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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K405/A
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File No. 0-15098
JONES MEDICAL INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of 43-1229854
incorporation or organization) (I.R.S. Employer Identification No.)
1945 Craig Road, St. Louis, MO 63146
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (314) 576-6100
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on which Registered
- ------------------- -----------------------------------------
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.04 par value
----------------------------
(Title of class)
AMENDMENT NO. 1
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-K for
the Fiscal Year Ended December 31, 1995, as set forth on the pages attached
hereto:
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
------- ----------------------------------------------------------------
(a) 1. The consolidated financial statements filed as part of this
report on Form 10-K are listed on the accompanying Index to
Consolidated Financial Statements and Consolidated Financial
Statement Schedule on page F-1 (previously filed).
2. The consolidated financial statement schedule filed as part of
this report on Form 10-K is listed on the accompanying Index to
Consolidated Financial Statements and Consolidated Financial
Statement Schedule on page F-1 (previously filed).
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3. Exhibits:
(3.1) Restated Certificate of Incorporation of the Company dated June
21, 1988 (previously filed).
(3.2) Certificate of Amendment of the Certificate of Incorporation of
the Company dated May 14, 1990 (previously filed).
(3.3) Certificate of Amendment of the Certificate of Incorporation of
the Company dated May 30, 1991 (previously filed).
(3.4) Certificate of Designation of Convertible Preferred Stock,
Series A as, filed with the Secretary of State of Delaware on
May 15, 1991, is incorporated by reference from Form 8-K dated
May 29, 1991.
(3.5) Amended By-Laws of the Company as of June 14, 1988 (previously
filed).
(3.6) Amendment to Section 3.02 of By-Laws of the Company as of April
1, 1992 (previously filed).
(10.1) The Company's 1989 Incentive Stock Option Plan (previously
filed).
(10.2) The Company's Cash or Deferred Profit Sharing Plan and Trust
amended and restated as of January 1, 1995.
(10.3) Agreement and Plan of Reorganization dated as of December 27,
1990, as Amended and Restated as of March 15, 1991, between the
Company and GenTrac, Inc., is incorporated by reference from
Form 8-K dated May 29, 1991.
(10.4) Asset Purchase Agreement dated as of February 12, 1993, between
the Company and Tsumura International, Inc., is incorporated by
reference from Form 8-K dated February 18, 1993.
(10.5) Stock Purchase Agreement dated as of March 22, 1993, among the
Company and each of the stockholders of Bronson
Pharmaceuticals, is incorporated by reference from Form 8-K
dated April 7, 1993.
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(10.6) The Company's 1994 Incentive Stock Plan effective June 1, 1994,
is incorporated by reference from the Company's Proxy Statement
dated April 21, 1995 for the Annual Meeting of
Stockholders held May 15, 1995.
(10.7) The Company's 1994 Formula Stock Option Plan for Non-Management
Directors effective May 25, 1994, is incorporated by reference
from the Company's Proxy Statement dated April 21, 1995 for the
Annual Meeting of Stockholders held May 15, 1995.
(10.8) Licensing Agreement dated August 31, 1995 between the Company
and Eli Lilly & Company is incorporated by reference from Form
8-K dated September 15, 1995.
(10.9) Manufacturing Agreement dated August 31, 1995 between the
Company and Eli Lilly & Company, is incorporated by reference
from Form 8-K dated September 15, 1996.
(11.1) Statement re: computation of per share earnings (previously
filed).
(21.1) Subsidiaries of the Registrant (previously filed).
(23.1) Consent of Ernst & Young LLP (previously filed).
(27.1) Financial Data Schedule (previously filed).
(b) No reports on Form 8-K were filed by the Company during the last
quarter of the period covered by this report.
SIGNATURES
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Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
JONES MEDICAL INDUSTRIES, INC.
