<PAGE>
As filed with the Securities and Exchange Commission on September 19, 1996
Registration No. 333-
- -----------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
TRANS LEASING INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-2747735
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3000 DUNDEE ROAD 60062
NORTHBROOK, ILLINOIS (Zip Code)
(Address of Principal Executive Offices)
___________________________________________
TRANS LEASING INTERNATIONAL, INC. SAVINGS PLAN
(Full title of the plan)
___________________________________________
RICHARD GROSSMAN (847) 272-1000
PRESIDENT AND CHIEF EXECUTIVE OFFICER (Telephone number, including
3000 DUNDEE ROAD area code, of agent for service)
NORTHBROOK, ILLINOIS 60062
(Name and address of agent for service)
____________________________________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
IMMEDIATELY UPON THE FILING OF THIS REGISTRATION STATEMENT
_____________________________________________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF REGISTRATION
REGISTERED REGISTERED(1) SHARE(2) PRICE(2) FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share 30,000 shares $3.53125 $105,937.50 $36.54
====================================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416 under the Securities Act of 1933, as
amended (the "Act"), this Registration Statement also covers an
indeterminate number of additional shares as may be issuable as a result of
anti-dilution provisions of, and such indeterminate amount of interests to
be offered or sold pursuant to, the employee benefit plan described herein.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h) under the Act, based upon the
average high and low bid price of the registrant's Common Stock on September
13, 1996, as reported by the Nasdaq National Market.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED
IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated by reference in this
Registration Statement: (1) the Company's Annual Report on Form 10-K for
the year ended June 30, 1995 (File No. 0-15167); (2) the Company's
Quarterly Reports on Form 10-Q for the quarters ended September 30, 1995,
December 31, 1995 and March 31, 1996 (File No. 0-15167); (3) all other
reports filed by the Company pursuant to Sections 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") since June
30, 1995; and (4) the description of the Company's Common Stock contained
in its Registration Statement on Form 8-A and any amendments or reports
filed for the purpose of updating such description.
All documents filed by the Company and the Trans Leasing
International, Inc. Savings Plan (As Amended and Restated Effective as of
July 1, 1994), as amended effective as of October 1, 1995 (the "Plan"),
with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Registration Statement and prior to the
filing of a post-effective amendment which indicates that all shares of
Common Stock offered pursuant to this Registration Statement have been sold
or that deregisters all shares of Common Stock then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement
and to be a part hereof from the date of filing of such documents.
The financial statements of the Company and the Plan incorporated
by reference in this Registration Statement have been audited by Deloitte &
Touche LLP, independent accountants, for the periods indicated in their
reports thereon, which are incorporated by reference or included in the
Annual Report on Form 10-K for the year ended June 30, 1995. The
consolidated financial statements audited by Deloitte & Touche LLP have
been incorporated herein by reference in reliance on their report given on
their authority as experts in accounting and auditing. To the extent that
Deloitte & Touche LLP audits and reports on the financial statements and
any financial statement schedules of the Company issued at future dates,
and consents to the use of their reports thereon, such financial statements
and schedules also will be incorporated by reference in this Registration
Statement in reliance upon their reports and said authority.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable - the Company's Common Stock to be offered pursuant
to this Registration Statement has been registered under Section 12 of the
Exchange Act as described in Item 3 of this Part II.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Delaware law and Article Ninth of the Company's Restated
Certificate of Incorporation, as amended, provide that the Company shall,
under certain circumstances and subject to certain limitations, indemnify
any person made or threatened to be made a party to a proceeding by reason
of that person's former or present official capacity with the Company
against judgments, penalties, fines, settlements and reasonable expenses.
Any such person is also entitled, subject to certain limitations, to
payment or reimbursement of reasonable expenses in advance of the final
disposition of the proceeding.
2
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
No securities are to be reoffered or resold pursuant to this
Registration Statement.
ITEM 8. EXHIBITS.
4.1(a)* Restated Certificate of Incorporation.
4.1(b)* Certificate of Amendment to Restated Certificate of
Incorporation, dated December 12, 1986.
4.2(a)* Bylaws.
4.2(b)* Amendment to the Bylaws, dated April 27, 1988.
4.3* Specimen form of the Company's Common Stock certificate.
5.1** Opinion and Consent of Oppenheimer Wolff & Donnelly.
5.2** Internal Revenue Service Determination Letter for the
Savings Plan
(As Amended and Restated Effective as of July 1, 1994).
23.1 Consent of Oppenheimer Wolff & Donnelly (included in
Exhibit 5.1).
23.2** Consent of Deloitte & Touche LLP.
24.1 Power of Attorney (included on page 6 of this Registration
Statement).
99.1** Trans Leasing International, Inc. Savings Plan (As Amended
and Restated Effective as of July 1, 1994).
99.2** First Amendment to Trans Leasing International, Inc.
Savings Plan (As Amended and Restated Effective as of
July 1, 1994), as amended effective as of October 1, 1995.
* Incorporated by reference to the exhibits to the Company's
Registration Statement on Form S-1, as amended (File No. 33-50228).
** Filed herewith.
In connection with Exhibit 5.2, the registrant will also submit the
Plan to the Internal Revenue Service ("IRS") in a timely manner and will
make all changes required by the IRS in order to qualify the Plan.
3
<PAGE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represents a fundamental change in the information set
forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end
of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to
be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by
the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and
4
<PAGE>
Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
5
<PAGE>
SIGNATURES
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 Northbrook, State of Illinois, on September 16, 1996.
TRANS LEASING INTERNATIONAL, INC.
By:/s/Richard Grossman
---------------------------------------
Richard Grossman
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard Grossman and Norman Smagley, and each of
them, as his true and lawful attorney-in-fact and agent, with full powers of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on September 16,
1996 in the capacities indicated.
SIGNATURE TITLE
--------- -----
/s/ Richard Grossman President, Chief Executive Officer and
- --------------------------- Chairman of the Board (Principal Executive Officer)
Richard Grossman
/s/ Norman Smagley Vice President, Finance and Chief Financial Officer
- --------------------------- (Principal Financial and Accounting Officer)
Norman Smagley
/s/ Clifford V. Brokaw, III Director
- ---------------------------
Clifford V. Brokaw, III
/s/ Larry S. Grossman Director
- ---------------------------
Larry S. Grossman
/s/ Michael J. Heyman Director
- ---------------------------
Michael J. Heyman
/s/ Mark C. Matthews Director
- ---------------------------
Mark C. Matthews
- --------------------------- Director
John S. Stodder
6
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the Plan
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Northbrook, State of
Illinois or September 16, 1996.
TRANS LEASING INTERNATIONAL, INC.
SAVINGS PLAN
By:/s/ Richard Grossman
---------------------------------
Richard Grossman
Plan Administrator
7
<PAGE>
INDEX TO EXHIBITS
EXHIBIT PAGE NO.
------- --------
4.1(a)* Restated Certificate of Incorporation....................
4.1(b)* Certificate of Amendment to Restated Certificate of
Incorporation Incorporation, dated December 12, 1986.....
4.2(a)* Bylaws...................................................
4.2(b)* Amendment to the Bylaws, dated April 27, 1988............
4.3* Specimen form of the Company's Common Stock Certificate..
5.1** Opinion and Consent of Oppenheimer Wolff & Donnelly......
5.2** Internal Revenue Service Determination Letter for the
Savings Plan (As Amended and Restated Effective as of
July 1, 1994)............................................
23.1 Consent of Oppenheimer Wolff & Donnelly (included in
Exhibit 5.1).............................................
23.2** Consent of Deloitte & Touche LLP.........................
24.1 Power of Attorney (included on page 6 of this
Registration Statement)..................................
99.1** Trans Leasing International, Inc. Savings Plan (As
Amended and Restated Effective as of July 1, 1994).......
99.2** First Amendment to Trans Leasing International, Inc.
Savings Plan (As Amended and Restated Effective as of
July 1, 1994), as amended effective as of October 1,
1995.....................................................
_____________
* Incorporated by reference to the exhibits to the Company's Registration
Statement on Form S-1, as amended (File No. 33-50228).
** Filed herewith.
<PAGE>
September 18, 1996
Trans Leasing International, Inc.
3000 Dundee Road
Northbrook, Illinois 60062
RE: REGISTRATION STATEMENT ON FORM S-8 EXHIBIT 5.1
Ladies and Gentlemen:
We are acting as counsel to Trans Leasing International, Inc., a Delaware
corporation (the "Company"), in connection with the offering and registration by
the Company of (a) 30,000 shares of the Company's Common Stock, par value $.01
per share (the "Shares"), and (b) an indeterminate amount of plan interests (the
"Interests") issuable in connection with the Trans Leasing International, Inc.
Savings Plan (As Amended and Restated Effective as of July 1, 1994), as amended
by the First Amendment to the Trans Leasing International, Inc. Savings Plan
(the "Plan"), pursuant to the Company's Registration Statement on Form S-8 filed
with the Securities and Exchange Commission on September 19, 1996 (the
"Registration Statement"). We understand that it is the Company's intention
that the Shares will be purchased by the Plan Trustee on the open market.
In this connection, we have examined originals or copies, certified or otherwise
identified to our satisfaction, of such corporate records, certificates and
written and oral statements of officers and accountants of the Company and of
public officials, and other documents that we have considered necessary and
appropriate for this opinion and, based thereon, we advise you that, in our
opinion:
1. The Shares that are being registered by the Company under the Registration
Statement pursuant to the Plan referred to in the Registration Statement shall
not constitute original issuance securities, but shall continue to be validly
issued, fully paid and nonassessable after being purchased in open market
transactions.
2. The Interests, when issued, delivered and paid for in accordance with the
Plan as set forth in the Registration Statement, will be validly issued, fully
paid and non-assessable.
<PAGE>
Trans Leasing International, Inc.
September 18, 1996
Page 2
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to its use as part of the Registration Statement.
Very truly yours,
/s/ OPPENHEIMER WOLFF & DONNELLY
<PAGE>
EXHIBIT 5.2
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
P O BOX A-8617 DPN20-6
CHICAGO, IL 60690
Date: September 29, 1995 Employer Identification Number:
36-2747735
TRANS LEASING INTERNATIONAL, INC. File Folder Number:
C/O GREGORY K. BROWN 360078137
OPPENHEIMER WOLF & DONNELLY Person to Contact:
180 NORTH STETSON AVE., 45TH FLOOR TECHNICAL SCREENER
CHICAGO, IL 60601 Contact Telephone Number:
(312) 435-1040
Plan Name:
SAVINGS PLAN [AS AMENDED
AND RESTATED EFFECTIVE
AS OF 7-1-94]
Plan Number: 001
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 02-24-95.
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.
<PAGE>
-2-
TRANS LEASING INTERNATIONAL, INC.
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, Publ. L. 103-465.
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/ Robert H. Brock
-------------------
Robert H. Brock
District Director
Enclosures
Publication 794
<PAGE>
Exhibit 23.2
------------
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Trans Leasing International, Inc. ("Trans Leasing") on Form S-8 of our report
dated September 1, 1995, included in the Annual Report on Form 10-K of Trans
Leasing for the year ended June 30, 1995 and to the reference to us as experts
under Item 3. of this Registration Statement.
/s/ Deloitte & Touche LLP
Chicago, Illinois
September 17, 1996
<PAGE>
Exhibit 99.1
TRANS LEASING INTERNATIONAL, INC.
