<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION VIA
THE EDGAR SYSTEM ON NOVEMBER 4, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
Registration Statement
under
The Securities Act of 1933
CAPSTONE PHARMACY SERVICES, INC.
------------------------------------------------
(Exact name of issuer as specified in its charter)
Delaware 11-231052
------------------------------ ----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9901 East Valley Ranch Parkway, Suite 3001
Irving, Texas 75063
- ------------------------------------------ --------
(Address of principal executive offices) Zip Code
CAPSTONE PHARMACY SERVICES, INC. 401(k) PROFIT SHARING PLAN
-----------------------------------------------------------
(Full title of the Plan)
James D. Shelton
Executive Vice President,
Chief Financial Officer and Secretary
Capstone Pharmacy Services, Inc.
9901 East Valley Ranch Parkway, Suite 3001
Irving, Texas 75063
-------------------
(Name and address of agent for service)
(972) 401-1541
--------------
(Telephone number, including area code, of agent for service)
Copies to:
M. David Cox, Esquire
Harwell Howard Hyne Gabbert & Manner, P.C.
1800 First American Center
315 Deaderick Street
Nashville, Tennessee 37238
(615) 256-0500
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum
Amount offering aggregate Amount of
Title of securities to be price per offering registration
to be registered registered (1) share (2) price fee
- ------------------- -------------- --------- --------- ------------
<S> <C> <C> <C> <C>
Common Stock, $.01 450,000(2) $11.25 $5,062,500 $1,534.09
par value
</TABLE>
- ----------
(1) Pursuant to Rule 416 under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests
to be offered or sold pursuant to the Capstone Pharmacy Services, Inc.
401(k) Profit Sharing Plan, and such additional shares as may
hereinafter be offered or issued to prevent dilution resulting from
stock splits, stock dividends, recapitalizations or certain other
capital adjustments.
(2) Calculated pursuant to Rule 457(h) and Rule 457(c) under the Securities
Act of 1933, based upon the average of the high and low sales price
on October 29, 1997 as reported in the Nasdaq National Market.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Capstone Pharmacy Services, Inc.
(the "Registrant") with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 are incorporated into this registration
statement by reference:
1. The Registrant's Annual Report on Form 10-K, for the year
ended December 31, 1996.
2. The Registrant's Quarterly Report on Form 10-Q, for the
quarter ended March 31, 1997.
3. The Registrant's Quarterly Report on Form 10-Q, for the
quarter ended June 30, 1997.
4. The Registrant's Current Report on Form 8-K dated January
2, 1997.
5. The Registrant's Current Report on Form 8-K dated January
31, 1997.
6. The Registrant's Current Report on Form 8-K dated
September 30, 1997.
7. The description of the Registrant's shares of Common
Stock, par value $.01 per share (the "Common Stock"), contained in the
Registration Statement on Form 8-A dated June 18, 1986 filed by the Registrant
to register such securities under the Securities Exchange Act of 1934, as
amended by a Form 8-A/A dated July 18, 1996 and all other amendments and reports
filed for the purpose of updating such description prior to the termination of
the offering of the Common Stock offered hereby.
All documents filed by the Registrant pursuant to Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this
registration statement and prior to the filing of a post-effective amendment to
this Registration Statement which indicates that all securities offered hereby
have been sold or which deregisters all securities 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 such documents. Any statement contained
in a document incorporated by reference herein shall be deemed to be modified or
superseded for purposes hereof to the extent that a statement contained herein
(or in any other subsequently filed document which also is incorporated by
reference herein) modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed to constitute a part hereof except as
so modified or superseded.
<PAGE> 3
Item 4. Description of Securities.
Not applicable.
Item 5. Experts.
The financial statements and schedules of Capstone Pharmacy Services,
Inc. as of December 31, 1996 and 1995 and for the year ended December 31, 1996,
the ten months ended December 31, 1995 and the year ended February 28, 1995
incorporated by reference in this registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
Item 6. Indemnification of Directors and Officers.
Under Section 145 of the General Corporation Law of the State of
Delaware, as amended, the Company has the power to indemnify directors and
officers under prescribed circumstances and subject to certain limitations
against certain costs and expenses, including attorneys' fees, actually and
reasonably incurred in connection with any action, suit or proceeding, whether
civil, criminal, administrative or investigative, to which any of them is a
party by reason of his or her being a director or officer of the Company if it
is determined that he or she acted in accordance with the applicable standard of
conduct set forth in such statutory provisions.
Article Eleventh of the Company's Certificate of Incorporation
provides indemnification to directors and officers of the Company against all
expenses, liability and loss incurred as a result of such person's being a party
to, or threatened to be made a party to, any action, suit or proceeding by
reason of the fact that he or she is or was a director or officer of the Company
or is or was serving at the request of the Company as a director, officer,
employee or agent of another enterprise, to the fullest extent authorized by the
General Corporation Law of the State of Delaware. Article Eleventh further
permits the Company to maintain insurance, at its expense, to protect itself and
any such director or officer of the Company or another enterprise against any
such expenses, liability or loss, whether or not the Company would have the
power to indemnify such person against such expenses, liability or loss under
the General Corporation Law of the State of Delaware. The Company has purchased
directors' and officers' liability insurance.
Item 7. Exemption from Registration Claimed.
Not applicable.
-2-
<PAGE> 4
Item 8. Exhibits.
The following Exhibits are filed as part of this Registration
Statement:
4 Capstone Pharmacy Services, Inc. 401(k) Profit Sharing
Plan and Trust, as amended (the "401(k) Plan")
5* Opinion of Harwell Howard Hyne Gabbert & Manner, P.C.
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Harwell Howard Hyne Gabbert & Manner, P.C.
(contained in Exhibit 5)
24 Power of Attorney (contained on signature page in
Part II of the Registration Statement)
- ------------------------
* See undertaking 8(b) at Item 9 concerning submission of the 401(k) Plan
to the Internal Revenue Service.
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, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which is registered) and any deviation from the low or
high of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission pursuant to Rule
424(b), if, in the aggregate, the changes in volume and price represent no more
than 20 percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement;
-3-
<PAGE> 5
(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)(l)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the 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 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.
(h) 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
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.
8(b) The undersigned registrant hereby undertakes to submit the
401(k) Plan and any amendment thereto to the Internal Revenue
Service ("IRS") in a timely manner and will make all changes required by the IRS
in order to qualify the 401(k) Plan under the Employment Retirement Income
Security Act of 1974, as amended.
-4-
<PAGE> 6
SIGNATURES AND POWER OF ATTORNEY
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Irving, State of Texas on October __, 1997.
CAPSTONE PHARMACY SERVICES, INC.
By: /s/ James D. Shelton
---------------------------------
James D. Shelton
Executive Vice President, Chief
Financial Officer and Secretary
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James D. Shelton and Robert Della Valle,
and each of them, such person's true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for such person and in such
person's name, place and stead, in any and all capacities, to sign any and all
amendments to this Registration Statement, including post-effective amendments,
and to file the same with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be lawfully done in
connection with any such filing, as fully as such person might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their 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 below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Joseph F. Furlong, III Director October __, 1997
- --------------------------
Joseph F. Furlong, III
/s/ John Haronian Director October __, 1997
- --------------------------
John Haronian
/s/ Morris A. Perlis Director October __, 1997
- --------------------------
Morris A. Perlis
</TABLE>
-5-
<PAGE> 7
<TABLE>
<S> <C> <C>
/s/ Albert Reichmann Director October __, 1997
- --------------------------
Albert Reichmann
/s/ Allan C. Silber Director and October __, 1997
- -------------------------- Principal
Allan C. Silber Executive Officer
/s/ Edward Sonshine Director October __, 1997
- --------------------------
Edward Sonshine, Q.C.
/s/ Gail Wilensky Director October __, 1997
- --------------------------
Gail Wilensky, Ph.D.
/s/ John E. Zuccotti Director October __, 1997
- --------------------------
John E. Zuccotti
/s/ James D. Shelton Principal October __, 1997
- -------------------------- Financial Officer
James D. Shelton and Principal
Accounting Officer
</TABLE>
The Plan. Pursuant to the requirements of the Securities Act of 1933,
the Capstone Pharmacy Services, Inc. 401(k) Profit Sharing Plan has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Irving, State of Texas on October __,
1997.
THE CAPSTONE PHARMACY SERVICES, INC.
401(k) PROFIT SHARING PLAN
By: CAPSTONE PHARMACY SERVICES, INC.
By: /s/ James D. Shelton
-------------------------------
James D. Shelton
Executive Vice President, Chief
Financial Officer and Secretary
-6-
<PAGE> 8
CAPSTONE PHARMACY SERVICES, INC.
REGISTRATION STATEMENT ON FORM S-8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Page
- ----------- ----
<S> <C> <C>
4 Capstone Pharmacy Services, Inc.
401(k)Profit Sharing Plan and Trust, as amended....................................
5 Opinion of Harwell Howard Hyne Gabbert & Manner, P.C...............................
23.1 Consent of Arthur Andersen LLP.....................................................
23.2 Consent of Harwell Howard Hyne Gabbert & Manner, P.C. (contained in Exhibit 5).....
24 Power of Attorney (contained on signature page in Part II of the Registration
Statement).........................................................................
</TABLE>
-7-
<PAGE> 1
EXHIBIT 4
BENEFIT CENTER, INC. REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST
Revised 05/06/92
<PAGE> 2
BENEFIT CENTER, INC. REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST
Revised 05/06/92
PART I
ARTICLE I
INTRODUCTION
1.1.1 Creation and Title. The parties hereby create a Plan and Trust to
be known by the name set forth in the Adoption Agreement [Capstone Pharmacy
Services, Inc. 401(K) Profit Sharing Plan and Trust].
1.1.2 Effective Date. The provisions of this Plan and Trust shall be
effective as of the Effective Date set forth in the Adoption Agreement.
1.1.3 Purpose. This Plan and Trust is established for the purpose of
providing retirement benefits to eligible employees in accordance with the Plan
and the Adoption Agreement. If the Employer designates the Plan as a Cash or
Deferred Profit Sharing Plan in the Adoption Agreement, the Plan is also
intended to enable eligible Employees to supplement their retirement by electing
to have the Employer contribute amounts to the Plan and Trust in lieu of
payments to such Employees in cash and the Plan and Trust are intended to
satisfy the provisions of Section 401(k) of the Internal Revenue Code of 1986,
as amended.
ARTICLE II
DEFINITIONS
As used in this Plan and the Adoption Agreement, the following terms shall have
the following meanings:
1.2.1 "Account": The Employer Account, Controlled Account, Elective
Contribution Account, Matching Account, Qualified Non-Elective Contribution
Account, Voluntary Account or Segregated Account of a Participant, as the
context requires, established and maintained for accounting purposes.
1.2.2 "ACP": The average contribution percentage determined in
accordance with the provisions of Part II, Article VII.
1.2.3 "Act": The Employee Retirement Income Security Act of 1974, as
amended from time to time.
<PAGE> 3
1.2.4 "ADP": The actual deferral percentage determined in accordance
with the provisions of Part II, Article VII.
1.2.5 "Anniversary Date": Unless otherwise specified in the Adoption
Agreement, the last day of each Plan Year.
1.2.6 "Beneficiary": The person or persons entitled hereunder to
receive the benefits which may be payable upon or after a Participant's death.
1.2.7 "Board of Directors": The board of directors of an incorporated
Employer.
1.2.8 "Break in Service": The failure of a Participant to complete more
than five hundred (500) Hours of Service or such lesser number specified in the
Adoption Agreement during any 12 consecutive month computation period, beginning
with a Participant's first computation period after becoming a Participant.
A Year of Service and a Break in Service for vesting purposes shall be measured
on the same computation period. The Eligibility Computation Period and a Break
in Service for eligibility purposes shall be measured on the same computation
period.
1.2.9 "Code": The Internal Revenue Code of 1986, as amended from time
to time.
1.2.10 "Compensation": The compensation as defined in the Plan and as
specified in the Adoption Agreement (or Earned Income in the case of a
self-employed individual) which is actually paid to the Participant by the
Employer during the Compensation Computation Period; provided that if specified
by the Employer in the Adoption Agreement, compensation shall also include any
amount which is contributed by the Employer pursuant to a salary reduction
agreement and which is not includible in the gross income of the Employee under
Sections 125, 402(a)(8), 402(h), 403(b) or 457(b) of the Code; provided further
that for years beginning after December 31, 1988, the annual gross compensation
taken into account for purposes of the Plan shall not exceed $200,000, as such
amount may be adjusted by the Secretary of the Treasury at the same time and in
the same manner as under Section 415(d) of the Code, except that the dollar
increase in effect on January 1 of any calendar year is effective for years
beginning in such calendar year and the first adjustment to the $200,000
limitation is effected on January 1, 1990. If the plan determines compensation
on a period of time that contains less than twelve (12) calendar months, then
the annual compensation limit is an amount equal to the annual compensation
limit for the calendar year in which the compensation period begins multiplied
by the ratio obtained by dividing the number of full months in the period by 12.
For purposes of this dollar limitation, the rules of Section 414(q)(6) of the
Code requiring the aggregation of the compensation of family members shall
apply, except that in applying such rules, the term "family" shall include only
the spouse of the Participant and any lineal descendants of the Participant who
have not attained age nineteen (19) before the close of the year. If, as a
result of the application of such rules the adjusted $200,000 limitation is
exceeded, then (except for
2
<PAGE> 4
purposes of determining the portion of compensation up to the Social Security
Integration Level if this Plan provides for permitted disparity), the limitation
shall be prorated among the affected individuals in proportion to each such
individual's compensation as determined under this Section prior to the
application of this limitation. If compensation for any prior plan year is taken
into account in determining an employee's contributions or benefits for the
current year, the compensation for such prior year is subject to the applicable
annual compensation limit in effect for that prior year. For this purpose, for
years beginning before January 1, 1990, the applicable annual compensation limit
is $200,000.
1.2.11 "Compensation Computation Period": The period specified as the
Compensation Computation Period in the Adoption Agreement.
1.2.12 "Controlled Account": An account established and maintained for
a Participant to account for his interest in a Segregated Fund over which he
exercises investment control.
1.2.13 "Date of Hire": The date an Employee first completes an Hour of
Service for the Employer.
1.2.14 "Distributable Benefit": The benefit to which a Participant is
entitled following termination of his employment.
1.2.15 "Distribution Date": The date as of which the Distributable
Benefit of a Participant is determined.
1.2.16 "Early Retirement Age": The age specified as the Early
Retirement Age, if any, in the Adoption Agreement.
1.2.17 "Early Retirement Date": The date specified as the Early
Retirement Date, if any, in the Adoption Agreement.
1.2.18 "Earned Income": The net earnings from self-employment in the
trade or business with respect to which the Plan is established for which
personal services of the Participant are a material income-producing factor. Net
earnings shall be determined without regard to items not included in gross
income and the deductions allocable to such items but, in the case of taxable
years beginning after 1989, with regard to the deduction allowed to the taxpayer
by Section 164(f) of the Code. Net earnings shall be reduced by contributions to
a qualified plan to the extent deductible under Section 404 of the Code.
1.2.19 "Elective Contribution Account": An Account established and
maintained for a Participant to account for the Elective Contributions made on
his behalf.
1.2.20 "Elective Contribution": A contribution to a cash or deferred
profit sharing plan by the Employer on behalf of an electing Employee.
3
<PAGE> 5
1.2.21 "Elective Deferrals": Any Employer contributions made to the
Plan at the election of the Participant, in lieu of cash compensation, including
contributions made pursuant to a salary reduction agreement or other deferral
mechanism. With respect to any taxable year, a Participant's Elective Deferral
is the sum of all Employer contributions made on behalf of the Participant
pursuant to an election to defer under any qualified CODA as described in
Section 401(k) of the Code, any simplified employee pension cash or deferred
arrangement as described in Section 402(h)(1)(B), any eligible deferred
compensation plan under Section 457, any plan as described under Section
501(c)(18), and any employer contributions made on the behalf of a participant
for the purchase of an annuity contract under Section 403(b) pursuant to a
salary reduction agreement. Elective Deferrals shall not include any deferrals
properly distributed as excess annual additions.
1.2.22 "Eligibility Computation Period": For purposes of determining
Years of Service and Breaks in Service for purposes of eligibility, the initial
eligibility computation period is the twelve (12) consecutive month period
beginning with the employment commencement date on which the Employee first
renders an Hour of Service for the Employer, and unless otherwise specified in
the Adoption Agreement, the subsequent eligibility computation periods are each
subsequent twelve (12) consecutive month period commencing on the annual
anniversary of such employment commencement date. If in accordance with the
election in the Adoption Agreement, the subsequent periods commence with the
first Plan Year which commences prior to the first anniversary of the Employee's
employment commencement date, an Employee who is credited with 1,000 Hours of
Service in both the initial eligibility computation period and the first Plan
Year which commences prior to the first anniversary of the Employee's initial
eligibility computation period shall be credited with two (2) years of service
for purposes of eligibility to participate.
1.2.23 "Employee": A person who is currently or hereafter employed by
the Employer, or by any other employer aggregated under section 414(b), (c), (m)
or (o) of the Code and the regulations thereunder, including a Leased Employee
subject to section 414(n) of the Code and a self-employed owner of an
unincorporated Employer, but, unless otherwise provided in the Adoption
Agreement, excluding (a) an independent contractor; (b) an employee who is a
non-resident alien (within the meaning of section 7701(b)(1)(B) of the Code)
deriving no earned income (within the meaning of section 911(d)(2) of the Code)
from the Employer which constitutes income from sources within the United States
(within the meaning of section 861(a)(3) of the Code); and (c) employees who are
included in the unit of employees covered by a collective bargaining agreement
between the Employer and employee representatives, provided benefits were the
subject of good faith bargaining and two percent or less of the employees of the
Employer who are covered pursuant to that agreement are professionals as defined
in Treasury Regulation Section 1.410(b)-9(g). For this purpose, the term
"employee representatives" does not include any organization more than half of
whose members are employees who are owners, officers, or executives of the
employer.
4
<PAGE> 6
1.2.24 "Employer": The Employer that is a party to this Plan, or any of
its affiliates, successors or assigns which adopt the Plan; provided, however,
that no mere change in the identity, form or organization of the Employer shall
affect its status under the Plan in any manner, and, if the name of the Employer
is hereafter changed, a corresponding change shall be deemed to have been made
in the name of the Plan and references herein to the Employer shall be deemed to
refer to the Employer as it is then known.
1.2.25 "Employer Account": An Account established and maintained for a
Participant for accounting purposes to which his share of Employer contributions
and forfeitures are added.
1.2.26 "Employer Contribution": A contribution to a money purchase
pension plan or profit sharing plan other than a cash or deferred profit sharing
plan by the Employer.
1.2.27 "Entry Date": The date or dates specified as the Entry Date in
the Adoption Agreement.
1.2.28 "Excess Aggregate Contributions": With respect to any Plan Year,
the excess of:
(a) The aggregate contribution percentage amounts taken into
account in computing the numerator of the contribution percentage actually made
on behalf of Highly Compensated Employees for such Plan Year, over
(b) The maximum contribution percentage amounts permitted by
the ACP test (determined by reducing contributions made on behalf of Highly
Compensated Employees in order of their contribution percentages beginning with
the highest of such percentages). Such determination shall be made after first
determining Excess Elective Deferrals and then determining Excess Contributions.
1.2.29 "Excess Contributions": With respect to any Plan Year, the
excess of:
(a) The aggregate amount of Employer Contributions actually
taken into account in computing the ADP of Highly Compensated Employees for such
Plan Year, over
(b) The maximum amount of such contributions permitted by the ADP test
(determined by reducing contributions made on behalf of Highly Compensated
Employees in order of the ADPs, beginning with the highest of such percentages.
1.2.30 "Excess Elective Deferrals": Those Elective Deferrals that are
includible in a Participant's gross income under section 402(g) of the Code to
the extent such participant's Elective Deferrals for a taxable year exceed the
dollar limitation under such Code section. Excess Elective Deferrals shall be
treated as annual additions under the Plan, unless such amounts are distributed
no later than the first April 15 following the close of the Participant's
taxable year.
5
<PAGE> 7
1.2.31 "Excessive Annual Addition": The portion of the allocation of
contributions and forfeitures that cannot be added to a Participant's Accounts
due to the limitations on annual additions contained in the Plan.
1.2.32 "Family": The spouse and lineal ascendants or descendants of an
Employee and the spouses of such lineal ascendants and descendants.
1.2.33 "Fiduciary": The Plan Administrator, the Trustee and any other
person who has discretionary authority or control in the management of the Plan
or the disposition of Trust assets.
1.2.34 "Highly Compensated Employee": A highly compensated active
employee and a highly compensated former employee. A highly compensated active
employee includes: any Employee who performs service for the Employer during the
determination year and who, during the look-back year: (i) received compensation
from the Employer in excess of $75,000 (as adjusted pursuant to Section 415(d)
of the Code); (ii) received compensation from the Employer in excess of $50,000
(as adjusted pursuant to Section 415(d) of the Code) and was a member of the
top-paid group for such year; or (iii) was an officer of the Employer and
received compensation during such year that is greater than 50 percent of the
dollar limitation as in effect under Section 415(b)(1)(A) of the Code. The term
highly compensated employee also includes: (i) employees who are both described
in the preceding sentence if the term "determination year" is substituted for
the term "look-back year" and the employee is one of the 100 employees who
received the most compensation from the Employer during the determination year;
and (ii) employees who are 5 percent owners at any time during the look-back
year or determination year. If no officer has satisfied the compensation
requirement of (iii) above during either a determination year or look-back year,
the highest paid officer for such year shall be treated as a highly compensated
employee.
For this purpose, the determination year shall be the Plan Year. The look-back
year shall be the twelve-month period immediately preceding the determination
year and compensation is as defined in Section 415(c)(3) of the Code including
amounts contributed by the Employer pursuant to a salary reduction agreement and
which is not includible in gross income under Sections 125, 402(a)(8), 402(h) or
403(b) of the Code.
A highly compensated former employee includes any employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for the employer during the determination year, and was a
highly compensated active employee for either the separation year or any
determination year ending on or after the employee's 55th birthday.
If an Employee is, during a Plan Year or the preceding Plan Year, a family
member of either a 5 percent owner who is an active or former employee or a
Highly Compensated Employee who is one of the 10 most highly compensated
employees ranked on the basis of compensation paid by
6
<PAGE> 8
the Employer during such year, then the family member and the 5 percent owner or
top-ten highly compensated employee shall be aggregated. In such case, the
family member and 5 percent owner or top-ten highly compensated employee shall
be treated as a single employee receiving compensation and plan contributions or
benefits equal to the sum of such compensation and contributions or benefits of
the family member and 5 percent owner or top-ten highly compensated employee.
For purposes of this section, family member includes the spouse, lineal
ascendants and descendants of the employee or former employee and the spouses of
such lineal ascendants and descendants.
An Employee is in the top-paid group of employees for any year if the Employee
is in the group consisting of the top twenty (20%) percent of the employees when
ranked on the basis of compensation paid during such year.
For purposes of determining whether an Employee is a highly compensated
employee, Sections 414(b), (c), (m), (n) and (o) of the Code shall be applied.
The determination of who is a highly compensated employee, including the
determination of the number and identity of employees in the top-paid group, the
top 100 employees, the number of employees treated as officers and the
compensation that is considered, will be made in accordance with Section 414(q)
of the Code and the regulations thereunder.
1.2.35 "Hour of Service": An hour for which (a) the Employee is paid,
or entitled to payment by the Employer for the performance of duties, (b) the
Employee is paid or entitled to payment by the Employer during which no duties
are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence, or (c) back
pay, irrespective of mitigation of damages, has been either awarded or agreed to
by the Employer. Hours of Service shall be credited to the Employee under (a),
above, for the period in which the duties are performed, under (b), above, in
the period in which the period during which no duties are performed occurs,
beginning with the first Hour of Service to which the payment relates, and under
(c), above, for the period to which the award or agreement pertains rather than
the period in which the award, agreement or payment is made; provided, however,
that Hours of Service shall not be credited under both (a) and (b), above, as
the case may be, and under (c) above. Notwithstanding the preceding sentences,
(i) no more than five hundred one (501) Hours of Service shall be credited under
(b), above, 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) no Hours of Service shall be credited to the Employee by reason of
a payment 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) no Hours of Service shall be credited by
reason of a payment which solely reimburses an employee for medical or medically
related expenses incurred by the Employee. The determination of Hours of Service
for reasons other than the performance of duties and the crediting of Hours of
Service to computation periods shall be made in accord with the provisions
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of Labor Regulation Sections 2530.200b-2(b) and (c) which are incorporated
herein by reference.
Solely for the purposes of determining whether an Employee has incurred a Break
in Service, an Employee shall be credited with the number of Hours of Service
which would otherwise have been credited to such individual but for the absence
or in any case in which such Hours cannot be determined with eight (8) Hours of
Service for any day that the Employee is absent from work by reason of the
Employee's pregnancy, the birth of a child of the Employee, the placement of a
child with the Employee in connection with the adoption of such child by the
Employee or for purposes of caring for such child for a period beginning
immediately following such birth or placement. Such Hours of Service shall be
credited only in the computation period in which the absence from work begins if
the Employee would be prevented from incurring a Break in Service in such
computation period solely because credit is given for such period of absence
and, in any other case, in the immediately following computation period.
Notwithstanding the foregoing, no credit shall be given for such service unless
the Employee furnishes to the Plan Administrator information to establish that
the absence from work is for the reasons indicated and the number of days for
which there was such an absence.
In the event the Employer does not maintain records of the actual hours for
which an Employee is paid or entitled to payment, credit for service shall be
given in accordance with the method selected in the Adoption Agreement.
Service with another business entity that is, along with the Employer, a member
of a controlled group of corporations under Section 414(b) of the Code, an
affiliated service group under Section 414(m) of the Code or trades or
businesses under common control under Section 414(c) of the Code, or which is
otherwise required to be aggregated with the Employer pursuant to Section 414(o)
of the Code and the regulations issued thereunder shall be treated as service
for the Employer. Hours of Service shall be credited for any individual
considered an employee for purposes of this Plan under Section 414(n) or Section
414(o) of the Code and the regulations issued thereunder.
If the Employer maintains the plan of a predecessor employer, service with such
predecessor shall be treated as service for the Employer.
1.2.36 "Insurer": Any insurance company which has issued a Life
Insurance Policy.
1.2.37 "Joint and Survivor Annuity": An immediate annuity for the life
of the Participant with a survivor annuity for the life of the spouse which is
not less than fifty (50%) percent and not more than one hundred (100%) percent
of the amount of the annuity which is payable during the joint lives of the
Participant and the spouse and which is the amount of benefit which can be
purchased with the Participant's vested Account balances. The percentage of the
survivor annuity shall be fifty (50%) percent unless a different percentage is
elected by the Employer in the Adoption Agreement.
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1.2.38 "Leased Employee": Any person (other than an employee of the
recipient) who pursuant to an agreement between the recipient and any other
person has performed services for the recipient (or for the recipient and
related persons determined in accordance with Section 414(n)(6) of the Code) on
a substantially full time basis for a period of at least one (1) year and such
services are of a type historically performed by employees in the business field
of the recipient employer; provided that any such person shall not be taken into
account if (a) such person is covered by a money purchase pension plan providing
(i) a nonintegrated employer contribution rate of at least ten (10%) percent of
compensation, as defined in Section 415(c)(3) of the Code and Section
3.2.1(h)(iii) of the Plan, but including amounts contributed by the employer
pursuant to a salary reduction agreement which are excludable from the person's
gross income under Sections 125, 402(a)(8), 402(h) or 403(b) of the Code; (ii)
immediate participation; and (iii) full and immediate vesting; and (b) leased
employees do not constitute more than twenty (20%) percent of the workforce of
the recipient who are not Highly Compensated Employees. Contributions or
benefits provided a leased employee by the leasing organization which are
attributable to services performed for the recipient employer shall be treated
as provided by the recipient employer.
1.2.39 "Life Insurance Policy": A life insurance, annuity or endowment
policy or contract which is owned by the Trust and is on the life of a
Participant.
1.2.40 "Limitation Year": Unless otherwise specified in the Adoption
Agreement, the Plan Year; provided that all qualified plans maintained by the
Employer use the same Limitation Year.
1.2.41 "Mass Submitter": DATAIR Employee Benefits Systems Inc.
1.2.42 "Matching Account": An Account established and maintained for a
Participant for accounting purposes to which his share of Matching Contributions
are added.
1.2.43 "Matching Contribution": A contribution to the Plan by the
Employer which matches in whole or in part an Elective Contribution on behalf of
an electing Employee.
1.2.44 "Non-Elective Contribution": A contribution to a cash or
deferred profit sharing plan by the Employer which is neither a Qualified
Non-Elective Contribution, a Matching Contribution nor an Elective Contribution.
1.2.45 "Normal Retirement Age": The earlier of the date specified as
the Normal Retirement Age in the Adoption Agreement or the mandatory retirement
age enforced by the Employer.
1.2.46 "Normal Retirement Date": The date specified in the Adoption
Agreement as the Normal Retirement Date.
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1.2.47 "Owner-Employee": An individual who is a sole proprietor or who
is a partner owning more than ten percent (10%) of either the capital or profits
interest of the partnership.
1.2.48 "Participant": Any eligible Employee who becomes entitled to
participate in the Plan.
1.2.49 "Plan": The defined contribution plan for Employees as set forth
in this Agreement and the Adoption Agreement, together with any amendments or
supplements thereto.
1.2.50 "Plan Administrator": The person, persons or entity appointed by
the Employer to administer the Plan, or, if the Employer fails to make such
appointment, the Employer.
1.2.51 "Plan Sponsor": The Plan Sponsor specified in the Adoption
Agreement.
1.2.52 "Plan Year" or "Year": The 12 consecutive month period
designated by the Employer in the Adoption Agreement.
1.2.53 "Preretirement Survivor Annuity" A survivor annuity for the life
of the surviving spouse of the Participant, the actuarial equivalent of which is
equal to the portion of the Account balance of the Participant as of the date of
death to which the Participant had a vested and nonforfeitable right, provided
that any security interest held by the Plan by reason of a loan outstanding to
the Participant for which a valid spousal consent has been obtained, if
necessary, shall be taken into account.
1.2.54 "Qualified Non-Elective Contribution": A contribution to a cash
or deferred profit sharing plan by the Employer which is neither a Matching
Contribution nor an Elective Contribution, is one hundred percent (100%) vested
and nonforfeitable when made, which a Participant may not elect to have paid in
cash instead of being contributed to the Plan and which may not be distributed
from the Plan (except in the case of a hardship distribution) prior to the
termination of employment or death of the Participant, attainment of age 59-1/2
by the Participant or termination of the Plan without establishment of a
successor plan.
1.2.55 "Qualified Non-Elective Contribution Account": An Account
established and maintained for a Participant to account for the Qualified
Non-Elective Contributions made on his behalf.
1.2.56 "Qualifying Employer Securities or Real Property": Securities or
real property of the Employer which the Trustee may acquire and hold pursuant to
the applicable provisions of the Code and the Act.