BY: /s/ Dennis M. Jones
------------------------------
Dennis M. Jones, President
Date: March 18, 1996
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EXHIBIT 10.2
__________________________________________________________________
ADOPTION AGREEMENT
DATAIR
FOR THE MASS-SUBMITTER PROTOTYPE
STANDARDIZED CASH OR DEFERRED PROFIT SHARING PLAN AND TRUST
(WITH PAIRING PROVISIONS)
__________________________________________________________________
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ADOPTION AGREEMENT
FOR THE DATAIR MASS-SUBMITTER PROTOTYPE
STANDARDIZED CASH OR DEFERRED PROFIT SHARING PLAN AND TRUST
(WITH PAIRING PROVISIONS)
The DATAIR Mass-Submitter Prototype Standardized Cash or Deferred
Profit Sharing Plan and Trust ("the Plan and Trust") is hereby adopted
by JONES MEDICAL INDUSTRIES, INC. (hereinafter "the Employer")
effective as of January 1, 1995 ("the Effective Date"). The Plan and
Trust as applicable to the Employer shall be known as: JMI'S EMPLOYEE
RETIREMENT 401(k) PLAN.
( ) 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 January 1,
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 : 1945 CRAIG ROAD
ST. LOUIS, MO 63146
2. Employer Telephone : 314 576-6100
3. Employer Tax ID : 43-1229854
4. Employer Fiscal Year : January 1 to December 31
5. Three Digit Plan Number : 001
6. Trust ID Number : N/A
7. Plan Fiscal Year (must : January 1 to December 31
be 12 consecutive mos.)
8. Short Initial Plan Year : N/A
9. Plan Agent : JONES MEDICAL INDUSTRIES, INC.
1945 CRAIG ROAD
ST. LOUIS, MO 63146
1
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10. Plan Administrator : JONES MEDICAL INDUSTRIES, INC.
1945 CRAIG ROAD
ST. LOUIS, MO 63146
11. Plan Administrator : 43-1229854
ID Number
12. Plan Trustees : DENNIS JONES
JUDITH A. JONES
1945 CRAIG ROAD
ST. LOUIS, MO 63146
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 : 2830
17. State of Legal Construction : DELAWARE
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)
Controlled Group
( ) a. Not Applicable
(X) b. Other Members
JMI Canton Pharmaceutical, Inc., JMI Phoenix Laboratories,
Inc., and Gentrac, Inc.
Affiliated Service Group
(X) a. Not Applicable
( ) b. Other Members
2
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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 18 years (Not to exceed 21, partial years may
be used)
(X) c. Minimum of 6 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)
( ) d. _____ 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. 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 18 years (Not to exceed 21, partial years may
be specified)
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(X) c. Minimum of 6 months of service (Not to exceed 12, if other
than full years are selected hours may not be specified)
( ) d. _____ 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 18 years (Not to exceed 21, partial years may
be used)
(X) c. Minimum of 6 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)
( ) d. _____ 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
(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
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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:
BRONSON PHARMACEUTICAL, BOWMAN PHARMACY, INC., SPI
PHARMACY/LEGERE, GENTRAC, INC.
Service with the above entities has been determined
under the terms of the following documents:
_____________________________________________
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
(X) f. Semiannual - (X) first or ( ) last day of 6 month periods,
beginning with first of Plan Year, coincident with or after
satisfying eligibility requirements
( ) g. Quarterly - ( ) 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 20 1/2).
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
5
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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
(X) 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
( ) f. Other - Specify. (Must be at least annually)
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:
( ) a. Age ____ (not to exceed 65)
(X) b. The later of age 65 (not to exceed 65) or the 5th (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.
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( ) 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)
( ) a. The Plan does not provide an early retirement date
( ) b. The actual date the Participant attains the Early Retirement
Age
(X) 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.)
( ) a. Age _____ (not to exceed 65)
(X) b. Age 55 and 10 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 _____
( ) 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
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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.
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.
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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.
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 _____% .
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( ) 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:
_____% 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)
( ) a. With respect to Elective Contributions in excess of _____% 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):
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(X) c. On behalf of
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) 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.