SAVINGS PLAN
(As Amended and Restated Effective as of July 1, 1994)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE I DEFINITIONS 1
ARTICLE II ELIGIBILITY 11
2.1 CONDITIONS OF ELIGIBILITY 11
2.2 EFFECTIVE DATE OF PARTICIPATION 11
2.3 DETERMINATION OF ELIGIBILITY 12
2.4 TERMINATION OF ELIGIBILITY 12
2.5 OMISSION OF ELIGIBLE EMPLOYEE 12
2.6 INCLUSION OF INELIGIBLE EMPLOYEE 12
ARTICLE III CONTRIBUTION AND ALLOCATION 12
3.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION 12
3.2 PARTICIPANT'S SALARY REDUCTION ELECTION 13
3.3 AMOUNT OF EMPLOYER PROFIT SHARING CONTRIBUTION 16
3.4 TIME OF PAYMENT OF EMPLOYER MATCHING, BASIC AND DISCRE-
TIONARY CONTRIBUTIONS 17
3.5 TIME OF PAYMENT OF ELECTIVE CONTRIBUTION 17
3.6 ALLOCATION OF CONTRIBUTIONS AND EARNINGS 17
3.7 ACTUAL DEFERRAL PERCENTAGE TESTS 20
3.8 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS 22
3.9 MAXIMUM CONTRIBUTION PERCENTAGE 23
3.10 ADJUSTMENT FOR EXCESSIVE CONTRIBUTION PERCENTAGE 24
3.11 ADDITIONAL NONDISCRIMINATION IN EMPLOYER CONTRIBUTIONS 25
3.12 MAXIMUM ANNUAL ADDITIONS 26
3.13 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS 30
3.14 TRANSFERS FROM QUALIFIED PLANS 31
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE IV VALUATIONS 35
4.1 VALUATION OF THE TRUST FUND 35
4.2 METHOD OF VALUATION 35
ARTICLE V DETERMINATION AND DISTRIBUTION OF BENEFITS 35
5.1 DETERMINATION OF BENEFITS UPON RETIREMENT 35
5.2 DETERMINATION OF BENEFITS UPON DEATH 35
5.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY 37
5.4 DETERMINATION OF BENEFITS UPON TERMINATION 37
5.5 DISTRIBUTION OF BENEFITS 38
5.6 DISTRIBUTION OF BENEFITS UPON DEATH 41
5.7 TIME OF DISTRIBUTION 44
5.8 DISTRIBUTION FOR MINOR BENEFICIARY 45
5.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN 45
5.10 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS 45
5.11 DIRECT ROLLOVERS 45
ARTICLE VI TRUSTEE 46
6.1 BASIC RESPONSIBILITIES OF THE TRUSTEE 46
6.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE 47
6.3 OTHER POWERS OF THE TRUSTEE 48
6.4 LOANS TO PARTICIPANTS 50
6.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS 52
6.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES 52
6.7 ANNUAL REPORT OF THE TRUSTEE 52
6.8 AUDIT 53
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
6.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE 54
6.10 TRANSFER OF INTEREST 55
ARTICLE VII AMENDMENT, TERMINATION, AND MERGERS 55
7.1 AMENDMENT 55
7.2 TERMINATION 56
7.3 MERGER OR CONSOLIDATION 56
ARTICLE VIII TOP HEAVY AND ADMINISTRATION 57
8.1 TOP HEAVY PLAN REQUIREMENTS 57
8.2 DETERMINATION OF TOP HEAVY STATUS 57
8.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER 60
8.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY 61
8.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES 61
8.6 POWERS AND DUTIES OF THE ADMINISTRATOR 61
8.7 RECORDS AND REPORTS 62
8.8 APPOINTMENT OF ADVISERS 63
8.9 INFORMATION FROM EMPLOYER 63
8.10 PAYMENT OF EXPENSES 63
8.11 MAJORITY ACTIONS 63
8.12 CLAIMS PROCEDURE 63
8.13 CLAIMS REVIEW PROCEDURE 64
ARTICLE IX MISCELLANEOUS 64
9.1 PARTICIPANT'S RIGHTS 64
9.2 ALIENATION 65
9.3 CONSTRUCTION OF PLAN 65
9.4 GENDER AND NUMBER 66
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
9.5 LEGAL ACTION 66
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS 66
9.7 BONDING 67
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE 67
9.9 INSURER'S PROTECTIVE CLAUSE 67
9.10 RECEIPT AND RELEASE FOR PAYMENTS 68
9.11 ACTION BY THE EMPLOYER 68
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY 68
9.13 HEADINGS 69
9.14 APPROVAL BY INTERNAL REVENUE SERVICE 69
9.15 UNIFORMITY 69
</TABLE>
iv
<PAGE>
TRANS LEASING INTERNATIONAL, INC.
SAVINGS PLAN
(As Amended and Restated Effective as of July 1, 1994)
THIS AGREEMENT was originally made and entered into on the 23rd day of June
1, 1988, by and between Trans Leasing International, Inc. (herein referred to
as the "Employer") and Richard Grossman (herein referred to as the "Trustee").
W I T N E S S E T H:
WHEREAS, the Employer desires to recognize the contribution made to its
successful operation by its employees and to reward such contribution by means
of a 401(k) Profit Sharing Plan for those employees who shall qualify as
participants hereunder;
WHEREAS, the Employer desires to amend and restate the Plan effective July
1, 1988 (the "Prior Plan") to incorporate various amendments;
NOW, THEREFORE, effective July 1, 1994, except as otherwise herein provided
(hereinafter called the "Effective Date"), the Prior Plan is amended and
restated, except where otherwise noted, in its entirety, and the Trustee hereby
accepts the Plan on the following terms:
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 "Actual Contribution Percentage" has the meaning given in Section
3.9(b).
1.3 "Actual Deferral Percentages" has the meaning given in Section
3.7(b).
1.4 "Administrator" means the person or persons designated by the
Employer pursuant to Section 8.4 to administer the Plan on behalf of the
Employer.
1.5 "Aggregate Account" means, with respect to each Participant, the
value of all accounts maintained on behalf of that Participant, whether
attributable to Employer or Employee contributions.
1.6 "Aggregation Group" has the meaning given in Section 8.2(d).
1.7 "Anniversary Date" means June 30th.
1.8 "Annual Additions" has the meaning given in Section 3.12(b).
1.9 "Annuity Starting Date" has the meaning given in Section 5.5(a)(4).
1.10 "Applicable Period" has the meaning given in Section 5.6(d).
1
<PAGE>
1.11 "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.
1.12 "Beneficiary" means the person to whom the share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
5.2 and 5.6.
1.13 "Code" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
1.14 "Company" means Trans Leasing International, Inc., a corporation with
its principal offices in the State of Illinois.
1.15 "Compensation" with respect to any Participant means total
compensation paid or accrued by the Employer for a Plan Year. Amounts
contributed by the Employer under the within Plan, except for an Employee's
Compensation that is deferred pursuant to Section 3.2, and any non-taxable
fringe benefits provided by the Employer shall not be considered as
Compensation.
For purposes of Section 3.7(a) and Section 3.9 "Compensation" with respect
to any participant means his Deferred Compensation plus compensation which is
currently includible in gross income as provided for under Code Section 414(5).
For a Participant's initial year of participation, Compensation shall be
recognized for the entire Plan Year.
For the Plan Year ending June 30, 1994, Compensation in excess of $235,840
shall be disregarded. For Plan Years beginning after June 30, 1994, a
Participant's Compensation in excess of $150,000 (as may be adjusted each Plan
Year by the Secretary of the Treasury or his delegate) shall be disregarded. In
determining the maximum amount of a Participant's Compensation hereunder, the
family aggregation rules under section 414(q)(6) of the Code shall apply to
Highly Compensated Employees who are five percent (5%) owners or are one of the
ten most highly compensated employees. The Highly Compensated Employee's Family
Members will be treated as a single employee for the Compensation dollar limit
described above (as adjusted), which will be allocated among the Family Members
in proportion to each person's Compensation (without regard to such dollar
limit).
1.16 "Contract" or "Policy" means a life insurance policy or annuity
contract (group or individual) issued by an insurer elected by a Participant.
1.17 "Determination Date" has the meaning given in Section 8.2(e).
1.18 "Direct Rollover" has the meaning given in Section 5.11(b)(iv).
1.19 "Distributee" has the meaning given in Section 5.11(b)(iii).
1.20 "Eligible Employee" means any Employee who has satisfied the
provisions of Section 2.1, exclusive of any such employee the terms of whose
employment are governed by the provisions of a collective bargaining agreement
with respect to which retirement benefits were the subject to good faith
negotiations unless such agreement provides for his coverage hereunder.
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1.21 "Eligible Retirement Plan" has the meaning given in Section
5.11(b)(ii).
1.22 "Eligible Rollover Distribution" has the meaning given in Section
5.11(b)(i).
1.23 "Employee" means any person who is employed by the Employer, but
excludes any person who is employed as an independent contractor. Employee shall
include leased employees within the meaning of Code Section 414(n)(2) unless
such leased employees are covered by a plan described in Code Section 414(n)(5)
and such leased employees, with respect to services performed after December 31,
1986, do not constitute more than twenty percent (20%) of the recipient's
nonhighly compensated work force.
1.24 "Employer Basic Contribution" means Employer's contributions to the
Plan that are made in accordance with the provisions of Section 3.1(c).
1.25 "Employer Elective Contribution" means with respect to any
Participant the Employer's contributions to the Plan that are made pursuant to
the participant's deferral election provided in Section 3.2.
1.26 "Employer Matching Contribution" means the Employer's contributions
to the Plan that are made in accordance with the provisions of Section 3.1(b).
1.27 "Employer Non-Elective Contributions" means Employer Basic
Contributions, Employer Matching Contributions and Employer Profit Sharing
Contributions.
1.28 "Employer Profit Sharing Contribution" means Employer's contributions
to the Plan that are made in accordance with the provisions of Section 3.1(d).
1.29 "Employers" means Trans Leasing International, Inc. and each Related
Company which, with the Company's consent, adopts the Plan and any successor
which shall maintain this Plan; and any predecessor which has maintained this
Plan. Such Employers are referred to individually as an Employer.
1.30 "Entry Dates" means the first day of each Plan Year quarter; namely,
the July 1, October 1, January 1 and April 1 of each Plan Year. The
Administrator may, in its discretion, allow additional Entry Dates, as it deems
necessary, with uniform and nondiscriminatory application.
1.31 "Excess Aggregate Contributions" has the meaning given in Section
3.10(b).
1.32 "Excess Amount" has the meaning given in Section 3.13(b).
1.33 "Family Member" means an individual described in Code Section 414(q)
(6)(B).
1.34 "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.
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1.35 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on July 1st of each year and ending the following June 30th.
1.36 "Former participant" means a person who has been a Participant, but
who has ceased to be a participant for any reason. For purposes of Section 1.32,
a Former Participant shall be treated as a Highly Compensated Employee if such
Former Participant was a Highly Compensated Employee when he separated from
service with the Employer or was a Highly Compensated Employee at any time after
attaining age 55.
1.37 "415 Compensation" has the meaning given in Section 3.12(d).
1.38 "Highly Compensated Group" and "Highly Compensated Employee." The
Highly Compensated Group includes every Participant who is a Highly Compensated
Employee. A Highly Compensated Employee is an employee who, during the
determination year or the year preceding the determination year (the Preceding
Year):
(a) was a 5 percent owner of the Employer at any time during such
year.
(b) received Compensation in excess of $99,000 for the 1994 Plan Year
(or $96,368 during the Preceding Year) from his Employer.
(c) received Compensation in excess of $66,000 (or $64,245 during the
Preceding Year) and was in the top twenty percent (20%) of employees when
ranked on the basis of Compensation for that year.
(d) was an officer of an Employer at any time during that year and
received Compensation of more than fifty percent (50%) of the Code section
415(b)(1)(A) limitation in effect for the applicable year.
(e) was the spouse, lineal ascendant or descendant, or spouse of a
lineal ascendant or descendent of an employee who was a 5 percent owner or
was one of the top 10 most Highly Compensated Employees.
A former employee will be considered a member of the Highly Compensated Group if
such former employee was a Highly Compensated Employee either when he separated
from service with the Employers, or at any time after he attained age 55. The
determination of whether an employee is a Highly Compensated Employee will be
made with reference to the definitions provided in Code section 414(q) and any
regulations issued by the Secretary of the Treasury thereunder (including any
cost-of-living adjustments). For purposes of determining the Highly Compensated
Group, no more than 50 employees or, if lesser, the greater of 3 employees or 10
percent of employees shall be considered officers of an Employer. An employee
shall be treated as an officer hereunder if he is an administrative executive in
the regular and continued service of an Employer, irrespective of any title
which may or may not have been assigned to him.