1.2.57 "Segregated Account": An Account established and maintained for
a Participant to account for his interest in a Segregated Fund.
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1.2.58 "Segregated Fund": Assets held in the name of the Trustee which
have been segregated from the Trust Fund in accordance with any of the
provisions of the Plan.
1.2.59 "Self-Employed Individual": An individual who has Earned Income
for the taxable year from the trade or business for which the Plan is
established or who would have had Earned Income but for the fact that the trade
or business had no net profits for the taxable year.
1.2.60 "Social Security Integration Level": The Social Security
Integration Level shall be equal to the taxable wage base or such lesser amount
specified in the Adoption Agreement. The "taxable wage base" is the contribution
and benefit base in effect under Section 230 of the Social Security Act on the
first day of the Plan Year for which allocations of Employer contributions and
forfeitures are made (referred to as the Social Security Wage Base). The Social
Security Integration Level shall be deemed to be the full amount of such Social
Security Integration Level, even though a Participant's Compensation may include
less than a full year's compensation because of either his participation
commencing after the first day of the Compensation Computation Period or his
service terminating prior to the end of the Compensation Computation Period.
1.2.61 "Trust Fund": All money and property of every kind and character
held by the Trustee pursuant to the Plan, excluding assets held in Segregated
Funds.
1.2.62 "Trustee": The persons, corporations, associations or
combination of them who shall at the time be acting as such from time to time
hereunder.
1.2.63 "Valuation Date": The date or dates specified as the Valuation
Date in the Adoption Agreement.
1.2.64 "Voluntary Account": An Account established and maintained for a
Participant for accounting purposes to which his voluntary Employee
contributions made prior to Plan Years beginning after 1986 have been added.
1.2.65 "Year of Service": The 12-consecutive month period (computation
period) specified in the Adoption Agreement during which an employee completes
at least one thousand (1,000) Hours of Service or such lesser number specified
in the Adoption Agreement. Unless otherwise specified in the Adoption Agreement,
all Years of Service shall be taken into account.
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PART II
ARTICLE I
PARTICIPATION
2.1.1 Eligibility Requirements. Each Employee shall be eligible to
participate in this Plan and receive an appropriate allocation of contributions
upon satisfying the eligibility requirements set forth in the Adoption
Agreement.
2.1.2 Commencement of Participation. An eligible Employee shall become
a Participant in the Plan on the applicable Entry Date selected in the Adoption
Agreement.
2.1.3 Participation Upon Re-Employment. A Participant whose employment
terminates and who is subsequently re-employed shall re-enter the Plan as a
Participant immediately on the date of his reemployment. In the event that an
Employee completes the eligibility requirements set forth in the Adoption
Agreement, his employment terminates prior to becoming a Participant and he is
subsequently re-employed, such Employee shall be deemed to have met the
eligibility requirements as of the date of his re-employment and shall become a
Participant on the date of his re-employment; provided, however, that if he is
re-employed prior to the date he would have become a Participant if his
employment had not terminated, he shall become a Participant as of the date he
would have become a Participant if his employment had not terminated. Any other
Employee whose employment terminates and who is subsequently reemployed shall
become a Participant in accordance with the provisions of Sections 2.1.1 and
2.1.2.
2.1.4 Termination of Participation. An Employee who has become a
Participant shall remain a Participant until the entire amount of his
Distributable Benefit is distributed to him or his Beneficiary in the event of
death.
2.1.5 Employer's Determination. In the event any question shall arise
as to the eligibility of any person to become a Participant or the commencement
of participation, the Employer shall determine such question and the Employer's
decision shall be conclusive and binding, except to the extent of a claimant's
right to appeal the denial of a claim.
2.1.6 Omission of Eligible Employee. If an Employee who should be
included as a Participant in the Plan is erroneously omitted and discovery of
the omission is made after the contribution by the Employer is made and
allocated, the Employer shall make an additional contribution on behalf of the
omitted Employee in the amount which the Employer would have contributed on his
behalf had he not been omitted.
2.1.7 Inclusion of Ineligible Participant. If any person is erroneously
included as a Participant in the Plan and discovery of the erroneous inclusion
is made after the contribution by the Employer is made and allocated, the
Employer may elect to treat the amount contributed on behalf of the ineligible
person plus any earnings thereon as a forfeiture for the Plan Year in which
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<PAGE> 14
the discovery is made and apply such amount in the manner specified in the
Adoption Agreement.
2.1.8 Election Not to Participate. With respect only to nonstandardized
plans and notwithstanding anything contained in the Plan to the contrary, an
Employee may elect with the approval of the Employer not to participate in the
Plan if the election does not jeopardize the qualified or tax-exempt status of
the Plan under sections 401(a) and 501(a) of the Code, respectively. The
Employee shall sign such documents as may be reasonably required by the Employer
to evidence the election. If it is subsequently determined that either the
qualified or the tax-exempt status of the Plan has been jeopardized, the
Employer may elect to treat such Employee as having been erroneously omitted. An
Employee may revoke the election only with respect to any subsequent Plan Year
by written notice of revocation to the Employer prior to the end of the Plan
Year for which the revocation is effective.
2.1.9 Change in Status. If any Participant continues in the employ of
the Employer or an affiliate for which service is required to be taken into
account but ceases to be an Employee for any reason (such as becoming covered by
a collective bargaining agreement unless the collective bargaining agreement
otherwise provides) the Participant shall continue to be a Participant until the
entire amount of his benefit is distributed but the individual shall be deemed
not to have completed any "Years of Service" for purposes of Article V
("Benefits") during the period that the Participant is not an Employee for such
reason.
Such Participant shall continue to receive credit for Years of Service completed
during the period for purposes of determining his vested and nonforfeitable
interest in his Accounts. In the event that the individual subsequently again
becomes a member of an eligible class of employees, the individual shall
participate immediately upon the date of such change in status. If such
Participant incurs a Break in Service and is subsequently reemployed,
eligibility to participate shall be determined in accordance with Section 2.1.3.
In the event that an individual who is not a member of an eligible class of
employees becomes a member of an eligible class, the individual shall
participate immediately if such individual has satisfied the eligibility
requirements and would have otherwise previously become a participant.
2.1.10 Existing Participants. An Employee who, on the Effective Date,
was a Participant under the provisions of the Plan as in effect immediately
prior to the Effective Date shall be a Participant on the Effective Date and the
provisions of Sections 2.1.1 and 2.1.2, pertaining to participation, shall not
be applicable to such Employee. The rights of a Participant whose employment
terminated prior to the Effective Date shall be determined under the provisions
of the Plan as in effect at the time of such termination.
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ARTICLE II
CONTRIBUTIONS
2.2.1 Employer Contributions.
(a) Amount of Contribution.
(1) Money Purchase Pension Plan. The Employer shall
contribute to the Trust Fund each Plan Year such amount, including any
forfeitures to be applied, set forth in the Adoption Agreement.
(2) Profit Sharing Plan. The Employer shall
contribute to the Trust Fund each Plan Year such amount as it may determine.
(3) Cash or Deferred Profit Sharing Plan.
(i) Amount of Non-Elective Contribution. The
Employer shall contribute to the Trust Fund each Plan Year such amount as a
Non-Elective Contribution as the Employer may determine.
(ii) Amount of Matching Contribution.
Subject to applicable limitations provided by the Plan, the Employer shall
contribute to the Trust Fund each Plan Year with respect to the amount of
Elective Contributions on behalf of each electing Employee a Matching
Contribution determined in the manner set forth in the Adoption Agreement.
(iii) Amount of Qualified Non-Elective
Contribution. The Employer shall contribute to the Trust Fund each Plan Year
such amount as a Qualified Non-Elective Contribution as the Employer may
determine. In addition, in lieu of distributing Excess Contributions or Excess
Aggregate Contributions as provided in Article VII, below, and to the extent
elected by the Employer in the Adoption Agreement, the Employer may make
Qualified Non-Elective Contributions on behalf of Employees who are not Highly
Compensated Employees that are sufficient to satisfy either the ADP test or the
ACP test, or both, pursuant to regulations under the Code.
(b) Limitation. The contribution for any Plan Year by the
Employer shall not exceed the maximum amount deductible from the Employer's
income for such Year for federal income tax purposes under the applicable
sections of the Code.
(c) Time of Contribution. All contributions by the Employer
shall be delivered to the Trustee not later than the date fixed by law for the
filing of the Employer's federal income tax return for the Year for which such
contribution is made (including any extensions of time granted by the Internal
Revenue Service for filing such return).
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(d) Determination of Amount to be Final. The determination by
the Employer as to the amount to be contributed by the Employer hereunder shall
be in all respects final, binding, and conclusive on all persons or parties
having or claiming any rights under this agreement or under the Plan and Trust
created hereby. Under no circumstances and in no event shall any Participant,
Beneficiary, or other person or party have any right to examine the books or
records of the Employer.
(e) Rights of Trustee as to Contributions. The Trustee shall
have no duty to report any contribution to be made or to determine whether
contributions delivered to the Trustee by the Employer comply with the
provisions of this Agreement. The Trustee shall be accountable only for funds
actually received by the Trustee.
2.2.2 Elective Contributions by the Employer on Behalf of Electing
Employees.
(a) Amount of Contribution. If the Plan is designated in the
Adoption Agreement as a Cash or Deferred Profit Sharing Plan, each Employee may
elect to have the Employer contribute to the Trust on his behalf for any Plan
Year during which he is a Participant such amounts expressed either in dollars
or in whole percentages of his Compensation as he may elect which would
otherwise be payable by the Employer as Compensation (but not to exceed the
dollar limitation provided by Section 402(g) of the Code as in effect at the
beginning of the taxable year); provided that the Employer may impose reasonable
limitations in a uniform, nondiscriminatory manner on the amounts which may be
so contributed in order to satisfy applicable legal requirements and to assure
the deductibility of amounts contributed by the Employer to the Plan and any
other qualified plan of deferred compensation.
(b) Election. The Plan Administrator shall determine the
manner in which a Participant may elect to have Elective Contributions made to
the Plan on his behalf. The Plan Administrator shall establish reasonable
periods during which the election may be made, modified or revoked. Unless the
Plan Administrator establishes another period during which the election may be
made, modified or revoked, any such election may be made, modified or revoked
during the first and last months of the Plan Year. An election by an Employee
may not be made retroactively and once made shall remain in effect until
modified or terminated.
(c) Payment of Contribution. Elective Contributions shall be
remitted by the Employer within a reasonable period after such amount would have
otherwise been payable to the Participant. The Employer shall designate, in
accordance with the Participant's election, the Plan Year to which any such
contributions which are made after the end of the Plan Year pertain.
(d) Segregated Fund. Unless an Elective Contribution on behalf
of a Participant is received by the Trustee within the time prescribed by the
Plan Administrator prior to a Valuation Date, the Plan Administrator shall
direct the Trustee to establish a Segregated Fund with respect to such
contribution. The funds contained in such Segregated Fund shall be transferred
to the
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<PAGE> 17
Trust Fund in accordance with the instructions of the Plan Administrator
and such transfer shall be deemed to have been made as of such next succeeding
Valuation Date. If an Elective Contribution on behalf of a Participant is
received by the Trustee within the period prescribed by the Plan Administrator,
such contribution shall be added to the Trust Fund. Notwithstanding the
foregoing, if the Trust Fund is invested in such a manner that the Plan
Administrator can determine, with a reasonable degree of certainty, that portion
of the adjustment to fair market value which is attributable to Elective
Contributions received by the Trustee other than within such period, then the
Plan Administrator shall direct the Trustee shall add any such Elective
Contributions to the Trust Fund at the time the Trustee receives such Elective
Contributions.
(e) Hardship Distributions. An Employee may not have Elective
Contributions made on his or her behalf for the taxable year following the
taxable year of a hardship distribution in excess of the applicable limit under
Section 402(g) of the Code for such taxable year less the amount of the
Employee's Elective Deferrals for the taxable year of the hardship distribution.
2.2.3 Employee Contributions.
(a) Amount of Contribution. An Employee is neither required
nor permitted to contribute to the Plan for any Plan Year beginning after the
Plan Year in which the prototype Plan is adopted by the Employer. Employee
contributions for Plan Years beginning after 1986 shall be limited so as to meet
the nondiscriminatory test of Section 401(m) of the Code. The Plan Administrator
shall not accept deductible employee contributions which are made for a taxable
year beginning after December 31, 1986. Contributions made prior to that date
will be maintained in a separate account which will be nonforfeitable at all
times. The account will share in the gains and losses of the trust in the same
manner as provided in Section 3.1.2 of the Plan. No part of the deductible
voluntary contribution account will be used to purchase life insurance.
(b) Withdrawal of Contributions. In accordance with the
provisions of the Plan as in effect prior to Plan Years beginning after 1986,
all or any portion of an Employee's contributions may be withdrawn by giving to
the Plan Administrator written notice of any proposed withdrawal. The Plan
Administrator may adopt such procedures with respect to such withdrawals as may
be necessary or appropriate. At the Plan Administrator's direction, the Trustee
shall distribute any such withdrawal to the Participant in accordance with the
procedures adopted by the Plan Administrator. Except in the case of the
voluntary deductible contribution account, such withdrawals shall not include
any interest or other increment earned on such contributions. No forfeitures
shall occur as a result of withdrawal of an Employee's contributions.
Notwithstanding the foregoing, a withdrawal of an Employee's contributions must
be consented to in writing by the Participant's spouse.
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2.2.4 Return of Contributions. Contributions by the Employer, including
Employer, Qualified Non-Elective, Non-Elective and Matching Contributions shall
be returned to the Employer in the following instances:
(a) If a contribution by the Employer, including an Employer,
Qualified Non-Elective, Non-Elective or Matching Contribution is made by the
Employer by mistake of fact, then the contribution shall be returned within one
year after its payment upon the Employer's written request.
(b) If a contribution by the Employer, including an Employer,
Qualified Non-Elective, Non-Elective or Matching Contribution is conditioned on
initial qualification of the Plan under the applicable sections of the Code, and
the Commissioner of Internal Revenue determines that the Plan does not qualify,
then the contribution made incident to the initial qualification by the Employer
shall be returned within one year after the date of denial of initial
qualification of the Plan; provided that the application for initial
qualification is made by the time prescribed by law for filing the Employer's
tax return for the taxable year in which the Plan is adopted, or such later date
as the Secretary of the Treasury may prescribe.
(c) Each contribution by the Employer, including an Employer, Qualified
Non-Elective, Non-Elective and Matching Contribution is conditioned upon the
deductibility of the contribution under the applicable sections of the Code and
to the extent of a disallowance of the deduction for part or all of the
contribution, the contribution shall be returned within one year after such
disallowance upon the Employer's written request.
ARTICLE III
ALLOCATIONS
2.3.1 Profit Sharing and Money Purchase Pension Plans. As of each
Anniversary Date, the Employer Contributions made by the Employer with respect
to the preceding Plan Year, and forfeitures shall be allocated among the
Employer Accounts of Participants during the Plan Year in the manner set forth
in the Adoption Agreement.
2.3.2 Cash or Deferred Plans.
(a) Non-Elective Contributions. As of each Anniversary Date,
the Non-Elective Contributions made by the Employer with respect to the
preceding Plan Year, and forfeitures, shall be allocated among the Employer
Accounts of Participants during the Plan Year in the manner specified in the
Adoption Agreement.
(b) Matching Contributions. Unless otherwise specified in the
Adoption Agreement, as of each Anniversary Date, the Matching Contribution made
by the Employer with respect to the preceding Plan Year, and forfeitures, shall
be allocated to the Matching Accounts
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of Participants for whom Elective Contributions were made in the manner
specified in the Adoption Agreement.
(c) Elective Contributions. The Elective Contributions by the
Employer on behalf of an electing Employee shall be allocated to the Elective
Contribution Account of such electing Employee as of each Valuation Date of the
Plan Year to which the Elective Contribution pertains.
(d) Qualified Non-Elective Contributions. As of each
Anniversary Date, the Qualified Non-Elective Contributions made by the Employer
with respect to the preceding Plan Year shall be allocated to the Qualified
Non-Elective Contribution Account of Participants during the Plan Year in the
manner specified in the Adoption Agreement.
2.3.3 Limitation. The allocation of Employer contributions must satisfy
the requirements of Section 416 of the Code regardless of how the Adoption
Agreement is completed. Elective Contributions and Matching Contributions
allocated to key employees (as defined in Section 416(i) of the Code) are taken
into account for the purpose of determining the minimum contribution under Code
Section 416. However, Elective Contributions and Matching Contributions made on
behalf of non-key employees (as defined in Code Section 416(i)) may not be taken
into account for the purpose of satisfying the minimum contribution requirement
under Code Section 416.
2.3.4 Minimum Allocation. In the event the Plan becomes a Top-Heavy
Plan during any Plan Year, the provisions of Section 2.6.1(a) shall apply.
2.3.5 Fail-Safe Allocation. With respect only to nonstandardized plans
and notwithstanding any provision of the Plan or Adoption Agreement to the
contrary, for Plan Years beginning after December 31, 1989, if the Plan would
otherwise fail to satisfy the requirements of Section 401(a)(26), 410(b)(1) or
410(b)(2)(A)(i) of the Code and the regulations thereunder because Employer
contributions have not been allocated to a sufficient number or percentage of
Participants for the Plan Year, an additional contribution shall be made by the
Employer and shall be allocated to the Employer Accounts of affected
Participants subject to the following provisions:
(a) The Participants eligible to share in the allocation of
the Employer's contribution shall be expanded to include the minimum number of
Participants who are not otherwise eligible to the extent necessary to satisfy
the applicable test under the relevant Section of the Code. The specific
Participant who shall become eligible are those Participants who are actively
employed on the last day of the Plan Year who have completed the greatest number
of Hours of Service during the Plan Year.
(b) If the applicable test is still not satisfied, the
Participants eligible to share in the allocation shall be further expanded to
include the minimum number of Participants who are
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not employed on the last day of the Plan Year as are necessary to satisfy the
applicable test. The specific Participants who shall become eligible are those
Participants who have completed the greatest number of Hours of Service during
the Plan Year.
(c) A Participant's accrued benefit shall not be reduced by
any reallocation of amounts that have previously been allocated. To the extent
necessary, the Employer shall make an additional contribution equal to the
amount such affected Participants would have received if they had originally
shared in the allocations without regard to the deductibility of the
contribution. Any adjustment to the allocations pursuant to this paragraph shall
be considered a retroactive amendment adopted by the last day of the Plan Year.
ARTICLE IV
BENEFITS
2.4.1 Distributable Benefit. At such time that the employment of a
Participant terminates for any reason, he or his Beneficiary shall be entitled
to a benefit equal to the vested and nonforfeitable interest in his Accounts as
of the Distribution Date. Such Accounts shall include the allocable share of
contributions and forfeitures, if any, which may be allocated to said Accounts
as of such Distribution Date and shall be determined after making the
adjustments for which provision is made in the Plan.
2.4.2 Vesting. A Participant shall at all times be one hundred percent
(100%) vested and have a nonforfeitable interest in his Elective Contribution
Account, Qualified Non-Elective Contribution Account, Voluntary Account and
Segregated Account. The vested and nonforfeitable interest of the Participant in
his Controlled Account shall be determined by reference to the Account from
which the funds were originally transferred. The vested and nonforfeitable
interest in a Participant's Employer Account and Matching Account shall be
determined as hereinafter provided.
(a) Normal Retirement. If a Participant terminates employment
at his Normal Retirement Age, he shall be one hundred percent (100%) vested and
have a nonforfeitable interest in his Employer Account and Matching Account.
(b) Deferred Retirement. If a Participant continues in active
employment following his Normal Retirement Age, he shall continue to participate
under the Plan. From and after his Normal Retirement Age, he shall be one
hundred percent (100%) vested and have a nonforfeitable interest in his Employer
Account and Matching Account.
(c) Disability. If the employment of a Participant is
terminated prior to his Normal Retirement Age as a result of a medically
determinable physical or mental impairment which may be expected to result in
death or to last for a continuous period of not less than twelve (12) months and
which renders him incapable of performing his duties, he shall be one hundred
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<PAGE> 21
percent (100%) vested and have a nonforfeitable interest in his Employer Account
and Matching Account. All determinations in connection with the permanence and
degree of such disability shall be made by the Plan Administrator in a uniform,
nondiscriminatory manner on the basis of medical evidence.
(d) Death. In the event of the death of a Participant, he
shall be one hundred percent (100%) vested and have a nonforfeitable interest in
his Employer Account and Matching Account.
(e) Termination of Plan. In the event of termination of the
Plan (including termination resulting from a complete discontinuance of
contributions by the Employer), each Participant shall be one hundred percent
(100%) vested and have a nonforfeitable interest in his Employer Account and
Matching Account. In the event of a partial termination of the Plan, each
Participant with respect to whom such partial termination has occurred shall be
one hundred percent (100%) vested and have a nonforfeitable interest in his
Employer Account and Matching Account.
(f) Early Retirement, Resignation or Discharge. If the
employment of a Participant terminates by reason of early retirement,
resignation or discharge prior to his Normal Retirement Age, he shall be vested
and have a nonforfeitable interest in a percentage of his Employer Account and
Matching Account determined by, except as provided below, taking into account
all of his Years of Service as of such termination date in accordance with the
schedule set forth in the Adoption Agreement.
2.4.3 Leave of Absence. A temporary cessation from active employment
with the Employer pursuant to an authorized leave of absence in accordance with
the nondiscriminatory policy of the Employer, whether occasioned by illness,
military service or any other reason shall not be treated as either a
termination of employment or a Break in Service provided that the Employee
returns to employment prior to the end of the authorized leave of absence.
2.4.4 Re-Employment. Unless otherwise elected by the Employer in the
Adoption Agreement, in the case of a Participant who has five (5) or more
consecutive Breaks in Service, all Years of Service after such Breaks in Service
shall be disregarded for the purposes of vesting the employer-derived account
balance that accrued before such breaks, but both pre-break and post-break
service shall count for the purposes of vesting the employer-derived account
balance that accrues after such breaks. Both accounts shall share in the
earnings and losses of the Trust Fund. In the case of a Participant who does not
have five (5) consecutive Breaks in Service, both the pre-break and post-break
service shall count in vesting both the pre-break and post-break
employer-derived account balance.
2.4.5 Distribution Date. The Distribution Date shall be determined as
hereinafter provided.
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(a) General. For purposes of determining the amount to be
distributed, the Distribution Date shall be determined in the manner specified
in the Adoption Agreement.
(b) Termination of Plan. In the event of termination of the
Plan (including termination resulting from a complete discontinuance of
contributions by the Employer), the Distribution Date shall be the date of such
termination. In the event of a partial termination of the Plan, as to each
Participant with respect to whom such partial termination has occurred, the
Distribution Date shall be the Anniversary Date coinciding with or immediately
following the date of such partial termination.
(c) Distributions following Distribution Date. Subject to the
necessity, if any, of obtaining the consent of a Participant and spouse,
distribution of a Participant's Distributable Benefit shall commence within a
reasonable period after the Distribution Date, unless otherwise elected by the
Participant in accordance with the provisions of the Plan or as required by the
provisions of the Plan.
2.4.6 Forfeitures. If an Employee terminates service, and the value of
the Employee's vested account balance derived from employer and employee
contributions is not greater than $3,500 and the Employee receives a
distribution of the value of the entire vested portion of such account balance,
the nonvested portion shall be treated as a forfeiture as of the last day of the
Plan Year in which the Participant's entire vested interest is distributed from
the Plan. If the value of an Employee's vested account balance is zero, the
Employee shall be deemed to have received a distribution of such vested account
balance. A participant's vested account balance shall not include accumulated
deductible employee contributions within the meaning of Section 72(o)(5)(B) of
the Code for plan years beginning prior to January 1, 1989.
Unless otherwise elected in the Adoption Agreement, if an Employee terminates
service, and elects, in accordance with the provisions of the Plan, to receive
the value of the employee's vested account balance, the nonvested portion shall
be treated as a forfeiture. If the Employee elects to have distributed less than
the entire vested portion of the account balance derived from employer
contributions, the part of the nonvested portion that will be treated as a
forfeiture is the total nonvested portion multiplied by a fraction, the
numerator of which is the amount of the distribution attributable to employer
contributions and the denominator of which is the total value of the vested
employer derived account balance.
If an Employee receives a distribution and the Employee resumes employment
covered under the Plan, the Employee's employer-derived account balance shall be
restored to the amount on the date of distribution if the Employee repays to the
Plan the full amount of the distribution attributable to Employer contributions
before the earlier of five (5) years after the first date on which the
Participant is subsequently re-employed by the Employer, or the date the
Participant incurs five (5) consecutive Breaks in Service following the date of
the distribution. If an Employee is deemed to receive a distribution pursuant to
this section, and the Employee resumes employment covered under the Plan before
the date the Participant incurs five (5) consecutive
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<PAGE> 23
Breaks in Service, upon the reemployment of such Employee, the employer-derived
account balance of the Employee will be restored to the amount on the date of
such deemed distribution.
Unless otherwise elected in the Adoption Agreement, such forfeiture shall be
allocated in the same manner as a contribution by the Employer for the Year in
which said forfeiture occurred. Notwithstanding any provision herein to the
contrary, forfeitures resulting from contributions by an Employer shall not be
reallocated for the benefit of another adopting Employer.
If a Participant is re-employed following a Break in Service and is entitled to
restoration of any amount of his Accounts which was forfeited as a result of
such Break in Service, such amount shall be restored in the manner specified in
the Adoption Agreement.
ARTICLE V
DISTRIBUTIONS
2.5.1 Commencement of Distribution.
(a) Immediate Distribution. A Participant whose employment is
terminated for any reason, other than resignation or discharge prior to his
Early Retirement Date or his Normal Retirement Date, may elect upon his
termination of employment to begin distribution of his Distributable Benefit
within a reasonable period after the Distribution Date as of which his
Distributable Benefit is determined, or as of the date determined under
subsection (b), below, if that date is earlier. If a Participant does not so
elect, distribution of the Participant's Distributable Benefit shall in no event
begin later than the date determined under subsection (b), below.
(b) Deferred Distribution. Except in the case of amounts
subject to Section 2.5.2(h) for which a Participant's consent is not required,
unless the Employer elects in the Adoption Agreement to permit the Employee to
elect earlier commencement and the Employee so elects or the Employee elects to
further defer distribution, if the employment of a Participant is terminated by
reason of resignation or discharge prior to either his Early Retirement Date or
his Normal Retirement Date, distribution of his Distributable Benefit shall be
deferred and commenced on the sixtieth (60th) day after the close of the later
of the following Plan Years:
(i) The Plan Year during which the Participant
attains the earlier of age sixty-five (65) or the Normal Retirement Age;
(ii) The Plan Year during which the tenth (10th)
anniversary of the commencement of the Participant's participation in the Plan
occurs; or
(iii) The Plan Year during which the Participant
terminates service with the Employer.
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<PAGE> 24
If, however, the Employer selects an Early Retirement Date in the Adoption
Agreement, a Participant who terminates employment before satisfying the age
requirement for early retirement but has satisfied any service requirement shall
be entitled to a distribution of his Distributable Benefit in accordance with
subsection (a) above upon attaining such age. If distribution is so deferred,
unless otherwise determined by the Plan Administrator, the Trustee at the Plan
Administrator's direction shall transfer the Distributable Benefit to a
Segregated Fund from which distribution shall thereafter be made. Such transfer
shall be made as of the Distribution Date. Notwithstanding the foregoing, the
failure of a Participant and spouse to consent to a distribution while a benefit
is immediately distributable, within the meaning of Section 2.5.2(j), shall be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this section.
(c) Required Distribution. Notwithstanding anything herein to
the contrary, unless the Participant has made an appropriate election by
December 31, 1983 to defer distribution which has not been revoked or modified,
the Participant's benefit shall be distributed to the Participant not later than
April 1 of the calendar year following the calendar year in which he attains age
70-1/2 (the required beginning date) or shall be distributed, commencing not
later than April 1 of such calendar year in accordance with regulations
prescribed by the Secretary of the Treasury over a period not extending beyond
the life expectancy of the Participant or the life expectancy of the Participant
and a beneficiary designated by the Participant. The amount required to be
distributed for each calendar year, beginning with distributions for the first
distribution calendar year, must at least equal the quotient obtained by
dividing the Participant's benefit by the applicable life expectancy. Unless
otherwise elected by the Participant (or spouse, if distributions begin after
death and the spouse is the designated beneficiary) by the time distributions
are required to begin, the life expectancy of the Participant and the
Participant's spouse shall be recalculated annually. Other than for a life
annuity, such election shall be irrevocable as to the Participant or spouse and
shall apply to all subsequent years. The life expectancy of a non-spouse
beneficiary may not be recalculated. Life expectancy and joint and last survivor
expectancy shall be computed by use of the expected return multiples in Tables V
and VI of Section 1.72-9 of the Treasury Regulations. For calendar years
beginning after December 31, 1988, the amount to be distributed each year,
beginning with distributions for the first distribution calendar year shall not
be less than the quotient obtained by dividing the Participant's benefit by the
lesser of (1) the applicable life expectancy or (2) if the Participant's spouse
is not the designated beneficiary, the applicable divisor then determined from
the table set forth in Q&A-4 of Section 1.401(a)(9)-2 of the proposed
regulations. Distributions after the death of the Participant shall be
distributed using the applicable life expectancy as the relevant divisor without
regard to Proposed Regulations Section 1.401(a)(9)-2. The minimum distribution
for subsequent calendar years, including the minimum distribution for the
distribution calendar year in which the Participant's required beginning date
occurs, must be made on or before December 31 of that distribution calendar
year.
(d) Distribution After Death. Unless the Participant has made
an appropriate election by December 31, 1983 to extend the period of
distribution after his death and the
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<PAGE> 25
election has not been revoked or modified, the following provisions shall apply.
If distribution of the Participant's benefit has begun and the Participant dies
before his entire benefit has been distributed to him, the remaining portion of
such benefit shall be distributed at least as rapidly as under the method of
distribution being used as of the date of the Participant's death.
If the Participant dies before the distribution of his benefit has begun, the
entire interest of the Participant shall be distributed by December 31 of the
calendar year containing the fifth (5th) anniversary of the death of such
Participant, provided that if any portion of the Participant's benefit is
payable to or for the benefit of a designated beneficiary and such portion is to
be distributed in accordance with regulations issued by the Secretary of the
Treasury over the life of, or over a period not extending beyond the life
expectancy of such designated beneficiary, such distributions shall begin not
later than December 31 of the calendar year immediately following the calendar
year of the Participant's death or such later date as may be provided by
regulations issued by the Secretary of the Treasury. If the designated
beneficiary is the surviving spouse of the Participant the date on which the
distributions are required to begin shall not be earlier than the later of
December 31 of the calendar year immediately following the calendar year in
which the Participant had died and December 31 of the calendar year in which the
Participant would have attained age 70-1/2.
If the surviving spouse thereafter dies before the distributions to such spouse
begin and any benefit is payable to a contingent beneficiary, the date on which
distributions are required to begin shall be determined as if the surviving
spouse were the Participant.
