion to each such Family Member's Compensation prior to
the application of this limitation, or the limitation shall be adjusted in
accordance with any other method permitted by Regulation.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Code Section 401(a)(17)(B). The cost of living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in this
Plan to the limitation under Code Section 401(a)(17) shall mean the OBRA '93
annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into account in
determining an Employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
If, as a result of such rules, the maximum "annual addition" limit of
Section 4.9(a) would be exceeded for one or more of the affected Family Members,
the prorated Compensation of all affected Family Members shall be adjusted to
avoid or reduce any excess. The prorated Compensation of any affected Family
Member whose allocation would exceed the limit shall be adjusted downward to the
level needed to provide an allocation equal to such limit. The prorated
Compensation of affected Family Members not affected by such limit shall then be
adjusted upward on a pro rata basis not to exceed each such affected Family
Member's Compensation as determined prior to application of the Family Member
rule. The resulting allocation shall not exceed such individual's maximum
"annual addition" limit. If, after these adjustments, an "excess amount" still
results, such "excess amount" shall be disposed of in the manner described in
Section 4.10(a) pro rata among all affected Family Members.
If, in connection with the adoption of this amendment and restatement, the
definition of Compensation has been modified, then, for Plan Years prior to the
Plan Year which includes the adoption date of this amendment and restatement,
Compensation means compensation determined pursuant to the Plan then in effect.
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<PAGE>
For Plan Years beginning prior to January 1, 1989, the $200,000 limit
(without regard to Family Member aggregation) shall apply only for Top Heavy
Plan Years and shall not be adjusted.
1.9 "Contract" or "Policy" means any life insurance policy, retirement
income or annuity policy, or annuity contract (group or individual) issued
pursuant to the terms of the Plan.
1.10 "Deferred Compensation" with respect to any Participant means the
amount of the Participant's total Compensation which has been contributed to the
Plan in accordance with the Participant's deferral election pursuant to Section
4.2 excluding any such amounts distributed as excess "annual additions" pursuant
to Section 4.10(a).
1.11 "Early Retirement Date" means the first day of the month (prior to the
Normal Retirement Date) coinciding with or following the date on which a
Participant or Former Participant attains age 55. A Participant shall become
fully Vested upon satisfying this requirement if still employed at his Early
Retirement Age.
A Former Participant who terminates employment and who thereafter reaches
the age requirement contained herein shall be entitled to receive his benefits
under this Plan.
1.12 "Elective Contribution" means the Employer's contributions to the Plan
of Deferred Compensation excluding any such amounts distributed as excess
"annual additions" pursuant to Section 4.10(a). In addition, any Employer
Qualified Non-Elective Contribution made pursuant to Section 4.1(c) and Section
4.6 shall be considered an Elective Contribution for purposes of the Plan. Any
such contributions deemed to be Elective Contributions shall be subject to the
requirements of Sections 4.2(b) and 4.2(c) and shall further be required to
satisfy the discrimination requirements of Regulation 1.401(k)-1(b)(5), the
provisions of which are specifically incorporated herein by reference.
1.13 "Eligible Employee" means any Employee.
Employees who are nonresident aliens (within the meaning of Code Section
7701(b)(1)(B)) and who receive no earned income (within the meaning of Code
Section 911(d)(2)) from the Employer which constitutes income from sources
within the United States (within the meaning of Code Section 861(a)(3)) shall
not be eligible to participate in this Plan.
Employees of Affiliated Employers shall not be eligible to participate in
this Plan unless such Affiliated Employers have specifically adopted this Plan
in writing.
1.14 "Employee" means any person who is employed by the Employer or
Affiliated Employer, but excludes any person who is an independent contractor.
Employee shall include Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and such Leased Employees do not constitute
more than 20% of the recipient's non-highly compensated work force.
1.15 "Employer" means Peoples Federal Savings and Loan Association of
Massillon and any successor which shall maintain this Plan; and any predecessor
which has maintained this Plan. The Employer is a corporation, with principal
offices in the State of Ohio.
1.16 "Excess Aggregate Contributions" means, with respect to any Plan Year,
the excess of the aggregate amount of the Employer matching contributions made
pursuant to Section 4.1(b) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.7(c) on behalf of
Highly Compensated Participants for such Plan Year, over the maximum amount of
such contributions permitted under the limitations of Section 4.7(a).
1.17 "Excess Contributions" means, with respect to a Plan Year, the excess
of Elective Contributions made on behalf of Highly Compensated Participants for
the Plan Year over the maximum amount of such contributions permitted under
Section 4.5(a). Excess Contributions shall be treated as an "annual addition"
pursuant to Section 4.9(b).
1.18 "Excess Deferred Compensation" means, with respect to any taxable year
of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 4.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference. Excess Deferred Compensation shall be treated as an "annual
addition" pursuant to Section 4.9(b) when contributed to the Plan unless
-3-
<PAGE>
distributed to the affected Participant not later than the first April 15th
following the close of the Participant's taxable year. Additionally, for
purposes of Sections 2.2 and 4.4(h), Excess Deferred Compensation shall continue
to be treated as Employer contributions even if distributed pursuant to Section
4.2(f). However, Excess Deferred Compensation of Non-Highly Compensated
Participants is not taken into account for purposes of Section 4.5(a) to the
extent such Excess Deferred Compensation occurs pursuant to Section 4.2(d).
1.19 "Family Member" means, with respect to an affected Participant, such
Participant's spouse and such Participant's lineal descendants and ascendants
and their spouses, all as described in Code Section 414(q)(6)(B).
1.20 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Employer and its representative body, and the
Administrator.
1.21 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on October 1st of each year and ending the following September 30th.
1.22 "Forfeiture" means that portion of a Participant's Account that is not
Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Terminated Participant's Account, or
(b) the last day of the Plan Year in which the Participant
incurs five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of a
Terminated Participant whose Vested benefit is zero, such Terminated Participant
shall be deemed to have received a distribution of his Vested benefit upon his
termination of employment. Restoration of such amounts shall occur pursuant to
Section 6.4(g) (2). In addition, the term Forfeiture shall also include amounts
deemed to be Forfeitures pursuant to any other provision of this Plan.
1.23 "Former Participant" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.24 "415 Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments of
compensation by the Employer (in the course of the Employer's trade or business)
for a Plan Year for which the Employer is required to furnish the Participant a
written statement under Code Sections 6041(d), 6051(a)(3) and 6052. "415
Compensation" must be determined without regard to any rules under Code Section
3401(a) that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2)).
If, in connection with the adoption of this amendment and restatement, the
definition of "415 Compensation" has been modified, then, for Plan Years prior
to the Plan Year which includes the adoption date of this amendment and
restatement, "415 Compensation" means compensation determined pursuant to the
Plan then in effect.
1.25 "414(s) Compensation" with respect to any Participant means such
Participant's "415 Compensation" paid during a Plan Year. The amount of "414(s)
Compensation" with respect to any Participant shall include "414(s)
Compensation" for the entire twelve (12) month period ending on the last day of
such Plan Year, except that "414(s) Compensation" shall only be recognized for
that portion of the Plan Year during which an Employee was a Participant in the
Plan.
For purposes of this Section, the determination of "414(s) Compensation"
shall be made by including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not includible in the
gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457, and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
-4-
<PAGE>
"414(s) Compensation" in excess of $200,000 shall be disregarded. Such
amount shall be adjusted at the same time and in such manner as permitted under
Code Section 415(d), except that the dollar increase in effect on January 1 of
any calendar year shall be effective for the Plan Year beginning with or within
such calendar year and the first adjustment to the $200,000 limitation shall be
effective on January 1, 1990. For any short Plan Year the "414(s) Compensation"
limit shall be an amount equal to the "414(s) Compensation" limit for the
calendar year in which the Plan Year begins multiplied by the ratio obtained by
dividing the number of full months in the short Plan Year by twelve (12). In
applying this limitation, the family group of a Highly Compensated Participant
who is subject to the Family Member aggregation rules of Code Section 414(q)(6)
because such Participant is either a "five percent owner" of the Employer or one
of the ten (10) Highly Compensated Employees paid the greatest "415
Compensation" during the year, shall be treated as a single Participant, except
that for this purpose Family Members shall include only the affected
Participant's spouse and any lineal descendants who have not attained age
nineteen (19) before the close of the year.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Code Section 401(a)(17)(B). The cost of living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in this
Plan to the limitation under Code Section 401(a)(17) shall mean the OBRA '93
annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into account in
determining an Employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
If, in connection with the adoption of this amendment and restatement, the
definition of "414(s) Compensation" has been modified, then, for Plan Years
prior to the Plan Year which includes the adoption date of this amendment and
restatement, "414(s) Compensation" means compensation determined pursuant to the
Plan then in effect.
1.26 "Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder, and generally means an Employee
who performed services for the Employer during the "determination year" and is
in one or more of the following groups:
(a) Employees who at any time during the "determination
year" or "look-back year" were "five percent owners" as defined
in Section 1.32(c).
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $50,000 and were
in the Top Paid Group of Employees for the Plan Year.
(d) Employees who during the "look-back year" were
officers of the Employer (as that term is defined within the
meaning of the Regulations under Code Section 416) and received
"415 Compensation" during the "look-back year" from the Employer
greater than 50 percent of the limit in effect under Code Section
415(b)(1)(A) for any such Plan Year. The number of officers shall
be limited to the lesser of (i) 50 employees; or (ii) the greater
of 3 employees or 10 percent of all employees. For the purpose of
determining the number of officers, Employees described in
Section 1.55(a), (b), (c) and (d) shall be excluded, but such
Employees shall still be considered for the purpose of
identifying the particular Employees who are officers. If the
Employer does not have at least one officer whose annual "415
Compensation" is in excess of 50 percent of the Code Section
415(b)(1)(A) limit, then the highest paid officer of the Employer
will be treated as a Highly Compensated Employee.
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(e) Employees who are in the group consisting of the 100
Employees paid the greatest "415 Compensation" during the
"determination year" and are also described in (b), (c) or (d)
above when these paragraphs are modified to substitute
"determination year" for "look-back year."
The "determination year" shall be the Plan Year for which testing is being
performed, and the "look-back year" shall be the immediately preceding
twelve-month period.
For purposes of this Section, the determination of "415 Compensation" shall
be made by including amounts which are contributed by the Employer pursuant to a
salary reduction agreement and which are not includible in the gross income of
the Participant under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457,
and Employee contributions described in Code Section 414(h)(2) that are treated
as Employer contributions. Additionally, the dollar threshold amounts specified
in (b) and (c) above shall be adjusted at such time and in such manner as is
provided in Regulations. In the case of such an adjustment, the dollar limits
which shall be applied are those for the calendar year in which the
"determination year" or "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees who are
non-resident aliens and who received no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Affiliated Employers shall be taken into account as
a single employer and Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are not
covered in any qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Employer's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard to
whether they performed services during the "determination year."
1.27 "Highly Compensated Former Employee" means a former Employee who had a
separation year prior to the "determination year" and was a Highly Compensated
Employee in the year of separation from service or in any "determination year"
after attaining age 55. Notwithstanding the foregoing, an Employee who separated
from service prior to 1987 will be treated as a Highly Compensated Former
Employee only if during the separation year (or year preceding the separation
year) or any year after the Employee attains age 55 (or the last year ending
before the Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner." For purposes
of this Section, "determination year," "415 Compensation" and "five percent
owner" shall be determined in accordance with Section 1.26. Highly Compensated
Former Employees shall be treated as Highly Compensated Employees. The method
set forth in this Section for determining who is a "Highly Compensated Former
Employee" shall be applied on a uniform and consistent basis for all purposes
for which the Code Section 414(q) definition is applicable.
1.28 "Highly Compensated Participant means any Highly Compensated Employee
who is eligible to participate in the Plan.
1.29 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties during the applicable computation period; (2) each
hour for which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period; (3) each hour for
which back pay is awarded or agreed to by the Employer without regard to
mitigation of damages. These hours will be credited to the Employee for the
computation period or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement or payment is made.
The same Hours of Service shall not be credited both under (1) or (2), as the
case may be, and under (3).
Notwithstanding the above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
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<PAGE>
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be made by or
due from the Employer regardless of whether such payment is made by or due from
the Employer directly, or indirectly through, among others, a trust fund, or
insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
An Hour of Service must be counted for the purpose of determining a Year of
Service, a year of participation for purposes of accrued benefits, a 1-Year
Break in Service, and employment commencement date (or reemployment commencement
date). In addition, Hours of Service will be credited for employment with other
Affiliated Employers. The provisions of Department of Labor regulations
2530.200b-2(b) and (c) are incorporated herein by reference.
1.30 "Income" means the income or losses allocable to "excess amounts"
which shall equal the allocable gain or loss for the "applicable computation
period". The income allocable to "excess amounts" for the "applicable
computation period" is determined by multiplying the income for the "applicable
computation period" by a fraction. The numerator of the fraction is the "excess
amount" for the "applicable computation period." The denominator of the fraction
is the total "account balance" attributable to "Employer contributions" as of
the end of the "applicable computation period", reduced by the gain allocable to
such total amount for the "applicable computation period" and increased by the
loss allocable to such total amount for the "applicable computation period". The
provisions of this Section shall be applied:
(a) For purposes of Section 4.2(f), by substituting:
(1) "Excess Deferred Compensation" for "excess amounts";
(2) "taxable year of the Participant" for "applicable
computation period";
(3) "Deferred Compensation" for "Employer contributions";
and
(4) "Participant's Elective Account" for "account balance."
(b) For purposes of Section 4.6(a), by substituting:
(1) "Excess Contributions" for "excess amounts";
(2) "Plan Year" for "applicable computation period";
(3) "Elective Contributions" for "Employer contributions";
and
(4) "Participant's Elective Account" for "account balance."
(c) For purposes of Section 4.8(a), by substituting:
(1) "Excess Aggregate Contributions" for "excess amounts;"
(2) "Plan Year" for "applicable computation period;"
(3) "Employer matching contributions made pursuant to
Section 4.1(b) and any qualified non-elective
contributions or elective deferrals taken into account
pursuant to Section 4.7(c)" for "Employer
contributions;" and
(4) "Participant's Account" for "account balance."
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Income allocable to any distribution of Excess Deferred Compensation on or
before the last day of the taxable year of the Participant shall be calculated
from the first day of the taxable year of the Participant to the date on which
the distribution is made pursuant to either the "fractional method" or the "safe
harbor method." Under such "safe harbor method," allocable Income for such
period shall be deemed to equal ten percent (10%) of the Income allocable to
such Excess Deferred Compensation multiplied by the number of calendar months in
such period. For purposes of determining the number of calendar months in such
period, a distribution occurring on or before the fifteenth day of the month
shall be treated as having been made on the last day of the preceding month and
a distribution occurring after such fifteenth day shall be treated as having
been made on the first day of the next subsequent month.
1.31 "Investment Manager" means an entity that (a) has the power to manage,
acquire, or dispose of Plan assets and (b) acknowledges fiduciary responsibility
to the Plan in writing. Such entity must be a person, firm, or corporation
registered as an investment adviser under the Investment Advisers Act of 1940, a
bank, or an insurance company.
1.32 "Key Employee" means an Employee as defined in Code Section 416(i) and
the Regulations thereunder. Generally, any Employee or former Employee (as well
as each of his Beneficiaries) is considered a Key Employee if he, at any time
during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is defined
within the meaning of the Regulations under Code
Section 416) having annual "415 Compensation" greater
than 50 percent of the amount in effect under Code
Section 415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415
Compensation" from the Employer for a Plan Year greater
than the dollar limitation in effect under Code Section
415(c)(1)(A) for the calendar year in which such Plan
Year ends and owning (or considered as owning within
the meaning of Code Section 318) both more than
one-half percent interest and the largest interests in
the Employer.
(c) a "five percent owner" of the Employer. "Five percent
owner" means any person who owns (or is considered as
owning within the meaning of Code Section 318) more
than five percent (5%) of the outstanding stock of the
Employer or stock possessing more than five percent
(5%) of the total combined voting power of all stock of
the Employer or, in the case of an unincorporated
business, any person who owns more than five percent
(5%) of the capital or profits interest in the
Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated
under Code Sections 414(b), (c), (m) and (o) shall be
treated as separate employers.
(d) a "one percent owner" of the Employer having an annual
"415 Compensation" from the Employer of more than
$150,000. "One percent owner" means any person who owns
(or is considered as owning within the meaning of Code
Section 318) more than one percent (1%) of the
outstanding stock of the Employer or stock possessing
more than one percent (1%) of the total combined voting
power of all stock of the Employer or, in the case of
an unincorporated business, any person who owns more
than one percent (1%) of the capital or profits
interest in the Employer. In determining percentage
ownership hereunder, employers that would otherwise be
aggregated under Code Sections 414(b), (c), (m) and (o)
shall be treated as separate employers. However, in
determining whether an individual has "415
Compensation" of more than $150,000, "415 Compensation"
from each employer required to be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be taken into
account.
For purposes of this Section, the determination of "415 Compensation" shall
be made by including amounts which are contributed by the Employer pursuant to a
salary reduction agreement and which are not includible in the gross income of
the Participant under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457,
and Employee contributions described in Code Section 414(h)(2) that are treated
as Employer contributions.
1.33 "Late Retirement Date" means the first day of the month coinciding
with or next following a Participant's actual Retirement Date after having
reached his Normal Retirement Date.
1.34 "Leased Employee" means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
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the recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are of a type historically performed by employees in the
business field of the recipient employer. Contributions or benefits provided a
Leased Employee by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by the
recipient employer. A Leased Employee shall not be considered an Employee of the
recipient:
(a) if such employee is covered by a money purchase pension
plan providing:
(1) a non-integrated employer contribution rate of at least
10% of compensation, as defined in Code Section
415(c)(3), but including amounts which are contributed
by the Employer pursuant to a salary reduction
agreement and which are not includible in the gross
income of the Participant under Code Sections 125,
402(e)(3), 402(h)(1)(B), 403(b) or 457, and Employee
contributions described in Code Section 414(h)(2) that
are treated as Employer contributions.
(2) immediate participation; and
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than 20% of
the recipient's non-highly compensated work force.
1.35 "Non-Elective Contribution" means the Employer's contributions to the
Plan excluding, however, contributions made pursuant to the Participant's
deferral election provided for in Section 4.2 and any Qualified Non-Elective
Contribution.
1.36 "Non-Highly Compensated Participant" means any Participant who is
neither a Highly Compensated Employee nor a Family Member.
1.37 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.38 "Normal Retirement Age" means the Participant's 65th birthday. A
Participant shall become fully Vested in his Participant's Account upon
attaining his Normal Retirement Age.
1.39 "Normal Retirement Date" means the first day of the month coinciding
with or next following the Participant's Normal Retirement Age.
1.40 "1-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a 1-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and paternity
leaves of absence." Years of Service and 1-Year Breaks in Service shall be
measured on the same computation period.
"Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" means, for Plan Years beginning
after December 31, 1984, an absence from work for any period by reason of the
Employee's pregnancy, birth of the Employee's child, placement of a child with
the Employee in connection with the adoption of such child, or any absence for
the purpose of caring for such child for a period immediately following such
birth or placement. For this purpose, Hours of Service shall be credited for the
computation period in which the absence from work begins, only if credit
therefore is necessary to prevent the Employee from incurring a 1-Year Break in
Service, or, in any other case, in the immediately following computation period.
The Hours of Service credited for a "maternity or paternity leave of absence"
shall be those which would normally have been credited but for such absence, or,
in any case in which the Administrator is unable to determine such hours
normally credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity leave of absence"
shall not exceed 501.
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1.41 "Participant" means any Eligible Employee who participates in the Plan
as provided in Sections 3.2 and 3.3, and has not for any reason become
ineligible to participate further in the Plan.
1.42 "Participant's Account" means the account established and maintained
by the Administrator for each Participant with respect to his total interest in
the Plan and Trust resulting from the Employer's Non-Elective Contributions.