( ) a. Plan Provision - Include all Years of Service
(X) 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)
(X) b. At the rate of 20% each year after 2 Years of Service. (20%
vested in second year)
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( ) 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 Non-Elective Employer Contributions
Matching Accounts:
( ) a. At the rate of 20% each year after 3 Years of Service. (20%
vested in third year)
(X) b. At the rate of 20% each year after 2 Years of Service. (20%
vested in second year)
( ) 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.
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( ) b. The prior schedule was
Employer
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)
( ) 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
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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.
(X) a. Plan Provision
( ) b. Count all service after the Break
( ) 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.
(X) a. Plan Provision.
( ) b. Determine in Plan Year of 5th consecutive Break in Service.
( ) c. Determination as of the Valuation Date coincident with or
next following the Distribution Date
( ) 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):
(X) 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
(X) 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.
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<PAGE> 16
10. Forfeitures of Matching Contributions shall be applied to: (Select
all applicable)
(X) 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
(X) 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)
(X) a. Must be eligible to receive an allocation of the respective
type of contribution, i.e.
Matching or Non-elective
( ) b. Not applicable. Forfeitures reduce contributions.
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.
(X) 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:
15
<PAGE> 17
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:
( ) a. Applied to reduce Employer contributions.
(X) 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. 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 ____
( ) 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
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<PAGE> 18
( ) 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 lives of the
participant and spouse, unless the Employer elects a different
percentage (Select one):
( ) 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.
(X) b. The Valuation Date coinciding with or following the date of
termination
( ) 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
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<PAGE> 19
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
(X) b. The Valuation Date coinciding with or following the date of
termination
( ) 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.
(X) b. The Valuation Date coinciding with or following the date of
termination
( ) c. As soon as practical but prior to the Anniversary Date
following the date of termination, based upon the preceding
Valuation Date
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
(X) c. The Valuation Date coinciding with or following the date of
termination
( ) 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
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<PAGE> 20
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)
(X) 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)
(X) d. In Service Distributions are permitted upon reaching Normal
Retirement Date
(X) e. In Service Distribution are permitted for amounts
attributable to a rollover from another plan regardless of
age or periods of participation
( ) f. In Service Distributions are not permitted.
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.
( ) a. Loans are permitted.
(X) 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
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<PAGE> 21
( ) c. Rollover contributions are permitted only by Employees who
have satisfied the conditions for participation.
(X) 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.
(X) a. Participants may not control their investments.
( ) 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.
( ) d. Participants may control their investments without regard to
their vested interest.
( ) e. Participants may control their investments solely with
respect to amounts attributable to: (Select all applicable)
( ) e.1. Non-Elective Contributions
( ) e.2. Qualified Non-Elective Contributions
( ) e.3. Elective Contributions
( ) e.4. Matching Contributions
( ) e.5. Voluntary Contributions
( ) 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):
( ) a. the first day of Plan Year.
(X) 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).
20
<PAGE> 22
( ) 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.
( ) 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:
21
<PAGE> 23
(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
(X) a. Wages as computed for Wages, Tips, and Other Compensation
Box on Form W-2.
( ) b. Section 3401(a) wages.
( ) c. Section 415 safe harbor compensation.
13. Paired Plan - Indicate whether the Plan is to be paired with another
DATAIR Mass-Submitter Prototype Plan. Prototype Plan.
(X) a. No or not applicable
( ) b. Yes. Paired with:
Plan Name _____________________________________________
Three Digit Plan Number _______________________________
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<PAGE> 24
The name, address and telephone number of the Plan Sponsor is:
DATAIR Employee Benefit Systems, Inc.
735 N. Cass Avenue
Westmont, IL 60559-1100
(708)325-2600
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 DATAIR Mass-Submitter 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 DATAIR
Mass-Submitter Prototype Defined Contribution Plan and Trust, Revised
05/06/92.
* * *
The Employer and Trustee hereby adopt the Plan and Trust as evidenced
by the foregoing Adoption Agreement on this 20th day of January, 1995.