If the Participant has not specified the manner in which benefits are payable by
the time of his or her death, the Participant's designated beneficiary must
elect the method of distribution no later than the earlier of (1) December 31 of
the calendar year in which distributions would be required to begin under this
section, or (2) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Participant. If the Participant has no
designated beneficiary, or if the designated beneficiary does not elect a method
of distribution, distribution of the Participant's entire interest must be
completed by December 31 of the calendar year containing the fifth anniversary
of the Participant's death.
(e) Payments to Children. In accordance with regulations
issued by the Secretary of the Treasury, any amount paid to a child shall be
treated as if it had been paid to the surviving spouse if such amount shall
become payable to the surviving spouse upon such child reaching majority (or
other designated event permitted under such regulations).
(f) Incidental Death Benefit Distributions. Any distribution
required by the rules applicable to incidental death benefits shall be treated
as a distribution required by this Section. All distributions required under
this Section shall be determined and made in accordance with the proposed
regulations under Section 401(a)(9) of the Code, including the minimum
distribution incidental benefit requirement of Section 1.401(a)(9)-2 of the
proposed regulations.
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(g) Distributions. For the purposes of this section,
distribution of a Participant's interest is considered to begin on the
Participant's required beginning date or the date distribution is required to
begin to the surviving spouse. If distribution in the form of an annuity
irrevocably commences to the Participant before the required beginning date, the
date distribution is considered to begin is the date distribution actually
commences.
(h) Definitions.
(1) Applicable life expectancy. The life expectancy
(or joint and last survivor expectancy) calculated using the attained age of the
Participant (or designated beneficiary) as of the Participant's (or designated
beneficiary's) birthday in the applicable calendar year reduced by one for each
calendar year which has elapsed since the date life expectancy was first
calculated. If life expectancy is being recalculated, the applicable life
expectancy shall be the life expectancy as so recalculated. The applicable
calendar year shall be the first distribution calendar year, and if life
expectancy is being recalculated such succeeding calendar year.
(2) Designated beneficiary. The individual who is
designated as the beneficiary under the Plan in accordance with Section
401(a)(9) and the proposed regulations thereunder.
(3) Distribution calendar year. A calendar year for
which a minimum distribution is required. For distributions beginning before the
Participant's death, the first distribution calendar year is the calendar year
immediately preceding the calendar year which contains the Participant's
required beginning date. For distributions beginning after the Participant's
death, the first distribution calendar year is the calendar year in which
distributions are required to begin.
(4) Participant's benefit.
(i) The account balance as of the last
valuation date in the calendar year immediately preceding the distribution
calendar year (valuation calendar year) increased by the amount of any
contributions or forfeitures allocated to the account balance as of dates in the
valuation calendar year after the valuation date and decreased by distributions
made in the valuation calendar year after the valuation date.
(ii) Exception for second distribution
calendar year. For purposes of paragraph (i) above, if any portion of the
minimum distribution for the first distribution calendar year is made in the
second distribution calendar year on or before the required beginning date, the
amount of the minimum distribution made in the second distribution calendar year
shall be treated as if it had been made in the immediately preceding
distribution calendar year.
(5) Required beginning date.
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<PAGE> 27
(i) General rule. The required beginning
date of a Participant is the first day of April of the calendar year following
the calendar year in which the Participant attains age 70 1/2.
(ii) Transitional rules. The required
beginning date of a Participant who attains age 70 1/2 before January 1, 1988,
shall be determined in accordance with (I) or (II) below:
(I) Non-5-percent owners. The
required beginning date of a Participant who is not a 5-percent owner is the
first day of April of the calendar year following the calendar year in which the
later of retirement or attainment of age 70 1/2 occurs.
(II) 5-percent owners. The required
beginning date of a Participant who is a 5-percent owner during any year
beginning after December 31, 1979, is the first day of April following the later
of:
(A) the calendar year in which
the Participant attains age 70 1/2, or
(B) the earlier of the
calendar year with or within which ends the Plan Year in which the Participant
becomes a 5-percent owner, or the calendar year in which the Participant
retires.
The required beginning date of a
Participant who is not a 5-percent owner who attains age 70 1/2 during 1988 and
who has not retired as of January 1, 1989, is April 1, 1990.
(iii) 5-percent owner. A Participant is
treated as a 5-percent owner for purposes of this section if such Participant is
a 5-percent owner as defined in Section 416(i) of the Code (determined in
accordance with Section 416 but without regard to whether the Plan is top-heavy)
at any time during the Plan Year ending with or within the calendar year in
which such owner attains age 66 1/2 or any subsequent Plan Year.
(iv) Once distributions have begun to a
5-percent owner under this section, they must continue to be distributed, even
if the Participant ceases to be a 5-percent owner in a subsequent year.
(i) Transitional rule.
(1) Notwithstanding the other requirements of this
Section and subject to the requirements of Section 2.5.2, distribution on behalf
of any employee, including a 5-percent owner, may be made in accordance with all
of the following requirements (regardless of when such distribution commences):
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<PAGE> 28
(a) The distribution by the trust is one
which would not have disqualified such trust under Section 401(a)(9) of the
Internal Revenue Code as in effect prior to amendment by the Deficit Reduction
Act of 1984.
(b) The distribution is in accordance with
a method of distribution designated by the employee whose interest in the trust
is being distributed or, if the employee is deceased, by a beneficiary of such
employee.
(c) Such designation was in writing, was
signed by the employee or the beneficiary, and was made before January 1, 1984.
2.5.2 Method of Distribution. Subject to the provisions of Section
2.5.1 above and any security interest in a loan from the Plan for which any
necessary spousal consent has been obtained (to the extent such security
interest is used as repayment of the loan), distribution shall be made by one of
the following methods, as determined in accordance with the election of the
Participant (or in the case of death, his Beneficiary) with such spousal
consents as may be required by law:
(a) In a single distribution, as designated by the Employer
in the Adoption Agreement;
(b) In substantially equal annual, quarterly or monthly
installments over a period of more than one year but which does not exceed the
period designated in the Adoption Agreement, as selected by the Participant
(provided that such period is not greater than the Participant's life expectancy
as of the annuity starting date), plus accrued net income. If distribution is to
be so made in installments, the Plan Administrator shall cause the undistributed
portion of the Distributable Benefit to be transferred to a Segregated Fund,
from which installment payments shall thereafter be withdrawn from time to time.
(c) By the purchase and delivery of a single premium,
nontransferable, fully refundable, annuity policy issued by a legal reserve life
insurance company providing for payments over such period as may be designated
in the Adoption Agreement as selected by the Participant; provided, however,
unless the Employer has designated a life annuity distribution option in the
Adoption Agreement, in the event of distribution of such an annuity policy to a
Participant, such duration shall be for a fixed duration which is less than the
Participant's life expectancy as of the annuity starting date. The refund
feature under such annuity policy following the death of the Participant shall
inure to the benefit of the person or persons designated by the Participant as
his Beneficiary.
(d) Any alternative method of equivalent value contained in
the Plan at any time on or after the first day of the first Plan Year beginning
after 1988 to which the Participant consents.
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<PAGE> 29
(e) Annuity Payments
(1) Requirement of Annuity Payment. The provisions of
this Section 2.5.2(e) shall apply to any Participant who is credited with at
least one Hour of Service with the Employer on or after August 23, 1984, and
such other Participants as provided in Section 2.5.2(k). Unless an optional form
of benefit is selected pursuant to a qualified election within the 90-day period
ending on the annuity starting date, a married Participant's vested Account
balance will be paid in the form of a Joint and Survivor Annuity and an
unmarried Participant's vested Account balance will be paid in the form of a
life annuity.
Unless an optional form of benefit has been selected within the election period
pursuant to a qualified election, if a Participant dies before the annuity
starting date then the Participant's vested Account balance shall be applied
toward the purchase of a Preretirement Survivor Annuity.
Notwithstanding the other provisions of this Section 2.5.2(e), if the Plan is
designated in the Adoption Agreement as a Cash or Deferred Profit Sharing Plan
or a Profit Sharing Plan and the Employer does not designate a life annuity
distribution option in the Adoption Agreement, the Qualified Joint and Survivor
Annuity and Preretirement Survivor Annuity forms of distribution shall not be
available. However, a Participant's surviving spouse shall be entitled to elect
distribution of the Participant's vested Account balance in the manner provided
by Section 3.8.3.
A Participant's vested Account balance is the aggregate value of the
Participant's vested account balances derived from employer and employee
contributions (including rollovers), whether vested before or upon death,
including the proceeds of insurance contracts, if any, on the Participant's
life. The provisions hereof shall apply to a Participant who is vested in
amounts attributable to employer contributions, employee contributions (or both)
at the time of death or distribution.
The Participant may elect to have such annuity distributed upon attainment of
the earliest retirement age under the Plan. A surviving spouse may elect to have
such annuity distributed within the ninety (90) day period commencing on the
date of the Participant's death.
(2) Election to Waive Annuity Payment. A Participant
may elect at any time during the applicable election period to waive the Joint
and Survivor Annuity form of benefit or the Preretirement Survivor Annuity form
of benefit (or both) and may revoke any such election at any time during the
applicable election period.
(3) Spousal Consent Required. An election to waive
any annuity form of benefit shall not take effect unless the spouse of the
Participant consents in writing to the election, such election designates a
specific beneficiary, including any class of beneficiaries or contingent
beneficiaries, or, solely in the case of a waiver of a Joint and Survivor
Annuity, a form of benefits which may not be changed without spousal consent (or
the consent of the spouse
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<PAGE> 30
expressly permits designations by the Participant without any requirement of
further consent by the spouse), and the spouse's consent acknowledges the effect
of such election and is witnessed by a Plan representative or a notary public,
or it is established to the satisfaction of the Plan Administrator that such
consent cannot be obtained because there is no spouse or because the spouse
cannot be located. A spouse may not revoke the consent without the approval of
the Participant.
Any consent by a spouse obtained under this provision (or establishment that the
consent of a spouse may not be obtained) shall be effective only with respect to
such spouse. A consent that permits designations by the Participant without any
requirement of further consent by such spouse must acknowledge that the spouse
has the right to limit consent to a specific beneficiary, and a specific form of
benefit where applicable, and that the spouse voluntarily elects to relinquish
either or both of such rights. A revocation of a prior waiver may be made by a
Participant without the consent of the spouse at any time before the
commencement of benefits. The number of revocations shall not be limited. No
consent obtained under this provision shall be valid unless the Participant has
received notice as provided in subsection (4) below.
(4) Written Explanations. The Plan Administrator
shall provide each Participant no less than 30 days and no more than 90 days
before the annuity starting date a written explanation of -
(a) the terms and conditions of a Joint and
Survivor Annuity;
(b) the Participant's right to make and the
effect of an election to waive the Joint and Survivor Annuity form of benefit;
(c) the rights of the Participant's spouse
to consent to a Participant's election;
(d) the right to make and the effect of a
revocation of an election.
The Plan Administrator shall provide to each Participant within the applicable
period a written explanation of a Preretirement Survivor Annuity comparable to
that provided with respect to a Joint and Survivor Annuity.
(5) Applicable Period. The applicable period means
with respect to a Participant, whichever of the following periods ends last:
(a) 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.
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<PAGE> 31
(b) A reasonable period ending after the
individual becomes a Participant.
(c) A reasonable period ending after the
Plan ceases to fully subsidize costs.
(d) A reasonable period ending after Section
401(a)(11) of the Code first applies to the Participant.
(e) A reasonable period ending after
separation from service in case of a Participant who separates before attaining
age 35.
For purposes of applying the foregoing, a reasonable period ending after the
enumerated events described in (b), (c) and (d) is the end of the two-year
period beginning one year prior to the date the applicable event occurs and
ending one year after that date. In the case of a Participant who separates from
service before the Plan Year in which age 35 is attained, notice shall be
provided within the two-year period beginning prior to separation and ending one
year after separation. If such a Participant there after returns to employment
with the Employer, the applicable period for such Participant shall be
redetermined.
(6) Applicable Election Period. The applicable
election period means -
(a) in the case of an election to waive a
Joint and Survivor Annuity, the ninety (90) day period ending on the annuity
starting date; and
(b) in the case of an election to waive a
Preretirement Survivor Annuity, the period which begins on the first day of the
Plan Year in which the Participant attains age thirty-five (35) and ends on the
date of the Participant's death; provided that in the case of a Participant who
is separated from service, such period shall not begin later than the date of
such separation from service.
A Participant who will not yet attain age 35 as of the end of any current Plan
Year may make a special qualified election to waive the Preretirement Survivor
Annuity for the period beginning on the date of such election and ending on the
first day of the Plan Year in which the Participant will attain age 35. Such
election shall not be valid unless the Participant receives a written
explanation of the Preretirement Survivor Annuity in such terms as are
comparable to the explanation required under subsection (4). Preretirement
Survivor Annuity coverage will be automatically reinstated as of the first day
of the Plan Year in which the Participant attains age 35. Any new waiver on or
after such date shall be subject to the full requirements of this section.
(7) Annuity Starting Date. The annuity starting date
means the first day of the first period for which an amount is payable as an
annuity or any other form.
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(8) Marriage Requirement. Notwithstanding the
foregoing, the benefits under the Plan shall not be provided in the form of a
Joint and Survivor Annuity or a Preretirement Survivor Annuity unless the
Participant and his spouse have been married throughout the one (1) year period
ending on the earlier of the Participant's annuity starting date or the date of
the Participant's death. If a Participant marries within one (1) year before the
annuity starting date and the Participant and his spouse in such marriage have
been married for at least a one (1) year period ending on or before the date of
the Participant's death, the Participant and such spouse shall be treated as
having been married throughout the required period. A former spouse shall be
treated as the spouse or surviving spouse and a current spouse will not be
treated as the spouse or surviving spouse to the extent provided under a
qualified domestic relations order as described in Section 414(p) of the Code.
(f) Terms of Annuity Contracts. Any annuity contract
distributed from the Plan must be nontransferable. The terms of any annuity
contract purchased and distributed by the Plan to a Participant or spouse shall
comply with the requirements of the Plan. If the Participant's benefit is
distributed in the form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with the requirements of
Section 401(a)(9) of the Code and the proposed regulations thereunder.
(g) Incidental Death Benefits. For calendar years beginning
before January 1, 1989, if the Participant's spouse is not the designated
Beneficiary, the method of distribution selected must assure that at least fifty
(50%) percent of the present value of the amount available for distribution is
paid within the life expectancy of the Participant.
(h) Consents. If the value of a Participant's vested account
balance derived from Employer and Employee contributions does not exceed (and at
the time of any prior distribution did not exceed) $3,500, the consent of the
Participant and his or her spouse shall not be required; provided that if such
value exceeds $3,500, the Participant and spouse (or where either has died, the
survivor) must consent to any distribution of such account balance. The consent
shall be obtained in writing within the 90 day period ending on the annuity
starting date. Neither the consent of the Participant nor the Participant's
spouse shall be required to the extent that a distribution is required to
satisfy Section 401(a)(9) or Section 415 of the Code. In addition, upon
termination of the Plan if the Plan does not offer an annuity option (purchased
from a commercial provider) and if the Employer or any entity within the same
controlled group does not maintain another defined contribution plan (other than
an employee stock ownership plan as defined in Section 4975(e)(7) of the Code),
the Participant's account balance in the Plan will, without the Participant's
consent, be distributed to the Participant. However, if any entity within the
same controlled group as the Employer maintains another defined contribution
plan (other than an employee stock ownership plan as defined in Section
4975(e)(7) of the Code), then the Participant's account balance will be
transferred, without the Participant's consent, to the other Plan if the
Participant does not consent to an immediate distribution.
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<PAGE> 33
.
(i) Zero Benefits. If the value of the Participant's vested
and nonforfeitable interest in the Plan at the time of his termination of
employment is zero, the Participant shall be deemed to have received a
distribution of such interest.
(j) Restrictions on Immediate Distributions. The Plan
Administrator shall notify the Participant and the Participant's spouse of the
right to defer any distribution until the Participant's account balance in the
Plan is no longer immediately distributable. Such notification shall include a
general description of the material features and an explanation of the relative
values of the optional forms of benefit available under the Plan in a manner
that would satisfy the notice requirements of Section 417(a)(3) of the Code and
shall be provided no less than 30 days and no more than 90 days prior to the
annuity starting date. Notwithstanding the foregoing, only the Participant need
consent to the commencement of a distribution in the form of a qualified joint
and survivor annuity while the Participant's account balance in the Plan is
immediately distributable. Furthermore, if payment in the form of a qualified
joint and survivor annuity is not required with respect to the Participant
pursuant to the Plan, only the Participant need consent to the distribution of
an account balance that is immediately distributable. The Participant's account
balance is immediately distributable if any part of the Participant's account
balance could be distributed to the Participant (or surviving spouse) before the
Participant attains (or would have attained if not deceased) the later of age 62
or the Normal Retirement Age.
(k) Transitional Rules.
(1) Any living Participant not receiving benefits on
August 23, 1984, who would otherwise not receive the benefits prescribed by the
previous sections of the article must be given the opportunity to elect to have
the prior sections of this article apply if such Participant is credited with at
least one hour of service under this Plan or a predecessor plan in a Plan Year
beginning on or after January 1, 1976, and such Participant has at least 10
years of vesting service when he or she separated from service.
(2) Any living Participant not receiving benefits on
August 23, 1984, who was credited with at least one hour of service under this
Plan or a predecessor plan on or after September 2, 1974, and who is not
otherwise credited with any service in a plan Year beginning on or after January
1, 1976, must be given the opportunity to have his or her benefits paid in
accordance with Section (4) below.
(3) The respective opportunities to elect (as
described above) must be afforded to the appropriate Participants during the
period commencing on August 23, 1984, and ending on the date benefits would
otherwise commence to said Participants.
(4) Any Participant who has elected pursuant to
Section (2) above and any Participant who does not elect under Section (1) or
who meets the requirements of Section (1) except that such Participant does not
have at least 10 years of vesting service when he or she
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<PAGE> 34
separates from service, shall have his or her benefits distributed in accordance
with all of the following requirements if benefits would have been payable in
the form of a life annuity:
(i) Automatic joint and survivor annuity.
If benefits in the form a life annuity become payable to a married Participant
who:
(1) begins to receive payments under
the Plan on or after normal retirement age; or
(2) dies on or after normal
retirement age while still working for the Employer; or
(3) begins to receive payments on or
after the qualified early retirement age; or
(4) separates from service on or
after attaining normal retirement age (or the qualified early retirement age)
and after satisfying the eligibility requirements for the payment of benefits
under the plan and thereafter dies before beginning to receive such benefits;
then such benefits will be received under this Plan in the form of a qualified
joint and survivor annuity, unless the Participant has elected otherwise during
the election period. The election period must begin at least 6 months before the
Participant attains qualified early retirement age and end not more than 90 days
before the commencement of benefits. Any election hereunder will be in writing
and may be changed by the Participant at any time.
(ii) Election of early survivor annuity. A
Participant who is employed after attaining the qualified early retirement age
will be given the opportunity to elect, during the election period, to have a
survivor annuity payable on death. If the Participant elects the survivor
annuity, payments under such annuity must not be less than the payments which
would have been made to the spouse under the qualified joint and survivor
annuity if the Participant had retired on the day before his or her death. Any
election under this provision will be in writing and may be changed by the
Participant at any time. The election period begins on the later of (1) the 90th
day before the Participant attains the qualified early retirement age, or (2)
the date on which participation begins, and ends on the date the Participant
terminates employment.
(iii) For purposes of this Section (4):
(1) Qualified early retirement age
is the later of:
(i) the earliest date,
under the Plan, on which the Participant may elect to receive retirement
benefits,
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<PAGE> 35
(ii) the first day of the
120th month beginning before the Participant reaches normal retirement age, or
(iii) the date the
Participant begins participation.
(2) Qualified joint and survivor
annuity is an annuity for the life of the Participant with a survivor annuity
for the life of the spouse as otherwise described in the Plan.
2.5.3 Nature of Distributions. The nature of the distribution of a
Participant's Distributable Benefit shall be as hereinafter provided.
(a) Trust Fund and Segregated Funds. Subject to the Joint and
Survivor Annuity requirements, except as provided in subsection (b) with regard
to Life Insurance Policies, distribution of a Participant's Distributable
Benefit shall consist of cash or property, or an annuity contract as provided in
Section 2.5.2 above.
(b) Insurance Policies. In the event that the Trustee has
purchased Life Insurance Policies on the life of the Participant, the values and
benefits available with respect to each such Policy shall be distributed as
follows:
(i) If the Participant's employment terminates for
any reason other than death, then the Trustee shall either surrender the Life
Insurance Policy for its available cash value and distribute the proceeds as
provided in subsection (a) above or, at the election of the Participant,
distribute the Life Insurance Policy to the Participant, provided the
Participant has a vested and nonforfeitable interest in his Accounts in an
amount at least equal to the cash value thereof.
(ii) If the Participant's employment terminates by
reason of death, the beneficiary designated by the Participant in accordance
with the terms of the Plan shall be entitled to receive from the Trustee the
full amount of the proceeds thereof.
The Trustee shall apply for and be the owner of any Policies purchased under the
terms of the Plan. The Policies must provide that the proceeds are payable to
the Trustee subject to the Trustee's obligation to pay over the proceeds to the
designated Beneficiary. A Participant's spouse will be the designated
beneficiary of the proceeds of such Policies unless a qualified election has
been made in accordance with Section 2.5.2(e) of the Plan, if applicable. Under
no circumstances shall the trust retain any part of the proceeds. In the event
of any conflict between the terms of the Plan and the terms of any Policies
purchased hereunder, the Plan provisions shall control.
2.5.4 Advance Distributions. If the Employer elects in the Adoption
Agreement to permit advance distribution to a Participant or his Beneficiary
after his employment has terminated and
34
<PAGE> 36
before he is otherwise entitled to distribution of his Distributable Benefit but
in no event earlier than a reasonable period following the Distribution Date,
the Trustee upon the request of the Participant or Beneficiary shall make
advance distributions to him or to his Beneficiary. The aggregate of such an
advance distribution shall not exceed the sum of the vested and nonforfeitable
interest in the Participant's Accounts.
If the Employer elects in the Adoption Agreement to forfeit nonvested amounts
immediately upon distribution of the Employee's entire vested account balance on
termination of service, an Employee who terminates service and elects to receive
the value of the Employee's vested account balance shall forfeit the nonvested
portion. If the Employee elects to have distributed less than the entire vested
portion of the account balance derived from Employer contributions, the part of
the nonvested portion that is treated as a forfeiture is the total nonvested
portion multiplied by a fraction, the numerator of which is the amount of the
distribution attributable to Employer contributions and the denominator of which
is the total value of the vested Employer derived account balance.
Except as provided in the preceding paragraph, if a Participant receives a
distribution which reduces the balance in his Employer Account when he has less
than a one hundred percent (100%) vested and nonforfeitable interest in the
Account, the amount, if any, of the Participant's vested and nonforfeitable
interest in the undistributed balance of said Account on his Accrual Date shall
be transferred to a Segregated Account and shall not be less than an amount
("X") determined by the formula: X = P (AB + (R x D)) - (R x D). For purposes of
applying the formula: P is the vested percentage at the relevant time; AB is the
account balance at the relevant time; and D is the amount of the distribution;
and R is the ratio of the account balance at the relevant time to the account
balance after distribution.
2.5.5 Hardship Distributions. If the Plan is designated in the Adoption
Agreement as a Cash or Deferred Profit Sharing Plan or a Profit Sharing Plan and
the Employer elects in the Adoption Agreement to permit hardship distributions,
a Participant may request a distribution from the Plan as a result of immediate
and heavy financial needs of the Participant to the extent that the distribution
is necessary to satisfy such financial needs. Hardship distributions are subject
to the spousal consent requirements contained in Sections 401(a)(11) and 417 of
the Code. The determination of whether a Participant has an immediate and heavy
financial need shall be made by the Plan Administrator on the basis of all
relevant facts and circumstances. A distribution shall be deemed to be made on
account of an immediate and heavy financial need if the distribution is on
account of:
(a) Deductible medical expenses described in Section 213(d) of
the Code incurred or necessary for medical care of the Participant, his spouse
or dependents;
(b) Purchase (excluding mortgage payments) of a principal
residence for the Participant;
35
<PAGE> 37
(c) Cost of tuition and related educational fees for the next
12 months of post-secondary education for the Participant, his spouse, children
or dependents; or
(d) The need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage of the Participant's
principal residence.
A distribution shall be considered as necessary to satisfy an immediate and
heavy financial need of the Participant only if:
(a) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans under all plans maintained by
the Employer;
(b) All plans maintained by the Employer provide that the
Participant's elective Deferrals and employee contributions shall be suspended
for twelve (12) months after the receipt of the hardship distribution;
(c) The distribution is not in excess of the amount of an
immediate and heavy financial need (including amounts necessary to pay any
federal, state or local income taxes or penalties reasonably anticipated to
result from the distribution); and
(d) All plans maintained by the Employer provide that the
Participant may not make Elective Deferrals for the Participant's taxable year
immediately following the taxable year of the hardship distribution in excess of
the applicable limit under Section 402(g) of the Code for such taxable year less
the amount of such Participant's Elective Deferrals for the taxable year of the
hardship distribution.
In the event of such distribution, when a Participant is less than one hundred
percent (100%) vested in his Employer Account or Matching Account, the vested
interest in the Employer Account or Matching Account shall thereafter be
determined in accordance with Section 2.5.4 of the Plan.
2.5.6 In Service Distributions.
(a) Cash or Deferred Profit Sharing Plans. If the Plan is
designated in the Adoption Agreement as a Cash or Deferred Profit Sharing plan
and if the Employer elects in the Adoption Agreement to permit distributions to
a Participant after attaining age 59 1/2 but prior to his termination of
employment, a Participant shall be entitled to receive a distribution of all or
a part of his interest in the Plan upon filing a written request with the Plan
Administrator; provided that no distribution shall be made unless the interest
of the Participant in the Account from which the distribution is to be made is
fully vested and nonforfeitable and the balance in the Account to be distributed
has accumulated for at least two (2) years or the individual has been a
Participant for five (5) or more Plan Years; and the distribution of Elective
Deferrals and Qualified
36
<PAGE> 38
Non-Elective Contributions satisfy the limitations imposed by Part II, Article
VII. Any distribution shall be subject to the written consent of the
Participant's spouse.
(b) Profit Sharing Plans. If the Plan is designated in the
Adoption Agreement as a Profit Sharing Plan and if the Employer elects in the
Adoption Agreement to permit distributions to a Participant prior to his
termination of employment, a Participant shall be entitled to receive a
distribution of all or part of his interest in the Plan upon filing a written
request with the Plan Administrator; provided that no distribution shall be made
unless the interest of the Participant in the Account from which the
distribution is to be made is fully vested and nonforfeitable and the balance in
the Account to be distributed has accumulated for at least two (2) years or the
individual has been a Participant for five (5) or more Plan Years; provided
further that in-service distributions shall be permitted subject to the terms of
Section 2.5.5 if the Employer elects in the Adoption Agreement to have such
provision apply. Any distribution shall be subject to the written consent of the
Participant's spouse.
(c) All Plans. Upon attainment of his Normal Retirement Date,
a Participant shall be entitled to receive a distribution of all or a part of
his interest in the Plan upon filing a written request with the Plan
Administrator. In service distributions are permitted at the election of the
Participant for amounts held in a Segregated Account attributable to a rollover
from another plan regardless of age or periods of participation. Any
distribution shall be subject to the written consent of the Participant's
spouse.
ARTICLE VI
CONTINGENT TOP HEAVY PROVISIONS
2.6.1 Top Heavy Requirements. If the Plan becomes a Top Heavy Plan
during any Plan Year, the following provisions shall supersede any conflicting
provisions in the Plan or Adoption Agreement and apply for such Plan Year:
(a) Except as otherwise provided below, the Employer
contributions and forfeitures allocated on behalf of any Participant who is not
a Key Employee shall not be less than the lesser of three percent of such
Participant's Compensation or in the case where the Employer has no defined
benefit plan which designates this plan to satisfy Section 401 of the Code, the
largest percentage of Employer contributions and forfeitures, as a percentage of
the first $200,000 of the Key Employee's compensation, allocated on behalf of
any Key Employee for that year. The minimum allocation is determined without
regard to any Social Security contribution. This minimum allocation shall be
made even though, under other plan provisions, the Participant would not
otherwise be entitled to receive an allocation, or would have received a lesser
allocation for the year because of (i) the Participant's failure to complete
1,000 Hours of Service (or any equivalent provided in the plan), or (ii) the
Participant's failure to make mandatory employee contributions to the plan, or
(iii) compensation less than a stated amount.
37
<PAGE> 39
Neither Elective Deferrals nor Matching Contributions may be taken into account
for the purpose of satisfying the minimum allocation.
For purposes of computing the minimum allocation, Compensation shall mean a
Participant's compensation as defined in Section 3.2.1(h) of the Plan.
The minimum allocation provided above shall not apply to any Participant who was
not employed by the Employer on the last day of the Plan Year.
The minimum allocation provided above shall not apply to any Participant to the
extent the Participant is covered under any other plan or plans of the Employer
and Employer has provided in the Adoption Agreement that the minimum allocation
or benefit requirement applicable to top-heavy plans will be met in the other
plan or plans.
(b) References in Section 3.2.1(d), pertaining to combined
plan limitations, to "1.25" shall be applied by substituting "1.0" for "1.25"
therein. Reference in Section 3.2.1(e), pertaining to a special transition rule,
to "$51,875" shall be applied by substituting "$41,500" for "$51,875" therein.
(c) The vested and nonforfeitable interest of each Participant
shall be equal to the percentage determined under the vesting schedule specified
in the Adoption Agreement if the Plan becomes a Top Heavy Plan, or if no vesting
schedule is specified, the percentage determined under the following schedule:
<TABLE>
<CAPTION>
Years of Service Percentage
---------------- ----------
<S> <C>
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
</TABLE>
The top-heavy minimum vesting schedule applies to all benefits within the
meaning of Section 411(a)(7) of the Code, except those attributable to employee
contributions, including benefits accrued before the effective date of Section
416 of the Code and benefits accrued before the Plan becomes top-heavy.
No decrease in a Participant's nonforfeitable percentage may occur in the event
the Plan's status as top-heavy changes for any Plan Year. Any minimum allocation
required (to the extent required to be nonforfeitable under Section 416(b)) may
not be forfeited under Section 411(a)(3)(B) or (D) of the Code.