A separate accounting shall be maintained with respect to that portion of
the Participant's Account attributable to Employer matching contributions made
pursuant to Section 4.1(b) and Employer discretionary contributions made
pursuant to Section 4.1(d).
1.43 "Participant's Combined Account" means the total aggregate amount of
each Participant's Elective Account and Participant's Account.
1.44 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer's Elective
Contributions. A separate accounting shall be maintained with respect to that
portion of the Participant's Elective Account attributable to Elective
Contributions pursuant to Section 4.2 and any Employer Qualified Non-Elective
Contributions.
1.45 "Plan" means this instrument, including all amendments thereto.
1.46 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on October 1st of each year and ending the following September 30th.
1.47 "Qualified Non-Elective Contribution" means the Employer's
contributions to the Plan that are made pursuant to Section 4.1(c) and Section
4.6. Such contributions shall be considered an Elective Contribution for the
purposes of the Plan and used to satisfy the "Actual Deferral Percentage" tests.
In addition, the Employer's contributions to the Plan that are made
pursuant to Section 4.8(h) which are used to satisfy the "Actual Contribution
Percentage" tests shall be considered Qualified Non-Elective Contributions and
be subject to the provisions of Sections 4.2(b) and 4.2(c).
1.48 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to time.
1.49 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.50 "Retirement Date" means the date as of which a Participant retires for
reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date, Early or Late Retirement Date
(see Section 6.1).
1.51 "Super Top Heavy Plan" means a plan described in Section 2.2(b).
1.52 "Terminated Participant" means a person who has been a Participant,
but whose employment has been terminated other than by death, Total and
Permanent Disability or retirement.
1.53 "Top Heavy Plan" means a plan described in Section 2.2(a).
1.54 "Top Heavy Plan Year" means a Plan Year during which the Plan is a Top
Heavy Plan.
1.55 "Top Paid Group" means the top 20 percent of Employees who performed
services for the Employer during the applicable year, ranked according to the
amount of "415 Compensation" (determined for this purpose in accordance with
Section 1.26) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased Employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such Leased Employees are covered by a plan described in Code
Section 414(n)(5) and are not covered in any qualified plan maintained by the
Employer. Employees who are non-resident aliens and who received no earned
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income (within the meaning of Code Section 911(d)(2)) from the Employer
constituting United States source income within the meaning of Code Section
861(a)(3) shall not be treated as Employees. Additionally, for the purpose of
determining the number of active Employees in any year, the following additional
Employees shall also be excluded; however, such Employees shall still be
considered for the purpose of identifying the particular Employees in the Top
Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per
week;
(c) Employees who normally work less than six (6) months
during a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the Employer are
covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Employer, and the
Plan covers only Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the identification of particular
Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be applied on a
uniform and consistent basis for all purposes for which the Code Section 414(q)
definition is applicable.
1.56 "Total and Permanent Disability" means a physical or mental condition
of a Participant resulting from bodily injury, disease, or mental disorder which
renders him incapable of continuing his usual and customary employment with the
Employer. The disability of a Participant shall be determined by a licensed
physician chosen by the Administrator. The determination shall be applied
uniformly to all Participants.
1.57 "Trustee" means the person or entity named as trustee herein or in any
separate trust forming a part of this Plan, and any successors.
1.58 "Trust Fund" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.59 "Vested" means the nonforfeitable portion of any account maintained on
behalf of a Participant.
1.60 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at least 1000
Hours of Service.
For purposes of eligibility for participation, the initial computation
period shall begin with the date on which the Employee first performs an Hour of
Service. The participation computation period beginning after a 1-Year Break in
Service shall be measured from the date on which an Employee again performs an
Hour of Service. The participation computation period shall shift to the Plan
Year which includes the anniversary of the date on which the Employee first
performed an Hour of Service. An Employee who is credited with the required
Hours of Service in both the initial computation period (or the computation
period beginning after a 1-Year Break in Service) and the Plan Year which
includes the anniversary of the date on which the Employee first performed an
Hour of Service, shall be credited with two (2) Years of Service for purposes of
eligibility to participate.
For vesting purposes, the computation period shall be the Plan Year,
including periods prior to the Effective Date of the Plan.
For all other purposes, the computation period shall be the Plan Year.
Notwithstanding the foregoing, for any short Plan Year, the determination
of whether an Employee has completed a Year of Service shall be made in
accordance with Department of Labor regulation 2530.203-2(c). However, in
determining whether an Employee has completed a Year of Service for benefit
accrual purposes in the short Plan Year, the number of the Hours of Service
required shall be proportionately reduced based on the number of full months in
the short Plan Year.
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Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special vesting
requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan and the
special minimum allocation requirements of Code Section 416(c) pursuant to
Section 4.4 of the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year in
which, as of the Determination Date, (1) the Present Value of
Accrued Benefits of Key Employees and (2) the sum of the
Aggregate Accounts of Key Employees under this Plan and all plans
of an Aggregation Group, exceeds sixty percent (60%) of the
Present Value of Accrued Benefits and the Aggregate Accounts of
all Key and Non-Key Employees under this Plan and all plans of an
Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year,
but such Participant was a Key Employee for any prior Plan Year,
such Participant's Present Value of Accrued Benefit and/or
Aggregate Account balance shall not be taken into account for
purposes of determining whether this Plan is a Top Heavy or Super
Top Heavy Plan (or whether any Aggregation Group which includes
this Plan is a Top Heavy Group). In addition, if a Participant or
Former Participant has not performed any services for any
Employer maintaining the Plan at any time during the five year
period ending on the Determination Date, any accrued benefit for
such Participant or Former Participant shall not be taken into
account for the purposes of determining whether this Plan is a
Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan
Year in which, as of the Determination Date, (1) the Present
Value of Accrued Benefits of Key Employees and (2) the sum of the
Aggregate Accounts of Key Employees under this Plan and all plans
of an Aggregation Group, exceeds ninety percent (90%) of the
Present Value of Accrued Benefits and the Aggregate Accounts of
all Key and Non-Key Employees under this Plan and all plans of an
Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate Account as
of the Determination Date is the sum of:
(1) his Participant's Combined Account balance as of
the most recent valuation occurring within a twelve (12)
month period ending on the Determination Date;
(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount of
any contributions actually made after the valuation date but
due on or before the Determination Date, except for the
first Plan Year when such adjustment shall also reflect the
amount of any contributions made after the Determination
Date that are allocated as of a date in that first Plan
Year.
(3) any Plan distributions made within the Plan Year
that includes the Determination Date or within the four (4)
preceding Plan Years. However, in the case of distributions
made after the valuation date and prior to the Determination
Date, such distributions are not included as distributions
for top heavy purposes to the extent that such distributions
are already included in the Participant's Aggregate Account
balance as of the valuation date. Notwithstanding anything
herein to the contrary, all distributions, including
distributions made prior to January l, 1984, and
distributions under a terminated plan which if it had not
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been terminated would have been required to be included in
an Aggregation Group, will be counted. Further,
distributions from the Plan (including the cash value of
life insurance policies) of a Participant's account balance
because of death shall be treated as a distribution for the
purposes of this paragraph.
(4) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax deductible
qualified voluntary employee contributions shall not be
considered to be a part of the Participant's Aggregate
Account balance.
(5) with respect to unrelated rollovers and
plan-to-plan transfers (ones which are both initiated by the
Employee and made from a plan maintained by one employer to
a plan maintained by another employer), if this Plan
provides the rollovers or plan-to-plan transfers, it shall
always consider such rollovers or plan-to-plan transfers as
a distribution for the purposes of this Section. If this
Plan is the plan accepting such rollovers or plan-to-plan
transfers, it shall not consider such rollovers or
plan-to-plan transfers as part of the Participant's
Aggregate Account balance.
(6) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or made
to a plan maintained by the same employer), if this Plan
provides the rollover or plan-to-plan transfer, it shall not
be counted as a distribution for purposes of this Section.
If this Plan is the plan accepting such rollover or
plan-to-plan transfer, it shall consider such rollover or
plan-to-plan transfer as part of the Participant's Aggregate
Account balance, irrespective of the date on which such
rollover or plan-to-plan transfer is accepted.
(7) For the purposes of determining whether two
employers are to be treated as the same employer in (5) and
(6) above, all employers aggregated under Code Section
414(b), (c), (m) and (o) are treated as the same employer.
(d) "Aggregation Group" means either a Required Aggregation
Group or a Permissive Aggregation Group as hereinafter
determined.
(1) Required Aggregation Group: In determining a
Required Aggregation Group hereunder, each plan of the
Employer in which a Key Employee is a participant in the
Plan Year containing the Determination Date or any of the
four preceding Plan Years, and each other plan of the
Employer which enables any plan in which a Key Employee
participates to meet the requirements of Code Sections
401(a)(4) or 410, will be required to be aggregated. Such
group shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in
the group will be considered a Top Heavy Plan if the
Required Aggregation Group is a Top Heavy Group. No plan in
the Required Aggregation Group will be considered a Top
Heavy Plan if the Required Aggregation Group is not a Top
Heavy Group.
(2) Permissive Aggregation Group: The Employer may also
include any other plan not required to be included in the
Required Aggregation Group, provided the resulting group,
taken as a whole, would continue to satisfy the provisions
of Code Sections 401(a)(4) and 410. Such group shall be
known as a Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan
that is part of the Required Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation
Group is a Top Heavy Group. No plan in the Permissive
Aggregation Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year shall
be aggregated in order to determine whether such plans are
Top Heavy Plans.
(4) An Aggregation Group shall include any terminated
plan of the Employer if it was maintained within the last
five (5) years ending on the Determination Date.
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(e) "Determination Date" means (a) the last day of the
preceding Plan Year, or (b) in the case of the first Plan Year,
the last day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case of a
defined benefit plan, the Present Value of Accrued Benefit for a
Participant other than a Key Employee, shall be as determined
using the single accrual method used for all plans of the
Employer and Affiliated Employers, or if no such single method
exists, using a method which results in benefits accruing not
more rapidly than the slowest accrual rate permitted under Code
Section 411(b)(1)(C). The determination of the Present Value of
Accrued Benefit shall be determined as of the most recent
valuation date that falls within or ends with the 12-month period
ending on the Determination Date except as provided in Code
Section 416 and the Regulations thereunder for the first and
second plan years of a defined benefit plan.
(g) "Top Heavy Group" means an Aggregation Group in which,
as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key
Employees under all defined benefit plans included in the
group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum determined
for all Participants.
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint and remove
the Trustee and the Administrator from time to time as it deems
necessary for the proper administration of the Plan to assure
that the Plan is being operated for the exclusive benefit of the
Participants and their Beneficiaries in accordance with the terms
of the Plan, the Code, and the Act.
(b) The Employer shall establish a "funding policy and
method," i.e., it shall determine whether the Plan has a short
run need for liquidity (e.g., to pay benefits) or whether
liquidity is a long run goal and investment growth (and stability
of same) is a more current need, or shall appoint a qualified
person to do so. The Employer or its delegate shall communicate
such needs and goals to the Trustee, who shall coordinate such
Plan needs with its investment policy. The communication of such
a "funding policy and method" shall not, however, constitute a
directive to the Trustee as to investment of the Trust Funds.
Such "funding policy and method" shall be consistent with the
objectives of this Plan and with the requirements of Title I of
the Act.
(c) The Employer shall periodically review the performance
of any Fiduciary or other person to whom duties have been
delegated or allocated by it under the provisions of this Plan or
pursuant to procedures established hereunder. This requirement
may be satisfied by formal periodic review by the Employer or by
a qualified person specifically designated by the Employer,
through day-to-day conduct and evaluation, or through other
appropriate ways.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any person,
including, but not limited to, the Employees of the Employer, shall be eligible
to serve as an Administrator. Any person so appointed shall signify his
acceptance by filing written acceptance with the Employer. An Administrator may
resign by delivering his written resignation to the Employer or be removed by
the Employer by delivery of written notice of removal, to take effect at a date
specified therein, or upon delivery to the Administrator if no date is
specified.
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The Employer, upon the resignation or removal of an Administrator, shall
promptly designate in writing a successor to this position. If the Employer does
not appoint an Administrator, the Employer will function as the Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the responsibilities
of each Administrator may be specified by the Employer and accepted in writing
by each Administrator. In the event that no such delegation is made by the
Employer, the Administrators may allocate the responsibilities among themselves,
in which event the Administrators shall notify the Employer and the Trustee in
writing of such action and specify the responsibilities of each Administrator.
The Trustee thereafter shall accept and rely upon any documents executed by the
appropriate Administrator until such time as the Employer or the Administrators
file with the Trustee a written revocation of such designation.
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the Plan
for the exclusive benefit of the Participants and their Beneficiaries, subject
to the specific terms of the Plan. The Administrator shall administer the Plan
in accordance with its terms and shall have the power and discretion to construe
the terms of the Plan and to determine all questions arising in connection with
the administration, interpretation, and application of the Plan. Any such
determination by the Administrator shall be conclusive and binding upon all
persons. The Administrator may establish procedures, correct any defect, supply
any information, or reconcile any inconsistency in such manner and to such
extent as shall be deemed necessary or advisable to carry out the purpose of the
Plan; provided, however, that any procedure, discretionary act, interpretation
or construction shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the intent that the
Plan shall continue to be deemed a qualified plan under the terms of Code
Section 401(a), and shall comply with the terms of the Act and all regulations
issued pursuant thereto. The Administrator shall have all powers necessary or
appropriate to accomplish his duties under this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions relating
to the eligibility of Employees to participate or remain a
Participant hereunder and to receive benefits under the
Plan;
(b) to compute, certify, and direct the Trustee with
respect to the amount and the kind of benefits to which any
Participant shall be entitled hereunder;
(c) to authorize and direct the Trustee with respect to
all nondiscretionary or otherwise directed disbursements
from the Trust;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and to make
and publish such rules for regulation of the Plan as are
consistent with the terms hereof;
(f) to determine the size and type of any Contract to
be purchased from any insurer, and to designate the insurer
from which such Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or
desirable to be contributed to the Plan;
(h) to consult with the Employer and the Trustee
regarding the short and long-term liquidity needs of the
Plan in order that the Trustee can exercise any investment
discretion in a manner designed to accomplish specific
objectives;
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(i) to prepare and implement a procedure to notify
Eligible Employees that they may elect to have a portion of
their Compensation deferred or paid to them in cash;
(j) to assist any Participant regarding his rights,
benefits, or elections available under the Plan.
2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall keep
all other books of account, records, and other data that may be necessary for
proper administration of the Plan and shall be responsible for supplying all
information and reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and others as required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the Administrator,
may appoint counsel, specialists, advisers, and other persons as the
Administrator or the Trustee deems necessary or desirable in connection with the
administration of this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the Employer shall
supply full and timely information to the Administrator on all matters relating
to the Compensation of all Participants, their Hours of Service, their Years of
Service, their retirement, death, disability, or termination of employment, and
such other pertinent facts as the Administrator may require; and the
Administrator shall advise the Trustee of such of the foregoing facts as may be
pertinent to the Trustee's duties under the Plan. The Administrator may rely
upon such information as is supplied by the Employer and shall have no duty or
responsibility to verify such information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund unless
paid by the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, including, but not limited to, fees of
accountants, counsel, and other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall constitute a liability of
the Trust Fund. However, the Employer may reimburse the Trust Fund for any
administration expense incurred.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of administrative
authority pursuant to Section 2.5, if there shall be more than one
Administrator, they shall act by a majority of their number, but may authorize
one or more of them to sign all papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within 90 days after the application is filed. In the event the
claim is denied, the reasons for the denial shall be specifically set forth in
the notice in language calculated to be understood by the claimant, pertinent
provisions of the Plan shall be cited, and, where appropriate, an explanation as
to how the claimant can perfect the claim will be provided. In addition, the
claimant shall be furnished with an explanation of the Plan's claims review
procedure.
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2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section 2.12
shall be entitled to request the Administrator to give further consideration to
his claim by filing with the Administrator (on a form which may be obtained from
the Administrator) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim should be
allowed, shall be filed with the Administrator no later than 60 days after
receipt of the written notification provided for in Section 2.12. The
Administrator shall then conduct a hearing within the next 60 days, at which the
claimant may be represented by an attorney or any other representative of his
choosing and at which the claimant shall have an opportunity to submit written
and oral evidence and arguments in support of his claim. At the hearing (or
prior thereto upon 5 business days written notice to the Administrator) the
claimant or his representative shall have an opportunity to review all documents
in the possession of the Administrator which are pertinent to the claim at issue
and its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed six (6) Months of Service and has
attained age 21 shall be eligible to participate hereunder as of the date he has
satisfied such requirements. However, any Employee who was a Participant in the
Plan prior to the effective date of this amendment and restatement shall
continue to participate in the Plan. The Employer shall give each prospective
Eligible Employee written notice of his eligibility to participate in the Plan
prior to the close of the Plan Year in which he first becomes an Eligible
Employee.
For purposes of this Section, an Eligible Employee will be deemed to have
completed six (6) Months of Service if he is in the employ of the Employer at
any time six (6) months after his employment commencement date. Employment
commencement date shall be the first day that he is entitled to be credited with
an Hour of Service for the performance of duty.
3.2 APPLICATION FOR PARTICIPATION
In order to become a Participant hereunder, each Eligible Employee shall
make application to the Employer for participation in the Plan and agree to the
terms hereof. Upon the acceptance of any benefits under this Plan, such Employee
shall automatically be deemed to have made application and shall be bound by the
terms and conditions of the Plan and all amendments hereto.
3.3 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as of the first
day of the month coinciding with or next following the date on which such
Employee met the eligibility requirements of Section 3.1, provided said Employee
was still employed as of such date (or if not employed on such date, as of the
date of rehire if a 1-Year Break in Service has not occurred).
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In the event an Employee who is not a member of an eligible class of
Employees becomes a member of an eligible class, such Employee will participate
immediately if such Employee has satisfied the minimum age and service
requirements and would have otherwise previously become a Participant.
3.4 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer. Such
determination shall be conclusive and binding upon all persons, as long as the
same is made pursuant to the Plan and the Act. Such determination shall be
subject to review per Section 2.13.
3.5 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a
classification of an Eligible Employee to an ineligible Employee,
such Former Participant shall continue to vest in his interest in
the Plan for each Year of Service completed while a noneligible
Employee, until such time as his Participant's Account shall be
forfeited or distributed pursuant to the terms of the Plan.
Additionally, his interest in the Plan shall continue to share in
the earnings of the Trust Fund.
(b) In the event a Participant is no longer a member of an
eligible class of Employees and becomes ineligible to participate
but has not incurred a 1-Year Break in Service, such Employee
will participate immediately upon returning to an eligible class
of Employees. If such Participant incurs a 1-Year Break in
Service, eligibility will be determined under the break in
service rules of the Plan.
3.6 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a Participant
in the Plan is erroneously omitted and discovery of such omission is not made
until after a contribution by his Employer for the year has been made, the
Employer shall make a subsequent contribution with respect to the omitted
Employee in the amount which the said Employer would have contributed with
respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any taxable
year under applicable provisions of the Code.
3.7 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made, the
Employer shall not be entitled to recover the contribution made with respect to
the ineligible person regardless of whether or not a deduction is allowable with
respect to such contribution. In such event, the amount contributed with respect
to the ineligible person shall constitute a Forfeiture (except for Deferred
Compensation which shall be distributed to the ineligible person) for the Plan
Year in which the discovery is made.
3.8 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect voluntarily
not to participate in the Plan. The election not to participate must be
communicated to the Employer, in writing, at least thirty (30) days before the
beginning of a Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
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(a) The amount of the total salary reduction elections of all
Participants made pursuant to Section 4.2(a), which amount shall be deemed
an Employer's Elective Contribution.
(b) On behalf of each Participant who is eligible to share in matching
contributions for the Plan Year, a discretionary matching contribution
equal to a percentage of each such Participant's Deferred Compensation, the
exact percentage to be determined each year by the Employer, which amount
shall be deemed an Employer's Non-Elective Contribution.