Notwithstanding the foregoing, an employee other than a five percent (5%)
owner who was not a Highly Compensated Employee during a Preceding Year will not
be considered a Highly Compensated Employee for a determination year unless he
is one of the top 100 employees ranked by Compensation for the determination
year. The dollar amounts referred to in this subsection 1.32 shall be adjusted
each
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Plan Year to take into account increases in the cost of living as provided
by the Secretary of the Treasury or his delegate.
1.39 "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.
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
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, and
employment commencement date (or reemployment commencement date). The provisions
of Department of Labor regulations 2530.200b-2(b) and (c) are incorporated
herein by reference.
1.40 "Investment Funds" means the funds maintained under the Plan pursuant
to the provisions of Section 3.15.
1.41 "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.
1.42 "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 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 150 percent of the amount in effect under Code
Section 415(c) (1) (A) for any such Plan Year.
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(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), and (m) 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), and (m) 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), and (m) shall be taken into
account.
1.43 "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.
1.44 "Limitation Year" means the Plan Year.
1.45 "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, if credit therefor is
necessary to prevent the Employee from incurring a 1-Year Break in Service, and,
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.
1.46 "Non-Elective Contribution" means the Employer's contributions to the
Plan other than those made pursuant to the Participant's deferral election
provided for in Section 3.2.
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1.47 "Non-Highly Compensated Employee or Group." The Non-Highly Compensated
Group includes every Participant who is not a Highly Compensated Employee. Every
member of the Non-Highly Compensated Group is a Non-Highly Compensated Employee.
1.48 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.49 "Normal Retirement Date" means the first day of the month coinciding
with or next following the Participant's Normal Retirement Age (the later of (i)
age 65, (ii) in the case of a Participant who commences Participation within
five years before attaining age 65, the 5th anniversary of Participation in the
Plan, or (iii) in the case of a participant not described in (ii), the 10th
anniversary of participation in the Plan). A participant shall be fully vested
in his Account upon attaining his Normal Retirement Age.
1.50 "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."
1.51 "Participant" means any Eligible Employee who is participating in the
Plan as provided in Sections 2.2 and 2.3, and has not for any reason become
ineligible to participate further in the Plan.
1.52 "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.
1.53 "Participant's Combined Account" means the total aggregate amount of
each Participant's Elective Account and Participant's Account.
1.54 "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 Elective
Contributions.
1.55 "Plan" means this instrument, including all amendments thereto.
1.56 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on July 1st of each year and ending the following June 30th.
1.57 "Pre-Retirement Survivor Annuity" means an annuity for the life of the
Participant's spouse the payments under which must be equal to the amount of
benefit which can be purchased with the accounts of a Participant used to
provide the death benefit under the Plan.
1.58 "Projected Annual Benefit" has the meaning given in Section 3.12(1)
(2).
1.59 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to time.
1.60 "Related Company" means any corporation, trade or business during any
period in which it is, along with the Company, a member of a controlled group of
corporations, a group of trades or
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businesses under common control or an affiliated service group, as described in
sections 414(b), 414(c) and 414(m), respectively, of the Code and the
regulations issued thereunder, and any other entity required to be aggregated
with the Company pursuant to regulations issued under section 414(0) of the
Code, provided, however, that only Related Companies that are within the
controlled group of corporations described in section 409(l)(4) of the Code are
eligible to adopt the Plan. For purposes of determining the existence of a
Related Defined Contribution Plan under subsection 5.5, a Related Company under
a parent-subsidiary agreement shall be determined by using a "more than 50
percent test," instead of an "at least 80 percent test" under sections 414(b)
and 414(c) of the Code.
1.61 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.62 "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 or Late Retirement Date (see
Section 5.1).
1.63 "Rollover contribution" has the meaning given in Section 3.14(f).
1.64 "Section 415 Suspense Account" has the meaning given in Section
3.13(c).
1.65 "Super Top Heavy Plan" means a plan described in Section 8.2(b).
1.66 "Taxable Wage Base" means the Social Security taxable wage base
established annually under Section 230 of the Social Security Act.
1.67 "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.
1.68 "Top Heavy Group" has the meaning given in Section 8.2(g).
1.69 "Top Heavy Plan" means a plan described in Section 8.2(a)
1.70 "Top Heavy Plan Year" means a Plan Year during which the Plan is a Top
Heavy Plan.
1.71 "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.
1.72 "Trustee" means the person or entity named as trustee herein or in any
separate trust forming a part of this Plan, and any successors.
1.73 "Trust Fund" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.74 "Valuation Date" means each Anniversary Date and such other date or
dates deemed necessary by the Administrator to determine the value of Plan
assets.
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1.75 "Vested" means the portion of a Participant's Combined Account that is
nonforfeitable. Effective July 1, 1988 and thereafter, any amount in a
Participant's Combined Account shall be at all times one hundred percent (100%)
Vested and nonforfeitable.
1.76 "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.
Years of Service with any Related Company shall be recognized.
ARTICLE II
ELIGIBILITY
2.1 CONDITIONS OF ELIGIBILITY
Any Employee who has completed one (1) Year of Service shall be an
Eligible Employee hereunder as of the date he has satisfied such requirement.
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.
2.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a participant effective as of the
Entry Date coinciding with or next following the date such Employee met the
eligibility requirement of Section 2.1, provided said Employee was still
employed as of such date (or if not employed on such date, as of the date of
rehire).
2.3 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 8.13.
2.4 TERMINATION OF ELIGIBILITY
In the event a participant shall go from a classification of an
Eligible Employee to a noneligible Employee, such Former participant shall no
longer be entitled to share in employer contributions, until such time as his
participant's Account shall be distributed pursuant to the terms of the Plan
unless his status shall change again to that of an Eligible Employee.
Additionally, his interest in the Plan shall continue to share in the earnings
of the Trust Fund.
2.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Fiscal 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
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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.
2.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Fiscal 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 be placed in a suspense
account and used first to reduce aggregate Employer Matching Contributions under
Section 3.1(b) for subsequent Fiscal Years and second to reduce Employer Basic
Contributions under Section 3.1(c) for subsequent Fiscal Years.
ARTICLE III
CONTRIBUTION AND ALLOCATION
3.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For the Fiscal Year during which the Plan is adopted and each Fiscal
Year thereafter, and subject to the conditions and limitations contained herein,
the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of all
participants made pursuant to Section 3.2(a), which amount shall be deemed
the Employer Elective Contribution, plus
(b) The Employer Matching Contribution equal to thirty percent (30%)
of the Employer Elective Contributions of all participants eligible to
share in allocations, plus
(c) An Employer Basic Contribution which may be made annually in the
discretion of the Chief Executive Officer of the Company. Such Employer
Basic Contribution will consist of the following components: (i) An amount
of up to five and seven-tenths percent (5.7%) of each participant's
Compensation for the Fiscal Year, and (ii) an additional contribution for
each such Fiscal Year on behalf of each participant in an amount of up to
five and seven-tenths percent (5.7%) of each Participant's Compensation in
excess of the Taxable Wage Base for that Fiscal Year. The percentage
applicable under each of the foregoing components will be determined
annually in the discretion of the Chief Executive Officer of the Company,
provided that the percentage applicable under clause (ii) will not exceed
the percentage applicable under clause (i) and that the amount of such
contributions will otherwise comply with the applicable provisions of
Section 401(1) of the Code.
(d) Such discretionary Employer Profit Sharing Contribution, if any,
out of current or accumulated profits as the Employer may determine in
accordance with Section 3.3. Employer Profit Sharing Contributions shall be
deemed Employer Non-Elective Contributions and allocated and credited to
Participant's Accounts in accordance with Section 3.6(d).
(e) Notwithstanding the above, however, the Employer's contributions
for any Fiscal 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.
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3.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer from two percent (2%) to
fifteen percent (15%) of his Compensation, subject to the limitations of
this Section.
The amount by which Compensation is reduced shall be that
Participant's Employer Elective Contribution and will be 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
distributed prior to the earlier of:
(1) his termination of employment, Total and permanent Disability,
or death;
(2) his attainment of age 59-1/2;
(3) termination of the Plan without establishment of a successor
plan by the Employer or Related Company;
(4) the date of the sale by the Employer to an entity that is not
a Related Company of substantially all of the assets (within the
meaning of Code Section 409(d)(2)) with respect to a participant who
continues employment with the corporation acquiring such assets;
(5) the date of the sale by the Employer or a Related Company of
its interest in a subsidiary (within the meaning of Code Section
409(d)(3)) to an entity which is not an Related Company with respect
to a participant who continues employment with such subsidiary; or
(6) proven financial hardship, subject to the limitations of
Section 3.2(h).
(d) A Participant's Employer Elective Contribution made pursuant to
this Section shall not exceed $8,994 for the 1993 taxable year ($9,240 for
the 1994 taxable year) of the Participant, as specified in Section 402(g)
of the Code. This dollar limitation shall be adjusted annually as provided
in Code Section 415(d) pursuant to Regulations. The adjusted limitation
shall be effective as of January 1st of each calendar year.
(e) In the event that the dollar limitation provided for in Section
3.2(d) is exceeded with respect to any participant, the Administrator may,
not later than March 1 following the close of such participant's taxable
year, notify the participant in writing of such excess. The Administrator
shall direct the Trustee to distribute such excess amount (and any income
or loss allocable to such amount, determined in accordance with one of the
methods allowed for under Section 1.402(g)-1(e)(5) of the Regulations) to
the participant not later than the first April 15th following the close of
the participant's taxable year. Such distributions will not require the
consent of the participant's spouse under Section 5.5 of the Plan and will
not violate outstanding qualified domestic relations orders, as defined in
Section 9.2(c).
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(f) In the event that a participant is also a participant in (1)
another qualified cash or deferred arrangement (as defined in Code Section
401(k)), (2) a simplified employee pension (as defined in Code Section
408(k)), or (3) a salary reduction arrangement (within the meaning of Code
Section 3121(a)(5)(D)) and the elective deferrals, as defined in Code
Section 402(g)(3), made under such other arrangement(s) and this Plan
cumulatively exceed $8,994 ($9,240 for the 1994 taxable year) for such
participant's 1993 taxable year (or such amount adjusted annually as
provided in Code Section 415(d) pursuant to Regulations), the participant
may, not later than March 1 following the close of his 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. Such amount may then be distributed in the same manner as
provided in Section 3.2(e).
(g) 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 pursuant to Section 5.5.
(h) A participant who is an employee of the Employer may, by:
(1) showing of immediate and heavy financial need, and
(2) showing that other resources are not available to meet the
immediate and heavy financial need,
upon an election filed with the Administrator, withdraw up to one hundred
percent (100%) of his Employer Elective Contributions, but not earnings thereon,
credited to his Participant's Elective Account.
Any request for a withdrawal in accordance with this subsection 3.2(h)
shall be in writing filed with the Administrator in such form and at such time
as the Administrator may require, and the Administrator shall direct the Trustee
to make any distribution with respect to such an election. A participant will be
deemed to have an immediate and heavy financial need if such withdrawal is for
the purpose of:
(1) medical expenses of participant, his spouse or dependent,
(2) down payment on participant's principal residence,
(3) post-secondary tuition (for a period following the date of the
hardship request) for participant, his spouse or dependent, or
(4) the prevention of the eviction from or the foreclosure on
participant's principal residence.
A Participant will be deemed not to have any other resources available to meet
the immediate and heavy financial need if:
(i) he has taken all loans available pursuant to subsection 6.4;
and
(ii) the amount of withdrawal under this subsection 3.2(h) does
not exceed the amount necessary to satisfy his immediate
financial need; and
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(iii) his ability to make Elective Contributions is suspended for a
period of 12 months following a withdrawal under this
subsection 3.2(h); and
(iv) the amount of his Elective Contributions for the Plan Year next
following the Plan Year during which a withdrawal was made
pursuant to this subsection 3.2(h), is reduced by the amount of
Elective Contributions, if any, made by the participant during
the Plan Year in which such hardship withdrawal was taken.