38
<PAGE> 40
2.6.2 Top Heavy Definitions. The following terms, as used in this Plan,
shall have the following meaning:
(a) "Key Employee": An Employee or former employee who, at
any time during the Determination Period is either:
(i) an officer of the Employer having an Annual
Compensation greater than fifty (50%) percent of the amount in effect under
Section 415(b)(l)(A) of the Code;
(ii) an owner (or a person considered an owner under
Section 318 of the Code) of one of the ten largest interests in the Employer if
such individual's Annual Compensation from the Employer is more than the
limitation in effect under Section 415(c)(l)(A) of the Code;
(iii) any person who owns directly or indirectly more
than five (5%) percent of the outstanding stock of the Employer or stock
possessing more than five (5%) percent of the total combined voting power of all
stock of the Employer or, in the case of an unincorporated Employer, the capital
or profits interest in the Employer;
(iv) any person who owns directly or indirectly more
than one (1%) percent of the outstanding stock of the Employer or stock
possessing more than one (1%) percent of the total combined voting power of all
stock of the Employer or, in the case of an unincorporated Employer, the capital
or profits interest in the Employer and having an Annual Compensation from the
Employer of more than $150,000; or
(v) any beneficiary of a Key Employee. The
determination of who is a Key Employee shall be made in accordance with Section
416(i)(1) of the Code and the regulations thereunder.
(b) "Aggregation Group": Each qualified retirement plan of the
Employer in which a Key Employee is a participant and each other qualified
retirement plan of the Employer which enables any plan in which a Key Employee
is a participant to meet the requirements of Section 401(a)(4) or Section 410 of
the Code.
(c) "Annual Compensation": Compensation as defined in Section
415(c)(3) of the Code, but including amounts contributed by the Employer
pursuant to a salary reduction agreement which are excludable from the
Employee's gross income under Section 125, Section 402(a)(8), Section 402(h) or
Section 403(b) of the Code.
(d) "Top-Heavy Plan": For any Plan Year beginning after
December 31, 1983, the plan is top-heavy if any of the following conditions
exists:
39
<PAGE> 41
(i) If the top-heavy ratio for the plan exceeds 60
percent and the plan is not part of any required aggregation group or permissive
aggregation group of plans.
(ii) If the plan is a part of a required aggregation
group of plans but not part of a permissive aggregation group and the top-heavy
ratio for the group of plans exceeds 60 percent.
(iii) If the plan is a part of a required aggregation
group and part of a permissive aggregation group of plans and the top-heavy
ratio for the permissive aggregation group exceeds 60 percent.
(e) "Top-Heavy Ratio":
(i) If the Employer maintains one or more defined
contribution plans (including any simplified employee pension plan) and the
Employer has not maintained any defined benefit plan which during the 5-year
period ending on the Determination Date(s) has or has had accrued benefits, the
top-heavy ratio for this plan alone or for the required or permissive
aggregation group as appropriate is a fraction, the numerator of which is the
sum of the account balances of all Key Employees as of the Determination Date(s)
(including any part of any account balance distributed in the 5-year period
ending on the Determination Date(s)), and the denominator of which is the sum of
all account balances (including any part of any account balance distributed in
the 5-year period ending on the Determination Date(s)), both computed in
accordance with Section 416 of the Code and the regulations thereunder. Both the
numerator and denominator of the top-heavy ratio are increased to reflect any
contribution not actually made as of the Determination Date, but which is
required to be taken into account on that date under Section 416 of the Code and
the regulations thereunder.
(ii) If the Employer maintains one or more defined
contribution plans (including any simplified employee pension plan) and the
Employer maintains or has maintained one or more defined benefit plans which
during the 5-year period ending on the Determination Date(s) has or has had any
accrued benefits, the top-heavy ratio for any required or permissive aggregation
group as appropriate is a fraction, the numerator of which is the sum of account
balances under the aggregated defined contribution plan or plans for all Key
Employees, determined in accordance with (i) above, and the present value of
accrued benefits under the aggregated defined benefit plan or plans for all Key
Employees as of the Determination Date(s), and the denominator of which is the
sum of the account balances under the aggregated defined contribution plan or
plans for all Participants, determined in accordance with (i) above, and the
present value of accrued benefits under the defined benefit plan or plans for
all Participants as of the Determination Date(s), all determined in accordance
with Section 416 of the Code and the regulations thereunder. The accrued
benefits under a defined benefit plan in both the numerator and denominator of
the top-heavy ratio are increased for any distribution of an accrued benefit
made in the five-year period ending on the Determination Date.
40
<PAGE> 42
(iii) For purposes of (i) and (ii) above, the value
of account balances and the present value of accrued benefits will be determined
as of the most recent valuation date that falls within or ends with the 12-month
period ending on the Determination Date, except as provided in Section 416 of
the Code and the regulations thereunder for the first and second plan years of a
defined benefit plan. The account balances and accrued benefits of a Participant
(1) who is not a Key Employee but was a Key Employee in a prior year, or (2) who
has not been credited with at least one hour of service with any Employer
maintaining the plan at any time during the 5-year period ending on the
Determination Date will be disregarded. The calculation of the top-heavy ratio,
and the extent to which distributions, rollovers, and transfers are taken into
account will be made in accordance with Section 416 of the Code and the
regulations thereunder. Deductible employee contributions will not be taken into
account for purposes of computing the top-heavy ratio. When aggregating plans,
the value of account balances and accrued benefits will be calculated with
reference to the Determination Dates that fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee shall be
determined under (a) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the Employer, or (b) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Section 411(b)(1)(C)
of the Code.
(f) "Permissive Aggregation Group": The required aggregation
group of plans plus any other plan or plans of the Employer which, when
considered as a group with the required aggregation group, would continue to
satisfy the requirements of Sections 401(a)(4) and 410 of the Code.
(g) "Required Aggregation Group":
(i) Each qualified plan of the Employer in which at
least one Key Employee participates or participated at any time during the
Determination Period (regardless of whether the plan has terminated).
(ii) Any other qualified plan of the Employer which
enables a plan described in (i) to meet the requirements of Sections 401(a)(4)
or 410 of the Code.
(h) "Determination Date": For any plan year subsequent to the
first plan year, the last day of the preceding plan year. For the first plan
year of the plan, the last day of that year.
(i) "Valuation Date": The date elected by the Employer in the
Adoption Agreement as of which account balances or accrued benefits are valued
for purposes of calculating the top-heavy ratio.
41
<PAGE> 43
(j) "Present Value": Present value shall be based only on the
interest and mortality rates specified in the Adoption Agreement.
(k) "Determination Period": The Plan Year containing the
Determination Date and the four (4) preceding Plan Year.
(l) "Non-Key Employee": An Employee who is not a Key Employee.
2.6.3 Pairing Requirements. If an Employer adopts two or more defined
contribution plans by executing Adoption Agreements pursuant to this Plan or
another prototype plan for which the Mass Submitter is the same, the following
provisions shall apply:
(a) Only one of the Adoption Agreements may provide for
permitted disparity by integration with Social Security.
(b) For each Plan Year in which the paired plans are top-heavy
the Employer shall provide a minimum contribution equal to three (3%) percent of
Compensation for each Non-Key Employee (i) under the paired plan designated by
the Employer in the Adoption Agreement if the plans benefit the same
Participants, or in the case of a plan subject to Code Section 401(k) or 401(m),
the same Participants are eligible to make elective deferrals or employee
contributions, or (ii) under both paired plans if the plans benefit the same
participants. Note: The same eligibility requirements in Section A of the
Adoption Agreement must be selected.
(c) In any Plan Year in which the paired plans are top-heavy,
i.e. the top-heavy ratio exceeds sixty (60%) percent, the denominators of the
defined benefit fraction and defined contribution fraction in Section 3.2.1(d)
shall be computed by multiplying the dollar limitation by 1.0 instead of by
1.25.
ARTICLE VII
SPECIAL CODA LIMITATIONS
2.7.1 Limitation on Deferral Percentage for Highly Compensated
Employees. Notwithstanding any provision herein to the contrary, the actual
deferral percentage for all Highly Compensated Employees for each Plan Year must
not exceed the actual deferral percentage for all other Employees eligible to
participate by more than the greater of:
(a) the actual deferral percentage of such other Employees
multiplied by 1.25; or
(b) the actual deferral percentage of such other Employees
multiplied by 2.0, but in no event more than two (2) percentage points greater
than the actual deferral percentage of such other Employees.
42
<PAGE> 44
For purposes hereof, the actual deferral percentages for a Plan Year for all
Highly Compensated Employees and for all other Employees respectively are the
averages of the ratios, calculated separately for each Employee in the
respective group, of the amount of Elective Contributions and Qualified
Non-Elective Contributions paid under the Plan on behalf of each such Employee
for such Plan Year including Excess Elective Deferrals to the Employee's
Compensation for such Plan Year (whether or not the Employee was a Participant
for the entire Plan Year) but excluding Elective Deferrals that are taken into
account in the Contribution Percentage test (provided the ADP test is satisfied
both with and without exclusion of those Elective Deferrals). An Employee who
would be a Participant but for the failure to have Elective Contributions made
on his behalf shall be treated as a Participant on whose behalf no Elective
Contributions are made. For purposes of calculating the actual deferral
percentages of Highly Compensated Employees who are 5 percent owners or among
the ten most highly paid Employees, Elective Contributions and Qualified
Non-Elective Contributions on behalf of a member of the Family of such Highly
Compensated Employees shall be taken into account and Compensation of such
Employees shall include the Elective Deferrals and Qualified Non-Elective
Contributions and Compensation for the Plan Year of members of his Family (as
determined in Section 414(q)(6) of the Code). A member of the Family of such
Highly Compensated Employees shall be disregarded as a separate Employee in
determining the actual deferral percentage both for Participants who are Highly
Compensated Employees and for all other Employees.
For purposes of determining the actual deferral percentage test, Elective
Contributions and Qualified Non-Elective Contributions must be made before the
last day of the twelve month period immediately following the Plan Year to which
the contributions relate.
The Employer shall maintain records sufficient to demonstrate satisfaction of
the actual deferral percentage test and the amount of Qualified Non-Elective
Contributions used in such test.
The determination and treatment of the actual deferral percentage amounts of any
Participant shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
2.7.2 Multiple Plan Limitations.
(a) The actual deferral percentage for any Participant who is
a Highly Compensated Employee for the Plan Year and who is eligible to have
Elective Contributions (and Qualified Non-Elective Contributions if treated as
Elective Deferrals for purposes of the actual deferral percentage test)
allocated to his or her Accounts under two or more arrangements described in
Section 401(k) of the Code, that are maintained by the Employer, shall be
determined as if such Elective Deferrals (and, if applicable, such Qualified
Non-Elective Contributions) were made under a single arrangement. If a Highly
Compensated Employee participates in two or more cash or deferred arrangements
that have different Plan Years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations under Section 401(k) of the Code.
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(b) In the event that this Plan satisfies the requirements of
Section 401(k), 401(a)(4) or 410(b) of the Code only if aggregated with one or
more other plans, or if one or more other plans satisfy the requirements of such
sections of the Code only if aggregated with this Plan, then this section shall
be applied by determining the actual deferral percentage of Employees as if all
such plans were a single plan. For Plan Years beginning after December 31, 1989,
plans may be aggregated in order to satisfy Section 401(k) of the Code only if
they have the same Plan Year.
2.7.3 Limitation on Matching Contributions. Notwithstanding any
provision herein to the contrary, the average contribution percentage for all
Highly Compensated Employees for each Plan Year must not exceed the average
contribution percentage for all other Employees eligible to participate by more
than the greater of:
(a) the average contribution percentage of such other
Employees multiplied by 1.25; or
(b) the average contribution percentage of such other
Employees multiplied by 2.0, but in no event more than two (2) percentage points
greater than the average contribution percentage of such other Employees.
For purposes hereof, the average contribution percentages for a Plan Year for
all Highly Compensated Employees and for all other Employees respectively are
the averages of the ratios, calculated separately for each Employee in the
respective group, of the amount of Matching Contributions paid under the Plan on
behalf of each such Employee for such Plan Year, to the Employee's Compensation
for such Plan Year whether or not the Employee was a Participant for the entire
Plan Year. Such contribution percentage amounts shall include forfeitures of
Excess Aggregate Contributions or Matching Contributions allocated to the
Participant's Accounts which shall be taken into account in the Plan Year in
which such forfeiture is allocated. Forfeitures of Matching Contributions shall
be included as contribution percentage amounts only to the extent such
forfeitures are used to reduce or supplement the Matching Contributions, as
specified in the Adoption Agreement. If so elected in the Adoption Agreement,
the Employer may include Qualified Non-Elective Contributions in the
contribution percentage amounts. The Employer may also elect to use Elective
Deferrals in the contribution percentage amounts so long as the ADP test is met
before the Elective Deferrals are used in the ACP test and continues to be met
following the exclusion of those Elective Deferrals that are used to meet the
ACP test. If an Elective Contribution or other contribution by an Employee is
required as a condition of participation in the Plan, any Employee who would be
a Participant if such Employee made such a contribution shall be treated as an
eligible Participant on behalf of whom no such contributions are made.
The Employer shall maintain records sufficient to demonstrate satisfaction of
the average contribution percentage test and the amount of Qualified
Non-Elective Contributions used in such test.
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The determination and treatment of the contribution percentage of any
Participant shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
2.7.4 Special Rules.
(a) Multiple Use: If one or more Highly Compensated Employees
participate in both a CODA and a plan subject to the ACP test maintained by the
Employer and the sum of the ADP and ACP of those Highly Compensated Employees
subject to either or both tests exceeds the Aggregate Limit, then the ACP of
those Highly Compensated Employees who also participate in a CODA shall be
reduced (beginning with such Highly Compensated Employee whose ACP is the
highest) so that the limit is not exceeded. The amount by which each Highly
Compensated Employee's contribution percentage amounts is reduced shall be
treated as an Excess Aggregate Contribution. The ADP and ACP of the Highly
Compensated Employees are determined after any corrections required to meet the
ADP and ACP tests. Multiple use does not occur if either the ADP or ACP of the
Highly Compensated Employees does not exceed 1.25 multiplied by the ADP and ACP
of the Employees who are not Highly Compensated Employees.
(b) The contribution percentage for any Participant who is a Highly
Compensated Employee and who is eligible to have contribution percentage amounts
allocated to his or her Accounts under two or more plans described in Section
401(a) of the Code, or arrangements described in Section 401(k) of the Code that
are maintained by the Employer, shall be determined as if the total of such
contribution percentage amounts was made under each plan. If a Highly
Compensated Employee participates in two or more cash or deferred arrangements
that have different plan years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations under section 401(m) of the Code.
(c) In the event that this Plan satisfies the requirements of
Sections 401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or
more other plans, or if one or more other plans satisfy the requirements of such
Sections of the Code only if aggregated with this plan, then this section shall
be applied by determining the contribution percentages of Employees as if all
such plans were a single plan. For Plan Years beginning after December 31, 1989,
plans may be aggregated in order to satisfy Section 401(m) of the Code only if
they have the same Plan Year.
(d) For purposes of determining the contribution percentage of
a Participant who is a five-percent owner or one of the ten most highly-paid
Highly Compensated Employees, the contribution percentage amounts and
Compensation of such participant shall include the contribution percentage
amounts and Compensation for the Plan Year of members of the Family of such
Highly Compensated Employees. Family members, with respect to Highly Compensated
Employees, shall be disregarded as separate employees in determining the
contribution
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percentage both for Participants who are Highly Compensated Employees and for
all other Employees.
(e) For purposes of determining the contribution percentage
test, Employee Contributions are considered to have been made in the Plan Year
in which contributed to the trust. Matching Contributions and Qualified
Non-Elective Contributions shall be considered made for a Plan Year if made no
later than the end of the twelve month period beginning of the day after the
close of the Plan Year.
2.7.5 Distribution of Excess Elective Deferrals. A Participant may
assign to the Plan any Excess Elective Deferrals made during a taxable year of
the Participant by notifying the Plan Administrator on or before March 15 of
each calendar year of the amount of the Excess Elective Deferrals to be assigned
to the Plan. A Participant is deemed to notify the Plan Administrator of any
Excess Elective Deferrals that arise by taking into account only those Elective
Deferrals made to this Plan and any other plans of the Employer.
Notwithstanding any other provision of the Plan, Excess Elective Deferrals, plus
any income and minus any loss allocable thereto, shall be distributed no later
than April 15 to any Participant to whose account Excess Elective Deferrals were
assigned for the preceding year and who claims Excess Elective Deferrals for
such taxable year.
Excess Elective Deferrals distributed under this section shall be adjusted for
any income or loss based on a reasonable method of computing the allocable
income or loss. The method selected must be applied consistently to all
Participants and used for all corrective distributions under the Plan for the
Plan Year, and must be the same method that is used by the Plan for allocating
income or loss to Participants' Accounts. Income or loss allocable to the period
between the end of the taxable year and the date of distribution may be
disregarded in determining income or loss.
2.7.6 Distribution of Excess Contributions. Notwithstanding any other
provision of this Plan, Excess Contributions, plus any income and minus any loss
allocable thereto, shall be distributed no later than the last day of each Plan
Year to Participants to whose Accounts such Excess Contributions were allocated
for the preceding Plan Year. If such excess amounts are distributed more than 2
1/2 months after the last day of the Plan Year in which such excess amounts
arose, a ten (10) percent excise tax will be imposed on the Employer maintaining
the Plan with respect to such amounts. Such distributions shall be made to
Highly Compensated Employees on the basis of the respective portions of the
Excess Contributions attributable to each of such Employees. Excess
Contributions of Participants who are subject to the family member aggregation
rules shall be allocated among the family members in proportion to the Elective
Deferrals (and any amounts treated as Elective Deferrals) of each family member
that is combined to determine the combined ADP.
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Excess Contributions distributed under this section shall be adjusted for any
income or loss based on a reasonable method of computing the allocable income or
loss. The method selected must be applied consistently to all Participants and
used for all corrective distributions under the Plan for the Plan Year, and must
be the same method that is used by the Plan for allocating income or loss to
Participants' Accounts. Income or loss allocable to the period between the end
of the taxable year and the date of distribution may be disregarded in
determining income or loss.
Excess Contributions shall be distributed from the Participant's Elective
Contribution Account in proportion to the Participant's Elective Deferrals for
the Plan Year. Excess Contributions attributable to Qualified Non-Elective
Contributions shall be distributed from the Participant's Qualified Non-Elective
Contribution Account only to the extent that such Excess Contributions exceed
the balance in the Participant's Elective Contribution Account.
2.7.7 Distribution of Excess Aggregate Contributions. Notwithstanding any other
provision of this Plan, Excess Aggregate Contributions, plus any income and
minus any loss allocable thereto, shall be forfeited, if forfeitable, or if not
forfeitable, distributed no later than the last day of each Plan Year to
Participants to whose accounts such Excess Aggregate Contributions were
allocated for the preceding Plan Year. Excess Aggregate Contributions of
Participants who are subject to the family member aggregation rules shall be
allocated among the family members in proportion to the Employee and Matching
Contributions (or amounts treated as Matching Contributions) of each family
member that is combined to determine the combined ACP. Such distributions shall
be made to Highly Compensated Employees on the basis of the respective portions
of the Excess Aggregate Contributions attributable to each of such Employees. If
such Excess Aggregate Contributions are distributed more than 2 1/2 months after
the last day of the Plan Year in which such excess amounts arose, a ten (10)
percent excise tax will be imposed on the Employer maintaining the Plan with
respect to those amounts.
Excess Aggregate Contributions distributed under this section shall be adjusted
for any income or loss based on a reasonable method of computing the allocable
income or loss. The method selected must be applied consistently to all
Participants and used for all corrective distributions under the Plan for the
Plan Year, and must be the same method that is used by the Plan for allocating
income or loss to Participants' Accounts. Income or loss allocable to the period
between the end of the taxable year and the date of distribution may be
disregarded in determining income or loss.
Forfeitures of Excess Aggregate Contributions may either be reallocated to the
accounts of Employees who are not Highly Compensated Employees or applied to
reduce Employer Contributions, as elected by the Employer in the Adoption
Agreement.
Excess Aggregate Contributions shall be forfeited, if forfeitable or distributed
on a pro-rata basis from the Participant's Matching Account and Voluntary
Account (and, if applicable, the Participant's Qualified Non-Elective
Contribution Account or Elective Contribution Account).
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2.7.8 Limitation on Distributions. Except as otherwise provided in this
Article, Elective Deferrals and Qualified Non-Elective Contributions and income
allocable thereto are not distributable to a Participant or his or her
Beneficiary in accordance with such Participant's or Beneficiary's election
prior to separation from service, death or disability. Such amounts may,
however, be distributed upon:
(a) Termination of the Plan without the establishment of
another defined contribution plan, other than an employee stock ownership plan
(as defined in Section 4975(e) or Section 409 of the Code) or a simplified
employee pension plan as defined in Section 408(k) of the Code.
(b) The disposition by a corporation to an unrelated
corporation of substantially all of the assets (within the meaning of Section
409(d)(2) of the Code) used in a trade or business of such corporation if such
corporation continues to maintain this Plan after the disposition, but only with
respect to employees who continue employment with the corporation acquiring such
assets.
(c) The disposition by a corporation to an unrelated entity of
such corporation's interest in a subsidiary (within the meaning of Section
409(d)(3) of the Code) if such corporation continues to maintain this Plan, but
only with respect to employees who continue employment with such subsidiary.
(d) The attainment of age 59 1/2.
(e) The Hardship of a Participant in accordance with Section
2.5.5.
All such distributions are subject to the spousal and Participant consent
requirements, if applicable, contained in Sections 401(a)(11) and 417 of the
Code. In addition, distributions after March 31, 1988 that are triggered by any
of the first three events enumerated above must be made in a lump sum.
2.7.9 Limitation on Elective Deferrals. No Participant shall be
permitted to have Elective Deferrals made under this Plan, or any other
qualified plan maintained by the Employer, during any taxable year, in excess of
the dollar limitation contained in Section 402(g) of the Code in effect at the
beginning of such taxable year.
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PART III
ARTICLE I
ACCOUNTING
3.1.1 Accounts. All income, profits, recoveries, contributions and any
and all monies, securities and properties of any kind at any time received or
held by the Trustee shall be held as a commingled Trust Fund, except to the
extent such assets are transferred to a Segregated Fund. For accounting
purposes, the Plan Administrator shall establish and maintain certain Accounts
for each Participant. An Employer Account shall be established and maintained
for each Participant to which shall be added the Participant's share of Employer
or Non-Elective Contributions and forfeitures. A Matching Account shall be
established and maintained for each Participant to which shall be added the
Participant's share of Matching Contributions and forfeitures. A Qualified
Non-Elective Contribution Account shall be established and maintained for each
Participant to which shall be added the Participant's share of Qualified
Non-Elective Contributions. If a Participant has previously made voluntary
nondeductible employee contributions, the Plan Administrator shall establish and
maintain a Voluntary Account for the Participant. If, in accordance with any of
the provisions of the Plan, assets are either deposited initially or transferred
to a Segregated Fund for the benefit of a Participant, the Plan Administrator
shall establish and maintain a Segregated Account for the Participant. If a
Participant elects to exercise investment control over all or a portion of his
Accounts, the Plan Administrator shall establish and maintain a Controlled
Account for the Participant.
3.1.2 Adjustments. As of each Valuation Date, each Participant's
Accounts shall be adjusted in the following order and manner.
(a) Distributions. Any distribution made to or on behalf of a
Participant since the last preceding Valuation Date shall be deducted from the
Participant's Account from which the distribution was made.
(b) Insurance Premiums. Payments made since the last preceding
Valuation Date for Life Insurance Policies on the life of a Participant
(including without limitation payments of premiums and interest on policy loans)
shall be deducted from the Account of the Participant from which the payment was
made.
(c) Adjustment to Fair Market Value. The value of all monies,
securities and other property in the Trust Fund, excluding Life Insurance
Policies, shall be appraised by the Trustee at the then fair market value. In
determining such value, all income and contributions, if any, received by the
Trustee from the Employer or Participants on account of such Year calculated
under the method of accounting of the Trust shall be included and there shall be
deducted all expenses determined in accordance with the method of accounting
adopted by the Plan Administrator.
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If the total net value of the Trust Fund so determined exceeds (or is less than)
the total amount in the affected Accounts of all Participants, the excess (or
deficiency) shall be added to (or deducted from) the respective Accounts of all
Participants in the ratio that each such Participant's Account bears to the
total amount in all such Accounts.
(d) Adjustment of Segregated and Controlled Accounts. The
value of all monies, securities and other property in each Participant's
Segregated Account or Controlled Account, if any, but exclusive of Life
Insurance Policies, shall be appraised by the Trustee at the then fair market
value. In determining such value, all income calculated under the method of
accounting of the Trust shall be included and all expenses shall be deducted.
If the total net value of a Participant's Segregated Account or Controlled
Account, as the case may be, so determined exceeds (or is less than) the
previous balance in such Account, the excess (or deficiency) shall be added to
(or deducted from) the Participant's respective Account.
(e) Insurance Dividends. Dividends or credits received since
the last preceding Valuation Date on any Life Insurance Policy on the life of a
Participant shall be added to the Account of the Participant from which the
premiums for such Life Insurance Policy have been paid.
(f) Contributions and Forfeitures. Each Participant's Account
shall be increased by that portion of the contribution and forfeitures which is
allocated to him.
(g) Transfers to Segregated Funds. To the extent that funds in
the Trust Fund attributable to a Participant's Accounts were transferred since
the last preceding Valuation Date or are to be transferred to a Segregated Fund
pursuant to any of the provisions of the Plan, the Account from which the funds
were transferred shall be decreased and the Account to which the funds were
transferred shall be increased.
(h) Transfers From Segregated Funds. To the extent that funds
are transferred from a Segregated Fund of a Participant to the Trust Fund
pursuant to any of the provisions of the Plan, the Account from which the funds
were transferred shall be decreased and the Account to which the funds were
transferred shall be increased.
(i) Time of Adjustments. Every adjustment to be made pursuant
to this Section shall be considered as having been made as of the applicable
Valuation Date regardless of the actual dates of entries, receipt by the Trustee
of contributions by the Participant or the Employer for such Year, or the
transfers of funds to or from Segregated Funds. The Trustee's determination as
to valuation of trust assets and charges or credits to the individual Accounts
of the respective Participants shall be conclusive and binding on all persons.
If funds are transferred from the Trust Fund to a Segregated Fund as of any date
other than a Valuation Date pursuant to the terms of the Plan, the adjustment to
be made pursuant to this Section shall be made as of the date as of which such
transfer is made, as if such date is a Valuation Date.
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If any Participant receives a distribution pursuant to the terms of the Plan as
of any date other than a Valuation Date, then the adjustments to be made
pursuant to this Section shall be made in the manner specified in the Adoption
Agreement.
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ARTICLE II
LIMITATIONS
3.2.1 Limitations on Annual Additions. If the Participant does not
participate in, and has never participated in, another qualified plan maintained
by the Employer, or a welfare benefit fund, as defined in Section 419(e) of the
Code, maintained by the Employer, or an individual medical account, as defined
in Section 415(l)(2) of the Code, maintained by the Employer, which provides an
annual addition, then subject to the adjustments hereinafter set forth, the
amount of annual additions which may be credited to a Participant's Accounts
during any Limitation Year shall not exceed the maximum permissible amount,
which shall equal the lesser of: (a) thirty thousand dollars ($30,000.00) or, if
greater, one-fourth of the dollar limitation under Section 415(b)(1)(A) of the
Code as in effect for the Limitation Year, or (b) twenty-five percent (25%) of
the Participant's Compensation for the Plan Year. The compensation limitation
referred to in (b) shall not apply to any contribution for medical benefits
(within the meaning of Section 401(h) or Section 419A(f)(2) of the Code) which
is otherwise treated as an annual addition under Sections 415(l)(1) or
419A(d)(2) of the Code.
If the Employer contribution that would otherwise be contributed or allocated to
the Participant's Account would cause the annual additions for the Limitation
Year to exceed the maximum permissible amount, the amount contributed or
allocated shall be reduced so that the annual additions for the Limitation Year
shall equal the maximum permissible amount.
(a) Annual Additions. The term "annual additions" shall mean
the sum of the following amounts credited to a Participant's Accounts for the
Limitation Year:
(i) Employer contributions;
(ii) Employee contributions;
(iii) Forfeitures;
(iv) Excess Elective Deferrals, Excess Contributions
and Excess Aggregate Contributions; and
(v) Payments allocated after March 31, 1984, to an
individual medical account, as defined in section 415(l)(2) of the Code, which
is part of a pension or annuity plan maintained by the Employer and amounts
derived from contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to post-retirement medical
benefits, allocated to the separate account of a key employee, as defined in
section 419A(d)(3) of the Code, under a welfare benefit fund as defined in
section 419(e) of the Code, maintained by the Employer.
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Any excess amounts applied under subsections (b) and (c) below to reduce
Employer contributions are considered annual additions for such Limitation Year.
(b) Excessive Annual Additions. Prior to determining a
Participant's actual Compensation for a Limitation Year, the Employer may
determine the maximum permissible Annual Addition for the Participant on the
basis of a reasonable estimation of the Participant's Compensation for the
Limitation Year, uniformly determined for all Participants similarly situated.
As soon as is administratively feasible after the end of the Limitation Year,
the maximum permissible amount for the Limitation Year shall be determined on
the basis of the Participant's actual Compensation for the Limitation Year. Any
Excessive Annual Addition attributable to nondeductible voluntary employee
contributions made by a Participant to the extent they reduce the excess amount
shall be returned to the Participant before any other adjustments are made. Any
Excessive Annual Addition attributable to a reasonable error in determining the
amount of Elective Deferrals that may be made on behalf of a Participant under
the limits of Section 415 of the Code shall next be returned to the Participant.
If an excess amount still exists, and the Participant is covered by the Plan at
the end of the Limitation Year, the excess amount in the Participant's Account
shall be used to reduce Employer contributions (including any allocation of
forfeitures) for such Participant in the next Limitation Year, and each
succeeding Limitation Year, if necessary. If an excess amount still exists, and
the Participant is not covered by the Plan at the end of a Limitation Year, the
excess amount shall be held unallocated in a suspense account. The suspense
account shall be applied to reduce future Employer contributions for all
remaining Participants in the next Limitation Year, and each succeeding
Limitation Year, if necessary. If a suspense account is in existence at any time
during a particular Limitation Year, all amounts in the suspense account must be
allocated and reallocated to Participants' Accounts before any Employer or any
Employee contributions may be made to the Plan for that Limitation Year. Excess
amounts may not be distributed to Participants or former Participants. If a
suspense account is in existence at any time during a Limitation Year, it shall
not participate in the allocation of the Trust's investment gains and losses.
(c) Participation in Certain Other Plans. If in addition to this Plan,
the Participant is covered under another qualified regional prototype defined
contribution plan maintained by the Employer, a welfare benefit fund, as defined
in Section 419(e) of the code maintained by the Employer, or an individual
medical account, as defined in Section 415(l)(2) of the Code, maintained by the
Employer, which provides an Annual Addition during any Limitation Year, the
annual additions which may be credited to a Participant's account under this
Plan for any such Limitation Year shall not exceed the maximum permissible
amount reduced by the Annual Additions credited to a Participant's Account under
the other plans and welfare benefit funds for the same Limitation Year. If the
Annual Additions with respect to the Participant under other defined
contribution plans and welfare benefit funds maintained by the Employer are less
than the maximum permissible amount and the Employer contribution that would
otherwise be contributed or allocated to the Participant's Account under this
Plan would cause the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated
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<PAGE> 55
shall be reduced so that the Annual Additions under all such plans and funds for
the Limitation Year shall equal the maximum permissible amount. If the Annual
Additions with respect to the Participant under such other defined contribution
plans and welfare benefit funds in the aggregate are equal to or greater than
the maximum permissible amount, no amount will be contributed or allocated to
the Participant's Account under this Plan for the Limitation Year.