In applying the matching percentage specified above, only salary
reductions up to 6% of Compensation shall be considered; except however,
effective January 17, 1994, such 6% shall be increased to 10%.
(c) On behalf of each Non-Highly Compensated Participant who is
eligible to share in the Qualified Non-Elective Contribution for the Plan
Year, a discretionary Qualified Non-Elective Contribution equal to a
percentage of each eligible individual's Compensation, the exact percentage
to be determined each year by the Employer. The Employer's Qualified
Non-Elective Contribution shall be deemed an Employer's Elective
Contribution.
(d) A discretionary amount, which amount shall be deemed an Employer's
Non-Elective Contribution.
(e) Notwithstanding the foregoing, however, the Employer's
contributions for any Plan Year shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code
Section 404. All contributions by the Employer shall be made in cash or in
such property as is acceptable to the Trustee.
(f) Except, however, to the extent necessary to provide the top heavy
minimum allocations, the Employer shall make a contribution even if it
exceeds the amount which is deductible under Code Section 404.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer from 1% to 20% of his
Compensation which would have been received in the Plan Year, but for the
deferral election. A deferral election (or modification of an earlier
election) may not be made with respect to Compensation which is currently
available on or before the date the Participant executed such election.
The amount by which Compensation is reduced shall be that
Participant's Deferred Compensation and be treated as an Employer Elective
Contribution and allocated to that Participant's Elective Account.
(b) The balance in each Participant's Elective Account shall be fully
Vested at all times and shall not be subject to Forfeiture for any reason.
(c) Amounts held in the Participant's Elective Account may not be
distributable earlier than:
(1) a Participant's termination of employment, Total and
Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the establishment or
existence of a "successor plan," as that term is described in
Regulation 1.401(k)-1(d)(3);
(4) the date of disposition by the Employer to an entity that is
not an Affiliated Employer of substantially all of the assets (within
the meaning of Code Section 409(d)(2)) used in a trade or business of
such
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corporation if such corporation continues to maintain this Plan after
the disposition with respect to a Participant who continues employment
with the corporation acquiring such assets; or
(5) the date of disposition by the Employer or an Affiliated
Employer who maintains the Plan of its interest in a subsidiary
(within the meaning of Code Section 409(d)(3)) to an entity which is
not an Affiliated Employer but only with respect to a Participant who
continues employment with such subsidiary.
(d) For each Plan Year beginning after December 31, 1987, a
Participant's Deferred Compensation made under this Plan and all other
plans, contracts or arrangements of the Employer maintaining this Plan
shall not exceed, during any taxable year of the Participant, the
limitation imposed by Code Section 402(g), as in effect at the beginning of
such taxable year. If such dollar limitation is exceeded, a Participant
will be deemed to have notified the Administrator of such excess amount
which shall be distributed in a manner consistent with Section 4.2(f). The
dollar limitation shall be adjusted annually pursuant to the method
provided in Code Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship distribution
pursuant to Regulation 1.401(k)-1(d)(2)(iv)(B) from any other plan
maintained by the Employer, then such Participant shall not be permitted to
elect to have Deferred Compensation contributed to the Plan on his behalf
for a period of twelve (12) months following the receipt of the
distribution. Furthermore, the dollar limitation under Code Section 402(g)
shall be reduced, with respect to the Participant's taxable year following
the taxable year in which the hardship distribution was made, by the amount
of such Participant's Deferred Compensation, if any, pursuant to this Plan
(and any other plan maintained by the Employer) for the taxable year of the
hardship distribution.
(f) If a Participant's Deferred Compensation under this Plan together
with any elective deferrals (as defined in Regulation 1.402(g)-1(b)) under
another qualified cash or deferred arrangement (as defined in Code Section
401(k)), a simplified employee pension (as defined in Code Section 408(k)),
a salary reduction arrangement (within the meaning of Code Section
3121(a)(5)(D)), a deferred compensation plan under Code Section 457, or a
trust described in Code Section 501(c)(18) cumulatively exceed the
limitation imposed by Code Section 402(g) (as adjusted annually in
accordance with the method provided in Code Section 415(d) pursuant to
Regulations) for such Participant's taxable year, the Participant may, not
later than March 1 following the close of the Participant's taxable year,
notify the Administrator in writing of such excess and request that his
Deferred Compensation under this Plan be reduced by an amount specified by
the Participant. In such event, the Administrator may direct the Trustee to
distribute such excess amount (and any Income allocable to such excess
amount) to the Participant not later than the first April 15th following
the close of the Participant's taxable year. Distributions in accordance
with this paragraph may be made for any taxable year of the Participant
which begins after December 31, 1986. Any distribution of less than the
entire amount of Excess Deferred Compensation and Income shall be treated
as a pro rata distribution of Excess Deferred Compensation and Income. The
amount distributed shall not exceed the Participant's Deferred Compensation
under the Plan for the taxable year. Any distribution on or before the last
day of the Participant's taxable year must satisfy each of the following
conditions:
(1) the distribution must be made after the date on which the
Plan received the Excess Deferred Compensation;
(2) the Participant shall designate the distribution as Excess
Deferred Compensation; and
(3) the Plan must designate the distribution as a distribution of
Excess Deferred Compensation.
Any distribution made pursuant to this Section 4.2(f) shall be made
first from unmatched Deferred Compensation and, thereafter, simultaneously
from Deferred Compensation which is matched and matching contributions
which relate to such Deferred Compensation. However, any such matching
contributions which are not Vested shall be forfeited in lieu of being
distributed.
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(g) Notwithstanding Section 4.2(f) above, a Participant's Excess
Deferred Compensation shall be reduced, but not below zero, by any
distribution of Excess Contributions pursuant to Section 4.6(a) for the
Plan Year beginning with or within the taxable year of the Participant.
(h) At Normal Retirement Date, or such other date when the Participant
shall be entitled to receive benefits, the fair market value of the
Participant's Elective Account shall be used to provide additional benefits
to the Participant or his Beneficiary.
(i) All amounts allocated to a Participant's Elective Account may be
treated as a Directed Investment Account pursuant to Section 4.12.
(j) Employer Elective Contributions made pursuant to this Section may
be segregated into a separate account for each Participant in a federally
insured savings account, certificate of deposit in a bank or savings and
loan association, money market certificate, or other short-term debt
security acceptable to the Trustee until such time as the allocations
pursuant to Section 4.4 have been made.
(k) The Employer and the Administrator shall implement the salary
reduction elections provided for herein in accordance with the following:
(1) A Participant may commence making elective deferrals to the
Plan only after first satisfying the eligibility and participation
requirements specified in Article III. However, the Participant must
make his initial salary deferral election within a reasonable time,
not to exceed thirty (30) days, after entering the Plan pursuant to
Section 3.3. If the Participant fails to make an initial salary
deferral election within such time, then such Participant may
thereafter make an election in accordance with the rules governing
modifications. The Participant shall make such an election by entering
into a written salary reduction agreement with the Employer and filing
such agreement with the Administrator. Such election shall initially
be effective beginning with the pay period following the acceptance of
the salary reduction agreement by the Administrator, shall not have
retroactive effect and shall remain in force until revoked.
(2) A Participant may modify a prior election during the Plan
Year and concurrently make a new election by filing a written notice
with the Administrator within a reasonable time before the pay period
for which such modification is to be effective. However, modifications
to a salary deferral election shall only be permitted quarterly,
during election periods established by the Administrator prior to the
first day of each Plan Year quarter. Any modification shall not have
retroactive effect and shall remain in force until revoked.
(3) A Participant may elect to prospectively revoke his salary
reduction agreement in its entirety at any time during the Plan Year
by providing the Administrator with thirty (30) days written notice of
such revocation (or upon such shorter notice period as may be
acceptable to the Administrator). Such revocation shall become
effective as of the beginning of the first pay period coincident with
or next following the expiration of the notice period. Furthermore,
the termination of the Participant's employment, or the cessation of
participation for any reason, shall be deemed to revoke any salary
reduction agreement then in effect, effective immediately following
the close of the pay period within which such termination or cessation
occurs.
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution to the
Plan for each Plan Year within the time prescribed by law, including extensions
of time, for the filing of the Employer's federal income tax return for the
Fiscal Year.
However, Employer Elective Contributions accumulated through payroll
deductions shall be paid to the Trustee as of the earliest date on which such
contributions can reasonably be segregated from the Employer's general assets,
but in any event within ninety (90) days from the date on which such amounts
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would otherwise have been payable to the Participant in cash. The provisions of
Department of Labor regulations 2510.3-102 are incorporated herein by reference.
Furthermore, any additional Employer contributions which are allocable to the
Participant's Elective Account, for a Plan Year shall be paid to the Plan no
later than the twelve-month period immediately following the close of such Plan
Year.
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an
account in the name of each Participant to which the
Administrator shall credit as of each Anniversary Date all
amounts allocated to each such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper
allocation of the Employer's contributions for each Plan year.
Within a reasonable time after the receipt by the Administrator
of such information, the Administrator shall allocate such
contribution as follows:
(1) With respect to the Employer's Elective Contribution
made pursuant to Section 4.1(a), to each Participant's
Elective Account in an amount equal to each such
Participant's Deferred Compensation for the year.
(2) With respect to the Employer's Non-Elective
Contribution made pursuant to Section 4.1(b), to each
Participant's Account in accordance with Section 4.1(b).
Any Participant actively employed during the Plan Year
shall be eligible to share in the matching contribution
for the Plan Year. However, with respect to Plan Years
beginning after December 31, 1989, in lieu of the
foregoing, only Participants who are actively employed
during the Plan Year shall be eligible to share in the
matching contribution for the year.
(3) With respect to the Employer's Qualified Non-Elective
Contribution made pursuant to Section 4.1(c), to each
Participant's Elective Account in accordance with Section
4.1(c).
Only Non-Highly Compensated Participants who have
completed a Year of Service during the Plan Year and are
actively employed on the last day of the Plan Year shall
be eligible to share in the Qualified Non-Elective
Contribution for the year.
Only Participants who have completed a Year of Service
during the Plan Year and are actively employed on the last
day of the Plan Year shall be eligible to share in the
discretionary contribution for the year.
(4) With respect to the Employer's Non-Elective
Contribution made pursuant to Section 4.1(d), to each
Participant's Non-Elective account in the following
manner:
(i) For any Plan Year in which this Plan is
determined to be Top Heavy, the contribution shall
be credited to each Participant's account in an
amount sufficient to meet the minimum allocation
requirement of Section 4.4(h)
(ii) The balance of the Employer's discretionary
contribution over the amount allocated under
subparagraph (i) hereof shall be allocated to the
Account of each Participant who is a Key Employee
("Key Employee") in a uniform percentage of
compensation in such a manner that the total
allocation to that Participant's Account (including
subparagraph (i)) does not exceed the lesser of (a)
the Participant's annual addition limitation under
Section 415 of the Code, or (b) the "Maximum
Permitted Allocation Under Section 401(a)(4) of the
Code" as described below. If the allocation to a
Key Employee equals the annual addition limitation
under Section 415 of the Code, allocation shall
continue to be made in accordance with this Section
to the remaining Key Employees until the entire
amount of Employer Contribution is allocated. If
the Employer does not contribute a sufficient
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amount to make such an allocation for all Key
Employees, equal to the lesser of (a) the
Participant's annual addition limitation under
Section 415 of the Code, or (b) the "Maximum
Permitted Allocation Under Section 401(a)(4) of the
Code" as described below, each Key Employee will be
allocated a share of the contribution in the same
proportion that his Compensation bears to the total
Compensation of all Key Employees.
(iii) If the entire amount of the Employer's
discretionary contribution has not yet been
allocated, then the balance of the Employer's
contribution over the amount allocated under
subparagraphs (i) and (ii) hereof shall be
allocated to the Account of each Participant in a
dollar amount equal to .10% of each Participant's
total Compensation. If the Employer does not
contribute a sufficient amount to make such an
allocation for all Participants, each Participant
will be allocated a share of the contribution made
in the same proportion that his total Compensation
for the Plan Year bears to the total Compensation
of all Participants for that year.
(iv) The allocation steps set forth in paragraphs
(ii) and (iii) shall be repeated until the balance
of the Employer's discretionary contribution is
fully allocated.
For purposes of this Section, the "Maximum Permitted Allocation Under
Section 401(a)(4) of the Code" means the highest percentage of Plan Compensation
rounded to the next lower multiple of 10% of the Participant's Plan Compensation
that may be used without causing the plan to fail the test under Treasury
Regulation Section 1.401(a)(4)-8(b)(1) using equivalent accrual rates determined
pursuant to Treasury Regulation Sections 1.401(a)(4)8(b)(2)(i)(A), (B), and (C).
In applying Treasury Regulation Section 1.401(a)(4)-8(b)(2)(i)(b), the following
actuarial assumptions shall be used:
(A) The interest rate to "Normalize each amount..." and for the
annuity factor shall be 8.5% per annum;
(B) The mortality table for the annuity factor shall be the 1983
Individual Annuity Mortality Table (1983 IAM) (Female).
In applying Treasury Regulation Section 1.401(a)(4)8(b)(2)(i)(C), the
percentage of the Participant's testing Compensation shall be used. Permitted
disparity under Treasury Regulation Section 1.401(a)(4)-8(b)(2)(i)(D) shall not
be used. The grouping rules under Treasury Regulation Section
1.401(a)(4)8(b)(2)(i)(E) shall not be used. (All references to Treasury
Regulations are as published in TD 8360, filed September 12, 1991; corrected by
the Federal Register February 7, 1992.) These regulations are being used in
order to assure that the allocation hereunder is in accordance with a definite
predetermined formula.
(c) As of each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date shall first be made
available to reinstate previously forfeited account balances of
Former Participants, if any, in accordance with Section
6.4(g)(2). The remaining Forfeitures, if any, shall be allocated
to Participants' Accounts in the following manner:
(1) Forfeitures attributable to Employer matching
contributions made pursuant to Section 4.1(b) shall be
allocated among the Participants' Accounts in the same
proportion that each such Participant's Compensation for the
year bears to the total Compensation of all Participants for
the year.
Except, however, Participants who are not eligible to
share in matching contributions (whether or not a deferral
election was made or suspended pursuant to Section 4.2(e))
for a Plan Year shall not share in Plan Forfeitures
attributable to Employer matching contributions for that
year.
(2) Forfeitures attributable to Employer discretionary
contributions made pursuant to Section 4.1(d) shall be added
to the Employer's discretionary contribution for the Plan
Year in which such Forfeitures occur and allocated among the
Participants' Accounts in the same manner as the Employer's
discretionary contributions.
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Provided, however, that in the event the allocation of
Forfeitures provided herein shall cause the "annual
addition" (as defined in Section 4.9) to any Participant's
Account to exceed the amount allowable by the Code, the
excess shall be reallocated in accordance with Section 4.10.
(d) For any Top Heavy Plan Year, Employees not
otherwise eligible to share in the allocation of
contributions and Forfeitures as provided above, shall
receive the minimum allocation provided for in Section
4.4(h) if eligible pursuant to the provisions of Section
4.4(j).
(e) Notwithstanding the foregoing, Participants who are
not actively employed on the last day of the Plan Year due
to Retirement (Early, Normal or Late), Total and Permanent
Disability or death shall share in the allocation of
contributions and Forfeitures for that Plan Year.
(f) As of each Anniversary Date or other valuation
date, any earnings or losses (net appreciation or net
depreciation) of the Trust Fund shall be allocated in the
same proportion that each Participant's and Former
Participant's time weighted average (based on beginning year
base) nonsegregated accounts bear to the total of all
Participants' and Former Participants' time weighted average
(based on beginning year base) nonsegregated accounts as of
such date.
Participants' transfers from other qualified plans
deposited in the general Trust Fund shall share in any
earnings and losses (net appreciation or net depreciation)
of the Trust Fund in the same manner provided above. Each
segregated account maintained on behalf of a Participant
shall be credited or charged with its separate earnings and
losses.
(g) Participants' accounts shall be debited for any
insurance or annuity premiums paid, if any, and credited
with any dividends received on insurance contracts.
(h) Minimum Allocations Required for Top Heavy Plan
Years: Notwithstanding the foregoing, for any Top Heavy Plan
Year, the sum of the Employer's contributions and
Forfeitures allocated to the Participant's Combined Account
of each Employee shall be equal to at least three percent
(3%) of such Employee's "415 Compensation" (reduced by
contributions and forfeitures, if any, allocated to each
Employee in any defined contribution plan included with this
plan in a Required Aggregation Group). However, if (1) the
sum of the Employer's contributions and Forfeitures
allocated to the Participant's Combined Account of each Key
Employee for such Top Heavy Plan Year is less than three
percent (3%) of each Key Employee's "415 Compensation" and
(2) this Plan is not required to be included in an
Aggregation Group to enable a defined benefit plan to meet
the requirements of Code Section 401(a)(4) or 410, the sum
of the Employer's contributions and Forfeitures allocated to
the Participant's Combined Account of each Employee shall be
equal to the largest percentage allocated to the
Participant's Combined Account of any Key Employee. However,
in determining whether a Non-Key Employee has received the
required minimum allocation, such Non-Key Employee's
Deferred Compensation and matching contributions needed to
satisfy the "Actual Contribution Percentage" tests pursuant
to Section 4.7(a) shall not be taken into account.
However, no such minimum allocation shall be required
in this Plan for any Employee who participates in another
defined contribution plan subject to Code Section 412
providing such benefits included with this Plan in a
Required Aggregation Group.
(i) For purposes of the minimum allocations set forth
above, the percentage allocated to the Participant's
Combined Account of any Key Employee shall be equal to the
ratio of the sum of the Employer's contributions and
Forfeitures allocated on behalf of such Key Employee divided
by the "415 Compensation" for such Key Employee.
(j) For any Top Heavy Plan Year, the minimum
allocations set forth above shall be allocated to the
Participant's Combined Account of all Employees who are
Participants and who are employed by the Employer on the
last day of the Plan Year, including Employees who have (1)
failed to complete a Year of Service; and (2) declined to
make mandatory contributions (if required) or, in the case
of a cash or deferred arrangement, elective contributions to
the Plan.
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(k) In lieu of the above, in any Plan Year in which an
Employee is a Participant in both this Plan and a defined
benefit pension plan included in a Required Aggregation
Group which is top heavy, the Employer shall not be required
to provide such Employee with both the full separate defined
benefit plan minimum benefit and the full separate defined
contribution plan minimum allocation.
Therefore, for any Plan Year when the Plan is a Top
Heavy Plan, an Employee who is participating in this Plan
and a defined benefit plan maintained by the Employer shall
receive a minimum monthly accrued benefit in the defined
benefit plan equal to the product of (1) one-twelfth
(1/12th) of "415 Compensation" averaged over the five (5)
consecutive "limitation years" (or actual "limitation
years," if less) which produce the highest average and (2)
the lesser of (i) two percent (2%) multiplied by years of
service when the plan is top heavy or (ii) twenty percent
(20%). Further, the extra minimum allocation (required by
Section 4.9(m) to provide higher limitations) shall not be
provided.
(1) For the purposes of this Section, "415
Compensation" shall be limited to $200,000. Such amount
shall be adjusted at the same time and in the same manner as
permitted under Code Section 415(d), except that the dollar
increase in effect on January 1 of any calendar year shall
be effective for the Plan Year beginning with or within such
calendar year and the first adjustment to the $200,000
limitation shall be effective on January 1, 1990. For any
short Plan Year the "415 Compensation" limit shall be an
amount equal to the "415 Compensation" limit for the
calendar year in which the Plan Year begins multiplied by
the ratio obtained by dividing the number of full months in
the short Plan Year by twelve (12). However, for Plan Years
beginning prior to January l, 1989, the $200,000 limit shall
apply only for Top Heavy Plan Years and shall not be
adjusted.