Any hardship withdrawal made pursuant to this Section shall require the written
consent of the Participant's spouse in a manner consistent with Section 5.5(a)
(2), where such withdrawal exceeds $3,500. Such written consent must be obtained
within the 90-day period prior to the date the distribution is made.
(i) The Employer and the Administrator shall adopt a procedure
necessary to implement the salary reduction elections provided for herein.
3.3 AMOUNT OF EMPLOYER PROFIT SHARING CONTRIBUTION
The Employer shall determine the amount of any Employer Profit Sharing
Contribution to be made to the Plan. In determining such contribution, the
Employer shall be entitled to rely upon an estimate of the total Compensation
for all Participants and of the amounts contributible by it. The Employer's
determination of such contribution shall be binding on all Participants, the
Employer, and the Trustee. Such determination shall be final and conclusive and
shall not be subject to change as a result of a subsequent audit by the Internal
Revenue Service or as a result of any subsequent adjustment of the Employer's
records. The Trustee shall have no right or duty to inquire into the amount of
the Employer's Contribution or the method used in determining the amount of the
Employer's Contribution, but shall be accountable only for funds actually
received by the Trustee.
3.4 TIME OF PAYMENT OF EMPLOYER MATCHING, BASIC AND DISCRETIONARY
CONTRIBUTIONS
The Employer shall pay to the Trustee its Contributions to the Plan
under paragraphs 3.1(a), (b), (c), and (d) for each Fiscal 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.
3.5 TIME OF PAYMENT OF ELECTIVE CONTRIBUTION
Employer Elective Contributions accumulated through payroll deductions
shall be paid to the Trustee as soon as is practicable.
3.6 ALLOCATION OF CONTRIBUTIONS 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 the
end of each calendar month (or as of such other time as may be determined
by the Chief Financial Officer of the Company acting in a uniform and
nondiscriminatory manner) all amounts allocated to each such Participant as
set forth herein.
(b) Subject to the provisions of Sections 3.7, 3.9 and 3.12, as of
the end of each calendar month (or as of such other time as may be
determined by the Chief Financial Officer of the Company acting in a
uniform and nondiscriminatory manner), the Employer Elective and
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Matching Contributions made on behalf of each Participant who has elected
to have Employer Elective Contributions made on his behalf for the period
ending on that date, will be allocated and credited to the Participant's
Elective Account.
(c) Subject to the provisions of subsection 3.12, as of the end of
each calendar month (or as of such other time as may be determined by the
Chief Financial Officer of the Company acting in a uniform and
nondiscriminatory manner), Employer Basic Contributions made on behalf of
each Participant for the period ending on that date will be allocated and
credited to such Participant's Account in the following manner:
(1) A Participant will receive an allocation in the same
proportion as his Compensation for the Plan Year bears to the
total Compensation for the Plan Year of all eligible participants,
up to a maximum of five and seven-tenths percent (5.7%) of his
Compensation for the Plan Year.
(2) If the entire amount of the Employer Basic Contribution for
the Plan Year is not allocated under clause (1), an eligible
participant will receive, an allocation of the remaining amount in
the same proportion as his Compensation in excess of the Taxable
Wage Base for the Plan Year bears to the total amount of
Compensation in excess of the Taxable Wage Base for the Plan Year
of all eligible participants, up to a maximum of five and seven-
tenths percent (5.7%) of his Compensation in excess of the Taxable
Wage Base for the Plan Year.
(d) Subject to the provisions of Section 3.12, as of the end of each
Plan Year (or such other time as may be determined by the Chief Financial
Officer of the Company acting in a uniform and nondiscriminatory manner),
Employer Profit Sharing Contributions will be allocated and credited to the
Accounts of participants entitled thereto in the same proportion as his
Compensation for the Plan Year bears to the total Compensation for the Plan
Year of all eligible participants.
(e) As of the end of each calendar month (or as of such other time as
may be determined by the Chief Financial Officer of the Company acting in a
uniform and nondiscriminatory manner), the Rollover Contributions made by,
or on behalf of, a Participant to the Plan for the period ending on that
date will be credited to his Rollover Account.
An Employer contribution made for any Fiscal Year after the end of
such Fiscal Year pursuant to Section 3.1(a), (b), (c), and (d) will be
considered to have been made on the last day of that Fiscal Year, but only
if paid to the Trustee prior to the Company's Federal income tax due date
for that year, including extensions.
Notwithstanding the foregoing provisions of this subsection 3.6, a
Participant who performs less than 501 Hours of Service during a Plan Year
shall not share in the Employer's Matching, Basic or Profit Sharing
Contributions, made pursuant to Section 3.1 for that year, unless required
pursuant to Section 3.6(f).
As of each Anniversary Date or other valuation date, before allocation
of Employer contributions and 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
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nonsegregated accounts bear to the total of all Participants' and Former
Participants' nonsegregated accounts as of such date.
Participants' transfers from other qualified plans deposited in the
general Trust Fund after the first month of the Plan Year shall not share
in any earnings and losses (net appreciation or net depreciation) of the
Trust Fund for the Plan accounting period in which the transfer is
received. Each segregated account maintained on behalf of a participant
shall be credited or charged with its separate earnings and losses.
(e) Participants' Accounts shall be debited for any insurance or
annuity premiums paid, if any, and credited with any dividends received on
insurance contracts.
(f) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of the
Employer's contributions allocated to the Participant's Combined Account of
each Non-Key Employee shall be equal to at least three percent (3%) of such
Non-Key Employee's 415 Compensation (reduced by contributions, if any,
allocated to each Non-Key Employee in any defined contribution plan
included with this plan in a Required Aggregation Group). However, if (i)
the sum of the Employer's contributions 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 (ii)
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 allocated to the
Participant's Combined Account of each Non-Key Employee shall be equal to
the largest percentage allocated to the Participant's Combined Account of
any Key Employee. In determining whether a Non-Key Employee has received
the required minimum allocation, such Non-Key Employee's Deferred
Compensation shall not be taken into account.
Except, however, no such minimum allocation shall be required in this
Plan for any Non-Key Employee who participates in a money purchase pension
plan which is included with this Plan in a Required Aggregation Group.
(g) 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 allocated on behalf of such Key Employee divided by the 415
Compensation for such Key Employee.
(h) For any Top Heavy Plan Year, the minimum allocations set forth
above shall be allocated to the Participant's Combined Account of all Non-
Key Employees who are Participants and who are employed by the Employer on
the last day of the Plan Year, including Non-Key Employees who have (1)
failed to complete a Year of Service; (2) declined to make mandatory
contributions (if required) or salary reduction contributions to the Plan;
and (3) been excluded from participation because of their level of
Compensation.
(i) Any Participant who terminated employment during the Plan Year for
reasons other than death, Total and Permanent Disability or retirement
shall not share in the allocations of the Employer's Basic Contributions
under Section 3.1(c) or Employer Profit Sharing Contributions under Section
3.1(d). Further, if any nonsegregated account of a Participant has been
distributed prior to the subsequent Anniversary Date or other valuation
date, no earnings and losses shall be credited.
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(j) Participants who terminated employment during the Plan Year shall
share in the Employer Elective Contributions under Section 3.1(a) made by
the Employer for the year of termination without regard to the Hours of
Service credited.
(k) Participants who terminated employment during the Plan Year shall
share in the Employer Matching Contributions for the year of termination
without regard to the Hours of Service credited.
(l) Notwithstanding anything herein to the contrary, Participants
terminating for reasons of death shall share in the allocations of
contributions provided for in this Section regardless of whether they
completed a Year of Service during the Plan Year.
(m) Notwithstanding anything herein to the contrary, Participants
terminating for reasons of Total and Permanent Disability shall share in
the allocations of contributions provided for in this Section regardless of
whether they completed a Year of Service during the Plan Year.
(n) Notwithstanding anything herein to the contrary, Participants
terminating for reasons of retirement shall share in the allocations of
contributions provided for in this Section regardless of whether they
completed a Year of Service during the Plan Year.
3.7 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year, the annual
allocation derived from Employer Elective Contributions to Participants'
Elective Accounts shall satisfy one of the following tests:
If the Non-Highly The Highly Compensated
Compensated Group Group may contribute
contributes an average of an average of
------------------------- -------------
Under 2% of Compensation 2 times the rate of
the Non-Highly
Compensated Group
Between 2% - 8% of 2% more than the rate of
Compensation the Non-Highly Compensated
Group
Over 8% of Compensation 1-1/4 times the rate of the
Non-Highly Compensated
Group
(b) The tests under Section 3.7(a) are based on Actual Deferral
Percentages. The term Actual Deferral Percentages means, with respect to
any Participant, the ratio of the amount of Employer Elective Contributions
made on behalf of that Participant to that Participant's Compensation for
such Plan Year. For the purpose of determining the Actual Deferral
Percentage of a Highly Compensated Employee, the Elective Contributions and
Compensation of such Highly Compensated Employee shall include the Elective
Contributions and Compensation of Family Members, and such affected Family
Members shall be disregarded in determining the Actual Deferral Percentage
for the Non-Highly Compensated Employees group. Further, the
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Actual Deferral Percentage of a Highly Compensated Employee shall be
determined after any corrective distributions of Excess Contributions
pursuant to Section 3.2(e), Excess Deferred Compensation pursuant to
Section 3.8 and Excess Aggregate Contributions under Section 3.10.
(c) For the purposes of Sections 3.7(a) and 3.8, a Highly Compensated
Employee and a Non-Highly Compensated Employee shall include any Employee
eligible to make a deferral election pursuant to Section 3.2, whether or
not such deferral election was made.
(d) For the purposes of this Section, 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), the cash or deferred
arrangements included in such plans shall be treated as one arrangement.
(e) For the purposes of this Section, if a Highly Compensated Employee
is a Participant under two (2) or more cash or deferred arrangements of the
Employer or an Related Company, all such cash or deferred arrangements
shall be treated as one (1) cash or deferred arrangement for the purpose of
determining the deferral percentage with respect to such Highly Compensated
Employee.
(f) Notwithstanding the above, the determination and treatment of
Elective Contributions and Actual Deferral Percentage of any Participant
shall satisfy such other requirements as may be prescribed by the Secretary
of the Treasury.
3.8 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's
contributions made pursuant to Section 3.6 do not satisfy one of the tests set
forth in Section 3.7(a), the Administrator shall adjust either the Employer's
Elective Contribution or the Employer Matching Contribution pursuant to the
options set forth below:
(a) Not later than the close of the following Plan Year, each Highly
Compensated Employee, beginning with the Participant having the highest
Actual Deferral Percentage, shall have his portion of excess Deferred
Compensation (adjusted to reflect any income or loss allocable to such
portion, determined in accordance with one of the methods allowed for under
Section l.401(k)-1(f)(4) of the Regulations) distributed to him until one
of the tests set forth in Section 3.7(a) is satisfied. Such distributions
will not require the consent of the Participant's spouse under Section 5.5
of the Plan and will not violate any outstanding qualified domestic
relations order.
(b) Within 2-1/2 months after the end of the Plan Year, a portion of
the Employer Matching Contribution may be deemed an Employer Elective
Contribution for purposes of Section 3.7(a) and for withdrawal purposes
pursuant to Section 3.2(h). Such portion shall be equal to an amount
necessary to satisfy one of the tests set forth in Section 3.7(a), and
shall be reallocated to the Participant's Elective Account. However,
Employer Matching Contributions may be so reallocated to the extent that
they are not used to satisfy the tests of Section 3.9(a). Such reallocation
of the Employer Matching Contribution shall be made on behalf of Non-Highly
Compensated Employees.
(c) Within 2-1/2 months after the end of the Plan Year, the Employer
shall make a contribution on behalf of Non-Highly Compensated Employees in
an amount sufficient to satisfy one of the tests set forth in Section
3.7(a). Such contribution shall be deemed an Employer
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<PAGE>
Elective Contribution and allocated to the Participant's Elective Account
of each Non-Highly Compensated Employee in the same proportion that each
Non-Highly Compensated Employee's Employer Elective Contribution for the
year bears to the total Deferred Compensation of all Non-Highly Compensated
Employees.