Prior to determining the Participant's actual Compensation for the Limitation
Year, the Employer may determine the maximum permissible amount for a
Participant in the manner described in subsection (b) above. As soon as is
administratively feasible after the end of the Limitation Year, the maximum
permissible amount for the Limitation Year shall be determined on the basis of
the Participant's actual Compensation for the Limitation Year.
If a Participant's Annual Additions under this Plan and such other plans would
result in an excess amount for a Limitation Year, the excess amount shall be
deemed to consist of the Annual Additions last allocated, except that Annual
Additions attributable to a welfare benefit fund or individual medical account
will be deemed to have been allocated first regardless of the actual allocation
date.
If the excess amount was allocated to a Participant on an allocation date of
this Plan which coincides with an allocation date of another plan, the excess
amount attributed to this Plan will be the product of:
(i) the total excess amount allocated as of such date, times
(ii) the ratio of (I) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this Plan to (II) the
total Annual Additions allocated to the Participant for the Limitation Year as
of such date under this and all the other qualified regional prototype defined
contribution plans. Any excess amount attributed to this Plan will be disposed
in the manner described in subsection (b), above
If the Participant is covered under another qualified defined contribution plan
maintained by the Employer which is not a regional prototype plan, Annual
Additions which may be credited to the Participant's Account under this Plan for
any Limitation Year shall be limited as provided above as though the other plan
were a regional prototype plan unless the Employer specifies other limitations
in the Adoption Agreement.
For purposes hereof, the excess amount is the excess of the Participant's annual
additions for the Limitation Year over the maximum permissible amount and a
regional prototype plan is a plan the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
If the Employer maintains, or at any time maintained, a qualified defined
benefit plan covering any Participant in this Plan, the sum of the Participant's
defined benefit plan fraction and defined contribution plan fraction will not
exceed 1.0 in any Limitation Year. The Annual Additions
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<PAGE> 56
which may be credited to the Participant's account under this Plan for any
Limitation Year shall be limited in the manner specified in the Adoption
Agreement.
(d) Combined Plan Limitation. In the event that a Participant
in this Plan participates in a defined benefit plan (as defined in the
applicable sections of the Code) maintained by the Employer, the sum of the
"defined benefit plan fraction" plus the "defined contribution plan fraction"
shall at no time exceed 1.0. The "defined benefit plan fraction" for any year is
a fraction (i) the numerator of which is the projected annual benefit of the
Participant under all the defined benefit plans (whether or not terminated)
maintained by the Employer (determined as of the close of the year), and
(ii) the denominator of which is the lesser of (A) the product of 1.25
multiplied by the dollar limitation determined for the Limitation Year under
Sections 415(b) and (d) of the Code, or (B) the product of 1.4 multiplied by one
hundred (100%) percent of the Participant's average compensation for the three
(3) consecutive Years of Service with the Employer that produces the highest
average, including any adjustments under Section 415(b) of the Code.
Notwithstanding the above, if the Participant was a Participant as of the first
day of the first Limitation Year beginning after December 31, 1986, in one or
more defined benefit plans maintained by the Employer which were in existence on
May 6, 1986, the denominator of this fraction shall not be less than 125 percent
of the sum of the annual benefits under such plans which the Participant had
accrued as of the close of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the Plan after May
5, 1986. The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Section 415 for
all Limitation Years beginning before January 1, 1987. The "defined contribution
fraction" for any year is a fraction (i) the numerator of which is the sum of
the annual additions to the Participant's accounts under all defined
contribution plans (whether or not terminated) maintained by the Employer for
the current and all prior Limitation Years, including the annual additions
attributable to the Participant's nondeductible employee contributions to all
defined benefit plans, whether or not terminated, maintained by the Employer,
and the annual additions attributable to all welfare benefit funds and
individual medical accounts (as defined in Sections 419(e) and 415(l)(2) of the
Code) maintained by the Employer, and (ii) the denominator of which is the sum
of the lesser of the following amounts determined for the current year and for
all prior limitation years of service with the Employer, regardless of whether a
defined contribution plan was maintained by the Employer: (A) the product of
1.25 multiplied by the dollar limitation determined under Sections 415(b) and
(d) of the Code in effect under Section 415(c)(1)(A) of the Code, or (B)
thirty-five (35%) percent of the Participant's compensation from the Employer
for such plan year. If the Employee was a Participant as of the end of the first
day of the first Limitation Year beginning after December 31, 1986, in one or
more defined contribution plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction will be adjusted if the
sum of this fraction and the defined benefit fraction would otherwise exceed 1.0
under the terms of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0 times (2) the
denominator of this fraction, shall be permanently subtracted from the numerator
of this fraction. The adjustment is calculated using the fractions as they would
be computed as of the end of the last Limitation Year beginning before
January 1,
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1987, and disregarding any changes in the terms and conditions of the Plan
made after May 5, 1986, but using the Section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987.
The annual addition for any Limitation Year beginning before January 1, 1987,
shall not be recomputed to treat all employee contributions as annual additions.
The projected annual benefits under a defined benefit plan is the annual
retirement benefit (adjusted to an actuarially equivalent straight life annuity
if such benefit is expressed in a form other than a straight life annuity) or
qualified joint and survivor annuity) to which the Participant would be entitled
under the terms of the Plan assuming the Participant continues employment until
normal retirement age under the plan (or current age, if later), and the
Participant's compensation for the current Limitation Year and all other
relevant factors used to determine benefits under the Plan remain constant for
all future Limitation Years.
(e) Special Transition Rule for Defined Contribution Fraction.
At the election of the Plan Administrator, in applying the provisions of
subsection (d) above with respect to the defined contribution plan fraction for
any year ending after December 31, 1982, the amount taken into account for the
denominator for each Participant for all years ending before January 1, 1983
shall be an amount equal to the product of the amount of the denominator
determined under subsection (d) above for the year ending in 1982, multiplied by
the "transition fraction". The "transition fraction" is a fraction (i) the
numerator of which is the lesser of (A) $51,875 or (B) 1.4 multiplied by
twenty-five (25%) percent of the Participant's compensation for the year ending
in 1981, and (ii) the denominator of which is the lesser of (A) $41,500 or (B)
twenty-five (25%) percent of the Participant's compensation for the year ending
in 1981.
(f) Special Transition Rule for Excess Benefits. Provided that
the Plan satisfied the requirements of Section 415 of the Code for the last Plan
Year beginning before January 1, 1983, an amount shall be subtracted from the
numerator of the defined contribution plan fraction (not exceeding such
numerator) so that the sum of the defined benefit plan fraction and the defined
contribution fraction computed in accordance with Section 415(e)(l) of the Code
(as amended by the Tax Equity and Fiscal Responsibility Act of 1982) does not
exceed 1.0 for such year, in accordance with regulations issued by the Secretary
of the Treasury pursuant to the applicable provisions of the Code.
(g) Employer. For purposes of this Section, employer shall
mean the Employer that adopts this Plan and all members of a group of employers
which constitutes a controlled group of corporations or trades or businesses
under common control (as defined in Sections 414(b) and (c) of the Code, as
modified by Section 415(h) of the Code), or an affiliated service group (as
defined in Section 414(m) of the Code) of which the adopting employer is part
and any other entity required to be aggregated with the Employer under Section
414(o) of the Code and the regulations issued thereunder.
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(h) Compensation. For purposes of this Section as elected in
the Adoption Agreement by the Employer, Compensation shall mean all of a
Participant's:
(i) Wages, Tips and Other Compensation Box on Form
W-2. Wages as defined in Section 3401(a) and all other payments of compensation
to an employee by the employer (in the course of the employer's trade or
business) for which the employer is required to furnish the employee a written
statement under Sections 6041(d) and 6051(a)(3) of the Code. Compensation must
be determined without regard to any rules under Section 3401(a) that limit the
remuneration included in wages based on the nature or location of the employment
or the services rendered (such as the exception for agricultural labor in
Section 3401(a)(2) of the Code).
(ii) Section 3401(a) Wages. Wages as defined in
section 3401(a) of the Code for the purposes of income tax withholding at the
source but determined without regard to any rules that limit the remuneration
included in wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor in section
3401(a)(2) of the Code).
(iii) Section 415 Safe-Harbor Compensation. Wages,
salaries and fees for professional services and other amounts received without
regard to whether or not an amount is paid in cash for personal services
actually rendered in the course of employment for the employer maintaining the
Plan to the extent that the amounts are includible in gross income (including
but not limited to commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits, and reimbursements or other expense allowances under a
nonaccountable plan (as described in section 1.62-2(c) of the Regulations), but
excluding:
(I) Employer contributions to a plan of
deferred compensation which are not includible in the Employee's gross income
for the taxable year in which contributed, or employer contributions under a
simplified employee pension plan to the extent such contributions are deductible
by the Employee or any distributions from a plan of deferred compensation;
(II) Amounts realized from the exercise of a
non-qualified stock option or when restricted stock or property held by the
Employee is no longer subject to a substantial risk of forfeiture or becomes
freely transferable.
(III) Amounts realized from the sale,
exchange or other disposition of stock acquired under an incentive stock
option; and
(IV) Other amounts which received special
tax benefits or contributions made by the Employer (whether or not under a
salary reduction agreement) towards
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the purchase of an annuity contract described in Section 403(b) of the Code
(whether or not the contributions are actually excludable from the gross income
of the Employee).
For any self-employed individual, Compensation shall mean earned income. For
limitation years beginning after December 31, 1991, for purposes of applying the
limitations of this Article, Compensation for a Limitation Year is the
Compensation actually paid or made available during such Limitation Year.
Notwithstanding the preceding sentence, Compensation for a Participant who is
permanently and totally disabled (as defined in section 22(e)(3) of the Code) is
the compensation such Participant would have received for the Limitation Year if
the Participant had been paid at the rate of compensation paid immediately
before becoming permanently and totally disabled; such imputed compensation for
the disabled Participant may be taken into account only if the Participant is
not a Highly Compensated Employee and contributions made on behalf of such
Participant are nonforfeitable when made.
(i) Short Limitation Year. If the Limitation Year is amended
to a different twelve (12) consecutive month period, the new Limitation Year
must begin within the Limitation Year in which the amendment is made. If a short
Limitation Year is created because of an amendment changing the Limitation Year
to a different twelve (12) consecutive month period, the maximum annual addition
shall not exceed the defined contribution dollar limitation determined in
accordance with Section 415(c)(1)(A) of the Code then in effect multiplied by a
fraction, the numerator of which is the number of months in the short Limitation
Year and the denominator of which is twelve (12).
3.2.2 Controlled Businesses. If this plan provides contributions or
benefits for one or more owner-employees who control both the business for which
this plan is established and one or more other trades or businesses, this plan
and the plan established for other trades or businesses must, when looked at as
a single plan, satisfy sections 401(a) and (d) for the employees of this and all
other trades or businesses.
If the plan provides contributions or benefits for one or more owner-employees
who control one or more other trades or businesses, the employees of the other
trades or businesses must be included in a plan which satisfies sections 401(a)
and (d) and which provides contributions and benefits not less favorable than
provided for owner-employees under this plan.
If an individual is covered as an owner-employee under the plans of two or more
trades or businesses which are not controlled and the individual controls a
trade or business, then the contributions or benefits of the employees under the
plan of the trades or businesses which are controlled must be as favorable as
those provided for him under the most favorable plan of the trade or business
which is not controlled.
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For purposes of the preceding paragraphs, an owner-employee, or two or more
owner-employees, will be considered to control a trade or business if the
owner-employee, or two or more owner-employees together:
(a) own the entire interest in an unincorporated trade or
business, or
(b) in the case of a partnership, own more than 50 percent of
either the capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an owner-employee, or two or more
owner-employees shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such owner-employee, or
such two or more owner-employees, are considered to control within the meaning
of the preceding sentence.
ARTICLE III
FIDUCIARIES
3.3.1 Standard of Conduct. The duties and responsibilities of the Plan
Administrator and the Trustee with respect to the Plan shall be discharged (a)
in a non-discriminatory manner; (b) for the exclusive benefit of Participants
and their Beneficiaries; (c) by defraying the reasonable expenses of
administering the Plan; (d) with the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent man acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims; (e) by diversifying the investments of the
Plan so as to minimize the risk of large losses, unless under the circumstances
it is clearly prudent not to do so; and (f) in accordance with the documents and
instruments governing the Plan insofar as such documents and instruments are
consistent with the provisions of the Act.
3.3.2 Individual Fiduciaries. At any time that a group of individuals
is acting as Plan Administrator or Trustee, the number of such persons who shall
act in such capacity from time to time shall be determined by the Employer. Such
persons shall be appointed by the Employer and may or may not be Participants or
Employees of the Employer. Any action taken by a group of individuals acting as
either Plan Administrator or Trustee shall be taken at the direction of a
majority of such persons, or, if the number of such persons is two (2), by
unanimous consent.
3.3.3 Disqualification from Service. No person shall be permitted to
serve as a Fiduciary, custodian, counsel, agent or employee of the Plan or as a
consultant to the Plan who has been convicted of any of the criminal offenses
specified in the Act.
3.3.4 Bonding. Except as otherwise permitted by law, each Fiduciary or
person who handles funds or other property or assets of the Plan shall be bonded
in accordance with the requirements of the Act.
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3.3.5 Prior Acts. No Fiduciary shall be liable for any acts occurring
prior to the period of time during which the Fiduciary was actually serving in
such capacity with respect to the Plan.
3.3.6 Insurance and Indemnity. The Employer may purchase or cause the
Trustee to purchase and keep current as an authorized expense liability
insurance for the Plan, its Fiduciaries, and any other person to whom any
financial responsibility with respect to the Plan and Trust is allocated or
delegated, from and against any and all liabilities, costs and expenses incurred
by such persons as a result of any act or omission to act in connection with the
performance of the duties, responsibilities and obligations under the Plan and
under the Act; provided that any such insurance policy purchased with Plan
assets permits subrogation by the Insurer against the Fiduciary in the case of
breach by such Fiduciary. Unless otherwise determined and communicated to
affected parties by the Employer, the Employer shall indemnify and hold harmless
each such person, other than a corporate trustee, for and from any such
liabilities, costs and expenses which are not covered by any such insurance,
except to the extent that any such liabilities, costs or expenses are judicially
determined to be due to the gross negligence or willful misconduct of such
person. No Plan assets may be used for any such indemnification.
3.3.7 Expenses. Expenses incurred by the Plan Administrator or the
Trustee in the administration of the Plan and the Trust, including fees for
legal services rendered, such compensation to the Trustee as may be agreed upon
in writing from time to time between the Employer and the Trustee, and all other
proper charges and expenses of the Plan Administrator or the Trustee and of
their agents and counsel shall be paid by the Employer, or at its election at
any time or from time to time, may be charged against the assets of the Trust,
but until so paid shall constitute a charge upon the assets of the Trust. The
Trustee shall have the authority to charge the Trust Fund for its compensation
and reasonable expenses unless paid or contested by written notice by the
Employer within sixty (60) days after mailing of the written billing by the
Trustee. All taxes of any and all kinds whatsoever which may be levied or
assessed under existing or future laws upon the assets of the Trust or the
income thereof shall be paid from such assets. Notwithstanding the foregoing, no
compensation shall be paid to any Employee for services rendered under the Plan
and Trust as a Trustee.
3.3.8 Agents, Accountants and Legal Counsel. The Plan Administrator
shall have authority to employ suitable agents, custodians, investment counsel,
accountants and legal counsel who may, but need not be, legal counsel for the
Employer. The Plan Administrator and the Trustee shall be fully protected in
acting upon the advice of such persons. The Trustee shall at no time be obliged
to institute any legal action or to become a party to any legal action unless
the Trustee has been indemnified to the Trustee's satisfaction for any fees,
costs and expenses to be incurred in connection therewith.
3.3.9 Investment Manager. The Employer may employ as an investment
manager or managers to manage all or any part of the Trust Fund any (i)
investment advisor registered under the Investment Advisors Act of 1940; (ii)
bank as defined in said Act; or (iii) insurance company
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qualified to perform investment management services in more than one state. Any
investment manager shall have all powers of the Trustee in the management of
such part of the Trust Fund, including the power to acquire or dispose of
assets. In the event an investment manager is so appointed, the Trustee shall
not be liable for the acts or omissions of such investment manager or be under
any obligation to invest or otherwise manage that part of the Trust Fund which
is subject to the management of the investment manager. The Employer shall
notify the Trustee in writing of any appointment of an investment manager, and
shall provide the Trustee with the investment manager's written acknowledgment
that it is a fiduciary with respect to the Plan.
3.3.10 Finality of Decisions or Acts. Except for the right of a
Participant or Beneficiary to appeal the denial of a claim, any decision or
action of the Plan Administrator or the Trustee made or done in good faith upon
any matter within the scope of authority and discretion of the Plan
Administrator or the Trustee shall be final and binding upon all persons. In the
event of judicial review of actions taken by any Fiduciary within the scope of
his duties in accordance with the terms of the Plan and Trust, such actions
shall be upheld unless determined to have been arbitrary and capricious.
3.3.11 Certain Custodial Accounts and Contracts. The term "Trustee" as
used herein will also include a person holding the assets of a custodial
account, an annuity contract or other contract which is treated as a qualified
trust pursuant to Section 401(f) of the Code and references to the Trust Fund
shall be construed to apply to such custodial account, annuity contract or other
contract.
ARTICLE IV
PLAN ADMINISTRATOR
3.4.1 Administration of Plan. The Plan Administrator shall be
designated by the Employer from time to time. The primary responsibility of the
Plan 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 Plan Administrator shall administer the Plan and shall construe and
determine all questions of interpretation or policy in a manner consistent with
the Plan and the Adoption Agreement. The Plan Administrator may correct any
defect, supply any omission, or reconcile any inconsistency in such manner and
to such extent as he shall deem necessary or advisable to carry out the purpose
of the Plan; provided, however, that any interpretation or construction shall be
done in a nondiscriminatory manner and shall be consistent with the intent that
the Plan shall continue to be a qualified Plan pursuant to the Code, and shall
comply with the terms of the Act. The Plan Administrator shall have all powers
necessary or appropriate to accomplish his duties under the Plan.
(a) The Plan Administrator shall be charged with the duties of
the general administration of the Plan, including but not limited to the
following:
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(1) To determine all questions relating to the
eligibility of an Employee to participate in the Plan or to remain a
Participant hereunder.
(2) To compute, certify and direct the Trustee with
respect to the amount and kind of benefits to which any Participant shall be
entitled hereunder.
(3) To authorize and direct the Trustee with respect
to all disbursements from the Trust Fund.
(4) To maintain all the necessary records for the
administration of the Plan.
(5) To interpret the provisions of the Plan and to
make and publish rules and regulations for the Plan as the Plan Administrator
may deem reasonably necessary for the proper and efficient administration of the
Plan and consistent with its terms.
(6) To select the Insurer to provide any Life
Insurance Policy to be purchased
for any Participant hereunder.
(7) To advise the Fiduciary with investment authority
regarding the short and long-term liquidity needs of the Plan in order that the
Fiduciary might direct its investment accordingly.
(8) To advise, counsel and assist any Participant
regarding any rights, benefits or elections available under the Plan.
(9) To instruct the Trustee as to the management,
investment and reinvestment of the Trust Fund unless the investment authority
has been delegated to the Trustee or an Investment Manager.
(b) The Plan Administrator shall also be responsible for
preparing and filing such annual disclosure reports and tax forms as may be
required from time to time by the Secretary of Labor, the Secretary of the
Treasury or other governmental authorities.
(c) Whenever it is determined by the Plan Administrator to be
in the best interest of the Plan and its Participants or Beneficiaries, the Plan
Administrator may request such variances, deferrals, extensions, or exemptions
or make such elections for the Plan as may be available under the law.
(d) The Plan Administrator shall be responsible for procuring
bonding for all persons dealing with the Plan or its assets as may be required
by law.
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(e) In the event this Plan is required to file reports or pay
premiums to the Pension Benefit Guaranty Corporation, the Plan Administrator
shall have the duty to prepare and make such filings, to pay any premiums
required, whether for basic or contingent liability coverage, and shall be
charged with the responsibility of notifying all necessary parties of such
events and under such circumstances as may be required by law.
3.4.2 Disclosure Requirements. Every Participant covered under the Plan
and every Beneficiary receiving benefits under the Plan shall receive from the
Plan Administrator a summary plan description, and such other information as may
be required by law or by the terms of the Plan.
3.4.3 Information Generally Available. The Plan Administrator shall
make copies of this Plan and Trust, the Adoption Agreement, the summary plan
description, latest annual report, Life Insurance Policies, or other instruments
under which the Plan was established or is operated available for examination by
any Participant or Beneficiary in the principal office of the Plan Administrator
and such other locations as may be necessary to make such information reasonably
accessible to all interested parties. Subject to a reasonable charge to defray
the cost of furnishing such copies, the Plan Administrator shall, upon written
request of any Participant or Beneficiary, furnish a copy of any of the above
documents to the respective party.
3.4.4 Statement of Accrued Benefit. Upon written request to the Plan
Administrator once during any twelve (12) month period, a Participant or
Beneficiary shall be furnished with a written statement, based on the latest
available information, of his then vested accrued benefit and the earliest date
upon which the same will become fully vested and nonforfeitable. The statement
shall also include a notice to the Participant of any benefits which are
forfeitable if the Participant dies before a certain date.
3.4.5 Explanation of Rollover Treatment. The Plan Administrator shall,
when making a distribution eligible for rollover treatment, provide a written
explanation to the recipient of the provisions under which such distribution
will not be subject to tax if transferred to an eligible retirement plan within
sixty (60) days after the date on which the recipient received the distribution
and, if applicable, the provisions of law pertaining to the tax treatment of
lump sum distributions.
ARTICLE V
TRUSTEE
3.5.1 Acceptance of Trust. The Trustee, by joining in the execution of
the Adoption Agreement to the Plan, agrees to act in accordance with the express
terms and conditions hereof.
3.5.2 Trustee Capacity - Co-Trustees. The Trustee may be a bank, trust
company or other corporation possessing trust powers under applicable state or
federal law or one or more
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individuals or any combination thereof. When there are two or more Trustees,
they may allocate specific responsibilities, obligations or duties among
themselves by their written agreement. An executed copy of such written
agreement shall be delivered to and retained by the Plan Administrator.
3.5.3 Resignation, Removal, and Successors. Any Trustee may resign at
any time by delivering to the Employer a written notice of resignation to take
effect at a date specified therein, which shall not be less than thirty (30)
days after the delivery thereof; the Employer may waive such notice. The Trustee
may be removed by the Employer with or without cause, by tendering to the
Trustee a written notice of removal to take effect at a date specified therein.
Upon such removal or resignation of a Trustee, the Employer shall either appoint
a successor Trustee who shall have the same powers and duties as those conferred
upon the resigning or discharged Trustee, or, if a group of individuals is
acting as Trustee, determine that a successor shall not be appointed and the
number of Trustees shall be reduced by one (1).
3.5.4 Consultations. The Trustee shall be entitled to advice of
counsel, which may be counsel for the Plan or the Employer, in any case in which
the Trustee shall deem such advice necessary. The Trustee shall not be liable
for any action taken or omitted in good faith reliance upon the advice of such
counsel. With the exception of those powers and duties specifically allocated to
the Trustee by the express terms of the Plan, it shall not be the responsibility
of the Trustee to interpret the terms of the Plan and the Trustee may request,
and is entitled to receive, guidance and written direction from the Plan
Administrator on any point requiring construction or interpretation of the Plan
documents.
3.5.5 Rights, Powers and Duties. The rights, powers and duties of the
Trustee shall be as follows:
(a) The Trustee shall be responsible for the safekeeping of
the assets of the Trust Fund in accordance with the provisions of the Plan and
any amendments hereto. The duties of the Trustee under the Plan shall be
determined solely by the express provisions hereof and no other further duties
or responsibilities shall be implied. Subject to the terms of this Plan, the
Trustee shall be fully protected and shall incur no liability in acting in
reliance upon the written instructions or directions of the Employer, the Plan
Administrator, a duly designated investment manager, or any other named
Fiduciary.
(b) The Trustee shall have all powers necessary or convenient
for the orderly and efficient performance of its duties hereunder, including but
not limited to those specified in this Section. The Trustee shall have the power
generally to do all acts, whether or not expressly authorized, which the Trustee
in the exercise of its fiduciary responsibility may deem necessary or desirable
for the protection of the Trust Fund and the assets thereof.
(c) The Trustee shall have the power to collect and receive
any and all monies and other property due hereunder and to give full discharge
and release therefore; to settle,
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compromise or submit to arbitration any claims, debts or damages due to or owing
to or from the Trust Fund; to commence or defend suits or legal proceedings
wherever, in the Trustee's judgment, any interest of the Trust Fund requires it;
and to represent the Trust Fund in all suits or legal proceedings in any court
of law or equity or before any other body or tribunal.
(d) The Trustee shall cause any Life Insurance Policies or
assets of the Trust Fund to be registered in its name as Trustee and shall be
authorized to exercise any and all ownership rights regarding these assets,
subject to the terms of the Plan.
(e) The Trustee may temporarily hold cash balances and shall
be entitled to deposit any funds received in a bank account in the name of the
Trust Fund in any bank selected by the Trustee, including the banking department
of a corporate Trustee, if any, pending disposition of such funds in accordance
with the Plan. Any such deposit may be made with or without interest.
(f) The Trustee shall pay the premiums and other charges due
and payable at any time on any Life Insurance Policies as it may be directed by
the Plan Administrator, provided funds for such payments are then available in
the Trust. The Trustee shall be responsible only for such funds and Life
Insurance Policies as shall actually be received by it as Trustee hereunder, and
shall have no obligation to make payments other than from such funds and cash
values of Life Insurance Policies.
(g) If the whole or any part of the Trust Fund shall become
liable for the payment of any estate, inheritance, income or other tax which the
Trustee shall be required to pay, the Trustee shall have full power and
authority to pay such tax out of any monies or other property in its hands for
the account of the person whose interest hereunder is so liable. Prior to making
any payment, the Trustee may require such releases or other documents from any
lawful taxing authority as it shall deem necessary. The Trustee shall not be
liable for any nonpayment of tax when it distributes an interest hereunder on
instructions from the Plan Administrator.
(h) The Trustee shall keep a full, accurate and detailed
record of all transactions of the Trust which the Employer and the Plan
Administrator shall have the right to examine at any time during the Trustee's
regular business hours. As of the close of each Plan Year, the Trustee shall
furnish the Plan Administrator with a statement of account setting forth all
receipts, disbursements and other transactions effected by the Trustee during
the year. The Plan Administrator shall promptly notify the Trustee in writing of
his approval or disapproval of the account. The Plan Administrator's failure to
disapprove the account within sixty (60) days after receipt shall be considered
an approval. Except as otherwise required by law, the approval by the Plan
Administrator shall be binding as to all matters embraced in any statement to
the same extent as if the account of the Trustee had been settled by judgment or
decree of a court of competent jurisdiction under which the Trustee, Employer
and all persons having or claiming any interest in the Trust Fund were parties;
provided, however, that the Trustee may have its account judicially settled if
it so desires.
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(i) The Trustee is hereby authorized to execute all necessary
receipts and releases to any parties concerned.
(j) If, at any time, as the result of the death of the
Participant there shall be a dispute as to the person to whom payment or
delivery of monies or property should be made by the Trustee, or regarding any
action to be taken by the Trustee, the Trustee may postpone such payment,
delivery or action, retaining the funds or property involved, until such dispute
shall have been resolved in a court of competent jurisdiction or the Trustee
shall have been indemnified to its satisfaction or until it has received written
direction from the Plan Administrator.
(k) Anything in this instrument to the contrary
notwithstanding, the Trustee shall have no duty or responsibility with respect
to the determination of matters pertaining to the eligibility of any Employee to
become or remain a Participant hereunder, the amount of benefit to which any
Participant or Beneficiary shall be entitled hereunder, or the size and type of
any Life Insurance Policy to be purchased from any Insurer for any Participant
hereunder; all such responsibilities being vested in the Plan Administrator.
3.5.6 Trustee Indemnification. The Employer shall indemnify and hold
harmless the Trustee for and from the assertion or occurrence of any liability
to a Participant or Beneficiary for any action taken or omitted by the Trustee
pursuant to any written direction to the Trustee from the Employer or the Plan
Administrator. Such indemnification obligation of the Employer shall not be
applicable to the extent that any such liability is covered by insurance.
3.5.7 Changes in Trustee Authority. If a successor Trustee is
appointed, neither an Insurer nor any other person who has previously had
dealings with the Trustee shall be chargeable with knowledge of such appointment
or such change until furnished with notice thereof. Until such notice, the
Insurer and any other such party shall be fully protected in relying on any
action taken or signature presented which would have been proper in accordance
with that information previously received.
ARTICLE VI
TRUST ASSETS
3.6.1 Trustee Exclusive Owner. All assets held by the Trustee, whether
in the Trust Fund or Segregated Funds, shall be owned exclusively by the Trustee
and no Participant or Beneficiary shall have any individual ownership thereof.
Participants and their Beneficiaries shall share in the assets of the Trust, its
net earnings, profits and losses, only as provided in this Plan.
3.6.2 Investments. The Trustee shall invest and reinvest the Trust Fund
without distinction between income or principal in one or more of the following
ways as the Trustee shall from time to time determine:
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(a) The Trustee may invest the Trust Fund or any portion
thereof in obligations issued or guaranteed by the United States of America or
of any instrumentalities thereof, or in other bonds, notes, debentures,
mortgages, preferred or common stocks, options to buy or sell stocks or other
securities, mutual fund shares, limited partnership interests, commodities, real
estate or any interest therein, or in such other property, real or personal, as
the Trustee shall determine.
(b) The Trustee may cause the Trust Fund or any portion
thereof to be invested in a common trust fund established and maintained by a
national or other bank for the collective investment of fiduciary funds even
though the bank is acting as the Trustee or Investment Manager, providing such
common trust fund is a qualified trust under the applicable section of the Code,
or corresponding provisions of future federal internal revenue laws and is
exempt from income tax under the applicable section of the Code. In the event
any assets of the Trust Fund are invested in such a common trust fund, the
Declaration of Trust creating such common trust fund, as it may be amended from
time to time, shall be incorporated into this Plan by reference and made a part
hereof.
(c) The Trustee may deposit any portion of the Trust Fund in
savings accounts in federally insured banks or savings and loan associations or
invest in certificates of deposit issued by any such bank or savings and loan
association. The Trustee may, without liability for interest, retain any portion
of the Trust Fund in cash balances pending investment thereof or payment of
expenses.
(d) The Trustee may buy and sell put and call options, covered
or uncovered, engage in spreads, straddles, ratio writing and other forms of
options trading, including sales of options against convertible bonds, and sales
of Standard & Poor futures contracts, and trade in and maintain a brokerage
account on a cash or margin basis.