Employer: Trustee:
JONES MEDICAL INDUSTRIES, INC.
/s/ Dennis Jones /s/ Dennis Jones
- ------------------- --------------------------
DENNIS JONES DENNIS JONES
CEO Trustee
/s/ Judith A. Jones
--------------------------
JUDITH A. JONES
Trustee
23
<PAGE> 25
/s/ Dennis Jones
- ------------------------------
JMI Canton Pharmaceutical, Inc.
/s/ Dennis Jones
- -------------------------------
JMI Phoenix Laboratories, Inc.,
/s/ Dennis Jones
- -------------------------------
Gentrac, Inc.
24
<PAGE> 26
____________________________________________________________
DATAIR MASS-SUBMITTER PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST
____________________________________________________________
<PAGE> 27
DATAIR MASS-SUBMITTER PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST
TABLE OF CONTENTS
PART I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1.1 Creation and Title . . . . . . . . . . . . . . . . . . 1
1.1.2 Effective Date . . . . . . . . . . . . . . . . . . . . 1
1.1.3 Purpose . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2.1 "Account" . . . . . . . . . . . . . . . . . . . . . . 2
1.2.2 "ACP". . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2.3 "Act". . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2.4 "ADP" . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2.5 "Anniversary Date" . . . . . . . . . . . . . . . . . . 2
1.2.6 "Beneficiary". . . . . . . . . . . . . . . . . . . . . 2
1.2.7 "Board of Directors" . . . . . . . . . . . . . . . . . 2
1.2.8 "Break in Service" . . . . . . . . . . . . . . . . . . 2
1.2.9 "Code" . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2.10 "Compensation" . . . . . . . . . . . . . . . . . . . . 2
1.2.11 "Compensation Computation Period". . . . . . . . . . . 3
1.2.12 "Controlled Account" . . . . . . . . . . . . . . . . . 3
1.2.13 "Date of Hire" . . . . . . . . . . . . . . . . . . . . 3
1.2.14 "Distribution Benefit" . . . . . . . . . . . . . . . . 3
1.2.15 "Distribution Date". . . . . . . . . . . . . . . . . . 3
1.2.16 "Early Retirement Age" . . . . . . . . . . . . . . . . 3
1.2.17 "Early Retirement Date". . . . . . . . . . . . . . . . 3
1.2.18 "Earned Income". . . . . . . . . . . . . . . . . . . . 4
1.2.19 "Elective Contribution Account". . . . . . . . . . . . 4
1.2.20 "Elective Contribution". . . . . . . . . . . . . . . . 4
1.2.22 "Eligibility Computation Period" . . . . . . . . . . . 4
1.2.23 "Employee" . . . . . . . . . . . . . . . . . . . . . . 4
1.2.24 "Employer" . . . . . . . . . . . . . . . . . . . . . . 5
1.2.25 "Employer Account" . . . . . . . . . . . . . . . . . . 5
1.2.26 "Employer Contribution" . . . . . . . . . . . . . . . 5
1.2.27 "Entry Date" . . . . . . . . . . . . . . . . . . . . . 5
1.2.28 "Excess Aggregate Contributions" . . . . . . . . . . . 5
1.2.29 "Excess Contributions" . . . . . . . . . . . . . . . . 5
1.2.30 "Excess Elective Deferrals". . . . . . . . . . . . . . 6
1.2.31 "Excessive Annual Addition". . . . . . . . . . . . . . 6
1.2.32 "Family" . . . . . . . . . . . . . . . . . . . . . . . 6
i
<PAGE> 28
1.2.33 "Fiduciary". . . . . . . . . . . . . . . . . . . . . 6
1.2.34 "Highly Compensated Employee". . . . . . . . . . . . 6
1.2.35 "Hourly Service" . . . . . . . . . . . . . . . . . . 7
1.2.36 "Insurer". . . . . . . . . . . . . . . . . . . . . . 8
1.2.37 "Joint and Survivor Annuity" . . . . . . . . . . . . 8
1.2.38 "Leased Employee". . . . . . . . . . . . . . . . . . 9
1.2.39 "Life Insurance Policy". . . . . . . . . . . . . . . 9
1.2.40 "Limitation Year". . . . . . . . . . . . . . . . . . 9
1.2.41 "Mass Submitter" . . . . . . . . . . . . . . . . . . 9
1.2.42 "Matching Account" . . . . . . . . . . . . . . . . . 9
1.2.43 "Matching Contribution". . . . . . . . . . . . . . . 9
1.2.44 "Non-Elective Contribution". . . . . . . . . . . . . 9
1.2.45 "Normal Retirement Age". . . . . . . . . . . . . . . 9
1.2.46 "Normal Retirement Date" . . . . . . . . . . . . . . 9
1.2.47 "Owner-Employee" . . . . . . . . . . . . . . . . . . 10
1.2.48 "Participant". . . . . . . . . . . . . . . . . . . . 10
1.2.49 "Plan" . . . . . . . . . . . . . . . . . . . . . . . 10
1.2.50 "Plan Administrator" . . . . . . . . . . . . . . . . 10
1.2.51 "Plan Sponsor" . . . . . . . . . . . . . . . . . . . 10
1.2.52 "Plan Year" or "Year". . . . . . . . . . . . . . . . 10
1.2.53 "Preretirement Survivor Annuity" . . . . . . . . . . 10
1.2.54 "Qualified Non-Elective Contribution". . . . . . . . 10
1.2.55 "Qualified Non-Elective Contribution Account". . . . 10
1.2.56 "Qualifying Employer Securities or Real Property". . 10
1.2.57 "Segregated Account" . . . . . . . . . . . . . . . . 10
1.2.58 "Segregated Fund". . . . . . . . . . . . . . . . . . 11
1.2.59 "Self-Employed Individual" . . . . . . . . . . . . . 11
1.2.60 "Social Security Integration Level". . . . . . . . . 11
1.2.61 "Trust Fund" . . . . . . . . . . . . . . . . . . . . 11
1.2.62 "Trustee". . . . . . . . . . . . . . . . . . . . . . 11
1.2.63 "Valuation Date" . . . . . . . . . . . . . . . . . . 11
1.2.64 "Voluntary Account". . . . . . . . . . . . . . . . . 11
1.2.65 "Year of Service". . . . . . . . . . . . . . . . . . 11
PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.1.1 Eligibility Requirements . . . . . . . . . . . . . . 12
2.1.2 Commencement of Participation. . . . . . . . . . . . 12
2.1.3 Participation Upon Re-Employment . . . . . . . . . . 12
2.1.4 Termination of Participation . . . . . . . . . . . . 12