(d) In no event can the amount of the Employer Elective Contributions
of a Highly Compensated Employee which are adjusted for a Plan Year in
accordance with either Section 3.8 (a) or (b) exceed the amount of the
Employer Elective Contributions for the same Plan Year for such Highly
Compensated Employee, in accordance with 1.401(k)-1(f)(2) of the
Regulations.
3.9 MAXIMUM CONTRIBUTION PERCENTAGE
(a) For each Plan Year, the annual allocation derived from Employer
Matching Contributions to Participants' Elective Accounts shall satisfy one
of the following tests:
If the Non-Highly The Highly Compensated
Compensated Group Group may receive
receives allocations: allocations
--------------------- ----------------------
Under 2% of Compensation 2 times the rate of
the Non-Highly
Compensated Group
Between 2% - 8% of 2% of Compensation more
Compensation than the Non-Highly
Compensated Group
Over 8% of Compensation 1-1/4 times the rate of the
Non-Highly Compensated
Group
(b) The tests under Section 3.9(a) are based on Actual Contribution
Percentages. The term Actual Contribution Percentage means, with respect to
any Participant, the ratio of the Employer Matching Contribution allocated
to his accounts to that Participant's Compensation for the Plan Year. The
Actual Contribution Percentage of a Highly Compensated Employee shall be
determined after any corrective distribution of excess contributions under
Section 3.2(d), excess Deferred Compensation under Section 3.7(a) and
Excess Aggregate Contributions under Section 3.10(b).
(c) For purposes of determining the Actual Contribution Percentage,
the Administrator may elect pursuant to Regulations to take into account
elective deferrals (as defined in Code Section 402(g)(3)(A)) and qualified
non-elective contributions (as defined in Code Section 401(m)(4)(C))
contributed to any plan maintained by the Employer. In addition, the Actual
Contribution Percentage for a Highly Compensated Employee shall be
determined by including Employer Matching Contributions made pursuant to
Section 3.1 and Compensation of Family Members, and such affected Family
Members shall be disregarded in determining the Actual Contribution
Percentage of Non-Highly Compensated Employees. The Actual Contribution
Percentage of a Highly Compensated Employee shall be determined after any
corrective distributions of Excess Aggregate Contributions. In all cases
the determination and
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<PAGE>
treatment of the Actual Contribution Percentage of any Participant shall
satisfy such other requirements as may be prescribed by the Secretary of
the Treasury.
(d) If two or more plans of the Employer to which matching
contributions, Employee contributions, or elective deferrals are made are
treated as one plan for purposes of Code Section 410(b), such plans shall
be treated as one plan for purposes of this Section 3.9. In addition, if a
Highly Compensated Employee participates in two or more plans described in
Code Section 401(a) or arrangements described in Code Section 401(k) which
are maintained by the Employer or a Related Company to which such
contributions are made, all such contributions shall be aggregated for
purposes of this Section 3.9.
(e) For purposes of Sections 3.9(a) and 3.10, a Highly Compensated
Employee and Non-Highly Compensated Employee shall include any Employee
eligible to have Employer Matching Contributions pursuant to Section 3.1
allocated to his account for the Plan Year.
3.10 ADJUSTMENT FOR EXCESSIVE CONTRIBUTION PERCENTAGE
(a) In the event that the Actual Contribution Percentage for the
Highly Compensated Employee group exceeds the Actual Contribution
Percentage for the Non-Highly Compensated Employee group pursuant to
Section 3.9(a), the Administrator (not later than the end of the following
Plan Year) shall direct the Trustee to distribute to the Highly Compensated
Employee group) the amount of Excess Aggregate Contributions (and any
income allocable to such contributions). Such distribution shall be made on
behalf of the Highly Compensated Employee group in order of their Actual
Contribution Percentages beginning with the highest of such percentages. If
there are losses allocable to such excess amount, the distribution shall in
no event be less than the lesser of the Participant's Account attributable
to Employer Matching Contributions or the Employer's Matching Contributions
for the Plan Year.
(b) Excess Aggregate Contributions means, with respect to any Plan
Year, the excess of:
(1) the aggregate amount of Employer Matching Contributions made
on behalf of the Highly Compensated Employee group for such Plan Year,
over
(2) the maximum amount of such contributions permitted under the
limitations of Section 3.9(a).
(c) The determination of the amount of Excess Aggregate Contributions
with respect to any Plan Year shall be made after:
(1) first determining the excess contributions pursuant to Section
3.2(d), and
(2) then determining the excess annual allocations pursuant to
Section 3.7(a).
3.11 ADDITIONAL NONDISCRIMINATION IN EMPLOYER CONTRIBUTIONS
In addition to the requirements of subsection 3.7 and 3.9, the sum of
the Actual Deferral Percentage and the Actual Contribution Percentage of the
Highly Compensated Employee Group may not exceed the greater of:
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(a) the sum of:
(i) 1.25 times the greater of:
(A) the Actual Deferral Percentage of the Non-Highly Compensated
Group; or
(B) The Actual Contribution Percentage of the Non-Highly
Compensated Group; and
(ii) two percentage points plus the lesser of (A) or (B) next above,
but in no event in excess of twice of the lesser of (A) or (B) above;
or
(b) the sum of:
(i) 1.25 times the lesser of:
(A) the Actual Deferral Percentage of the Non-Highly Compensated
Group; or
(B) the Actual Contribution Percentage of the Non-Highly
Compensated Group; and
(ii) two percentage points plus the greater of (A) or (B) next above,
but in no event in excess of twice or the greater of (A) or (B) above.
If the requirements of this subsection 3.11 are not satisfied, the amount
of such excess will be Excess Contributions or Excess Aggregate Contributions,
as determined in the discretion of the Administrator and will be reduced and
distributed to Highly Compensated Employees according to the applicable
provisions of subsections 3.8 and 3.10.
3.12 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)(l)(A)) or (2) twenty-five
percent (25%) of the Participant's 415 Compensation for such Limitation
Year.
(b) Annual Additions means the sum credited to a Participant's
accounts for any Limitation Year of (1) Employer contributions, (2)
Employee contributions, (3) amounts allocated 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 (4) amounts derived from
contributions paid or accrued, 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(1)(1).
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(c) 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 3.12(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) 415 Compensation shall include the Participant's wages, salaries,
fees for professional service and other amounts for personal services
actually rendered in the course of employment with an Employer maintaining
the Plan (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips and bonuses and in the case of a
Participant who is an Employee within the meaning of Code Section 401(c)(1)
and the regulations thereunder, the Participant's earned income (as
described in Code Section 401(c)(2) and the regulations thereunder)) paid
or accrued during the Limitation Year. 415 Compensation shall exclude (1)
(A) contributions made by the Employer to a plan of deferred compensation
to the extent that, before the application of the Code Section 415
limitations to the Plan, the contributions are not includible in the gross
income of the Employee for the taxable year in which contributed, (B)
Employer contributions made on behalf of an Employee to a simplified
employee pension plan described in Code Section 408(k) to the extent such
contributions are excludable from the Employee's gross income, (C) any
distributions from a plan of deferred compensation regardless of whether
such amounts are includible in the gross income of the Employee when
distributed except any amounts received by an Employee pursuant to an
unfunded non-qualified plan to the extent such amounts are includible in
the gross income of the Employee; (2) amounts realized from the exercise of
a non-qualified stock option or when restricted stock (or property) held by
an Employee either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture; (3) amounts realized from the sale,
exchange or other disposition of stock acquired under a qualified stock
option; and (4) other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the extent that the
premiums are not includible in the gross income of the Employee), or
contributions made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of any annuity contract described in Code
Section 403(b) (whether or not the contributions are excludable from the
gross income of the Employee). For Limitation Years beginning after
December 31, 1988, 415 Compensation shall be limited to $200,000 (unless
adjusted in the same manner as permitted under Code Section 415(d)). For
Limitation Years beginning after June 30, 1994, 415 Compensation shall be
limited to $150,000 (unless adjusted in the same manner as permitted under
Code Section 415(d)).
(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) 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.
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(g) 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)) or
is a member of an affiliated service group (as defined by Code Section
414(m)), all Employees of such Employers shall be considered to be employed
by a single Employer.
(h) 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) Subject to the exception in Section 3.12(o) below, 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.
(k) (1) The defined benefit plan fraction for any Limitation Year is a
fraction (A) the numerator of which is the Projected Annual Benefit of the
Participant under the Plan (determined as of the close of the Limitation
Year), and (B) the denominator of which is the lesser of: (i) the product
of 1.25 multiplied by the maximum dollar limitation provided under Code
Section 415(b)(1)(A) for such Limitation Year, or (ii) the product of 1.4
multiplied by the amount which may be taken into account under Code Section
415(b)(1)(B) for such Limitation Year.
(2) For purposes of applying the limitations of Code Section 415,
the Projected Annual Benefit for any Participant is the benefit,
payable annually, under the terms of the Plan determined pursuant to
Regulation 1.415-7(b)(3).
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(1) (1) The defined contribution plan fraction for any Limitation Year
is a fraction (A) the numerator of which is the sum of the Annual Additions
to the Participant's accounts as of the close of the Limitation Year and
(B) the denominator of which is the sum of the lesser of the following
amounts determined for such year and each prior year of service with the
Employer: (i) the product of 1.25 multiplied by the dollar limitation in
effect under Code Section 415(c)(1)(A) for such Limitation Year
(determined without regard to Code Section 415(c)(6)), or (ii) the product
of 1.4 multiplied by the amount which may be taken into account under Code
Section 415(c)(1)(B) for such Limitation Year.
(2) Notwithstanding the foregoing, the numerator of the defined
contribution plan fraction shall be adjusted pursuant to Regulation
1.415-7(d)(l) and questions T-6 and T-7 of Internal Revenue Service
Notice 83-10.
(m) Notwithstanding the foregoing, for any Limitation Year in which
the Plan is a Top Heavy Plan, 1.0 shall be substituted for 1.25 in
paragraph 1(1) and m(l) unless the extra minimum allocation is being
provided pursuant to Section 3.6. However, for any Limitation Year in which
the Plan is a Super Top Heavy Plan, 1.0 shall be substituted for 1.25 in
any event.
(n) If (1) the substitution of 1.00 for 1.25 or (2) the excess benefit
accruals or Annual Additions provided for in Internal Revenue Service
Notice 82-19 cause the 1.0 limitation to be exceeded for any Participant in
any Limitation Year, such Participant shall be subject to the following
restrictions for each future Limitation Year until the 1.0 limitation is
satisfied: (A) the Participant's accrued benefit under the defined benefit
plan shall not increase (B) no Annual Additions may be credited to a
Participant's accounts and (C) no Employee contributions (voluntary or
mandatory) shall be made under any defined benefit plan or any defined
contribution plan of the Employer.
(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, the terms of which are specifically
incorporated herein by reference.
3.13 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of a reasonable error in estimating a
Participant's Compensation 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) 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 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.
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(b) The term 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 3.12.
(c) 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.
(d) The Plan may not distribute Excess Amounts to Participants or
Former Participants.
3.14 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be transferred
from other qualified plans, provided that the trust from which such funds
are transferred permits the transfer to be made and the transfer will not
jeopardize the Plan's 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 such amounts shall not
be subject to forfeiture for any reason and may not be withdrawn by, or
distributed to the Participant, in whole or in part, except as provided in
Paragraph (c) of this Section.
(c) 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.
(d) The Administrator may direct that employee transfers made after
the first month of the Plan Year pursuant to this Section 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 the first day of the following Plan Year, at which time
they shall be invested as determined by the Administrator pursuant to
Section 3.14(e).
(e) Unless the Administrator directs that the Participant's Rollover
Account 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, it shall be invested as part of
the general Trust Fund and share in earnings and losses. Except, however,
deposits into the general Trust Fund after the first month of the Plan Year
shall not share in earnings and losses for the Plan accounting period in
which the transfer was received.
(f) The term Rollover Contributions shall include: (i) amounts
transferred to this Plan directly from another qualified plan (that is, any
tax qualified plan under Code Section 401(a)); (ii) lump-sum distributions
received by an Employee from another qualified plan which are eligible for
tax free rollover to a qualified plan and which are transferred by the
Employee to this Plan within sixty (60) days following his receipt thereof;
(iii) amounts transferred to this
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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 (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. 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.