(e) The Trustee may invest any portion or all of the assets of
the Trust Fund which are attributable to the vested and nonforfeitable interest
in the Accounts of a Participant in the purchase of group or individual Life
Insurance Policies issued on the life of and for the benefit of the Participant
with the consent of the Participant, subject to the following conditions:
(i) The aggregate premiums paid for ordinary whole
Life Insurance Policies with both nondecreasing death benefits and nonincreasing
premiums on the life of any Participant shall not at any time exceed forty-nine
percent (49%) of the aggregate amount of Employer contributions which have been
allocated to the Accounts of such Participant.
(ii) The aggregate Premiums paid for Life Insurance
Policies on the life of any Participant which are either term, universal or any
other contracts which are not ordinary whole life Policies shall not at any time
exceed twenty-five percent (25%) of the aggregate amount of Employer
contributions which have been allocated to the Accounts of such Participant.
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(iii) The sum of one-half of the aggregate premiums
for ordinary whole Life Insurance Policies and all premiums for other Life
Insurance Policies shall not at any time exceed twenty-five percent (25%) of the
aggregate amount of Employer contributions which have been allocated to the
Accounts of such Participant.
(iv) If the Plan permits in-service distributions to
a Participant prior to his Normal Retirement Date in accordance with Section
2.5.6(a) or (b) and the Plan does not take into account contributions to provide
benefits under Social Security in the allocation of contributions by the
Employer, the amount which may be distributed to the Participant may be applied
to the purchase of Life Insurance Policies.
(f) The Trustee may invest the Trust Fund or any portion
thereof to acquire or hold Qualifying Employer Securities or Real Property,
provided that the portion so invested shall not exceed the amount allowed as an
investment under the Act.
3.6.3 Administration of Trust Assets. Subject to the limitations herein
expressly set forth, the Trustee shall have the following powers and authority
in connection with the administration of the assets of the Trust:
(a) To hold and administer all contributions made by the
Employer to the Trust Fund and all income or other property derived therefrom as
a single Trust Fund, except as otherwise provided in the Plan.
(b) To manage, control, sell, convey, exchange, petition,
divide, subdivide, improve, repair, grant options, sell upon deferred payments,
lease without limit as determined for any purpose, compromise, arbitrate or
otherwise settle claims in favor of or against the Trust Fund, institute,
compromise and defend actions and proceedings, and to take any other action
necessary or desirable in connection with the administration of the Trust Fund.
(c) To vote any stock, bonds, or other securities of any
corporation or other issuer; otherwise consent to or request any action on the
part of any such corporation or other issuer; to give general or special proxies
or powers of attorney, with or without power of substitution; to participate in
any reorganization, recapitalization, consolidation, merger or similar
transaction with respect to such securities; to deposit such stocks or other
securities in any voting trusts, or with any protective or like committee, or
with the trustee, or with the depositories designated thereby; to exercise any
subscription rights and conversion privileges or other options and to make any
payments incidental thereto; and generally to do all such acts, execute all such
instruments, take all such proceedings and exercise all such rights, powers and
privileges with respect to the stock or other securities or property
constituting the Trust Fund as if the Trustee were the absolute owner thereof.
(d) To apply for and procure, at the election of any
Participant, Life Insurance Policies on the life of the Participant; to exercise
whatever rights and privileges may be granted
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to the Trustee under such Policies, and to cash in, receive and collect such
Policies or the proceeds therefrom as and when entitled to do so under the
provisions thereof;
(e) 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;
(f) To register any investment held in the Trust in the
Trustee's own name or in the name of a nominee and to hold any investment 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;
(g) To borrow money for the purposes of the Plan in such
amounts and upon such terms and conditions as the Trustee deems appropriate;
(h) To commingle the assets of the Trust Fund with the assets
of other similar trusts which are exempt from income tax, whether sponsored by
the Employer, an affiliate of the Employer or an unrelated employer, provided
that the books and records of the Trustee shall at all times show the portion of
the commingled assets which are part of the Trust; and
(i) To do all acts whether or not expressly authorized which
the Trustee may deem necessary or proper for the protection of the property held
hereunder.
3.6.4 Segregated Funds. Unless otherwise determined by the Trustee to
be prudent, the Trustee shall invest and reinvest each Segregated Fund without
distinction between income or principal in one or more appropriately identified
interest-bearing accounts or certificates of deposit in the name of the Trustee
and subject solely to the dominion of the Trustee in a banking institution
(which may or may not be the Trustee, if the Trustee is a banking institution)
or savings and loan association.
Any such account or certificate shall bear interest at a rate not less than the
rate of interest currently being paid upon regular savings accounts by that
banking corporation principally situated in the community in which the Employer
has its principal business location, which has capital, surplus and undivided
profits exceeding those of any other bank so situated. Such accounts shall be
held for the benefit of the Participant for whom such Segregated Fund is
established in accordance with the terms of the Plan and the Segregated Account
of the Participant shall be credited with any interest earned in connection with
such accounts. If the Trustee determines that an alternative investment is
appropriate, the Trustee may invest the Segregated Fund in any manner permitted
with respect to the Trust Fund and such Segregated Fund shall be credited with
the net income or loss or net appreciation or depreciation in value of such
investments. No Segregated Fund shall share in any Employer contributions or
forfeitures, any net income or loss from, or net appreciation or depreciation in
value of, any investments of the Trust Fund, or any allocation for which
provision is made in this Plan which is not specifically attributable to the
Segregated Fund.
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3.6.5 Investment Control Option. If the Employer elects in the Adoption
Agreement to permit Participants to direct the investment of their Accounts,
each Participant may elect to have transferred to a Segregated Fund and exercise
investment control by appropriate direction to the Trustee with respect to funds
in the Trust Fund which do not exceed the balances in his Accounts. To the
extent that the balance in the Participant's Account with respect to which a
transfer is to be made includes his share of an Employer contribution which has
not been received by the Trustee, such transfer shall not be made until such
contribution is received by the Trustee. Funds so transferred to a Segregated
Fund on behalf of the Participant shall be thereafter invested by the Trustee in
such bonds, notes, debentures, commodities, mortgages, equipment trust
certificates, investment trust certificates, preferred or common stocks,
partnership interests, life insurance policies, including universal life
insurance policies, or in such other property, real or personal (other than
collectibles), wherever situated, as the Participant shall direct from time to
time in writing; provided, however, that the Participant may not direct the
Trustee to make loans to himself, nor to make loans to the Employer; and
provided further that the Trustee may limit the investment alternatives
available to the Participant in a uniform and nondiscriminatory manner but
taking into account whether the interest of the Participant is fully vested and
nonforfeitable. Any such election shall be made by the Participant giving notice
thereof to the Trustee as the Trustee deems necessary and such notice shall
specify the amount of such funds to be transferred and the Account from which
the transfer is to be made. Any such election shall be at the absolute
discretion of the individual Participant and shall be binding upon the Trustee.
Upon any such election being made, the amount of such funds to be transferred
shall be deducted from his Account as appropriate and added to a Controlled
Account of the Participant. All dividends and interest thereafter received with
respect to such transferred funds, as well as any appreciation or depreciation
in his investments, shall be added to or deducted from his Controlled Account.
If a Participant wishes to make such an election to transfer funds from the
Trust Fund to a Segregated Fund as of a date other than a Valuation Date, the
Trustee may defer such transfer until the next succeeding Valuation Date or, in
the Trustee's discretion, make such transfer, provided that the Trustee
determines that the nature of the assets in the Trust Fund is such that it is
feasible and practical to make, as of the date of such transfer, the adjustments
to Participants' Accounts for which provision is made in the Plan, as if such
date is a Valuation Date.
The Trustee shall not have any investment responsibility with respect to a
Participant's Segregated Fund. In the event that a Participant elects to have
any such funds transferred to a Segregated Fund and invested in particular
securities or assets pursuant to this Section, the Trustee shall not be liable
for any loss or damage resulting from the investment decision of the
Participant. As of any Valuation Date, the Participant may elect to have all or
any portion of any cash contained in his Segregated Fund transferred back to the
Trust Fund, in which case such cash shall be invested by the Trustee together
with other assets held in the Trust Fund. Any such election shall be made by
giving notice thereof to the Trustee as the Trustee deems necessary, and the
notice shall specify the amount of cash to be transferred.
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As of the said Valuation Date, the amount of such funds to be so transferred
which is attributable to the balance in the Participant's Controlled Account
shall be deducted from such Account and added to the appropriate Account of the
Participant.
ARTICLE VII
LOANS
3.7.1 Authorization. If the Employer elects in the Adoption Agreement
to permit loans to Participants or Beneficiaries, the Trustee shall establish a
participant loan program in compliance with Labor Regulation section 2550.408b.
The terms of such participant loan program shall be in writing and shall
constitute part of the Plan. Such terms shall include:
(a) The identity of the person or positions authorized to
administer the participant loan program;
(b) A procedure for applying for loans;
(c) The basis on which loans will be approved or denied;
(d) Limitations (if any) on the types and amount of loans
offered;
(e) The procedure under the program for determining a
reasonable rate of interest;
(f) The types of collateral which may secure a participant
loan; and
(g) The events constituting default and the steps that will be
taken to preserve plan assets in the event of default.
3.7.2 Spousal Consent. A Participant must obtain the written consent of
his spouse, if any, to the use of the Participant's interest in the Plan as
security for the loan within ninety (90) days before the date on which the loan
is to be so secured. A new consent must be obtained whenever the amount of the
loan is increased or if the loan is renegotiated, extended, renewed or otherwise
revised. The form of the consent must acknowledge the effect of such consent and
be witnessed by a Plan representative or a notary public but shall be deemed to
meet any such requirements relating to the consent of any subsequent spouse.
Such consent shall thereafter be binding with respect to the consenting spouse
or any subsequent spouse with respect to that loan.
If a valid spousal consent has been obtained, then notwithstanding any other
provision of the Plan, the portion of the Participant's vested Account balance
used as a security interest held by the Plan by reason of a loan outstanding to
the Participant shall be taken into account for purposes of determining the
amount of the Account balance payable at the time of death or distribution but
only if the reduction is used as repayment of the loan. If less than the entire
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amount of the Participant's vested Account balance (determined without regard to
the preceding sentence) is payable to the surviving spouse, the Account balance
shall be adjusted by first reducing the vested Account balance by the amount of
the security used as repayment of the loan and then determining the benefit
payable to the surviving spouse.
3.7.3 Limitations. Except to the extent provided in the participant
loan program, in no event shall the amount loaned to any Participant or
Beneficiary exceed the lesser of (a) fifty thousand dollars ($50,000.00)
(reduced by the excess, if any, of the highest outstanding balance of loans from
the Plan) during the one year period ending on the day before the date on which
the loan was made over the outstanding balance of loans from the Plan on the
date on which such loan was made) or (b) one-half of the sum of the vested and
nonforfeitable interest in his Accounts, determined as of the Valuation Date
coinciding with or immediately preceding such loan. For the purposes hereof, all
loans from all plans of the Employer and other members of a group of employers
described in Sections 414(b), (c), (m) and (o) of the Code shall be aggregated.
All loans must be adequately secured and bear a reasonable interest rate. No
Participant loan shall exceed the present value of the Participant's vested
Account balance. In the event of a default, foreclosure on the note evidencing
the loan and attachment of the security shall not occur until a distributable
event occurs.
3.7.4 Availability. Loans, if any, must be available to all
Participants and Beneficiaries without regard to any individual's race, color,
religion, sex, age or national origin. Loans shall be made available to all
Participants and Beneficiaries and loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount made available to
other employees.
3.7.5 Prohibitions. A loan shall not be made to a five (5%) percent or
greater shareholder-employee of an S corporation, an owner of more than ten
(10%) percent of either the capital interest or the profits interest of an
unincorporated Employer, a family member (as defined in section 267(c)(4) of
the Code) of such persons, or a corporation controlled by such persons through
the ownership, directly or indirectly, of fifty (50%) percent or more of the
total voting power or value of all shares of all classes of stock of the
corporation, unless an exemption for the loan is obtained pursuant to section
408 of the Act.
ARTICLE VIII
BENEFICIARIES
3.8.1 Designation of Beneficiaries. Each Participant shall have the
right to designate a Beneficiary or Beneficiaries and contingent or successive
Beneficiaries to receive any benefits provided by this Plan which become payable
upon the Participant's death. The Beneficiaries may be changed at any time or
times by the filing of a new designation with the Plan Administrator, and the
most recent designation shall govern. Notwithstanding the foregoing and subject
to the
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provisions of Section 2.5.2(e)(3), the designated Beneficiary shall bethe
surviving spouse of the Participant, unless such surviving spouse consents
in writing to an alternate designation and the terms of such consent acknowledge
the effect of such alternate designation and the consent is witnessed by a
representative of the Plan or by a notary public. A spouse may not revoke the
consent without the approval of the Participant. The designation of a
Beneficiary other than the spouse of the Participant or a form of benefits with
the consent of such spouse may not be changed without the consent of such spouse
and any consent must acknowledge the specific non-spouse Beneficiary, including
any class of Beneficiaries or any contingent Beneficiaries.
3.8.2 Absence or Death of Beneficiaries. If a Participant dies without
having a beneficiary designation then in force, or if all of the Beneficiaries
designated by a Participant predecease him, his Beneficiary shall be his
surviving spouse, or if none, his surviving children, equally, or if none, such
other heirs or the executor or administrator of his estate as the Plan
Administrator shall select.
If a Participant dies survived by Beneficiaries designated by him and if all
such surviving Beneficiaries thereafter die before complete distribution of such
deceased Participant's interest, the estate of the last of such designated
Beneficiaries to survive shall be deemed to be the Beneficiary of the
undistributed portion of such interest.
3.8.3 Surviving Spouse Election. If the Plan is designated in the
Adoption Agreement as a Cash or Deferred Profit Sharing Plan or a Profit Sharing
Plan and the Employer does not elect a life annuity form of distribution in the
Adoption Agreement, a surviving spouse, who has not consented to an alternate
designation under Section 3.8.1, above, may elect to have distribution of the
Participant's vested Account balance commence within the 90-day period following
the date of the Participant's death. The Account balance shall be adjusted for
gains or losses occurring after the Participant's death in accordance with the
provisions of the Plan governing the adjustment of account balances for other
types of distributions.
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ARTICLE IX
CLAIMS
3.9.1 Claim Procedure. Any Participant or Beneficiary who is entitled
to a payment of a benefit for which provision is made in this Plan shall file a
written claim with the Plan Administrator on such forms as shall be furnished to
him by the Plan Administrator and shall furnish such evidence of entitlement to
benefits as the Plan Administrator may reasonably require. The Plan
Administrator shall notify the Participant or Beneficiary in writing as to the
amount of benefit to which he is entitled, the duration of such benefit, the
time the benefit is to commence and other pertinent information concerning his
benefit. If a claim for benefit is denied by the Plan Administrator, in whole or
in part, the Plan Administrator shall provide adequate notice in writing to the
Participant or Beneficiary whose claim for benefit has been denied within ninety
(90) days after receipt of the claim unless special circumstances require an
extension of time for processing the claim. If such an extension of time for
processing is required, written notice indicating the special circumstances and
the date by which a final decision is expected to be rendered shall be furnished
to the Participant or Beneficiary. In no event shall the period of extension
exceed one hundred eighty (180) days after receipt of the claim. The notice of
denial of the claim shall set forth (a) the specific reason or reasons for the
denial; (b) specific reference to pertinent Plan provisions on which the denial
is based; (c) a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such material or
information is necessary; and (d) a statement that any appeal of the denial must
be made by giving to the Plan Administrator, within sixty (60) days after
receipt of the notice of the denial, written notice of such appeal, such notice
to include a full description of the pertinent issues and basis of the claim.
The Participant or Beneficiary (or his duly authorized representative) may
review pertinent documents and submit issues and comments in writing to the Plan
Administrator. If the Participant or Beneficiary fails to appeal such action to
the Plan Administrator in writing within the prescribed period of time, the Plan
Administrator's adverse determination shall be final, binding and conclusive.
3.9.2 Appeal. If the Plan Administrator receives from a Participant or
a Beneficiary, within the prescribed period of time, a notice of an appeal of
the denial of a claim for benefit, such notice and all relevant materials shall
immediately be submitted to the Employer. The Employer may hold a hearing or
otherwise ascertain such facts as it deems necessary and shall render a decision
which shall be binding upon both parties. The decision of the Employer shall be
made within sixty (60) days after the receipt by the Plan Administrator of the
notice of appeal, unless special circumstances require an extension of time for
processing, in which case a decision of the Employer shall be rendered as soon
as possible but not later than one hundred twenty (120) days after receipt of
the request for review. If such an extension of time is required, written notice
of the extension shall be furnished to the claimant prior to the commencement of
the extension. The decision of the Employer shall be in writing, shall include
specific reasons for the decision, written in a manner calculated to be
understood by the claimant, as well as specific references to the pertinent Plan
provisions on which the decision is based and shall be promptly furnished to the
claimant.
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ARTICLE X
AMENDMENT AND TERMINATION
3.10.1 Right to Amend.
(a) The Employer may at any time or times amend the Plan and
the provisions of the Adoption Agreement, in whole or in part. Subject to
subsection (b), an Employer that amends the Plan shall no longer participate in
this prototype plan and shall be considered to have an individually designed
plan.
(b) The Employer may change the choice of options in the
Adoption Agreement, add overriding language in the Adoption Agreement when such
language is necessary to satisfy Section 415 or 416 of the Code because of the
required aggregation of multiple plans and add certain model amendments
published by the Internal Revenue Service which specifically provide that their
adoption shall not cause the Plan to be treated as individually designed. An
Employer that amends the Plan for any other reason, including a waiver of the
minimum funding requirements under Section 412(d) of the Code, shall no longer
participate in this prototype plan and shall be considered to have an
individually designed plan.
An Employer that has adopted a standardized regional prototype plan may amend
the trust or custodial account document provided such amendment merely involves
the specifications of the names of the Plan, Employer, trustee or custodian,
Plan Administrator or other fiduciaries, the trust year, or the name of any
pooled trust in which the Plan's trust will participate.
An Employer that has adopted a non-standardized regional prototype plan will not
be considered to have an individually designed plan merely because the Employer
amends administrative provisions of the trust or custodial account document
(such as provisions relating to investments and duties of trustees) so long as
the amended provisions are not in conflict with any other provision of the Plan
and do not cause the Plan to fail to qualify under Section 401(a) of the Code.
3.10.2 Manner of Amending. Each amendment of this Plan shall be made by
delivery to the Trustee of a copy of the resolution of the Employer which sets
forth such amendment.
3.10.3 Limitations On Amendments. No amendment shall be made to this
Plan which shall:
(a) Directly or indirectly operate to give the Employer any
interest whatsoever in the assets of the Trust or to deprive any Participant or
Beneficiary of his vested and nonforfeitable interest in the assets of the Trust
as then constituted, or cause any part of the income or corpus of the Trust to
be used for, or diverted to purposes other than the exclusive benefit of
Employees or their Beneficiaries;
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(b) Increase the duties or liabilities of the Trustee without
the Trustee's prior written consent;
(c) Change the vesting schedule under the Plan if the
nonforfeitable percentage of the accrued benefit derived from Employer
contributions (determined as of the later of the date such amendment is adopted
or the date such amendment becomes effective) of any Participant is less than
such nonforfeitable percentage computed without regard to such amendment; or
(d) Reduce the accrued benefit of a Participant within the
meaning of Section 411(d)(6) of the Code, except to the extent permitted under
Section 412(c)(8) of the Code. An amendment which has the effect of decreasing a
Participant's account balance or eliminating an optional form of benefit with
respect to benefits attributable to service before the amendment shall be
treated as reducing an accrued benefit.
If a Plan amendment changes the vesting schedule or the Plan is amended in any
way that directly or indirectly affects the computation of the Participant's
nonforfeitable percentage or if the Plan is deemed amended by an automatic
change to or from a top-heavy vesting schedule, each Participant who has
completed three (3) or, in the case of Participants who do not have at least one
(1) Hour of Service in any Plan Year beginning after 1988, five (5) or more
Years of Service may elect within a reasonable period after the adoption of such
amendment to have his nonforfeitable percentage computed without regard to such
amendment or change. The period during which the election may be made shall
commence with the date the amendment is adopted or deemed to be made and shall
end on the latest of sixty (60) days after:
(i) the amendment is adopted;
(ii) the amendment becomes effective; or
(iii) the Participant is issued written notice of the
amendment by the Employer or Plan Administrator.
3.10.4 Voluntary Termination. The Employer may terminate the Plan at
any time by delivering to the Trustee an instrument in writing which designates
such termination. Following termination of the Plan, the Trust will continue
until the Distributable Benefit of each Participant has been distributed.
3.10.5 Involuntary Termination. The Plan shall terminate if (a) the
Employer is dissolved or adjudicated bankrupt or insolvent in appropriate
proceedings, or if a general assignment is made by the Employer for the benefit
of creditors, or (b) the Employer loses its identity by consolidation or merger
into one or more corporations or organizations, unless within ninety (90) days
after such consolidation or merger, such corporations or organizations elect to
continue the Plan.
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3.10.6 Withdrawal By Employer. The Employer may withdraw from
participation under the Plan without terminating the Trust upon making a
transfer of the Trust assets to another Plan which shall be deemed to constitute
an amendment in its entirety of the Trust.
3.10.7 Powers Pending Final Distribution. Until final distribution of
the assets of the Trust, the Plan Administrator and Trustee shall continue to
have all the powers provided under this Plan as are necessary for the orderly
administration, liquidation and distribution of the assets of the Trust.
3.10.8 Delegation to Sponsor. The Employer expressly delegates
authority to the Plan Sponsor the right to amend any part of the Plan on its
behalf to the extent necessary to preserve the qualified status of the Plan. For
purposes of amendments by the Plan Sponsor, the Mass Submitter shall be
recognized as the agent of the Plan Sponsor. If the Plan Sponsor does not adopt
the amendments made by the Mass Submitter, the Plan shall no longer be identical
to or a minor modifier of the mass submitter plan. The Plan Sponsor shall submit
a copy of the amendment to each Employer who has adopted the Plan after first
having received a ruling or favorable determination from the Internal Revenue
Service that the Plan as amended satisfies the applicable requirements of the
Code. The Employer may revoke the authority of the Plan Sponsor to amend the
Plan on its behalf by written notice to the Plan Sponsor of such revocation.
ARTICLE XI
PORTABILITY
3.11.1 Continuance by Successor. In the event of the dissolution,
consolidation or merger of the Employer, or the sale by the Employer of its
assets, the resulting successor person or persons, firm or corporations may
continue this Plan by (a) adopting the Plan by appropriate resolution; (b)
appointing a new Trustee as though the Trustee (including all members of a group
of individuals acting as Trustee) had resigned; and (c) executing a proper
agreement with the new Trustee. In such event, each Participant in this Plan
shall have an interest in the Plan after the dissolution, consolidation, merger,
or sale of assets, at least equal to the interest which he had in the Plan
immediately before the dissolution, consolidation, merger or sale of assets. Any
Participants who do not accept a position with such successor within a
reasonable time shall be deemed to be terminated. If, within ninety (90) days
from the effective date of such dissolution, consolidation, merger, or sale of
assets, such successor does not adopt this Plan, as provided herein, the Plan
shall automatically be terminated and deemed to be an involuntary termination.
3.11.2 Merger With Other Plan. In the event of the merger or
consolidation with, or transfer of assets or liabilities to, any other deferred
compensation plan and trust, each Participant shall have an interest in such
other plan which is equal to or greater than the interest which he had in this
Plan immediately before such merger, consolidation or transfer, and if such
other plan thereafter terminates, each Participant shall be entitled to a
Distributable Benefit which is equal
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to or greater than the Distributable Benefit to which he would have been
entitled immediately before such merger, consolidation or transfer if this Plan
had then been terminated.
3.11.3 Transfer From Other Plans. The Employer may cause all or any of
the assets held in connection with any other plan or trust which is maintained
by the Employer for the benefit of its employees and satisfies the applicable
requirements of the Code relating to qualified plans and trusts to be
transferred to the Trustee, whether such transfer is made pursuant to a merger
or consolidation of this Plan with such other plan or trust or for any other
allowable purpose. In addition, the Employer, by appropriate election in the
Adoption Agreement, may permit rollover to the Trustee of assets held for the
benefit of an Employee in a conduit Individual Retirement Account, a terminated
plan of the Employer, or any other plan or trust which is maintained by some
other employer for the benefit of its employees and satisfies the applicable
requirements of the Code relating to qualified plans and trusts. Any such assets
so transferred to the Trustee shall be accompanied by written instructions from
the employer, or the trustee, custodian or individual holding such assets,
setting forth the name of each Employee for whose benefit such assets have been
transferred and showing separately the respective contributions by the employer
and by the Employee and the current value of the assets attributable thereto.
Upon receipt by the Trustee of such assets, the Trustee shall place such assets
in a Segregated Fund for the Participant and the Employee shall be deemed to be
one hundred percent (100%) vested and have a nonforfeitable interest in any such
assets. Notwithstanding any provisions herein to the contrary, unless the Plan
provides a life annuity distribution option, the Plan shall not be a direct or
indirect transferee of a defined benefit pension plan, money purchase pension
plan, target benefit pension plan, stock bonus or profit sharing plan which is
subject to the survivor annuity requirements of Section 401(a)(11) and Section
417 of the Code.
3.11.4 Transfer to Other Plans. The Trustee, upon written direction by
the Employer, shall transfer some or all of the assets held under the Trust to
another plan or trust of the Employer meeting the requirements of the Code
relating to qualified plans and trusts, whether such transfer is made pursuant
to a merger or consolidation of this Plan with such other plan or trust or for
any other allowable purpose. In addition, upon the termination of employment of
any Participant and receipt by the Plan Administrator of a request in writing,
the Participant may request that any distribution from the Trust to which he is
entitled shall be transferred to an Individual Retirement Account, an Individual
Retirement Annuity, or any other plan or trust which is maintained by some other
employer for the benefit of its employees and satisfies the applicable
requirements of the Code relating to qualified plans and trusts. Upon receipt of
any such written request, the Plan Administrator shall cause the Trustee to
transfer the assets so directed and, as appropriate, shall direct the Insurer to
transfer to the new trustee any applicable insurance policies issued by it.
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ARTICLE XII
MISCELLANEOUS
3.12.1 No Reversion to Employer. Except as specifically provided in the
Plan, no part of the corpus or income of the Trust shall revert to the Employer
or be used for, or diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries.
3.12.2 Employer Actions. Any action by the Employer pursuant to the
provisions of the Plan shall be evidenced by appropriate resolution or by
written instrument executed by any person authorized by the Employer to take
such action.
3.12.3 Execution of Receipts and Releases. Any payment to any person
eligible to receive benefits under this Plan, in accordance with the provisions
of the Plan, shall, to the extent thereof, be in full satisfaction of all claims
hereunder. The Plan Administrator may require such person, as a condition
precedent to such payment, to execute a receipt and release therefore in such
form as he shall determine.
3.12.4 Rights of Participants Limited. Neither the creation of this
Plan and Trust nor anything contained in this Plan or the Adoption Agreement
shall be construed as giving any Participant, Beneficiary or Employee any equity
or other interest in the assets, business or affairs of the Employer, or the
right to complain about any action taken by or about any policy adopted or
pursued by, the Employer, or as giving any Employee the right to be retained in
the service of the Employer; and all Employees shall remain subject to discharge
to the same extent as if the Plan had never been executed. Prior to the time
that distributions are made in conformity with the provisions of the Plan,
neither the Participants, nor their spouses, Beneficiaries, heirs-at-law, or
legal representatives shall receive or be entitled to receive cash or any other
thing of current exchangeable value, from either the Employer or the Trustee as
a result of the Plan or the Trust.
3.12.5 Persons Dealing With Trustee Protected. No person dealing with
the Trustee shall be required or entitled to see to the application of any money
paid or property delivered to the Trustee, or determine whether or not the
Trustee is acting pursuant to the authorities granted to the Trustee hereunder
or to authorizations or directions herein required. The certificate of the
Trustee that the Trustee is acting in accordance with the Plan shall protect any
person relying thereon.
3.12.6 Protection of the Insurer. An Insurer shall not be responsible
for the validity of the Plan or Trust and shall have no responsibility for
action taken or not taken by the Trustee, for determining the propriety of
accepting premium payments or other contributions, for making payments in
accordance with the direction of the Trustee, or for the application of such
payments. The Insurer shall be fully protected in dealing with any
representative of the Employer or any one of a group of individuals acting as
Trustee. Until written notice of a change of Trustee has been received by an
Insurer at its home office, the Insurer shall be fully protected in dealing with
any
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party acting as Trustee according to the latest information received by the
Insurer at its home office.
3.12.7 No Responsibility for Act of Insurer. Neither the Employer, the
Plan Administrator nor the Trustee shall be responsible for any of the
following, nor shall they be liable for instituting action in connection with:
(a) The validity of policies or policy provisions;
(b) Failure or refusal by the Insurer to provide benefits
under a policy;
(c) An act by a person which may render a policy invalid or
unenforceable; or
(d) Inability to perform or delay in performing an act, which
inability or delay is occasioned by a provision of a policy or a restriction
imposed by the Insurer.
3.12.8 Inalienability. The right of any Participant or his Beneficiary
in any distribution hereunder or to any separate Account shall not be subject to
alienation, assignment or transfer, voluntarily or involuntarily, by operation
of law or otherwise, except as may be expressly permitted herein. No Participant
shall assign, transfer, or dispose of such right nor shall any such right be
subjected to attachment, execution, garnishment, sequestration, or other legal,
equitable, or other process. The preceding shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such order is
determined to be a qualified domestic relations order, as defined in Section
414(p) of the Code, or any domestic relations order entered before January 1,
1985.
In the event a Participant's benefits are attached by order of any court, the
Plan Administrator may bring an action for a declaratory judgment in a court of
competent jurisdiction to determine the proper recipient of the benefits to be
paid by the Plan. During the pendency of the action, the Plan Administrator
shall cause any benefits payable to be paid to the court for distribution by the
court as it considers appropriate.
3.12.9 Domestic Relations Orders. The Plan Administrator shall adhere
to the terms of any judgment, decree or order (including approval of a property
settlement agreement) which relates to the provision of child support, alimony
payments, or marital property rights to a spouse, former spouse, child or other
dependent of a Participant and is made pursuant to a state domestic relations
law (including a community property law) and which creates or recognizes the
existence of an alternate payee's right to, or assigns to an alternate payee the
right to, receive all or a portion of the benefits payable with respect to a
Participant.
Any such domestic relations order must clearly specify the name and last known
mailing address of the Participant and the name and mailing address of each
alternate payee covered by the order, the amount or percentage of the
Participant's benefit to be paid by the Plan to each such alternate
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payee, or the manner in which such amount or percentage is to be determined, the
number of payments or period to which such order applies, and each plan to which
such order applies.