2.1.5 Employer's Determination . . . . . . . . . . . . . . 12
2.1.6 Omission of Eligible Employee. . . . . . . . . . . . 12
2.1.7 Inclusion of Ineligible Participant. . . . . . . . . 12
2.1.8 Election Not to Participate. . . . . . . . . . . . . 13
2.1.9 Change in Status . . . . . . . . . . . . . . . . . . 13
ii
<PAGE> 29
2.1.10 Existing Participants . . . . . . . . . . . . . . . . . . 13
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.2.1 Employer Contributions. . . . . . . . . . . . . . . . . . 14
2.2.2 Elective Contributions by the Employer
on Behalf of Electing Employees . . . . . . . . . . . . . 15
2.2.3 Employee Contributions . . . . . . . . . . . . . . . . . 16
2.2.4 Return of Contributions . . . . . . . . . . . . . . . . . 16
ARTICLE III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ALLOCATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.3.1 Profit Sharing and Money Purchase Pension Plans . . . . . 18
2.3.2 Cash or Deferred Plans . . . . . . . . . . . . . . . . . 18
2.3.3 Limitation. . . . . . . . . . . . . . . . . . . . . . . . 18
2.3.4 Minimum Allocation. . . . . . . . . . . . . . . . . . . . 18
2.3.5 Fail-Safe Allocation. . . . . . . . . . . . . . . . . . . 18
ARTICLE IV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.4.1 Distributable Benefit . . . . . . . . . . . . . . . . . . 20
2.4.2 Vesting . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.4.3 Leave of Absence . . . . . . . . . . . . . . . . . . . . 21
2.4.4 Re-Employment . . . . . . . . . . . . . . . . . . . . . . 21
2.4.5 Distribution Date . . . . . . . . . . . . . . . . . . . . 21
2.4.6 Forfeitures . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.5.1 Commencement of Distribution. . . . . . . . . . . . . . . 23
2.5.2 Method of Distribution. . . . . . . . . . . . . . . . . . 28
2.5.3 Nature of Distributions . . . . . . . . . . . . . . . . . 35
2.5.4 Advance Distributions . . . . . . . . . . . . . . . . . . 36
2.5.5 Hardship Distributions. . . . . . . . . . . . . . . . . . 37
2.5.6 In Service Distributions. . . . . . . . . . . . . . . . . 39
ARTICLE VI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
CONTINGENT TOP HEAVY PROVISIONS. . . . . . . . . . . . . . . . . . . . 39
2.6.1 Top Heavy Requirements. . . . . . . . . . . . . . . . . . 39
2.6.2 Top Heavy Definitions . . . . . . . . . . . . . . . . . . 40
2.6.3 Pairing Requirements. . . . . . . . . . . . . . . . . . . 43
ARTICLE VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SPECIAL CODA LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . 45
2.7.1 Limitation on Deferral Percentage for
Highly Compensated Employees. . . . . . . . . . . . . . . 45
2.7.2 Multiple Plan Limitations . . . . . . . . . . . . . . . . 46
2.7.3 Limitation on Matching Contributions. . . . . . . . . . . 46
2.7.4 Special Rules . . . . . . . . . . . . . . . . . . . . . . 47
2.7.5 Distribution of Excess Elective Deferrals . . . . . . . . 48
2.7.6 Distribution of Excess Contributions. . . . . . . . . . . 48
iii
<PAGE> 30
2.7.7 Distribution of Excess Aggregate Contributions. . . . . . 49
2.7.8 Limitation on Distributions . . . . . . . . . . . . . . . 50
2.7.9 Limitation on Elective Deferrals. . . . . . . . . . . . . 50
PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ACCOUNTING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
3.1.1 Accounts . . . . . . . . . . . . . . . . . . . . . . . . 51
3.1.2 Adjustments . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
3.2.1 Limitations on Annual Additions . . . . . . . . . . . . . 54
3.2.2 Controlled Businesses . . . . . . . . . . . . . . . . . . 60
ARTICLE III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
FIDUCIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
3.3.1 Standard of Conduct . . . . . . . . . . . . . . . . . . . 62
3.3.2 Individual Fiduciaries . . . . . . . . . . . . . . . . . 62
3.3.3 Disqualification from Service . . . . . . . . . . . . . . 62
3.3.4 Bonding . . . . . . . . . . . . . . . . . . . . . . . . . 62
3.3.5 Prior Acts. . . . . . . . . . . . . . . . . . . . . . . . 62
3.3.6 Insurance and Indemnity . . . . . . . . . . . . . . . . . 62
3.3.7 Expenses . . . . . . . . . . . . . . . . . . . . . . . . 63
3.3.8 Agents, Accountants and Legal Counsel . . . . . . . . . . 63
3.3.9 Investment Manager. . . . . . . . . . . . . . . . . . . . 63
3.3.10 Finality of Decisions or Acts . . . . . . . . . . . . . . 63
3.3.11 Certain Custodial Accounts and Contracts. . . . . . . . . 64
ARTICLE IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
PLAN ADMINISTRATOR. . . . . . . . . . . . . . . . . . . . . . . . 65
3.4.1 Administration of Plan . . . . . . . . . . . . . . . . . 65
3.4.2 Disclosure Requirements . . . . . . . . . . . . . . . . . 66
3.4.3 Information Generally Available . . . . . . . . . . . . . 66
3.4.4 Statement of Accrued Benefit. . . . . . . . . . . . . . . 66
3.4.5 Explanation of Rollover Treatment . . . . . . . . . . . . 66
ARTICLE V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
3.5.1 Acceptance of Trust . . . . . . . . . . . . . . . . . . . 68
3.5.2 Trustee Capacity - Co-Trustee . . . . . . . . . . . . . . 68
3.5.3 Resignation, Removal and Successors . . . . . . . . . . . 68
3.5.4 Consultations . . . . . . . . . . . . . . . . . . . . . . 68
3.5.5 Rights, Powers and Duties . . . . . . . . . . . . . . . . 68
3.5.6 Trustee Indemnification . . . . . . . . . . . . . . . . . 70