3.15 INVESTMENT FUNDS
(a) The Trust Fund as at any date will consist of all property of
every kind then held by the Trustee. Various Investment Funds shall be
maintained for the investment of the accounts of Participants. The
Administrator may designate, add or delete such Investment Funds as
investment options under the Plan as may be deemed to be desirable from
time to time. A separate account will be established by the Administrator
to reflect the portion, if any, of the Participant's accounts that is
invested in any of the Investment Funds.
The Trustee shall also maintain a loan fund to reflect the portion, if
any, of the Participants' accounts attributable to any outstanding loans
made by the Plan in accordance with Section 6.4. The loan fund shall
consist only of promissory notes evidencing loans made to Participants in
accordance with the provisions of Section 6.4.
(b) Investment of Funds. The Investment Funds shall be invested
without distinction between principal and income within the investment
objectives of each Fund. Pending payment of costs, expenses or anticipated
benefits, or acquisition of permanent investments, the Trustee may hold
any portion of the Investment Funds in obligations issued or fully
guaranteed as to payment of principal or interest by the United States
Government, short-term demand notes, short-term commercial paper,
collective trust funds investing in short-term investments or in cash and
may deposit any uninvested funds with any bank selected by the Trustee.
(c) Participant's Election to Invest in Funds. Each Participant shall
have the right to file a written election with the Administrator from time
to time directing that amounts contributed to his Plan Accounts be
invested, in such multiples as the Administrator may establish, in any or
all of the then available Investment Funds; provided, that all of the
Participant's Accounts, shall be invested in the same percentages of such
Funds. Any such election shall become effective as of the first day of the
next calendar quarter falling thirty (30) days or more after delivery of
the written election to the Administrator and shall apply only to deposits
and contributions made, and to funds transferred into his Participant's
Transfer Account, on and after such effective date.
(d) Transfers of Investment Funds. Under rules established by
the Administrator from time to time and implemented in a uniform and
nondiscriminatory manner, each Participant may file a written election with
the Administrator directing that any amounts currently invested in any of
the Funds be transferred in whole or in part, but only in specified
percentages permitted
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by the Administrator from time to time, to any or all of the then available
Investment Funds, with the transfer being made from the Participant's
Combined Account and Participant's Elective Account in the same specified
percentages. The Administrator may, in a uniform and nondiscriminatory
manner, limit the number of transfers a Participant may make during the
Plan Year. Such elections shall become effective as of the transfer date
established by the Administrator falling thirty (30) days or more after
delivery of the written election to the Administrator (or at such other
time as may be determined by the Administrator in a uniform and
nondiscriminatory manner), unless otherwise required to meet the conditions
of Section 6.4 regarding loans to Participants.
(e) Designating Funds for Withdrawal. When a Participant elects to
make a withdrawal pursuant to Section 6.4, he shall designate the
Investment Fund or Funds from which the withdrawal shall be made.
(f) Repayments to Loan Fund. Each Participant's Loan Fund will be
credited with any loan made to such Participant in accordance with Section
6.4 and any interest which has accrued thereon since the last preceding
Valuation Date. Any payments of principal and interest received by
the Trustee from such Participant since the last preceding Valuation
Date with respect to any loan made to that Participant in accordance with
the provisions of Section 6.4 will be charged to such Participant's Loan
Fund on that Valuation Date.
(g) (1) A Participant may direct the Trustee to acquire and hold in
the Trust a Contract on the life of such Participant. In the event a
Participant shall direct the Trustee to acquire and hold in the Trust a
Contract, the Participant shall also direct the Trustee as to who shall be
the issuing company, as to the form and substance of such Contract, as to
the payment of premiums thereon, as to the exercise of rights, options and
privileges available under the Contract, as to the ultimate disposition of
the Contract or its proceeds, and as to all other matters respecting such
Contract. The ownership of any such Contract shall be in the name of the
Trustee, but the Trustee shall not take any independent action with respect
to such Contract and shall have no responsibility or liability whatsoever
with respect to such Contract except to act as directed by the participant
consistent with the Employee Retirement Income Security Act of 1974, as
amended.
(2) Any and all Contracts acquired for a Participant pursuant to this
Section 3.15(g), together with the proceeds thereof, and any other monies
received by the Trustee from the issuing insurance company in connection
therewith shall be held by the Trustee in a separate fully vested account
designated Insurance Account.
(3) All dividends on a Contract shall be used to reduce premiums on
that Contract or to purchase additional insurance as directed by the Participant
covered by such Contract.
(4) Any charge or expense of the Trustee in handling a Contract shall
be paid by the Employer but, if not so paid, shall be a charge against the
Participant's Account.
(5) For the purpose of determining the value of a Contract hereunder,
such Contract shall be valued at its then cash surrender value, but neither
such Contract nor any Insurance Account shall be considered a part of the Trust
for purpose of allocating income and market gains and losses of the Trust on
other Plan accounts.
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(6) On maturity of an undistributed Contract by reason of the death
of the Participant, the proceeds thereof shall be deemed a death benefit under
the Plan and shall be distributed to his beneficiary in the manner described in
Article V hereof.
ARTICLE IV
VALUATIONS
4.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Valuation Date,
to determine the net worth of the assets comprising the Trust Fund as it exists
on the Valuation Date prior to taking into consideration any contribution to be
allocated for that Plan Year. 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.
4.2 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 V
DETERMINATION AND DISTRIBUTION OF BENEFITS
5.1 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. Upon such Normal
Retirement Date, all amounts credited to such Participant's Combined Account
shall become distributable. 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 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 5.5.
5.2 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 continue to be fully Vested in
accordance with Section 1.48. On or before the Anniversary Date
coinciding with or next following such death, the Administrator
shall direct the Trustee, in accordance with the provisions of
Sections 5.6 and 5.7, to distribute the value of the deceased
Participant's Combined Account to the Participant's Beneficiary.
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(b) On or before the Anniversary Date coinciding with or next
following the death of a Former Participant, the Trustee, in
accordance with the provisions of Sections 5.6 and 5.7, shall
distribute any remaining amounts credited to the account of such
deceased Former Participant to such Former Participant's Beneficiary.
(c) 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.
(d) Unless otherwise elected in the manner prescribed in Section
5.6, the Beneficiary of the death benefit shall be the Participant's
spouse, who shall receive such benefit in the form of a Pre-Retirement
Survivor Annuity pursuant to Section 5.6. Except, however, the
Participant may designate a Beneficiary other than his spouse if:
(i) the Participant and his spouse have validly waived the Pre-
Retirement Survivor Annuity in the manner prescribed in Section
5.6, and the spouse has waived his or her right to be the
Participant's Beneficiary, or
(ii) the Participant has no spouse, or
(iii) 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.
5.3 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 continue to be fully
Vested in accordance with Section 1.48. On or before the Anniversary Date
coinciding with or next following the event of Total and Permanent Disability,
the Trustee, in accordance with the provisions of Sections 5.5 and 5.7, shall
distribute to such Participant all amounts credited to such Participant's
Combined Account as though he had retired.
5.4 DETERMINATION OF BENEFITS UPON TERMINATION
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 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 a Participant's
Combined Account is not segregated, the amount shall remain in a
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separate account for the Terminated Participant and share in allocations per
Section 3.6 until such time as a distribution is made to the Terminated
Participant.
In the event that the amount of the Terminated Participant's
Combined Account equals or exceeds the cash surrender 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 are consistent with the provisions
of Section 5.5.
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, or Normal Retirement). If
the value of a Terminated Participant's benefit derived from Employer and
Employee contributions is $3,500 or less, the Administrator shall direct the
Trustee to cause the entire benefit to be payable to such Participant without
regard to the Participant's election or the consent of said Participant's
spouse.
5.5 DISTRIBUTION OF BENEFITS
(a) (1) Unless otherwise elected as provided below, a participant who
is married on the Annuity Starting Date and who does not die before the Annuity
Starting Date shall receive the value of his benefits in the form of a joint
and survivor annuity. The joint and survivor annuity shall be equal in value to
a single life annuity. Such joint and survivor benefits following the
Participant's death shall continue to the spouse during the spouse's lifetime
at a rate equal to a fifty percent (50%) of the rate at which such benefits were
payable to the Participant. The Participant may elect to receive a smaller
annuity benefit with continuation of payments to the spouse at a rate of
seventy-five percent (75%) or one hundred percent (100%) of the rate payable to
a Participant during his lifetime. An unmarried Participant shall receive the
value of his benefit in the form of a life annuity. Such unmarried Participant,
however, may elect in writing to waive the life annuity. The election must
comply with the provisions of this Section as if it were an election to waive
the joint and survivor annuity by a married Participant, but without the spousal
consent requirement.
(2) Any election to waive the joint and survivor annuity must be
made by the Participant in writing during the election period and be
consented to by the Participant's spouse. Such election shall
designate a Beneficiary (or a form of benefits) that may not be
changed without spousal consent (unless the consent of the spouse
expressly permits designations by the Participant without the
requirement of further consent by the spouse). Such spouse's consent
shall be irrevocable and must acknowledge the effect of such election
and be witnessed by a Plan representative or a notary public. Such
consent shall not be required if it is established to the satisfaction
of the Administrator that the required consent cannot be obtained
because there is no spouse, the spouse cannot be located, or other
circumstances that may be prescribed by Regulations. The election made
by the Participant and consented to by his spouse may be revoked by
the Participant in writing without the consent of the spouse at any
time during the election period. The number of revocations shall not
be limited. Any new election must comply with the requirements of this
paragraph. A former spouse's waiver shall not be binding on a new
spouse.
(3) The election period to waive the joint and survivor annuity
shall be the 90 day period ending on the Annuity Starting Date.
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(4) The Annuity Starting Date means the first day of the first period
for which an amount is payable as an annuity, or, in the case of a benefit
not payable in the form of an annuity, the first day on which all events
have occurred which entitles the Participant to such benefit.
(5) With regard to the election, the Administrator shall provide the
Participant within a reasonable period of time before the Annuity Starting
Date (and consistent with Regulations), a written explanation of:
(i) the terms and conditions of the joint and survivor annuity,
and
(ii) the Participant's right to make an election to waive the
joint and survivor annuity, and
(iii) the right of the Participant's spouse to consent to any
election to waive the joint and survivor annuity, and
(iv) the right of the Participant to revoke such election, and
effect of such revocation.
(6) The distribution of a benefit in the form of a joint and survivor
annuity shall require the Participant's consent if such distribution
commences prior to the later of his Normal Retirement Age or age 62.
(b) In the event a married Participant duly elects pursuant to paragraph
(a)(2) above not to receive the retirement benefit in the form of a joint and
survivor annuity, or in the event an unmarried Participant similarly elects not
to receive the retirement benefit in the form of a life annuity, the
Administrator 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 as elected by the Participant:
(i) One lump-sum payment in cash or in property;
(ii) Payments over a period certain in monthly, quarterly, semiannual, or
annual cash installments after first having (A) segregated 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) purchased a
nontransferable annuity contract 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).
(iii) Purchase of or providing an annuity. However, such annuity may
not be in any form that will provide for payments over a period extending
beyond either the life of the Participant (or the lives of the Participant
and his designated Beneficiary) or the life expectancy of the Participant
(or the life expectancy of the Participant and his designated Beneficiary).
(c) The present value of a Terminated Participant's joint and survivor
annuity derived from Employer and Employee contributions may not be paid without
his written consent if the
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value exceeds $3,500. Further, the spouse of a Terminated Participant must
consent in writing to any immediate distribution. If the value of the Retired
Participant's benefit derived from Employer and Employee contributions does not
exceed $3,500, the Administrator may immediately distribute such benefit without
such Retired Participant's or spouse's consent. No distribution may be made
under the preceding sentence after the Annuity Starting Date unless the
Participant and his spouse consent in writing to such distribution. Any written
consent required under this paragraph must be obtained not more than 90 days
before commencement of the distribution and shall be made in a manner consistent
with Section 5.5(a)2.