In addition to other applicable limitations set forth
in the Plan, and notwithstanding any other provision of the
Plan to the contrary, for Plan Years beginning on or after
January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA
'93 annual compensation limit. The OBRA '93 annual
compensation limit is $150,000, as adjusted by the
Commissioner for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). The cost of
living adjustment in effect for a calendar year applies to
any period, not exceeding 12 months, over which Compensation
is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer
than 12 months, the OBRA '93 annual compensation limit will
be multiplied by a fraction, the numerator of which is the
number of months in the determination period, and the
denominator of which is 12.
For Plan Years beginning on or after January 1, 1994,
any reference in this Plan to the limitation under Code
Section 401(a)(17) shall mean the OBRA '93 annual
compensation limit set forth in this provision.
If Compensation for any prior determination period is
taken into account in determining an Employee's benefits
accruing in the current Plan Year, the Compensation for that
prior determination period is subject to the OBRA '93 annual
compensation limit in effect for that prior determination
period. For this purpose, for determination periods
beginning before the first day of the first Plan Year
beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
(m) Notwithstanding anything herein to the contrary,
Participants who terminated employment for any reason during
the Plan Year shall share in the salary reduction
contributions made by the Employer for the year of
termination without regard to the Hours of Service credited.
(n) If a Former Participant is reemployed after five
(5) consecutive 1-Year Breaks in Service, then separate
accounts shall be maintained as follows:
(1) one account for nonforfeitable benefits attributable to
pre-break service; and
(2) one account representing his status in the Plan
attributable to post-break service.
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(o) Notwithstanding anything to the contrary, for Plan
Years beginning after December 31, 1989, if this is a Plan
that would otherwise fail to meet the requirements of Code
Sections 401(a)(26), 410(b)(1) or 410(b)(2)(A)(i) and the
Regulations thereunder because Employer contributions would
not be allocated to a sufficient number or percentage of
Participants for a Plan Year, then the following rules shall
apply:
(1) The group of Participants eligible to share in the
Employer's contribution and Forfeitures for the Plan
Year shall be expanded to include the minimum number of
Participants who would not otherwise be eligible as are
necessary to satisfy the applicable test specified
above. The specific Participants who shall become
eligible under the terms of this paragraph shall be
those who are actively employed on the last day of the
Plan Year and, when compared to similarly situated
Participants, have completed the greatest number of
Hours of Service in the Plan Year.
(2) If after application of paragraph (1) above, the
applicable test is still not satisfied, then the group
of Participants eligible to share in the Employer's
contribution and Forfeitures for the Plan Year shall be
further expanded to include the minimum number of
Participants who are not actively employed on the last
day of the Plan Year as are necessary to satisfy the
applicable test. The specific Participants who shall
become eligible to share shall be those Participants,
when compared to similarly situated Participants, who
have completed the greatest number of Hours of Service
in the Plan Year before terminating employment.
(3) Nothing in this Section shall permit the reduction of a
Participant's accrued benefit. Therefore any amounts
that have previously been allocated to Participants may
not be reallocated to satisfy these requirements. In
such event, the Employer shall make an additional
contribution equal to the amount such affected
Participants would have received had they been included
in the allocations, even if it exceeds the amount which
would be deductible under Code Section 404. Any
adjustment to the allocations pursuant to this
paragraph shall be considered a retroactive amendment
adopted by the last day of the Plan Year.
(4) Notwithstanding the foregoing, for any Top Heavy Plan
Year beginning after December 31, 1992, if the portion
of the Plan which is not a Code Section 401(k) or
401(m) plan would fail to satisfy Code Section 410(b)
if the coverage tests were applied by treating those
Participants whose only allocation (under such portion
of the would otherwise be provided under the top heavy
formula as if they were not currently benefiting under
the Plan, then, for purposes of this Section 4.4(o),
such Participants shall be treated as not benefiting
and shall therefore be eligible to be included in the
expanded class of Participants who will share in the
allocation provided under the Plan's non top heavy
formula.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year beginning after
December 31, 1986, the annual allocation derived from Employer
Elective Contributions to a Participant's Elective Account shall
satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not be more than the "Actual
Deferral Percentage" of the Non-Highly Compensated Participant
group multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the
Highly Compensated Participant group over the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
shall not be more than two percentage points. Additionally, the
"Actual Deferral Percentage" for the Highly Compensated
Participant group shall not exceed the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
multiplied by 2. The provisions of Code Section 401(k)(3) and
Regulation 1.401(k)-1(b) are incorporated herein by reference.
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<PAGE>
However, for Plan Years beginning after December 31, 1988,
in order to prevent the multiple use of the alternative
method described in (2) above and in Code Section
401(m)(9)(A), any Highly Compensated Participant eligible
to make elective deferrals pursuant to Section 4.2 and to
make Employee contributions or to receive matching
contributions under this Plan or under any other plan
maintained by the Employer or an Affiliated Employer shall
have his actual contribution ratio reduced pursuant to
Regulation 1.401(m)-2, the provisions of which are
incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral
Percentage" means, with respect to the Highly Compensated
Participant group and Non-Highly Compensated Participant group
for a Plan Year, the average of the ratios, calculated separately
for each Participant in such group, of the amount of Employer
Elective Contributions allocated to each Participant's Elective
Account for such Plan Year, to such Participant's "414(s)
Compensation" for such Plan Year. The actual deferral ratio for
each Participant and the "Actual Deferral Percentage" for each
group shall be calculated to the nearest one-hundredth of one
percent for Plan Years beginning after December 31, 1988.
Employer Elective Contributions allocated to each Non-Highly
Compensated Participant's Elective Account shall be reduced by
Excess Deferred Compensation to the extent such excess amounts
are made under this Plan or any other plan maintained by the
Employer.
(c) For the purpose of determining the actual deferral
ratio of a Highly Compensated Employee who is subject to the
Family Member aggregation rules of Code Section 414(q)(6) because
such Participant is either a "five percent owner" of the Employer
or one of the ten (10) Highly Compensated Employees paid the
greatest "415 Compensation" during the year, the following shall
apply:
(1) The combined actual deferral ratio for the family
group (which shall be treated as one Highly Compensated
Participant) shall be determined by aggregating Employer
Elective Contributions and "414(s) Compensation" of all
eligible Family Members (including Highly Compensated
Participants). However, in applying the $200,000 limit to
"414(s) Compensation," for Plan Years beginning after
December 31, 1988, Family Members shall include only the
affected Employee's spouse and any lineal descendants who
have not attained age 19 before the close of the Plan
Year. Notwithstanding the foregoing, with respect to Plan
Years beginning prior to January l, 1990, compliance with
the Regulations then in effect shall be deemed to be
compliance with this paragraph.
(2) The Employer Elective Contributions and "414(s)
Compensation" of all Family Members shall be disregarded
for purposes of determining the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant
group except to the extent taken into account in paragraph
(1) above.
(3) If a Participant is required to be aggregated as a
member of more than one family group in a plan, all
Participants who are members of those family groups that
include the Participant are aggregated as one family group
in accordance with paragraphs (1) and (2) above.
(d) For the purposes of Sections 4.5(a) and 4.6, a Highly
Compensated Participant and a Non-Highly Compensated Participant
shall include any Employee eligible to make a deferral election
pursuant to Section 4.2, whether or not such deferral election
was made or suspended pursuant to Section 4.2.
(e) For the purposes of this Sect ion and Code Sections
401(a)(4), 410(b) and 401(k), if two or more plans which include
cash or deferred arrangements are considered one plan for the
purposes of Code Section 401(a)(4) or 410(b) (other than Code
Section 410(b)(2)(A)(ii) as in effect for Plan Years beginning
after December 31, 1988), the cash or deferred arrangements
included in such plans shall be treated as one arrangement. In
addition, two or more cash or deferred arrangements may be
considered as a single arrangement for purposes of determining
whether or not such arrangements satisfy Code Sections 401(a)(4),
410(b) and 401(k). In such a case, the cash or deferred
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<PAGE>
arrangements included in such plans and the plans including such
arrangements shall be treated as one arrangement and as one plan
for purposes of this Section and Code Sections 401(a)(4), 410(b)
and 401(k). Plans may be aggregated under this paragraph (e) for
Plan Years beginning after December 31, 1989 only if they have
the same plan year.
Notwithstanding the above, for Plan Years beginning
after December 31, 1988, an employee stock ownership plan
described in Code Section 4975(e)(7) or 409 may not be combined
with this Plan for purposes of determining whether the employee
stock ownership plan or this Plan satisfies this Section and Code
Sections 401(a)(4), 410(b) and 401(k).
(f) For the purposes of this Section, if a Highly
Compensated Participant is a Participant under two or more cash
or deferred arrangements (other than a cash or deferred
arrangement which is part of an employee stock ownership plan as
defined in Code Section 4975(e)(7) or 409 for Plan Years
beginning after December 31, 1988) of the Employer or an
Affiliated Employer, all such cash or deferred arrangements shall
be treated as one cash or deferred arrangement for the purpose of
determining the actual deferral ratio with respect to such Highly
Compensated Participant. However, for Plan Years beginning after
December 31, 1988, if the cash or deferred arrangements have
different plan years, this paragraph shall be applied by treating
all cash or deferred arrangements ending with or within the same
calendar year as a single arrangement.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's
Elective Contributions made pursuant to Section 4.4 do not satisfy one of the
tests set forth in Section 4.5(a) for Plan Years beginning after December 31,
1986, the Administrator shall adjust Excess Contributions pursuant to the
options set forth below:
(a) On or before the fifteenth day of the third month
following the end of each Plan Year, the Highly Compensated
Participant having the highest actual deferral ratio shall have
his portion of Excess Contributions distributed to him until one
of the tests set forth in Section 4.5(a) is satisfied, or until
his actual deferral ratio equals the actual deferral ratio of the
Highly Compensated Participant having the second highest actual
deferral ratio. This process shall continue until one of the
tests set forth in Section 4.5(a) is satisfied. For each Highly
Compensated Participant, the amount of Excess Contributions is
equal to the Elective Contributions on behalf of such Highly
Compensated Participant (determined prior to the application of
this paragraph) minus the amount determined by multiplying the
Highly Compensated Participant's actual deferral ratio
(determined after application of this paragraph) by his "414(s)
Compensation." However, in determining the amount of Excess
Contributions to be distributed with respect to an affected
Highly Compensated Participant as determined herein, such amount
shall be reduced by any Excess Deferred Compensation previously
distributed to such affected Highly Compensated Participant for
his taxable year ending with or within such Plan Year.
(1) With respect to the distribution of Excess Contributions
pursuant to (a) above, such distribution:
(i) may be postponed but not later than the close
of the Plan Year following the Plan Year to which
they are allocable;
(ii) shall be made first from unmatched Deferred
Compensation and, thereafter, simultaneously from
Deferred Compensation which is matched and matching
contributions which relate to such Deferred
Compensation. However, any such matching
contributions which are not Vested shall be
forfeited in lieu of being distributed;
(iii) shall be adjusted for Income; and
(iv) shall be designated by the Employer as a dis-
tribution of Excess Contributions (and Income).
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<PAGE>
(2) Any distribution of less than the entire amount of
Excess Contributions shall be treated as a pro rata
distribution of Excess Contributions and Income.
(3) The determination and correction of Excess
Contributions of a Highly Compensated Participant whose
actual deferral ratio is determined under the family
aggregation rules shall be accomplished by reducing the
actual deferral ratio as required herein, and the Excess
Contributions for the family unit shall then be allocated
among the Family Members in proportion to the Elective
Contributions of each Family Member that were combined to
determine the group actual deferral ratio. Notwithstanding
the foregoing, with respect to Plan Years beginning prior
to January l, 1990, compliance with the Regulations then
in effect shall be deemed to be compliance with this
paragraph.
(b) Within twelve (12) months after the end of the Plan
Year, the Employer may make a special Qualified Non-Elective
Contribution on behalf of Non-Highly Compensated Participants in
an amount sufficient to satisfy one of the tests set forth in
Section 4.5(a). Such contribution shall be allocated to the
Participant's Elective Account of each Non-Highly Compensated
Participant in the same proportion that each Non-Highly
Compensated Participant's Compensation for the year bears to the
total Compensation of all Non-Highly Compensated Participants.
(c) If during a Plan Year the projected aggregate amount
of Elective Contributions to be allocated to all Highly
Compensated Participants under this Plan would, by virtue of the
tests set forth in Section 4.5(a), cause the Plan to fail such
tests, then the Administrator may automatically reduce
proportionately or in the order provided in Section 4.6(a) each
affected Highly Compensated Participant's deferral election made
pursuant to Section 4.2 by an amount necessary to satisfy one of
the tests set forth in Section 4.5(a).
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for Plan Years
beginning after December 31, 1986 for the Highly Compensated
Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly
Compensated Participant group; or
(2) the lesser of 200 percent of such percentage for
the Non-Highly Compensated Participant group, or such
percentage for the Non-Highly Compensated Participant group
plus 2 percentage points. However, for Plan Years beginning
after December 31, 1988, to prevent the multiple use of the
alternative method described in this paragraph and Code
Section 401(m)(9)(A), any Highly Compensated Participant
eligible to make elective deferrals pursuant to Section 4.2
or any other cash or deferred arrangement maintained by the
Employer or an Affiliated Employer and to make Employee
contributions or to receive matching contributions under
this Plan or under any other plan maintained by the Employer
or an Affiliated Employer shall have his actual contribution
ratio reduced pursuant to Regulation 1.401(m) -2. The
provisions of Code Section 401(m) and Regulations 1.401(m)
-1(b) and 1.401(m) -2 are incorporated herein by reference.
(b) For the purposes of this Section and Section 4.8,
"Actual Contribution Percentage" for a Plan Year means, with
respect to the Highly Compensated Participant group and
Non-Highly Compensated Participant group, the average of the
ratios (calculated separately for each Participant in each group)
of:
(1) the sum of Employer matching contributions made
pursuant to Section 4.1(b) on behalf of each such
Participant for such Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan
Year.
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<PAGE>
(c) For purposes of determining the "Actual
Contribution Percentage" and the amount of Excess Aggregate
Contributions pursuant to Section 4.8(d), only Employer matching
contributions (excluding Employer matching contributions
forfeited or distributed pursuant to Sections 4.2(f) and
4.6(a)(1) or forfeited pursuant to Section 4.8(a)) contributed to
the Plan prior to the end of the succeeding Plan Year shall be
considered. In addition, the Administrator may elect to take into
account, with respect to Employees eligible to have Employer
matching contributions pursuant to Section 4.1(b) allocated to
their accounts, elective deferrals (as defined in Regulation
l.402(g)-l(b)) and qualified non-elective contributions (as
defined in Code Section 401(m) (4) (C)) contributed to any plan
maintained by the Employer. Such elective deferrals and qualified
non-elective contributions shall be treated as Employer matching
contributions subject to Regulation l.401(m)-l(b)(5) which is
incorporated herein by reference. However, for Plan Years
beginning after December 31, 1988, the Plan Year must be the same
as the plan year of the plan to which the elective deferrals and
the qualified non-elective contributions are made.
(d) For the purpose of determining the actual
contribution ratio of a Highly Compensated Employee who is
subject to the Family Member aggregation rules of Code Section
414(q)(6) because such Employee is either a "five percent owner"
of the Employer or one of the ten (10) Highly Compensated
Employees paid the greatest "415 Compensation" during the year,
the following shall apply:
(1) The combined actual contribution ratio for the
family group (which shall be treated as one Highly
Compensated Participant) shall be determined by
aggregating Employer matching contributions made pursuant
to Section 4.1(b) and "414(s) Compensation" of all
eligible Family Members (including Highly Compensated
Participants). However, in applying the $200,000 limit to
"414(s) Compensation" for Plan Years beginning after
December 31, 1988, Family Members shall include only the
affected Employee's spouse and any lineal descendants who
have not attained age 19 before the close of the Plan
Year. Notwithstanding the foregoing, with respect to Plan
Years beginning prior to January 1, 1990, compliance with
the Regulations then in effect shall be deemed to be
compliance with this paragraph.
(2) The Employer matching contributions made
pursuant to Section 4.1(b) and "414(s) Compensation" of
all Family Members shall be disregarded for purposes of
determining the "Actual Contribution Percentage" of the
Non-Highly Compensated Participant group except to the
extent taken into account in paragraph (1) above.
(3) If a Participant is required to be aggregated
as a member of more than one family group in a plan, all
Participants who are members of those family groups that
include the Participant are aggregated as one family group
in accordance with paragraphs (1) and (2) above.
(e) For purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(m), if two or more plans of the
Employer to which matching contributions, Employee contributions,
or both, are made are treated as one plan for purposes of Code
Sections 401(a)(4) or 410(b) (other than the average benefits
test under Code Section 410(b)(2)(A)(ii) as in effect for Plan
Years beginning after December 31, 1988), such plans shall be
treated as one plan. In addition, two or more plans of the
Employer to which matching contributions, Employee contributions,
or both, are made may be considered as a single plan for purposes
of determining whether or not such plans satisfy Code Sections
401(a)(4), 410(b) and 401(m). In such a case, the aggregated
plans must satisfy this Section and Code Sections 401(a)(4),
410(b) and 401(m) as though such aggregated plans were a single
plan. Plans may be aggregated under this paragraph (e) for Plan
Years beginning after December 31, 1988, only if they have the
same plan year.
Notwithstanding the above, for Plan Years
beginning after December 31, 1988, an employee stock ownership
plan described in Code Section 4975(e)(7) or 409 may not be
aggregated with this Plan for purposes of determining whether the
employee stock ownership plan or this Plan satisfies this Section
and Code Sections 401(a)(4), 410(b) and 401(m).
(f) If a Highly Compensated Participant is a
Participant under two or more plans (other than an employee stock
ownership plan as defined in Code Section 4975(e)(7) or 409 for
Plan Years beginning after December 31, 1988) which are
maintained by the Employer or an Affiliated Employer to which
matching contributions, Employee contributions, or both, are
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<PAGE>
made, all such contributions on behalf of such Highly Compensated
Participant shall be aggregated for purposes of determining such
Highly Compensated Participant's actual contribution ratio.
However, for Plan Years beginning after December 31, 1988, if the
plans have different plan years, this paragraph shall be applied
by treating all plans ending with or within the same calendar
year as a single plan.
(g) For purposes of Sections 4.7(a) and 4.8, a
Highly Compensated Participant and Non-Highly Compensated
Participant shall include any Employee eligible to have Employer
matching contributions pursuant to Section 4.1(b) (whether or not
a deferral election was made or suspended pursuant to Section
4.2(e)) allocated to his account for the Plan Year.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that, for Plan Years beginning
after December 31, 1986, the "Actual Contribution Percentage" for
the Highly Compensated Participant group exceeds the "Actual
Contribution Percentage" for the Non-Highly Compensated
Participant group pursuant to Section 4.7(a), the Administrator
(on or before the fifteenth day of the third month following the
end of the Plan Year, but in no event later than the close of the
following Plan Year) shall direct the Trustee to distribute to
the Highly Compensated Participant having the highest actual
contribution ratio, his Vested portion of Excess Aggregate
Contributions (and Income allocable to such contributions) and,
if forfeitable, forfeit such non-Vested Excess Aggregate
Contributions attributable to Employer matching contributions
(and Income allocable to such forfeitures) until either one of
the tests set forth in Section 4.7(a) is satisfied, or until his
actual contribution ratio equals the actual contribution ratio of
the Highly Compensated Participant having the second highest
actual contribution ratio. This process shall continue until one
of the tests set forth in Section 4.7(a) is satisfied.
If the correction of Excess Aggregate Contributions
attributable to Employer matching contributions is not in
proportion to the Vested and non-Vested portion of such
contributions, then the Vested portion of the Participant's
Account attributable to Employer matching contributions after the
correction shall be subject to Section 6.5(f).
(b) Any distribution and/or forfeiture of less than
the entire amount of Excess Aggregate Contributions (and Income)
shall be treated as a pro rata distribution and/or forfeiture of
Excess Aggregate Contributions and Income. Distribution of Excess
Aggregate Contributions shall be designated by the Employer as a
distribution of Excess Aggregate Contributions (and Income).