3.5.7 Changes in Trustee Authority. . . . . . . . . . . . . . . 70
ARTICLE VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
TRUST ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . 71
3.6.1 Trustee Exclusive Owner . . . . . . . . . . . . . . . . . 71
3.6.2 Investments . . . . . . . . . . . . . . . . . . . . . . . 71
IV
<PAGE> 31
3.6.3 Administration of Trust Assets. . . . . . . . . . . . . . 72
3.6.4 Segregated Funds . . . . . . . . . . . . . . . . . . . . 73
3.6.5 Investment Control Option . . . . . . . . . . . . . . . . 74
ARTICLE VII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
3.7.1 Authorization . . . . . . . . . . . . . . . . . . . . . . 76
3.7.2 Spousal Consent . . . . . . . . . . . . . . . . . . . . . 76
3.7.3 Limitations . . . . . . . . . . . . . . . . . . . . . . . 77
3.7.4 Availability. . . . . . . . . . . . . . . . . . . . . . . 77
3.7.5 Prohibitions. . . . . . . . . . . . . . . . . . . . . . . 77
ARTICLE VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
BENEFICIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . 78
3.8.1 Designation of Beneficiaries. . . . . . . . . . . . . . . 78
3.8.2 Absence or Death of Beneficiaries . . . . . . . . . . . . 78
3.8.3 Surviving Spouse Election . . . . . . . . . . . . . . . . 78
ARTICLE IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
CLAIMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
3.9.1 Claim Procedure . . . . . . . . . . . . . . . . . . . . . 79
3.9.2 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . 79
ARTICLE X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . . . 80
3.10.1 Right to Amend . . . . . . . . . . . . . . . . . . . . . 80
3.10.2 Manner of Amending . . . . . . . . . . . . . . . . . . . 80
3.10.3 Limitations On Amendments. . . . . . . . . . . . . . . . 80
3.10.4 Voluntary Termination. . . . . . . . . . . . . . . . . . 81
3.10.5 Involuntary Termination. . . . . . . . . . . . . . . . . 81
3.10.6 Withdrawal By Employer . . . . . . . . . . . . . . . . . 82
3.10.7 Powers Pending Final Distribution. . . . . . . . . . . . 82
3.10.8 Delegation to Sponsor . . . . . . . . . . . . . . . . . 82
ARTICLE XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
PORTABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
3.11.1 Continuance by Successor . . . . . . . . . . . . . . . . 83
3.11.2 Merger With Other Plan . . . . . . . . . . . . . . . . . 83
3.11.3 Transfer From Other Plans . . . . . . . . . . . . . . . 83
3.11.4 Transfer to Other Plans. . . . . . . . . . . . . . . . . 84
ARTICLE XII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 85
3.12.1 No Reversion to Employer . . . . . . . . . . . . . . . . 85
3.12.2 Employer Actions . . . . . . . . . . . . . . . . . . . . 85
3.12.3 Execution of Receipts and Releases . . . . . . . . . . . 85
3.12.4 Rights of Participants Limited . . . . . . . . . . . . . 85
3.12.5 Persons Dealing With Trustee Protected . . . . . . . . . 85
3.12.6 Protection of Insurer. . . . . . . . . . . . . . . . . . 85
3.12.7 No Responsibility for Act of Insurer . . . . . . . . . . 86
3.12.8 Inalienability . . . . . . . . . . . . . . . . . . . . . 86
3.12.9 Domestic Relations Orders. . . . . . . . . . . . . . . . 86
V
<PAGE> 32
3.12.10 Authorization to Withhold Taxes . . . . . . . . . . . . . 88
3.12.11 Missing Persons . . . . . . . . . . . . . . . . . . . . . 88
3.12.12 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 88
3.12.13 Governing Law . . . . . . . . . . . . . . . . . . . . . . 88
3.12.14 Severability of Provisions. . . . . . . . . . . . . . . . 88
3.12.15 Gender and Number . . . . . . . . . . . . . . . . . . . . 88
3.12.16 Binding Effect . . . . . . . . . . . . . . . . . . . . . 88
3.12.17 Qualification Under Internal Revenue Laws . . . . . . . . 89
vi
<PAGE> 33
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.
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.
1
<PAGE> 34
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.
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,
2
<PAGE> 35
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 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.
3
<PAGE> 36
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.
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
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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.
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
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<PAGE> 38
(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.
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.
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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 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
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<PAGE> 40
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 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
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<PAGE> 41
survivor annuity shall be fifty (50%) percent unless a different percentage is
elected by the Employer in the Adoption Agreement.
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 re-employment. 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 the discovery is made and apply such amount in the manner specified in the
Adoption Agreement.
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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 Trust Fund in accordance