(d) Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits, whether under the Plan or through the
purchase of an annuity contract, 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 Section 1.401(a) (9)-2):
(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 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 the life of the Participant (or the lives of the
Participant and the Participant's designated Beneficiary) or the life
expectancy of the Participant (or the life expectancies of the
Participant and his designated Beneficiary) in accordance with
Regulations. For Plan Years beginning after December 31, 1988, clause
(ii) above shall not apply to any Participant unless the Participant
had attained age 70-1/2 before January 1, 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 a manner 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.
(e) For purposes of this Section, the life expectancy of a Participant
and a Participant's spouse (other than in the case of a life annuity) may, at
the election of the Participant or the Participant's spouse, be redetermined in
accordance with Regulations. The election, once made, shall be irrevocable. If
no election is made by the time distributions must commence, then the life
expectancy of the Participant and the Participant's spouse shall not be subject
to recalculation.
5.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below, a Participant who dies
before the Annuity Starting Date and who has a surviving spouse shall have his
death benefit paid to his surviving spouse in the form of a Pre-Retirement
Survivor Annuity. The Participant's spouse may direct that payment of the Pre-
Retirement Survivor Annuity commence within a reasonable period after the
Participant's death.
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If the spouse does not so direct, payment of such benefit will commence at the
time the Participant would have attained the later of his Normal Retirement Age
or age 62. However, the spouse may elect a later commencement date. Any
distribution to the Participant's spouse shall be subject to the rules specified
in Section 5.6(g).
(b) Any election to waive the Pre-Retirement Survivor Annuity before
the Participant's death must be made by the Participant in writing during the
election period and shall require the spouse's irrevocable consent in the same
manner provided for in Section 5.5(a)(2). Further, the spouse's consent must
acknowledge the specific nonspouse Beneficiary or the alternative form of death
benefit to be paid in lieu of the Pre-Retirement Survivor Annuity.
Notwithstanding the foregoing, the nonspouse Beneficiary or the alternative form
of death benefit need not be acknowledged, provided the consent of the spouse
acknowledges that the spouse has the right to limit consent only to a specific
Beneficiary or a specific form of benefit and that the spouse voluntarily elects
to relinquish one or both of such rights.
(c) The election period to waive the Pre-Retirement Survivor Annuity
shall begin on the first day of the Plan Year in which the Participant attains
age 35 and end on the date of the Participant's death. In the event a
Participant separates from service prior to the beginning of the election
period, the election period shall begin on the date of such separation from
service.
(d) With regard to the election, the Administrator shall provide each
Participant within the applicable period, with respect to such Participant (and
consistent with Regulations), a written explanation of the Pre-Retirement
Survivor Annuity containing comparable information to that required pursuant to
Section 5.5(a)(5). For the purposes of this paragraph, the term Applicable
Period means, with respect to a Participant, whichever of the following periods
ends last:
(1) The period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the close of the
Plan Year preceding the Plan year in which the Participant attains age
35;
(2) A reasonable period after the individual becomes a
Participant.
(3) A reasonable period ending after the Plan no longer fully
subsidizes the cost of the Pre-Retirement Survivor Annuity with
respect to the Participant;
(4) A reasonable period ending after Code Section 401(a)(l1)
applies to the Participant; or
(5) A reasonable period after separation from service in the case
of a Participant who separates before attaining age 35.
(e) If the value of the Pre-Retirement Survivor Annuity derived from
Employer and Employee contributions does not exceed $3,500, the Administrator
shall direct the immediate distribution of such amount to the Participant's
spouse. No distribution may be made under the preceding sentence after the
Annuity Starting Date unless the spouse consents in writing. If the value
exceeds $3,500, an immediate distribution of the entire amount may be made to
the surviving spouse, provided such surviving spouse consents in writing to such
distribution. Any written consent required under this paragraph must be obtained
not more than 90 days before commencement of the distribution and shall be made
in a manner consistent with Section 5.5(a)2.
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(f) (1) In the event the death benefit is not paid in the form of a
Pre-Retirement Survivor Annuity, it shall be paid to the Participant's
Beneficiary 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 to the rules specified in Section 5.6(g):
(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 shall adjust the cash amount of such
periodic installments accordingly.
(2) In the event the death benefit payable pursuant to Section
5.2 is payable in installments, then, upon the death of the Participant,
the Administrator shall direct the Trustee to segregate into a separate
Trust Fund(s) the death benefit, and the Trustee shall invest such
segregated Trust Funds separately, and the funds accumulated in such Trust
Fund(s) shall be used for the payment of the installments hereinabove
provided.
(3) The Administrator, at the election of the Participant's
Beneficiary, shall direct the Trustee to accelerate any installment payment
to a Participant's Beneficiary.
(g) 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 5.5 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. However, the 5-year distribution
requirement of the preceding sentence 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 shall be distributed over
the life of such designated Beneficiary (or 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. Except, 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.
(h) For purposes of this Section, the life expectancy of a Participant and
a Participant's spouse (other than in the case of a life annuity) may, at the
election of the Participant or the Participant's spouse, be redetermined in
accordance with Regulations. The election, once made, shall be
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irrevocable. If no election is made by the time distributions must commence,
then the life expectancy of the Participant and the Participant's spouse shall
not be subject to recalculation.
5.7 TIME OF DISTRIBUTION
Except as limited by Sections 5.5 and 5.6, 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, but in no event later than
180 days after the Anniversary Date. Except, 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.
5.8 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.
5.9 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 expiration of five (5)
years after it shall become payable, remain unpaid solely by reason of the
inability of the Administrator, after sending a 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 an Employer contribution. In the event a
Participant or Beneficiary is located subsequent to his benefit being
reallocated, such benefit shall be restored.
5.10 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS
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 as those terms are
defined in Code Section 414(p).
5.11 DIRECT ROLLOVERS
(a) For distributions on or after July 1, 1993, notwithstanding any
provision of the Plan to the contrary that would otherwise limit a
Distributee's (as defined below) election under this subsection 5.11, a
Distributee may elect, at the time and in the manner prescribed by the
Administrator, to have any portion of an Eligible Rollover Distribution
that is $200 or greater paid directly to an Eligible Retirement Plan
specified by the Distributee in a direct rollover. In addition, if the
amount of the Eligible Rollover Distribution is greater than $500, the
Distributee may elect to have a portion of such total amount paid directly
to an Eligible Retirement Plan with the balance paid to the Distributee,
provided that the portion transferred to the Eligible Retirement Plan is an
amount not less than $500.
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(b) Definitions
(i) Eligible Rollover Distribution: 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 the
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; any
distribution to the extent such distribution is required under section
401 (a) (9) of the Code; 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);
and any other distribution which the Secretary of the Treasury (or his
delegate) provides in regulations or rulings of general applicability.
(ii) Eligible Retirement Plan: An Eligible Retirement Plan
is an individual retirement account described in section 408 (a) of
the Code, an individual retirement annuity described in section 408(b)
of the Code, an annuity plan described in section 403 (a) of the Code,
or a qualified trust described in section 401(a) of the Code, that
accepts the Distributee's Eligible Rollover Distribution. However, in
the case of an Eligible Rollover Distribution to the surviving spouse,
an Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
(iii) Distributee: A Distributee includes an Employee or
former Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's spouse or
former spouse who is the alternate payee under a qualified domestic
relations order are distributees with regard to the interest of the
spouse or former spouse.
(iv) Direct Rollover: A Direct Rollover is a payment by
the Plan to the eligible retirement plan specified by the Distributee.
5.12 INCOME TAX WITHHOLDING
The amount distributed to a Participant or Beneficiary under the Plan
shall, notwithstanding any provision herein to the contrary, be reduced to the
extent necessary to comply with federal, state and local income tax withholding
rules.
ARTICLE VI
TRUSTEE
6.1 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;
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(c) To maintain records of receipts and disbursements and furnish to the
Employer and/or Administrator for each Fiscal Year a written annual report per
Section 6.7.
(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.
6.2 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 (which shall make
such directions only at the direction of a Participant as provided in Section
3.15(g)), 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 fifty percent (50%) of the aggregate of the
contributions to the credit of the Participant at any particular time. If term
insurance is purchased with such contributions, the aggregate premium must be
less than twenty-five percent (25%) of the aggregate contributions 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 twenty-five percent (25%) of the aggregate contributions
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.
6.3 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.
(b) Subject to Participants' directions pursuant to Section 3.15 , to
sell, exchange, convey, transfer, grant options to purchase, or otherwise
dispose of any securities or other property held by the Trustee. 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;
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(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;
(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 Participants, 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;
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(n) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan associations;
(o) 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;
(p) 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;
6.4 LOANS TO PARTICIPANTS
(a) While the primary purpose of the Plan is to accumulate funds for the
Participants when they retire, it is recognized that under some circumstances it
is in the best interests of Participants to permit loans to be made to them
while they continue in the employ of the Employer. Accordingly, the
Administrator, in his sole discretion and upon written request by a Participant
who is an employee of the Employer, may make a loan from the Trust Fund to the
Participant for any purpose which the Administrator believes would be desirable
and in the best interest of such Participant, and subject to the following
provisions: (1) 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, officers, or shareholders 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 shall not be granted to any Participant or his Beneficiary that
provide for a repayment period extending beyond such Participant's Normal
Retirement Date.
(c) A Participant may only borrow against the balances of his Accounts,
may only have one loan outstanding at a time and may not receive a new loan
until 12 months have elapsed after the repayment in full of any prior loan. The
amount of such loan must be at least $500 and, together with the accrued
interest under this Plan and all other qualified employer plans shall be limited
to the lesser of:
(1) one-half the balance of his Accounts; or
(2) $50,000, reduced by the excess (if any) of:
(A) the highest outstanding balance of loans under the Plan and
all other qualified Employer plans during the 1-year period ending on
the day before the date on which such new loan is made, over
(B) the outstanding balance of those outstanding loans
on the date on which the new loan is made.
(d) The Participant must pledge as security for such loan up to fifty
percent (50%) of the corresponding portion of the balance of his Plan
Accounts. Loans shall be evidenced by a
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written note approved by the Administrator which shall bear the rate of
interest which is equal to the prevailing rate for loans of a similar type
at a major commercial lending institution as determined by the
Administrator and shall be payable in equal periodic installments of
principal and interest, not less frequently than quarterly. The Participant
must authorize repayment of any loan to be made by payroll deductions. Such
loans shall be of reasonable duration, not to exceed 5 years, given the
needs of the Participant and the purpose for which the loan is made, except
that if the proceeds of the loan are used to purchase or repair the
Participant's principal place of residence, the Administrator may authorize
a longer repayment schedule. The Administrator may, on a uniform and
nondiscriminatory basis, charge a reasonable loan processing fee. Except as
noted, if there is an outstanding balance on a loan after a duration of
five years, such balance shall be treated as distribution from the Plan.
(e) A Participant's non-payment of a required payment under a loan
shall constitute a default on the loan. Upon default, a Participant shall
have 30 days to repay his loan and any accrued interest thereon in full.
Thereafter, any loan or portion of a loan made to a Participant, together
with the accrued interest thereon, shall be charged to the Participant's
Accounts after all other adjustments required under the Plan have been
made; provided, however, that a Participant's Account shall not be charged
for a default prior to his termination date. Any payment or distribution
made pursuant to the foregoing provisions of this Section 6.4 shall be
offset by the charges described in the preceding sentence.
(f) Any loan made pursuant to this Section where the interest of the
Participant is used to secure such loan shall require the written consent
of the Participant's spouse in a manner consistent with Section 5.5(a)2.
Such written consent must be obtained within the 90-day period prior to the
date the loan is made. Any security interest held by the Plan by reason of
an outstanding loan to the Participant shall be taken into account in
determining the amount of the death benefit or the Pre-Retirement Survivor
Annuity.
6.5 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.
6.6 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.
6.7 ANNUAL REPORT OF THE TRUSTEE
Within sixty (60) days after the later of the Anniversary Date or
receipt of the Employer's contribution for each Fiscal Year, the Trustee shall
furnish to the Employer and Administrator a written statement of account with
respect to the Fiscal Year for which such contribution was made setting forth:
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(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.