Forfeitures of Excess Aggregate Contributions shall be treated in
accordance with Section 4.4. However, no such forfeiture may be
allocated to a Highly Compensated Participant whose contributions
are reduced pursuant to this Section.
(c) Excess Aggregate Contributions, including
forfeited matching contributions, shall be treated as Employer
contributions for purposes of Code Sections 404 and 415 even if
distributed from the Plan.
Forfeited matching contributions that are reallocated to
Participants' Accounts for the Plan Year in which the forfeiture
occurs shall be treated as an "annual addition" pursuant to
Section 4.9(b) for the Participants to whose Accounts they are
reallocated and for the Participants from whose Accounts they are
forfeited.
(d) For each Highly Compensated Participant, the
amount of Excess Aggregate Contributions is equal to the Employer
matching contributions made pursuant to Section 4.1(b) and any
qualified non-elective contributions or elective deferrals taken
into account pursuant to Section 4.7(c) on behalf of the Highly
Compensated Participant (determined prior to the application of
this paragraph) minus the amount determined by multiplying the
Highly Compensated Participant's actual contribution ratio
(determined after application of this paragraph) by his "414(s)
Compensation." The actual contribution ratio must be rounded to
the nearest one-hundredth of one percent for Plan Years beginning
after December 31, 1988. In no case shall the amount of Excess
Aggregate Contribution with respect to any Highly Compensated
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<PAGE>
Participant exceed the amount of Employer matching contributions
made pursuant to Section 4.1(b) and any qualified non-elective
contributions or elective deferrals taken into account pursuant
to Section 4.7(c) on behalf of such Highly Compensated
Participant for such Plan Year.
(e) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after
first determining the Excess Contributions, if any, to be treated
as voluntary Employee contributions due to recharacterization for
the plan year of any other qualified cash or deferred arrangement
(as defined in Code Section 401(k)) maintained by the Employer
that ends with or within the Plan Year.
(f) If the determination and correction of Excess
Aggregate Contributions of a Highly Compensated Participant whose
actual contribution ratio is determined under the family
aggregation rules, then the actual contribution ratio shall be
reduced and the Excess Aggregate Contributions for the family
unit shall be allocated among the Family Members in proportion to
the sum of Employer matching contributions made pursuant to
Section 4.1(b) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.7(c)
of each Family Member that were combined to determine the group
actual contribution ratio. Notwithstanding the foregoing, with
respect to Plan Years beginning prior to January l, 1990,
compliance with the Regulations then in effect shall be deemed to
be compliance with this paragraph.
(g) If during a Plan Year the projected aggregate amount
of Employer matching contributions to be allocated to all Highly
Compensated Participants under this Plan would, by virtue of the
tests set forth in Section 4.7(a), cause the Plan to fail such
tests, then the Administrator may automatically reduce
proportionately or in the order provided in Section 4.8(a) each
affected Highly Compensated Participant's projected share of such
contributions by an amount necessary to satisfy one of the tests
set forth in Section 4.7(a).
(h) Notwithstanding the above, within twelve (12) months
after the end of the Plan Year, the Employer may make a special
Qualified Non-Elective Contribution on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy one
of the tests set forth in Section 4.7(a). Such contribution shall
be allocated to the Participant's Elective Account of each
Non-Highly Compensated Participant in the same proportion that
each Non-Highly Compensated Participant's Compensation for the
year bears to the total Compensation of all Non-Highly
Compensated Participants. A separate accounting shall be
maintained for the purpose of excluding such contributions from
the "Actual Deferral Percentage" tests pursuant to Section
4.5(a).
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual
additions" credited to a Participant's accounts for any
"limitation year" shall equal the lesser of: (1) $30,000 (or, if
greater, one-fourth of the dollar limitation in effect under Code
Section 415(b)(1)(A)) or (2) twenty-five percent (25%) of the
Participant's "415 Compensation" for such "limitation year." For
any short "limitation year," the dollar limitation in (1) above
shall be reduced by a fraction, the numerator of which is the
number of full months in the short "limitation year" and the
denominator of which is twelve (12).
(b) For purposes of applying the limitations of Code Section
415, "annual additions" means the sum credited to a Participant's
accounts for any "limitation year" of (1) Employer contributions,
(2) Employee contributions, (3) forfeitures, (4) amounts
allocated, after March 31, 1984, to an individual medical
account, as defined in Code Section 415(1)(2) which is part of a
pension or annuity plan maintained by the Employer and (5)
amounts derived from contributions paid or accrued after December
31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to the
separate account of a key employee (as defined in Code Section
419A(d)(3)) under a welfare benefit plan (as defined in Code
Section 419(e)) maintained by the Employer. Except, however, the
"415 Compensation" percentage limitation referred to in paragraph
(a) (2) above shall not apply to: (1) any contribution for
medical benefits (within the meaning of Code Section 419A(f)(2))
after separation from service which is otherwise treated as an
"annual addition," or (2) any amount otherwise treated as an
"annual addition" under Code Section 415(l)(1).
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(c) For purposes of applying the limitations of Code Section
415, the transfer of funds from one qualified plan to another is
not an "annual addition." In addition, the following are not
Employee contributions for the purposes of Section 4.9(b) (2):
(1) rollover contributions (as defined in Code Sections 402(a)(5)
, 403(a) (4) , 403(b) (8) and 408(d) (3)); (2) repayments of
loans made to a Participant from the Plan; (3) repayments of
distributions received by an Employee pursuant to Code Section
411(a)(7)(B) (cash-outs); (4) repayments of distributions
received by an Employee pursuant to Code Section 411(a)(3)(D)
(mandatory contributions); and (5) Employee contributions to a
simplified employee pension excludable from gross income under
Code Section 408(k)(6).
(d) For purposes of applying the limitations of Code Section
415, the "limitation year" shall be the Plan Year.
(e) The dollar limitation under Code Section 415(b)(1)(A)
stated in paragraph (a) (1) above shall be adjusted annually as
provided in Code Section 415(d) pursuant to the Regulations. The
adjusted limitation is effective as of January 1st of each
calendar year and is applicable to "limitation years" ending with
or within that calendar year.
(f) For the purpose of this Section, all qualified defined
benefit plans (whether terminated or not) ever maintained by the
Employer shall be treated as one defined benefit plan, and all
qualified defined contribution plans (whether terminated or not)
ever maintained by the Employer shall be treated as one defined
contribution plan.
(g) For the purpose of this Section, if the Employer is a
member of a controlled group of corporations, trades or
businesses under common control (as defined by Code Section
1563(a) or Code Section 414(b) and (c) as modified by Code
Section 415(h)), is a member of an affiliated service group (as
defined by Code Section 414(m)), or is a member of a group of
entities required to be aggregated pursuant to Regulations under
Code Section 414(o), all Employees of such Employers shall be
considered to be employed by a single Employer.
(h) For the purpose of this Section, if this Plan is a Code
Section 413(c) plan, all Employers of a Participant who maintain
this Plan will be considered to be a single Employer.
(i) (1) If a Participant participates in more than one
defined contribution plan maintained by the Employer which have
different Anniversary Dates, the maximum "annual additions" under
this Plan shall equal the maximum "annual additions" for the
"limitation year" minus any "annual additions" previously
credited to such Participant's accounts during the "limitation
year."
(2) If a Participant participates in both a defined
contribution plan subject to Code Section 412 and a
defined contribution plan not subject to Code Section 412
maintained by the Employer which have the same Anniversary
Date, "annual additions" will be credited to the
Participant's accounts under the defined contribution plan
subject to Code Section 412 prior to crediting "annual
additions" to the Participant's accounts under the defined
contribution plan not subject to Code Section 412.
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412
maintained by the Employer which have the same Anniversary
Date, the maximum "annual additions" under this Plan shall
equal the product of (A) the maximum "annual additions"
for the "limitation year" minus any "annual additions"
previously credited under subparagraphs (1) or (2) above,
multiplied by (B) a fraction (i) the numerator of which is
the "annual additions" which would be credited to such
Participant's accounts under this Plan without regard to
the limitations of Code Section 415 and (ii) the
denominator of which is such "annual additions" for all
plans described in this subparagraph.
(j) If an Employee is (or has been) a Participant in one or
more defined benefit plans and one or more defined contribution
plans maintained by the Employer, the sum of the defined benefit
plan fraction and the defined contribution plan fraction for any
"limitation year" may not exceed 1.0.
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(k) The defined benefit plan fraction for any "limitation
year" is a fraction, the numerator of which is the sum of the
Participant's projected annual benefits under all the defined
benefit plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser of 125
percent of the dollar limitation determined for the "limitation
year" under Code Sections 415(b) and (d) or 140 percent of the
highest average compensation, including any adjustments under
Code Section 415(b).
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first "limitation year"
beginning after December 31, 1986, in one or more defined benefit
plans maintained by the Employer which were in existence on May
6, 1986, the denominator of this fraction will not be less than
125 percent of the sum of the annual benefits under such plans
which the Participant had accrued as of the close of the last
"limitation year" beginning before January l, 1987, disregarding
any changes in the terms and conditions of the plan after May 5,
1986. The preceding sentence applies only if the defined benefit
plans individually and in the aggregate satisfied the
requirements of Code Section 415 for all "limitation years"
beginning before January 1, 1987.
(1) The defined contribution plan fraction for any
"limitation year" is a fraction, the numerator of which is the
sum of the annual additions to the Participant's Account under
all the defined contribution plans (whether or not terminated)
maintained by the Employer for the current and all prior
"limitation years" (including the annual additions attributable
to the Participant's nondeductible Employee contributions to all
defined benefit plans, whether or not terminated, maintained by
the Employer, and the annual additions attributable to all
welfare benefit funds, as defined in Code Section 419(e), and
individual medical accounts, as defined in Code Section
415(1)(2), maintained by the Employer), and the denominator of
which is the sum of the maximum aggregate amounts for the current
and all prior "limitation years" of service with the Employer
(regardless of whether a defined contribution plan was maintained
by the Employer). The maximum aggregate amount in any "limitation
year" is the lesser of 125 percent of the dollar limitation
determined under Code Sections 415(b) and (d) in effect under
Code Section 415(c)(1)(A) or 35 percent of the Participant's
Compensation for such year.
If the Employee was a Participant as of the end of the first
day of the first "limitation year" beginning after December 31,
1986, in one or more defined contribution plans maintained by the
Employer which were in existence on May 6, 1986, the numerator of
this fraction will be adjusted if the sum of this fraction and
the defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0
times (2) the denominator of this fraction, will be permanently
subtracted from the numerator of this fraction. The adjustment is
calculated using the fractions as they would be computed as of
the end of the last "limitation year" beginning before January 1,
1987, and disregarding any changes in the terms and conditions of
the Plan made after May 5, 1986, but using the Code Section 415
limitation applicable to the first "limitation year" beginning on
or after January l, 1987. The annual addition for any "limitation
year" beginning before January 1, 1987 shall not be recomputed to
treat all Employee contributions as annual additions.
(m) Notwithstanding the foregoing, for any "limitation year"
in which the Plan is a Top Heavy Plan, 100 percent shall be
substituted for 125 percent in Sections 4.9(k) and 4.9(1) unless
the extra minimum allocation is being provided pursuant to
Section 4.4. However, for any "limitation year" in which the Plan
is a Super Top Heavy Plan, 100 percent shall be substituted for
125 percent in any event.
(n) If the sum of the defined benefit plan fraction and the
defined contribution plan fraction shall exceed 1.0 in any
"limitation year" for any Participant in this Plan, the
Administrator shall limit, to the extent necessary, the "annual
additions" to such Participant's accounts for such "limitation
year." If, after limiting the "annual additions" to such
Participant's accounts for the "limitation year," the sum of the
defined benefit plan fraction and the defined contribution plan
fraction still exceed 1.0, the Administrator shall then adjust
the numerator of the defined benefit plan fraction so that the
sum of both fractions shall not exceed 1.0 in any "limitation
year" for such Participant.
(o) Notwithstanding anything contained in this Section to
the contrary, the limitations, adjustments and other requirements
prescribed in this section shall at all times comply with the
provisions of Code Section 415 and the Regulations thereunder,
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the terms of which are specifically incorporated herein by
reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of the allocation of Forfeitures, a
reasonable error in estimating a Participant's Compensation, a
reasonable error in determining the amount of elective deferrals
(within the meaning of Code Section 402(g)(3)) that may be made
with respect to any Participant under the limits of Section 4.9
or other facts and circumstances to which Regulation 1.415-6(b)
(6) shall be applicable, the "annual additions" under this Plan
would cause the maximum "annual additions" to be exceeded for any
Participant, the Administrator shall (1) distribute any elective
deferrals (within the meaning of Code Section 402(g)(3)) or
return any voluntary Employee contributions credited for the
"limitation year" to the extent that the return would reduce the
"excess amount" in the Participant's accounts (2) hold any
"excess amount" remaining after the return of any elective
deferrals or voluntary Employee contributions in a "Section 415
suspense account" (3) use the "Section 415 suspense account" in
the next "limitation year" (and succeeding "limitation years" if
necessary) to reduce Employer contributions for that Participant
if that Participant is covered by the Plan as of the end of the
"limitation year," or if the Participant is not so covered,
allocate and reallocate the "Section 415 suspense account" in the
next "limitation year" (and succeeding "limitation years" if
necessary) to all Participants in the Plan before any Employer or
Employee contributions which would constitute "annual additions"
are made to the Plan for such "limitation year" (4) reduce
Employer contributions to the Plan for such "limitation year" by
the amount of the "Section 415 suspense account" allocated and
reallocated during such "limitation year."
(b) For purposes of this Article, "excess amount" for any
Participant for a "limitation year" shall mean the excess, if
any, of (1) the "annual additions" which would be credited to his
account under the terms of the Plan without regard to the
limitations of Code Section 415 over (2) the maximum "annual
additions" determined pursuant to Section 4.9.
(c) For purposes of this Section, "Section 415 suspense
account" shall mean an unallocated account equal to the sum of
"excess amounts" for all Participants in the Plan during the
"limitation year." The "Section 415 suspense account" shall not
share in any earnings or losses of the Trust Fund.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be
transferred from other qualified plans by Employees, provided
that the trust from which such funds are transferred permits the
transfer to be made and the transfer will not jeopardize the tax
exempt status of the Plan or Trust or create adverse tax
consequences for the Employer. The amounts transferred shall be
set up in a separate account herein referred to as a
"Participant's Rollover Account." Such account shall be fully
Vested at all times and shall not be subject to Forfeiture for
any reason.
(b) Amounts in a Participant's Rollover Account shall be
held by the Trustee pursuant to the provisions of this Plan and
may not be withdrawn by, or distributed to the Participant, in
whole or in part, except as provided in paragraphs (c) and (d) of
this Section.
(c) Except as permitted by Regulations (including
Regulation l.411(d)-4), amounts attributable to elective
contributions (as defined in Regulation 1.401(k)-l(g)(3)),
including amounts treated as elective contributions, which are
transferred from another qualified plan in a plan-to-plan
transfer shall be subject to the distribution limitations
provided for in Regulation 1.401(k)-l(d).
(d) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive
benefits, the fair market value of the Participant's Rollover
Account shall be used to provide additional benefits to the
Participant or his Beneficiary. Any distributions of amounts held
in a Participant's Rollover Account shall be made in a manner
which is consistent with and satisfies the provisions of Section
6.5, including, but not limited to, all notice and consent
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requirements of Code Section 411(a)(11) and the Regulations
thereunder. Furthermore, such amounts shall be considered as part
of a Participant's benefit in determining whether an involuntary
cash-out of benefits without Participant consent may be made.
(e) The Administrator may direct that employee transfers
made after a valuation date be segregated into a separate account
for each Participant in a federally insured savings account,
certificate of deposit in a bank or savings and loan association,
money market certificate, or other short term debt security
acceptable to the Trustee until such time as the allocations
pursuant to this Plan have been made, at which time they may
remain segregated or be invested as part of the general Trust
Fund, to be determined by the Administrator.
(f) All amounts allocated to a Participant's Rollover
Account may be treated as a Directed Investment Account pursuant
to Section 4.12.
(g) For purposes of this Section, the term "qualified
plan" shall mean any tax qualified plan under Code Section
401(a). The term "amounts transferred from other qualified plans"
shall mean: (i) amounts transferred to this Plan directly from
another qualified plan; (ii) distributions from another qualified
plan which are eligible rollover distributions and which are
either transferred by the Employee to this Plan within sixty (60)
days following his receipt thereof or are transferred pursuant to
a direct rollover; (iii) amounts transferred to this Plan from a
conduit individual retirement account provided that the conduit
individual retirement account has no assets other than assets
which (A) were previously distributed to the Employee by another
qualified plan as a lump-sum distribution (B) were eligible for
tax-free rollover to a qualified plan and (C) were deposited in
such conduit individual retirement account within sixty (60) days
of receipt thereof and other than earnings on said assets; and
(iv) amounts distributed to the Employee from a conduit
individual retirement account meeting the requirements of clause
(iii) above, and transferred by the Employee to this Plan within
sixty (60) days of his receipt thereof from such conduit
individual retirement account.
(h) Prior to accepting any transfers to which this Section
applies, the Administrator may require the Employee to establish
that the amounts to be transferred to this Plan meet the
requirements of this Section and may also require the Employee
to provide an opinion of counsel satisfactory to the Employer
that the amounts to be transferred meet the requirements of this
Section.
(i) This Plan shall not accept any direct or indirect
transfers (as that term is defined and interpreted under Code
Section 401(a)(11) and the Regulations thereunder) from a defined
benefit plan, money purchase plan (including a target benefit
plan), stock bonus or profit sharing plan which would otherwise
have provided for a life annuity form of payment to the
Participant.
(j) Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from another qualified plan (or a
transaction having the effect of such a transfer) shall only be
permitted if it will not result in the elimination or reduction
of any "Section 411(d) (6) protected benefit" as described in
Section 8.1.
4.12 DIRECTED INVESTMENT ACCOUNT
(a) The Administrator, in his sole discretion, may
determine that all Participants be permitted to direct the
Trustee as to the investment of all or a portion of the interest
in any one or more of their individual account balances. If such
authorization is given, Participants may, subject to a procedure
established by the Administrator and applied in a uniform
nondiscriminatory manner, direct the Trustee in writing to
invest any portion of their account in specific assets, specific
funds or other investments permitted under the Plan and the
directed investment procedure. That portion of the account of
any Participant so directing will thereupon be considered a
Directed Investment Account, which shall not share in Trust Fund
earnings.
(b) A separate Directed Investment Account shall be
established for each Participant who has directed an investment.
Transfers between the Participant's regular account and his
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Directed Investment Account shall be charged and credited as the
case may be to each account. The Directed Investment Account
shall not share in Trust Fund earnings, but it shall be charged
or credited as appropriate with the net earnings, gains, losses
and expenses as well as any appreciation or depreciation in
market value during each Plan Year attributable to such account.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each
Anniversary Date, and at such other date or dates deemed necessary by the
Administrator, herein called "valuation date," to determine the net worth of the
assets comprising the Trust Fund as it exists on the "valuation date." In
determining such net worth, the Trustee shall value the assets comprising the
Trust Fund at their fair market value as of the "valuation date" and shall
deduct all expenses for which the Trustee has not yet obtained reimbursement
from the Employer or the Trust Fund.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the
Trust Fund which are listed on a registered stock exchange, the Administrator
shall direct the Trustee to value the same at the prices they were last traded
on such exchange preceding the close of business on the "valuation date." If
such securities were not traded on the "valuation date," or if the exchange on
which they are traded was not open for business on the "valuation date," then
the securities shall be valued at the prices at which they were last traded
prior to the "valuation date." Any unlisted security held in the Trust Fund
shall be valued at its bid price next preceding the close of business on the
"valuation date," which bid price shall be obtained from a registered broker or
an investment banker. In determining the fair market value of assets other than
securities for which trading or bid prices can be obtained, the Trustee may
appraise such assets itself, or in its discretion, employ one or more appraisers
for that purpose and rely on the values established by such appraiser or
appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer
and retire for the purposes hereof on his Normal Retirement Date or Early
Retirement Date. However, a Participant may postpone the termination of his
employment with the Employer to a later date, in which event the participation
of such Participant in the Plan, including the right to receive allocations
pursuant to Section 4.4, shall continue until his Late Retirement Date. Upon a
Participant's Retirement Date, or as soon thereafter as is practicable, the
Trustee shall distribute all amounts credited to such Participant's Combined
Account in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement
Date or other termination of his employment, all amounts credited
to such Participant's Combined Account shall become fully Vested.