with the instructions
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<PAGE> 48
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.
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:
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<PAGE> 49
(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.
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<PAGE> 50
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 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
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<PAGE> 51
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 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.
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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 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
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<PAGE> 53
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.
(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.
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<PAGE> 54
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 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.
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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.
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.
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<PAGE> 56
(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 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
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<PAGE> 57
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.
(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
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<PAGE> 58
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.
(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.
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<PAGE> 59
(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):
(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
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<PAGE> 60
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.
(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
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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 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
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<PAGE> 62
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.
(b) A reasonable period ending after the
individual becomes a Participant.
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(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. (8)
Marriage Requirement. Notwithstanding the foregoing, the
benefits
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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> 65
(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
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years of vesting service when he or she 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:
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(i) the earliest date, under the Plan, on
which the Participant may elect to receive
retirement benefits,
(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
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<PAGE> 68
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 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;
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<PAGE> 69
(b) Purchase (excluding mortgage payments) of a principal
residence for the Participant;
(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 Non-Elective Contributions satisfy
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<PAGE> 70
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.
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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.
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:
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<PAGE> 72
Years of Service Percentage
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
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.
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
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(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:
(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.
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(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.
(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
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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.
(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.
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(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.
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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.
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.
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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.
(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
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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.
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
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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
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
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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. 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
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welfare benefit fund as defined in section 419(e) of the Code,
maintained by the Employer.
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.
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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 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
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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 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
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<PAGE> 90
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, 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
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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.
(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.
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(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 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.
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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.
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.
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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.
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
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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 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
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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.
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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:
(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.
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(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.
(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
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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.
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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 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.
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(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, 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
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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.
(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.
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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:
(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:
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(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.
(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
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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 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
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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.
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.
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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.
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.
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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
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.
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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.
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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 provisions of Section 2.5.2(e)(3), the designated
Beneficiary shall be the 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.
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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 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.
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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 party acting as Trustee according to the latest information received by the
Insurer at its home office.
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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 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
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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.
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
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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.
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.
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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
JMI'S EMPLOYEE RETIREMENT 401(k) PLAN
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 rollover distribution
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
JMI'S EMPLOYEE RETIREMENT 401(k) PLAN
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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