Any such domestic relations order shall not require the Plan to provide any type
or form of benefit, or any option not otherwise provided under the Plan, to
provide increased benefits (determined on the basis of actuarial value) or the
payment of benefits to an alternate payee which are required to be paid to
another alternate payee under another order previously determined to be a
qualified domestic relations order. Notwithstanding the foregoing sentence, a
domestic relations order may require the payment of benefits to an alternate
payee before the Participant has separated from service on or after the date on
which the Participant attains or would have attained the earliest retirement age
under the Plan as if the Participant had retired on the date on which such
payment is to begin under such order (but taking into account only the present
value of the benefits actually accrued and not taking into account the present
value of any Employer subsidy for early retirement) and in any form in which
such benefits may be paid under the Plan to the Participant (other than the form
of a joint and survivor annuity with respect to the alternate payee and his or
her subsequent spouse). The interest rate assumption used in determining the
present value shall be five (5%) percent. For these purposes, the earliest
retirement age under the Plan means the earlier of: (a) the date on which the
Participant is entitled to a distribution under the Plan, or (b) the later of
the date the Participant attains age 50, or the earliest date on which the
Participant could begin receiving benefits under the Plan if the Participant
separated from service.
If the Employer so elects in the Adoption Agreement, distributions may be made
to an alternate payee even though the Participant may not receive a distribution
because he continues to be employed by the Employer.
To the extent provided in the qualified domestic relations order, the former
spouse of a Participant shall be treated as a surviving spouse of such
Participant for purposes of Sections 401(a)(11) and 417 of the Code (and any
spouse of the Participant shall not be treated as a spouse of the Participant
for such purposes) and if married for at least one (1) year, the surviving
former spouse shall be treated as meeting the requirements of Section 417(d) of
the Code.
The Plan Administrator shall promptly notify the Participant and each alternate
payee of the receipt of a domestic relations order by the Plan and the Plan's
procedures for determining the qualified status of domestic relations orders.
Within a reasonable period after receipt of a domestic relations order, the Plan
Administrator shall determine whether such order is a qualified domestic
relations order and shall notify the Participant and each alternate payee of
such determination. If the Participant or any affected alternate payee disagrees
with the determinations of the Plan Administrator, the disagreeing party shall
be treated as a claimant and the claims procedure of the Plan shall be followed.
The Plan Administrator may bring an action for a declaratory judgment in a court
of competent jurisdiction to determine the proper recipient of the benefits to
be paid by the Plan.
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During any period in which the issue of whether a domestic relations order is a
qualified domestic relations order is being determined (by the Plan
Administrator, by a court of competent jurisdiction or otherwise), the Plan
Administrator shall separately account for the amounts which would have been
payable to the alternate payee during such period if the order had been
determined to be a qualified domestic relations order. If, within the eighteen
(18) month period beginning on the date on which the first payment would be
required to be made under the domestic relations order, the order (or
modification thereof) is determined to be a qualified domestic relations order,
the Plan Administrator shall pay the segregated amounts, including any interest
thereon, to the person or persons entitled thereto. If within such eighteen (18)
month period it is determined that the order is not a qualified domestic
relations order or the issue as to whether such order is a qualified domestic
relations order is not resolved, then the Plan Administrator shall pay the
segregated amounts, including any interest thereon, to the person or persons who
would have been entitled to such amounts if there had been no order. Any
determination that an order is a qualified domestic relations order which is
made after the close of the eighteen (18) month period shall be applied
prospectively only.
3.12.10 Authorization to Withhold Taxes. The Trustee is authorized in
accordance with applicable law to withhold from distribution to any payee such
sums as may be necessary to cover federal and state taxes which may be due with
respect to such distributions.
3.12.11 Missing Persons. If the Trustee mails by registered or
certified mail, postage prepaid, to the last known address of a Participant or
Beneficiary, a notification that the Participant or Beneficiary is entitled to a
distribution and if (a) the notification is returned by the post office because
the addressee cannot be located at such address and if neither the Employer, the
Plan Administrator nor the Trustee shall have any knowledge of the whereabouts
of such Participant or Beneficiary within three (3) years from the date such
notification was mailed, or (b) within three (3) years after such notification
was mailed to such Participant or Beneficiary, he does not respond thereto by
informing the Trustee of his whereabouts, the ultimate disposition of the then
undistributed balance of the Distributable Benefit of such Participant or
Beneficiary shall be determined in accordance with the then applicable Federal
laws, rules and regulations. If any portion of the Distributable Benefit is
forfeited because the Participant or Beneficiary cannot be found, such portion
shall be reinstated if a claim is made by the Participant or Beneficiary.
3.12.12 Notices. Any notice or direction to be given in accordance with
the Plan shall be deemed to have been effectively given if hand delivered to the
recipient or sent by certified mail, return receipt requested, to the recipient
at the recipient's last known address. At any time that a group of individuals
is acting as Trustee, notice to the Trustee may be given by giving notice to any
one or more of such individuals.
3.12.13 Governing Law. The provisions of this Plan shall be construed,
administered and enforced in accordance with the provisions of the Act and, to
the extent applicable, the laws of the state in which the Employer has its
principal place of business. All contributions to the Trust shall be deemed to
take place in such state.
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3.12.14 Severability of Provisions. In the event that any provision of
this Plan shall be held to be illegal, invalid or unenforceable for any reason,
said illegality, invalidity or unenforceability shall not affect the remaining
provisions, but shall be fully severable and the Plan shall be construed and
enforced as if said illegal, invalid or unenforceable provisions had never been
inserted herein.
3.12.15 Gender and Number. Whenever appropriate, words used in the
singular shall include the plural, and the masculine gender shall include the
feminine gender.
3.12.16 Binding Effect. The Plan and Adoption Agreement, and all
actions and decisions hereunder, shall be binding upon the heirs, executors,
administrators, successors and assigns of any and all parties hereto and
Participants, present and future.
3.12.17 Qualification Under Internal Revenue Laws. The Employer intends
that the Trust qualify under the applicable provisions of the Code. Until
advised to the contrary, the Trustee may assume that the Trust is so qualified
and is entitled to tax exemption under the Code. If the Plan of the Employer
fails to attain or retain qualification, the Plan of the Employer shall no
longer participate in this prototype and shall be considered an individually
designed plan.
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MODEL SECTION 401(a)(31) AMENDMENT TO THE CAPSTONE PHARMACY SERVICES,
INC. 401(K) PROFIT SHARING PLAN AND TRUST
Section 1. This Article applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the plan to the contrary that
would otherwise limit a distributee's election under this Article, a distributee
may elect, at the time and in the manner prescribed by the plan administrator,
to have any portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct rollover.
Section 2. Definitions.
Section 2.1. 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 a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the Code; and the portion of
any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
securities).
Section 2.2. 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 retirement plan to
the surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
Section 2.3. 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 the former employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
section 414(p) of the Code, are distributees with regard to the interest of the
spouse or former spouse.
Section 2.4. Direct rollover: A direct rollover is a payment by the
plan to the eligible retirement plan specified by the distributee.
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MODEL SECTION 401(a)(17) AMENDMENT TO THE CAPSTONE PHARMACY SERVICES, INC.
401(K) PROFIT SHARING PLAN AND TRUST
SECTION 401(a)(17) LIMITATION
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to contrary, for plan years
beginning on or after January 1, 1994, the annual compensation of each employee
taken into account under the plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination period) beginning
in such calendar year. If a determination period consist of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination period, and
the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in this plan
to the limitation under section 401(a)(17) of the Code shall mean the OBRA '93
annual compensation limit set forth in the provision.
If compensation for any prior determination period is taken into account in
determining an employee's benefits accruing in the current plan year, the
compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
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REVENUE PROCEDURE 93-47 AMENDMENT TO THE CAPSTONE PHARMACY SERVICES, INC.
401(K) PROFIT SHARING PLAN AND TRUST
The following language, applicable to distributions made on or after January 1,
1993, is hereby inserted following the final sentence of section 2.5.2(j) of the
The Benefit Center, Inc. Defined Contribution Plan and Trust.
"If a distribution is one to which sections 401(a)(11) and 417 of the Internal
Revenue Code do not apply, such distribution may commence less than 30 days
after the notice required under section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(1) the plan administrator clearly informs the participant that the
participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution (and
if applicable, a particular distribution option), and
(2) the participant, after receiving the notice, affirmatively elects
a distribution."
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ADOPTION AGREEMENT FOR THE BENEFIT CENTER, INC. REGIONAL PROTOTYPE STANDARDIZED
CASH OR DEFERRED PROFIT SHARING PLAN AND TRUST (WITH PAIRING PROVISIONS)
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ADOPTION AGREEMENT
FOR THE BENEFIT CENTER, INC. REGIONAL PROTOTYPE
STANDARDIZED CASH OR DEFERRED PROFIT SHARING PLAN AND TRUST
(WITH PAIRING PROVISIONS)
The Benefit Center, Inc. Regional Prototype Standardized Cash or Deferred Profit
Sharing Plan and Trust ("the Plan and Trust") is hereby adopted by Capstone
Pharmacy Services, Inc. (hereinafter "the Employer") effective as of September
1, 1996 ("the Effective Date"). The Plan and Trust as applicable to the Employer
shall be known as: Capstone Pharmacy Services, Inc. 401(K) Profit Sharing Plan
and Trust.
( ) a. The Plan and Trust is an amendment of a preexisting Plan which was
originally effective as of ____/____/____.
(X) b. The Plan and Trust is an amendment and restatement of a preexisting
Plan which was originally effective as of August 15, 1987.
*** CAUTION ***
FAILURE TO FILL OUT THE ADOPTION AGREEMENT PROPERLY MAY
RESULT IN DISQUALIFICATION OF THE PLAN
PART I. The following identifying information pertains to the Employer and the
Plan and Trust:
1. Employer Address: 2930 Washington Boulevard
Baltimore, MD 21230
2. Employer Telephone: (410) 646-7373
3. Employer Tax ID: 74-2680245
4. Employer Fiscal Year: January 1 to December 31
5. Three Digit Plan Number: 001
6. Trust ID Number: 74-2019242
7. Plan Fiscal Year (must: January 1 to December 31
be 12 consecutive mos.)
8. Short Initial Plan Year: N/A
<PAGE> 90
9. Plan Agent: Capstone Pharmacy Services, Inc.
2930 Washington Boulevard
Baltimore, MD 21230
10. Plan Administrator: Capstone Pharmacy Services, Inc.
2930 Washington Boulevard
Baltimore, MD 21230
11. Plan Administrator:
ID Number
12. Plan Trustees: R. Dirk Allison
Donald W. Hughes
A. J. McLellan
2930 Washington Boulevard
Baltimore, MD 21230
13. IRS Determination: N/A
Letter Date
(Leave blank for a New Plan)
14. IRS File Folder Number: N/A
(Leave blank for a New Plan)
15. Legal Organization of Employer:
( ) a. Sole Proprietorship
( ) b. Partnership
(x) c. C Corporation
( ) d. S Corporation
( ) e. Not for Profit Corporation
( ) f. Personal Service Corporation
( ) g. Other - Explain:
16. Business Code: 5129
17. State of Legal Construction: MD
18. Other Members of a Controlled Group or Affiliated Service Group:
(If any, each member should sign Adoption Agreement or otherwise
satisfy applicable participation requirements. Leave blank if not
applicable)
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Controlled Group
( ) a. Not Applicable
(x) b. Other Members
all Subsidiaries
Affiliated Service Group
(x) a. Not Applicable
( ) b. Other Members
PART II. The Plan contains certain predetermined design features intended to
provide the statutory requirement or most commonly adopted feature but permits
the selection of alternative features. If an Employer desires to retain the
predetermined design feature, select the provision designated Plan Provision. If
an alternative design feature is desired, select the appropriate provision.
Unless specifically provided to the contrary, only one selection may be made for
each design category. Section references are to relevant Plan Sections. Defined
terms have the meanings provided in the Plan.
A. Eligibility and Service Provisions
1. Eligible Employees - Section 1.2.23 provides that all employees,
including employees of certain related businesses and leased employees
are eligible except for certain union members and non-resident aliens.
(Specify all applicable)
(x) a. Plan Provision
( ) b. Include members of collective bargaining unit
2. Eligibility Requirements (See Section 2.1.1) - An Employee is eligible
to participate in Non-Elective Contribution portions of the Plan if he
satisfies the following requirements during the Eligibility Computation
Period. (Specify one option or any combination other than c and d.
Selecting more than one option means that an Employee must meet all
indicated requirements for eligibility, except for option e. Option e
overrides all other requirements):
( ) a. Date of hire, i.e. no age or service required (no other
choices may be selected)
(x) b. Minimum Age of 20.5 years (Not to exceed 21, partial years may
be used)
( ) c. Minimum of _____ months of service (Cannot require more than
24 months, or more than 12 months if full vesting after not
more than 2 Years of Service is not selected; if periods other
than whole years are selected an Employee cannot be required
to complete any specified number of Hours of Service to
receive credit for the fractional year)
(x) d. 1,000 Hours of Service required during each 12 month
Eligibility Computation Period (cannot exceed 1000)
( ) e. Employed on ___/___/___. (For new plans
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only, select an additional option if this provision is
selected)
( ) f. Not applicable. Non-Elective Contributions are not permitted.
3. For the purposes of having Elective Contributions made on the
Employee's behalf, Section 2.1.1 provides that, unless the Employer
specifies otherwise in the Adoption Agreement, an Employee must
complete 1000 Hours of Service during the Eligibility Computation
Period. For these purposes, an Employee is eligible if the following
requirements are satisfied: (Select all applicable. Selecting more
than one option means that an Employee must meet all indicated
requirements for eligibility, except for option e. Option e overrides
all other requirements):
( ) a. Date of hire, i.e. no age or service requirement (No other
choices may be selected)
(x) b. Minimum Age of 20.5 years (Not to exceed 21, partial years may
be specified)
( ) c. Minimum of _____ months of service (Not to exceed 12, if other
than full years are selected hours may not be specified)
(x) d. 1,000 Hours of Service required during each 12 month
Eligibility Computation Period (cannot exceed 1000)
( ) e. Employed on ___/___/___. (For new plans only, select an
additional option if this provision is selected)
4. Matching Eligibility Requirements (See Section 2.1.1) - An Employee is
eligible to participate in the Matching Contributions portion of the
Plan if he satisfies the following requirements during the Eligibility
Computation Period. (Specify one option or any combination other than c
and d. Selecting more than one option means that an Employee must meet
all indicated requirements for eligibility, except for option e. Option
e overrides all other requirements):
( ) a. Date of hire, i.e. no age or service required (No other
choices may be selected)
(x) b. Minimum Age of 20.5 years (Not to exceed 21, partial years
may be used)
( ) c. Minimum of _____ months of service (Cannot require more than
24 months, or more than 12 months if full vesting after not
more than 2 Years of Service is not selected; if periods
other than whole years are selected an Employee cannot be
required to complete any specified number of Hours of
Service to receive credit for the fractional year)
(x) d. 1,000 Hours of Service required during each 12 month
Eligibility Computation Period (cannot exceed 1000)
( ) e. Employed on ___/___/___. (For new plans only, select an
additional option if this provision is selected)
( ) f. Not applicable. Matching Contributions are not permitted.
5. Eligibility Computation Period - Section 1.2.22 provides that the
initial eligibility computation period begins on the date of hire and
the subsequent periods commence on each annual anniversary of such
date. (Select one)
( ) a. Plan Provision
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<PAGE> 93
(x) b. The eligibility computation periods subsequent to the initial
eligibility computation period are the Plan Year beginning with
the first Plan Year commencing prior to the first anniversary
of the employment commencement date.
6. Hour of Service - Section 1.2.35 provides that service will be credited
on the basis of actual hours for which the employee is paid or entitled
to payment. If records of actual hours are not maintained, credit is
given on the basis of: (Select one)
(x) a. Plan Provision - Records are maintained
( ) b. Days Worked - An Employee will be credited with 10 Hours of
Service if he is credited with at least 1 Hour of Service during
the day
( ) c. Weeks Worked - An Employee will be credited with 45 Hours of
Service if he is credited with at least 1 Hour of Service during
the week
( ) d. Semi-Monthly Payroll Period - An Employee will be credited with
95 Hours of Service if he is credited with at least 1 Hour of
Service during the payroll period
( ) e. Months worked - An Employee will be credited with 190 Hours of
Service if he is credited with at least 1 Hour of Service
during the month
7. Service with Predecessor Employers - Section 1.2.35 provides that
service with predecessor employers is treated as service for the
Employer. Where applicable, identify the predecessor employer(s) and
any document(s) which provides for the crediting of service with such
predecessor(s):
( ) a. Not applicable.
(x) b. Service with the following entities shall be credited as service
under this plan: Integrated Health Services, Inc. and each
subsidiary acquired thereafter.
Service with the above entities has been determined under the
terms of the following documents: the document of each
acquired subsidiary's qualified plan.
8. Entry Date - Section 2.1.2 provides that an Employee who satisfies any
eligibility requirements enters the Plan on the Entry Date. For this
purpose the Entry Date is the: (Select one)
( ) a. First day of next Plan Year or _____ months (Not to exceed 6) after
satisfying the eligibility requirements, if earlier
( ) b. First day of _____ month (Not more than 6) after satisfying eligibility
requirements or the first day of the next Plan Year, if earlier
( ) c. Date of satisfying the eligibility requirements
( ) d. First day of Plan Year in which the eligibility requirements are
satisfied
( ) e. First day of Plan Year nearest to the date the eligibility requirements
are satisfied
( ) f. Semiannual - ( ) first or ( ) last day of 6 month periods, beginning
with first of Plan Year, coincident with or after satisfying
eligibility requirements
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<PAGE> 94
(x) g. Quarterly - (X) first or ( ) last day of 3 month periods, beginning
with first of Plan Year, coincident with or after satisfying
eligibility requirements
( ) h. Monthly - ( ) first or ( ) last day of each month of the Plan Year,
coincident with or after satisfying eligibility requirements
( ) i. First day of the Plan Year coincident with or immediately following the
date the eligibility requirements are satisfied. (May be selected only
if eligibility requirements of Plan do not require more than 6 months
of service (18 months if 100% immediate vesting) and attainment of age
20 1/2.)
( ) j. Last day of the Plan Year coincident with or after satisfying the
eligibility requirements. (May be selected only if eligibility
requirements of Plan do not require more than 6 months of service
(18 months if 100% immediate vesting) and attainment of age 201/2).
NOTE: The Entry Date should be coordinated with the Compensation Computation
Period.
9. Break in Service - Section 1.2.8 provides that a Break in Service
occurs if an Employee fails to complete more than 500 hours of service
during the applicable computation period unless a lesser number is
specified. (Select one)
(x) a. Plan Provision
( ) b. A Break will occur if the Employee fails to complete more
than ____ (Not to exceed 500) Hours of Service
B. Date Provisions
1. Anniversary Date - Section 1.2.5 provides that the Anniversary Date is
the last day of the Plan Year unless another date is specified.
(Select one)
(x) a. Plan Provision - No other date is specified.
( ) b. The first day of the Plan Year.
( ) c. Other - Specify. (Must be at least annually)
2. Valuation Date - Section 1.2.63 provides that the Valuation Date is the
date or dates specified in the Adoption Agreement. (Select one)
( ) a. Anniversary Date
( ) b. Semiannually on the last day of each 6 month period beginning
with the first of the Plan Year
( ) c. Quarterly on the last day of each 3 month period beginning with
the first of the Plan Year
( ) d. Monthly on the last day of each month of the Plan Year
( ) e. Last day of Plan Year (use option (a) if Anniversary Date is
last day of the Plan Year
(x) f. Other - Specify. (Must be at least annually)
The valuation date shall be each day of the plan year the
exchange, on which the assets of such account are traded, is
open.
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3. Normal Retirement Date - Section 1.2.46 permits the adoption of a
Normal Retirement Date. (Select one)
(x) a. Date Normal Retirement Age is attained
( ) b. First day of month in which Normal Retirement Age is attained
( ) c. First day of month nearest date Normal Retirement Age is
attained
( ) d. First day of month coincident with or next following the date
Normal Retirement Age is attained
( ) e. Anniversary Date nearest date Normal Retirement Age is attained
( ) f. Anniversary Date coincident with or next following date Normal
Retirement Age is attained
4. Normal Retirement Age - For each Participant the Normal Retirement
Age is:
(x) a. Age 65 (not to exceed 65)
( ) b. The later of age ____ (not to exceed 65) or the ____ (not to
exceed the fifth (5th)) anniversary of the participation
commencement date, if later. The participation commencement
date is the first day of the Plan Year in which a
Participant commenced participation in the Plan. Solely for
Plan Years beginning before 1988, if the normal retirement
age was determined by reference to the anniversary of the
participation commencement date, the anniversary for
participants who first commenced participation before the
first Plan Year beginning on or after January 1, 1988 is the
earlier of the tenth anniversary of the date the participant
commenced participation in the Plan (or such anniversary as
had been elected by the Employer if less than ten) or the
fifth anniversary of the first day of the first Plan Year
beginning on or after January 1, 1988.
( ) c. Age ____ and the ____ anniversary of the participation
commencement date, if both requirements are met earlier than
the later age of 65 or the fifth (5th) anniversary of
participation
5. Early Retirement Date - Section 1.2.17 permits the adoption of an Early
Retirement Date: (Select one)
(x) a. The Plan does not provide an early retirement date
( ) b. The actual date the Participant attains the Early Retirement Age
( ) c. The Anniversary Date coincident with or next following the date
the Participant attains the Early Retirement Age
( ) d. The Valuation Date coincident with or next following the date
the Participant attains the Early Retirement Age
( ) e. The ( ) first ( ) last day of the month coincident with or
next following the date the Participant attains the Early
Retirement Age
6. Early Retirement Age: (Select all applicable. If more than one option
is selected, Early Retirement Age is attained on the first date the
requirements of any option are met.)
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( ) a. Age _____ (not to exceed 65)
( ) b. Age _____ and ____ Years of Service
( ) c. Age ____ and ____ Years of Service while a Participant
( ) d. _____ years prior to the Normal Retirement Age
( ) e. Sum of age and Years of Service equals _____
(x) f. Not Applicable
NOTE: Cannot discriminate in favor of Highly Compensated Employees.
C. Compensation
1. Compensation - See Section 1.2.10. For purposes of the Plan a
Participant's compensation is based on the Compensation Computation
Period and shall: (Select a, b, or c and d if applicable)
( ) a. Equal compensation as defined in Section 3401(a) except as
indicated below
( ) b. Equal compensation as defined in Section 415(c)(3) except as
indicated below
(x) c. Equal compensation as defined for the Wages, Tips, and Other
Compensation Box on Form W-2 except as indicated below
( ) d. Include compensation which is not includible in gross income by
reason of Sections 402(h)(1)(B)(SEP deferrals), 125 (Cafeteria
Plan), 402(a)(8) (401(k) deferrals), 403(b) or 457(b)
2. The Compensation Computation Period is:
(x) a. The Plan Year
( ) b. The calendar year ending with or within the Plan Year
3. For the initial Plan Year of participation, include Compensation from:
(Select one)
(x) a. Entry Date as a Participant
( ) b. First day of the Compensation Computation Period which ends
during the initial Plan Year of participation
D. Contribution and Allocation
1. Non-Elective Contribution Formula - The Employer's Non-Elective
contribution to the Plan shall be: (Select one)
( ) a. Discretionary, out of profits
(x) b. Discretionary, but not limited to profits
( ) c. ______% of each Participant's Compensation. (not to exceed 15%)
( ) d. Not applicable. Non-Elective Contributions are not permitted.
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2. Allocation Method - The Employer Non-Elective contribution is allocated to
Participants: (Select one)
(x) a. Proportionate to Salary. Based upon each Participant's
Compensation in proportion to the Compensation of all
Participants.
( ) b. Integrated with Social Security. Based on each Participant's
Compensation to the extent of a base contribution percentage
multiplied by the Participant's Compensation plus the lesser
of 5.7% or the base contribution percentage (the
contribution rate on each Participant's Compensation up to
the Social Security Integration Level) multiplied by the
Participant's Compensation in excess of the Social Security
Integration Level and any remainder is allocated based upon
each Participant's Compensation in proportion to the
Compensation of all Participants. (Select d, e, f, g or h,
below)
( ) c. Not applicable - No Non-Elective Contributions.
The Social Security Integration Level is equal to:
( ) d. The taxable wage base under Section 230 of the Social Security
Act in effect as of the first day of the Plan Year.
( ) e. $_____ (Not to exceed the taxable wage base under Section 230
of the Social Security Act in effect as of the first day of
the Plan Year).
( ) f. _____% (Not to exceed 100) of the taxable wage base under
Section 230 of the Social Security act in effect as of the
first day of the Plan Year.
( ) g. The greater of $10,000 or 20% of the taxable wage base under
Section 230 of the Social Security Act in effect as of the
first day of the Plan Year.
( ) h. 80% of the taxable wage base under Section 230 of the Social
Security Act in effect as of the first day of the Plan Year
plus $1.00.
NOTE: The Employer Contribution allocable to Compensation in excess
of the Social Security Integration Level (SSIL) may not exceed
5.4% if the SSIL is more than 80% but less than 100% of the
taxable wage base under Section 230 of the Social Security Act
at the beginning of the plan year (TWB), and may not exceed
4.3% if the SSIL is greater than 20% of the TWB, but not more
than 80% of the TWB, and greater than $10,000.
3. Requirement to Share in Contribution Allocation - An allocation of the
Employer's Non-Elective Contribution shall be made to each Participant
during the Plan Year who completes more than 500 Hours of Service
during the Plan Year or is employed as of the last day of the Plan
Year.
A participant is also eligible to share in the allocation if: (Select
all applicable)
(x) a. The Employee dies during the Plan Year.
(x) b. The Employee retires during the Plan Year.
(x) c. The Employee becomes totally disabled during the Plan Year.
( ) d. Not applicable.
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4. Requirement to Share in Matching Allocation - An allocation of the
Employer's Matching Contribution shall be made to each Participant
during the Plan Year who completes more than 500 Hours of Service
during the Plan Year or is employed as of the last day of the Plan
Year.
A Participant is also eligible to share in the allocation if: (Select
all applicable)
(x) a. The Employee dies during the Plan Year.
(x) b. The Employee retires during the Plan Year.
(x) c. The Employee becomes totally disabled during the Plan Year.
( ) d. Not Applicable - No Matching Contributions.
5. Matching Contributions - The Matching Contribution by the Employer for
the Plan Year in accordance with Section 2.2.1(a)(3)(ii) is
( ) a. Matching Contributions are not permitted
(x) b. Discretionary each Plan Year
( ) c. Based upon the Allocation Method set forth below
( ) d. Based upon the Allocation Method set forth below plus a
supplemental discretionary Matching contribution
6. Allocation Method for Matching Contributions - Matching Contributions
shall be allocated to eligible Participants in an amount:
(x) a. Proportionate to the Elective Contributions made on behalf of
a Participant
( ) b. Equal to ______% of the Elective Contributions made on behalf
of a Participant
( ) c. Graded based on the dollar amount of the Elective Contribution
of each Participant as follows:
_____% of the first $_____ plus
_____% of the next $_____ plus
_____% of the next $_____ plus
_____% of the next $_____ .
( ) d. Graded based on the percentage of compensation of the Elective
Contribution of each Participant as follows:
_____% of the first _____% plus
_____% of the next _____% plus
_____% of the next _____% plus
_____% of the next _____% .
( ) e. Graded based on the dollar amount of the Elective Contribution
of each Participant as follows:
_____% if contribution is $_____ or more;
_____% if contribution is $_____ or more;
_____% if contribution is $_____ or more;
_____% if contribution is $_____ or more.
( ) f. Graded based on the percentage of compensation of the Elective
Contribution of each Participant as follows:
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_____% if contribution is _____% or more
_____% if contribution is _____% or more
_____% if contribution is _____% or more
_____% if contribution is _____% or more
( ) g. Not applicable
NOTE: Graded percentages entered in c. through f. must decrease as
percentage or amount of compensation increases.
7. If a supplemental discretionary Matching Contribution is made, Matching
Contributions shall be allocated to eligible Participants in an amount:
( ) a. Proportionate to the Elective Contributions made on behalf of
a Participant
( ) b. According to the method selected in 6b.- f. above
(x) c. Not applicable
8. Matching Contribution Allocation Date - Matching Contributions are
allocated as of the Anniversary Date unless an alternate date is
selected. For the purposes of this Plan the Matching Contribution is
allocated as of: (Select one)
(x) a. Plan Provision - the Anniversary Date.
( ) b. The next Valuation Date.
( ) c. Other - Specify. (Must be allocated at least annually)
( ) d. Not applicable
9. Limitations on Matching Contributions - The Employer shall not make
Matching Contributions: (Select all applicable)
(x) a. With respect to Elective Contributions in excess of 1 percent
of a Participant's Compensation
( ) b. In excess of $______ for any Participant
( ) c. To Key Employees
( ) d. Not applicable.
10. Allocation of Qualified Non-Elective Contributions - (Select a or b. If
a is selected, do not complete the remainder of this section)
( ) a. Qualified Non-Elective Contributions are not permitted.
(x) b. Qualified Non-Elective Contributions shall be made at the
Employer's discretion.
Qualified Non-Elective Contributions shall be allocated (complete c
and d):
(x) c. On behalf of
( ) All Participants
( ) Solely on behalf of Participants who are not Highly
Compensated Employees
(x) Solely on behalf of Participants who are not Highly
Compensated Employees to the extent necessary to
satisfy the ACP or the ADP test (X)
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d. Who are eligible to receive an allocation of ( ) Non-Elective
Contributions
(x) Matching Contributions
Qualified Non-Elective Contributions shall be allocated: (Select e or
f; also select g, if applicable)
(x) e. In proportion to a Participant's Compensation.
( ) f. As a uniform dollar amount.
(x) g. To the extent necessary to satisfy the ACP test or the
ADP test.
:
11. Limitation Year - Section 1.2.40 provides that unless otherwise
specified the Limitation Year for purposes of the limitation imposed by
IRC Section 415 is the Plan Year. (Select one)
(x) a. Plan Provision
( ) b. Calendar year coinciding with or ending within the Plan Year
( ) c. Twelve consecutive month period ending ___/___.
E. Vesting Provisions
1. Years of Service - Section 1.2.65 provides that a Year of Service is
the 12 consecutive month period specified in the Adoption Agreement in
which at least 1000 Hours of Service are performed unless a lesser
number is specified. (Select all applicable)
(x) a. Use the Plan Year as the computation period
( ) b. Use Eligibility Computation Period as the computation period
( ) c. Use _____ in lieu of 1000 Hours of Service (Not to exceed
1000 hours)
2. Excluded Years - Section 1.2.65 provides unless otherwise specified all
Years of Service are taken into account.
(x) a. Plan Provision - Include all Years of Service
( ) b. Exclude Plan Years prior to age 18
( ) c. Exclude Plan years prior to adoption of plan or predecessor
plan. Effective date of (prior) plan: ___/___/___
3. Vesting Schedule - Section 2.4.2(f) provides that benefits will vest in
accordance with the method specified in the Adoption Agreement.
Employer Accounts:
( ) a. At the rate of 20% each year after 3 Years of Service.