The Administrator shall direct the Trustee, in accordance with
the provisions of Sections 6.6 and 6.7, to distribute the value
of the deceased Participant's accounts to the Participant' s
Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute any remaining
Vested amounts credited to the accounts of a deceased Former
Participant to such Former Participant's Beneficiary.
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(c) Any security interest held by the Plan by reason of an
outstanding loan to the Participant or Former Participant shall
be taken into account in determining the amount of the death
benefit.
(d) The Administrator may require such proper proof of
death and such evidence of the right of any person to receive
payment of the value of the account of a deceased Participant or
Former Participant as the Administrator may deem desirable. The
Administrator's determination of death and of the right of any
person to receive payment shall be conclusive.
(e) The Beneficiary of the death benefit payable pursuant
to this Section shall be the Participant's spouse. Except,
however, the Participant may designate a Beneficiary other than
his spouse if:
(1) the spouse has waived the right to be the
Participant's Beneficiary, or
(2) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the
Participant has a court order to such effect (and there is
no "qualified domestic relations order" as defined in Code
Section 414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary
shall be made on a form satisfactory to the Administrator. A
Participant may at any time revoke his designation of a
Beneficiary or change his Beneficiary by filing written notice of
such revocation or change with the Administrator. However, the
Participant's spouse must again consent in writing to any change
in Beneficiary unless the original consent acknowledged that the
spouse had the right to limit consent only to a specific
Beneficiary and that the spouse voluntarily elected to relinquish
such right. In the event no valid designation of Beneficiary
exists at the time of the Participant's death, the death benefit
shall be payable to his estate.
(f) Any consent by the Participant's spouse to waive any
rights to the death benefit must be in writing, must acknowledge
the effect of such waiver, and be witnessed by a Plan
representative or a notary public. Further, the spouse's consent
must be irrevocable and must acknowledge the specific nonspouse
Beneficiary.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability
prior to his Retirement Date or other termination of his employment, all amounts
credited to such Participant's Combined Account shall become fully Vested. In
the event of a Participant's Total and Permanent Disability, the Trustee, in
accordance with the provisions of Sections 6.5 and 6.7, shall distribute to such
Participant all amounts credited to such Participant's Combined Account as
though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date coinciding with or
subsequent to the termination of a Participant's employment for
any reason other than death, Total and Permanent Disability or
retirement, the Administrator may direct the Trustee to segregate
the amount of the Vested portion of such Terminated Participant's
Combined Account and invest the aggregate amount thereof in a
separate, federally insured savings account, certificate of
deposit, common or collective trust fund of a bank or a deferred
annuity. In the event the Vested portion of a Participant's
Combined Account is not segregated, the amount shall remain in a
separate account for the Terminated Participant and share in
allocations pursuant to Section 4.4 until such time as a
distribution is made to the Terminated Participant.
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In the event that the amount of the Vested portion
of the Terminated Participant's Combined Account equals or
exceeds the fair market value of any insurance Contracts, the
Trustee, when so directed by the Administrator and agreed to by
the Terminated Participant, shall assign, transfer, and set over
to such Terminated Participant all Contracts on his life in such
form or with such endorsements so that the settlement options and
forms of payment are consistent with the provisions of Section
6.5. In the event that the Terminated Participant's Vested
portion does not at least equal the fair market value of the
Contracts, if any, the Terminated Participant may pay over to the
Trustee the sum needed to make the distribution equal to the
value of the Contracts being assigned or transferred, or the
Trustee, pursuant to the Participant's election, may borrow the
cash value of the Contracts from the insurer so that the value of
the Contracts is equal to the Vested portion of the Terminated
Participant's Account and then assign the Contracts to the
Terminated Participant.
Distribution of the funds due to a Terminated
Participant shall be made on the occurrence of an event which
would result in the distribution had the Terminated Participant
remained in the employ of the Employer (upon the Participant's
death, Total and Permanent Disability, Early or Normal
Retirement). However, at the election of the Participant, the
Administrator shall direct the Trustee to cause the entire Vested
portion of the Terminated Participant's Combined Account to be
payable to such Terminated Participant. Any distribution under
this paragraph shall be made in a manner which is consistent with
and satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code Section
411(a)(11) and the Regulations thereunder.
If the value of a Terminated Participant's Vested
benefit derived from Employer and Employee contributions does not
exceed $3,500 and has never exceeded $3,500 at the time of any
prior distribution, the Administrator shall direct the Trustee to
cause the entire Vested benefit to be paid to such Participant in
a single lump sum.
For purposes of this Section 6.4, if the value of a
Terminated Participant's Vested benefit is zero, the Terminated
Participant shall be deemed to have received a distribution of
such Vested benefit.
(b) The Vested portion of any Participant's Account shall
be a percentage of the total amount credited to his Participant's
Account determined on the basis of the Participant's number of
Years of Service according to the following schedule:
Vesting Schedule
Years of Service Percentage
---------------- ----------
Less than 3 0 %
3 20 %
4 40 %
5 60 %
6 80 %
7 100 %
(c) Notwithstanding the vesting provided for in paragraph
(b) above, for any Top Heavy Plan Year, the Vested portion of the
Participant's Account of any Participant who has an Hour of
Service after the Plan becomes top heavy shall be a percentage of
the total amount credited to his Participant's Account determined
on the basis of the Participant's number of Years of Service
according to the following schedule:
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Vesting Schedule
Years of Service Percentage
---------------- ----------
Less than 2 0 %
2 20 %
3 40 %
4 60 %
5 80 %
6 100 %
If in any subsequent Plan Year, the Plan ceases to be a
Top Heavy Plan, the Administrator shall revert to the vesting schedule
in effect before this Plan became a Top Heavy Plan. Any such reversion
shall be treated as a Plan amendment pursuant to the terms of the Plan.
(d) Notwithstanding the vesting schedule above, the Vested
percentage of a Participant's Account shall not be less than the
Vested percentage attained as of the later of the effective date
or adoption date of this amendment and restatement.
(e) Notwithstanding the vesting schedule above, upon the
complete discontinuance of the Employer's contributions to the
Plan or upon any full or partial termination of the Plan, all
amounts credited to the account of any affected Participant shall
become 100% Vested and shall not thereafter be subject to
Forfeiture.
(f) The computation of a Participant's nonforfeitable
percentage of his interest in the Plan shall not be reduced as
the result of any direct or indirect amendment to this Plan. For
this purpose, the Plan shall be treated as having been amended if
the Plan provides for an automatic change in vesting due to a
change in top heavy status. In the event that the Plan is amended
to change or modify any vesting schedule, a Participant with at
least three (3) Years of Service as of the expiration date of the
election period may elect to have his nonforfeitable percentage
computed under the Plan without regard to such amendment. If a
Participant fails to make such election, then such Participant
shall be subject to the new vesting schedule. The Participant's
election period shall commence on the adoption date of the
amendment and shall end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of
the amendment from the Employer or Administrator.
(g)(1) If any Former Participant shall be reemployed by
the Employer before a 1-Year Break in Service occurs, he shall
continue to participate in the Plan in the same manner as if such
termination had not occurred.
(2) If any Former Participant shall be reemployed by the
Employer before five (5) consecutive 1-Year Breaks in Service,
and such Former Participant had received, or was deemed to have
received, a distribution of his entire Vested interest prior to
his reemployment, his forfeited account shall be reinstated only
if he repays the full amount distributed to him before the
earlier of five (5) years after the first date on which the
Participant is subsequently reemployed by the Employer or the
close of the first period of five (5) consecutive 1-Year Breaks
in Service commencing after the distribution, or in the event of
a deemed distribution, upon the reemployment of such Former
Participant. In the event the Former Participant does repay the
full amount distributed to him, or in the event of a deemed
distribution, the undistributed portion of the Participant's
Account must be restored in full, unadjusted by any gains or
losses occurring subsequent to the Anniversary Date or other
valuation date coinciding with or preceding his termination. The
source for such reinstatement shall first be any Forfeitures
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occurring during the year. If such source is insufficient, then
the Employer shall contribute an amount which is sufficient to
restore any such forfeited Accounts provided, however, that if a
discretionary contribution is made for such year pursuant to
Section 4.1(d), such contribution shall first be applied to
restore any such Accounts and the remainder shall be allocated in
accordance with Section 4.4.
(3) If any Former Participant is reemployed after a 1-Year
Break in Service has occurred, Years of Service shall include
Years of Service prior to his 1-Year Break in Service subject to
the following rules:
(i) If a Former Participant has a 1-Year Break in Service,
his pre-break and post-break service shall be used for
computing Years of Service for eligibility and for vesting
purposes only after he has been employed for one (1) Year
of Service following the date of his reemployment with the
Employer;
(ii) Any Former Participant who under the Plan does not
have a nonforfeitable right to any interest in the Plan
resulting from Employer contributions shall lose credits
otherwise allowable under (i) above if his consecutive
1-Year Breaks in Service equal or exceed the greater of
(A) five (5) or (B) the aggregate number of his pre-break
Years of Service;
(iii) After five (5) consecutive 1-Year Breaks in Service,
a Former Participant's Vested Account balance attributable
to pre-break service shall not be increased as a result of
post-break service;
(iv) If a Former Participant who has not had his Years of
Service before a 1-Year Break in Service disregarded
pursuant to (ii) above completes one (1) Year of Service
for eligibility purposes following his reemployment with
the Employer, he shall participate in the Plan
retroactively from his date of reemployment;
(v) If a Former Participant who has not had his Years of
Service before a 1-Year Break in Service disregarded
pursuant to (ii) above completes a Year of Service (a
1-Year Break in Service previously occurred, but
employment had not terminated), he shall participate in
the Plan retroactively from the first day of the Plan Year
during which he completes one (1) Year of Service.
(h) In determining Years of Service for purposes of
vesting under the Plan, Years of Service prior to the vesting
computation period in which an Employee attained his eighteenth
birthday shall be excluded.
6.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election of the
Participant, shall direct the Trustee to distribute to a
Participant or his Beneficiary any amount to which he is entitled
under the Plan in one or more of the following methods:
(1) One lump-sum payment in cash or in property;
(2) Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments. In order to
provide such installment payments, the Administrator may
(A) segregate the aggregate amount thereof in a separate,
federally insured savings account, certificate of deposit
in a bank or savings and loan association, money market
certificate or other liquid short-term security or (B)
purchase a nontransferable annuity contract for a term
certain (with no life contingencies) providing for such
payment. The period over which such payment is to be made
shall not extend beyond the Participant's life expectancy
(or the life expectancy of the Participant and his
designated Beneficiary).
(b) Any distribution to a Participant who has a benefit
which exceeds, or has ever exceeded, $3,500 at the time of any
prior distribution shall require such Participant's consent if
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such distribution commences prior to the later of his Normal
Retirement Age or age 62. With regard to this required consent:
(1) The Participant must be informed of his right to defer
receipt of the distribution. If a Participant fails to
consent, it shall be deemed an election to defer the
commencement of payment of any benefit. However, any
election to defer the receipt of benefits shall not apply
with respect to distributions which are required under
Section 6.5(c).
(2) Notice of the rights specified under this paragraph
shall be provided no less than 30 days and no more than 90
days before the first day on which all events have
occurred which entitle the Participant to such benefit.
(3) Written consent of the Participant to the distribution
must not be made before the Participant receives the
notice and must not be made more than 90 days before the
first day on which all events have occurred which entitle
the Participant to such benefit.
(4) No consent shall be valid if a significant detriment
is imposed under the Plan on any Participant who does not
consent to the distribution.
If a distribution is one to which Code Sections 401(a)(11)
and 417 do not apply, such distribution may commence less
than 30 days after the notice required under Regulation
1.411(a) -11(c) is given, provided that: (1) the
Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days
after receiving the notice to consider the decision of
whether or not to elect a distribution (and, if
applicable, a particular distribution option) , and (2)
the Participant, after receiving the notice, affirmatively
elects a distribution.
(c) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's benefits shall be
made in accordance with the following requirements and shall
otherwise comply with Code Section 401(a)(9) and the Regulations
thereunder (including Regulation l.401(a)(9)-2), the provisions
of which are incorporated herein by reference:
(1) A Participant's benefits shall be distributed to him
not later than April 1st of the calendar year following the later
of (i) the calendar year in which the Participant attains age 70
1/2 or (ii) the calendar year in which the Participant retires,
provided, however, that this clause (ii) shall not apply in the
case of a Participant who is a "five (5) percent owner" at any
time during the five (5) Plan Year period ending in the calendar
year in which he attains age 70 1/2 or, in the case of a
Participant who becomes a "five (5) percent owner" during any
subsequent Plan Year, clause (ii) shall no longer apply and the
required beginning date shall be the April 1st of the calendar
year following the calendar year in which such subsequent Plan
Year ends. Alternatively, distributions to a Participant must
begin no later than the applicable April 1st as determined under
the preceding sentence and must be made over a period certain
measured by the life expectancy of the Participant (or the life
expectancies of the Participant and his designated Beneficiary)
in accordance with Regulations. Notwithstanding the foregoing,
clause (ii) above shall not apply to any Participant unless the
Participant had attained age 70 1/2 before January l, 1988 and
was not a "five (5) percent owner" at any time during the Plan
Year ending with or within the calendar year in which the
Participant attained age 66 1/2 or any subsequent Plan Year.
(2) Distributions to a Participant and his Beneficiaries
shall only be made in accordance with the incidental death
benefit requirements of Code Section 401(a)(9)(G) and the
Regulations thereunder.
Additionally, for calendar years beginning before 1989,
distributions may also be made under an alternative method
which provides that the then present value of the payments
to be made over the period of the Participant's life
expectancy exceeds fifty percent (50%) of the then present
value of the total payments to be made to the Participant
and his Beneficiaries.
(d) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse shall be redetermined
annually in accordance with Regulations. Life expectancy and
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joint and last survivor expectancy shall be computed using the
return multiples in Tables V and VI of Regulation 1.72-9.
(e) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of any
annuity Contract purchased and distributed to a Participant or
spouse shall comply with all of the requirements of the Plan.
(f) If a distribution is made at a time when a Participant
is not fully Vested in his Participant's Account (employment has
not terminated) and the Participant may increase the Vested
percentage in such account:
(1) a separate account shall be established for the
Participant's interest in the Plan as of the time of the
distribution; and
(2) at any relevant time, the Participant's Vested
portion of the separate account shall be equal to an amount
("X") determined by the formula:
X equals P(AB plus (R x D)) - (R x D)
For purposes of applying the formula: P is the Vested
percentage at the relevant time, AB is the account balance
at the relevant time, D is the amount of distribution, and R
is the ratio of the account balance at the relevant time to
the account balance after distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) (1) The death benefit payable pursuant to Section 6.2
shall be paid to the Participant's Beneficiary within a
reasonable time after the Participant's death by either of the
following methods, as elected by the Participant (or if no
election has been made prior to the Participant's death, by his
Beneficiary) subject, however, to the rules specified in Section
6.6(b):
(i) One lump-sum payment in cash or in property;
(ii) Payment in monthly, quarterly, semi-annual, or
annual cash installments over a period to be
determined by the Participant or his Beneficiary.
After periodic installments commence, the
Beneficiary shall have the right to direct the
Trustee to reduce the period over which such
periodic installments shall be made, and the
Trustee shall adjust the cash amount of such
periodic installments accordingly.
(2) In the event the death benefit payable pursuant to
Section 6.2 is payable in installments, then, upon the
death of the Participant, the Administrator may direct the
Trustee to segregate the death benefit into a separate
account, and the Trustee shall invest such segregated
account separately, and the funds accumulated in such
account shall be used for the payment of the installments.
(b) Notwithstanding any provision in the Plan to the
contrary, distributions upon the death of a Participant shall be
made in accordance with the following requirements and shall
otherwise comply with Code Section 401(a)(9) and the Regulations
thereunder. If it is determined pursuant to Regulations that the
distribution of a Participant's interest has begun and the
Participant dies before his entire interest has been distributed
to him, the remaining portion of such interest shall be
distributed at least as rapidly as under the method of
distribution selected pursuant to Section 6.5 as of his date of
death. If a Participant dies before he has begun to receive any
distributions of his interest under the Plan or before
distributions are deemed to have begun pursuant to Regulations,
then his death benefit shall be distributed to his Beneficiaries
by December 31st of the calendar year in which the fifth
anniversary of his date of death occurs.
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However, the 5-year distribution requirement of the
preceding paragraph shall not apply to any portion of the
deceased Participant's interest which is payable to or for the
benefit of a designated Beneficiary. In such event, such portion
may, at the election of the Participant (or the Participant's
designated Beneficiary), be distributed over a period not
extending beyond the life expectancy of such designated
Beneficiary provided such distribution begins not later than
December 31st of the calendar year immediately following the
calendar year in which the Participant died. However, in the
event the Participant's spouse (determined as of the date of the
Participant's death) is his Beneficiary, the requirement that
distributions commence within one year of a Participant's death
shall not apply. In lieu thereof, distributions must commence on
or before the later of: (1) December 31st of the calendar year
immediately following the calendar year in which the Participant
died; or (2) December 31st of the calendar year in which the
Participant would have attained age 70 1/2. If the surviving
spouse dies before distributions to such spouse begin, then the
5-year distribution requirement of this Section shall apply as if
the spouse was the Participant.
(c) For purposes of Section 6.6(b), the election by
a designated Beneficiary to be excepted from the 5-year
distribution requirement must be made no later than December 31st
of the calendar year following the calendar year of the
Participant's death. Except, however, with respect to a
designated Beneficiary who is the Participant's surviving spouse,
the election must be made by the earlier of: (1) December 31st of
the calendar year immediately following the calendar year in
which the Participant died or, if later, the calendar year in
which the Participant would have attained age 70 1/2; or (2)
December 31st of the calendar year which contains the fifth
anniversary of the date of the Participant's death. An election
by a designated Beneficiary must be in writing and shall be
irrevocable as of the last day of the election period stated
herein. In the absence of an election by the Participant or a
designated Beneficiary, the 5-year distribution requirement shall
apply.
(d) For purposes of this Section, the life
expectancy of a Participant and a Participant's spouse shall be
redetermined annually in accordance with Regulations. Life
expectancy and joint and last survivor expectancy shall be
computed using the return multiples in Tables V and VI of
Regulation 1.72-9.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the Trustee
is to make a distribution or to commence a series of payments on or as of an
Anniversary Date, the distribution or series of payments may be made or begun on
such date or as soon thereafter as is practicable. However, unless a Former
Participant elects in writing to defer the receipt of benefits (such election
may not result in a death benefit that is more than incidental), the payment of
benefits shall begin not later than the 60th day after the close of the Plan
Year in which the latest of the following events occurs: (a) the date on which
the Participant attains the earlier of age 65 or the Normal Retirement Age
specified herein; (b) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or (c) the date the Participant terminates
his service with the Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution
payable to a Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
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registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored.
6.10 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached the "earliest
retirement age" under the Plan. For the purposes of this Section, "alternate
payee," "qualified domestic relations order" and "earliest retirement age" shall
have the meaning set forth under Code Section 414(p).