6.8 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 each of the following statements, schedules or lists, or
any others that are required by Section 103 of the Act 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:
(i) statement of the assets and liabilities of the Plan;
(ii) statement of changes in net assets available to the Plan;
(iii) statement of receipts and disbursements, a schedule of all
assets held for investment purposes, a schedule of all loans or
fixed income obligations in the Plan Year;
(iv) a list of all leases in default or uncollectible during
the Plan Year;
(v) the most recent annual statement of assets and liabilities of
any bank common or collective trust fund in which Plan assets
are invested or such information regarding separate accounts or
trusts with a bank or insurance company as the Trustee and
Administrator deem necessary; and
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(vi) a schedule of each transaction of series of transactions
involving an amount in excess of three percent (3%) or Plan assets.
All auditing and accounting fees shall be an expense of and may, at
the election of the Administrator, be paid from the Trust Fund.
(b) If some or all of the information necessary to enable the
Administrator to comply with Section 103 of the Act 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
Section 103(b) of the Act 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.
6.9 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 Fiscal Year during which he served as Trustee.
This statement shall be either (i) included as part of the annual statement of
account for the Fiscal Year required under Section 6.7 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 Fiscal Year. The procedures set forth in Section 6.7 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 6.7 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 6.7 and this subparagraph.
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6.10 TRANSFER OF INTEREST
The Trustee may accept funds transferred from such trusts or a
conduit Individual Retirement Account for the account of a Participant under
this Plan, provided the conditions precedent to such transfer set forth in
Section 3.14 are satisfied. In the event of such a transfer under this Plan, the
Trustee shall maintain a separate, nonforfeitable "Participant's Rollover
Account" for the amount transferred. The Trustee may act upon the direction of
the Administrator without determining the facts concerning a transfer.
ARTICLE VII
AMENDMENT, TERMINATION, AND MERGERS
7.1 AMENDMENT
The Employer shall have the right at to amend the Plan at any time and
from time to time by the duly authorized action of its Board of Directors, in
accordance with the applicable provisions of the Company's certificate of
incorporation or by-laws as then in effect. However, no such amendment shall
authorize or permit 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
purposes other than for the exclusive benefit of the Participants or their
Beneficiaries or estates; no such amendment shall cause any reduction in the
amount credited to the account of any Participant or cause or permit any portion
of the Trust Fund to revert to or become the property of the Employer; and no
such amendment which affects the rights, duties or responsibilities of the
Trustee and Administrator may be made without 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.
For the purposes of this Section, a Plan amendment which has the
effect of (1) eliminating or reducing an early retirement benefit or a
retirement-type subsidy, (2) eliminating an optional form of benefit (as
provided in Regulations) or (3) restricting, directly or indirectly, the benefit
provided to any Participant prior to the amendment shall be treated as reducing
the amount credited to the account of a Participant except that an amendment
described in clause (2) (other than an amendment having an effect described in
clause (1)) shall not be treated as reducing the amount credited to the account
of a Participant to the extent so provided in Regulations.
7.2 TERMINATION
The Employer shall have the right to terminate the Plan at any time
and from time to time by the duly authorized action of its Board of Directors,
in accordance with the applicable provisions of the Company's certificate of
incorporation or by-laws as then in effect. The Employer shall deliver to the
Trustee and Administrator written notice of such termination. A complete
discontinuance of the Employer's contributions to the Plan shall be deemed to
constitute a termination. Upon any termination (full or partial) or complete
discontinuance of contributions, all amounts credited to the affected
Participants' Combined Accounts shall continue to be one hundred percent (100%)
Vested 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. Upon such termination of the Plan, the Employer, by
written notice to the Trustee and Administrator, may direct either:
(a) complete distribution of the assets in the Trust Fund to the
Participants, in cash or in kind, in a manner consistent with the
requirements of Section 5.5; or
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(b) continuation of the Trust created by this agreement and the
distribution of benefits at such time and in such manner as though the Plan
had not been terminated.
7.3 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.
ARTICLE VIII
TOP HEAVY AND ADMINISTRATION
8.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall meet the special minimum
allocation requirements of Code Section 416(c) under Section 3.6 of the Plan.
8.2 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
valuation occurring within a twelve (12) month period ending on the
Determination Date;
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(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 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 1, 1984, and
distributions under a terminated plan which if it had not 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 deductible
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.
(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) or (m) 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
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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) 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 1, 1984, and distributions under a terminated
plan which if it had not 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.
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.
(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 Related Companies, 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).
(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
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(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.
8.3 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 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.
8.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any person or
persons, including, but not limited to, the Employees of the Employer, shall be
eligible to serve as an Administrator. Any person or persons 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.
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.
8.5 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.
8.6 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 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
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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) to determine all questions relating to the eligibility of
Employees to participate or remain a Participant hereunder;
(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, remedy ambiguities,
inconsistencies and omissions, and to make and publish such rules for
regulation of the Plan as are consistent with the terms hereof;
(f) to certify to the Employer and to the Trustee from time to time
the sums of money contributed to the Trust Fund;
(g) 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;
(h) to prepare and distribute to Employees a procedure for notifying
Participants and Beneficiaries of their rights to elect joint and survivor
annuities and Pre-Retirement survivor Annuities as required by the Act and
Regulations thereunder;
(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.
8.7 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.
8.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustees 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.
8.9 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 conclusive on all persons as is supplied by the Employer
and shall have no duty or responsibility to verify such information.
8.10 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 expenses incurred. Any administration expense paid to the Trust
Fund as a reimbursement shall not be considered an Employer contribution.
8.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 8.5, 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.
8.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed with the Administrator
on forms supplied by the Employer. 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.
8.13 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 8.12
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 8.12. 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 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 affect 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.
(b) This provision shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, for any reason, under any provision of
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 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 indebtedness. Prior to making a payment,
however, the Participant or Beneficiary must be given written notice by the
Administrator that such 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 indebtedness is a valid claim against his Participant's
Combined Account, he shall be entitled to a review of the validity of the
claim in accordance with procedures provided in Sections 8.12 and 8.13.
(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 Illinois, 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 Section 403(c) (2) (A) of the Act, the
Employer may demand repayment of such excessive contribution at any time
within one (1) 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.
(c) The contributions of the Employer under the Plan are conditioned
upon the deductibility thereof under Section 404 of the Code and, to the
extent any such deduction is disallowed, the Trustees shall, as soon as
practicable, upon the written request of the Employer return the amount of
the contribution (to the extent disallowed), reduced by the amount of any
losses thereon. This provision shall only apply, however, if the adjusted
contribution is returned to the Employer within one (1) year after the date
the deduction is disallowed.
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 ten percent (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 Section 412 (a) (2) of the Act), and the bond shall be in a
form approved by the Secretary of Labor. Notwithstanding
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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
and void or unenforceable in whole or in part. To the extent any individuals
acting hereunder as either an Administrator, Fiduciary, or Trustee are not
indemnified or saved harmless under any liability insurance contracts, the
Employer does hereby indemnify and agree to defend said persons and to hold them
harmless from and against any and all liabilities, losses, costs or expenses
including reasonable attorneys' fees and court costs, of whatsoever kind and
nature which may be imposed upon, incurred by or asserted against, said persons
at any time by reason of any such persons' services hereunder or to the Plan,
provided, however, the foregoing shall not apply to a particular person if he
should be guilty of willful misconduct or gross negligence, or of a willful
violation of the law or regulation under which such liability, loss, or expense
arises.
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 its board of directors or a person or persons authorized by its
board of directors.
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 3.1; 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 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
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Manager, who shall be solely responsible for the management of the assets
assigned to it, all 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.
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
2.6, 2.7, and 3.1(e), and 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.
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EXHIBIT 99.2
FIRST AMENDMENT TO
TRANS LEASING INTERNATIONAL, INC.
SAVINGS PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF JULY 1, 1994)
WHEREAS, Trans Leasing International, Inc. (the "Company") maintains the
Trans Leasing International, Inc. Savings Plan (As Amended and Restated
Effective as of July 1, 1994) (the "Plan") by and between the Company and
Richard Grossman (the "Trustee") for the benefit of its eligible employees; and
WHEREAS, the officers of the Company have recommended that the Plan be
amended to include a Company Stock Fund;
NOW THEREFORE, pursuant to the amending powers reserved to this Company
under Section 7.1 of the Plan, the Plan be, and it hereby is, amended in the
following respects effective as of October 1, 1995:
1. By substituting the following for subsection 1.72 of the Plan:
"'Trustee' or 'Trustees' means (i) the Plan Trustee and (ii) every
other trustee as may be from time to time appointed to hold and invest
any portion of the assets of the Plan including, but not limited to,
the Company Stock Fund described in subsection 3.15(h) pursuant to the
Trust."
2. By substituting the following for subsection 1.73 of the Plan:
"'Trust Fund' means the assets of the Plan and Trust as they are
invested pursuant to subsection 3.15."
3. By adding the following subsection 3.15(h):
"(h) Special Company Stock Provisions. The provisions of this
subsection 3.15(h) govern the Company Stock Fund. The Company Stock
Fund is defined as a fund designed to be invested primarily in common
stock issued by the Company and which is readily tradable on a
national securities exchange. The maximum portion a Participant may
reallocate into his Company Stock Fund account is 50% of his Account
balances, determined at the time the amount is transferred to, or
deposited in, such Company Stock Fund account. Further, the maximum
portion a Participant may contribute into his Company Stock Fund
account is 50% of current Contributions to the Plan in accordance with
subsection 3.1. The Company shall have the right to pay from amounts
transferred to or deposited in the Company's Stock Funds account any
brokerage fees and expenses associated with such transfer and
acquisition of Company Stock with such amounts. Further,
<PAGE>
the Company shall have the right to pay from the Participant's Account
balance any brokerage fees and expenses associated with the conversion
of such balance to any other investment option and/or cash.
Within a reasonable time prior to each annual or special meeting
of the shareholders of the Company, the Company shall send to each
Participant a copy of the proxy soliciting material (including an
annual report) for the meeting, together with a form requesting
instructions to the Trustee for the Company Stock Fund (the "Company
Stock Fund Trustee") on how to vote the proportional number of shares
of Company Stock (and any fractional share thereof) attributable to
the Participant's interest in the Company Stock fund account. Upon
receipt of such instruction, such Trustee shall vote such shares to
the extent possible to reflect the direction of such Participants and
shall vote the Company Stock attributable to each Participant's
interest in the Company Stock fund account for which such Trustee does
not receive voting instructions in the same proportion as such Trustee
votes the shares of Company Stock which are attributable to
Participants' interests in the Company Stock Fund of which such
Trustee receive voting instructions. Notwithstanding any provision to
the contrary, if a tender or exchange offer is made for a majority of
the outstanding shares of Company Stock, a Participant shall direct
the Company Stock Fund Trustee as to the disposition of the
proportional number of shares of Company Stock attributable to his
interest in the Company Stock fund account. If a Participant does not
direct the Company Stock Fund Trustee as to the disposition of the
Company Stock attributable to his Company Stock fund account within
the time specified, such Participant shall be deemed to have timely
instructed the Company Stock Fund Trustee not to tender or exchange
such shares of Company Stock.
Additionally, information relating to the purchase, holding and
sale of Company Stock and the exercise of Shareholder Rights with
respect to such Company Stock by Participants shall be maintained in
accordance with procedures designed by the Company Stock Fund Trustee
to safeguard the confidentiality of such actions by the Participant,
except to the extent necessary to comply with federal laws or state
laws.
The Company reserves the right to file with the Securities
Exchange Commission (the "SEC") a Registration Statement on Form S-8
(the "Form S-8") in connection with registration of the shares of
common stock of the Company and the participation interests to be
offered and sold to the Plan.
4. By adding the following as subsection 5.5(f):
"(f) With regard to the Company Stock Fund accounts, each Terminated
Participant or Retired Participant with a Company Stock Fund Account
(or if applicable, such Participant's Beneficiary) will receive a
distribution in whole shares of Company Stock with any fractional
shares paid out in cash."