(20% vested in third year)
( ) b. At the rate of 20% each year after 2 Years of Service.
(20% vested in second year)
(x) c. 100% vesting upon participation.
( ) d. 100% vesting after ____ Year(s) of Service (Not to exceed 5)
( ) e. 100% vesting at Early Retirement Date (Must also select
another alternative)
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( ) f. Other: (Optional vesting schedule must be at least as
favorable as a. or d.)
Year(s) of Service Percent Vesting
Less than 1 _______
1 but less than 2 _______
2 but less than 3 _______
3 but less than 4 _______
4 but less than 5 _______
5 but less than 6 _______
6 but less than 7 _______
7 or More _______
( ) g. Not applicable - No Non-Elective Employer Contributions
Matching Accounts:
( ) a. At the rate of 20% each year after 3 Years of Service.
(20% vested in third year)
( ) b. At the rate of 20% each year after 2 Years of Service.
(20% vested in second year)
(x) c. 100% vesting upon participation.
( ) d. 100% vesting after ____ Year(s) of Service (Not to exceed 5)
( ) e. 100% vesting at Early Retirement Date (Must also select
another alternative)
( ) f. Other: (Optional vesting schedule must be at least as
favorable as a. or d.)
Year(s) of Service Percent Vesting
Less than 1 _______
1 but less than 2 _______
2 but less than 3 _______
3 but less than 4 _______
4 but less than 5 _______
5 but less than 6 _______
6 but less than 7 _______
7 or More _______
( ) g. Not applicable - No Matching Contributions
4. Prior Vesting Schedule - Section 3.10.3 provides that if the Vesting
schedule has been amended to a less favorable schedule, participants
are entitled to have their vested interest calculated under the prior
schedule under certain instances.
(x) a. Not applicable. Either not amended or new schedule is more
favorable.
( ) b. The prior schedule was
Employer
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Year(s) of Service Percent Vesting
Less than 1 _______
1 but less than 2 _______
2 but less than 3 _______
3 but less than 4 _______
4 but less than 5 _______
5 but less than 6 _______
6 but less than 7 _______
7 or More _______
Matching
Year(s) of Service Percent Vesting
Less than 1 _______
1 but less than 2 _______
2 but less than 3 _______
3 but less than 4 _______
4 but less than 5 _______
5 but less than 6 _______
6 but less than 7 _______
7 or More _______
5. Top Heavy Vesting Schedule - Section 2.6.1(c) provides that if the Plan
becomes Top Heavy, unless the Employer specifies otherwise, vesting
will be at a rate of 20% per year beginning with the second Year of
Service.
Employer Accounts:
( ) a. Plan Provision
( ) b. 100% vested after ____ Year(s) of Service (Not to exceed 3)
(x) c. Same as non-Top Heavy vesting schedule (Must be at least as
favorable as a or b)
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( ) d. Other: (Optional vesting schedule must be at least as
favorable as a. or b.)
Year(s) of Service Percent Vesting
Less than 1 _______
1 but less than 2 _______
2 but less than 3 _______
3 but less than 4 _______
4 but less than 5 _______
5 but less than 6 _______
6 or More _______
( ) e. Not Applicable - No Employer Non-Elective Contributions
Matching Accounts:
( ) a. Plan Provision
( ) b. 100% vested after ____ Year(s) of Service (Not to exceed 3)
(x) c. Same as non-Top Heavy vesting schedule (Must be at least as
favorable as a or b)
( ) d. Other: (Optional vesting schedule must be at least as
favorable as a. or b.)
Year(s) of Service Percent Vesting
Less than 1 _______
1 but less than 2 _______
2 but less than 3 _______
3 but less than 4 _______
4 but less than 5 _______
5 but less than 6 _______
6 or More _______
( ) e. Not Applicable - No Matching Contributions.
6. Re-employment - Section 2.4.4 provides that Years of Service completed
after a Break in Service are not counted for purposes of increasing the
vested percentage attributable to service before the Break unless
reemployed within 5 years.
( ) a. Plan Provision
( ) b. Count all service after the Break
(x) c. Not applicable - 100% immediate vesting
7. Forfeitures - Section 2.4.6 provides that forfeitures are determined as
of the last day of the Plan Year in which the Participant's entire
interest is distributed from the Plan.
( ) a. Plan Provision.
( ) b. Determine in Plan Year of 5th consecutive Break in Service.
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( ) c. Determination as of the Valuation Date coincident with or next
following the Distribution Date
(x) d. Not applicable - All benefits are fully vested. Leave the
remaining items in this Section E blank.
8. Forfeitures of Non-Elective Contributions shall be applied to
(select all applicable):
( ) a. Supplement Non-Elective Contributions
( ) b. Reduce Non-Elective Contributions
( ) c. Reduce Qualified Non-Elective Contributions
( ) d. Supplement Matching Contributions
( ) e. Reduce Matching Contributions
9. Forfeitures of Non-Elective Contributions shall be reallocated to
participants:
( ) a. In the same manner as Non-Elective Contributions
( ) b. In proportion to each participant's Compensation
( ) c. Not applicable. Forfeitures are applied to reduce
contributions.
NOTE: If the Plan provides for permitted disparity, forfeitures
must be allocated under the Plan's allocation formula.
10. Forfeitures of Matching Contributions shall be applied to:
(Select all applicable)
( ) a. Supplement matching Contributions
( ) b. Reduce Matching contributions
( ) c. Reduce Qualified Non-Elective contributions
( ) d. Supplement Non-Elective Contributions
( ) e. Reduce Non-Elective Contributions
11. Forfeitures of Matching Contributions shall be reallocated to
participants:
( ) a. In the same manner as Non-Elective Contributions
( ) b. In proportion to each participant's Compensation
( ) c. In proportion to Matching Contributions
( ) d. In proportion to Elective Contributions
( ) e. Not applicable. Forfeitures are applied to reduce
contributions.
12. Requirement to Share in Allocation of Forfeitures - In order to share
in the allocation of Forfeitures which supplement rather than reduce
other contributions, a Participant: (Select all applicable)
( ) a. Must be eligible to receive an allocation of the respective
type of contribution, i.e. Matching or Non-elective
(x) b. Not applicable. Forfeitures reduce contributions.
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13. Restoration of Forfeitures - If a Participant is entitled to a
restoration of a forfeiture, the amount to be restored shall be
restored by:
( ) a. An additional contribution by the Employer specifically
allocated to the Participant's Account.
( ) b. Allocating other forfeitures arising in the year of
restoration to the Participant's Account to the extent thereof
and an additional contribution by the Employer specifically
allocated to the Participant's Account to the extent that
allocable forfeitures are insufficient.
F. CODA Limitation Provisions
1. Actual Deferral Percentages - Qualified Non-Elective Contributions may
be taken into account for purposes of calculating the ADP-Actual
Deferral Percentages. For purposes of the ADP test in Section 2.7.1,
the amount taken into account shall be:
( ) a. All Qualified Non-Elective Contributions.
(x) b. The Qualified Non-Elective Contributions that are needed to
meet the ADP test.
2. Average Contribution Percentage - The amount of Elective Deferrals and
Qualified Non-Elective Contributions taken into account as contribution
percentage amounts for the purpose of calculating the ACP-Average
Contribution Percentage, subject to such other requirements as may be
prescribed by the Secretary of the Treasury, shall be:
For elective deferrals:
( ) a. All such Elective Deferrals.
( ) b. Only those Elective Deferrals that are needed to meet the
Average Contribution Percentage test.
(x) c. Elective Deferrals are not to be included in the ACP test.
( ) d. Not applicable.
For Qualified Non-Elective Contributions:
( ) e. All such Qualified Non-Elective contributions.
(x) f. Only those Qualified Non-Elective Contributions that are
needed to meet the Average Contribution Percentage test.
( ) g. Qualified Non-Elective Contributions are not to be included
in the ACP test.
( ) h. Not applicable.
3. Excess Aggregate Contributions - Forfeitures of Excess Aggregate
Contributions pursuant to Section 2.7.7 shall be:
(x) a. Applied to reduce Employer contributions.
( ) b. Allocated, after all other forfeitures under the Plan, to
each Participant's Matching Contribution Account in the ratio
which each Participant's Compensation for the Plan Year bears
to the total Compensation of all Participants for the Plan
Year.
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Such forfeitures will not be allocated to the Account of
any Highly Compensated Employee.
G. Distribution Provisions
1. Form of Distributions - Section 2.5.2 provides that the Employer may
elect to permit Plan distributions to be made in the form of: (Select
all applicable)
(x) a. Lump sum without regard to amount.
( ) b. Lump sum but not to exceed $________.
( ) c. Installments over ____ years payable: (Select one or more)
( ) c.1. annually
( ) c.2. quarterly
( ) c.3. monthly
( ) d. Installments over a period of years certain selected by the
Participant that is less than the life of the Participant
payable (Select one or more.)
( ) d.1 annually
( ) d.2 quarterly
( ) d.3 monthly
( ) e. An annuity for not more than ____ years
( ) f. An annuity for the life of: (Select one or more)
( ) f.1 the Participant
( ) f.2 the Participant and spouse
( ) f.3 the Participant and a designated beneficiary
( ) g. An annuity for ____ years certain and thereafter for the
life of: (Select one or more)
( ) g.1 the Participant
( ) g.2 the Participant and spouse
( ) g.3 the Participant and a designated beneficiary
( ) h. An annuity for a period certain selected by the Participant
that is less than the life of: (Select one or more)
( ) h.1 the Participant
( ) h.2 the Participant and spouse
( ) h.3 the Participant and a designated beneficiary
NOTE: Any number of options may be selected. Once selected,
however, any option may not thereafter be eliminated.
If an annuity option of life or longer is selected
Qualified Joint and Survivor Annuity provisions are
required.
2. Survivor Annuity Percentage - If a Joint and Survivor Annuity is
payable, Section 1.2.37 provides that the normal survivor annuity is
50% of the amount payable during the joint
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<PAGE> 107
lives of the participant and spouse, unless the Employer elects a
different percentage (Select one):
(x) a. Plan Provision - 50%
( ) b. Other Percentage - ____% (Not less than 50% nor more than 100%)
( ) c. Other Percentage selected by the Participant -
(Not less than 50% nor more than 100%)
3. Time of Distribution - Section 2.5.1(b) provides that distributions are
deferred to Participants who resign or are discharged prior to
retirement until the retirement date unless the employer elects to
permit distributions in advance of such date.
( ) a. Plan Provision without advance distribution election.
(x) b. Distributions may be made at the Participant's election
within a reasonable period following the Distribution Date.
4. Distribution Date - Section 2.4.5 provides that, subject to the
necessity of obtaining the consent of a Participant and spouse, for the
purposes of determining the amount to be distributed, the Distribution
Date:
For a Participant who is not fully vested, is
( ) a. The anniversary Date coinciding with or following the date of
termination.
( ) b. The Valuation Date coinciding with or following the date of
termination
(x) c. As soon as practical but prior to the Anniversary Date
coinciding with or following the date of termination, based on
the preceding Valuation Date.
( ) d. the ( ) Valuation Date ( ) Anniversary Date following ____
consecutive Breaks in Service
( ) e. The Participant's Normal or Early Retirement Date
For a Participant who is fully vested but who terminates employment
prior to death, total and permanent disability or retirement at his
retirement date is:
( ) a. The Anniversary Date coinciding with or following the date of
termination
( ) b. The Valuation Date coinciding with or following the date of
termination
(x) c. As soon as practical but prior to the Anniversary Date
following the date of termination, based upon the preceding
Valuation Date
( ) d. The Participant's Normal or Early Retirement Date
For a Participant who terminates employment as a result of death, total
and permanent disability or retirement at his retirement date, is:
( ) a. The anniversary Date coinciding with or following the date of
termination.
( ) b. The Valuation Date coinciding with or following the date of
termination
(x) c. As soon as practical but prior to the Anniversary Date
following the date of termination, based upon the preceding
Valuation Date
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In the case of a Participant's interest in an Elective Account,
Voluntary Account or Segregated Account attributable to a rollover
contribution from another plan, notwithstanding the foregoing, the
Distribution Date, is:
( ) a. Not applicable - The Distribution Date is determined in the
manner indicated above for the fully vested Participants
( ) b. The anniversary Date coinciding with or following the date of
termination
( ) c. The Valuation Date coinciding with or following the date of
termination
(x) d. As soon as practical but prior to the Anniversary Date
following the date of termination, based upon the preceding
Valuation Date.
5. Hardship Distributions - Section 2.5.5 provides that an Employer may
permit distributions to Participants while employed in the event of
financial hardship as specified in the Plan:
(x) a. Hardship distributions are permitted.
( ) b. Hardship distributions are not permitted.
Hardship Distributions may be made from a Participants Account as
elected below in c and d, provided that Hardship Distributions of
earnings on elective Deferrals may only be made on such earnings
credited to the Participant's account as of the end of the last Plan
Year ending before July 1, 1989. Therefore, subject to such
limitation, Hardship Distributions may be taken from:
( ) c. all of Participant's Accounts.
(x) d. only the Participant's Account balances attributable to the
following accounts:
( ) d.1 Employer Account
( ) d.2 Qualified Non-Elective Contribution Account
(x) d.3 Elective Contribution Account
( ) d.4 Matching Account
( ) d.5 Segregated Account (attributable to a rollover)
( ) d.6 Voluntary Account
6. In Service Distributions - Section 2.5.6 provides that an Employer may
permit distributions to fully vested Participants over the age of
59-1/2 prior to termination of employment if the amounts withdrawn have
been allocated to the Participant for two (2) or more years or the
Participant has been a Participant for at least five (5) years.
(Select all applicable)
( ) a. Plan Provision.
( ) b. Require that amounts have been allocated for ____ years.
(Must be at least 2)
( ) c. Require participation for at least ____ years.
(Must be at least 5)
( ) d. In Service Distributions are permitted upon reaching Normal
Retirement Date
( ) e. In Service Distribution are permitted for amounts attributable
to a rollover from another plan regardless of age or periods
of participation
(x) f. In Service Distributions are not permitted.
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7. Qualified Domestic Relations Orders - Section 3.12.9 provides that the
Employer may elect to permit distributions to an alternate payee
pursuant to the terms of a qualified domestic relations order even if
the Participant continues to be employed. (Select one)
( ) a. Distributions to an alternate payee are not permitted while the
Participant continues to be employed.
(x) b. Distributions to an alternate payee are permitted while the
Participant continues to be employed.
H. Other Administrative Provisions
1. Earnings - Section 3.1.2 permits the Employer to specify the manner in
which earnings are allocated to Participants who receive distributions
on any date other than a Valuation Date.
Select any of the following:
(x) a. Earnings will be credited solely as of the immediately
preceding Valuation Date.
( ) b. Actual earnings will be credited to the date of distribution.
( ) c. Earnings will be credited solely as of the immediately
preceding Valuation Date if distribution is within ____ days
of such Valuation Date and will be credited to date of
distribution otherwise.
( ) d. Earnings will be credited to the date of distribution based
upon an estimate of earnings equal to ______% annually.
( ) e. Earnings will be credited to the date of distribution based
upon an estimate of earnings equal to the average rate of
earnings during the preceding
( ) e.1 Valuation Period.
( ) e.2 Plan Year.
( ) e.3. ____ Valuation Periods.
2. Loans - Section 3.7.1 provides that the Employer may elect to permit
loans to Participants and Beneficiaries in accordance with a
participant loan program adopted by the Trustee.
(x) a. Loans are permitted.
( ) b. Loans are not permitted.
3. Rollovers - Section 3.11.3 authorizes the Employer to permit the
transfer of interests in other qualified plans to the Plan.
( ) a. Rollover contributions are not permitted.
( ) b. Rollover contributions are permitted only from other plans of
the Employer
(x) c. Rollover contributions are permitted only by Employees who
have satisfied the conditions for participation.
( ) d. Rollover contributions are permitted from any employee even
if not otherwise eligible to be a Participant.
4. Investment Control - Section 3.6.5 provides that the Employer may elect
to permit Participants to control the investment of their Accounts.
( ) a. Participants may not control their investments.
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( ) b. Participants may control the investment of their Accounts if
fully vested in the Account.
( ) c. Participants may control the investment of their Accounts to
the extent vested.
(x) d. Participants may control their investments without regard to
their vested interest.
(x) e. Participants may control their investments solely with respect
to amounts attributable to: (Select all applicable)
(x) e.1 Non-Elective Contributions
(x) e.2 Qualified Non-Elective Contributions
(x) e.3 Elective Contributions
(x) e.4 Matching Contributions
( ) e.5 Voluntary Contributions
(x) e.6 Amounts rolled over and held in a Segregated Account
5. (This question only applies if the Employer has a Defined Benefit plan)
The interest rate used to establish the Present Value of Accrued
Benefits in order to calculate the top heavy ratio under IRC Section
416 shall be ______% and the mortality tables used shall be
____________________.
6. Valuation Date - For purposes of computing the top-heavy ratio, the
Valuation Date is (Select one):
(x) a. the first day of Plan Year.
( ) b. the last day of the Plan Year.
( ) c. Other - Specify. ___/___ (Must be at least annually)
7. Single Plan Minimum Top-Heavy Allocation - For purposes of minimum
top-heavy allocations, contributions and forfeitures equal to the
following percentage of each non-Key Employee's compensation will be
allocated to the Employee's account when the Plan is top-heavy
(Select one):
(x) a. 3% or the highest percentage allocated to any Key Employee
if less.
( ) b. ______% (Must be at least 3).
8. Multiple Plans Provision - The Employer which maintains or ever
maintained another qualified defined benefit plan or welfare benefit
fund or individual medical account in which any participant in the Plan
is, was or could become a participant adds the following optional
provision which it deems necessary to satisfy Section 415 or 416 of the
Code because of the required aggregation of multiple plans:
(Select one)
(x) a. Not applicable (No other plan or other plan terminated
prior to the Effective Date of
this Adoption Agreement).
( ) b. A minimum contribution allocation of 5% of each Non-Key
Participant's total compensation shall be provided in a defined
contribution plan of the Employer.
( ) c. A minimum contribution allocation of 7.5% of each Non-Key
Participant's total compensation shall be provided in a defined
contribution plan of the Employer.
22
<PAGE> 111
( ) d. A minimum benefit of _____ (must be at least the lesser
of 2% times years of service or 20%) of each Non-Key
Participant's total compensation shall be provided in a
defined benefit plan of the Employer.
( ) e. A minimum benefit of _____ (must be the lesser of 2% times
years of service or 20%) of each Non-Key Participant's
total compensation shall be provided in a defined benefit plan
of the Employer but offset by the amount contributed on such
participant's behalf under any defined contribution plan of
the Employer.
( ) f. Other - Specify.
NOTE: The method selected must preclude Employer discretion and
the Employer must obtain a determination letter in order to
continue reliance on the Plan's qualified status.
9. Multiple Defined Contribution Plans - If the Participant is covered
under another qualified defined contribution plan maintained by the
Employer, other than a master or prototype plan:
(Select one)
(x) a. Not applicable.
( ) b. The provisions of this Plan limiting annual additions will
apply as if the other plan is a master or prototype plan.
( ) c. Other - Specify.
NOTE: Specify the method under which the plans will limit
total annual additions to the maximum permissible
amount, and will properly reduce any excess amounts
in a manner that precludes Employer discretion.
10. Top Heavy Duplications - The Employer who maintains two or more Defined
Contribution plans makes the following election:
(x) a. Not applicable.
( ) b. A minimum non-integrated contribution of 3% of each Non-Key
Participant's Compensation shall be provided by:
( ) b.1 this Plan.
( ) b.2 the following defined contribution plan:
________________________________________________
( ) c. Other - Specify.
NOTE: The method selected must preclude Employer discretion
and avoid inadvertent omissions, including any
adjustments required under Code Section 415(e). The
Employer must obtain a determination letter in order
to continue reliance on the Plan's qualified status.
If the plan is to be paired with another defined
contribution plan:
23
<PAGE> 112
(a) if the plans benefit the same participants,
one of the paired plans must provide the
top-heavy minimum contribution.
(b) if the plans do not benefit the same
participants, then each plan must make its
own top-heavy minimum contributions.
11. Annual Addition Limitation - If a Participant is or has ever been a
participant in a defined benefit pension plan maintained by the
Employer, Section 3.2.1(c) provides that Annual Additions shall be
limited.
(x) a. Not applicable
( ) b. The contribution to the Plan allocable to the Participant shall
be reduced so that the limitations are not exceeded.
( ) c. Other - Specify
NOTE: specify the method under which the plans will limit total
additions to the maximum permissible amount, and will
properly reduce any excess amounts in a manner that
precludes employer discretion.
12. Section 415 Compensation Definition. For purposes of calculating an
Employee's compensation pursuant to Section 3.2.1(h), relating to
limitations on contributions and benefits, Compensation means all of
each Participant's
( ) a. Wages as computed for Wages, Tips, and Other Compensation Box
on Form W-2.
( ) b. Section 3401(a) wages.
(x) c. Section 415 safe harbor compensation.
13. Paired Plan - Indicate whether the Plan is to be paired with another
Benefit Center, Inc. Regional Prototype Plan. Prototype Plan.
( ) a. No or not applicable
( ) b. Yes. Paired with:
Plan Name
_______________________________________________
Three Digit Plan Number
_____________________________
The name, address and telephone number of the Plan Sponsor is:
The Benefit Center, Inc.
P.O. Box 2277
Concord, NH 03302-2277
(603) 753-8100
24
<PAGE> 113
Applicable requirements mandate that the use of this Prototype Document be
registered by the Plan Sponsor with the Internal Revenue Service. Unregistered
use may cause the Plan to become disqualified because it may not be maintained
as required by law.
The Plan Sponsor will inform the Employer of any amendments made to the Plan or
of the discontinuance or abandonment of the Plan.
NOTE: An employer may rely on the notification letter issued by the National
Office of the Internal Revenue Service as evidence that the plan is qualified
under Section 401 of the Internal Revenue Code unless the Employer has ever
maintained or who later adopts another plan in addition to the Plan (including a
welfare benefit fund which provides post-retirement medical benefits allocated
to separate accounts for key employees or an individual medical account plan)
other than Benefit Center, Inc. Regional paired plans. If the Employer who
adopts or maintains multiple plans wishes to obtain reliance that the plans are
qualified, application for a determination letter should be made to the
appropriate Key District Director of Internal Revenue.
This Adoption Agreement may be used only in conjunction with the Benefit Center,
Inc. Regional Prototype Defined Contribution Plan and Trust, Revised 05/06/92.
* * *
25
<PAGE> 114
The Employer and Trustee hereby adopt the Plan and Trust as evidenced by the
foregoing Adoption Agreement on this 21st day of October, 1996.
Employer: Trustee:
Capstone Pharmacy Services, Inc.
SIGNED SIGNED
- --------------------------- ---------------------------
R. Dirk Allison, President R. Dirk Allison, Trustee
SIGNED
---------------------------
Donald W. Hughes, Trustee
SIGNED
---------------------------
A. J. McLellan, Trustee
SIGNED
- ---------------------------
all Subsidiaries
R. Dirk Allison, President
26
<PAGE> 115
AMENDMENT TO THE CAPSTONE PHARMACY SERVICES, INC.
401(k) PROFIT SHARING PLAN
(Effective as of October 28, 1997)
WHEREAS, CAPSTONE PHARMACY SERVICES, INC., a Delaware corporation (the
"Company), established the Capstone Pharmacy Services, Inc. 401(k) Profit
Sharing Plan (the "Plan") effective August 15, 1987, to provide benefits to
those of its employees who are eligible to participate; and
WHEREAS, the Company desires to amend the Plan in order to permit
matching contributions to be made in the form of common stock of the Company;
and
WHEREAS, the Company desires to modify the provisions of the Plan
relating to eligibility for an allocation of matching contributions made by the
Company; and
WHEREAS, the Company desires to amend the Plan to take into account
certain corporate transactions (the "Merger") pursuant to which certain
employees of Pharmacy Corporation of America ("PCA") are expected to become
employees of the Company or of a subsidiary of the Company (the "PCA
Employees"), and to include for purposes of the Plan the periods of service of
such PCA Employees as employees of PCA; and
WHEREAS, the Company desires to amend the Plan so as to permit the PCA
Employees who meet the age and service eligibility requirements of the Plan, as
hereby amended, to commence their participation in the Plan immediately upon the
commencement of their employment with the Company or any of its subsidiaries;
and
WHEREAS, pursuant to Article X of the Plan, the Company is authorized
to amend the Plan (including any provisions of the adoption agreement), in whole
or in part, (thereby causing the Plan to be an individually designed plan).
NOW, THEREFORE, the Plan (including the Adoption Agreement) is hereby
amended as follows:
1. Notwithstanding any provisions set forth in the Plan or the Adoption
Agreement to the contrary, the Company may, at the discretion of its Board of
Directors, make its matching contribution in the form of common stock of the
Company, which stock may consist of authorized but unissued shares or of shares
acquired by the Company for this purpose.
2. In the event Company matching contributions are made in the form of
common stock of the Company, such contributions shall be held in a separate
account (the "Company Stock Account"). Each employee shall have an interest in
such Company Stock Account to the extent of the shares allocated to such
employee as a result of a Company matching contribution in the form of Company
common stock. The Plan Administrator shall provide to all employees
<PAGE> 116
having an interest in the Company Stock Account copies of all information as
would be generally available to any shareholder of record. Any employee having
an interest in the Company Stock Account shall be permitted to provide the Plan
Administrator with instructions concerning how such shares are to be voted and
what response should be made with respect to a tender or exchange offer
involving the common stock of the Company, which instructions shall be
implemented with respect to that portion of the Company Stock Account allocated
to responding employees. The Plan Administrator shall also vote shares of
Company common stock held in the Company Stock Account with respect to which no
instructions are received on a proportionate basis, reflecting the instructions
actually received from responding employees; provided, however, that if timely
instructions are not received with respect to a tender or exchange offer, the
shares representing the portion of the Company Stock Account for which
instructions are not timely received shall not be tendered or exchanged. Each
employee having an interest in the Company Stock Account shall also have the
right to direct the Plan Administrator to liquidate his or her interest in the
Company Stock Account, which shall be implemented by means of a sale of shares
representing that employee's share of the Company Stock Account. In the event an
employee instructs the Plan Administrator to liquidate all or any portion of his
or her interest in the Company Stock Account, the Plan Administrator shall sell
shares of common stock of the Company representing such employee's share of the
Company Stock Account and shall cause the proceeds of such sale to be invested
in accordance with such investment instructions, consistent with the otherwise
applicable provisions of the Plan, as are provided to the Plan Administrator by
the employee. No employee shall be permitted to invest in the Company Stock
Account, and no employee shall have any interest in the Company Stock Account
otherwise than as a result of an allocation of a Company matching contribution
made in the form of Company common stock. Notwithstanding anything to the
contrary contained herein, the provisions of the Plan relating to the
acquisition and holding of Company Stock shall permit the acquisition and
holding of Company Stock by the Plan even if such holdings of Company Stock
exceed 10 percent of the fair market value of the assets of the Plan.
3. Notwithstanding any provisions set forth in the Plan or the Adoption
Agreement to the contrary, including, without limitation, Part II, Sections A.4
and D.4. of the Adoption Agreement, and Article II and Article III of the Plan,
in the event the Company determines to make a matching contribution with respect
to a Plan Year, such contribution shall be allocated as of the last day of the
Plan Year to the accounts of "Eligible Employees" (as hereinafter defined) in
proportion to the amount of Elective Contributions made on their behalf for such
Plan Year. For purposes allocating any matching contribution made by the
Company, the term "Eligible Employee" means any employee who has satisfied the
requirements to participate in the Plan and who is (a) employed by the Company
(or by any affiliate of the Company whose employees participate in the Plan) as
of the last day of the Plan Year with respect to which such contribution is
being made or (b) not employed by the Company (or by any affiliate of the
Company whose employees participate in the Plan) as of the last day of the Plan
Year on account of such employee's death, retirement or disability occurring
during such Plan Year.
2
<PAGE> 117
4. Notwithstanding any provisions set forth in the Plan or the Adoption
Agreement to the contrary, including, without limitation, Part II, Sections A
and E of the Adoption Agreement and Sections 1.2.35 and 1.2.65 of the Plan,
Years of Service and Hours of Service for all purposes of the Plan shall be
determined with respect to each PCA Employee by taking into account his or her
years of service and hours of service as an employee of PCA. In making these
determinations, the Plan Administrator may rely on the employment records
maintained with respect to such employees by PCA, and may take into account the
Years of Service and Hours of Service shown in such records as maintained with
respect to any tax-qualified "employee pension benefit plan" (as that term is
defined in Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended) maintained for the benefit of such employees by PCA or any affiliate
of PCA.
5. Notwithstanding any provisions set forth in the Plan or the Adoption
Agreement to the contrary, including, without limitation, Part II, Section A.8
of the Adoption Agreement and Section 2.1.2 of the Plan, each PCA Employee who
becomes an employee of the Company (or of any affiliate of the Company whose
employees participate in the Plan) as of the effective date of the Merger and
who, taking into account the credited service of such employee as an employee of
PCA, meets the eligibility requirements of the Plan, shall be eligible to
participate in the Plan immediately without regard to whether such participation
commences on an Entry Date.
3
<PAGE> 1
Exhibit 5
November 3, 1997
Capstone Pharmacy Services, Inc.
9901 East Valley Ranch Parkway, Suite 3001
Irving, Texas 75063
Ladies and Gentlemen:
We have acted as special counsel to Capstone Pharmacy Services, Inc.
(the "Company") in connection with the registration of 450,000 shares of its
common stock to be issued under the provisions of the Company's Amended 401(k)
Profit Sharing Plan pursuant to a registration statement on Form S-8, as filed
with the Securities and Exchange Commission (the "Registration Statement"). This
firm hereby consents to the filing of this opinion as an exhibit to the
Registration Statement and with agencies of such states and other jurisdictions
as may be necessary in the course of complying with the laws of such states and
jurisdictions regarding the offering and sale of the stock in accordance with
the Registration Statement.
We have examined originals, or certified or photostatic copies of such
statutes, records, regulations, certificates of the officers of the Company and
of public officials, and such other information as we have deemed necessary for
purposes of rendering this opinion.
In stating our opinion, we have assumed: (i) that all signatures are
genuine, all documents submitted to us as originals are authentic, and all
documents submitted to us as copies conform to authentic original documents; and
(ii) that the parties to such documents have the legal right and power under all
applicable laws, regulations and agreements to enter into, execute, deliver and
perform their respective obligations thereunder.
On the basis of such review, but subject to the limitations expressed
herein, we are of the opinion, as of the date hereof, that the securities being
registered by the Registration Statement will, when sold as contemplated under
the Registration Statement, be legally issued, fully paid and non-assessable.
Our opinion herein is limited solely to the laws of the United States
of America and the corporate law of the State of Delaware. In rendering the
opinion set forth herein, we have relied upon the documents referenced above and
have made no independent verification or investigation
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated March 14, 1997,
included in Capstone Pharmacy Services, Inc.'s Form 10-K for the year ended
December 31, 1996, and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
October 30, 1997
Baltimore, Maryland