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of
responsibilities:
(a) Consistent with the "funding policy and method"
determined by the Employer, to invest, manage, and control the
Plan assets subject, however, to the direction of an Investment
Manager if the Trustee should appoint such manager as to all or a
portion of the assets of the Plan;
(b) At the direction of the Administrator, to pay benefits
required under the Plan to be paid to Participants, or, in the
event of their death, to their Beneficiaries;
(c) To maintain records of receipts and disbursements and
furnish to the Employer and/or Administrator for each Plan Year a
written annual report per Section 7.7; and
(d) If there shall be more than one Trustee, they shall
act by a majority of their number, but may authorize one or more
of them to sign papers on their behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust Fund
to keep the Trust Fund invested without distinction between
principal and income and in such securities or property, real or
personal, wherever situated, as the Trustee shall deem advisable,
including, but not limited to, stocks, common or preferred, bonds
and other evidences of indebtedness or ownership, and real estate
or any interest therein. The Trustee shall at all times in making
investments of the Trust Fund consider, among other factors, the
short and long-term financial needs of the Plan on the basis of
information furnished by the Employer. In making such
investments, the Trustee shall not be restricted to securities or
other property of the character expressly authorized by the
applicable law for trust investments; however, the Trustee shall
give due regard to any limitations imposed by the Code or the Act
so that at all times the Plan may qualify as a qualified Profit
Sharing Plan and Trust.
(b) The Trustee may employ a bank or trust company
pursuant to the terms of its usual and customary bank agency
agreement, under which the duties of such bank or trust company
shall be of a custodial, clerical and record-keeping nature.
(c) The Trustee, at the direction of the Administrator,
shall ratably apply for, own, and pay premiums on Contracts on
the lives of the Participants. If a life insurance policy is to
be purchased for a Participant, the aggregate premium for
ordinary life insurance for each Participant must be less than
50% of the aggregate of the contributions and Forfeitures to the
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credit of the Participant at any particular time. If term
insurance is purchased with such contributions, the aggregate
premium must be less than 25% of the aggregate contributions and
Forfeitures allocated to a Participant's Combined Account. If
both term insurance and ordinary life insurance are purchased
with such contributions, the amount expended for term insurance
plus one-half of the premium for ordinary life insurance may not
in the aggregate exceed 25% of the aggregate contributions and
Forfeitures allocated to a Participant's Combined Account. The
Trustee must convert the entire value of the life insurance
contracts at or before retirement into cash or provide for a
periodic income so that no portion of such value may be used to
continue life insurance protection beyond retirement, or
distribute the Contracts to the Participant. In the event of any
conflict between the terms of this Plan and the terms of any
insurance Contract purchased hereunder, the Plan provisions shall
control.
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under
common law, statutory authority, including the Act, and other provisions of the
Plan, shall have the following powers and authorities, to be exercised in the
Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or other
property and to retain the same. In conjunction with the purchase
of securities, margin accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to
purchase, or otherwise dispose of any securities or other
property held by the Trustee, by private contract or at public
auction. No person dealing with the Trustee shall be bound to see
to the application of the purchase money or to inquire into the
validity, expediency, or propriety of any such sale or other
disposition, with or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to
give general or special proxies or powers of attorney with or
without power of substitution; to exercise any conversion
privileges, subscription rights or other options, and to make any
payments incidental thereto; to oppose, or to consent to, or
otherwise participate in, corporate reorganizations or other
changes affecting corporate securities, and to delegate
discretionary powers, and to pay any assessments or charges in
connection therewith; and generally to exercise any of the powers
of an owner with respect to stocks, bonds, securities, or other
property;
(d) To cause any securities or other property to be
registered in the Trustee's own name or in the name of one or
more of the Trustee's nominees, and to hold any investments in
bearer form, but the books and records of the Trustee shall at
all times show that all such investments are part of the Trust
Fund;
(e) To borrow or raise money for the purposes of the Plan in
such amount, and upon such terms and conditions, as the Trustee
shall deem advisable; and for any sum so borrowed, to issue a
promissory note as Trustee, and to secure the repayment thereof
by pledging all, or any part, of the Trust Fund; and 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,
expediency, or propriety of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash
balances as the Trustee may, from time to time, deem to be in the
best interests of the Plan, without liability for interest
thereon;
(g) To accept and retain for such time as the Trustee may
deem advisable any securities or other property received or
acquired as Trustee hereunder, whether or not such securities or
other property would normally be purchased as investments
hereunder;
(h) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry out the
powers herein granted;
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(i) To settle, compromise, or submit to arbitration any
claims, debts, or damages due or owing to or from the Plan, to
commence or defend suits or legal or administrative proceedings,
and to represent the Plan in all suits and legal and
administrative proceedings;
(j) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation, and such agent or counsel
may or may not be agent or counsel for the Employer;
(k) To apply for and procure from responsible insurance
companies, to be selected by the Administrator, as an investment
of the Trust Fund such annuity, or other Contracts (on the life
of any Participant) as the Administrator shall deem proper; to
exercise, at any time or from time to time, whatever rights and
privileges may be granted under such annuity, or other Contracts;
to collect, receive, and settle for the proceeds of all such
annuity or other Contracts as and when entitled to do so under
the provisions thereof;
(l) To invest funds of the Trust in time deposits or savings
accounts bearing a reasonable rate of interest in the Trustee's
bank;
(m) To invest in Treasury Bills and other forms of United
States government obligations;
(n) To invest in shares of investment companies registered
under the Investment Company Act of 1940;
(o) To sell, purchase and acquire put or call options if the
options are traded on and purchased through a national securities
exchange registered under the Securities Exchange Act of 1934, as
amended, or, if the options are not traded on a national
securities exchange, are guaranteed by a member firm of the New
York Stock Exchange;
(p) To deposit monies in federally insured savings accounts
or certificates of deposit in banks or savings and loan
associations;
(q) To pool all or any of the Trust Fund, from time to time,
with assets belonging to any other qualified employee pension
benefit trust created by the Employer or an affiliated company of
the Employer, and to commingle such assets and make joint or
common investments and carry joint accounts on behalf of this
Plan and such other trust or trusts, allocating undivided shares
or interests in such investments or accounts or any pooled assets
of the two or more trusts in accordance with their respective
interests;
(r) To do all such acts and exercise all such rights and
privileges, although not specifically mentioned herein, as the
Trustee may deem necessary to carry out the purposes of the Plan.
(s) Directed Investment Account. The powers granted to the
Trustee shall be exercised in the sole fiduciary discretion of
the Trustee. However, if Participants are so empowered by the
Administrator, each Participant may direct the Trustee to
separate and keep separate all or a portion of his account; and
further each Participant is authorized and empowered, in his sole
and absolute discretion, to give directions to the Trustee
pursuant to the procedure established by the Administrator and in
such form as the Trustee may require concerning the investment of
the Participant's Directed Investment Account. The Trustee shall
comply as promptly as practicable with directions given by the
Participant hereunder. The Trustee may refuse to comply with any
direction from the Participant in the event the Trustee, in its
sole and absolute discretion, deems such directions improper by
virtue of applicable law. The Trustee shall not be responsible or
liable for any loss or expense which may result from the
Trustee's refusal or failure to comply with any directions from
the Participant. Any costs and expenses related to compliance
with the Participant's directions shall be borne by the
Participant's Directed Investment Account.
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7.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's discretion, make
loans to Participants and Beneficiaries under the following
circumstances: (l) loans shall be made available to all
Participants and Beneficiaries on a reasonably equivalent basis;
(2) loans shall not be made available to Highly Compensated
Employees in an amount greater than the amount made available to
other Participants and Beneficiaries; (3) loans shall bear a
reasonable rate of interest; (4) loans shall be adequately
secured; and (5) shall provide for repayment over a reasonable
period of time.
(b) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the
Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the
Participant during the one year period ending on the day
before the date on which such loan is made, over the
outstanding balance of loans from the Plan to the
Participant on the date on which such loan was made, or
(2) one-half (1/2) of the present value of the
non-forfeitable accrued benefit of the Participant under
the Plan.
For purposes of this limit, all plans of the Employer shall
be considered one plan.
(c) Loans shall provide for level amortization with
payments to be made not less frequently than quarterly over a
period not to exceed five (5) years. However, loans used to
acquire any dwelling unit which, within a reasonable time, is to
be used (determined at the time the loan is made) as a principal
residence of the Participant shall provide for periodic repayment
over a reasonable period of time that may exceed five (5) years.
(d) Any loans granted or renewed on or after the last day
of the first Plan Year beginning after December 31, 1988 shall be
made pursuant to a Participant loan program. Such loan program
shall be established in writing and must include, but need not be
limited to, the following:
(1) the identity of the person or positions authorized
to administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or
denied;
(4) limitations, if any, on the types and amounts of
loans offered;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a
Participant loan; and
(7) the events constituting default and the steps that
will be taken to preserve Plan assets.
Such Participant loan program shall be contained in
a separate written document which, when properly executed, is
hereby incorporated by reference and made a part of the Plan.
Furthermore, such Participant loan program may be modified or
amended in writing from time to time without the necessity of
amending this Section.
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7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from
time to time, in accordance with the terms of the Plan, make payments out of the
Trust Fund. The Trustee shall not be responsible in any way for the application
of such payments.
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as shall
from time to time be agreed upon in writing by the Employer and the Trustee. An
individual serving as Trustee who already receives full-time pay from the
Employer shall not receive compensation from the Plan. In addition, the Trustee
shall be reimbursed for any reasonable expenses, including reasonable counsel
fees incurred by it as Trustee. Such compensation and expenses shall be paid
from the Trust Fund unless paid or advanced by the Employer. All taxes of any
kind and all kinds whatsoever that may be levied or assessed under existing or
future laws upon, or in respect of, the Trust Fund or the income thereof, shall
be paid from the Trust Fund.
7.7 ANNUAL REPORT OF THE TRUSTEE
With in a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer's contribution for each Plan Year,
the Trustee shall furnish to the Employer and Administrator a written statement
of account with respect to the Plan Year for which such contribution was made
setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund
upon sales or other disposition of the assets;
(c) the increase, or decrease, in the value of the
Trust Fund;
(d) all payments and distributions made from the Trust
Fund; and
(e) such further information as the Trustee and/or
Administrator deems appropriate. The Employer, forthwith
upon its receipt of each such statement of account, shall
acknowledge receipt thereof in writing and advise the
Trustee and/or Administrator of its approval or disapproval
thereof. Failure by the Employer to disapprove any such
statement of account within thirty (30) days after its
receipt thereof shall be deemed an approval thereof. The
approval by the Employer of any statement of account shall
be binding as to all matters embraced therein as between the
Employer and the Trustee to the same extent as if the
account of the Trustee had been settled by judgment or
decree in an action for a judicial settlement of its account
in a court of competent jurisdiction in which the Trustee,
the Employer and all persons having or claiming an interest
in the Plan were parties; provided, however, that nothing
herein contained shall deprive the Trustee of its right to
have its accounts judicially settled if the Trustee so
desires.
7.8 AUDIT
(a) If an audit of the Plan's records shall be required
by the Act and the regulations thereunder for any Plan Year,
the Administrator shall direct the Trustee to engage on
behalf of all Participants an independent qualified public
accountant for that purpose. Such accountant shall, after an
audit of the books and records of the Plan in accordance
with generally accepted auditing standards, within a
reasonable period after the close of the Plan Year, furnish
to the Administrator and the Trustee a report of his audit
setting forth his opinion as to whether any statements,
schedules or lists that are required by Act Section 103 or
the Secretary of Labor to be filed with the Plan's annual
report, are presented fairly in conformity with generally
accepted accounting principles applied consistently. All
auditing and accounting fees shall be an expense of and may,
at the election of the Administrator, be paid from the Trust
Fund.
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(b) If some or all of the information necessary to enable
the Administrator to comply with Act Section 103 is maintained by
a bank, insurance company, or similar institution, regulated and
supervised and subject to periodic examination by a state or
federal agency, it shall transmit and certify the accuracy of
that information to the Administrator as provided in Act Section
103(b) within one hundred twenty (120) days after the end of the
Plan Year or by such other date as may be prescribed under
regulations of the Secretary of Labor.
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering to
the Employer, at least thirty (30) days before its effective
date, a written notice of his resignation.
(b) The Employer may remove the Trustee by mailing by
registered or certified mail, addressed to such Trustee at his
last known address, at least thirty (30) days before its
effective date, a written notice of his removal.
(c) Upon the death, resignation, incapacity, or removal of
any Trustee, a successor may be appointed by the Employer; and
such successor, upon accepting such appointment in writing and
delivering same to the Employer, shall, without further act,
become vested with all the estate, rights, powers, discretions,
and duties of his predecessor with like respect as if he were
originally named as a Trustee herein. Until such a successor is
appointed, the remaining Trustee or Trustees shall have full
authority to act under the terms of the Plan.
(d) The Employer may designate one or more successors
prior to the death, resignation, incapacity, or removal of a
Trustee. In the event a successor is so designated by the
Employer and accepts such designation, the successor shall,
without further act, become vested with all the estate, rights,
powers, discretions, and duties of his predecessor with the like
effect as if he were originally named as Trustee herein
immediately upon the death, resignation, incapacity, or removal
of his predecessor.
(e) Whenever any Trustee hereunder ceases to serve as
such, he shall furnish to the Employer and Administrator a
written statement of account with respect to the portion of the
Plan Year during which he served as Trustee. This statement shall
be either (i) included as part of the annual statement of account
for the Plan Year required under Section 7.7 or (ii) set forth in
a special statement. Any such special statement of account should
be rendered to the Employer no later than the due date of the
annual statement of account for the Plan Year. The procedures set
forth in Section 7.7 for the approval by the Employer of annual
statements of account shall apply to any special statement of
account rendered hereunder and approval by the Employer of any
such special statement in the manner provided in Section 7.7
shall have the same effect upon the statement as the Employer's
approval of an annual statement of account. No successor to the
Trustee shall have any duty or responsibility to investigate the
acts or transactions of any predecessor who has rendered all
statements of account required by Section 7.7 and this
subparagraph.
7.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, the
Trustee at the direction of the Administrator shall transfer the Vested
interest, if any, of such Participant in his account to another trust forming
part of a pension, profit sharing or stock bonus plan maintained by such
Participant's new employer and represented by said employer in writing as
meeting the requirements of Code Section 401(a), provided that the trust to
which such transfers are made permits the transfer to be made.
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7.11 DIRECT ROLLOVER
(a) This Section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election
under this Section, a distributee may elect, at the time and in
the manner prescribed by the Plan Administrator, to have any
portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct
rollover.
(b) For purposes of this Section the following definitions
shall apply:
(1) An eligible rollover distribution is any
distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one
of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint
life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such
distribution is required under Code Section 401(a)(9); and
the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities).
(2) An eligible retirement plan is an individual
retirement account described in Code Section 408(a), an
individual retirement annuity described in Code Section
408(b), an annuity plan described in Code Section 403(a), or
a qualified trust described in Code Section 401(a), that
accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to
the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement
annuity.
(3) 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 Code
Section 414(p) are distributees with regard to the interest
of the spouse or former spouse.
(4) A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to
amend the Plan, subject to the limitations of this Section.
Any such amendment shall be adopted by formal action of the
Employer's board of directors and executed by an officer
authorized to act on behalf of the Employer. However, any
amendment which affects the rights, duties or
responsibilities of the Trustee and Administrator may only
be made with the Trustee's and Administrator's written
consent. Any such amendment shall become effective as
provided therein upon its execution. The Trustee shall not
be required to execute any such amendment unless the Trust
provisions contained herein are a part of the Plan and the
amendment affects the duties of the Trustee hereunder.
(b) No amendment to the Plan shall be effective if it
authorizes or permits any part of the Trust Fund (other than
such part as is required to pay taxes and administration
expenses) to be used for or diverted to any purpose other
than for the exclusive benefit of the Participants or their
Beneficiaries or estates; or causes any reduction in the
amount credited to the account of any Participant; or causes
or permits any portion of the Trust Fund to revert to or
become property of the Employer.
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(c) Except as permitted by Regulations, no Plan amendment
or transaction having the effect of a Plan amendment (such as a
merger, plan transfer or similar transaction) shall be effective
to the extent it eliminates or reduces any "Section 411(d) (6)
protected benefit" or adds or modifies conditions relating to
"Section 411(d) (6) protected benefits" the result of which is a
further restriction on such benefit unless such protected
benefits are preserved with respect to benefits accrued as of the
later of the adoption date or effective date of the amendment.
"Section 411(d) (6) protected benefits" are benefits described in
Code Section 411(d)(6)(A), early retirement benefits and
retirement-type subsidies, and optional forms of benefit.
8.2 TERMINATION
(a) The Employer shall have the right at any time to terminate
the Plan by delivering to the Trustee and Administrator written notice
of such termination. Upon any full or partial termination, all amounts
credited to the affected Participants' combined Accounts shall become
100% Vested as provided in Section 6.4 and shall not thereafter be
subject to forfeiture, and all unallocated amounts shall be allocated to
the accounts of all Participants in accordance with the provisions
hereof.
(b) Upon the full termination of the Plan, the Employer shall
direct the distribution of the assets of the Trust Fund to Participants
in a manner which is consistent with and satisfies the provisions of
Section 6.5. Distributions to a Participant shall be made in cash or in
property or through the purchase of irrevocable nontransferable deferred
commitments from an insurer. Except as permitted by Regulations, the
termination of the Plan shall not result in the reduction of "Section
411(d) (6) protected benefits" in accordance with Section 8.1(c).
8.3 MERGER OR CONSOLIDATION
This Plan and Trust may be merged or consolidated with, or its
assets and/or liabilities may be transferred to any other plan and trust only if
the benefits which would be received by a Participant of this Plan, in the event
of a termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d) (6) protected
benefits" in accordance with Section 8.1(c).
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between
the Employer and any Participant or to be a consideration or an inducement for
the employment of any Participant or Employee. Nothing contained in this Plan
shall be deemed to give any Participant or Employee the right to be retained in
the service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect which
such discharge shall have upon him as a Participant of this Plan.
9.2 ALIENATION
(a) Subject to the exceptions provided below, no benefit
which shall be payable out of the Trust Fund to any person
(including a Participant or his Beneficiary) shall be subject in
any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber,
or charge the same shall be void; and no such benefit shall in
any manner be liable for, or subject to, the debts, contracts,
liabilities, engagements, or torts of any such person, nor shall
it be subject to attachment or legal process for or against such
person, and the same shall not be recognized by the Trustee,
except to such extent as may be required by law.
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(b) This provision shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan, as a result
of a loan from the Plan. At the time a distribution is to be made
to or for a Participant's or Beneficiary's benefit, such
proportion of the amount distributed as shall equal such loan
indebtedness shall be paid by the Trustee to the Trustee or the
Administrator, at the direction of the Administrator, to apply
against or discharge such loan indebtedness. Prior to making a
payment, however, the Participant or Beneficiary must be given
written notice by the Administrator that such loan indebtedness
is to be so paid in whole or part from his Participant's Combined
Account. If the Participant or Beneficiary does not agree that
the loan indebtedness is a valid claim against his Vested
Participant's Combined Account, he shall be entitled to a review
of the validity of the claim in accordance with procedures
provided in Sections 2.12 and 2.13.
(c) This provision shall not apply to a "qualified
domestic relations order" defined in Code Section 414(p), and
those other domestic relations orders permitted to be so treated
by the Administrator under the provisions of the Retirement
Equity Act of 1984. The Administrator shall establish a written
procedure to determine the qualified status of domestic relations
orders and to administer distributions under such qualified
orders. Further, to the extent provided under a "qualified
domestic relations order," a former spouse of a Participant shall
be treated as the spouse or surviving spouse for all purposes
under the Plan.
9.3 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to
the Act and the laws of the State of Ohio, other than its laws respecting choice
of law, to the extent not preempted by the Act.
9.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or
neuter gender, they shall be construed as though they were also used in another
gender in all cases where they would so apply, and whenever any words are used
herein in the singular or plural form, they shall be construed as though they
were also used in the other form in all cases where they would so apply.
9.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding
the Trust and/or Plan established hereunder to which the Trustee or the
Administrator may be a party, and such claim, suit, or proceeding is resolved in
favor of the Trustee or Administrator, they shall be entitled to be reimbursed
from the Trust Fund for any and all costs, attorney's fees, and other expenses
pertaining thereto incurred by them for which they shall have become liable.
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically
permitted by law, it shall be impossible by operation of the Plan
or of the Trust, by termination of either, by power of revocation
or amendment, by the happening of any contingency, by collateral
arrangement or by any other means, for any part of the corpus or
income of any trust fund maintained pursuant to the Plan or any
funds contributed thereto to be used for, or diverted to,
purposes other than the exclusive benefit of Participants,
Retired Participants, or their Beneficiaries.
(b) In the event the Employer shall make an excessive
contribution under a mistake of fact pursuant to Act Section
403(c)(2)(A), the Employer may demand repayment of such excessive
contribution at any time within one (l) year following the time
of payment and the Trustees shall return such amount to the
Employer within the one (1) year period. Earnings of the Plan
attributable to the excess contributions may not be returned to
the Employer but any losses attributable thereto must reduce the
amount so returned.
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9.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act and regulations thereunder, shall be bonded in an amount not
less than 10% of the amount of the funds such Fiduciary handles; provided,
however, that the minimum bond shall be $1,000 and the maximum bond, $500,000.
The amount of funds handled shall be determined at the beginning of each Plan
Year by the amount of funds handled by such person, group, or class to be
covered and their predecessors, if any, during the preceding Plan Year, or if
there is no preceding Plan Year, then by the amount of the funds to be handled
during the then current year. The bond shall provide protection to the Plan
against any loss by reason of acts of fraud or dishonesty by the Fiduciary alone
or in connivance with others. The surety shall be a corporate surety company (as
such term is used in Act Section 412(a) (2)), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an expense of and may, at the election
of the Administrator, be paid from the Trust Fund or by the Employer.
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors, shall
be responsible for the validity of any Contract issued hereunder or for the
failure on the part of the insurer to make payments provided by any such
Contract, or for the action of any person which may delay payment or render a
Contract null void or unenforceable in whole or in part.
9.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not have
any responsibility for the validity of this Plan or for the tax or legal aspects
of this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the insurer.
9.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for such Participant or
Beneficiary in accordance with the provisions of the Plan, shall, to the extent
thereof, be in full satisfaction of all claims hereunder against the Trustee and
the Employer, either of whom may require such Participant, legal representative,
Beneficiary, guardian or committee, as a condition precedent to such payment, to
execute a receipt and release thereof in such form as shall be determined by the
Trustee or Employer.
9.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2)
the Administrator and (3) the Trustee. The named Fiduciaries shall have only
those specific powers, duties, responsibilities, and obligations as are
specifically given them under the Plan. In general, the Employer shall have the
sole responsibility for making the contributions provided for under Section 4.1;
and shall have the sole authority to appoint and remove the Trustee and the
Administrator; to formulate the Plan's "funding policy and method"; and to amend
or terminate, in whole or in part, the Plan. The Administrator shall have the
sole responsibility for the administration of the Plan, which responsibility is
specifically described in the Plan. The Trustee shall have the sole
responsibility of management of the assets held under the Trust, except those
assets, the management of which has been assigned to an Investment Manager, who
shall be solely responsible for the management of the assets assigned to it, all
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as specifically provided in the Plan. Each named Fiduciary warrants that any
directions given, information furnished, or action taken by it shall be in
accordance with the provisions of the Plan, authorizing or providing for such
direction, information or action. Furthermore, each named Fiduciary may rely
upon any such direction, information or action of another named Fiduciary as
being proper under the Plan, and is not required under the Plan to inquire into
the propriety of any such direction, information or action. It is intended under
the Plan that each named Fiduciary shall be responsible for the proper exercise
of its own powers, duties, responsibilities and obligations under the Plan. No
named Fiduciary shall guarantee the Trust Fund in any manner against investment
loss or depreciation in asset value. Any person or group may serve in more than
one Fiduciary capacity. In the furtherance of their responsibilities hereunder,
the "named Fiduciaries" shall be empowered to interpret the Plan and Trust and
to resolve ambiguities, inconsistencies and omissions, which findings shall be
binding, final and conclusive.
9.13 HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
9.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary,
contributions to this Plan are conditioned upon the initial
qualification of the Plan under Code Section 401. If the Plan
receives an adverse determination with respect to its initial
qualification, then the Plan may return such contributions to the
Employer within one year after such determination, provided the
application for the determination is made by the time prescribed
by law for filing the Employer's return for the taxable year in
which the Plan was adopted, or such later date as the Secretary
of the Treasury may prescribe.
(b) Notwithstanding any provisions to the contrary, except
Sections 3.6, 3.7, and 4.1(f), any contribution by the Employer
to the Trust Fund is conditioned upon the deductibility of the
contribution by the Employer under the Code and, to the extent
any such deduction is disallowed, the Employer may, within one
(1) year following the disallowance of the deduction, demand
repayment of such disallowed contribution and the Trustee shall
return such contribution within one (1) year following the
disallowance. Earnings of the Plan attributable to the excess
contribution may not be returned to the Employer, but any losses
attributable thereto must reduce the amount so returned.
9.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
IN WITNESS WHEREOF, this Plan has been executed the day and year first
above written.
PEOPLES FEDERAL SAVINGS AND LOAN
ASSOCIATION OF MASSILLON
By /s/ Paul von Gunten, President
TRUSTEES OF THE PEOPLES FEDERAL
401(K) PROFIT SHARING PLAN
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By /s/ Paul von Gunten
________________________
Paul von Gunten
By /s/ Thomas E. Shelt
________________________
Thomas E. Shelt
By /s/ Linda L. Fowler
________________________
Linda L. Fowler
<PAGE>
RESOLUTION OF BOARD OF DIRECTORS AND
FIRST AMENDMENT TO
PEOPLES FEDERAL SAVINGS AND LOAN ASSOCIATION OF MASSILLON
401(K) PROFIT SHARING PLAN
WHEREAS, Peoples Federal Savings and Loan Association of Massillon adopted
the Peoples Federal 401(k) Profit Sharing Plan effective October 1, 1988; and
WHEREAS, Peoples Federal Savings and Loan Association of Massillon adopted
an Amendment and Restatement of such 401(k) Profit Sharing Plan effective
October 1, 1993;
NOW, THEREFORE, BE IT RESOLVED that said Plan is hereby amended as follows:
ITEM I
Effective July 1, 1996, Section 3.1, CONDITIONS OF ELIGIBILITY, is amended by
deleting the words "six (6) Months" and substituting the words "one Year of
Service" in the first paragraph thereof and deleting the second paragraph
thereof so that such section reads as follows in its entirety:
Any Eligible Employee who has completed one (1) Year of
Service and has attained age 21 shall be eligible to participate
hereunder as of the date he has satisfied such requirements. However,
any Employee who was a Participant in the Plan prior to the effective
date of this amendment shall continue to participate in the Plan. The
Employer shall give each prospective Eligible Employee written notice of
his eligibility to participate in the Plan prior to the close of the
Plan Year in which he first becomes an Eligible Employee.
ITEM II
Effective July 1, 1996, Section 3.3, EFFECTIVE DATE OF PARTICIPATION, is amended
by deleting the words "the first day of the month" in the first paragraph
thereof and substituting the words "the October 1st or April 1st" so that such
paragraph reads as follows:
An Eligible Employee shall become a Participant effective
as of the October 1st or April 1st coinciding with or next following the
date on which such Employee met the eligibility requirements of Section
3.1, provided said Employee was still employed as of such date (or if
not employed on such date, as of the date of rehire if a 1-Year Break in
Service has not occurred).
ITEM III
Effective August 1, 1996, ARTICLE VII, TRUSTEE, is amended by the addition of
the following Section 7.12:
7.12 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold
"qualifying Employer securities," as that term is defined in the Act,
provided, however, that the Trustee shall not be permitted to acquire
any qualifying Employer securities if, immediately after the acquisition
of such securities, the fair market value of all qualifying Employer
securities held by the Trustee hereunder should amount to more than 80%
of the fair market value of all the assets in the Trust Fund. The
authority to acquire such qualifying Employer securities shall be
limited to purchases made during the initial public offering period
pursuant to the direction of the Participants in this Plan.
ITEM IV
Effective October 1, 1996, Section 4.1, FORMULA FOR DETERMINING EMPLOYER'S
CONTRIBUTION, is hereby amended by adding the following paragraph thereto:
Effective October 1, 1996, no contributions will be made
to this Plan during the time that the Employer is actively funding the
Employee Stock Ownership Plan. It is the Employer's intention to resume
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contributions to this 401(k) Profit Sharing Plan once the Employee Stock
Ownership Plan is no longer being funded.
I hereby certify that the foregoing is a true and correct copy of a Resolution
duly adopted by the Board of Directors of Peoples Federal Savings and Loan
Association of Massillon in a meeting held July 15, 1996.
Date: July 15, 1996 By: /s/ Paul von Gunten
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SECOND AMENDMENT
TO THE
PEOPLES FEDERAL
401(K) PROFIT SHARING PLAN
WHEREAS, Peoples Federal Savings and Loan Association of Massillon (the
"Company") sponsors the Peoples Federal 401(k) Profit Sharing Plan (the "Plan");
and
WHEREAS, the Company wants to add an employer stock fund to the Plan;
NOW THEREFORE, effective as of February 25, 1997, the Plan shall be amended
as follows:
1. The paragraph added to Section 4.1 by the First Amendment, prohibiting
contributions effective October 1, 1996, for the period that the Company is
funding its Employee Stock Ownership Plan, is hereby deleted.
2. Section 4.12 is amended to provide as follows:
4.12 DIRECTED INVESTMENT ACCOUNT
The Trustee shall create and maintain the Employer Stock Fund
consisting of Employer Stock and cash or cash equivalents needed to meet
the obligations of such fund or for the purchase of Employer Stock. For
purposes of this Section and Article IV, "Employer Stock" means stock or
other securities of the Employer permitted to be held by the Plan under
the Employee Retirement Income Security Act of 1974 and the Code. The
Administrator will direct the Trustee to create and maintain three or
more additional investment funds according to investment criteria
established by the Administrator. The Administrator has the right to
direct the Trustee to merge or modify any existing investment funds
(other than the Employer Stock Fund), or to create additional investment
funds.
Each Participant has the right to direct that his Account and
contributions be invested in one or more investment funds. A Participant
may make or change an investment direction among the investment funds,
excluding the Employer Stock Fund, on any business day by submitting an
instruction in a way prescribed by the Administrator. A Participant may
direct the investment of his Accounts and contributions to his Accounts
into or out of the Employer Stock Fund during the period commencing on
the third business day following an earnings release by the Employer
with respect to its preceding fiscal quarter and ending on the last day
of the second calendar month of the then current fiscal quarter. The
Board of Directors of the Employer may, in its sole discretion, declare
additional periods during which Participants may direct the investment
of their Accounts and contributions to their Accounts into and out of
the Employer Stock Fund. Such instructions shall be implemented as soon
as administratively practicable. A reasonable charge (established by the
Administrator to defray the administrative expense of processing the
investment direction) shall be deducted from a Participant's Account in
connection with the implementation of an investment instruction.
No more than $500,000 of a Participant's Rollover Account may be
invested in the Employer Stock Fund.
3. Sections 4.13, 4.14, 4.15 and 4.16 are added to provide as follows:
4.13 INVESTMENT IN EMPLOYER STOCK
One of the purposes of the Plan is to provide Participants with
ownership interests in the Employer, and to the extent practicable, all
available assets of the Employer Stock Fund shall be used to purchase
Employer Stock, which shall be held by the Trustee until distribution or
sale for distribution of cash to Participants or Beneficiaries or until
disposition is required to implement changes in investment designations.
Up to 100% of the Trust Fund may be invested in Employer Stock as a
result of the operation of this Section.
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4.14 VOTING EMPLOYER STOCK
Each Participant will be entitled to direct the manner in which
any Employer Stock held in his Account will be voted or not voted. The
Administrator will establish procedures for the notification of
Participants of matters on which a vote is to be taken and for the
giving of voting directions. In the absence of directions from the
Participant, the Trustee will vote Employer Stock in the Trustee's sole
discretion.
4.15 TENDER OFFERS
Each Participant shall have the sole right to direct the Trustee
as to the manner in which to respond to a tender or exchange offer for
Employer Stock allocated to such Participant's Account. The
Administrator shall use its best efforts to notify or cause to be
notified each Participant of any tender or exchange offer to holders
generally of Employer Stock, together with appropriate forms for
directing the Trustee as to the manner in which to respond to such
tender or exchange offer. Upon timely receipt of directions from a
Participant, the Trustee shall respond to the tender or exchange offer
in accordance with, and only in accordance with, such directions. If the
Trustee does not receive timely directions from a Participant under this
Section, the Trustee shall not tender, sell, convey or transfer any
Employer Stock allocated to a Participant's Account in response to any
tender or exchange offer.
The Trustee will respond to a tender or exchange offer as to
unallocated Employer Stock in such manner as the Trustee shall determine
in its sole discretion.
4.16 TRUSTEE'S RESPONSIBILITIES REGARDING EMPLOYER STOCK
The Trustee may purchase and sell Employer Stock for the Plan
wherever Employer Stock is traded, in the over-the-counter market or in
negotiated private transactions. The Trustee shall not actively manage
the Employer Stock Fund. Employer Stock shall be systematically
purchased or sold by the Trustee, pursuant to Participants' directions,
as soon as administratively practicable after the Trustee receives
contributions and/or the dates as of which Participants are permitted to
change investment directions under the Plan. All transactions in
Employer Stock will be at the then current market price as quoted on the
exchange or quotation system where Employer Stock is traded. Except in
the case of negotiated private transactions, neither the Employer nor
any of its Affiliates nor the Administrator may exercise any control or
influence over the times when, or the prices at which, shares of
Employer Stock are purchased or sold by the Trustee, the amount of
Employer Stock to be purchased or sold, the manner in which purchases or
sales are made, or the selection of the broker or dealer through, from
or to whom the purchases or sales are executed or made.
IN WITNESS WHEREOF, the Company has caused this Amendment to be executed
the 19th day of February, 1997.
PEOPLES FEDERAL SAVINGS AND
LOAN ASSOCIATION OF MASSILLON
By: /s/ Paul von Gunten
Name (Print): Paul von Gunten
Title: President, Ceo
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EXHIBIT 5
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
P.O. BOX 2508
CINCINNATI, OHIO 45201
Date: NOV 02 1995
Employer Identification Number:
34-0684576
DLN:
345238111
PEOPLES FEDERAL SAVINGS & LOAN Person to Contact:
ASSOCIATION OF MASSILLON JOANNA WEBER
211 LINCOLN WAY EAST Contact Telephone Number:
MASSILLON, OH 44646 (513) 684-3347
Plan Name:
PEOPLE FEDERAL 401(K)
PROFIT SHARING PLAN
Plan Number: 002
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend on
its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal or
local statutes.
This determination letter is applicable for the amendment(s) adopted on
9/19/94.
This plan has been mandatorily disaggregated, permissively aggregated, or
restructured to satisfy the nondiscrimination requirements.
This letter is issued under Rev. Proc. 93-39 and considers the amendments
required by the Tax Reform Act of 1986 except as otherwise specified in this
letter.
This plan satisfies the nondiscriminatory current availability requirements
of section 1.401(a)(4)-4(b) of the regulations with respect to those benefits,
rights, and features that are currently available to all employees in the plan's
coverage group. For this purpose, the plan's coverage group consists of those
employees treated as currently benefiting for purposes of demonstrating that the
plan satisfies the minimum coverage requirements of section 410(b) of the Code.
This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by the Uruguay Round
Agreements Act, Pub. L. 103-465.
The information on the enclosed addendum is an integral part of this
determination. Please be sure to read and keep it with this letter.
<PAGE>
We have sent a copy of this letter to your representative as indicated in
the power of attorney.
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ C. Ashley Bullard
_________________________
C. Ashley Bullard
District Director
Enclosures:
Publication 794
Reporting & Disclosure Guide
for Employee Benefit Plans
Addendum
-2-
<PAGE>
PEOPLES FEDERAL SAVINGS & LOAN
This plan satisfies the nondiscrimination in amount requirement of section
1.401(a)(4)-1(b)(2) of the regulations on the basis of a design-based safe
harbor for plan years beginning before 10/1/93. For plan years beginning on or
after 10/1/93, this plan satisfies the nondiscrimination in amount requirement
of section 1.401(a)(4)-1(b)(2) of the regulations on the basis of a general test
described in the regulations.
<PAGE>
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
P.O. BOX 2508
CINCINNATI, OHIO 45201
Date: JUNE 02 1994
Employer Identification Number:
34-0684576
File Folder Number:
340005020
PEOPLES FEDERAL SAVINGS & LOAN Person to Contact:
ASSOCIATION OF MASSILLON JOANNA WEBER
211 LINCOLN WAY EAST Contact Telephone Number:
MASSILLON, OH 44646 (513) 684-3141
Plan Name:
401 K PROFIT SHARING TRUST
Plan Number: 002
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend on
its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal or
local statutes.
This determination letter is applicable for the amendment(s) adopted on
June 21, 1993.
This plan has been mandatorily disaggregated, permissively aggregated, or
restructured to satisfy the nondiscrimination requirements.
This plan satisfies the nondiscrimination in amount requirement of section
1.401(a)(4)-1(b)(2) of the regulations on the basis of a design-based safe
harbor described in the regulations.
This letter is issued under Rev. Proc. 93-39 and considers the amendments
required by the Tax Reform Act of 1986 except as otherwise specified in this
letter.
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ C. Ashley Bullard
_________________________
C. Ashley Bullard
District Director
Enclosures:
Publication 794
<PAGE>
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
P.O. BOX 2508
CINCINNATI, OHIO 45201
Date: 22 FEB 1990
Employer Identification Number:
34-0684576
File Folder Number:
340005020
PEOPLES FEDERAL SAVINGS & LOAN Person to Contact:
ASSOC OF MASSILLON TECHNICAL SCREENER
211 LINCOLN WAY EAST Contact Telephone Number:
MASSILLON, OH 44646 (513) 684-3957
Plan Name:
401 K PROFIT SHARING TRUST
Plan Number: 002
Dear Applicant:
Based on the information supplied, we have made a favorable determination
on your application identified above. Please keep this letter in your permanent
records.
Continued qualification of the plan will depend on its effect in operation
under its present form. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) The status of the plan in operation will be reviewed periodically.
The enclosed document describes the impact of Notice 86-13 and some events
that could occur after you receive this letter that would automatically nullify
it without specific notice from us. The document also explains how operation of
the plan may affect a favorable determination letter, and contains information
about filing requirements.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other Federal or
local statutes.
This determination letter is applicable for the plan adopted on September
7, 1988.
If you have any questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ H. M. Browning
_____________________________
Harold M. Browning
District Director
Enclosures:
Publication 794
PWBA 515
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference of our report dated December
5, 1996, on the consolidated financial statements of Peoples Financial
Corporation as of and for the year ended September 30, 1996, as filed with the
Securities and Exchange Commission on Form S-8 on or about February 26, 1997.
GRANT THORNTON LLP
/s/ Grant Thornton LLP
Cincinnati, Ohio
February 25, 1997
EXHIBIT 23(b)
CONSENT OF INDEPENDENT ACCOUNTANTS
Peoples Federal Savings and Loan
Association of Massillon
211 Lincoln Way East
Massillon, Ohio 44646
We consent to the incorporation by reference in this Registration Statement
of Peoples Financial Corporation on Form S-8 of our report dated December 5,
1996, on the consolidated balance sheet of Peoples Federal Savings and Loan
Association as of September 30, 1995, and the related consolidated statements of
income, changes in shareholders' equity and cash flows for the two years ended
September 30, 1995.
HALL, KISTLER & COMPANY LLP
Canton, Ohio
February 21, 1997